there, but the vampires don't show up. >> top financial holding, it's wr berkeley, ticker symbol wrb, property insurance >> i'll see all of you in "over time" what is now has a tendency not necessarily to be later. we'll see how we finish it we'll talk about it with our special guests today "the exchange" is now. >> happy friday, everybody welcome to "the exchange." i am brian in for kelly. several fed heads throwing a hawkish haymaker at the market can stocks really rally longer term, even if the fed keeps hiking a new superstar, goldman sachs, here to break it down. speaking of breakdowns, oil limping into the weekend it was down big all week is it a recession risk or something else and if you're sick of stocks and can't stand kcrypto, how about investing in art and it's not just for the super rich we are going to paint that

picture coming up with robert frank. but before we duct tape a banana or throw a shark in formaldehyde, let's toss it to the sirott of stocks >> i love basil. >> from the market standpoint, it's been a modest day so far. we've seen gains and losses, but for the s&p 500, we're tilting towards the lower end of the range today. we're down about four points 39 high pressure 42, the last trade there. at the highs of the session, for some context, we were up 33 points very solid update. as the lows of the session, down 11 tilting towards that downside of the range, off just about .1% of 1% the nasdaq composite, 11,080, the last trade down, roughly one-half of 1% br brian, you mentioned that trade.

lowest oil prices since the end of september now, wti crude currently blow 80 bucks a barrel, 79.10, down 3%, similar percentage move for ice brent crude futures, the world gauge. diamondback encourage on the exploration and production side, down about 4.5%, even majors like chevron, down 1.5%. and the energy sector spider, down about 1.5% as well. from a stock-specific standpoint one name stands out in the wake of what's happening with ftx and the royals through cryptocurrency right now that's the u.s.-based exchange operator, coinbase shares are down 8% right now due in part to a downgrade by analysts at bank of america to a neutral rating they think that coinbase is nowhere near, not close to being ftx, but that it's not immune to the downside being put from a macro perspective on the crypto industry from that reason, they've down

their target prices. coinbase share down 8% we'll see if it sticks that way. >> this ftx story, a long way from being over, and there's a lot of collateral damage dom chu. >> if you're wondering why yields were all over the place this week, they sent the stock market up and then down before sending it back up look no further than the federal reserve. steve liesman is here to try to wrap up a wild week of fed speak. i'm trying to count how many speeches you had to listen to this week. >> don't be -- don't feel sympathy for me. i love my job, but there is a limit, brian we heard from fed presidents 16 times this week. some of them twice, but 16 total speeches to listen to. and along with the data, just as you said, brian, it created sharp movements in yields and the outlook for fed rate hikes on wednesday i spoke to san francisco fed president, mary daly

we used to think of her as dove. >> the fed's esther george from kansas city earlier in the week said it was hard to see inflation coming down without, quote, painful outcomes. and yesterday, st. louis fed president bullard upped the anteon everyone. he showed a chart that his modeling showed that fed rates could peak under dovish assumptions at 5%, but go as high as 7% under hawkish assumptions that he put in his model. today, susan collins, a little more dovish, maybe, sort of, told me that there were risks, but we could escape this rate hike cycle without large-scale unemployment >> i do see a pathway that we're able to do that without needing to increase employment more than some modest amount i'm not going to put numbers on that at the same time, i'm very realistic. there are a lot of risks there are no certainties here.

