The Fed's U-turn is a COMPLETE Disaster | Worsening Reset.

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연준의 금리 정책이 계속 뒤바뀌며(플립플랍) 인플레이션이 여전히 높고 긴축이 장기화될 것이라는 진단. 시장은 2023년 3월 피크 후 인하를 기대하나 연준은 2024년 말까지 고금리(higher for longer)를 시사해 주식시장 고통이 이어진다고 주장. 대응으로 단기 국채·현금 보유 후 주가·부동산 급락 시 매수, 경기침체 방어주 선별을 제시하며 자신의 부동산 스타트업(House Hack) 투자 유치를 홍보.

다듬은 글

※ 자동 자막 원문(다듬기 전)

01. on one hand we have kathy wood and elon musk banging pots and pans screaming about how the fed is going to force us into deflation which will require the eventual return to a similar amount of money printing to stimulate the economy again that led to the disaster we're in now and on the other hand the fed finally put out the truth they put on their big boy pants strapped up their boots and said inflation is out of control we've lost and we're finally going to be real with you about the trajectory and terminal endpoint of where we think interest rates will go even though that could end up being worse hey everyone meet kevin here we are facing lots of pain we are facing a disaster because quite frankly inflation while it came down in july didn't really do great in august and unfortunately when we take out some of the largest contributors to inflation pretty much like everything like food and shelter energy used cars and trucks the chart that we end up with is pretty miserable it's this right here shout out to bloomberg for this look at this folks it is inflation that is still uncontrollably rising and this is why the federal reserve is suggesting it's time to change our definition of what we're actually trying to accomplish because clearly what we have been doing hasn't been working or at least it's not working yet which is clearly the argument that folks like elon musk and kathy wood are taking that hey we've got to be careful here because if we over tighten we are going to usher in deflation the world the likes of which the world has not seen since the great depression remember a recession tends to be two quarters of negative gdp but a depression can often times even though there's no clear definition be more than four quarters of a negative gdp growth and quite frankly with what we're seeing in markets now it wouldn't be a surprise that we go from the two quarters of negative gdp that we already have to another two quarters of negative gdp potentially not only resetting markets but leading to quite a depressing environment either actually or just mentally but one of the most important things that we have to realize from what the fed told us yesterday is where are flip-floppers that's what they told us because see the federal reserve first told us we want to see core inflation go down the chart i just showed you we want to see that go down then it turned into well we want to see both headline and core go down now the fed is changing their minds again the fed is making the argument that we're not even worried about inflation going down even though that's the number one priority but what we're actually going to use to measure our success is instead of being inflation we're actually going to measure our success by the impact we are creating on the labor market yes that is the other half of the fed's dual mandate one half being get prices stable and the second half being ensure or try to get to maximum employment well we are so far to the other end of maximum employment right now that is to the extreme beyond end of maximum employment that we have about two job openings per employee uh willing to work and this creates a lot of demand for labor and in january when i first warned warned about what the absolute worst thing is that could happen with the federal reserve it was what's known as a wage price spiral this is when prices go up so workers demand more pay when workers demand more pay companies seek to uh maintain any kind of semblance of margin or profit so what do they do they raise prices again but then things get more expensive and the workers raise their demands for wages again and this is how you get a stair-stepping or spiraling of prices just going up and they don't just go up once to where you have a year-over-year high comparison and then it drops off and you don't really have inflation anymore they keep going up and so yesterday the fed pulled off another great flip-flop on us they made it clear that we are going to focus on reducing job openings unfortunately the only way to reduce job openings is to make companies feel like they're running low on money or access to capital and the stock market is the biggest source of capital for companies so stocks go down companies feel like they may have less access to capital consumers may spend less money creating less demand for products hopefully leading companies to finally shut down some job openings and when those job openings shut down then maybe we'll see the jolts indicator come down we'll also potentially see the quits ratio come down which currently sits at about 2.7 to 2.8 percent and the reality is if people are still quitting at a rate of 2.72.8 percent it means that they're not worried about finding another job it means they could easily find another job right which again means too many companies are hiring so the feds pulled off another beautiful flip-flop on us and this is leading to substantial uncertainty and lots of red in the market again and it's not just the united states all of this is compounded by an extremely challenging macro environment where the entire world is conducting synchronous interest rate hikes even the bank of england today coming with a 50 bp hike although not as large as the 75 is expected still a relatively large hike and the world is slowly moving away from the days of zerp zero interest rate policies z-i-r-p except for of course china but then again china is probably in a depression a severely devastating economic environment where even though china has started 52 000 infrastructure projects this year they are still seeing a decline in construction property investment and land sales that's pretty scary so in other words if you're not we're like raising interest rates right now you're just getting screwed and if you are raising interest rates right now you're also getting screwed because you're trying to crimp down on your economy get people to spend less money and reduce people's wealth and one of the greatest drivers of wealth is of course the housing market and this is why yesterday drum powell told us that he expects a quote difficult correction to come to the housing market to bring housing prices back in line with affordability in english price is going to go down so what do we have well we've got a fed that once again flip-flopped and markets need to price in this new flip-flop so if you're wondering why things are red it's because markets have to price in the new flip-flop take a look at this chart this chart shows you a blue line the blue line tells you what the market's expectations were for the federal reserve's peak rates and the market believed oh okay so we'll have peak rates over here in march of 2023 and then they'll come down after the meeting the market also believed that rates would peak in march and then come down that's signified by the orange line but as i said yesterday when i covered the federal reserve yo market apparently you're missing the beat here because the federal reserve is making it clear they really don't intend to u-turn until likely the end of 2024.

