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How to Prepare for a European Deluge

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  • Description

    Hennion & Walsh Asset Management CIO Kevin Mahn weighs in on the European and U.S. markets.

  • Duration 3:33
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Thanks so much our next guest says Europe's debt crisis is a dark cloud that will hang over US markets for the remainder of the year.

He's also got a TI and JPMorgan -- -- so how can investors protect themselves.

From the European day -- perhaps banking meltdown.

Joining us is Kevin -- president and chief investment officer penny and Walsh asset management Kevin welcome back to the -- and you first heard the breaking news this so called London wellness through -- now fired from JPMorgan.

What are your thoughts on this gigantic trade banks' ability and stations to take risk and whether or not a shareholder is really what that role should be with that relationship should be like.

Yes I can't think that the headlines tomorrow is not going to be the big well as help impeached.

But I think it's indicative of where we thank you very much I think it's indicative -- we stand right now as a country.

In terms of capital markets and the need for additional regulation and I have to -- -- Jamie Dimon in this case because.

I think as a private institution.

We're gonna they're publicly traded they should be allowed to place big bets take big breasts Burris can be rewarded for those they should be also be allowed to fail.

The -- does happen and because they feel they've not to suffer the consequence.

-- the shareholder to be wary about but that said.

We've -- just additional transparency so that shareholders can monitor these traits better.

But I think transparency is a great thing but I think at the end of the day we have been very careful about how far we regulate prevent those abilities for those banks to make money.

If you're shareholder -- you don't like the risk management that's -- -- and JPMorgan.

Don't invest your money that I think that's the real answer.

You see Europe is really the dark cloud we have a lot of headlines about that earlier today.

You know whether or not Greek banks would receive direct funding or -- was gonna get through there on central banker and made markets very nervous.

Are we sitting on pins and needles about Europe right now what's the next thing you're looking towards the next sign.

Still I think nothing has really changed in Europe that's why find so interesting that the market was able to -- twelve and a half percent in the first quarter despite any real meaningful progress in Europe.

Greece will default -- on the question of if it's a question of when and how long can they actually prevent that from happening to stabilize the rest of Europe.

But the difficulty with this becomes is what type of meaningful austerity measures can they put in place clearly the people of Greece do not want austerity measures.

Most people many -- population want whenever they can get from the government -- pushed back the turn take that away from them.

Explained the exposure of the US exposure to the European banks -- it's not necessarily smaller banks but.

When -- the ripple goes down to it goes up to rather the larger European banks and how you're watching the credit spreads tighten in and what all this means much signals are signposts.

To your point it's a great question because people say there is no contagion risk -- US is that doesn't have exposure to Greece and to Spain -- Italy -- too much lesser extent but of course that's what was at the heart of the JPMorgan trader who can't and -- -- forget connecting these two topic that's what's got the ball rolling back up.

But keep in mind -- -- big US banks to have exposure to the big German banks Storch affect the big European banks -- spec.

Those banks have exposure to all the pigs countries if they start to experience problems and people start to default on their loans that won't work all over into the US markets as well.

Are you starting to see the impacts of tightening credit markets yet.

Not yet have not yet thank you let me been waiting for that for a long time because even covering the debt crisis for years at -- -- And we haven't seen it yet.

Certainly seeing that the dollar rallying because I would argue that the US is in the ninth -- if I can use a baseball now due for a recession in Europe's in the second or third inning.

So US appears to be the safe haven right now.

Kenneth I was mentioning that a timeframe on your outlook that for the remainder of the year and you really think the hangover will will.

Come away after after the year's over I don't I don't think so I think we'll know a lot more by -- especially with respect to the elections.

But it's gonna be around us for quite some time alright Kevin man -- talk to you thank you on her.

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