The Trump Trade War *JUST* Flipped EVEN WORSE.

It's official. We have just had the

ninth worst week in the S&P 500 since

World War II, only bested by weeks like

those around Black Monday 1987, the

dotcom bubble bursting, the great

financial crisis, COVID, all really bad

times. At the same time, the spread

between the twos and the tens just hit

56. Spoiler alert, that's an early

recession indicator for you. when that

spread between the two rises above 50

into that 50 to 90 range. It's the first

time we have seen it since before CO.

It's the first time we've hit that kind

of spread. It's usually a sign of an

imminent start to a recession. And I

don't want to cause any alarm. That's

just statistically and historically what

has been true. Maybe this time is

different. At the same time, you have

some reports that hedge funds are

offloading quote all or most of their

holdings in stocks as volatility is

pushing them away from the US stock

market. Now, some of that could be

because hedge funds like using margin

and then, you know, if they end up

getting screwed being caught offside,

well, then they lose lots of money and

they lose their jobs or their companies.

But at the same time as this, China is

conducting an 11 billion US dollar

market stabilization activity in China

to help stabilize their stock market

because of the damage this trade war is

causing. So you can see this is starting

to really get intense where people are

really making longerterm decisions based

on the shorter term movements of well

the tariff debuckle. Now that said,

Barclay's just released a piece

suggesting that you should not catch a

falling knife. And not only are we going

to talk about this Barclay's falling

knife piece, but we're also going to

talk about some massive shifts in China.

Because as you remember, when you come

to this channel, I'm going to give you

perspective you're not going to hear

somewhere else. A lot of people on the

internet today are suggesting, "Oh,

China is desperate to make a deal with

us." In this video, you get a little bit

of a different perspective and I'll give

you some evidence as to why I have some

thoughts regarding China as well as this

Barclay's recession piece. But first, I

want to make a quick little mention.

This morning in the course member live

stream when the market opened up, I

mentioned to everybody that I would be

really cautious of the bounce that we're

seeing in markets because I expect it's

going to get faded. I don't think upside

is good. I'll show you the clip in just

a moment. that is I didn't think upside

was good on the day today. I actually

thought that not only was there a

greater chance that stocks would get

faded today, but I actually advocated

for selling call options because the

volatility is so high. I have not seen

the volatility this high in some stock

option premiums in a while. I mean, you

can make like 13 or 14% on some sold

call options for 70 days. That is

phenomenal volatility. I'll show you the

clip in just a moment, but look at this.

If you go look at what happened to the

Q's, we were up over

3% and we ended up fading all the way

down to negative 1.8%. That's almost a

5% move in the NASDAQ 100 intraday. That

is a shocking move. Now, let me go ahead

and play the clip for you. And just

remember, you could be part of what

thousands over 4,000 of you are watching

on a daily basis in our private course

member live streams. You can be part of

it by joining the Meet Kevin membership.

The price is going up on April 15th. If

you lock in your price now, you will not

have any price increase ever. You lock

that price increase in forever. And

anybody who joins after you has to pay a

higher price. It's the way it is. So, go

check it out over at meetke.com. But

here's the clip so you can get a glance.

I don't want you to think like a retail

investor right now. I want you to think

like a money manager who doesn't want to

get sued in the next crash. I want you

to think like an institution uh or a

hedge fund. take the tactical rally and

fade it. Because what has actually

changed in tariffs?

Nothing. What

has psychologically changed? The words

coming out of Bessant's mouth. Now in

pre-market, we've moved up to our next

line set 438. But I don't have anything

for us past this. So I think it's a I

think it's a a hard lift to say, "Oh,

yeah. Okay. Today we got to go calls on

QQQ. Uh you know because a you're going

into no man's land and b you're already

extended up 36. So from a trading point

of view this is a very undesirable call

position now. What I could consider

would be sold options right now. Look

just because that was exactly what ended

up happening does not mean I'm always

right. And I want you to know my goal is

to share perspective with you and with

as much factual information as possible.

