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What Does the ECB Need to Do?

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  • Description

    The MDE Group CEO Mitchell Eichen on the next steps for the ECB and the U.S. economy.

  • Duration 3:17
  • Date

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We'll be European Central Bank followed the feds leave this morning with no new monetary policy action -- -- -- and says -- -- three things that they need to address.

He is spending the last hour train with me and a -- this exclusive -- the CEO founder -- rest three point zero asset management and you know -- -- -- capital obviously but.

The situation in Europe is also incredibly effective market psychology today and you did not like what you did not here today and here.

-- likely only getting out of Europe is hyperbole -- more hyperbole we get a different story every week or every two weeks and all they doing is trying to build bridges to nowhere but that's exactly where we're going.

We need substantive to look solutions but the problem is a substance substantive solutions of very very painful.

Andy involved letting some of the weaker members leave the Euro but right now like -- greatest thing and like increase but that people are afraid they don't know -- what the effect is going to be.

And nobody wants to play a game where they don't know what the rules are so.

They're very afraid of doing that the other thing they need to do I think is less than I was -- -- -- we talked about this opens choice of consultants choice chemical was facing us remember that.

-- facilities was -- -- was facing is.

You really need -- year old bond in Europe I mean -- socialize the currency but to have a socialized the risk and you can't do one without the other.

I eurobond or TARP program -- you need you'll unity you need something where everybody is jointly and suddenly liable for everybody's.

Yet and until you -- that -- not consult you know the question of -- costly get so is US exposure.

Two of the Euro crisis and why does this matter and it seems that your your you've been putting up your clients in matters for several reasons bank exposure.

US multinationals that exposure to Europe -- a business over in Europe.

Well first of all European banks in total.

Have about 650.

Billion dollars worth of exposure to what -- the -- company countries that's.

Greece Ireland Italy Portugal and Spain.

Right most -- bit about 450 billion is in the too big to which is Spain and Italy but do you less.

Banks have about a hundred billion dollars with -- social also.

To extend Europe slows down we get fifteen to 20% -- -- corporate earnings in the S and beef from Europe so.

That's a huge contributor to our earnings which already -- so that doesn't bode well far more recently Germany's.

On ten year fell to about 1%.

But US treasuries have been affected they were -- yesterday after the Fed decision affected again today after the -- lack of decision -- -- really handy thing.

From from groggy and where we go from here.

-- the irony is United States is a very weak economy right now in absolute terms we have enormous problems sixteen billion dollars with a -- you don't know.

Direction -- have the policy complete divided electorate.

By all rights there was no way our treasury should be at -- -- one point five and the ten year.

But the irony is we have a flight to quality trade where the United States is the best quality so -- extends the rest of the world continues to weaken I see.

Potentially United States treasury trading down in terms of yield continuously.

Again only on a flight to quality trade that's not the same treacherous quality.

Okay how -- it doesn't take out our country all right we're gonna see you it is a little bit you've got some work.

Specific picks for our viewers to fund some ideas their civil seems so.

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