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자막 기준 발언 요약: 우크라이나 평화안은 러시아 측 관심이 낮아 진전이 어렵다는 주장, 미 국방부의 마약선박 공습 보도 및 트럼프 억지 메시지 언급. 카르돈의 비트코인·부동산·부채 1/3씩 전략을 레버리지 위험으로 비판. 에어버스 소프트웨어 문제는 과도한 공포라며 비행 안전 사안으로 평가. AI CapEx는 아직 수익이 실현되고 있다며 AI 투자 붐 지속을 전망하나, 12월 FOMC를 매파적 부정 촉매로 보고 약세 전환 가능성 언급.
다듬은 글
Jerome Powell is talking on Monday, but it's not what you think. And we've got leaked audio with Witkoff and the Russians, which is a little embarrassing. Airbus might end up having an oopsy-doopsies that could lead to a lot of flights getting grounded. We've got calls of four a potential 35% chance of recession at JP Morgan and only a 15% chance of real growth in this economy.
A lot to break down and so today, being Black Friday, let's just start by reminding you to go to meetkevin.com. Get your Meet Kevin Alpha report for the Black Friday sale. Make sure to get your Reinvest AI over at househack.com or reinvest.co as well. With that out of the way, let's get started. Keep in mind, we will be raising the price massively this weekend on those, so make sure you get in before that price increase.
You see that Black Friday coupon code is active and you are good and golden and you are getting the best price guaranteed. Okay, so why don't we go ahead and start with these leaked transcripts before we get into the recession and market. Want to talk a little bit about Putin and what's going on with Ukraine.
So apparently Witkoff got on the phone with Yuri, the foreign minister of political affairs in in in Russia. And the transcript is kind of bizarre, honestly. So this is the the transcript right here and I highlighted the most interesting components of it. This transcript is from Bloomberg. It's likely a leaked transcript that came from inside of Congress because the recording of the call did end up getting into the hands of committees within Congress.
So that's likely where the transcript of the call leaked from. And what I find that's very fascinating here is you could hear Steve Witkoff get on the phone with Yuri here in this transcript. Steve Witkoff says, "Well, listen, I'm going to tell you something. I think if we can get the Russia-Ukraine thing solved, everybody will be jumping for joy." Yuri, you actually see a lot of doubt here.
This call, by the way, took place on October 14th, about 6 weeks ago, but it's really important because it sets this groundwork for this quote-unquote 28-point peace plan that supposedly is being negotiated between Trump and the Russians. Meanwhile, Putin comes out just yesterday and he's like, "I don't know anything about this plan.
This is no way close to final plan. I can't do a great Putin accent, but the point is you can actually see the eagerness of the Americans here, Steve Witkoff specifically, trying to make a deal. And in my opinion, it comes across as somewhat childish how eager the United States is to get a deal. Of course, Trump and the Trump administration are defending it saying that this is just negotiating, but let's just stick to the facts and let you be a decider of what you think about this.
So take a look at this. My friend, I just want your advice. Do you think it will be useful if our bosses talk on the phone? Steve says, "Yes, I do." Okay, so so keep in mind, Yuri, his goal is to get Putin and Trump on the phone because Putin's really good at talking. And Putin tends to manipulate Trump to delay.
That's what's happened every single time there's been a discussion. Anytime things get hard, Putin wants to get on the phone with Trump and then all of a sudden magically Putin gets a whole bunch more time. You know, they start with this joke of Yuri saying, "Yeah, yeah, yeah. Happy to help you solve this problem to make sure everybody gets their joy and is jumping up and down.
You only need to solve one problem and that's the Russia-Ukrainian war." And of course, Witkoff says, "How do we get that solved?" Yuri goes, "Hey, maybe we could get Putin on the and Trump on the phone. You know, Trump's ready to do it." Okay, Yuri's like, "Great, awesome." And Yuri's kind of like sounding like he wants to end the phone call here.
He's like, "Great. Yep, let's get Trump and Putin on the phone and be done." But then Steve Witkoff, he talks like 27 times as much as Yuri does. And listen to his phraseology. I would make the call. This is Putin to Trump. And just reiterate that you congratulate the president on this achievement, that you supported it.
You supported it in that you respect he is a man of peace and you're just you're really glad to see it happen. And I would just say that I think it's going to be a really good call because let me tell you what I told the president. I told the president you, the Russian Federation, have always wanted peace and that's my belief.
