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OppenheimerFunds Chief Economist Jerry Webman on the risks to the U.S. economy from Spain, Portugal and Europe as a whole.
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On the -- -- and what I hope that our viewers have really -- cents up here.
Is that -- there's a lot of -- a lot about FaceBook at NASDAQ and things happening here with the the jobs report here for -- -- but keep in mind.
There is that cloud that lurks from Europe and it is an issue at the moment Treasury Secretary Timothy Geithner told me that -- Fox Business exclusive interview yesterday.
But he also said that the American economy is gradually getting stronger he's been criticized in the past for being too negative.
But I asked him what is the single biggest threat to the economy as it recovers and it came in disorder.
That's -- big risk you see out there still is Europe still.
Facing a very difficult very challenging period likely to have very weak growth.
He also mentioned Iran -- the -- the turmoil there of course in the Middle East but Europe credit -- -- kind of took me by surprise let's bring in -- wedeman who's not surprised.
He's been worried about that -- chief economist senior investment officer at Oppenheimer Funds.
And you Jerry with a 183 billion in assets under management have to be very realistic.
And careful about markets and money.
Early right that's it certainly true so Europe.
This Spanish problem is a serious problem weeks we -- the views the European Central Bank.
They found out LT RO was the German word firm for quantitative easing.
They -- liquefied -- banks twice that's really important.
But ultimately it's just a way of buying time.
These countries are gonna have to find a way to produce real good old fashioned economic growth.
And there are several European countries -- how that's gonna happen is just a real puzzle reside in one of let me -- -- the bond yields here sure Spain and you can elaborate or articulate exactly what you see here that becomes worrisome but you still have ideas for investing in the US well we wrote.
Let's look.
So so Spanish bond yields they're not they're not yet at a level -- mechanics we read where they have already seeing or five and a half I'm gonna gas.
You know that's still not at that level where they can't refinance themselves but it's telling you that they're serious stress they're serious stress in Europe.
So it it isn't the systemic.
Financial system problem that we worried so much about through much of last year because of the really qualification of the banks at least not yet.
But it is a threat to having a major part I think -- -- climbing until at least the the.
I must your eyes -- -- but but let's also talk about credit default swaps those of course of the -- a financial instruments are people could insure against a they hit 475.
Yet.
It it's it's clearly a problem here.
-- where near an -- by the way one of the good results of the Greek default let's call it what it was was that the it can credit default swaps were actually trigger people bought insurance actually got paid off unlike what happened to me when my basement flooded actually -- they were able to get claims on that insurance and that's a good thing.
But the world is becoming more worried about and should be more worried about Spanish about Spanish -- and Portuguese.
Let's shift the camera to to -- here in the United States we get the march jobs report how heavily will that way and we have seen job creation average over the -- -- about 245000.
Right which is okay not great to.
But remember that the US consumer is the single largest part of the whole world economy house -- looking -- -- -- we're looking.
Well they today we got confidence numbers the consumer feels pretty good -- see I think we -- -- foot race in the US economy among US consumers do the price of gasoline.
And that and that and -- pace of jobs creation and right now by calling it wasn't knows maybe it's gonna be ahead.
The jobs creation is beating gasoline prices and of -- -- falling back that actually is a near term positive for US consumer.
Don't misunderstand me.
This is not you know -- the good old days.
But this is this means that nearly 20% -- the world economy is in pretty good shape -- slightly bullish stuff outside now that sounds concerned but he's gonna talk about the story of bond guy and what did -- order a what a life that -- eighty.
You don't sleep and Jerry's coming back in just a few minutes to talk about what sectors he.