>> the upshot, the fed peak rate traded as low as 488 now we're trading well over 5% and i will say this. more and more hawkish or dovish, it seems that fed officials are not pushing back on a terminal rate that is 5% or higher. like i said, brian, i love the job was but it was an awful lot this week. and shout-out to my producer who weaves them along with me. >> i had 12.5 as the over/under, but i guess i got caught up in the weather. that's a shout-out to your buffalo, because who knows what's going on up there enough with the weather. steve, december 14th, is that the next meeting date? and we have that blackout period a week before them so things should come off the radar a little bit soon? >> yeah, there will be a quiet period that begins on the monday before that meeting. i think there's still one more week left before that starts the meeting is on the 13th, the announcement on the 14th it looks like the market is

coalescing around a 50 basis point hike and talking about 25 after that, it's worth bringing up the goldman sachs piece from last night, who agreed with collins that the u.s. narrowly avoids a recession. at the same time, they upped their forecast for the peak rate being in the 5.25% range it does seem higher, but whether or not we still get out of this without a recession remains something the market is going to have to debate i don't know, brian, if draft king will take that over/under on fed speeches from you >> we'll see if the line moves on the liesman factor. you're always the wild card, steve. thank you, josh allen. >> thank you >> speaking of goldman sachs of all of this fed talk and the real risk of an economic slowdown has your big brain spinning a bit, do not worry, you are not alone. it's a bit of a confusing time let's try to make sense of it all with one of our favorite people, elizabeth burton,

goldman sachs asset management you may recognize her as states formally known as hawaii, where you ran the pension fund, ran like seven time zones and you're here good to see you. >> the fed call this morning, you're an economist, no recession next year or real close? the razor's edge >> closer to the razor's edge. our base case remains there will not be a recession a softish landing. we're still pricing in around 35%. probably a little more optimistic than the market >> and you've got -- i'm going to call it a udo is your sort of investment thesis, not ufo, and that is sort of up and down and up and active and out. what do we do right now? where are we going on the risk spectrum and the quality spectrum >> let me qualify. for right now, i'm getting a lot of questions about where investors should put their money to work, particularly because a lot of folks are underweight

equities right now, i would say, go up, go active. when we have some clarity around our situation from a rate standpoint and an inflation point, i would say go down, go out. up, active up and quality across equity, fixed incomes, basically everywhere and go active where you can, where it makes sense and go out later, and go down later in quality and in duration and out meaning, out of the u.s. >> basically, if you're buying stocks, if you're buying bonds, if you already own them, if i'm hearing you right, you want to own the best stuff >> sure, yes >> this is not the time to take fly flyers >> at least on the equity side, there's still value there. if you hug your benchmarks, you'll get exposed to things like past winners, not future winners. >> i'm not much of a hugger. what do you mean by hugging your benchmark? >> just take the small cap

indices, for example you'll get overexposed there very specifically to past losers if you can, you want to go a little bit more active, where it makes sense from a cost basis, from an inefficiency basis, that was in equities and in fixed income and i would say that it is the time to get out of cash and get back in. >> really, is that treasuries, munis? where are we buying bonds? >> right now, i would say we should look to the shorter end of fixed income, so, for example, like a one-year u.s. treasury rate, i think the last time i checked is around 460-something. that would have to go up about 400 basis points in order for you to miss out on the extra coupon income there. that is a pretty good case versus your bank account we could also start looking at the ten-year there are still rate risk, right. i think staying on the shorter end for now makes sense. and to my down and out theme, you can go out longer duration once we get some more clarity.

>> we were joking, you heard me sitting here with the conversation with steve. we try to make it fun, why not, it's friday. but at the same time, i do wonder, all of this fed talk, is it hard for you, and even your teams, some of the brightest people on the planet to keep track of all of this >> to keep of -- >> yeah, one thing one thing, how do you filter through that noise? >> i think the most important thing for us is focusing on what that terminal rate will be i think we're less correspond about the incremental rate hikes and we've been fairly consistent over the past couple of months within the range, we've changed our forecast yesterday but that's the most important thing. i think there is some consistency in the fact that they want to be taken very serious. so i think there are still risks out there. i wouldn't be shifting anything just quite yet >> has the fed, and i'm going to use the word "damage" sort of coll colloquially has the damage been done