I told the president that I believe that. And I believe the question is, the issue is, we have two nations that are having a hard time coming together with a compromise. I am even thinking that maybe we set out like a 20-point peace proposal just like we did in Gaza, put a plan together. And my point is this." And then Yuri interrupts, "Okay, okay, my friend.
I think the point is very clear. Our leaders could discuss. Hey Steve, I agree with you. Okay, we will suck him and we will suck him off." He didn't say that. "We will congratulate. We will say that Mr. Trump is man of peace and so so." And he will say, but Steve is "But here's the thing that I think would be amazing." Yuri, "Okay, okay." And you can kind of tell like Yuri's just like, "Bro, just get him on the phone.
I don't want to play this game. Like I'm done with this call." And Steve's like, "No, man, I got a ShamWow sell you, bro. I'm I'm selling you on this deal. You got to You got to suck up to Trump. You got to talk about how brilliant Trump is." Like Steve's basically trying to lay out this whole plan.
And then Yuri, "Okay, okay. What if What if Hear me out. Okay, I will discuss with my boss and I come back to you, okay?" "No, no, no, no, hear me out. Hear me out." And then he wants to keep going, right? And Steve Witkoff goes, "Because listen to what I'm saying. I just want you to say, maybe just to say this to President Putin because I know you know I have the deepest respect for President Putin." That's interesting coming from Steve Witkoff, but he gets into this.
"Maybe he says to President Trump, you know, Steve and Yuri discussed something very similar to the 20-point peace plan that could be something that could move the needle a little bit and we're open to some sort of this of things. Maybe we could do a land swap like Donetsk and maybe a land swap somewhere else.
And instead of talking like that, let's talk more hopefully so we can get a peace done." Steve Witkoff is basically like, "Can you pump up Trump and make it seem like he he has hope and then we could like pitch that we have some kind of 28-point peace plan and we could get all this cheer and enthusiasm that, you know, we're the stewards of world peace." "Okay, okay, sounds good.
And here's one more thing. Zelenskyy is coming to the White House Friday." Haha, [snorts] "I know that. I will go to that meeting because they want me there, but I think if possible, we will have the call with Putin before the meeting." "Before? Before?" "Yeah, correct." "Okay, okay, I got your advice.
I discuss that with my boss and come back to you, okay?" "Okay, Yuri, speak to you soon." "Great, great. Thank you so much." Thanks you. Bye-bye. Bye. Anyway, so like this whole call really comes across as Witkoff like getting on his knees going, "Please, just get Putin on the phone. Tell Trump how great he is and how there's potential for a 28-point peace plan or whatever." And really, the idea there, in my opinion, is they're just trying to pop up prop up that there's hope.
Like this is how Trump negotiates, okay? If I can come across as making it seem like the Russians are on board with 28-point peace plan, then I can go to Zelenskyy and go, "The Russians are on board with the peace the peace plan. You should accept the peace plan." And if Zelenskyy accepts it, then they can take that acceptance and go back to Putin and go, "I got him to accept it.
I got him to accept it." And then Putin go, "Okay, one more change." Right? But the reality is like Trump and Witkoff are scrambling to get this 28-point peace plan. They're going to the Russians and the Russians are like, "We don't want anything to do with this." Zelenskyy's like, "Bro, this isn't even close." And you don't really have anything.
So it's an interest like this dialogue right here, this transcript, I think really says we're going nowhere anytime soon with this Russia-Ukraine peace deal. Now, of course, there's no denying that there's been corruption in Ukraine and I know the probe of you know, the the de facto VP who just resigned in Ukraine doesn't look good, but it's also a sign that they are chasing corruption in Ukraine.
And we also don't know if Andriy Yermak was corrupt. You know, he got raided, but a lot of people are treating him as guilty until well, basically proven otherwise, including David Sachs who's in the White House as the cryptos are. Sachs is basically cheering, "I told you all the Ukrainians were corrupt 2 years ago and I was right." Because a probe is happening?
It is kind of interesting, but that's the sort of cheering that's going on ahead of actual conclusions coming out. And I always like to be cautious of things like that because I think sometimes you could really put the cart before the horse and cheer about having a deal when you don't have a deal at all.
So that's a little bit on Ukraine. On top of that, another piece that got a lot of attention today was the Washington Post piece that Hexeath ordered a strike on the you know, this this was one of the first strikes on a one of these drug ships in the Caribbean. And the ship apparently was targeted by SEAL Team Six and they struck the ship and nine people appeared to die immediately.
