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tv   Making Money With Charles Payne  FOX Business  March 24, 2023 2:00pm-3:00pm EDT

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is it isn't a supply issue, it's demand starting to pull back. brian: yeah. i think people are getting nervous about recession. raid thers are getting nervous about the same thing, they're making bets accordingly. the sad thing right now is about the only way we get any relief at pump is if we get bad economic news, not good news like we're producing more. jackie: i think when summer driving season comes, people will find a way to be able to -- brian: they're going to want to get out there. a guy who loves to be on the road, charles payne and "making money," they're going to start their engines right about now. charles: as long as jet fuel count go up any more, i'm okay. have a great weekend, guys. all right. good afternoon, everyone, i'm charles payne, this is "making money." speaking of money, america's money is on the run, folks. billions of dollars flying all over the economic system. depositors are seeking yields they haven't seen in decades. banks are seeking capital to weather the storm. dan niles, he saw the crisis
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coming, he's going to share with us the know to the fal. and senator roger marshall with the worst thing congress could do with regard to the this banking crisis. i'll also ask brian bell skin if the -- brian belski about the federal reserve. and what we've got here is failure to commune candidate, folks. janet yellen flip-flops. she's trying to put lipstick on that billionaire bailout, and let's just say it's not that easy. plus, my takeaway on the modern day federal reserve and why jay powell will soon be tossing money out of the helicopter just like i all his predecessors. all that and so much more on "making money." ♪ ♪ charles: all right. so it was interesting because yesterday -- we're up a little bit now, and is you want to see the internals, but yesterday we were up, but service the only two sectors. the broad market got hit pretty good, and they were led by real estate and financials.
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today the market wantedded to rally. yesterday it wanted to rally as well. treasury secretary janet yellen, though, she began to the speak and it's the really remarkable, she just kneecapped the optimism for the second day in a row. yesterday, of course, stocks tumbled on confusion. there was a flip-flop to the prior day's flip-flop, and i've got to be the honest, right now i think everyone's confused. meanwhile, another major bank in europe appears to be on the rocks, deutsche bank. credit default swaps went to a 4-year high, so the bank did go into action, they've rechemod some bonds -- redeemed some bonds, also la guard has told -- christine lagarde saws said the central bank is fully prepared to provide liquidity. i buying yields continue to plunge, it is mind-boggling. and get the, in the last two weeks, $238 billion have poured into money market funds. that asset now has more than $5
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rl. banks also leaning harder on the federal reserve as they continue to sort of make this mad cash to the discount window. and remember that new facility, the bank term funding program? it's getting the bum's rush as well. $50 billion in demand this in just its second e week of existence. consequently, the fed's balance sheet continues to balloon, more than $400 billion in the last two weeks, that's two-thirds of quantitative tightening that was supposed to pull money out of the economy so they can slow inflation. experts keep telling me, charles, that's not. quantitative easing. i know. listen, it's been less than 48 hours since jay powell said no to rate cuts for 2023, but the modeling sees an emergency cut in june of this year. because the fed has been the most aggressive central bank out there, all the others are going on the looking for powell and company to lead and so will investors. joining me now, san torrey fund founder dan niles. dan, so depositors have
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withdrawn a trillion dollars from banks since the fed began right thenninging a year ago. and believe it or not, the bulk of it has come from from larger commercial banks. and late last year you said that one of your concerns was a big company failing like a long-term capital management or a lehman brothers. so i'm wondering does silicon valley bank fit the bill, or could there be something larger? >> well, i think you have to look at it and say silicon valley bank combined with signature bank, you add those two out the, that's $300 billion in assets. both of them failed. and washington mutual, which was the largest bank failure in history, that was at $300 billion during the period of time where lehman brothers failed. and, obviously, credit suisse didn't fail exactly -- [laughter] i think you could say it was the pretty close, and that's at $1.1 trillion. so you've seen a lot already. of the problem, quite honestly, is you've got to step back from this and think, you know, why was i worried about a big issue.
