Stock Market Commentary and Analysis

[00:02] go. Here we go. Another day in the stock go. Here we go. Another day in the stock market. Yep, today we are looking at uh we're getting a little bit of a recovery again, continuing some of that with uh

[00:15] 607 getting a nice hold here. This was important this morning. We saw that uh uh it a you know, couple candlesticks that pushed us down didn't last, which that pushed us down didn't last, which is great. Uh we've got um

[00:29] you know, overall I think uh enthusiasm for the catalyst, but some cautiousness. Obviously, there is a concern that we're going to end up getting some bad catalysts this week, potentially jobs, uh potentially uh CPI.

[00:46] potentially jobs, uh potentially uh CPI. I think those are less likely, but uh it's entirely possible. Uh so, uh you know, we'll keep an eye on those. That's weird day for the jobs report. Usually, we get the BLS report or um the uh

[01:00] um ADP report on those days. Uh and so, here we are getting it on a um uh on a Wednesday. Uh and that's because of that shutdown, right? So, uh now

[01:15] we're looking at uh kind of almost I I would say discount shopping uh as long as those catalysts hold up. For example, you know, Tesla in the low 400s. Uh although, you know, you have to

[01:29] really believe in the fundamental mission of robotics and robotaxis here. Uh and uh then you look at Palantir. Nice rebound from look at that 125. pain we've been in. Uh if you jump into Hims, obviously Hims

[01:45] here has uh been a uh you know, risky GLP bet uh for a while there. Of course, they do a lot more than GLPs, but back in May we were live stream. Back in May, we said, you

[01:59] know, the biggest concern that we have for for Hims is is that they can't sell commoditization of GLPs. Unfortunately, that's exactly what played out. Now, with Hims, only there are only 10% of their subscribers that

[02:13] are on GLPs, but they generate 40% of that revenue growth. So, a lot of their growth was growth was coming from that. And that was a bit of a red flag. Now, that that took 5 months to start playing out. And it's the stock has really

[02:26] collapsed since then. It's actually getting quite cheap now. it's probably overdone at this point. You're at you're at quite a low level you're you're almost back to some of the lows of 2024, which is quite remarkable.

[02:42] aggressive here. So, we'll see. And in fairness, you letter from Novo Nordisk, they they did stop selling that pill. So, I I think

[02:54] people got a got to chill a little bit on on the Hims selling, but, you know, I I I don't own it, but the numbers numbers don't look that bad. You know, Roblox is you're not expecting to see any kind of profitability until 2028.

[03:08] And so, it does make them more sensitive to an economic downturn. I think in a in a bull market though, there's a lot of enthusiasm to be had here. But yeah, I mean, look, you know, you've got Microsoft, AMD all rebounding here.

[03:22] The a lot of this as well as the Oracle spend or the Oracle movement today, which is also quite aggressive, 9%. A lot of this is probably because we're expecting that $100

[03:35] expecting that $100 OpenAI deal to get announced soon. Um It looks like markets are trying to price some of that in now. But uh you know, it's indicative that the top of the hardware cycle isn't quite here

[03:49] yet, but a lot of it is going to depend on uh you know, private credit's ability that, Apollo uh because we know Elon needs money at xAI, look at this.

[04:03] Apollo is actually going to help raise $3 is actually going to help raise $3 to buy Nvidia chips and lease them to xAI. So that's pretty remarkable right here.

[04:17] So that's pretty remarkable right here. So this is private credit and clearly still making a movement here for for hardware. $3.4 billion is is quite a lot and I'm sure Jensen's happy about that. The deal would be Apollo's second

[04:32] biggest investment in a vehicle to lease chips to xAI. Which you know, also is chips to xAI. Which you know, also is interesting to me that xAI has now dare I say devolve to leasing. Part of that is because they

[04:45] for it. So they don't really have a choice. They have to lease. Which is unfortunate because it does hit margins. But I don't think Elon really margins. But I don't think Elon really cares about the margins right now. So

[04:59] private credit is also quite probable that because SpaceX is thinking about going public that maybe as part of these negotiations

[05:11] you know, xAI realized they really need that the backing of uh vehicle. So So Apollo uh

[05:24] close to Yeah, it's not done yet. Close to $3.4 billion Nvidia to $3.4 billion Nvidia Nvidia chip deal to buy chips and lease Nvidia chip deal to buy chips and lease them to xAI. So I would say indicates

[05:38] private credit still going where there's some security, right? In my opinion, SpaceX ownership of

[05:51] of xAI provides some security. While SpaceX may not be some security. While SpaceX may not be responsible for xAI debt, uh SpaceX responsible for xAI debt, uh SpaceX shares probably create a good backstop

[06:06] for Apollo. Right? Like the joint entity is probably a good thing to actually uh use as somewhat of a hedge for for this private credit firm. So, I get that.

[06:24] is aiming to raise $5.3 billion of equity and debt. Right. Right. So, this is very much like a Blue Owl, it sounds like. Mhm. Uh sounds like a Blue Owl-style deal

[06:41] Uh sounds like a Blue Owl-style deal where an SPV owns the chips and raises debt and equity. Uh so, if the Uh so, if the data center goes bust, the risk stays

[06:56] data center goes bust, the risk stays mostly with the SPV owners and bondholders. Right? That's exactly what they did with Meta. Blue Owl-style Meta deal. Uh for 27 billion.

[07:11] Yeah, so this is actually smaller. This is a uh 5. 3 billion-dollar fund in total.

[07:23] And this would be close to lending. So, they're going to put up 3.4 billion on debt. So, that way Apollo can get the yield essentially. yield essentially. Yeah, that makes sense.

[07:37] guys, we believe in this. You should believe in it too, you know, whatever. They agreed to the deal before Musk decided to merge the two. Yeah, but I

[07:50] think I think there was a nudge nudge wink wink that that was going to happen. spending heavily. Musk did not face too much friction on raising for OpenAI.

[08:05] much friction on raising for OpenAI. Well, or I'm sorry, for XAI. you know, so that's XAI 20 bill last month.

