Market Outlook for Sep 29, 2024

[Music] I'm going to take uh just a second here for a public service announcement I posted this on LinkedIn um last night as well if you uh were a um subscriber on Mark m.com at any time in your history or you're a current subscriber now and you do not have the applied level you would have received this email um I had a deadline as it uh says here I had a deadline for the applied level all Applied level subscribers up to July 31st are going to get access to all content added to the series in

perpetuity as of August 1 while new subscribers will continue to get access to the applied level in perpetuity along with any content added certain new modules that will be added we have an additional fee and then I say here an oversight on my part was not informing all current and past mark.com subscribers about the deadline while This was telegraphed on YouTube and Linkedin several subscribers from The Mark mom.com family have notified me that they were unaware of the deadline date and have asked me if I can extend the grandfather status and I say okay I

will do that to September 30th only this is an extension only for those uh who uh are um uh past subscribers or current subscribers of Mark mm.com you have until September 30th uh to to take advantage of this so that's what this Email is you would have received this email if you didn't I would encourage you to check your spam folder because maybe it went there and if you are a current or past subscriber on uh Mark mom.com and you did not get this email anywhere it could be that the email address we have for

you on file is incorrect by you know a letter or a number somewhere or you gave a different email address I would contact Support at Mark mm.com actually you got to spell out the whole Mark Meldrum it's not mm but contact support at mark.com and say hey I uh you know I I was a past subscriber at some point and I never I never received this email because to take advantage of this opportunity you actually have to click that button if you don't click that button it doesn't give you uh it doesn't give you the

link to get to where you're going so you have until September 30th To get this done and because I've extended this to September 30th anybody who bought August 1st to September 30th outside of the system I will extend the same thing so if you bought on August 10th let's say and you say oh I don't have the all-in uh the all-in status you you will I'll just upgrade everybody to that as of September 30th so check your email check your spam folder see if you have this uh and if you don't um contact support at

mark.com for anyone outside Of this who says well what about me yeah I I will make sure that everybody who purchases by September 30th has the same status however once we get to October 1st all that code disappears okay it just automatically it's out of my hands at that point and then it's over at that point uh if you purchase on October 1st you'll still get the applied level and everything that gets in the applied level but there'll be newer modules in the future that are added on that you Would not get okay there's the

PSA done okay we have a lot to talk about this week but before we head in uh for the applied level our next sub industry I have time um the financial modeling is going going well I thought it would take up more of my time so I do have some time so I'm going to start the next sub industry uh by far it was cyber security in terms of uh where we were voting uh I need a Target company now uh I can pick one or I can crowdsource this one I put Five up here

that I don't mind dealing with I'm leaning towards crowd strike they're not profitable uh but if you look at their last three years their loss has been going if this is the zero line has been increasing at a very rapid Pace uh they look interesting I'm leaning towards crowd strike but there's a crowd strike oaka uh Palo Alto Networks foret and zscaler if I had to pick a number two I'd be over here but you tell me which ones uh which ones uh That you like uh knowing of course I'm leaning towards crowd strike in

Pao Alto if you're okay with those we'll just go with those uh crowd strike being number one then you need a backup you know something to contrast it with uh going to uh the financial model in Costco this week we'll be doing the cost schedule we are finished with the revenue schedule we'll be introducing the cost schedule and then uh from that we will have uh our line items all the way to ebbit on The income statement and we can compare that with the 2024 earnings uh that we got on Thursday and we can review

uh the earnings report and uh and make any necessary adjustments uh while we're there and there was one number that I looked at and I thought how can I be so far off there's something wrong here and I found a mistake I made I was calculating some number using an average uh you use an average but then when I forecasted I did not use averages in Forecasting out Ah that's a big mistake and I thought how could I be off so much CU I calculated the variances and all the variances are within within uh uh

you know acceptable ranges anything that's based on a relationship of something came in almost spoton but there was just one line that I looked at I thought that that doesn't seem right how could how could it be off that much if all my assumptions are right why is this one off well was a calculation Error we're going to fix we're going to fix that error and then we're going to review one of the assumptions we made in terms of the inclusion of the number of years in creating an average we made a judgment call uh

and now we have the ability to look and say well you know was that the right judgment to make and if it wasn't then we should we should change it so that we don't uh uh you know compound that mistake for 2025 2026 2027 uh forward we don't want to overfit To the results but if there's something glaring like the calculation error that I made here if there's something glaring you fix it if there was something a judgment assumption you made that looks like well maybe maybe not so you can make the decision to do

that so we'll do the cost schedule and then we will review uh hopefully you've all listened to the conference call you've looked at the press release and you've listened to the conference call uh and here's a nice Thing about listening to that call as you're listening to the call you'll find that a lot of things if you've been following along with the modeling a lot of things and a lot of questions that are being asked you would say yeah that is a good question you'll recognize uh the value in these calls now that you're immersed

in this process all right let's head in we'll start with the economic calendar as we always do a lot to get through and um some things that happened Outside of the economic calendar I don't think we can get through last week without talking about China they uh pulled out the guns several times so I'll spend a whole screen on that um I have uh France Germany the EU Great Britain and us uh on the screen here in terms of the pmis uh I've been asked to include more stuff about the Eurozone I really don't know

much about it but this this stood out if we're thinking about the next move for interest rate Cuts uh I don't know uh that you can avoid interest rate Cuts in the EU I think it's all but a certain thing look at these pmis uh we'll ignore the composite we'll just look at the manufacturing and services for France 44 on manufacturing 483 on Services look at the previous 55 483 that's a big drop call this unchanged 439 to 44 still under 50 still Contracting month over month right so these are still all of these are

still contractions going into Germany uh Ignore the composite here's the manufacturing here is Services 42 4 down to 40 .3 manufacturing for Germany that's a big thing there uh and uh Services 512 down to 50.6 expansion but you know uh uh certainly uh the second derivative is going the wrong direction uh and Manufacturing and services here for the U 458 down to 448 529 down to 50.5 going to the UK for manufacturing 525 515 and services 550 537 528 again expansion over the month before but at a Slower I wouldn't say a slower rate because

it's diffusion index so it doesn't really work that way but at a slower expansion uh coming to the US uh you have um the S&P Global pmis they're they're not you know we have a couple of pmis in the US these are not really the more important ones but 47 versus 479 the expectation 48 5 so uh it really missed on that and 557 down to 554 kind of in line with the Consensus but it was a step down uh for Mexico backwards looking we have July data here uh economic activity6 previous reading was Zero

