The Fed JUST Bailed out Stocks.

The last few days have been

nerve-wracking. And on our jobs release

day, we actually got pretty decent jobs

data. We mentioned that there was one

thing that can help alleviate some of

the pain. If you go back to my 5:30 a.m.

live stream, you'll see that I mentioned

the Federal Reserve has until next

Friday to do something for us. See, the

Federal Reserve might not quote unquote

care about stock prices, but the Federal

Reserve does recognize that if the stock

market falls in a weak economy, you can

actually induce a recession through a

stock market decline. It's exactly what

happened in the dot bubble. We didn't

have underlying economic issues. We had

a stock market that created underlying

economic issues when the bubble burst.

Now, the Federal Reserve wants to make

sure we don't go into a recession. That

is really bad for unemployment. It's

really hard to get those jobs to come

back, especially in the day of AI, the

days of AI. So, what did what happened

this morning? Well, after the market's

been selling off and selling off and

selling off, sure enough, this morning,

the Federal Reserve is unleashed to

prevent a continuation of the dip. And

just this morning, we get John Williams

telling us that, hey, we should actually

still be cutting in December. Now, it's

not worth really listening to what they

all say, but what matters for Williams

is even though he's a dove, he's a

voting member of the FOMC. And he's a

mid-range dove, so he's kind of a

centrist. He's like 5149 on the dove

tilt. He's not like Mega Dove like Myron

who's going to tell you we should always

be going for a 50 basis point cut, you

know, because that's what Trump wants.

Although Myron has really shaped out to

be a pretty good member of the Fed so

far. I think he's got very transparent

ideas and and and good ideas. But this

was impressive and just Williams's talk

alone doubled the odds that we are going

to get a rate cut uh in December, which

is great because we just got rugpulled

on the October CPI data. We will not be

getting CPI or inflation data uh for

October and we're not going to be

getting a jobs or CPI report until after

the next Fed meeting. That led to a lot

of nervousness in markets that at a time

where liquidity isn't that great, the

Fed was potentially going to stay

restrictive. And I think that was one of

the large contributors to a lot of

uncertainty with what's going on in

markets. And if the Fed doesn't cut, it

actually strengthens the dollar. And if

you strengthen the dollar, you

potentially set up for more of that

Japanese carry trade. Either the fear of

the carry trade or that sudden unwind.

It's the shifts in policy that trigger

the carry trade. Not a consistent

movement in one direction. It's the

sudden shift that you have to be careful

of, which we talked a lot about

yesterday. So today, we kind of got

bailed out by the Federal Reserve. We're

now sitting, we went as high as a 70%

chance of getting a cut December 10th.

Right now, we sit at about a 63% chance

of a cut. Now, we still have a sensitive

market market that's still a little

shockprone, but we're seeing volatility

come down. Part of that is because

yesterday a lot of people were pounding

the pavement going, "Oh my gosh, Michael

Bur is right." But if you actually

watched my video breakdown of what the

catalyst for pain yesterday was, it had

very little to do with Michael Bur being

right or wrong. It doesn't really matter

where Michael Bur sits because the Bur

problem is a long time in the future

issue. It's not a now issue. Instead,

what you really want to pay attention

to, in my opinion, is the potential

default of a company like Coreweave.

That is critical for this AI play. Uh,

and right now, fortunately, we're

getting some recovery on the cues. We're

coming back to 595.

My expectation, my hope was that we

would go bullish today, but I will say

we had a lot of selling we had to get

through at the AM. Uh, AMD went down,

Nvidia went down. the first, you know, 2

3 hours here, we were straight down on

Nvidia and and AMD. Fortunately, it

seems like some of that selling flush is

now behind us. Volatility's coming down,

and unless you're in fat brands, you

should be seeing a recovery today. Now,

we've been dumping on fat brands for the

last couple days, uh, over two or three

days here, mostly because I can't

believe a company with two billion or $2

million of cash has over $1.5 billion of

debt. But that's really a topic for a

different video. But what you'll notice

is there's a lot of buy the dipping

going on here. You've got Target up 5%.

As they're offering a 5% dividend,

people are buying the consumer dip.

Chipotle, which has been tanking, is

getting a bid up 4%. Red Robin, which is

issuing $40 million of of of stock

because they're out of money. They can't

pay their bills. They have horrible

financials. They're up 5% today. Dave

and Busters, which screwed up massively

on capex spending, is worth less than

half a billion dollars now, up 5%.