02. see this period right here that's called higher for longer and that's because we're probably also seeing inflation that is higher for longer and a decline that is coming later than expected and unfortunately this section right here the difference between where the fed is likely going with fed rate policy and the orange line is signified by one thing folks pain pain in the stock market so what do you do about this well i think there are three things that you can do about this the first thing that you can do is you could consider getting into uh treasuries treasuries are something that we're talking ab a lot about and we're uh likely investing in uh via or with i should say with house hack because house hack is my real estate startup that we are porting cash for so that way when the real estate market corrects we can go buy real estate at the bottom of the market accredited investors can join me now and if you join by september 30th as an accredited investor at househack.com you just upload w2s or income statements or whatever accredited investor letter from investready.com you do that all at househack.com you will get founding shares in this company that is going to go by not now we're not catching a falling knife with house sack but when the market is lower and with house act we are going to deploy likely a good chunk of the cash that we have in things like six-month treasuries so that way since we don't plan to buy for six months we sit in treasuries for six months yielding somewhere around three point nine to four percent on an annual basis doing nothing if you invest 25 million dollars into treasuries at four percent you make one million dollars per year literally doing nothing could you imagine that one million dollars per year doing nothing and you could have founding shares in this company if you're not an accredited investor stay tuned i'm hoping to get accredited investors involved as soon as uh maybe even december or january we'll see so treasuries are a very interesting uh product to look at right now especially if you buy shorter term treasuries like the 6 or 12 month treasuries so that way you don't actually end up being subject to market risks right because if you hold your treasury to duration it doesn't matter if your treasury on the open market becomes worth less or more if it's worth more you could sell it for more of a profit if it's worth less you just hold it to maturity and you get your payment right so one of the safest places in my opinion to go right now is treasuries however treasuries come with an opportunity cost and for personal investors that opportunity cost might not be the best decision it's the best decision for house act because house hack isn't designed to invest in stocks it's designed to prepare to invest in real estate so it makes more sense for house hack to sit on cash or treasuries however for personal investors there's a good chance that it makes sense to either sit on cash or recession proof stocks which i'm going to talk about three or four different stocks here in just a moment cash is beautiful because it increases your access to opportunity now something we talk a lot about in the stocks and psychology of money course on real estate on stock investing link down below there's also of course a zero-to-millionaire real estate course a coupon code for these expires also on september 30th so check those out down below in those programs we talk a lot about opportunity cost and the cost of you sitting on cash right now is actually the lowest it's been in decades that's because if you're sitting on cash most people have this impression that oh well cash is going to get ruined by inflation that's only true if you're buying coffee eggs and food and and gas or whatever right that's only true for the first maybe twenty thousand dollars of your household expenditures on an annual basis for for food and miscellaneous items or maybe maybe thirty forty thousand dollars depending on what your rent is right that is affected by inflation but the extra cash you have above and beyond that is actually investable cash so the excess cash you have becomes more powerful as stocks and real estate go down this is why you can combine number one and two you invest in treasuries and you sit in cash and you wait for opportunities either in the stock market like the pain we're experiencing now or you wait for that real estate crash that has already begun and is likely to hit peak fear in 2023 again the startup i'm creating is not designed to start buying homes now while where people would be catching a falling knife it's designed to go shopping when we hit bottom and you can get founding shares in this company just go to househack.com read the solicitation number three your next option is recession-proof stocks recession-proof stocks this is interesting let me give you an example of what i believe is not a recession-proof stock poll star see every morning when the market is open i try to do a fundamental analysis with course members on either or both real estate and stocks today we took a little bit of a look at pulstar and boy we did not actually have to go that deep while polstar's production is low it's kind of like tesla in 2015 levels its gross margin has declined over the last year from six percent to five percent now sure some of this may be due to inflation or employee costs going up or commodity prices going up but the reality is they lost over half of a billion dollars in just the last six months and that's not even including their listing expense and conversion fees between some of their other shares i've already taken that out they also have roughly as many current liabilities as they have cash suggesting they're potentially getting close to running out of money which explains why they just opened two new credit lines with chinese banks for another 200 million dollars the chinese are very smart they're not lending a blank check here the reality is companies with low profit margins and operating losses are going to face massive hurdles in a recessionary environment and that's because as stock prices fall these companies ability to go to the stock market to raise money will fall and unfortunately if you're a company like pulstar going to the market to raise money is kind of exactly what you're trying to do i hate to say it but they literally tell it to you on page seven you don't even have to get in