tv Making Money With Charles Payne FOX Business October 14, 2022 2:00pm-3:00pm EDT
mild one which is what we hope for going in to next year. everyone is in one of those camps. neil: one of my not so favorite memories when you were subbing on this show and -- connell: roper that? neil: 48 minutes. connell: he comes running through the door. neil: connell doesn't brag but he is as you see him on air, same thing, exact same person in person. me? i charles: i remember when you came running back too. i only wish you closed your robe in the back. that's the only problem. neil: oh, come on. charles: thanks a lot, neil. good afternoon, everyone. i'm charles payne, this is " making money" breaking right now, well, no repeat of
yesterday's miracle session as the market really couldn't find that spark after yet more bad news on inflation but we're still going to un unpack what was one of the most remarkable sessions folks, looking for clues about what will it take for sustained move higher and i have ed yardeni with me and ryan dietrich here and historic ramifications and new support point for the s&p and it was the admission that rung a whole lot of bells. scott martin is here to respond to all of the haters that $28 lunch at taco bell that made him famous and we're between an economic rock and hard place, brian wesbury and the economic whirl wind we can't get out of plus what might be the biggest trigger for relief rallies it'll surprise you all that and so much more on "making money". so, after yesterday's session,
i'm reminded of that classic question, from mother goose. how much would could a wood chuck chuck if a wood chuck could chuck wood? we put the move to the downside, virtually impossible even under great market conditions and a runaway bull market to come back to being down but 2022 coming back from 2%-plus, wow and by the way on disappointing news it's like a fairytale. yet we saw the fifth-best and fourth-best reversals in market history for the s&p and nasdaq 100 and nasdaq composite in history. now, evidence suggests a lot of it may have been short covering, now there's also since that the cpi report might be flawed as well and you start to hear more about that, so it'll be nuts to continue to hold it in higher regard or later hold the market back, of course the flawed issue i'll ask brian wesbury about that later, meanwhile there's a universal agreement that the results of
the process means right now owner equivalent rents and rents in general are behind. now you could debate whether it's six months behind or a year behind so that means yesterday's report does reflect a sizzling rental market that has become cold so there's that. then of course there's the yield curve, two year on fire, folks. it's just parabolic yesterday. we're more inverted than we have ever been at least in this cycle the focus many say shouldn't be on inflation, but how deep does the recession go? joining me now to help unpack all of this yardeni research president ed yardeni. ed, we are really starting to get mixed messages from the markets and since the terminal rate yesterday goes to almost 5% but you have the two year erupting so much higher than points perhaps deep recession. meanwhile the stock market show ed a little bit of moxy, you know, some wrote it off as short coverings, some said it was the algorithms but it is a reminder that this market can be explosive to the upside, once we get the all clear, but when will that be? >> yeah, we also had a
remarkable ratio not to the upside but to the downside last week, it was back under .60, and i think just nobody has been, nobody is optimistic, nobody is bullish, a lot of bearishness and so i think that's part of the reason why the market did so well, but as you said, it was a combination of probably technical and fundamentals. i think a lot of people were very nervous about the cpi and started to hedge their bets on their portfolios and as soon as the cpi came in worse than expected the market took a dive and i think a lot of those hedge s were lifted and anybody who was short with no hedge at all i think had to cover, so i wouldn't get too excited about what happened. in fact, it's largely pretty impressed with what happened and think that it may continue to move here, but from a fundamental perspective we got more fed tightening and i think
the fed is going to do 75 basis points in november, but i think the other thing in the market maybe starting to do is anticipate that we're getting closer to the terminal rate which i think is going to be somewhere between 4.5 and 5%. not that far off if you do two 75 in a row. charles: and i remember when this whole thing began i was arguing for 100 basis points. i think 100 back in march now looks like it would have been a move. we both were sort of, it doesn't make sense, right? in the meantime though, to your point. we cannot get out of the shadows inflation. this morning the michigan sentiment report one year expectations on inflation spiked to 5.1% the street was looking for 4.7%. you know, i started to think okay, what keeps fueling this and for months, i had so many experts come on particularly economists saying bragging really about the 2 trillion, at one point 4 trillion in excess savings but is it now a blessing or curse if it keeps stoking inflation? >> well, yeah, i think that is
a very good point. the reason we have had this explosion in inflation over the past year is because of excessive fiscal and monetary stimulus and we all know that at first they were very helpful in getting us out of the economic caused by the pandemic, the politicians like t overstay their welcome when it comes to spending money and that's exactly what they did last year and suddenly inflation exploded but i see what you're saying. clearly economists including myself pointed out there's over a trillion dollars in excess savings and that's not really a good thing, because it could either go into growth or it could go into inflation, and right now the data suggests that it's going into a little bit of both and it'll be much better for just growth and not into inflation. charles: its been tough, ed, but really i appreciate all the help you've given to our viewers thank you very much. >> sure. charles: see you soon hopefully. also, now want to bring in ubs private wealth management financial advisor sarah ponzak.
