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Empyrion Wealth Management President Kimberly Foss and Barron's Online Stock Editor Bob O'Brien weigh in on Greece and the markets.
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But we've again with this Fox Business alert we are halfway through the session and US markets are sinking as Greece's bailout plans have been put into question.
Greek workers have walked off the job striking for the second time this week and clashing with police.
For Greek cabinet members have quit over what they consider forced austerity measures by eurozone leaders.
The -- finance minister says -- parliament could vote on Sunday but will they make that deadline.
And how safe.
Our US markets from all of this timing out Kimberly -- in -- on wealth management president.
And joining me right here in the studio for the entire hours a matter of fact Barron's online stocks editor.
Bob O'Brien some talk -- debug and Kimberly I wanna start with you the debate has been among US investors and -- take -- -- money managers like yourself.
That Greece is not going to be a problem Greece and six months is going to be a major problem for US markets.
What do you say Kimberly.
Yeah Jack up well hi hi Bob and Sarah they'd be back again and yet this isn't difficult it's not that bad right now that.
The ad markets could add to be okay with the Greece -- situation.
But I think assistant at gaining on the will and and that in six months from now Begin with the same -- and asking for another bail out.
And I think the US markets actually have kind of absorbed and they had the fact that it decreases in trouble it's that contagion effect.
The other it's as back as Spain and Portugal.
And Italy what happens then we'll Bob I'm curious -- that's why we're seeing such a market sell off because we have had somewhat of a muted effect.
On a points basis from the markets this week has been legally through all of this -- even yesterday when the Germans said -- minute we don't think there's a deal in place the market didn't really react why today I'd like now.
I -- apple by the complacency in this market throughout January into February I just keep thinking.
Why are we being exactly so you don't even tempered about what's going on with Greece and I think it's because there's an inevitability.
To some sort of a resolution of this problem.
As long as it can be contained to Greece but the Kimberley -- point.
You were concerned about you know Spain Portugal Italy.
Were also concerned about France and Germany be -- real lions.
Of the European economy.
What's going to happen to them I mean right now what we're saying is we're ring fencing Greece we're able to keep it to the smallest economy.
-- in the troubled nations but boy if there is a problem.
You gotta wonder for -- only to re do exactly with this market didn't 2011.
Also -- what we keep saying from these deals that are being made over and over whether they're they're stuck you're not frankly is that the private bondholders here continue to take a haircut not just the ECB.
But private investors continuing -- -- -- now many on the US side of sent wall that is not our problem that is their problem.
But there is that contagion effect to US markets correct.
I I agree add that they question is what is the systemic risk to the US markets it's -- back in 2008 when.
Wall Street and main street amnesia with class -- whereas Boston said.
We should say hey you know -- Wall Street -- its OK there's no there's no correlation but.
As we know what happens on Wall Street that's a fact that main street and what begins in Greece as a said he are going to show -- Cheryl was -- Begin degrees so goes the world.
Some time yeah we're interconnected we aren't -- it's just an -- what's the systemic risk that -- the banks have the US.
And the investors have to the acted -- -- that -- and -- Kimberley he's point I mean think about money market funds.
The safest investment you can make that have investments in European banks what happens then and then to attempt you don't have -- -- Tibet.
What happens that the European economy goes into a double dip recession that's going to get it exported around the globe and we're not going to be insulated for.
The contagion effects -- particular if you look at.
Other relationship between Europe and China in Europe is the largest export market for China the Chinese owned the biggest bulk of American debt.
Absolutely and act like -- said what goes to a star -- is angry so goes the world so we're all interconnected I think part of this is that.
EV EO and and maybe the world Rhonda you know rock kind of addicted -- hope BM I loved -- I -- -- -- -- yeah I heard.
Quote -- -- let me -- general or we're hoping.
We're hoping that the that -- 20% had a minimum wage increase that the 20% and pension -- That 25% and a I have homeless right now they're not paying property taxes.
I'm the next point -- 48%.
-- 44 girls younger at a working grace come on how are they going to dig themselves out of this whole.
And then whose gonna bail them out and then what is that a fact China US.
All of us together so I better be prepared and not scared let me just give us -- us really quick Kimberly you read the point and I want to follow up on this you made the point earlier that we're looking at the wrong numbers on the -- You say overall US investors should be looking for -- 181000 that is what would help you sleep at night.
We're noted that right now obviously we're adults 12100782.
Thanks guys why is it it will look at the wrong numbers are the document.
What does -- -- -- -- the last year that last ten years the Anheuser reinvested dividends on the Dow is about six point 79%.
If you look at from -- the nineteenth century on it's about nine point 5%.
So really for tracking with the Dow consistently you know for going for thirteen thousand -- really should be looking at eighteen so I think there's a lot of undervalued although I'm not a stock -- I don't project you know that.
We by the markets -- in -- and get from -- -- across the world so I believe that you have to be and in your allocation -- and you have to stay there through the debts and a and and valleys and and a health.
So if you if you are allocated properly you will get that you will get the rate of return last year my 4060 portfolios.
Actually did three times what the what the Dow did.
Just because -- diversification so that's really important.
An important in the international markets as well supposedly an -- specific diversification and bottom are gonna -- -- -- -- on emerging markets later -- -- -- -- -- -- thank -- For being with me and Bob O'Brien has more -- to.
