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a special San Francisco Edition of quick America I'll be able to but put this one look the market got crushed today tell me 522 points sap plunging 1.71 NASDAQ nose diving 1.79 why well another 75 basis point rate hike from the FED Jay Pal's more or less saying he'll do whatever it takes to beat inflation we'll be done when we are done it's going to cause some pain in your pocket but until the Help Wanted signs come down until savings or diminished until housing price is cool until supply and demand get in balance he fears correctly I think that we will be ravaged down the road it's kind of pain now or never those words may sound harsh but they'll be soothing later on we don't know when Once the fed's job is done Pal's tough when inflation stance will be good longer term which is why tech stocks initially did bounce in response that was a thoughtful response but then the whole Market rolled over driven by shorter term worries about the collateral damage from a Fed mandated recession that we talk about almost every night the thing is past creating and preserving long-term wealth even as he crushes short-term value because over the Long Haul persistently High inflation is much worse for the stock market and almost any other asset class and you it's just bad for you what matters though is that we're living in j-pal's head right now obviously nobody wants to lose money because of the FED but pal knows you can lose money in two ways you can lose it now as we've been doing in this incredibly well where you can see the value of your Holdings erode gradually over time because of inflation with a few years of high single digit inflation as we have now the buying power of a dollar would be dramatically reduced versus where it is now Pals bring the pain now in order to stop that from happening so let me play with an open hand as someone who lived through the 70s I stand with pal I don't want my life savings or your life savings be eaten up by inflation now I know sure hey Kramer what does it mean to you you saved a lot of money okay that's true but it doesn't make me wrong no matter how much you have it will be worth less in a world of embedded inflation that's a fact a historical fact there is no instance where inflation raged and your stockholders actually increasing value over Time Pal doesn't want to bet on whether he can be the first Central Banker ever to break that pattern he refuses to roll the dice so he's punishing us now in order to save us from Financial Purgatory later on as is often the case there are two broad camps emerging as Powell vows to stay tough until the job is done there's a short-term camp and we saw them in action today where they'll slow the economy too too hard throw many people out of work in the process and really Crush earnings he may overshoot and cause a recession pal says that is collateral damage from bringing down inflated wages and he's willing to do it these people sold stocks right into the bill betting we opened down big tomorrow we were up right after the different q a that's what palace had put himself through remember we're in Pals and he's thinking we have too many jobs and too few workers that's what's causing Relentless wage inflation and Central Bankers worry most about wage inflation because it's sticky and it spreads throughout the whole system pal can't create new workers but he can make fewer job openings by raising rates to the point where companies cancel their expansion plans it even hit us with significant layoffs give many says he's keeping rates uh raising we're going to continue to raise rates well you know what despite what these people did with the Q a it is pointless to ask when this will be done it'll be done when it's done it'll be done when The Help Wanted signs are replaced with no help needed signs we're now leasing signs pal isn't worried geez I'm going to hurt the stock market here with this tough talk not at all if anything he's worried stocks are too high as people have lots of money left from covid transfers from the government he wants you to deplete your savings in order to force more people back to work you may think this is a brutal way to beat inflation it really is but it's the only tool if it has in its Arsenal that can do the job so when the news breaks the short-term Camp runs and buys the recession stocks yeah look today was a good day for it General Mills supported an amazing number and stock went higher but all the staple stocks overly went higher over time in the day because money managers believe pal can't beat inflation without causing a possibly severe recession you're going to hear that for days on end so remember I said it to you that's what you're going to hear the Campion predominant today it will predominate over multiple days they doubt Powell at every turn they will bet he'll overshoot they think he's not any good at his job but now let's take on a second Camp the one I would call the silent majority after Classic Dixon you're a piece of political Leisure event I think this hot majority believes that pal needs to do this because it's just not right that every time you go to the darn Supermarket things have gone up in price the silent majority