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Marketwatch Columnist Brett Arends on why he's concerned over another financial crisis.
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-- the 2008 financial crisis -- a laundry list for the blame game Alan Greenspan is in the housing bubble Ben Bernanke.
For crisis response Tim Geithner for not recognizing Citigroup in Lehman's problems.
Whoever is to -- have we actually learned anything or are we doomed to repeat the same mistakes.
Of 2008 joining us now is Brett parents he is a MarketWatch columnists -- Brett.
Not -- major players.
Dick Fuld Angelo Mozilo have been punished you've pointed that out in a great piece of.
-- -- -- -- -- it's sort of it's sort of amazing really.
I guess -- -- -- younger more naive I'd be shocked at this point I seem to have some of reached a zen like cynicism about.
Both Wall Street and our ability to address the problems I mean the truth is you know.
Nobody really has been brought to book.
You know the people who -- this -- a lot of people who were involved.
None of them seemed -- been punished we seem to be learning all the wrong lessons or no lessons at all and I fear we -- constantly setting ourselves up.
For -- piece.
Crisis I mean I really I find it hard.
To -- -- to look at what's going on and actually believe that we're not gonna have another financial crisis.
Well we're credit Bob O'Brien with parents and none you know -- -- I did take issue with a couple of your points some of them -- talking about the market conditions right now.
You're talking about the equity market perhaps look at a little bit frothy win.
You're talking about a PE about thirteen times on earnings expected to grow eighteen to 20%.
This year.
That doesn't I mean that's -- cheap to -- meanwhile the credit market.
You say is also approaching -- like.
Straits but I I also feel I mean -- Tap the credit market in the second quarter of the year.
It's basically I mean -- -- like the credit market is -- it's available it's fully functioning and it was not the case in 2008.
Well addressing a -- the first point first.
The market looks cheap compared to current earnings there are other measures which would suggest.
That it is elevated I mean I'm not arguing that necessarily this the equity market is about to collapse what I'm saying.
Is we've had this book big boom on Wall Street certainly a lot of you know high risk stocks.
Have risen a long way we have risen we've got a lot of risk appetite back on.
On Wall Street I look at some of the valuations on -- number of -- group on a couple weeks ago and I was just you know laughing.
Some of these valuations are -- there's a lot of animal spirits up around.
-- the rise on Wall Street rise in stocks is good news or people invest in the stock market I don't -- listen listen what I'm saying is that you know when the problems have not been fixed.
And we have a sort of if you like a rigged or liquidity driven boom and return to risk appetites and animal spirits.
That's can be a dangerous combination -- the credit markets I -- bluntly.
It's very hard to see how the the bond markets have been.
Complete irrational.
The bond market is basically open people are so desperate for income.
With interest rates on the Forest Service for random -- by almost any bond fund and the bond funds have put their money into the bond market.
And that we've seen all -- of silly stuff going on and the bond market as a result.
Well I had spent you know Alexander Hernandez because I think the one thing that -- that we have normally -- here's the housing issue and -- that we're talking about going back 2008.
But -- we really haven't come out of 2008 when it comes to the housing market -- -- -- foreclosures.
One in four homes and from closures this country used about the banks try to work through.
All of their issues.
With the bad loans so ever guarantee that and you hear what I would be that nobody's been punished for that nobody's been punished for the situation that we were put and then.
But I think -- dinner today I'm real challenge you a little bit -- to on the equity situation.
You remember that although we doubled from the Lowe's back in 2009.
I mean you look at this is a global market were not only reflecting what's happened here in United States in the crisis here in the United States.
There's other revenues at that stock market's looking at that -- I would like to know from -- perspective about commodities and Bernanke one of your points he said Bernanke doesn't get it.
I think that's a valid concern about ten seconds -- Well I mean I thought amazing with Ben Bernanke in his first press conference in -- Trumpeted the fact that he got the Russell 2000 index.
Flying with quantitative easing this is not his job if he's if -- -- his job is distorting the equity markets along with.
Unemployment and inflation in this is not that this does not give me confidence.
Brett parents about the way I think that yeah.
I think that you don't look you have an aids today he'll look great when mission here in New York comes CSN I don't know -- Napa -- and -- mr.
Brett.
