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Aug. 9, 2022 - Lionel Nation
29:15
Recession Looms Certain While Global Economies Implode
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I'm again honored to have Bob Cundia with us.
He is the founder and president of Trade Genius Academy.
Every time I've talked with him, he has provided information to me that was mind-boggling.
And my mind is very rarely boggled, but it is with him.
He provides bare-bones, most important, instructionals as to macro and the like.
And Bob, without further ado, tell us, let's start off right off the bat.
What must we know?
Well, it's now midterm season for the election.
So we're sitting on top of, you know, the old Greek story of Sisyphus.
We pushed Iraq up to the top.
Now we have to figure out which way it's going to roll back down.
So, you know, are we going to get inflation under control?
Or are we going to have what's called endemic high cost of living?
And, you know, and that's kind of up in the air.
Now, me personally, I think...
They're going to kill the quote-unquote high inflation bug because oil prices are down, food prices are down, but the costs are elevated against wages.
So you're still going to have a lot of stress in the marketplace.
And I think what's going to happen is we're going to bleed out.
Now, this doesn't account for any of the political shenanigans going on right now, which we won't really talk about.
The only thing I'll say about what's going on here is that the political theater that's happening is tearing the country apart.
And at some point, people don't like to invest when they're afraid.
And when I'm talking about afraid, I'm talking visceral fear.
And people will go to ground.
And I think we crossed that Rubicon this week with the legislation that passed and some of the actions from the executive branch.
So I don't care what side of the political spectrum you fall.
It doesn't matter how much you care about...
You love Trump, hate Trump, vote for Trump, think he's a crook.
None of that matters anymore.
You have half the country who are livid right now and the other half the country who's gleeful right now and is not an environment that's going to prove out to be where bull markets are made.
So I think we're at a point here now where things can go really wrong.
Really fast.
And the Fed could easily make a policy mistake here by continuing to raise interest rates or what's called, more importantly, they're drawing liquidity out of the market.
So I'll explain that in a second.
I'll give you a chance to get a word in edgewise.
But that's where we are right now.
It's not an easy market right now.
Although, you know...
The general rule of thumb is if you drop it on your foot and it hurts, you want to own it.
So you want to start shifting away from the financial assets.
You want to start shifting towards what we call hard assets.
And I don't necessarily mean gold and silver.
I mean assets that are concrete, not financialized.
Like what?
Uranium, copper, cobalt, oil, gas.
Steel, iron ore, platinum, palladium, land, farmland, soft commodities like wheat, corn, soybean, those kind of things are all going to get a lift because the government is still spending in excess of what it brings in.
And that in and of itself, ironically, is not a bad thing.
It's bad when the amount of money into the market...
Coupled with velocity exceeds the productivity of the nation.
And so that's when you start getting inflationary pressures.
And that's what we've been in over the last couple of years.
And these dips in oil and these dips in food are basically seasonal.
And if they start going up again, it's going to cause great harm to the economy.
I expect a recession.
Forget the technical recession.
Recession to me means that...
There is a meaningful drop in consumer spending.
And so the consumer now got a big hit of expense, which slowed them down, but they took out a lot of credit.
And once all that credit gets expended, they can't spend anymore, and then you're going to have these decisions being made of, I only have so much money, what am I going to buy?
And that's what's going to cause what I call the...
The real recession is when you start seeing massive layoffs in the services industries.
Again?
We just got off of COVID, I think.
You're saying we're going to go back again to this period of disaster?
Yeah, so what's going to happen is, look, you and I only make so much money, correct?
I believe so, yes.
Right.
So you don't have a magic printing machine.
You have a credit card that gives you a temporary printing machine, but at some point, you only have so much money to spend every month.
And so when you start lifting the core expenses, I call them the four horsemen of the economic apocalypse, right?
You got food, energy, rent, and health care.
All of those are sustaining above 10% annualized, right?
And wages are not keeping up with that.
So what happens then?
Because it eats into the non-essential spending.
And non-essential spending is, you know, you sit back and think for yourself.
You know, Starbucks is non-essential, right?
Massage engines, not essential.
Carnival Cruise Line is not essential, right?