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well, you came into this year with $620 billion in losses on u.s. bank balance sheets against a capital base of $2.2 trillion. so, you know, that's a very big percentage. and that doesn't really matter unless ifs sents start moving concern deposits start moving around. and that's what's going on. and the underlying issue is, obviously, bond prices are losing their value because inflation is still high. and i don't think that's going to be going away as much as people want it to be, because for one simple reason. china is reopening afterring having been locked down for three years. they had a covid spike in january, and those consumers want to get out and costuff stuff, right? -- do stuff. we were only locked up for two, and look at what happened to inflation last year when we became unlocked. i think that is underlying cause, and that's why we put out in our tweet this morning that showed a chart that, you know, bankruptcies actually
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accelerated in 2009 after the bankruptcies in 2008 and went from about 25 banks with went under in '08 to 140 in 2009, after the u.s. government passed the t.a.r.p. program. so i don't think this is the over by a long shot, but you're absolutely right, there have been some pretty big names involved in it. charles: so right now the hanky capping of the market -- hanky capping of the market sees an avenue land. of rate cuts, although earlier today james bullard saying they have to stay the course and fight inflation. how do you see it playing out with regard to the federal reserve? >> well, you have to remember anybody who's invested in stocks, they desperately want a rate cut because that's what's fueled the market for the 13 years since the global financial crisis. the one big difference is you've got inflation, and that's why over the last week the swiss national bank raised their rates by 50 basis points despite having to save credit suisse. in the u.s., obviously, we
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raised rates by 25 the basis points even though you had the second and third largest bankruptcies in the united states for banks. and so you're fighting this other war which you haven't had to really fight hike this since the 1970s which is inflation. so i don't think people are going to get the rate cuts that they want and desperate wily need for a lot of them to the make money. ask that's an issue. charles: right. >> because you have to remember there's a whole lot of americans out there, they don't own their own homes, they aren't invested in successings. that's 40% there -- in stocks. and those people are just getting killed when they go to the gas pump, when they have to pay their rent. they matell, and they're the least that can afford inflation. and so i think you have to really think about that as opposed to the people on wall street, right, that are lucky enough to own homes, stocks, etc. charles: right. you know, we're out of time. i do want to give you a shout-out on meta.
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you've absolutely crushed it. today two major firms jumped on bandwagon. i hope we can get you back real soon, dan. thank you very much. >> appreciate, charles. charles: all right, folks, in europe, of course, all eyes on copy bank as we head into this weekend. i want to bring in chief economist daniel that call. dan, you know, we concern first, i want to get an idea, it felt like it happened suddenly. what's pushed deutsche bank into the spotlight now? >> i think what you're seeing right now is the domino effect of the so-called 81 bonds which are the con inthe gent convertible bonds that banks issued in europe in order to improve their capital, in order to strengthen their balance sheet. now, being convertible bonds as you know, charles, they generate a very big risk when the equity leads the bond and and then the bond leads the equity down further. so what is basically happening
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is after the credit suisse merger -- well, merger or takeover by ubs and the almost hidden bailout from the government that pushed 50 billion into credit suisse, the bondholders that held these 81 bonds, these convertible bonds, simply started to get out of them because they see that the risk is enormous. think about this, the deutsche bank convertible bonds give a 19% yield. so that shows how risky they are. charles: yeah. i mean, 19% is buyer beware, but by the same oak toen, a couple days ago dan loeb said you have a contract, right? now people are learning those aren't really bonds, wink-wink. i know earlier today deutsche bank redeemed some of the higher level of bonds, but that's one of the key e issues out there. what because it mean for all of banking in europe? how precarious is the banking
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situation in all of europe? >> well, the situation in europe is much more dangerous than in the united states. let's start from the size of the banking system is in europe which is about between 190-200% of gdp in most economies, so it's very, very large in terms of assets relative to gdp in the major economies. that compares with less than a third of that in the united states. a very important factor as well is that the european banks did not leave the 2011 crisis with a balance sheet that was strong enough. charles: right. >> however, what they have been doing is increasing call capital as much as they could in a period of negative rates. and here is the key issue. in the european union the european central bank implemented negative rates. and negative rates have decimated the asset base, the profitable asset base on the
