Prepare for a 20% Stock Market Crash - Lies Discovered.

should you be preparing for a 20 market

crash and correction coming by the end

of March that's what we're going to talk

about in this video in addition to our

Bears manipulating data to make things

actually worse than they appear that and

more in this report let's get started

let's mark your calendars for January

30th and the expiration of that coupon

code it's the last expiration so you'll

lock in the best price ever at least for

the next three months guaranteed we've

had quite a few negative pieces of

information come out about the market a

lot of banks suggesting there's reason

not to buy the rally to not get caught

in this idea that oh that's it a peak uh

Peak pain is now behind us and we can

move forward in this stock market rally

probably one of the biggest individuals

screaming this is Mike Wilson from

Morgan Stanley we're going to take a

look at some of his notes but it's not

not just him there are a lot of

companies screaming don't buy the rally

and I'd like to pay a little bit of

attention to exactly what it is they're

saying and observe what the market is

doing in response to bad news I think

one of the easiest ways to look at what

the market is doing in response to bad

news is to look at how companies are

performing following their earnings

reports so we just had Logitech report

earnings and a logitech's earnings

weren't that great Logitech announces uh

the third quarter 2023 results they did

so uh last night Switzerland January

24th and they indicated that sales were

down 22 in US Dollars and they blame the

macro economic environment on this they

say that gaming sales were down 16 in US

Dollars keyboard sales down 22 percent

pointing devices down 14 percent event

video collab sales down 17

and a reflection that consumer

purchasing was concentrated in

promotional weeks throughout the quarter

now we just heard the Verizon CEO say

that people were kind of buying or

spending money in in lumpy periods that

people were still buying but they're

doing so in sort of lumps that's roughly

what Logitech is telling us and it's

also what Macy said that a bulk of the

spending was happening during

promotional periods of time and that can

actually be a sign of some stress from

the consumer that consumers are waiting

until the last absolute minute or last

possible minute to depart with their

cash maybe because cash is becoming a

little bit harder to come by because

either they've been laid off their hours

are getting cut we are seeing hours drop

for hours worked on labor surveys which

which is taking some pressure off of

wages and we're also obviously seeing

the savings right plummet but not only

that the amount of savings that

individuals have in America is now lower

than where we were before the pandemic

so you're seeing that draw down as well

as an increase in deficit spending

taking on debt to spend money to support

a lifestyle or to support spending now

what I thought was remarkable was most

of the damage for Logitech stock was

actually on January 12th when they

pre-guided that some of this pain was to

come the stock fell from about 68 to

about 56. however after the actual

earnings came out the stock barely moved

and if we look back to December or we

look back to some of the lows of last

year even with some of these terrible Q4

earnings you're not seeing companies

fall back to levels that that we had

seen at the end of last year suggesting

that some of the pain that we're looking

at in the stock market may already be

priced in or potentially more pain than

was necessary was priced him way back at

the end of last year now you again do

have a lot of investment analysts saying

be careful the leading data is

overwhelmingly negative and this is

where you have folks like Morgan

Stanley's Mike Wilson suggesting that

the stock market still has a large

correction ahead of it potentially as

high as a 20 correction coming

more uh Morgan Stanley's Mike Wilson

suggests that the s p with a Ford

17.5 times price to earnings multiple is

too optimistic that the s p is basically

pricing in a less hawkish fed it's

pricing in a Goldilocks scenario and

it's not really pricing in an earnings

Miss in fact they suggest that 70 of

exposure for U.S companies is to America

which means even as the dollar weakens

providing some relief for companies with

International exposure most of the S P

500 well 70 percent of its earnings come

from the United States

where the United States is actually the

one potentially lagging more than the

rest of the world this is actually kind

of crazy in fact I joked about this last

year I go wouldn't it be crazy because

everybody's calling for a recession in

Europe and everybody thinks we're going

to get through without a recession in

the United States wouldn't it be crazy

if it's the U.S that goes through a

recession and not Europe and in a weird

way that's kind of how things are

looking right now it's almost as if the

United States is destined for a

recession whereas now you've got Germany

and France saying hey growth's going to

be low Germany just came out with a 0.2

percent estimate but we think we're

going to skate past without a recession

especially as their winter wasn't as

hard as expected and in part this is

leading the emerging markets and

International Community to see their

stocks rally above and beyond that of

the United States

consider that Europe is up about 12

since October lows whereas the United

