저자: Kevin · 외국인
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연준의 긴축(QT 포함)으로 소비 둔화와 경기침체 가능성이 높아지고, 금리가 높게 유지되며 부동산 조정이 길어질 수 있다고 주장. 연준이 금리 인하에 나서도 QT로 장기금리는 높을 수 있음. 단기 변동성 속에서 가격결정력(PP)이 큰 기업이 반등 시 강할 것이라 봄. 소파이(SoFi)는 자산가치 대비 저평가 가능성은 있으나 뱅크런 우려를 점검해야 한다고 언급.
다듬은 글
Bond deals are going down oil is going down stocks are going down Jamie dimon just warned about hell we've got a terrible warning coming from Jamie Diamond we've got a CPI report coming and next week we've got this idea floating around that could Sofi go bankrupt and cause a bank run we'll briefly talk about that in this video as well and we've got things to talk about regarding expectations and curves so we all like curves around here real estate broker I have courses on building your wealth they're amazing I keep adding content you get lifetime access to those and private course member live streams there is a coupon code expiring Friday it's coupon code PP I'll be closing bell this Friday you're welcome to meet me outside 5 00 pm on December 9th at 5 PM again but folks so let's get into the news first J medai talks up about how we're the strongest economy in the world this morning in an interview with CNBC tells us that consumers are spending 40 percent more money than what they were spending before coven tells us that households combined still have an additional one trillion dollars of money sitting in there checking and savings account and that even this Black Friday and this year to date we have spent 10 percent more than last year now inflation's been knocking on the door of 10 so maybe in real terms we're not actually spending 10 percent more but what did Jamie Diamond warn us of well he actually gave us two warnings one's a little bit more generic kind of expecting this one the other one's a little bit more ominous so warning number one was that Jamie Diamond expects consumers to run out of their excess savings by the middle of 2023 and that could cause a mild to hard recession which is a pretty wide range mild to Heart recession and that kind of Echoes The Narrative that the Federal Reserve tells us that well we are probably not looking at a soft Landing anymore the door to the soft Landing is substantially closing and we could be in a nice little recession doodle after all 70 percent of the economy is driven by and seventy percent of GDP is driven by the consumer so if the consumer stops spending what happens GDP goes negative growth goes negative year over year and earnings per share at companies go down which is the second half of a valuation Crush in the stock market the first half is a multiple Crush where people pay less for future earnings because their discount rates go up in English and simply put if you were used to paying 50 times earnings for a stock maybe now you're only willing to pay 25 times earnings for a stock that leads to the first 50 Decline and then if all of a sudden earnings go down 50 percent well then that multiple is now multiplying a number that's half as big so the stock goes down to another 50 simple of course that simple is very painful and if a recession does come in Q3 around Q3 Q4 of 2023 well it would align with the potential Peak that's expected for the FED funds rate and it would align with what the bond market is suggesting via the inverted yield curve which is screaming that we are about to enter a recession potentially as soon as Q3 of 2023 now many folks think we've already been in a recession q1 Q2 of 2020 uh two had negative GDP so why is it likely that we wouldn't already have been in a recession well depends sometimes those GDP numbers could get conveniently revised up and maybe we weren't actually in a recession we actually technically won't know if we were in a recession until generally about a year after the recession begins so determining how you're investing based on whether or not we're in a recession is usually a Fool's errand because we have no idea until it's already too late and it's already happened so what's the bigger warning though that Jamie Diamond gave not that we're potentially walking into a recession I think that's pretty much confirmed at this point that the FED is basically forcing a recession to stamp inflation out of the market we know that this has been their game plan and their MO since the beginning they just haven't been very transparent about it and there's actually the potential that maybe they've substantially over tightened in fact in a video I made a few days ago I talked about massive potential rate Cuts coming from the FED I want to be clear I expect those rate cuts to come after they finish hiking so we're still on the trend up we're still going to get that 50 basis point hike in December we're still expecting potentially two more 50 basis point hikes thereafter so that way we end up around a uh five and a quarter percent fed funds rate and then we'll stay there maybe for three months six months nine months who knows it all depends how much how soon inflation comes down but when it comes down I expect massive raid cuts from the fed the problem is while those rate Cuts could come or are we going to be in a dirty recession and could that recession actually be fueled by Jamie