Cheesecake Factory, Macy's, a lot of

these consumer beaten up stocks are

rallying today. And I think a lot of it

is because of the belief that the

Federal Reserve is going to come prop

the stock market up. And frankly, you

kind of want that. You want the Fed to

pump the bags because if a company like

Coreweee goes bankrupt and it goes full

circle, much like Circle Stock did,

going full retrace here, full 100%

retrace all the way back down to the

zero line. If Cororeweave goes full

circle and we go down to 33 or worse,

Cororeweave goes bust, you have to

understand the greater implications that

it's going to have for Nvidia. See, I

wrote this note yesterday in the Meet

Kevin app. Nvidia is basically a bank.

And so what I wrote is let's ignore

inventory for a moment. Let's just

assume that the inventory issue is just

part of their increasing sales at

Nvidia. What's more interesting at

Nvidia is actually its accounts

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down below. What's more interesting at

Nvidia is actually its accounts

receivable profile. You're going to

notice that accounts receivable on

January 26th showed that 33% of their

top customers had receivables

outstanding. You know, contribute. Well,

33% of total receivables outstanding at

Nvidia were from their top customers.

Concentration, right? That concentration

has nearly doubled. You're now at 65% of

your receivables are concentrated in

your top four customers. Now, in my

opinion, while a top customer could be a

company like Microsoft, I think

Microsoft has plenty of cash to pay for

their bills. But a company that I don't

think two companies I do not think have

plenty of cash to pay their bills. XAI

and Coreweave. Coreweeef has tanked from

all-time highs. It's de facto bailed out

by Nvidia. And XAI is trying to raise

$15 billion so they could pay their

bills and actually buy their chips.

Okay, Amazon and Google, they're build

they're buying Nvidia chips, but they're

also building their own chips and

they've got cash flow. But Cororee and

XAI, I don't know this because it's not

disclosed, but I wouldn't be surprised

that Cororee and XAI are in this top

four customer batch who hasn't paid

their bills yet. That could be one of

the reasons why we're seeing finished

good inventory rise. It all comes down

to this customer concentration of they

don't have the money to pay for their

bills yet. And understand the cycle of

how this works. This is how Nvidia is

the bank. Nvidia is like the JPOW of AI.

Nvidia wants to sell Cororeef chips.

Okay, simple, right? But Cororeweave

can't take delivery because nobody will

lease to them. So Nvidia ends up

guaranteeing Cororeweave. Cororeweave

then gets the lease because they have

Nvidia's credit backing. Nvidia gets to

hold their inventory until Cororeef can

actually take it and raise the money.

Hopefully the stock pumps and then they

can pay Nvidia more. The more Core

pumps, the more Nvidia can sell them

stuff. Nvidia wins on a stock pump.

They're also hedged with the $470

million they have in escrow. But

remember, Nvidia is committing to 26

billion dollars of leasing. They're

basically forcing people to install

Nvidia chips. So if Coree tanks more,

it's really bad because then Nvidia

loses a customer, they lose the debt,

they lose the leasing tenant, and Nvidia

gets a bunch of ba data center space

that they really don't want. So stocks

tanking can literally burst the bubble.

So you want the Fed to bail out stocks.

Is it sustainable? Maybe not. But you

want the Fed to come in and go, "No, no,

no. We'll keep we'll keep cutting

rates." And I think that's what you're

seeing today. Now, it wasn't as clear of

a trade because clearly the market had

to go down before it was able to go up

today intraday. I was really looking for

green out of the gate on these Williams

comments. I was bullish on the Williams

comments because I'm like, "This is

good. This means the Fed is using the

last week they have before the blackout

window to put a floor under this market

crash. stop the bleeding because the

bleeding could actually impose the very

recession the Fed is trying to avoid.

Now, when you look at the fundamentals,

because I'm I'm a big fan of looking at

the fundamentals. You know this, okay? I

don't have to tell I don't need CNBC to

tell you what you already know.

>> Kevin is much more interested than most

people, by the way, in the balance

sheet.

>> So, when we look at the sheets for

Cororeweave, understand this.

Cororeweave has $2.5 billion of cash. Do

you know how much they have in debts?

They have $8.6 billion in current debt.

They need to pay $ 8.6 billion of bills.

They have about $4.2 total in liquid.