economic activity year-over-year for July 3.8 now for June was negative .6 retail sales month over month uh increased by 7 previous reading for the month before was negative .5 and retail sales year-over-year yeah negative .6 but the previous reading was -3.1 so some base effects are falling off um Couple of central banks uh this week we had the Swiss National Bank we had Australia and China um Australia no change sitting at 4.35% moving into Tuesday uh and Tuesday is when um the news started coming out of China of what they wanted to do I got

a whole screen for that later on so I'm not going to include it in the calendar here we're going to take a whole screen on that one uh Tuesday uh still in Mexico this is For uh September we have uh their price index here mid Monon core inflation month over month 0. 21 the previous was 0.1 so you got to step up on this still lower than consensus uh year over year 3.95 slightly down from 3.98 and slightly below the consent of 397 uh the headline 09 uh up from uh what we had deflation the

previous read and year-over-year 4.66 down quite a bit from 5.16 we will See uh they had a Central Bank Meeting uh the last week as well uh consumer confidence 987 heading into the US here previous read 1056 expectation 1038 987 and the market said have you heard what's going on in China and that uh that pretty much dominated the day uh Australia CPI uh was 3.5 down to 2.7 remember uh on Monday uh on the previous screen uh at their Central Bank meeting they did not lower rates uh well this is this is giving them

permission At the uh at the next meeting so I have a question here rate decrease at the next meeting Wednesday got to talk about oil got to spend some time there we had big draw Downs uh in the US crude oil stocks down 4.47 million barrels uh the expectation was for a draw down of 1.4 normally big draw Downs are supportive uh of prices but look what happened on the report down we came the financial time story about Saudi Arabia potentially Abandoning uh their $100 US oil price Target didn't come out till the next day

so uh you had this this drop in in price even gasoline stocks uh that draw down 1.5 million barrels uh the expectation was for well call it unchanged uh and then once the financial time story came out oil continued uh to sell off so the expectation here is uh starting in December they're going to begin to increase output uh and that they uh their output Will be higher by 1 million barrels a day than it is now higher by 1 million barrels a day by the end of 2025 so every month they're going to increase

their production to get there so you think well 12 12 months of increases 880,000 85,000 barrels uh barrels a month they'll begin to increase uh their output um that's only going to put pressure and that'll put you know keep prices down and if prices go lower That's going to put pressure on other countries that need a certain amount of Revenue and they're not really too concerned about how many barrels of oil it takes to get there they need a certain amount of Revenue Russia being the big one it's got to fight a war it needs

those revenues so it may start uh to put more oil out to keep the the revenue the same price which would then cause the price to go lower which would then cause even more output to come out Which would push the price down the iea predicts uh an 8 million Barrel per day Surplus 8 million per day Surplus by 2028 so over the next three years uh it uh it doesn't look like it's going to be a good price environment for oil now this is all based on on you know the best forecast that you

can come up with based on what companies say they're going to do but at some point as the price goes down it's going to take some high cost producers offline so uh lower Prices will uh result in low Supply so I don't know that I'm too willing to buy in uh to this 8 billion uh sorry 8 million Barrel per day Surplus by 2028 only because lower prices will discipline uh oil producers um but it is troubling if you have exposure uh to any of the oil companies that uh especially in the US that the

oil inventory report showing a huge draw down did not give any lift uh to prices in fact it had the the Opposite effect altogether that's that's rather troubling that means that the market is looking past this and saying yeah but look what's coming you know it's it's an inevitability what's coming and and the price is going to go lower and then with Saudi Arabia now it wasn't anybody in particular in Saudi Arabia the financial times quoted a source but they're pretty good at figuring things out uh by uh you know asking certain people for comment

and if There is no comment coming on something they feel fairly certain they figured out who who leaked it and they're pretty sure it was uh it was the prince not not uh MBS but uh his uh his brother that uh that potentially um put that out Financial Times so you know starting December uh production will increase uh they've lost a bit of market share by pulling back they pulled back their output I think by two million barrels a day uh to help support prices uh and if They start fighting for market share again you

could have another 2014 uh oil price correction where you went from about $100 a barrel it finally broke 80 after years being above 80 and continued to go down and settled around $35 to $40 a barrel in a little while after that we saw you know there's the zero line you saw that negative uh oil prices but you know you could you could see something like that if we have a repeat of that I don't know that anybody wants to go back To $40 oil so I think companies would be willing to discipline themselves a

little bit better but you might see 50 um based on where we are now 68 64 you might see 50 before you see 80 okay lot on this screen we're now into Thursday uh durable goods for August came in zero came in flat no growth month over month previous was a a big month though the expectation uh was for it to be uh negative so that actually beat the Consensus um taking out Transportation up5 the previous month was down 0.1 so controlling for that you do have something there uh and taking out defense negative2 uh

previous was 10.3 G GDP growth our final look at it not much changes here 3% the expectation was three uh the GDP price index quarter over quarter 2.5 the expectation was 2.5 nice step down from uh from q1 uh which was three uh core 2.8 Expectation 2.8 Ste down from 3.7 that is fairly good corporate profits 3.5 that's a big jump from uh The Last Read we had or the consensus of 1.6 7 q1 -2.1 it's a 3.5 real consumer spending very solid 2.8 uh q1 was 1.9 and the job market initial jobless claims 218

that is that is fairly low continuing jbless claims though have stepped up by 13,000 1,834 th000 versus 1, 821000 here is uh the Mexican Central Bank interest rate decision uh was 10.75 they did cut to 10.5 there's a 25 basis point cut the peso has been hanging in around 19 and a half really 19.6 maybe 197 you see but hanging in around there it's not really not really going going very far uh Swiss National Bank 25 basis points that's their third cut they're down to uh 1% on the overnight rate their CPI for August came

in at 1.1% and a statement I put in quotes a Statement uh on the uh decision further rate Cuts may be necessary to stabilize inflation within the range of price stability if we look at the Swiss National bank's forecast for CPI for 2024 they're forecasting 1.2 20 25.6 20267 7even uh so significantly below the 2% upper bound their target is 0 to 2% most economists think if you're below 1% you're probably already in deflation Which is a a terrible thing for a country to be in especially uh one of the uh more indebted uh Western

