2015 is upon us and so is turmoil in the markets. U. S. Stocks tumbled jshlg sending the Dow Jones Industrial down by about 1. 9 for the day. Global stocks also took a hit, especially markets in europe which bled between 2 and 3 for the day, the one specific thing weighing on stocks is fear over falling oil prices. But there are also major Geopolitical Forces at work. But take a look at where oil traded today, 50. 04 a barrel but earlier in the day for the First Time Since 2009 u. S. Oil prices fell below 50 a barrel. And many market watchers say it could fall below 40 or even 30 a barrel before going back up again. World currencies has plummeted against the dollar which is bad news for u. S. Exporters. It makes u. S. Products more expensive to buy abroad. Meanwhile the Federal Reserve is expected to raise Interest Rates sooner rather than later. Ill have more on that later in the show as well. But the fear in the market over sales earnings and rates is playing out against an increasingly global backdrop. Political tension is more heated than at any other time since the cold war. Both russia and the west are waging active economic war fair against each other over the crisis in ukraine. The Obama Administration is said to be weaponizing financing. It dangles access to u. S. Capital with one hand and sanctions with the other. Meanwhile europes economies are just stagnating but now contentious internal politics in greece germany, and elsewhere could make all of that worse. All of this breeds global uncertainty, and that is something we know markets hate. We are joined by the president of the eurasia group. The group today released its lists of the worlds top geopolitical risks in 2015. Ian good to see you. Welcome and happy new year. Happy new year ali. Weaponization of finance. What do you mean when you talk about this . Well im talking about a United States which is still the worlds only superpower by far, but its not Americas Nuclear arsenal or boots on the ground that is the primary projection its Surveillance Drones and most importantly its the dallas dollar. Its the ability of American Financial institutions to meet out american policy and squeeze actors they dont like. It is clearly what is being done against the russians chinese, and North Koreans now. If you dont behave the way they want the United States is going to use that pressure. We saw by the way if the negotiations with iran continue we did see that iran got brought to the table because of sanctions that were effective, because they were a part of the Global Financial enterprise. We see the Obama Administration trying this with isil because it is an organization that deals in oil and money, with limited success, but it is still in a world where we think the u. S. Is getting less powerful or opponents of barack obama will say he has weakened america in the eyes of the world, this is an area where america has been strengthened. Yeah they are saying america is being more isolationist and turning in ward i dont see that at all. I see america becoming more unilateral. So theres a lot of theres much less interest for america to take a proactive role. When they do take a role its being defined in ways that are useful to the American National interest, not so much of bringing together a coalition of allies and thats where the weapon of finance might be effective from iran but is also driving americans apart from the traditional allies whos banks are on the wrong end of the american dollars stick. How is this working in terms of recent developments including the u. S. Stepping in because of the sony hack . It was relatively effective with the russians after the invasion of ukraine. Theres no question that what you are trying to do here is not just bring the north Korean Leader to his knees or putin for that matter but to hurt the people around them. American sanctions, a lot of them have been organized at oligarchs, right . And if you look at bloomberg today, youll see the top 15 billion dollarsaries in russia their net worth is down almost 15 billion. The United States would love to see those people turn to putin and say, hey, stop wrecking our wealth. They are trying to make life difficult for those close to kim jong un in north korea. And thats been one of the followones from sony. Probably also with at least some knowledge and complicity from china, because all of that comes through the chinese system. Thats true. What do you think about china right you . Is china strengthening or weakening going into 2015 . And how is this Oil Price Drop working . You are the only man i know that cares around an actual oil barrel as a prop im very impressed with that. But 50 oil, who benefits the most is the chinese leader. He wants to make the stateown enterprises more efficient, have them less reliant on cheap capital from china. He can now do that because they benefit so much from these cheaper input costs. Thats huge. So the risk is not able instability, the risk is he is now going to be successful in restructuring his economy, focusing more on consumption, and less on buying commodityies, and all of these countries that have been selling to them for decades now, this year is going to fall way off, for australian brazil, even thailand, those are countries that will be taking it on the chin. As russia continues to get isolated it also does not get isolated from china. This is playing right into chinas hands. This oil price is hurting russia. We spent most of the year talking about russian natural gas, but they dont make near as much out of what they sent to europe, as they do to oil. So whatever the reason behind the develop this oil is it enough to really hurt russia . First of all, no. The fact