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lending side of the european banks -- charles: you know, i want to just highlight that because we want, i wanted to know for a long time, how could there be trillions and trillions of a negative if yield, and it seems like that's coming back. i've got a minute to go, and i do want to ask about the faith in all the major problems involved in this drama. on our side of the pond, yellen, powell, the biden administration, lagarde came out today with more comments. you know, what's going to -- do you think that they have the wherewithal to ring post this thing, to fix this before it gets out of control? >> oh, certainly. because right now it is a relatively manageable situation. right now central banks are hiking rates, which makes sense as the previous commentator was saying, and at the same time they're providing liquidity to avoid widespread banking crisis. if central banks decided to u-turn and go into negative
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rates again, then the problem would not be just a problem of liquidity or maybe one bank suffering losses in their asset base, it would be a much more severe crisis. charles: right. >> and let's remember that the european banking system count have the level of -- doesn't have the level the of collateral and liquidity providers that the u.s. banking system has. significantly more, let's say, conservative. carl charles right. >> but at the same time, racier -- risker. charles: you have confidence but it is a precarious situation. daniel, thank you very much. appreciate pit. all right, i want to go to senior portfolio manager emma molman. you've absolutely one of the best in monitoring the pulse if of the globe, right? i'm just going to ask you straight, are we going to hell in a hand basketsome? >> um, depends on your glass half full or glass half empty
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outlook. [laughter] but in short, yeah. charles: yeah? [laughter] >> i'd be very concern so if you're going to panic, panic early. [laughter] charles: is that what's happening right now, or do you think they're trying to be too cool by half? in other words, i've always said that people sometimes there is a pyre in a crowded theater. >> yeah, exactly. so what i'm saying here is if you have a bunch of, a bunch of small banks, even larger banks that pay, you know, 50 basis points on deposits or next to nothing and then you raise rates, you can get treasury bonds paying 3.5-4.5% and then you to go and have a little banking theme with silicon valley bank and then it gets announced to the whole world that, guess what? you can just go online and buy the treasuries ask move out of the stupid deposits that aren't paying you anything, there's a lot of people with over $250,000
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sitting in chase with, like, 800 grand, just old older folks. rd. charles: right. >> i'm thinking of parents of mine that just kid that, switched out from the above 250 even though they're in a big bank, they still switched it over to, you know, treasuries because now they know -- charles: you look here in the statements, and treasury correct, for instance, it's a massive spike. a massive spike. we're seeing money markets, right, 100 billion this year concern this week, rather, 120 billion last week. people are smart. they're finally making a move. ironically, a lot of folks with less than 250,000 are making a move too just because they want to sleep at night. having said all that, where do you see the banking system going? because as we said with the prior guest, it feels like we're in a precarious situation. >> yeah. so the only way i would think that one could stem the departures of deposits from regional banks and the smaller
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banks is -- and i don't, i'm not saying i think this is going to the happen by any means, but the fed would literally have to just drop rates so low that it makes it no longer attractive to bail on toes i sits and do all this work -- deposits and do all this work. bring rates down so low that it's almost unfathomable, if you will. charles: right. >> so i would anticipate we are going to continue to see and already have, probably has already occurred at certain banks, it's just not been revealed yet, and maybe even the regulators don't know just yet. but -- charles: a lot of banks, a lot of banks in your opinion are on the verge of or will eventually go out of business. i hope janet yellen gets her message straight and we're prepared for it. emma, thank you very much, appreciate it. >> thanks for having me. charles: absolutely. coming up, treasury secretary yellen, she keeps flip-flopping, and this is rattling the
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markets. i want to get to brian wesbury on failure to communicate at the most important time. my next guest, in the meantime, just penned an op-ed highlighting the dangerous message that the administration has sent with their svb rescue. we're talking about senator roger marshall is. he joins us next. ♪ ♪
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charles: so in the book "the black swan: the impact of highly probable," the author or offers a definition. first, it's an outlier as it lies outside the realm of regular expectations. the second thing, it carries an extreme impact. and then the third is human nature makes up concocted explanations for its occurrence. this, of course, after the fact. joining me now, senator roger marshall from kansas. the failure of svb in and of itself may not be a black swan event per se, but what i peer is the follow-up actions are taking us down that black swan path, because they all seem to be the wrong thing. you just wrote a great op-ed on fox news about this fiasco, and i wanted to go over it.
