Folks, hell is coming for the stock market. Yesterday we went and we broke the Market's June bottom but leading Global asset managers have come out and said very, very loudly that this will get much much worse in this video. I Am going to walk you through very violently what they are saying and more importantly, what they are actually doing with their money. We will start with billionaire hedge fund manager Stanley Drucken Miller who came out this morning and said that his Central base case scenario is now a hard Landing.

Then we need to discuss the dire warnings from some of the largest and most well-known asset managers like BlackRock and Goldman Sachs Let's Get Right to Work Folks time stamps down below. Okay, so famed Manager Drucken Miller comes out this morning and says he'll be stunned if there's no recession this year. Quote: Our Central case is a hard Landing by the end of 23. I will be stunned if we don't have a recession in 23.

Okay So we've been told for the last year that we are not heading for a hard Landing That a very very French case Scenario: Both politicians and Central Bankers have said hey, you know what? we're heading for a landing, but we're going to be landing on a bed of Charmin toilet paper. It's soft on the rear and it'll be soft on our economy. But Drucken Miller here is coming out and he's saying hey, hey hard Landing is not a fringe case scenario. In fact, that is the central case scenario.

His reason, well quote tackling inflation is trickier now than it was in the 1980s when Fed Chairman Paul Volker pushed up rates to curb it because the economy wasn't nearly as leveraged and we had not been through an asset bubble. People always like to make the Volcker comparison and say, oh yeah, that was pretty bad back then, but this time, nothing like that. Nothing at all but drucken Miller Saying here, Wait a second. No, actually, things are way way worse.

What are you talking about? The economy of that era was not pumped up by nearly nearly the same amount of Leverage as this current economy is. So I went and I found the data on debt Securities and Loans dating back the last 70 years and in Q2 of 1980, the economy had roughly 4.5 trillion dollars worth of Leverage AKA debt in it. And by Q2 of this year, do you know what that debt has climbed to? well, 91 trillion dollars now I Went ahead and calculated what the debt would be at if it simply kept pace with the inflation that we've had since 1980 and it would be at 16 trillion. Which means that adjusted for all the insane inflation that we've had since 1980, Leverage is still more than five times higher during the inflation battle today than it was during Volker's time.

So for folks who say oh, this time, it's not nearly as scary as the Volcker era. I Have to ask you, how is it not substantially riskier to Nuke the economy and raise rates when debt has been piled on five times as high? If you are slowing down and perhaps bankrupting an economy that has five times the debt, how is that not a riskier scenario? What about his asset bubble point? A lot of people say oh yeah, we got bubbles in our sparkling water but definitely not announced The prices? Well, from Q1 of 2020, the start of the pandemic, the US went from 94 trillion in total wealth to 136 trillion in total wealth by Q1 of 2022. That's nearly a 45 jump. Who knew that shutting down the economy and forcing businesses to close and operate at reduced capacity for a year plus would have such a positive impact on the economy that we create all this massive wealth? Why don't we just do this every couple of years, We'll be very, very wealthy.

Oh wait, because that's not how this works. Easy Money Policies and printing tons and tons of money created this again. nearly 45 percent increase in total household wealth, not actual wealth creation. and Volker in the 1980s did not have anywhere near the concentration of asset appreciation and the years leading up to his tightening battle as we do now.

And by the way, do you want to see what all the stock market and asset pain we've seen so far has actually done to resetting? U.S Wealth? Well, just this small downtrend together. and if the FED continues on this policy trajectory that it's on, it's going to be a lot. A lot worse. A lot more wealth is going to be drained.

folks. This is the new. American Dream Save up all your earnings for 40 plus years, put it into a 401k and a house, watch them grow, feel good and ready for retirement, and then watch the FED obliterate all that value right in front of your eyes. Somehow the video I filmed a couple hours ago got corrupted right in the middle.

So I gotta go ahead and film this again. No suit because we're running low on time. But anyways, this is what Drucken Miller said says about the asset bubbles. You don't even need to talk about black swans to be worried here.

To me, the risk versus reward of owning assets just doesn't make sense. So here he's saying, hey, did you look at this chart? How does it make sense to own anything right now? The risk versus reward doesn't make much sense at all. You don't need a Black Swan event for this to come tumbling. You just simply need the FED to reverse what it pumped in the first place.

So what has he been doing in light of all this? Well, Bloomberg reported he's been shorting stocks, running a portfolio that has been from zero to twenty percent short since January 5th markets topped out January 4th and he's also made some money in currencies and in U.S UK and European exchange rates I went ahead and I made some Charlie notes on his various interviews and statements. He predicts that the stock market will be at a relatively similar level in a decade to what it is now. He said he's bullish on Biotech. He specifically likes Eli Lilly because of their Alzheimer's drug and new diabetes drug.

