wtf is going on | Meet Kevin Report 5 [Jan 10]

Tik Tok May officially be banned this

month today's jobs report has everyone

in the market confused and the Market's

pretty pissed too could Elon musk's Doge

fail and how does Walgreen Skyrock at

27% on the day at the same time as

California fires continue to rage we get

debates about politics arson and how in

the world does California get exposed

for a 117 million gallon Reservoir right

above the Pacific Palisades sitting

empty what is going on must be climate

change or is it on today's meet Kevin

report news that makes you money hey a

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news that happens instead just remember

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which usually has to do with politics

finance a real estate and much more so

if you like that follow along so let's

get started first Doge there are now

claims that Elon Musk knows that Doge or

the department of governmental

efficiency is going to fail I'd like to

clarify that this is really just

twisting what Elon Musk is saying Elon

Musk says that getting $2 trillion of

cuts out of the government would end up

being a goal for Doge but it's a goal

that they know they might end up missing

but Elon musk's best case scenario goal

of $2 trillion of cuts I want to make

sure I said that correctly trillion ion

dollar of cuts uh comes as a way of

saying hey let's aim for the stars or or

as they like to say let's shoot for the

moon and even if we miss we'll end up

amongst the Stars right this is a way of

him saying look if we aim for two

trillion in Cuts maybe we get $1

trillion of cuts and we still see that

as a potential Boon and success Elon

says there's no shortage of being able

to cut from the government expenditures

because quite frankly when people are

spending other people's money it's

really easy to find places to cut so

Elon Musk is really optimistic in Doge

and I don't think he's really claiming

that he thinks doge is going to fail but

that's not stopping critics of Elon

musk's from from saying oh doge is going

to be a big failure I mean frankly let's

see what they can do do I think that uh

government gridlock is going to enable

all of the change that they want to

accomplish no of course not I mean it

was hard enough to get speaker Johnson

you know approved you almost had

Republicans vote against speaker Johnson

and then we would have had a democratic

speaker of the house and that's before

Trump even gets into office so the

margins are razor thin for Congress to

actually authorize certain things this

is where a lot of people hope Donald

Trump can just remove expenses via

executive

action but we'll see so I'm still

positive on Doge and I just want to

clarify I don't think Elon Musk thinks

doge is going to be a failure but he

knows there are challenges up ahead on

macro obviously a big deal today the

jobs report came out now it's worth

looking at some reactions first Goldman

Sachs thinks after this jobs report that

we're only looking at maybe two rate

Cuts this year the first potentially

getting kicked back to June Bank of

America actually thinks rate increases

are no more are now more likely than

rate Cuts JP Morgan only sees two rate

Cuts this year and City Bank thinks the

earliest cut we're going to get is May

right now markets are pricing in for the

first cut in interest rate policy to

come sometime between June and July by

July we get to about a minus 83 basis

point move so we don't actually fully

price in a full cut until September of

2025 with only a 2% chance chance of

actually getting a cut in January and a

25% chance of a cut in March now why is

this happening well it's all happening

because of the jobs report that we got

this morning and I have to tell you the

jobs report was actually really

impressive Goldman Sachs yesterday

thought jobs would come in at 120 to

125,000 I personally thought we would

have gotten something around

expectations around 165,000 mostly

because I didn't think you would start

to see layoffs in December you usually

see them in January Feb March but we

were both wrong we actually got 256,000

jobs which was a four Sigma beat over

the average four standard deviation beat

over the average estimate which kind of

makes you wonder like what's the point

of all these Wall Street estimates but

anyway average hourly earnings matched

and this should be really good news

because as I said yesterday hey if we

get anything close to expectations it's

going to be good because it means we're

not running into a recession like if we

got a minus 100K it'd be recessionary

well we got 256 which is is like the

opposite of recession but it's so far

the opposite of recession and we spent a

lot of time in the course member live

stream about an hour this morning

talking about this and strategies but

this is so far above expectations that

markets actually sold off today uh

because the news is so good that some

people actually think I mean here's the

NASDAQ down you know 1.56% today uh and

uh you know Bitcoin bouncing around 94k

I think even Tesla Tesla was mostly flat

and trading most of the day but

obviously ended slightly red there uh

but the point is these numbers are so

good that people are now concerned the

Federal Reserve is going to talk about

hiking again as inflation potentially

takes hold now the good news here to

sort of offset this is ghoul spe over at

the Federal Reserve I give this guy

