Prepare for a Fed "Level 3" Rug Pull. Danger Ahead.

oh man I hope you got your helmet

because I do because guess what fear has

entered this Market folks on Friday

33 million bearish contracts traded

hands that is the busiest amount of

shorting and busiest day for hedging

that we have seen in America since we

started paying attention to it back in

1992 which happens to be 30 years ago

and I know that quite easily because not

only can I do math 22 minus 92. but I'm

also 30.

now this bearishness is implying

potential

capitulation coming from retail thus far

during this 2022 Market disaster retail

has not been a net seller in this market

for a single day instead retail has been

spending about 1.2 billion dollars per

day buying the dip and generally and

historically we know that the best thing

to do in downdrafts is to buy the dip

because if you miss some of the best

days some say as few as the best three

days of a year you could end up having

subpar returns even though you would be

riding through a lot more pain

potentially in the short term now we

don't know if that'll be true for 2022

there's been a lot of tactical trading

where people have sort of moved down the

slope so to speak that is selling or

waiting and then buying back lower but

even folks like that me included are now

also feeling pain given that we are

potentially now hitting brand new lows

again

and some say it's all because of the FED

in fact some say the FED has this

bizarre notion that because unemployment

is so low that the economy still as Mr

President of the Atlanta fed Bostick

this morning said has positive momentum

so as long as the economy has quote

positive momentum then the economy in

the words of Mr Bostic has quote some

ability to absorb the actions we're

taking in other words the FED feels

righteous in their ability and

opportunity to say hey you know what

yeah we're just going to keep hiking

because obviously everything we throw at

the American economy just to crush it

and Destroy people's wealth isn't

working so uh let's just ramp it up a

little bit then okay you thought level

uh you know level three percent interest

rates was bad so like level one paying

you thought that was bad okay let's

crank you to level two which is like uh

four and a half percent a terminal fed

funds rate and if that ain't gonna cut

it maybe level three will and this is

what some people are starting to fear

which is why we've had such an ugly

market last week and probably already

you know going into this week we'll see

kryptos or red tail already but if they

crank us to level three where they're

like oh yeah you still don't want to you

know lose your job you still spending

money people hmm we'll Crush you

terminal rate to five or six percent now

of course there are many who say that's

exactly what needs to be done to be able

to crush the highest inflation that

we're seeing in 40 years while at the

same time core inflation is still Rising

we are seeing some indications that

inflation is cracking but uh it's making

people on one side very very nervous

that you know what the FED is so far

behind the curve they have to be

aggressive of course then there are an

equal amount of people who say no the

FED is going to drive us into a Great

Depression if they continue to crush the

market the way they are we're talking

about this regularly and we're using

this as an opportunity to do some

fundamental analysis on great companies

and take advantage of essentially abuse

beautiful opportunity in the market to

buy the dip on great companies that were

fundamentally very comfortable in by

doing fundamental analysis every single

day whether it's SAS businesses or it's

amd's incredibly low valuation or it's

businesses that we think are overvalued

and if you want to be part of those live

streams where I go through that make

sure to check out the courses on

building your wealth linked down below

now on AMD it's worth noting that AMD

looks really really sexy right now

versus Nvidia at least based on some of

uh well not only there are multiples but

also the amount of damage that they took

relative to Nvidia who took a

substantially disproportionate share of

damage from the gaming collapse which

since crypto is built into Gaming

revenue was probably more of a crypto

collapse but anyway if you have more

insight onto AMD or Nvidia I'd love to

hear your comments in the comments down

below leave a comment there or join me

in those course member live streams

remember there's a coupon code expiring

this uh Friday on the 30th I think

that's Friday maybe maybe that's

actually actually maybe that's Thursday

whatever the 30th is oh the 30th is

Friday indeed anyway okay so what do we

know we know that the FED is moving

faster we know that they're telling us

they have to move

and there is this legitimate concern

that the Federal Reserve could over the

next few Cycles continue to increase

their hawkishness and that kind of pain

is something that we're going to

continue to feel for the rest of the

year now I'm going to talk Catalyst in

just a moment but I want to talk fed

first because you have to remember that

no matter what happens with short-term

catalysts we're just trying to predict

what the FED is going to do and right

now there's no sign that the FED during

this unprecedented and unique time

saying you know Jerome Powell going as

far as saying that we are in a new era

right now which is kind of

nerve-wracking because it somewhat

implies the FED might just do

unprecedented things right and possibly

it's because they don't know what

they're doing but either way they kind

of feel like they've lost the plot and

so therefore markets are not only

hedging but they're also pricing in this

potential that the FED could actually

bring us to that level three of

tightening which is where we go to a

terminal rate at the Fed Federal Reserve