what's your takeaway yesterday from that session, all the ups and downs, the crazy gyrations. what did you learn from that? >> well, yesterday was an erratic day. like ed yardeni just eluded to sentiment was pessimistic beforehand and we saw the s&p fall six straight days back to the lows of november 2020 giving back half of the post-covid game but all it teaches us is that one markets are erratic right now, and that investors mentally are going to have to learn to cope with a bumpy ride, at least for the rest of the year, and in the short-term, because as you were just discussing, until we see inflation cool and until we see the labor market cool, because it's still extremely tight, the feds going to continue on its path and then in the face of that it's really difficult to really believe in a truly sustainable stock rally at least for now in the near term. charles: what do you think of earnings season? a lot of banks reported today,
jpmorgan, morgan stanley not so much. where do you think, what role would this play with respect to trying to get some equilibrium in this market? >> so right now it's really all about learning about the macro, so what are these companies saying about the consumer, what are they saying about the health of the economy. typically the banks are really great place to take that away from. clearly, this year, as we've seen interest rates rise we've seen the p and the price earnings ratio, come down. now the million dollar question is how much are we going to see the e and earnings contract but what i will point out is that we had seen earnings estimates really come down substantially heading into this earnings season. if you look at consensus earnings estimates from an a it's hads heading into third quarter earnings season, they are still predicting 2% growth but down from 10% growth expected at the denuclearization ing of the year so will they let easier most likely for companies to at least beat what analysts are expecting , but those estimates have come down for very good reason considering the macro headwinds out there really real right now.
charles: it's only 35 but so far so good i think 3.5%, unless you take on energy. so, before i let you go, i need to know how are you advising your clients and trying to navigate this? >> so clearly its been a challenging year. tactically our chief investment officer has been saying shift a little bit more to a defensive posture if you'd like, look to value stock, defensive areas of the stock market, consumer staples, healthcare, more structurally with our client's portfolios we've been incorporating some alternative investments which have really acted as a pretty great buffer so direct lending, private credit, private real estate but we're certainly not doing at least for our clients who have a longer term time horizon is not selling. we're actually at a point where we're saying maybe it make sense if you have cash on the sidelines, to start slowly averaging into the market here. both on the stock side and on the bond side because yields have risen so drastically this year but on the stock side, look. no one is going to be able to time when this bear market is going to end but what we do know is that if you look at the average bear market, going back
in history to the 1940s, on average for the s&p see a decline of 35% that lasts about 16 months so things could get a little bit worse but if you look at where we went to, following that, where were stocks after they hit and down 20% threshold a year later, well on average they were up 12% a year later and two years later up 23%, so on and so forth, because typically, stocks rise, so be a buying opportunity if you're a long term investor and if you can take that longview it is really beneficial. charles: i think a lot of people will learn what their pain threshold is the hard way. joining me now chief investment officer cameron dawson and cameron, i read your note that you think the market is a coiled spring, but not for people to chase just yet. what uncoils this spring? >> that's a great question, because i think that we can see just a little bit of good data be enough to give relief to