wants to be able to buy a house at a reasonable price without having a bidding war over it this higher majority knows that their stocks are going to be worth less when they retire if Pal doesn't act now the silent majority doesn't ever want to lose money nobody does they're watching stocks bounce initially and then get slaughtered because the short-termers realize Palace action will make it harder for companies to make money I don't blame the short-term Gunslingers those estimate cuts are definitely coming and when the estimates get cut then what happens I'll go down the prices of stocks are as visible as the scores on a scoreboard today you lost because the palace actions the short-termers also think that over the next few days this will become more and more evident so they want to avoid the pal inflicted pay now I understand it but I disagree longer term I am with the silent majority on this one even as I was not with them during the Nixon regime I believe that not only has commodity inflation peaked but we'll soon see housing Peak we'll have too many homes with too few buyers if you didn't have to live in your house if moving wasn't a nightmare pal makes you feel like you should sell it now and buy it back later at a lower price that's right he makes me want to short my own house even this is an art tonight said housing prices are still a big year over year a pound of money or that he also makes you feel like buying stocks that are coming down hard because he's so cautious that I have to believe that he'll get wage inflation under control faster than people realize not necessarily because we're going to recession but because we'll definitely have a long slowdown where every business has to adjust but it won't be a disaster the short-term Camp is made up of people who either can't handle any pain or don't believe in pal and want to get out ahead of others who think that it's going to really come down the launch from Camp though including me knows that Pals methods are serious and we're going to see downward visions of everything until it's clear that the inflation giant is slain and when you start moving up again the solid majority says Mr Powell scorched by savings now because I know they'll be worth more later the shorter terms don't even care they act out of fear and myopia their why stocks closed at the lowest level since June they always Score first always but the bottom line I think Powell wins the game and when he does we'll be on the field and the short-termers will be at the bottom of the standings if they are still in the standings at all let's take some calls why don't we go to Kevin in Florida Kevin hey how are you doing Jim I am doing well Kevin how about you thank you and I'm so glad you log me on your show or yeah I I appreciate what you uh your the knowledge you impart to others to call it yeah and you're more than welcome and we want me my sweetie watch you every every night doing my best you're a tough tough what's up well okay well look at this what the deal is I I got a a a question about Eli Lilly and Company and just for the record I I worked there in new product planning and in sales um and and so um and I I've seen you had uh Ricks on David Rick's yes he's born a couple times well look let me just tell you this is a big hauling for my travel trust we almost decided to buy some more now we do fear that the drug stocks can go lower because there's a high price hearings Mobile stock but I think the future for Lily is unbelievable for its weight loss drug and I'm not even talking about what it may have for Alzheimer's so I know you worked there and all I can tell you is hold on to it if you got stock and buy some more when it breaks to the 280s because it may do that because this Market's so bad let's go to and thank you for those kind words because this is one tough job I got right now let's go to Tyler and California Tyler a big Booyah from California Jim how you doing I'm looking for you I don't see it right now but I'm sure you're here what's up all right so looking at the charts for the potential uh bear Marketplace I want to know uh if you think there's a bottom on ticker Kruger Kroger reported great quarters are doing a fantastic job the stock sells 11 times earnings I think the bottom is in hand but the chart's so bad people keep selling and selling and selling let's say 43.
okay how about that now I think Powell wins the game I feel very alone right now very alone but I don't care because when he does we will be on the field and the short-termers will be at the bottom of the standings if they're on there at all oh man money tonight Skyward Solutions jumped higher so uh could the stock be the solution to your portfolio uh even though the Bears are more I'm checking with the CEO then the semiconductor space has become one of the most watched and hated sectors in this market so where's Marvel technology stand I'm gonna talk to the company's top brass and Salesforce held its investor day after the Bell from dreamforce piling a whole they had a whole host of metrics that we gotta find out more about so we're going to sit down with a Coco Brett Taylor foreign Smith here thanks for watching CNBC on YouTube
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