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Bad Signs About the Economy

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  • Description

    Delphi Management president Scott Black gives his outlook for economic growth.

  • Duration 3:18
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-- next guest says the economy is in serious trouble Scott Black as president of Delphi management.

Us now from -- said.

Scott you look at the NASDAQ in the broad market measure by the S&P 500 last year double digit gains were -- about up about 15%.

Is that not warranted.

Well let -- ask us multiples and cheap even if we look today.

On yesterday's close is roughly fourteen point one times expected earnings.

But the problems other corporate earnings are really trying to head down.

In the last latest reported quarter the S&P earnings were -- that's the first drop since the bottom of the -- market.

-- are only up one point 1% which is not good.

And truthfully -- estimates for next year like a 113 dollars on the S&P.

Right now we're at a level like 9976.

I don't see a lot of growth and earnings -- -- Operating margin is -- party -- they hit nine point 5% in the third quarter of last year they nine point 06% that's a big decline.

It doesn't bode well.

So it's hard to be very bullish on the market is so.

-- right when that -- that if he starts to should hit that he's starts to sure agents stocks all of a sudden look a lot more expensive.

I well -- -- you just got ready to mention the fiscal -- you most concerned about what is happening here in the United States.

Or what you see going on over in Europe again a big downgrade by Germany's Central Bank on growth there but what about here and our lack action in Washington.

Obviously I'm very concerned because a shows a lack of confidence for investors.

The public posturing is ridiculous just like the speech we heard pretty prior to my coming on by Boehner it's time that the president and Boehner and start going -- campaigning on their rhetoric which they did prior to that first Tuesday in Alabama.

Get behind closed doors in a serious way.

It's ridiculous that the Grover Norquist pledge is taken by people we need to raise revenue assumption -- point get out but the president has the lead and not follow from behind on cutting the growth and entitlements it's always a misnomer when people several gonna cut spending no -- cut the growth of spending.

But -- gonna have to put real things.

On the table Medicare Medicaid social security.

And -- -- discretionary.

Things in the budget because the gap as to why.

-- other people pointed out we need revenue -- about -- and a half percent of GDP we need expenditures in about 21%.

And now look at the economy going again -- -- better fiscal shape overall.

Another point that I wanted to make is that the consumers pretty much tapped out if you look at nominal GDP was up five point 4% in the last quarter.

Personal income was only up 3%.

That's a bad sign because it helped -- consumption is when he went to the seven and 1%.

About GDP at this point some people at this saving -- -- bomber credits going back up.

Contrary to the fact that people think.

His deleveraging actually against -- credits up eleven point 7% year over year lot of these factors don't bode well going to the coming year.

Thank you for shaking me up this move -- Scott above -- the weekend as great to see you as always.

Terrific insight Scott Black from now on management thank you very much he -- -- will get.

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