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tv   Making Money With Charles Payne  FOX Business  November 28, 2022 2:00pm-3:00pm EST

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your budget? call humana now at the number on your screen for this free guide. it's just one of the ways that humana is making healthcare simpler. and when you call, a knowledgeable, licensed agent-producer can answer any questions you have and help you choose the plan that's right for you. the call is free, and there's no obligation. you know medicare won't cover all your medical costs. so, call now and see why a medicare supplement plan from a company like humana just might be the answer. cheryl: markets are slipping further on hawkish fed comments and china covid concerns. the dow as you can see down 441 points. we are at session lows. sending it over to charles payne. hey, charles. charles: cheryl, what a day to come back from a four-day week for some folks. appreciate it. i'm charles payne. this is "making money." breaking right now as cheryl
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mentioned stocks opened lower on initially worries that the covid protests in china could derail the entire global economy. in this case you know what, if that is the case let it happen. i will ask art laffer if it is time for u.s. corporations to finally break ties with beijing. market lower on jay powell peeking on wednesday. he crushed the market last couple times he spoke this year. will he do it ain. lance roberts, joe lavorgna with me. the latest blockfi files for bankruptcy. dylan leclare breaks it down what happens next. the 84 year journey for gaslighting to become the word of the year. how we can make it go away. all that and so much more on "making money". ♪. charles: oh, boy, so we opened under a tremendous amount of
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pressure today. part of this chaos is in china but also a lot of uncertainty. we've got so many things coming out this week, so many economic reports, so much data, all of this stuff can move the market. of course a parade of fed officials capping off with chairman powell on wednesday. so for me on all the things out there my top concern out there is jay powell, then the jobs report, inside the jobs report, participation and earnings i think will be most important and core pce. remember jay powell said that is how he is monitoring inflation. those are the things i think are the most important as we head into this week, really get going. of course there is a whole lot of other things, right, that we got to talk about. the u.s. consumer, i feel maybe has lost their oomph. look at this, folks, this is the united states, the uk and europe. we're the blue line. look at our savings rate. it has absolutely plunged. at the same time have we done? our credit card rate is moving fast. in fact this last spike, the fastest spike in 20 years.
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i hear a lot of people saying the shopping season has gotten off to a pretty good start. nominally an abysmal move thus far. before invasion that is what was having. we were eating away at savings, going heavy on credit cards even more so than european countries this is the one of the tough predictments we're in, why a record number, a record number of professional forecasters, i want you to take a look at this. 45%, almost 45% say we're definitely heading into recession the next four quarters. this chart goes all the way to m.i.t. 72. joining me ria advisors ceo lance roberts. lance, first i need your top market moving events this week. i don't think anything can supersede jay powell, what do you think? >> absolutely not. that will be the key story this week. you mentioned it earlier, i think it is a really important point that gets overlooked when markets rally that actually eases financial conditions which is exactly the opposite of what
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the federal reserve is trying to accomplish. they want to tighten financial conditions, slow economic growth to bring inflation down. rallying markets boost consumer confidence. why in august, jackson hole he came out changed his speech at last minute, crushed the market. did it last time during the last rally don't be surprised if he comes out hawkish wednesday [inaudible]. charles: you called for the latest bounce. it began last october. last time you were on the show last week you cautioned us it was looking a little extended. we mid-a pretty good mood. maybe the 200-day moving average what foils it. a lot of folks are putting bets on this, negative bets. here is what my thinking, if everyone thinks we fail the 200-day, and it doesn't, could we take off pro there? >> exactly you could exactly what you said everyone is banging against that. that is the steady downtrend
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line this year. charles: been pretty consistent. >> [inaudible]. charles: another thing you and i talk about all the time is valuation, every one is talking about valuation. look at forward p-e ratio, united states at 17, well above the median. look at the rest of the world. the uk is 9.5 times forward earnings but here's the thing, sometimes i think maybe they deserve to be here and is there anything special about america we should be willing to pay more? after all look at our historic range. it is the best anyway. >> right. charles: don't we at some point want to pay a premium to be in u.s. stocks? >> we've been doing it the last 12 years, charles. we had the largest inflows of foreign money into the u.s., last five, six, seven years in particular because this has been the best place to have money invested versus other countries. so going forward i don't expect that to change unless we continue to erode our base of
