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Speaker 1: Let's get to our guest, Chuck Camello. He is with

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Speaker 1: us Chuck as president and CEO of Essex Financial Services.

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Speaker 1: He joins the line from Connecticut, where they're voting on

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Speaker 1: a couple of key races tonight, not the least of

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Speaker 1: which governor I believe. Also, um Mr Blumenthal is up

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Speaker 1: for reelection. But we won't talk politics right now, Chuck,

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Speaker 1: let's talk crypto. Were you surprised by this meltdown that

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Speaker 1: we saw across the board? Something as simple as Finance

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Speaker 1: Holding saying hey, I'm on to take over Arrival and

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Speaker 1: look what happened. Yeah, there's there's a lot going on there.

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Speaker 1: And I would say it's the latest, the latest bit

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Speaker 1: of bad news to an industry that's had an awful

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Speaker 1: lot of it so far this year, and especially the

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Speaker 1: fact that it involved you know, Sam Bankman Freed, who

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Speaker 1: until this event has been sort of the backstop, if

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Speaker 1: you will, to the industry. But I think listen, what

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Speaker 1: you had here was a good old fashioned run on

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Speaker 1: the bank. You know, as soon as CZ the Finance CEO,

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Speaker 1: so they were liquidating. Uh you know f t T

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Speaker 1: which is the token that's native to f t X.

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Speaker 1: I mean they've lost its you two billion dollars gone,

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Speaker 1: and obviously that's a deal that was done under dar Rest.

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Speaker 1: Given the liquidity crunch that ft x AD, what does

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Speaker 1: it show us about I guess the broader picture in

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Speaker 1: terms of you mentioned there that liquidity crunch that we

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Speaker 1: know czzal said. He was saying as well, just in

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Speaker 1: terms of some of these bigger concerns that we are

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Speaker 1: facing on the global economy. Well, you know, I think

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Speaker 1: if you look at it, right, I mean, think about

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Speaker 1: all the various sort of long duration assets, if you will,

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Speaker 1: If you think about what tech stocks have done, um,

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Speaker 1: you know, especially I don't mean the Microsoft and the

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Speaker 1: Amazons in the world, even though they're down, you know,

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Speaker 1: especially for Amazon, but you know, for some of these

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Speaker 1: small tech stocks or tech stocks that aren't going to

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Speaker 1: make money for years if God knows when. Um, you know,

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Speaker 1: you can throw digital assets right in that same boat

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Speaker 1: in a very challenging interest rate environment. Um, they're the

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Speaker 1: ultimate long duration asset, and that is the asset that

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Speaker 1: is suffering the most in this market environment that we

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Speaker 1: have right now. So I can't I'm surprised by it.

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Speaker 1: I mean also, if you put it in perspective. I mean,

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Speaker 1: at one point Netflix was down more than bitcoin, you know,

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Speaker 1: back in two thousand, two thousand one, you know, during

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Speaker 1: the dot com bust, Amazon's draw down. So, I mean,

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Speaker 1: it's acting just like any other sort of long duration

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Speaker 1: speculative asset right now. Um, and we've seen these crypto

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Speaker 1: winners before and time is going to tell, but it's

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Speaker 1: it's a certainly a challenging environment for that asset in

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Speaker 1: this this macroeconomic environment, Chuck. As you saw the sell

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Speaker 1: offen these crypto related assets precipitated a lot of buying

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Speaker 1: in the havens of the precious metals rally today, treasuries

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Speaker 1: were up, yields across the curve moving Loward. Do you

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Speaker 1: think on the yield side of the story, this is

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Speaker 1: kind of a temporary phenomenon very quickly. Uh yeah, I

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Speaker 1: mean I think so. I mean, I think we must

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Speaker 1: see hopefully things stabilize a little bit. But you know,

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Speaker 1: bitcoin is is if you look at it by GBTC,

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Speaker 1: right and that's down, gold is down eight point eight. So, um,

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Speaker 1: it being crypto and bitcoin being a digital gold, I

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Speaker 1: certainly don't think that's the case in this year so

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Speaker 1: far as borne that out. So looking at these moves

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Speaker 1: in the bond market, and particularly an outperformance there on

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Speaker 1: the seven year treasury, when does the Fed pivot? You say,

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Speaker 1: the word pivot is this year is transitory? Yeah, I

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Speaker 1: heard that the other day. I thought it. I put

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Speaker 1: it resonated. Given how many times the word pivot is

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Speaker 1: being used so far this year, and you if you

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Speaker 1: compare that to how many times the word transitory is

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Speaker 1: being used last year. I think you're gonna I think

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Speaker 1: you're gonna see the Fed start to change course after

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Speaker 1: one of two things happens. Right. One is you know,

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Speaker 1: you get the positive real rates, I mean Fed funds.

