WHY The Stock Market Is *CRASHING* | BULL$H*T

hey everyone meet kevin here the market

is a complete disaster the nasdaq's

basically down five percent the dow is

down over a thousand points everything's

going nuts why well a you've got europe

which we talked about this morning the

bank of england recessionary fears the

recession will come all this kind of

nonsense right but in the united states

you've got this productivity report and

so even though i reported on that this

morning i went through the details

because i'm like wait a minute this just

doesn't make sense why are we so

concerned about this stupid productivity

report in the united states and then i

got to thinking to myself a little bit

wait a minute maybe we shouldn't be

maybe i'm missing something but take a

look at this okay this is very

interesting and no it's not the fact

that there's an expiring coupon code for

may 16th for the programs of building

your wealth linked down below and having

that long-term perspective like what

you're about to learn take a look at

this okay so we're gonna draw this

together so wait a frickin minute here a

productivity report much like a gdp

report is a quarterly report and what's

fascinating about this quarterly report

is that january

february

and march together minus the holidays

that we had had 62 working days

but something that the report spent

absolutely zero time talking about was

the fact that a lot of people took one

to two weeks off in january and early

february because of omicron now we know

omicron oh i roll or whatever and some

people like oh i could get my work done

anyway but wait a second if you're

producing like like let's say you're a

salesperson you're knocking on doors or

you're

creating something at a business like

working on uh you know selling inventory

or whatever because you're a wholesale

managing distributor a distributor or

whatever

it's hard to catch up on that work like

you fall behind and stuff just falls out

of the quarter everything kind of gets

kicked down the road so productivity can

go down when people miss work you know

some people think i i'll catch up on

catch up we generally don't especially

when you're out a week or two like it's

one thing if you're out a day but if

you're out a week or two that's a lot

let's just say the average worker when

we don't know this they don't give us

these stats of course but let's say the

average worker was out five days folks

that is an eight percent decline in

productivity simply because the average

worker was out five working days in q1

and so what's really fascinating about

this report uh and we talked about this

this morning in the course member live

stream and when we brainstorm on this

together in addition to our peg

spreadsheet that we're working on but

this was really fascinating because

we're brainstorming about this when i

first got this report and heard this is

the worst decline in productivity since

1947 i'm like oh my gosh this is sending

a signal that employees just suck that

they're not that they're not working

hard right now right but then i'm like

what happened in q1 ah well duh omicron

and supply chain issues now

fascinatingly though i did ask myself is

this supply related and down here we see

manufacturing sector label labor

productivity in the united states was

actually up 0.7 percent so it wasn't

manufacturing that hurt us it was

non-farm business that basically

represents 75

of the commerce that we transact in the

united states now it doesn't track the

supply chain issues from china so for

example if we have supply chain issues

from china that could show up in

non-farm business because people aren't

able to let's say sell wholesale goods

because they're stuck in china so the

supply chain issues will represent in

non-farm business even though our

manufacturing sector grew in

productivity so now we get a couple

things like we want to put this together

so we have omicron then we have china

and then we have the highest cpi pretty

much we're expecting hopefully is a peak

in march

uh and this high cpi in march

affects productivity take a look at this

okay this is pretty ridiculous you jump

over here

they say this is a this is when we look

at this uh a real output right here

labor productivity negative 7.7 percent

right and then the per unit cost of

labor went up over 11

well what is productivity productivity

is the relationship between real output

and the time involved to make that real

output but real output is actually an

inflation adjusted number

so that means you're going to get a high

number

in a high number of basically cost which

means lower productivity in q1 because

of inflation so personally i hate to say

it but i think that when we combine the

productivity drop of omicron the supply

chain drop of china and already very

high prices which are then reflected in

a decline of real output what do you get

well you get a recipe for a massive drop

in productivity even if workers are

actually working harder and better

and so that's why i think this report is

not necessarily a sign that things are

getting worse it's a dated report it's a

lagging indicator if inflation peaked in

march guess what happens potentially in

q2 productivity skyrockets it's just my

thought i'm not trying to be like the

perma bull here or whatever but when i

looked at the details of this report

let's just say i got a lot less nervous

it doesn't change the fact the market's

selling off today but that's the way the

market works all right folks see you in

the next one bye