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Of Schlitz and paps, blue ribbon. Jim Bianco, I believe is with us all right now? Rich, do we have mister Bianco? Okay, we do, Thank you Rich Truman for that. This morning, Jim Bianco is nailed the sticky inflation call. We get an update, Jim like good news this morning. Futures up twenty five. We're getting knocked around here in immense emotional volatility. What does a Bianco view on inflation?
That it's still sticky and that you're starting to see signs that even people are starting to become nervous about it. The surveys like Michigan and the Conference Board are showing that people are expecting even higher levels of inflation. The FED might call that being a bit unanchored. And I think that it's going to, you know, stay with us
and be a problem. Now now that I've said that it's a three percent three and a half percent problem, it is not an eight ten or Zimbabwe problem, but even still a three to three and a half percent problem means that interest rates, even though the bond market is rallied down, the four point three you know, we don't have a whole lot more on the downside to go. If we've got such that kind of sticky inflation.
How will the FED adapt to our new I love this phrase fiscal space. How does the FED adapt to you know, forget about the legislation overnight and the ramifications of x numbers of zillions of dollars of debt added on where we are now, how do they adapt to our fiscal policy?
Well, I'll answer the question by saying I hope they adapt, because their attitude right now has been well, we have to wait and see, and we have to sit on our hands and see what happens with tariffs and see what happens with the budget and then kind of assess it from there. And that's why the market doesn't expect
the FED to move until June at the earliest. At this point, so I think the FED is going to have to learn to adjust that there is a plan out there by this administration, and it isn't just a bunch of disconnected things like you know, tariffs or a sovereign wealth fund or demanding the Europe pay for it more security so that we could relieve our own defense budget. It's what I've been talking about for the last couple
of weeks. It's the mar A Lago Plan. That is the plan, and we're getting all the phases of that plan. And the idea is to lower the value of the dollar, is to bring the US into a more competitive position. Is to relieve us of the debt burden and bring down interest rates. But right now the Fed seems to think like there's kind of three random things that are happening side by side and hasn't put that together. Once they do, hopefully they'll understand the plan.
So it's interesting. Jim Torsten slockover to Apollo's out with a note this morning and just kind of talking about the reverse of globalization. He calls it segmentation, as in talking about the how that puts structural upper pressure on inflation, goods, inflation in labor, keeping industry structurally higher for longer. How do you think about that? Is that something that can be a real headwind for global economy?
Oh? I think it is a headwind for the global economy, and it will be for both that and inflation. Torsten's right about that. It will put upward pressure on inflation. And if you look at the global economy, especially if you look at the European economy, they're not doing very well right now. The Chinese economy is not doing well at all. Right now. The bright spot in the globe is United States, at least at the top line. The United States economy is stronger than most of the other
developed countries, and it continues to do well. But that segmentation, or that deglobalization as it was called before, that that's been underway now pretty much since the financial crisis and got accelerated post COVID, and I suspect we're going to continue to see that happen. That's the impetus behind tariffs, and why President Trump keeps talking about we have unfair deals is that he's trying to correct that. But that means we're going to see more segmentation.
Jim Mianco, We've had a series of conversations. If you're just joining us, James Bianco with us from Chicago threat
he could be with us with Jim Bianco research. Jim, I I look at the last couple of days of conversations and a lot of people are yeah, yeah, but we're cautious, and it's the politics and all that A headline out three minutes ago Elon Musk will attend Trump cabinet meeting today that according to Fox News Jim Bianco, how do you participate in the market, in the stock market, given the newsflow we're all having right now, Well, that is the thing you want to definitely get yourself, you know,
away from, is getting a bogged down into all of these situations, whether you know there's this or that that's happening, or even the mar Alago accord.
I think you'd want to take a longer term perspective and to decide what you like what you don't like. Now, not that I've said that, I'll a note precaution. The other problem that the stock market has, while I think it's having indigestion more than anything else, is we started the year with very high valuations in the market, and
the max evenstocks had extremely high valuations. They need everything to go right when you have those kind of valuations, you know, to put it into you know, in baseball terms, you need to score eight runs, and if you score six runs, that's not enough, even though six runs sounds like a lot, because that's the problem when you have high valuation, and that I think is why we're starting to see people be more cautious more than anything else is those type of issues, and it gets kind of
wrapped up into, you know, the news flow of the day. Jim.
We're about ninety percent of the way through the SP five hundred reporting season here obviously and video big, big, big name after the close. What have you learned from earnings?
Yeah, and Vidiao's the biggest name. But the earnings numbers have looked great so far. The year over year earnings numbers for the fourth quarter to fourth quarter for the S and P five hundred is running around twelve or thirteen percent. That's been a very good number. Even sales, which is kind of an analogous to nominal GDP because they're like trillions of dollars of sales, is five and a half percent, and so these numbers have been looking
very good. Now that I've said that, remember that those are the numbers they report it. They don't have much forward guidance, But even the companies are offering guidance that is somewhat positive right now. So that is that is a good thing, but that is also running into that high valuation thing. So even though those numbers might be good, they might not be good enough.
Shib biancle way too early from shimmy uncle, thank you so much for joining us.