if we get a half point rate hike in december, another quarter point in january, has the market already shifted? nobody should be surprised at this point >> i think there's still room to fall in equities i don't think we've seen them get as cheap they probably can for example, look at the earnings that just came out. yes, they looked pretty good but we're going into christmas do you remember last year when you went to the zstore and nothing you wanted was on the she feels. if we want to buy the inventory ene items that are still there three, if the wage pressures are enough to keep margins high. and three, we have to see that there's persistence there. we've been hearing there's going to be discounting next year. we need more than one data point, one quarter of earnings resilience to kind of see what happens going forward. >> anywhere in the world that you like, like, specifically >> internationally, that looks good i hear the thesis about europe, and i'll go back to europe soon and europe will have a much tougher 2023 than we had this

year, believe it or not. people think the crisis is over, it's not it never refilled just on imports and pipelines and on russian pipelines, but you can make the case for europe, like, things were so bad that the only place they can go is up. do you buy into stuff like that? >> i think it's still too early there. we still have some risk. and even emerging markets are kind of a mixed bag there. you've got some that have already taken care or started, you know, their rate hikes, way above the united states, but we have still got questions happening in the commodity t as well >> yeah, we feel a little more insulated than a lot of the world that may still have a lot of problems next year. great to have you on set, elizabeth burton >> thanks so much for having me. >> absolutely. goldman sachs asset manager. we have a market flash for you. shares of ticket master live nation sinking in the last few minutes. you know what i?

the justice department opening up an anti-trust investigation into the company that according to "the new york times. this all actually has to do with taylor swift because the company is facing backlash over the chaotic rollout of sales for taylor i saw somebody on twitter posted something like ftx found 15 taylor swift tickets on their balance sheet valued at $13.4 billion. coming up, crude why oil is down even as the big russia sanctions are about to kick in. plus, this week pretty mellow for margins plus, the options story on why things could get a little more crazy ahead. oil's down we're back after this. if you have this... and you get this...

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i just showed you before the break, oil prices are sliding right now. higher rates and weaker demand in china may be taking their toll crude oil below $79. it's on pace for its worst week since april. all of this as things are going to get pretty hot soon listen to this, the white house getting set to sell another 15 million barrels from our emergency reserves they're already at 40-year lows. that sale, by the way, kicks off december 1st, which is three days before opec meets again, on

a sunday, which opec could, could again cut their outlook. and that's four days before the big new eu sanctions on russia kick in. joining us now to make sense of it all is ed morris, citi's global head of commodity research, you have been one of the few out there that have not been more wildly bullish on oil and obviously that's the correct call what are you seeing that makes you have a bit of an outlier view >> i think what we're seeing on the outlier view is really the supply/demand balance. we've been tracking it pretty closely. some of it's related to the spr growth but that includes oil on land, in inventory, oil in transit at the seas, and oil that's floating in the seas and we moved from may/june at the bottom of the six-year range, close to the top of the six-year range so oil markets have actually been getting loser physically than most people have perceived. we thought this was going to be

the case and it is the case. there are other things that work now where the head winds associated with economic growth and you mentioned some of the main ones. fed rate and other central bank rate increases on the horizon. the palpable slowdown in chinese growth, with the covid lockdowns continuing for a while that means any pickup in china, in chinese growth will be pushed back until the end of the year and we had a kind of outlier thing that happened this week with a pipeline in the united states, that connects the internal market with the external market broke down and it's not likely to be fixed for a couple of weeks, maybe a month. and that means oil being exported out of the u.s. will not be quite as robust as it's been and that means more inventory will be building in the u.s., and that's what's basically responsible for the split that we've seen in wti. the weakening of the front, partly triggered by a sell-off, because the market was overly long, but also triggering a

compango and that's the concern that the u.s. is going to turn into a block market, with an inability to export to the degree we have been so, ed, there's a lot there. i get the u.s. part, but what i'm hearing, i think, is we could see u.s. prices go down, because of these sort of wangy export things you're talking about. it's a global oil market and you have the eu sanctions about to kick in on december 5th. >> we have a bunch of bullish things in the market that the market has not responded to. one of them is the eu december 5th sanctions, which basically eliminate seaborn russian crude into europe. higher tank er markets are resulting, making the costs of

