TO ALBRIGHT, WE ARE AT THE
LOWEST RIGHT NOW.
A LOT OF THIS IS THE SO-CALLED
SMART MONEY.
IT'S IN THE EYE OF THE BEHOLDER
A FEW SEE SOMEONE AS A GAZILLION
AIR AND YOU'RE WORRIED ABOUT
INTEREST RATES GOING UP IN AN
ENVIRONMENT LIKE THAT.
WHEN IT'S SOMEONE LIKE
DRUCKENMILLER ARE SOME OF THE
OTHERS WARNING ABOUT WHETHER
IT'S WISE TO THINK ABOUT RAISING
RATES WHEN YOU COMBINE THAT WITH
A POTENTIAL GOVERNMENT SHUT DOWN
LATER IN THE WAY, THAT MIGHT OR
MIGHT NOT DRAG ON FOR A WHILE
AND THEN THE CONCERN OF GOLDMAN
SACHS AND OTHERS HAVE RAISED
ABOUT POTENTIAL FOR A SLOWDOWN
AND NOT AN OUTRIGHT RECESSION.
NEVER MIND MANY OF THOSE SAME
FIRMS HAVE BEEN WRONG ABOUT THE
RUN-UP WE HAVE SEEN.
ADD IT ALL UP AND THERE'S
CONCERN SENDING DOCKS DOWN ABOUT
356 POINTS AS WE SPEAK.
DENNIS GARTMAN, EXCELLENT MARKET
READ.
I SHOULD'VE BEEN IN THE SMART
MONEY CROWD.
DENNIS, WHAT ARE YOU SEEING NOW
THAT THE MARKETS HAVE BEEN THE
PAST SORT OF SWEPT OFF.
WHAT ARE THEY NOT SLEEPING OFF
NOW?
>> WHAT THEY'RE NOT BLUFFING OFF
IS THE FACT OF THE SITE, NOT
THAT THEY'RE TIGHTENING MONETARY
POLICY WITH RAISING INTEREST
RATES, WHETHER THEY DO OR DO NOT
RAISE THE OVERNIGHT FED FUNDS
RATE ON WHEN HE IS
INCONSEQUENTIAL.
WHAT PEOPLE ARE NOT PAYING
ATTENTION TO WHAT THEY NEED TO
PAY ATTENTION TO IS THE FED
THROUGH THE ADJUSTED MONETARY
BASE WITHOUT GETTING ESOTERIC,
THAT IS THE FED HOLDINGS WITH
SECURITIES HAVE BEEN ROLLING OFF
NOW FOR THREE YEARS.
YOU HAD AN INCREASE IN THE FED
HOLDINGS FROM 2008 UNTIL 2015.
YOU NEEDED THAT TO SPONSOR BOTH
ROBBERS STOP PRICES IN A
STRONGER ECONOMY.
NOW YOU HAVE A LESSENING OF THE
FUEL SUPPLY.
THE ECONOMY IS DOING QUITE WELL
BUT WITH A LESSENING OF THE FUEL
SUPPLY, ONE OF THE TWO HAS TO
FOLLOW THE FOLLOWS IN THE STOCK
MARKET.
I TRADE ONLY FOR MY OWN ACCOUNT
TO MILLIONS OF MY OWN MONEY BUT
I HAVE BEEN SHORT IN THIS
MORNING I GOT SHORTER WHEN THE
DOW GOT BACK TO UNCHANGED AND I
HAVE NO INTENTION OF CHANGING A
POSITION AT THIS POINT.
NEIL: THAT'S INTERESTING YOU'RE
BETTING THE MARKET WILL GO DOWN.
BUT THE TENURE NOTED AROUND TO
.87%, IN A FIVE-YEAR, 2.71% FOR
THE TWO YEAR AT 2.71% IN BANK
LENDING RATES AT AROUND 2.5%,
THAT IS AS TIGHT AS A TICK.
>> WELL, LET'S PUT IT INTO
PROPER CONTEXT.
I'VE BEEN IN THIS BUSINESS SINCE
1972 BECAUSE I CAN REMEMBER WHEN
THE RATE WAS CONSISTENTLY ABOVE
20% AND MY OWN FIRST MORTGAGE
WELL ABOVE 10%.
NEIL: I THOUGHT I WAS THE ONLY
ONE WHO BRAGGED ABOUT THAT.
>> I DO REMEMBER WHEN THE LONG
BOND WAS AT 814 AND A QUARTER
COUPON AND YOU COULDN'T GIVE IT
AWAY.
THE FACT WE RAISE THE OVERNIGHT
FED FUNDS RATE TO WHERE WE HAVE
TO MEAN IT'S REALLY NOT --
NEIL: I GUESS WHAT I'M SAYING IS
THAT NORMALLY PERILS OF IT ALL
HOLDS THIS LOWDOWN AT A MINIMUM
MAYBE SOMETHING WORSE.
WHAT DO YOU SAY?
>> I THINK BY THE FIRST QUARTER
OF NEXT YEAR WE WILL FIND THE
ECONOMY HAS SLOWED AT LEAST FOR
ONE QUARTER.
MAYBE WE'LL HAVE TWO QUARTERS.
WE'RE GOING TO HAVE A RECESSION.
LONG OVERDUE.
WILL BE ANYWHERE NEAR AS SERIOUS
AS THE WINTER AND 2007, 2008,
2009?
NO IT WILL NOT.
WE WON'T HAVE THE SAME BUBBLES
IN OUR EXTENSIONS.
IF THE FED TIGHTENING OF POLICY
ALLOWED THE MONETARY BASE TO
ROLL OFF?
YES AND I BOTH BUILT FOR THE
ECONOMY GOING FORWARD.
NEIL: THAT RECESSION WOULD JUST
ADD TO CONTRACTING QUARTERS IN A
ROW.
DO YOU SEE A GOOD POSSIBILITY
THAT NEXT YEAR?
>> I THINK YOU'LL GET AT LEAST
ONE.
YOU MIGHT WELL GET TO.
THEY DIDN'T UNDERSTAND WE WERE
IN RECESSION IN 2007.
THEY DIDN'T ANNOUNCE IT UNTIL
2009 AND DIDN'T KNOW WHAT ROD
RECESSION UNTIL 2010.
THEY ARE VERY SLOW TO MAKE THAT
DECISION.
WE HAVE A QUARTER AT LEAST A
LESSER GDP GROWTH ALMOST
CERTAINLY.
NEIL: THEY ALWAYS REALIZE THE
FACT, POOR GEORGE BUSH SENIOR
AND WERE COMING OUT OF THE
RECESSION AT THAT TIME IN 92 IS
TOO LITTLE TOO LATE TO HELP IN
THE ELECTION.
DENNIS, WE'LL SEE WHAT HAPPENS.
THANK YOU VERY MUCH, MY FRIEND.
>> THANK YOU, NEIL FOR HAVING ME
ON.