the FED funds rate of five to six

percent that would just to be very clear

before I talk catalysts here what a

terminal rate of five to six percent

would mean first of all it would

guarantee Us in my opinion this is just

my opinion it would guarantee Us in my

opinion a real estate correction to the

size of a 20 to 30 percent decline

that's a five to six percent terminal

rate right now we're sitting at probably

around four and a half percent and I

still think my goal or I should say my

target of somewhere between a fifteen to

twenty percent real estate decline is

likely if you want to learn more by the

way about catalysts that I look at for

when we're at the bottom Market there's

a completely free video that I'll link

down below that breaks down the Catalyst

that I recommend looking for when you're

trying to time the bottom of the market

I also talk a little bit about my

startup house hack there but you could

also go to househack.com to learn more

but it's a good video for catalysts

alone uh for the real estate market but

anyway if we get to five to six percent

not only are we going to see probably an

additional 10 percent decline in real

estate maybe even 15 additional decline

in real estate up to maybe even a 35

decline we're not going to see something

like 2008 I really don't believe that's

likely because we have substantially

stronger Banks we're not going to see a

financial banking crisis sure well you

know we might see people selling their

homes that a fear that prices are peaked

and they don't want to ride through

another cycle but then again there are a

lot of people who have locked in really

low interest rates which kind of makes

it difficult to say that oh yeah you

should sell because then you might end

up buying something and having a

substantially higher rate in which case

you may have just stayed but not

everybody is in that sort of situation

especially people with multiple

properties they can afford to sell while

still maintaining low rates on the

property that they're living in gee kind

of like what I did but anyway the other

thing to know is if we do get a Fed

terminal fed uh funds rate of five to

six percent the stock market paying is

just the beginning it's really just

beginning we could end up seeing what

Ray dalio looks forward to which is

potentially an additional 20 decline in

the S P 500 if we thought the s p 500

sitting around a 3600 was bad we might

go below 3 000. in fact they're

predicting potentially as low as 2900

that's pretty damaging and pretty

painful so you seriously better get out

of margin and have some pretty dang

Diamond hands if you want to get through

this next cycle in fact that's probably

my biggest recommendation is do whatever

you can to save money build up cash War

chess pay off credit card debt another

debt and be prepared because we're gonna

go through hell and then back now

hopefully when we start going back we go

back quickly so I personally I'm not the

biggest fan of sitting out to the market

I'm just holding on and it is painful

but that's because I don't want to miss

those best days when the FED does

ultimately soften their position and

generally and I've been saying this

since January the time to get back in

oftentimes if you don't want to ride the

whole way through time to get back in

often is when the Federal Reserve

u-turns unless of course you're writing

stocks that you think think will

actually do very well when consumer

demand plummets like a recession in my

opinion obviously a stock like that

would be a company like Tesla or

American Express or end phase problem is

a housing market downturn is going to

take end phase down with it so that

doesn't leave you much but don't worry

we'll keep doing fundamental analysis

every day and hopefully I'll be able to

report some more of my favorites to you

soon although AMD look at my AMD

analysis that was a good one and then

also make sure you look at some of my

another other analysis like my analysis

on pole star anywho so uh now let's talk

Catalyst okay so a big Catalyst that we

have developing right now is obviously

Russia and that is Russia is trying to

recruit one million men now the problem

with this is these would be untrained

people you've got to send them through a

boot camp you've got to train them but

many of the Russian leaders are well

dead the Kremlin is trying to or

potentially considering ceiling borders

and keeping people from fleeing Russia

there are now people literally queuing

up for hours to get into countries like

Kazakhstan and people are Crossing into

Finland at Double the rate that they

have been Crossing into Finland uh so

Russia is going to be a potential

Catalyst here as Putin gets backed into

a corner and well is not only failing

but likely will continue to fail this is

leading some to worry that there's the

potential for any kind of smaller scale

or strategic deployment of a nuclear

weapon which of course the United States

says they will not tolerate but then

again we've heard the United States say

they won't do or like they won't allow

certain things to happen and and then

those things happen anyway like when

chemical weapons were used in Syria but

now again we won't go into any kind of

specific examples of red lines that get

crossed and then we don't do anything on

Tuesday we have a catalyst coming out

for Real Estate which I love looking at

the real estate Catalyst obviously

because whether you're accredited or not

check out househack.com non-accredited

investors who should be able to open

that up to you uh in January the sooner

you get in obviously you're are able to

get more warrants which are kind of like

but they're not free call options just

read the PPM this isn't a solicitation

the PPM is and you can read more about

those those options which are pretty

neat and those expire at the end of each