moving oil into europe even more expensive. and the first month now of the opec cuts and tanker tracking seems to kit that opec really is down a million barrels a day saudi arabia, maybe half of that amount, as opposed to where they were a month ago that's a bullish sign in the market, but the market is perceiving that economic growth is really being tapered in a very significant way and we'll have to wait and see, because there is much in the way of financial flows that are misleading us as to where the market balances really are so, we'll see what happens, whether this sell-off ends and reverses next week >> because i do wonder t, the oc meeting, we know that $90 brent number, the saudis kind of like to defend it, maybe. you wonder if there's a possibility, and we'll be there, will opec cut those quotas again. >> they could do it and they might not do it. they might wait a month. they had reasons to do what they

did, and now i think they're facing a whole bunch of unknowns but yes, they are meeting on december 4th, as you indicated and if this continues through the thanksgiving weekend and into the next week, we could very much see another potential cut by the opec -- >> can india do enough buying to counter the eu sanctions i could see a situation where eu sanctions on russian oil so the saudis buy russian oil to use domestically and export more of their oil to europe and/or india. how could that play out. >> that could play out, but the indian issue is really an interesting one. we noticed in terms of known taking of russian oil scheduling, of russian oil of by some private sector indian refiners and some chinese refiners has tailed off. which means they are concerned at least in the private sector in both of those countries about the consequences of the new

sanc sanctions that are associated with the european and g-7 deadlines on price cap and importing oil. there is a caution to tell which is bullish as well, with india nod knot being able to absorb the crude. >> and we'll see, we'll see if the thawing -- it didn't get a lot of attention, but yesterday, the white house thawing the relationship with crowned prince mohammad bin al salman that was a big shift last night not getting a lot of macro attention. ed morris, appreciate your time. >> thanks for having me. coming up, more on the space race no, not outer space. we're talking warehouse space. jane wells is here with why watching the warehouses really matter and then, bank seat over

bonds. why art might be the best bet of all and it is not only for the super rich what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq

hope you're having a great weekend. markets are mixed. nasdaq down a touch, about a half a percent not a big macro move but as always, there's some individual movers. you've got shares of ross, foot locker, the gap, all higher. all reporting, by the way, better than expected earnings. meantime, shares of the lgbtq focused dating app grindr are surging on their public debut,

public via a spac. and also two names in the gree masimo and cogent communications both on our insider buying segment. a segment we do almost every friday on worldwide exchange, at 2:00 a.m. eastern. and cnbc pro, sign up today. both of these stocks had some of the biggest insider buys this week masimo, their ceo buying nearly $5 million worth cogent communications also had some big buying. three more names on this week's list we do five every week. >> here's what's happening at this hour. with nancy pelosi stepping aside, new york representative hakeem jeffries has announced that he will seek to become the democrats' next leader in the house. if elected, jeffries would become the first black leader of congressional caucus and the highest ranking black lawmaker

on capitol hill. the justice department is asking the supreme court to reinstate president biden's student loan relief plan a federal appeals court had wl blocked the program while a legal challenge by six states moves forward. the government argues that the stay of the relief plan is leaving millions of vulnerable borrowers in limbo well, the dangerous lake-effect snowstorm already brought more than 2 feet of snow in some areas near new york city looks like yellowstone, my goodness plenty more is on the way. state of emergency remains in effect for 11 new york counties. welcome to winter, everybody brian, back to you >> apparently there's some chatter they may move the buffalo/cleveland game to detroit. >> i think they have already done it. >> have they done that >> it's going to detroit, which is a domed stadium, obviously, far away from where the snowstorm is >> and detroit is playing at new york this week but buffalo is playing at

detroit on thursday, thanksgiving, so buffalo could just like hang out in detroit for a week, tyler. >> maybe they just stay there. why would you come back to buffalo and go to the snow >> that's it go to the motor city casino. have a great time. >> tyler, thank you very much. >> see you, man. coming up, something is happening in the options market that we have not seen since boyz ii men and blues traveler were topping the charts we'll tell you what iits and what it may tell you about the markets. stick around and buying your starter home. or whatever this is. but the things that last a lifetime like happiness, love and confidence... you can't buy those. but you can invest in them. we believe that your investments should work harder for the future you imagine. and that's where our strategic investing approach can help. t. rowe price. invest with confidence. we all have a purpose in life - a “why.”