Go and get your dry cleaning done, not essential, right?
Putting your kids in camp, not essential.
So these things all start to bite.
Well, you know, we have a...
70% of our economy is service-based, and probably 70% of that 70% is non-essential services.
You know, my wife owns a pet boarding business, right?
So you think if people do go on vacations, they don't need to board their pets.
You see what I'm saying?
Exactly.
Vets, you know what?
I can't treat this dog.
Look, when I was a kid, Lionel, the pet got sick.
Dad took him for a walk, okay?
You can take them to the vet.
What happened to Rufy, right?
Well, Rufy ran away.
And you start seeing dogs being sunk back in the pound.
And you see it in the dentist's office, right?
Oh, yes!
So all these things happen.
And now we're starting to see it in the second phase is the housing environment.
So there was a study done.
I mean, I wish I would have saved the, I have it somewhere.
Maybe for the next video, I'll let you throw it up on here.
It shows the percentage, states with percentage of their GDP tied to real estate.
Everybody thinks California is, their GDP is tied to high tech.
Not true.
33% of their GDP is tied to real estate.
So, when people are not buying homes and selling homes, they're not fixing homes up.
Okay?
And, you know, realtors make a lot of money in California, and we're not selling homes.
They're not making any money, okay?
And so you're going to see a big draw on that, and rents aren't necessarily going down because there's still not enough homes on the market, and real interest rates are too high, so people can't...
go in and buy the house out from the landlord saying, "Hey, I want to buy your home.
We're stuck with high rent and low ability to own.
At the same time, we killed sales volumes.
So you're going to start wiping out.
And I consider real estate, it's called the fire.
You know, the fire economy, you know, basically it's financials, insurance, and real estate, right?
F-I-R-E.
That whole economy is going to get rolled up.
Okay, and that is a huge part.
And those people make a lot of money.
Insurance brokers make a lot of money.
Real estate brokers, in aggregate, make a lot of money.
Financial managers, you know, investment advisors.
They make a lot of money.
When that whole engine slows down, it throws us into a recession in a heartbeat.
Okay?
Manufacturing side of the house can't catch up.
Eventually may, but the manufacturing jobs are not where the fire people live.
Okay?
The fire people live where I live, and they live where you live.
But the jobs are in Oklahoma.
The jobs are in Kansas.
You know, you're killing me right now.
You're killing me.
I mean, this is just...
I mean, it's important news.
This reminds me of the opposite of the domino effect.
You know, when things go like this, this is almost in reverse.
This stops, and then this stops, and then this stops, and now the dominoes aren't moving.
Nothing's moving.
It's all frozen.
No, and service recessions are different than manufacturing recessions.
You know, they have in flow because of capital, you know, equipment purchases, and then they snake back up.
What happens in the service industry is that the companies start feeling pressure.
They invest in automation, and these jobs don't come back or they offshore them.
So, look, I don't want to be a Debbie Downer.
No, no, no, no, no, no.
These are opportunities.
That's what I want to get to know.
Please, listen, if I go to a doctor and you know the old, I got good news and bad news.
Life's not like that.
I want reality.
Here's the most important question.
And I don't mean to interrupt the flow of this because I find you mesmerizing.
But right now, if I want to say, you know what?
I got it.
Tell me what I do right now.
How can you help me?
How can Trade Genius help me?
Help me!
Please!
Yeah, so it's really quite simple.
If energy costs rise, you want to own energy, and you want to own commodities.
If energy prices start to fall off, that means we're going into a recession, you want to own bonds.
Okay.
And you probably want to own gold and silver.
Okay.
So that's really, it's really quite, it's a bifurcation.
Okay.
And so what we're seeing over the last couple of weeks is we're seeing money coming out of tech.
Now they had this bear market rally and that's starting to fizzle out.
Money's coming out of tech again and it's been rolling into copper companies.
It's been rolling into uranium.
It's been rolling back into oil and gas.
So we see that.
We see a shift.
The Fed's going to have to take their foot off the gas of those rate hikes, or the market's going to perceive that they're not controlling inflation well enough, and those commodities are going to move higher.
