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I'm worried this is just going to sound Doomer and gloomer again so I really don't want to make this video I'm really depressed uh but um it's I I I I don't feel good right now both uh about the economy uh which I think is about to go down the pooper and literally what just went down the pooper at 4:00 a.m.
yesterday let's just say I got really sick because I had way too much caffeine I told myself that I'm going to get into this routine where I could stay up all night long and I'll finally have my sleep schedule fixed because I'll just go to sleep at the appropriate time but then end with caffeine poisoning again and let's just say it it's not pretty this is the problem with trying to do a meet Kavin report video in the morning before your 5:25 a.m.
live stream and then you actually have to put the news together uh for it uh it's um that that was challenging let's just say it didn't work out well and so this morning I screwed up and uh after being sick I didn't wake up on time and I feel terrible about that it's entirely my fault maybe I can finally figure out how to get this sleep schedule right over this weekend but let's just say there's nothing worse than feeling like you got uh a a this this collapsed uh sleep schedule as you're trying to do more uh at the same time as uh feeling like you really just want to go out there and go on a run and work out but you got too much going on okay with all that complaining and pardon the French bitching uh out of the way let's get into this this economy that we're in I'm really concerned the consumer sentiment numbers this morning are really just sort of like icing on the concern cake but we started with weak consumer sentiment data really with Etsy that's when I really started panicking a little bit because I saw the Etsy numbers and I'm like wait a minute and this is Etsy okay like what do I buy on Etsy buy you know a RuneScape Dragon medium Helmet or a RuneScape crossbow or there's a long sword right here or you know stuff like this a dragon dagger okay poison tipped poison tip dragon dagger kind of like how I felt yesterday like somebody stabbed me right in the kidney and just poisoned the snot out of me but the reality is uh Etsy I think is a canary in the coal mine and I'm really concerned about that see Etsy gave us a really big heads up about what might end up happening with the consumer sentiment data this morning and I hate to say it which obviously we'll go through that but I hate to say this but I think people have forgotten that as much as it's fun that GDP can be built up by the military-industrial complexes and military spending Biden bucks or artificial intelligence infrastructure spending when those things go away I'm really concerned that things are just going to get substantially worse why well because the consumer makes up 70% of the economy I think we've forgotten that we're not like China where the consumer makes up less than half of that in terms of their economy and their econom is in the Poopers too that's mostly driven by the fraud of the real estate bubble that they created but I mean consider this for a moment in case you haven't seen it I'll just give you a quick run through here okay Etsy in their earnings call I thought all right look there's Stock's been declining forever maybe just maybe they'll give us some kind of hope that the pain is about to be over you know it's kind of like the solar folks you had uh what was it sunron or whatever that told us hey you know we're confident q1 is the bottom things are finally going to get better great that's great that's for people who actually have money to invest in solar systems and batteries that cost you you know 50 to 70 grand and you're willing to finance them at seven and a half to 8% which is like you may as well just pay the utility at that point but whatever so this is etsy's stock and as you could see it boomed during the pandemic duh that's obvious but it's literally been dragging along like the Titanic's anchor at the bottom of the ocean quite frankly since the middle of 22 so we're coming up on two years here of some of the worst price action ever for Etsy and it just feels like it's about to get even worse than this like even worse we might frankly in my opinion go down another 50% down to basically the depths of what we had during Co except after covid everybody was locked in at home so everybody's buying crap on etsc that they didn't need and boom we get this you know euphoric run in the stock now look we're going to go beyond Etsy in a moment don't worry we're going to go beyond Etsy I promise but look at this for a moment I'm thinking they'll tell us something about a bottom right because everybody keeps talking about hey hey hey the consumer is so resilient don't worry the consumer keeps spending okay that's fine the consumer can continue to be resilient but you know what I hate is when every company tells me the consumer continues to be resilient and then some of them start going I don't know man we're starting to see the canary and the coal mine because that spreads like cancer to other Industries rapidly that is what concerns me and so look at this closely these headwinds are real and they do not appear to be abating consumer wallets remain squeezed duh did you hear about the bnpl stuff let me write this in bnpl look at the bnpl crisis ready for this so there's this article Bloomberg put together from a Harris poll on Phantom debt and it suggested that uh basically 43% of those who owe money to bnpl were behind on payments and of those households with over 00,000 of annual income 42% were delinquent according to the survey so one of the problems with bnpl is that many of these don't show up on consumer reports like your credit report or otherwise they're just sort of like little installment reports like paying for or whatever but people are