this market, meaning that it won't take a lot given how short positioning is for the market to rally. now that doesn't mean that a market rally reflects the true underlying fundamentals, and that's the reallies on that yesterday and today has taught us which is that bear market rallies happen and they can be very violent, but you have to remain disciplined. when the market gets very over sold, make sure you aren't too short, not overly bearish, not overly fearful, and not selling into that oversold, that as you rally, you want to make sure that you're not chasing the rally, and that as you hit resistance, that you're actually looking to trim risk. charles: so but i mean, is it still, can you still trim risk, the s&p is down 25% nasdaq is down over 30%. these small bounces though, you're still talking individual losses that are so magnificent. if you haven't sold even your favorite great names, quality names that, you know, companies that make $200 million a day, you're talking about a hell of a hair cut that maybe someone might regret just in a few
months. >> well exactly, which is that we don't want to be selling into just one day of the bounce, which is that we do think that there is resistance, that we could reduce risk at 3,900, because when you get to 3,900 at $200 a share in earnings which is where we think earnings will shake out next year, that's about 10% down from this years levels, that means you're trading at 18 times. 18 times really would only be justified if you're in an environment where the fed has already started to pivot and that they are starting to ease, so if we get up to that 3,900 maybe a little bit higher -- charles: i gotcha then something like that a more sustained rally , where a lot of people may start to pile in thinking the coast is clear, so like the june rally. >> exactly. charles: but you mentioned fundamentals. in a bear market, the bear market can also makeovershadow fundamentals. in other words we know that new lows begot new lows, so how do
you, what are you using? what are you looking at balance sheets, income statements, what are you looking to sort of say i'm going to move away from price for a moment and just look what i think this company is worth on an intrinsic measure, however you measure that because this is what people are grappl ing with. the true worth of what they own right now. >> it's like warren buffett is what you said. price is what you pay the value is what you get so how do we determine value when we do not know the outcome in the macro? and i think that what we're looking for is two key things that we're screening. we're looking for high return on invested capital names, so these are names that for every dollar that they put into the business, they make a lot of money, and those names typically have strong cash generation, so that's on the fundamental side on that front. then on valuation, we want to look for names that are trading at discounts compared to where they were pre-pandemic. charles: i gotcha. >> we do not want to anchor to pandemic-level valuations because that was the bubble. charles: great point and you are buying something, right? there are some areas that you
see opportunity right now. >> exactly, because what we're doing is being disciplined on big down days to find that opportunity in the crown jewel names, and what we're also doing is looking outside of what led in the last cycle, because we think that there is a chance that what led in the last cycle doesn't lead in the next, so tech and growth may not actually be your winners in the next cycle, so look to those areas that have been really left for dead for the last decade, materials industrials, energy, and this is not to say that those are the favorite sectors but there are diamonds in the rough in those areas. charles: i caught that. materials, diamonds in the rough you tied it all together and i also caught could you jewels instead of high-quality is replaced by crown jewels. i love it thank you very much but that's great stuff and a lot of people debate what will lead us out of this and many think it won't be that. thanks a lot, cameron, appreciate it. of course its been a wild week, day, month, year, its been tough
it's times like this you really got to understand what's happened historically. no one, and i mean no one better than ryan dietrich, we're going to talk about october. can it still be a bear market killer's reputation is given it also did you catch the open? me and my fellow colleagues rang the opening bell at the nasdaq in honor of fox business network 15th anniversary. it was a great moment want to thank all of you viewers for making it possible. we'll be right back. ♪ celebration, let's all celebration and have a good time , celebration, we're gonna celebrate and have a good time ♪ e how liberty mutual customizes your car insurance so you only pay for what you need. showtime. whoo! i'm on fire tonight. (limu squawks) yes! limu, you're a natural.
