$90 bln drain yesterday. I don’t like it.

Summary

In this video, the host discusses his new haircut and delves into the stock market's modest positive close, influenced by major tech stocks like Nvidia, Apple, and Amazon. He notes the significant corporate tax drain and lack of market correction, suggesting the market may be overvalued. The host also addresses the government's surplus, comparing it to the deficit and its impact on the economy. He shares his insights on buying opportunities in stocks like Lenar and Google and discusses the dynamics of commodity trading, emphasizing the importance of understanding market patterns and having a long-term perspective.

Takeaways

• 💇 The speaker got a haircut at a local barbershop in New York City, which was their first non-self haircut in a long time.
• 📈 The market closed up with modest gains, influenced significantly by large cap stocks like Nvidia, Apple, Google, and Amazon.
• 💹 There's a large impact of a small concentration of stocks on market averages, despite a 90 billion corporate tax drain.
• 🏦 The speaker still believes the market is overvalued and may experience a significant correction, especially with the government running a surplus in June.
• 💔 The government's surplus represents a net transfer from the economy to the government, taking away 100 billion, with a need to recover 1439 billion since the April 15 tax deadline.
• 📊 The speaker predicts a potential market correction, comparing the current situation to the economic conditions of 2022, which saw two quarters of negative growth.
• 💡 The speaker emphasizes the importance of understanding the difference between government spending and draining reserves through the sale of treasury securities.
• 📉 The speaker bought stocks of home builders and Google when they were down and believes in following the actions of producers and banks in commodity markets.
• 🛑 The speaker warns of a potential pullback in oil prices around $80, based on recent selling by banks and producers.
• 🗓 Historically, the speaker has been vocal about market predictions, including calling the bottom of the 2022 sell-off and advising to buy during panic.
• 🤼‍♂️ The speaker encourages daily exertion and maintaining a long-term perspective amidst the ups and downs of the market.

Q & A

What significant change did the speaker make to their appearance?

The speaker got a regular haircut from a barber shop, which was the first time in a long time as they usually do a self-haircut with clippers.

How did the speaker describe their appearance before getting the haircut?

The speaker described their appearance as looking like a maniac and a cross between someone escaping from an insane asylum and Robert De Niro.

What major factor is influencing the stock market averages according to the speaker?

The speaker mentioned that the stock market averages are greatly influenced by a small concentration of big name stocks like Nvidia, Apple, Google, and Amazon.

What economic term did the speaker use to describe the government's current financial status in June?

The speaker used the term 'government surplus' to describe the government's financial status in June, indicating a net transfer from the economy to the government.

What is the speaker's view on the market's current state?

The speaker believes that the market is ahead of itself and that despite the strong leading flows, there hasn't been any significant correction yet.

What was the speaker's prediction regarding the market's future correction?

The speaker predicted that when the market corrects, it could do so in a very big way, but they also mentioned that the magnitude of the drain from the economy is not that significant in the grand scheme of things.

What did the speaker say about the government's balance as of April 14th?

The speaker mentioned that there is a need to recover approximately 1439 billion to get back to where the non-government's balance was on April 14th.

What was the speaker's stance on the understanding of the economy by certain individuals in the financial sector?

The speaker criticized certain individuals, including a billionaire hedge fund manager, for lacking a true understanding of the economy and being more focused on exploiting legal loopholes for profit.

What advice did the speaker give regarding personal responsibility in the stock market?

The speaker advised taking responsibility for one's own actions in the stock market, reflecting on past experiences, and not to expect precise timing on market movements.

What activity did the speaker recommend for maintaining perspective and mental toughness?

The speaker recommended engaging in some form of hard exertion, such as hiking, long walks, boxing, or jiujitsu, to maintain perspective and mental toughness.

What was the speaker's experience like at the barber shop?

The speaker described the barber shop as being 'underground' and having an entrance that resembled a subway entrance. The barber, Mike from Brooklyn, was watching soap operas when the speaker arrived.

