This transcript is automatically generated
Grand Marshal our boxing your fellow with the Roosevelt institute and portfolio strategist with with Madison street partners -- blows your president of the estate.
-- group did not start with you -- touching -- on this move by the NI EA today and in particular the economy we had Ben Bernanke yesterday.
Do you think that this is signaling.
To the world -- in the US that the US economy is not as soft patch anymore this is not.
-- -- Yeah we certainly believe that it's more than just the soft patch in the economy.
There's so many headwinds and Bernanke kind of talked about some of those headwinds yesterday.
Talking about the retail.
Sales talking about growth of the economy being a little bit less than -- anticipated.
-- talked about Japan there's a number of issues we don't like in the economy we think this is a great time to be playing defense in this type of an economy.
Until I love -- there's a lot of questions today about the IAEA's move one of them is that this was some type of prop up for the eurozone.
That we're basically is supporting Europe in some way in our economy -- that's a possibility.
It's a possibility I wouldn't describe it is major possibility.
I don't think people should be surprised by the move today.
The fact is we've been -- -- -- that the American government and various other governments -- very unhappy with the -- the move in the oil price.
You've had the saudis themselves that that -- oil is fundamentally overvalued because the president of gulf today saying the same thing you have the president excellent thing that.
More fundamentally realistic price of 65 have you -- so we shouldn't be surprised by this move taken by the US government today.
You know but on the equities side of this and I wanted to James late developments.
The oil companies Nicole -- -- the losers today in those companies have been some of the biggest drivers on the equity side along with the banks now what's.
Well they sure have but you know what they're actually still quite cheap even with oil prices coming down actually took a look at ConocoPhillips annual report just last night.
And if any investor out there wants to see a really well written letter by CEO of -- company it's just getting -- all right.
Take a look at ConocoPhillips is -- annual report I don't -- the shares in -- my clients but.
It's clear these guys are making a lot of money and whether oil's at a 105 or 85 dollars a barrel they're still gonna make a lot of money so this could be a good entry point on the.
He's doing well there also mitigated natural gas but that's another side story -- just a question -- -- the trading -- why is it oil's plunge today.
A huge bipolar overreaction guys sixteen million barrels is Bob -- the US uses almost twenty million barrels every single day this is not think.
-- oil over -- -- -- -- -- -- I can explain why I can explain why basically it's not a question of quantity it's a question of quality if you look at the global oil market oversupply.
The problem is were over supplied with heavy oil Saudi Arabia is pumping more OPEC's gonna -- more the problem is we don't have the high quality stuff.
Now what we're doing -- we've -- this oil from the reserve gonna be putting more high quality oil.
Back into the market it's the -- -- peak and now it's not a heck of a lot of oil.
But it is when you consider it's gonna be better quality what Europe needs you right this is definitely gonna help Europe that's where the problem it's.
But -- trickled down to the US if you look at imports into.
New York Harbor.
-- they've -- down dramatically over the last few weeks crude supplies gasoline supplies -- do started the impact the US especially on the -- cubs.
-- and I go back to the US economy to question where around the US economy is a some type of signal do you think that the second half of 2011 is not going to be.
As good as we originally.
A lot of us thought it was a good be good for -- for several months now I mean it's been clear as your previous guess that that indicated that euro's been falling off a cliff.
There's been signs of the slowdown in China -- you've had a very very significant slowdown in Japan as a consequence of the earthquake.
And the data in the US has been closer to one and a half 2% growth.
Rather than 33 and a half we think -- that's -- forecast by the market for the markets have got it wrong -- A considerable period of time that clearly.
Declining oil price is one of the things that policy makers hopeful act as a quasi.
Fiscal stimulus by.
In the same way that a tax cut would if you have a significant -- -- the oil price that does put a lot more disposable income.
Into lower middle class income loan holders and -- and and that's going to be very very important.
-- -- going forward because clearly we're not going to be getting -- -- monetary or fiscal stimulus for the foreseeable future.
And Dave this is gonna affect not just consumer Staples this -- -- a lot of the major players that the stocks that we -- watching the Dow thirty S&P the sectors with -- overall a lot of these could be affected to the downside.
Are you watching that side of the equation today.
-- we certainly are in terms of the downside we.
We're certainly would be more -- short the financials.
The news about the financials of the banks has been consistently bad.
There's been negative watch is by Moody's there's been deleveraging of balance sheets there's non performing assets on many bank financial sheets.
There leading the Dow down we would be more apt to hold.
Short position on the financials and general boat okay the feeling that.
We have been worrying -- worrying about the impact of 200 dollar oil -- on the world economy worried about growth.
Now oil is plunging clearly was set up for a plunge anyway speculation probably help drive it higher stocks are down 17200.
Yet stock should be up overall -- that kind of news because one dollar the gas pump -- a hundred billion dollars.