So right now, those are plays that we're in.
We're long shippers because there's a lot of shipping activity going on right now.
Around the world.
And we're long energy.
And it's been paying the bills.
So that's kind of where we are.
But we're going to go into a recession in 2023.
There's simply no way around it.
And part of it's political.
So think about this.
So the Republicans take over the House and or the Senate in November, right?
But Biden administration still owns the executive branch.
And so they're going to go ahead and they're not going to allow these people to have any kind of excess.
Plus, these guys are going to go to war with each other.
You can just imagine the payback that's going to happen, right?
So that's the one.
And that's the likely scenario.
The unlikely scenario is that the Dems keep all three of the legislatures intact.
And their policies are damaging to...
The economy, because they're on basically a socialist progressive role right now.
Look, they're trying to defund the biotech industries right now by, you know, I'm not saying it's good or bad.
I'm just telling you what they're doing.
I understand.
I understand.
From a stock standpoint, that's all I care about.
They're defunding those industries out.
They're going to go hard after the energy industry, right?
And they're going to go hard after landlords, right?
You've got to know who votes for them.
And they're going to go hard into renewables, which also raises the price of energy, ironically.
And I know something about it because I own a renewable energy company for 14 years, so I know what a scam that whole story is, even though I love solar.
I've been talking for six hours, so I lose my voice at the end of the day.
I understand.
So, yeah, that's going to cause the economy to contract, too.
You know, plus you're going to have the administrative state is going to really, really go out.
If the Dems keep control of everything, they're just going to double down on what's been working for them, right?
And that just shrinks everybody in.
So 2023, we're in a recession for sure.
And that's going to cause issues.
But ironically, the Treasury bonds are going to move higher.
And in 2008, when we had a market collapse and we had recession, TLT, which is a bond fund, went up 100%.
So I don't care how I make my money as long as it's moral.
And I don't care.
You could tell us that the United States, their dollar is going to go to zero.
That's fine.
But in the meantime, the bond market may go to zero first.
And that means your bond funds are going to go straight up into the roof and you'll make money on it.
And they have no choice.
When they start recession, we'll have zero interest rates again too, Lionel.
So people will be able to get one more chance to refi if they missed it last time.
So, and then they're going to what's called yield curve control this thing because they're going to spend and they're going to cap yield and they're going to try to recreate inflation again.
The inflation we're getting now is different than the inflation that they want to create.
The inflation we have now is the inflation came from supply shocks, okay?
And then temporary demand from the...
From all the stimulus money.
So this new one's going to be not having supply shocks.
It's going to be having a lot of demand because the government's going to keep spending money like they just did.
They'll keep doing resolutions, Glidel.
Just because they got this one done doesn't mean they're not going to try again next week to spend more money and to spend more money and to spend more money.
As long as they can keep Manchin and Samina on board, they'll keep spending money.
Their goal is to get Biden elected.
And that's going to cause a lot of problems.
You know, the Democrats, they should say, in the fall.
But Biden, he's not going to go again.
So we're likely to have Newsom as president before 2024, the way we're going right now.
Absolutely.
With Buttigieg as VP.
But that's another story.
Let me recap something, Bob.
And this is not a political argument.
People are going to hear...
Keywords, and they're going to be confused.
What you're saying is this, taking a macro look at it.
Whenever something happens, yin-yang, whatever it is, if it's left, you go right.
You're always, it's like tacking.
The wind comes in.
In order to go straight, you have to tack left and tack right.
So your position is, in terms of investing, in terms of trying to seek some type of stability, is to take whatever's being thrown at you and to work accordingly, to react accordingly.
If somebody right now And I want to get to the bottom line.
If somebody says, I need Trade Genius, I need you, what can you do for me?
Seriously, what can you do?
How can you help?
Yeah, so we created a couple of really effective algorithms that help us in terms of understanding whether you should be buying the dip, meaning that if the market consolidated is going higher or sell the rip, the market's overvalued, it's going to fall.
So we have algorithms for that, and then we have algorithms that have, Momentum indicators assigned to it.
Plus, we understand the seasonal aspect of things.
