The Great Reset is Canceled.

all right we've got 10 minutes because I

got a plane to catch and I gotta leave

this door in 13 minutes so that'll give

me three minutes to upload this sucker

are you ready let's go we gotta talk

about the economy recession and real

estate all three of these in this video

look we already know some data we

already know that CPI has slowed in

Consumer Price inflation has slowed to

the lowest level in two years we can all

agree on that we could agree that prices

are still high but we can also agree

that in America the Federal Reserve and

the government doesn't care if prices

are high the just care if prices are

rising rapidly which they no longer are

still high though so we're still stuck

paying higher prices we also know that

wholesale prices have cooled more than

ever before in the last 35 months yeah

that's one month shy of three years I

wish I could have said three years and

we also know we just had the biggest one

week slide in treasuries

since March of this year when we had the

banking crisis and we just got banking

earnings where we saw that consumers are

still willing to spend and borrow and

results are way better than expected so

what could go wrong because at the same

time as we're getting this data

recession expectations are actually

being revised Down the Wall Street

Journal just conducted a survey of I

didn't make the number up 69 economists

and what did they find that the same

economists who thought in the prior two

surveys that we had a 61 chance of a

recession now believe that has been

revised it down to a 54 chance of

recession which initially made me a

little bit concerned because we've seen

this image before take a look on screen

now what do you see probability of the

US in recession in the next 12 months

and if you look over here on the right

we can see this skyrocketing of

recession to over 60 percent and then we

level out at 61 percent and we just had

a massive decline now what makes me

nervous is not that we had this

basically guaranteed recession during

covet but look at this we've had this

decline before in 2008 between April and

September of 2008 recession expectations

actually fell they fell from about the

70s to about 60 percent from April to

September of 2008 and that made me

wonder oh my gosh are we potentially

just repeating the same mistakes so

we're thinking oh things are euphoric

again everything's safe after all

consider the.com bubble

we had a 20 rebound of the S P 500 from

bottom up 20 percent

three times before it was over it took

14 years to recover your investment in

some stocks

or just to break even it's scary so is

potentially this time different from

2008 well I guess it not sure is

probably still out on that but what we

can look at is the one thing that

continues to give markets hope and the

one thing that's driving this

expectation

it's jobs which has a lot to do with

real estate as well which is why we're

talking about all of this together

look at jobs data at the same time we

saw recession expectations oddly fall in

2008 zoom in right over here to where

the mouse is on the right in fact we can

just pull this chart all the way to just

2008 let's get that Focus right on 2008

which is now over here in the middle and

what do you notice you actually notice

that jobs data was basically negative

all of 2008. get really inflation or

recession expectations actually fell for

the first nearly two-thirds uh the first

three quarters of 2008

that's bizarre it wasn't actually until

jobs data started recovering that we

really confirmed we were in a recession

this is of course because jobs data is

an extremely lagging indicator and we

could absolutely go negative with jobs

data by this October November and now

end up having a recession by the middle

of next year

the problem is most people seem

convinced that if we have a recession

it's probably going to be relatively

nominal in fact GDP expectations for

2024 are quite positive probably because

homebuilders are building like wild

because there's a massive lack of

inventory leading to a massive

investment in residential fixed

Investments that's a massive component

of GDP and people keep spending GDP for

quarter three of this year is expected

to be 0.6 now so we're not looking at a

recession starting in Q3 especially

since the prior expectation was a

negative point three percent that's been

revised way up almost by an entire

percentage point

then uh what do you have you have one

percent or a point one percent to the

negative expected for the fourth quarter

so you could end up getting a Q4 q1

recession but unless that's combined

with a large lead of jobs loss our

session is probably going to be super

nominal recall we were losing jobs for

almost nine months before we officially

thought we were in a recession when

Lehman Brothers collapsed in September

of 2008. remember this gray bar that

says you're in recession is decided like

two years later like we could be in a

recession now without knowing it

but the data doesn't align with it now

like it did in 2008. who knows maybe

we're still at like a 2006 and that

recession's actually more of a late

2004-2005. who knows but what does it

mean for real estate well it means for

real estate people aren't anxious to

sell their real estate and they're still

buying real estate in fact what we're

going through right now is probably

known as a HELOC boom that is people

have jobs

they not only have jobs but rather than

sell and give up their 2.75 or three or

three and a quarter percent mortgage

that's fixed for 30 years they're taking

out a home equity line of credit soon

we're going to see The Return of rental

property lines of credit again relocks

where you basically take out extra

Equity out of your home and what does

that let you do lets you go buy a

vacation stocks boats cars RVs you name

it it just lets you keep spending as a

consumer now of course all of this makes

us scratch our heads and wonder how is

this not a massive debt bubble and the

reality is it is but that dead bubble

doesn't have to explode now

eventually it will it could explode in

20 years it could explode in 100 years

and our currency will eventually

collapse at some point it could be a

thousand years from now

but current data doesn't suggest it's

now which brings me to my thoughts on

real estate currently

take a look at this