[08:17] And then we're looking at uh another, you know, 5.3 billion dollar, so I'll call it like an access fund uh this time. So, that's pretty good.

[08:30] Increasingly turning to the debt market as his most loyal backers to fund his as his most loyal backers to fund his ambitions.

[08:42] uh came in for 5 billion dollars at 12.5%. Dude, this is why the private credit people love this, right? It's this money, look at that, 12.5%. It's insane. So, you know, private credit, if you think

[08:57] about it, private credit has to keep doing these deals so they can keep getting their, you know, 10 to 12.5% uh yields. What they're really doing though is is

[09:12] taking on more risk. So, they're taking on more risk, hence these SPV structures that include equity. Because if you think about it, loan? So, in this case, we're looking at 3.4

[09:29] So, in this case, we're looking at 3.4 in in debt, right? 3.4 divided by 5.3. That's a loan to value of about 64%. Okay? 64% a loan to Uh so, bondholders like Apollo

[09:47] uh only take only take losses only take losses if uh equity gets burned out. Cuz bondholders are preferred, right? Bondholders get preference in

[09:59] liquidation. Um so, bondholders like Apollo only take Um so, bondholders like Apollo only take losses if equity gets burned and 35% of the value of the fund evaporates first. So, really what this

[10:14] evaporates first. So, really what this is is this is a way private credit is Private uh credit is now hedging with equity credit is now hedging with equity exposure. So, the stockholders

[10:28] get burned first. It actually So, now now you're getting now you're effectively getting around a 12% yield plus a 35% hedge, right?

[10:42] Uh that's that's pretty good. Like I I could see why companies like Apollo are could see why companies like Apollo are doing this.

[11:01] to finance chips exploring ways to invest large amounts of money from large life insurance companies. Right, right. Hence why. Yes.

[11:13] Uh this might also be uh the life insurance strategy. This might also be the game plan to get companies like life insurers in uh as they as as these funds get an

[11:29] investment-grade rating. All right. Apollo often in to back companies that are struggling to raise money usually demands high returns and strict protections against losses. Yeah.

[11:42] Yeah. Interesting, but that's also interesting that they're saying they usually they're like the last to step in.

[11:55] The information almost considers Apollo a Uh like during Hertz bankruptcy. So that's quite interesting. It makes you wonder like are we are we running

[12:10] starting to run dry here? Are we starting to tap out on sources starting to tap out on sources of funding? Sounds like it a little bit. returns of greater than 22% if the vehicle is able to sell the chips in the

[12:26] data center equipment for one quarter of their purchase price 5 years from now. Which is presented as the base case scenario. Right. Right. Okay. scenario. Right. Right. Okay. Base case pitch to equity investors is a

[12:40] 22% annual return if annual return if if chips can be sold if chips can be sold for 25% of NAV in 5 years.

[12:57] Yeah, in 5 years. Right. Uh danger is obvious here. Uh chips get commoditized and you can't you can't even earn you know

[13:11] pennies on the dollar for the chips. Man, typing today Kevin. I got to step up the typing. Yeah, that's obviously the risk factor. Okay. This is actually a very interesting piece.

[13:30] Yeah, right, dude. They're bare cases. They sell the chips to refiners for the value of the raw material. Dude, that is such a lie. I material. Dude, that is such a lie. I don't buy that at all. Um

[13:44] They argue in the bare case, they sell the chips to refiners for raw materials. Uh and or in 17%. I think that's BS.

[14:00] those raw commodities uh commodities would likely also be uh commodities would likely also be worth much less in a down scenario. You know, cuz they're probably using today's prices to make those forecasts.

[14:15] So, that's a little kooky-dooky. But, all right. It kind of shows you the extent that private credit is having to go. Like, they're having to take every Like, trick out of the bag, right? Uh they're

[14:34] on money, they're having to take every last trick I don't know how I feel about that, honestly. Uh Oh, well.

[14:48] All right, how CapEx will squeeze. Let's see here. How CapEx ramp will squeeze Google, Amazon, Meta. Uh huh. We'll see what they say. the companies to make difficult choices, such as whether to end stock buybacks.

[15:02] Oh, sure. Um you know, >> or borrow. Well, could be a combo. Good news is the big tech companies have the capacity to borrow hundreds more than they currently do. That's true.

[15:15] back buybacks. Cutting off the dividend though could be tricky. Yeah, you don't need to kill the dividend. you just kill the buyback. Amazon has a buyback stock anyway and doesn't pay a dividend.

[15:28] Amazon issued 15 billion in bonds. Microsoft is a different position. It's aggressive as other companies. Blah, blah, blah. All right, whatever. This is just a little bit of an analysis on

[15:41] I feel like I got enough of that already. to chatbots? You know, I was thinking that actually this weekend. I tried the voice bot for uh OpenAI, uh Claude, and

[15:57] Gemini. All of them suck. I don't know what happened. I feel like OpenAI's voice lady used to be a lot better, but they've all gotten kind of crap, man. I don't know. Uh let's see what they say. Audio models

[16:12] are still lagging behind in terms of intelligence. Correct. Uh why is that? Compared to text models like Opus 46, audio models need to spend more computing power just to understand and

[16:25] generate sound, meaning there's less processing available like for advanced reasoning. Ah, okay. Yeah, that makes sense. I there's no point to doing the voice model. I feel like I'm getting a cheaper

[16:41] uh product. This is actually a red flag then for Siri, right? So so Apple uh that's actually really interesting. Uh

[16:54] everyone is quite excited about Gemini getting integrated into Apple. Uh I was on a run on a run yesterday and

[17:07] Uh I was on a run on a run yesterday and tried GPT, Gemini, Claude via voice models. Uh frankly, ass compared to

[17:20] uh the text-based versions. Uh I was really disappointed. Uh I was I was very disappointed. Uh and so sure enough, today it's almost

[17:34] like they read my mind. Today uh the information explains why uh lower processing {slash} compute

[17:47] lower processing {slash} compute available in translating voice to text and back. That's bad for you know that's not ideal for uh Siri as it means

[18:00] that's not ideal for uh Siri as it means Siri likely still, even with Gemini, won't be as good as uh text-based AI.

