Recession? Market Crash? The Data Says Do NOT Bet On It

0:00Hello, everyone. The Fed's cutting rates, real income is increasing, and the White House says more financial good news is on the way. Jordy Visser is going to explain the two big investment ideas that he's focused on moving forward. And a politician out in California believes that we should outlaw AI from replacing workers. We are live today from the desk of Anthony Pompliano.

0:29Before we get into today's episode, I need your help to get to my goal of 1 million subscribers on YouTube. The people are saying we can't get there, but with your help, we're going to do it. We currently have 38 ,411. Hit the subscribe button and let's get into today's show. All right, ladies and gentlemen, the market sell off on Thursday and Friday last week. It spooked a lot of investors. They're wondering if the bull market in stocks is over. They think we might be on the cliff of a 75 % drawdown in Bitcoin. And people want to know, is the doomsday pessimists finally going to have their day in the sun?

1:01These are all legitimate questions, in my opinion. But before we can pontificate about the future, we got to analyze what's happening right now in the market. Dan Niles, he's the founder of Niles Investment Management. He had one of the best explanations over the weekend. He writes that there was two factors driving the market this year. First, easy money was coming due to the rate cuts. And second, there's been continued optimism on the AI trade. Both of those make sense. But he says that recently these twin pillars of the market, they've been called into question. He says that a December rate cut seems to be a toss-up for the Fed.

1:33And second, OpenAI talking about a government backstop forced investors to question whether they could actually fund their infrastructure commitments. Do they got the money or do they not? As a result of one and two, high valuations for the market in general, and especially some of the more speculative sectors that are relying on easy money, all of that is being called into question. Is the bull market over or not? Now, Dan's point about investors questioning the future is hard to argue with. You can see sentiments shifting in real time online. And obviously, market prices, those are the signals that never lie.

2:05The White House and President Trump, they're not exactly known to sit on the sidelines while all of the fear mongers run wild. They're going to come out and punch them right back in the face. That's what happened this weekend. White House economic advisor Kevin Hassett went on ABC, and he explained why the new economic policies under the current administration is actually helping Americans. Here's what he had to say? Well, first of all, like if you look at the history of inflation, right, what happened was that there was right away Democrat spending in Joe Biden's term and we got inflation up almost to 10 percent.

2:38It averaged 5 percent over the four years. And that has created a situation where, for example, mortgage rates went up. And so the typical payment for a monthly mortgage payment almost doubled. A bag of groceries that cost$400 a month when President Trump left office is$500 or$515 when President Trump came back this time. And so there's this really big hole that's been dug. And then the question you could also ask as an economist is, how do I summarize all those different prices and everything? And one of the ways you could do it is just look at purchasing power, the real wage. Purchasing power, I'll just finish this and then I'll get back to it.

3:17The purchasing power dropped by about three thousand dollars under Joe Biden because the wages didn't keep up with prices. Under President Trump, it's already gone up by about twelve hundred. We understand that people still feel the pain of the high prices, but we're closing the gap and filling the gap. Now, it's not just Hassett that was out on TV. Treasury Secretary Scott Besson, he sees an even bigger boom in purchasing power on the horizon. He was on television yesterday explaining to Maria Bartiromo how American citizens are poised to see their real purchasing power substantially accelerate.

3:48Those are his words, substantially accelerate in the first half of 2026. Take a listen. So we inherited this terrible inflation. We are flattening it out. I believe we're going to push it down. Energy prices are down. Interest rates are down. But the real thing that is going to happen that is going to give Americans real purchasing power increases, it's going to be through growth. We passed the one big, beautiful bill. I am also the IRS commissioner, and I can see that working Americans, thanks to the president, living up to his campaign promises, is no tax on tips, no tax on overtime, no tax on Social Security, deductibility of auto loans.

4:33If you buy an American car, there are going to be substantial refunds in the first quarter of 26. Working Americans will change their withholdings and they will get a bump up in their real incomes. So I would expect in the first two quarters, we are going to see the inflation curve bend down and the real income curve substantially accelerate. And when those two lines cross, Americans are going to feel it. But Maria, I will tell you what we're not going to do. What we're not going to do is tell the American people that they don't know how they're feeling, which is what the Biden administration did.

