THAT STOCK DOWN ABOUT 1%. >> YEAH, IT IS DOWN. FED CHAIR JAY POWELL SAYS INVESTORS ARE GOING TO HAVE TO WAIT UNTIL MARCH FOR AN INTEREST RATE CUT. JOINING US TO TALK ABOUT THE MARKETS, STEVE EISMAN, SENIOR PORTFOLIO MANAGER AT NEUBERGER BERMAN. IT'S GOOD TO SEE YOU. WE HAVE SEEN SURPRISING STRENGTH ACROSS THE BOARD IT SEEMS LIKE, AND I WONDER WHETHER YOU CAN JUST GIVE US YOUR VIEW JUST FLYING AT 30,000 FEET WHAT EXACEX EXACTLY IS HAPPENING IN THE ECONOMY. IS IT ORGANIC? IS IT ILLUSORY? >> I THINK THE ANSWER TO YOUR QUESTION IS NO ONE FRICKEN KNOWS, AND EVERYBODY WHO COMES ON THIS SHOW DOESN'T KNOW. >> RIGHT. >> AND EVERYBODY WHO -- AND EVERY ECONOMIST, MANY WHOM I RESPECT, ARE SAYING THERE'S ABOUT TO BE A RECESSION BECAUSE THE FED RAISES RATE BUT THEN THEY'LL ADMIT THERE'S NOT A SINGLE DATA POINT POINTING TO THAT HAPPENING. I DON'T KNOW. ALL I CAN SAY IS 70% OF THE U.S. ECONOMY IS CONSUMER DRIVEN. THE CONSUMER SEEMS TO BE PRETTY STRONG. THEY STILL HAVE SAVINGS. WHY EVERYBODY IS GETTING SO HYSTERICAL, I DON'T GET IT. EVERYBODY SHOULD WAIT. UNTIL THEN,S THE ECONOMY IS JU FINE. >> I'VE SEEN -- AND JUST LOOKING FOR ALL THE PEOPLE THAT WE'RE EXPECTING THIS NOT TO HAPPEN, THERE'S A LOT OF EXCUSES FOR WHY IT'S HAPPENING. I'VE HEARD A LOT OF THE JOBS CREATED ARE TEMPORARY JOBS OR SECOND JOBS I'VE HEARD. I'VE HEARD THAT THERE'S A LOT OF GOVERNMENT JOBS. >> LISTEN, IN MY BUSINESS WHEN YOU'RE WRONG, YOU'RE WRONG. YOU SEE IT ON A SCREEN, YOU KNOW, ECONOMISTS CAN PRETEND UNTIL THEY'RE DEAD THAT EVENTUALLY THEY'LL BE RIGHT LIKE THE PEOPLE WHO SAY THAT FOR 40 YEARS THE DEFICIT'S GOING TO CRUSH US. THEY'VE BEEN ARGUING IT FOR 40 YEARS. 40 YEARS IS A LONG TIME. ALL I KNOW IS THE DATA IS FINE, CREDIT QUALITY -- CAPITAL ONE, THE CEO OF CAPITAL ONE GOT ON AND SAYS HE THINKS DELINQUENCIES ARE GOING TO START TO GO DOWN IN THE SECOND HALF OF THIS YEAR. UNTIL SOMEBODY CAN GIVE AN ACTUAL DATA POINT THAT SAYS THINGS ARE BAD, IT'S FINE. >> IS IT POSSIBLE ANY OF IT IS KANZ YAN LARGESS. >> IT CERTAINLY IS. IT'S CERTAINLY POSSIBLE. YOU CAN'T SEE THE GOVERNMENT STOP SPENDING. >> THAT ALL MAKES ME THINK WE'RE GOING BACK TO MMT WORKS, SO WHY NOT DO IT? >> YOU KNOW, THAT'S WAY ABOVE MY PAY GRADE, I KNOW WHAT YOU'RE SAYING. I DON'T HAVE AN ANSWER FOR THAT. >> IS THERE ANYTHING ORGANIC, ANYTHING GOOD HAPPENING? PRODUCTIVITY SEEMS TO BE BETTER. A LOT OF GOOD THINGS HAPPENING, BUT IS IT ORGANICALLY GOOD