National Debt, Rate Cuts, Bullish on AI - Scott Shellady AKA Cow Guy - video Dailymotion

Benzinga

Scott Shellady AKA The Cow Guy joined Benzinga's Premarket Prep team ahead of Fed Chair Jerome Powell's Jackson Hole speech.

Transcript

00:00All right, Scotch lady, the cow guy here.

00:03First question is, are you out of your yen carry trade?

00:08Well, I'm happy I never got involved with it, but I don't think that's over by the way.

00:14I know that the market wants to brush everything under the rug very quickly.

00:18Nothing to see here.

00:19Please move along.

00:20But I think that was a little bit of a warning shot.

00:23I still think we're going to see volatility, actually a lot of volatility.

00:26And I think that whomever's going to be the president on January 1st is going to be given

00:30a bleak, a big hot plate of warm you-know-what to manage going into 2025.

00:35Okay.

00:36All right.

00:37Let's go a little bit shorter term here.

00:39I'm sure you've been sitting on pins and needles for the Jackson Hole speech at 10 o'clock

00:46for Mr. Powell.

00:47What a bunch of nonsense here.

00:49I guess a quarter, a half or whatever.

00:52I'm the only one that thinks we don't need an interest rate cut, but whatever.

00:56Just anticipation, dovish, hawkish, nothing-ish, all the ballyhoo about the Fed and Jackson

01:03Hole today.

01:04Well, they've painted themselves into a corner, haven't they?

01:06I mean, you've got part of the market, I would say a large part of America that believes

01:10that they already feel like they're in a recession, so they maybe would benefit from starting

01:14to cut rates.

01:15But at the same time, I've asked anybody that wants to come on my show, I'll pay their airfare

01:19and their hotel to come in and tell me, explain to me how cutting rates is going to help inflation

01:23go lower.

01:25So they're in a damned if you do, damned if you don't.

01:27If they cut rates, they're going to have an inflation problem.

01:29If they don't cut rates, they're going to have an American story problem.

01:33On top of that, the reason why we haven't been in an official recession, because NBER

01:40has not been able to label one.

01:41We had two quarters of negative growth, but they didn't want to do anything about that

01:44because that would have hurt the current administration back in 2022.

01:48But we've had government spending hand over fist.

01:51We've basically spent our way out of not having a recession.

01:55If you look at those jobs numbers month over month, the government spending has kept us

01:58out of a recession and that's it.

02:01But then we've come to learn a couple of days ago that we can't even do that right.

02:05We got ripped off because all the money that we've been spending to keep ourselves out

02:08of a recession, apparently we bought 818,000 jobs that actually weren't there.

02:14What?

02:15Yeah.

02:16Yeah.

02:17The BLS came out with the revision saying that from last April to this March, they overstated

02:24their jobs numbers by 818,000.

02:27So that's a huge revision.

02:30The biggest one in the last 15 or 16 years.

02:32How does that happen?

02:33How does that happen?

02:34Well, I mean, how does it happen that we have continually month over month headline beat,

02:39but then the last two months get revised lower?

02:41That also flies in the face of, I mean, that's like we're talking four and five sigma stuff.

02:47It just doesn't happen.

02:48Yeah.

02:49So we got ripped off.

02:50We've been spending money to stay out of a recession and we bought 818,000 jobs were

02:53absolutely fictitional.

02:55So I, you know, look, I'm, I'm, I'm bearish on, on what the economy looks like here.

03:00But I am bullish on, I think that, you know, artificial intelligence is here to stay.

03:03I think there's some, some good things out there, but that doesn't mean we can't go lower

03:07for a little while here and maybe even go sideways.

03:10And my last thing I'll say is this, you know, I've got all, I had all the licenses myself

03:15for my entire life, you know, to sell stocks.

03:18I've been a stock broker, commodity guy, income guy, fixed income guy.

03:24But what I don't like, what I'm seeing now from 2008 forward, if you go back and take

03:27a look at the SMP going back to say 1970, there's a clear line, a demarcation line in

03:322008, 2009, where you can see the Fed becoming ultra accommodative.

03:37And it seems like now, and I guess three weeks ago, whenever that was the hiccup we just

03:42had two and a half weeks ago, it just seems disingenuous to me that every time we see

03:46a decent sell-off in stocks, everybody comes out of the woodwork calling for the Fed for

03:51an emergency 1% rate cut.

03:53The Fed's got to rescue us.

03:54Why?

