Concern. This as the s p gets closer to a critical support point and investors are desperately seeking answers. We have four days to fund the government. I will ask senator bill cassidy can republicans overcome their own infighting . There is a heavy malaise hanging over the nation. We all fee it. The question how do we fix it. Rebecca walser joins knee in a specs takeaway. All that and more on making money. Charles usually when people say, hey, how did the market today, charlie, how did the market do, we assume theyre talking about the stock market, right . I got to tell you these days everything is running off of the bond market. The canary in the coal mine, we always used to call it that, that is a truth teller, that is always its historic role of the economy and nature of risk. You look at the bond market all of sudden it has become irrational at least for those on the wrong side of the trade, right . That has everyone on edge including all the different markets. Case in point, our friend warren pies put up a great point what is happening with the bond market. Up until 1998 bonds and stocks traded together. When stocks were down, bonds were down. They were interesting. Bonds were down 60 of the 100 first worst days of the stock market. Check this out, after 1998 post1998 stocks would be down, purple, look at bonds the green lines, they would be up. That was pretty cool. That is a way you sort of can invest. That is way the bonds were levelheaded. You could use the bonds go into bonding stock markets were getting hurt. That was a pretty good trade. That is sort of the 60 40 trade, right. If stocks are not working bonds are working. However this changed a lot. It feels like it is postpre1998. Here is what is really worrisome, a lot of wall street folks are saying no, this is just a temporary thing. Check it out, not just asset managers, but everyone loading up. One way to play the bonds is through tlt we heard a lot of guests talk about it. Look at the amount of cash going into it. This is record amount of money. What is happening to tlt itself . It is getting absolutely hammered, 48 . Theyre putting tons of cash into it. It is losing value minute by minute. It is bizarre. The new question, is this a new paradigm going back to pre1998 or a new anomaly. I want to bring in erin gibbs. This is the way, not a lot of people are in this market since 1998. If youre in the market you got in since 1998 this is the norm. This is easy to work off. Okay, i want to hedge, stocks are down, i willowed up on bonds. It is not working right now. Part of that, we talked about recently, part of the inversion weve been talking about so long we have seen, when youre looking at the total bond market there is a big difference between the short Duration Bonds, one year, two years, three years, versus 10, 20, 30. Where most of the money is. Most of the money is in the 10year. That is causing all of this very different behavior and unpredictability and where do i invest because everything is going dunn type of days. Charles so is it an anomaly. When your clients call you, because obviously you have a lot of folks who are in the 6040 portfolio. We should mention also so far bonds are down for the year. This would be the first time in history three years in a row, bonds are down. This was the safe bet. This was a bet a lot of retirees are putting money, people close to retirement. Everyone is nervous about it. What are you telling them . Are we back to pre1998 or just an anomaly . This is pre1998 as long as we see the fed being hawkish because they will raise rates. Were looking specifically at longerterm rates like 10 years, 20 years, those rates keep going higher which means the bond prices go down. Charles right. So until we see yields coming down youre going to see that big price differencetation. Charles talk about, you still like energy . I like energy, one of safer, if you will be in stocks, have to evaluate equity premiums, that is one of options. Short Duration Bonds is another. Up to how long . Five years absolute maximum. There are great etfs one to three years where you just dont get that big price movement, you just get the yield because thats the problem you get into the bond etfs maybe you make 5 but the price is going down so no good. Charles right. Short durr ranges, get a nice stable price and get 12 or 3 . Charles before you go there is a stock you find intriguing here . Yes. I get a question. This is one of the big winners of the year. Charles fat miracle drug. Part of ozempic trade. Actually, nova nor disk is trading 40 times. Jackie this is much cheaper than the american eli lilly. This is danish company. Charles got the big gap. Got up here. Use this pull back as a opportunity to buy the stock on weakness . If you want to get in earnings potential and growth looks phenomenal. Supply chain issues seem to be resolved this might be the entry point. Charles it is absolutely amazing. I do a piece on this, sideeffects kidney failure, liver failure, we dont care. If we can eat and be slim, are you kidding me . Are have you looked at economy about this