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. 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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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