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all right. welcome back, the markets are looking to bounce back this month, but the bearish bets just keep getting bigger. the put-to-call ratio in the options market just hit its highest level since the mid-1990s and the second highest reading ever essentially, investors have more appetite for downside protection, relative to upside exposure or maybe they're just hedging. but it doesn't necessarily spell trouble for stocks joining us now to make sense of this is mike khouw with optimize advisers, cnbc contributor and superstar. has basically awesome show every 5:30 don't roll your eyes i'm giving you a promo for the 5:30 show, mike. do we read this as people being

super bearish, or just hedging long equity exposure >> so historically, what the put/call ratio was used for was actually a contrarian indicator. so generally speaking, in the past, when you started to see really big increases in activity relative to calls, that suggested that everybody was getting on one side of the boat, getting excessively bearish, and that sort of gave the market an opportunity for kind of an upside surprise. the big difference, i think, between the put/call ratio that we see today versus the one that we have experienced historically is there's another big change that's going on in the options market, and that is the activity, the average trading volume we see invery, very short dated options. i'm talking about options that expire the same day, for one day later, or maybe just at the end of any given trading week. and that kind of activity doesn't really give us the same

kind of barometer for market sentiment as you look out in time why is that? because they expire at the end of today or the end of tomorrow or the end of the week and what this is really a function of is there is an increased use by traders to make very, very short-term directional bets, and that isn't really a hedge, that's making a bet on what might happen in the very short period of time. these people might overseas for example be trading futures >> how long will it take for this kind of set-up to play itself out, then it feels like it's kind of like a little bit of a land mine? you just don't know if it's going to go off or not >> that's a really interesting observation, one of the things that can happen, if you have a lot of activity in very short-dated options, you have participants who might be buying calls, for example the dealers, the market makers have to hedge that activity. and that can have a reflexive effect so it can contribute on any given day an increase to

volatility, because you have both people buying upside calls, you have the dealers going out to hedge, and that convexity tends to be much higher, as expiration approaches. so that's when you can get these 50 and 100-point days in the s&p. >> it's truly a remarkable set-up wherever you hearfirsttime in 30 years, you wonder how it got this way, too, mike. what do you think triggered this kind of -- we just talked about what it means, but who did we get here you wonder why everybody is so on one side. >> there's a couple of things going on first of all, if you take a look at the aggregate options volume that we see today, call it 40 million plus contracts, that's more than double what it was pre-pandemic now, we know that during the pandemic, when a lot of people were working from home or maybe not working at all, that there was a really big increase of trade options for self-directed investors and day traders. what's interesting is that

actually more recently, as the proliferation in volumes in these short-dated contracts have increased so much, is there's a lot of institution in these short-dated trades as well if you go back to the 1990s, these things didn't exist. we didn't have zero days to expiration options we didn't have weekly options at that time. and significantly spreads. options would trade in eights and quarters and 3/8 wide. now they can be a nickel to a penny wide in some cases and that obviously encourages people who are going to go in there and play for very short-term directional bets. that's what i would emphasize here, these are pets, not investment strategies at all >> mike khouw, really appreciate it, my man good stuff all right, what we just talked about, catch mike and the rest of the "options action" gang tonight, 5:30 p.m. eastern time after the 30-minute "fast money. still ahead, we are t-minus one week until black friday. whether or not you are ready for the holidays, that's your own business what about the supply chain?

for that, we're going to turn to jane wells, who is live in linwood, california, which i've got a lot of questions, but the first is, where is linwood >> reporter: it's not far from the ports. it's kind of between watts and san pedro, wilmington. if you're from here, you know what i'm talking about a big port destination for cargo. and, yes, this black friday, it looks like the supply chain kinks have been worked out but one reason is there ar weships coming here. california's loss is new york's gain, when we come back. oal? announcer: derek jeter ...or plan? maybe... it's because in dreams, you can do anything. in dreams... you can hold your entire world in the palm of your hand. and turn time inside out... again and again. and you can do it all with your eyes wide open.

