Latest / Felix Nikolas Prehn's Podcast / ⚠️FED RUG PULL AT 2.35PM TOMORROW + Stock Market News 19 March 2024

Transcript

⚠️FED RUG PULL AT 2.35PM TOMORROW + Stock Market News 19 March 2024 · Felix Nikolas Prehn's Podcast

• 0:00
  Speaker 1: Felix here and welcome to this pre-market live stream on a day that is a little more exciting than perhaps you'd like it to be.
• 0:09
  Speaker 1: We've got some major news today that you need to understand if you want to be a great investor in the coming weeks and months.
• 0:16
  Speaker 1: Japan yeah, japan still matters.
• 0:19
  Speaker 1: Bitcoin, of course.
• 0:21
  Speaker 1: What's going on over there Nvidia, google, apple, tie up possibly, and a few other bits and bobs that are rather important, and this is, of course, all brought to you in research by my hang on.
• 0:35
  Speaker 1: I was going to show you somebody special, but she says no, oh dear, okay, we've got a cat on the loose.
• 0:41
  Speaker 1: She is upset with me now.
• 0:44
  Speaker 1: I tried to pick her up.
• 0:45
  Speaker 1: She's not a fan.
• 0:46
  Speaker 1: All right, there we go.
• 0:48
  Speaker 1: Anyway, let's dive straight into this.
• 0:50
  Speaker 1: Of course, put your questions in the chat and I'll do my best to answer it.
• 0:55
  Speaker 1: Of course, isn't financial advice just your opinion of an in old banker with a cravat.
• 0:59
  Speaker 1: And let's get cracking, shall we?
• 1:02
  Speaker 1: Let's get cracking, oh yes, before we do, in literally 12 hours actually 13 hours I'm running a life trading training and we're once again massively over subscribed, so we've opened up 500 extra spots, of which the first 300 already went in the last hour.
• 1:18
  Speaker 1: So I will teach you in that how we make money this year so far.
• 1:24
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• 1:27
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• 1:30
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• 1:33
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• 1:42
  Speaker 1: That's the premise.
• 1:42
  Speaker 1: No, no promise of particular outcomes or anything like that, but I'll teach you how I do it, what I do, how I do the automations, what the three rules are and how a golden retriever can do this.
• 1:52
  Speaker 1: So it's fairly simple.
• 1:54
  Speaker 1: It's fairly structured, very structured in fact.
• 1:57
  Speaker 1: So come and grab yourself one of the last 180 spots or so Felix Ransselauk slash webinar and join me in 13 hours and be on time.
• 2:08
  Speaker 1: The room gets full and then you can't join, so I'd encourage you to be on time.
• 2:13
  Speaker 1: Now I want to get a package of Japan, because that actually really matters, and I'll do that in a second.
• 2:18
  Speaker 1: But we should have a glance at Bitcoin.
• 2:20
  Speaker 1: Whenever you take a screenshot of Bitcoin, you kind of regret it afterwards because the thing moves so bloody quickly that you are better off.
• 2:28
  Speaker 1: You can see, I was doing some work here on a video that's coming out later today.
• 2:33
  Speaker 1: Btc USD and we are down to $63,000, which, of course, means people are panicking and just massively flipping out because we are where we were at the beginning of March, having lost about $10,000 there on those Bitcoins.
• 2:51
  Speaker 1: So that's matters.
• 2:53
  Speaker 1: And why does that matter?
• 2:54
  Speaker 1: Well, what I put in here sort of trend lines, and it doesn't really matter all that much, but we've broken through moving averages and we're heading lower.
• 3:07
  Speaker 1: So at the moment, this just looks like a technical sell, and that does matter.
• 3:12
  Speaker 1: And this is happening on fairly sizable volumes.
• 3:15
  Speaker 1: So the whole theory that, because ETFs have joined the party, bitcoin can only go up Well, I've asked a question to a few Bitcoiners on Twitter and said well, what happens when the ETFs start selling Because they have to sell right, when the market goes down, who's going to buy all that?
• 3:33
  Speaker 1: And my thought always was this was going to make it more volatile.
• 3:37
  Speaker 1: Yes, more money coming in is a good thing.