And Pete Hexeath gave an order and said that quote, "The order was to kill everybody." And so after the smoke cleared, this drug-ferrying boat was then struck a second time because they saw two survivors that were holding on to the shipwreck basically. And then they bombed the two survivors as well.
And so this has been a big messaging play by Donald Trump that hey, if you smuggle drugs in the Caribbean, we are going to blow you out of the water. And you know, Donald Trump is cheering this obviously as a large success that wow, there are all of a sudden very few boats in the Caribbean. Makes sense because he's trying to send this deterrent signal.
Makes a lot of sense. So, then we've got Skiling says, "I just got both programs." Yeah, if you have any questions by the way on the programs, a just quick reminder because I know it it's confusing. If you have any questions, first of all, you could always email us [email protected]. But there are really three things, right?
There's Meet Kevin, that's the Alpha report at meetkevin.com. The courses, trade alerts, you know, top 10 stocks, whatever, right? That's one thing. Then there's the Reinvest AI, that's another thing. Those are on Black Friday sale. And then of course, you can actually invest in the AI real estate startup Reinvest, also known as House Hack reinvest.com, right?
So I I always like to say with that, but I see you asking here and I don't want to help you quickly. All right, so Melania Trump is also apparently now announcing that she's going to get into the business of making movies and she's announced the formation of Muse Muse Films. Muse Films is now being created by Melania Trump.
On top of that, I also briefly watched part of this Cardone and Sailor interview. I had to click around because I was really having trouble like listening to what I've heard Michael Sailor say about 20,000 times before. And I even listened to Cardone and Eric Trump just sort of go on about you know, Bitcoin.
A lot of these arguments we've heard before, but I think one of the most interesting things for me is that Cardone argues that now at least his latest funds or what he's arguing now is that he's 1/3 debt, 1/3 Bitcoin, and 1/3 real estate. And I think that's very interesting because if you end up in a volatile market or any kind of recession, you've really destroyed all of your downside protection.
Because you know, in an extreme example where you know, Bitcoin which has happened is down 70% and his real estate's down like you know, whatever 10, 20% or something like that, your debt ratios are going to be so far out of whack that you might end up being not only negative cash flow on your real estate assets, but because you have now debt that's actually based in part on Bitcoin as an asset, which seems odd unless you're talking about appreciated real estate.
But then it's you know, obviously not clearly leveraged to what it could be, which is would be a good thing. But like I guess what I'm trying to say if you have 1/3 debt, 1/3 Bitcoin, and 1/3 real estate, and Bitcoin goes through a normal kind of 70% correction cycle, let's just math it out really quickly to see what your debt ratios would look like and what your real estate positioning would look like relative to that to that debt.
And I don't think it's good. So let's do it together so you can kind of transparently see what that would look like. So if I go into a quick spreadsheet and just throw in let's do let's do a you know, $100 of we'll call it crypto, we'll go loans, and then we'll go real estate. And we'll go 100 on each of these, right?
Those are net assets obviously of 300. Now if we had a correction cycle and this was worth 30 for a moment and let's say this was worth 80. Well now you've got 110 of assets. Sorry, you have 200 of of of actual assets here, right? So 200 of assets, 100 of loan, I should say. Let me clear that up a little bit.
So in this case, you have a 50% debt ratio. But in the example over here where you know, if all of a sudden crypto goes through a down cycle and your real estate goes down a little bit because you've mostly bought in Sun Belt you know, Southeast like Texas and Florida where you're overbuilding and the real estate market is much more sensitive to these swings.
Now all of a sudden you're at a debt ratio of almost one to one. You know, you have 110 million in assets versus 100 million dollars of debt. I think what you've really done is you've increased your risk profile, not decreased your risk profile. I think Cardone is trying to suggest he's actually de-risking by exposing to Bitcoin, but what he's actually done is he's introduced a massive volatility to a real estate play.
Probably to try to attract investors because I wouldn't be surprised if he's slowing down on people investing in Cardone Capital because people are starting to wake up and realize Cardone's trying to take a 35% waterfall and a you know, asset under management fee every single year and an acquisition fee for acquiring and holding Bitcoin and real estate.
Like it it seems odd to me. And now obviously read his documents, get his exact numbers. This is just roughly what what I'm gathering from from briefly watching this interview. And I think it's wild because I think what he's done is he's he's exposed himself to being at a really nasty debt position by having an asset that is really aligned with the risk markets, which are at all-time highs.