is that russias Approval Rating for president putin is in the high 80s now. They go up because of sanctions on russia and up because of demonization of the United States. Putin more in the corner what is he going to do in much more nationalism. Economically there is no question russia doesnt want to be isolated they will forge deals that are economically beneficial to the chinese 20 to help them out. But north korea was the deal that the chinese loved for quite a while. Now they are becoming a bit of a problem. The chinese sort of own north korea, and when north korea does something dangerous, the chinese dont have the ability to reign them in. And do the chinese really want to own the russian problem. They look to be moving head strong into russia. And i think thats a problem. We have germany, things going on. Greece has shown up on the agenda again. Europe is not in the position to misstep. The skirmish with russia has cost them. They are worried about oil, they have had an economy that has lurched and recessed and lurched and recessed. And that does matter to them. And radicalism spilling over into europe and the United States, and then you have all of this politics within europe. Greece is now a germans in domestic politics, and germany has become a big issue for the greeks coming into the elections. That is a bad thing. Clearly what were seeing is in all of these countries get aer populism that is making them turn inward and creating tougher relations between the center and the periphery. So, you know im a political scientist, fact was the economics were much worse three years ago in europe but the politics were better. Today the economics are okay but the politics on every front, massively worse. So for us in 2015, the politics of europe is actually our number one risk. And we ticked off a few of those things on your list. Great to see you. We hope to spending a lot of time with you this year. Thank you, ali. And on the topic we were just talking about in europe this nationally. That ian was speaking about, theres a growing antiimmigrant movement targeting muslims in germany. Its happening despite official efforts to discourage people. They protested what they are calling the islamization of germany. But not all germans are are buying into it. Reporter the crowd of antiracist protesters clearly outnumbered the pegida supporters. They hoped to march to the citys cathedral. The cathedral turned off its lights at the protest, saying they werent welcome in this city effectively. Angela merkel the german chancellor has come out in the last week or so, and said people shouldnt be tempted to follow pegida saying its organizers came from racists and haters. A poll said 13 of people would turn up for a pegida rally. But they said it was exaggerating the threat of islam here in germany. So its not clear exactly how people around germany sign up to all of the slogans and campaigning clauses of pegida main Stream Political Party certainly distancing themselves from the movement. Back here not only does the consumer love the plunging cost of oil, so do the car dealers. And ill tell you what you should know about Interest Rates in 2015 before you pull the trigger on a new car or house. You are watching real money, hit me up on facebook or twitter. Keep it here. Start with one issue education. Gun control. The gap between rich and poor. Job creation. Climate change. Tax policy. The economy. Iran. Healthcare. Ad guests on all sides of the debate. This is a right we should all have. Its just the way it is. Theres something seriously wrong. Theres been acrimony. The conservative ideal. Its an urgent need. And a host willing to ask the tough questions how do you explain it to yourself . And youll get. The inside story ray suarez hosts inside story weekdays at 5 eastern only on Al Jazeera America the Auto Industry entered 2014 with its best month in years. December is historically a strong month for sales as dealers offer huge incentives to clear out old inventory. And last month was no exception, General Motors sales surged 19 compared to last year. Chrysler was up 20 . Ford was the exception, sales were up only 1 . It was a banner year for the Auto Industry. The big contributor to sales . Very low Interest Rates. Rates will slowly grind higher in 2015 but it wont detract from another year of strong auto sales according to greg mcbribe an old friend of mine. You are for my viewers the barer of bad news about 2015. Lots of things we dont know about, but we all think Interest Rates are going up and you seem relatively certain of it. Yeah happy new year ali. I think this is the year the fed start to raise shortterm Interest Rates, but i expect it to be very modest. I only forecast two rate hikes from the fed all year. And the impact on consumers in terms of those Monthly Payments on their debt obligations i see as being very manageable in 2015. Lets take a look at car loans and what the impact is likely to be. Its important for people to remember because we talk so much about the fed that in fact it doesnt always have a one to one relationship. A fouryear new car loan is about 5. 1 now. You guying are proverdicting about 5. 