Howdy doodly Deadly! What's going on Team: I Hope you're having a fantastic day and welcome back to the Mad core show where we're here to talk about stocks, crypto options Futures and even a little bit of breaking news. As I alluded to yesterday, things have been quiet. a little too quiet I even mentioned that it was the Calm before the storm and that calmness is about to be over because tomorrow and for the remainder of the week, there's gonna be a lot of volatility in the market and obviously I'll be explaining all of that in this video. I Want to lay out all the major events that you should be paying attention to for the remainder of this week and I also want to talk about what the FED just said that caused the market to pop a little bit and I also want to give you the skinny on the whole debt limit ceiling situation.

So now that you know what the plan is, buckle up, destroy the like button and let's ride. Even though the news cycle was a bit slower today, there was one major thing that everyone was talking to as it relates to the economy, politics, and the overall market. and that's the debt ceiling. Now, wait before you click off the video because I know that already sounds incredibly boring and I could already see that your eyes are glossing over I think I found a good way to explain really what's going on and shout out to the morning Brew team and specifically Dan Toomey Well, I'm just saying maybe if you were more considerate you could see where I'm coming from in this situation.

Why do we keep coming back? We need to raise the debt limit with no strings attention. No, no, we need to raise it, but include budget cuts. Okay, why is this happening again? Okay, so America is a powerful country because we're really reliable on paying off our debts, but oh uh sorry. since we're so good at paying off our dues, We issue tons of bonds to people in other countries which ties up a lot of global wealth into every single.

Bond The government used to approve every one of these bonds we gave out, but created the debt ceiling over 100 years ago is a way to make this process faster and say like, hey guys, we need to set a borrowing limit but since we borrow so much money, we keep hitting this debt ceiling. So every few years we just approved raising the debt ceiling again and again. Sold! So what's happening now Congress hasn't agreed on a deal to raise the ceiling yet? Was there anything else we can do? Some weird yeah, Democrats Could try to overhaul the process through what's called a discharge petition or forcing a vote on the floor. Another is the treasury.

Commit This trillion dollar platinum coin which we would use to pay back our debt President Biden could invoke the 14th Amendment which protects the debt of the U.S Or the treasury could do some really creative finance and issuing bonds, but these are all really weird and Creative Solutions the best outcome would just be for Congress to agree on something or else or else our credit rating which is basically the confidence people have in us paying back our debt gets downgraded, leading to higher interest rates. a weekend dollar collapsing financial markets, bad vibes, bad vibes, bad bad vibes. Got it? So it's good to find a way to raise it now. Yeah, and what happens after we do and we never deal with this again? Uh, well, in all honesty, that was scarily accurate.

There's a couple things I want to dive into more detail about, but once again, Applause to Dan To me, that was an excellent explanation of what in the world is going on with this whole debt ceiling debacle as of Tuesday May 9th Here's the most recent update: McCarthy Rejects short-term debt limit fix ahead of pivotal meeting with Biden Congressional leaders. So basically four of the major lawmakers in the nation will be meeting with President Biden today to see if they can somehow come to some sort of resolution. or at least come a little bit closer to seeing eye to eye. you're probably now thinking to yourself, big whoop Democrats Republicans Fighting That's the same as cats and dogs fighting.

It's a Tale As Old As Time What's so special about that And I Hear you I Totally totally hear you. That's probably most likely not going to change. but this particular fight of not seeing eye to eye on the debt ceiling is actually a really big issue because the U.S debt ceiling has implications on our economy, our stock market, and really even the whole global stability. So just add a little bit of framework to this conference conversation.

What even is the debt ceiling? According to the interwebs, it is the maximum amount of money Congress allows the federal government to borrow to cover its bills. Because the government typically spends more money than it collects in taxes, It must take out debt to pay its expenses. Fun Fact: This whole concept of a debt ceiling was actually created during World War One Prior to that, Congress had to approve additional debt for every new spending measure. And then they thought to themselves, that's not fun And man oh man, do they like doing it Because from 1960 until now, the debt limit has actually been raised 78 times.

Most recently, in December of 2021, the government decided to raise the limit by an additional 2.5 trillion dollars. Which means that the cap was Sky High just below 31.4 trillion and that's with a T. So basically, at least in a business sense, the US government is a very poorly run business. They spend a lot more money than they're actually taking in, and obviously to keep that party going, they just borrow more and more.

And when they hit their maximum, they just raise the maximum that they're allowed to borrow. So now you're probably thinking two things: Number one: sounds pretty awesome to be the US government. Number two. What happens if we don't raise that maximum level? Defaulting on sovereign debt could wreak havoc, cause chaos, or really? I guess I would have to crack open a thesaurus to see any other related words.

But I think you get the point. Essentially, it all adds up to sending the US economy into a pretty brutal tailsman. according to Moody's Analytics If the US were to default, gross domestic product, AKA GDP would drop four percent and more than 7 million workers would lose their jobs. Even a brief default would lead to a loss of potentially 2 million jobs according to fish ratings.

U.S Bond ratings would be classified as restricted. default and treasuries would have a derating until the U.S could once again borrow. The Brookings institution noted the default could lead to 750 billion in higher Federal borrowing costs over the next decade. Obviously, there would be clear financial and economic implications, but on top of that, the US as a world leader not being able to pay its bills.

it truly really is embarrassing when asked the right way to proceed from here. The Treasury Secretary Yellin had this to say: there are no good options. Every option is a bad option. I Really don't want to get into discussing them and ranking them because Every treasure secretary has known.