You know, the stock market is very aligned with crypto and real estate is usually on a different cycle. Real estate goes through booms and busts as well, but usually years separated from a stock market boom or bust. Very very normal. So usually what you find savvy investors will look for a stock market that's at all-time highs and they invest in real estate.
And then when real estate's at all-time highs like the Airbnb bubbles or whatever, they take money out of there and they get into the stock market, which is often at lower levels. You know, there we had this huge Airbnb boom. Everybody wanted to get into Airbnbs in late 2021. It really fueled this boom throughout 2022.
The stock market was at lows in '22, but you still had a booming real estate market because people were still getting low interest rates in the you know, 3% range. That that flipped obviously '24, '25 where you know, the stock market's higher and real estate market's much more stagnant. So I was somewhat surprised that Bitcoin Cardone is exposing himself to that kind of stuff, but but I guess he is.
So that covers Ukraine, a little bit on Hexath, a little bit on Sailor and Bitcoin and Cardone. We've still got to talk what's going on with Airbus and what's going on with Jerome Powell. So let's get Airbus out of the way. Oh, and then we got to talk Tesla as well because that'll be quite fun. So if you haven't seen it yet, there basically is this massive Airbus software problem that needs to be fixed and it all goes back to an issue that actually happened on a flight in October where quote-unquote 15 people were sent to a hospital after a JetBlue flight drops in altitude forcing emergency landing.
This is like a really scary, crazy headline. But what you have to realize is when you actually look at this, the article says that two children and 12 adults were taken to the hospital with quote minor injuries. So we had minor injuries, which is often an indicator that like people almost just went to the hospital for liability's sake or just in case like people bumped their heads or whatever like well, check them out check you out just to be sure.
The airlines do that because they want to encourage you go to the hospital to sort of wipe that liability. Like we didn't discourage you going from going to the hospital, right? I'm not saying that these people didn't belong in the hospital, but I have a feeling these people didn't belong in the hospital.
Why do I say that? Because here you can see that in the actual data as Scott pointed out here, in the actual data, the aircraft, the A320 fell 100 feet because of a flight control issue and then the pilots pulled it out of that dive, that you know, 100 feet mind you dive, at 1.4 Gs. Okay, so let's just understand this for a moment.
1.4 Gs it's not comfortable. You're going to feel it as a passenger. It's an adjustment, but it's probably the extent of you like bonking your head on the on the back of something like whoa, what happened there, right? 1.4 Gs relatively minor. You get to 2 Gs pretty quickly doing some steep turns. Very common in flight training.
And the descent of 100 feet is also by no means a dive. A 100 foot difference in your altitude at 30,000 the 35,000 feet. Most of the time you don't even notice it. It happens so modestly and so quickly. But obviously the pilots noticed this deviation in flight controls likely starting to tilt down and they took over and presumably overcorrected.
I I think the pilots did the right thing to land immediately and this is nothing to say the pilots did anything wrong, but an autopilot descent versus a pilot oh my gosh, what's happening is going to the reaction's going to be a little jerkier. So my opinion here is what happened with that 100 foot drop, not a big deal.
What matters more is why it happened. And that's actually the scarier part. So apparently what happened was you had a flight control failure because of some form of software bug in the A320 that may have been caused by solar flares. And this is because the A320s are a fly-by-wire system. We had this in the Phenom 300.
Basically, what that means is if I push the throttle forward, I'm not my throttle lever isn't actually attached to some kind of lever that attaches to like the gas valve opening to these turbine jet engines. Instead, I'm just sending a computer signal. That's all the throttle is doing. Like I may as well just be turning a little knob or like I could may as well type into my computer, set throttle to 99%.
It would do exactly the same thing as pushing this fancy lever forward. Point of that is when you have a system like that, it's a lot harder to fly if you have software bugs. Because if you have a software bug, like if I have a mechanical plane that's not fly-by-wire, like it's actually attached, and I can fly the plane like any kind of older plane or I mean the Phenom 300 as an example, the jet that that I flew has you know I can steer.
And I have direct steering. So you know when I move my yoke, the ailerons of this aircraft move, all right? When I step on the rudder, it moves. But that throttle control column is all by wire. It's all computers. And so what happens is if you get solar flares that somehow create some kind of bite flip or whatever, and you get a software bug, you got to now uncorrupt this data to make sure these aircraft can stay afloat.
It's actually kind of scary because you know, we should be grateful we saw that JetBlue flight only drop 100 ft because the what if they weren't able to regain control? Now obviously, there are many redundancies and I'm grateful that they're announcing that these aircraft are getting this software update.
