Feb 11, 2011|
Brian Sullivan from Fox Business tells us how Mubarak stepping down impacts the economy. We also get his thoughts on inflation
Transcript - Not for consumer use. Robot overlords only. Will not be accurate.
Pandemonium. Joyful pandemonium. After word from Egypt and vice president he announced that Hosni Mubarak who has been the leader of that country for almost thirty years handing. Stepped down. Good afternoon ladies and gentlemen welcome to lunch money my name is Barry Armstrong in earlier today when I was preparing for my show. You know I talked to Brian Sullivan and -- Brian you know will will will. Play one clip that says he's resigning and will play another one that says he's not resigning in and you and I can figure out whether he's gonna resign or not. Ryan Sullivan from the Fox Business Network I guess our work's all done for us. Yes that is so it will bark out who knows who did apparently the military now control in the country having. -- widely respected -- but let's hope that the military does the right they have been history is littered. -- military regime that -- set out to quote do the right thing. Right Americans and their tends to be a little power struggle going on in -- we got right right. -- that works they what can we do you know anything about the Egyptian. ETF yesterday thing was down around seventeen dollars a share. Is it up today at a based on this news or what have you seen. In -- particular emerging market it ETFs. You don't move higher. You know and that that Egyptian. ETF which are talking about a six and a half percent but I thought I would I would listen outside investment advisor but I'm strongly by New York. Listeners to. There -- all. More yeah. Get -- it's not over the years there's you've got to jubilation going on right now but this thing is far from over. Meet the Egyptian ATF OK just -- by a very reputable firm called -- to take up. Egyptian stock market has been closed for -- little -- -- this is meant to near the underlying. Strength of companies either based Egypt or that derives more than 50% of the revenue from each -- don't know how they're -- Okay yet this is yet continues to trade he closed end fund which is what this says that I've looked partly asset value right that value the underlying assets. -- out trading at about fifteen to 20% premium today that it. This is -- speculated. On we don't know how those Egyptian companies are going to do so for Pete's sake. You know careful all right sepia and it's very small to -- about this assets are are you about things you that I put together so just be careful on the. All right now let's let's take a look at other aspects of our economy specifically. The housing market I've watched the ten year treasury. Rise dramatically during the last -- -- a 120 days. In I've also seen a corresponding increase in mortgage interest rates. These creating a headwind for the their housing market. You. Probably will all the problem is that. Of course you know we're starting pitcher that political spring selling season hot time have to wait and see exactly can be -- slightly about it but. You know we're seeing your write a big move interest rates the last couple weeks it does take some time to move to the system because. There's a lot of the big mortgage lenders will do what they call where -- -- by huge chunks of blown a discount they can still Lockheed east rates so I'll. I've actually poked around a little bit. And -- -- still some pretty favorable rate. They will -- be -- to rise. We know is that Thomas -- still on the market the at least my county joint security record high for the number ballistics. Or houses -- -- hundred yards to meet at a -- So. We gotta wait and see it's going to be. We don't need -- we don't need higher mortgage rates right now we still have a tremendous amount of inventory nationally. To burn through my fear Brian is mortgage rates pop up to 67% people just say well heck I'm I'm gonna rent I'm not gonna buy. You also -- the keynote it took me it doesn't matter people that -- report out to journal this week that housing affordability and pre bubble -- not -- good but you know -- -- the very reputable columnist who was referenced it. Doesn't matter what the price of a home visit by itself Palestine living in a move that's if you're not a new buyer you presumably old home. I guarantee you I could not sell my home today. Probably what I paid for which I am not move. Now -- in the other issues you still have high unemployment and unlike. The old days you actually have to have a job in order to get a mortgage. Yeah the -- They traded the report out by the treasury today and I'm about ready to post a story of my blog Fox Business about how it fails to address the real problem which is the FHA. FHA has been you know basically thrown money anybody yet have a -- Six Tony credit score and you get a mortgage. You know and I'm gonna travel my blog noticeable -- at some charge showing default rate based on credit score illicit. You know and you we got to separate low and -- with bad credit just because somebody is -- doesn't mean they're bad credit risk right. Don't be insulting to people lower incumbent a lot of most folks are just responsible -- a lot of irresponsible rich people. But you know low credit score whether or not you have. You know you -- you don't pay or cater your payback -- or you're gonna pay Lachey going to be a pain in the neck it. There's a lot of need out there that indicate that 20% one every five mortgages insured by the FHA. Is seriously delinquent borrowers default. I doubt that that is taxpayer money right there because it would that goes bad treasury. They're talking about fixing Fannie Freddie and Fannie are they addressing FHA at all. -- on the net that's the whole point -- my historical power to do recovered on my show at 2 PM. Which is you know basic basically a Digital -- did it which is just ridiculous total government that says -- Determining appropriate path for how to respond to -- Fannie and Freddie to reduce the side of it TJ will