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Newedge USA senior director Larry McDonald weighs in on the Jackson Hole Conference and the European crisis.
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Just there for us.
The global markets posting small losses as investors await Federal Reserve Chairman Ben Bernanke's speech later this week joining us now to talk about what we can expect.
As we look ahead to Jackson -- economic the economic symposium there senior director at new edge SA Larry -- Larry -- to be here.
The danger is expecting.
Nothing are expecting no great news is that what you thing will happen on Friday.
Well if you think about it more I think more important happening Jackson holds what's happening in Europe.
Mario Draghi.
-- -- to come right to Jackson Hole this morning announce -- staying Europe.
I think what disturbs me the most is this rilya.
Ever read about this my book a colossal -- of common sense there's a massive systemic risk event that's brewing in Europe it's been brewing for last year and a half that put it out with little.
Little treatments but they really haven't -- the solution and here in the United States.
I wrote about this over the weekend.
Or four years after Lehman's failure and the infrastructure of our regulators -- still massively coordinated.
That really we don't have the resources in the plan to unwind the next Lehman and I think.
They're looking at Jackson holds important for the economy and all but there read something really disturbing happening here well.
Aren't they on the case of that we've gotten indications out of the European Central Bank.
That the bank will be buying bonds typically in Spain and Italy potentially putting caps on the sovereign debt there they are on the job -- -- not.
Well what do you think they're not acting.
Well if you look over the last couple years.
We've had multiple periods of -- market goes up when euphoria and down and impatience though there was they've done a number of things over there that.
Have lost the each time including you know that the bond by buyback of Greece last year so.
That the problem is they don't have what we have the United States are true infrastructure.
To back to back up -- bond buying in the markets could force their hand at some point they don't you really need -- trillion dollars of liquidity.
The US we have that kind of capital but our regulatory system is really what's most -- -- have that kind of capital because we keep printing that's right so it's not truly working here in the United States either is it and yet -- according to the markets they're expecting.
Ben Bernanke to say more money my money's coming.
Because that's why we're wrapped up by the market has ran up as -- exactly now.
That's where you get into the markets vs the Fed and that's really eloquent point because.
When the when the Fed has that much capital that is really unlimited firepower.
The really canned stuff out.
A crisis the mean at least four.
Longer period of time.
Where in Europe it's the the opposite erected don't have printing press -- putting you know bandits and that's why we have this constant constant market volatility we Europe keeps coming back and they don't have unlimited firepower of the dollar collapses.
Europe we -- that parents are that's right that's -- that's the real.
Ultimate worry that Greenspan's alluded to a number of people glued to but.
But the thing attempt hoping justices messed up as they are business that is other countries are in the world -- -- and fiscally.
We still if you have the bitsy what I had like two billion dollars we need to put it somewhere for a short period time with relatively less risk.
Two billion town as the US US treasury.
Again look at Japan and it township it rates stay low for decades Larry thank you -- actually -- -- -- Larry McDonnell.