• 3:38
  Speaker 1: I mean, it doesn't move the price up in the long run, but when there is a momentum turn that we're seeing right now, it'll make the move down just as rapid as the move up.
• 3:47
  Speaker 1: That's, that's all I'm saying.
• 3:49
  Speaker 1: So that's one thing.
• 3:53
  Speaker 1: Okay, yeah, let's move past the Bitcoin here.
• 3:56
  Speaker 1: It's also moving in the opposite direction of the dollar, which is kind of interesting, and we'll talk a little bit more about the dollar in just a second here.
• 4:05
  Speaker 1: But, yeah, let's move past the Bitcoin.
• 4:08
  Speaker 1: Too much Bitcoin, right, I think that's a little bit too much Bitcoin.
• 4:12
  Speaker 1: I wanted to talk about banks because I touched up on that yesterday and I left you sort of with a slightly gloomy note and some of you were asking well, which banks you know, who's actually affected?
• 4:21
  Speaker 1: Can you tell me more?
• 4:22
  Speaker 1: And I thought, well, let's do that.
• 4:23
  Speaker 1: And this is a lovely chart here that's made by the visual capitalist.
• 4:28
  Speaker 1: It's a touch fuzzy, but I think you get the idea.
• 4:31
  Speaker 1: What is?
• 4:33
  Speaker 1: The proportion of all their loans are CRE, which is commercial real estate, which is the toxic stuff right now.
• 4:42
  Speaker 1: So CRE commercial real estate is like an empty Trump Tower.
• 4:47
  Speaker 1: You know what I mean.
• 4:48
  Speaker 1: It's just no tenant wants to go, that kind of type thing.
• 4:51
  Speaker 1: It's not a political statement, I'm just making a joke.
• 4:54
  Speaker 1: So if you look at some of these citizens, that's 23%.
• 4:59
  Speaker 1: Wells Fargo is 21%.
• 5:01
  Speaker 1: The big boys are fine, right 4% at Citigroup, 6%, 7% at Bank of America.
• 5:08
  Speaker 1: That isn't really going to bankrupt them.
• 5:09
  Speaker 1: But I'll cut for my mouth.
• 5:12
  Speaker 1: Even Capital One is 15%, they'll be fine.
• 5:15
  Speaker 1: But oh yeah, the New York Community Bank it's 57%.
• 5:24
  Speaker 1: Of their loan book is basically toxic junk.
• 5:26
  Speaker 1: Huntington's, it's 33%.
• 5:30
  Speaker 1: What is that?
• 5:31
  Speaker 1: M&t Bank never heard of it.
• 5:32
  Speaker 1: It's 40%.
• 5:34
  Speaker 1: So these are the banks you want to be worried about.
• 5:36
  Speaker 1: If you got your money in there, move it, yeah.
• 5:40
  Speaker 1: And someone's going to say Felix is encouraging a bank run.
• 5:42
  Speaker 1: No, I'm encouraging you to protect your money.
• 5:44
  Speaker 1: And you might say, okay, you're going to get bailed out.
• 5:46
  Speaker 1: Well, yes, you can have faith in the chosen one who gives money to everybody who happens to be president, but I'd rather be safe.
• 5:55
  Speaker 1: So if I add money in the US which I do guess where I have my money that Right, they're the biggest ones.
• 6:04
  Speaker 1: If they fail, the world is over.
• 6:07
  Speaker 1: They're never going to fail.
• 6:08
  Speaker 1: It's just no one's ever going to allow that to happen.
• 6:10
  Speaker 1: So the smart thing is to put your money there.
• 6:13
  Speaker 1: Bank of America will also be fine.
• 6:14
  Speaker 1: Or Citigroup they're far too big to fail.
• 6:16
  Speaker 1: So that's where I would put my money.
• 6:18
  Speaker 1: If you're one of the little regional banks, move it.
• 6:20
  Speaker 1: And yes, that is what they want.
• 6:22
  Speaker 1: They want the little banks to fail so that JP Morgan can make a bit more money.
• 6:27
  Speaker 1: But you're not the system, you're part of it.
• 6:30
  Speaker 1: You're going to have to live with that and therefore I think that's the smart move.
• 6:34
  Speaker 1: Are we at the same chart?
• 6:36
  Speaker 1: I think that's the same chart.
• 6:39
  Speaker 1: Let's move on.