[18:14] It's a little little bit of a red flag there to watch. Audio recordings used in training data often have background noise. Uh of course. Overlapping speech or microphone quality issues, sure. Sure. Oh, that's

[18:30] Uh so so uh lower quality audio to train on makes the process of training models slower and more difficult.

[18:50] Yeah, cuz you have to listen to a bunch of crap you don't want to listen to. about its thought processing before arriving with a final answer. People

[19:05] Right, right, right, exactly. Because then they just cut it off. uh uh people also don't like uh waiting

[19:21] I'll be writing and I'm waiting for the thing to reply, and it's just going to answer? Uh so it that is that does get pretty as a user of the product, I I see

[19:34] as a user of the product, I I see exactly this challenge. models could be the key to solving companies like consumers don't know the full range of things they could do with open AI, whatever. Today, many

[19:48] search. Well, we're not seeing that in search revenues, that's for sure. But search revenues, that's for sure. But that is true. One researcher spoke with said that people could be used to feeding queries like blah blah blah,

[20:00] this near me. People again speaking out loud to AI models, so blah blah blah. Google chatbot style tab, AI model, blah blah blah, non-text input. All right,

[20:13] fine. Like we get it. So there's still work to be done here. work to be done here. This is totally reasonable.

[20:27] to challenge China. Yeah, lithium prices have come up a little bit recently. SpaceX shifts focus. Yeah, Elon had this big tweet post where he basically said, yeah, we're going to try to um uh

[20:40] you know, build a city on the moon instead on um Mars. that in terms of the alignment and of of

[20:52] the planets and stuff, and it makes sense.

[21:05] they don't allow you to type and it's frankly crap. Yeah. Yeah, though the voice models just aren't that good. Uh that's consistently what I found.

[21:17] Crypto exchange BitHump mistakenly sent 44 billion of Bitcoin to users. But they've recovered 99.7% of it. I'm sure some people saw the money and they're like, "Yeet! I'm taking that

[21:32] out." >> [laughter] uh Microsoft had this like Excel spreadsheet

[21:44] uh ad and I'm like, "Really? That's the best you guys got? Geez, man." Uh I thought they would have had something better than that, honestly. They didn't. They did not.

[22:11] Well, let's see here. Banking charter approval, that's fine.

[22:23] Don't care. Alibaba battles for AI users with a holiday campaign, fine. AI reveals frontier AI agent platform, whatever.

[22:35] This Some of this was just from from last week and older, so no problem. All right. Let's go take a peek the queues right now. Still doing well, you know, still at the upper end of the

[22:50] day here. I've got Oracle still popping on that I've got Oracle still popping on that 8%. Nice rebound from 72 on Robinhood, 125 on Palantir, nice rebound from that. Very good. Still going on Nvidia

[23:05] stabilizing, which is pretty good. Someone is asking about Netflix. Netflix uh 80 bucks downtrend. Looks like it's trying to slow down that

[23:19] downtrend, but man, what a downtrend. I actually think the valuation of the company is amazing. Uh uh it's uh let me go see what exactly what it is really quickly. So, if I go to Netflix

[23:32] Current valuation for Netflix is sitting at as cheap as it was. Well, I think it's we had a discount their growth rate a little bit. Yeah, this whole acquisition uh kind of messed up some of their

[23:45] forecast numbers. They have a 2.2. So, it's not like a killer valuation I think the whole Warner Brothers deal slowed slowed that down a little bit money from Warner Brothers for like two or three years, so it kind of screws up

[23:58] the growth rates a bit. Oh, well. Uh let's see here. Chinese factory don't care.

[24:15] What? Let's take a look at that. think there's a risk that PPI ends up slipping into

[24:28] slipping into um the uh the CPI this this week.

[24:40] halftime show? I mean, I like the collection of all the uh the countries and the shout-out and stuff that he did. I'm not really familiar with his music.

[25:09] let's see. We saw Lindsey Vonn's crash. That was unfortunate. I feel bad for her. A philosopher is teaching AI how to have banger." Somebody else says, "It sucked." Somebody else says, "I like the

[25:22] women." Yeah, there was a lot of booty shaking in there. understand. I don't speak Spanish, couldn't understand." Yeah, I I I had no Spanish. I don't think there's anything wrong with a Spanish song. You know, uh

[25:36] like the Spanish version of uh Despacito is pretty good. But >> I yeah, I couldn't understand a word either. I'm like, "All right." right? But I think that was the point.

[25:52] care. I've seen more pictures. Well, I I don't know if you can actually qualify it as watching a sporting event.

[26:06] I I was with Jack. Uh and we were at a Pokémon store. We were We were at a um uh a card store. And uh dude, Jack got some good pulls. He uh I'll have to put them up on uh on the IGs later. But um

[26:25] Yeah, and he also got a Pokémon shirt. But yeah, they had uh they had the game going on there. And uh we thought that was pretty cool. there. But anyway, we'll keep going on news

[26:38] But anyway, we'll keep going on news here in just a moment. Here we go. So uh we were cuz we were in Thousand Oaks. So Oh, I got him there, which is uh slightly large for him, but I want him to grow

[26:53] threw this on top of the shirt he was wearing and then this was his face and then I asked him to do a thumbnail face. So he got gave us a thumbnail face as well. Uh Green Day 100% 1000% better. Yeah, I

[27:07] like the Green Day as well. Sad to hear what happened with the 3 Doors Down singer though. Mr. Arnold like 25 years. I didn't know that and apparently the cancer he had renal

[27:22] cancer one of the things that can cause it is smoking. Uh I you know obviously nobody knows if that's related could just be bad luck or genetics or whatever but um yeah I thought that was interesting.

[27:53] Honestly there's not horribly much uh in the way of news at the moment.

[28:09] than TPUSA half time show. Yeah, I did see uh Puppy Bowl uh while I was going through the Direct TV channel to find the Super Bowl and then I saw Puppy Bowl and I'm like Puppy Bowl that's not Super Bowl.