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Speaker 1: You know usually you know for the Fed too sort

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Speaker 1: of curb inflation and get ahead of things, that Fed

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Speaker 1: funds rate is going to be higher than cp I. Well,

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Speaker 1: we're right now the Fed funds rates at four and

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Speaker 1: CPI is at eight point two. So we have we

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Speaker 1: have ways to go there, and I think we'll see,

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Speaker 1: most likely when CPI comes out this week, that coming

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Speaker 1: down a little bit. Um. And again they're they're dual

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Speaker 1: mandate of employment and right now, you know the unemployment

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Speaker 1: rates at three point seven with ten million open jobs. Um,

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Speaker 1: you know that that at this point, um, you know,

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Speaker 1: isn't a particular issue. But if you start to see

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Speaker 1: unemployment really start to rise and appoint me to become

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Speaker 1: an issue, then that might also give you the catalyst

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Speaker 1: for the FED all of a sudden to pause and

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Speaker 1: take a look at what they've already done and decide

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Speaker 1: perhaps it's time to maybe just take a little bit

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Speaker 1: the break. So the reopening in China is another important

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Speaker 1: story beyond what we're talking about with respect to the FED.

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Speaker 1: As you know, Chuck, last week, I mean, it was

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Speaker 1: stunning to see the performance in the market in Hong

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Speaker 1: Kong Friday alone, we saw a gain of something greater

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Speaker 1: than five percent. Yesterday the hangs Sang was up about

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Speaker 1: two point seven percent. But now we've got word ed

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Speaker 1: just mentioned it. The situation with the COVID zero policy

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Speaker 1: on the mainland, Guangzho locking down a second district from

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Speaker 1: nine am today, Beijing now with the highest daily level

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Speaker 1: of new COVID cases in five months, it doesn't appear

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Speaker 1: as though we're near the end of the story in China.

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Speaker 1: And how does that affect your decision making when you

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Speaker 1: put money to work in global markets? Yeah, well, listen,

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Speaker 1: I mean, investing in China right now is not for

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Speaker 1: the faint of heart. And listen, there's been many articles

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Speaker 1: written in conversation had that you know, as China quite

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Speaker 1: honestly at this point uninvestable UM. And obviously China has

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Speaker 1: a very big impact on the global economy, especially on

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Speaker 1: commodities UM and a host of other things. But when

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Speaker 1: you're looking at global markets, to be completely candid, we're

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Speaker 1: very much US biased right now. UM. You know, we're

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Speaker 1: certainly not perfect. But in terms of the issues that

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Speaker 1: Europe is dealing with and with on any given day,

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Speaker 1: what China is doing or not doing, UM, I think

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Speaker 1: you're right now much better to sort of lean a

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Speaker 1: little bit closer to home in the US on with

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Speaker 1: your investment dollars until you know, things get a little

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Speaker 1: bit more sorted out in Europe visa you know, the

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Speaker 1: challenging situation there faced with this crisis in Ukraine. UM.

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Speaker 1: And then again on any given day, your guess is

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Speaker 1: good in mind, is what China is going to do?

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Speaker 1: And so where are you looking specifically in the US?

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Speaker 1: I know you're looking at the energy sector. Yeah, Listen,

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Speaker 1: energy continues to be you know it's been energy has

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Speaker 1: been the best performing SMP sector of the last three

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Speaker 1: five in two hundred and fifty and five hundred days. Um.

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Speaker 1: But yet it has a very small amount of actually

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Speaker 1: inflows that are heading into it compared to technology. So

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Speaker 1: energy certainly in an inflationary environment and with low pees,

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Speaker 1: and they are just printing and minting cash. You know,

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Speaker 1: right now you want to be buying companies that are

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Speaker 1: making money, not losing money, not might make money. The

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Speaker 1: ones that are actually making money so good, Strong dividend

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Speaker 1: paying stocks, strong free cash flow, strong balance sheets, dividend

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Speaker 1: aristocrat type stocks again will tend to do well in

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Speaker 1: this environment. And and things like energy at this point

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Speaker 1: have done well, are doing all right now. And in

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Speaker 1: this you know, this imbalance we have with supply and demand,

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Speaker 1: which will just get worse once China starts to get

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Speaker 1: back online. Um, it still seems to be a very

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Speaker 1: compelling sector, so very quickly chucked thirty seconds or so.

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Speaker 1: What do the mid term elections mean for markets? Well,

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Speaker 1: you know, the market more than anything wants some certainty,

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Speaker 1: right and I think you know, we'll see how this

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Speaker 1: day and probably to be caned to the next few

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Speaker 1: days pan out as they count all the votes, but

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Speaker 1: you know, I think just having it behind will be

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Speaker 1: a very good thing. Um. I think the market probably

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Speaker 1: would have been most impacted if it was a democratic

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Speaker 1: sweep and all of a sudden, you know, there's there's

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Speaker 1: not a lot more checks and balances in place. But

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Speaker 1: the market tends to do well in the gridlock split, um,

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Speaker 1: you know split, you know, executive and legislative branches scenario.

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Speaker 1: So I think it'll just be happy that it's over.

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Speaker 1: I think you've seen this nice rally usually get a

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Speaker 1: nice bump in the market. Chullo. Thank you, President and

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Speaker 1: CEO at Essex Financial Services for US from Connecticut,