Nations no government at this point Canada US wants to see deflation because with deflation you have lower GDP p and if you think of GDP as your tax base you have a lower tax base you have lower revenues your situation only gets worse but if you have inflation your GDP is higher so your tax revenues are higher even Without higher tax rates but your debt you know if you ow $1,000 you $1,000 it didn't get up you can deflate away the debt but deflation would inflate the debt that would be a bad thing uh so

there is some solid belief here that the Swiss National Bank is going back to the zero line I've held for quite some time the belief that the US will have no choice uh but to head to the zero line because deflation uh is is probably the backdrop that we've always had the Inflation we had was I think very pandemic related but after the great financial crisis for that Whole Decade after that deflation was the biggest concern uh of the Fed uh so with deflation uh if the economy is not going to produce inflation the central

bank has to do it it has to be a monetary phenomena which means you increase the money supply it's all you can really do is increase the money supply and hope uh That you get inflation otherwise that debt becomes a huge problem well uh we're probably heading back to the zero line uh over here Japan new uh prime minister isba uh there is talk and there is action and he has a certain talk uh to two main points he endorses the bank of Japan's policy of raising rates uh and he has voiced concern about Yen

depreciation whether he'll actually do anything or encourage anything to be Done is a different thing you can say look when I'm in office I'm going to do this you get an office your advisers come in and say look here's some things the public doesn't know and we're going to tell you these things and you hear them you think okay I I clearly can't do what I want to do then I can't do what I promis to do because I didn't know all of these things right so you know he may be saying look we're only

hurting pensioners with these low uh with these Low interest rates and we are a funding currency which makes it hard to defend our currency let's get interest rates up when he gets an office somebody may pull them aside and say look you know with the level of debt we have things are worse than what you think we we we can't afford you you you can't do what you said you want to do so there's talk and there's action this is talk and sometimes you talk to get votes right look at what Trump is saying I

love crypto I love unions I love this I love that no tax on this no tax on that no tax on so he promising everything to anybody who wants to hear it right CU what he's saying is to get is to get the vote not not that he actually means to do any of that stuff but he'll tell any room what they want to hear to get the vote this could be something like that but look at the Yen uh you know I mean it had a little bit of a runup before it got to

14625 and uh there's the new prime minister announced oh he wants to raise rates he doesn't like the weekend all the way to 14220 that is over 15 hours 14625 to 14220 over a 15h hour time span but I mean you know you could say well it really wasn't 14620 it was less than that it ran up in anticipation of the other person the woman potentially getting the nomination and nope and a massive correction very very quickly That could also have um supported the peso in the end of the week uh you know being fairly

weak is that the interest rate differential if the uh expect ation is well Mexico is going to continue to cut their rate Japan's going to continue to increase their rate that differential is changing uh it might be time rather than borrowing in Yen and investing in another country uh to borrow in borrow short in Yen and invest long in Yen so rather than an intra and I'll write that Out rather than an intra Market yield curve trade intram market means between markets and you're doing something at the short end of the curve so you borrow

in Yen and you invest in peso because you have um call it 10% here and let's call it 0% here but if you think that rates are going to be dropping over here uh and rates are going to be increasing over here rather than borrowing here and investing here to get the interest rate differential you would borrow here and Invest on the long end of the Japanese yield curve to get duration you might get uh maybe 20 you know anywhere from 15 to 20 on your duration you'll make a lot more on a duration trade

if in fact they raise rates and the long end increases than you would on an interest rate differential and you can lever that up as well so you may get more of an intra or sorry an inter Market carry trade rather than an intram Market carry trade maybe that's why the peso uh was Again hanging around 19.5 to 19.7 not really doing much all right into Friday uh here's France we've already seen all the pmis here is inflation for September look at this negative 1.2 this is the headline uh inflation oh sorry this is month

over month sorry inflation rate month over month negative 1.2 uh and year-over-year 1.2 I uh didn't see throughout the week inflation readings from any of the other countries but I thought I would show That is uh youve got a lot of weak uh pmis which would support uh a deflationary or massive disinflationary uh uh backdrop which we're seeing why we wouldn't book 100% probability of a rate decrease coming out of the EU I don't know uh that seems like a given at this point Canadian GDP for July uh up point2 previous read uh was Zero

the consensus was zero so that's kind of a nice little surprise however August takes it away uh the Previous read was 02 and saying no let's go to zero so give it on one side take it away on the other side right I still expect the next uh Central the next Bank of Canada meeting to give uh Canada another 25 basis point cut coming into the US I don't know that there's any any surprise here on uh pce it tends to follow CPI uh 0.1 uh previous reading was 0 2 expectation was 0 2 This

is the core there you go uh the uh price index uh The headline month over Monon 0.1 expectation was for 02 year-over-year uh for headline 2.2 down from 2.5 the core that's the only one that you can really point to but it came in uh as expected uh I expect this trend to continue I've said this before we have uh a technologically uh uh uh deflationary backdrop to the economy and that will that will continue I don't know that you could say that there is an Inherent shortage of anything in Western Nations um if you

rank all the countries in terms of GDP uh and you know the most GDP on the way down you know us obviously China I think it's is it it's a tie between Japan and India I think but if you rank them all the way down and say okay well let's take 80% uh there's a whole bunch of countries under here by the way uh you got an 8020 rule here you take uh 80% of Global GDP and you go to any of those countries and you walk into any any store anywhere there's no shortage of

food there's no shortage of goods there's no there's no shortage of clothing in fact there's an abundance of that stuff there is no shortage of anything we don't live in a world of shortages at least not in uh the the uh gdps that matter uh in terms of creating inflation the the bottom even though there's a lot of countries down here um They're they they are too too small that even any massive increase in their economies in demand could not have much of a Global Effect overall so really it's the big countries there are no

shortages and Technology does promise to make lives cheaper that is the the benefit of Technology right so I do think that deflation is going to be the bigger problem going forward this inflation clearly clearly we know what the source of the inflation Was um personal incomes month over month for August up 0 2 previous was. 3 expectation was for 04 personal spending 0 2 expectation was for3 previous was 0.5 so personal incomes growth but uh not as much as was expected personal spending growth but not as much as what was expected um at this point

well let me let me get to uh Michigan consumer uh uh sentiment and then I'll say something here uh sentiment 70.1 up from 679 uh um expectation was 697 so uh Sentiment came in it's made up of two indexes uh the uh expectations what do I think the future is and what do I think it feels like today uh it feels better today in September than it did in August and uh I think the future is going to be better uh from my perspective in September uh than it was in August um let me say