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first, the part you talked about the most dangerous part of this bailout is the message from the if administration that it's sending to depositors. >> right, charles. so appreciate you having me on to talk about community banks. i was part of a community bank board for some 15 years, a very active board where once a month the management would present to us the financial situation of the bank. what folks back home are hearing from janet yellen is that your deposits are safer in a big bank than those community banks. community banks are the backbone of small businesses, of farmers and ranchers and of main street. so if everyone takes their business, their business accounts or non-interest-bearing accounts, their big cds off to big banks, we'll have no money left to loan. we're the ones that can quickly pivot to the needs of a small community. so i'm afraid this will hurt small businesses,st it's certainly going to hurt community banks. charles: and then the overreaction, right? again, horrible management on the board of silicon valley bank, just absolutely horrible.
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the white house panicked. let's face it, i think it was a bailout of billionaires, of bigtime vcs, political donors and and, of course, when they say the taxpayer doesn't have to pay for it, anybody with a bank account's got to pay for it. so now the onus is on community banks to to come up with this money, and you also have a lot of folks saying let's add more regulation to the community banks as an answer to this. >> right. so the last thing congress should cois overreact now and add regulations. look, you pointed out that their management team was incompetent. they were incompetent from the standpoint that they were buying long-term treasuries when interest rates were low, when the return rate was low. that's breaking banking rules 101. and then the board was irresponsible. they should have been reviewing interest rate risk assessment. you know, every quarter our management team would present to our board what would happen to our bank if interest rates went up 1, 2, 3, 4% or they went
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down. that should have been grossly obviously a year ago that silicon valley bank was going in the wrong direction, and no amount of regulations is going to fix incompetence. charles: right. >> the interest rate risk assessment is not part of the way the feds do a bank exam, that's not part of the exam. you have to have competent management, and aye talked to multiple community banks across the state of kansas, dozens of them, and i feel that those deposits are very, very safe. charles: senator, to that point though the, secretary yellen and the way she's articulated her position and even i would think president biden two sundays ago, or was it last sunday, suggesting -- and you wrote this out, that positiver thes are safer in -- depositors are safer in too big the fail banks. i mean, i'm surprised none of them emphasized that the overwhelming majority of americans are covered. $250,000 the, you're covered. and they never really have emphasized that. >> exactly. and you pointed out in your
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opener here just a poor job of communication. the white house and yellen are doing in this situation, that, look, you're still insured at that $250,000 rate. but i want about to talk about solutions too. and something that needs to be debate up here on capitol hill, the pros and cons of some type of insurance for those non-interest-bearing accounts. and i haven't come down on one side or the other, but i want tp is so important to community banks. we need to make sure that cash is flowing in and out quickly that we keep those relationships too. charles: yeah. right now first republic is offering less than 2%, people could get more than 4% in a money market, so you're right, something's got to be cone. -- done. i can't wait for you to get those solutions. by the way, who you got this weekend in the nc a aa? [laughter] >> how about those the kansas state wildcats? we have a motto, that we have a plan, we have a logo.
