Okay folks, so stocks are back in panic mode with everyone and their mother. Racing For safety and we've got a lot to discuss Number One Banks are getting pummeled by toxic debt at rates that we've never seen before and they are at a very high risk of falling apart entirely. We need to break down where it's coming from. Number two: a major Bank came out and said this is quote not a time to buy and the S P 500 is exiting its best ERA in decades for earnings growth amid dried liquidity and they say this is what the future of the Market's going to look like.

Not so good folks. I Hope you brought some sunscreen and some extra water. And then for the main entree Number three, another bank came out and said U.S Stocks are officially in the death zone and could sink 26 percent Death Zone Being right about here, what do you need to know and is the Death Zone a good place? Is it a place of life? Well, we'll let you know. let's get to work.

time stamps down below. Okay, let's go in and start with toxic debt. So the baking sector's lending segment is getting Rams pretty hard by every angle. Let's go ahead and start with car loans.

The Wall Street Journal Just reported that more auto payments are late, exposing cracks and Consumer Credit borrowers with low credit scores are falling behind in numbers unseen since 2010. here is the data. You could see a pretty fast increase in subprime delinquency amongst various degrees of low credit borrowers. Lower credit individuals are the first to start going delinquent in a crisis, and in some brackets, this is at a higher rate than we've seen since the Great Recession There's a reason though, that this is extra freaky for lenders though.

Remember, used core prices jumped 47 percent in 2021, but they crashed 15 percent in 2022. and now as we head into 2023, they are net continuing to crash and are expected to crash more if consumers don't pay. Banks can repell the vehicle Sure, but they're still going to be left with insane liability since the resale prices are dropping pretty damn fast. Borrowers who took out big loans at the height of the boom owe far more than their vehicles are worth.

Those buyers are sticking lenders with bigger losses when they fall behind. On top of that, believe it or not, a lot of buyers have big loans on cars that can barely run. Cars were in such short supply that people paid insane amounts of money for cars that should have never been on the road at all. Quote Consumer lawyers said that when cars were in short supply during that time, some dealers were able to sell vehicles that were in worse condition, increasing the risk that they would break down or require major repairs.

A key reason borrowers stop paying is that the car stops working. So what happens when you can barely afford your car payment? You owe more money on the car than what it's worth. and then your car needs a big repair just to keep it running because you bought a piece of garbage for twenty five thousand? Do you keep paying that loan even though the car doesn't even work anymore? Well, of course not. You say screw it and you stop paying and then the bank has to eat the costs and that's one of the things we were starting to see pile up and it's creating a big big headache for Banks Banks that don't want to be stuck with a lot of inventory of used cars, right? Banks that are not opted demise to sell used cars, they have to sell it for a deep, deep discount to auctioners or whatever wholesalers.

Meanwhile, household debt as they hold a skyrocketing to the highest level since the 2008 Financial Crisis, the average household owed a total of 142 860 at the end of 2022. 142 000 folks. MarketWatch Reports were not quite to the breaking point, but U.S Households can't afford to take on too much more debt, especially if the economy takes a turn for the worse. People should be thinking about how to shed debt and get in shape for a recession.

Not assuming a bit more debt will make no difference. and how much of the 142 000 is? Mortgage Debt Well, about a hundred thousand dollars worth, which is fine because at least most of that is locked in at lower rates. But the worst and part of this is actually the insane amount of credit card debt. Fox Business Reports the rising credit card usage and debt is particularly concerning because interest rates are astronomically high right now.

The average credit card APR or annual percentage rate set a new record high of 19.14 last week according to to a Bankrate.com database that goes back to 1985. the previous record was 19 in July 1991. And guess what folks, delinquencies are growing. An analyst from Wolf research believes that delinquency rate is going to accelerate much further.

We expect delinquency rate formations to continue to rise over the coming months before accelerating later in the year as the long and variable lags associated with monetary policy get factored in. So what happens when delinquencies start increasing? Well, more headaches for banks. Of course, when this unemployment rate starts going up all of a sudden, it's going to be more and more and more people that are unable to pay back these loans on cars, on credit cards, on whatever it is, and you're going to start having those Banks tapping in to their reserves a lot faster than you'd expect and a lot faster than they probably planned. for.

Now, the next segment we are going to talk about is why Bank of America says this is not the time to buy and why the best ERA in decades for earnings growth could be over and we'll go through some trade ideas that will likely benefit from this new pain like your Uvxy or your S Triple Q. But speaking of trade ideas, you may be asking. But but Charlie What's a good reliable and Powerful broker in trading platform that you can use to trade these? Well, that's where our sponsor today comes in and we'll get right back to work after a word from today's sponsor. MooMoo Umu is a powerful platform with zero fees, a free powerful Suite of tools and data, and real Us-based Specialists ready to answer any of your questions Mumu helps you save hours on investment research and helps you optimize and apply your strategies.

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The U.S Stock Market as measured by the S P 500 Index appears to be exiting the best ERA for growth and earnings per share. In decades as sources of liquidity have dried up according to research from Bank of America, the S P 500s earnings per Shares are more cyclically peaked than ever from low financing costs, buy back fuel growth, and Peak stimulus secular EPS growth is at a multi-decade high B of A which has forecast the S P 500 will see 200 in earnings per share in 2023 says now is not the time to buy the crowded Market index, but the strategist set that shifts in liquidity should drive opportunities or, as I like to say, opportunistas within and outside of the index. We may be exiting the best S P EPS era, but we are likely entering the Best stock. Pickers Market in our careers which I like to hear.