respect okay I I actually originally

when he came on the scene everybody's

like Ah that's fool speed who is this

guy right nobody gave this guy any

credit at all uh and to say I mean it

was you know everybody kind of hopped on

the bandwagon there because he was kind

of this newer weird kind of guy who was

like well everything's fine know this is

going to happen and so people thought he

was a little goofy I have to say his

interview on CNBC this morning which we

watched during the course member live

stream as well is actually really good

he says look the speed of cutting is

going to slow and that is going to

affect long rates but we have to pay

attention to the uninverted

because we are normalizing or is

something else going on now this is

really interesting because this is the

first like reasonable fed member that

I'm hearing actually saying there are

two risks here we could actually be

potentially overtightening and then

cause a crash so we have to be careful

not to do that especially in the face of

good data and then Sarah Eisen comes and

goes but what about inflation you know

12-month inflation is up uh and and it's

barely making any progress and look I

respect Sarah a lot but gouby shut her

down hard he goes look Sarah the

beginning of 2024 had a bump in

inflation and the 12-month figures count

that but if you ignore that bump at the

end of last year and look at what's

happened over the last 6 months which is

much more recent data the pce levels are

at just

1.6% with core PC sitting at 2.2% over

the last 6 months which means if we

continue what is happened the last 6

months in the next 6 months those

12-month readings which we're going to

be lapping those higher q1 numbers are

actually going to mean we're below

Target on inflation now I want to be

clear that's kind of a brilliant

analysis because just yesterday we were

talking about how we're going to be

lapping higher inflation from last year

and we'll probably get lower numbers CPI

and PPI come out next week and Bloomberg

intelligence actually thinks that

markets might rally going into CPI and

PPI as people start digesting okay okay

okay no no this is actually good

inflation is down and the economy is

strong thanks to this jobs report

honestly I agree with this I

substantially increased my bare bull

scale today because I'm like wait this

is like this is actually fantastic

because I don't believe that inflation

is going to stick around and I agree

with gouls but I'm grateful that he's

analyzing both sides of the equation

look everybody's going to have a

different opinion on this and obviously

time will tell especially in the face of

tariffs but what he says is there's not

not a lot of evidence right now that the

economy is overheating and the FED has

to be careful that they don't go too far

to the tightening side because what if

the yield curve is actually signaling

something worse to us what if we got was

actually and he used this word what if

what we've been getting is actually

transitory productivity where you had a

2023 and 2024 that was boosted up by

artificial intelligence productivity

that was really just a lot of capex

spending and new investment into this

sort of AI world but what if that starts

fading away and we don't get those

year-over-year gains anymore for

productivity then you're left with

transitory productivity and you

potentially end up having a productivity

either flatlining or crash in 2025 or 6

so this is interesting and I'm actually

grateful to hear these perspectives

because I appreciated his debate with

Sarah Eisen and I appreciate this

perspective that he's aware of the yield

curve either signaling a normalization

or something worse historically the

yield curve doing what it's doing is

really bad but then again this data

today was really good right so it's like

ah this is very confusing uh and as far

as uh productivity growth interesting

perspective now when I look deeper into

the job numbers I couldn't find anything

that was bad you know me look I'm a data

kind of person when the data is bad I

tell you it's bad and then people like

to leave comments like oh you're just

being a bear when the data is good

people leave me comment and then I talk

about how the data is good people like

oh you're a flip-flopper or you're just

a blind bull you just can't win when

you're reporting this stuff but I will

say I looked for something bad in

today's jobs report and either the jobs

report is total BS and it's all going to

get revised away next year or it was

actually pretty good the household

revisions we were looking for no real

change in fact we showed 478,000 uh job

gains in the household report which is

usually noisy but that's way up from the

negative reads we had the last couple uh

reads

the jobs growth was actually pretty well

Diversified too 33,000 in government

education and Healthcare 80 but we also

got 43k in Leisure and Hospitality 28k

in Business and Professional 10K in it

43.9k in

trade this was a diversified good

report so why then is the market falling

well honestly I think it's just drisking

and de grossing by institutions usually

when the market Falls right the market

open as it did right here see this drop

right at the market open to the low of

the day or going into the close look at

this bleed into the cloth it's a sign of

institutional or even fund deg grossing

where people are taking risk off the

table and they're saying look things are