States is only up about 4.85 percent

since October in fact if you look at the

msci world index and subtract out the

United States the rest of the world is

up 19 to our about five percent so the

rest of the world is actually

substantially more optimistic than the

United States right now which is

basically the opposite of what everyone

was expecting last year that this was an

international problem the United States

would be able to weather this this sort

of inflationary pain more maybe we

printed too much money and that actually

isn't actually going to be true but

anyway uh Mike Wilson here suggests that

the hard data and Survey data all points

to a recession and earnings per share

declines they think that the big pain is

actually going to occur in q1 so this is

a big warning from Mike Wilson and those

are over at Morgan Stanley suggesting

that we have to be careful that the full

reopening in China will not be enough to

help the United States they say that the

S P 500 only has about four percent of

its shares exposed to the United uh or

exposed to China so the Chinese

reopening shouldn't actually show up in

earnings really at all is what they're

suggesting now this is where I think

it's very fascinating something that you

can do is you can go look at your own

stocks let's say for example you're

really interested in pricing power

stocks you could look at your individual

stocks and say oh wow look Nvidia 25

exposure to China that alone is already

five times more than the United States

average exposure to China in the s p

500. AMD is about 25 exposure to China

Taiwan massive Taiwan semiconductors

massive International exposure uh you've

got a Tesla 45 International exposure

Apple

substantially large International

exposure I could show you how to

calculate that as well it's pretty

simple but usually what I like to do is

I like to just go investor relations

throw that into Google type in something

like investor relations and then the

company you're looking for and then when

that investor relations page pops up

grab the last quarterly or an annual

report and generally pretty soon after

the revenue section on the income

statement you actually see a geographic

breakdown which is useful obviously for

understanding what's your exposure to

Emerging Markets you'd be surprised but

a lot of U.S companies actually give you

a lot of international exposure the S P

500 in aggregate doesn't though and this

is where a lot of folks say the biggest

recession might be coming to larger

indices and not individual stocks this

is where we're also seeing a lot of data

pointing to retail buying actively

managed ETFs or individual stocks more

than they're buying uh index-based ETFs

at this point fascinating argument let's

keep looking here at Mike Wilson though

Mike Wilson here suggests that in

January of 2001 forward earnings per

share we're down four and a half percent

from the peak and he actually says that

remember that in January of 2001 we were

about a year eight months into the.com

bubble he actually thinks we're in the

same place today as we were in January

of 2001 and keep in mind the stock

market didn't actually bottom out until

about the end of 2002 early 2003 where

we kind of flat now In fairness and this

is something that Mike Wilson does not

mention today's stock market plummet has

occurred about three times as fast as

the drawdown that we had in 2000 uh to

2003 suggesting that maybe today we

would actually recover three times as

fast who knows but he makes some other

comparisons such as where pmis are and

where the unemployment rate is basically

saying the recession has not been priced

in yet and what ended up happening

between January of 2001 and March of

2001 was a 20 drawdown through the end

of March and a shallow labor cycle

thereafter and monetary policy at the

time was not accommodative enough to

compensate for those deteriorating

fundamentals and he ends up saying that

look five percent rates today by the FED

is going to be very hawkish in the face

of bad news Mike Wilson goes on pretty

heavily here to show all of the bad news

and all of the fear uncertainty and

doubt you could potentially put together

in a report to reiterate why the stock

market rally now is ridiculous now

stock market seems to disagree because

obviously we've had a pretty strong move

over just the last couple weeks but then

again the stock market has a very

short-term mindset whereas data

obviously it tends to represent longer

periods of time although sometimes by

the time we actually get the data

and the data shows that maybe we're in a

recessionary environment sometimes it

actually argues that it could be or we

could actually argue that it could be

the best potential time to actually buy

even if there's more pain ahead look for

example here CEO confidence about the

economy bottomed out over here it's a

little large uh let's do that a little

smaller there we go CEO confidence about

the economy bottomed out at about 2009

which is roughly where the the stock

market bottomed out now it did bottom

out in about 2001 which is not yet where

the stock market bottom and look at

where we sit right now pretty painfully

low if you look at small businesses what

percentage of small businesses think

it's a good time to expand pretty dang

low levels right now kind of like what

we saw in the covid recession and if you

compare that to 2009 you didn't really

get the bottom of small business

expansionary thought until about 2009.