• 6:40
  Speaker 1: This is also something I would internalize the interest payments on non-mortgage loans.
• 6:51
  Speaker 1: So that's your car loans.
• 6:54
  Speaker 1: The idiots are not paying off their credit cards.
• 6:56
  Speaker 1: That's student debt.
• 6:59
  Speaker 1: That's all sorts of personal store cards.
• 7:02
  Speaker 1: I hope you don't have a store card.
• 7:03
  Speaker 1: If you do, cut it up.
• 7:05
  Speaker 1: And mortgages, they're not the same.
• 7:08
  Speaker 1: It's never happened before.
• 7:09
  Speaker 1: Never in the history of the United States, land of the free, no sorry land of debt, have people paid the same amount of money on voluntary, pointless debt like car loans, as they have for their home.
• 7:26
  Speaker 1: And that is a bit scary.
• 7:28
  Speaker 1: And that's because home loans, so mortgages, how fixed rates in the US, right, say, car loans and all the other stuff.
• 7:42
  Speaker 1: Car loans might to some extent, but basically credit cards and so on, they're not.
• 7:46
  Speaker 1: They go up and down and rates have gone up 5.25% and therefore that's what's happening and that means Papa Powell, the chairman, is hurting those with bad credit discipline, or those who maybe haven't got enough money and therefore they have to take out debt at least they feel like they have to take out consumer debt, and it means at some point he's going to have to cut rates fairly soon, because these people are going bust right, and you don't really want that sort of lower middle America to go bust even furthermore than they have already.
• 8:20
  Speaker 1: That's not really a vote winner, elections coming up, so I think that's probably going to happen.
• 8:25
  Speaker 1: Now there is also something which I thought I'd put in here, but clearly I hadn't, but I'll rise it out for you is what just happened in Japan and why does that matter.
• 8:37
  Speaker 1: But before we do that, let's have a quick glance at just the pre-market here.
• 8:39
  Speaker 1: Google Still Green, meta, microsoft, nvidia are down.
• 8:43
  Speaker 1: Nvidia good presentation, I think, really interesting stuff going on there.
• 8:48
  Speaker 1: I will put out today a video on my take on Nvidia and what smart money is doing, so you know what to do If you want to watch that alert buttons and all sorts of things.
• 8:59
  Speaker 1: Tesla's down a bit.
• 9:00
  Speaker 1: So the big tech stuff is down, except for Google still floating a little bit on the apple juice.
• 9:05
  Speaker 1: But you see what I did there Apple juice and that's one thing, papa Powell meeting today with his cronies and they're going to tell us tomorrow that they're not cutting rates, but he's also going to give us some indication when he might.
• 9:25
  Speaker 1: And we've put out in our newsletter three trades actually today, one you might particularly enjoy.
• 9:35
  Speaker 1: If you hate the woke crowd, seriously, you got to read this.
• 9:40
  Speaker 1: And how do you read this?
• 9:42
  Speaker 1: You go here, let me write it out for you.
• 9:44
  Speaker 1: Get a free trial to this, at the very least.
• 9:48
  Speaker 1: It's Felix friendsorg slash sub.
• 9:54
  Speaker 1: That's the newsletter.
• 9:55
  Speaker 1: Three juicy trades that we walk you through right over there.
• 9:59
  Speaker 1: So get your pause on that.
• 10:00
  Speaker 1: Felix friendsorg slash sub, like the sandwich, or subscribe, which I think was the original intention.
• 10:06
  Speaker 1: And then also two trades that profit of Jerome Powell ruins the parade, which is possible.
• 10:11
  Speaker 1: Now, why is it possible?
• 10:13
  Speaker 1: Until yesterday I thought Papa Powell was going to deliver us in Easter present.
• 10:19
  Speaker 1: Why?
• 10:20
  Speaker 1: Because he's destroying middle and lower America with high credit rate cards and high loan rates, and inflation has come down tremendously from 11% to probably only one or 2% right now, and therefore it makes sense to cut rates, because cutting rates takes time.
• 10:49
  Speaker 1: But something else has happened and that is our friends in Japan have done what the fun, funky color, isn't it?
• 10:58
  Speaker 1: Let's go for blue, shall we?
• 10:59
  Speaker 1: I think blue is a little better.