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i want to highlight a breaking story right now nbc is reporting that merrick garland will name a special counsel to determine whether

former president trump should face charges the special counsel will be named to address conflicts of interest so this news now, nbc news saying that merrick garland will name a special counsel to decide if trump should face charges all right. ready or not, christmas is only 37 days away but the first real test for the supply chain comes next week, with, of course, black friday. for now, let's turn to jane wells who is live at a warehouse. i should look it up, i should know, because i livided as a ki in gardena, california, which is where lynwood is jane, what's going on in the warehouse? >> reporter: they are moving stuff. it's quite a bit different than when i was here a year ago we came to this very warehouse one year ago during the worst of the supply chain crisis. and so we came back now to see what's changed and what's ahead. and what we've seen is the pendulum has really swung, maybe too much in the other direction. i mean, this is a warehouse owned by prologis, and it leads

to a third party logistics company called idc when we took this drone video a year ago, the port were really backed up here there weren't enough truckers to bring goods to this facility now, one year later, that's no longer a problem, which could be kind of a problem. they've got more space here, but fewer containers are coming in, for two reasons. one, retailers are importing less from china as they work through too much inventory and some of them have started shipping to the east coast over the last year, where there was more port space and they haven't come back. >> if you remember november 2021, 160 vessels lining up, waiting to be unloaded, a few days ago, it was less than five. >> we see shifting of port traffic moving from the west to the east, as just another way in which our customers are building yi resiliency into the supply chain. >> now, scenes like this, from a year ago are one reason traffic has been rerouted to the east

coast. container volume and local sports last month was down about 20% from a year ago to levels not seen since 2009, and new york and new jersey have been the number one ports for three months in a row. that is not good news here in southern california, especially as contract talks with the longshoreman have stalled. brian? >> yeah, it's really been quite the shift, jane. l.a. and long beach were the biggest forever, and now it's new york but we're actually starting to see the good news for you guys, bad for us because now we're starting to have the backlogs. on the east coast. >> well, i'm a little surprised that -- and i realize how long it takes to turns the ship around and you had to reroute everything to go through the panama canal i'm a little surprised more of that hasn't come back. the longshoreman situation here may be part of the reason. but the ports account for billions and billions of clars to the local economy and losing these ships permanently will be a big deal >> it really is. jane wells and a shout-out to

everyone who's working to get the stuff on the shelves we say merry christmas and happy holidays to all of them. jane, thank you. they're the ones that actually make it happen still ahead, maybe we should call this a new cnbc segment, mad monet. because let's talk art art collectors had a chance to buy their very own master pieces at a major auction last week, and they went for big money. robert frank's got some of the eye-popping numbers. >> we have a cezanne, a sirott, and a van gogh each of these paintings sold for over $100 million each that was part of the most expensive collection ever sold we'll take a look at art as an inflation hedge. these soaring prices and how you can get into the master piece market for as little as $500 coming up.