be challenging and require great care. But require great care -- -- -- -- requires great -- -- -- ridiculous slide in -- as the typical government you know nonsense. -- they -- speaking of government got nonsense. Consumer sentiment or Michigan sentiment can you explain what the they would have first of all whether it's relevant at all -- -- and and what it is. Well it there's there's two consumer confidence report that surrogate -- you know importance -- bolstered the conference board a private organization. Our company to poured into the Michigan consumer sentiment or so. How you can support will basically just stated your people ask about complex are their current prospects for future prospects in. -- -- I haven't found a great -- relation to be you know to be completely -- to six in the conference board -- those organizations. I have never -- my fifteen -- to do in this sound great core relation between how those numbers come out. What happens it'll last spare super strong right so these numbers have been moving up slightly for the most part but -- -- historically low. How does become out today and I didn't look -- look on the separated thing. -- I -- -- botnets are not follow any FHA and an homage to a T shirt shows an -- 45 minute. No worries I don't know that but those numbers are super high to very evident they're soaring right we don't everybody's you know -- crazy with consumers but the most. I -- positive number. That's seen recently -- to ISM. Report -- -- despite manufactured right that's been a pretty good number and also consumer credit actually wrote for the first time. Before leading blew up you know in 2008 so what every pick up borrowing world borrowings society. And that number sort of deride indicate people are willing to take on some. Some some credit risk which means they're buying bigger ticket item is that generally require credit just partisan. In a vacuum cleaner whatever people -- you don't pick no nobody down whatever. -- M Brian I I I got a little bit concerned not a little -- a lot concern the other day when I had heard Bernanke say there's no inflation we have no inflation you don't have to worry about it. It's -- I'm nervous about that and then. To cap things off. The only really conservative guy on the bed was this guy -- and he steps down -- with heat with he -- doubters he -- are sent. And horses young guy who's the youngest member ever voted and about five years ago when he was put in. You know listen -- guys they got a hard job they were relatively speaking got a lot of that anybody relatively speaking don't make a lot of money. Doctors say what they -- you in the private sector they go back out in the private sector and they make a 1000002 million -- So yes absolutely incomes are higher than average American by far but but -- what bear market is. Right it's like oh it's like remember the Red Sox playing for Pawtucket just because they want to. Right. -- event and what they make 25300000. Yes -- -- lower 175 but they've updated recently point is they take seven figures pretty easily on on Wall Street I think Porsche probably looking for some. The opportunity elsewhere. On the inflation from consumer perspective hasn't hit that much yet because -- company to be able to eat it it's totally Eli. I don't know Brian I get to what we can't we did a survey year yesterday and the the average Boston listeners thinks that inflation's running around eight or 9% I mean how high does it have to be before we get nervous. Well. You know he's got because they're hearing the reports of folks like myself that you talk about inflation running rampant. I don't know they think were smoking dope and maybe they listen -- -- say oh inflation's only 1% and then they say hey there. I gotta pay four bucks a gallon from my heating oil on paying four bucks a pound for chicken my gas is costing me 320 used to cost me 250 I mean they really. -- took exception. To the stance that. Many people in the media take that which is there's no inflation I gotta tell you the average guy on the street Brian. But I agree with that in in in -- -- is much Hewitt I've talked about the government's inflation data. I'll put it is housing. Okay so it's always housing remains weak the official inflation data will remain weak write the core CPI which which takes out food and energy which. I heard somebody kind of just -- there -- -- is. Inflation data that -- inflation. Right I I yes I agree but my point is not that we haven't seen -- prices. I guess it's. That we're gonna see higher prices more now that we had because. Companies have probably reached the limit of what they're able to eat in terms of managing productivity. So did you just say that it's bad now and it's gonna get the heck yeah a lot worse -- -- not as -- now but it but it's going to get more. But now you know I feel this way. All of my show we're talking pot content they post war high. Civil war hi Terry that's the problem -- Not -- -- didn't -- that will affect if your banana republic are happy to like you get you -- digit rate while eventually you'd say. Okay we have to raise prices -- lead this great price you get firm general melt it's it's more inflation is coming so I -- it's not bad now. Would think is it worse. Well you just you Richard yeah thanks a lot with one such story up next week next week you -- that's all right. Brian Sullivan from the box because network joining us today on lunch money. Up next we're going to be talking with Larry Kudlow on taken him to task on this inflation thing too early I gotta tell you I'm gonna ask Larry what he thinks real inflation rates I get I think. That the problem is. The people who report inflation. Are all Macon 300 grand 400 grand a year so if gas goes from 250 gallon to three tanning down literally care -- about that. But if your -- and sixty grand a year -- and a hundred grand a year and your home heating oil goes from 250 gallon to four bucks again and. You know what it leaves a dent. We're gonna talk about that next with Larry Kudlow right here on AM 680 W market.