you take this out economy is flat. This is driving denmark now. Charles you make a bet that americans will keep eating keep getting fat, having a miracle drug . As long as supply chain issues are out of i think this can continue. Charles wait this whole other thing, market malaise thing, wait it out. Exactly, until we really understand where the bond yields are going it has been a sharp rise. You have to sort of reset. Charles right. For at that time least the next two to three weeks well have a reset. It will be very risky. I would be very careful about any new positions right now. Charles erin, thank you very much. Always appreciate it. Folks coming up my takeaway on the weight on this country, the malaise on this country right now. You can feel it. It is palpable. We have a very special guest Rebecca Walser is. The fear and greed index, right . Lets talk about that because the fear and greed index just swung to extreme fear, right on the edge, right on cusp of extreme fear part of that is due to the spike of the vix the fear index. Still way below where anyone thought it would be at this time. I want to bring in daily dirtnap editor jared dillian. Youve been pounding the table on this market. It is overvalued. You been saying that for a long time but do you sense investors are sufficiently fearful though . No, not yet. We still have a great deal of complacency. My core position has been we are headed into a recession. The yield curve inverted 15 months ago. Typically you get a recession within 18 months of yield curve inversion. I think the reason we havent had one is because of all the stimulus money sloshing around from the pandemic. We will get a recession, and if you look at, if you go back, look at the chart of equities in seven and 2000, typically when you get that last rate hike, when the fed pauses, that is the absolute top of the market. Charles and then we start to go down from there. I saw where you posted that on twitter. Heres the thing, youve been vocal about the significance of a few stocks doing heavy lifting well remind people, top 10 stocks, 31 of the market going back to 1980. It has never been this concentrated with this much handful of names but why is it such a problem though . The. You know thats a good question. We dont really know why its a problem but we do know it is correlated to other periods in history when we did have that concentration and it was a problem. You know when i first got into the business back in 1999, 2000, i was a local on the picos Options Exchange and cisco had a five or six or 700 billiondollar market cap and it was xpercent of the index that ended up being the top in the dotcom bubble. We had echoes of that in the past. Charles to your point, by the way i have a new book coming out. I have a whole chapter on cisco were on the same page there. That is when the cisco move youre talking about there. That was again another rough time, rough patch for the market. Lets talk about how much, you know, riding this thing out because, you also were saying to folks, hey, listen this are ways to make money on the downside, to avoid any kind of instrument that uses swaps. The most layman way of explaining it what does that mean . Oh, man, it is very hard to explain in layman terms but leveraged etfs have a lot of invisible risks and when i say invisible i mean you cannot see them. These products decay and lose value over time. If you want to get short exposure to the market sell short, sell something short, use puts, you can use in the money puts, 100 delta puts or you can use futures. I, when i was working at Lehman Brothers running the etf desk and these issuers came to me telling me about these leveraged etfs would issue i was shocked that the sec ever agreed to do this. Charles by the way we put it on the screen for viewers. Sell shorts, deep puts, in the money puts and use futures. Just a guesstimate then, youre a student of history, you outlined for us, paved the trail, painted the picture, when do you think it would be safe to go back long stocks . Do we have to go through a lot of pain before then . I dont think this will be a generational bear market. I dont think were going to have a 40 or 50 draw down. I think it is possible we could have an additional 15 other 20 from here which would be pretty painful. So i mean i think were at the beginning of this, not the end. I think youre probably looking at three to 6 months before you would even thinking about dipping a to back in again. Charles jared, great stuff i appreciate it. A tough message but we have to hear it from time to time. Thank you why coming up senator bill cassidy, Dan Greenhaus will join me breaking down the potential looming government shut down. Well preview tonights president ial debate. Look nor inside of this market for opportunities. First american businesses are struggling to keep their doors open and one of the big reasons . Were not going to cities, and if we do, the store we usually go to may be looted. Were talking about distressed real estate assets and what it means for everyone. Done peoples, talking about the ultimate