They said we recommend being invested in equities but selectively. Okay, so what are they saying here? Well, they are saying that the large, capped, heck focused market performance we've been accustomed to over the last decade plus is coming to an end. and it's going to be a violent end. Companies that have had an overabundance of capital last decade as a result of easy financing, fiscal stimulus, and BuyBacks are now going to see the lifeblood drain out of them.

But companies that had lower liquidity than necessary to expand will actually boom. If you're a company in the last 10 years that had a huge demand and you have a massive demand now, but you just had no Capital available to you because people are so busy over concentrating in Tech Well now according to these B of A analysts, they're going to start seeing a massive massive boom. We like the capital deprived sectors. The B of A strategist wrote financials, home builders, materials, and fossil fuels are areas of the market that have been starved of capital for more than a decade.

While technology is among those that have enjoyed free money amplifying the duration risk of the S P 500 bloated growth sectors still need to rationalize capacity After overbuild, they said deflating a treasury bubble will be unkind to bond like and longer duration stocks. So right now folks as this bloated treasury bubble pops and that air just flies out of it, well, what do you seeing? You're seeing a lot of these big tech companies start laying people off like crazy and that's what you're starting to see first before all the other layoffs happen and before the actual overall unemployment starts skyrocketing. Next, the Stanley's over at Morgan came out and said U.S stocks are in Death Zone and could sink 26 percent Death Zone Wow, that sounds real positive. Thanks Morgan Thanks Stanley I Wish they had some sort of good cop bad cop routine going on where Morgan is always bullish.

Stanley's always bearish, but sadly not, they're both little. Barry Mcberries Today, many fatalities in high altitude mountaineering have been caused by the death zone, either directly through loss of vital functions or indirectly by wrong decisions made under stress or physical weakening that led to accidents. This is a perfect analogy for where Equity investors find themselves today, and quite frankly, where they've been many times over the past decade. So according to Stanley and according to Morgan, we are at about here.

Not good folks, not good. Hope you don't have a fear of heights. Well, if you do, no worries, because apparently we gotta head down pretty pretty soon. it's time to head back to base camp before the next guide down in earnings.

The analyst from Morgan Stanley wrote and this is something we've been talking about and warning about. hey, timing is going to cause earnings to get worse, not better. I was of the opinion that you could see a melt up for a while that faces a storm to evaporate very, very fast. but we've been talking about this for a long time.

Tightening is going to make earnings get worse, not better. And when that happens, and when it's clear, well, investors are going to start freaking out again and that just hasn't happened yet, but could happen very very soon. And in the meantime, the risk versus reward in equities is now very poor, especially as the FED is far from ending. Its monetary tightening rates remain higher across the curve, and earnings expectations are still 10 to 20 too high.

Morgan Stanley's analyst here is very, very pessimistic, and he holds a view that The Benchmark can slide to as low as three thousand a 26 percent drop from its close in the first half of 2023, and that's very much out of the consensus at this point right now. Still, if you're a bear, you're considered a fuddy duddy. But the truth is that there's a lot of reasons to be a fuddy duddy right now. Bank of America's Chief Economist Michael Hortnet last week predicted that a no Landing scenario is going to happen in the first half of the Year where there is no immediate slowdown in growth, but inflation remains above Trend and still could clobber stock so you don't get any kind of landing at all and you still have a massive massive stall clobber, right? So it's like, okay, well, you either get a very, very hard landing and stocks get clobbered or you get it no landing and stocks still get clobbered and then eventually you got to force the landing anyway.

So then all of a sudden you get clobbered again. And so now that Wall Street knows that they can't hide behind the soft Landing narrative that was fueling the Melt up that we saw last month. Well, more and more analysts are admitting, hey, expect more massive sell-offs. But Charlie what are some ways that you can take advantage? Well, here are some ideas for those of you who read our free newsletter that we put out this morning, which by the way, you can sign up for for free with our link down below.

Well, I pointed out in that newsletter that the Vix is breaking out AKA Fear and uncertainty is breaking out and with that, you are going to see a lot of opportunity with Uvxy, which trades the Vix's movements. Uvxy is on a beautiful uptrend right now and trying to break the previous resistance at 565.. if this, Market Panic continues, you'll expect to see Uvxy continue to uptrend. During days it is set back, you'll see Svxy uptrend.

Another opportunity to keep in mind is s Triple Q Triple Q was one of the best performing indices in the first part of this year, but as that narrative has shifted, it's going to be more prone to being the worst performing index. So the triple Q index which shorts the QQQ index is going to be one of the most ripe to uptrend. As you know, when inflation slows and the FED is at ease, we tend to see Tech and the triple Q index Skyrocket, but when it's the opposite, you tend to get it. C You tend to see it get destroyed and right now we are unfortunately in the destruction phase, so that means you got to keep your eyes on that S Triple Q Anyways, folks that caps out today's video I Appreciate the support.

Make sure to hit that ravaging like button and subscribe. Let us know what your thought process is on this current market, what your favorite plays are, and whether you think things are going to get better or worse. Let us know your thoughts down below and shout out to MooMoo for sponsoring today's video. Make sure to get your free stocks and try them out with our link.

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