So, they have at least $2, more than $2

of debt of bills to pay in the next 12

months. Then they have cash to pay.

Coreweave needs money. How does

Coreweave raise money right here? They

issue debt and they go IPO. They public.

They go public, right? So, they issue

stocks and debts. Look at their cash

flow statement. This is a horrible,

horrible, horrible, horrible cash flow

statement.

If especially if this bubbles, this gets

worse. Why? Cuz look at this. Net cash

provided by operations 1.5 billion. How

much are they spending? 6.2 2 billion.

They're basically borrowing money and

blowing over $4.7 billion in capex,

which is essentially everything they

raised from their their net debt

issuance because they refinanced some

debt over here. So, they took out a $7.5

billion loan, but they paid off a $3

billion loan. So, their net financing is

4.5 billion, right? Okay. So, they're

borrowing to build. We know that. But

the only way you could keep sustaining

the Ponzi, the circular financing,

there's only one way you could keep the

ponds going, especially, you know, I

mean, there they they do have C, in

fairness, they do have net income if you

add back into depreciation. You got to

give them that. But the only way you

keep this going is by keeping the core

stock buoyant. Okay? It doesn't have to

be 100. It doesn't have to be 200. It

just can't go bankrupt. Because if

Cororeweave goes bankrupt, that's what

starts the Michael Bur cascade. The

Michael Bur problem is not what

yesterday's problem was. I want you to

pin this stupid stock to your whatever

broker you use. If you use Weeble,

great. If you don't use Weeble, you

could sign up. Use my affiliate link,

meet Kevin.com/weee.

I think they give away free stuff if you

use my affiliate link. Anyway, paid

promotion.

>> Paid promotion. But understand this, you

need to have corewave pinned because if

coreweave keeps falling, guess what

happens when a stock falls? It's a

simple game, folks. When the stock goes

down, fewer people want to buy it.

That's human psychology. I'm telling

you, you know what people want to buy

right now? Apple at a four peg. You want

to know why people want to buy Apple

right now? Cuz it's going up.

It's simple. Human psychology is very

simple. Stomp go up, people want more of

it. Stomp go down, people don't want it.

It's the opposite, not always, of what

you want to do. Like, I don't want to

buy Core Weef just because it's going

down. I'd rather buy the dip on

something else. Like Netflix, you know,

that's a cash machine and it's got a

horrible technical trend right here.

Like this this technical trend right

here is not good. And we're losing 108,

which is not great. you know, it could

be $90 soon, but this is a phenomenal

cash generating machine that is a

beneficiary of the advertising wave

that's coming from LLM uh LLM's

overspending on advertising, which will

be the next phase after they overspend

on chips. That's to come. That's my

thesis, okay? I'm not trying to distract

from the point. The point is the Fed

needs to keep Coreweave buoyant because

if Cororeweave goes bankrupt, Nvidia

takes a giant L, the ability to finance

all of the other data center plays goes

to crap. Then Nvidia's earnings plummet

and then you got yourself a recession

driven by the stock market. So the Fed

had to utilize their blackout window.

They're not blackout window yet. Their

blackout window starts on February 29th.

Okay, in English, basically about two

weeks before the Fed meeting, the Fed is

told, "Okay, boys and girls, we're about

to have a meeting. Class is about to be

in session, so now you have to be quiet

until the teacher shows up." Okay,

that's a blackout window. They're not

allowed to say anything. They don't do

their circuit or whatever. So, they only

have between now and next Friday to pump

the odds of a rate cut. Now, if you want

to guarantee the odds of a rate cut, I

almost promise this is what's going to

happen. Monday, Tuesday, Wednesday,

right before Thanksgiving, you're going

to get somebody else come out from the

Fed. I don't know who's who who it's

going to be. Somebody another voting

member from the Fed is going to come out

and they're going to go, you know,

because we don't have the data yet,

we're probably better off doing one more

cut and then we'll let the data guide

us. That's all you need. All you need

one more person from the Fed and you

will guarantee the rate cut for

December. The odds of a rate cut will go

from 63 to 100%. They'll be like 98% or

whatever. Then we'll get our rate cut

December 10th and hopefully we could

just be bullish between now and then.