I do want to mention that sometimes this

pisses people off. For example, here is

a tweet that I made on July 25th where I

said, "Sorry, Tom Lee. Rotating into

small caps just as recession as

recession risks rise is fully rword, you

know, with some censorship here." Now,

micro to macro says the only thing that

is the rword is actually meet Kevin.

basically saying the Russell 2000 is

doing just fine. Well, since these

tweets, the Russell 2000 is down over

22%. Fundst strat in his fund, in other

words, Tom's fund, has lost over

20% in his fund for his clients that he

charges a large management fee for since

just the election. It's not even a

year-over-year performance. It's since

the election. Now, it's not my fault.

Some people don't position for

protecting themselves when there's

evidence of a recession coming.

Ultimately, that is everybody's own

desiraability and their own moves.

Everybody has to take responsibility for

their own decisions. But I want you as

an investor to consider what Barclays is

telling you in their global macro

thoughts. Don't catch a falling knife

because I understand how desirable it is

to be bullish and to buy the dip. In

fact, I want you to remember that the

whole goal of Wall Street is to get you

to put money in with their fund. That's

Wall Street's

goal. Wall Street does not want you to

sell. Wall Street makes money off of

you, whether the market's going up or

down. And the more bullish you are, the

more people invest with you. So

remember, that is a risk factor. Now,

what is Barclays telling you? Barlays

interestingly has a research piece out

suggesting that we now expect recessions

in both the US and Euro era area. This

by the way comes just as JP Morgan is

convinced we are going to have a

recession this year and JP Morgan says

the Russell 2000 small cap index is

showing indications with a 79% certainty

that we are going into recession. So in

other words small caps say 79% chance of

recession. JP Morgan says yes recession.

And now Barclays is joining the yes

recession camp. Goldman Sachs is at

about a 65% chance of recession. But I

want you to look at some of the

commentary they give because I do think

they give some really good insight here.

They suggest that they do not expect a

really quick walk back on tariffs and

that the president has emphasized

tariffs will be permanent. He feels that

if companies see tariffs as temporary,

they will not move production back to

America. Okay, there's a lot to

unpackage here. And a lot of what there

is to unpackage actually goes into why I

made the claim this morning that we were

probably going to fade. A lot of folks

sometimes they hear me say these things

and they're like, "Wait a minute,

Kevin." Like, "Did you just guess that

the market was going to fade this

morning?" Like, why would you say in

your course member live stream the

market's going to fade? And then crap,

it literally faded by 5% on the cues.

Huge move, by the way. Why would you

make that decision?

The reason I had that opinion was

because what happened yesterday was a

rebranding. Donald Trump is a salesman.

He knows how to market. The problem with

this is what they found is they've

changed the messaging on tariffs to try

to reduce some of the damage of tariffs,

but not the actual intentions. This is a

big mistake in my opinion. See, what's

happening is Howard Lutnik from the

Commerce Department, which many people

are now calling Nutlick because he's a

yes man or Slutnik because he never says

no. These are very inappropriate. You

should not say these things. Lutnik has

actually been replaced by Treasury

Secretary Besson. See, Political has a

piece which appears to be accurate that

Besset flew to Florida to lobby Trump on

tariffs. And basically the article talks

about how Besson is trying to smooth

over the tone of how they're describing

tariffs to the American people and how

they're trying to sell tariffs to

Americans. The problem with this is

Steve Besson himself says that he

expects tariffs to be a melting ice

cube. In other words, it's going to take

a while, but eventually we're going to

use tariffs to negotiate better trade

deals with other countries and bring

jobs back to America. Besson is

convinced that fired federal workers,

imagine this, like imagine DMV workers

doing this. Okay, just as an example,

but fired federal workers will end up

taking jobs in American

factories, right? Because we see that

happening. No, we don't see that

happening. But the point is Bessant's

messaging is, hey, we're going to

negotiate to get that manufacturing done

in America. That sounds positive.

Lutnik's messaging is, "We're not

negotiating with anyone. We want our

tariffs." That sounds blunt and harsh.

