The Fed is about to Print like NEVER Before.

Well, in two days, the Federal Reserve

does their usual, cut rates, and pretend

to tell us that they know what the hell

they're talking about. And in this

video, we got to break down why the next

6 weeks are so much more critical than

the last 8 weeks that we've had and why

it means everything for the state of the

economy. Look, the last 8 weeks, we

pretty much haven't had any catalysts or

basically reports from the government to

tell us how things are kind of going on

now. Even though we believe a lot of

these reports are rigged and inaccurate,

at least it's something to go on. Things

have been pretty dang quiet. We had

government shutdown. We didn't really

have catalysts that showed up because

they either got cancelled or delayed.

And they're all delayed to well now

basically the future, what we get to

look forward to. And so we're really

running on fumes in terms of data. And

after all, the Federal Reserve is

supposed to be

>> data dependent. And so that's why it's

not a surprise that right now markets

are a little on edge today. You've got

this rejection at 627 on the Q's. You

got a little bit of a bleed over on the

Q's. Tesla got a downgrade. So you got a

bit of a bleed on Tesla. MP Materials

kind of keeps dropping off those

all-time highs that we FOMOed up to

under the Trump administration's

investment into the company. You know,

Tesla's almost back here at 433. Still

knocking on the door of alltime highs.

But, you know, intraday it's been

bleeding a little bit. It's down almost

4%. So, what's going on? It's all Fed

nervousness. But not just that, we got

to know the conditions for what could

actually mean that we could turn this

money printer on and start really

getting back to a real bull run. Kind of

like maybe Canada's trying to pull off.

So, let's talk about this. First, mark

your calendar for the following dates.

These are really important. We've got

the Fed meeting and the employment cost

index coming out on Wednesday. That's

December 10th. Then, we have the

inflation report coming out on December

16th, followed by the November jobs

report on December 18th. That's already

a lot. So, we get to know, are we

getting inflation from stuff and from

wages? The answer is probably not yet.

though we're so worried we might see

some tariff inflation coming up. The Fed

basically wants to cut. The only reason

they would be hawkish is this fear that

this tariff inflation is going to come

and prop up inflation which

unfortunately increases the odds of them

making a mistake if the economy is about

to roll off a cliff. Then we got caddies

coming up Jan 9th, Jan 13th and Jan 14th

in order jobs, CPI, PPI. So basically,

while for the last eight weeks, we've

pretty much had no data. In the next

five, we're about to get a crapload of

data. And what we're looking for is, are

we about to fall off the cliff to where

the money printer is about to get yeated

on? And there's a pretty real consensus,

TS Lombard agrees, that if layoffs hit,

then we are going to run the money

printer like never before. Now, people

argue like, "But Kevin, how can they

possibly run the money printer? Debt is

at all-time highs." And that's always

where I like to say, "That's the new

argument." The noob argument is, "But

Kevin, debt is so high, how could they

run the money printer when there's so

much debt in the economy?" It's true.

There is a lot of debt. The government

owes a lot of money. We're at a very

high percentage of GDP. But what matters

is our ability to sustain the debt. See,

usually companies don't go bankrupt and

you actually get hyperinflation, which

you know the Ponzi of paper money will

evaporate at some point for every

country. But the question is really, is

it something we have to worry about now?

And the pro says, well, what is our

capacity [music] for actually paying

this debt? And that answer is right here

on this chart. Back in the mid80s and

the early 90s between the 80 82 and the

91 recession during those three

recessions our outlay or uh percentage

of GDP that went towards interest was

actually substantially higher than where

we sit today which means the capacity

for us to keep paying this debt and keep

the sort of Ponzi going is actually

really high. So, yes, the debt is a

problem and yes, that is leaving the

10-year Treasury yield elevated right

now, but it's not actually what would

lead this economy to collapse in the

near term. There are other issues and

small businesses are a leading indicator

that we might be trending towards

recession. Small business employment is

falling, small medium enterprises are

usually a leading indicator that hey,

there are real problems in the economy.