It's a pain in the butt cuz there are about 6,000 planes and it takes time for somebody to go around, you know, you probably have to budget like an hour per plane or maybe for somebody to go around and update the software for all these aircraft. So the aircraft has to be taken out of service. Somebody has to be available to do the software upgrade.
These aren't like Tesla over-the-air updates. The software updates, especially on older aircraft, they're a pain in the butt. They usually involve manual memory exchanges into the systems and multiple restarts and verifications. They're a pain in the butt. If there's one thing I hated about the Phenom 300, software updates, most PITA ever.
Like mechanics charge you $750 just to do a software update. I kid you not. $750 to do a software update. Like a free software update. Like the software doesn't cost you anything. They update. It's $750 to do it cuz it's a PITA. It's wild. So now imagine this on a you know a global fleet of 6,000 of these aircraft.
Yeah. You could see quite a lot of of downtime over time. Now a lot of airlines so far some airlines have actually paused bookings on some of these aircraft. Otherwise, a lot of them are um uh you know, scheduling to to get these issues fixed. But it's it's good because the FAA has put out an airworthiness directive on this, an emergency order essentially demanding that this update go into place.
And it's good. That's exactly what they should do. It's an emergency order that you know, basically don't fly the planes until you upgrade the software to fix this solar flare bug. It's a really big deal, especially on these aircraft that are so electronically sensitive. The software can't have bugs.
So grateful to see that they're working on solving that. Uh now with that, I want to touch on Tesla and then let's talk about Jerome Powell and markets a bit. So Tesla had a nice little sort of viral thread this weekend. It wasn't very long. But Gary Tan basically said, "Hey, can we get FSD for RVs?" And that's really because they you know, somebody was showing a video of them driving an RV and how cool it is or whatever, but how nice it would be to have full self-driving.
And Ashok then responds from Tesla and says, "On it." with a picture of the Robovan, which stands for Robo Van. Now, the Robovan, mind you, I kind of think was a little bit of like I don't I don't want to say it, but it was a little bit of a scam. Mostly because it this is my opinion, okay? I think it was just a remote controlled concept that they wanted to show off on the Robo day.
And that's fine. Like I get it. This thing reminds me of I I robots so much. I love it. Like it's really cool. I want this. Obviously, you don't have windows in the front. It's really trying to send this signal of hey, we can have a fully autonomous vehicle that can actually house a lot of people, right?
Like you basically have a bus or an RV or whatever that drives itself. And I thought this was really cool. I'm 99% convinced it was just teleoperated, and which makes sense. But the vehicle would be so cool and and I love that they're saying on it because as somebody who owns the Cybertruck, the Model X, and the Model S, I would love nothing and I've had the original Tesla Roadster, I would love nothing more than FSD 14.2 or greater on a Mercedes Sprinter style van or Robovan, whatever you want to call it.
I will buy it. I will be the first person to order it and buy it. Like just make me a new car. Just give me another product I can buy, Elon, so I can buy it. You know? Like so juiced on on autopilot. You know, I was at I was at the doctor the other day. They're like, "Oh, we saw you driving the Cybertruck.
How do you like it?" And I'm like, "Love it." Uh yeah, FSD is great. I don't want to drive a car without it. Sometimes I have to, like the Sprinter van, but it's just a great great product. Uh I think the the only thing that really gives it a run for its money and greatness is the Reinvest AI. Okay, honestly, I have to say I was going through our test flight on it earlier and I was like, "Oh my gosh.
This is so cool. I can put in a zip code anywhere around across the United States and go, "Show me the deals I should prioritize." And it's actually showing me really good deals. And I'm like, "We are about to democratize real estate with artificial intelligence in a way nobody's ever done before." And I'm so excited for it.
And so obviously, you could get you know, just sort of as subscribers on YouTube for now because I'm marketing this myself, right? You could get lifetime access to our AI on the reinvest.co website. You know, I imagine you know, if venture capital got a hold of us one day because you can invest in the company as well.
Read the solicitation. This video is not a solicitation. I imagine if venture capital got a hold of us one day, they would be really mad that I offered people lifetime access, but I'm never going to rug my subscribers and my supporters of the channel. So anyway, check it out. Go to reinvest.co. I think it's really cool.
You can see our AI section. That's on a has a Black Friday sale. And then you can check out of course you can read about that. You get I mean, I feel like we're valued as a real estate startup at a pretty low valuation, you know, buck 40 a share is the conversion price. And I think you know, if if this AI keeps going the way it is, I mean we're already ROI positive on our investments into artificial intelligence just with the sales we've done so far.