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go, cats. charles: some people have swag, they just win. that that's their swagger. [laughter] thanks a lot are, senator. coming up, square, block, whatever you want to call it,s the getting its block knocked off. the hindenburg research group did it again. sarah coontz in next concern is next. janet yellen has done so much harm to the markets in the last 48 hours. i've got to ask brian wesbury, what should she be saying? we'll be right back. ♪ it's a little too loud on the highway, i want to pull back in your driveway ♪ you'll always remember buying your first car. but the things that last a lifetime like happiness, love and confidence... you can't buy those. but you can invest in them. at t. rowe price,
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charles: i've got to tell you, that's all i can think about the last few days, that iconic scene from coolhand luke. janet yellen botched the message so much that i'm not sure if we're back to the being implicit coverage of all deposits or, you know what? if you've got more than 250 in the bank, go pound sand. i want to bring in brian wesbury. all of this really stems from bailing out those billionaires in silicon valley, and hay know they're going to have a lot of political reor percussions, and now heir in this pickle. you've got fund managers around the world who are saying systemic credit event, that's your biggest tail risk. essentially, i read into that they don't have faith in the powers that be to something like that -- to control something like that. >> right, exactly. the proximate cause is bailing people out of silicon valley bank, but where all this started was back in 2008 when we
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invented quantitative easing. we flooded the banking system with reserves. banks had to buy something with those, and we ended up owning treasury bonds. the amount of debt floating around the economy, and then the fed held interest rates below where they should have been for 15 years. and now trying to get them back to where they should be, they're starting to blow things up. and the only way to fix it is to go in and bail out all the banks, bail out all the shareholders, bail out all the depositors. otherwise everything's going to move to the big banks, and we'll look like canada. and that's not a good thing. charles: yeah, but a lot of that's happening anyway with, right? you've got a bank and your offering .002% on a savings account -- [laughter] i mean, this week 117 billion went to money markets, last week 1 the 1 billion. people are buying t-bills online out of their own homes. so how do you rectify that? >> yeah.
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you -- this is the abun cant reserve monetary the policy, and is we obviously don't have time to get into what that exactly is, but that's what they started in '08-'09. and this is kind of the end result. charles: brian, let me jump in real quick. wasn't, whenever they have these so-called emergency actions like that, aren't they supposed to be putting money in the banks and they distribute it to society? i've got a novel idea, why don't they make loans to people? >> yes, exactly. well, that's one of the things that's happening right now. so not only are they maybe implicitly guaranteeing all deposits, but they're going in and if you have a treasury bond that you bought at a up super low interest rate and is you're a bank and it's now traigding at 80 cents on the dollar, they will give you 100 cents on the dollar. charles: right. >> it's an overnight rate, sofer plus 10 basis points, and you
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take that money and put it in your reserves, and the fed pays you interest on reserves. so basically, they're boosting bank capital on government debt only. charles: right. >> not private debt for, like, 10 basis points. that's all you have to pay. charles: yeah. they're bailing out the banks, but i'm not necessarily sure how that helps main street. your piece yesterday cover something that a lot of people are whispering about, maybe overall there's an effort to create a national bank of sorts. what does that mean? >> yeah. well, by the way, this goes all the way back to alexander hamilton who wanted a national bank. but today what we're doing is we're literally socializing all of the losses in the banking system that come from this crazy fed policy. we're backstopping all government debt, not private debt, and the government wants money to flow, and they want cheap money to flow, and they're the real beneficiary. one of the ways to do that is to
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have a real national bank, and hen the you can punish areas of the economy like you -- that you don't like, let's say fossil fuels, and you can subsidize areas that you colike, clean energy, and that's the big worry about moving to a national bank. charles: yeah, a lot of folks out there saying we should only have four banks is nuts. brian, thanks very much. my next guest sees the fed pausing for a moment but then the resuming a later in the year. but i've got to tell you, the cme fed watch model sees a cut every single meeting from now through july of next year. i'm going to bring in collie owe capital -- cleo capital managing director, zaire sarah kinds. what to do you make of some of this modeling that suggests there's just going to be a long string of cuts? >> i think that thermoed eling a fantasy. you know -- thermoed eling a fantasy. the fed has been consistent even in the last couple days since jay powell's remarks.
