THE 2027 ECONOMY: Why You Need to Prepare NOW

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SPEAKER_2 (0:30)

Star Wars The Mandalorian and Grogu is now streaming on Disney Plus.

Dan (0:36)

What are you waiting for?

SPEAKER_2 (0:37)

Hop on. The must-see galactic adventure comes home on Disney Plus.

Michael Zuber (0:42)

This is the way. Our only chance is to work together.

SPEAKER_2 (0:47)

I like this kid.

Michael Zuber (0:49)

Always wear your seatbelt.

SPEAKER_2 (0:52)

Star Wars The Mandalorian and Grogu now streaming on Disney Plus. Rated PG-13.

Michael Zuber (1:02)

All right, folks, you know that I think the US economy is in for a rough start to 2027 Frankly, I think the next nine months are going to be ugly.

We have what I believe is inflation on the increase. We can talk about the report last week, but the numbers get ugly from here. We also have wage inflation coming through the service sector, which is only going to get worse. We obviously have talk of this war with Iran going next level after the midterms. We have the AI debt bubble potentially exploding now or in the near future.

We will have a negative wealth effect. We can also have implications of the cost of token maxing showing up in earnings report. Dan, I don't know if you watch the Daily Financial News, but I am scared for the next six to nine months. I've been recording contents every day since 2018, and this is the first time I'm publicly concerned about what is coming. So please either A, make me feel better or help validate what I'm thinking.

Dan (2:04)

Well, to make you feel better, things always turn around at some point.

Michael Zuber (2:11)

The sun will rise.

Dan (2:13)

All day bottom.

Michael Zuber (2:15)

Yeah, yeah.

Dan (2:16)

But between now and then.

Michael Zuber (2:18)

It's got to be bumpy, I'm afraid.

Dan (2:20)

Yeah, you're not, I don't think you're too off base with that. What you're thinking? I mean, things are starting to, right now, the market is just consolidating at the highs.

So it really, except for Friday, it really hasn't, and I've said this before, it hasn't really shown any panic going on. The VIX has been really low until Friday. Until Friday.

Michael Zuber (2:42)

Until Friday.

Dan (2:43)

VIX hit 20, 1999, and on Friday.

SPEAKER_1 (2:47)

Okay. All right.

Dan (2:49)

If it goes over 20 and it stays up there, then the panic starts.

Michael Zuber (2:53)

Okay. All right. Well, good news is, the futures will be open here in a few hours. We'll see if there's follow-through.

The other rumor on Friday was there was a hedge fund that blew up, but I haven't seen anything over the weekend documenting that.

Dan (3:05)

I haven't seen anything about that either.

Michael Zuber (3:07)

Okay.

Dan (3:10)

Also, and I've mentioned before, just historically, the Monday after options expiration, which was Friday, is usually the worst day of the month.

Michael Zuber (3:18)

Oh, great. Okay. All right. Well, we got that to look forward to. Well, I don't know where you want to start. I got a list of five scary things. Why don't we start with inflation? Because we did get a print, and you and I were texting earlier in the week. You nailed it. We both did.

CPI came in hotter than expected. Chlor came in much hotter than expected. And then, oh my goodness, PPI? That thing was nuts on Wednesday. So what did you see in inflation?

Dan (3:44)

Yeah, I agree. I showed it last week. I can show it again. What's coming?

The worst hasn't happened yet.

Michael Zuber (3:51)

That's exactly why I think the next six to nine months are going to be ugly, because the worst hasn't happened. We're going to print a four-handle next month.

Or more. Or more.

Dan (4:00)

Yeah.

Do you want to show that? Why that's going to be?

Michael Zuber (4:04)

Yeah, go ahead.

Dan (4:05)

Yeah, it's just... It's not just a guess or an opinion.

Michael Zuber (4:09)

It's almost math. It is math.

Dan (4:11)

It's math, right. It's the actual data. All right. Let's see.

You see that?

Michael Zuber (4:21)

Right now, I'm looking... Yep, it's up. Yep.