It's really incredible. And then I think the future is really bright for the company. Knock on wood. But anyway, let's now talk about uh markets and Jerome Powell. So Jerome Powell is expected to speak on Monday. And a lot of people are wondering if this is going to be some kind of rug pull. So Fed Chair Jerome Powell delivers brief remarks and participate participates in a panel discussion on George Shultz and his economic policy contribution.
Event takes place during Fed blackout precluding remarks on economic outlook or monetary policy at Stanford University. Uh and there will be a moderator doing a Q&A. Now I think this signals to me is you know, nothing. No, a lot of people are going to say, "Wow, this is actually really weird. Why is Jerome Powell going to an event during the Fed blackout period?" And it might come across as quite odd because it is.
Like usually, you don't see these events happen during the Fed blackout periods, you know, just 9 days before rate cut meeting. But I will imagine that the moderator will be pretty guarded in terms of allowing any kind of questions to get through the J Powell that could put him in an uncomfortable position.
And I think J Powell will be pretty good at dodging any kind of economic or monetary policy questions. But really, what it is strange for them to do a Q&A event like this during a blackout. George Shultz was back in the '70s a Treasury Secretary, Secretary of State, Secretary of Labor. He's got a big legacy, big legacy of public service.
You know, Powell probably talk up his integrity and his effort in opposing Nixon price controls, which have a little bit of a comparison to tariffs today and in pushing for basically free markets and free trade. Like there will be some talk on that. But broadly, I don't think we'll get any real clues there on rate cuts.
What's really more likely to happen in my opinion is we're going to get a hawkish cut and we'll get our cut in December, but it will be hawkish. And that's what brings up this JP Morgan scenario that not only do we have this potential 5th 35% chance of a recession where either the US falls by itself with a 20% downturn chance or all countries fall with a 15% chance.
Uh but that they only actually give us a Goldilocks chance of 15% for real growth and that we might be stuck in stickier sluggish growth or a losing balance scenario. 50% chance of sluggish or losing balance with you know crappy labor and of course a combined 35% chance of recession only 15% chance of real growth and this comes in the same piece where JP Morgan actually does have a bullish price target of the S&P 500 hitting 8000 by 2026 but it's very interesting that in the same exact piece where they say yeah S&P 500 could hit 8000 and that's what's getting all the headlines in the same damn piece they say we really only have a 15% chance of real growth and a 35% chance of recession.
Not great which sort of delves into what we're seeing at Morgan Stanley and some others. Like for example if I look at Morgan Stanley's piece they've got some interesting notes here. So Morgan Stanley they're looking at the consumer and what they think is that the consumer is basically going to be weak through about March and April.
You could see that in the charts right here on the right. Goods versus services spending they actually think we're going to be in a hole in the fourth quarter and in Q 1 mostly because of tariff pull forward and taxes blah blah blah whatever. And they think that for now it's great that rich households keep spending but it's going to take time for the lower part of that K shaped recovery to get a boost and that's going to come from lower rates on credit cards and cars as well as lower inflation but it's not going to come until the second half of next year.
So expect a consumer discretionary recovery second half of next year and in the meantime you got to get through the labor market problems. So tax refunds probably won't show up until March or April. I would guess that we could stick a soft landing if we can make it to May like April May with good employment data but keep in mind you know somebody on my live stream was like oh but Kevin Hassett's coming.
Bro Kevin Hassett ain't coming for another 7 and a half months. Like think about that. Kevin Hassett won't actually have a Fed meeting to attend until June 17th because Powell's term ends May 15th. There's no Fed meeting in May and so June 17th would be the first meeting that Kevin Hassett could attend to.
That is 7 and a half months away. That's not good. So you got quite a while to wait to get to Kevin Hassett. You got a lot of unemployment problems to get to until then and hopefully we've had good Black Friday data. I mean I know that you know our Black Friday stuff has been doing great but but I also know that people investing in you know the Meet Kevin membership or in the Reinvest AI or even in Reinvest the company itself these are investors.
You know these are people investing in their wealth. These are people wanting to make money. These are you know you you listening to this video you're not like that dime a dozen person who you know wants to hear far left crap or far right crap. Like I feel like you're a reasonable and rational person mostly in the middle.
You know you might be 20 30% to one direction that's okay. It's okay to have you know a side but I think that you're you're looking for a true understanding of what's going on in the economy and what's happening. And based on that really the consumer spending that we're seeing outside of like these sort of investment style products Bloomberg is suggesting it's Gen Z kind of stuff.