dimon's second warning Jamie Diamond's second warning is that never in our lifetimes have we actually been through a phase of quantitative tightening I think this is really interesting because Qantas Titan quantitative I should say it appropriately quantitative it's such a weird word never in our lifetimes he says have we been through quantitative tightening although there has been a little bit so I think Jamie Diamond was being a little hyperbolic about this because we did have a little bit in 2018 this 2018 cycle over here was actually where the FED began raising rates and then they started running off their balance sheets a little bit here in 2018 which actually led to quite a bit of a panic in the market we had quite a bit of a crash in December of 2018 and this tightening cycle became so severe in 2018 and 19 that Donald Trump threatened to fire the chair of the Federal Reserve Jerome Powell over rate hikes and the tightening cycle so we did have a little bit of offloading here but Jamie dimon the CEO of JPMorgan Chase says look we you've never been to a real QT cycle so we have no idea what could happen in fact he goes as far as saying look if we have two percent inflation it would not be unreasonable to have bond yields stay at four percent for a very long period of time and if bond yields stay at four percent for a long period of time mortgage rates are going to stay high for a very long period of time and they're going to cause a lot of pain to the real estate market the more pain you cause in the real estate market the less consumers spend right now Moody's is projecting that real estate prices are going to fall 15 from their peak in q1 Q2 of 2022.
they've already fallen about six to ten percent in many markets and I think we're going to go as far as 15 to 25 percent and if Jamie Diamond is right we walk into a recession and yields stay high because of quantitative tightening then mortgage rates could stay high for a very long time and the real estate bust could take years to buy bottom out not a quick v-shaped recovery last time the real estate market collapsed in 2006 prices started falling prices really collapsed in 2009 we didn't bottom Until the End about November of 2011.
that's a really big down cycle of about five years of a Down cycle and fear could exacerbate that right but not only that let's understand quantitative tightening a little bit quantitative tightening I'm just going to say QT now because that word is such a mess spell it it's crazy I.T there I just spelled it knee slapper oh so good got him anyway uh QT is the running off of the FED balance sheet and which basically means they're buying less treasury bonds and potentially in the future they'll even sell mortgage-backed Securities now what happens when the FED provides less demand for treasuries by letting them expire and roll off essentially well less demand for treasuries means the price goes down so more q t means lower prices for bonds lower prices for bonds and more QT means higher yields for bonds higher yields for bonds means higher costs of borrowing higher costs on credit cards car loans student loans housing loans and any kind of corporate borrowing everything gets more expensive so the QT cycle could actually keep rates High even as the Federal Reserve starts slashing rates so we could be in a really weird position where next year we start seeing what the world looks like when the FED actually slashes interest rates but at the same time ramps up QT to keep rates in the market High we are about to enter a very Bizarro world now I'm very optimistic about America I personally believe bad on America but by no means am I saying if you need any of the money you have invested in the stock market in the near to medium term which means anywhere between six months to two years all bets off we have no freaking idea what's gonna happen but we're watching the movements so we could try to position as best possible I personally like investing in companies that I believe have what I call PP I like it when PP goes up okay I like a strong thick paper PP is purchasing power that's it pricing power purchasing power interchangeable but generally I like investing in companies that have pricing power expanding margins look at a company like Nvidia forty percent net margins in some quarters look at AMD gross margins really powerful and phase solar Edge really strong growing margins growing revenues Tesla growing EPS the largest Automotive manufacturing uh margins that we've ever seen now some of that pricing power could Wane so you have to be careful but I personally believe that is the entire Market sort of collapses companies with high free cash flow and pricing power or PP can actually outperform on the rebound everything's probably going to hurt in the meantime as everything sinks but when the rising tide comes back up I think the ones that stand strongest are ones with the most PP okay so always look for good strong Papi now Jamie Diamond's warning about QT I think is one that's really understated in markets right now and it's one that we have to pay attention to not just here in the next few weeks but honestly for the next months two years but in addition to