All they've done is remarketed,

rebranded how they're talking about the

tariffs. They have not actually changed

the fundamental basis of tariffs. And

so, when I was in the course member live

stream this morning with thousands of

you, I said,

"Listen, I am of the mindset that this

rebranding will end up getting seen.

People will read it like a book and go,

wait, nothing's actually changed. We

haven't made a deal with Vietnam. We

haven't made a deal with Taiwan. We've

had talks. We've had concepts of talk

with these countries, but we don't

actually have deals. If anything, things

are worsening in China. Don't even get

me started on China. We still have to

get through the Barclays recession piece

here. But don't even get me started with

China because that's that's going to be

a big one here in just a moment. But a

lot of this relates like this sounds

very Trumpian what I'm about to show

you. There is a transcript about a

discussion between Gary Cohen and Donald

Trump. Now, I don't know if it's

accurate or if it's true, but let me

just put it this way. It sounds like

Donald Trump. Let me read it to you

because I think it's going to give you a

little bit more color into the mind of

Donald Trump. It says, Gary Cohen, Mr.

President, can I show you this? Cohen

fanned out the pages of data in front of

the president. See, the biggest levers

of jobs, people leaving voluntarily, was

from manufacturing. In other words,

where were people leaving workforces in

America? They were leaving out of

manufacturing. They didn't want

manufacturing jobs. Donald Trump says,

"I don't get it." Cohen tried to

explain. I could sit in the nice office

with air conditioning and a desk, or I

could stand on my feet for 8 hours a

day. Which one do you do for the same

pay? People don't want to stand in front

of a 2,000 degree blast furnace. People

don't want to go into coal mines and get

a black lung for the same dollar or the

equivalent dollar. They choose to do

something else. Customer service, IP

work, legal work, accounting work,

artificial intelligence, development,

doesn't

matter. Trump wasn't buying it. Several

times, Conan asked, "Hey, Mr. President,

why do you have these views?" Trump

replied, "I just do. I've had these

views for 30

years. Gary replies, that doesn't mean

they're right. I had the view for 15

years I could play professional

football. It doesn't mean I was right.

Now, this is really interesting coming

uh from Gary Con. What you find is the

stubbornness of Donald Trump is probably

exactly what's happening in the White

House today. Now, people say, "Oh, come

on. You know, he's a reasonable man.

He's not going to be stubborn. Really, I

don't know about that because even Elon

Musk failed. And Elon Musk is pretty

damn convincing. He's got a pocketbook.

Look at this. Musk made direct appeals

to Trump to reverse sweeping new tariffs

and failed. This, by the way, was before

Liberation Day. I'm not going to bore

you with the entire story. It's obvious

there was a failure. This is why

Starlink and Tesla are begging for

exemptions uh from tariffs on critical

parts. For example, Starlink wants is

begging for exemptions on Chinese

machines so they can continue to

manufacture the Starlink parts or the

satellite parts that they critically

need in their business. You have to

think about it this way.

SpaceX or you know the Starlink

division, they might pay a million

dollars for a machine, let's just say,

but with that machine that they spend a

million dollars on in China, they might

be able to do $10 million of business in

the United States. What's their trade

deficit? That company, what is in that

example, what is their trade deficit

with China? They bought a billion

dollars of machines in China and then

sold $10 million worth of products in

America. Well, technically their trade

deficit with China is $1 million because

China didn't buy any of those star-like

units, but China enabled the selling of

$10 million of revenue or maybe even a

lot more in America through that quote

unquote trade deficit. But Donald Trump

doesn't understand that logic. See,

Donald Trump is of the mindset that a

trade surplus or trade deficit is like a

profit and loss statement. He said it

himself. He said that, hey, what a trade

surplus is is basically like a P&L and I

want to treat it like a P&L. In other

words, I want it to be positive. This is

what he told us yesterday in his press

conference. The problem with that, Mr.

President, is it's not logical. It

doesn't make sense because when you

consider the example I just gave, you

could actually import from China and do

a lot more for the economy or global

growth and have a technical trade

deficit, but still be promoting the

economy in a massive manner. See, Donald

Trump sees a trade deficit as a loss.