[28:23] Cuz I just typed in Bowl and uh and then I saw Puppy Bowl come up. I'm like man you got something going on for dogs. I mean it sounds kind of cool but I didn't Um All right, what else we have here? So

[28:40] shop too. Yeah, they actually have pretty decent uh sealed products for more house hack shares? >> [laughter] >> Uh,

[28:55] immigration raids, South Texas starting to hit the economy. Yeah, I I can imagine this this is going to be a a broader issue that we're going to face for a while. And And Kevin Hassett, I should find it.

[29:07] Um, a second here. Ah, let's see here. Let me grab my headphones. Hey, Kevin Hassett was on CNBC this morning, and he was actually kind of talking about slower

[29:21] jobs growth, and I wonder if he was somewhat trying to foreshadow what's to come. Let me see here. It's CNBC.

[29:43] Uh, what about re-sealed? Haha, yeah. Yeah, that sounds great. yeah. Yeah, that sounds great. Um, let me see. There's Hassett. for a sec. NBC News, he's proud of the US economy,

[29:59] better. Joining us right now is White House National Economic Council Director Kevin Hassett. Uh, good morning to you. There's been a a long sort of back and forth about the state of our economy, about how good it is, but also maybe how

[30:15] bad it is, and the bad part being what came before during the Biden administration, and whether the president now owns this Does the president now officially own this economy?

[30:29] Right. I mean, yes, of course he does. The president is the leader of the free world, and he's the leader of this economy. The bottom line is that there are some things that moved in the last couple of years that haven't recovered.

[30:42] So, for example, excuse me, there's a big truck going by all of a sudden. So, for example, there was 20-something percent inflation, and we've got inflation way down, incomes are up, real

[30:54] incomes are growing, but we haven't filled the hole from the inflation. So, is it Trump's economy or Biden's economy? I think that that at some point that's uh All right, let's get to the point. You need to just like slow down

[31:07] and say, "Okay, so when we're talking >> about who's a cotta uh that we haven't we've seen you since Kevin Warsh was was announced. >> time we we Right. So, but now So, now Kevin Warsh uh is is going to have the

[31:20] the confirmation process. Um but, you know, one of the arguments he's made quite publicly is actually that because of AI and the idea of productivity uh Somebody says it's not about where he is from, it's the fact that the majority of

[31:34] they put a singer in there that his customers could understand. Yeah, I wonder what percentage of of Americans do speak Spanish, and it doesn't doesn't matter to me, but I I I that is an interesting point. Uh I'm going to

[31:48] guess it's like 20% of Americans speak Spanish. 13 to 14%. Wow, that's it's So, it's lower than I thought. you know, 14% of people speak Spanish, and just because you can speak Spanish

[32:03] song, right? That's that's another thing. Uh but um you know, 100 divided by 14, that means about one in seven people at the Super Bowl probably spoke Spanish.

[32:16] California. But, you know, that's that's not a big number. That means the vast majority of people had no idea what was going on Uh that there's an opportunity to to lower interest rates, and that you can

[32:30] the same time, there's now this new question about what's happening with >> Here we >> how you think about squaring those two Right. I mean, there's absolutely no question that we're in the biggest

[32:46] productivity boom that we've seen since the '90s. That the introduction of the artificial intelligence are very similar in the ways that they're affecting the data. I thought it was interesting. You

[32:58] graphic of a minute ago where you showed that the Somebody says, "Kevin, if driveway on a tighter budget, what would you suggest? I've patched the cracks Should I just paint over it, make it uniform?" I mean, I think paint's going

[33:11] drive on it is the problem. I mean, you'd have to like I guess you could do it in garages, right? But I don't know how that's going to last on the outside concrete driveway. I mean, the thing is concrete cracks. Who cares? You know,

[33:24] like I think they got to get over it. If they don't have the money to pay for new enjoy your cracks. You know, I know that's harsh, but like frankly, cares? Like

[33:39] perfect. That's my take. the biggest outperformer of the Dow was Caterpillar of all things. But that's 100% consistent with what we're seeing, which is that first of all, that Trump's tax policies are making it so that you can

[33:52] expense capital equipment. So there's big demand for Caterpillar stuff. But then also AI is making it so that every company from Caterpillar on up is finding that it's more productive when it does stuff. And so with higher

[34:06] productivity, they get higher profits. And profits is network it's a mother's milk of stocks. And and so yeah, I absolutely believe that we're on an uptick that's that's significant. I think that the

[34:21] open question really is what's going to happen to jobs as productivity goes up. And I think that there's a chance that that job creation lags productivity sky sky >> say that uh

[34:35] >> maybe they were trying to, um, what's it called? Uh, audience. Yeah, that would be a good point. Uh, just to to try to get some more viewership on on the NFL. That's interesting.

[34:48] They skyrocket. Uh, but then all of a sudden, like you're making 20 widgets and and you can make 20 widgets with a fewer person and then that person has to to new job. I think that that kind of transition could happen.

[35:00] When When you think about last week in the markets, I don't know how how focused you were on sort of the back and forth, but there really was a sort of the mood music it seemed to to change, if you will. For for much of the week,

[35:12] there was a real concern about tech companies effectively overspending on on companies, which had been rewarded for their spending, uh, were were getting, other end, there became worries about

[35:27] and whether they were going to be cannibalized by the big guys. By the end of the week, things had shifted gears all over again. And And how you're talking to about it. Yeah, I actually talked to a bunch of my

[35:41] week to try to understand what was going on. And the bottom line is that a software engineer at a typical, you know, West Coast Silicon Valley company has seen their productivity go up by 50, 80% over the last year because of these

[35:56] amazing tools that Anthropic and the other countries are developing. And so, what that means is that if you're, you know, a 22-year-old uh, kid who just graduated from college, uh, with a software engineering degree, that there

[36:08] is a machine that can probably, you know, help a senior person do your job. But in in the bottom line, in the end, uh, these big companies that were going up and down last week, that their clients are people that have built

[36:23] relationships with them over the years that they trust. And so, I think that it's going to be a long, long time until the client base moves away from the really, really big organizations like Salesforce and moves, you know, straight

[36:36] that these uh in the in the data that these firms Hey Kevin, want to ask you about the jobs market. We do have the jobs number coming finally on Wednesday after the little bit of a delay. We got some uh

