What's Up On Wall Street - Russell Pearlman, Smart Money

-- news out of Europe has the stock market. In a broad based sell off right now the Dow down -- 103 points NASDAQ off 22. S&P down thirteen. Ten year treasury note at 181 gold beaten them this is very and you see cooled down twenty dollars an ounce on the day like today. And good news oil prices down a dollar 25 per barrel 9576. We're joined by Russell Pearlman from Smart money magazine Russell welcome to the show Daria Dolan. Great thanks for having me -- fuel. He rusty it what do you think is a C at the beginning of a pretty healthy correction or is this a buying opportunity with. Well it's funny or a few weeks ago I it's look -- there's. Barring any problems in Europe or ran the market should should keep going up but what happens problems and Europe I think that. You're still seeing corporate America. Continue to slowly churn out profits are probably -- getting better but at least via. -- hot money is getting out of stocks right now because. The issue in Spain in particularly Greece of old book put Smart -- nobody. Can get out of eurozone entire -- but you look at kind of stocks on a valuation basis that are trading at about thirteen times. Estimated profits which is a little below the court covered so -- Xbox and that that's this if if the market keeps going down -- Water too worried confide more percent. I'd be targeted. Approach to broker Peter Castro worked and certainly there's a lot of young. On Butler. Are you worried about Portugal and a Spain -- in in and what could happen there I mean I look at the ten year auction. I mean he can't have a 6% ten year treasury in Spain and expect them to be of the pay their bills. No that isn't huge problem as well Spanish banking system which bloated public. A lot of Spanish. Housing debt is so we had a housing bubble Spain's Bobble. Sonogram to go even worse than ours. That is going to be huge problem with Spain and they were out 20% unemployment rate which is. Kind of call that's Great Depression locals for us at. That is a serious problem although no one seems that they. Spain is going to get into as. -- -- In terms or capital to you but eurozone and you back to via a safe but. It -- looked good in the short term floor for Spain and particularly Spanish ball although that's. A lot of people -- Italy and huge problem. Six months ago when they're off -- went above. 7%. And it turned out this fantastic partner a tree in the short term because upon -- -- almost 5%. And you be having an -- person that you'll pay your pursuit on so. It's quite possible if Spain has enabled mobile reverse. Sure -- -- -- -- Spanish bond you the above 6% -- -- decent buying opportunity -- -- And I saw it we've been following this Yahoo! story about Scott Thompson he's a local kid who went to school at stone -- college up here it's just outside of Boston. And one of the board members I guess was excused or dismissed from the board of directors her name was part. Is Scott Thompson next is he gonna be shown the door over Yahoo! because it it sounds like he lied about his resonant. -- a little more all the scored -- out lie on your resonate in me he apparently is -- has said that he had a degree in computer science. It turns out he. He did not opt. Because -- credential haven't bought an offer until four years after he actually graduated and this big hedge fund which has not been particularly happy -- just. Yahoo! -- list. All the company audit and to look to you you are it's too light in the Resnick. So -- -- was. The director kind of in charge of the actual -- process. -- Error and that looks like there's went the other committee of independent board members to look into how. Scott Thompson was hired. Does this happen before particularly RadioShack went at it came out to the see over your show accurate -- -- is -- -- He ended up resigning so I would not be surprised -- that is the same state. Of Scott Thompson. But I -- -- But I've heard Russell that he still a pretty good job. They illegally it would be ironic in his stock in the companies is allegedly in a turnaround. Well allegedly that the issue here is if you look you're debate the stock -- 5% if you look over one year period -- down 20%. So the the question is in a lot of old they are turn around and they certainly here are having a lot of -- of trying a different strategy. Whether that strategy works is another matter Adam they've really lost ground to do. Facebook's -- to rules of the world and at least this particular hedge fund third point. Just doesn't seem to think that. That strategy that mr. Thompson is about. We know -- war over the well. All right -- I investor sentiment remains in the tank I mean it's still. There's a lot of evidence at their on the sidelines -- at 800 billion dollar sitting inside fund in in in cash and in bond funds. Is everybody were coming back -- -- investor investor sentiment has been ruined due to the crash of 20072008. Well here's the strange thing you'd think which -- -- investor sentiment would be in the toy boat based on the fact that they're not buying stocks. But if you look at kind of the weekly survey of what investor sentiment is what they think -- will go up. Six months from now and it's still pretty well which earlier this here's this connected I think it's just a matter that people are worried about the ones being. This sense that you and they're optimistic over the long haul they're worried about a 2008 that -- And they just they don't want they're much more afraid of Wednesday. Their money. In short hole and making more money -- also are happy to park cash. Which is taking action not saying or treasury bonds which are paying slightly more than. 22. Because there's just bunker and -- mentality. -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- Despite all despite a lot of the evidence that. And battle with these -- -- reasonably expect -- that looked downright cheap compared to what cash -- to pay. They're not willing to go into the market and I thought perhaps a 100% gain -- -- which in turn that turn back at a that bunker mentality around we cannot gain over the past three years yup. Not the case perhaps we are 200 acre -- to extricate lit a fire which and its people to conduct. Which do you think the elections or holding people back I've talked to a number of people and they said well you know I'm I'm in a presidential elections and then there's a lot of concern that. -- you know even if Mitt Romney wins. That the he's gonna have to do a lot of painful measures in 2013. So I get the sense that some money sitting on the sidelines just for political reasons. I think that's probably a minority. I thought I would would. Police election would be a bigger part of this if we didn't see. Investor sitting -- let's last year as well and Europe and you're -- that. It's just an attitude that people are just I was scared of stocks. Regardless of who is and who's an officer I think you could probably have like the tricky coming into amateur art AT&T and they wipe out these days and people be. Afraid individuals be afraid of the stock because they've been -- one aspect it. And for younger investors. Good that's already know is that they never stall like go go go nineties or Cocoa Beach in the stock market can't always remember -- to future crashes. And they -- big recession and. Yeah and that'll changer that scar you for like all right well Rocco thank you very much for your time I sure appreciate it. That's Russell Pearlman from Smart money magazine joining us today a company to exchange.