something about uh uh us recession and uh Global recession we it It it kind of looks like Europe is probably in a recession uh or you know uh close to to it uh I don't know that that that's avoidable uh for the US it it's a different country it is extremely rare uh that it falls into a recession because of endogenous conditions endogenous means nothing external happens no external event happens it just is you know the weight of of all the spending the fatigue of the spending The you know companies that are adding efficiency by

laying off people here or there that it slowly tips itself into recession under its own weight very rare uh do recessions happen endogenously there is usually some exogenous event that occurs uh and it usually tips an economy into a recession when the economy is already in kind of a Slowdown mode uh and the Slowdown mode is usually created ated by the FED raising interest rates To constrict the uh use of credit uh so an inverted Curve will slow down an economy the FED has already started to lower rates my noticing that the economy uh is

the bigger thing to worry about that it's looks a little weak let's start lowering rates and the curve uninverted but you have a weak economy and these rate Cuts do work with a leg that if you get an Exogen shock with a weak economy that's what causes the recession an exogenous shock with a Strong economy May lower it to a weak economy but not a recession but in a weak economy some exogenous shock will do that well we have a port uh Port worker strike coming up uh the longer that lasts the more that may

cause uh cause a drop in GDP you have certainly increased uh activity and tensions and and finger wagging going on uh with Israel's latest move against Hezbollah Iran is now saying we vow Revenge but their vows are I don't know they seem more afraid of starting a war than anything it's kind of like that kid from across the soccer field remember when you're in school that would call you names but when you walked up to him and said what did you say nothing but you get 10 ft away he's calling you names again turn around

what did you say nothing you you remember that kid right yeah uh that sounds like kind of sounds like what Iran is like right now what did you Say nothing um so I don't know that I would that I would think a recession is going to happen however I will say this the economic conditions are ripe for an exogenous event to actually cause something bad but exogenous events are unforecastable they're unpredictable they're random who knows so I don't know that I would uh you know get out of whatever I'm in and take a big short

position uh and sit around and wait for An exogenous event many exogenous events are headed off before they actually happen because you have you have people who are motivated to make sure bad things don't happen if I had to point to any one thing potentially being a catalyst uh it would be it would be uh Iran actually you know when when Israel turns around and say what did you say they actually say something you heard me and you know push Them in you know push them and start a fight that would be that would be

an issue I just don't know that they they have it in them to do it okay let's have a look at our money market and Capital Market rates and yields uh the money market still continuing to suggest that there uh is more uh than um 25 basis points or two times 25 the uh probability for the 50 is increased slightly week over week uh for the next meeting and I'm hearing uh You know a couple more analysts saying we expect another 50 I don't know I was wrong last time so I don't know I'm going

to take much of an opinion here uh longer end of the curve uh you know feeling that uh you know we we we we've done a lot let's uh let's hang out here for a while so I think TLT is probably going to be range Bound for for a while uh I have calls on my position that are sold for uh October I don't plan to close them I don't think TLT gets there So it's uh this will be range bound I think uh until we get a little bit more clarity we get jobs report

uh on Friday coming up we'll see that on the next screen what the economic calendar looks like that'll be uh I think an important event for determining uh where the direction of long rates go the curent is firmly uninverted we have 20 points on this I don't see it reining unless you get a port worker strike uh on Monday night that lasts uh 3 four five weeks uh a significant amount of containerized goods and food come in through those ports it could cause shortages and inflation and cause the FED to potentially be on hold for

a while at this rate which might cause a bear uh uh a a uh um uh the two-year sorry the two-year to come up not a bear uh steepener the two-year uh to come up uh and if it does uh come up above the 10 you may reinert But uh I don't I don't think that that's that that's really uh that's really viable at this point I think we're firmly out of inversion uh up 20 points Canada 4.6 has an upward sloping Capital Market curve the money market the Capital markets still inverted but the us

is under 100 now uh 699 days on the inversion for that one this will take a while to uninverted Very tightly uh to monetary policy uh and curvature continuing to flatten out -19 to -15 uh January was uh 1 was 123 B basis points now we're uh -5 the balance sheet running off nicely here uh the S down 17.6 billion is 6.55 trillion I don't know that we'll see a five handle on this before they have to start increasing uh security Holdings again uh the balance sheet itself run off uh there is lower by 29

billion so a Net decrease in the balance sheet beyond the Securities decrease of 11.4 billion and here again this is uh rather curious is why the safety of money market funds what's going on look at the increase $20 billion going into the end of last week now we could say well it's it's a quarter end you know call Mondays the the real quarter end but okay we have the weekend coming up maybe it's a lot of positioning going into the weekend so You don't have to do it Monday um that would make sense it's consistent

with what we'll see in the reverse repo is maybe it's just positioning and we really won't know until you know next week when we get into October get past the end of a reporting quarter um retail up 7.8 Billion institutions up 113 billion uh up on all of them uh if if we believe that look uh Central banks around the world are in a rate cutting cycle China just exploded with their stimulus in every measure that you can think of we'll have a look at that isn't this bullish and if it's bullish shouldn't we you

know what are we sitting in Money Market uh funds that are earning 50 basis points less now than they were you know a month ago shouldn't we shouldn't we be grabbing some of this Equity some of this duration on the long end of the curve But it keeps going up so it is it's questionable what do you need the safety of the money market for um just to continue on a moment from that last thought you know you have $ 6.42 trillion in Money Market funds I'm not one of those people that are going to

say we have $6.4 trillion of money on the sidelines uh to say that is to suggest uh that the assets under management for money market fund should be zero right If you say that you have 6 .4 trillion on the sidelines uh waiting to come into the market um money market funds always have a balance always have assets under management it never goes to zero so you don't really have 6.4 trillion on the sidelines you have some money in Money Market funds above what would be normal but it never goes to zero so we can't

say 6.4 trillion number two you don't know it belongs to the equity Market it could belong to the bond market nobody Knows where that money belongs so I I I will never sell you on the idea that you should be bullish on stocks because there's 6.4 trillion on the sidelines that would suggest again that assets under management for money market mutual fund should be zero it is not so it's just why the increase why the increase is going on when markets are well they're they're on a tear Commodities are doing well everything seems to be

doing well duration has been doing well Why why the safe safy that's that's all I'm asking why the safety November 7th fomc 39 days away dot dot it's going to be a big day again right every every meeting's a big day um 50 basis point cut 54% up from 50% slight slight increase but it's leaning more towards uh 50 uh 50 basis points going out to December uh not much of a change here uh the 4.25 still hanging out at 50% and the odds seem to have shifted down to even more Ray Cuts 283 up

