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Speaker 1: And let's get to our final conversation of this hour.

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Speaker 1: We're joining us now is Tim Pagliara, chief investment officer

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Speaker 1: at cap Wealth, to discuss the latest on the markets. Tim,

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Speaker 1: very good morning or good evening to you wherever you

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Speaker 1: may be in the world. So I'm reading the notes

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Speaker 1: and uh, you know, don't hold back. You believe stocks

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Speaker 1: in Europe and Asia are uninvestable at this time. What

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Speaker 1: should investors do if you do see a very hard

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Speaker 1: landing ahead? Well, thank you for having me, Steve. I

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Speaker 1: believe that, um, it's going to be, you know, just

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Speaker 1: three yards and a cloud of dust to use an

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Speaker 1: old football analogy, And I don't think it's a it's

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Speaker 1: just a not a good time for conservative investors to

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Speaker 1: put much of a stake in the ground. So I'm

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Speaker 1: advocating that they stay with domestic companies that are somewhat

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Speaker 1: recession proof and and even some short term treasuries. Um

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Speaker 1: as we you know, kind of watch the storm go

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Speaker 1: by here. It's kind of great to have you go

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Speaker 1: all Vince Lombardi and New Rockney on us this uh,

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Speaker 1: and and football season is nigh. Um, well, how much

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Speaker 1: do you blame the FED for the predicament we're in

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Speaker 1: or are you sort of in the camp that, Look,

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Speaker 1: there's just so many global challenges around the world that

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Speaker 1: it's making it is making investing in risk assets difficult.

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Speaker 1: I think they're There are a lot of global challenges,

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Speaker 1: So I don't think you can blame the FED other

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Speaker 1: than maybe they could have started earlier. Um. I think

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Speaker 1: it's curious that the Fed's response was so short. It's

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Speaker 1: the sinct and you know, I've described it as you know,

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Speaker 1: Chairman Powell canceling Christmas, but it came right on the

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Speaker 1: heels of you know, a very inflationary debt reductor debt

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Speaker 1: um you know, cancelation of student loans, and that was

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Speaker 1: followed by the Inflation Reduction Act with that which had

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Speaker 1: nothing to do with inflation reduction. So I just think

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Speaker 1: that the FED, they've got a mandate that they have

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Speaker 1: to follow, and global markets aren't making it any easier,

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Speaker 1: and US government policies not making it easy on them either. So, Tim,

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Speaker 1: if the outlook and the landscape is the frozen tundra,

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Speaker 1: where do you find where will you find recession proof stocks?

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Speaker 1: I think, for example, Um Williams M W m B

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Speaker 1: it's a natural gas pipeline. UM company very well established,

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Speaker 1: strong UM core assets four and a half percent of

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Speaker 1: it end. I think a company like that, it's just

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Speaker 1: made for a conservative investor in a good place to

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Speaker 1: to stay while we're going through this and we get

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Speaker 1: a few more solutions both to the energy side and

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Speaker 1: the inflation side. On the macro side, because we have

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Speaker 1: real rate setting hired, do you expect companies to start

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Speaker 1: laying off a lot more people. I think where you're

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Speaker 1: going to see the layoffs are in UM. You know,

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Speaker 1: the companies that don't have, you know, real business models

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Speaker 1: that we're struggling that we're on the wrong side of,

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Speaker 1: you know, the COVID trade UM for example, like a Peloton.

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Speaker 1: You know, there's others, and you're going to see substantial layoffs.

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Speaker 1: M Octa was in the news back on Friday and

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Speaker 1: Thursday and Friday and they had a horrible quarter. Well,

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Speaker 1: they overpaid for an acquisition and the talent drain for example.

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Speaker 1: We talk a lot about UM the workers shortage, but

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Speaker 1: there's also a lack of talent in the C suite

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Speaker 1: and that was a perfect example of that. They had

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Speaker 1: two new people that came in and completely turned the

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Speaker 1: company upside down and now they're paying for it. So, UM,

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Speaker 1: I would just avoid any of these companies that have

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Speaker 1: not established a firm business model with profitability and that

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Speaker 1: may have to go back to the capital markets, um

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Speaker 1: to sustain you know, their businesses well. Tim with the

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Speaker 1: FED taking a more hawkish tone following, of course Jackson hole,

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Speaker 1: how long do you see this this ice age, if

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Speaker 1: you will, lasting, I think it is going to go

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Speaker 1: well into the first half of next year. UM. So

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Speaker 1: I think you take Chairman Paul at his word, UM,

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Speaker 1: not to expect, you know, any break in the action,

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Speaker 1: so to speak. Um. You know, inflation is is really tough.

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Speaker 1: You know, they consumer price index is calculated differently than

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Speaker 1: it used to be, so you know a lot of

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Speaker 1: the housing costs that haven't shown up yet are there.

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Speaker 1: And so you've got housing, you've got energy, you've got food,

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Speaker 1: and the only thing that changes the inflation trajectory trajectory

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Speaker 1: is increasing supply and that looks very difficult too. So

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Speaker 1: I see embedded inflation in the system at four to

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Speaker 1: six percent for quite a while, way ahead of the

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Speaker 1: Fed's targets. What do you think of the measures that

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Speaker 1: the European authorities are looking at here capping profits on

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Speaker 1: energy companies. I can imagine you probably don't like the

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Speaker 1: idea of that, and then redistributing the wealth. Um, what

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Speaker 1: about also the price cap on on power generated from renewables,

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Speaker 1: coal and nuclear. These are other measures that they're looking at. Well,

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Speaker 1: it's it's not the question of liking it, it's they

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Speaker 1: don't work, and it will be it will compound their problems. Um. Well,

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Speaker 1: that first worked in a grocery store in the seventies.

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Speaker 1: There were two guys that came up with this same

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Speaker 1: type of policy. For Richard Nixon it was whipped inflation.

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Speaker 1: Now it was Donald rumsfeld Um and Dick Cheney. You know,

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Speaker 1: they were young staffords in the White House. You know,

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Speaker 1: price controls never worked. They lead to more shortages, and

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Speaker 1: you know, we're just gonna have to let the markets,

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Speaker 1: um engage in price discovery like Esther George of the

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Speaker 1: Kansas City Feds. It alright, Tim, thanks very much, out

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Speaker 1: of time, Thank you very much for joining us here

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Speaker 1: live on the show. Tim Pagliara, chief investment officer at

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Speaker 1: cap Wealth