maybe priced to Perfection right now

let's just wait and see now I'm not

encouraging anybody do that I'm really

not making any encouragement at all I'm

just letting you know what I'm observing

is that's probably why we're seeing some

negativity especially since there's been

some risking in debt payoff since the

December 18th flip-flop of the Federal

Reserve because see you've got two camps

at the FED you've got the Jerome POW

Camp who are basically like no man

everything's fine economy is great we

won and then you've got the ghoul spe

that are like not so fast you know there

there could be reasons why we had this

good bump in

2324 will it

last small note somebody got mad at me

yesterday for saying Trump bump because

they thought it refers to a trump

pregnancy bump I don't think they

actually thought I meant that but they

just didn't like the illusion of that or

picturing Donald Trump pregnant okay

this is why are we talking about this

anyway University of Michigan

expectations beat on current conditions

but the onee and the 5 to 10 year

inflation reads all beat at 3.3% it's

not good because it sort of reactivates

this fear that people have that

inflation is going to come

back we'll see uh anyway

Bloomberg calls this situation A lose

lose where they basically say the Donald

Trump small cap trade has now gotten

hosed and a lot of the gains you're

seeing in Donald Trump trades are sort

of fading uh in fact if you go jump over

to the Russell 2000 you could see the

peak here in the summer you could see

the peak that we had post Trump we are

now below both of those Peaks I've been

a big proponent of staying away from

small caps because I see them as

disproportionate risky if we end up

going into a recession anyway uh you've

also got Bloomberg saying that any sign

of growth now which we're hoping to get

really good numbers from Q4 earnings

from tech companies and others any signs

of growth might actually just make the

Federal Reserve more aggressive which

means potentially if you get a Fed that

wants to even talk about or even

remotely think about raising rates again

you actually end up with a 2022 Market

sell-off scenario again versus a

recession induc SM itself it seems like

no matter what the mainstream media is

telling you everything's going to crash

and I'm I'm just starting to get really

skeptical of it all because the numbers

today were good and if they continue

like this it's going to turn into a buy

the dip opportunity I don't know anyway

China's Central Bank has suspended the

purchases of treasuries on Friday uh

citing a shortage of bonds this is

basically a way of them trying to say

hey stop making bond yields go so low

you are screwing up the market and

making everybody think we're going into

a deflationary spiral how dare you this

is really normal interventionism from

China in fact Xin ping was apparently so

pissed at an economist who said that uh

the you know Chinese government is uh

you know misleading people with their

data and the data is probably worse than

uh uh or the data is probably looking a

lot better than what the reality in

China is that person end up getting

censored by uh xiin ping almost directly

uh and the Chinese government is saying

hey look look look everything's fine in

fact y all should stop betting on excess

expectation for monetary stimulus

because everything's fine okay so the

POV of the Chinese government and

Central Bank basically the same thing is

we don't need a stimulate more because

everything's fine our data is good and

the Market's

like you get it anyway uh China's Autos

there was a front page story of this on

the Wall Street Journal I actually don't

think I have handr it doesn't matter

front page story on the Wall Street

Journal this morning they talk about an

elimination round coming for automotive

manufacturers because of an inventory

glut in 2025 and even though demand Rose

5.5% in 2024 demand is far short of what

the capacity is for Autos which means

you could expect uh some more price Wars

for Autos in 2025 and 26 Walgreens

indicated fresh signs of stability with

an earnings per share beat adjusted

earnings per share beat they actually

lost money their adjusted EPS this

adjusted numberers ridiculous came in at

52 cents versus 40 uh 38 cents expected

and keep in mind adjusted EPS numbers

they're usually designed to remove

things that are like one time in nature

so yes sometimes they make sense but

people hear that and then they think the

company's making money I just want to be

very clear the company is losing

money but we will go through some of the

good numbers sales came in greater than

expected 39.4 billion versus 37.3

expected even International and

Healthcare numbers beat slightly which

was good their operating cash flow flow

is negative 140 million but their free

cash flow is actually positive almost a

couple hundred million because they're

selling and liquidating assets and

locations that they have so watch for

that you know usually when companies are

selling their assets to have positive

cash flows because they're out of cash

and quite frankly they kind of are they

do have inventories and receivables

they've got inventories around $10

billion and receivables around $6

billion but they've got AC crude

expenses of $27 billion and less than a

billion of cash another $300 million in

marketable Securities so when you add

all that together they do not have a lot

of

cash to pay for all of the current debts