from 237 and Ending at 4.5 uh probability dropping 219 versus 263 being that we're almost at December Let's uh just jump ahead and we'll put December of 2025 in here look at the range of outcomes here I think this will be the more interesting one to watch and I think we'll just drop this one well this one will drop off off eventually at the uh once we get to the November meeting and I think we stop uh with the TGA reporting the TGA it was interesting When you had a debt ceiling and um we watched

the TGA account you know run off uh and when it would be out of cash uh but it's not a problem right now it's going to hug very closely to 750 billion every week I look at I go this is boring there's nothing to say about it uh it is as expected so I'm going to drop off uh the TGA why bother let's look at December uh look at the uh distribution I found the median where uh you're at 50% it's 3% uh by the end of 2025 that's the upper range that's 2.75 to3 we're

at 4.75 to5 so that's implying 200 basis points of rate Cuts in 10 meetings or eight rate Cuts over 10 meetings I think that's reasonable you know I look at that 3 % I think yeah okay I think that's reasonable what I don't think is reasonable is 3% by the June meeting I don't think that's reasonable but by the end of next year I think that's reasonable I don't think There's a play here on zq I think that's that's probably reasonable uh 3% and then you have some probability of it being more but you know

with this kind of distribution I don't know that listing off all the probabilities matters more than the median the median to me seems reasonable uh give it another year and the FED will be talking about you know the threat of deflation because you have inflation Running under 2% then it shoots up and then it's coming down do you think it's just going to do this you know it shoots up it's going to shoot down before it comes back up well that is going to be where you're going to have big rate Cuts uh because it's

not just going to stop it at at 2% and go sideways you know the the the summary of economic projections has a doing this ah here we are we're home not going to happen another thing I want to point out here um give it uh you Know from 2025 sometime in 2026 sometime in 2026 the FED will start talking about its inflation Target that maybe it should be 1 to 3% it'll start walking up its inflation Target one way to help deal with the debt is to inflate it away rather than 2% have a 3%

Target cuz if you have real GDP of let's say 2% and you have nominal uh sorry inflation of 3% you pull out a 5% nominal GDP which means tax revenues will increase by 5% without increasing tax rates or Increasing taxes on anything new uh but if you have a 2% rate and let's say you uh have only 1% in inflation you have 3% growth in tax revenues not 5% growth in tax revenues well that starts to make uh uh the debt more unaffordable the probability of tax increases and of more taxes increases at that point

uh and you're not you're not closing a deficit so one of the tools that uh the central bank has available to it if it wants to avoid the zero Line is to raise the inflation Target and if it's credible the market will believe it and begin to price that in thereby creating the very inflation uh that they wanted uh I would I'm going to go ahead and say that now that wait wait till this inflation thing is over and that they can declare Victory and then uh I'm pretty sure they'll start talking about raising the

inflation Target uh to uh help avoid deflation and at the same time to help Finance uh the sheer amount of debt if you have inflation you can inflate it away right but given the governments that we have these days if you have increased tax revenue they will not see that as an opportunity to manage the debt they'll see that as an opportunity to run bigger deficits revenues are increasing we can spend more today we will grow our way out of this and none of it will work and they'll they'll ruin the opportunity they Have um

yeah so this we we'll drop this off after the November meeting and then we'll focus on this and I think the important metric here is where's the median on this one we'll get rid of the TGA by the way the TGA is down 60 billion but we'll get rid of the TGA there's no information there uh New York fed effect the effective federal funds rate uh 4.83% we know that that's not going to change till November reverse repo up 97 billion to 436 uh billion um what gives uh you know again I'm going to go

ahead and say like I said on the last screen I'll give it to the end of the month because okay Monday really is the end of the month but in front of the weekend why not get the work done now companies do have to report and many of them have a September 30th clothing clo closing uh date on their uh on their end of quarter so positioning uh more money Into Cash equivalents uh makes your liquidity positions look better makes your uh debt ratios look better it's window dressing for the end of the quarter maybe

that's what's going on so I'll Reserve judgment until next week uh next Friday if I'm right I should see a large draw down in money market mutual funds and a large draw down uh in the reverse repo but next Friday if these two things increase again we got to say what is going on money is looking for Safety what is going on we can't ignore that uh reverse repo plus reserves minus ample 1 trillion at 40 billion a month 2027 months but we have rates coming down now so the MBS the prepayments on MBS may

increase so this actually may be running off at a faster rate than 40 billion uh because they're not rolling them over so as they get their prepayments if the PSA speed increases and we're seeing it with Mortgage applications being elevated for how many weeks now if that continues on probably you might have 42 43 even 45 billion running off a month right now what's on the calendar this week the more important isms uh uh this week ISM Manufacturing uh we get in two days this is the PMI ISM purchasing manager uh get in two days

and services in four days these ones seem to get a hell of a lot more attention than S&P uh let's watch Total vehicle sales for the Us we get that in 2 days um Tuesday and this is a big uh jobs week Tuesday jolts uh Wednesday ADP Thursday initial claims and let's uh keep watching The Challenger job Cuts Friday the jobs report us only Canada is um next Friday and we have so far uh as the week unfolds more names are announced but so far here's what we got Monday Bowman and uh Powell Bowman is

the one who dissented by the way the governor that dissented said no I only want to go 25 And I want to be on the record of saying that uh Tuesday bosk times two uh and in case you didn't hear him he'll say it again Thursday Bostic cook bark and Collins and Thursday Bostic and kashari okay uh you know I got to say something here uh I reviewed my Market Outlook from last week and for some reason this screen didn't make it in but I remember narrating it I guess I just didn't put it in

the timeline uh but what hurts most is Nobody said anything it wasn't there and nobody missed it nobody cares nobody cares that's the message I get is you don't really care anyways what do we got here real rates uh hardly any movement there and break even rates look at that hardly any movement here nothing to talk about when we get to the OAS so I'll say the same thing there's nothing to talk about about here uh the FED funds Futures very little change uh in these 95 175 9518 well this is October we Wouldn't expect

any change 95 94 95 96 95 56 sorry 9656 9657 like hardly any change at all Q4 uh suggesting 78.5 uh that is a 50 for November and a 25 uh for December I'm not at the 50 uh you know I wasn't at the 50 the first time and it went 50 uh Michelle Bowman wasn't at the 50 either so she must have been listening to me um I don't know we'll we'll have to see about the jobs report and the data coming in I'm data Dependent that's what I'll say I'm data dependent I'll make