insider, he will share his analysis next. This is american infrastructure. Megawatts of power, rails and open road, and essential services of every kind. All running on countless invisible networks, making it a prime target for cyberattacks. But the same aipowered security that protects all of google also defends the systems running americas infrastructure. For these services. For the 336 million of us living here. se fue la luz pero todavia tenemos wifi para hacer las tareas. ¿y eso es algo bueno . Wifi y estudiar. Buenisimo. Wifi y pedir una pizza online seria buenisimo. Presentamos storm ready wifi. Solo de xfinity. Ahora puedes mantener una conexion confiable durante apagones, con datos celulares ilimitados y bateria de respaldo de hasta 4 horas para mantenerte conectado. Obtenlo solo con xfinity. El hogar del 10g network. Enterate mas hoy. Nice footwork. Man, youre lucky, watching live sports never used to be this easy. Now you can stream all your games like its nothing. Yes [ cheers ] yeah woho running up and down that field looks tough. Its a pitch. Get way more into what youre into when you stream on the xfinity 10g network. Charles all right, so just as the bond market is taking on more significance for stock investors and everyone else another giant market is really starting to hang over our heads sort of like the sword of damocles. Commercial real estate market. This was valued at that in 2021. Look at some of these things. 3. 8 trillion multifamily, 3. 2 million office. 3 trillion in retail just alone. After the Silicon Valley bank failure the word was cre, commercial real estate would be the first wave to crash. It would first hammer the banks and then of course after you hammer the banks you hammer everyone else. So far the worstcase scenario hasnt happened but i can just tell you this week alone, a couple things in my email in box caught my eye. One, new york lenders increase cautions, i never heard this term distressed grip, there is a distressed grip. Next day from the real, this is really intriguing, distressed grip but there was a specific line that said lenders are trapped in a sinkhole. I mean a sinkhole. That is kind of ominous talk. So, again you have the lenders are in bad shape, you have the commercial real estate in bad shape. To give you a size how big this could be the threat, right now abouthundred banks, about 700 american banks have too much, have excessive cr eloan exposure. That is ominous, that is very, very scary. We want to talk about this. I want to bring in a special guest to discuss it all don peebles is with us. Chair and ceo of peebles corporation. In 2008, 2009 everyone was worried market is getting hammered. Dont get back in then the next shoe to drop was come pressural real estate. They didnt buy the lows. It never really dropped. Is this time different from that time . Yes it is. This is more like the late 1980s where the market fundamentals of commercial Office Buildings have changed. For example, commercial Office Buildings market fundamentals have changed. People were going to different places around the country to move their businesses to more businessfriendly environments before covid. Covid changed everything because people worked remotely. Right now today in our Nations Capital where the federal government leases almost 50 million square feet of office space, their peak occupancy is 25 . So they have an excess inventory of 30 million plus square feet of commercial office space. That is happening all around the country. New york, 40 is the peak on pan sy. The values for that space is plummeted. Onetwo punch is Interest Rates. Interest rate swaps are now burning off. So thats debt service is going on a multiple now of what it was before and most of the loans, 80 of these commercial loans are held by regional and local banks. Charles right. Those dont have Interest Rate swaps. They adjust daily. Charles right. So to your point then i want to bring this up, i saw this tweet, Signature Bank had a cr eloan portfolio valued at 33 billion. Apparently they were trying to sell it. There were no takers. There is scary, they dropped the price to 16 billion, thats huge. That is a hell of a haircut. That is a fundamental shift and whats happening is the demand for office space has collapsed and as a result only the top class a buildings are going to be able to compete in the marketplace. The b and c buildings or any class a building built before bill Clinton Left Office is now a class b or c buildings. So those buildings are in tremendous trouble and value in those buildings have dropped 40 to 60 . I think they go down even more. I think you will see a 75 lows in value of many of those Office Buildings. Charles i put this up for the audience, folks. This is people going back to the office. So you can see, obviously at one point we all worked in the office at 100 . The virus came. Were about 60 . We got close to 70 in general but we certainly stalled. One of the big issues now, beyond just the work from home thing because, i think that is working its way out a little bit anecdotally. My commute is getting