Outlines

00:00

💇‍♂️ New York Barber Experience and Market Insights

The speaker starts by sharing a personal anecdote about getting a haircut in New York City, which was a departure from his usual self-haircutting routine. He then transitions into discussing the stock market, noting that despite a modest positive close, the market is influenced heavily by a few large stocks like Nvidia, Apple, Google, and Amazon. He mentions a significant corporate tax drain and expresses concern that the market may be overvalued. He also discusses the concept of government surplus versus deficit, explaining how the current surplus represents money taken away from the economy, which could lead to a significant market correction if it continues.

05:01

📉 Market Concerns and Personal Investment Moves

The speaker continues to express his apprehension about the current market environment, despite acknowledging that the drains from the economy are not as significant in the grand scheme of things. He talks about his personal investment decisions, such as buying stocks in home builders and tech giants like Google and Amazon when they were down. He also discusses his strategy for investing in commodities, emphasizing the importance of following what producers and banks do. He predicts a potential market pullback and provides a historical context by referring to past market corrections and his own experiences.

10:03

🗣️ Reflections on Market Dynamics and Economic Understanding

In this paragraph, the speaker reflects on the dynamics of the stock market and the importance of having a long-term perspective. He recounts instances where he advised buying during market downturns, facing backlash from those who disagreed with his timing. He emphasizes the need for individuals to take responsibility for their own investments and not to expect precise predictions from anyone. He also criticizes those who make money through questionable practices, advocating for integrity and understanding of the economy over short-term gains.

15:04

🏋️‍♂️ Life as a Struggle and the Value of Hard Work

The speaker concludes by likening life to a 12-round fight, emphasizing the need for daily effort and resilience. He shares his experience of getting a haircut from a barber named Mike in a unique, underground shop, adding a personal touch to the narrative. He encourages his audience to engage in physical activities like hiking, walking, boxing, or jiu-jitsu to maintain mental and physical toughness, and signs off with a reminder to stay strong and prepared for the ongoing challenges.

Keywords

💡Market

The term 'market' in the video script refers to the stock market, which is a platform where buyers and sellers trade shares of publicly held companies. The speaker mentions that the market closed up, indicating a positive trend in stock prices. This is central to the video's theme of discussing financial trends and personal investment strategies.

💡Nvidia

Nvidia is a leading technology company known for its graphics processing units and is one of the 'big name stocks' mentioned by the speaker as having a significant influence on market averages. The company's performance is used as an example to illustrate how a few large companies can sway the overall market direction.

💡Corporate Tax Drain

The 'corporate tax drain' refers to the outflow of funds from the market due to corporate tax payments. The speaker discusses a '90 billion drain' as an example of how such financial activities can impact market liquidity and potentially lead to market corrections.

💡Government Surplus

A 'government surplus' is the opposite of a deficit, where the government's revenue exceeds its spending. The speaker mentions the government running a surplus in June, which implies a net transfer of funds from the economy to the government, affecting the overall economic liquidity.

💡Economic Growth

Economic growth is the increase in the production of goods and services in an economy over a period of time. The script talks about the impact of government surplus and corporate tax drain on economic growth, suggesting that these factors can slow down the pace of economic expansion.

💡MMT (Modern Monetary Theory)

Modern Monetary Theory is an economic theory that the speaker seems to reference, particularly when discussing government spending and the issuance of Treasury Securities. MMT posits that currency-issuing governments can create new money without immediate concern for budget constraints, a concept that underpins the speaker's views on government finance.

💡Treasury Securities

Treasury Securities are debt instruments issued by the U.S. Department of the Treasury to finance government spending. The speaker discusses the sale of these securities as a 'reserve drain' and explains how they are purchased with money already in the economic system from government spending.

💡Mega-cap Tech Stocks

Mega-cap tech stocks refer to the stocks of very large technology companies, such as Apple, Microsoft, and Google, mentioned by the speaker. These stocks are significant market movers and are used to illustrate how a few companies can disproportionately affect stock market indices.

💡Home Builders

The term 'home builders' in the script refers to companies that construct residential properties. The speaker mentions buying stock in a home builder company (Lenar) when its price was down, demonstrating an investment strategy of buying low during market downturns.