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charles: i gotta tell you yesterday's session was so exciting, but i also have to admit that we're 20 years ago i would have been standing in my office chair with my rally cap on backwards. yesterday i kind of just watched a little bit of sinicism. you know, it was impressive but you had the feeling maybe it was a flash in the pan, i'll bring in ryan dietrich. ryan, i'm typically in rose colored glasses kind of guy but like everyone in 2022 its been a brutal year, and so we got to talk about history because this is where i lean on you to kind of help me see the light, so to speak. what does history tell us about these kind of sessions, down more than 2%, to rally back and
close up more than 2%. they've been rare, but have they had impact? >> yeah, charles thanks for having me. good job ringing the bell this morning. today is my 16th wedding anniversary so i better say happy anniversary to emily before i say anything else here but you mentioned yes, yesterday was a wild day. such negative start to the day so i thought what in the world just happened. days actually finish more than 5 % off the lows and actually made a 52 week low along the way it's extremely rare and here are some dates for you charles last time we saw, march 2009, late december 2018, and then march 2020. believe me small sample size, but that's the type of stuff you tend to see when markets are forming a low, so i note today is kind of ugly, friday has been weak lately. still yesterday was pretty optimistic, i think, for a year we've been really beat up. charles: i mean, small sample size, for march 2009, march 202. those are points where you
really wish not only were you in the market but that you were loading up on the market. of course like a lot of things held yesterday, that were intriguing right? people pointed to certain things what was the rebound off the 50% retracement from this pandemic rally top? what does that tell you though about how much dry powder there is out there that something like this happens people say oh, we held at 50% retracement point and now i'm going to pounce. how much money do you think is out there because i feel like it happened so quickly and there's a lot of folks eager to get back into this market. >> yeah, you're right. so 3,500 is a 50% retracement of that big bull market so we knew that coming in the. buyers did step in. you had a great conversation with ed a little bit ago talking about overall market sentiment really negative put the call ratios flows all that stuff but charles one other thing really cool. on june 16, summertime lows, about 200 stocks a new 52 week low in the s&p. earlier this week, less than 100 stocks were making new lows even though the s&p was making new
lows. what does that tell us? less stocks making new lows, that's another clue another signal another sign that you tend to see markets are forming a low so there is internal strength you wouldn't see if you looked at the price action. charles: so is there a chance still then in october could be the infamous bear market killer? >> yeah, we think so. i know couple weeks ago i talked about six out of the last 17 bear markets did end in october. two worst starts ever, this year was the third worst start both terrible bull markets ended within the first two weeks of october so we would not want to bet against it and mid-term years, the forth quarter, extremely strong seasonally. again, something wouldn't want to bet against with all the one- sided bets and the negativity, the guests before talking about the negativity we see it but if we can get any good news the expectations are low and that's how bounces happen. charles: and i've got to tell you ryan, we do these hits people give you some grief afterwards but i think when it's all said and done, you're going
to have the last laugh, so i appreciate you coming on sharing history with us because it does have a way of repeating itself especially in the stock market. happy anniversary, by the way. >> thank you. charles: all right folks coming up, his $28 taco bell lunch has become the most famous lunch of the year. its caused a firestorm of social media even aoc mocked it. scott martin is here. he's brought receipts, folks, will high inflation stop people from spending money this holiday season, a retail expert jan rogers is here, he's got something on the outlook can't wait to hear it, next. ♪
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a rock and this is on the narrow straight, and this was on a whirlpool on the other side. these days i've got to be honest i think investorrings must feel like the sailors on the one side run-away inflation on the oater side potentially very deep and painful recession sadly on main street many people are feeling both i want to bring in chief economist brian wesbury. brian, we've had three of the largest increases in annual inflation in the past four months. at the same time the markets flashing recessionary signals. what do economists call these sort of economic environments? >> yeah, well first of all, charles, i guess if you just look at the data, stagflation, right? we use that word from the 70s but really, what i've been telling people is that we live in a completely distorted world. remember, we locked down, we subsidized all of the goods spending, everybody bought bicycles, pool tables, boats,
anyway, we bought all the goods but we closed down the services and now, we're correcting from all of that, and at the same time, we printed way too much money, and that's where all of this inflation is coming from, and then i think the federal reserve and a lot of other government officials are completely lost about how to fix the inflation, and what they think is you just have to kill the economy to destroy demand to kill the inflation and i think all of this is just a recipe for disaster. charles: i really do hate when they say the fed only has a blunt instrument. for a long time all he talked about was this magical toolkit and they keep inventing new instruments golly you got all of the phd's working there, you can't make a screwdriver? everything is a mallot. let's talk about the cpi number for a moment because a lot of debate in the last 24 hours saying for the most part the notion that rents are just miss calculated, right?
