Phil Cannella – Phillip Cannella News
Phil Cannella: “Do you think The Fed will continue
this Quantitative Easing or is there an end in sight?”
Andrew Huszar: “I think The Fed’s going to keep on buying. You know I think we have an addiction problem right now, and unfortunately we had a bad moment five years ago and we basically doubled down on the addiction. I think that correction’s coming. I tend to think it’s probably a longer term thing, and one of the reasons is because the government is going to keep on doing what it’s doing, and I think that’s a bad thing but I think that’s the reality.”
Phil Cannella: “So the consequences of The Federal Government delaying and continuing the Quantitative Easing, you feel that this bubble will continue to blow up until it pops?”
Andrew Huszar: “I do. I think The Fed has proven that it’s all-in and as long as it keeps on thinking it’s the only game in town, that almost becomes a self fulfilling prophecy, and people start looking more and more to The Fed to keep on doing what it’s doing. I do think if The Fed suddenly talks meaningfully about pulling back, I think your listeners should be very aggressive about repositioning their portfolios away from stocks, but I think The Fed often talks about it, but we’d have to start seeing some meaningful action, and I think talking and acting have proven during the last five years to be two very different things.”
Phil Cannella: “Are we heading for a severe market correction in the near future?”
Andrew Huszar: “I believe that we’re going to keep on seeing the U.S. Government, particularly The Fed, continue this stimulus. So as long as the stimulus keeps going, I don’t see a short term potential for a huge fall. When we finished QE 1, just to give you a sense, in the next four months we saw the U.S. stock market fall 14%. So if The Fed starts meaningfully pulling back from stimulus, I think the potential for the stock market to fall is significant. I just think The Fed is going to do this far more slowly than people think, and I think we’re probably talking about the Fed continuing to buy bonds indefinitely on some level, because of this prospect of the markets actually crashing, or at least falling dramatically. That’s where I think as long as we keep the pump going, I don’t see that happening. Again I could be wrong, or maybe The Fed will pull back, because it realizes it’s just setting us up for a bigger fall, and maybe we will see some of this real volatility.”
Hear more from the interview with Phil Cannella and Andrew Huszar on The Crash Proof Retirement Show®. Saturdays at 11am and Sundays at 1pm on Talk Radio 1210AM, WPHT!
