Submitted by Taps Coogan on the 8th of February 2019 to The Sounding Line.
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National Alliance Securities’ Andy Brenner recently spoke with CNBC’s Rick Santelli about the deteriorating economic data coming out of Europe and China and it’s inevitable implications for the US.
Rick Santelli:
“…Eurozone rates are negative out to eight years, in France out to six years, in Switzerland out to ten years. In Japan, even their ten-year is now negative even though they’ve had it under major control. These are all issues that have to effect the US. The question is ‘how much?'”
Andy Brenner:
“Rick, I think it all starts with a weakening European economy. Even today, everywhere you look everything is horrible…. You have… factory orders and industrial production in Germany down 7% and 4% year-over-year… You’ve got 10-year Bunds at 10 basis points (0.01%). Everything else inside of that is negative… The Brits have really shot themselves in the foot with this Brexit and the lack of negotiation. And a lot of it is due to weakness out of China… There’s no way that the US economy can sustain the growth that it currently has with the world crumbling around it, whether it be Europe, whether it be China, whether it be anywhere else… You want to buy when there is blood on the streets… when everyone is selling and things get real bad…, but I don’t think that time is yet in Brexit and I think there is a lot more pain that is going to come to the UK and to Europe as both the ECB and the BOE try to figure out what their next moves are. “
As we first noted here, Brexit negotiations up to this point have be focused on securing a transition period to allow for further negotiations after the UK’s Article 50 exit. As a result, there have been virtually no negotiations about the actual trade deal that the UK will need if the transition plan fails or if the UK ever gets around to leaving the EU customs union. The result is maximum uncertainty at a time when the global economy is slowing. Meanwhile, the ECB has zero conventional tools to help reverse a technical recession in Italy and looming recessions elsewhere. A perfect storm is brewing on Europe’s horizon.
There is more to the interview, so enjoy it above.
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