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capitalism. if we move more towards socialism, that will undermine our earnings power. that is driving these inflows into the country. we certainly want to keep that intact, but i don't see that changing anytime soon. charles: real quick, i have 30 seconds, bonds down 18.5%. this is greater than the oil crisis, postwar slump than w w2, oil crisis this is the worst it has ever been. is it time to start kicking the tires with bonds? >> yeah, i would. we've been actually adding bond exposure to our portfolios and we'll be lengthening duration over the course of the next few months. when you get less inflation and slower economic growth. that drives the long end of the curve. that will bring interest rates down at 10-year level. buy bonds here and you will be happy next year. charles: lance, thanks a lot. hope you you had a great thanksgiving. >> you too. charles: my next guest says winter is here. not just the kind she deals with the in the mid des. all string head of global
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equities ann mileti. what are the sig nels ahead of you right now? >> inflation and hitting into the threat of recession like you earlier showed on the screen, charles. i think that is the truly the most fear in the marketplace. just on a fundamental basis, finally the deterioration of earnings too. charles: this week we've got everything. i mean it is just everything. we've got first tier, second-tier, third tier, all the economic data we'll have to figure it all out. it culminates friday with the jobs report. i think powell is the most important thing. certainly other things will come out that could sway this market. what do you think of this is importance. >> you will hate me for this answer, because you will think it's a hedge because it is not. to me it is never one thing. i think the jobs report will matter a lot because powell has said so much about the jobs report and they need the jobs numbers to start weaken before they start to slow down. charles: they need the unemployment a to go up. >> i think the combination.
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charles: street is looking for 3.8, 3.7. that is nowhere near their target. what is their target? i read anywhere from four 1/2 to 5%? >> i think that is what they have been saying. i think signs underneath the number, digging underneath is what matters. for us it is never one matter. it is the pattern. charles: one thing you talked about i've been reading that capital is no longer free and that you know, of course that means expensive for everyone including corporations but one thing that's interesting corporate debt in terms of their burden right now is relatively light. this is corporate debt, interest expense as a percentage of cash flow. so i mean it is really, rarely it has been this low. this goes back 70 years. so do corporations really, are they really in any need of expensive cash at this point? >> one it should be that low because we've had free capital essentially for a long time but the challenge really is, it is not going to stay there, right? we already know the cost of
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capital if you need it is really expensive but i think you have to take it one step further. if you're a company that has a lot of cash on the balance sheet and are producing for cash your flexibility in a market like this to go out and spend, put capital to work, to increase your competitive position when others can't is a real determining factor of success going forward. charles: that is what you're looking at, you're really zeroing in on cash flow. okay this is exxonmobil, just the last quarter. i want to help folks out there. people take a look at this. they had cash from operating $24.4 billion. they used $5.1 billion. they sold something for 2.7 billion. net they ended up with $22 billion. ann, this is what you are talking about here. with that they were able to distribute $8.2 billion to shareholders between buybacks and dividends and they're still sitting on $30 billion. this is the kind of company you're looking at. >> you're right. if you take the name off, if you look at the metrics like this, this is the type of company you
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will want to own coming out of whatever it is we're going into because cash is going to be king. free cash flow is going to matter a lot. it gives you that flexibility and by the way those shareholder distributions are going to matter more. if you look historically in high inflationary time periods. when interest rates are rising, companies that pay dividends typically outperform as well. charles: i've been saying that. the demand for dividends, money flowing into dividend etfs are you saying that? is that what you're clients are asking for now? >> we're seeing more and more needs for dividends and people trying to get into that. charles: do people need more hand-holding or comforted for lack of a better word? >> i think we should be, when times are tough, even if clients don't want to talk we should being talking more to them. charles: right. >> it is more because they need to understand that if you're an investor and not a trader that there are real opportunities in a market like this. you just have to think long
