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Heritage Capital President Paul Schatz on why J.P. Morgan’s losses will not be the catalyst for another financial crisis.
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And we cannot -- lot of people weighing in on taking more -- billion dollar -- Whether to sign a bigger problem is facing the sector will my next guest was quoted in USA today today.
On the issue saying.
It is not likely the beginning of a crisis or contagion.
It's just one event that involve some pretty stupid decisions joining me now is Paul Schatz president and chief investment officer of its capital great to have you.
Thank you have you learned so you don't think this is the beginning.
This event is not significant of another event that could be catalysts for another financial meltdown.
I don't think so at all look.
For for years we keep talking about the banks.
Think of how much better shape the banks are in today 2012 than they were and 07 I mean -- world's -- -- -- sitting on more than a trillion dollars in cash.
What I find amazing is when the banks have been making all this money over the past and it's.
6812.
Quarters to the tune of billions and billions -- it barely gets -- detention because when you have losses they're normally magnified.
And is normally some kind of rogue trader problem behind the scenes I think here what with a significant was -- was JP.
Right not Citibank and Deutsche Bank or somebody else but.
I'd like I -- like you also you do you ask is this the first -- cockroach.
A bad banking investment decisions -- about that a angle of this.
If it was anybody else but Jamie Dimon.
You know my my cockroach indicator would go up and I think keys is our problem here at the bank.
But listen this is Jamie Dimon are talking about this is probably is biggest black -- certainly JP if not it in his CEO career.
I feel pretty strongly that Jamie -- -- gonna get to the bomb this very quickly heads are gonna roll you not to see this happen again at JPMorgan.
Yet -- to say a lot of the markets been so -- and look at the doubts up a couple points I mean nothing.
Extraordinary but a lot of people were concerned it could have been a lot uglier.
Equipment other -- if you look back in history.
Things like this normally happen during a more significant decline -- -- back in in January -- wait.
You had the rogue soc gen trader that -- even got 18% that put us in it in a 23% tailspin.
This stuff normally comes out after you've had some kind of decline of significance.
The that the market's only offer a few percent from the high it's it's a little bit curious that it came out.
So soon after a high but as I pale and -- we dime for coming clean this magazine did and it was and they get anybody else you'd you'd really be.
A little more skeptical I think this is -- a footnote I think it'll be the -- over the weekend and.
So we're gonna let me -- your outlook on the broader market because they get to censor a little bit -- actually you're on the record right expecting another recession next year cracked.
I think we're gonna see a recession in thirteen or fourteen there's nothing -- and recession to help the declines assist them.
What kind of bet -- -- consecutive quarters of negative GDP growth that's what you're looking for the -- the definition of a recession.
Yes I think it happens in -- in thirteen or fourteen.
But can -- there aren't a lot of us that are -- had to the last couple of years you think we need an actual -- -- to cleanse us further.
-- MB -- I think we'll go ahead response.
I don't think we need to -- I think it's gonna happen and I think it'll it'll it'll be from global issues I don't think there were sessions get -- emanate United States.
But I think you gotta be realistic here Europe is a complete disaster.
I'm -- I don't think China lands really softly I think Japan is the elephant in the room.
So -- what we're we're do listen the business cycle we're gonna be due to have another recession I think it's gonna be mild.
Three trillion dollars in corporate balance sheets -- be able to survive the recession a whole lot better than you when you had a banking crisis in 08.
So recessions happen I don't want -- I've arrested -- -- 40000.
What I don't think that's happening yet we're gonna have recession it's gonna be normal it's gonna be -- a quarter -- healthy and that.
That next recession I think.
The unemployment rate really collapse I think you we create job having a lot of good things happen and I think -- begins a secular bull market 125 years.
After the next recession okay.
We got to take on things Paul -- thanks a lot.
