NEIL: ALL RIGHT, THANK YOU FOR
THAT, JERRY GERRI WILLIS.
BOB, YOU KNOW, YOU’VE BEEN
AROUND THE FINANCIAL WORLD FOR A
WHILE, DON’T LOOK A DAY OLDER
FOR IT, MY FRIEND.
BUT I AM CURIOUS TO THIS
ARGUMENT MORE GOVERNMENT
SPENDING, THAT THIS IS
DIFFERENT, THAT IT WON’T, YOU
KNOW, MAKE THE INFLATION
SITUATION WORSE, I’D JUST BE
CURIOUS YOUR THOUGHTS ON THAT.
>> INFLATION PREVENTION ACT,
INFLATION REDUCTION ACT, I DON’T
GET IT.
SINCE WHEN DO HIGHER TAXES AND
MORE SPENDING HEED TO LESS
INFLATION?
I SCRATCH MY HEAD.
HAVING SAID THAT, NEIL, THIS IS
NOW COMING OUT, THE ANNOUNCEMENT
OF AN AGREEMENT, ABOUT THE SAME
TIME INFLATION’S GOING TO START
FALLING.
I AM IN THE CAMP THAT SAYS
SECOND QUARTER WAS THE PEAK
INFLATION RATE.
WE’RE NOT GOING BACK TO 2, BUT
WE’LL BACK OFF SOME, AND THEY
MAY SAY, SEE, I TOLD YOU SO.
[LAUGHTER]
BUT IT WON’T BE THAT.
IT’LL BE THE SLOW ECONOMY,
DECLINING COMMODITY PRICES, SOME
SOLVE IN THE SUPPLY PROBLEM, BUT
INFLATION’S PROBABLY PEAKED.
NEIL: IN THE MEANTIME, THERE’S
NO DOUBT WE HAVE INFLATION.
THERE’S A BACK AND FORTH AMONG
PARTICULARLY THOSE IN THE WHITE
HOUSE WHETHER WE’RE IN A
RECESSION.
I RAISED THAT ISSUE WITH GENE
SPERLING, ONE OF THE PRIME
MINISTER’S ECONOMIC ADVISERS --
PRESIDENT’S ECONOMIC ADVISERS,
TRYING TO GET A SENSE OF IF IT
ISN’T A RECESSION, WHAT IS IT?
THIS IS MY CONVERSATION
YESTERDAY.
WHEN YOU SAY THAT WE’RE TO NOT
IN A RECESSION, YOU KNOW,
WHATEVER HOPE YOU GET FROM THAT
AND AMERICANS HEAR THAT AND
REMEMBER SOME OF THE STUFF THAT
I’M TALKING ABOUT, THEY THINK
YOU’RE JUST OUT OF TOUCH, GENE.
>> EXCEPT WE AREN’T AND I
DIDN’T.
I STARTED BY SAYING EVERY FAMILY
IS THE GREATEST EXPERT OF THEIR
SITUATION, THAT PEOPLE FEEL
SQUEEZED OR --
NEIL: NO, THEY’RE FACING A
RECESSION, THEY FEEL IT’S A
RECESSION.
OKAY.
AMERICANS FEEL A RECESSION, THEY
HAVE NO DOUBT ABOUT IT.
I KNOW THE BACK AND FORTH ON
WHETHER TWO BACK TO BACK
NEGATIVE QUARTERS CONSTITUTE A
RECESSION.
IF MAYBE YOU COULD SETTLE THIS
ARGUMENT, BOB.
HOW DO YOU SEE IT?
WHAT DEFINITION DO YOU USE?
WHAT DO YOU LOOK AT?
HOW WOULD YOU CHARACTERIZE WHAT
WHAT WE’RE IN?
>> LOOK, WE’RE CLEARLY SLOWING.
WHETHER IT’S A RECESSION OR NOT
IS SOMEWHAT MEANINGLESS.
WE ARE SLOWING.