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last week was a biggy for the ultra-wealthy fine art collector microsoft founder paul alan's private collection hit the auction block and brought in a record amount at christie's, arguably one if not the greatest private collections of all time. robert frank is here now with some of these numbers. >> was definitely the most

expensive collection ever sold more than $2 billion of art sold in new york over the past week that collection going for $1.6 billion. the most expensive collection ever sold. buyers from around the world bid up prices, especially from asia. three of the top works, a van go gogh,syra went for over $100 million. warhol's white disaster went for $85 million on wednesday total art sales topping $65 billion this year. that was last year, this year likely to be even higher the average collector now spending $274,000 a year that's more than three times the average pre-covid. it's young collectors that are really taking a big interest in art right now. nearly half the bidders at sotheby's last year were under the age of 40. now, art has long been seen as an inflation hedge the art market up 13% over the past 12 months

it's up 84% over the past ten years. you don't have to be a millionaire or billionaire to invest in art. you have company like master works creating these special funds, sort of like an etf for a single picasso, where you can invest in an artwork for less than $500. >> okay, because that -- when i saw you in the hallway, i said -- >> do you have to be really rich >> i was like, robert, do we have to be super life of the secret rich to own this stuff? >> this market has become so big, the prices are going up so fast, people think at some point soon, it will be securitized and symptomized in finance so that more and more people can buy shares, they can buy even shares of art loans, so this will be a security tooids market in the not too distant future >> stick around, because you've also brought us a top lender to the biggest art collections out there. let's bring in another voice that is drew watson. he is the head of art services for bank of america, which i didn't even know was a thing art services

that's how big of a market this has become, that they need a guy like you >> absolutely. the art lending industry is an over $20 billion a year industry and it only continues to grow. >> yeah, and to robert's point, because, listen, it's cool to talk about, you know, the clempt that goes for $100 million or something. but that's like powerball or paul alan money. what about for the regular cnbc viewer higher-end demographic, obviously, but a dentist in des moines, can they get in on this game? >> absolutely. look, there's a real disconnect in the art world between what you see in the big headlines with the paul alan sale or major works that are breaking records and all of the art that is sold over the course of a normal sales season that's very accessible most of the art that's sold, if you're just looking at it on a per lot basis is really under

$10,000 or $5,000. really accessible if you're looking at categories like photography, prints, et cetera, for, you know, a broader demographic. >> and drew, you studied the economics of art over a long period of time what does it tell us about art during inflationary periods? and is it truly, so far, a hedge against inflation? >> yeah, it's a really good question, robert so savvy collectors often will view their art as a hedge gend inflation, in part due to its liquidity profile. however, one of the things to keep in mind is that with inflation also means an increase in the carrying cost of owning an art collection. so think about all the things that you need if you're an art collector. insurance, logistics, conservation, et cetera. all of the costs of that tend to go up in times of inflation. also, as we've seen over the

past couple of months, is the fed continues to raise interest rates to come combat inflation historically, we have seen that low interest rates typically correlate to a strong art market because the interest rates can be seen as the opportunity cost of tieing up capital and a nonincome generating asset like art. so, if we continue to see raises in interest rates, you may see cooling in demand of the art market, due to that opportunity cost profile. >> you mentioned lending is now a $20 billion a year business. i wonder how much of the collectors now are simply buying new art with the money that they have taken out of their existing collection and to what extent that is at risk now that these art loans are probably way above even the mortgage rate of 7% i don't know what the typical art loan is now, probably more like 9% or 10% does that put at risk collectors buying new stuff

>> you know, not really. the thing to remember about art lending is that it enables collectors to access capital they have tied up in their art collection without having to sell their art so, a lot of times with collectors, the last thing they want to do is sell their art because the very nature of collecting is amassing these objects that you love living with, right? and so if you sell art, of course, you have not only -- you may free up some liquidity, you also need to pay attention to transaction costs and also the tax treatment of art, which is taxed at a different rate than other assets so, you know, an art loan can allow a collector to take their acquisition strategy to the next level by freeing up some of the capital that they had sitting in their art collection while continuing to enjoy the art on the walls of their home or office or wherever it may be >> well, a comment and a question first off, i looked him up on linkedin this is informative for the kids out there that know if they get

