I JUST HOPE THEY KNOW WHAT THEY
ARE DOING. LET’S DIG INTO THIS.
LET’S DIG INTO THIS.
JOINING KNEE, JOE LA LOWERING JO
DAVID BAHNSEN.
BASICALLY WHEN THE 3 MONTH IS
HIGHER THAN THE 12 MONTH, THAT’S
A BAD TREND.
I SAW TOO MUCH OF THIS IN THIS
BAD REPORT.
YOU DON’T BELIEVE IN THE
INFLATION TO START WITH SO IT’S
MUCH MORE FUN TO START WITH YOU.
IT’S PRETTY WIDESPREAD
THROUGHOUT, THE 3-MONTH FASTER
THAN THE 12-MONTH WHICH MAKES ME
THINK THIS PEAK INFLATION COMING
OUT OF WALL STREET IS WRONG.
THE STOCK MARKET GOT HIT TODAY
PRETTY BAD.
WHAT’S YOUR TAKE?
>> THE GOODS INFLATION NUMBER IS
LOWER THAN IT WAS THE LAST
COUPLE MONTHS, AND THAT’S THE
ONLY POSSIBLE POSITIVE
INDICATOR.
WHEN YOU SAY I DON’T BELIEVE THE
INFLATION STORY, USUAL KIDDING
ME BECAUSE YOU KNOW LOVE YOU.
THE STORY I WORRY ABOUT IS
RESOLVED IN YOUR FOUR-PRONGED
PLAN.
I’M WORRIED ABOUT THE DEBT
DEFLATION CYCLE AFTER THIS
INFLATIONARY EPISODE.
I THINK IF THE RATE WAS 10%
TOMORROW WE WOULD STILL HAVE
THESE PROBLEMS BECAUSE THE
WORKERS DON’T REPORT TO LONG
BEACH.
I’M LOOKING TO GET 3.4% REAL GDP
GROWTH BACK.
AND I DON’T WANT TO BUY INTO THE
NOTION THAT THE ANSWER IS
KEYNESIAN.
IT’S SUPPLY SIDE.
LARRY: WHICH GOODS?
>> CONSUMER GOODS SHOWED A LOWER
RATE OF INFLATION AND IT’S STILL
DOUBLE WHAT IT WOULD HAVE BEEN.
USED CAR PRICES.
REAL INFLATION IS MUCH MORE THAN
IT WAS A FEW MONTHS AGO.
THE RATE OF GROWTH IS ALL I’M
SAYING.
LARRY: I LOOKED AT THIS JOE
LAVORGNA.
HOUSE AND SALES PRICES ARE
RISING AT A FASTER PACE THAN
THEY WERE BEFORE.
THAT TROUBLES ME.
I NOTE CAR PRICES ARE UP.
HERE IS THE MEDICAL CARE IS UP.
WE KNOW ABOUT THE ENERGY PRICES.
THOSE ARE IMPORTANT GOODS.
SERVICES PRICES ARE UP, TOO.
BUT SERVICES PRICES ARE SURGING.
THIS IS A SERVICE-ORIENTED
ECONOMY.
SO SERVICES PRICINGS THE LAST 3
MONTHS UP 9% ANNUALLY.
THE PRIOR FIVE MONTHS, 5.7.
IF YOU TOOK OUT ENERGY FROM THAT
IT’S 8.5.2.
8 EVER US 5.2.
>> YOU ARE SAYING THE SHORT-TERM
MOMENTUM IS GREAT THAN THE
LONGTERM.
LARRY: AM I MISREADING SENATE.
>> NO.
YOU ARE SPEAKING OF THE BREADTH
OF INFLATION.
AND WHATEVER YOU ARE LOOKING AT
WILL TEND TO LAST LONGER.
LOTS OF WHAT YOU ARE LOOKING AT
IS GOING IN THE SAME DIRECTION.
WHAT SCARES ME MORE THAN THE
INFLATION NUMBERS IS THE
CONSUMER EXPECTATION SERIES.
FROM MICHIGAN.
THAT’S ONE OF THE THEORIES THE
INDESKS LEADING INDICATORS.
-- THE INDEX OF LEADING
INDICATORS.
IT’S THE SECOND LOWEST READING
IN THE HISTORY OF THE REPORT.
WHAT I’M WORRIED ABOUT IS THE
FED IS GOING TO BE HIKING INTO A
WEAKENING ECONOMY.
INFLATION IS HIGHER.
THEY WILL BE HIKING INTO IT.