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term, not so much on a day-to-day or week to week. charles: of course you give them the tools. this right here is the tool, right. you figure this out. find a few companies that can do this, you can ride this out pretty good. ann, thanks a lot. great having you in studio. exciting news i will host a small business survival town hall, december 15th, 2:00 p.m. eastern. i will talk to a variety of small business owners from a variety of industries how they're handling it all of this. crime, inflation. how do they chart a path to success in this kind of environment? you will not want to miss it. joe lavorgna will talk about a fed official who compared his profession to a broken clock. we'll be right back. ♪
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chief economist joe lavorgna. joe, i have a trivia question for you. which, which is least accurate when it comes to predictions, weather forecasters, broken clocks or economists? [laughter]. >> all of the above, charles. charles: you spent some time in d.c., i can see this. john williams, just moments ago said it is actually economists that are pretty bad at this, the recession thing. by the way i guess it's a tradition. you would know this irving fisher considered by many one of the top economists in the first half of the 20th century, said this right before the crash, stocks reached what looks like permanently high plateau. i expect to see the stock market a good deal higher within a few months. no. >> yeah. charles: the reason we bring this up, our hands, our lives are in their hands right now. >> to some extent, charles, a lot depends on the assumptions. what assumptions are you making? how does the economy think about
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how the economy works? there are monetary and fiscal factors. the big debate even among investors where we are in the business cycle and that is where economists can often times different. however thinking through a good forecast with a good assumptions gives you a road map. it is changes as it is a denam i can process as things evolve and change. you can be good at it but you yu have to put the work in. charles: seems to me that is the part, evolution, being wedded to a idea, theory, sticking to it as you see the evidence is changing. i feel that is the part where maybe there is a big mistake made. >> the academics are the worst at it, old adage of scientific progress is one funeral at a time. so you've got people who have their whole livelihood at stake how they think the world evolves. i would say from more practicing standpoint, you have to be right, right more often than not otherwise you're out of a job. charles: what is the fed trying to do here? a lot of economists talk about excessive savings. we know the majority is in the hands of wealthier folks.
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they didn't get it through stimmie checks. we say the economic data is starting to break down. they acknowledge the lag effect. who are they trying to break at this point? >> they're trying to generally break aggregate demand and they look at the world, charles, inflation largely the function of a very tight labor market. they want the labor market loser, they want the unemployment rate five, five 1/2, 6%, i don't believe too many jobs creates inflation. there are reasons why we have inflation. a lot is their fault, excessive fiscal policy. we didn't need the 2 trillion-dollar bill in march of '2. that's a problem. this fed wants to slow things down. the hawkish message as you shared is the reason stocks are down today and powell will likely reiterate again on wednesday. charles: a week ago they took 40 billion out of the balance sheet that was a record by far. they're starting to go through the quantitative tightening. what people are talking about, the kind of money they will eventually take off the balance sheet, it doesn't jive with the
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c-me fed watch which the fed will break something real soon and sometime next year have to cut rates instead of hike them? >> i agree with that. the market has the peak of the funds rate 5%, june, july. by 50 basis points of easing in the back half. my guess the fed will be much more aggressive because when they reverse they tend to reverse quickly. i'm surprised something hasn't broken at this point. but it will. with deficits much higher than people thought a couple years ago, the fed buying a trillion duration a year who will buy that? a lot of pressure on markets for the fed to come back in. you get qe started next year believe it or not. charles: it is amazing. i'm all timed out here but will it feel like a exercise just unnecessary exercise? will we get something out of it bides all the ups and downs and pain and agony. >> truman said give me one-handed economist or someone
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is a slave to some dead economist something like that. we're in a bizarro world. charles: yeah. >> unfortunately that will continue. charles: feels like they're pinging back and forth so rapidly. we can't get any steady footing. i think it is hurting our fundamentals. joe, wish you were there. maybe, it is not too late. you're still young. get you there sooner rather than later. >> thank you, charles. charles: speaking of things falling apart the latest in the crypto world, blockfi filing for bankruptcy. we have dylan leclare he called the scam two years ago. i wish somebody had listened to him. more warnings at 2:45. more protests across china due to covid restrictions. are they seriously a threat to china's regime? we'll ask foreign policy expert lease daktari after this. ♪. oh, there you are...