that in the very short term here a lot of folks are wondering Kevin why is the stock market going down and what do you have to say about Sofi okay so look I've been saying this for about a month now because a month ago we were just on about to have the uh release of the October CPI numbers in November and I said what's likely to happen if we have a good CPI report is the stock market will run until we get to about a week within a week of the next CPI report because once you get within a week of the next CPI report which this is being filmed within a week of the next CPI release in December December uh 13th we have the next CPI release for the November data anytime you're within a week of a really big report like that or a Fed decision which happens the next day the 14th what happens well institutional buyers stop buying they start selling why because how the hell are you supposed to justify to your investors now you're on a buying spree right before critical data comes out this is so easy to play if you want to trade the market in my opinion you should know before a data release volatility goes generally well I mean it depends the volatility I should say volumes plummet volatility and uncertainty goes up so right before a data release like the week week before volatility up volumes down which is usually associated with prices go down it makes sense because less people are buying people are fearful like what if the report's really bad whether you don't want to be in if the report's really good you could get back in and then you get a rally that's the way it works so what are the expectations for that CPI report next week well the expectations are for a month over month CPI gain of 0.3 percent I hope we come into the low side of that point three percent is three point six percent annualized I'd like to be closer to two percent but I have no idea core CPI 0.3 month over month year over year we're expected to go from 7.7 down to 7.3 how nice it would be to get under seven percent again it's terrible it's a very high level of inflation and core you're over you're expected to go down to 6.1 so those are CPI expectations next week and right now the break-even rates for uh for the market are a little volatile they're up more than they've been down over the last few weeks and unfortunately that's been leading to some pain in the stock market keep in mind break evens are the Market's measure of inflation and when the market believes that inflation is potentially going to Trend up we see break evens go up uh so this is kind of what that chart looks like right here and if you see the trend here since the war we have a downtrend but if you zoom in where I am blocking the screen right now you see this volatility over here we had a spike at the end of October a nice relaxation after the October CPI read in November nice plummet here but going into the CPI print we see this uncertainty again that's what this is It's the tumor of uncertainty and uncertainty is exactly what's also Weighing on a company like sofa look do we actually think sofa is going to go bankrupt probably not but what's an interesting thing to do if you want to understand a company like Sofi well I have a very and we reviewed this in detail in my course member live stream this morning remember if you join any of get private access to me in our daily live streams some people join the courses just for that it's actually not that expensive you can get into our least expensive course and get access to these live streams for like I think it's like 400 bucks right now or something like that for Lifetime access to all the future content that gets dropped in these courses it's not bad so I'd really consider that take advantage of that code PP linked Down Below in honor of pricing power but uh in our course member live stream this morning and I'm just going to speed this up I do I have a very strict way of how I analyze cash and so I put sofi's asset position when I strip out things like servicing rights good will intangibles when I discount their loans I discount their loans which are an asset for them because they make Loans Discount their loans for credit losses beyond what they discount them to I discount them to about 10 point uh 10 billion dollars I give them a cash of a position of about 1.2 billion dollars I say they have assets around 11.12 11.2 billion dollars that's the Kevin asset math okay that puts them around a book value of about a buck per share so at about a dollar per share about a billion dollar market cap after their liabilities that's kind of where I put so-fi at like okay if they're trading for under a dollar per share they're like four dollars per share right now that's when they're under Kevin's version of Book value they're actually knocking on the door of Book value if you use their company's Equity but I think that gives too much value to potentially inflated loan values and potentially inflated Equity So based on Kevin's crazy math I think a safe level of equity is around 1 point two billion dollars for the company when I take out demand deposits and payables and long-term liabilities okay this is being very aggressive it's a large Warren Buffett style margin of