Then you get the data the week before

Christmas. That's the hope. Hopefully

hopefully this Fed bailout is a way of

providing liquidity again. Now is it

possible that it fails? Of course. you

know, if this isn't enough, like if this

becomes a continuation of profit taking

because, you know, we're seeing that

liquidity stress, whether it's in repo,

I know the chart's not as high as it

was, but you have to zoom out and

recognize we usually don't use this

facility at all. So, the fact that it's

being used at all is a sign of liquidity

stress or the fact that you're getting

issues in private credit, those issues

don't go away. You have to look at the

48 pallets bankruptcyish. I call it a

bankruptcy. Okay. stupid payw wall here.

Uh 48 pallets basically went into

bankruptcy in my opinion. So what

happened was 48 pallets last year took

out $1.75 billion of a loan. You could

get this all in the Meet Kevin app, by

the way. 48 Pallets took out a $1.75

billion loan. Then they started take

making payments in kind, which is

basically like, hey, just add it to what

I owe you. Okay. So they stopped making

payments in August entirely. So they go

payments in kind since I think like

liberation. Then they stop making

payments entirely and then what happens?

They fail. And so now you have KKR,

Black Rockck, and Carile who are like,

"Oh yeah, these are worth 86 cents on

the dollar. Now they're actually worth

46 cents on the dollar. Now they're

actually worth zero." You basically have

another private credit failure on your

hands. Yet another one. Like this keeps

happening on like a daily basis. You get

these private credit failures. that

liquidity issue doesn't go away because

of the Fed being bullish. So, I'm not

saying that all of our issues are gone.

I'm saying the Fed is trying to prop up

the market. Now, people always leave,

but Kevin, the Fed says they don't care

about stocks. Of course, they have to

say that. But if you study history,

you'll understand that if the stock

market tanks 30%. We are going into a

recession. The fundamentals of this

economy are too damn weak. If

Cororeweave goes bankrupt, it's gonna

take down Nvidia. And if Nvidia gets

taken down, it's over. We'll be we'll be

we won't make a dime on stocks for 10

years with buy and hold. It'll be 10

years before you make a buck again.

It'll suck. So, of course, the Fed's

trying to prop this up again. Does it

mean the liquidity issues are gone? No,

of course not. Does it mean OpenAI is

going to be success? Not necessarily. I

mean the information on the front page

of the uh information they've got a

piece on Sam Alman basically saying that

hey dude we might act let me get out of

incognito here we might be facing some

economic headwinds here because Google

is basically kicking our AWS

and to me that's a sign that they're

hitting I mean somebody mentioned this

in the comments and I think they're

right an innovative wall but it's also a

sign that hey if your competitor is

doing better than

and you're going to have economic

headwinds because of that, it means you

have too much debt. It means you're

relying on the market financing you

instead of your competitor and you're

worried about not getting the financing

you think you need to keep innovating

because your innovation has stalled.

It's not a good thing. Like this doesn't

save Open AI. This doesn't save the

private credit disasters that are going

on. It's just a way to engineer a bounce

in the stock market. And I think you're

seeing that in these consumer names. I

think these consumer names are directly

responding to Williams. You'll notice

Target straight up since Williams talk

this morning. Straight up. And I trust

me, I am very tempted by Target. Uh but

you know, they're like they're very

cheap. Their sales are are declining

though, so that's the problem. Walmart

is destroying them. Uh and this is

probably a Williams bounce here. Not

nothing. There's nothing fundamental in

these consumer stocks going up. The

consumer is still getting reamed. So

like Restoration Hardware, I know it's

exciting that it's up 9% today. I

recognize that. But if you do a

fundamental analysis on Restoration

Hardware, first of all, that's your weak

chart. But if you actually do a

fundamental analysis on Restoration

Hardware, you know the true pain for

Restoration Hardware is not behind us.

It's ahead of us. I'll give you a

spoiler alert as to how bad this is.

Okay, so spoiler alert. I'm gonna go to

the stocks tab

in the uh course member tab. This is

this is RIP, man. I shouldn't give this

away. Okay. Hold on.

Where was it?

Okay. All right. So, all you have to do

if you have the Meet Kevin membership

and you download the Meet Kevin app, if

you have So, if you're part of the alpha

report, you get the membership right in

the stock. So, you get the stock tab.

You could download the app for free, but

you don't get the stock tab unless

you're a member, right? Anyway, so you

go to the drop down on the right, you

click RH,

and then you could look at, you know,

things that I've highlighted. You could

download these things or whatever. You

could look at my fundamental analysis.