The reality is it's not a loss.

And as a result of his opinion that

there's a loss, he's refusing to

negotiate with countries unless they

give him even more than 000. China, the

European Union, and other countries were

all offering trade deals well before

Donald Trump

suggested liberation day, but he

rejected all of those in favor of well

liberation day. And so well, here we

are. And so this is where we go into

this Barclay's piece and we look and we

see Donald Trump feels that if companies

see these tariffs as temporary, they

will not move production back. That's

where we left off on the Barclays piece.

And that's exactly what's happening.

Donald Trump is convinced through a

misconceived notion that we must have a

trade surplus with every country and

we're going to sell them something

whether they like it or

not. This is being considered the

reordering of global trade.

And even countries that have no tariffs

against us, like Singapore, are still

getting blanket tariffs because Donald

Trump wants more than zero zero.

See, we had these positive suggestions

over the last 48 hours that Vietnam

would be a leader in global trade deals.

But White House officials subsequently

cautioned that did not mean the US would

drop tariffs on Vietnam. That there

might still be permanent tariffs against

other countries that do strike deals

with us and deals will actually look

like we're still going to tariff you,

but we want us to do more for you. Well,

what we're really doing here is

rebuilding the entire existing global

trade system. And it's no surprise that

Barclays is now suggesting that the

president is basically toying with a

recession. In fact, if you just go to

the bottom over here for a moment, you

can see Barclays tells you the

following. Barclay says, "We expect the

United States to be in a recession

between Q4 2024 and Q4 2025 all year.

They expect the Euro zone will be in a

recession during that time and they

expect China's growth will not be 5% but

rather it will be 3%. They think global

growth is likely to be near recessionary

levels in the coming quarters. They also

suggest that they like bonds as an

investment. Uh and they tell us that

they think the earnings per share impact

of tariffs and retalatory measures are

likely to be around 10%.

Now, what's interesting is if you just

consider 10% and you take a stock that's

trading for 20 times, 20 times, let's

say $10 of EPS is $200. That's the stock

value. Okay, very simple, the stock

valuation 101. But the problem is it's

not just EPS that gets hit. It's the

valuation multiple. So instead of a 20x,

we might be at a 16x. So now you take

EPS down and you take the multiple down

another four points, right? So, if EPS

instead of

$10 is actually, let's say, $9 and we're

multiplying at $160, that stock is now

$144 instead of $200, which is a 28%

drop. And that's potentially just the

beginning of the story because you could

have compression much more than that.

And EPS declines could be much more

sizable in a recession. Something else

to keep in mind is that the labor market

is holding up and is being cheered by

Donald Trump. But this is yet another

mistake because as we know and I've

beaten this into everyone who watches my

channel's mind, the labor market is the

most lagging indicator of recession

ever. Barclays actually does a great job

here. They indicate that in 2009, let me

see if I can find it. In 2009, the labor

market here has peaked at the end of

2009 at 10%.

But the joblessness rate in September of

2008, right around the time of the

Lehman Brothers collapse, was just 6.1%.

In other words, the shock element that

occurs in an economy doesn't necessarily

align with when you get bad unemployment

numbers. You usually get bad

unemployment numbers after the shock

event. And now that the 102 spread is

over 50, we are ready and primed for a

shock. And that's what's really scary is

we think the tariff event was a shock.

The tariff event just lit the fire of

the filled spilled fuel of the problems

that our economy had going into this.

Right? Donald Trump didn't solely create

the conditions for a rough economy. You

know, we didn't know we were going to

have crazy tariffs like this last July.

