♪You fill up my senses .
MARIA: WELCOME BACK, 8 ♪You fill up my senses .
MARIA: WELCOME BACK, 8
MINUTES AWAY FROM CPI FUTURES,
DOW INDUSTRIALS UP 59
FRACTIONAL MOVE NASDAQ HIGHER
BY 3, THE S&P UP 3 3/4 POINTS,
MARCH CPI REPORT OUT IN ABOUT
8 MINUTES ECONOMISTS
EXPECTING, THE CPI UP 2/10 OF
A PERCENT MONTH-OVER-MONTH,
5.2% YEAR-OVER-YEAR, JOINING
US RIGHT NOW THORNBERG
INVESTMENT MANAGEMENT
PRESIDENT JASON BRADY GREAT TO
SEE YOU.
THANKS FOR BEING HERE HOW DO
YOU SEE INFLATION MOVING WHAT
DO YOU THINK ABOUT CPI GIVEN
THE FACT OIL PRICES ARE BACK
UP, TO 81 DOLLARS ON FOOD.
>> BACKUP NOW, BUT WHEN YOU
LOOK AT CORE AND HEADLINE WHAT
YOU ARE GOING TO SEE FROM
HEADLINE NUMBERS FOR THE FIRST
TIME IN A WHILE HEADLINE LOWER
THAN CORE ENERGY PRICES
BROADLY CAME DOWN,
PARTICULARLY GAS PRICES THAT
IS GOING TO BE A MAJOR SHIFT I
AM REALLY LOOKING FOR, WHAT IS
GOING TO HAPPEN WITH SERVICES
THE BIG QUESTION.
>> WHAT DO YOU LOOK AT IN
TERMS OF CPI MOST IMPORTANT
METRICS ARE YOU STUDYING.
>> KEY PIECES GOODS PASSED AT
ABOUT TON SERVICES AS FAR AS
WHAT IS DRIVING INFLATION
GOODS PRIZE DOWN 1% SERVICES
INFLATION UP AROUND 6.
GOING FORWARD THE QUESTION HOW
STRONG ARE WAGES LIKELY TO BE
WEEK ON FRIDAY FROM JOBS’
REPORT AVERAGE HOURLY WAGES
BUT REALLY HOW STICKY WILL
SERVICES INFLATION BE THEREFOR
WHAT IS THE DYNAMIC OF A
POTENTIAL WAGE --
>> THAT IS TRUE FOR AWHILE WE
WERE SPENDING ON STUFF, RIGHT,
JAMES THEN, YOU KNOW ONCE
PEOPLE GOT OUT OF COVID THEY
STARTED SPENDING ON SERVICES,
AND PRICES WENT HIGHER.
JAMES: I AM WONDERING WHAT
YOU SEE I THINK OBVIOUSLY, A
APPETITE ON WALL STREET TO
HAVE CONFESSED END TIGHTENING
THINKING IF LOWER INFLATION
THIS MONTH LOOKING AT THE
RECENT BANK TROUBLES MAYBE
THAT IS THE END OF IT.
ABOUT IT YOU LOOK AT THAT FED
BALANCE SHEET, MUCH BIGGER
AFTER COVID IT CAME DOWN A
LITTLE BIT, THEN STARTED
HEADING BACK UP RECENTLY IN
RESPONSE TO BANK TROUBLE.
>> RIGHT.
>> DOESN’T THAT SUGGEST THERE
IS MORE MONEY THAT NEEDS TO BE
TAKEN OUT OF THE SYSTEM.
>> I THINK THAT WE’RE IN
PROCESS OF NORMALIZING REALLY
THE STORY OF 2022 PARTICLE IN
MARKETS NORMALIZING TOWARDS
REAL RATES POF VERSUS WHAT OF
THIS GEP A LONG TIME NEGATIVE
HE.
THAT IS NOT A NORMAL
SITUATION.