again that was actually buy time so in a

weird way some of Mike Wilson's charts

here even though he's trying to be

bearish about the market in my opinion

you're kind of signaling a screaming but

don't get me wrong but I am that kind of

crazy person and I realize that I feel

like you have to kind of be crazy to to

do what I do and to want to work as much

as I do I don't encourage it for anyone

but what I actually believe and I

wholeheartedly believe this but I

believe that a recession is one of the

best times to expand it's one of the

reasons I've added another course

remember we've got a coupon code

expiring on January 30th for that it's

one of the reasons I bought a plane to

expand my startup and I personally

bought that plane zero dollars have been

charged to my uh to my company uh my

real estate startup for that because I'm

basically what I'm doing is I'm making

this life YOLO thinking this is the time

to build this is the time to launch an

ETF this is the time to launch a startup

this is the time to launch everything

that I can expand my businesses because

nobody else thinks it's time to do so I

love that personally I think the worst

time to do it is here right so anyway uh

that's just my thesis obviously then you

have ISM pmis Manufacturing surveys

obviously plummeting drops in ISM below

50 sending recessionary signals I'm I

mean there are no shortages of charts

pointing down suggesting yes Mike Wilson

you are correct things look painful

inventories are rising Supply chains are

loosening however one of the big

differences that Mike Wilson forgets is

that these charts actually provide a

counter narrative to his fud see a lot

of investors today especially people

like Michael burry argue that wait a

minute folks we gotta take a seat back

here because wait a minute what if the

FED ends up cutting rates because we're

in a recession and then we end up

getting a second wave of inflation well

in my opinion and it's an argument that

I've made before we have a scrunchie of

pent up capable uh Supply right now

rather than being a stretched thin

rubber band we're a little scrunchy of a

rubber band right now where

manufacturing can easily expand and be a

normal rubber band from where we are now

in other words companies have a lot of

excess Supply capabilities on the

sidelines and his own charts argue what

I am saying Supply chains have loosened

yeah no kidding Supply chains are at

some of the loosest levels that we have

seen since the 2009 recession or the.com

bubble that actually in my opinion

counters his own arguments so that

things are bad because in my opinion the

biggest fear that we have now is that

inflation pops back up this suggests no

and so does inventories or so do

inventories Rising because as

inventories rise you get pricing

pressures to the downside which is a

deflationary force a disinflationary

force so I hate to say it but Mike

Wilson has a 41 page basically fud piece

on on the market and these are his

positions he's underweight Tech

underweight discretionaries he's still

old school January 2022 long Health Care

long Staples and long utilities look I

hate to say it but that was the Tactical

trade of 2022. the the best thing you

could have done in 2022 would have been

to move to cash or go Staples that was

the Tactical trade

and the opposite of that tactical trade

was uh well well I should say to

reiterate that tactical trade but just

the other side of that tactical trade

was getting out of discretionary and

getting out of tech

well if inflation goes away and one of

the only reasons we're actually seeing

such a terrible uh a bear Market is

because the FED is inducing a recession

to Stamp Out inflation and if the

inflationary concerns actually go away

and prove that they're gone then maybe

things actually aren't that bad

but bears are really good at only giving

you bad information now don't get me

wrong there are also Bulls who only give

you good information

and I'm probably a little bit biased to

the bull side I do try my best to

provide balanced information but I have

to say I'm a little bit concerned that

we're getting into an environment where

there are actually a lot of analysts who

are trying to manipulate data to the

downside to paint a more bearish picture

than is really happening now I actually

respect this individual on Twitter but I

have a lot of questions for him and I

hope that he could provide a little bit

more answers into what he provided

there's this guy named macro elf who's

basically been a bear since about

February of

2022. uh I followed him a lot when I

originally became very bearish in

January of 2022 and sold my stocks

because I'm like oh look here's another

bear you know because I felt kind of

lonely anyway

he posted something the other day called

the credit impulse chart

now to briefly understand credit impulse

and this is really important because

there's there's a real big concern to

this to understand credit impulse you

have to know that credit impulse is just

a fancy way CI is saying hey how much

debt are people taking out so how much

debt and we'll go ahead and call this

