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Speaker 1: So we had this very hot jobs report and we

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Speaker 1: have this very aggressive FED, so a lot of people

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Speaker 1: might be wondering, you know, why didn't they sell down

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Speaker 1: this stock market. We're joined by Dennis Gartman, the chairman

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Speaker 1: of the University of Akron's endowment, to discuss the latest year.

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Speaker 1: I suppose we can say that, Dennis, if you if

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Speaker 1: you have high inflation and an aggressive FED, you're just

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Speaker 1: better off with a with a strong economy to offset it, uh,

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Speaker 1: And that that might be why we saw a little

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Speaker 1: bit of uh, you know, buying into the clothes your thoughts.

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Speaker 1: I know you were negative. You were pretty barished when

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Speaker 1: you were on last time with us. Have you softened

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Speaker 1: a bit? I would say softened just a tad. I've

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Speaker 1: been quite bear since January one this year. As a

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Speaker 1: chairman of the university's endowment. We I actually had the

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Speaker 1: committee move to take our portfolio out of out of

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Speaker 1: equities and on December thirty one, and we actually did that.

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Speaker 1: We took a three percent out last March and moved

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Speaker 1: three percent into the gold market to hedge against an inflation.

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Speaker 1: But I must admit the rally has been a little

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Speaker 1: more exuberant than I had thought I was a little

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Speaker 1: surprised by the response on Friday. Maybe it's just a

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Speaker 1: rally and a bear market, which I think is what

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Speaker 1: it is. But I have to admit that I have

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Speaker 1: been somewhat taken aback by the fact that the market

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Speaker 1: has remained as strong as it has, given the fact

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Speaker 1: that the YEO curve is inverted and will continue to

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Speaker 1: invert even more substantively, given the fact that the FED

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Speaker 1: is probably going to tighten at least seventy five basis

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Speaker 1: points in in September, probably another seventy basis points in

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Speaker 1: the November meeting, and maybe even fifty basis points in

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Speaker 1: the December meeting. And I have been surprised by Miss Daly,

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Speaker 1: who's not a voter this year. She votes next year.

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Speaker 1: If I'm not mistaken. On the f O m C,

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Speaker 1: who has tended to be rather devish, has been a

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Speaker 1: little more hawkish of of late, which that surprises me.

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Speaker 1: So I'm I'm somewhat the used by the fact that

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Speaker 1: the stock market has been as strong as it has

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Speaker 1: been since the middle of June. I continue to think

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Speaker 1: this is a rally in a bear market, but less

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Speaker 1: vocifers less amenable to that to the fact that less

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Speaker 1: amenable to the fact that I thought we'd be down

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Speaker 1: another before the US. Well, actually, Donny, what you said

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Speaker 1: in June was that the rallies are actually at the

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Speaker 1: moment in the rallys and equities, I should be sold

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Speaker 1: into weakness right now, but that may change in another three,

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Speaker 1: four or five, six months or so. So has that changed?

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Speaker 1: You know? The point is you have to be hugely selective.

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Speaker 1: I'm sure, well that has to always be selective in

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Speaker 1: this business. Doesn't one it's uh, it's it's what keeps

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Speaker 1: you alive and keeps you able to fight to the

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Speaker 1: next war. I like um simple things I like, I wrote,

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Speaker 1: I like very much dividend paying stocks. I like as

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Speaker 1: as I said in the past, I like the things

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Speaker 1: that if I dropped them on my foot will hurt.

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Speaker 1: I like copper, I like trains, I like ships, I

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Speaker 1: like things of movement. Relatively easy to understand business circumstances.

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Speaker 1: But I have to admit the jobs number on Friday

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Speaker 1: was quite a surprise to everybody. It was a surprise

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Speaker 1: for me. I quit forecasting the numbers two and three

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Speaker 1: years ago. Well you're still doing was looking rather rather foolish.

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Speaker 1: With revisions that come to it, then in the next month,

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Speaker 1: will it makes some people uncomfortable, um that they're the

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Speaker 1: ones selling here when Warren Buffett is buying, Yes, the apparently,

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Speaker 1: from what I understanding, has been buying for the past

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Speaker 1: several weeks. When Warren Buffett buys, one has to at

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Speaker 1: least pay attention. And one doesn't have to always follow,

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Speaker 1: but one has to pay attention. Noah sends or bus

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Speaker 1: about it. Certainly, you you have to balance, say, here's

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Speaker 1: one of the great investors of all time doing something

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Speaker 1: on the bullet side. Dennis tell me here, I mean,

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Speaker 1: have you ever known a situation like this in terms

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Speaker 1: of where we are with an economy with not rampant

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Speaker 1: but certainly highly elevated inflation, on the job market which

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Speaker 1: is so strong, and what does that mean for investing?

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Speaker 1: Rich I think you have to take a look seriously

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Speaker 1: at the job number that came out Friday at first Blush.

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Speaker 1: It was a stunning number, but one of the one

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Speaker 1: of the problems with the numbers that there were three

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Speaker 1: thousand new jobs at it because of the birth death.

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Speaker 1: Just my that'll probably come down to eighty thousand next month,

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Speaker 1: which means next month's number is going to be demonstrably smaller,

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Speaker 1: so there are some problems with the number. But I

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Speaker 1: have to admit all of the economic data, other than

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Speaker 1: the employment numbers, seemed to indicate an economy that's recessionary.