💡Commodities

Commodities are basic goods used in commerce that are interchangeable with other goods of the same type. The speaker discusses oil as a physical commodity, advising viewers to follow the actions of producers and banks when investing in commodities, as they can indicate market trends.

💡Perspective

Perspective in the video script refers to the speaker's advice to viewers to maintain a long-term view and not to be swayed by short-term market fluctuations. The speaker emphasizes the importance of stepping back and considering the bigger picture when making investment decisions.

Highlights

The speaker got a haircut for the first time in a long time, choosing a local barber shop over self-haircuts.

The stock market closed up again, influenced by large cap tech stocks like Nvidia, Apple, Google, and Amazon.

A significant corporate tax drain of 90 billion occurred, with no market correction seen yet.

The speaker believes the market is overvalued and anticipates a possible major correction.

The government is running a 100 billion surplus in June, which is a net transfer from the economy to the government.

There is still a need to recover 1439 billion to reach the pre-April 15 tax balance.

The deficit for the year is projected to be around 1.4 to 1.5 trillion, including the 200 billion drain.

The speaker reflects on the economic impact of large drains in 2022 and the market's response.

Interest income transfers are discussed as a positive economic factor, contrary to popular negative views.

The 20-year Treasury auction is mentioned as a non-issue due to the money already being in the system from government spending.

The speaker bought stocks in home builders and Google when they were down, and shares in Amazon and oil company PSX.

Oil prices are discussed, with the speaker predicting a rebound and subsequent pullback based on producer and bank actions.

The speaker recalls past market corrections and his predictions, emphasizing the importance of perspective in investing.

The speaker criticizes short-term thinking in social media and the need for long-term perspective.

The speaker discusses his philosophy on integrity, knowledge, and playing by the rules in contrast to certain wealthy individuals.

The speaker's experience at a unique barber shop in Brooklyn is shared, adding a personal touch to the discussion.

The speaker encourages daily effort and perseverance, comparing life to a 12-round fight.