and we're seeing right now it's old. some say it's six months old even a-year-old. here is the thing though. if most folks agree that the calculation is incorrect and that it doesn't capture what's happening in realtime and rents doesn't the fed know that as well? >> right. yeah, they do. look, charles, i could beat update a, because none of it is perfect; however we try as hard as we can, and rents include the cost of taxes, the interest rate increases, the rebuilding and repair costs. rents will include all of that, where the home price might not, and so i kind of agree with the way they do that but then we have the atlanta fed, cleveland fed, all these feds picking out different things. let's take median increase. let's throw out the high ones and the low ones. bottom line is we have inflation , and somebody said to me the other day, hey, my pizza cost more and i'm like no, your
pizza doesn't cost anymore and they looked at me like i was crazy. i said what it is is your dollar buys less. inflation is when the currencies value falls relative to goods and services and the way that happens is we print too many of them. too many dollars chasing too few goods is what inflation is. charles: so i'm looking earlier this morning at the atlanta sticky inflation, sticky price cpi, and it seems everyone keeps saying it's all about sticky inflation but it's coming out pretty quickly it was flexible inflation going up but just feels like we can't catch a break from either one of them. where is the real issue here? which one is going to take longest to unravel? >> yeah, probably the flexible one. i mean, but the point is when you print, i guess there's all kinds of different measures of inflation. there's the median cpi, the ppi , all kinds of different measures, and all of them are
significantly higher than where we were in 2020 and that corresponds perfectly with the massive increase in the m 2 measure of the money supply, and that's where this inflation is coming from, and until it goes away, until we absorb all of that money, in higher prices, we're going to have inflation, so it's probably if i had to guess what the real numbers are, it's probably six or 7% this year, at least four to five next year, and probably 4% the year after that. the fed right now thinks inflation is coming down to 2.8 next year. i think that's a complete pipe dream. we have printed too much money and we have to absorb it. charles: yeah, although you might be underestimating how much damage a mallot can do in the right hands because they are swinging it like thor. brian thank you so much always appreciate it these conversation s. of course, it's a lot of headwinds facing consumers these
days, and it's reflected in the retail sales number. september came in unchanged in nominal terms but in real terms, adjusted for inflation now 0.7% , onset with me jay rogers n effen, worldwide ceo and you, know you just how long, how long would it be before like i've got the results in front of me just in nominal numbers here, but it feels like how long, i think like to what the point that brian just made, how long would it be, could a business stay, retailer stay in business if it says spend more get less something to that degree because that's what we're doing. we're spending a lot of money but obviously, it doesn't go as far as it once did. >> you know i was in the business during that last stagflation period and i'll tell you what we saw. we saw people trade down all the way along, but we didn't see them quit spending until they didn't have money to spend and i think that's what we're seeing right now. the consumer right now is in that whirlpool and "the rock" situation and they are now cruising right down that little
lane between them. that can't go on forever, but right now, they are still spending. they are only buying about as much as last year but they are spending 8% more and so far they are putting up with that. and they are still trading down. charles: okay. >> spending way too much from their point of view on food, but amazingly, they are still spending a lot on apparel, accessories, jewelry, cosmetics, because tht to look good and go out and they are spending money on travel and that's going to keep happening too until they run out of money and so far they haven't. charles: that's part of the you only live now, you only live once kind of yolo thing that permeates the younger millennial -type. i do want to ask you because on friday we saw consumer credit the largest single jump in history, the third largest jump in credit cards in history and what's fascinating is all these trillions of dollars distributed , the free money so to speak, we set a record in debt, the bottom 90% of