THE PROBLEM IS SPEED LIMIT FOR
RATES IN THE ECONOMY MAYBE
DIFFERENT THAT SPEED LIMIT FOR
RATES IN THE FINANCIAL SYSTEM,
THAT IS DYNAMIC EXTREMELY
COMPLEX ULTIMATELY THE FED
BELIEVES THEY HAVE TOOLS TO
HANDLE FINANCIAL SYSTEM
SEPARATE FROM ECONOMY BUT
QUITE A LOT OF INTERPLAY
THERE.
MARIA: WE’VE S&P WHAT HIGHER
RATES HAVE DONE TO SOME
COMPANIES SILICON VALLEY BANK,
SIGNATURE BANK MAJOR IN
QUARTER SOME KICKING OFF
EARNINGS PERIOD
JPMORGAN, WELLS FARGO
CITIGROUP REPORTING BEFORE THE
OPENING PEL, TREASURY
SECRETARY JANET YELLEN, IS
DOWNPLAYING THE BANKING CRISIS
DID THIS YESTERDAY, WATCH
THIS.
>> U.S. BANKING SYSTEM REMAINS
SOUND.
WITH STRONG CAPITAL AND
LIQUIDITY POSITIONS, THE
GLOBAL FINANCIAL SYSTEM ALSO
REMAINS RESILIENT, DUE TO THE
SIGNIFICANT REFORMS THAT
NATIONS TOOK AFTER THE
FINANCIAL CRISIS.
WILL HAVE WE ARE COMMITTED TO
CONTINUING THIS WORK TO BODIES
LIKE FINANCIAL STABILITY
BOARD, AND THE BANKINGING
SUPERVISION.
MARIA: REACTION DUE DEBRIS.
>> IF TREASURY SECRETARY SAID
NOT RESILIENT WE HAVE HAD
SERIOUS PROBLEM OF COURSE SEE
WILL SAY THAT I AM INTERESTED
WHAT IMF CAME OUT WITH LONG
TERM PROJECTIONS ON GLOBAL
ECONOMY QUITE NEGATIVE, THE
FED DELIBERATED ARRANGE
INCREASE AROUND SAME TIME AS
BANKING CRISIS SEE WHAT THEY
THOUGHT I THINK MUCH MORE
INTERESTING THAN SORT OF
HEADLINE.
>> MARKET PARENTS CONFUSED BY
JANET YELLEN IN THE MIDDLE OF
THE COLLAPSE OF SILICON VALLEY
BANKING SAID SUPPORTING
DEPOSITS 1 TRILLION DOLLARS
THEN SAID CAN’T SECURE ALL WE
HAVE TO MAKE CHOICES IN TERMS
OF WHO WE SUPPORT, WHAT ARE
YOUR THOUGHTS.
>> BACK-AND-FORTH I THINK PART
WAS THEY ARE TRYING TO ADDRESS
THE PRON CREATED IN WASHINGTON
TOO BIG TO FAIL BANKS IF ONE
ENSHRINED THAT DON’T WORRY
ABOUT MONEY FLOWING FROM
OTHERS NOT TO APPEAL TO
AUTHORITY OF JANET YELLEN OR
OBTAINING FOR INTERNATIONAL
SETTLEMENTS OR ANYTHING OF
THESE ORGANIZATIONS DO YOU
THINK THE BANKING SYSTEM IS
FUNDAMENTALLY HEALTHY?
RELATED TO THAT DO YOU SEE A
REAL CREDIT CONTRACTION SINCE
SILICON VALLEY BANK AND
SIGNATURE BLEW UP OR ONE OFF
EVENTS WITH THEIR PROBLEMS NOT
NECESSARILY LARGER.
>> I THINK THE BANKING SYSTEM
HAS PROBLEM THE BANKING SYSTEM
ALWAYS HAS A LEVERAGED WAY
DOING BUSINESS BORROW SHORT
RUN LONG THAT SAID I DON’T
THINK THIS IS 2008 SCENARIO
WHERE A SYSTEMIC BANKING
CRISIS I THINK A SILICON
VALLEY BANK TELLS MORE
INTERESTING STORY ABOUT TECH
PRIVATE CAPITAL SYSTEM THAN
BANKING.