The only option that really leaves our economy and our financial system in good shape is raising the debt ceiling and making clear that Congress stands behind the basic principle that America pays its bills now I'm by no means a fan of Janet Yellen In fact, I disagree with her on many things, but on this particular issue I Don't really think she's far off base, so if the downside, the risk of the situation is so severe, so vast I think we could fairly ask why in the world is Congress even messing around, why would they risk this type of thing and the answer to that is government spending. The Republican side of the argument is that the refusing to raise the debt ceiling unless it's also paired with government spending cuts House Republicans passed the Limit Save in Grow act last month outlining the areas they want to pair. the bill would impose sweeping cuts to Federal discretionary spending, imposed new work requirements for welfare recipients and expand Mining and fossil fuels production all in exchange for raising the debt limit for roughly a year and on the other side of the aisle. President Biden and his colleagues have essentially said no, no, no, give us a clean debt ceiling increase and we could talk about the spending budget cuts.

As I've said all along, we can debate where to cut, how much to spend, how to finally overhaul the tax system to where everybody has to pay their fair share or continue the route they're on, but not under the threat of default. So uh, that's where things currently stand. We're basically caught in a limbo from Hell, our politicians are in a pissing match, and we're watching our financial and economic security being put to the test. Now in all reality I Truly do believe an agreement will be made before we default, which as of now is estimated to be in early June And yeah, maybe we get a little bit close for comfort, but seeing how things in this situation have played out historically, generally some sort of compromise is made beforehand.

Obviously, this time could be different, but I don't think our government's that stupid, right? Moving on, let's talk about how the market violently went nowhere today, and how things in the very short term are about to most likely change in a dramatic fashion. If you're looking at the opening and the closing price of the market today, there wasn't much of a differential, but if you were watching it on an intraday basis, it was a decent amount of whipsaw. And that's partly due to what was said by a Fed member Fed's John Williams doesn't say whether more rate Rises will be needed New York Fed: President says it will take time for past increases to slow economic activity and inflation. Mr Williams Who's the New York Fed President and also happens to be a top advisor to the Fed chair Jerome Powell Didn't say whether he thought further rate increases would be necessary this year and has prepared remarks until now.

His previous remarks this year have hinted at the prospect of additional increases. So basically he's echoing the words that end the sentiment of Chairpow: They're leaving the door open for another rate increase, but most likely they won't be using it. We haven't said we're done raising rates, but then he added on I Do think that that we've made incredible progress over the past year or so, bringing interest rates from close to zero to a little over five percent. So once again, no Fed member wants to definitively say that they're done raising rates, but it seems as if they're strongly hinting at that, at least based on their current set of data.

Speaking of data, this is the major thing you need to be paying attention to tomorrow. Wednesday May 10th at 8 30 A.m an hour before the Market opens, we will be getting the next CPI report the Consumer Price Index Report. This is a pretty fancy way of saying we're getting another inflation report that will have a massive impact on the Fed's next decision. I'm pretty sure this goes without saying, but this report is pretty important to the economy, which means it could have a pretty volatile impact on the market.

so I think it'll behoove you to be paying attention. Luckily, I'll be streaming the whole event, so hope to see you there in terms of other things that you should probably be paying attention to. This is the final major week of this particular earnings season today. Tuesday You might want to be paying attention to Airbnb Rivian and Oxy before the mark it opens.

Tomorrow we have roadblocks and Wendy's and then after the market closes, today is the major report of the week: Disney You might also want to be paying attention to Robin Hood and then on Thursday we have JD Fiverr and Krispy Kreme for my D Gen short-term zero DTE Traders I Want you to know that tomorrow the 10th it does seasonally favor the Bears even though the Bulls have won 56 of the time. When the Bears did win the other 44 of the time, they won pretty handily. and that's why the profit factor is 0.5 And as you can see from the equity curve, obviously, it's been pretty favorable for the Bears. The closing bell finally went Diggity Ding ding ding.

And I'm saying finally because they put an end to a very frustrating whipsaw not too special type of a day. The Spy ended up putting a slight red day in. it dropped 0.44 But as you can see, we're still in this very big bar from Friday of last week, so still another inside bar. If it breaks above 4 13 72, then I'll be looking for a fill up to 4 15 27.

We have an upside Gap though. and then on the other hand, if we end up breaking below 408.64 I'll be looking for a downside gaffle to 407.27 That's pretty much my plan. I'm looking for a breakout and I'll be bullish. I'm looking for a breakdown and I'll be bearish.

Easy peasy, lemon squeezy. In terms of crypto, we're essentially going sideways Bitcoin is currently trading at 27.6 K hasn't been much movement in a bit and it looks like the hemorrhaging and pepe has finally paused and we're training sideways right now around 19.6 Enjoy the evening while you can because starting tomorrow morning, volatility chaos Calamity will all be picking up starting around 8 30 a.m When we get the CPI report aka the next major inflation report, then don't forget Thursday we get the PPI report and then on Friday we get the consumer sentiment report and in between all that, we're gonna have a bunch of Fed members giving public speeches. So yes, you can definitely bet that Insanity will most likely be playing out. And don't forget about the little sprinkles on this overall Sunday of the debt ceiling and also that banking crisis that is not particular regularly over right now I Appreciate all the Good Vibes Thank you thank you thank you.

Don't forget I'll be catching you early in the Stream tomorrow morning. Other than that, I Hope you have a great day. Peace out.