YOU LOOK AT THE EMPLOYMENT
NUMBERS, YEAH, THERE ARE A LOT
OF JOBS AVAILABLE, BUT
EMPLOYMENT IS SLOWING, LAYOFFS
ARE RISING, CONSUMER SPENDING IS
FALLING.
AND UNTIL AND UNLESS WE SOLVE
THE INFLATION PROBLEM, NEIL,
WE’RE IN HOT WATER.
AND IN THE MEANTIME, THE FED IS
BETWEEN THE PROVERBIAL ROCK AND
HARD PLACE.
NEIL: SO IT’S NOT ACROSS THE
BOARD.
TO YOUR LOOKING AT VE SESSION --
RECESSION AND WHAT WE’RE GOING
THROUGH THE RIGHT NOW, THERE IS
EVIDENCE TO SUPPORT MUCH OF THE
ADMINISTRATION’S ARGUMENT THAT
IF THIS IS A RECESSION GIVEN THE
JOB GROWTH WE’VE SEEN AND GIVEN
SOME OF THE COMPANIES THAT HAVE
TALKED ABOUT STRONG CONSUMER
DEMAND CAN, LOOK AT APPLE, OF
COURSE, STRONG DEMAND FOR THOSE
iPHONES.
THEY’RE NOT EXACTLY CHEAP ITEMS.
YOU’VE SEEN, YOU KNOW, SALES
EVEN WITH RECORD PRICE INCREASES
AT DONALD’S AND CHIPOTLE, COVERS
THE GAMUT.
NOW, I KNOW THIS ISN’T EVERYONE,
BUT WHAT DO YOU MAKE OF THE
RESILIENCY OF THE CONSUMER TRUE
ALL OF THIS? -- THROUGH ALL OF
THIS?
>> THE CONSUMER STILL HAS A LOT
OF CASH ACCUMULATED WHEN THE
GOVERNMENT MAILED THEM TRILLIONS
OF DOLLARS AND WHEN THEY STAYED
AT HOME IN THEIR PAJAMAS BECAUSE
THEY WERE SCARED OF COVID.
THAT MONEY’S SILL ON THE BALANCE
SHEET, SO THEY’RE USING SOME OF
THAT, NEIL, THAT’S GIVING US
ROBUST AREAS OF OUR ECONOMY.
BUT IT’S STARTING TO FRAGMENT.
IT’S NOT LIKE EVERYTHING WAS --
LOOK AT THE SECOND QUARTER
EARNINGS.
THEY’RE MIXED.
LESS BAD THAN FEAR, FOR SURE,
BUT PROBABLY SLOWING FROM HERE.
THAT’S THE PROBLEM, THE
TRAJECTORY IS IN THE WRONG
DIRECTION.
NEIL: YOU KNOW, BOB, YOU
MENTIONED WE MIGHT SEE THROUGH
THE WORST OF THE INFLATION
PROBLEM.
ARE WE THROUGH THE WORST OF THE
STOCK MARKET PROBLEM?
IN OTHER WORDS, GIVEN THIS MONTH
UNLESS SOMETHING FALLS
COMPLETELY OUT OF BED IN THE
NEXT FEW HOURS, WE’RE LOOKING AT
HEADY GAINS IN ALL THE MARKET
AVERAGES INCLUDING THE NASDAQ,
UP MORE THAN 11%.
WILL WE LOOK BACK AT THIS TIME
AS THE TURN AROUND, OR HOW DO
YOU SEE IT?
>> NEIL, LOOK, RALLY’S BEEN THE
MOST IMPRESSIVE SINCE THE BEAR
MARKET STARTED.
BUT WE STILL HAVEN’T SEEN THE
GIVE-UP THAT OCCURS AT NATURAL
BOTTOMS.
SO I DON’T THINK WE’RE OUT OF
THE WOODS, ABSENT A SIGNIFICANT
RECESSION I DON’T THINK THERE’S
A WHOLE LOT OF DOWNSIDE.
BUT I WOULD BELIEVE SECOND HALF
OF THIS YEAR FROM JUNE 30,
DECEMBER 31, STOCK PRICES ARE
LIKELY TO BE UP BUT MAYBE NOT BY