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the fed governors have come out and said, no, guys, we really are going to do more hikes, and we're not doing cuts anytime soon. they are telling the market, and the market's say aing, well, maybe if we model it this way, they'll bend to our will. this fed has been remarkably consistent, and i don't see that changing. charles: jpmorgan says all the excess savings that's been out there we talked about, that the it probably will be gone by mid year: how does that change your outlook on the strength of the economy, the strength of the consumer? >> the consumer's been in a tough situation for a while, right? you look at auto loan defaults that are up, way upper, you know, 33% over last year, you look at credit card debt which is, you know, we had more credit card debt last year than any other year on record. you know, the consumer has not been okay. and, yeah, i do think that money that was saved is going to start running out in the fall. the thing that i actually think is going on the interesting is there are people slow down their spending leading up to that, or are they going to just keep
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going until they hit the wall? charles: credit card data in the last week or so looks like it's slowing down a little bit. i've got to ask you about the hindenburg research report that's crushing square or block, whatever you call it. yesterday, listen, hindenburg's got a good track record of dismantling companies. cathie wood says she's buying the stock, and a couple of firms say it's overdone. this is a really critical company, i think, in the sort of hierarchy where we're going on the payments side. >> yeah, look, shorts, especially hindenburg, they love to have a lot of hand waving in those reports. but when you really krill down into it, you know, watch the rap compilation video, there's some great strongs in there -- songs in there. some of the issues are legitimate, right? the pe ratio and where it's trading compared to its peers is really high. some of the same issues that a paypal's been faced with around how many of these accounts
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represent individuals. and some of those issues are real, and i think a lot of it is the sort of hand waving to do what happened today, which is drive the price down and make some money on their shorts. so i don't think this is the end of square, i don't think that this is, you know, another nikola, another huge scandal. but i do think that fin-tech in general is going to be held to the, you know, more account in the coming years and that this is the start of concern start of it. charles: it's going to be interesting. if you're right, maybe cathie wood did a smart thing today. sarah, thank you very much. coming up, my takeaway on the creature from jumbo island and and why they keep that helicopter at the ready at all times. but first, my next guest sees some opportunities in front of us, but what about this so-called moment that's supposed to sink this moment? i'll ask brian belski, he's next. ♪
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to reflect on those who have sacrificed so much to defend our freedom. i know how much you care about america and our veterans and all the things. but you have such a platform now. yeah. and to share that with us that we need to get the word out that we have to take care of these great heroes and their families. you know, as i started to be more and more successful, i was like, how can i help? but when i heard of the tunnel of the towers, and i met brandon in idaho and his family, i was like, wow. there's actually a charity where we know where the money's. going to go. we have 95.1% of every dollar goes to our programs. and i think brandon's a great spokesman for t2t and and his wife, shannon, has two daughters. i mean, oh, my god. they're just special families. so pretty much, if you put your life on the line, if something goes bad, they're there. that's awesome. yeah. they're incredible people, man. you saw all the stuff we put in these homes, right? i was i was blown away. and they deserve it. they earned it. this is not of course, we give them a mortgage
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charles: all right, so it's weeks like this when well known market bulls are ridiculed or sought after for advice. now, i'm in the latter camp, and we happen to have one of the best bulls out there with an amazing track record. joining me now, chief investment strategist brian belski. brian, we're told that the market was going to implode for a number of reasons, right? coming into the week. i'm not sure you're familiar with the menski moment, but the onset of a reckless collapse. this occurs because investors take on additional credit risk and when speculative activity reaches an extreme that is unsustainable. it's hard to the argue those
