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Well, the government shutdown is upon us again. And not a terrible surprise given that the longest government shutdown we've ever had in history was under Trump 1.0. That was in January of 2019 lasted 35 days. The runner up for the second longest government shutdown was Clinton during the soft landing of 1995, 21 days, followed by Obama 16 days.
Which means if you combine Clinton and Obama, they got slightly more than Trump 1.0. But none of that really matters. We've had 10 historical shutdowns in history. They are almost always a buy the dip opportunity because they create uncertainty. Markets don't like uncertainty, and we usually say buy the dip.
The only reason you might not want to buy the dip is if we have a plunge into some kind of economic jobs recession. That does not seem to be on the radar at all right now. Now, hat the issues are, and what each side is saying, and what the odds of a shutdown are, as well as what VA is threatening, but what you really got to understand uh is broadly government shutdowns, not that big of a deal.
Now that it's combined though with the potential for jobs recession, a little poopy doobie. Now, this morning's PCE spending numbers for August don't really suggest that there's a lot of concern that people were going to get laid off anytime soon. Real personal spending increased more than personal income increased.
We see more spending than we saw during this, you know, sort of the the save and uncertainty period of April and May. We talked about that in our PCE video this morning. And following the PCE numbers coming in with an ad expectations read for this month, but a slightly downward revisions for last month, the Atlanta Fed took this data and then what they do is they adjust their inflation adjustments as well as taking the latest sort of spending data and they update their GDP model.
Look at this folks. I mean, tell me this doesn't look bullish, at least for now. GDP at the Atlanta Fed now increased to 3.9%. Private domestic investment growth at 4.1%. Real personal consumption expenditures at 3.4% and net exports growing revised up to.58 percentage points of growth. That all leading to a 3.9 percentage point gain in GDP estimates for Q3.
Now, keep in mind, these are aggressive Q3 estimates that could be amplified by those downward revisions in inflation that we're just not seeing as much of that inflation yet. Uh, you know, who knows? Maybe we won't. Maybe there's, you know, people are taking it in the margins, so to speak. But what's incredible here is as while it is possible that lower inflation expect or like readings are leading this GDP number to be artificially high because you know if you subtract out less inflation GDP looks bigger right uh while that's possible it does seem like the underlying consumer is still cranking which is great of course now we got this potential for a government shutdown and more layoffs at the same time as we get jobs reports which this creates some nervousness.
So what's actually going on here? Okay, so John Thun says we're probably plunging towards a government shutdown. The Senate technically goes back to work cuz they're off right now at home in their districts September 29th. The House of Representatives are tentatively expected to be back after October 1st, so like Thursday, Friday of next week.
But Republicans might purposefully not bring the House of Representatives back next week so they can keep the pressure on the Senate to get a continuing resolution passed. That's a clean continuing resolution. Now, what that refers to is Republicans just want to kick the can down the road, fund the government for about six extra weeks, and let's not talk about the Democratic demands.
Democrats are demanding money. Now, we're going to talk about that in just a moment. Donald Trump did have a bipartisan meeting planned with congressional leaders, Republicans and Democrats, but ended up abruptly cancelling that, deciding that no meeting with congressional leaders could possibly be productive.
That's a quote from Donald Trump. And then ended up cancelling talks with Schumer, you know, Chuck Schumer and Hakee Jeff, Democratic leaders of the Senate and and House. Now, Mr. But, and this is a scary one, he wants this government shutdown in my opinion because he wants mass government layoffs. And that's the big risk factor here is that we end up getting big government layoffs that are sort of like Doge 2.0.
Now, Democrats are responding to this and they're saying, "Hey, like, dude, we're not going to be intimidated. They're going to fire workers anyway." Hakee Jeff literally tweeted, "We will not be intimidated by your threat to engage in mass firings. get lost. And you know, the Brookings Institute is arguing that Democrats that have no control right now at all of the House, Senate, or White House are kind of being pressured by their constituents to be a little bit more ballsy.
Like a lot of people look at Chuck Schumer and they're like, "Dude, you were a wet blanket the last time we had a potential for a government shutdown." Uh, and uh, he kind of just rolled over towards Donald Trump. Well, so what did you end up with? A lot of people kind of making fun of Democrats for that one and blaming Democrats.
Now, Democrats are kind of digging in their heels, seeing this as an opportunity to shut down the government and lay the blame on Trump. Now, right now, the Trump administration needs seven Democrats, which I guess could be two independents, but really, you need seven votes because you have 53 Republicans, and you need to get past the filibuster.
