Warning: Don't Fall for the Fed Lie.

you know the world sort of changes

gradually of a hard Landing If the Fed

doesn't start cutting rates you know

pretty soon hey everyone me Kevin here

in this video we're going to talk about

how to make hundreds of millions of

dollars by tweeting and manipulating

markets oh scratch the manipulating part

by

tweeting yeah in this video we're going

to talk about the importance of

communication in markets what Bill Amman

just pulled off with his treasury short

and how much money he made and what he

saw and how he did it but we'll also

talk about what the Federal Reserve just

said mostly because we've got to study

the implications of communication now

communication is pretty overrated by

most in fact most believe that markets

are completely dictated by information

that is readily available at the time in

other words if GDP is strong and

unemployment is still strong and

inflation is trending down and Company

earnings are XY Z whatever they might be

it's believed that markets are efficient

that talking about the markets doesn't

actually make a difference what makes a

difference is new data but in this video

you're going to find how absolutely

wrong that idea is and how easy it is to

manipulate markets especially when

you're in a position of power we'll

start with what the Federal Reserve just

did and we'll end with somebody not at

the FED Mr Amman to show you that it's

quite frankly possible for anyone and

quick reminder if you want to catch me

live for the stock market open every day

the market is open join me at the meet

Kevin live Channel we're going to be

doing the live streams there as opposed

to on this channel so make sure to

subscribe to the live Channel first

let's take a look at the Federal Reserve

yesterday yesterday Mr Waller at the

Federal Reserve suggested that we're

encouraged by early signs of moderating

economic activity and that inflation is

trending down that even though it's

still too high we feel increasingly

confident that policy is currently well

positioned to slow and get inflation

back to

2% in fact if we continue to see

inflation Trend down over the next 3 to

five months the FED might start lowering

interest rates and this sort of bullish

talk helped contribute the S&P 500

getting all the way back to basically

its a summer highs look at that this is

the Spy which tracks the S&P 500

basically all the way back to Summer

highs the S&P 500 rallying over

10% this month alone and yesterday's

comments by the FED really starting yet

another risk on rally Bitcoin up Tesla

up mem stocks up GameStop up 10%

followed by another 10% the next morning

this kind of communication

can have a really big impact on how

people feel and the reality is the stock

market is not a place of perfect

information equals perfect pricing in

other words an efficient market

hypothesis instead the stock market is

more or less a graph of human emotions

when we feel most in despair like how we

felt at the end of

2022 when we thought we were about to

get the pvar rug pole and were going

into the depths of a dark recession with

no end in sight for Rising

inflation well the market was at its

lows but of course those lows ended up

being some of the best buying

opportunities Tesla at nearly $100

Nvidia at somewhere in the mid 100s

these were fantastic buying

opportunities those are exactly the

buying opportunities that Warren Buffett

and now the late Charlie Monger God

bless Charlie wer have said they have

said they've been able to make billions

of dollar in profits investing in

markets because of people's

emotion in fact I have a thesis

regarding this sort of emotion that we

tend to see I call it my rubber band

thesis the rubber band thesis which is

something we talked about in the meat

Kevin podcast yesterday is simply this

if you have a group of five stocks and

all of a sudden four of them move

up and let's say the stock that you went

all in on because you thought it was the

next greatest thing and you have the

best fundamental thesis for it your

stock is just that one everybody else

had all the other ones so everybody else

is like hey look our portfolio is

alltime highs your stock is

here it's very tempting for people to

sell the stock here and buy these stocks

because the belief is well we were

taught in school that the market is

efficient and therefore I'm must be

wrong about my thesis because my stock

isn't going up like the other stocks

well my belief is that these stocks are

actually connected by a rubber band so

if you had for example a pole right here

in the middle the more you go up the

easier it is to snatch right back down

and the lower you stay when the entire

bar on average goes up the easier it is

for your stock to snap up to that bar

now of course a lot of folks are going

to hear this and they might think oh but

wait like the FED is part of what the

market needs to price in so the market

is just reacting to a Fed because that

is new information right well maybe and

that's why we're going to talk about

Bill Amman in just a moment but first

it's worth wrapping up the idea that yes

the FED is indeed powerful this came

across the tape just this morning right

around the 7:00 hour California time and

10:00 hour eastern time we had bosk

suggest that the path to 2% inflation

will be bumpy this is very different

from that optimism we got from Waller

yesterday probably a little texy doodle

from Jerome Powell suggesting Hey Hey

listen we rely on tight Financial