month so we've got a catalyst for that

coming up but anyway on Tuesday we get

new home sales month over month we're

expecting minus 2.2 percent last month

we had a minus 12.6 percent it'll be

interesting to see if we actually only

get a minus 2.2 percent I think it'll

end up being worse but we'll see we'll

get a home price index which is expected

to be flat that could be because

interest rates over the last uh well I

should say in August didn't really

Skyrocket the way they did in September

so I would expect more pain on next

month's report on this on Wednesday we

do a veil Resorts reporting paychecks

reporting Wednesday very interested for

both of these to see commentary on any

kind of quits and the employment

situation especially since the Federal

Reserve has now highlighted this as a

top priority I'm also looking for

information on inventories from any kind

of companies that we see reporting like

for example on Thursday we're going to

get earnings from Nike inventories are

going to be great here but I also like

to know if we're going to see the start

of the earnings recession with Nike Nike

had annual year-over-year growth of

negative one percent I wouldn't be

surprised to see this negative again and

that would mean we are officially in an

earnings recession at least for Nike

their net earnings were a negative a

five percent last quarter year over year

so we'll see what happens Bed Bath and

Beyond they should be bankrupt but

they're still surviving I would like to

see here not so much declining Revenue

because I think the business sucks I

would like to see here how spend per

basket is changing that means how much

are people spending every time they

check out at Bed Bath and is that number

going down are we seeing any kind of

commentary of people buying cheaper

things versus more premium things I

would expect to see that not only at Bed

Bath but also on Rite Aid which also

reports or at right edit which also

reports on Thursday CarMax reports on

Thursday jobless claims are also

expected to come in at 215 000 on

Thursday this is not a very elevated

number by the way anything really under

300 000 is is

um relatively nominal and that's not to

be insensitive to anybody who's losing

their job but it's it's just a small

number historically uh jobless claims

around 200k aren't that big of a deal

we do get annualized GDP on Thursday

which is expected to come in at negative

point six percent on an annualized level

that would reiterate that we are still

on recessionary times on Friday we get

Carnival we'd like to see capacity

numbers here how much of their cruise

ships are actually booking out and we've

got a huge data dump on Friday Friday's

the 30th we've got quite a few pieces of

information coming out on Friday less so

on earnings but some really important

catalysts I do want to just get these

two out of the way obviously the coupon

code I'm building your wealth with the

courses linked down below expires on

Friday we've got a really really big

transformation coming by the way for the

path to wealth course so whether you're

in that or you're considering joining

that uh the the entire course is getting

a huge huge makeover it was never

originally completed and I apologize for

that but it's getting this huge

transformation and you're if let me just

leave a hint you're better off getting

in before the price goes up on Friday

and we announced these changes for that

program so stay tuned but you're better

off getting in before you won't regret

it and then of course a Thursday or

Friday rather is the end of the month so

if you're interested or considering and

investing in house hack Make sure you

wire your funds before a Friday so that

way you get that maximum 55 warrants if

you're a course member you get an extra

10 now then

Eurozone numbers coming out in terms of

inflation they're expected to come in at

9.7 percent honestly they could come in

at 10 and if it came in at 10

psychologically there would be some

major damage to markets in my opinion

just because a double-digit inflation

read would be quite devastating again

we're expecting 9.7 but we'll see in the

United States we do get pce on Friday

that comes out at 5 30 a.m leave a

comment down below if you think I should

go live on a pce month over month we're

expecting point one percent year over

year we're expecting six percent these

numbers are always lower than CPI core

pce coming in at 4.7 is the expectation

for year over year and month over month

at 0.5 which is not great because the

number of uh core at this is probably

gonna be the most important number a

core read on the month over month that

point five percent is still six percent

annualized and that's terrible that's

perfect reason for the FED to keep

beating us up then as if we didn't have

enough catalysts on on Friday or let

alone this week the University of

Michigan expectations come out these are

going to give us an idea on consumer

sentiment expected to come at 59.5 one

year inflation expectations no

expectation yet for those but for five

to ten year we expect them to remain

stable at 2.8 these expectations have

actually been coming down and I wouldn't

be surprised with a pumbling drone

Powell has been giving us that we should

expect to see these continue to decline

which would be very very good so very

important these earnings coming up pce

University of Michigan consumer

expectations very very important as well

uh and look everything is just going to

point at the Federal Reserve are they

going to continue beating us into the

sand or are they going to give us a

chance here anyway if we continue to get

beaten to the sand well it was nice

knowing you rip if we get through this

and in a year from now we look back and

we're like thank freaking God we

invested in 2022 well

fist bump I'll be there cheering with

you all right folks thanks so much bye