4 if you wait until the end of the year. Yeah and that has a minimal impact on a 20,000 car loan. A quarter percentage point difference you are talking about 3 bucks a month, or even half a percentage point, 6 bucks a month. So i wouldnt focus so much on where Interest Rates are going in terms of timing that purchase make sure you have everything in order, and shop around to get the best terms, which if you do all of that you will get a very competitive Interest Rate. In the world of cars you can probably still get a good deal. In the world of buying a house, in which people make a mortgage their Interest Rates do play a bit more of a role. They have much more of an impact on Monthly Payments. Absolutely. Right now were seeing Mortgage Rates below the 4 rate right now. So its a great time to buy a home or refinance. Take care of that now. I think were going to have these below 4 rates for the first couple of months of the year, but when we get into the Second Quarter of the year middle part of the year i think you will see those Mortgage Rates moving their way higher. Even then i do expect ali that Mortgage Rates will stay well below 5 for the balance of the year. So yes, it will have an impact on Monthly Payments but it shouldnt be a significance difference. A 200 thousand dollars loan is not abnormal. On a 200,000 loan if we went to 4. 75, which is about threequarters of a percentage point higher than we are now, you are showing moonthly increase of about 88. Yeah absolutely which i mean thats nothing to sneeze at but its also not a game changer for that wellqualified buyer, it becomes a game changer if somebody stretching to begin with. In 2003 everybody was stretching to buy a home because everybody told you it was the right thing to do i think in 2014, 2015, if its not clearly something you should be doing, stay away. Yeah i just think its really important to take care of the things like improve your credit pay down debt improve your savings, if you do those things, you are going to qualify for a good rate and put yourself on solid financial standing. I like [ inaudible ]. Com, and rate. Com, and people should use it to check. You said you should save. Thats still very hard to do. If you are a saver, and you want to save and you want an entirely lowrisk environment, what do you think the best thing is to do . Well it depends on the timetable. If you are talking about an emergency you are going to go with for a home go with an Online Savings account. Those are also the accounts that will be first to ratchet higher as these fed Interest Rate hikes come to fruition. The bottom line is this is money that is liquid its fully insured, you are not taking any risk and you have access to that money whenever you need it. Greg thank you so much. Happy new year. Thanks ali. The reason im talking about safe investments is because today was a very ugly day in the stock market. Most strategists say the bull run in stocks is nowhere close to over. So what do you do . Ill get you some advice. Stick around real money is coming back in just two minutes. The first monday of 2015 left most stock Market Investors wishing they could turn the clock back and you cant blame them because today was truly ugly. The dow jones bumbles 1. 9 . That was not as bad at it got for the say. The broader s p 500 which you probably pay more attention to fell exactly the same element by the way. The nasdaq was down 1. 6 . Thats all of the newer tech stocks and some of the stuff we talk about a lot on this show but most of the blame belongs to Falling Crude oil prices. They delivered a painful blow to Energy Stocks caterpillar fell more than 5 on certains that the energy slump will hurt its business. This was the worst fall since october, and follows it very strong 11. 4 gain in 2014. But as you can see todays selloff is just a rounding error in a bull market that began about march 8th, 2010. Since then stocks are up more than 200 . Most of the wall street strategists who make their living forecasting the market they its not a problem, although stock investors can be a bit like Real Estate Agents it is never a bad day. They are looking ta gain a bit more than 8 . That is overly optimistic in the eyes of hew johnson who manages or advises investors, and has more than 40 years of experience. Hugh and i dont want to keep drawing attention to age or experience but these days you need people can a few gray hairs to put perspective into this. The beginning of the year in the market often reflects a trade imbalance. There are a lot of investors who are buying up stocks and may be selling off stocks. It may not be reflective of anything. Yeah but today i think its reflective of a couple of things. Trying to put some rationale on what happened today. First of all we did have a big move up in the stock market in 2013 and 2014 and we got to numbers that were overvalued. And the second thing i think every observer of this thing says we had widespread optimism as we started the week so you get that combination of overvaluation and widespread optimism, and those of us who have been around a while know thats a really bad combination of regardless of what happens. Everything didnt go right. We had the decline in oil prices. I talked to ian at the top of the show about concerns about oil prices problems going on in europe and then we talked to greg mcbride about Interest Rates, pretty much everybody expects them to go up some this year nobody is expecting anything fast or less than gradual increases in Interest Rates. In the end when you put all of this soup together what does the investor do . The first thing you do is try to ignore the shortterm swings. If you cant sleep at night maybe take a little money off of the table, but i ignore these shortterm swings and thats exactly what it think it is. As i mentioned we were overvalued and we have gotten down almost in one day to a level that i think is fairly valued. These things never end being fairly valued. They always end as we saw in the fall between september and october, they always end when the market gets pretty cheap or undervalued. The blessing is youll get stocks down to levels which makes a little bit more since, and that gives you a little bit more upside for 2013. Right now