new debt how much new debt are people

taking out as a ratio of GDP so in other

words you're measuring a change right if

this number goes massively negative it

just means people are taking out less

debt as a percentage of GDP and that

could actually be a red flag for the

future of earnings for companies which

actually reiterates what Mike Wilson

says at Morgan Stanley that hey look if

Morgan Stanley and Mike Wilson are huge

Perma Bears right now and they're like

hell's about to come ahead of us and

then all of a sudden the macro elf post

this

for credit impulse the Blue Line

representing G5 credit impulse G5 being

like us China right uh the big five

economies of the world well this is

massively concerning because it shows

credit impulse going from positive say

about three and a half percent to about

negative two and a half percent this is

a massive drawdown in credit impulse

and this looks very very concerning

and so what my team and I actually did

and and again I want to be very very

clear here

we could be wrong

but we have suspicions about this chart

what we did is first thing we said let's

try to replicate the data let's see

where they're getting their data from

and so the first thing we did is we

looked at the United States credit

impulse

charts and we do not see that drop

this chart goes all the way back to

2000. his chart went to about 2014 and

yes we do see some decline but it's

nowhere near what we saw in the pandemic

and when we jump over here we actually

see that his pandemic uh a credit

impulse drop is like right there and

we're like why is there so much

Distortion in his chart showing such a

massive decline in credit impulse

implying basically the world is about to

end why is there such a difference

between his chart and the U.S credit

impulse and then we're like okay well

maybe China's credit impulse as part of

the G5 is really bad and we're like well

here's China going back to 2004 for the

credit impulse chart and yeah it goes up

and down but it's nowhere near as low as

what we've seen in the past

so how all of a sudden are we getting

this massive chart to the downside in

credit impulse from a bear

and this is where we thought to

ourselves

we have to figure out how he built this

data and again we could be wrong about

how we built this data but we have a

theory even though it's not perfect we

have a theory about how a bear is

showing that everything's about to go to

hell in the market and we're a little

bit concerned about the theory

take a look at this this is his tweet

the Tweet here from macroth suggests

that his Global impulse tracker tracks

the real pace of economic money Creation

in inflation-adjusted terms now this

right here is a really critical phrase

he says inflation adjusted terms

so what we did

is we thought okay what if he's taking

this ratio right here and he's

subtracting nominal inflation from it

which means if credit impulse is like

negative point two five percent and

throughout the last 20 years inflation

has been say two percent then everywhere

credit impulses negative 2.5 percent it

would be negative 2.25 right and then

you would just see fluctuations like

from negative 2.25 to negative 2.75 to

maybe positive uh or to negative 1.75

right you would see minor fluctuations

but what would you do if you subtracted

inflation today from this well you'd go

a credit impulse of basically negative

0.25 minus inflation of say seven

percent you'd be a negative seven points

uh two five percent in other words if

you just subtracted inflation from his

credit impulse chart you would basically

get credit impulse that looks like that

because inflation is so historically

high today so that was our Theory we're

like is he subtracting inflation from a

ratio which you should not do you you

should not take inflation off of a ratio

if you want to inflation adjust this you

inflation adjusts the new debt and the

GDP but you do not inflation adjust a

ratio inflation adjustments are made to

pricing power not to ratios okay so we

went with that anyway though and we

rebuilt

his chart uh going all the way back to

the 80s I believe that's the chart I

have here let me double check uh okay we

went back to 2000 because the G5 for

China didn't pull back to the 80s uh but

we do have other charts going back to

the 80s as well and I'll talk about

those so we rebuilt the credit impulse

chart and uh the gray line that you're

about to see is the rebuilt credit

impulse chart over the last 22 years if

you simply subtract inflation from what

credit impulse is doing so I want you to

pay attention to the Gray Line and our

chart's not as pretty as the macro guys

but look at this chart that we've

rebuilt you could see on the right side

The Gray Line plummets because you're

pulling inflation off of it more so than

the plummet you saw during the pandemic

more so than the plummet you saw in the

recession and when we rebuilt this going

back to the 80s we also saw a massive

drop in the 80s because because you're

pulling off inflation off of a ratio

which I don't think you should do so now