longer and longer every month, right . This is anecdotally. This is huge problem, crime. Target closing nine stores. National Retail Federation saying 112 billion lost last year. I mean this is a, you go, all right, so you decide to go to the office but you walk down to the store to cvs and it is being looted in fact either looted or constant shoplifting because these cities like new york city, san francisco, los angeles, wont prosecute shoplifters unless they cross a thousand dollar limit. So you have people walking out with their phone calculators on, 980 and they walk out. That also is affecting people coming back to work because people are fearful for their safety because these communities, these cities are becoming less safe. And as a result, youre going to see the occupancy numbers of people going back to work declining. That is also taking away the business for these retailers. That is the other thing. Half their business has been gone. Charles thats crazy. They will struggle a lot. Charles you think of the domino effect, right . The restaurant next to the store and it is just devastating you know. I dont know why theyre letting this happen. We talked about that a lot. Don, glad to have you on. Really appreciate it. Thank you. Charles by the way, folks, a reminder a special edition of making money, it is called unbreakable investors based on my new upcoming book, october 19th 2 00 p. M. Join us here in new york city. Ask us it i will it i will be f. Last one was standing room only. Go to event bright search charles payne. Etoro, the very few have a better pulse of the individual investor that she does. First countdown of course to the shutdown. Congress has less than four days to fund this government. I will ask louisiana senator bill cassidy if his party can get their act together. 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Yeah there is, and i think anything ultimately passes has to strengthen the border. Ed border is at a crisis. If President Biden started a year ago how do you make it infighting among republicans i think i do it allowing 200,000 people coming across the border illegally every month. He has done a great job. There has to be something done about the border not just to stop infighting but primarily there is crisis at border f president will let it happen maybe congress can force him to do something about it. Charles what is it looking like . Kevin mccarthy saying no deal without border in it. Can you handicap it for us . I cant handicap for you because i would be handicapping the house of representatives. I dont think kevin can handicap the house of representatives right now. But i know, i left our republican lunch. Lots of conversation. How do we do something which can keep the government and address the issue at the border and can we do both at once . That is the conversation. Charles we have the debate tonight. Of course the border will be brought up. I suspect everyone will be on the same page there, but where this is more division on ukraine. Continued funding of ukraine. Youre one of the republicans who continues to back the funding but a larger part of party saying no or you know, lets pause, lets get some sort of assessment. What are you telling constituents who may be wondering, were in louisiana. There is a lot of people in your state that need help, financial help, theyre watching cash, billions of dollars go to another country by the way to protect their border . First i will say were helping ukraine because not only are the ukrainians helping themselves theyre helping the United States of america. Russians are trying to kill americans around the world. Google wagner group attacking u. S. Troops in syria and you will see where they literally attacked. We slaughtered them but they attacked our troops unprovoked. Theyre in venezuela, theyre in cuba, theyre in africa, actively trying to enable the killing of americans or killing americans themselves. Charles is there limits, sir, is there a limit to the funding . You have a lot of folks in your state are living week to week. Theyre on food stamps and food stamps run out two days before the next round comes through. What do you tell them, were fighting russia . We can walk and chew gum at the same time. Number one. Were protecting young people. My daughter is in rotc. Were protecting our people by having ukrainians take down the russians, number one. Number two, we absolutely have to take care of americans by the way. I will point out, if you look at one of the greatest jobs programs for americans it was bipartisan infrastructure bill. Those dollars continue to go out and continue to promote not just better roads but better jobs. Charles yeah. I could go down the list. We have to take care of those programs you mentioned charles. Charles some folks are worried about inflationary aspects of it. Something else critical to voters, Social Security. You bring it up a lot. You tweet about it a lot. You have got a proposal out there. How does it work with respect to securing it, you notamping down making sure it is there for people . So Social Security