LARRY: THE HOT ATLANTA FED,
INFLATION IS UP 0.9.
>> YOU CAN HAVE A VERY
INFLATIONARY CYCLE NOW BUT A
YEAR OR SO FORWARD YOU COULD
HAVE A DEFLATIONARY CYCLE
BECAUSE THE FED SEEMS TO BE HIKE
WITH ALL THIS DEMAND FROM
INFLATION.
>> THEY DESERVE IT BECAUSE
NECESSITY THREW IN WITH BIDEN A
YEAR AND A HALF AGO.
WHEN YOU LEFT WASHINGTON AND
OTHERS IT WAS 6.5% GROWTH.
SO THEY ARE LYING.
BEFORE WE GET TO DEFLATION.
WE HAVE TO GET TO INFLATION.
THE FED -- YOU MENTION THE 4%
FED FUNDS RATE.
I RECKON THAT’S WHERE IT OUGHT
TO BE RIGHT NOW.
NOT 1, 4.
IF I’M WRONG ABOUT THAT, IT
SHOULD BE 6.
WE HAVE HAD HISTORICALLY, 40, 45
YEARS AGO, INFLATIONARY
RECESSION.
MAN TEARY STRENGTH WHICH WE --
MONETARY STRENGTH WHICH WE
HAVEN’T HAD YET.
THAT’S THE WARNING I WANT TO
POST.
IT’S THE WORST POSSIBLE
COMBINATION FOR MIDDLE CLASS
TYPICAL WORKING FOLKS.
INFLATION AND RECESSION.
UNEMI AM>> HOW ARE THEY GOING TO
THE NEXT RECESSION?
THEY WILL TRITE WITH MORE
MONETARY INTERVENTION.
THEY CAN’T GET OFF OF THIS
CYCLE.
THE JAPANIFICATION.
AND IT’S PUN AMERICAN IT’S
UNACCEPTABLE.
>> THEY ARE AT 2 A 50% WITH NO
ECONOMIC GROWTH.
LARRY: THAT’S A CONUNDRUM, WHAT
DO YOU THINK ABOUT THAT?
WHY ARE PEOPLE TALKING ABOUT 50
IN JUNE AND 50 IN JULY?
>> THEY SHOULD RAISE THE FUNDS
RATE, JACK IT UP BY 100 BASIS
POINTS.
YOU KNOW WHAT?
EQUITIES MIGHT LOOK BETTER IF
SOMEBODY DID SOMETHING RIGHT
DOWN THERE LIKE CUTTING TAXES OR
FREEZING SPERCHGDS OR
DEREGULATING ENERGY.
>> THE POLICIES, IT’S NOT JUST
THE FED. YOU HAVE AN INFLATIONARY
YOU HAVE AN INFLATIONARY
RECESSION AND DETBLAITIONARY
BOTTOM.
HERE IS THE OTHER THING, THE FED IS GOING TO THANK RINK ITS -- IS
IS GOING TO THANK RINK ITS -- IS
THANK RINKGOING ISTO SHRINK ITS
LARRY: CAN I JUST RAISE A POINT?
INFLATION FEARS.
THE MICHIGAN SURVEY CONTINUES TO
SNROOK WORSE ON THESE
EXPECTATIONS.
INFLATION IS GETTING TO BE EMBED
IN THE WAY PEOPLE THINK.
THAT’S SHADES OF THE 1970s.
FORGET ABOUT CLIMATE.
ALL YOUR WOKE FEDERAL RESERVE
GOVERNORS.
THEY ARE WORRIED ABOUT CLIMATE
AND NOT INFLATION.
>> WHAT YOU JUST DESCRIBED -- I
HAVE BEEN IN THIS CAMP, IS A
HARD LANDING.
LARRY: I DON’T LOVE IT.
I AM JUST SAYING DO YOU THINK
THERE IS A RECESSION OUT THERE?
>> I THINK A RECESSION IS
COMING.
IT’S NOT HELPFUL IN THE MARKET
TO TRY TO TIME IT.
I AM FOCUSED FROM AN INVESTOR,
MARKET STANDPOINT FINDING EQUITY
IN SHORT DURATION.
I DON’T THINK THEY WILL GET
MULTIPLE EXPANSION FOR A DECADE.
WE NEED BIG ENERGY POLICIES.
LARRY: WE ARE ON THE WAY DOWN, I
HOPE THE CAVALRY KNOWS WHAT THE
HELL IT’S DOING AND HEADS TO
WASHINGTON.
FIND THE WAY DOWN, HOLD IT FOR