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Will Consumers Break If Gas Hits $5 Per Gallon

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  • Description

    Vinny Catalano talks about a possible impending gas crisis.

  • Duration 7:08
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Let's talk more about the economy didn't count on those with a -- now president and global investments judges of -- -- research you know for a while I think people we're seeing in the beginning of this year was going to be.

Well military's policy going to be well we were off today it would be nice little rise -- to the races in this whole gas thing has kind of a little -- hasn't it yeah.

Yeah it has and just like several years ago when you have rising oil prices and rising gas prices there is a breaking point and it used to be the breaking point was roughly around four dollars a gallon right US.

Were right over at that level that we'll find out again if this is going to be the breaking point I suspect it's probably going to be a bit higher.

This time around I think that there's -- certain amount of adaptation that takes place.

That consumers do Begin to adjust you.

The higher thresholds that are there but there is a point that which.

You you are crossing over and it can be problematic and also you are entering into the season where there's a lot of driving.

OK -- you have a lot of families that are not taking trips.

On planes but they are taking trips using new automobile so if you end up -- 455 dollars a gallon that's definitely gonna -- him.

On a lot of -- spending in other areas so yes -- take the trip yes she'll do the vacation but maybe you don't body.

Several items for the home that you might want to the body under the circumstance right so would what -- that did and say this you know so called recovery.

Impacts -- accident drags it down that's why you have.

Washington not you find and -- arrived talking about -- be you know they're they're sticking with their recession call.

Most traditional economist and how they can actress recession property doesn't -- current for second half right correct yeah.

Correct and and and certainly the data that big that they see is that it's gone pretty much the economy -- gone pretty much flat lined as of late.

The growth is flattened out and maybe this well you know there's durable goods orders number.

We'll start to reflect its way -- -- other aspects of the economy as well.

You know you had a big bump published -- -- a lot of spending pent up demand.

The China continues to grow.

But a lot of that is -- -- You know we're -- money has been flooded into the system.

A lot of this is running up against the proper balance.

Of how long something like that can go without -- being natural organic growth without there being.

Stimuli coming in from central banks without there being consumers going and it capping in.

Tail lines of credit again what you doing.

All over again issue -- Still AI from the government -- what does that mean QE3.

Do well there in the midst of this Operation Twist right which is forcing money in Q.

Riskier assets and that's where you're getting financial markets doing reasonably well equity markets doing reasonably well.

Plus that -- so you've got the financial market liquidity that's there investors are not really on mass pulling money out although.

Many individual investors and -- participating to the extent that they've done in the past.

Well I think and that being said it's almost sad because they've missed the run since October -- what so what would you say to someone who's sitting there now watching this market thinking maybe it's time -- -- -- and they did they miss it.

-- -- the big chunk of and obviously and I think from this point going forward.

You know the risks are greater than the rewards.

-- you know if you take a step back and sick what's my long term plan.

Let's let's -- you -- the -- All right or and -- famous through 100%.

-- our long term plans how old am -- -- worth my risk tolerance or my goals objectives callables standard things that you should do.

They make a determination of how much your asset allocation should be and I get to that number.

Roughly almost immediately so let's say that is in -- -- moderate risk investor 60% equities.

Maybe a step in a 30% right now -- a little bit more cautiously what's the -- -- would you still like consumer Staples -- -- -- -- that.

On -- short term consumer Staples utilities things of that sort promote conservative place on a longer term basis I still like the ones that we've discussed before.

-- resources being probably the capitalist infrastructure.

Those are areas that you know there ETFs that you -- -- that space and but would you would you be dot -- at continuing into -- us now they can hot that you want to walk you -- in -- a lot of them and gradually move your way into.

A hot area very attractive long -- -- Biotech.

But I mean you wanna step right in now and that's not -- lottery tickets to offer our yards ahead that's correct but Biotech and Biotech is benefiting from the fact that big pharma has a lot of money and they're running out of the patents that they have right now where they gonna go for the new.

Drowsiness and an employee -- -- digging in airline Eminem and today that yeah you got government growth.

Organic within itself it is a lottery ticket but -- -- -- with some of the blue chip names of higher -- -- don't take a lot like a venture capital.

And and venture Capital -- a whole tier of risk levels you have non proven methodologies non proven.

Processes.

That are there and non proven products all the -- on up to those that do have some degree of in the case of of the medical field efficacy so you have those that are close that are less risk that's for Biotech and like IBB gives you know a whole range of issues on their blood.

Stepped in to -- -- BV -- all that's the ETF for Biotech.

Right okay.

Biotech what are quarter reserved.

CGW.

Etc.

-- -- ETFs usually gives.

-- GM debt for a big chunk of the money this is what I recommend clients did he can't bet.

For a big chunk of money and what ever feel that you want to be in and then if you think you're Smart enough and lucky enough and -- lucky enough that you can find the winners with them.

Yeah take a little bit a bit of a bet on some of the award resource company that you think.

Based on the analysis has a chance to be up a big winner wary you overseas.

Practically nowhere has been in this area right now.

The other global markets don't look especially good right now -- -- towards the US markets and I think that that's probably gonna run its course and then we'll enter into.

More substantial bear market.

In the US worldwide worldwide this thing happened that -- there's no emerging market play have going on right now now.

I'd love Turkey on a long term basis I'd be very careful about stepping in on that.

Obviously you can always do the ETF -- Which is emerging miner grammar and bought me you know.

Right now I would say they have to be very very small best below average.

That you would ordinarily wanted to that area which I don't know India and no I'm and you go down -- -- and both fundamentally and technically technical analysis stuff.

They don't look particularly good tennis sentiment stop growing now it's not gonna grow as much.

I think there's an argument to be made -- -- -- child's argument yeah.

That China is got a fairly good degree of question well let's call it.

Growth.

The numbers behind them and I think it could be very problematic.

In -- not to distant future and if you look at FX side which is -- KF that tracks a lot of the Chinese market in his visit in a sideways to down market.

For the last several years.

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