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we are pleased to once again be joined by the CEO of europacific capital Peter shift Peter thank you so much for being with us again you've been calling for a correction uh for a long time more than that actually more than a correction and this is certainly a correction the Dow down sharply the S&P also and NASDAQ down uh again yesterday was no bargain either uh is this it Peter well I've been calling for a bare market and I think this is a bare market and if we get a rally will be the correction because the primary trend is now down this is early in this bare Market it's very young and unfortunately it's going to be uh very long lived I think this is going to be similar if not worse than the bare Market that went from 1966 to 1982 it took 16 years for the Dow to make a new high and during that time period inflation took about 70% away from the Dow's value this time I think it's going to be worse and and and and why do you think that I mean at the initial point right here Peter is it that uh some Traders just don't want to face the music even if it's Downer Tunes they don't even understand the music or what's playing what they don't get is that we are about to finish the financial crisis and Great Recession that started 10 years ago in 2008 because all the FED succeeded in doing was interrupting that process which was The markus's Cure uh for the underlying economic disease which is now much worse uh 10 years of additional debt borrowing and spending simply allowed us to reflate an even bigger bubble than the one that popped before and so as a result we're in much worse economic condition than we were on the eve of the last crisis and so now uh the finishing process is going to be far more severe so the the back half of the of the Great Recession is going to be much greater than the first half and the rest of the financial crisis is going to be much worse than the beginning and people just don't get that yet and it's going to take a long time for them to figure it out I mean maybe not that long maybe months we'll see uh but in the meantime everybody thinks this is a healthy correction there is nothing healthy about what's going on this is a bubble deflating this is exactly how it started in 2008 only this is a bigger bubble and it's going to produce a bigger crisis you know you've said this before and I I I want to if if you'll pardon me I want to sort of tease it out a little bit more so you know part of the problem back leading up to 2008 was these the unregulated markets the uh the mortgage back Securities and those over-the-counter things that you know weren't regulated and rampant speculation but why do you say that this is a a a bigger problem than then Peter I'm sorry to have you do a little remedial stuff for us but I'm very curious well that's a common misconception that was all these underregulation or non-regulated markets it was the regulated products you know Fanny May and Freddy Mack you know these were the entities and you know what what they were doing with subprime but remember the fuel for that bubble was not the the mortgage lenders it was the Federal Reserve which kept interest rates artificially low they kept interest rates at 1% which at that time was the lowest they had ever been they left them there for an entire year and then it you know it took two to three years to normalize back up to 5% uh but you know we took on a lot of debt when interest rates are artificially low a lot of it was Mortgage Debt and the bubble popped but this time the Federal Reserve injected far more monetary heroin into the the economy they kept interest rates at zero for 6 years they've been raising them for 3 years and they're just now back at 2% so you have nine years so far of extremely artificial low interest rates which have caused a much bigger credit bubble than the one that popped in 2008 we have a bubble in real estate we have a bubble not only in residential but commercial we have a bubble in stocks we have a bubble in bonds we have bubbles everywhere and they all popped and the air is coming out and the economy during these nine years got way more screwed up than it did during the years that greenpan inflated the housing bubble the Bernan the bernacki yelling and now pal bubble is far bigger so the economy is in much more trouble uh and and and so therefore the the the process of unwinding all these malinvestments right liquidating all the mistakes and you know a lot of money is going to be lost far more money than was lost uh in the collapse of 08 and the difference is the Fed is not going to be able to bail anybody out there is no bigger bubble that the FED can blow this is it they're done blowing bubbles we now finally finally have to deal with the consequences and because we kicked the can down the road for so many years the consequences are much more severe than they would have been had we bit the bullet and and dealt honestly with them earlier uh you know we we totally blew our time uh talking about that but I appreciate it so much uh Peter go going back I mean from my view I get what you're saying and agree about you know the the lower interest rates but uh boy those OTC products that nobody knew about seemed like a problem to me as well I think in in tandom with what you said about Freddy and and and Fanny uh Peter this is asking a lot because we're out of time but I'd sure like you to come back in the next week and talk about some of these specific stocks that we were going to get to but we didn't now I I thank you so much you want to talk about them uh I know you do unfortunately we don't today but thank you the CEO and chief Global Stratus your Pacific capital thank you Peter appreciate it
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