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David Stockman our formal budget director -- -- Ronald Reagan.
Causing a lot of balls without all bed in the New York Times over the weekend he warns of -- stock market bubble again on go to quote this is what he said in the article.
When it -- there will be no new round of bailouts like the ones the banks got -- no way to instead America would descend into an era a zero sum austerity and virulent political conflict extinguishing even today's feeble remnants of economic growth they saw what.
That is very very strong stuff is -- I I think we need to recognize where we are she -- the -- -- it bias that says what we've been doing for the last couple years only we'll take a little more time.
And recognize that trend here's the trend main street economy has been failing for a decade or -- -- -- well for one we have created only 171000.
Jobs a month since 2000 in the last thirteen years averaged seventeen month we need -- 150.
Investment growth business investment real growth less than 1% a year for twelve years.
Real income real net worth of the 90% on the bottom downed 25%.
I could give many others but the point is the main street economy is struggling.
On the other hand we have.
The Fed bubble machine creating serial bubbles that essentially end up.
Shooting the wealth and income up to the top 1%.
And leaving everyone else behind this is the third time.
We have been at 1516.
Plus or minus on the S&P we've had to.
Dot com five trillion lost.
Green Greenspan really deflated the -- we hit Lehman seven trillion -- Bernanke replay it's the bubble.
All this money he's created is simply circulating in the -- a Wall Street.
It doesn't go out to the real economy and shouldn't and you'll say it is no way around it.
I'm -- -- this is a -- is coming and get out a way because there's nothing the policy makers or anybody else to do about.
-- yes because the entire -- file a machinery of Wall Street is medicated.
-- -- By fed policy the interest rate -- in a real free market interest -- anymore it's entirely pagan medicated.
The overnight rate to three year rate to five year rate the ten year rate.
All of -- -- set by the Fed.
Although the fast money traders are trading against the Fed.
And if they think the Fed is ever gonna trade direction change directions they will sell the bond as fast as they bought it -- that's why we're in the mother of all bond prices the stock market.
Trades entirely on whether there's more Jews coming from the Fed.
And whether the smoke signals.
Our real last lion of your article in the times was.
Kate -- -- that basically don't hang around the book the book what was going to be votes.
And basically get out -- get out of it and get into cash.
Yes because if we look at the history of the three bubbles we've been through this is the third one.
Win the buildup happens it takes months and months and years four years and so pretty soon all the Talking Heads are saying this time is different.
We're on the way this is the remember that goldilocks economy.
And then when the bubble breaks in the Fed can't stop it.
You lose all that ground within a matter of a few trading days -- a few weeks you can't get out of the way.
So we learned that lesson in 20720.
Wait people got devastated.
Because they couldn't get out of the way when they finally got out of the way the fast money and -- figured.
That Bernanke is reef lady in the mobile.
So the fast money bought all the junk and is now laughed always -- -- -- a lot of obvious it was essentially.
Yeah yeah you're respectable guy got credibility on and that they're listening to what you've got a -- you'll say get into cash.
Now what what you mean by that to mean treasury securities and saying that office.
I'm saying into short term bank deposits or treasury securities because the capital markets in the money markets are entirely -- They're entirely.
Know stocks long -- you're gonna.
Dangerous it's a dangerous because all you know how about all I think -- is probably in the end go to win out because all of Fiat moneys in the world are in a race to the bottom.
But even gold is subject to all of these trading forces in margin calls and a lot of speculation so I'm not even confident about it.
But what I do know is that this market.
Lives and dies by the last word of the Fed.
And the people at the Fed have no clue what they're doing Bernanke is the most dangerous man ever to hold high financial office in the history of the United States.
2004 it affected orchestrate rate hikes though and made it came up pretty well in 2000 where there was 1517 rate hikes.
The question is can they do it again and also when you see this bubble bursting and what time -- Well first of all I don't think the rate hikes did so well they've raised the rate 25 basis points a little bit a little bit of time that actually fueled the sub prime bubble.
Because it drove mortgages into high yield rates and into the sub prime market and now sudden 20720 wait the whole thing craters.
So the Fed creates bubbles it shouldn't create bubbles it shouldn't be out there pumping this.
Under the earth -- a second although I I -- almost out of time you know what you respond to Paul Krugman.
Paul Krugman writes this morning you know the guy with the president economic and of office offensive -- -- -- he says.
What you've written is cranky old man stuff the kind of thing you get from people who read investor's business daily.
Listen to Rush Limbaugh and maybe if that -- usually tacked up get investment advice from zero hedge sad he's and we says -- well win.
Paul Krugman was a young man on the staff of the Reagan economic staff in the White House helping us with the tax cuts he was a pleasant astute young man.
And something over the last thirty years happened to him.
He's lost his way or change his mind that -- softened this is this article from the in the times that's part of the -- business we have some of the book the great.
Just been published yes it's -- -- it's out today yes.
And -- is this your first TV interview.
A few back.
-- saw what a pleasure it was great to have you with us coming and I see here -- certainly got a real buzz going yeah.
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