Started, last friday we had the talk of inflationary pressures in the jobs report had people worried including the sky. The market was down 666 and you started to think about a new environment that might include inflation Rising Interest Rates and we got the week ending up back to monday. Thats when we saw the word volatility really spike to the top of your word search and people not only had volatility but they were betting against it. Those bets became unwound in these comp located Financial Products that neil has talked about so much that were created after the crisis and i got ugly as those anti volatility bats were unwound. Wednesday the volatility, the upanddown was still there but the market was down by only 19 points on the dow at the of today. Yesterday was interesting. People on wall street said a lot of people lost money in the portfolio because none of their trades were wor working. We were down a 18 in 2008. We ended where we are will probably have our worst we can the dow since then but thats basically where the comparison stands. There were todays weather dow is down 7 and thats about what were down for the week. We could end up a little lower or slightly higher to be the worst week since 2016. All end with this, we are all in this together. This has gone global. Europe is down and this was asia overnight. China had their worst and a market in about a year. Talks of the valuation of their stock even people talking of cashing out before the Lunar New Year next week. Asia is down, europe is down, we are all down trying to figure out this new environment with rising Interest Rate. Many people who trade this market on a daytoday trading deck dont have a lot of expense with this and havent lived through it but their living through now. Down 7 for the week. Stuart thank you very much. The average bull market, remember this, the correction of almost 11 , with the average bull Market Correction about 13 and goes on for about four months. It can last 22 months. If it gets to 25 the world will end. No, im just point that out. Theres different ways of looking at the stats. Theres different ways of looking at the budget acquired with a temporary shutdown and reopen but if youre looking at that being a panic for the market, it was not. The idea that we had a twoyear extension to keep the government lights on only reinforced that the only way was done to increase spending by 300 billion. That just adds the deficit, blake is in the white house with how all of this is turning out. You have to give it too congress, they talked about needing more bipartisanship and thats exactly what happened in the Early Morning hours as republicans and democrats had to get this spending package across the finish line. There are also a lot of republicans in democrats who absolutely hate the thing. 82 democrats and 83 democrats who ended up voting against it. You can break down into three different buckets predict that the president and republic of leadership think this is great for military spending that they want and need and now they get it. On the other hand you got conservative saying there is a lot of runaway spending and thats why they didnt supported them and the democrats on the left side this had nothing to do to solve the daca situation so they were no votes as well. President trump summed it up in his latest week. Talks on nonmilitary lines will never come down when do not like more republican than 2018 and beyond. This bill is a victory for military but much waste in order to get democrat votes. Fortunately daca not included in the bill, negotiations will start now. You heard him say there was some waste. He said in a statement, at some Point Washington has to get serious about stopping this before its too late. Im very disappointed in the results but i maintain my commitment to fighting for the kind of fiscal responsibility that can sustain our country to come in and fighting for the day we will do better. On the dac apron nancy posey on the house floor earlier this morning. Let the chips fall where they may but let us have a chance to relay the fear in the hearts of these dreamers and their families. The government is funded through march 23 in the spending caps are raised in the debt ceiling is pushed off another for 13 months. A lot of spending issues off the table but over the next three and half weeks, march 5 is the deadline for daca to get an immigration deal. This will consume washington. You heard trump say that there is nothing to do with securing the southern border he would be for another government shutdown. Incredible. Thank you very much fred couple other trends we are following, the role of the individual indexer. You open that your she and the first one to get clobbered. 36billion in net outflow from equity flood funds on the part of individuals. Two weeks ago they were pit pouring a hundred billion dollars into the market. Also gold is still separate second straight flat or declining week. Mortgage rates are at a 14 month high. There are a lot of crosscurrents and you dont want to over read any one of those developments. They are just trendsetters. Ive got michael here then jillian. Michael when you step back and advise clients, what you tell them . Some get frantic, some say dont care about how this will affect my taxes, i want out now. You tell them to take a deep breath. You see the swings in a market where we see hundred. Movements by the minute, nobody can make money unless your professional trader sitting at home youre not going to make money trading this market. Stick with your plan. However if the last week has caused you anxiety and youre not sleeping, you have to much exposure. You probably need to reallocate your assets. Stuart but youd be reallocating out lower prices so youd be taking a hit. The market will go up but it will also go down. Stuart so were not done in that part of it. Its tough to call where the bottom comes in. The point were making as you might have too much risk in your portfolio if you cant handle this. When i look at the source i was advising you i would say neil we have a longerterm time rise in the market will sell off and rally and we will try to jump in front of it. As you saw the inflows comment and record outflows. That is exactly what not to do. Stay the course. Stuart it is hard not to get too wonky when you see people want to cash out, they take a big cash it because msa brutally been beaten down the pay taxes on those gains which i imagine in a lot of cases will still equips whatever they are saving getting out of a falling stock. Sometimes panic isnt the answer. Its so funny. For the past year we had fear of missing out. When you get in because the market keeps getting higher and then that became ono. People are saying now what would happen. We are in a correction right now, alas for four months and will come down 13 . Can we survived that, yes. Arguably stocks are still overbought. Youre also turning about Mortgage Rates and Interest Rates and every time ago to 2. 