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charles: so tensions have been simmering for a long time but erupted after a deadly fire that killed at least 10 people but maybe much more. the victims were trapped in a high-rise apartment in beijing a building sealed shut to prevent them from leaving. in fact it took firefighters 150 minutes to put the blaze out as fire trucks had to wait for road barriers, other obstructions to be removed. showing me editor in chief of the foreign desk, lisa daktari. what is interesting to me, it is remarkable when president xi took over, call him ruler for life the head of the national congress, number of cases skyrocketed, number of cities have skyrocketed. is this is coincidence? is there a connection there? >> it may be. we're looking 40,000 cases a day right now, that is what china is citing for the reason for the zero covid policy and lockdowns.
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best case scenario it's a flu season. they have a huge population. people living in close quarters, especially in crowded cities. worst-case scenario this is more of the power grab. this is exactly what the chinese government would want to do to suppress any sort of dissent or any opposition and this is the best way to do it. they become the infallible voice. charles: meantime the protests have been vocal than anything we've seen in a long time. we've seen creative forms of protests. the question everyone is asking will it make a difference? >> right. that is the best question to ask one of the global protests this is not just a global protest. a lot of media reports will tell us it is. that may have been the proverbial straw that broke the cam medical's back, and people came out cause of that what you're hearing on the streets of china asking xi to step down. they're calling for end to communism. this is much bigger movement than end to covid protests.
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>> rewhited to the one china policy. does that mean we the united states will not do much to help the citizens to your point are seeking freedom? >> the biden administration in terms of its foreign policy had the pick and choose kind of buffet when it comes to human rights, right? we may see movements on the street. we may see a lot of brutality on the streets, like we're seeing in the iran movements. that is not part of their foreign policy. the biden foreign policy came in even as candidate similar to the obama foreign policy a lot of appeasement. what happened in the biden administration, global parallels have not corresponded to the foreign policy the biden administration has set out. they're responding to something that is not match what is going on globally. we have normalized relations with china. it doesn't leave us much room to speak out about human rights. charles: you mentioned iran, what is going on there is absolutely amazing.
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the administration not saying much. you wonder how much this is hoping that paris deal, not the paris deal, the iranian nuke deal goes through. >> right. charles: is there a way we can help the iranians who clearly, the people clearly, we've seen this groundswell, they want something different? >> absolutely. they have entered the third month of protests. the death toll is rising. they're rounding up famous soccer players and artists, poets and rappers. it seems like the global community is silent on their movement but the iranian people are saying please tell our stories. i speak to them daily. we cover this at the foreign desk. the best thing we can do to keep the spotlight, share it on social media, allow the citizen journalists to get their story out. they want the regime gone. they're very clear about the message. we're hearing it on the streets. they're willing to fight for it to end it. they're losing their lives. very young people. this is a protest across the
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country. they hope to have some results from it. charles: i got to tell you you're doing an amazing job chronicling it. we're watching. a lot of people in this country would love to find a way to help all these folks. thank you very much, lisa. >> thank you. charles: joining me laffer associates, founder, art laffer. art, i want to go back to the china story. you said our relationship has been sort of a win-win for both sides but is there anything from the religious concentration camps brutal enforcement of covid-19 policies that should give americans pause? >> of course, but not on trade. we should consider chinese actions as being reprehensible. they are, what is happening with the uyghurs and what is happening with religious freedoms, it is awful. you shouldn't stop trade. trade is not the proper tool to handle these types of problems. if you did that, you wouldn't trade with any country, charles. trade is a way of making these problems disappear. if we trade with them, they trade with us.