03:55I mean, if the Fed's not going to let the market go down, this is a rigged game.

03:59I mean, I would love to go back to be a stock broker, because if you come into my office

04:03and say, I've got a three-year time horizon or longer, I'd say, just put it in the market.

04:06The Fed's not going to let it go down.

04:08Commodity guys have to worry about markets going down.

04:10And I would argue, even say sometimes interest rate guys do.

04:13But with the Fed coming to the rescue all the time for the equity guys, it just smacks

04:18of disingenuous, and I don't like it.

04:21So whenever they change that tune, which I don't know if they ever do, but they have

04:26to come to, you can't continually screw with the laws of nature all the time, because ultimately

04:32it will come back and boomerang back and hurt you twice as bad had you just let the market

04:37do what it was supposed to do.

04:39Because they're continually trying to manage an outcome, and it's not going to work.

04:45So at some point in time, we have to come and pay the piper.

04:48But right now, put your money in the market, because they're not going to let it go down.

04:52It's short-term gain for long-term pain.

04:55Yes.

04:56I mean, this is really what the Fed, this is really what everything is, our administrations.

05:03And it's not just the Dems.

05:05It's obviously the Republicans.

05:06Oh, it's both.

05:07Yeah, I agree.

05:08I mean, it's apolitical.

05:09I mean, and fellas, look, we can't, I talk about it all the time on my show because it's

05:16the biggest thing that nobody talks about, that's our debt, $35 trillion.

05:21We have a $2 trillion budget deficit, annual budget deficit.

05:24And so just the reason why we don't talk about it is because people can't imagine what a

05:28trillion dollars is.

05:29They hardly can imagine what a billion dollars is.

05:31But if I said it to you this, if you would have spent a million dollars every day since

05:36Jesus Christ was born, you would not have spent a trillion dollars yet.

05:41It's unbelievable when you say that.

05:44I know.

05:45And it's like 700, you know, whatever, $750 billion.

05:49So we're $35 trillion in debt.

05:52You know, if a second is a dollar on a clock, a trillion seconds ago was 31,677 years ago.

06:00I mean, it's mind-boggling, and nobody cares.

06:03Because at some point in time, we're not going to be able to sell our bonds, and interest

06:06rates are going to go through the roof because of it.

06:08Just saying.

06:09Wow.

06:10And then just how long is this, like, again, this is where interest rates have to eventually

06:15come back down too, because the debt's so high, they won't be able to service the interest

06:19payments.

06:20Right.

06:21We've crossed that threshold, the Rubicon of we're starting to print money just to pay

06:27the service on our debt, not even the principal.

06:29We're printing money to pay the service on our debt.

06:34And our service on our debt will be the biggest line item in our budget next year.

06:38It's sickening, really.

06:39I mean, it's farcical, but nobody wants to do anything about it because it's unelectable.

06:45You can't make it to Washington saying, we're going to stop spending, and I'm going to trim

06:49back your entitlements.

06:50That's just not electable.

06:51So, Scott, you said you mentioned, you know, you think AI is here to stay.

06:56Yeah, I do.

06:57How are you playing this?

06:58Are you buying NVIDIA?

06:59Yeah.

07:00Well, I haven't bought it yet.

07:02I missed my opportunity.

07:04I wanted to get it below a hundred bucks.

07:05But when I got...

07:06You had about one hour there, that moment.

07:11That's me.

07:12That's me being too much of a trader.

07:13Right.

07:14I got too cute for school on that one because I bought, well, it went down to 90 so quickly.

07:18Here we go.

07:19Right.

07:20I'm 70 big.

07:21Come to papa.

07:22Well, it didn't quite work out like that, but it doesn't mean that's over yet either.

07:27You'll be able to pick those things up.

07:28I mean, there's going to be a time where we start to run a little long in the tooth when

07:31it comes to AI.

07:33But it's still going to be a great place to invest.

07:34And I still love American Ingenuity and our tech sector.

07:39It's going to be the leading.

07:40I lived in London for 16 years.

07:42Our tech sector is the envy of the world.

07:46So those things are going to be safe place.

07:48You just need to buy them on dips and get good prices for them and hold on to them for

07:52a long time.

07:53And again, as long as you have a three-year time horizon, the Fed's going to be in your

07:56back pocket too.

07:57They're going to help you out.

National Debt, Rate Cuts, Bullish on AI - Scott Shellady AKA Cow Guy

Category

Transcript

Recommended