Teenaged brands are winning because they're pitching better deals like Bed Bath & Beyond Brandy Melville I don't even know what the hell that is Kendra Scott stuff Ettika diddly whatever. Like they're basically saying it's it's these teeny bopper brands that are doing well but otherwise Black Friday has been pretty crappy is so far one of the initial assessments of what's going on with consumer spending.
Now consumer sentiment has already told us as much that consumer sentiment is total trash right now not great but really what we should look at is the labor market and the risk is that we normalize on the Beveridge curve. We already know about this. We normalize over here because of more layoffs we have a problem.
Now there is an upshot and the upshot would be that we actually end up seeing a pickup in labor force participation in 2026. So basically or sorry we see let me rephrase that. They're saying we have seen an uptake in youth labor force participation and if we go back to a normalization next year participation doesn't expand as much which means the unemployment rate stays more stable.
Okay. So they actually think the participation rate will decline in 2026 and 27. The thing that could really lead to a surge of participation would be the stock market falling and then a bunch of people rush back into working and that'll shoot the labor market you know way high in unemployment and then you have your recession.
But here Morgan Stanley is arguing they only see a 4.7% unemployment rate going into 2026 and this roughly aligns with what you're seeing with some of these other outlooks which we're going to look at in just a moment. A more bearish point of view is right here from US macro strategy from MUFG deteriorate like recoveries in markets happen very slowly but deteriorations happen very rapidly and they say that we see a risk of a more rapid decline in the months ahead as firms stop hoarding labor.
And so this really puts us through what I'm kind of going to start calling like a labor lull where you're probably going through this decline right here and then you might have even more of a labor hole and this is what we're going through and we're hoping that this labor hole of Q4 is just temporary or transitory and that we actually get back to growth next year.
That would be the best case scenario. But the problem is they see here that firms might stop hoarding labor if Black Friday sales and Q4 sales are bad or January sales are bad. People like that's it we can't hold you anymore you're out of here and then you get the surge of layoffs in February and January which then of course drops spending and then what do you have then?
Well I mean then you're in a recession. So we'll see hopefully not obviously. Now Morgan Stanley also takes a peek at investment themes. Obviously artificial intelligence being one of the most desirable here. Something when it comes to the market here is that so far it looks like earnings remain resilient.
You're getting revisions written up on earnings expectations which is good. They're bullish on things like Gap and Macy's and Urban Outfitters. I think they might be a little early on that although we have seen some consumer discretionaries come back like Dave & Buster's over the last four or five days.
You know another one like Six Flags has come back a little bit. Target's come back a little bit over the last five days. But of course they think that AI CapEx is really only going to be constrained by debt which is exactly how I feel. Debt is the only thing that's going to hold back this artificial intelligence spend that is otherwise booming.
They think agentic shoppers are coming and that's going to be good for Amazon Walmart and Wayfair but maybe bad for companies like Etsy or Fakes my opinion pins on that. And then of course they argue here that you know sure there's a lot of fear about a Gen AI investment bubble but a lot of folks are looking for okay well can we at least get real revenue?
And this is where I'm throwing us at least I'm not trying to say we're like a Palantir or Meta or Google or Microsoft at all. I'm just try I put us up here because we are seeing positive returns already on our artificial intelligence. So you know we've invested in Blackwell chips. We've invested in AI infrastructure and what we're finding is that just with the product we're selling so far on AI we already have a positive ROI on every dime that we have spent on artificial intelligence at House Hack and chip investments and developers and software development or whatever.
We have a positive ROI on that already and that's really incredible. And I mean like I I get it because I also I look at the product myself and as somebody who's done real estate for you know 15 years I look at this and I'm like oh my gosh I could put any zip code in the country in here and I could prioritize what deals to look at.
Like this is sick. I can sort them by you know most recent listings. I can sort them by potential value like what rating they're given. This is great and there are even more features obviously coming out in 2026 so we're really excited about it and we think people share that enthusiasm with us. And so if companies can do that you know if a company like Palantir can prove to corporations hey if you invest a thousand bucks in us we'll get you a hundred thousand dollar return why would people not throw more thousand dollars at it right?
I think that's what Palantir is seeing. I think that's what Meta is seeing and Google is seeing and Microsoft is seeing. Now of course is it going to turn at some point? Sure. Like at some point there just won't be any more debt to finance and this is why we want to expand without debt. But and we are.