So, you need 60 votes on this. Now, uh, with the commentary right now or or at least like what Democrats are demanding are two things. Number one, they want affordable care act subsidies, Obamacare subsidies. Uh, and number two, they want the restoration of Medicaid benefits. Those are for lower income individuals.
So, uh, ACA subsidies are currently set to expire December 31st of this year. and they may start showing up like those like higher prices related to those subsidies expiring may start showing up in annual renewals when the renewal window opens November 1st. And this is where a lot of people are worried that people just aren't going to renew their health insurance because they're going to see out-ofpocket expenses potentially balloon as much as 70%.
If these Affordable Care Act subsidies do not pass. Now, the total expectation over the next 10 years for the Affordable Care Act subsidies and Medicaid benefits of about a trillion dollars that were cut from the Big Beautiful Bill. That was a way that Republicans were able to get the Big Beautiful Bill to have a lower price tag was cutting Medicaid.
So, basically like giving tax breaks to richer people and to AI companies, but taking Medicaid benefits away from poorer individuals. That's how they made the big beautiful bill only cost $3 trillion, by ripping a trillion dollars away from poor people via Medicaid benefits. Democrats are like, "Yo, double bird, bro.
F you. We want a reversal here. We want that trillion dollars back." So, the CBO was estimating that this is going to be about $1.4 trillion over the next 10 years. And that's what Democrats are looking for. Now, I want to show you some of these actual articles and some of the components that go into this.
I do quickly want to shout out if you're not part of the Meet Kevin membership yesterday or already. We had a great bounce here on our 414 line on Tesla. I've been calling for Tesla to go down to this 414 line over the last couple days and yesterday it just tanked basically straight down to 414. So, you're not part of this analysis yet.
You want to be a part of this. We also gave warnings that this is not the best week for call options on the cues. After we hit our $600 price target, we said just wait. Now is the time to maybe plan out for October options or further out. Why? Because of these government shutdown fears. And so if you're not yet a member of the Meet Kevin membership, consider joining.
Got a lot of people joining today. Thank you so much for joining and being a part of the Meet Kevin membership. ; is at meetc.com. You know where it is. Okay. So now what we've got to do is we got to analyze a little bit of like what what is being said from VA and what is in this memo from the federal government.
Take a look at this. This memo is kind of wild. All right. Ready for this? So the memo is right here. This is the memo from the uh uh basically from the White House. Uh and so this is getting circulated uh on uh the potential for quote unquote Democrats signaling their intent to break a bipartisan trend and shut down the government with their demands for a trillion dollars in new spending.
Now they call it a trillion dollars in new spending here like the White House, but it's not really a trillion dollars in new spending. It's like bringing back spending that was cut in order to fund the Trump tax plan, the big beautiful bill. Right? So, Democrats are trying to get that back. And you could see very frequently, you're going to see I highlighted them in green, uh, with the exception of this one right here.
I guess I can make that one. Uh, there's a lot of yapping about how Democrats are to blame here. Look at this. Democrats, Democrats, Democrats. Uh, and then, you know, they bury kind of their plans over here, then Democrats, Democrats. So, they mentioned Democrats a lot here because the White House is really trying to blame this on Democrats, but they're going to use this as an opportunity.
And this is where the mass layoffs potentially come from. Here it is. Programs that did not benefit from an infusion of mandatory appropriation will bear the brunt of the shutdown. If the government shuts down on October 1st, that shutdown date, the White House is directing that all agencies, all agencies are directed with, you know, respect to applicable laws to consider reduction in force notices for all employees in all programs, projects or activities that satisfy all three of the following conditions.
Discretionary funding lapses on October 1st. So basically, if the funding expires via government shutdown and you do not have another source of funding and the projects don't have anything to do with Donald Trump's specific priorities, we want you to start furlowing people right away. Now, this has VA written all over it.
you know, your project 2025 guy, your project 2025 guy, which, you know, Donald Trump said he knew nothing about and there would be no implementation of project 2025 because he doesn't know anything about it. Uh, project 2025 has basically just been a checklist for this administration so far. We've just been checking stuff off like it has been just been playby-play, check, check, check, check, check.
Uh, that's really a topic for a different video. How much of that has been checked off, but we we already know this, so this isn't a surprise. So what you find here is that while Donald Trump is trying to blame Democrats, you have VA who is promising to bring pain on uh bureaucracy. A lot of people actually will say, "Hey, this is exactly what I want.
