Let's get to Michael Cogino, President and portfolio manager at Permanent Portfolio family of funds. So the FED chief Michael often sounds a little more devish in the in the news conferences than the statement. I think his comment to being sort of referring to being near neutral already really juiced up the bulls. But he also said that it doesn't matter if we get a negative GDP report, and that tells us that he's mainly watching the jobs market,
and that has some implications. You can get some other bad data and maybe the FED doesn't take such notice. How are you playing this latest fit move? Well, the comment on GDP is self serving because I think we expect the number to not be that great tomorrow. And depending on your definition of recessions, um, you know, it
either is or isn't. But it's really kind of a technicality. Uh. The economy is slowing, and I think the Fed's announcement today was indicative of the cross currents that are currently in the marketplace. I mean, on one hand, employment strong, on the other hand, we're near neutral, but on the other hand we might be raising more. They just might not be as big as chunks as we've seen in the last couple of months. So it all adds up a continuous or or it continues to add up as
a lot of uncertainty and unanswered questions. So I think the way you play it is to be fairly diversified among a broad sector of assets. Sounds like a broken record for me, but but that's how you play this environment. You head your bets in a number of directions, and you have exposure in a number of spots, and that way you minimize downside risk um and you have multiple avenues to possibly make some money or stay close to
zero in this environment. Michael Steve Angel here, of course, we just talked about how Powell doesn't think the U S is currently in a recession. How do you how deep do you feel the recession will will be? If there is one UH during this What you admitted to is a slowing US economy, Well, I I think you know, if you go by the technical definition, I think we're probably in one right now. I don't expect much in the second quarter, and even if it's positive, it's going
to be marginally and probably negative year today. Um, the question as to how deep, how long, how extensive, we really don't know. I mean, there's arguments in a number of directions on whether this recession could be pretty brief and shallow given the employment picture, um or it could be deep in something we're mired in a while, if inflation is stubborn and we have a hard time reducing that number. And again I go back to the the
point that we just do not have answers. It's a very unique cycle, given what we've done the last couple of years in terms of creating money, in terms of COVID, in terms of coming out of COVID, the voluntary shutting down of the economy, the unattended consequences of trying to get back online, not only here but globally. Um it just presents a lot of things we just don't know
the answer to. So I can't tell you today well how deep it's gonna be or whether we're even gonna be in one, but I suspect we are and the jury's out as to how deep and long it'll be. So of course we talked to not the FED, but we also need to talk about the big tech rally. Tech investors overnight kind of latching onto perhaps what they wanted to hear from the fed, But Michael, does it
reflect the fundamentals in tech right now? Meta disappointed after the bell Calalcolm gave a lackluster forecast, but again Microsoft yesterday had the disappointing results, but then gave a bullets Outlook. What's your take. It's always hard to predict stock directions on quarterly earnings. We're long on term investors, so it really whether I don't place much emphasis on immediate stock reaction. I think you know, tech generally has gone up the
last month or so, um from an oversold condition. And if if the market is right, or people in the market or right and thinking that we're near the end of rate increases and might even be looking at rate cuts because of a recession down the road, then the migration towards growth stocks makes a lot of sense. Um. Well, I don't know if that's going to be the case or not, but but buying them now is a lot
cheaper than several months ago. So um, you know you want to have it to versified portfolio, and generally speaking, that's where the growth is in the market. Um, But you have to look at those in conjunction with the macro economic environment, and just because they performed that way in the past, doesn't mean they will again. So all were sold a nice bounce that we need to learn more as to whether it's sustainable and moves further from here.
So you're not a big believer in the fundamentals indicating that things will get better. And I think people generally in America probably share your thoughts. UM. I'm curious why if people have jobs they feel like they're either already in reflation or heading into it. Is it mainly inflation? Well, employment numbers are lagging indicator UM, and we're starting to
hear announcements of companies restructuring laying people off. Jobless claims was a higher number UM than recent over the last week or so, So I mean, you know that that number could flip. But I think what you have, or what you've add in the last couple of years is UM. You had a lot of money put in people's pockets that went into savings accounts. It bought stocks and bonds
in real estate. People were spending it. They felt good because they had that money, and those that could work or wanted to work, we're working in conjunction with that, UM. To the extent you're working, you still have that although prices are getting higher, So it's making you more nervous as to how you're going to spend. And for those that didn't work and they're spending their savings, at some
point that's going to run out. The question is what if the job market turns and what if you deplete all those savings and assets, what are you going to spend? And that would be a tail win to a deeper recession if if that were to occur. So it does make sense to pay closer attention to jobs and job trends, um and underlying demand as to what would drive those
jobs one way or the other. Hey, Michael, do you have a hot take on what's happening with the Chinese economy as it relates to its contribution to global growth or perhaps not global growth. Obviously we have Biden and see they're gonna be talking soon I think later today, But we're also getting you know, lots of words out of like the SEC sing U s and Chinese officials. They must reach an agreement very soon on access to audits to avoid any delisting of Chinese stocks. Do you
see a decoupling as as kind of inevitable? Uh, that's a broad, broad question on a number of areas. I mean, you know, using accounting standards and and having common standards would make a lot of common sense for investors. We've we've allowed when you look at the overall terms of trade between the United States and China, UM, we've given up a lot more than we've received over the years, in my view, in terms of we let a lot
of things slide. The markets are not even competitive, um, U S companies have a lot harder time getting traction over there than Chinese companies have here. It's also two are raising capital opportunities. The amount of privacy that we have to give up when we're over there versus what they're allowed to do here. That's that's above my pay grade.
But the point is, UM, you know, you do need to have accounting standards to properly assess financial condition and financial statements that if you don't have it, that is a risk factor that I would say investor beware, UM And some investors are comfortable with that risk, others or not. We're a little less comfortable with that risk. Alright, Michael, thanks very much. Up against the clock. Michael Cogino, President and portfolio manager at permanent portfolio family of funds