pretty deep of their latest foreign report or report on foreign issues pollstar continues to finance its operations primarily through the issuance of equity instruments and of course debt and other things well that becomes substantially more difficult to do in a recession again if you want to be part of these live streams which i think are phenomenal content every single day the market is open in addition to all the lectures we have use the coupon down below before september 30th and join me like my goal is during these painful times provide even more value and we've got a whole bunch of new lectures coming out totally for free for course members as well over the next uh few a couple months here so stay tuned really excited about that now other companies that potentially face severe risks in this sort of recession or companies like open door which i believe may go bankrupt if they have to end up taking a 10 to 15 to 20 write down on their housing inventory while their current and and long-term liabilities are equal to about the same valuation of properties they had at the beginning of the year but you take a 20 right down on your assets and your liabilities stay the same you could be upside down to the tune of one and a half to one one to one and a half billion dollars and then you try to go access the market with shares worth three dollars a share you're gonna look worse than ape or amc today but boy oh boy did i get hate for selling ape ape ticker symbol at eight dollars and nine cents and now it's in the three dollar range uh sorry the writing was on the wall for it i tried to give my warnings but all i got was a bunch of people with uh ape in their bio telling me how much of an idiot i am for suggesting that an eight dollar nine cent stock probably wasn't worth eight dollars and nine cents and there's probably going to trend towards a dollar and boy oh boy doesn't that suck for the apes i mean hey you know what whatever uh sorry my heart goes out to you but it seems like every hate comment i get on the internet these days is from somebody with ape and amc in their bio or people sending gorilla poop to citadel which that honestly is actually kind of funny uh anyway then you have companies on the other side of the spectrum that are actually potentially making things worse for the federal reserve there are companies like american express and tesla and enfase who presently even though end phase is i think going to have a hard time when the housing market falls so a little bit of an asterisk there but you're going to have companies like enfase tesla and american express who are still hiring because they want to be growing in this environment and they are still growing in this environment that is remarkable see even though these companies will get smoked during this stock market downturn fundamentals should set them up for a greater squeeze than any kind of squeeze you could hope for by a short squeeze these are real fundamental squeezes that are being set up and in my opinion there is an opportunity to deploy cash into companies that in my opinion will survive an earnings recession quite well at the same time retail has not capitulated yet and unfortunately the fact that we're approaching levels uh of being within four and a half percent of the bottom of the market could send signals to retail that uh oh we might have to prepare to capitulate because this pain is just going to keep going however so far retail has given us no sign of capitulation instead retail keeps buying in fact retail spent two billion dollars flowing into the market yesterday that's above the usual 1.2 billion dollar inflow pace and investors who are generally more conservative over at schwab and td really began ramping up their purchases during the august dip now we're in the september dip anyway there's also quite a low allocation to cash by retail investors right now which kind of implies we could be a little bit more subject to capitulation when and if prices keep going down the current top buy the dip stocks according to retail investors averaged out over the last five days and thanks to vanda track are as follows fedex netflix adobe twilio who just laid off a ton of people moderna starbucks who uh their sales are sucking right now roku who for some reason during an inflationary environment wants to get into manufacturing tvs tesla alcoa oracle next era block apple paypal we have review levels going down which i personally am actually kind of satisfied by i like to see margin levels go down because you know i don't i don't always like to pat myself on the back but i will say i've been saying get out of margin since november of 2021 that's right that's the peak of the market and the reason i said get out of margin then because is because when you are in euphoric times it's much easier to fall hard so you get out of margin during euphoric times now that does not mean i am advocating to get into margin yet in fact i don't know if i will ever advocate getting into margin i don't like margin but margin balances are falling which is very very nice we're now under uh steadily under there that 700 uh billion dollar level in margin and hopefully we see this decline back to six to maybe 550 those were levels that we saw before the pandemic so a lot of pain in this market the federal reserve has flip-flopped again you really have three choices cash treasuries or buying the dip in stocks get founding shares of a company that i will make no money in until your shares double after an ipo how great is that in other words when your shares double and we ipo which means you can dump that's when i get paid subject to severe lock-up agreements which mean i'm stuck on the ship for at least another four years which i want to be because i actually think the ship is going to be like the biggest ocean liner cruise line or ever of a real estate company in america maybe i have grandiose streams but well i do uh but uh real estate is uh real estate is is uh is me so i'm very very excited and i'd love for you to join with me uh join me in househack.com if you are not accredited yet fear not i promise i am doing my absolute best to get you in uh in this cycle if you want to learn more go to househack.com this video is not a solicitation but househack.com is and since the market is so disheveled i too have made sure my hair looks nice and disheveled thank you so much and good luck out there