up my mind when it comes in q1 39 uh Q2 37 so by uh mid 2025 156 basis points by uh June 30th uh that is six cuts and six meetings if we say well 156 at 25 each time that's six Cuts or six meetings I think that's fair I think that's a fair number uh if you uh go at that pace TLT down. 35% for the week call it flat SPX up 62 again call that Flat uh in implied volatility the percentile pretty much faded away uh zero percentile which means in the last 13

weeks all observations of implied volatility being higher IV is way down at the bottom of this chart you can't see this little line but we're way down here uh so not a lot of uh not a lot of money in the premiums right now uh for doing anything uh I have made significant changes week over week uh to TLT so head Over to um Mark m.com if you have the applied level and the new positions video is up for uh Friday which outlines the uh positions I've taken uh in TLT mortgage rates going to be

sticky here trying to get a five handle on that it's going to be a little bit uh a little bit of work here but all the way down to call it 6% down a basis point the US 10year Treasury increased by six over the same period the spread decreased by 7 229 uh coming through in uh agency here not so much in analy but look at AB up 4.4 uh those uh people who were short have been covering uh pushing that price up uh it's uh that thing is is working out nicely the synthetic I

have on that not synthetic risk reversal I have on that iyr down xlu .43 uh I'll say more about xlu uh in a minute uh housing mixed housing is uh mixed on this one uh house price index was uh up .1% month over Month uh Cas Shiller 0% month over month 59% year-over-year mortgage apps up another 11% for the weekending September 20th building permits up 4.6% this is sort of mixed here new home sales down 4.7% pending only up 6% and nothing to see on OAS look at this hardly anything going on uh up 16

on Triple C um let's look at xlu uh data centers Are just a huge huge draw on energy so xlu has been performing very well um if we look at implied the xlu implied volatility this is 5226 and 13 you have very nice implied volatility here and if we look at and at the money an $80 put 49 days pays a181 uh I don't I don't think this data center uh story is ending anytime soon I don't know that AI is there yet I don't know that it is ready for prime time uh but you

can't be a significant Company and not be doing something about this so it is going to continue I think the demand for energy from utilities is going to continue uh primarily data centers because uh you think well it's only one data center the amount of energy that one data center takes is astronomical it's huge uh and the US seems to be almost the center of gravity of the world uh for AI training uh so you know America is going to have to produce the Energy that powers the AI Revolution globally uh xlu I think is

is not done doing what it needs to do okay okay dock worker strike um trying out a new new way to present information I was writing this out on the screen I thought why am I writing this out on the screen I could just type it out in Excel I mean in PowerPoint and then just screenshot it and bring it in here and then just write over it DOC worker strike East uh Us East Coast and Gulf ports there are 14 Ports 25,000 workers uh it's more like 50,000 uh but the number 25 given is

in terms of full-time equivalent because there are part-timers in there but 50 50,000 Monday night at midnight is uh when they uh when they can strike and the union is saying we will most definitely strike uh because they're not getting what they want uh how damaging can it be 68% of all containerized exports this is by value 68% of all by volume of Containers it's about 50% but by value it's 68% of all containerized exports 56% of All containerized Imports um this is going to significantly increase shipping costs because you're still going to ship this

stuff you're just going to reroute it to West Coast ports uh so you're going to have to uh incur longer Journeys and if you've been through the understanding ocean shipping video you know that if you have longer Journeys to make it Lowers the amount of ton mileage available which lowers the amount of Supply which raises uh container rates and raises shipping costs so if they do strike look for increases in shipping costs rerouting to the West Coast ports and but the West Coast ports can't handle it all nor can the rail system from those ports

handle it all so some stuff is simply not going to get into the US uh but uh my understanding is some companies have already begun Rerouting their product uh two West Coast ports uh beyond the um the Dock Workers that would strike it would affect another 100,000 workers because you have warehousing you have Trucking you have Customs uh all of the support uh around these ports would be affected as well so if you do have a strike at midnight initial jobless claims the next week is going to be is going to be significant and if

it lasts for a while Uh the uh jobs report for November could be pretty ugly well the one that we get in November for October could be pretty ugly would reduce GDP by 4.5 billion to 7.5 billion per week uh that is a loss of one tenth of a percent of GDP so if GDP for the quarter would have been 2.9% every week would be 2.8% goes another week would be 2.7% in terms of growth because this is would be uh decreasing uh the level of GDP which is going to affect the growth Rate so

it is going to have an effect on the US economy if this does happen the last time there was a strike it was on the west coast this was back in 2002 it went on for a number of days I forget how long but uh Bush ordered them back to work um Biden uh has said or the Biden Administration has said we're not going to we're not going to do that there's the not going to do it and then there's the reality of the election coming up right yeah rocking a hard Place you know Biden

could order them back to work and Harris could distance herself from Biden on that one and you know not affect the economy and Harris Can Escape unscathed from the union side uh but that's kind of tough to do to throw the old man under the bus twice uh if you don't do something you risk a long strike in the economy being affected going into the election and Trump you know saying I would have soled that strike you know before it even Happened I would have taken care of it it would have been beautiful like you've

never seen before everyone would be talking about you know you know that kind of stuff right um what do they want I look at West Coast wages uh 5485 an hour uh this is not counting uh overtime or benefits that's 5485 an hour increasing to 60 85 an hour in 2027 um East Coast makes 39 an hour and they're asking for a 77% wage hike over 6 years that's $5 a year over 6 years That would bring them to 69 us uh and that would be on par in 5 years of where the West Coast

would be um this is the big one here this is just brutal they want a complete ban on the automation of cranes Gates and container movement for loading or unloading anything that removes a j job they want a complete ban on even a gate that opens up and closes down for a truck to get through you know a truck pulls up to a Gate the gate opens you drive through uh one port put an automated gate in and the union had a contion fit I mean just had a fit about it because you need somebody

there to press the button to lift the gate for the truck to drive through and then to press the button to lower the gate until the next truck shows up then you press the button again to raise the gate why would you automate that when you could have somebody sitting there For 40 bucks an hour pressing that button to raise the gate when a truck shows up and to lower the gate even that even that we must have somebody sitting there says the Union as they take off their shoe and they pound the desk in

their most kusf moment uh this I think is is just a ridiculous ask I think that's a ridiculous ask yeah get your wages up I agree if West Coast is getting that much and you're only getting 39 okay that's a Fair ask but come on I mean come on have some have something although this is part of the art of negotiation right when you go into the negotiation you may want three things uh and you want those three things but you don't go in asking for those three things because you're going to have to negotiate