that they have they have $27 billion due

in the next year and they have less than

18 in the bank if you include

inventories and receivables this is why

they're trying to get bought out by a

private Equity deal but the problem is

the company's got $5.9 billion in

litigation expenses that are acred

payables which aren't something you

could just burn like carvon burn the

bond holders it's it's a lot harder to

do that with litigation expenses that

you owe people or other long-term debts

so TBD how this company is going to claw

its way out of debt but In fairness

their sales did grow 7.4% year-over-year

although their cost of goods sold

increased so their gross profit was flat

which means their margin

compressed Donald Trump was

unconditionally discharged via his

sentence so therefore he is convicted of

fraud but will suffer no jail time or

monetary penalties Donald Trump Trump

commented on him and Obama talking

yesterday and suggesting hey there is a

beautiful service yesterday yes I talked

to Obama and we got along it's worth

noting we just have different

philosophies you know I thought that was

actually a pretty mature thing there of

Donald Trump to say which is a little

different but I thought it was still

kind of funny for what John fedman said

when he came out of the meeting uh at

maralago with Donald Trump first

Democratic cator by the senator by the

way to meet Donald Trump after the

election uh and he says he's meeting

Donald Trump because he's a senator for

all pennsylvanians not just Democrats

big fan of that by the way like that a

lot when he walked out of the meeting

apparently he said that he demanded

Donald Trump make him the pope of

Greenland another news fetman also said

that he would be thrilled to work with

Donald Trump on solving the dreamers

issue these are children who entered the

United States illegally because of the

acts of their parents but then grew up

here and grew up as Americans but never

became

legal Facebook was on The Joe Rogan

podcast to speak about the Biden

Administration and Biden Administration

officials yelling and swearing at

Facebook officials demanding that even

true information or memes be censored

and taken down Zuck said they had to say

no often but as soon as they said no too

often to the Biden Administration quote

all of a sudden all of these agencies of

the government wanted to come after

Facebook and meta and frankly this isn't

a big secret given that what we saw with

the Twitter files revealed exactly this

the government especially the Biden

Administration weaponizing the FBI or

contacts within the White House to get

in touch with larger social media

companies to shape narratives Mark

Zuckerberg says that one of the reasons

Donald Trump won was probably because of

the free flow of information on X

exposing a different perspective to the

narratives that exist otherwise in a

more censored realm now this is not Mark

Zuckerberg saying that it's good for uh

you know people to be able to make

threats or break laws or whatever just

like I don't think it's Mark Zuckerberg

saying we should have censorship I think

Mark Zuck is actually just taking a

pretty reasonable approach here and it

really marks this flip-flop from their

prior stance where previously it seemed

like Mark Zuck was all for sort of

Defending what the Biden Administration

was doing especially with the amount of

money that they've donated to people

like the G uh you know Gavin Newsome's

re-election campaigns or the Biden

Administration and it feels like now now

that all of this is sort of getting

exposed suck is kind of like yeah yeah

yeah I'm on the winning team after all

so like I I kind of still take what Mark

Zuck says with a grain of salt we knew

this stuff was going on and I'm grateful

that he's starting to flip-flop but I

still have some questions about you know

the true motives of this recent yeah

we're going to a community notes uh X

style musk

style POV that they have anyway uh

regarding Tik Tok uh this is going to be

a really interesting one uh Tik Tok okay

the Supreme Court today is hearing oral

arguments about a Tik tok's ban Tik Tok

is expected to be banned this month and

Republicans and Democrats agree that Tik

Tok is a threat to National Security

it's worth noting that every time you

open up Tik tock on your phone unless

you've already given them permissions

the app basically demands it's annoying

like every time can we have access to

your contact can we have access to your

contact s they basically just download

all your contacts and beam them up to

China even though they say they hold the

American data in American based servers

the same data that's supposed to be on

American based servers has been found

through hacks in chinese-based servers

so like copies are being stored in China

there was obviously a lot to talk about

this because there's a balance between

the potential for disinformation

campaigns put together by the Chinese

government the CCP but then also data

Gathering of all of our contacts and

what we're doing and what we're looking

at but then also trying to back bance

people's right to free speech right now

it looks like the court doesn't give a

flying honies about the right to free

speech given that there's so many other

ways to express yourself which does suck

for Tik Tok creators but they argue that

hey look they're collecting too much

information and they could influence our