now bming their rent they are groceries the consumer is really like screwed the bottom 50% is absolutely whacked I mean we just had uh I think it was gunlock and also um uh Barry Stern say the same thing yeah here's Barry Barry told us we're starting to see the weakness in the consumer he shouts out Starbucks McDonald's warnings on credit cards he says 50 to 60% of Americans are out of savings the penny pinching is coming coming Barry Stern says now of course he says we're temporarily propped up by migrants taking jobs that Americans don't want uh and even though obviously we have an undocumented immigration problem it's better that people have jobs than not have jobs and basically be on welfare here which I suppose is a good point but uh he's also got this really big concern that the US debt is so large the fed's going to be forced to cut rates not because inflation is coming down no inflation could actually be worse but rather because you're going to start seeing one to two Regional Banks fail uh every single week maybe as much as one per day as these cracks continue to develop now maybe Barry's just being a bear maybe he should change his name to Bear Stern Lake instead of Barry Stern Lake okay that's that's a stupid joke but it's it's serious from the point of view of we're starting to get a lot of smart money that's saying hey cracks are coming Barry Stern says the Cs are coming consumers are out of money and we're seeing that at a canary in the coal mine the it's Lally Etsy in my opinion is literally the discretionary of discretionary like I think you kind of go from like discretionary which is like I need a 3D printed dragon dagger with a poison tip that way I could go look at my cool 3D printed poison dagger tip from RuneScape uh and then I could write it off because it obviously muted into this video just like everything else in this room C IRS okay so there's like the discretionary of discretion then there's like discretion which is like am I going to buy my kid a new Lego set and then there's like the subscription discretion do I really need Hulu Netflix Disney plus and a newspaper subscription right and so this is and then you get into like the discretion of like do I really need the Starbucks or am I going to go buy it at home and am I going to use the old mugs that I have or am I going to go to GameStop and buy you know the Pokemon mugs also right off um Etsy is the canary in the coold mine and I was really expecting them to tell us that there was some form of optimism coming see look at what we had in this meet Kevin uh post that we did in February okay I want you to see this so the last time we had earnings because this will show you a change over time does anybody ever remember writing five paragraph essays in school and they wanted to do like change over time essays in AP like a push anyway change over time okay what's the change over time look at this uh plenty of cash to cover short-term obligations sees etc's modest active buyer growth in the US and strong for international and they're expecting volumes to decline low single digits year-over-year okay so the growth is going away fine but now the headwinds or or like that that you know some pickup in some of those buyers that's gone now it's turned into consumer wallets remain squeezed the headwinds are real consumer sentiment remains distressed the international market that was growing has turned into macro is quite challenging especially in the UK and Germany consumers feel pressured they're seeking value and discounts and China is providing that our sellers have no pricing power even regular Spenders are spending less yeah I mean you could see all the screenshots here okay it's it's bad it's very bad and and so maybe Etsy just sucks you know maybe maybe that's it maybe etsy's just trash and it's over but then we need to also look at Starbucks which okay maybe they're getting beat up because of China but then maybe we should also start thinking that if we keep making excuses on the consumer then we might end up getting blindsided and I don't want to get blindsided McDonald's for example let's just put it this way they're now announcing a $5 meal deal I feel like they used to have a dollar menu now it's the $5 meal deal and the $5 meal deal is a an effort for McDonald's to quote lure the consumer back in other words the consumer is gone comp sales in Q2 so far are quote roughly flat this isn't good people were cut back on the Mickey of the dles and now they're coming out with discounted Burgers people back folks we're not going to have to worry about inflation anymore we're going to have to worry about deflation because you're going to take a simulated consumer you're about to turn them into a dead horse and people are going to go can can you get it up again hello I don't know I don't like maybe maybe I'm just being too bearish but let me put it this way right now the greed and fear index is at neutral I think we're about to go to extreme fear I don't want to say that I I don't want that to be true or the case that's bad but look this is where we are right now we're at neutral and uh we're at Greed for Market momentum I think this is going to go all the way down over here to extreme fear within the next three months why do I see that look we've had the volatile swoosh the Nike vol swoosh recovery we've had it it's been great it should keep going could it keep going could we be wrong here absolutely inflation could really impress to the downside and maybe We're Off to the Races next week consider inflation the forecast for inflation right now uh are sitting at uh let's see here we've got uh CPI month over month is expected at 4% and oil dropped like crazy so I'm kind of surprised by that I I would have thought that oil would have drugged that down a little bit more so maybe we'll come in low on that CPI month over month but the CPI core is expected to grow by.
