The market is rough, things look really bad. I don't think there's really any beating around the bush when i say that the spy right now is uh at 412 dollars. And if you were to look at the last 365 days of trading uh, we were actually red in terms of the one year. Time frame, and so far for 2022 uh, the spy is down 12.99.

It's a lot. A lot of people are feeling the pain, uh and i've seen people sort of mentioning this on twitter. You know this is looking a lot like 2008, but i saw an opinion and i thought about it a lot and it was from tyler wilson, tyler wilson, said uh. What people aren't grasping is that this is worse than 2008 and i thought really hard about that.

Uh, i thought hard about the data that currently exists and what the big difference is uh, and it makes a lot of sense, and i wanted to take the time to sort of discuss that today guys welcome to trace trades where you freaking talk fast, usually, and Don't skip classical property by salmonella, so they would say the green salt today guys um. I want to talk about what 2008 looked like in comparison to now, because things right now look very rough, but before i get into that, this is a a cycle that sucks. It's a cycle in the market that really blows uh because it affects ultimately you and as you're gon na see by sort of the illustrations i have drawn out. People don't win us regular, guys, don't win in uh in a financial crisis, even if you're playing puts quote unquote, you just don't win.

You know. Let me show you why what happened in 2008 right? We can all think back on 2008 and sort of the events that uh that took place. You can see investors all believe that they're getting uh, you know one over on the big banks and you had the cdo crisis. The the housing crisis, this uh, basically uh big banks, were in complete control of the pricing of a specific asset that was tradable throughout the market right.

They were able to determine the price of these things until they no longer could put on a rate. Well, when the charade ended, lots of people lost lots of money uh to the tune of roughly about a trillion dollars and we're gon na discuss this more, but at the end of the day, uh the losers. In the end, were you you know, it was the taxpayers, it was general average americans now, i'm very lucky and i'm very grateful to uh never have had to financially take care of myself through the 2008 crisis. But a lot of people did a lot of people in the markets now had to uh my parents - maybe you maybe your parents, maybe your grandparents.

You know lots of people suffered through the 2008 crisis and the worst part of it is uh. People were sipping on champagne, glasses and laughing from wall street because they in the end got a 700 billion dollar bank bailout and it was paid by the taxpayer. So not only did you get in the market, but you got by wall street twice because you had to pay for the bailout sounds pretty rough right. It's a tough situation! Well, things are worse this time around and i want to explain to you why.

So let's continue on here's my claim. I've got two claims, one we are entering into another recession and the market will continue to sell off. I don't know what this looks like in terms of time frame. Maybe it'll be another month.

Maybe it'll be two months. Maybe it'll be three, and this is actually contradictory to a prior belief that i had had uh. That was changed. My belief was that you would watch the economy continue to slowly grow and the market would continue to slowly grow, because i believe that the fed would not be so aggressive with rate hikes, and i think that this is sort of the catalyst that is uh.

Pushing the market down in the manner that it is so i do believe we're going to enter another recession. I also don't think that there's going to be any help from taxpayers and i'll get further into that as we continue on. But before that we have to talk about 2008 and why? I think this is worse check this out. If you go back in 2008, this is an article that i pulled up kind of going over some of the the the key points that took place back in that uh period of time.

What you saw was, as as i have labeled in red here, a total asymmetry of information with the information mismatch heavily favoring the likes of goldman sachs. Essentially, the cdos are just an asset class that was uh uh in a very simple way: sort of trading the housing market right, you were able to trade, the housing market uh by a security instead of instead of the actual property itself. Thus, the banks were able to dictate the terms of an inefficient market. The prices of cdos were whatever the banks said.

They were almost nobody had the knowledge or was willing to do the work to question this uh. So in today's modern day and age you can think of this as a synthetic instrument tool equivalent. You think of a synthetic share, you think of uh naked short selling, you think of all the sort of twisted mechanisms that the market trades on today. This was the equivalent back.

In 2008., there was a nine billion dollar loss from one bank believe this was goldman sachs morgan. Oh, it was morgan stanley, morgan stanley back here, uh admitted defeat and exited a nine billion dollar lost trade, the largest single uh trading loss. In wall street history, uh back then, and taxpayers paid for this bailout. In the end, it came just shy of a trillion dollars uh or just over a trillion dollars.

Uh for these total losses that you saw across the market, total losses of u.s subprime related assets would eventually top one trillion dollars. It's a lot of money back then that had a lot more weight than it does today, because there was less money circulating around. You think about sort of how much money has been printed. If we printed 80 of all circulating cash in the last two years, 16 ish trillion dollars.

That would mean that back then, you had maybe roughly four or five trillion dollars that were circulating around in the economy and if a trillion poof evaporated just like that, well then what happens you're in a pretty tough spot. I mean your economy economy's gon na. Do pretty rough well, how about today you had a nine billion dollar loss from one bank. You had a total of one trillion dollar loss back here across the entirety of the housing market crisis.