[36:51] not great news last week when we were looking at the jobs numbers. I I guess one was Challenger, Gray & Christmas came out with numbers that were the largest number of layoffs we've seen in any month since 2009. You had the

[37:03] little hotter than expected. And then you also had the JOLTS jobs openings you also had the JOLTS jobs openings that dropped

[37:15] much if there's too much of an area that's just cracky and bad, um we'll replace sections, you know, so if there's just one really bad area, you know, cut out whatever, you know, 8x4 section and just

[37:30] pour new there. Uh so, you know, that that's always an you don't have to do a whole new driveway, you know. But the color's going to be different. popped uh in December to 6.54 million

[37:44] and I think the revised number for November had been like 6.93 million. happening in the jobs market right now with all the data you see. that are sort of pushing down and then one force that's pushing up. The force

[37:58] that's pushing up is that GDP growth is through the roof uh even with a revised down uh GDP now we're looking at 4% growth into the end of the year, 3% for that we had a really negative uh first quarter with Joe Biden. And and so,

[38:14] that's the positive effect. The negative effects are when there's the Biden, I think it's hilarious. boom, then maybe you can make the same amount of stuff with your workers since that might reduce labor demand. And then the

[38:27] decline in the labor force because illegals leave the country. And so the break-even job number is quite a bit lower than it was under Joe Biden

[38:39] when there were people you know you know basically coming across the border willy-nilly. And so I think that you should expect slightly smaller job numbers that are consistent with high GDP growth right now. Okay. And

[38:51] that one shouldn't panic if you see a sequence of numbers I wonder if he a see this? Kevin Hassett literally just said one Kevin Hassett literally just said one shouldn't panic about the job numbers.

[39:05] Now that that makes me very curious. Hold on. I want to listen to that portion again and I'm going to write down what he said there. Because that I think is a little bit of a forecast

[39:17] for what to expect for job numbers this week. So let's see here. Let's write that down. Hassett hinting on jobs. It was something like one shouldn't panic if the job numbers

[39:35] are a bit lower for a time. for a time. Okay. smaller job numbers that are consistent with high GDP growth right now. And that

[39:53] one shouldn't panic if you see a sequence of numbers that are lower than you're used to because again population growth is going down and productivity growth is skyrocketing. It's an unusual set of circumstances.

[40:05] Kevin, how concerned are you about a um an additional government shutdown if if we get that for things like TSA and what that could ultimately mean? Yeah. I was saying for all others who still think But but but people negotiate, right? And

[40:18] got to shut the thing down." And then they get back to the table. the key points the Democrats have brought up where they would like to see body cams being worn by ICE agents where they would like to All right. So, a

[40:31] little bit of a a hint there from Hassett, but not not terribly much. Q certainly doesn't care. We're It looks like we're really getting We're trending back to 617 over here. That was in our in our alpha this morning. We said,

[40:45] "Hey, if if we can hold 607, we got a good shot at um at going bullish and trending up." But, it was all about that first 5 minutes. were going to go if we were going to hold that 607 and we got 607 within the

[40:59] first 5 minutes and then we held it very nicely. So, So, this is good. It's very good. All right, let's see what else. So, that was Hassett. All right, that's boring. Got a little

[41:13] bit there. Now, what is this concern here? January inflation numbers. Consensus called for 0.3 on the rise. Still, many on Wall Street are bracing for an unpleasant surprise. Why?

[41:26] unpleasant surprise. Why? Uh let's see here. In recent years, inflation in January has tended to come in relatively hot. Last year, CPI rose more in January than any other month. The same thing happened in '23.

[41:43] as proof companies are passing Trump's tariffs on. than any other month. The same thing happened in 2023.

[41:58] If that happens again, it will be seen as proof as of companies passing on the tariffs to consumers. Well, we know that's happening. Oh, I I how bonds are doing today. Take a look at this.

[42:16] basically January potentially being hot, whatever. Let's go look at bonds and jobs piece. Nice prayer pot. Yeah, I love this prayer potion. Uh no Runescape no plans for Runescape clan though. Rust clan on the other hand, see that's what

[42:31] we really need. We need to make a Zerg. Uh all right, we got the uh And we're knocking on the door of some of the highest levels uh frankly

[42:44] since uh since COVID, you know, post-COVID. So, this has been a pretty steady move up and unfortunately, as we say, 1.25 is that recessionary level. Isn't great. All right, let's let's rip one.

[42:58] and then we'll go to that jobs piece. So, let's see what we got here. We got a Phantasmal Flames for all the Pokémon fans. um Let's get rid of that.

[43:11] And uh let's see what we got here. So, we got water. All right, it's a quick little quick little rip. Let's see what we got. So,

[43:24] get through these pretty fast here. See if there's anything fun in this. Seal. Some of the artwork's pretty good. Seed Bomb. All right, let's see here. Oh yeah, I

[43:38] can tell Jack I I ripped one. You know, this one's kind of funny because they they give this away as a promo. Uh so, I I I I don't know why they even put it in here anymore.

[43:50] But um Dropping them. Yeah. Card down, card down. All right. So, that's our reverse holo. I've got

[44:03] second reverse holo and nothing. something pull something fun. One day. All right, no problem. So, where were we? Job hunters. Job hunters are so

[44:18] desperate that they're paying to get recruited. So, this I don't understand. white-collar job is so tough that some candidates are paying recruiters to match them. Oh, interesting. Okay, okay, okay. So, yeah, instead of the companies

[44:34] company will pay like 30% of a salary or whatever. Somebody says, uh, TBC just came back you're not prepared. Aren't they coming out with a new expansion? What's it called? There's

[44:46] don't I don't know what it's called. But, I'm pretty sure, um, with a new one. And then Rust just had its naval expansion. But, boy, I haven't played a game in I feel like 6 months.

[45:01] I feel like 6 months. Uh, so, we've had a lot of building to workload goes up at House Hack, all the fun's got to stop. But, that's okay. We had a We had a really good run there of a lot of progress.