3% month over month next Wednesday and I mean maybe we'll get like this glorious uh Miss and we'll get tws across here you know we really want to be closer to 0.17 to get to about 2% for the inflation Target for the FED uh but those are the expectations right now and quite frankly you've got Bloomberg this morning saying after consumer sentiment data things have quote taken a distinct turn for the worse yeah that's because the consumer drives this economy and so when people wake up and realize oh crap the consumer drives everything the consumer is the one who buys the GPT subscription or the FSD subscription or the AI subscription for their you know Workforce subscription at their office so they can have co-pilot the consumer is the one that either Buy or uses all of that and if the consumer loses their job then their boss buys less seats for Microsoft co-pilot consumer loses their job they have to go cancel their GPT subscription then growth on the lack of software revenues we're seeing anyway for AI evaporates the uh AI boom of building out AI servers is built and then what happens well you sit around and twiddle your thumbs as you wait to get through the nasty times and the market crashes uh I I the AI valuations right now are at a level that assume we are just going to keep booming forever and some of it is somewhat ludicrous maybe we will and and I hope so because if we boom forever the market won't go into a recession or the economy won't go into recession everything will be just fine but look at the qes The Q's have topped out these are the q's right here let's go to the average candlesticks it's a little easier to say we can't seem to get above this line we just got through earning season earning season started out good started getting a little worse when we started getting into the the you know the midcaps and the consumer the consumer was really not fantastic in this earning cycle AI Microsoft they did pretty good uh at least decently though you did have some downsells obviously after earnings though I will say the earnings overall were good for this quarter just you're starting to see that slowing growth uh in some of the forecasts and so you did get some sell Downs okay whatever so topping out on the q's you're also topping out on BTC we know this we also just got we're on this channel this is a pretty obvious downtrend channel right here we were trying to break out this morning look at this this morning we broke out above my 617 line I wouldn't have known because I was asleep but anyway we broke out uh around 10:30 uh uh sorry this is 10:30 yesterday my fault we broke out around 10:30 yesterday and start Ed running throughout the day uh and right here we got our University of Michigan sentiment data which we'll touch on in just a moment and what happened right after we got that sentiment data within the next 30 minutes we dropped 1.2% then another nearly 2% uh and here we are now down about 3.4 in the last 24 hours right straight through that line not even a a a lick of a pause at uh that 617 line now maybe we'll recover but the point is is the Bitcoin in my opinion is a leading bad Omen for the markets it's a great Omen when it's running it's a bad Omen when it's trending down and I'm looking for catalysts that are going to say it's going to be able to run again in the near term now I understand a lot of this is what I call fundamental trading people like Kevin you're just a Trader you know what that's right I fundamentally trade when I see things that don't make sense in the economy I get nervous and I say you know what I'm pack my bags I'm going to hedge a little I'll spread out my stuff into multiple different bags and diversify just in case things get a little loony out there uh make sure we got our good old what do you call them the go bag at multiple different spots in the house that's uh you know the go bag the one with your med pin your bandages and your Glock uh anyway um you got I don't know man these