5:12They said it was a vibe session. You don't know how good you have it. And we are working every day to get these prices down. Energy prices are down. Interest rates are down. Those are both important facts when evaluating the economic policies. These are policies that Besant, Trump, Hassett, and others have put into place. But my favorite part of the Besant conversation, it was his pledge to refrain from telling the American people how they're feeling, not being paternalistic and saying, oh, you're actually wrong. I remember when the All In podcast guys interviewed Besant earlier this year. They asked him point blank, do you believe the official economic data?

5:48Besant said no. But more importantly, he explained the reason why he doesn't believe the data is that the data had been saying one thing over the last few years, but the American people were screaming from the rooftop about a different personal experience. In that situation, who are you gonna believe? Do you listen to the data or do you listen to the people? Well, there's a lot of examples of where we can see this playing out. Take Ritholtz' Ben Carlson as an example. He wrote a great piece over the weekend titled, What If Things Are Better Than They Seem? In it, Carlson points out the following data points.

6:1954 % of Americans with incomes between 30 and 80K they now have a taxable brokerage account. And half of those people have entered the stock market in the past five years. That's good news. Robinhood, very popular brokerage, has something like 25 million customers. And for half of those people, it's the first brokerage account they've ever opened. Third, nearly 40 % of 25-year-olds now have an investment account. That's up from just 6 % in 2015. And lastly, households with incomes below the median now account for one third of JP Morgan customers. And those customers are moving money into investment accounts, one third of them.

6:56But that was up from 20 % in the 2010s. And then of course, Ben points out that we've gone from housing being the biggest investment in someone's portfolio to the stock market. Just look at the increase in stock holdings for people under the age of 40. Besides that being an insane chart of a 300 % increase since 2020, here's my big takeaway. The data may not actually matter. People are feeling pain. Grocery prices are too high. Electricity bills are skyrocketing. Rent and home prices are no better. It is so bad out there. The New York Times, the big bad New York Times. They ran an op-ed recently arguing that we should implement price controls on various products and services to provide relief.

7:36There is madness everywhere you look. But let's bring it back to investment assets. All this pain in the regular economy, it's unlikely to pull down stock prices. Companies are producing more profits with less employees. They are becoming more productive, more efficient, end more valuable. You can fake forecasts and you can fake a lot of stuff, but you can't fake 30 % year-over-year growth for a trillion-dollar company. In terms of Bitcoin, we just got two days straight of the fear and greed index sitting at a score of 10. It's a scale of 1 to 100. The score was 10. It's very rare. Quentin Franquos, he shows that the average performance when the fear and greed drops below 20.

8:14In one week, it's up 5%. A month later, Bitcoin's usually up 20%. 20%. And three months later, Bitcoin can be up 62%. So what's going to happen in the future here? No one knows. But the data is telling us that the recent market volatility is much less likely to be the start of a big recession or a big market crash across all asset classes. We may see lower prices for longer in certain sectors or in certain assets, but the global bull market is still underway. Who cares what your neighbors say? The challenge for investors moving forward is deciding whether their investment portfolio is optimized for the long term or not.

8:47If you're sitting there and you're sweating short-term price movements, you may be holding the wrong assets, or you may just be positioned incorrectly. And of course, if you got leverage, leverage can be the demise of even the best investor. So here's my suggestion. Everyone take a deep breath. Relax. If you're long-term oriented, everything is going to be just fine. The bull market is still underway all around the world, and a lot of assets are going to keep going up and to the right. I sat down with Jordy Visser this weekend and I asked him, what are the areas that you're looking to put capital to work?

9:21The next big areas for investment return. Here's what Jordy had to say. So let me go start with the stock market and just say two things. I do believe international stocks are going to outperform U.S. stocks. One of the themes that people should be paying attention to when you go through a year where. AI was the dominant theme and we own it. So go back to kind of the internet, go back to the post 2009 period with mobile. This was not a great year for the Mag 7. They've underperformed Europe, they've underperformed China, they've underperformed emerging markets. That should be something people should be thinking about.

10:03Normally when tech is dominating, the S &P is outperforming. NASDAQ is outperforming. That didn't happen this year. And you can try to go through this. It's not that American exceptionalism is down. I just believe that we are building out and spending an enormous amount of money. And rather than call it a bubble, I believe that this has been, we're building something out, which is actually going to democratize it, which means the people who get swallowed up by it are the people who are doing the building of it. They don't actually monetize it to the degree that they did on the prior thing. That is something I believe in and we've talked about it.