conditions and Waller just hit the tape

yesterday loosening Financial conditions

bro you're making it harder for us see

when treasury yields go down and stocks

go up when that happens Financial

conditions go down uh in other words

they become looser the chart of

financial conditions tightness goes down

when you have looser Financial

conditions people might be a little bit

more optimistic at paying a little bit

of a higher price and they might be less

discriminatory in how they're uh

choosing what to pay for and that

potentially could lead to more inflation

so the FED wants to be careful so what

happens no surprise the very next day

Jerome pow must have picked up the phone

and said hey fix the problem Waller

caused so who do we send in Boston bumpy

path to inflation tighter Financial

conditions which we've had are going to

start biting harder and and that is

scary so when we hear that things might

start biting harder what we're actually

doing is suggesting stocks should go

down which then they do stocks going

down tightens Financial conditions even

more it's manipulation is what it is now

it's this fed speak is legal they call

it transparent but let's be clear it is

what it is it's manipulating the market

on a day-to-day basis then of course

Barkin comes out we will in the end have

some kind of slowdown my forecast is

that inflation will come down but

stubbornly and once we get to 2% then we

can have a conversation about changing

the inflation Target which is really

interesting because really there's no

expectation that this target is ever

actually going to get changed at the FED

but I feel like this is a way of bark

and saying well look we we might

consider talking about changing the

target but first we must get to 2% it's

just a way of reiterating that they're

going to 2% to lower rates you'd need to

be confident inflation is heading back

to 2% so of course what happened to the

markets immediately after this well it's

obvious you could see right here is

where the market opened rallied to and

collapse to following right here in that

early 10: a.m. hour the notes from the

FED but again people might say Hey Kevin

Kevin look the FED is part of what the

market has to price in in fact the

Federal Reserve speak was quite timely

look at this treasury yields were

plummeting on the tenure this morning

down to about

4.25 and this is extending the greater

collapse we've seen from 5% of course

after wallers and bostick's discussion

we've seen rates Trend right back up not

a horrible surprise though because we

know the Federal Reserve has accustomed

markets to paying attention to things

that are said well now a market Market

accustomed to the latest opinion from

someone at the FED also turns into a

market that's getting accustomed to the

latest opinion from hedge fund traders

who have made lots of money in the past

and therefore you should pay attention

to them because they're always right

well then people wonder well what came

first the chicken or the egg and the

reason I say that is because amman's had

good bets but he's also had bad bets

which is technically the average

definition of an investor massive losses

on the Herbal Life short sale which have

come to haunt him for a very long period

of time also paper handing Netflix when

he bought Netflix the stock fell 35% he

paper handed it and then the stock

skyrocketed it so we have to take

everything with a grain of salt Bill

Amman was also the person who during the

covid-19 pandemic said oh yeah we're

long stocks but we should shut the

economy down for 30 days to stop the

spread only to find out that he had very

short-term option bets against the

market so even though he may have been

net long the short-term option bets

profit him over a billion dollars by

potentially manipulating the market with

communication so is it possible that

bill Amman is back at it again well I

believe the answer is yes fact nothing's

ever changed take a look at this bill

Amman reveals he's shorting the 30-year

treasury this is back in August

suggesting the 30-year yield could reach

5.5% soon in fact he says it's hard to

imagine how the market absorbs the large

increase of supply of higher rates and

given de globalization higher defense

costs and energy costs and growing

entitlements and growing debt oh my gosh

every potential fear somebody has

treasure yields must go up quick note

some folks have reached out requesting

some additional lectures and content

which is fantastic because I always like

to add more lectures to the programs on

building your wealth including the brand

new gold course which is live now and

what I'm going to do is I'm going to add

those like I always do completely for

free as a result I'm going to just keep

the Cyber Monday sale going for a few

days longer as we get those extra

lectures posted and I'll give everyone a

heads up once those are posted here we

literally see fund managers grouping up

and teaming together to make sure to

remind you that treasury yields are

going to Skyrocket here's a Business

Insider piece Bill Amman Larry thinkink

see US Treasury yields hitting 5% within

literally weeks interest so I would not

be shocked to see you know 30-year rates

well you know well into the you know

through the five barrier uh and you

could see 10 the 10e approach approach

five J and that and that can happen in

the very short term like like literally

we weeks don't mind the short-term

option positions we have betting that