some of that away you go in asking for six things you go and asking for some things you do not want and you make it a big deal uh because you're willing to back down on That without having to back down on the other stuff right so it's very common going into negotiations to say okay what do I care about what do I not care about let me go in and then your job is to figure out well of the things the other side put forward what do they not care about let's let's figure out

what they care about and what they not care about I don't know so much that the union cares much about this maybe they do I don't know this just seems like Something that they would negotiate away in exchange for wages um usmx this is the the uh us Maritime Alliance uh has offered 40% the Ila is the international long shoreman Association that's the Union uh this is management management offered 40% not 77% and uh isn't saying much about this there they're saying we'll extend the current existing uh uh uh wordage or verb that we have

uh about automation we'll extend that going forward but they Uh you know I don't know that they're willing to write out the words an all out ban on everything so uh look at the trade-offs that you have here if you have the strike it is going to hurt the US economy but it is the US workers right to strike and if you order them back to work you are denying them of their right to strike you have to balance this however uh management is mostly foreign owned companies You order them back to work you're kind

of siding with the foreign owned companies uh and the US economy against the US worker now you got a tough tradeoff here uh if you are the administration now he's not running for reelection so Biden could go ahead and do what he wants and Harris Can distance herself from this but think about think about the Optics on this management is mostly foreign owned companies the workers are us Workers that seems like a clear-cut choice side with the US workers but that could hurt the US economy which is a much bigger group than the workers that

are striking and I've said this many times in the past a strike is a sacrifice of the many for the benefit of the few it is the most socialist thing that you could ask for is a strike uh I think all strikes should be banned uh and if you don't reach an agreement you go to binding Arbitration period nobody wants to be out of a job but people want to be treated fairly negotiate but don't hurt everyone else around you and throw a fit because you can't get what you want and put other people out

of work cuz you didn't get what you want I think that uh that it is a sacrifice of the many for the benefit of the few and if I were the president I would have already said there will be no strike there will be no strike go ahead and and and bang the Desk with your shoe all you want there will be no strike and I wouldn't play favorites there'd be no strike anywhere I would shut down every strike immediately I'd find some way I'd shut down every strike and say binding arbitration uh in fact

I would probably want to pass legislation stripping unions of the right to strike and replacing it with binding arbitration because a strike is an economic weapon Of mass destruction held by a few people who use it to extract what they want uh what is that racketeering yeah racketeering Imports uh we're running 10% higher leading into this uh most Christmas inventory arrives in August and September so most Christmas inventory is already here if you have ever been to any of the trade shows for the retail uh uh for the Retail Group the trade shows are usually

in July and August and it's an ordering show where you place your orders and your orders are usually delivered end of September mid October uh so there already all that Christmas stuff is in is in the country already I don't think you're going to see real shortages of that uh so I don't know that you're going to get a lot of price pressure Less Price pressure uh than economic weakness from a prolonged strike though it's more likely to lead To economic weakness than it is to inflation uh so if there is a strike the belief

is that that almost cements a 50 basis point uh cut in uh in November and the longer the strike goes on the more likely you're going to get a 50 basis point cut it's a tough it's a tough decision to make us workers or foreign companies us workers versus US economy what would you do okay let's look at China there's something here for everybody there are moves uh to uh Promote more disposable income to support consumption to support home prices uh creating a wealth effect uh also to support asset prices directly for credit expansion to

support consumption and investment and some growth focused uh actions to support consumption and investment as well issuing uh quite a bit of bonds uh to get this done as well let's uh go through what they're doing 7-Day repo rate cut by 20 basis points the rate on Medium-term lending facility cut by 30 basis points loan Prime rates cut by 20 to 25 basis points uh for the property Market 50 basis point reduction on existing mortgages let me explain that you got a mortgage uh you're paying your payments every month uh you get a 50 basis

point reduction on your existing mortgage not new mortgage rates coming in this is not for new this is everyone who's got a mortgage on average let's cut those Rates 50 basis points that will uh leave more disposable income in the hands of households which should support consumption 15% minimum down payment on all types of homes down from 25% so you can enter the property Market sooner you only need 15% down payment that should support or at least the belief is it's going to support home prices right there's announcements you know there's saying something and then

there's action so this is what they're Saying will the consumer take up uh uh the uh the challenge and actually say okay well it's 15% I will buy now will it actually result in something that's a different story the stock market just in case that was left out over the last 10 years that stock market has gone straight down 500 billion yuan which is about uh 60 what is that 60 70 70 billion US 500 billion Yan swap facility for funds insurers and Brokers uh to provide liquidity to buy stocks and uh Two more rounds

of 500 billion are possible 300 billion uh you on in uh the uh pboc loans at 2.25% to commercial Banks to help fund other entities share purchases and BuyBacks uh and some discussion of a stock market stabilization fund was also mentioned that if stock prices keep falling maybe the government will buy it all right to support prices well this will create a wealth effect if you can push that stock market up and push those prices up you Can create capital gains and maybe some of that will be converted into property or into consumption spending uh

also if uh marginal loans loans are cheaper to get it will bring more money into the market to put asset prices higher the higher those go the wealthier you feel the more you're likely to spend a greater proportion of your income on consumption uh 50 basis point cut not Cur but cut cut in the reserve requirement uh so this is uh all banking Is reserve uh Reserve style banking where you get a deposit of $100 you must leave $10 in reserves at the at the central bank and you can lend out 90 well 50 basis

point cut adds 1 trillion Yuan for Lending it's another 142 billion that can be lent out uh and uh signal that maybe there'll be another 25 to 50 basis points cut in the reserve ratio uh later this year that supports credit expansion which supports both consumption and investment you can Borrow money to buy a vehicle or you can borrow money uh to uh buy house on the fiscal side uh money for kids 114 the equivalent of a it's in Yan they're not getting US dollar but equivalent of $114 uh uh us per child for families

with two or more but not the first so if you have two kids uh then you qualify for this but not the first one only everything after the first so obviously it would be for two or more right uh Money for the impoverished uh more money for them than uh for kids subsidies for consumer goods replacement program I'm not quite sure what that means I guess if you're buying a fridge because you're old fridge is done maybe there's a subsidy to help you buy the fridge and for business equipment upgrades help for local government debt

up to 1 trillion Yuan uh into the largest banks going to be issuing three trillion yuan in bonds to fund these measures keep in Mind they'll eventually have to come from somebody and government is going to issue bonds right to help promote the common Prosperity the most successful people in China are probably well aware that you know when they go to pay this back they're going to get it from me they're going to get it from me so at the margin this may push more Capital out of China because money does leave China at a