Like, when you and I talked for the first time, I said, market's going to bottom in June, oil's going to top in June.
Okay, so now we're in August and September, oil's going to bottom in September, and market's going to top in September.
That's seasonal.
So now that you know the framework, if you fight against that framework, you better have a good reason for it, right?
So inside of that, then we have our algorithms that are looking to say, okay, if oil's coming back into seasonality for a buy here in the next couple weeks, we should be looking at oil stocks that should be hitting our buy signals.
And that's what we do.
And so in addition to that, we teach you how to use that system.
In addition to that, we actually give you trades every day.
Based on that system.
And then we have a chat room where people can communicate with each other and with myself and my team on questions they have around trading or stocks or whatever they want to talk about related to that marketplace.
And so we do that for the stock market.
We do that for the crypto market.
And we do that for what's called options and futures.
We have a VIP room for that.
Or people just want training.
Or, you know, training materials.
We have that too.
So what we did, Lionel, we just created.
Seven bundles for people.
They can pick and choose what they want to buy.
And we discount it as 65% off.
And that's pre-discounted.
And they take advantage of it by the 14th.
Or they can use a promo code and get 40% off.
And I think you have that in the link below.
And it's not discounted.
That's all for the gross of what the price in the store is.
Bottom line, what I'm telling you is that we have a really good sense as to market direction, macroly.
But even if we're wrong, we don't care because the algorithms will tell us whether or not we should take that trade.
It's just that you look in these areas that the macro is telling you to look in, okay?
And then you then apply the indicators accordingly.
And that's all we do.
And I'm looking every day.
And I have an algorithm that tells me, Bob, look at this one, look at this one, look at this one, look at this one, all day long.
And so it's finding stocks for me that I can't look at everything.
And that's what we do, and that's why we have such a good win record.
And everything we do, too, is that we're fairly new together.
I'm not a Lambo guy, Lionel.
So we're basic kind of traders, and you don't have to make a lot of money to make a lot of money in the long term.
If you make $100 a day in the market, you're making $20,000 a year.
So you're making $400, you're making $80,000 a year.
You see how that goes?
So it's really...
You don't have to make a lot of money on each trade to make a lot of money.
As long as you're winning more than you're losing, the system will take care of itself.
And we have a good system.
This system's been around for a long time.
And it's effective.
And then we share that with you.
You have my system.
I let you use my system as a client.
So it's not like some guru black box system.
Here it is.
You know, you can pick and choose your own stocks you want to follow.
Or you can follow what I follow.
It's up to you.
Every time we talk, you'll say something that will stick with me.
One, the other day, you were, last time we talked, seems like it was yesterday, you talked about China.
And we're hearing China's this burgeoning behemoth, and you're saying, no, no, no, not so fast, not so fast.
And then we heard that crypto is the Hindenburg and the disaster.
And you said, no, no, no, no, no, no, not so fast.
Two completely different, because stupid me, I'm listening, maybe tangentially, to financial shows and idiots on squawk boxes and things like that.
And you're always giving me something which I never know, because you have a dispassionate look at it, very analytical.
Do those analyses still hold today?
Yeah, I mean, China is imploding.
Their banking system's at max leverage, so...
They're on the tip of the edge of a precipice here, which can be really nasty.
And crypto, look, when I told you about crypto, that was the bottom.
People are saying crypto is going to zero.
We're like, oh, no, it's not going to zero.
And it's picking back up.
And look, they've been having a hard time banging it down.
And now you've got BlackRock saying, hey, it's open to our customers now.
So now I'm not in the camp that crypto a million, if it gets to a million, awesome.
And, you know, people that want to be religious about it, that's fine with you.
I'm a trader.
You know, if it's going up, I'm buying it.
If it's going down, I'm not in it.
You know, so it's quite simple.
But Bitcoin's bottomed here.
And you can see it now.
You know, a company like Mara, M-A-R-A, $5.
It's at $14 right now.
And that's over a month.
Okay, they own Bitcoin.
They mine Bitcoin.
These people are closer to it than any of us ever will be.
That stock tripled.
How about that?
Make 300% on your money in six weeks.