it's going to happen we believe it's

going to happen that could happen in the

very short term like literally weeks

says Mr Amman and then we get the Tweet

thesis of course I've been surprised of

how low long-term us rates have remained

in light of structural changes this is

implying that you wouldn't flip-flop off

of a structural change right because if

you have a structural change

why would you flip-flop off of it after

all it's a structural change so it's

going to last right especially if that's

based on De globalization higher defense

cost energy transitions growing

entitlements which we just heard greater

bargaining power of workers oh the

strikes strike people while they're

fearful about the strikes see it's it's

perfectly perfectly timed uh from a

supply demand perspective we have $32

trillion of debt and large deficits as

far as the I can see when you couple

this with quantitive tightening it's

hard to imagine how the market absorbs

such such a large increase without

materially higher rates okay mind you

this is coming to you from August from

bill lman now this continues you can see

it right here August 2nd 6:06 p.m but

he's not done yet because he's still

pleading his case and I want you to ask

yourself do you think any of the things

he's saying here greater uh worker

bargaining power or uh the structural

change of deglobalization or China uh or

the long-term budget deficits of the

United States are any of those things or

the energy transition are any of those

things going to flip flop and change in

the span of three months four months

probably not right let's keep going with

the thesis though consider China and

other countries desire to financially

decouple from the US oh here we go let's

go into the whole the dollar is going to

collapse narrative as well right so if

long-term inflation is 3% instead of 2%

in history holds then we should see 5.5%

interest rates that's why we are short

the 30-year treasury but it's just as a

hedge folks it's just a hedge see the

best Hedges are the ones you would

invest in anyway even if you didn't need

the Hedge but boys and girls I think we

need the Hedge H wow those are some

serious structural changes those

probably would endend up leading

treasure yields to Skyrocket right well

and that is exactly what they did so

congratulations Bill Amman thanks to the

fear that in part Bill Amman created

treasury yields skyrocketed right around

the early August period to approximately

5% now remember Bill Amman made these

claims as highly structural and unlik

liky to disappear now keep in mind if

you are short treasuries you make money

when this line goes up and Bill Amman

made money as the line went up because

after all he must have correctly seen

massive and true truly impactful

structural changes right because I mean

he was right and you know 5% is just

right here so he must think they're

going to keep going on forever right no

not even he believed that in fact the

very next thing Bill akman did as soon

as we even got close to 5% which means

once again he didn't make it to where he

was suggesting we were going to go Bill

Amman right here closed his short

position on treasuries so by doing this

he took a delicious profit of yes $200

million $200 million making a 2 and 1

half month bet you know the world sort

of changes

gradually by manipulating markets with

communication because obviously the fear

that China and Bricks will take over the

US dollar de globalization worker

pricing power and an energy transition

are structural things that now are no

longer structural and we should actually

bet on treasuries instead because you

know we covered our bond short there's

too much risk to remain short bonds the

economy is slowing more than recent data

suggests so from Full thesis to uh uh JK

forget everything I just

said yeah that is how the market is 100%

not efficient I think there's a a risk

of a hard Landing If the Fed doesn't

start cutting rates you know pretty soon

so you know I think the market expects

sometime middle of next year I think

it's more likely probably as early as q1

so not only is it the fed's communic

but it's the fact that hedge fund

investors can manipulate markets and

quite frankly people as well the good

news is we have some real data that

shows Market expectations of inflation

are the lowest they've been in virtually

all year this is the 5-year Break Even

which is good news it means yes reality

is inflation is probably trending away

markets even though there's volatility

are also pricing in no more rate hikes

in fact the blue line represents cuts

and as you can see we are pricing in up

to five rate Cuts between now and

January

2025 that's four for next year and this

remains true even after the feds speak

earlier today so what do we make of all

of this well I think as an investor you

have to decide are you number one a

Trader uh who likes to use this

information as sort of this breaking

news and this talk to trade the market

and if you do you probably have plenty

of opportunities because markets do move

a lot on people talking which somewhat

proves markets aren't really efficient

certainly not at least in the short term

like Warren Buffett mentions though in

the shortterm the stock market is a

voting machine in the long term it's a

weighing

machine second thing to consider is if

you're a long run investor maybe it

makes sense to be careful of how you get

manipulated by the data or hedge fund

managers uh you're being presented with