He also thinks cryptocurrencies might benefit if distrust in central banks swell after this current inflationary crisis. Okay, so moving on, Strategist over at BlackRock recently sent a note to clients telling them that investors and central banks are still too optimistic about the potential for a soft Landing BlackRock Said quote: Many central banks aren't acknowledging the extent of recession needed to rapidly reduce inflation. Markets haven't priced that in, so we must shun most stocks. The pain for stocks is far from over and investors should look elsewhere until the market comes to grip with a global recession caused by central banks according to Blackrock and reported by CNBC.

Okay, so here you have one of the most well-known asset managers in the world saying they are shunning stocks. Markets haven't priced in the pain that federal banks must cause. And a soft Landing is very, very unlikely. And this is the sequence of events that they are predicting.

Well, this all implies a clear sequence over Titan policy. first, significant economic damage, second, and then only then third. signs of inflation easing many months later. So their prediction is, hey, wait a second.

Markets and central banks have little or no idea that the only way for the FED to actually get inflation down to that Target at two percent is to literally throw the economy off a cliff and watch it fall for quite some time. And only then will you start seeing inflation start going down a little bit and easing quote. We don't see a soft Landing where inflation returns to Target very quickly without crushing activity. And what is their reaction to this? Again, they say we must shun stocks.

Okay, so moving on to Goldman. So if you've been following news lately, you'll notice: Goldman Sachs has been laying off specific investment bankers and underperformers alongside other Wall Street institutions. Of course, everybody's just saying, oh yeah, we're just trimming. We all happen to be trimming at the same time, and we all just happen to be wanting to save some cash at the same time, It was fine to waste cash last year, but just right now.

Coincidentally, we all want to trim. has nothing to do with the fact that the economy is tightening up the fastest in 40 years or anything like that. and Goldman has actually even reportedly cut back on free coffee for certain employees When Goldman Sachs is cutting back on offering coffee. you know times are tough.

but in terms of equities, Bloomberg reports Goldman strategists cut equities to underweight in the U.S Investment bank's Global allocation over the next three months while staying overweight cash. So here, they're starting to really store up cash right now. and this chart from Goldman is very, very fascinating. Look here at Exhibit 2.

It shows the gap between earnings yield on S P 500 companies and U.S 10-year tips is now below the average that it's been and seen since 1990.. What does that mean? Well, remember, tips are treasury inflation protected securities, right? Essentially, yield on no risk government-backed asset, and as yields as the gap of yields between no risk assets and risk Assets in the S P 500 closes, it makes less and less sense for investors to risk their Capital to risk their capital in something like an S P 500 fund. But the bigger issue I see here and you really have to read between the lines like you usually do, is that these are lagging charts right? It shows what these variables have looked like so far. But as we head into 2023, you're going to see The Gap close substantially more.

S P 500 earnings should start dropping as the economy contracts probably to somewhere like here. And we already know the FED is planning on raising yields on tips and other types of government-backed assets. So the Gap will be very, very very little, if anything, within the next year. And perhaps they even inverse where you get more yield to buy tips.

Which means what the incentive to buy stocks is evaporating in front of our eyes. Goldman Strategist said that we are switching from Tina there is no alternative to stocks to Hera there are reasonable Alternatives Bonds are looking more and more attractive Tara Just punched Tina in the face and the more that Tara is looking attractive, the more bonds are looking more and more attractive, the more fight they put up in terms of competitiveness with stocks. and the more they draw Capital out of stocks. And the point of time when you see a really, really large collapse of the stock market is when all of a sudden those yields look like they're about to cross.

and all of a sudden you can get a better return just buying a bond and you don't have to risk your Capital at all. Now if it never gets to that point and it only gets to a point where that Gap is really closed, that is still a massive problem because if you can get a good enough return on bonds with basically zero risk and in many cases tax benefits, why the hell would you buy stocks that are extremely volatile in a downtrending economy? And this is the dynamic that we're dealing with as the FED tightens. If or rather, when we get the hard Landing we're going to be in a economy that is crashing at the same time where rates are really, really high. so the incentive to invest vast in the economy and rebound rally the economy is going to be very, very low.

until the FED pivots. That is the hard truth in my opinion when you're looking at this kind of chart and this kind of exhibit. Anyways, folks that caps off this video, make sure to hit that ravishing like button and subscribe. Share your thoughts on this topic down below.

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