are the cues uh this is sqq let's go to spy where's the Spy so the S&P 500 basically uh same thing uh you you you have you're trying to top you're trying to break out I think you're you're going to be in for a world of a rejection here again I could be wrong but we've had some Euphoria after Jerome Powell suggested hey you know we're at Peak rates I think he suggested we're at Peak rates because he has to because maybe the inverted yield curve will actually end up being right it just ended up taking a little bit longer we're the most inverted or we've been inverted for the longest period of time quite frankly ever but uh we're at 37 basis points inverted consumer sentiment this morning didn't help at all as well as inflation expectations which almost feel like they're dis anchoring a little bit or de anchoring um but I'm I'm not even so worried about inflation I'm more worried about what happens when the consumer collapses and the canaries and the coal mine start turning into the coal mine collapsing look at consumer sentiment first of all I want you to see this expected change in unemployment during the next year we're at the highest level since 2009 briefly had a little bit of fear there at uh the beginning of 2023 as some of the big techs were laying off uh although stocks started Rising again so you did have a little bit of fear but why all of a sudden are we getting this skyrocketing of fear again this time it's not the first round of layoffs this time it's the Deep Cuts this time it's the Javier Malay chainsaw Elon Musk we're going to expand the supercharger team we're just going to or number of superchargers we have don't worry we'll invest 500 million into superchargers we're just going to fire everyone at our company on the supercharger team that happens to have experience with permitting land use negotiating leases negotiating Wind win deals for a longterm with uh operators of the facilities we'll just get rid of all of them and we'll let our competition like BP or EV go or blink hire all the Tesla folks that just got fired yeah that's not something that you do when you think you you have enough cash to really get through the year and it's not something that you do when you think you're going to grow a portion of your business dramatically I'm nervous uh this and and Tesla's just Tesla's just the beginning all these people they're going to be the first to stop buying on Etsy I mean I understand they were probably paid uh you know reasonably well while they were working at Tesla uh and their stock has probably performed oh wait uh so you know I mean I'm sure from their their earnings they've got plenty of savings but now you got to find a new job and you know I just think of the anecdotes of people and this is just an anecdote we know plural of anecdote is not data but I just think how sad it is you know there was a story that was circulating on on X or Reddit or whatever where basically an engineer got fired in December took him three months to find a job lands a job with Tesla in March 72 hours before he's supposed to get his badge here in May sorry your position's been terminated that's scary how is somebody in a position of that level of uncertainty going to buy anything on Etsy well let me tell you this they're not how are they going to buy the latest iPad they're not they're going to buy the stuff they need I think that's one of the reasons why Walmart and Amazon and Costco are doing well right now because you've got basically this you know people just have to spend where they where where they think they can get the best deal where they can get the best value and it's sort of like what Etsy said people are discount driven and looking for the best value uh so it's concerning so not only do we have this expected change in unemployment so basically fear going up of people getting fired I mean here's another one look at this one uh oh I got to fix that typo here those making 150k or more worry about it more uh 72.
