the big question is the problem that the fed faces with wage increases. wage increases are rising steadily. we expected inflation to come down. energy prices have come down. food prices have come down. the threat always was the extent to which those inflation expectations got embedded in people s minds. that would affect wage increases which companies would have to reflect in price increases. we won t see that. so i think it s very uncertain what happens to inflation, how long it takes it get it down to a reasonable level. even if inflation is coming down, it s coming down in large part because the fed is also raising interest rates aggressively in a way that is very likely to push the economy in to recession. neil: gerry, what is weird about it and i know you explored this on your show, but one thing that fascinates me, earnings don t matter. consumer sentiment surveys don t matter amount number on inflation that appears to be a tad better than what they felt
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we are gathered here today to celebrate the union of tim and laura. it s amazing how appreciative people are when you tell them they could save a lot of money on their car insurance by switching to geico.they may even make you their best man. may i have the rings please? ah, helzberg diamonds. nice choice, mate. .and now in the presence of these guests we join this loving couple. oh dear. geico. 15 minutes could save you 15% or more on car insurance. neil: before the markup, the blowup. since when are ski instructors key to immigration reform? believe it or not a section of the bill is dedicated to them. to byron york who fears the senate is glossing over the details in its rush to put this through. it keeps getting bigger and bigger and more bizarre. don t forget snowboarders, they re in there, too. it was interesting in the first
they cut their expenses. they got very efficient. and you look at their balance sheets now. you know this, neil. they look very pristine, very good, and this is now paying very big dividends, and i think the explanation for it, my explanation, is that cloud of fear that has been hanging over the u.s. economy for the last two or three years, even as the economy has been recovering, gist see signs of the cloud of fear dissipating and that explains why people are getting back into the market. neil: i hope you re right. a couple of things worry me along the way. and we were that s way about the internet boom when all these young entrepreneurs were telling us, earnings don t matter anymore, and promised the i used to say even then, i d like to see some money in the tank before i invest in this bank. that was then, this is now. very different. but one thing that worries me is revenue growth, sales growth, has actually not met expectations. if anything, more than half the companies report
everybody including my clients to do nothing. stocks are 20 percent under valued based on next year s expected earnings. that s a fact. earnings don t match up we are encouraging people to buy now stocks are cheap. you lock in your losses that s for darned sure. i think there s sort of a purple storm coming lots of bad news a lot coming together a lot of news tomorrow morning. s&p has a conference call on tuesday federal reserve meets. gdp mo puny. all of this is coming together. don t forget europe. oh, wow. that is something we have completely egg anothered really. do you see this as the perfect