BECAUSE OF PRODUCTIVITY RISING FOR SOMETHING THAT ECONOMISTS MISS? EVERYBODY MISSES IT. >> HONESTLY, I DON'T KNOW. I JUST KNOW THE DATA IS FINE AND I DON'T TRY AND GO TOO MUCH BEYOND THAT. >> WHERE WOULD THE FIRST SIGNS SHOW UP? YOU DO HEAR AREAS WHERE THEY THINK IT'S A RECESSION, WHETHER THAT BEING IN COMMERCIAL REAL ESTATE. >> COMMERCIAL REAL ESTATE'S BEEN BAD FOR A COUPLE OF YEARS NOW. >> BUT WHERE WOULD YOU LOOK -- BUT THE PROBLEM IS THAT COMMERCIAL REAL ESTATE IS NOT BIG ENOUGH -- LET ME REPHRASE, OFFICE REAL ESTATE IS NOT BIG ENOUGH TO HAVE A REAL BIG NEGATIVE EFFECT ON THE ECONOMY. >> CONSUMER GOODS SALES HAVE BEEN WEAKER IN SOME AREAS TOO. WHERE WOULD YOU LOOK FOR THINGS? >> I LOOK AT CREDIT. YOU KNOW, IF CONSUMER CREDIT QUALITY WOULD START TO REALLY DETERIORATE, LIKE IT STARTED IN LATE 2006, OKAY. BUT YOU KNOW, UNTIL THEN, AS LONG AS THE CONSUMER IS HEALTHY, I DON'T THINK THERE'S MUCH TO REALLY TALK ABOUT. >> DOES IT SCARE YOU THAT YOU'RE NOT MORE SKEPTICAL AT THIS PARTICULAR MOMENT GIVEN YOUR HISTORY? >> WELL,I I SAID THIS LAST WEEK I DON'T REALLY SHORT STOCKS ANYMORE. I'M LONG ONLY. THE LINE I USE IS I WAS BORN JEWISH BUT I CONVERTED TO LONG ONLY. I THOUGHT THAT WAS A PRETTY GOOD LINE. I'M VERY DATA DRIVEN. IF YOU WERE TO TELL ME THERE WAS A REAL POCKET OF CREDIT QUALITY THAT WAS STARTING TO DETERIORATE, I WOULD PAY ATTENTION. AS LONG AS CREDIT EQUALQUALITY FINE. LOOK AT NYCB LAST WEEK, THAT WAS PRETTY BAD BUT THAT WAS NYCB BECAUSE THEY PASSED THE 100 BILLION THRESHOLD AND THE REGULATORS WERE ALL OVER THEM AND FORCED THEM TO INCREASE THEIR LIQUIDITY AND INCREASE THEIR RESERVES. IS THAT A HARBINGER OF FUTURE BAD THINGS HAPPENING IN OFFICE REAL ESTATE? MAYBE BUT IT'S CONFINED TO OFFICE REAL ESTATE. >> FOR MICB, IT WASN'T JUST THE REGULATORS. IT WAS THE REGULATORS BUT ALSO -- >> AND THEY HAD CHARGE OFFS. >> OFFICE REAL ESTATE IS CONFINED TO CERTAIN COMMUNITY BANKS AND REGIONAL BANKS. IT'S NOT A BIG BANK PROBLEM. IT'S A CMBS PROBLEM. INVESTORS WILL HAVE LOSSES. I JUST DON'T SEE A SYSTEMIC OR BIG PROBLEM AT THIS POINT THAT'S GOING TO HURT THE ECONOMY. >> WE WERE TALKING EARLIER ABOUT THE INVERTED YIELD KUFCURVE ANDW LONG IT TAKES FOR A RECESSION, AND IT'S SUPER BOWL WEEK, AND I DON'T EVEN KNOW WHICH TEAM I'M SUPPOSED TO -- BECAUSE I KNOW IT DOESN'T WORK, I DON'T EVEN REMEMBER WHETHER IT WAS THE NFC OR AFC TEAM. >> IT WAS THE ORIGINAL AFC TEAM IF THEY WIN, THE