Uh, but listen to this line. I'm just

saying the high-end furniture market,

it's not coming back for years, and all

it's going to mean is people are going

to there's a lot of people going to

close. He was basically about to say

people are going to go bankrupt. A lot

of people are going to close. A lot of

jobs are going to be lost. And I think

people have to consider that. That's

your CEO freaking out.

Freaking out.

Crazy, right? Oh, did I say February

29th? Yeah, November. November 29th is

the blackout date. Anyway, so so like

you know and then when you look at the

fundamentals, if you actually go look at

the income statement, you should study

the restoration hardware income

statement and understand

have they paid any money on tariffs yet?

And when you answer that question,

you'll know is this pump of 10% on

Restoration Hardware fundamental or

momentum? Spoiler alert, it's momentum

because of Williams. Intraday momentum,

not long-term momentum here, right? So,

intraday bounce on these consumer plays

that have gotten really cheap. I promise

you, Red Robin is going to look at this

and they're going to issue a crapload of

shares because they need to pay their

bills. So, this pump is because of the

Fed. It's engineered by the Fed and it's

great. That's what you want. I mean,

Bitcoin was almost under 80,000. So,

we're getting a nice little bounce in

recovery. Fingers crossed it lasts. Now,

if you're worried about liquidity, watch

the close, okay? Because this close,

uh, you know, coming up at three hours

when the market closes, hopefully we

regain 595. If we can regain and hold

five 595, we could be bullish through

December 8th. That's right before the

Fed meeting. Uh, but I think we'll get

our rate cut over there. So, so let's

hold 595 and let's hope the Williams

pump actually holds. Rejecting this

wouldn't be good. Uh but um oh Kevin

Hasset's yapping now. Nick Te's talking

about Kevin Hasset. Kevin Hasset, who is

a candidate for Fed chair, tells Larry

Cuddlo, "The only way to explain the Fed

decision not to cut in December would be

anti-Trump partisanship." Why? Well,

because they're under the impression

that uh Democrats ruined the economy and

therefore we need to cut. All right.

Whatever with the political

partisanship,

that's not partisan, I guess. Anyway, so

keep in mind I am still buying the dip

at a fraction of what I've sold. Okay,

so I sold a lot over the last couple

months. Uh I do not think a recession is

a foregone conclusion. I think there are

buyable dips. I think there are stocks

that I want to rotate continue rotating

into over the next 10 years. So I'm not

I'm not like, oh, we're definitely dead

in the water or whatever. I'm still

mid-range on the Bear Bull scale. Uh and

what does concern me though is this. I

posted this uh yesterday on X. I'm at

Realme Kevin if you want to follow me

there. But anyway, I wrote, "Wow, Robin

Hood." Oh, and by the way, the delayed

CPI data that doesn't whatever the jobs

data matters more, but anyway, I wrote,

"Wow, Robin Hood is offering I I

miswrote this. I corrected this in the

comments, but basically, uh, Robin Hood

will let you take on $16 million of

margin if you have $6 million in in a

Robin Hood portfolio. This is insane in

my opinion. So, this kind of leverage I

didn't even see in 2021 when I played

with margin a lot. Uh, you know, like if

I had a million bucks in M1 Finance,

they'd let me take like 30%. On margin,

right? Uh, maybe up to 50% on some

platforms. You really had to go to some

of the advanced trading platforms to get

3 to 4x margin. And Robin Hood is

literally letting you do 3 to 4x margin

right now. And that's scary to me. I

think that's very dangerous. And you

should utilize bounces like this. When

we do have these bounces, you should

utilize them to ask yourself, am I too

high in debt? Should I trim a little bit

here? Should I take some profits here?

And should I move into a little bit more

of a safer, sleep better at night

position? You know, my argument is

absolutely, but then again, you know, I

don't know your personal financial

situation. So, I just think these are

bouncable opportunities thanks to the

Fed. And maybe they give you an

opportunity to go diversify into

something fun like like house hack.

Why?

>> It's because that's why

>> exactly. So anyway, that's my take.

>> Why not advertise these things that you

told us here? I feel like nobody else

knows about this.

>> We'll we'll try a little advertising and

see how it goes. Congratulations, man.

You have done so much. People love you.

People look up to you.

>> Kevin Praath there, financial analyst

and YouTuber. Meet Kevin. Always great

to get your take.