we again we don't know if this

individual who's providing this data is

doing so uh you know to purposefully

mislead people that's not what we're

suggesting we're just saying we can't

rebuild this credit impulse plummet the

way he has it his only goes back to 2013

it ignores the recession it ignores the

inflationary time of the 80s and we

think the way they're achieving this

chart is by somehow making some kind of

crazy inflation adjustment on the right

side of the chart which we think is

totally misleading and inappropriate

again maybe maybe we have rebuilt the

charts inappropriately but we cannot

recreate that kind of bearish chart

because seriously when we first saw it

we're like this is terrible that's

horrible so that's why we wanted to

rebuild the data because we're like that

is really a bad leading indicator for

Market

but we can't rebuild the data we're not

getting the same bearish result and so

we think what's happening is the data is

whether intentionally or not being

manipulated to paint a more bearish

picture of the economy than should

actually be painted now moving on to

some other reports don't get me wrong

there are a lot of bad indicators which

I talked about how Morgan Stanley is

bearish I talked about how the uh the

macro elf guy is is providing very

bearish information we looked at

Logitech earnings to just see how

bearish things are right now things are

bad there's also Barclays warning that

hey hey we got to be careful we're

getting a little bit too Goldilocks over

here I'll show it to you look this is uh

this is uh the temporary Goldilocks I

believe that's the headline of this a

temporary Goldilocks a global macro

thought piece and they're basically

saying Europe and China are doing better

than expected better than the United

States U.S data flow has worsened retail

sales are falling sharply in November

December housing starts an industrial

production point to a further slowdown

so don't get me wrong data is looking

bad the question now is just how bad is

it and how much has been priced in

that's the question right now Barclays

interesting note actually thinks that

the X date or one will run out of money

for the debt ceiling is actually closer

to August uh we uh Barclays also says we

think markets will only react a few

weeks before the debt ceiling debate uh

the soft Landing narrative is likely to

carry on for a few weeks but bad data

could actually drive the market lower

this is very similar to what Morgan

Stanley is saying so don't get me wrong

I'm probably outnumbered in how many

bears there are right now there are a

lot of bearish folks here's another one

BNP what do they say they say

fundamentally we do not not believe the

current Goldilocks flow of information

is stable equilibrium if U.S data proves

more resilient and the labor market

remains tight then inflation will not

fall and will remain near the fed's

target without the policy uh well

without policy being kept restricted for

longer something has to give so they're

basically making this argument look the

economy

yeah right now we're getting some data

that's like bad saying inflation's going

to come down but if the labor market

remains tight maybe inflation doesn't go

down the thing is nobody really knows

what's going to happen but I am starting

to see a trend where some people who

have kind of adopted the bearish mindset

are doubling down on being Perma bears

that is even news that's coming out

that's good is starting being

interpreted as bad because that's their

position and a lot of people have a

really hard time flipping their position

it's really hard to say oh things are

changing that's very very difficult and

for some reason in society we seem to be

attracted to people who have the same

position all the time you know like

never use debt there's not a single

circumstance you could use debt or like

never buy a single family home it's

stupid right like it's very hard for

people to make the argument that wait a

minute there could be exceptions to

those rules right it's very hard to say

oh maybe things actually aren't as

bearish as they seem because after all

and this is sort of just just my my

thesis on this my thought is that yes we

have bad data and yes the data is

pointing to a substantial slowdown in

inflation but we have to make sure that

data continues to come in otherwise the

FED has to stay strong and tighten

through a recession which truly would be

bad fortunately so far leading

indicators are suggesting inflation will

continue its plummet now we just have to

prove that it will continue to plummet

to the FED I highly expect that but that

is the weak bull thesis the bull thesis

falls apart as soon as inflation shoots

back up

we could though and this is something

that I think a lot of bears are not

considering

the FED does not have to destroy the

labor market think about that for a

moment this is something that a lot of

bears are not considering right now the

FED does not have to kill the labor

market the FED thinks that the

unemployment rate is going to rise to

four and a half percent that's what they