trust fund is going insolvent in eight years. When that happens people receiving Social Security will get a 24 cut, boom, like that, under current law. Weve got to fix it. My problem, neither biden or trump, theyre both pretending there is not a problem. Their solutions are nonsolutions. We have to have candidates willing to stalk about it and offer an idea. We have a proposal repeals windfall elimination provision, has work incentives in there, does other things, by the way prevents the 24 cut. We need to talk bit. We need to fix it. Charles if you presented this to voters 65 and older would they think it was a great odd or recoil in fear and horror . No, we presented it through polling and focus groups. They think its a fabulous idea. That is the thing. It should be the third rail to allow a 24 benefit cut. That is what unfortunately both President Biden and President Trump are effectively proposing. Senator cassidy thank you very much. Thank you. Charles joining me managing director dan green haas. Pick up on the shutdown conversation here. So many different numbers. One of these things they crunch, if it lasts a week, last as month, whatever. Last time we had it real gdp was up. The stock market was up 9 after 34 days of a shutdown. How fearful should we be of a shutdown . My personal opinion based on the numbers i dont think we should be particularly concerned. You forget, for the viewers out there, when the government shuts down the whole of government doesnt shut down. It is really somewhere between a quarter and a third of the government shutdowns. Even that portion isnt fully shut down. People are commanded to go to work. They may miss a paycheck or two. The real effects are relatively small. Ultimately everyone who doesnt receive a paycheck receives later. Charles everyone ultimately gets paid. Yeah. Charles talk about the bond market. I started show with that. What do you make of this amazing action . Is it a new paradigm . Jim grant told me two months ago seeing a 40 bear market. Almost everyone in wall street pushing back on that. Everyone is loading up on bonds that it is easy pickens. What do you think . Picking out 40 years charles only jim grant. The idea of a new paradigm is something we should consider. What i mean by that the flipside of jims argument we basically been in a bond bull market for 40 years, 30 years, Interest Rates continuously fallen. That allowed everything that happened over the last 30 years to occur. Because of the level of Government Spending and burst of inflation we experienced we broken out of that trading range, if you will, that 30 year trading range. I think that higher level of Government Spending is certainly here to stay. As you know the outstanding debt right now is 30 plus trillion dollars. Over the next 10 years at best were going to accumulate 20 trillion more. Probably be closer to 25 to 30 trillion. So in essence well double that debt. That is all else wall not good for charles tax rates will not go lower than they are now. Most likely end up going higher during the same time period. With respect to the stock market, again, conventional wisdom is go with equal weight. Ignore the magnificent seven or top 10 stocks because theyre sort of due. Are you in that camp . Listen, over the next couple months it is probably likely that the rest of the market will outperform those bigger names but i think the general idea is despite all the doom saying that weve been hearing and that were talking about, the bias is probably higher into yearend. There is a lot to worry about student loan payments, the government shutdown, the auto workers strike, et cetera, et cetera, but seasonality is really important in the stock market. The economy seems to still have a strong tailwind to it. The job market is still quite strong. While were in a difficult moment here for stocks, a very difficult moment here for stocks, ultimately we come out on the other side of that in a positive sense. Charles to your point though seasonality worked this year almost better than any year. Thats right. Charles perfect roadmap. It is uncanny. If it continues ideally people should be buying in this, this week, next couple weeks, as it gets more painful we should be loading up own stocks. You pointed out not only a seasonally bad month but these two weeks are seasonally worse of the seasonally bad month. That is true. For most investors out there best phrase i give you keep buying. The market in general goes up, to senator cassidys point, Social Security, older viewers george bush tried to privatize Social Security after his election in 04. If he had done that the Social Security trust fund insolvency would not be a thing today. The market generally goes up. Shortterm fluctuations notwithstanding you more or less be buying. Charles i loved it when he wanted to do that but his polls went straight to the floor. Because the promise made, they cant get to the promises made with the way they invest the money now. Dan, wish we had more time. Great stuff. Thank you very much. Coming up more signs the consumer really feeling a wear and tear