But this is very interesting to me this not this one this this find this cost of debt right here. This AI CapEx might also be relatively price insensitive. And so in other words companies are like hey if we have to pay a higher interest rate we will but we want to attract that capital to to to invest into into AI.
So the boom kind of keeps going which is interesting because it kind of gives you this weird duality like how on one hand is there a 35% chance of recession but on the other hand people are going to keep booming money into artificial intelligence. And I think the only way to reconcile that is with this ANZ research piece where you basically say, "Look, AI is the economy right now, right?" We can't deny that AI investments are a bright spot for the economy.
No No way you can deny that. We expect a 25 basis point cut. But here's the thing, the weak labor market could ruin everything. So, like the way I look at it is if we have this pendulum, okay, this is like that the pendulum over here and it's swinging, okay? And this right here is the recession. I should really put that on the left side.
That'll be the left tail. If that's recession and that's Goldilocks and we're kind of just swinging back and forth, what pushes us to recession is only labor, right? And you could actually have a labor-led recession and AI investment booms. It's just you're not going to see that AI investment boom in the stock prices anymore.
So, you'll still see the AI investment boom go on for a while. So, I think Burry's like years early on this depreciation curve issue, but I find this a somewhat interesting analysis, especially since I mean, at least right now, we're not seeing a risk of recession yet as ANZ says, but as we hear from other companies, hey, 35% chance next year for a recession.
And when you look at what Where is it? And where are they? Where are they? I lost them. Uh Oh, I already closed them. What What the bears say, the the MUFG group, when you look at their macro outlook, it's kind of like, "Well, remember, deteriorations happen suddenly." And so, this is where I I'm of this middle mindset where I say like it this is not a question of to invest or not.
Like definitely invest. But do you want to invest in a place where if you get rug pulled because some deterioration happens all of a sudden and you weren't prepared for it, that you go bankrupt and you start over? Or do you want to invest in a way where if the market goes down, it doesn't matter, you can actually buy more?
I like the latter. I think that's great because you you don't want to be exposed to a poopsy-doopsies. So, that then leaves the December Fed meeting. And the December Fed meeting, unfortunately, is one that I think will be a negative catalyst. It'll be hawkish. And because I think they're going to be hawkish, you're going to end up having more sensitivity to data in December.
So, I get bearish after really December 9th. So, we'll see. Now, some people are already hedging this, like what you're finding with Oracle's credit protection. Credit default swaps at Oracle are now at almost as high Wait, let's see here. The price of a 5-year credit default swap is at risk of toppling a record set in 2008 on a borrowing, which is crazy.
Uh because that's scary, right? Like we don't want to be in that kind of place. Oracle CDS has hit a record 1.9 percentage points in 2008 and you know, right now we're sitting at about 130, 120, 130. So, we're trending back to what we saw in 2008. This could just be hedging or it's an early warning sign.
That's also why people are looking at gold and silver going, "Okay, oh, people are running to the precious metals and away from risk assets because they're nervous." Might explain also why Palantir stock has had its worst month in 2 years during the AI sell-off. And that was published today. So, like even today it couldn't really come back uh to to that growth level.
So, you know, we'll see. At the same time, you still have venture capital funds that are quote-unquote snapping up zombies, like brands like Evernote and Meetup and Vimeo. They're buying these companies, cutting the staff, and then they're trying to like milk them for what they're worth by raising prices.
Kind of wild. But this puts together, I think, a very consolidated view overall of what's going on out there. Now, I'll take just a one last moment here just to mention uh this reinvest course is part of the Meet Kevin membership. It's going to have brand new lectures and some really good quality stuff you're not going to want to miss.
Uh this whole course is going to drop along I mean, all the other ones are already out, but the new course will drop uh on um December 1st. So, uh if you want to be in you know, get that new content, it will come out on December 1st, which I'm very excited about. Uh and then uh in addition to that, you are uh looking at reinvest.co has its Black Friday sale as well.
Uh so, take a look at that. Lifetime access to the AI reinvest.co. If you get that, you can bundle up the Meet Kevin membership, get lifetime access to Meet Kevin membership over there, which comes with all the courses, lifetime access to those. That's why you get the new courses as well. So, existing members will benefit from that as well.
Uh the top 10 stocks to buy for the next 10 years, you know, not personalized advice, obviously. And then if you want to invest in House Hack, obviously, make sure to read the offering circular and read the risk factors. So, there you go. Thanks so much for hanging out .
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