We were looking at a weakening labor

market and the fact that this economy is

not going to be resilient in the face of

a bad shock. And so it's no surprise

that now all of a sudden you're seeing

high yield spreads moving 93 basis

points which has only ever happened

during major crises. I mean look at the

spike over here. We're still not at some

of the peaks of some of the other credit

events but credit spreads are finally

expanding. The largest credit spread

expansion in 17 months and this trend is

just beginning. We are just at the

beginning of this credit

event. Don't even look at what's

happening in like the CLO market right

now. the CLLO market, the the

collateralized loan obligation. Uh this

is different from credit default swap

CDOS. The CLLO market uh is is seeing

massive outflows because people don't

want exposure to the loans of

corporations that you know could be

small caps at risk of bankruptcy. I

mean, this makes logical sense, but the

problem is when the valuations of CLOS's

go down, the ability for companies to

get financing goes down because

companies rely on being able to get

debt, access to debt from banks, capital

from banks, but banks want to sell that

debt. Let me let me clear this up. Okay,

so see this cup right here? This is a

pile of

trash. See this wrapper? This is a loan

from a crappy small cap company that's

too overleveraged. Mind you, by the way,

at House Hack, there's a reason why we

have zero bank debt because we are very

conservative because we think the

biggest money is made during

recessionary times. And that's why I

think a lot of people are investing with

us right now. You can go check us out

over at househack.com because we're

probably a really good counteryclical

play and I have control over the

business and I'm really optimistic about

it. But anyway, so here is a pile of

crap or a bundle of crap. We could call

them tanches of craps. Boy, doesn't that

sound familiar? Here is a crappy loan

that is declining in value because the

market is selling these CLLO CLLLOs's

off like crazy. So, a new business comes

along and says, "Hey, I want a loan."

The bank

goes, "Smells like crap. Looks like

crap. We'll just put it in the bundle of

crap and hope it sells. If nobody buys

it, the bank is there like this. Oh,

We're holding all the crap.

Please, somebody buy the crap. And the

more the banks are holding crap that

pops up out of nowhere, the more the

banks are like, "Yeah, sorry, other

business. We don't want to give you

another loan because we're not going to

be able to sell your crap loan because

we're still trying to sell the other

crap loans." And that's when you truly

get to a real credit event where all of

a sudden leverage and credit standards

freeze up and banks aren't lending

anymore. That's when you have a true

collapse. We're not there yet. We're

just starting to see the conditions of

these things propping up. And these are

things that most people don't pay

attention to. I mean, if you look at uh

uh at at the CLLO market, Bloomberg just

today, uh CLO, ETF, Bloomberg had a big

piece on this. Cracks are forming. There

it is. Now, you can look this one up. I

think it's a good one. Cracks are

forming uh in the CLLO market.

Okay. Long and short, it's going to be

harder for businesses and banks to

actually lend crappy, you know, to

crappy businesses because nobody's going

to provide liquidity through the ETFs

anymore. Cracks are forming in CLO

market as ETFs are on a record selling

spree. These are the conditions for a

recession. The the fuel has been

spilled. The fuel was spilled before

Trump came along. Donald Trump just

spilled even more fuel and lit the fire.

Now we're waiting for it to hit the fuel

tank. It's bad. We got to put this fire

out. And maybe the thought is we could

put this fire out with our negotiations

with China. But let's put it this way.

It ain't looking good so far. Now people

have this impression that China is

panicking and that they're going to fold

on, you know, Donald Trump's demands.

I don't see that as much as other people

do. Now, it's possible that I'm wrong.

I'm I'm wrong. Like I said, I, you know,

everybody can be wrong. But I want you

to have my perspective on this because

I'm very concerned about what's

happening with China. China, first of

all, is sounding more capitalist than

I've ever heard them sound in my career.

Which is weird because I think of China

as well, frankly, the Chinese Communist

Party because golly, that's what they

are.

Why are they sounding more capitalist

than us? As Donald Trump is trying to

negotiate a trade deal with China, China

is going to the European Union and

promising close

partnerships. They're not negotiating

with us. They're negotiating with all of

our allies. Japan, South Korea, Europe,

everybody but us. Why? Because China

prepared for this. they started

diversifying their trade to other

countries. Out of all of the countries

and blocks, because the couple of these

are blocks like the EU and the Azian

countries. Uh out of these blocks, the

United States has the largest decline in

trade in 2023,

uh you know, compared to 2022. Now,

obviously, there were, you know, other

fluctuations going on in terms of

deflation in China and also a slowdown

in the Euro zone that had an effect on

this. The United States was in a bit of

a slowdown in 22 but started recovering

in 23, which should actually mean the

United States growth is even more

positive. But it's not. China is

diversifying their exports to other

countries. Why are they doing that?