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points, right? >> it is. thank you so much for having us. i think it would have been, actually, much more apropos if the moment last year, right, before the 25% correction. but we've already had four moments with respect to high multiple, no-growth tech stocks, the spacs, the memes and crypto. it completes the hand. but anytime that anybody gets greedy, everything in moderation, and this is exactly what has occurred. but at the end of the day, you know, we've taken a lot of negative comments the last couple of weeks because we've been telling people to buy financials. but not all financials, very select financials. and i don't think this is a con a ajohn. our great analysts don't believe that as well concern contagion with. we believe this is the isolated. and the way to think about it, charles, is, quote-unquote, usual suspects that once again got in trouble. charles: yeah. credit suisse has been in trouble for a decade, and, of
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course, silicon valley bank was arrogant, stupid and greed key. [laughter] but to your point, all of these financials look ugly at the moment, so you would say then for the most part, i mean, you know, when you say being select, could you narrow it down a little bit? if someone's going to buy this dip, they've got to buy the right names. >> great question. we're sticking with our theme, and our theme is scale. just a really easy word, scale. and and so what's scale in financials? money center banks, canadian banks, asset managers and brokers. now, there might even be a broker that goes out and buys one with of these banks. if you are going to buy a small or medium-sized banks, you're going to have to roll up your sleeps concern sleeves and do some analysis and see what's on their balance sheet. the only ones we run are those with very clean loan portfolios, very conservative, kind of the
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way we run banks in canada, very conservative, don't get out over our skis, and that kind of fits our model. charles: although you could argue that the risk-free bonds seemed conservative. i'm boeing to pick up on the maul and mid-capp names. i was reading your report and, listen, it's been a tale of two years for them. they crushed it out the year, they were unstoppable. the last two weeks though the wheels have come completely off. is it because these names are seen as having a harder time if they need to raise money as opposed to the, you know, these big mega cap names that keep going up because they don't have to worry about cash for right now in. >> yes and no. i think there's been too much said that the small companies only rely on small, medium banks. i don't think that's the true. i remember post the credit crisis we had nothing but small banks and medium banks do very well. everybody didn't want to be with a big bank. i think the inverse is going to happen around this time -- this
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time around. if you look at valuations, we're at a 25-year lows if you look at maul/mid versus large. and small and mid-cap stocks look very good. we actually have some and put some socks on our list in our report for our clients to see. they're actually growing dividends, charles. you and i would have never thought that 25 the, 30 years ago. so we think small is going on the a leader, we think that this is overdone, and it's just another example of the market being with binary and just selling anything. charles: all right. brian, always appreciate when you come on, particularly when there's rough waters and you help folks out. we really appreciate it. have a great weekend, my friend. >> you ooh the, charles. charles: my takeaway on why powell is going on toking tossing a whole bunch of money out of a helicopter. first though, top trading ideas. he's extremely nimble, he's the kind of guy you need in this kind of environment, right after this. ♪
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charles: i got a tell you the market's hanging in there a lot better than i thought it would. the s&p 500 held right above
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that key support point, 3900. i want to bring in hedge fund teleme try founder thomas thornon. let's talk about, i know you use some technicals, right? and this 3900 number goes back. it's held now for quite a bit. what is it about, you know, when it gets down here and buyers start to emerge? what's the magical magic about this? >> well, we've been in this real trending range for the last month right now, and every time we get to 3900, i think it's testing it, and we need some sort of catalyst to push us below -- charles: right, because we're in a real narrow range. if we do to go below it, i've heard numbers as low as 3200. could we really pall apart lowe theresome. >> it's going to the take a lot to happen, i think you could see 3750 again, i think that's more probable. charles: federal reserve, i'm a little surprised.