households from june of last year to june of this year. it just feels like we're a ticking time bomb. we got all this free money, went to the mall, bought a couple pairs of sneakers saw another one we liked so we put that on the card. we can't stop spending. americans can't stop spending but it's not unlimited. you hit a brick wall at some point. >> you always do. there's always recession out there some place and always the moment when the consumer tips, but we have not seen it as of yesterday. as of yesterday we're still getting everyone i talk to says i'm really worried about what's going to happen but my consumer is still buying and things seem okay and they are willing to pay the price and we're not getting that much resistance not clearly you're seeing markdowns but that's mostly because we're washing goods. we don't have a supply problem. charles: so i'm going through the numbers, right? so on the upside, food obviously to your point people feel like they are spending too much for clothing, food again, food and beverage so on the downside though. building materials, like
sprucing up the house, sports and hobbies and books down big. furniture, you know again we like to electronics and appliances down big, and it feels like all the stuff we, they gave you a zest for life we put on the shelf. are we getting ready for a darker period in life which is stocking up on food and it just, does this reflect the consumer that's getting gloomier? >> no. that's all the stuff we're done with. we're done fixing up our house because we did it all during when we hid in our house hibernating and now all we really want to do is buy some bl ing, put on our face and go do fun stuff and get on an airplane to do it because right now, tickets really expensive and everybody is still buying them, people are traveling. they aren't going to stop that until that credit card runs out, or they get nervous about their job. once those two things happen they will hit the wall. if they can bring miraculously inflation down before that happens, we'll be fine.
if they don't, some point in time, bang, we do hit the wall. not so far. charles: listen my nephews young folks in my family they are right. that's what the they did. they travel, they buy expensive things for themselves and they live life for the moment. >> luxury still really good. charles: luxury is good. great seeing you in person. talk to you again real soon. all right folks coming up facebook switches to meta. wow. they may want to go back to facebook. we'll show you a chart and by the way you know how many people are on meta? we got more people on the studio in the metaverse right now. my next guest though, let's just say he always wanted to be famous and now he is $28 lunch at taco bell has scott martin getting raked over the coals but he has the receipts right after the break. ♪ ♪
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charles: so, my next guest, he's old enough that when he was growing up he wanted to be a juke box hero, right? and yet, he's still young enough that he has longed for social media superstardom. and well, he's got it folks and it all stemmed from an appearance on neil cavuto. >> want to know how bad inflation is? yesterday i had a nice lunch at taco bell that cost me about $28 for lunch. people need to pay for those things. charles: [laughter] so financial twitter went crazy. even taco bell check this out posted a clip and so for , they dissed him at least 72000 likes sadly not one nice comment joining me now, kings view wealth management chief investment officer scott martin. scott? my money. >> i'm very hungry. charles: you know, we've got a hot dog eating contest in new york every july 4. i might have to enter you in
this thing. you posted a picture of your receipts to prove that it was indeed a 28 bucks, right? >> yeah, i took the order that i did and basically put it in the app and took a screen shot to show everybody because that's what i typically order or there abouts and it adds up. what's funny is theres a couple things going on. one is people thought it was a lot of food. it's actually not that much. it's very expensive food, there's a couple tacos pushing like almost six buck, and secondarily, people are like oh, it's 25 not 28. big difference, number one number two, hello, sales tax in chicago about 10.25% bangs you out at about 27.46 so it's all there. charles: were you surprised? you did get some love take a listen. >> he ate $28 worth of taco bell and we haven't heard from him since. you can't eat $28 worth of taco bell on a workday. i bet he called in today for fox business. you can't do a live hit for $28 for taco bell and your stomach
like that. somebody check on that man. you got what they call it? a wellness check. yeah, do a wellness check when you ain't heard from your loved one the police go by the house right now. charles: [laughter] >> i was laughing at week at that one. charles: did the police knock-on your door? i mean -- >> that guy at least cares. at least he's constructive and he cares and thank you for the concern, man and i'm doing fine. what i did though is i didn't have breakfast that morning and i had a late dinner but that was my lunch indeed on tuesday and guess what i'm going to go back eventually to that same lunch and maybe we'll do it on tv next time. charles: so next time you go though i did see , in fact i got an e-mail today out of left field all about your venture, and i get so many things but they say you made some mistakes. that you could actually save five bucks. you didn't bundle the stuff right way. i saw you had single tacos so make sure when you go back you order almost the same stuff but if you're smart about the combination packages save yourself five bucks.