of all of this. Just how bumpy will the road get . Well ask lisa ellis. She is at 2 45. Why you need to keep your emotions in check. Its tough. Callie cox relies on history. Her new survey came out today. Well go over that next. You cant buy great conversations or moments that matter, but you can invest in them. At t. Rowe price our strategic investing approach can help you build the future you imagine. T. Rowe price, invest with confidence. Say goodbye to daily insulin injections with omnipod 5. A tubeless system that automatically adjusts insulin to help protect against highs and lows. Try it today. Go to omnipod. Com for risk information and instructions for use. Consult your doctor before starting on omnipod. Charles all right in the show you heard about student loans. You heard about a shutdown. You heard about a whole bunch of different crises out there, weighing on investors minds, my next knows it better than anyone else because it affects investment sentiment. Etoro investor callie cox. Great survey you put out at that. So much to cover. Some of the more intryinging bullets. This just came out today, right, so it is updated . Yep. Hot and fresh for you, charles. Charles 24 cited potential recession as the biggest external risk. You think that is about right . I want to clarify this. 24 cited potential recession biggest long term risk, following 12 months. Charles okay. Right now investors feel current about their financial situations and theyre more worried about innation. That tells me economy is doing he will well but that shows up in prices. Charles sounds like the fed will do the job too well. They will push us into recession. They dont know it. They seem to be on the right path, that is my greatest fear, to be frank with you, the fed overdoes it. That is the pieces theyre putting together. That might not be the cited risk theyre saying but they feel change around us. There is immense pressure on the economy showing up in our daily lives. Charles 17 of young investors 18 to 34 say theyre on track to achieve a primariry investing goal. That is a big number. That is great. Strategist that works with younger investor i love to hear that. I remind you investors are longer term. Theyre investing for financial security, retirement. Charles traditionally but i dont see, the 18 to 34 crowd i see them on the betting sites, betting on if a quarterback throws a pass, touch down in the first quarter. This is what we were told, right . When the market began to go up, i call it the new investor revolution that people were making it a game. You say no, were taking traditional approach to this. Betting is another thing entirely, charles. I will note they have the same aspirations. They all want to grow the nest egg. They want to become wealthy, going about it a different way. Charles another thing we have to deal, 88 of investors acknowledge that emotions influence their decisions. Yay. Charles so is it, how do you counter that . I always tell People Knowledge is the only way i think you can counter that. Yeah i will say this too, emotions are not a bad thing. They are bad when they influence your decision making, force you to go against their logic. People are admitting it were humans. Were not spreadsheets. It makes sense. Charles how do you make sure you dont make emotional, listen, stocks, every time i see surveys people not losing money in the stock market, individual investors it boils down to one thing, when the stock goes down they sell it mostly because it is down, mostly because it is frustrated, mostly because they cant take the pain. The same stocks, later on be dead people outperform living people because they cant sell, they cant sell. I love this this confidence curve. Im thinking, im saying this is 2020, right . The new investor boom. Stocks only go us. Now we feel brilliant. All of sudden stocks r going down how do we get back to this point because this is where i worry we lose people . People will sell to the point they cant beat the markets and give up . So on the emotions point we tell our customers know your targets, know your numbers. You have to go back what is rational this chart here we send to our customers this is normal. You just started, at the beginning of everything you feel like a master of the universe, but as you get in you dont know what you dont know. You start learning. You feel your confidence start to drop. Unfortunately that is timing one a pretty difficult market to navigate. If you feel like youre in that spot, dont feel downtrodden, dont sell out, forget about everything. It is natural. Charles less than 30 seconds, september is usually the worst month but here is the good news. Usually the better months, look at that three month run. You are talking about this more often i think . Yeah. So were talking about the wall of worry right now. September is certainly living up to its reputation. But you know, if you believe in seasonality, the market followed seasonality trends more than usual this year. If you believe in it, we could be headed for a good q4. If you look for a list of worries, none of those