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Doug Roberts, chief investment strategist for Channel Capital Research, on the economy, stimulus and impact on the markets.
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-- this morning painting.
Yet another gloomy picture of the US economy so than ever -- -- -- -- the question do we need more stimulus to avoid what our next guest calls financial Armageddon.
-- -- doom and gloom is just you can cut in this studio today joining us now Doug Roberts channel capital research chief investment strategist.
What's not you know people are just fed up this is of this is frustrating to look at this now -- to see us down 210 points.
There goes my 401K.
I don't have a job I don't know any extra money to -- spend anything what is what's with the economy.
Right now the economy is in a period.
Adjustment our duration we have a really.
Address the fundamental problems.
So we're using short term stimulus to really deal with a monetary stimulus.
Now monetary stimulus actually drives up the financial markets and plates ask prices of -- today.
Well that's the reason is Operation Twist was clearly.
Enough to may be stabilize the market -- prevent a crash at least at this point.
But probably not enough to basically justify the rally that we've experienced over the last we curtail.
-- what we're talking that is adding another 400 billion dollars to the market with this next -- of Operation Twist which it it's not a lot of a lot of money at the end of the day.
That's correct racy unfortunately.
It's probably enough but the problem is is we talked about it before right now it's analogous to when a patient comes to a hospital after they've been an accident.
You administer pain killers to stabilize before he goes and surgery really the Fed and monetary easing painkillers.
But fundamentally that does not obviate the need for surgery because -- -- -- -- to pick up -- -- and cut it open at this point -- well it's not gonna be popular with anything there are no easy solutions to the problem.
So there for -- rely on painkillers and unfortunately painkillers as you see in real life.
Require higher and higher doses to be more effective but.
At this point I think we're numb to it right to discontinue this analogy here we are numb to it the market is not moving and people all I think it's happening is people are just getting more and more frustrated.
We even saw the -- finally come out and say consumer spending is deteriorating.
Clearly the housing market is still depressed all the stuff that access is -- at home is not getting better.
I don't -- -- care much growing -- up this year that's no consolation -- campaign my bills.
Ultimately you're correct it's not affecting the economy.
It only affects really it stabilizes the situation.
And prevents it from getting worse it doesn't cause it to get better so at that point that's really what the Fed Chairman was saying yesterday.
He I believe he will eventually be forced to do more monetary stimulus this is a guy whose primary focus when he was at Princeton.
Was really on mistakes the Fed made during the Great Depression but your point earlier more monetary stimulus is more painkillers that we are essential that -- number -- so what's the point.
I think at this point ultimately.
-- hoping that if what without the pain killers.
The situation could deteriorate fairly quickly so what he's trying to do in some -- and what most of the congressional hearings that you've been seeing.
He's he's trying to prod really the congressional administrative branches to really do their job yes.
I mean certainly punted the Walter them a bunch of times damning if he's got nothing -- -- them.
Can he fight this -- I mean can he even with monetary policy you have so -- extraneous factors he can't control.
Europe being the biggest one of them Kenny actually effectively make a difference here.
I think at this point he can stabilize the situation but it's going to be much more difficult if extraneous events occur but then what's happened in history in the past.
He saw this during World War II in times -- basically conflict.
We even subtle little bit -- in 2008.
The Fed can take extraordinary measures.
That normally wouldn't say and just -- -- remember back in 20072008.
They said the Fed was Alabama when he came up with new tools to deal with the situation.
As he did seem to have a closet full bullets to any Doug Roberts thank you very much I think people at this point -- opening just pull them all out and shoots.
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