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we tend to like our customers a lot. they tend to like us and we have communications with them and we can work these things out much better with free trade. now i am not suggesting sending nuclear weapons to kim jong-un, please. but normal trade is a way of developing relationships, developing friendships, developing ways of getting them to stop their bad ways and just maybe they can help us with some of things we're doing wrong as well. >> art, it is not working art. >> good prosperity. >> art, it is not working. >> it is cuba? we don't do any trade with cuba? you see how they have changed not. charles: president xi made himself ruler for life. they're crushing dissent over there. they put two million people in concentration camps you're okay with that to save a few bucks on a pair of sneakers. >> of course i'm not okay with that, but do you think stopping trade will them is going to stop that? charles: i think we're enriching them? aren't we enriching them? >> no.
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we're enriching ourselves and getting good relations with them so we can manipulate to get change inside of china which is the only way to really do it, charles. working as friends and partners getting them to change their ways is the right way. plus the people we're hurting by not doing trade with china are the people who are rioting right now. do you want to hurt the normal, everyday chinese people who are trying to get a better government? charles: i don't think the status, i don't think they mind being hurt. i hurt this stuff apartheid for a long time. we don't want to hurt them. they want to be hurt if at the end of the tunnel is freedom. america went to war with england we knew people would die but that is the sacrifice for freedom! >> if you think trade restrictions worked you must have loved the great depression. saw how it led to great solutions there, led to world war ii ultimately, charles. i think you're mistaken. charles: we'll have world war iii if we don't stop letting xi crush the people, make people
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with certain religion. he is crushing the muslims. he is crushing them. >> military solution, charles. if you're that anxious about it, attack them. bombay screening if you think that is good answer. i don't think that is good answer. charles: i didn't say bombay screening. >> i don't like xi what he is doing. >> using political tools and military tools correctly. charles: this past earnings season we heard a lot about shoring, reshoring, near shoring. a record amount of this kind of stuff. we're bringing this stuff out of china. do you think this is a good sign or do you think this is a mistake? >> i think businesses should died what they should do in china and do here in the u.s. and it shouldn't be u.s. government policy that determines what business we do with other countries. that is the way china runs it. that is not the right way to do it. you have free trade and use military and political tools to handle these situations. what we're doing in ukraine that is a military solution to a military problem. it is not a trade solution.
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trade solutions never worked. you saw it with the great depression. you saw it with world war ii. these things don't work. if you want to try the model again go ahead. i think you will be disappointed. the way reagan did it to nafta. charles: we didn't convert the world. the world hasn't been converted. >> reagan did a great job bringing peace to the world. >> the world has not been converted. that is the problem, right? >> it is converting. charles: just can't look the other way we want americaning corporations to have the biggest earnings possible no matter how many people are brutalized over it, keep it like that, keep it really guess. >> don't use trade as a weapon. if you want to do something about the brutalization, we have tools for that but the bagwadi theorems are not clear. do not use indirect tools to correct the problem. use direct ones. fentanyl things and the border. that is not where you cure
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fentanyl. you get people and addicts often at that nil. as long as the profit model will do it. peace is the answer, not war. charles: i'm not advocating war. i am advocating fighting back in a smart way economically. >> i think you're coming close. charles: what is coming close, we made relationships with china, average person is making 100 bucks a year now they're almost wealthy than they are. we are doing something very dumb right now. when you landed they didn't have a airstrip. they have the biggest most beautiful airports in the world. we're doing something dumb. that is what i'm saying. i'm not a trade economist. i have not war hat. i want to pick this up with you later. they're screaming at me. >> it's a deal i would love to go show how you free trade does a better job, screaming hollering that is the way to do it. i love you charles, by the way. charles: three blocks next time, art, thanks a lot. >> i would love to do that? why not? charles: coming up crypto, blockfi, they filed for