But there's a flip side to this that if

we look at what's going on in Canada,

Canada's basically had this recessionary

2-year period, especially with a housing

crisis that they've had. They don't have

the benefit of a 30-year fixed rate

mortgage in Canada. But you've had a lot

more of a challenge for Canada to deal

with even Trump's tariffs. But look at

what's happened recently. If you look at

the last 5 months of jobs data in

Canada, it's actually started to form a

Nike swoosh recovery. Now, some people

say, "Oh, but Kevin, that's just

government jobs data." And when we

charted it, we actually saw a decline in

government jobs. Uh, well, we've seen

this increasing growth rate, these right

here, growth rates, uh, in total jobs in

Canada. So, I'm not here to profess that

I know everything about the Canadian

economy. But what I am here to say is

that if the US economy can stick a Nike

swoosh recovery in the labor market, we

could actually go for

>> bullish catalyst.

>> Bullish catalyst for the United States.

But that's the only thing that makes me

bullish on the US economy is that we can

Nike swoosh a labor market recovery.

See, a lot of people say, "Kevin, we

should be bullish because of

deregulation coming." The problem with

deregulation is it takes a very long

time. See, that's where I also like to

say the noob says, "But Kevin, they're

going to deregulate." You know, they're

going to cut for every one regulation

that Trump creates, they're going to cut

four other regulations. That's great and

fantastic marketing, but the pro knows

[music] there's a massive lag between

when you get regulation cuts and when

you get benefits from those regulation

cuts. I like to think about it in

reverse. The benefits of how strong our

economy is today overall. I don't want

to say the economy is is like perfect

today, but why the economy has been so

resilient. You know, we have issues.

Okay, I'm not blind to the issues we

have right now. the K-shaped recovery.

You know, this this is all old news. We

already know that. But one of the

reasons we've been so resilient after

2021 and two and three and four is

because we've actually been propped up

on, you know, a relatively strong

set of regulations that have made

companies more transparent to their

customers, fewer scams and fewer frauds.

When you remove regulation, you can

actually create a bubble that takes

years to form and some of the components

of those bubbles are fraud and it takes

years for those to actually fall. So,

Pro knows that deregulation is is a

delayed bullish catalyst. The other

bullish catalyst that people are really

excited about is that oh well the Fed

will just keep cutting rates. Maybe

that's a foregone conclusion. The noobs

like oh but the Fed's cutting rates. The

pro looks at that and says, "Bro, what's

what's [music] 25 bips here there going

to do to actually support this economy?"

Not much. So,

near-term regulation cuts doesn't really

help us. Near-term 25 basis point cuts

doesn't really help us. It's too slow.

And if we fall off a cliff because the

labor market collapses on these

catalysts that are coming up, then

that's also really bad. So, all those

that appear to be bullish are actually

bearish. And that's why I say the best

thing, hands down, the best catalyst

that could happen for us is that we pull

a Canada with our jobs market is that

the November and December job numbers

and even going into January. So the job

numbers that we're going to get the

first week of February, so February 6th,

these next three jobs reports, if we

could pull off bullish catalysts on

those and actually not fall off a cliff

and not see layoffs skyrocket, best case

scenario

for our recovery. Now look at TS

Lombard. TS Lombard tells us that right

here we are sitting at a recessionary

level of the hiring rate. But in

addition to this recessionary hiring

rate, we are at boom title layoffs. In

other words, layoffs haven't ticked up.

Well, this is old news. We already know

this. But the pro also comes in and

says, "Hey, wait a second. If this is

true, then what happens when all of a

sudden we switch and lay off spike?"

Well, that's when you get instant

recession, right? We know that. That's

old news. Okay, fine. So, what are the

catalysts that could be bearish? Well,

the biggest negative catalyst for this

market in my opinion is Sam Alman. Sam

Alman is the biggest negative for

everything that we're facing right now.

Why? Because I kind of think he's sort

of like the leg. It's not the straw that

breaks the camel's back. I kind of see

Sam Alman as the legs of the actual

camel. That is the only thing really

propping things up right now. See, if

Sam Alman rugs his $1.4 trillion of AI

data center spending, then AI forecast

for spending on Nvidia chips plummet in

Q2 and then that leads to a reduction

investments for OpenAI, which means less

chip sales for AMD in Q3. So then data

centers get hit which is somewhat

already hedged but then private credit

gets hit and if you align that with

stall stalling f stalling stalling or

falling stocks the Japanese carry trade

issue unwinds even faster. It all comes

together in a bad way. So it's not to be

broadly bearish. It's just to say you

need Sam Alman not to die basically for

OpenAI to fall because that would be bad

because those are all the spending

commitments that are propping up the

economy and you want the labor market

staying propped up while at the same

time we're like man is the Fed going to

rugpull us or are they going to print

money? Well, they can't print money

until things fall off a cliff and if

things fall off a cliff it's too late.