[45:14] Okay, so, through good economic times and bad, recruiters have usually operated the other way around. Companies pay to find talent to fill positions. know, a certain percentage of salary or whatever.

[45:27] But, here's a dude who signed up for reverse recruiting service Refer last year. After receiving an email pitch,

[45:43] month's pay once it landed in his bank account. so, honestly, I mean, you got to do what you got to do, right? I mean, it's just state of the times. It's kind of sad, but

[45:57] developing world economy. These things happen when common man is so beaten down that they're extorted even by the hope of labor. It's a very, very bad sign. Yeah, it's not good for the labor market, that's for sure. I don't know if

[46:09] like a you know, this is commie, but it definitely is a sign of a weaker labor market. There's no question of that. For goodness sake, firms that charge to find jobs for clients, including professional

[46:23] years. Yeah, but but the whole point is that, you know, it's the other way around in terms of who's paying now. terms of who's paying now. Golden age looks more like third world.

[46:35] Golden age looks more like third world. I mean, Immigration raid starting to hit. What we got here?

[46:50] funny to me that, you know, everybody complains about affordable housing, and then the very people building housing are getting deported. And so it's like, here you go, yeah,

[47:03] you know, hard-working people, and you just kick them out. Uh, now I get it, you know, illegal immigration is a problem, but I mean, if you've been here working for years, why not have some kind of

[47:17] expedited opportunity to become legal, you know? Make sure they're not a make sure they've been paying their taxes through their TIN, and you know, get them on a path to like some kind of probationary legal

[47:29] citizenship. And then, you could keep building houses. Which is funny, because that's what you need. You need more housing. So, it's it's a little dumb.

[47:42] Yeah, so, resolved. Sunny says there's a legal way to go about it, shrug. Well, not really. Legal immigration process is horrible, and that's why so for for decades, our country's politicians have essentially encouraged

[47:55] and enabled illegal immigration because it's so hard to go through the legal immigration process. It takes years. The waiting list for green cards, it's it's terrible. It's terrible. What the what our government needs a realistic

[48:09] uh you know decent acceptable speed process to legal decent acceptable speed process to legal immigration, you know? Screen people and then give them an opportunity, right? So

[48:27] is like, "I hired a lawyer." Well, good for you. You know, not everybody can afford that. You know, not every like not everybody has the money to go hire attorneys and wait for years to to to fight for that. So, you know, if you

[48:40] want people to help build build houses, you know, maybe you should have a uh an expedited application process for home builders that's like, "Hey, uh you know, if you if you have a skill in construction or the trades uh and you're

[48:56] not a criminal, you know, we'll we'll process your application is more affordable housing by actually having more quantity housing Uh you know, I think there're a lot of benefits there. But um

[49:11] you know, this this um how how difficult and expensive the probably a quite the issue. If we had a you know, if we just like close the the wall, right? You you you seal up the borders

[49:24] introduce uh a process like, "Hey, if you're and you're not criminal, here's a way we'll get you through an expedited review." So, instead of just ripping everybody out from the you know,

[49:37] families or or livelihoods that they've created and trying to uproot a country essentially, uh let's uh a country of immigrants, mind you. Let's create a viable path uh for non-criminals to become legal. That that would be nice.

[49:52] Uh but, you know, logic usually doesn't prevail cuz, you know, you get one-sidedness. You know, people don't know, it's got to be but it was yeah,

[50:05] it's illegal. You know, that's where a lot of the opinion stops. All right. So, what else is no audio? How did I get muted? I didn't mute myself. Did it Did it literally go mute there? That's weird.

[50:19] Uh but anyway, uh that's weird. So, I didn't change anything. Oh, well. So, let's see here. Uh so, they're basically taking proper documentation or not. Yeah, when

[50:33] terrorizing job sites, people are afraid to go to work. to go to work. And blah blah blah blah blah.

[50:45] You're going to hurt the narrative." Yeah. Well, I mean, I I know. I know. You know, people get so hot hurt about their politics or whatever. I I I find it quite interesting. It's um it's um

[51:00] versus the alliance in World of Warcraft. You kind of just hate the side. You know, I I I don't know. That's never Uh South Texas example of what contractors are facing. Home builders in

[51:15] experience. ICE didn't reply to our request for comments. Situation here highlights the priorities how they're coming into conflict with each other. like how do we how do we build more

[51:28] kicking everyone out? I I I get it. I get it. Or terrorizing the job sites. Okay. Fine. Next.

[51:42] Doom burgers. See what the Doomers have for us.

[51:54] Let's see what we have here. Alphabet looking to raise about 15 Alphabet looking to raise about 15 billion from a bond sale. Microsoft hit with a second downgrade. That's interesting.

[52:12] Yeah, hard money loans are susy. Summer calls to quit. That's fine. Finance 101 still explains almost everything. Yeah.

[52:28] pledged 1.9 billion before the stock plunge. Okay, that's going to be interesting. How by the way are they doing right now?

[52:43] today? Apollo the current immigration system. Of course not. This is not it's not popular

[52:58] to do that. Apollo's actually done really well.

[53:11] totally agree with that. But Biden's approach of mass cast and have I agree. No, I I I and I I want to be clear. I I think everybody can agree that you know, Biden's open border policy was uh,

[53:27] a you know, a black eye to the country, right? Like that was dumb. Um and you're seeing that sort of issue in a lot of countries now, you know, even like Angela Merkel's open borders policy for,

[53:42] some people call it like the Syrian invasion in Germany or whatever, which, you know, some of that is is kind of tribalistic, but but, you know, people So, we've kind of gone to the other extreme,

[53:55] which is now, you know, ripping people off job sites that were here, you know, trying to contribute. And so, there's there's a balancing act, for sure. Uh, what do we got here? We beat 414 on

[54:07] the line. Look at that. That's great. All right, let's see what else we have here. >> [snorts] >> Uh, next up is

[54:21] piece. Blue Owl founders pledged 1.9 billion stake before the stock's plunge, okay? So, pledged more than half their stakes So, pledged more than half their stakes in order to secure loans. Uh-oh.