Well, let's just look at our cagos one hedge fund, who happens to be over levered, and this to me is the real problem that we see within the stock market itself, not just the economy. The stock market is over leveraging. These guys leverage themselves to the point of between 400 to 700 uh of cash. So if they had 100 investment, they had actually four to five six hundred dollars of leveraged margin.

On top of that investment, even up to a thousand a thousand percent, was the most leveraged. They were across any single uh investment that they happened to be dealing with. They lost 110 billion dollars in just five days when they ran into the crisis that they did now. Thankfully, back then, we had mechanisms that propped up the market, and things were kind of okay for the time being, while uh, while these guys were getting margin called them, while these guys were liquidating.

But what happens when multiple firms get caught in this when multiple firms have to liquidate because of uncontrollable factors such as the economy weighing in heavily on the stock market itself? I personally believe that that's going to be the case, i think that the stock market is going to suffer some pretty hard losses because of over leveraging. Lots of lots of lots of hedge funds are over leveraging the market right now and when things fall out from underneath well you're in a pretty tough spot. So now that we're giving you that crash course, uh, i'm gon na explain to you why. I think the current market situation is worse than 2008 problem.

One problem, one is inflation: what is inflation caused by well? This is obviously not just a one. Shoe fits all sort of situation, but this time around impeachment inflation peaked from massive amounts of money. That was printed here. I've got a chart pulled up.

That is showing two different things here. You can see the amount of money that was printed here. You can see inflation as it continues to rise, and what you're going to notice is a massive spike up in money printed and billions of dollars, which equates to trillions by the way uh back in 2020. This makes sense if you think back on the covet era when covet hit uh.

This was sort of a crisis for the united states in terms of how it was handled how it was handled. Well, a lot of businesses got shut down and people needed immediate relief. They made it an immediate stimulus to get things moving, so the fed's response to this, as you all know, was printing massive amounts of money. We watched from 2010 to 2020, roughly 2 trillion dollars get printed and from 2020 to now you have watched about 16 trillion dollars, get printed 16 trillion even just higher than that, because this is 20 trillion right here, which means we're slightly above that mark, and we Were at about four trillion dollars back in 2020, beginning of 2020., that means 16 trillion dollars was printed over 80 percent of all money that circulates around the us economy.

Well, what did this? Do it converted to an inflation rate that is skyrocketed? It is currently up to 8.5 percent, not a good metric. It's a pretty bad metric and the worst part of it is that cpi data, which is the consumer price index or inflation, is a lagging indicator. You can see that back in 2020. This is when we started printing really heavy right well back here we were actually going down in inflation.

You see a downward push, which means that this is behind. I don't think that it is priced in the full scope of how much money has been printed between these two years. I think it's starting to obviously uh, but i don't know if we're at a peak. I really don't think so.

Now. How does this work? Very? Simply put supply and demand i've got drawn out here in an ideal world supply and demand means somewhere in the middle. You've got a moderate amount of supply. Ms you've got a moderate amount of demand.

Md you meet in the middle. You have a fair market right. You're sort of the mechanisms low high for supply high low for demand. Well, if you flip this equation and you all of a sudden uh change, the the metric of supply - and you raise it - you raise supply which happens is you've, got a different, uh divergence point.

This is the divergence point here. Well, you'd move it if you have high supply uh, but also low demand. Well, what what? What? What happens? All of a sudden right, you are in a shoe. You've got less dollar value, you can think of the supply and demand as the us dollar.

If you print off a ton of money well, what happens, consequently, is you're going to have less demand for the dollar, which means less worth for the dollar? It's just what happens. It makes sense, that's what you saw take place here and unfortunately i think that inflation hasn't peaked out quite as bad uh, as it's going to get. You look at some different inflation metrics and the reason i bring up germany here is because they specifically mention energy uh. What you're going to notice is that their inflation's terrible german annual producer price inflation topped 30 in march of 2022.

This is the highest level uh. In the last 73 years, the biggest culprit was energy prices, oil, gasoline electric. All these things rose nearly 84 from the same month last year. Now, if you look at the current cost of gasoline in the united states, it has gone up more than eight percent.

That's an undeniable fact: that's an absolute fact now. Obviously, the german economy and uh the united states economy are drastically different, but i personally believe that there's a lack of energy pricing within the states - i would have argued differently a month ago and i'll own that, but i do think that there is a lack of Pricing - and this is mentioned more than once by some some other people who believe the same thing in terms of inflation, pricing, canadian inflation also starting to skyrocket up. This is affecting more than just the us economy and when you make this a worldwide sort of scale, you change the the dynamics of the way that things are going to really hold weight. You can see that covet affected the world and since the us economy runs not just within the united states, but it runs within the entire world.