Then the Fed proves they're too late. So

you're really in this crappy space where

we're hoping the Fed doesn't hawk too

much. But why are we seeing stocks sort

of vacasillate right now? Well, it's

because of the nervousness that hey, we

got a powee wow and a potential owie

this Wednesday. It's obvious. So

hopefully we get a I mean we're

expecting a cut on Wednesday. We're then

hoping that Powell doesn't hawk and

instead he just says, "Let's focus on

the data. We've got a lot of data data

coming up before the January 28th

meeting." And that's the window that I

think the real pros are looking at. The

real professionals are saying, "Look,

between December 16th

and January 13th, we're going to get two

jobs reports and two CPI reports. If we

don't fall off a cliff there, hopefully

we can stick the soft landing. And yes,

we're going to see through some tariff

inflation. Uh it's only so long before

Trump tariffs hit consumers. We already

know that. We've known that inflation

from tariffs was going to show up about

6 to 12 months after liberation because

companies stock up on inventory. And

then once they run through that

inventory, they have to acquire new

product at higher costs. And when you

acquire a new product at higher cost,

you're going to have to pass on some of

those costs to the extent that you can.

And if you can't, your pricing power

goes down, your stock goes down. If you

can, then consumers face higher costs.

Both are bad. So either EPS goes down or

consumers uh uh, you know, face higher

costs, and we see it show up in consumer

inflation. Both of those aren't good for

the stock market, but we want to see our

way through that. We want to see that

limited. And the best time to see that

is this next five week period of time.

So we're coming into five weeks that

matter. the last eight weeks less so may

way fewer catalysts now at the same time

Donald Trump is pumping stimulus Donald

Trump is pushing for 12 billion of a

farmer bailout that's robbing the

emergency fund over at the USDA to bail

out farmers who have been hurt by the

soybean disaster with China but then

also just broadly tariffs on machinery

which isn't great for farmers at the

same time uh the Saudis in this filing

are partnering with Jared Kushner to try

to bankroll Paramount's acquisition of

Warner Brothers to fight Netflix buying

Warner Brothers. So, it always seems to

show that the Trump administration's

family has their hands in a lot of

what's going on, even in the Paramount

Warner Brothers deal. I mean, it even

goes as far as Carolyn Levit's

apparently nephew getting bond like

being involved

in getting bailed out of prison. Look at

this. Levit's brother, Michael, gets

bonded out at the lowest possible bond

after the Trump administration says that

the individual who got bonded out at the

lowest possible level, uh the the actual

government is like, "Oh, this is a

criminal. They've got a criminal record.

They got arrested by ICE on the the way

to drop off their kid at school. You

know, they're going to get deported."

And then that flips and turns around

with, oh no, that's actually unfair and

untrue, says the Trump administration.

That's that's not true. This is this is

rigged. And so it's kind of interesting

because it shows that a lot of this

economy is a friends and family game.

And so Donald Trump, going back to econ

where we want to be focused on, Donald

Trump has a lot of incentives to keep

Sam Alman propped up because if Sam

Alman doesn't stay propped up, which is

why he's asking for government backs

stops, then the whole sort of moving

camel could collapse. So you actually do

want to watch the friends and family

moves of the Trump administration

because they are the very things that

could temporarily keep things propped up

longer. Again, Sam Alman falls, the

whole thing collapses. There was a piece

in the Wall Street Journal this morning

gapping about the depreciation

schedules. Again, by the way, I want to

note that, you know, a pro, what pros do

when it comes to this talk about

depreciation [music] is we look at, hey,

well, what are the actual depreciation

curves? And there is literally a 2017

Nvidia

V100 chip that is still getting rented

out for 55 cents per GPU hour. That's

incredible. So you have an incredible

money producer still on a chip that is 8

years old. This is uh has comparable

performance to like 3060 chips. The

consumer grade 3060 chips. It's insane.