a french and art history degree, they can also make wall street, drew watson. liberal arts are not dead. i was a liberal arts major i love this. drew, my dream, after i read a book called "short nights shadow catcher," my dream is to own edward curtis, i probably never will what should we be buying that is not a million bucks? >> yeah, look, there is a lot of opportunity for people who love art to get into the art market, you know what are some great entry level categorys? really looking at -- like i mentioned, photography, prints and multiples, and some, you know, more off the beaten path artists. i think the bottom line is that it really depends on what your objectives are you know, do you have financial objectives is it really more aesthetically driven there is also the social

component of collecting. there is the philanthropic component of collecting and are you involved with museums, et cetera so i would really encourage everyone to look at those entry level categories and also think about their objectives and what their strategy is. the best advice is buy with your eyes, not with your ears, because there is a lot of noise out there. >> last question, drew, so far this segment of the market and the art market has defied all economic gravity and fears of recession and volatility we have seen in the stocks and other assets how long do you think that will continue and do you think that this art market will truly be immune if we head into recession, if we see valuations for assets fall a lot more >> yeah. yeah, so, we continue to be, you know, very surprised about the resilience of the art market over the past couple of years, it was supply constrains coming off of covid, now we see

a lot of supply coming to market a because there is a lot of supply on the market now with the return of in person art fairs, new art fairs being added like free soul, paris, these major estates coming to auction, like the paul allen collection, the getty collection, you have a lot of supply in certain segments of the market they're struggling to absorb some of that supply. we're going to continue to see valuations remain stable because we're seeing strong bidding from both u.s. and asian buyers and also robust third party guarantee activity, which is helping bolster some of the sell through rates at auction this season >> drew, we got to leave it there. great stuff. robert, you go back on with jim, the segment has to be called "mad monet," i get a credit, 10%. thank you very much. coming up, do you think the retail earnings parade is over nope that'sex nt. this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing!

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this was a big week for retail earnings. next week brings more of the same and also thanksgiving. with some big names reporting including best buy, dick's sporting goods, dollar tree and nordstrom, we're getting a workout this week and next week. what are we watching for, melissa? >> there is a lot coming up. retailers across the spectrum here one of them is best buy. another one is dick's sporting goods. both are companies that really saw a lot of benefits to the pandemic as people got computer monitors and stocked up on active wear for working out and working at home. and then on the other end of the spectrum, we have dollar tree, and dollar tree could benefit from people being more price sensitive. it is low income consumers maybe feeling more pinched by inflation. and then the final one that i'll be looking closely at is nordstrom. nordstrom has been struggling during the past two years of the pandemic, people weren't dressing up, and getting suits

and fancier things and now -- >> they still aren't we're the only ones because we're on tv. >> that may be changing a little bit. what i heard from retail analysts, people do want to dress up for holiday parties again and want to look for unique gifts so nordstrom could be benefitting from that. >> you always see -- it is a running joke, i'm not going to insult much of our audience with the high demodemographic, the hh end is going to be okay. of course the high end is going to be okay with that in mind, are we looking at nordstrom, like, they'll be fine? >> there is part of that but what we learned this week is that shoppers are more strategic about how they spend their money, more thoughtful and value is not just about the price tag. it is also about the quality and so i spoke to jeff gannett, macy's ceo, he was talking about how people can mix and match their stores that includes bloomingdale's, but they also have a mix of goods, so people may say i'll

get a high end perfume but then get something from macy's credit label, a product that looks -- >> there is nothing hot with electronics. how many flat panels can we have >> that is definitely a stock -- >> not knocking them electronics in general, you know >> they saw so much pandemic growth it is tricky. >> melissa repko we'll see you next week. we'll see all of you next week "power lunch" starts right now and we at "power lunch" will see you right now, along with contessa brewer, i'm tyler mathisen here's what's ahead. maybe things aren't so bad the latest economic data better than feared. goldman sachs says the u.s. will narrowly avoid recession next year we're going to ask a veteran strategist if the worst is over. and where he may be seeing opportunity right now. on to the crypto contagion, shares of crypto bank silver gate down more than 25% this week 50% this