[54:35] The value of the collateral slap slump by more than 260 million. So, that's actually interesting. So, you had them basically leveraging up you had them basically leveraging up their shares.

[54:49] against the current administration, so Trump's approach, and still criticize Biden's bad policy." Yeah, I mean, I think what I found is I basically dump think what I found is I basically dump on politicians. Cuz I think in general,

[55:01] they're either corrupt, incompetent, or both. >> [laughter] >> Uh, and so, like, you kind of have to >> Uh, and so, like, you kind of have to choose from this scale of like, well, it

[55:13] it's almost like instead of for girls, the hot-crazy matrix, it's the corrupt versus incompetent matrix, you know? Like, let's let's say a hot-crazy matrix. You know, the hot-crazy matrix. You like

[55:27] that one. Uh, so, yeah, here we go. Uh, so, we pull up the hot crazy matrix here. Somebody wrote it. The self-absorbed

[55:41] Somebody wrote it. The self-absorbed axis. And then you've got Well, it's hot crazy, right? Uh, or is this is crazy? And this is hot. Yeah, yeah, yeah,

[55:56] bottom. So Oh, somebody changed this to somebody updated this. This is not like the original one. Um

[56:09] it into something I could use for. So, this was the original hot. Hot was here. And then this is crazy. Would this work with uh like corrupt? Uh, and then in

[56:25] incompetent? And I don't know if that works. Yeah, cuz those are both negatives and the hot is positive. So, that's not going to work. that's not going to work. A corrupt incompetent. Uh, so I guess

[56:37] you would have to call it competence. Competence. There we go. Yeah. So, hotter competence and then crazier corrupt. Maybe you could do it that way. corrupt. Maybe you could do it that way. Let's see if that works for politicians.

[56:51] Uh, so corrupt, this would be bad. So, this is all the danger zone. This is the no-go zone. Yeah, this is corruption over here. That's crazy. Okay, got it. So, then if you have high competence and

[57:04] less corrupt date zone. date zone. And then zero corruption and mega >> [laughter] >> We got it to work. We got it to work.

[57:19] That's it. This is it. All right. So, maximum competence and no corruption doesn't exist. Maximum competence and and low

[57:31] corruption, that's like where you want to marry. So, that's the that's the politician you want. This is like the fun zone over here. Uh you know, I don't know. I'm trying to figure out like where do you put AOC on

[57:46] I feel like she's over here in the fun zone. >> [laughter] >> You know? And then And then I'm trying to paint where you know, where's Donald Trump? You know, I I feel like he's a

[57:58] little allergic to data. So, his competence, you know, you know, is probably somewhere more around the five or six, right? Cuz he he around the five or six, right? Cuz he he he goes by the feels instead of data. Um

[58:12] you know, and then you have to scale him on the corrupt part. >> I'll let everybody fill that in themselves. Is he in the danger zone or the fun zone? I don't know. I I I would say he's

[58:24] he's somewhere And then everybody's own bias can come into here. Okay? So, I'm going to put Trump in the orange box. And then I'm going to put Biden uh uh in the uh

[58:37] in in like a purple box. Okay? So, this will be the Trump box. He's probably in here. That's probably the Trump box.

[58:49] And then the Biden box is probably um let's see here. Uh probably somewhere

[59:01] Uh maybe here. >> [laughter] >> Cuz competence is pretty low. So, probably here, you know? So, I still politician. >> [laughter]

[59:15] Yeah. Uh so, we're going to call that the That's not the hot crazy matrix. That's going to be the corrupt competence >> [laughter] >> I like it. I like it. Uh

[59:32] Trump orange box is diabolical. Yeah. >> [laughter] >> Yeah. Yeah. Somebody says, "Well, Biden's quite corrupt." Well, I mean, I think like I said, like there's always See, like

[59:45] just like the hot crazy matrix, you you don't go below a four on the you you don't go below a four on the the the corrupt scale for a politician. Like you can't go below a four because as soon as they're a politician, there's

[1:00:00] like a base level of corruption. That's why the corruption scale starts at a four and the competence scale starts at four and the competence scale starts at zero. So So, you basically you start the

[1:00:12] corrupt scale at four because there's a base level of corruption. base level of corruption. >> [laughter]

[1:00:24] All right. So So, and you can kind of pick where you want to place them within the box. Investors tend to be wary of poundy drop in the company shares can trigger demands for extra collateral. Yes.

[1:00:39] that the firm could decline more material if the CEOs had to sell because of a margin call. Uh-huh.

[1:00:56] small CEO compared to uh their, you know, their corporate exposure or a small net worth relative to their corporate exposure. That's usually where the big dollars are. Anyway, all right.

[1:01:12] So, they took out a lot of money on loans right before the stock fell. Got it. Yep. Story of life. So, that's why like the next time stocks really and I don't mean like what we saw last week. I mean like a sustainable crisis.

[1:01:26] eventually really start having some oopsy doopsy poopsies doopsies. Uh Microsoft shares were downgraded for a second time. Melius Research cut the stock from buy citing CapEx. I mean, this is old news,

[1:01:41] whatever. And the ratings usually follow stock performance anyway, right? stock performance anyway, right? So, if you go look at stock performance,

[1:01:55] let's see here. Yeah, so Microsoft is still down quite a bit. So, it's not a still down quite a bit. So, it's not a surprise.

[1:02:12] Alphabet. This is the bond raise, $15 billion bond sale.

[1:02:24] That's incredible financing. So, Google Google raises 15 billion, 40-year bond 40-year bond at 1.2 bip above Treasuries. So, you

[1:02:39] know, probably uh probably be about 6% actually. I know this is the 30-year, but it's the

[1:02:54] closest duration I could really find. So, probably around 6% interest. I mean, that's certainly a lot better than what XAI is raising at, right? So, it shows you that, you know, Google uh has about half the cost of capital as

[1:03:12] So, that also gives Google a strategic advantage. here for Google. spending way less than XAI on interest, right?