You see inflation going up here. You see inflation going up in canada. Well, it's just going to be more expensive to make trades with different countries, and that is ultimately going to affect inflation. It makes a difference.

I have already i've already, given my opinion. I've talked about this before is inflation worse than lead on? I personally believe so, must already believe so this isn't really a hot take. This is a take that i think is pretty standard. He believes that the official numbers actually understand the true magnitude of inflation.

Inflation appears to be likely to continue for at least the remainder of the year said the test. The ceo on the company's q1 2022 earnings call tuesday, take away from me. There's been lots of money printed uh, which is going to cause high inflation. It's just basic supply and demand.

You increase supply, you're going to decrease demand, and it's it's truly as simple as that. Quite unfortunately, so now we've laid the groundworks for this. We know that inflation is a major major culprit, despite whatever biden says, whatever other people within the country say, uh inflation was caused by massive amounts of printing from the federal reserve and buying of assets from the federal reserve. We have to identify problem.

Two problem, two is rate hikes rate heights began in march of 2022. Now this to me is probably the largest problem, and this is where we run into the scope of the problem, which is the fed was late. If you don't know what the fed is, the federal reserve is sort of like the the bodyguard the security guard for the entirety of the economy and the entirety of the market, they're supposed to sort of monitor a situation and be able to adjust, left and right Depending on whatever it calls for that right, well, they began rate hikes back in march of 2022, and over here you can see that i mentioned reference, the printing dates. This is march of 2022 right.

This is when we really started seeing rate hikes begin right around when the russian ukraine conflict really started picking up steam. Well, what you're going to notice here is that back in 2020, this is when we started printing massive amounts of money right. We went from 4 trillion all the way up to 16 trillion 12 trillion dollars of printing in probably about a year, and nothing happened. They pretended.

Everything was okay, and this to me put the fed in a shoe where now that they are reacting, they feel that they have to overreact, and maybe that's potentially true it could be. It could be true that they just need to rip the band-aid off and commit to some insane rate hikes, so they can sort of flash crash this thing and just get it over with. But this is the main problem, and this is why i think a recession is now uh, pretty likely far less likely. They started raising rates very passively a year ago.

It's because they're going to do this aggressively fans dally says the economy can handle rate hikes, but a milder session is possible. I think a mild recession is an understatement to be quite frank, uh, but dally admits that rate hikes could trigger a recession, they're being very aggressive, they're being what is known to be hawkish. I've got this drawn out in case you'd like to know hawkish versus dovish. What does this mean? Why are they hawkish? Well, let me explain this.

What is the why, behind each of these dovish means that you believe the economy needs a little bit of boosting right, it's uh! It's it's slow, you're, trying to speed things up so to speak. So you're going to have low interest rates, it makes it easier to borrow cash you're, going to maybe stimulate the economy like back during the covert air. They were very dovish. They were trying to stimulate the economy.

I let student loans sort of have a bypassing period. They tried to give relief, they gave out lots of grants, they had forgiveness of uh debts. They tried to ease the economy, they tried to try to loosen things up so that people can get back on their feet and get things moving well. This was sort of like the 2019 to 2021 era lasted about two years.

The market reacted very positively, as it typically would uh. However, what people are not accounting for is the inflationary gains that came from this growth period. You saw massive gains in the market. Don't get me wrong, but how much of it was legitimate or how much of it actually matched inflation.

That's the real question to me versus now. 2022. We are in the hawkish era, where you are doing the exact opposite. You think the economy is moving too fast.

You're trying to slow things down, that's what the fed's doing so they're going to raise interest rates; they're not going to have stimulus they're going to try to lower cpi they're, not going to give it out as many grants they're not going to have as much forgiveness. They're going to pressure the economy to slow down, saying, hey, stop spending as much lay off the gas pedal. We are going to have some massive massive problems. If people continue at the pace that they're going, it's not sustainable and now the culprit isn't covered.

It's inflation. The difference is in both of these situations: uh you over corrected in my eyes too much the covenant, especially to the wrong people. I mean you look at banks now and it's obviously pretty problematic and this time they're overreacting, uh too late, they're they're doing this too late, they're late to the game, which is going to cause massive problems, and this is the tightening phase. This is where we're at bullard claims recession isn't likely with current employment rates uh.

This is the tightening phase he's claiming that as long as people continue to work and unemployment rate stay where they're at you're not gon na see it. I i disagree. I think that uh, i think the unemployment rate is due to jobs, not wanting to pay out what people are asking for, and consequently people are wanting to work, and i think that that could continue to rise to be quite frank with you, especially with inflation, as It is uh, i don't think people are going to want to bend on that, and that brings me to problem three, and this is sort of the elephant in the room and the thing that nobody's really talking about, because we can recognize inflation. We can recognize the tightening problem, but it's the housing market, we're just finally starting to react to this.