Like I want VA to go in there and basically, you know, drain the swamp or or clean house or whatever." Well, this is bots's opportunity here to go in and blow up uh with firings the government in sort of a Doge 2.0. And Donald Trump is going to brand it as a Democratic failure. So, Donald Trump will brand it as Democrats are firing all these people because they're shutting down the government.
VA's going to go in and actually slay with the side and start firing. It's basically like Trump being able to how he was able to blame uh uh you know Elon for firings with Doge. He can now blame Democrats and he could get this sort of reduction in government spending which is what Donald Trump wants.
And a lot of people honestly are like hey like this is what I want. This is what I voted for. Okay, whatever. You know, this is this is everyone's own personal opinion. Oh, look. A little banner popped up that says uh there's an expiring coupon code tonight called Daddy's Back for the Membership. By the way, like I have to say we have we are kicking freaking butt.
We have this like um uh analysis that we're doing now when we do fundamental analysis. I won't show it all, but we have in our stock uh like in our course member app, we have a stock tab where people could sort by ticker symbol and look up my fundamental analysis on individual stocks, get my opinion on it, my bottom line opinion.
You can also now click on the PDFs to get my annotated earnings calls and earnings reports. So you can actually click on the PDF and have the PDF, the very PDF that I used to annotate my fundamental analysis. Uh and and you could get that like this morning we did, you know, Costco and we talked about a lot else in the course member membership.
And so you get that for life and you could potentially, you know, write this off on your taxes as well. But anyway, take a look at this. So basically Trump is going to fire a bunch of people. We're going to get these furlows and take a look at this. agencies should not repurpose balances or use transfer authority.
So basically like we don't want you to move money around. We basically just want you to cut and if you cut and then after cutting uh you don't have that that you know that money is basically just going to go back to the Treasury Department. We're we're not going to let you move it around or repurpose it for something else.
We just want those jobs gone. We want to shrink the size of government uh and then obviously provide more tax benefits to the rich. We remain hopeful that Democrats in Congress will not trigger a shutdown. Notice what they've done here. This is actually very brilliant framing. In the very first like four paragraphs, everything they say is Democrats are to blame, Democrats are to blame, Democrats are to blame, Democrats are to blame.
Then they go, "By the way, fire everyone." And then they end it with Democrats are to blame, Democrats are to blame. It's kind of brilliant if you think about it because the way they're selling this is Democrats are to blame, but they're burying, you know, the substance in the middle by framing it around Democrats are to blame.
And the argument is, hey, this is a great opportunity to go fire a lot of people. So, like VA is really excited about this opportunity. Uh, and you know, the Washington Post is reporting on this obviously as well. Uh this is you know the very real potential that a lot of federal employees could lose their jobs uh and that once government funding is reinstated usually agencies are able to bring their furled workers back.
But not in this case the government is literally being directed to keep only the smallest number of employees necessary to legally operate. So this is where a lot of people are like, "Oh my gosh, that's going to lead to more weight times with social security or you know, whatever." Right? So these these are real issues.
Now, Governor Mr. Thoon is like, "Hey man, Democrats should just pass a clean bill." Like why why are we trying to include all this stuff? Because this is like Democrats only opportunity here because this idea that Thoon's like, "Oh, we should debate Medicaid separately or Obamacare funding separately." Cool, bro.
Great story. But, you know, you're never going to have a separate debate. You know, it's never going to happen. So, that's why Democrats right now are like, "Bro, like, it ain't going to happen unless you shut it down now." Which increases the odds of a government shutdown. And again, my opinion, usually government shutdowns are a fantastic buying opportunity.
Big fan of the buying opportunities. The problem with the buying opportunity is it coincides with jobs data. October 1st, we get ADP numbers. Uh and then after October 1st, what do we get? We get the actual labor report on the 3, which is scary because, you know, if now you're going to add on top of a government shutdown and a lot more government layoffs, more than the ones we were already expecting, you're potentially getting double bad news next week on jobs.
And that's bad news on a government shutdown leading to government job losses, but then also potentially bad news on actual jobs data. Now, it's unclear what we're going to get in terms of jobs data. We expect that it's going to be revised down. It always is, right? We we get jobs data be like, "Oh, we got 50,000 job growth." And then we'll end up getting a bunch of revisions and then guess what? The job growth will be a fraction of
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