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That's over -- shock this week.
Starting on Wednesday as the -- she hinted the bank may take its foot off the stimulus paddle and then reports hit.
That happened sooner rather than later we not have a recovery on Friday but nerves are afraid should you be worrying about your money.
The Bulls and Bears are here to help hi everyone I'm Brenda -- let's get dry -- Yeah the Bulls and Bears this week Gary B Smith Jonas Max Ferris John Layfield.
Along with John tobacco and David Mercer welcome to everybody okay John tobacco a wild week mean to our viewers.
Brenda what I think this means to love you is is they should be very concerned going into Monday morning we've had an enormous run up over the last few months even the last year.
And people have a lot of profits on the table.
What -- seeing right now is a lot of the -- officials stimulation the market has gotten by Ben Bernanke's policies is starting to come to roost.
And off fund feels like the stock market right now has a correction in mind somewhere in the five to 7% range.
Over the next -- up.
I can look for somewhere in the course this week about a thousand points that a downside.
I was a retail investor.
I had some profits I would go into Monday morning thinking let me take some profits off the table if the bubble starts to -- they'll be great opportunities down the line.
But the prevailing opinion is always sell in May and go away where in June if you haven't sold yet I'd be sell on Monday.
-- thousand points Gary are you buying or -- -- selling.
Well first of all John just scared the heck out of me see how well I don't.
-- I don't think well OK look carriers couple things I agree with him.
In part of it I do think there is more downside I don't think it's going to be another thousand points down that would take us below -- 141000 I think that's up.
Probably -- pretty safe stopping ground in direct answer your question yes I hate.
Started buying a lot late Thursday I started buying a little on Friday.
If stocks dropped a little bit more I will buy a little more I would say just to put in perspective.
Here -- I'm probably about 70%.
Invested so I'd actually like to see a little bit more downside.
Nor to buy more over all my -- days has pessimistic this John you know I think there's a temporary pullback and probably more -- good buying opportunity.
Than anything else -- -- I feel the market has gone very far very fast isn't it time for the for the bulls take a breather I mean the the Dow was up.
13% so far this year even though it did have.
A couple tough -- last week.
Sure look what happened in Japan -- -- have -- have a negative news that they they have went almost straight up and they've come off significantly off their highs.
What does -- is about 121500.
A year ago was just short of 151000 right now something it's normal that anytime you have.
Any -- -- perception of bad news people start taking money off the table.
But you gotta look at this news lobotomy that I agree with -- -- that that this is.
Buying opportunity if we go much lower here because of the Bernanke says.
That he's not gonna raise rates until -- he's got a six -- percent and once you start seeing the economy get better look.
Ten of the last eleven fed tightening cycles the market has gone up but once you start seeing employment get a little bit better more people go in the workforce it's we'll take a while before they raise rates.
But David this is been a bond buying binge now if it stops if the Fed pulls back.
Isn't a sign that the economy is improving and isn't that good for the market.
Brenda I think you're absolutely right and it's a return.
That we can rely on the fundamentals of the economy you have the jobless rate.
Being reduced you have housing.
Up and you have corporate profits at all time high.
And so I think it was an indication by Bernanke.
Are seeing these indicators in the is a good forecast and that please look at this so because we made if we -- 7% unemployment start pulling on the brakes putting on the brakes as it relates to easy money if you will.
Well just a bubble about to burst -- we about to see what happened to the housing market.
No in fact what I think happened is a bubble was starting to form because of -- low rates in the market was getting ahead of the real economy which is still a little lackluster in a lot of areas and -- employment in the but the fact whoever wants to do is keep the monetary they wanted to keep encouraging growth in the economy gets stopped an asset -- from -- like we had a real estate during the last bottom low rates in the two thousands so the idea was to talk down the stock market in a war to.
And Dodd maybe keep states he'd gone so we can still not haven't told -- to -- what would you wouldn't want to have to do is because the market -- -- 181000.
How to start raising rates everywhere and then cause a recession for no -- -- a very -- dangerous hard to play game but that was the strategy.
And in general you want to be an economy where we don't have data pedals are creating money out of thin -- to buy debt that's not a natural state of things are healthy in the long run.
So it's two positives you look at it that way this week -- but John what you say that.
I don't to David's point I don't see any of the fundamentals he's referring to in the marketplace they see.
I think stagnation in GDP -- continued.
In used six as he capacity utilization up but -- -- employed.
And now part time employment up so I don't see any of those good fundamentals and what I do see is.
Ben Bernanke's policies are like.
Bernie Madoff and Allen Stanford on steroids they've been -- officially up up stimulating this marketplace because.
When people get zero return on their -- could count.
They're forced to go to one place I'll take some risk and get return in the marketplace so he's forced people.
Into the markets and that bubble is existing that bubble is getting bigger and I think you know I know everyone thinks I'm a little pessimistic but -- -- Call Bob on the hill about.
The job though -- about -- -- Point eight million jobs over the last 37 months.
That is a fundamental fact that we need to address and that was addressed by Bernanke.
In his speech on Wednesday well.
-- -- be lucky do you agree that the economy is on solid footing why.
I I think you'd think it's kind of mushy let's let's put it that way and I think the only number that we need to know John I feel like -- Collided that -- not gonna really take the foot off the accelerator until unemployment.
Is six and a half percent now we all well I think everyone here.
That I don't see current administration that -- never noticed.
Six and a half percent unemployment so I don't feel -- about 2000 yeah.
You know how well but just a fact -- gonna happen if we -- -- -- Don't -- what does that do to the market economy that's your real danger is we just saw a you know a few weeks ago was one point 6% on a government bond and now it's 2.5 basically now -- who cares and that's where they said mortgage rates from the -- try to get a mortgage 68 weeks ago you might -- block of thirty -- -- -- 3% now is pushing 4%.
That's a big difference in how you value -- home which -- only recently started go back up home prices so.
This is the market behaving this isn't the Federal Reserve that's bigger unfortunate in the Federal Reserve if this continues and we go to say another percent -- in -- rapidly in a few weeks.
You can see housing prices are to go down again and his recovery and -- so we don't want to go too far.
But I do think a little this was good because it was taking the heat off the stock market to -- America's point.
We don't want to have a really artificially low -- but I think the current economy deserve rates about today's level right now.
Now John -- does that worry you that the housing market is one of the few positives -- the -- right now.
-- probably -- -- -- go up significantly -- matter Tom looked the other standout -- today his point that 8% was -- -- -- Bismarck brought about the administration say hey give us all this free money it will never go above 8% that proved not not very impression it.
What you have.
Is a structural unemployment issue not a cyclical unemployment -- -- rates of zero forever it's not go to significantly help that the market rebounding will -- that.
Bernanke was 100% wrong -- trying to -- was something that is a structural issue not a cyclical issue.
Shale gas is gonna do more for this economy they've been Bernanke's gonna do have K -- the last word thanks --
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