scream einvestigation to me. If youre a long term investor, maybe it is time to buy in and consider this a pullback. Charles hang in there, folks give october a shot. I know. Charles appreciate it. Great, great stuff. Really appreciate it. Well be right back. She runs and plays like a puppy again. His 2s are perfect hes a brand new dog, all in less than a year. When people switch their dogs food from kibble to the farmers dog, they often say that it feels like magic. But theres no magic involved. dog bark its simply fresh meat and vegetables, with all the nutrients dogs need instead of dried pellets. Just food made for the health of dogs. Delivered in packs portioned for your dog. Its amazing what real food can do. The power goes out and we still have wifi to do our homework. And thats a good thing . Great in my book who are you . No power . No problem. Introducing stormready wifi. Now you can stay reliably connected through Power Outages with unlimited cellular data and up to 4 hours of battery backup to keep you online. Only from xfinity. Home of the xfinity 10g network. I dont want you to move. Im gonna miss you so much. You realize well have internet waiting for us at the new place, right . Oh, we know. We just like making a scene. Transferring your services has never been easier. Get connected on the day of your move with the xfinity app. Can i sleep over at your new place . Can katie sleep over tonight . Sure, honey this generation is so dramatic move with the xfinity 10g network. Charles probably dont have to tell you this, almost every measure of Consumer Sentiment not in freefall but pulling back. This is pro morning consult. From the Conference Board or Michigan Survey they have very identical charts and it aint pretty. What does the future hold . I want to bring in moffitt 1998 than send parter lisa ellis. Everyone with is trying to figure out consumer. Almost universally acknowledged stimmies are gone. Handful of rich folks like you have stimmie money yet. We have credit cards and debit cards can we maintain that same oomph . You remember in our conversations at beginning of the year the forecast was taking about nine months to burn through. Were getting into crunch time when we burn through the savings. Credit card spending is up. So far Consumer Spending is hanging in there. The latest numbers out of visa came in a few weeks ago. It is kind of stage. It is not strong but hanging in there, 6 , 7 kind of growth. But youre seeing the sentiment dropping. We think a lot is because of anticipation of Student Loan Repayment coming in this month. Charles i kind of remember, i want to say 2007 or 8 or something, where i saw a change in americans who started to use debit more than credit. Which i think is a smart thing, right . Now i feel like the last couple earnings reports it feels like credit is superseding debit again. Does it say we want to hold cash near and dear we dont mind going out even though Interest Rates so are so high . Debit is focused on the middle income consumer that is the mainstream american consumer. Credit is much more tied to your very affluent consumer who still up to now have been doing a lot of revenge spending, travel, taylor swift tickets. Charles, right, right. What were seeing debit spending which is more reflective of your walmart, Quick Service restaurant, et cetera, that is what is sort of hanging, holding on, sort of stable but some of the Companies Really exposed to that spending which is like a visa or a few serve, those stokes are down about 6 this month and i think it is in anticipation that the Student Loan Repayments are really going to hit that category. Charles another name you follow you, paychex, the stock up 5 almost right now. Paychex is early indicator. They report off cycle. Theyre very exposed to small businesses. The good news out of paychex was, employment levels hanging in there. That is the key metric, as long as people have jocks were okay. Small business bankruptcies are still above prepandemic levels. There is actually some Pretty Healthy new business formation. So the story was generally good which is why the stock is up a bit today. Charles halloween shopping, all the surveys say well spend less on christmas but we love halloween. All of sudden become like a big spender. Is it big enough it moves the needle or just one of these things a curiosity, wow, look how much were spending on halloween . Probably a little more than a curiosity, a little bit like the indulgent kind of spending . Charles right. Well have to see really as were getting closer to halloween how were looking for crisco mass. Charles you made one real change in your portfolio, your ratings, thats paypal. Kind of give you a hard time last time you here, are you in there . Ironically downgrade on a day they got new ceo. That is not giving the new ceo a vote of confidence. That were supportive of alex chris, from intuit. He has a tough road ahead of him. Theyre seeing increased pressure from apple pay and broader Payment Processing ecosystem like payments european player or stripe, the big u. S. Player. So he has got