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Cumberland Advisors CIO David Kotok on the outlook for Facebook and the issues facing the European economy.
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Well it in that these these daily a pace that's monumental date you the colossal mess playing -- Europe of course and JPMorgan in the hot seat they continue to stay there but we've got it all covered.
I'm gonna -- through what my next guest David -- -- chairman and chief investment officer Cumberland advisors thanks so much for joining -- nice to be here so much going on today with FaceBook -- you and I were talking about in the break.
We were arguing with Charlie gastric hope we didn't -- the name of your book.
They were just showing it from -- to -- ETFs.
It's so.
Let me take you back to -- that we're talking about it break and also.
You know we argue with Charlie Gasparino about what is a good opening price what do you think what do you think about what's -- -- tonight.
The debate about what is a good opening price in this New York Stock Exchange -- yeah.
Find it's news because of the questions about the fact of the matter is a week ago.
We're talking about that no one expected FaceBook at 41 -- they didn't expected to 38.
It's a success story right now let's see how the company unfolds do they get revenue do they make a profit do they grow up.
And let's find out and if they do this is going to be a marvelous story and a great success -- You expect more from popping and that's what a lot of people are saying I'm making their argument -- the investment bankers are happy it is never analysts say but that.
They know how do you know about underwriter restrictions you don't know exactly now.
This was positioned -- side and you would want to hold back a lot of stock could not have flippers.
And that would dampen some of the activity so you know the -- -- up it opened let's see what goes up would you -- Break here -- we only by ETFs.
Now as I talk about my book.
And there's going to be a social networking ETF within a few days it'll have FaceBook in it will look at it and see if it meets.
A lot of other cry to but it's not attempting to you on a personal level I own wonderful ETFs yeah and I am a few stocks that I've held a long time and I'm pleased okay.
Let me ask you about what's going on in Europe we'll take sort of a -- -- because you said you know that you're thinking the unthinkable that the unthinkable has occurred -- what do you mean by that well.
It Greece instead.
There the private sectors crushed the only thing that's left is government feeding government by taking money from one pocket put it to the other so that.
Debt payment can be made back to -- government the -- So the issue is Portugal Spain and really the issue is Italy Portugal spreads are wide.
There's lots of questions about whether it's the next Greece.
Spain is solvent if you look at its macroeconomic picture.
But it's got a liquidity problem but the big question in my mind is Italy the debt GDP ratios 120%.
-- the third largest debtor in the world -- so.
Is there enough is there enough money to go around the -- support seen.
In debt and equity I believe will test that before it's over the only game in town is European Central Bank.
They're gonna have to do big and soon.
And so there's another something coming -- whether it's an LT RO or some other form.
But it has to come.
What does that mean -- -- for an investment perspective.
Well I think that there's there's a rule that work in the world now in the US and in the UK in in the ECB everywhere else and that is no more Lehman's no more AM AIG's we blow up the Central Bank balance sheets we have a different response.
And that response is going to have to occur in Europe.
In the in the billions and billions and billions so what does -- -- apartment investment perspective what do you stay away from what do you buy while I'm under -- -- do you have a little bit in Northern Europe a little -- in Germany.
I'm over weighted DUS I think the US is in a long cycle out of recovery slow steady no more recessions.
And we're gonna get it and housing turnaround -- we're gonna get it.
In manufacturing.
We're gonna get -- energy and natural gas we're gonna re employed people.
We have an exciting decade I wanna be in the US market them fully invested real quick -- -- what do you think that JPMorgan situation.
When he testifies.
And they start to peel the skin off there will be revelations because every investigator.
How of the congress is exploring every rock in JPMorgan that's going to be a hot -- -- for you.
All right David -- talk thanks so much for joining us we appreciate it nice to.