9 or three we get worried but Mortgage Rates have picked up and we havent seen applications fall to the difference between now and the financial crisis, we are more regulated. Its not that craziness anymore. You know jillian, i was thinking about your generation because youre always whining. [laughter] im kidding. Just when it looks like some your colleagues were getting into the market and getting excited about it, a whammy like this happens and now a lot of you dont remember when rates were a lot higher but weve all been in the sort of weird world word 0 overnight and federal fundraising to present rates were the norm and now that has changed. How does that affect your psyche. Sure. Im not that phase. I think weve grown up in a quantitative of easy money and not have to and at some point. This is unwinding. We are seeing a return to normal volatility and risk. Does your generation, do they understand that. I think we are mistrustful, for sure. There is mistrust in wall street and enormous mistrust of government. I think thats one of the things driving attentive people to be interested in stuff like that claim. The biggest question is there pretty good. We are seeing gdp growth but i would just say to my generation, the last ten years havent been a supernormal financial situation. Stuart its interesting, from our perspective that you could look at it and say well i can remember our first target was 13 and we thought we were financial geniuses, but again, a much different environment. Im wondering, now that that we necessarily get back to that but any uptick since we dont know what its going is scaring investors. For sure. Everyone who is complaining that things. [inaudible] need to go back to normal. [inaudible] i think you are seeing both and i think thats the dichotomy going on. Will the market do it ahead of the federal role the fed get behind and have to jump 50 basis points and spook the market. In the bigger picture, everyone realizes we need rates to be a more normal level. Stuart what is normal. Going back over history, its run the four or five range. It spikes up to seven and eight and higher. So kind of triple where we are now. Stages. Zero Interest Rate was scary and that was in a weight on the difference between now and oh eight, you didnt know if the Financial System and trading threat or if the banks would be around the next day. This is very different. I think this is a normal correction. We are not a fair market hit yet. Yet. I dont have a crystal ball. At the end of this month, he testified before congress and we can get into his brain a little bit and the february job report, its going so fast. Stuart i think the news will continue to be good but i dont know if the market is embracing it that way. Anytime the feds push riskier assets, there will be a couple assets left naked on the beach. [laughter] i like that analogy. Of course we dont know if its just a beached well but it will be on the beach. Thank you very much. The dow is down 341 points. What is bothering a lot of folks is the fact that even as high as the ten year note goes, people are diving into it as the market falls. Where are they going . After this. You are against us, why . Because it spends too much money and borrows too much money. We will bring back obama era deficits. This is reckless spending that is out of control. The thing is we think when democrats are in charge that the republicans are conservative party. The problem is theres no conservative party. Someone needs to stand up and say you should spend what comes in. That used to be what it meant to be conservative, but a lot of socalled conservatives lose their mine once it becomes a partisan thing. They must govern and they government given massive new debt and i dont think thats good for the country. It threatens our security and the internal foundation of the country is threatened by so large a debt. He put his performance where his mouth wasnt tried to stop this from happening. Others came to the floor the budget and it was passed in the house now with this guy. This Committee Member was that a gas instead and with karen abou concerned about all the spending to make it possible. Now we have it and for two years we will be spending a lot more. Republicans are kind of lost identity on this, havent they. Youre absolutely right. There are many good republicans who voted for this bill that i just wasnt one of them because i think its offensive to the military to lash their safety in their fate to Government Spending that should not be justified given our current deposition. Im really worried about is that were robbing the country of the economic value of tax cuts when we dont cut spending. When you cut taxes and you dramatically increase spending , you are just sending the bill to the next generation. Government has to go out and spend a trillion dollars in treasury bonds. Thats a trillion dollars we are taking out of the game. Will instead be used to feed the beast of government and thats why i voted no. Why did republicans lead the way. Why didnt they say we will touch, when i can go out. Was it the memory of that ordeal that we were remember correctly. If youre worried enough about the majority they just didnt want to add to them. Republicans wanted