Transcripts

what's going on everybody it's Tuesday

June

18th still here in New York

City got a haircut

today first time I got a regular haircut

in like I don't know as long as I can

remember I usually I use my my uh my

clippers and I just do a self haircut

but there a little barber shop right

down the street I went in there cuz I

started looking like a maniac I was is

looking like a cross between some uh

escape from a from an insane asylum

combined with Robert

dairo so I got a

haircut uh all right let's talk about

what's going on so market closed up

again today just modest uh positive Clos

D folks these averages are being

influenced greatly by a

Nvidia uh you know these big name stocks

Apple Google Amazon it's it's a a small

concentration of stocks that have a very

large impact on the

averages but uh leading flows are still

strong yesterday was a 90 billion drain

on that corporate tax drain which I've

been talking about and you know we

really haven't seen any kind of a

correction whatsoever I still think that

the market is ahead of itself we've had

right now in the month of June which we

are

in government is running a 100 billion

Surplus remember government surplus is

the opposite of a net of a deficit the

deficit which I don't use that word but

I'll just use it in this uh explanation

is a net transfer to the economy

government surplus is a net trans

transfer from the economy to the

government so it's it's it's taken that

away okay that's 100

billion taken away and by the way we

still have like

1439

billion to

recover since the April 15 tax Trin to

get back to where the the non-g

government's balance

all right the economy's balance was on

April

14th I think when this thing corrects it

it can correct in a in a very big way

but um again I have to say that in all

fairness these

drains

okay 200 billion

whatever um they're not that big in

terms of the over overall transfers like

if you look at what the deficit is going

to end up being this year okay by

September 30th we're probably looking at

you know a 1.4 1.5 trillion

deficit and so that would

include a 200 billion

drain

so like I said in a in a prior

video when you think about for example

2022 when we had a

1.7 trillion drain for the

year I mean that was massive and that uh

ended

up creating two quarters of negative

economic growth okay and we had you know

was a it was a rough year in the stock

market in

2022 all the way up to October oober

2022 which I basically called out the

exact date of the bottom in that sell

off when everybody was panicking about I

said we're going to reach an inflection

point

where the negative impact of rate hikes

you know because the it's it's the

discounting future cash flow for

financial assets I said that'll be

offset by a rise in in interest income

transfers nobody else was saying it I

was the only one saying that and by the

way everybody now was talking about

interest income transfers but the funny

thing is they're talking about it in a

negative

way like oh the government's going to

have to pay all this interest yeah that

that goes into the economy and it's

nothing for the government in its own

money and its own currency by the way

speaking of

that I I saw a thing this

today the 20-year auction treasury

auction remember going back to like the

fourth quarter just getting into the

fourth quarter of 2023 I was talking to

you guys and I said all these monists

are freaking out because they're saying

the fourth quarter of 2023 is going to

have a record

issuance of Treasury Securities and

they're like oh my God who who's going

to buy all that and I said back then

that this is a a a a

nonissue when you're talking about

because I mean it it's just like it's

again it's another one of these

comical uh lack of

understanding on the part of the monitor

who's going to buy them the money to buy

treasuries comes from government

spending itself I always use the the uh

analogy you got to fill up a swimming

pool with water before you could drain

it the sale of government securities is

simply a reserve drain the spending puts

the money into the system into the

economic system and then people just

exchange those reserves that cash for

treasury Securities CU they're safe and

they're liquid and they have an interest

rate attack so like when you see this is

funny because had so many and I've I've

spoken about this many many times every

time it has popped up and believe me

mark my words it's going to pop up again

at some point in the future where

they're going to say oh my God this is

going to be a record treasury issu is

how they going to sell all this

stuff and they always sell it because

the money is already

there

so it's funny how like nobody catches on

and it just keeps repeating and it keeps

repeating and it keeps repeating over

and over and over again all let's get

back to the stock

market I'll be honest I do not like the

current environment where even

though I just kind of said that the the

the the magnitude of the drain is not

that big let's say let's say we're

talking about 200 billion by the time

the fiscal year ends on September 30th

um and that that that's showing up in

the slower rate of economic

growth but I think it you know a lot of

what we're seeing I think in like the

the stock averages again they're being

influenced greatly by these large Mega

cap tech

stocks you know

Nvidia Apple Microsoft

Amazon Google etc etc there's a lot of

stocks like I bought some stock

today home builders were down you know

pretty sharply lenar was down I bought

lenar I bought what I bu today I bought

some Google today that was down um

Amazon recently was down I bought so

there's stocks uh oil PSX I I I bought

um Philip

66 oil was up at 8 I said it was going

to rebound remember when it went down to

72 I said there's good buying by

producers down at this level how many

times have I explained to you guys that

when it comes to physical

Commodities you got to do what the

producers are doing and you get that

report every Friday by the way I break

that down in my report in my mmt Trader

report I go through that when the report

is released it has it in in there what

should you do with gold with

oil with silver if you're wondering I

have it in there because I follow what

the producers do and I follow what the

banks

do so when it was down at 72 I

said you got to be buying it down here