uh uh Society in in a way that we don't

like and if we ban if we uphold this ban

of Tik Tok then it will force Tik Tok to

divest which basically means sell the

American portion of their business bite

dance owns them so B dance would have to

divest that part China though says we

are going to block the sale of Tik Tok

if the Tik Tok algorithm goes with it to

the American company so they want the

algorithm so this is going to be really

interesting and it probably will set up

a boost to YouTube and meta because they

also have short form content which is

probably exactly why Mark Zuckerberg is

starting to flip-flop in this way

because he's setting up for maybe an

influx of viewers who use Tik Tok who

are like yeah man Zuck is cool now

oh boy all right you ready for the next

part California fires here we

go all right so let's talk a little bit

of History first now 10 people are dead

but which is absolutely terrible but we

got to talk about what's going on with

this stockpiling of water uh California

approved State borrowing in 2014 for

about $75 billion dollar because of

major droughts through proposition one

to build more reservoirs uh that was 10

years ago as of 2021 3 years ago the

Associated Press said that none of these

six plus planned reservoirs had received

any money or started construction now

the largest planned Reservoir would be a

proposed Lake in Northern California

which would be the largest project in

over 40 years and people have been

talking about this project for 50 years

but because of quote shifts in political

priorities it never happened part of

that is because the environmental review

permitting and water rights processes

take so freaking long the completion of

this Reservoir is not expected until at

the earliest 2030 if we even begin

Construction in

2026 this is because in California

people like Jerry Brown who actually

used to be the governor say that man for

every year of construction you want to

do expect three years of planning

permitting and Engineering in California

opponents say oh well you're going to

use too much water on Mixing concrete

and you're going to have to remove old

buildings and relocate cemeteries and we

don't want you to relocate our old stuff

or you're going to mess with our fish

habitats after all climate change is

causing these fire why are you trying to

go around and build more dams well the

reality is California gets or dams or

reservoirs well the reality is

California gets plenty of water the

issue is it all runs off that's because

when we get snow melt on the Sierra

nadaas which then melts off during the

Spring most of that water doesn't get

captured because we don't have the

infrastructure to capture it all we used

to build these projects back in the

1960s through the state Water Project we

approved and built over 10 dams and

California blew up its ability to

actually collect more water back when

our population was half the size of what

it is

today but then people got upset because

salmon and steelhead trout which you

know AR aren't endangered uh and can be

farm raised or raised somewhere else

were slightly having their River

habitats diverted and therefore they

couldn't get to where they nest and

everything paused this is how in the

1970s we got squa which was was a Ronald

Reagan law that essentially allowed

anybody with any beneficial or potential

affected interest from any kind of

project housing Transit infrastructure

drilling solar Farms you name it to be

able to Sue and hold up projects in

litigation until environmental equality

is determined now Newsome says that he's

able to get projects through the red

tape faster through proposals like which

which have been passed like a Senate

Bill 149 which was supposed to limit

these blockages to 270-day challenges

but that's only if they're approved by

the government as a by the governor

actually as a pet project of the

governor so you can imagine only the

Democratic projects get through because

he's a Democratic governor with the

Democratic legislature and now all of a

sudden what nothing ends up getting done

in fact this Reservoir that people want

to build up in uh kaloa County might

begin Construction in

2026 maybe and it'll take 6 years to

build

likely some people hope 2030 but I don't

have hope that that it's actually going

to get done by 2030 so the point is

California really sucks at building when

you need to nobody has the balls to

actually issue an executive order and

build what we need and then solve the

side effects later everybody wants to

stop and litigate every potential side

effect first and then nothing ends up

getting done much like for example the

Santa yanz Reservoir sitting empty above

the Pacific Palisades which could have

fed the D amam hydrants that went dry in

California uh during this fire that's

going on the Pacific Palisades I kid you

not look at this here's the Getty via

and the Pacific Palisades which we're

going to talk about the fade of the

Getty via in just a moment and what it

can actually tell us about climate

change or fire prevention measures

you'll hear about that in just a moment

and you can see this higher in elevation

San YZ Reservoir is right here and it h

it houses 117 million gallons of water

the three tanks that serve the Palisade

hold about 1 million gallons each so

that's you know what 30 times as much

water right up here than those three

tanks combined actually well what do you

got yeah more than that it's almost four

