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JPMorgan we told you at the top of the -- you've watched today that Jamie Dimon warned of risks involved with the Federal Reserve raising interest rates.
And Warren Buffett says he's being selective when purchasing financial stocks do investors need to be worried -- -- of the smartest names in the business are saying these things Fox Business senior correspondent.
Charlie Gasparino is here to tell us how that.
Supposed to register below these guys off now if you -- extra point earlier today that -- -- maybe Jamie -- to Contra indicator came out with a listed in the gloom.
And the market as you know right now is up we should point out that the markets have been up.
And down today amidst volatility down a 160 right you know and I think we shall tackle that would Jamie Dimon said he said he is weighing.
Every word coming from the Fed.
He believes that we're gonna have normalization of interest rates meaning the fifth and -- -- at some point stop printing money expanding its balance sheet.
House of fed current money it buys bonds in the open market and from the banks that gives the banks and capital extra money but expands the Fed's balance sheet.
At some point they have to stop why it could cause all sorts of economic dislocations including.
A huge bubble in the bond market and which small investors are invested in bonds.
That they could lose money once that and so at some point.
This all all this happy stuff which is cause -- -- two bubbles I believe.
A bubble in the stock market which is bad but a real bubble in the bond market I mean and small investors we should point out the retail.
It's much more in the bonds that in the stock market right now it's the stock market primarily invested by sophisticated investors who can blow out and they will at some point.
What Jamie Dimon Hussein is when the Fed really does do what Ben Bernanke hinted at about a month ago.
This thing is going to be Armageddon it's going to be really dead and you know what's interesting it was.
It may not be.
I sort of them a complete crash the stock market with -- going down to 121000 and bear market territory.
Would you could see is the bubble in response start to deflate an -- because a lot more hemorrhaging.
Like I said average people are in bonds but more than that more than that.
All these other asset classes risky asset classes and bonds even mortgage backed securities have been going up based on all this.
Fed printing of money which is -- you buying bonds of lowering interest rates.
That's a scary scenario.
People need to know that we've been talking about the scary scenario for quite some time -- right -- Jamie -- said it.
Right Gary -- of Goldman Sachs said it now it may be his words don't have as much heft as Jamie right now we welcome you I'm I would -- -- -- I would say this was I think Jamie you know I actually like Gary -- is a Smart guy the number two guy that Goldman Sachs.
But Jamie said it in a much more dramatic dramatic and he -- what I love about Jamie Dimon as Larry think -- these other guys are talking down 28000.
All this nonsense Jamie -- comes out.
And says listen guys were headed for an X store.
-- -- work that you did you know what's gonna hit the fan at some point you know.
We don't know exactly on wind slightly pared their treasury positions in a way -- -- that's what that's what some Smart people have been telling our viewers -- just be overexposed and the market itself really watched the stock market watch what the that is gonna do.
Bernanke's just -- And you know here's the other thing was you know once the Fed starts weaning itself out of this market member of the Fed printing money.
Why people buy stocks -- you by if you print money if you buy bonds.
From the bank's right that's Oprah's money gives banks the money.
The prices of bonds go up the yield goes down the return goes down so the alternative investment is stocks could you get lower yields on bonds.
That's why stocks -- -- now there's another thing going on it which.
It's gonna sound contradictory but small investors are so much worried about the Fred printing money.
That they are still behind bonds they think it's a safer investment -- and just repeat this it is is not always a safe in fact it -- -- -- when you print money you create economic dislocations like asset class bubbles as you have in bonds now.
Here is the bottom line problem with printing money to provide the content when this is monetary policy -- fiscal policy when.
Spending and stimulus coming from the White House doesn't work which it obviously had on -- while we're talking about this this is the problem -- when when you when you start printing money.
You create a market that the couples from the real economy.
Really what we should be talking -- Whatever the Dow is unemployment nasdaq's corporate profit so why.
Taxes should our stable that should be the real determinant.
Of the market not whether Ben Bernanke prints and that's the problem we have right now we should we should be shown bond -- sorry we're not like -- -- that's OK but I that we you know bond yields are.
Have been you know an historic lows we should happen.
You know it's hard to get much much lower at these prices to get them much -- so.
-- -- -- we could talk to a blue in the face here I would say this of your small investor if you think the Fed is still gonna print money.
It by this market because of markets and keep going up there are signs now that it's not.
And when it stops according to the smartest people I know and I think Jamie that was up there that means is going to be hell to -- in the market so just just keep that in mind.
Alpaca and finally I distract yourself with alpaca I just ran into Mike Collins is set -- in great shape that he can't with the CD in the Speedo what does that mean.
OK you know what does that mean.
I -- this means he wants to see you want to speak out.
You know that the hair on my legs kind of look like an alpaca hair that's that's really attractive and we just lost -- I'm not happy hours.
Well this is not during breakfast this out kids -- Charlie and on me or Danny or anybody else on the floor but Charlie thank you -- -- --
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