MARIA: BIOTECH TOO.
MARIA: LET ME SAY STEPHANIE
POMBOY FROM MACROMAVENS WAS
JUST WITH US US A FEW MINUTES
AGO HER WORD WORRIED LESS
ABOUT INFLATION BECAUSE COMING
DOWN, WORRIED MORE ABOUT THE
BANKING SECTOR AND THAT HAS
HER MAKING SERIOUS PREDICTIONS
ABOUT A SELL-OFF IN STOCKS
WATCH THIS.
>> I THINK, WE’RE OVERVALUED
BY STANDARD STOCK MARKET -- 20
TRILLION DOLLARS, SO THAT IS
ROUGHLY 50% HAIRCUT I THINK WE
ARE AT BEGINNING STAGES OF A
CREDIT BUST THAT I BELIEVE
COULD LOOK A LOT LIKE 2008,
2009 IN MAGNITUDE.
>> WHAT ABOUT THAT CREDIT BUST
JASON A TRILLION DOLLARS IN
CORPORATE DEBT ROLLS OVER THIS
YEAR THIS IS WHY SHE IS
WORRIED SOME COMPANIES WON’T
BE ABLE TO AFFORD THE HIGHER
RATES.
>> I THINK THERE IS THERE IS
THE ALWAYS GOING TO BE
COMPANIES OVERLEVERAGED IF I
WANT A VECTOR FOR CHALLENGES
LOOKS LIKE 2008 I AM NOT SO
MUCH WORRIED ABOUT BROAD
CORPORATE SECTOR PARTICULARLY
LARGE COMPANIES NOT TERRELL
LEVERED YOU MIGHT LOOK AT
HEADLINES AROUND THIS
COMMERCIAL REAL ESTATE 75%
SIZE OF THE RESIDENTIAL REAL
ESTATE MARKET NOT AS BIG, BUT
PRETTY MUCH A SIMILAR SCALE, I
MEAN LOOKING AROUND NEW YORK A
LOT OF VACANCY.
>> I AM WONG IF COMMERCIAL
REAL ESTATE IS A TRIGGER THAT
TAKES THIS ECONOMY INTO
REACTION FEDERAL RESERVE
OFFICIALS DIVIDED WHETHER TO
HIKE INTEREST RATES IN MAY
NEXT MEETING MAY 3, NEW YORK
FED PRESIDENT JOHN WILLIAMS
SAYS ONE MORE HIKE NEEDED TO
BRING DOWN INFLATION, CHICAGO
FED PRESIDENT GOOLSBY SAID WE
NEED CALL FOR MORE CAUTIOUS
APPROACH HOW IMPORTANT IS
TODAY’S ANYBODY, TO THE FED
DECISION-MAKING?
>> IT IS CRITICALLY IMPORTANT
TO THE FED DECISION-MAKING
PARTICULARLY IN MAY, LOOKING
FORWARD, SIX MONTHS OR A YEAR
WHETHER 25 BASIS POINTS OR NOT
IS FRANKLY IRRELEVANT THE
QUESTION IS HOW LONG ARE THEY
GOING TO BE ANIMAL TO STAY AT
THEY LEVELS HISTORY WOULD
SUGGEST, THAT THE FED DOESN’T
GET THAT GREAT RIGHT VERY
OFTEN HARD LOOK IN THE MIRROR
INFLATION UNEMPLOYMENT LAGGING
KAIRTSDZ, DO POINT TO
SOMETHING OF A DOWNTURN.
>> WE ARE AT ZERO 15 YEARS
WENT TO 5% IN 11 MONTHS.
JAMES: IT IS NEVER GOING TO
BE EASY CHANGE UP MESS THEY
MADE CONTINUING TO PRINT MONEY
AFTER ECONOMY STARTED
REBOUNDING, ARE IN MIDDLE OF
2020, SO, YEAH, THE IDEA THAT
WE WOULD DO THAT, BIZARRE,
UNPRECEDENTED EXPERIMENT AND
THIS WOULDN’T BE A DIFFICULTY