10:37So in that, I don't think it's tech stocks. I don't think it's the Mag7. With inside equities, I think if people sit back and go, humanoids and longevity expansion, those two things at some point, they go from being outside the front mirror, driving a car and you're like, hey, I can see the humanoids now. Hey, I can see life expansion. Those are the things you want to invest in when they're just getting on a long-term drive and I think they're going to enter next year. So I still think international stocks within equities. I think Bitcoin, again, because of the tokenization rise next year and because of the Clarity Act, I just think with sentiment this bad, far worse.

11:16Like S &P sentiment's nothing compared to where Bitcoin is. So you said it feels like a crash when it's up 5%, 6%, you know, for the year. I think that'll be the best performing thing. So those two things are the areas that I would – or three things I would focus my attention on. I was pretty impressed with Geordi's answers there. Humanoids and longevity. I'm a big believer in both of those trends, and I think that they will drive very asymmetric returns moving forward. Geordi's incredibly smart, and I wouldn't bet against him. All right, this is a crazy story. So Call of Duty Black Ops 7's video game, it uses a large amount of AI-generated artwork, according to this person.

11:51And it uses that AI-generated artwork instead of human-crafted art. Duh, technology. The AI can do it. Of course, it's going to do it. Now, Ro Khanna, politician out of California, he don't like this. He says, we need regulations that prevent companies from using AI to eliminate jobs to extract greater profits. What? Or to set these companies need to have a say in how AI is deployed. What? They should share in the profits. What? And there should be a tax on mass displacement. What? I don't know what's going on here, but David Friedberg, he said what everyone was thinking. David responded and said, what if the AI creates, enables, or unlocks new higher paying jobs?

12:30By trying to prevent organizational evolution due to technology, you are limiting technology's ability to create more value for workers. If you had done this with the emergence of the tractor to protect loss of jobs on farms, we'd have very expensive food, no industrial revolution, and a shitty standard of living for workers. If you had done this with the emergence of the automobile, we'd have lost the economic explosion that arose from highways, lower cost transportation, and countless networked industries. Now, if you had done this with the emergence of the computer and the internet, his entire district, Ro Khanna, would still be based on an economy of oranges and plums.

13:06What a great line. I mean, that should go in the hall of fame of bangers. Now, David goes on to say that humanity's ability to compete, organize, and carry itself forward is a magical miracle, magical miracle. In every truly free society, tech evolution has improved the lives of absolutely everyone. True fact. In every society where a government stood up to create barriers and gates to tech evolution in the name of workers' rights, standards of living went into a freefall. That is very true. Just study history. David then goes on to say to Roe, your view is Luddite at best and authoritarian at its heart.

13:42Limiting freedom of choice, controlling the rights of workers and capital providers is the core activity of socialism and it will cause unbelievably unintended damage. Well-intentioned, sure, but examining the consequences and nth order effects, it's clear how this model deeply harms workers, employment standards, wage growth, and more. David then urges Roe to deeply study the social and economic history of technology evolutions. He says, speak to folks in your district and avoid the socialist trap that the Democratic Party seems to be swirling into. Now, here's the thing. David obviously has a great point here and history is on David's side.

14:19I don't wanna pick on Roe Khanna. I always thought that he was a pretty rational, kind of centrist type person. Maybe this is just one bad take that he has. But what I do know is that we do not want to have the government or politicians trying to prevent private companies from pursuing profits by using software. Again, if you want to say that they're breaking the law, that's one thing. That's not what's going on here. What we're trying to do here is we're trying to say that the humans should be protected from software. I don't think that's the right way to do it. The free market obviously is going to have private companies chase efficiency.

14:51Efficiency leads to productivity. Productivity leads to profits. The whole purpose of a corporation is to pursue profits on behalf of their shareholders. So that's what the companies are going to do. That's what they should do. On top of that, if we apply the exact same framework that Ro Khanna is saying private companies shouldn't pursue, and we apply it to his office, he has less people working there than he otherwise would if he didn't use software. So software has automated away jobs in Ro Khanna's own office. You see, all of a sudden, I'm going to roll it back. Should we get rid of electricity, the internet, computers, and much more?

15:24Of course not. And so let's all return back to common sense. The trend of AI is that we are going to automate everything that we can, and we can go ahead and we can retrain workers, get them into better paying jobs and more productive roles. And that is better for the person, the company, and for the economy. That is creative destruction at its best. And that is what capitalism, democracy, and the United States of America was built on. That's it for today's show. Thank you guys so much for watching. Please remember, we got 38 ,411 subscribers on YouTube. Please hit the button, subscribe today, and I'll see you guys live tomorrow from the desk of Anthony Poppliano.