times as many gallons of water up there

uh and that Reservoir is empty yeah the

left laning LA Times just did a whole

expose about how this facility sits

above the hydrant that ranra and it has

been out of service due to a tear in the

cover and nobody has any idea as to when

it's going to be brought back into

service because the politicians just

don't pay attention to it at all so yeah

has there been an empty Reservoir yep

could it have helped mitigate some of

the damage that caused in the Palisades

yep now what do we have to deal with it

as well or I guess instead well the

potential that all of these lost 9,000

single family dwellings and apartments

are going to cause a lot of rent

inflation given that just 24.3 th000

were granted permits in LA county in

2023 and you just lost 9,000 of them

that are already built or we're already

built now they're burned down California

climate change is the big excuse that

people have people say oh well you know

this is climate change uh but the

reality is California has been

experiencing Fires for thousands of

years now yes fires have gotten worse

but there might be a reason they've

gotten worse first though one of the

reasons we know the fires have been

happening here for thousands of years is

because chapparall shrubs like lilacs

and manzanitas in California have

adapted to getting burned down and then

their Roots stay alive they sprout up

again and now there's no competition for

resources and these plants can flourish

they're literally evolutionary

predisposed to fires and surviving

through them kind of crazy but it shows

you that look we've always had fires in

California now people say oh but winds

have gotten worse and that may be true

and certainly temperatures have been

warmer and the periods of time that

things have been drier have been longer

so yeah there is some argument that the

environment certainly has changed over

time but it's hard to say if it's

changing uh more or if that change is

more impactful on Fires or what we're

doing is more impactful on Fires see in

the past fires would Sprout out all of

the time in California but they were

generally smaller fires because they

would burn and then they burn out and

because they were happening all of the

time before you know humans were

inhabiting California you were regularly

doing guess what clearing the dead

plants see Nature by itself was

previously limiting really big fires

because you had natural smaller fires

that burned away that brush that's

sitting dry everywhere so nothing's

really changed except we sto the small

fires when times are not super windy

we're really good at fighting and

putting out those small fires so we put

out the small fires but then when we get

a windy day we get screwed because

nobody's been conducting or we certainly

haven't been conducting as many

controlled Burns to mitigate some of

that leftover dry brush and then a heavy

wind comes through and we get a Mega

catastrophic fire that then Burns lots

of homes with it now yes this is an

argument that managing our land actually

matters in fact if you listen to what

the Getty via said it's pretty

incredible listen to how the Getty via

says they survived they said that they

survived despite the fire coming right

up to their property how because per the

at the gy Via they extensively cleared

brush their tree canopies were kept high

above the grounds any low Ling brush had

been thinned so much to where when some

of these low Ling brush actually caught

fire they said it would just burn up

like Roseberry on the top of pizza and

then put itself out because there was so

little to burn they'd catch fire oh my

gosh fire and they'd burn themselves out

there were small fires like at the

entrance Gates that were put out by fire

extinguishers but otherwise they fought

the fire with limited Water by

conducting preventative measures that

helped save the Getty via Historic

Museum this actually goes to show that

there is a way you can manage the land

now finally the LA Times is in the area

planes are apparently now getting hit by

drones that are floating around which is

not good you have to be careful because

the water capturing drones that exist uh

or sorry the water planes uh they're

called super scoopers that exist in

California uh they uh they fly very very

low a super scooper plane is about a $30

million plane it flies uh it's usually

down to about 100 ft above the Earth to

drop water larger boeings will usually

only get down to about 400t above the

ground uh AGL above ground level uh and

so these get pretty low into that that 0

to 400 range where drones will fly and

this is why generally they don't want

people flying drones in the fire areas

because of these efforts one of these

Canadian planes was damaged in the

process who were helping and now this

plane is grounded which kind of sucks

because you don't want these 30 million

doll vehicles that are actually really

effective to be grounded they can dump

up to 1,400 gallons of water in in a

swoop it's incredible the National Guard

has finally showed up in La meanwhile

Newsome is complaining about

misinformation and disinformation to

Biden via Zoom there are also rumors

circulating unconfirmed right now but

there are rumors circulating that

California at the moment uh is uh um

considering rezoning the Pacific

Palisades to allow for multif family

home construction as opposed to single

family construction this is leading