[1:03:27] right? So, good for them. I'll show you what I wrote in the stock tab. So, um we were looking at Spotify Uh and Spotify was really impressive. We

[1:03:42] did this fundamental analysis in the uh uh course member live stream this morning. Uh Hims has a strong valuation, like Anyway, the spaces are missing here. A very cheap, strong balance sheet,

[1:03:55] negative momentum. All those things are good. However, their pricing power is a are the things we do in the the course member live streams every day, which lifetime access at mekevin.com. But, uh their expenses are rising quite

[1:04:09] And a lot of their previous revenue growth compared to last year was because watch for a change over here. They are cash flow positive and their balance sheet is pretty good. You know, they got plenty of cash.

[1:04:23] Yeah, following the GLP issues. But, I think the lawsuit is mostly overblown. Yeah, the lawsuits probably going to fade. cuz they did stop selling the pills. So, it's like, come on, man. Like, what more

[1:04:36] Um but, you know, this So, I think this Novo lawsuit is a little extreme. I I wouldn't like I'm not going to, but I wouldn't be opposed to betting on Hims here

[1:04:48] just because I I think the lawsuits overblown. I think most of the damage is overblown. I think most of the damage is done. Uh and um happens with their growth over the next few years without GLPs.

[1:05:04] And uh you know, they were responsible for 40% of their revenue growth. And that was the warning we gave back in May. And I mean, they've fallen like 70% since May when I gave that warning. Those are the sort of warnings I give in

[1:05:16] Remember, you pay once, you get lifetime access, meetkevin.com. Uh so, that warning was was right. Now, the question is, have they bottom? And what the next earnings are going to indicate is like, can they have pricing

[1:05:30] power without Cuz the the risk is that in their next earnings, they show, "Hey, And then all of a sudden all their EPS forecasts look too high. And then the valuation don't look that cheap anymore. That's obviously the risk factor.

[1:05:44] So. All right. here. All right, what else? All right, what else? Uh let's see here.

[1:05:57] Let's rip one more and then we'll go to another uh article here. I guess we still got to look at the FT today, too. All right. What One more rip. One more rip. You know what? Like cards are

[1:06:12] All right, what's our going to be fire. Yeah, see, wrong. No no alpha on on on Pokémon cards. That's all right. See what we get.

[1:06:27] Boltund. I always think that's like a German way to write that. Now, a little they throw the OGs. This is in the Fantasmal Flames pack as well. Throw some uh you know, recent copies of the OGs in.

[1:06:41] Uh it's kind of cool. All right. See what we get here. All right, reverse holo. It's cool reverse holo and also nothing. Well, yesterday Jack pulled an $18 card,

[1:06:59] an $18 card, and a $30 card. And I'm like, "Dude, that's great." I pulled a uh what did I pull? I think I pulled a I think I pulled like a $50 card uh the awesome." So, I mean, that's what the whole point of the game, right? Is

[1:07:15] uh Who's digging outside? But anyway, uh what was it? And then we'll go back to

[1:07:27] this. Let's see if I can remember what it was. Let's see if I can remember what it was. It was Psyduck I had. And Oh, I can't remember.

[1:07:41] Oh, well, I'll have to look. All right. Psyduck was like a $90 card. All right. Next. [clears throat] And then we have And then we have Let's go to FT.

[1:08:10] year sterling bond sale. 100 year? I thought it was thought it was Wait, did I misread the date?

[1:08:28] Where's 100 year? Oh, here. In addition, the company also included a 100 year note for the sterling Oh, interesting.

[1:08:46] Wow. Okay, let's go write that down. Okay, let's go write that down. Uh potential so smart. Uh Swiss deal coming, too. Uh this is very smart. This is very

[1:09:01] Uh uh very long uh time horizons. Big fan.

[1:09:15] Collector because Collector you have to pay per like scan or you have to get like on you have to pay to continue scanning. Rare candy doesn't cost anything. And uh the kids love that cuz they just

[1:09:27] sit there and they scan every freaking card.

[1:09:39] Yeah, I was going to buy a Chipotle burrito the other day with like a $5 side of chicken and the total order for the burrito and a $5 side of chicken with like the delivery fee and all this it was like $37.

[1:09:52] And that was only tipping $3. And I'm like nearly $40 on a burrito and a side of chicken. Just not going to do it. So, I didn't order. I was pissed. I really wanted my burrito. Well, I'm like this

[1:10:07] is stupid. Uh I'm not I'm not paying that.

[1:10:19] Cuba runs out of jet fuel as Trump squeezes oil supplies. Wow. squeezes oil supplies. Wow. I guess you have to tanker it in then.

[1:10:38] Okay, we saw this. European alternatives, blah blah blah. Mountbatten-Windsor and Epstein. Man, those files are everywhere.

[1:11:05] Yeah, there's the Lindsey Vonn crash. All right, what else we here? Let's see here. What's the cheapest burrito you can get? Did you make a reference to something

[1:11:17] else? Yeah, I think the uh my favorite strategy is just the Costco chicken. Costco? Uh

[1:11:31] chicken that they do, the rotisserie Let me see if they have it on their website. I don't know how to spell rotisserie, do I? Rotisserie.

[1:11:45] Chicken. I definitely spelled that wrong. Rotisserie. Oh, I was close. It's an E.

[1:11:59] much it is? Cuz Lauren gets it all the time. No, they don't. Lauren gets it all the time. But um I guess it doesn't actually show. Oh, well.

[1:12:11] All right. And then that with some veggies, like And then that with some veggies, like peas and carrots, are great.

[1:12:29] What? AI.com bought by Crypto.com for 70 million? Are you kidding me? Holy crap. The founder of Crypto.com has bought AI.com for 70 million dollars.

[1:12:43] AI.com for 70 million dollars. You got to be kidding me. For a personalized AI app. Oh, who cares?

[1:13:01] Paid entirely in cryptocurrency. Oh my lord.

[1:13:18] your handle. ai.com's a mission to accelerate the decentralized network of autonomous self-improving AI agents. self-improving AI agents. Yeah, whatever, dude.

[1:13:39] in a recession. But uh so far so good on avoiding that. Almost up at 6:17 today.

[1:13:56] have fun. Good luck out there. Appreciate you. And yeah, we'll see you in the next one. Yeah, go get some Costco chicken.