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Speaker 1: The YEO curve in version now at the forty basis

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Speaker 1: points and heading to fifty. Nonetheless, the jobless the job's

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Speaker 1: number was impressive, you have to say that, and so

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Speaker 1: was the services number last week. So it's really more

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Speaker 1: than just the jobs. But Arvin Signarilla said he sort

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Speaker 1: of joked that the only soft landing in fifty years

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Speaker 1: was Captain Sully on the Hudson. But he did raise

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Speaker 1: the point that every time the FED goes too far,

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Speaker 1: why not stop short? The set has always gone too far.

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Speaker 1: They they tightened too far, they ease too far. It's

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Speaker 1: just the nature of the beast. They're slow to reactant

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Speaker 1: in both instances, always have been, always shall be. And

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Speaker 1: one of the things he begs the question, why why

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Speaker 1: not this time just stop shot? They won't do it.

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Speaker 1: It's just not in the nature of the beast. They

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Speaker 1: will they will, or again they always have they always shall.

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Speaker 1: One would say it would be wise if they wouldn't,

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Speaker 1: but they won't. That's often in this program we talked

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Speaker 1: about the suffication being supplied side. Certainly there could be

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Speaker 1: some evidence of that turning to a more demand side.

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Speaker 1: But structural changes are taking places of which we really

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Speaker 1: do need to take account of. One is green inflation.

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Speaker 1: On top of that, we've got an aging population, which

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Speaker 1: means you've got few of younger people support the older ones,

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Speaker 1: which on highest salaries and the like. And and certainly

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Speaker 1: at the moment we have all these elevated but off

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Speaker 1: the highest commodities prices. But there is a struggle going

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Speaker 1: on how the economy evolves. People are not paying enough

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Speaker 1: attention to the demographic ship sort of taking place. Europe

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Speaker 1: is now depopulating itself, Japan is depopulating itself, Korea is

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Speaker 1: going to depopulate itself. The United States is barely populating itself,

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Speaker 1: and if it weren't for immigration, we would be depopulating.

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Speaker 1: Russia is depopulating itself. We need to pay attention to

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Speaker 1: the demographics of the world, and nobody seems to be

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Speaker 1: paying much attention to it. That to me is one

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Speaker 1: of the big changes in the world that no one

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Speaker 1: no one is paying attention to it's bothersingme to me,

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Speaker 1: you need you need growing populations and not declining populations

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Speaker 1: to keep economies moving from the lower left of the

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Speaker 1: upper right, and we don't have that. That might argue

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Speaker 1: for a FED to get a little softer going forward,

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Speaker 1: I suppose. I mean, obviously inflation is the is the

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Speaker 1: main job. But you have now the bond market completely

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Speaker 1: at at loggerheads with the FED over long term growth.

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Speaker 1: Who's right? I think the bond mark attends to be right.

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Speaker 1: The bond market tends to be smarter in my opinion.

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Speaker 1: I've only been at this for forty five years, so

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Speaker 1: I'm still a newcomer to it. But the bond market

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Speaker 1: tends to be smarter than the FED on almost all

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Speaker 1: circumstances because it's real people putting real money to work.

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Speaker 1: The set is using other people's money or not their

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Speaker 1: own money at work, and when people put their own

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Speaker 1: money to work, they tend to make better decisions. So

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Speaker 1: the bond market, I think, is telling you what's really

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Speaker 1: going on in the bond market reversed over the past week,

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Speaker 1: made a new high end, I made a new low

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Speaker 1: and yield, and suddenly on Friday, on Friday after the

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Speaker 1: numbers came out, you had a technical reversal day. I've

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Speaker 1: learned to pay attention to reversal days, and I paid

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Speaker 1: real attention to reversal weeks, which you're rare, and in

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Speaker 1: a rare event, indeed that you had it on the

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Speaker 1: last week. So I think the bond market is telling

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Speaker 1: you that higher rates are coming and that the pivot

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Speaker 1: is now off into the distance for a long period.

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Speaker 1: That is, how far is the bond market being skewed

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Speaker 1: by quantitative tightening. Quantitative quantitative tightening is a reality. The

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Speaker 1: Sets has promised us, and I think they should follow

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Speaker 1: through to take nine billion dollars out of their balance

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Speaker 1: sheet over their course the next several years. When you

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Speaker 1: took the balance sheet from what nine nine trillion, nine

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Speaker 1: billion dollars nine nine billion dollars to nine trillion dollars

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Speaker 1: in the course of five years or ten years, you

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Speaker 1: have a lot of quantitative tightening has to go on

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Speaker 1: as they run the bond market off. That had been

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Speaker 1: the fuel that had driven stock prices higher, and the

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Speaker 1: SET is taking the SET is going to be taking

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Speaker 1: that fuel away for the next several years. It's going

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Speaker 1: to be a long slow and involved process. They said

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Speaker 1: they're going to do it. I hope they do. Dennis

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Speaker 1: always a pleasure. Thank you so much for joining as

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Speaker 1: Dennis Gartman their chairman of the University of Akrons Endowment

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Speaker 1: Fund