most of us understand that real estate

is inventory based and inventory is

massively low this year look at the 2003

level or sorry 2023 level of inventory

we're at 762 000 homes compare that to

where we were in uh 2022 we had about a

hundred and ten thousand more homes on

the market 2021 we also had about 100

about 90 000 more homes on the market

problem is you started seeing an

inventory Trend up at this point whereas

now you're actually seeing an inventory

Trend down

now what's remarkable about this though

is it's not just nominal inventory that

matters it's actually the month's supply

of homes that matters and this is pretty

remarkable let me catch you up to speed

we already know fact-based most markets

peaked between March and may of 2022. we

hit a low in December of 2022 on prices

not necessarily sentiment or your

opportunity to buy deals

but real estate has been cut recovering

since January so prices have already

started trending back up some areas are

already positive year over year with

home price gains but what's happening

with inventory well first let me give

you an example so you understand the

concept very simple

if you're in a market where there are

100 homes on the market

and 10 homes sell per month

how many months of Supply do you have

well in this example you have 10 months

of supply

okay well what if we change the data and

said all of a sudden inventory fell to

50 homes so inventory fell by 50 percent

and then

you actually now only sold two and a

half homes on average per month I know

we're not selling a half home okay but

on average you're selling about two and

a half homes per month

well now all of a sudden

if you divide these two what do you

actually have you have 20 months of

supply of housing so you can actually

have less inventory

but also significantly less competition

to buy those homes giving you better

opportunities to buy homes and guess

what that is actually showing up as well

we jump over here into the Redfin data

center month supply take a look at this

month's Supply is starting to inflect up

now wait a minute Kevin months Supply

also inflected up in 2021 and 2022 right

yes

but in 2021 or in 2022 inventory was

Rising so obviously Mud Supply is going

to go up if you have stable amounts of

buyers and inventories Rising

but what you actually have here is

inventory is falling but month supply is

going up that means more buyers are

leaving the market

then houses are leaving the market which

actually means this winter could be a

better time to buy real estate

because you have more opportunities this

is what we're watching for our real

estate startup house act we've been

saying for over a year now we plan to

buy in Q3 Q4 and hint we just started Q3

probably September to December is going

to be very juicy we'll see so I don't

think they're going to be a lot of

buyers the people who need to sell are

going to sell and this might be the last

moment we actually have really high

interest rates if 10 year treasury is

peaked now and they slowly start

trending down we can maximize on big

barriers to entry for buyers

and low buyers on the therefore low

buyers on the market even in a low

inventory Market actually have a better

time to buy deals better negotiating

power so

how does all of this potentially break

apart

well the one way all of this falls apart

is if inflation expectations rise that's

the only way this breaks apart people

say Kevin the job layoffs are coming I

don't think so I think most of the job

layoffs of the repositioning already

happened last year and it's really just

a giant rejiggering a re-jiggering is

basically always saying look we over

hired during the pandemic let's lay off

a bunch of people it's much easier to do

that after uh you had uh you know after

you have some economic turmoil because

look if you're Microsoft and you're like

look I'm firing 10 000 people that's

really really politically unpopular and

people will be like why and Microsoft is

like well your performance isn't that

great okay I'm suing you that's bad 10

000 lawsuits would be horrible obviously

ten thousand people wouldn't Sue but hey

if the economy is going into a recession

I mean look at Economist expectations

we're laying off 10 000 people because

of the economy yeah all right

they all get hired somewhere else we

have a rebalanced market those people go

on to continue spending so what is the

one thing that can destroy the market at

this moment

well obviously there's a Black Swan but

we don't aren't aware of a Black Swan

otherwise it would be called a Black

Swan it could be another banking crisis

some form of other collapse I'd like to

hear your comments on what kind of Black

Swan there could be we talk about this

daily in the course member live streams

but you should be joining me in those

make sure to join and use that coupon

code before the 26th when we have a

large expiration so buckle up for that

but no folks it's actually the following

it's five year Break Even inflation

rates you already know this you already

know that as long as this number

continues to stay stable the FED can be

relatively patient the fact that it

started trending up a little bit on the

right is why we got another 25 basis

point hike and I believe that once this

gets down to about 1.6 the Federal

Reserve is going to cut I think it's

very simple but if we get another

runaway like we did over here in January

or February

expect rates to go to six to six and a

half percent

that's what's going to hurt the market

but otherwise

this is this is a market that I find

very difficult to short I find very

difficult arguments to say it is not

the time to look for opportunities and

undervalued stocks

and potentially undervalued real estate

if you can get your hands on some sick

deals

stay tuned I should be able to fundraise

for my real estate a startup within the

next 30 to 45 days we are so so close

I'm just waiting for that SEC approval

now and folks thank you so much for

watching this video I hope you check out

the courses on building your wealth link

down below and we'll see you in the next

one now I want you to know this when it

comes to AI time is what's going to make

you money and if you can prove that

value to an employer you'll always be

able to be employed so this is another

way of making sure that you don't get

replaced but

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