>> i was in a hurry, a rush, picking it up and i thought of something else charles. how about the folks that can get me that combo, or whatever the combo deal, we can donate the rest of the money to charity or something like that. everybody could do that, add it up and help the world as well as help our stomachs. charles: yeah, and by the way before i let you go i have to ask about the market itself. you've been pretty optimistic. listen, take advantage of this dip, longer term people will be okay with that. you still feeling pretty good about all that? >> i am. and we're just dollar cost averaging in, charles. dark is before dawn. every pullback in the market every lower gap or lower leg lower increases that future expectation of return. that's what we're banking on. markets are positively sloped. i think the fed is going to pivot sooner than later and the economic data is going to get worse sooner than later. the market will rally ahead of that stuff and that's why you should be in the market buying when it's down. charles: by the way scott you should feel honored. flattered a little bit about all the heat you took and if i would have posted it or said i spend
28 bucks at taco bell nobody would say, yeah, it sounds about right so you should feel good about that, my man. [laughter] >> i'm willing to show people so next time put it on camera and see what they do maybe they will be nicer this time. everybody has their own opinion. charles: aoc dissed you too. take her with you. >> i told her i'd take her to lunch and she never replied. something about cannabis i forget what she was talking about. charles: with that kind you might need cannabis afterwards. [laughter] i'll see you soon, my man. >> okay, man. charles: coming up, my takeaway on what could actually trigger a series of relief rallies that maybe you want to trade, also meta sunk billions of dollars and bet the whole company on the metaverse, but is anybody in it? wait until you find some of these shocking numbers, we'll be right back. ♪
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and have historically low risk. call today to request your free bond guide. 1-800-217-3217. that's 1-800-217-3217. charles: you know, i've got to tell you yesterday, a few things moved as fast as that market reversal yesterday, but something is rivalling that in the uk. liz truss, the uk prime minister , what's happened so far with her is remarkable.