Because they don't solely want to be

reliant on the United States. So, we've

got the European Union here, which has

more trade than the United States does,

and they're partnering with China. The

European Union obviously led by

countries like Germany. These are

massive economies. Now then you have

Azian over here which would be like

Indonesia, Indonesia, Malaysia, the

Philippines, Singapore, right? Singapore

is like people call Singapore Singapore

Inc. because it's considered so

capitalistic. And what's remarkable is

you have

countries that are more than happy to do

deals with China because it's cheap to

do business with China.

China has faced deflation in

manufacturing which makes it more

inexpensive to produce your product in

China than ever before and you get a

better quality product than ever

before. Fortune estimates that if the

iPhone, the way Carolyn Levit described

it, wants the iPhone to be manufactured

in the United States, if the iPhone were

manufactured in the United States, it

would cost $30,000 to upwards of

$100,000 if we even had the capability

of doing it.

So, China relies on us less than ever

before. But what you should also pay

attention to is China's letter. China

just put together a letter and suggest

that US tariffs interrupt global supply

order, disrupt trade

negotiations, that the United States has

benefited from international trade, yet

now they are selfishly weaponizing

tariffs. that Donald Trump is conducting

economic bullying, and that he is lying

about fairness and reciprocity in order

to pursue an America first agenda, that

the Chinese people value sincerity and

good faith, and they do not provoke

trouble, but they are also not

intimidated by it, that US China

economic relations should be mutually

beneficial and win-win, and

protectionism is dead and there are no

winners in a trade war. That's not some

opinion of an American. It's literally

the article that China wrote. You could

read it. Chinese government's position

on opposing US abuse of tariffs. April

5th. They also tagged Trump at real

Trump on X. So, mind

you, China is pissed. And this is why

they're vowing to fight Donald Trump

because they see Donald Trump is making

the mistake here. Mind you, yeah, China

had tariffs on the United States

beforehand, but trade weighted, they

were 2.2%. 2%. Donald Trump just raised

the tariffs to

104%. That's insane. Now, part of that

is because China came back with a 34%

tariff, raising that 2.2 to to 36. But

you could see the magnitude of Trump

initially, you know, 30xing the tariffs

China has and now roughly 3xing the

tariffs China

has. I don't know if Trump is going to

win against China here. And this is not

being anti-American. I'm just concerned

that we are overplaying our hand. And

when we overplay our hand, we risk an

extended trade war and we risk losing.

And I don't like

losing. I'd rather have really good

cards but not be forced to play them.

Now, the good news is we're starting to

see some incredible sales events. You

know, car car dealers are reporting

massive boosts of sales in March. Uh

Tarp Tent, an outdoor gear company, has

a coupon code literally called tariffs

suck. and their sales surged 25%. Most

of their product comes from China. Apple

reportedly shipped in five plane phones

uh planes uh full of iPhones today to

try to you know extend how long they can

basically go without having to pay

tariffs. Some people are apparently

loading up on deodorant and toothpaste

like it was co Best Buy saw an 8% jump

in sales last month. The best jump since

COVID. Apple stores are super busy as

people think about getting a new

phone. All of these things are

happening.

in anticipation the tariffs might

actually last for quite a

while. Now the US trade representative,

the office of the US trade

representative argues that there are

differences between China and others who

are trying to negotiate and that's

because China indicates that they may

not want to work towards reciprocity.

That's because they don't believe in

Trump's reciprocity. And when they don't

trust somebody they're negotiating with,

well, you end up with problems. You end

up with no deal. You have to be able to

trust your counterparty. otherwise it

becomes really hard to negotiate and I

don't think we've exactly given China a

reason to trust us. So when I say as I

said this morning in the course member

liveream I think markets are going to

fade today and there's a greater chance

of us going down than there is up today.