Oh, look at this. Literally just now. US

to allow Nvidia H200 chip exports to

China. Literally just now, breaking

news. I'm telling you, everything right

now is propped up by the Trump friends

and family benefits. Uh, so that should

shoot Nvidia up right now. Yeah, I got a

fat green candlestick right here on

Nvidia.

Now, whether or not China actually buys

them is, you know, not necessarily a

foregone conclusion. Now, you look at

some of the other reports that are going

on in terms of our uh retail um

investors. For example, the BIS has a

whole piece on how the S&P 500 and gold

are at risk of being in a bubble because

of retail. Basically, how much retail

buying there has been for artificial

intelligence and gold uh and and really

this this trend chasing, but they at

least acknowledge that it's hard to say

that this trend chasing definitely puts

us into a bubble. While it's definitely

speculative, we don't really know when

there's a bubble. And that's kind of a

funny acknowledgement. So the Bureau of

International or the sorry the Bank of

International Settlement put the study

out and they're like, "Hey, we don't we

don't have any tools for actually

identifying when we're really in a

bubble." So the as long as this is why I

say bottom line, as long as we can keep

jobs

doing a Canada or stabilizing over the

next six weeks, we're good. We shouldn't

have to be worried about this pop.

Now, if the AI bubble pops, that's when

we have a problem. It's the AI bubble of

Sam Alman rugging 1.4 trillion leads to

the private credit falling leads to

stocks falling, stocks fall from more

than a dip, retail runs out of money,

leverage blows up, Japanese carry trade

blows up. That's exactly why I sit

midpoint on the bear bull scale right

now, or the bull bear scale is probably

the better way to put it. I'm midpoint.

I'm a five right there in the middle

because there are so many things that

can go right but that labor market is

the one thing to watch for. So this is

where you know when we look at yields

right now 4.18 this sucks on the 10-year

Treasury. It's anti-stimulative mind you

and it's no surprise that we're at shock

level at a 59 uh on on the 102 spread.

But the real question comes down to

these next catalysts. So, expect

nervousness over the next five weeks and

the data will be everything. I would

argue that with a survey of 40,000 jobs

right now on uh the next labor report

coming out next week, as long as we get

something that's positive, we're

probably good.

Sounds crazy to say, but break evens for

the labor market are probably plus or

minus zero right now because of the

deportation movement that we've seen.

That means as long as we have positive

data even though it's a big downtrend

from what we've seen at the beginning of

the year, labor markets could still be

okay and actually gives you sort of a

floor to ramp up off of. And so I'm

optimistic we could pull a Canada here.

And that makes me really excited. That

gives me

>> bullish catalyst. bullish catalyst means

you've got some time left to pick up in

my opinion things like real estate

because it'll take a little longer for

those yields to really fall and yields

come down one of two ways. One very

quickly because you go into a recession,

yields come down which is supportive to

real estate or slowly. I don't mind slow

because it means the economy is holding

up and you still get that slow trend

down in yields but it's going to take a

while. It's going to take some real

time. So anyway, uh somebody here writes

Nvidia. Yeah, exactly. That's so again

this is on the H 200. Now keep in mind

that Nvidia has argued that we uh may

not actually see China buying our chips

and so that is a risk factor because

China is trying to diversify away uh

from American chips. So that's a

near-term risk factor. You know,

initially people are going to go, "Oh my

gosh, this is great. Let's write up

Nvidia's earnings." Fair. But be careful

because if China doesn't buy any, then

it's sort of like, wait a minute. Okay,

now they're trying to really ice us and

prop up their own chips, whether they're

Alibaba's chips or, you know, whatever.

I mean, they've all probably stolen IP

from Nvidia anyway. But I think it's a

really good consolidation of where we

stand right now. the positive catalyst

of deregulation or this AI boom or

whatever carry real risks for next year.

We need [music] to V-shaped recovery. We

need to Nike swoosh like Canada. I'm

optimistic we could pull it off. But

until then, I sit in the middle and I

go, you know what? I'll buy stocks and

I'll go snipe what are good values in

stocks as we've been doing in the alpha

report. Make sure you get that over at

mekevin.com. Uh but I'm certainly not

going to leverage up for it. Anyway,

that gives you my summary of what the

hell is going on in this market. Thanks

so much for watching and we'll see you

in the next one.

>> 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

[music] and YouTuber. Meet Kevin. Always

great to get your take.