safety all right so what I am concerned about though is if so if I were to trade under a dollar I would be fearful that the market is potentially trying to start pricing in a bank run risk I don't actually think Sofi is going to go under a dollar it it is possible if that were to happen though I would think oh wow you could buy Sofi at a discount to their Book value which is a really good deal potentially unless of course the market is pricing in a bank run a bank run would occur if let's say uh if if so far has uh five billion dollars in customer deposits which they roughly do and 30 percent of them said we want our money out that would be them demanding 1.5 billion dollars but they only have 1.2 billion dollars in uh in in actual cash and cash equivalents they've got 1.2 billion dollars uh well well then sulfite runs out of money in a bank run commences now you do have FDIC Deposit Insurance because so if I did get their banking license you can verify that information on their website so am I really concerned about a bank like so because they are a bank now running out of money no not really I mean it's common for banks to lend out their deposits I was a I did think they had more cash though I was a little surprised I thought you know hey they've got all these loans they're using people's deposits to make loans fractional Reserve banking I get it uh I you know my belief is that the real Bank Run risk for Sofi gets priced in when and if that stock Falls even more you start knocking on the door two dollars for the stock or under three dollars then it's like okay are people really starting to get fearful about the platform I don't think that fear exists right now in fact I think sofa is doing great things uh they're doing I think they're they're getting ready to announce the 3.75 yield on their checking or savings account or whatever it's actually not that terrible right like that's pretty dang good you don't have to deal with the headache of treasuries uh seems kind of Epic to me but then again you wonder like do you want to keep your money in the safest places today and is that potentially at you know you know under your mattress maybe is it in Gold maybe or is it a JB Morgan you know when you just put your money in the big Banks I have no idea uh but I've been asked about this so I wanted to provide just a little bit of my brief look on this I actually do think sofa is growing very nicely and they're doing a lot of personal loans but then again personal loans I think are very risky in a recession so something to keep in mind the then what's going on with yield curves look the yield curve is in the crappiest position that it's been at since really the uh 1980s when we got Paul volckard now you could see on this left chart right here that I've just now zoomed into see that blue line going under the white line yeah that's how much the yield curve is inverted look how much it inverted in the 80s and yield curves can invert for two reasons one they invert for monetary reasons which is basically the fat is just going into an aggressive tightening cycle that we don't think will last very long or it's just straight up fear that the economy is going to go into a deep recession we don't really know what the reason is for this yield curve inversion it's probably a little bit of both that is we're probably going to go in a recession and the FED is after all hiking very quickly so I just wanna encourage anybody who's investing right now to just be extremely patient there's no way you can judge a stock or a company based on what's happening on the stock price day to day I think the best thing to do is if you want nothing to do and you want the most safety cash if you don't need the cash you have enough income to support your expenses and you don't need what you're investing but put your blinders on to what your net worth is try to ignore that I know it's very hard to do I know the losses make you feel like you know you get that lump in your throat and your your eyes water up and it's like damn you know lost one yeah even though you haven't sold yet to realize it it still hurts you it makes you feel like you're making mistakes right that's what a recession is a recession is designed to make you feel like [ __ ] and if you feel like [ __ ] the recession's working that's what this is supposed to feel like yet if you can have that power within yourself to zoom out and and look at the last 100 years of the stock market and you had to pick 10 points to invest in I can almost guarantee you you would pick a recession to invest in every single time are you gonna be perfect with your timing absolutely not are people going to give you [ __ ] for being exposed to the stocks in this sort of environment absolutely when I started buying real estate in 2011 everyone gave me crap they're like oh real estate is such a terrible investment why would you invest in housing oh my gosh what a scam that's fraud best time to invest but we won't have that feeling potentially for another five years maybe in five years we'll all be able to look back and go damn that PP got big God I love pricing power good luck everyone
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