believe from where we sit now at about

3.5 percent they think the unemployment

rate is going to get to four and a half

percent in order for them or have to get

to that level in order for them to get

inflation down but let me make an

extreme example here just to show you

how this doesn't have to be true let's

go extreme let's say starting next month

inflation comes in negative okay and we

don't actually think that but let's just

say the month over month data is

negative and you know what let's be

extreme the year-over-year data is a

negative and let's say for the next

three months it's all negative and it

continues negative thereafter in other

words comparing to 2022 everything is

less expensive

well at some point the Federal Reserve

will find that this

fall in inflation is consistent and

persistent enough that they can reduce

rates and if the unemployment rate has

gone up to say 3.7 percent and job

openings have reduced a little bit but

the unemployment rate hasn't gone up to

four and a half percent the FED does not

actually have to continue forcing people

to lose their jobs in order to get

inflation down because remember the Dual

Mandate of the fed the Dual Mandate of

the FED is stable prices and Max

employment well if prices are actually

unstable to the downside

and jobs are going up then they're

failing at both ends of their mandate so

then they have to cut rates and

stabilize the unemployment rate from

going up and actually kill this idea and

prevent that this is just an extreme

example to prove that the FED does not

have to continue to Hawk until

unemployment skyrockets they just have

to honk until inflation is down and

stably down that's it and then they can

U-turn and remember the big thing that I

think a lot of folks forget is the Fed

has an easy out to maintain and restore

their credibility all they have to do is

say hey look inflation right now is

sitting at about three percent that's

consistent with our two percent average

that's all they have to do through the

policy we adopted in 2019 called fate

flexible average inflation targeting and

then guess what game over all of a

sudden people like damn they pulled a

rabbit out of the hat that we weren't

expecting and by I've been screaming

about this for quite a while now that

they're probably gonna end up pulling

out that average argument to stabilize

markets and and ultimately fight off the

recessionary Dynamics that we're going

through but again I want to be very very

clear my criticisms of some of the Bears

are not to say they are wrong I'm not

here to say I could tell you the stock

market for sure is not going to fall 20

in March I just personally think what

we're seeing right now is consistent

with getting inflation down and things

could end up a lot better than has

potentially already been priced in and I

solely believe that because of what in

terms of price being priced in I believe

that because what I'm seeing in earnings

Taiwan semiconductors provides bad news

guess what stocks up like 50 since that

bad news Nvidia provides terrible news

on forecasts guess what stocks up

substantially uh Samsung reports like a

69 drop in Revenue guess what stocks up

substantially la Logitech similar thing

nowhere even close to the bottom we saw

last year suggesting in my opinion that

for earnings coming up especially you've

got like Microsoft and Tesla coming up

yeah the numbers are probably going to

be bad but possibly not as bad as

expected and that's actually quite

bullish so pretty remarkable situation

going on in markets that's also pretty

remarkable that that coupon code expires

in 30 days or sorry in Six Days on the

30th and you get lifetime access to all

those programs on building your wealth

and the course member live stream that

we do after the pre-market live stream

Callum I don't want to start with that I

want to start with this this from BMP

paraba in the last 24 hours I'll read

the quote out for you and I'll get you a

view on it self Landing has been the

catchphrase for still young 23 but we

think it will go out the window in the

same fashion as transitory inflation did

in 2022. that line right there do you

agree

it's what we just read I think there are

risks to this scenario I think the

dangers in markets we start pricing in I

would call it La La Land which is we

have two risks to worry about there's

the huge Global energy price shock which

so far actually at least in Europe and

the US doesn't seem to be playing out

quite as aggressively as markets might

have thought say six months ago but then

there's the reaction to that which is

tight Financial conditions from central

banks remember this energy shock hit

tight labor markets and tight product

markets coming out of covid and

triggered these second round effects and

so the danger here is that we think all

right I think we've got enough honestly

of the fun but uh like this is basically

what we were just reading it's maybe

they're watching our stream and they're

like Kevin's talking about about the

bearish reports let's put those up as

well okay no I'm just patting myself on

the back here