to fund our troops, democrats wanted to fund the wasteful domestic spending so we compromised. Thats ridiculous but im one of the youngest members of congress and i think its shameful that we would engage in generational theft and all of Human History because we dont have the guts to make decisions and cut spending. Do think they lost it which means ill go dark in november . That remains to be seen we have a compelling message regarding Economic Growth and i hope the spending doesnt want. Seizing tax cuts will overcome the apparent hypocrisy of parties who talk big on containing spending but is now spent on this issue. We better hope so. I didnt vote for that spending but i think at the end of the day, people will vote based on whether they believe their personal Economic Conditions are better or worse. If you judge us today people are doing better than the obama economy. Thank you very much. You hear a lot of discussion back and forth and we look at these markets and volatility has returned. A lot of you email and say what does it mean, the technical definition with market swings of 2 or more. Weve had very few of them throughout the entire bull market. For example, if you were to look at whats going on right now, this represents only the fourth time weve seen a 10 correction of any magnitude. Only the fourth time. This used to be commonplace. Thats one definition of volatility. The others the more common one where people just freak out. Thats the emotional definition of volatility. You forget. Know that chevy silverados are the most dependable, longest lasting fullsize pickups on the road. Which means that ford f150s are not. giggles which truck would you pick . The chevy. There you go. Boom. That was obvious. Plus it looks cooler. No doubt about it. Now they know what to get me. sighs i hate missing out missing out after hours. Not anymore, Td Ameritrade lets you trade select securities 24 hours a day, five days a week. Thats amazing. Its a pretty big deal. So i can trade all night long . All night long. Is that Lionel Richie . Lets reopen the market. Mr. Richie, would you ring the 24 5 bell . Sure can, jim. Trade 24 5, only with Td Ameritrade. Can you control the volatility in the market . This is a look at the market volatility in the fear index. People trade off of it but there have been creations to arbitrage against it. Its called shortterm futures , another velocity share said shortterm exchanges traded and does the same thing to trade both ways. They can be part of an algorithm mix that can speed up events in the markets. In other words, put them on steroids and hyper speed. These emotionless trigger point kick in and all is an you get Something Like a flash crash which has been happening of late or this whole process. Remember weve gone from a healthy strong bull market to this 10 plus correction in a little more than six trading days. Its very unusual. Is this the case of letting them do their own thing and not pleasing them appropriate enough . The next guest is concerned about that and theyre very much concerned to get rid of some regulations. Commissioner, very good to have you. We dont know what role some of these trading tools, whatever you want to call them played, we do know they were so crazy their credit disbanded them on a number of institutions. As high as 90 a share and plummeted and they failed that their key mission to address the key volatility. Is that the kind of stuff that concerns you. Absolutely. When you think about it, when youre at a casino and youve made some money on the day and youre walking out of the casino and you see that big last slot machine that is going to pay you a Million Dollars but across a 20dollar bill, its a bizarre bad but ill tell you, wall street has developed more bizarre thats than that and its the things youre talking about, not only can they be based upon the fear index, but they can be two or three times the payout. Its compounded every day. Its not like its an index on a regular Exchange Traded fund that youre just trying to mimic the s p or mimic oil prices or something. These can be really dangerous so i do think there needs to be some regulation of them more than they have now, more than just the adequate disclosure that is for the rest of the security equities so i hope they move forward on that. I think they get hair on their back when they hear regulation but i would even go for prove that this vehicle does what it says, have you done a computer test that when theres a selloff in the market that this mechanism which will contain thats a lot for those who buy it is going to do the job because in most meltdowns ive seen in the past whether its the 87 expands where folio and insurance was supposed to shield you or even after the meltdown in 2008, 2009 when mortgage relatives you could package all of those together and it would be a safeway to shield yourself from the crab that they were, im just wondering, whether we ever learn that you cant do that. It just doesnt work. I think youre right. Your analogies are really apropos. Forgive my language. Thats what it was. If you go back and look at credit default swaps that you are mentioning prior to the recession, they are actually a really good product and to make the analogy just like Exchange Traded funds are good for investors but then they take the swaps to make sliced and diced that and they made him toxic and no one knew what the valuation was and it was a leading cause of the recession. Way to package stuff in an unappealing way like you are stepping into a perfume bottle. Think its a very apt analogy for whats happening now in this family of Exchange Traded products and the ets i dont have a problem with, its these two and three times the leverage and also Exchange Traded notes and then these notes were taken the opposite side of something. Its crazy. Every place, i get pushback a lot of times, they are sophisticated investors and we know their gambling and everything, but even at disney world for crying out loud you have to be so tall to ride. Theres so many regulations that people are grounding in them. You just want to add another a