and I said up at 80 which is where we

are right now we have

seen good bank selling and producer

selling at 80 so until I see a reversal

of that I'm saying 80 right now we're

going to see a pullback from 80 or

slightly above 80

whatever so yeah it's all in there folks

it's all in there

um so I went back and I looked at

March when we also had the uh quarterly

corporate taag

Trin and

it took a couple of weeks like two weeks

after

that you know that

deadline when the market started heading

down and we had like a 6% correction I

think we could see that again uh look

I'll go back to what I've been saying

the leading flows the leading spending

flows are very strong you cannot you

know that's that's the water coming out

of the pipe

volume is

huge uh you know the the the uh the pace

of that flow is very very

large I mean for now you can't go

against that but when I see the

government running a positive balance a

surplus for the

month which is what's happening now I

mean that is a net drain from the

economy

and you know as as B as stocks are right

now you know that's the opposite

situation of what we saw in 2022 when

everybody was selling and panicking and

freaking out and I could give you so

many examples of me

personally when I've been through

this either as a publisher of my report

where people were freaking out and they

were selling you know the I remember um

in uh late 2018 in December 2018 I had

people cursing at me cursing at me

because I said you got to buy

that all

right so many of these uh instances

where I go back remember yesterday I

talked about how you got to reflect on

that you got to give yourself some

perspective and and we don't often we

don't do that we just we live in the

moment and I think a lot you know

especially nowadays with social media

and everything like that like oh our um

you know our time frame our uh you know

we just it's very short term everything

is very short term you got to be able to

step back and get some perspective

that's what I spoke about

yesterday that's what I spoke about

yesterday and I remember all those times

I remember all those times people

calling me all kinds of names cursing me

I said you got a buy back then it's

going to go back up don't worry even in

October 20

22 and we're going to have the same

thing now with what's happening right

now all right and in April I said we're

going to have a pullback and they were

like oh man I had one guy telling me

your timing is terrible no he said your

timing

sucks and I said months in advance in

April 15th we're going to have a

correction yeah maybe it wasn't a 20%

correction we had a that 6%

you know how many stocks I added to my

portfolio in that

6% I was buying meta at $420 I mean

like come on folks come

on

seriously take responsibility for

yourself like I said yesterday I'm just

trying to help you guys out I'm just

trying to help you guys

out my timing sucks because it doesn't

happen on the exact day that it's

supposed to happen it happens a little

bit later you know a lot of this

stuff like I always say

like this is markets are dynamical

systems if there was one

thing that you could look at and that

would tell you every single time exactly

what's going to happen at exactly the

moment

don't you think everybody would be doing

that I said in in uh other videos I

said the guys that are consistently

making money every single day they have

an edge I gave so many anecdotes about

my days on the floor I I've spoken about

who I know

personally uh the guy who founded virtue

Financial Vincent Viola who was a

champman of IMX guys like uh what's his

name from Citadel the big hedge fund guy

they just front run orders they they're

not if they had to actually do what

we're trying to

do which is be figure out the economy

and by the way I see what these guys say

about this guy who runs

Citadel and I forget his name but he's a

big hedge fund guy and he's worth like I

don't know 20 30 40 billion something

like that you know good for him I tip my

hat but how hard is it to make money

when you're front running orders but

when I listen to this guy talk about the

economy and saying like there's going to

be doomsday because of the uh the

national

debt it is it is

totally an an expose on how little this

guy understands he built a business and

good for him that takes advantage of

what used to be kind of illegal but now

now it's legal and he's a

billionaire all right if you could do

that my my hats off to you

too but is he Smart in the sense of

really having an understanding no does

he care no he doesn't care he's got

$40 billion he doesn't care I

care maybe I'm stupid because I care and

I you know things like

knowledge this may sound crazy to some

of you but things like knowledge things

like understanding things like

Integrity things like playing within the

rules uh and not bribing members of of

Congress and the government to because

that was almost going to be uh made

illegal that activity and those guys

with their money they they bought off

the

system sorry but I believe in stuff

maybe I'm stupid maybe I'm a Fool maybe

I'm a py but so be it I I don't care I

enjoy my life okay anyway that's all I

got to say what you think about the

haircut and the guy's name was Mike from

Brooklyn right here a little Barber Shop

no nothing fancy I go in a barber shop

in fact this Barber Shop it was like

underground I had to walk down

underneath the sidewalk

and I thought it was the entrance to the

subway uh and it might have been

actually I didn't follow this kind of

like a Labyrinth of of walkways I went

downstairs underneath the the pavement

and I I got a haircut and he was just

sitting there Mike was sitting there

watching the soap

opers when I came in then a couple other

people came in but I'm like wow

cool all right

everybody hang in there man this is a

you know

it's it's a 12 round fight you know you

got to be ready you got to wake up every

day every day is the same man don't

think like every you know one day you're

going to wake up and it's all going to

be butterflies and rainbows for the rest

of your life it's a fight that's why I

always encourage you

guys to do some kind of hard exertion

whether

that's you know hiking something hard

walking just walk walk 10

miles see how that feels boxing boxing

is awesome

jiujitsu take my word for it that helps

a lot see you tomorrow bye