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bankruptcy. the ftx debacle still going. dylan leclair is upset about this he is talking about the contagion. can it be stopped? first we'll discuss what you need to know as we head into december. a lot of pain on that screen, folks. we're -- we'll be right back. ♪ as an independent financial advisor, i stand by these promises: i promise to be a careful steward of the things that matter to you most. i promise to bring you advice that fits your values. i promise our relationship will be one of trust and transparency. as a fiduciary, i promise to put your interests first, always. charles schwab is proud to support the independent financial advisors who are passionately
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when it comes to the stock market the message is almost the exact opposite. every one is saying don't ever sell anything, buy, hold, don't get too cute. i'm sure seen articles and charts you have done last 15 years if you missed the last 10 sessions. they don't toll tell you how great it would be if you excluded the 10 worse sessions. joining me kaltbaum capital, gary kaltbaum. gary, i'm 100% in cash, that is hard for most of our viewers and investors to do but by the same token should they be more proactive? >> absolutely there is a rule in the bear markets, the big winners of the prior bull will drop anywhere 70% and more. we have great examples in this one. i looked, facebook is down0%. i could go on and on. so i studied under people like stan weinstein, one of the
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greatest technicians of all time and william o'neill. o'neill said if you're one of 1/100th% that know how to skirt bear markets you're way ahead of the game. we work hard at it. we look at 2,000 stocks every night, 200 sectors, every country, every country, commodities from major uptrends and downtrends. we're see major downtrends we get out the way and we did a yeoman's job on this bear market which by the way i'm not so sure is over yet. charles: to that appointment fed officials are out there laying it on thick. >> way overthick. charles: you're watching other things. what should we be looking at right now, gary? >> there has been a direct correlation between yields, the dollar and the markets. as the dollar has gone up, markets have come down, the same thing with yields. that has to be watched closely. eventually the correlation will change but it is in direction right now, but i must tell you,
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what bullard said today, i'm thinking the guy shorted the heck out of the market right now because it seems like he wants the dow down another 10,000 points. so that is very, very worrisome especially in a market where the dow let up and the nasdaq hardly moved off of the lows. charles: right. >> i think you're seeing some of the comeuppance here. we talked about it before. they just don't keep quiet. two of them out today, a bunch rest of this week culminating with powell. remember bullard is powell's mouthpiece. i'm not so sure we'll get good stuff out of him this week. charles: aye yi yi that is the worst sneak preview. short term paper, the value proposition in that? >> riskless. i can tell you two year yields are at 4 1/2 or close to them they were zero a year and change ago. so from income accounts i'm finally able to do some of that when i was, my income business was a big fat nothing for quite a while as they rigged,
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manipulated rates down to zero. in junk bonds i was finding junk bonds should have been paying nine and 10% that were paying 4%. guess what happened since then? they're back yielding 9% as prices come down big time. so much better environment for the income investor but i'm not going out long. i'm going short. charles: right. >> when i have two year-year-olds paying zero a year and change ago, paying 4.4 and riskless, you do it for your income people. charles: absolutely. gary, thank you so much, my friend. always appreciate it. >> thank you. charles: coming up my takeaway on merriam webster's word of the year. mean while the ftx contagion continues to spread. blockfi the latest to get hit by that. i want to bring in dylan leclare. he will come up next. boy, hold on to your hats. ♪.