people to say this was all the plan all

along they wanted to make you know Cal

here look at this it's a crazy video

shot they wanted to burn California down

specifically the Palisades so they could

bring in more low-income

housing now I I I don't I don't think

that's exactly why these fires were

caused but I will agree that there

probably are murmurings about rezoning

because of this and people want to be

able to rebuild their single family

homes but the permit process is probably

going to make all of that massive

hell especially since the insurance

process is probably going to take a hot

minute I should say no pun intended

there anyway when it comes to Insurance

uh State Farm obviously issued uh a

letter to 72,000 policies that they will

not renew in March uh they and and

another underwriter called chub said

that they wouldn't underwrite policies

anymore in California and you have to

say look everybody hates insurance but

the reality is when politicians are

letting reservoirs go dry and hydrants

fail you got to kind of ask if you were

an insurance company would you trust

Nome was doing all that he could be

doing to minimize your risk as an

insurance

company no of course not and then at the

same time California is telling you you

can't raise your prices to try to help

voters not have to pay higher insurance

claims which don't get me wrong nobody

or premiums nobody wants to pay pay

higher insurance premiums but you also

understand that when politicians are

making it more expensive for businesses

to operate the businesses are like this

doesn't make sense in fact the editorial

board of the Wall Street Journal had a

great math claim to this they're like

look it right now cost insurance company

uh insurance companies

$19 in expenses and claims for every $1

they collect in premiums that doesn't

even account for operating expenses they

have to exist so they literally just

light money on fire trying to work in

California California is like n we don't

need to let you know we don't need to

fix our stupid problems in California

let's just come up with the California

fair plan which will be a state-backed

no liability protection fallback

catastrophic insurance plan and that'll

provide property coverage up to $3

million cool except here's the problem

with that there are probably way many

more people on the California fair plan

right now than the fund actually has

money for the fund only has $700 million

in cash which is enough for about 350

homes and we just lost 9,000 structures

now they're not all on the fair plan but

the point is you probably have more than

350 homes in the Palisades you know two

billion $2 million cost to rebuild each

on there but that's okay that's not

going to stop people like Steve Lopez

the same knucklehead that the other day

said it's a compromise to live in

California and you should pay over 50%

in taxes for no water and fire hydrants

and accept the compromise of living in

California with forest fires and

wildfires the reason you should accept

this is because that's just that's just

the price to pay to live in California

well that same clown has struck again

yesterday fires are compromise a

compromise of living in California today

going to Ghana because the mayor of Los

Angeles went to Ghana you know and and

was gone she was Ghana uh while uh the

uh fire started even though we knew the

catastrophic winds were coming has now

written in the LA times today quote

generally speaking I don't have a

problem with the mayor of Los Angeles

traveling the world particularly when

it's about fostering economic and

cultural relationships that can benefit

Los Angeles got it going to Ghana as the

mayor of La helps our culture and our

economy understood thanks Steve Lopez

I'mma plan my trip to Ghana to make sure

I'm doing my part and keeping the

economy up meanwhile I actually sent him

an email

and that email that I sent him is on

screen right now to which Michael Jones

replies

[Laughter]

succinct oh boy okay uh what else do we

have uh then we've got the HOA talks

about arson and there's been you know

there was a lot of talk and there were

videos of an arsonist potentially

getting arrested yesterday but they were

arrested for a different fenel and the

police actually said that they didn't

have enough evidence that he was

actually an arsonist a lot of people

think there are professional arsonists

going around doing all of this which is

possible but we just it's too soon to

tell on this so uh with that said in

yesterday's Daily Wealth email I had a

question for you where are you in your

real estate Journey most importantly

what's next for you if you're a tenant

are you becoming an owner forget about

rates just start smaller it'll make a

great rental property in the future if

you already own a house when are you

buying a second if you own a house in a

rental when are you buying your next I

want you to always be thinking about

wedge deals and getting ahead in your

Investments while at the same time

thinking about yesterday's dad joke and

today's in case yesterday's dad joke

went over your head or below your knees

the answer to yesterday's dad joke was

well let me rephrase yesterday's dad

joke yesterday's job dad joke was I

ordered a chicken and egg on Amazon and

I said I'll let you know the joke is

what came first the chicken or the egg

for today's dad joke did you hear about

the kidnapping at

school he's fine he just woke up