The housing market's been in a bubble you can buy. If you bought a house 10 years ago, you probably double or tripled your investment value in some states, such as florida or texas, uh or maybe even north carolina, as mortgage rates, have been very cheap. Well now we have broken a very, very, very long downtrend. You look back to 1980 when we had a mortgage rate up in the 17 18 range.

We have only gone down for a very long time. We have broken that down trend uh, with mortgage rates 30 year, fixed mortgage rates going over 5 for the first time in quite some time. This is worrisome. This downtrend break.

Uh markets are funny things. They follow fibonacci numbers, they follow trends. They follow this. They follow that.

I would expect that trend to continue going a break of a downtrend like this, and this is a bad downtrend to break. This is like an inverse like the vix. You don't want to go higher on this. It presents risks uh, because people expect interest rates down here, but all of a sudden they're slapped with five percent and rising.

Well, what are the risks defaults and, over extension, people likely buying homes that they cannot afford? What happens if people buy a home that they cannot afford? Well, if you can't afford it, there's risk of you losing your home truly. Today's mortgage rate soared to nearly seven percent april 18. 2022.. What is this going to do? Well, if you raise cost you're going to have less demand, demand falls.

The average contract interest rate for 30-year fixed rate mortgages with conforming loan balances increased to 5.2 last week from 5.13. The problem wait: housing accounts for around 18 of the economy. This is why 2008 was so bad, so not only now do you have a problem with inflation, with interest rate hikes with printing, but we're about to prom we're about to encounter a problem with the housing market, which is the problem in 2008.. This to me is the worst part of it.

We've presented all the problems, the difference is this: in 2008, the problem wasn't caused by printing money. Problem was fixed by printing money. The problem was caused by greedy hedge funds that were creating synthetic demand for something they were able to control the price of something which i do believe presently happens. Now we look at archicos in 2021, when the the the house of cards came crashing down and all their assets went from super high highs to uh 50.

60. 70 corrections that's still happening, but only one's got busted so far. The difference now is this problem was caused by printing money, and now we have additional problems. Now you tell me if we're in a hawkish phase right now and we're trying to tighten the economy by not printing money.

Can this problem be fixed by printing money? Maybe they'll rely on that, maybe they will, i don't know, maybe they'll end up just printing more and we'll have to combat inflation further down the road to try and uh lessen the worries of the economy. But this to me can't be fixed by printing money. I think this has to be fixed by simply weathering the storm, and that's the sadness of this is if the market reacts too harshly. If things sell off too fast and mass liquidation start to happen similar to back in 2008 with bear stearns and morgan stanley and goldman sachs, the dominoes could start pushing and house of cards can start falling and that just exacerbates the problem.

And that looks rough. It looks rough and as retail we can play puts, and we can hedge and we can do this - we can do that, but the economy will still feel the burden of the current situation regardless of the market. The market is not a equal to of the economy. It's it's sort of a reaction to the economy.

The weight of the economy is still going to happen and it doesn't look good. So here's my summary, the economy looks rough. The probability of recession is high, the fed is over correcting, and this to me is the the biggest problem, and this is what i mentioned earlier in the video is the fed is overcorrecting because they're late and the market is finally reacting to this housing market bubble. Correction seems likely, and what i mean to say you know in all this is 2008 was bad, but the problem was fixed by you this time around uh.

If it is gon na be fixed by you, it's only gon na make it worse. It won't make things better: the taxpayers, the everyday ordinary people these. This is sad. This is genuinely sad, and i watched astros video on this, and i kept this on the back burner for a while, because, honestly, i just didn't want to believe it to be true, to be quite frank and we're here now.

You know this is sad stuff and usually uh. Usually i'm pretty straightforward and i agree with astro's approach on keeping things pretty somber man, because the market's tough hedge yourself do what you can to protect yourself. Uh keep your wallet tight, do what you got to do, but i think the pain is likely not over. Yet i think monday will probably be a green day.

To be quite frank, i think you're gon na get a bounce in some different tech stocks uh, which will maybe carry the spy to a percent percent and a half gain things are so rocky right now they just rock it back and forth back and forth back And forth, as we can see here, looking at the daily i mean it's just like a whip saw, but i don't think the pain is over. Things look pretty weak and i wanted to give you guys a heads up. I hope that this video was valuable. I hope you learned something and take care of yourselves guys, um, there's more important things in the world than the stock market, and that's you.

That's the people, because, unlike wall street and unlike the federal reserve who doesn't give a about people uh, we the people have to care about the people so take care of yourself. That's what i got catch y'all later much lovely taps, peace.