Dow down 500+ points as China trade tensions escalate

Channel: Fox Business
Published: 05/07/2019

Description
Economist Ben Stein on investor concerns over the market impact from U.S. trade tensions with China. FOX Business Network (FBN) is a financial news channel delivering real-time information across all platforms that impact both Main Street and Wall Street. Headquartered in New York — the busines...



Transcript
All right, a lot of anxiety, the corner of a wall and brother downtown 521 points. It'S a time like these that a lot of people say what do i do? What do i do? One of the comments smartest people i know on the planet joins me now: ben stein, a former nixon speechwriter capitalist co-author at con of so many bestsellers. I don't have time to get into it. Please he makes me look bad, but then very go ...
d to have you. How do you advise folks when they see something like like this on a day like this, and they get nervous? Don'T do anything just hold on hold on for the ride? Rarely do these thingsturn into the total crises that the market would seem to be predicting. We are huge trading partners with china they're huge trading partners with us. Neither one of us wants to do anything to super escalate this until it becomes a giant super crisis, and it's not going to be. The chinese are terribly smart, capable people they're not going to allow this to become a real crisis and the u. s. was fairly smart and fairly capable we're not going to allow it to become a huge super crisis either, but in any trade negotiation. What was the ronald reagan used to say? Both sides should come out with their dignity and i'm wondering if the if the administrationmaybe four perfectly sounded valid reasons, sort of locked china into a non face-saving corner. Well, i think if we did, it was a terrible mistake.

I don't think there's any don't no doubt whatsoever that china is violating all kinds of international rules and norms about technological transfers and technological theft. Frankly, but in terms of just prices of exports, we do very very well with china, they said, there's good quality goods at very low prices, and i think we don't want to start. We don't want to stop that. They don't want to stop taking our money. Yes, they take our money and they use it largely to buy us treasury bonds, not always but largely theydon't want. The deal is working out very well for both of us. I don't think there's any reason either. One of us wants to stop it and i don't think either one is going to stop it. There'S a lot of benefit for the traders in terms of making the markets to fluctuate wildly, there's no predict coming to a crisis and crashing cars. Yes, the cars can play chicken with each other, but we don't want them to actually crash. Nobody wants them to actually crash no you're right. I mean you hope that cooler or calm or heads prevail, but maybe just using the cboe volatility index, the so-called vix.

It'S at its highest level since backin january been up over 30 %. Now, as you remind me, that's a fast moving a barometer. If ever there was one, but it does represent a sentiment for the time being. People are scared, should they be well if they should be scared, if they're, if they're speculate the other vic's they're tougher and have nails and nerves of steel and they're tougher than i am, but i don't think they should know it as it's known for the vix. Well, when it's tougher than but i don't think, people need to be speculating. The vix we're trading in the vix at all, just hold on hold on tight things will get to be calm down. They'Re, not andyou're, not gon na be able to outsmart the market. You'Re. Not gon na be able to out trade. Actually, i've figured out, i predict that just hold on and let the market go find its level and the market will be back. I mean look. We have an enormous amount to gain by continuing good trade relations with china.

They do with us we're not gon na throw that away alright and remember the way you were very brave because you're, an economist by trading, a genius and you're, also an actor. So i think that alone, who would have advanced into that field? What right? But let me ask you about this. I mean we talked about. The point hits thatare coming here and i always think then a lot of times markets will look for an excuse to sell if you've had a virtually on a interrupted run-up. You can make the case since our december laws are up 20-some what percent this is a good catalyst to do that people will pounce and valuations will get down to maybe a more historical norm and off to the races we go again. What'S your view on the markets now my market guy view of the market is that it's fairly priced, it's not really wildly overpriced, as we've seen it at some points in the past. It'S a market that is sensibly priced market at this point and ifthere's no reason for it to go down the others just like there's no reason to go up a great deal, it's a sensibly priced market. At this point, the p/e ratio is not particularly high. It'S not particularly low, i mean it's just fine, just hold on and watch the market go up a little over a long period of time. Now, if you're in it for a day trade, i don't know what to tell you to do. Just don't do it anymore, but if you're in it for the long pier for a long haul just hold on and what's the long haul to ben stein, what's the long haul to ben stein five years, wow okaythere, you go low note for me, ben it's tomorrow. Lunch so i was hoping you could be a little more well actually, so i was hoping for lunch today.

I'M looking for our mcdonald's cheeseburger for lunch today. Alright, duly noted, everyone would be aware that mcdonald's could be a good investment ben stein. Great seeing you again, my friend be well great, seeing you my friend,.


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