What's Up On Wall Street - Michael Santoli, Barron's

Good morning to stock market opened 3536. Minutes ago and it is in positive territory -- got to tell you. You're doing a great job this and you know again if you're just such a unit great mood and you're smiling at me and I lot of the big money it's it's all about. Not shooting the messenger the Dow is up 86 points NASDAQ up to an S&P 500 up ten. And the ten year US treasury that's also up but just slight bit of one point 895 gold is up three dollars Mary. And then oil is up 77 cents to 9758. And art and have we given way to gas card yet we have is that this segment. And cannot tell secret stop trying to give it -- -- Wondered just don't make become the issue night segment -- and she's I'm a little afraid of on our next guest is Michael -- toll from Barron's Magazine Michael good morning and welcome to the show. I hey Mike the market's up in it seemed like it turned on the unemployment report and MI reading that -- is eight because the report wasn't that good was. Of course OK you know shows there's implement claims on a weekly basis kind of flattening out a little bit. And that plus you know the European markets did a start to recover in the latter part of this session. If you had to -- coming in and sort of backed stopping one of its banks. And you know the that the Greeks saga drags on but I think that we priced in a lot of lot of chaos in the last several days so you know markets try to find a little footing here I wouldn't read too much more to a and that but I didn't think. You know any time that the that it did domestic economic numbers don't backside anymore. Yeah it's a little bit of relief for investors. You know it seems like everything is revolving around these discussions about austerity you know -- nobody wants to invoke the austerity measures. Particularly on people who were already retired. Is is that what's causing big problems in Greece and in France and in other parts of the world. To a large degree yes you know especially when you it's very hard as a citizen of those countries to see the the sort of payoff for you know it's you know you sort of have the immediate. Pena have benefits being taken away not just capped not just frozen and you don't really -- the path toward haven't Konami can you know you're. -- and we elect better off financially down the road so that's the dilemma. You know this is the messiness of a capitalist democracies right the other thing I think that distinguishes what's happening over there from what might potentially be the debate in the US is that. These decisions on how these budget to be constructed. Were being made outside the country right it's just actual an international authority. And you know that would never go down well and not in any country and I think we're seeing the messy results. -- year where you're suggesting is that the Greeks -- The citizens did not like the fact that Germany was deciding how much their Social Security check was could be cut by. Precisely and you know and by the way just the -- size the the decline in government benefits. In countries where more than half the the official economy is really driven by government spending which really draconian so much saying. It's correct to to so that they -- streets in the elegance -- but it is understandable. And I do think the discussions changing a little bit right you have the so that newly elected French leader's -- -- you know we have to inject. Some growth measures into the discussion it's unclear exactly how you do that but it basically it's it I think there's always been a case of be the market should be careful what they wished for. Because you know engineering austerity -- -- engineering pretty bad and prolonged recession in some respect so you know if if that this thing that's been doing with the bank's interest -- because. It's really that's that's where it all hinges on it's not a matter of you know is -- better or worse from the average citizen -- it is. You know doesn't spillover into the large banking accident. Which would. That's when it would get them global market attention really. Yup they what I don't understand and maybe can help me is why there isn't just more discussion about. Cutting future benefits I mean if if it's like a problem we have here in the United States. You know we designed our Social Security system back. In the in the 1930s and when people -- retired in 35 their life expectancy at any sixty I was twelve and a half years now it's nineteen years. Why not rather than then have an all these arguments about cutting somebody's. Pension who's already retired wanted to say to people pay your your 55 years old you're sixty years old. You can't collect your benefits at age 65 you have to wait -- year seventy and you're not gonna get as much as we promised you gonna get 10% haircut. That way the austerity measures don't take any money out of the current economy and -- at and it boggles my mind that we don't hear more of a discussion along those lines. Well that is to discretionary think you're probably gonna see developed here hopefully in in this country the problem is over there. You -- sort of have everybody working at cross purposes with the markets are telling you hey guess what. Spain Portugal Greece Ireland if you -- roll your debt which is coming due in the next several months he here's what we need to say so they don't have. Have the ability to kind of by themselves that continuity that -- does where you can kind of do that two tracks solution can I do think that's going to be. You know the ultimate determination is guess what the solution for the entitlement problem -- you're not entitled to what we talked. Well things change we did it in the -- you just formulas for Sosa could I also think. Here you have particular opportunity. To have that conversation because every poll for the last twenty years is that the people under the age of 35 -- forty. Have at least professed that they don't expect Social Security could be there -- when they're ready Ford Edge could be. -- about lip service who knows but at least you can kind of called on apple. He would hear from the traders about oil and we we've had a nice little rally your relief. If you will in terms of oil prices. And that that areas making a lot of us feel good I actually paid 375. A gallon for gasoline earlier this week I thought that was a windfall. Well it is and it's it's happened relatively quietly right immediately declined to gas prices never happened which is much. Attention as the increases. So what's going -- things you're getting a little bit of that kind of a ram and premium taken out of a global oil price where it seems like things cooled off over there -- kind of reducing the possibility. That we see -- nastier -- and then really you've seen you know relatively moderate growth in the emerging markets. And and I think just the general risk off trade as people quality you know. If if people are at risk -- tarsala commodities along with equities and everything else so all those things have actually meant to what a ten dollar a like a barrel decline yeah global price and we're overseeing a department activity. Is field -- lesson of the solution to higher oil prices Ohio -- ultimately. Yup that is it would have come supply comes out people change their driving habits they. -- we look at the proliferation of small vehicles on the road today I'm -- Smart cars on the road it need to see all these small vehicles on the road I think it's a function of gasoline prices. And beyond small. Because you had such a massive decline in total nuke ourselves in the downturn. Really so far below the long term trend. You know simply having -- go up and essentially reading the proportion of newer vehicles. On the road by definition you're improving efficient. In my cohost unite here Michael she is such a patriot she's now riding her bicycle to work every day it really. Perhaps to the K I'm taken the -- to the -- as an -- it's really impressive beat him with a bathing suit in I'll let them. Just donate some of that -- energy to somebody else that you can really take the pressure off the grid. That's right well Michael thank you very much for your time we sure appreciate it sure thing. Michael -- toll from Barron's Magazine.