a tough turn around situation at paypal. Charles lisa, thank you very much appreciate it. Folks, well be right back. Thanks, charles. Us school di, which have become top targets for Ransomware Attacks. But theres never been a reported Ransomware Attack on a chromebook. Which is why thousands of schools like the fairfieldsuisun Unified School District switched to google tools for education. So they can focus on teaching and 22,000 students can focus on learning, knowing that their data is secure. if your child has diabetes, youll want the most accurate cgm, dexcom g7. Its on. And, hes off. You can see his glucose numbers right on your phone, so you can always be there for him with dexcom g7. Charles all right, so we began the show talking about Government Bond market which is known as the riskfree market. I mean, the government always pays its bills. Thats great if a bank can hold it to maturity, but what if a bank has to sell those bonds . I want to bring in walser Wealth Management president Rebecca Walser. The average u. S. Bond, treasure is treasure are trues, corporates, mortgages, theyre trading at 86 cents on the dollar. Right. Charles if you hold them to maturity, fine. But you cant always do do that. How did can we get here . How did the riskfree investment become the most dangerous thing out there . Well, what happened was the fed raised rates adepress with live i, and you aggressively. If you buy a bond of 100 and the rate is 3 and next year the rates are 6 , your fair market value is going to get discounted to make the yield effective 6 . Is so whenever rates are rising, existing bonds always decline in value. Charles so people were just a too comfortable with this . Are we just blaming this only on the fed . No. Im seriously concerned about the banking issue. Traditional banks take deposits and make loans, commercial real estate loans for regional banks, but what has happened is weve gone to treasuries. Banks have diversified their risk by buying treasuries instead of making loans so that they could shield the risk down so much in value, weve lost about 2 trillion in value in the Banking System on the treasuries that our banks hold. Charles wow. Silicon valley bank add had one the lowest one of the lowest loan values out there exactly. That thats the whole problem. Banks lend on the long term and borrow on the short term. When your short term is losing money, we have a massive banking problem. Charles speaking of massive problems, bankrupt withs are erupting higher, corporate defaults are climbing, and beyond that, you know, i look at whats happening in politics, President Bidens numbers are completely underwater, and you zero in on the main reason, and its financial. Everyones worried. Economy, its the economy. [laughter] charles so how do you heres the thing, you were one of the first to talk about this even late last year. You kept saying Something Big is happening. Yes. Charles is this the beginning of it . This is the end, charles, in my opinion, of the chickens coming home to roost of 20 years of cheap, easy money since the the dot. Com crash, since the Global Financial crisis, gse, and now the coronavirus. Weve just printed as if thats the solution, and there has got to be a reckoning. And with the banking crisis that were starting to see with what im talking about, this is the reckoning, i believe. Charles so, you know, listen, people come to you to help them with their money. Is there anything you can invest in . Im using the term a bridge asset if our system does experience a transition, Precious Metals, things that that will take us from one system to another. So i would say if youre really concerned charles so bob menendez sold at the wrong time. [laughter] if he listened to you, he wouldnt be in trouble right now. The gold bars not in the drywall, exactly. If youre really concerned, obviously, Precious Metals are true currency and not manipulated by government. Charles is there anything on the equity side . Theres a lot of value, but you have to look because theres not a lot of Capital Financing right now, so companies are going to have a hard time continuing the growth when theres not a lot of cap capital. Charles bottom line, its just starting. Just like your guest said, we always knew it was going to take us into the ninth month, and now with the 5 billion starting next month of Student Loan Repayments and all of the savings drying up, thats it. Ca. Charles all right, or rebecca its guest depressing, im sorry. Charles thanks a lot, really appreciate it. The market was falling apart as the show began. Right on cue, by the way, right in these closing selloffs have been worrisome. Were trying to firm up right now. Liz claman, you got a lot on your hands because this last hour of trading has been hectic. Liz yeah. And, guess what . Were kind of seeing this turn around due to headlines out of washington d. C. Investor s, you guys, they woke up on the riskon side of the bed, they quickly rolled over to the riskoff side, and now it appears her fighting to get back into the green. The turn around coming after senate leade