Puts are more

desirable. Well then all of a sudden we

look at the facts and we go well it

makes sense Kevin why you had that

opinion. You looked at the facts you

presented those facts to course members.

you present it just like I present the

facts on my videos uh broadly here

except you know we do our course member

live stream at market open so it's a

little bit more tradable and then you

know we can put together broad research

and thoughts and more organized videos

uh like

this which remember if you want to be

part of that meet Kevin membership go to

meet kevin.com price goes up April 15th

but what I want you to know is we are in

a

position where things aren't getting

better with tariffs there's the argument

that things are getting better, but so

far we're not seeing things get better.

People are arguing that China is

freaking out. I don't think they are.

People are arguing that the Fed is going

to bail us out. I don't think they are

anytime soon. Got to see the labor

market crap cracking first. Just like

Barkley says, hey,

uh, you know, the labor market is super

lagging. Well, that means the Fed's

probably going to lag and that means

Donald Trump, while he's cheering good

labor numbers, is probably going to miss

the boat and end up causing a deeper,

darker recession than previously thought

possible. Now, people are under this

impression that we're just going to have

a mild recession. Even Barclay suggests

mild recession. My concern is that this

mild recession is actually going to be a

much longer recession. See, you have

country or companies like Shopify now

arguing that hey, you know, we need to

consider using AI uh before we hire

anyone. Okay. Well, this is actually

slightly problematic. Not for the

company Shopify. It's smart for them,

but it's problematic for the economy in

recovering out of a recession. See, look

at this. Before asking for more

headcounted resources, teams must

demonstrate why they cannot get what

they want done using AI. What would this

area look like if autonomous AI agents

were already part of the team? This

question can lead to really fun

discussions and projects. In other

words, Shopify is like, "We're not

hiring anyone until you tell us why you

can't already use AI to cover this."

Well, this all comes at the same time as

Elon Musk through well, in part Kimble

Musk appears to be freaking out a little

bit over the drama that we're seeing

with Peter Navaro. Now, I find this

really interesting because

see Elon Musk being part of the Trump

admin essentially can't really bluntly

call out Donald Trump. He's tried to

talk Donald Trump down on the tariff

ledge and has failed. And so now what's

happening is you're actually seeing

Kimble Musk come out and try to defend

Elon Musk and go anti-tariffs on behalf

of Elon Musk. Now I wonder how much of

that is sort of being conveyed by Elon

uh but then you know to to Kimble and

then all of a sudden Kimble is is sort

of running with the story, right? I

wouldn't be surprised by that. China is

run by very smart people. This is not a

game that should be played by C minus

students like Peter Navaro. A lot of

this slamming of Peter Navaro, by the

way, including Elon Musk calling him the

Rword today, is happening because Peter

Navaro suggests that Elon Musk is a car

assembler, not a car manufacturer, and

that Elon Musk should get his parts from

the United States. Peter is only

partially right here because Teslas are

the most Americanmade vehicle that

exists. Uh even Kelly Blue Book

reiterates that. The problem is Peter

Navaro does have a slight point in that

35% to 45% of components in Teslas are

made in foreign

countries. You know, copper wiring, wire

harnesses, lithium ion faz phosphate

batteries come from China. Okay, those

batteries today are now twice as

expensive. Think about that. If Tesla

needs to put a

$6,000 battery in a car, that battery

now costs $12,000 to import. Well, you

may as well put 4680s in. Oh, but can we

scale 4680s to all the vehicles we're

doing right now?

No. Okay. Well, that's going to take a

while then. And it's more expensive to

use 4680 structural batteries. So, there

goes your margin. The tariffs hurt your

margin

directly. So, that's problematic. So,

now, I mean, think about it. If a uh

$35,000 car that Tesla sells has an 18%

margin with vehicle tax

credits, guess what

18% margin on a $35,000 car is? Take a

look at this right here. Uh see that

right there? 66,300 bucks. Okay. Well,

if a $6,000 battery now cost twice as

much, all your margin's

gone. This is what's problematic.

And it's like, oh, well then do 4680s.