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well, we fell in love through gaming. but now the internet lags and it throws the whole thing off. when did you first discover this lag? i signed us up for t-mobile home internet. ugh! but, we found other interests. i guess we have. [both] finch! let's go! oh yeah! it's not the same. what could you do to solve the problem? we could get xfinity? that's actually super adult of you to suggest. i can't wait to squad up. i love it when you talk nerdy to me. guy, guys, guys, we're still in session. and i don't know what the heck you're talking about. municipal bonds don't usually get the media coverage the stock market does. in fact, most people don't find them all that exciting. but, if you're looking for the potential for consistent income that's federally tax-free, now is an excellent time to consider municipal bonds from hennion & walsh. if you have at least 10,000 dollars to invest, call and talk with one of our bond specialists at 1-800-217-3217. we'll send you our exclusive bond guide,
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free. with details about how bonds can be an important part of your portfolio. hennion & walsh has specialized in fixed income and growth solutions for 30 years, and offers high-quality municipal bonds from across the country. they provide the potential for regular income... are federally tax-free... and have historically low risk. call today to request your free bond guide. 1-800-217-3217. that's 1-800-217-3217. ♪. charles: all right, folks, another major player in the crypto world files for bankruptcy. in its public release blockfi says quote, commences restructuring proceedings to stablize business and maximize value for its clients and stakeholders adding voluntary petition for chapter 11
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protection, pursue counterpatient obligations. we have dylan leclare. blockfi septembered with the sec, a 100 million-dollar fine. the larkest in history. that to me was a red flag. you saw red flags long before then. >> yeah. i've been kind of a skeptic of these yield bearing platforms. i think the reality is no one was really asking the question where was this yield coming from? and really the crypto mania of 2020 and 2021 was fueled by obfuscated leverage and particularly was exacerbated by these yield products. in case of blockfi fine, they got fined for the sec offering unregistered securities buildings look at the howie test and what defines a security by that sec, basically the promise of a return or investment with a counterparty. that is what these yield products are. i'm not one to call for the heavy hand of the state but the
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reality these yield products. bitcoin mass no stated yield. where is yield coming from? why a lot of counterparties are going bankrupt in a daisy-chain. charles: i had blockfi on the show a few times back then i would ask the same question. there was an ad in february of 2021. it ticked off all the reasons you should open a account with them. deposit lets you earn 6% annually. allow to borrow money and safe and backed by big investors. on that score big investors, silicon valley to what extent are they culpable for the ftxs, and these other things? once they put money into these companies it is sort of a seal of approval? >> yeah. totally it is important to differentiate the bad actors and fraud you can say in the case of ftx, versus people that were honestly trying to put together a product that was you know, usable for retail and institutional investors. i don't think blockfi is evil. charles: sure.
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>> i think the premise of what they were trying to do in the yield-bearing products is something that was never sustainable. all the fuel of the 2020 and 2021 bull market kind of wore off, right? charles: right. >> a few things like the de-fi summer and the bitcoin detaining go trade and arbitrage that fueled all the yield products but they were really just carry trades. once those carry trades got arbed enough you had no more yield. commence to blow ups when it all unwinds. charles: lawmakers that took money from sam bankman-fried. now they're in charge of investigating all of this. are you comfortable we'll get to the truth and justice will prevail? >> i mean one could certainly hope, right? there is quite the rabbit hole here with ftx and the political establishment and the sec. i don't know if i'm suited to comment on that and some of my beliefs there. yeah, there is quite a lot
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unraveling here. we're definitely not at the end of it all. there is quite the bit of conspiracy around it and you know, one is right to question the good faith of the regulators and the political establishment, that's for sure. charles: well, that is what we're going to keep doing. we appreciate you, dylan. thank you very much, my friend. >> charles, appreciate it. charles: you know, these days investors must feel like they're living inside of one of esop's fables because there are so many warnings like these, right? look at this, these all came from one of aesof fables, quality. honesty the best policy, look before you leap, the frog and the goat. bird in hand is worth two in the bush of a hawk and nightingale. my next guest has more warnings, main street asset management llc, chief financial officer erin gibbs. erin, what are you cautioning about for investors now?
