Wild Wall Street, Explained

Episode Transcript

Speaker 1 (00:00):
Rebounding a little bit here today after a couple of
really really tough days on the paper markets. And we're
joined for a few minutes here this morning by our
official economist, doctor Ernie Goss from Creating University.

Speaker 2 (00:12):
Earn A good morning, Very good to be you and
your team.

Speaker 1 (00:15):
You bet, I'm anxious to get your take on what's happening.
We got the bad jobs report on Friday. It seems
to be some cause and effect relationship there. I would think,
what do you think about that? And what do you
think about all of this talk of recession. That's where
that's re emerged.

Speaker 2 (00:35):
Absolutely. Gary and Is Courtney says, our markets are looking
better today. The Japanese market yesterday bounced to his best
day since two thousand and eight after having his worse
day since nineteen eighty seven. So it looks like our
market is going to be up, but it's up and
and down movements in the stock market. We're going to
see more and more down movements. We're moving, I won't

(00:58):
say in recession. We're still growth. Our surveys at Creighton
University show growth is slowing down dramatically. Look at the
yield and the tenured treasury, the fear gauge, I'll call
it one of the fear gauges is moving lower and
the vix the vixes yesterday had the largest jump since pandemic,
so that fear gauge today is moving lower. So that's

(01:20):
some good news.

Speaker 1 (01:21):
Yeah, what effect does that have? I mean that that
that measures I guess what traders are thinking, are thinking.
But what's what's the practical effect of the volatility index?

Speaker 2 (01:32):
That's just the ratio of puts to calls. In other words,
those who are betting against the market divided by those
who are betting for the market. So the higher that
number is, the more risk out there. And right now
the vics today is looking it's moved downwards. So that's
good news. But I again, today, what will happen. You'll
have a lot of folks to see the market up,
bought investors, and they'll sell into that trying to get back.

(01:55):
So they don't they get out. Some will be getting
out of the market for sure.

Speaker 1 (01:59):
I know you're are not a financial advisor per se,
or an economist and an analyst, but in general you
watch this stuff carefully. A lot of people are saying, Okay,
I'm out, I'm getting out of here, and other people
are saying, no, don't panic, don't go into bunker just yet.
What would you tell people? And I saw your comment

(02:19):
on Channel seven last night. A lot of it depends
on where you are in life.

Speaker 2 (02:23):
Right, absolutely, and if you got a long time arise,
and that's if you say under sixty, then you're okay,
don't panic, stick with it. A lot of stocks are
over valued though. We saw the Magnificent seven of Nvidia,
Macrosoft and so on way overpriced. And of course over

(02:43):
the weekend Berkshire Hathaway we found out on Monday that
Berkshire Hathaway had sold fifty percent of its Apple stock.
So that was a pretty good heads up for the
rest of us that things were overpriced. And again our
neighbors said, must move out of the market, move out
of Apple. They stayed in some with Apple.

Speaker 1 (03:04):
Not all that.

Speaker 2 (03:04):
They just sell all their Apple stocks, so they're betting
on the market too.

Speaker 1 (03:08):
What is the significance of that move that Warren Buffett made.

Speaker 2 (03:12):
Well, I think it's just your's too concentrated in the
Magnificent seven and it's just a good move taking reducing
your risk. I think that in my judgment, was a
good move, And of course he knows far more than
I'll ever know about stock market.

Speaker 1 (03:27):
So well, So what do you saying, basically is at
echoing would you mention a minute ago we got stocks
that are overpriced here. We took a nice ride for
a while, but as time they're too They're too expensive.

Speaker 2 (03:40):
Absolutely, and a lot of stocks remain that way even
after yesterday's downturn, So a lot of a lot. I
think today investors will take some of the gains and
cash out. But the market looks like it's going to
go up today, but it's send the downward trend right now.
With the Fed going to be reducing interest rates on
September the eighth teenth, I don't think there'll be a

(04:01):
rate move before that time.

Speaker 1 (04:03):
Though. What is your key one or two keys that
you watch? I Manufacturing is a big one. Employment's a
big one when you talk about recession. What are the
biggest things you watch right now?

Speaker 2 (04:16):
I'm watching first time planes for unemployment insurance comes out
every Thursday, So keeping out that number, keeping out on
the ten year yield on the tenure treasury, that's a
fear gauge. Also as investors seek safe havens for their money.
The problem is yesterday everything was down except well down. Also,
the tenure treasure was down. Just a lot of folks fleeing,

(04:39):
a lot of investors fleeing into that safe haven, the
tenure treasury.

Speaker 1 (04:44):
You mentioned earlier about people getting nervous about the market
and if you've got a longer time horizon, like if
you're under sixty, don't worry. What about if you're over sixty,
what would you say people should do?

Speaker 2 (04:56):
Well? You have to take a short term approach. In
other words, I am in that category, over sixty. So
what I've bought in the past is keeping it to
a ten year treasure. Short term treasures that'd be two years,
three years, something less than that. Keeping keeping what some
folks call cash. I don't call it cash. I bought

(05:16):
CDs too recently, so that's high, at least a high
portion of my portfolio in that area, the safe area.

Speaker 1 (05:24):
I don't even have a CD player anymore, Ernie, do you?

Speaker 2 (05:29):
Yeah?

Speaker 1 (05:30):
Yeah, Ernie's buying CDs of the Starland vocal bands. Great
to have you on, Doc, Thanks so much. Good on
journey Gods Great in the University are official economist with
an Ernesto Manifesto here,