Okay, well those cost twice as much. Oh,

great. You also have no

margin. So, it's a

problem. And unfortunately, it's taking

a lot longer to get through this tariff

negotiation because Trump is digging in

his heels. He wants $350 billion from

the European Union. European Union says,

"Let's go to 0." He says, "No, we want

$350 billion of energy imports so we can

offset this trade surplus," which is

phony math anyway.

Well, what the heck? If it's all based

on phony math and phony logic, why would

the European Union do it if they could

buy cheaper energy somewhere

else? So, unfortunately, what I think

you have are very undesirable uh a very

undesirable investing environment uh

because there's a lot of risk. There's a

risk of true deep dirty recession and we

are getting more and more signals than

ever before. Now, I already thought we

were primed for recession before all of

this, but there was hope that we could

prevent it, right? The slowdown in jobs,

the 27 weeks unemployed, the jolts

ratio, the quid ratio, the yield curve

steepening, all of these factors were

things we were looking at going,

okay, might want to start thinking about

a recession being in the cards.

Okay, Donald Trump has added to those

uncertainties. When we thought that he

would remove from those uncertainties,

we thought tax credits, more more

deregulation, more growth in America, we

got the opposite. We got more problems

layered on at an at an already sensitive

time. So this idea that oh well Kevin

you know your bearish thesis is only

playing out because of Trump's dariffs

or whatever you know like very few

people mention that because most people

who watch me have more brain power than

than that simplicity. But the reality is

the opposite. The conditions were

already there. Donald Trump has just

accelerated those conditions rather than

make them worse. Things aren't binary in

life. They're not sort of like light

switch on or off. There's a lot more to

it. And so this is where I I am

personally

concerned. Now I'm also grateful because

in February we gave $40 million in a

financial advisory fund back to

investors and said we are going into a

bad time. Take this money and be

careful. Don't buy the top of the

market. Be careful. Now one of the

reasons I did that is because I really

wanted to focus and triple down on house

hack. I don't do personalized financial

advice for folks. Uh I don't do fund

management. I've I've experienced Wall

Street. I've experienced broker deals

and everything. And what we're doing is

we're taking all of the knowledge and

all of the experience that we have in

Wall Street and we're applying it to

make House Hack the best Berkshire

Hathaway style company that's starting

with real estate that can be created

over the next hopefully 60 years. That's

my dream. That's my goal. That's my

baby. That's why I'm just basically

shutting everything and focusing only on

house hack because that I think is the

best play going into this insane uh

recessionary environment. Now maybe that

makes me biased, you know, may maybe I'd

be more interested in so consider that

maybe I'd be more interested in buying

the dip today in stocks if I didn't have

this opportunity in house hack. See, I

think I can 100x house hack. I mean,

obviously not a guarantee, but I think I

can 100x that. I have control over it

and I have hope in it. A company like

Tesla, I have hope but I don't have any

control. So that mismatch makes me very

very optimistic about what I could do

with house hack. And that's why I'm

focusing so many of my energies just on

that which I'm really excited about

especially as we go into this cycle

where we're going to be able to deploy

cash in opportune times because of what

we think is going to be probably an

extended and dirty recession. We'll see.

I hope not. Hopefully, we can undo some

of this drama that's going on with the

tariffs because it's making things worse

and not better and this this new spike

in the

210. It's worth remembering this also.

This is just another topic I know people

are going to ask about. A lot of people

are like, "Hey, Kevin, you know, why is

why is TLT

falling? Isn't it supposed to be a

hedge?" TLT is a hedge for recession.

Markets today are pricing in inflation

from tariffs that are staying longer.

But what happens after you stagnate and

go through

stagflation?

Recession. So, it'll come. Yields will

plummet. But what will happen first is

the 2-year yield will plummet. That's

when we get our credit shock. When we

get our credit shock, we fall into a

deep recession. That's when the 10ear

comes rapidly down. And it usually

happens a lot faster than we can even

react to it. Anyway, those are my

thoughts. Thank you so much for

watching. We'll see you in the next

video. Goodbye and good luck. 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 Papra there, financial

analyst and YouTuber. Meet Kevin. Always

great to get your take.