rapid Pace uh you know just go to Dubai and have a look uh so this May at the margin push more money out much as it would do uh in more Western Nations the US uh I think Canada is already going on is if you have the Spectre of higher tax rates taxes usually are only on successful people successful people are expected to pay a disproportionate uh share not their fair share a completely unfair share well that does Chase Capital away so you may have something like that going on there uh but this is this

has done a lot Uh in certain parts of the market uh especially in the Commodities play we'll look at a couple of screenshot a couple of uh um Commodities on the next screen uh but I don't know that you went through last week without noticing this uh if you had any exposure to any minors or any Commodities you probably looked at the reaction what's going on here you look around and you see this going on um there may be more announcements uh they're trying to Support their 5% which brings up sort of a question governments

lately have become a greater and greater part of the economy if if governments retreated back to their role they had 20 years ago what would the economy be today the amount of government support the US economy has needed and the amount of spending per GDP uh that the government now represents of the economy uh and you have this going on in China that to hit your 5% Target you Have massive spending and massive stimulation that has to go on from the government kind of uh makes you think about well what is what is the real

state of everything if you didn't have the government doing it so two big beneficiaries last week in the commodity space uh copper and aluminum uh precious metals not really uh up week over week but nothing much to talk about gold silver Platinum Palladium not much to talk about copper big move here 5.7% uh this was uh the first announcement over here uh copper was 43 418 ended at uh 45895 a little bit of rethinking on Friday here uh so you had uh the monetary followed by the fiscal announcements uh up 5.7% aluminum up 5.5% here's

the same thing this was the reaction for the monetary this was the reaction for the fiscal uh ended at 2551 from 2418 up 5.5% companies did uh even better look At free Port 5134 this is a onewe return up 15.3% for the week I was long free port and it was dropping sitting around $40 it ran up to 42 and I thought well given the backdrop that we have let's sell 45 calls against my position um because you didn't have this you didn't have the the central bank this is what is called an exogenous event

it's it's not endogenous to the system it's not a function of LLY and Demand it's something else uh so I did not anticipate uh that this that this would happen so unfortunately anything above 45 I don't get to participate uh what's the word for that uh BHP 6201 up 133% Rio 7123 up 10.3% now I'm giving you this in US Dollars uh whereas uh they are listed in Australian dollar so to get the true percentage did you look at them in Australian dollarss uh Southern Copper 1887 up 14.74% Freeport being the big winner here 15.3%

in the aluminum space Alcoa up 16% 3935 uh and we have a French Aluminum Company uh up slightly 3.76% Alcoa up big uh big moves so the question is well you have the announcement and then you actually have action from the consumers and businesses are they going to take this up uh are they going to run into the Property sector knowing what it has done are they going to run into the stock market you know knowing that over the last 10 years it's lost a significant amount of value yeah it's had a big runup uh

last week but uh you know take a 10-year chart and look at it it's it doesn't look great uh you know how many people have been burnt in the property sector and in the market is this going to get them back in there at the margin it's going to be helpful it's all in the Right direction uh but you know at this point it's up to the consumer uh and businesses to take up to take up the next leg of the journey I don't know uh I don't know if if if this will translate into

action but the announcements certainly moved markets okay spy becoming more expensive not in terms of price but valuation on a forward multiple forward four quarter operating Earnings this is the last week for these uh and the fourth quarter will fall off and the fourth quarter of uh sorry the third quarter will fall off and the third quarter of next sh will um come online which will boost these numbers because earnings look like this right this one falls off this one gets added uh closing SPX 57 3817 ahead of third quarter reporting you're sitting at a

22.3 times forward multiple I mean uh you're priced in Right uh versus 22.08.2012 beginning of the year it was closer to 8 89% 4.6% if we put that into the forward earnings we'd be down at 21.3 four times forward earnings uh implied volatility fading away I drew a couple of lines on uh on charts here because some people like lines on charts because uh if you can draw a line it's predictive right so let's draw lines on charts and see what we get uh here is the long leg run up and then you had a

little bit of Rethinking about it and then no no we're doing the right thing and then you had a little bit of rethinking about it and well are we doing the right thing you have another one potentially going on uh and uh you know I don't know I I I would seem to think that given all the events in the world going on right now that there'd be some caution uh being applied but this is not caution uh money market funds are Showing a lot lot of caution uh just increasing week after week after week

the the balance of money market the safe haven the safe place to be goes up gold going up uh Market going up it uh I don't know one of those one of those moves are wrong I don't know anymore macro's just been a brutally hard play alltime high 527 he reached on September 26th uh earnings for the week LSC says 7 sector spider uh says six I'm not even Going to worry what S&P Global says anymore but they just can't agree on it um lscg says Monday look for Carnival sector spider says I'm not I'm

not even going to I'm not even going to list it Tuesday Nike uh that'll be interesting right paychecks McCormick and lamb Weston is uh Tuesday according to sector spider.com and I confirmed it it is is Tuesday I went to investor relations to confirm it so lscg you lose Mark I'm not doing too Well on your test here Wednesday ConAgra and Thursday constellation brand so you got some interesting names here lamb Wesson will be interesting uh I think Nike will be the interesting uh one to look at because well it's hasn't been doing well lately uh

do we uh do we see some new life uh into Nike on this uh on this earnings report and that is it oh one more thing uh Tuesday night I don't think this matters at all vice presidential debate I I it's Rarely it rarely matters but you know I don't I don't see Vance out doing wals on this one uh I see it getting ugly at times because I think Vance will probably go after him for his statements about you know carrying weapons uh uh weapons in War when he never did I think he'll go

after him for that and wal wal's defense of that was weak which tells me that yeah he made it up he lied he got caught in the line he doesn't know what to do Right now um Canada had that same problem with our defense minister harit Singh where he made up stories about all the things he did it turned out he didn't do any of those things and he didn't admit that he lied it was great how liberals when liberals get caught in a lie what they call it he called it a mischaracterization I mischaracterized

my role I'm going to use that next time you Know you said you were home all night you lied no sweetheart I mischaracterized my location some of you guys who are in relationships try that out tell me if the mischaracterization works does she then say oh oh okay well that's different if you mischaracterized I didn't lie I mischaracterized anyways I will uh see you for the live event that is happening in in uh well uh 7:15 Eastern Time ciao [Music]