Okay folks, so I want to officially welcome you to the Bear Market of 2022.. the S P 500 that has been flirting on the edge of that magic 20 down level that designates the Holy Bear officially broke it today before bouncing back slightly towards close. But once you've broken it that first time, you're in a completely different probability pool in terms of what has historically happened over the coming months and quarters that follow. I want to talk to you about the stats of Bear Markets, what the data tells us, in terms of how much money has already been lost, and then we need to have an honest conversation.

not a line conversation, but an honest conversation about the economy. So there have been 14 Bear Markets since World War Ii, and if you're measuring periods of time where the S P 500 declines 20 percent without a 20 rally in between, the median drop has been about 30.2 percent peak to trough and has lasted about 359 days. In terms of months, it's already been about four months for the S P 500 and 5.5 for the Nasdaq. This stat is on the S P, but just for relevance.

The S P 500 topped out, peaked out in the first trading day of the year I believe that was January 3rd. The Nasdaq peaked out towards the end of November. You could see on this lovely data table hither that the shortest Bear Market on record was in 2020. It lasted 33 days and was down 33.9 percent.

Those are some of my favorite days in terms of video content. Though the market was dropping so fast and you had all these new people that had never seen the channel before rushing onto Youtube trying to figure out what was going on and people were like who's this Charlie Guy and why are stocks going down so fast and then you at the worst which was back in 1973 and dumped almost 50 percent and lasted 630 days, which is pretty crazy. That marked the beginning of the struggles to get down inflation that wouldn't meaningfully go down until you got Paul Volcker, who came into office a decade later and caused that early 1980s crash that also lasted over 600 days. Now let's talk about the stats and how much money U.s Equities have already lost this year.

We are now a bit more than seven trillion dollars down and have just barely scratched the surface. Overall, though not just the S. P. Bloomberg estimated this morning that stocks have lost nearly 12 trillion in market value since the peak in March.

Let's do some comparables. according to Covetedmoneytracker.org administrative actions have resulted in almost a trillion in spending, Legislative actions have resulted in almost 5.2 trillion in spending, and Federal Reserve actions have resulted in approximately 4.2 trillion in spending. Although spending may be a poor choice of word for what the Federal Reserve does, but you get the point. So you add up how much money has been disbursed or committed for coveted relief in one form or the other, and it comes out to roughly 10.2 trillion dollars.

Well, the stock market lost over seven trillion dollars just in this last little period alone. If inflation continues to be stubborn like it has been, it's hard to make any sort of argument that equities are going to find a floor anytime soon. The Fed is at war. It's at war with the overall financial system.

How does the Fed win? Well, it drains as much capital as it can from the financial system. While I don't necessarily think the Fed wants stocks to go down and for people to lose tons of money, it's a near absolute fact that they'd rather have people lose tons of money then for inflation to continue getting out of hand, especially while employment data is still relatively strong and is meeting their criteria. But that leads us to our next point of conversation. Which is the economy? How is it faring? Are there any signs of cracks and weaknesses? Or is it all berries and roses? Roses and berries except the roses and berries cost a lot of money.

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Now back to the content. Okay, back to the content. So the Washington Post said U.s may be barreling toward recession and next year. More experts say Wall Street Journal said Ceos are bracing for a recession even as the economy remains strong U.s economy heading into a downturn.

Wells Fargo Ceo warns no question Bloomberg. This morning, cracks in U.s economy start to show as recession warnings mount. Economists see slow down at best, growing risk of contraction and we already are in a contraction. Really? let's look at the data.

We'll start with supply chains. Nothing symbolizes the weird time we are in right now with supply chains quite as much as the baby formula shortage. I think this really sums up the massive, massive conflicting problems that we have in our society. Today, Cnn reported that families are literally rationing formula for children as the shortage worsens.

Now, the way that baby formula is distributed in this country is very, very very, very regulated. Which means in practice, only the most powerful and well-connected and most established players get to participate in the market. They're the only ones that can meet all these regulations, and a lot of the regulations seem to only benefit them then. all of a sudden, when the major players that they favored can't produce at the rate that they should be, All of a sudden, the rest of the market can't pick it up because of the regulations in place.

The U.s has regulated away the ability of other players in this industry to compete with the bigger players in the niche. And on top of that, the Us put 17.5 tariffs on most formula that is brought in, even from countries in the Eu and in Canada. And so basically the Us government said, okay, we're going to go ahead and regulate away all of the potential competition that could strengthen the supply chain for baby formula in order to protect the babies. And if something goes wrong, we'll just have to pray that everything works out.

And the straw that broke the camel's back was Abbott having to close their infant formula plant after finding contamination. But the lack of resiliency here was caused by Us government policy. and whether you blame the government business or both, the fact is that we are at a point where the United States can't figure out how to keep formula on the shelves for babies, and this is the most apparent example of terrible and stupid supply chain issues that we have right now. But this symbolizes a lot of the other issues that you're not hearing about right now that are going on in so many other sectors of the economy.