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what can we add to the list? >> i think quality, not quantity, be nimble. be willing to change. don't get stuck in a rut. i can't think of an east sop fable that would match that. >> you are concerned. you think people are too antsy trying to get back in too soon? >> so we've seen this risk on trade since mid-october. obviously the yields really started dropping. it seems to be waning a bit. i think we may see a little more bounce between risk on and risk off days until we get the december fed meeting because i think that is really at the forefront of everybody's minds for let's say the next three weeks. charles: i had lance on earlier, forward p-e ratio, 16 1/2, that is too high for a lot of people you included? >> yeah. charles: last time we got down here, in trouble, not last time we were in trouble, we got down, maybe a lot lower. >> yeah. charles: where do you want to
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see the forward p-e ratio? >> if we look in an area where we're more slower growth, you know, more midlevel type of interest rate environment, we're looking at more of a 16. that is back in the '90s, sort of the economic recovery. charles: that is not too far from here. >> that is not too far but it is still we're talk from 18 to 16, 10 to 15% potential. i think that is what we could be worried about if we see the fed looks a little more hawkish, if we see inflation numbers not going in the right trend, that is what you could see on your downside potential. charles: it doesn't have to hit that though. >> it doesn't have to. charles: let's talk about an old saying, stock market is not the economy and the economy not the stock market. here is a perfect example. s&p 500, 62% of earnings from goods, economy at large, 32%. 59% services. reason i bring that up i think a lot of these service stocks get
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lost out there. they don't get a lot of props. we've been focused on goods a long time. you like >> one of the reasons one it is consumer discretionary. when you're looking at actual earnings, back to fundamentals back to macros the consumer discretionary sector, a lot of the subsectors are the one area where we're looking at really massive profit growth versus a lot of other industries where we're seeing really big contractions or big downward revisions. >> you've been studying earnings revisions here unlike the broad market are going in the other direction. >> exactly. so the broad market, revisions have been going down, down. they have almost been cut by 1/3 talking about profit growth next year. booking is increasing, hotels, restaurant, these type of entainment services are actually increasing next year. that people think they will do better than a month ago. that is unusual because the outlook is a little pessimistic. charles: a little pessimistic.
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i put yolo. you only live once. two friends went out to vegas. one she never leaves the house. i was shocked, we're in vegas. not just the young kids. everybody is on yolo. maybe that will help booking as well. >> yep. >> erin, thank you very much. all right, so coming up the word of the year. it took a few decades to get there but nothing will beat it now. we'll be right back. good luck. td ameritrade, this is anna. hi anna, this position is all over the place, help! ... the company profile tool, in thinkorswim®. yes, i love you!! please ignore that. td ameritrade.
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charles: well, folks, it finally made it to the top, but it did take a long time. the 2022 word of the year, it's gaslighting according to webster , in this age of misinformation of fake news, conspiracy theories, twitter trolls, and gaslighting has emerged as a word for our time. a driver of disorientation and mistrust, gaslighting is the act or practice of grossly misleading someone especially for one's own advantage. 2022 saw 1,740% increase, that's 1,740% increase in lookups for gaslighting with high answers throughout the year. the word originated in 1938 and made it to two movies in 1,940 a british production, 1944 an american production, along star charles boyar, joseph
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cotton, and angela landsbury. i like both versions a lot, of course the u.s. version was a little bit slicker. now, for those who are interest ed, psychology today says the opposite of gaslighting is critical thinking, not validation or deferring or codelling. that might be a tall order for society but you know, let's face it. i know we're taking sides on everything. we don't look at the facts and if it goes against how we feel, and we defend the indefensible, but, something has got to happen we gotta figure this out and some people are looking at me saying oh, man, you just gas lighting. i'm not. liz claman, i'm trying to make make a legitimate point here. over to you. liz: don't gaslight near me or i will! flowed. charles, thank you very much. it's 4:00 a.m. right now in shanghai, china. we are getting word at this hour that the crackdown on nationwide protests has begun. this video that you're looking at shows government officials,


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