Kingsview CIO Scott Martin on Fox Business Cavuto Coast to Coast 3.15.23
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Program: Cavuto Coast to Coast
Date: 3/15/2023
Station: Fox Business News
Time: 12:00PM
NEIL CAVUTO: And the protests continue right now in Paris, France. All of this over rejiggering of the pension system there. You know, there are 45 or so different public pension funds throughout France. Emmanuel Macron wants to pare them down to one pushed back the retirement age 62 right now to 64, I believe, over seven years. That is not going down well with a public workforce. That is the majority of the workforce in France on these adjustments occur At the same time, the French market careened more than 3% today, mirroring what’s been happening throughout Europe, what’s kind of happening in the United States, certainly on concern about the safety of banks, not only here, but they’re everywhere right now. Let’s get a sense of how global this is and whether we should worry. Scott Martin Kingsview Asset Management. Kenny Polcari, the Slatestone Wealth Chief Market strategist. Kenny, and we do want to get your thoughts on what’s going on here that is so global that we’re now beginning to see the dimensions of this, not so much the fight over pensions in France, although that could come here, by the way. But but the fight over how safe people’s money is in banks. What do you think?
KENNY POLCARI: Listen, I think the whole Silicon Valley thing, valley Bank thing, just kind of created this this unwarranted level of fear in the markets over the banks. I don’t think there’s anything wrong with the banking system of the United States, whether it’s a big money center bank, whether it’s a, you know, a smaller regional bank. Silicon Valley was a very specific bank. They catered to a very specific group of people. You know, in retrospect, do I think we did the right thing kind of backstopping the depositors? My first reaction was, yes, I think we did let the bank fail, throw everybody out, actually go after people because, you know, they should they should tear that all apart and look at what the what actually happened in that bank in terms of the management. But look, don’t discount the speed at which social media and all those venture capital guys created this angst and anxiety over over something that was very normal in the banking industry that hold to maturity type of portfolio, whether it was right for Silicon Valley Bank. That’s one question. But but they created this hysteria. Peter Thiel and a lot of very prominent people created this hysteria that took all of 36 hours via social media to destroy the bank that I think we have to be more concerned about. But the health of the banks in this country, I’m not worried about it all. I think this is a way, way overreaction.
CAVUTO: It might be, but in a fast market conditions and maybe heightened and dramatically sped up, you know, correct. In this type of environment, Scott, people sell first, ask questions later. Are you worried that now the news that so many seem to be taking their money out of regional banks, putting them into the big money center, banks like a Bank of America, Citigroup, Wells Fargo, we’re told that that this could kind of feed on itself.
SCOTT MARTIN: It might. I’m worried that they’re making a mistake if people are doing that, because, I mean, Kenny said it perfectly in so many aspects. I mean, there’s not anything to worry about until there’s something to worry about. And when you’re worrying about something, unless it’s legitimate, like a housing bomb in 2008 and 2009, this is just some confidence issues that the Fed and the Treasury have to be ready to jump on. And they have been and they have to be ready to continue to do that, as does the ECB over in Europe, Neil. So I just worry that this thing goes further, maybe to take Kenny’s point further, that it goes further than it really should. But if it does fine as money managers, as somebody that invests money for you at home, we’re buying into this because we think that some of these sell offs and some of the bank names, some of the tech names, the oil commodities certainly is way overdone. It’s way stretched, and it’s going to be a great buying opportunity provided that things don’t go off the rails and the government doesn’t let some of these things fail. Because remember, these are depositors that are getting screwed over, you know, the businesses that have money on deposit there are there to basically have their money parked there and do payroll and things like that and pay bills. So they’re not the ones that are trying to take risk here. The banks are. And if the banks are doing things they shouldn’t be doing, then take them out of that game.
CAVUTO: All right. Real quickly, he was referring to the European Central Bank, which is expected to continue going ahead with a planned rate hike, I believe, tomorrow. Kenny Then the question becomes whether our Federal Reserve does the same when it meets next week. What do you think?
POLCARI: Right. I think they should. I don’t I do not think the Fed should pause. I don’t think they should do nothing because then I think that sends a different message that to the community versus what the narrative has been. Let let them go 25 Let them get the rate to 4.75 five, which is where the terminal rate will be after the 25 basis point hike. And then I think if they want to sit back and pause because, look, we’re going to get the peak at the end of the month and then we’re going to get CPI and PPI again in in April.
CAVUTO: Okay. We’ll see what happens. Gentlemen, very much again, Dan, you damned if you don’t. On whether the Fed moves to hike rates next week. Not moving could indicate some crisis moving could indicate some crisis.