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almost every guest so far on this show said the fed a's going to the stay the course even though the modeling says rate cuts for the rest of the year and the market has been screaming for that. is there a point where you think powell blinks, that, you know, in the near future? >> well, i think that they've had to the push the inflation fight on the back burner and look at financial stability right now. and so if we have more financial instability, i think the fed's going to have to do something. today may pause in may, and i think that might be some of the messaging that we hear. until we hear the next inflation report which i think will be higher. charles: oh, really? why would that be? >> i just don't think that inflation is coming down fast enough for the beneficials, and data's been really strong. the job market is really resilient concern. charles: yeah, but almost everyone getting hose jobs, they're the lowest paying jobs. how much does that add to inflation? because the wage part of it is really starting to slow
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dramatically. >> i don't thinkst the slowing as much as the fed needs it to for them to full on pause or even start to, start to cut rates. charles: under normal circumstances. but you mentioned stability with earlier. so at some point if we have a wacky week, you know, if we keep having these kind of wacky weeks, does stability move up temporarily in terms of being more important and inflation becomes subordinate to civility for the near termsome. >> yeah, i think that if we cough some, as you say, wacky weeks, i think every day's been a week in itself -- [laughter] if we do have that, i think the fed will message that they're going to pause. charles: in the mean time, you're a pretty nimble trader, and you saw some understoods out there. two of the hottest names in the market, nvidia and amd. this is not an indictment on those companies, i guess they're just come too far, too fast. >> that's exactly it. they're great companies. they dominate their businesses. i think nvidia's up 90% for the
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year. i have some exhaustion signals that i use, and they're telling me that it's time to sell this, so i'm shorting it for a trade. charles: quickly, i know no one knows,st it's tough, but next week, how do you maybe see it playing out? >> i think early in the market down and then towards the end of the month we'll see a little bit of buying -- charles: is that that windows addressing thing? >>st the possible. -- windows yes, sirring thing? >> it's possible. i've never done that. >> thomas, really appreciate it. all right, folks, we're just moments away from me doing the takeaway on why jay powell's going to follow his predecessors. it's just tooer resistible to be popular. when we come right back. ♪ that's what i want, that's what i want ♪
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we got this. we got this. we got this. we got this. yay! we got this. we got this! life is for living. we got this! let's partner for all of it. edward jones charles: okay. so we keep talking about the thing called the federal reserve, the powerful, omnipotent the, money-printing machine. how did it get here in the first place? here's the thing, it was created after a series of experiments including the first and second banks of the united states. and then on top of that, a series of economic crises, right? you go back to the all the banking panics in the 1800s, they were devastating. the final panic, the panic of 1907, is when all these rich people got together with the
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lawmakers and said, hey, let's go down to june coe island in georgia and have a meeting. this is why some people refer to the institution of the federal reserve as the creature from jekyll island. there was this promise that it would smooth out all these boom and bust cycles. you wouldn't have to wore are -- worry about it. that never if happened. the creature from jekyll island has been given more power and more autonomy and more control over the economy, even our lives. also along the way the focus has moved away are if sound money in the economy to the simply serving the stock market and the same wealthy folks who were the architectses of the fed in the first place. and along the way alan greenspan became the maestro for saving the market, ben bernanke became a hero for saving the banks, and at the end of 2020, jay powell was considered a winner. what they all had in common was no shame when it came to printing and priming the press. i suspect even though powell wants to impress the folks at
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social club that he can be paul volcker and crush this economy, he ultimately will opt out instead for the adulation of the masses and start to prime the pump yet again. we'll see what happens, you know? a lot of people, almost everyone on the show odd the said the fed's going to to stay the course. i believe though the way things are happening beneath the surface in this country, at some point this summer or earlier you're going to see the fed not only pause, but they'll start to to hint. liz claman, heir going to warm up the helicopter, so be ready. liz: yeah. and we still don't know, as i said yesterday, what's really going on underneath the skin of these banks. charles: right. liz: oh, boy. well, we're going to see, because here is the big question as we kick off the final hour of trade, will traders and investors turn tail or turn even more bullish than they are at the moment while barreling toward the closing bell? judging from the dow's behavior this session in which it's crossed the unchanged line 41 times today, i'm going to say it's too risky a call


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