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Forensic psychiatrist Dr. Keith Ablow and FBN’s Charles Payne debate the factors driving the market’s rally.
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That has promised it comes the fights between two Bonnie and company regulars doctor -- outlook on our growth jobs pay.
-- -- assess the market rally is a psychological.
Bubble.
Charles strongly disagrees he -- seen him go at each other -- the commercial break yesterday.
Let's start with your doctor make -- case it's a psychological bubble.
Here's the thing Stuart I'm not saying for short to stock psychological bubble but it certainly could be.
Fueled by printing money.
Fueled by an irrational exuberance.
And mirroring.
That lead up to the Great Depression when -- will hear from Charles perhaps industry was flourishing profits were soaring.
People were seduced to put more than their net worth in the markets and then you know what it fell apart.
Why because the underlying cultural and economic fundamentals were never there.
Now we face a possible delusional event.
Which is that these stocks should be valued through the roof and I think people should be exceedingly cautious right you have thirty seconds -- -- got study sentence.
Listen they the idea that people should always be exceedingly cautious but -- -- I worry about you talk about bubbles and and you talk about gambling you talk about being detached from reality.
-- the Dow thirty actually reflects the reality but it reflects that reality that I just think we're too myopic to understand.
In I would overall the Dow thirty stocks last night at home it's amazing how much money they're making but now -- making up from mainstream to making up from all over the world.
Every one of these companies is about.
The growth around the world particularly Asia particularly Latin America more than justify this but what's dangerous and with the bubble in my opinion is this what was me.
Mentality I gotta tell you something that's the bubble that we're gonna that the country's gonna collapse tomorrow that's the bubble and that's the bubble that that so many people miss out on -- -- lifetime opportunity.
Before we got back you don't why I'm gonna ask a factual question -- Charles tell me show me.
The profits are at an all time high just as the Dow thirty stocks are at an all time on -- They're there they're there I mean I you know I could show you of the income statements from each -- -- move more importantly.
The growth it's amazing it's not that it's reflective of the path it's reflective of the future and just real quick.
I want to tell you about some mass hysteria.
Visited two local newspapers in new York New York City the home of the stock market new wanna live even talked about the Dow hitting a -- there's no debt there's no hysteria out there.
This one -- a matter of fact talked about it.
-- call look at really your response doctor.
Of course there's hysteria listen I guess Charles wasn't listening to my first point.
Prior to nineteen point nine in -- in the first six months of that fiscal year.
There was a 36 point 6% increase in the profits of 536.
Major companies.
Auto registrations were booming.
Building did you know building was booming everything was booming if you just look at the profits Charles you don't understand that -- There are risks out there -- look at and I didn't waste any.
We -- the Middle East and turmoil we have a president who doesn't believe in the fundamentals of capitalism and a free economy.
You don't think that should be baked into the market that the guy in the corner office.
Doesn't think in the American dream fashion.
The thirty something broke quick OK I talked about the world being on far this this this -- -- this month of this and of Conde Nast traveler.
My next stop was still had its board born of the gold industry -- South Africa's biggest push is most dynamic city where anyone on the move pills like here she has a decent chance of making it.
Big this the way the rest of the world is thinking -- doctor -- is saying listen this is.
1920 and I want to go back to 1940 Hamas gonna -- a roaring twenties began a look at the move up you wanna talk about the day before -- -- part you know you know we got out of the Great Depression we prepared for war in 1941.
We may have to prepare for war again but boy that's going to be a tough way to get your money back in the people who lost at 92 -- nine spent most of their lives.
Trying to just tread water and get back to where they were in 1928.
OK let me make this point it is possible that you both have a very strong point.
That the market rally is the result of Ben Bernanke like mine better -- REI.
That the market rallies result yes -- -- -- Bernanke printing trillions of dollars and yes the market rally as a result of record profits for those studies stop to the Dow Industrials you've both got a good point.
I have the most important point hardly -- that they -- well I mean I don't what was me mentality doctor if you want.
Forget about what people feel may lose you you're you're kind of thing I have gone up so many millions of Americans from being the -- -- -- they -- from being great about it about.
Look I think -- -- -- Armstrong Lance Armstrong won those races but -- -- on steroids.
Still all you're looking at.
All your look at Charles is his Finnish time saying but wait he's riding so fast he looks so strong.
Well yeah but it's all -- lie.
As gonna come tumbling down I got -- against at all -- doctor if you own stocks now you would sell up which it.
I'm not saying that and listen I defer to my investment advisor because of a psychiatrist rather than investment advisor I would be -- Here's what I would do it common investment advisor today.
I wanna be prepared for a possible bad outcome here but I think that people may be part of a manic hysteria -- do that a -- -- are a buyer of stocks or.
-- imports of all doctor Keith would not be in this rally so let's get that straight I'm already and it I'm already up hundreds -- percent -- -- people of the money for the last several years doctor -- would not bigger rally to get out of the rally so to tell people whether -- get out now the more.
Terrible Charles -- as a friend I'll tell you be more careful as you're psychiatrist.
Would basic -- -- your actual friend I'd say man.
You sound like you're really you have to swallow in the -- About it oh wait that's not about good point there's just about the idea that I want people are not let's just put it this way people who are not in this rally people or not rich like you doctor cute.
What are you gonna say to them on what are they gonna do as it we're gonna do further why I got to -- drop are gonna drop -- -- -- -- you -- I guess they actually did they claim by a little gold to back the young that was a spirited an impassioned debate in which it was better than the one we had yesterday -- -- the commercial -- -- -- -- thank you gentlemen what I thought about on everybody.