here is part of the timeline. so september 5 she gets the job taking over for prime minister boris johnson, she promises this pro-growth government, right? she puts the gas, she puts a gas plant in place and that upsets conservatives because you don't really do that as a conservative but then she concedes a mini budget and that upset the liberals then she has her chancellor said okay this is a concept you put it together. they announce that the market swoons, bonds surge, the pound goes into free fall, but she says i'm sticking to my guns. then the bank of england they start to panic and they buy bonds this week they said we're not going to buy after friday and they draw the line in the sand. truss gets rid and brings in the same guy she beat for boris johnson's job. wow. those brits, never a dull moment figuring it all out ann berry. what the hell is going on? i've got the former ex-
chancellor, his resignation here, and the first part is, you know, of course i've accepted but he's pretty upset because he said listen i kind of did what you told me to do. >> the classic scape goat story he lost it less than five weeks so this was a very quick turn around. look its been a disaster the pound tanked and that was the runoff pensions. pensions, which is a really bad place so this was necessary and a sad outcome but there was no other choice. charles: what happens now, because at some point, i think her thinking is as a typical conservative is hey, what all this government spending and by the way is not the uk, we're dealing with it here. we have runaway inflation, highest in 40 years and we don't know how to get out of it. at some point you want organic growth, organic investment. when the government gets too big and start to write checks there is accountability and we're all living through it right now. is the problem you can't try to
change this abruptly at this moment? what's the real issue here? >> my take on this charles while you have the central banks trying to fight inflation we can debate whether they moved too slowly or not aggressively enough, you can't have fiscal policy going massively out of whack, you can't have massive fiscal spending. i think that's going to be -- charles: we're going to do a trillion for student loans and so-called inflation reduction act. that's initially spent money reduces some inflation years from now, so we're doing the exact same thing here. >> so that's the big debate. i think that is the case in point. the mid-terms are going to be a bit of the equivalent point is will the electorate in the u.s. take a step back and say i'm feeling the pain on inflation, yes i want to see fiscal spending to go up to help those feeling the pain but you can't at some point. charles: is that also why our markets are acting a certain way even though we don't have the same, i know somewhere like 44% of the uk housing is variable loans.
ours is 1% we're not worried about that but we do have pension issues and things like that. before i let you go i want to switch subjects because you got another expertise here and that's the technology ipo person and vc person. you wear a lot of hats. >> yeah. charles: meta. so i'm reading about decentralized land which was hot at we could do is talk about people spending million dollars on the metaverse homes and live next to snoop dog so apparently this $1.2 billion metaverse company only has 30 active users what does that say about the metaverse and what does that say about these private markets that you can get $1.2 billion valuation at something like that >> what's interesting to me charles is the private markets haven't caught up yet. that was an old valuation. if that business were to go raise money today they aren't raising money at a billion dollar valuation. you and i talked about meta in the past the public company formerly known as facebook. $15 billion has disappeared to invest into the metaverse. no one knows where its gone so the public markets is getting hammered. hasn't caught up yet.
charles: real quick are you buying anything here? >> i'm going all-american. i'm going to completely domestic looking at national vision, to go buy funky glasses like yours, everything is u.s.-based and the other is post-holdings which is a food staple business 80% u.s. , 20% uk but a good brand those are the kinds of businesses i'm looking at now. charles: great stuff, ann. always appreciate you. folks coming up my takeaway on what might trigger a few relief rallies and it might surprise you, stay tuned. we'll be right back. ♪ i'm so glad we did this. i'm so glad we did this. i'm so glad we did this. i'm so glad we did this. i'm so... ...glad we did this. [kid plays drums]
charles: you know, for the last few weeks its really felt like the main thing investors should be really dreading are third quarter earnings results and of course the guidance. now the assumption of course was that inflation would have provided enough evidence that it was peaking and that gaining the depth of how deep a recession would actually be welcome news sort of the thing you want the conversation because that means the federal reserve itself be closer to pivoting. in regular language that means after breaking a few things including your wallets, dream job, dream of owning a home the fed would have to stop and actually start to pump money back into the economy. of course just like this destructive phase, and it doesn't mean that everyone would get whole again but it means again that billions of dollars
would come gushing back, so that was the scenario in almost everyone's head. the wildcard again had to be earnings. well i think obviously, it's too soon now, to put those inflation fears to rest. the anguish is going to be with us just a little bit longer; however, i will say when it comes to these earnings, right? we've had 35 of them this week, and they haven't knocked the cover off the ball but they haven't been unmitigated disasters. folks if you're looking for mini rallies over the next few weeks it could come from earnings. in part because there's so much pessimism about them, so keep an eye on that and if you're a trader or would like to trade 10% moves i think you got a few coming up. right, liz? liz: yeah, and you talk about pessimism? the world was pessimistic that fox business would ever survive, right charles? happy anniversary 15 years at fox business. isn't that great? charles look at this. charles: it goes so fast. it went by so so fast but you're right against all these odds against all of the doubters, here
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