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Royce & Associates portfolio manager Bill Hench on falling commodity prices, manufacturing and Europe.
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According that ought to -- needs about 62 billion to certain.
Euros and that would be about 65 billion US dollars and that's the figure that some realists are putting out -- they're saying 024 to 34 right.
It's way more than that now that EFSF that European Financial Stability Facility has.
Just under 500 billion and there are so.
There appears to be some money but that's for everybody not just Spain so fewer problems -- Portuguese banks have Italian banks.
Although they city time banks are in better shape.
That's why we need to be watching this because it destabilize -- the region and it's sent shockwaves across to us now is it possible that the European crisis.
Is overshadowing positive economic forces in the US today's date government approved a bill lancet series -- there is no question about it he's here to help you cash and he's the portfolio manager.
At -- & Associates about two and a half billion in assets under management.
I completely agree with you I mean we've seen incrementally better data -- not today but some data looking better but it is completely whitewashed room or.
Black washed I guess by the darkness that is -- right.
Now well before we talk about -- every day we used to remind ourselves all the time that we -- consumer dominated economy right the consumer dominated everything.
May have a situation where boils down to -- under eighty dollars.
That's for the consumer every month we sell about 3540000.
F 150s that have to go and fill up.
A lot better to do right now than it was six months ago.
Are well I think you also have some other indicators and and one of them used to or on the brink of manufacturing.
-- -- which let me just say surprises me on a day.
Where we got the Philly Fed index it's a regional indicator of manufacturing and it dropped sharply.
Right that's a snapshot but overall the costs are coming down labor.
Energy not just oil but natural gas has been well documented.
It is becoming a place where you want to do business again so whether it's in North Dakota.
-- Louisiana the amount and that's shale activity in north -- as well as crackers down in Louisiana a tremendous amount of infrastructure build.
And mostly dominated right now by energy but.
-- we're gonna have.
English pretty short time situation where we're really gonna starting to spend on the US infrastructure all well -- -- help.
The manufacturers will say you know the guys who makes stuff -- DuPont.
Siemens.
Which is not of course the US company but a lot of those -- down year to date they are not outperforming the S&P 500.
But they all have a PE ratio of about nine -- ten which looks -- -- -- you very if you look at the big multinationals.
We don't look at them for say I actually personally -- doubt but.
But I just just from -- observation you know looking -- the market as a whole what do those companies saying you know they've.
They're happy with the natural gas prices very low they don't want the exports happening so it's very very different argument -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- That would help -- to the consulting work on exporting natural importing natural gas rather than in the gulf and now that's going to be going the other way.
So there's a lot happening is a lot of wonderful things going on -- economy today it looks terrible.
But it's just today.
He's got two names were you say if people don't wanna go with the big multinationals that have that massive exposure to every country that could stumble and fall.
You say that you pick out a Northwest Pipe company or see your coat that there's a variety -- Two companies have both in the US both.
Related to energy Northwest Pipe started out making a lot of pipe for water transmission.
But now also does a lot of oil left pipe as well also very much benefiting from what you talked about before the -- And Circor is -- also related their up in Massachusetts and make a lot of valves and pumps.
Predominantly -- for the energy industry but just two examples of hundreds literally that are that are sort of benefit I'd have you here for an important issues are just worried that.
No matter what psychologically Europe just -- us.
But you know it's it's hard to sort of -- anything else to Europe suits what's been set on Europe there's been so much.
Written every single day what what else can we -- of the the gonna have to fix it right now the way that they are looking -- it can't be fixed so you can have pretty much at some point.
Bill has a bunch of other names that he's going to share with you on how you can play it what is and unrealistic fear of Europe right now.
Remember that show room to 22 well that's the low of the session today to G-20 two.