48% of those making 150k or more worry about being fired versus 50 . 26% of those making 50k or less mind you these are really high numbers you know job security concerns are rising and it's not good like job security concerns going up imply that people are starting to see some writing on the wall where they're working and they're going crap you I mean maybe if you're like a startup that's well capitalized and you could write out whatever storm there is there's there's less concern obviously but you're at some of these big companies that are beholden to their shareholders and uh they got to prove some EPS growth in a depressing environment more people are going to get asked it's scary so uh again I I I you know I said I I really hope I don't feel too Doomer and gloomy here but this it feels like a very bizarre time you know I want to give you another analogy and then I we we still have to hit those expectations but I want to give you this analogy and remember an analogy is a comparison using like or as so I want to compare uh 2024 to 22 11 and 2019 I mostly I'm using those just to pick something within the last like 15 years here right so in 2019 what was the world like oh no China and the US have a trade war in 2011 sure you had you know uprisings in Egypt and that and Steve Jobs were signed but what was the fear in 2011 oh no there might be a double dip recession that'll tank real estate ended up being the bottom in 2020 it's like we're all United against Co we're all from you know working from home and everybody's United against Co and what do you have today well business feels like it's slowing down for many people people it's this is probably the hardest time ever to be an entrepreneur and grow a business probably the hardest time ever could you imagine trying to be a realtor today A lender today or trying to grow a business and and get more clients in this sort of environment people are going to start having like blood coming out of their eyes cuz they're they're staying up so late going I need to find more work you know I'm not trying to make a joke out of that I think that's that's sad it's depressing consumer sentiment crash this morning we're going to touch on that but I mean think about this cash liquidity is extremely tight we talked about the banking charge offs that the entire sort of industry is just sort of like all right so where were we that it's still on my mind debt payments are rising uh spying the cues are topping geopolitical crisis just feels gross you know the Israel Gaza issu is not ending Russia Ukraine Sudan government data says everything's fine and GDP is supposed to be like 4% but I think it's like delusion prices are high uh which is still frustrating people we talked about job security concerns you got the immigration fear and the Border crisis protests going on uh it just it feels like a lot a lot of negativity and who knows maybe maybe that's just emotional but I don't I mean it's not just me you could see it look at the data year-over-year sentiment and conditions are up but month over month is collapsing the index of consumer sentiment on a month-over-month basis is down 12.7% now yes we are up across the board on the year-over year we are better off than where we were but what concerns me is not the comparison to last year it's the trend now because if this 12% turns into another negative 12% and another 12% and another 12% we'll be in the depths of sentiment in the span of well two or 3 months so it is concerning uh and then of course we saw the inflation expectations so so so my take right now uh is twofold first of all hug your family focus on your health take a walk start running work out get away from the insanity of your phone delete you know Tik Tok and Instagram and X or whatever and just just get value try to get value in what you're what you're listening to uh and and get different perspectives you know listen to bullish arguments listen to bearish arguments and and then make up your own mind you know how's your s how are you doing leave me a comment down below how are you doing how is your your job how is your wife's job how is your husband's job how are your kids' jobs if they have jobs um or if they're old enough to have jobs I should say because if they're old enough to have jobs and they don't have jobs maybe that's actually AAL uh and and is there really this belief that we're about to just rocket ship up to the next level here I I don't know I how I guess I just don't see the Catalyst or earnings supposed to beat this delusional level that we've already hit I mean I guess what could Skyrocket markets is uh you get a a big CPI Miss uh well which would be a beat it's it's weird how they word it but but basically instead of getting like 04 and.
3 you get like 0.1 and 0.1 and then everybody's like yay we're going to start making a trend of inflation disappearing again just like we did at the end of uh 20203 which could entirely be Poss I don't know if it'll happen as soon as the April data but um inflation could definitely take down rapidly but the question is is the consumer still going to be alive at that point I don't know I don't know so I can't help myself but feel a little depressed so uh you know as usual I I send out alerts to some of my thoughts and trades that I'm making in the stocks and psych group uh it did open up uh a little bit of an out ofthe money short probably a bad idea but it's it's not it's not a big trade I I don't I don't know I'm just I'm just starting to create it and I'm starting to think to myself okay maybe uh maybe I establish a little bit of a position now and then if CPI comes in worse I'll double triple down on uh on that short oh I don't know maybe uh maybe I just need to like take a vacation to a beach and have a beer and it'll all be okay I do think it'll all be okay the question is is your business going to survive is your job going to survive is your mortgage going to survive is your you know like is your business going those are all really important things there's a reason my real estate startup has zero debt there's a reason I am heavy in cash right now like me personally it it doesn't really matter because it's like look if it runs great if the markets run guess what that's fantastic for my startups uh everything everything will be just fine if the Market's full we'll survive we'll be fine because we have cash I'll survive I'll be fine because we have cash so like either way it's fine I don't really have this fomo feeling because again I think well if the market skyrockets then the startups will do really well too so it's okay it's sort of like I've I've got so much invested in in in different directions that that it really like either way it'll be fine um but uh getting through this this 2024 you know obviously you got the election cycle but I don't I don't really look at the election cycle so much when I think of macro uh but getting through this next year is going to be the big one for everyone I think anyway thanks so much for watching good luck
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