We are in a situation where because of the events of the last couple of years, there's a lot of genuine supply chain issues, many of which are caused by failed government policies. And of course, governments are not very quick to correct mistakes because, ooh, that makes us look bad. And so you get to a point where the only time you get a correction is when babies are literally going without nutrition. In a lot of Us industries, you have companies that over the years get more and more money and they use that money to lobby politicians to give their company more favorable terms, in some cases, putting in regulation that kill competition that the politicians then sell as.

oh, we're protecting the consumer. But really, you're just favoring the companies that donated to your campaign or funded some other goal that you're trying to pursue. And then when something inevitably goes wrong because that's not a sustainable system the American people are told. Oh well.

The reason something went wrong is because the government doesn't have enough power. It's those damn greedy corporations that are making everything go bad. But there's a difference between a player trying to maximize how much they can win in the game and the referee decided oh yeah, maybe I should help that player out and screw the other players. And unfortunately, when shite hits the fan, these types of situations are revealed because you have massive failures that should never have been failures in the first place.

But outside of that, even outside of U.s supply chain issues, you're having a lot of the same problems from our biggest trading partners. You have China literally acting like we're back in the beginning of the pandemic with their zero covert policies and everything's locked down like it's 2020. And this is going to cause ripple effects and shortages that we're not even going to see probably until 2023 and 2024. Just like the ones in 2020 we're still dealing with right now in 2022.

And the issue is right now. You put everything together in this whole mess and it's like we are seeing the result of this. We are seeing huge, huge crunching of profit margins. Target just reported a 52 dump on profits, input costs are going up dramatically, and consumers are like, you know, I don't want to spend as much on discretionary purchases, so consumers are spending less than when they do spend.

Companies make less for what they sold, but these are things we've talked about. I want to focus on the American consumer for a moment and especially the lower income ones, as those are the ones that tend to feel the most pain and feel at the first. Before recession really happens, Wall Street Journal reported that delinquencies on subprime car loans and leases hit an all-time high in February, based on Equifax's tracking that goes back to 2007.. Imagine that delinquencies on subprime car loans and leases hit an all-time high since 2007..

If inflation stays high long enough as rates go higher and we actually get an economic slowdown, you're going to get into this period where everything bad is happening at once. and eventually it's not just gonna be subprime delinquencies happening, right? Let's talk energy. Russia just made the decision to cut gas supplies to Finland after Finland applied to join Nato. This has been causing prices to jump today as Finland is expected to be bidding on the rest of the non-russian oil market.

But you look at the bigger picture here. I mean everyone freaked out when prices jumped from 90 to 123 the first couple of weeks of the invasion, but then it calmed down some. But we are getting to the point where we are almost breaking a previous peak and heading into a new cycle high again and people aren't talking about at least not to the same degree they were a couple months ago and you have some analysts predicting that gas prices could hit 6.20 cents per gallon nationally by August. So glad that I switched to an electric car this year because now instead of paying the gasoline companies a ton of money, now I can just pay the utility companies a ton of money.

It's a great deal. I think the only real way to save money these days on transportation is to buy a horse. If only Elon Musk had thought of that. But anyways, you look at this energy crisis.

it seems to me that we aren't in the finale. It seems like things are going to continue to get worse for the next quarter at minimum, and squeeze the consumer and the businesses and make everything more troubling. So I don't know folks. I mean, I hate making bleak videos, but we're just in a bad time and you gotta accept it.

I think you look at the trend of not just tech, but also American economic staples now just getting destroyed like today. You're Ross. You're John Deere and Boeing, which never even recovered from its Kova drop is rapidly approaching covet lows. Again, we are heading into this everything crash where everything gets bludgeoned and in my view, the Fed is going to continue inducing a ton of pain until inflation gets under control.

Don't get it confused, we are in some of the worst periods of stock market history. According to Compound, this is the fourth longest weekly downtrend streak that we've had since 1928 2001 markets declined 14.9 percent over eight consecutive down weeks, and in 1970, it declined 14.5 percent. But you look at the Ford returns, almost all were positive. In fact, even in 1980, when Volker was vulcaring the economy, if you had bought after the seven worst consecutive weeks, your returns would have been insane.

Your forward returns would be out the roof. seventeen percent plus up in three months, 29 percent in six months, 41 percent in nine months, and all the way up to 10 years up, 421. And mind you, this is the S P 500. So if you're talking growth stocks, you're talking about some of the more aggressive stocks in the market.

Those are going up a lot more during these periods of time. I'm not saying this is going to happen right now, and I do think the ball is in the Fed's court, but I think that if you look at market history, you'll agree with me that the bleakest times, the bleakest times tend to have some of the biggest opportunities. Anyways, folks that caps off today's video: thank you again Moomoo for sponsoring us today! If you want to get your up to five free stocks with a great trading app, go ahead and click the link down below. If you're looking to learn how to trade rather violently, make sure to check out Ziptrader you below coupon code Charlie Fever.

Have a good weekend folks and I'll see you in the next video.