So these kind of opportunities are out in front of you, but people that were preparing for the end of Bitcoin missed that trade.
So I tend to just wash that stuff out of my head.
We tell our clients for crypto we're going back into the high swing here in the fall with Bitcoin because the halving season is coming up again.
And all season as I think the alt desert is probably ending here soon too.
But we kept our people out of the nightmare of Bitcoin with all the selling of all those exchanges that were doing the Ponzi schemes.
We had our people out of that stuff.
And now we have our people in it because that's what was causing a lot of the sell-offs in Bitcoin.
China is an absolute mess.
That's why they're picking a fight.
You know, with Taiwan and with us and with everybody else is that they're lashing out because they have to distract their people from an absolute nightmare.
Look, they're having riots in cities every day now.
You don't see them because their mainstream media is par excellence over ours in terms of hiding the truth from their people.
Right.
And so, but they reach peak, you know, so, you know, what people don't realize when you're in a bank, you're an unsecured creditor to the bank.
In the United States, we have FDIC insurance, so there's some protection, assuming that that doesn't get drained, right?
But China doesn't have that kind of stuff.
So the mandarins of China basically stole all the money from all the people, and now there's nothing.
And so people are trying to get their money out of the banks.
They can't.
No, no, please, please.
I'm sorry.
And it took 30, 40 years to get people to put money in the Bank of China.
They kept their money at home.
You know, gold and silver and diamonds and cash, home.
You know, and they were led into the slaughter.
You know, they probably were getting trained by Wall Street.
They were led into the slaughter.
They put their money in.
They believed.
They trusted.
They invested.
And they got catfished on a major, major, major Ponzi scheme around real estate.
And so, yeah, so China's hurting for certain.
And we don't know what that means internationally, but it's a problem.
We have China by the short hairs.
Everybody thinks China has us by the short hairs.
You stop sending food over to China.
Okay, China does something stupid.
You call Saudi Arabia up and say none of your tankers are leaving.
Okay?
If not, we're going to inspect every damn one of them.
And you start slowing down the energy for them.
I mean...
You know, I mean, this is warlike talk, but I mean, you're talking about leverage here.
The leverage is not what people think.
They think, oh, they can sell our bonds.
The Federal Reserve can buy every Chinese bond tomorrow.
What do they care, right?
It's just interest now they own.
So it doesn't really matter, you know, to us if everybody around the world sold all their treasury bonds.
Our Federal Reserve can buy them all up in a heartbeat.
Doesn't even matter.
Well, this is...
I'm sorry, please.
Well, then all those people are stuck with our dollars.
There is a devilish evil that I find so enticing and so appealing, Bob Kundia.
Let me remind everyone right now.
Right now, if you use promo code AUGUST, you get 40% off of non-bundled items.
That's promo code AUGUST, A-U-G-U-S-T.
People can't spell.
40% off of non-bundled items.
And you know, every time we speak, It's like there's this clarity that you provide, a pellucid way of looking at it, that I don't hear anywhere.
And that's why we talk.
And that's why Trade Genius is there.
And that's why it is always such a pleasure to speak.
And you must guarantee that we do this again, because every time people have told me they love this.
So thank you so, so very much.
I'll have all the information below in the...
A particular segment there.
And any final words for our viewers and followers and acolytes, Bob?
Yeah, first thing I'd say is, well, only God can guarantee that I'll be here for next month, but I'll do my level best.
And the only thing I would tell people is that sometimes you've got to let some of these things play out.
You don't have to be the bleeding edge on these things.
So we're going to have plenty of time to find out whether or not we're going to slip into some sort of...
We go out of inflation into what's called more stagflation or like an inflationary recession kind of environment.
You'll see that.
Oil prices and interest rates are the two things you need to watch.
So if oil prices sustain below 90, stay above 60, and interest rates don't go higher, we're in Goldilocks.
But if it doesn't...
And we're going to go into some sort of inflation, which will turn into a recession.
So just watch it and trade accordingly.
Or if you trade with us, we'll give you trades every day.
Rob Cundia, you have, again, mesmerized me.
Thank you so, so very much for being with us, sir.
Well, thank you for having me, Lionel.
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