MARKET GOES UP. >> WE STOP FOLLOWING IT BECAUSE IT DOESN'T WORK. CAN WE THROW THE INVERTED YIELD CURVES HAPPEN HERE? >> I DON'T THINK YOU CAN THROW THE INVERTED YIELD CURVE ON THE HEAP OF HISTORY. HOW FAR, THIS IS SUCH A STRANGE PERIOD POST-PANDEMIC, ALL THE STUFF THAT'S HAPPENED, I DON'T THINK NECESSARY YOU CAN PULL OUT YOUR OLD RULES THIS TIME. CAN YOU EXPLAIN WHY THE MARKET HAS HANDLED IT SO WELL THAT WE'RE NOT GETTING ZSEVEN RATE CUTTING STARTING NEXT MONTH. WE WERE COUNTING THAT. WE WERE SET UP FOR, THAT IT'S OBVIOUSLY NOT GOING TO HAPPEN NOW AND WE'RE STILL TRADING HIGHER. >> EARNINGS ARE COMING THROUGH PRETTY GOOD. AT THE END OF THE DAY, IT'S THE EARNINGS THATMATTER. IF WE WERE IN A SITUATION WHERE THE FED SAID IT WAS NOT GOING TO CUT RATES AND THIS WAS A BAD EARNINGS SEASON, THEN YOU'D HAVE A PROBLEM. >> DO YOU THINK THE FED'S STILL GOING TO CUT? >> YOU KNOW, I THINK THE FED HAS QUITE AN AMUSING COMMUNICATION PROBLEM, WHICH IS THAT BY VERY NATURE, THEY ARE UNBELIEVABLY DOVISH. THEY KNOW THEY CAN'T BE DOVISH, BUT THEY JUST CAN'T HELP THEMSELVES. LAST YEAR WHEN THEY HAD THE DOTS, THE DOTS WERE POINTING TO SIX RATE CUTS, I DON'T KNOW HOW SERIOUS THEY WERE ABOUT THOSE DOTS, BUT THEY'RE VERY INSENSITIVE TO HOW BADLY THE MARKET WANTS FREE MONEY. SO THEN THE MARKET TOOK OFF, AND THEN POWELL COMES OUT AND BASICALLY SAYS, WELL, WE REALLY DIDN'T MEAN IT. >> IT'S NOT A COMMUNICATIONS PROBLEM AS MUCH AS A FED DOTS PLOT. IT'S A STUPID PREDICTION TOOL. >> YEAH, BUT THEY KNOW HOW SERIOUSLY PEOPLE TAKE IT. IF YOU KNOW HOW SERIOUSLY PEOPLE TAKE IT, DON'T BE SO LIBERAL IN YOUR DOTS. >> IT'S JUST THAT EVERY TIME WE HEAR COMMUNICATION FROM JAY POWELL OR ANYBODY ELSE, THEY BASICALLY SAY CUTS AREN'T COMING. THE CUTS AREN'T COMING. >> AND THEN THEY DO DOTS. >> SO STOP WITH THE DOT PLOTS. >> STOP WITH THE DOTS. >> YEAH. >> DO YOU ASCRIBE ANYTHING TO THE FED MAYBE WOULD THEY ERR ON THE SIDE OF EASE BECAUSE OF AN ELECTION YEAR? THEY KEEP -- YOU KNOW, EVERYBODY WANTS TO STAY IN POWER. >> I DON'T PUT MUCH STOCK IN THAT. I ACTUALLY THINK DEEP DOWN POWELL IS PETRIFIED OF REDOING VULCAR AGAIN. THEY'VE ENGINEERED WHAT LOOKS TO BE A SOFT LANDING. INFLATION IS COMING DOWN. THE ECONOMY IS STILL STRONG. WHY WOULD YOU WASTE RATE CUTS NOW AND RISK A RESURGENCE OF INFLATION WHEN REALLY ALL YOU NEED TO DO IS DECLARE VICTORY AND SAY WE ENGINEERED SOMETHING REALLY PRETTY FANTASTIC AND WE'LL WAIT T