• 11:01
  Speaker 1: Japan has taken rates, their interest rates, from 0% to 0.1%.
• 11:10
  Speaker 1: And I hear you you're thinking why do I care?
• 11:13
  Speaker 1: That's really far away for most people, land of the sun and all of that, and it matters.
• 11:21
  Speaker 1: That's why it matters.
• 11:23
  Speaker 1: Japan is the biggest excuse, my handwriting lender in the world.
• 11:36
  Speaker 1: They basically provide credit to all of us.
• 11:41
  Speaker 1: Why?
• 11:41
  Speaker 1: Because they got money for free, so they would just borrow as much as they humanly possibly can and then send the money overseas to the United States and get some income.
• 11:51
  Speaker 1: What Japan wants to do is bring that money home right, reshoring the yen, essentially, and they can do that by paying us a little bit of interest.
• 12:03
  Speaker 1: Does that have an impact?
• 12:04
  Speaker 1: Yes, it does.
• 12:06
  Speaker 1: So what would I expect?
• 12:07
  Speaker 1: A drop in bond prices, and this is a little complicated always, isn't it?
• 12:15
  Speaker 1: What does a drop in bond prices do, children?
• 12:17
  Speaker 1: It increases interest rates.
• 12:22
  Speaker 1: That's a slightly counterintuitive, I get that, but that's what happens.
• 12:25
  Speaker 1: And then what happens there?
• 12:27
  Speaker 1: Well, when interest rates go up, stock prices go down.
• 12:32
  Speaker 1: Simple as that.
• 12:35
  Speaker 1: So Japan, raising rates, makes money, want to go back home and therefore they have to sell bonds to send the money home and therefore interest rates go up, because there is less demand for bonds and therefore the sellers of bonds have to essentially offer a higher interest rate and therefore bonds now pay more interest, actually become more attractive and therefore money is going to leave stocks and go back into two bonds.
• 13:04
  Speaker 1: Right, we should probably do a document on this, but that's the idea, and this isn't that great for Papa Powell in my view.
• 13:15
  Speaker 1: So we'll see.
• 13:20
  Speaker 1: We'll see what he says tomorrow.
• 13:21
  Speaker 1: He might just be very tight lipped I mean, he was quite bullish in front of Congress only about a week ago or so, but you never know.
• 13:29
  Speaker 1: You know what, if he doesn't have his breakfast cereal that morning, you know who knows?
• 13:35
  Speaker 1: We'll see where we are.
• 13:41
  Speaker 1: Carrots today is that Alexander Love?
• 13:42
  Speaker 1: That?
• 13:43
  Speaker 1: Or even is asking about the webinar.
• 13:58
  Speaker 1: We'll probably do one later in the year for Europeans.
• 14:02
  Speaker 1: So yeah, obviously 10 am Eastern time isn't super ideal If you're in Europe.
• 14:11
  Speaker 1: I get that.
• 14:11
  Speaker 1: I don't expect it to be awake.
• 14:13
  Speaker 1: So we'll consider doing another one sometime later in the year where it's most suitable for Europeans.
• 14:21
  Speaker 1: I'll let you know.
• 14:26
  Speaker 1: Carrots today Alexander Love that?
• 14:27
  Speaker 1: Winston for Google CEO?
• 14:29
  Speaker 1: Absolutely, yes, absolutely.
• 14:31
  Speaker 1: I agree with that.
• 14:32
  Speaker 1: I think he would probably make a slightly better one.
• 14:34
  Speaker 1: In all seriousness, google's still looking pretty good.
• 14:36
  Speaker 1: The rest of tech is looking a little concerned with what's going on here in Japan and possibly rates not coming down as quickly.
• 14:46
  Speaker 1: I think the only way rates are going to come down in June is if something breaks, and by something I mean possibly one of the banks or some other event like that.
• 14:57
  Speaker 1: That would have an incentive for the Fed to cut rates, because you would fix a lot of those.
• 15:05
  Speaker 1: You would fix the real estate crisis to a large extent with lower rates and therefore fix the banks and their balance sheets.
• 15:10
  Speaker 1: But until something breaks, they might just want to sit on their hands because of the whole 1980s where inflation went down and then up and then down and then up, and that's sort of the nightmare of the Fed.