no hispanics used to describe themselves and illustrate the problem they have with the progressives and setting the agenda for the democratic party for speaking for communities and colors in ways that they don't represent. gerry: we gotta go and thank you, that's it for us this week and will be back next week, thank you very much for joining us and >> barron's roundtable sponsored by global x etfs. jack: welcome to "barron's roundtable" where we get behind the headlines and prepare you for the week ahead. commissioner hester cursed on the controversial climate disposal and the future of crypto currency. rising rates hitting housing, which markets are cooling and

what should you do before buying or selling. we begin with 3 things. stocks were slammed after a red-hot inflation number, how aggressive will the fed need to be when it raises rates this month? bank earning sent a chill through the market, lenders short of expectations. what it tells us about the economy. bill ackman winding down the largest $4 billion to its investors, does it signaled the end of the blank check your a? on carleton, been levisohn, carleton english and jack hough was a very bad mood after that 9.1% inflation print and then some economic data some of which is surprisingly good. can you make sense of this. ben: it started as badly as you said. people became convinced the fed

was going to raise interest rates by a full percentage point at its meeting by the end of the month. after that inflation print there started to be pushback from fed governor but then other economic data that showed consumers are spending money but only as much as it takes to keep up with inflation and dialing back for how far it will go up. these expectations had pulled back to 3 quarters of a point and the market had a great rally. jack: that is what the fed is trying to do. last week, you said you weren't buying this optimism. how do you feel now? >> i'm still worried. what is crazy is we have a great rally because the fed isn't going to raise rates a

full percentage point but they will raise rates by 3 quarters of a point and that is a heck of a lot. we have that to contend with, the dollar is surging. they are at parity which is crazy, hasn't been that way for 20 years and the market still can't get a good bounce going. i looked back the last five times the market ended the week with a big gain of one% or more, the following week was down four of five times, these good days haven't led to good rallies. jack: any shelter of their from the storm? ben: i'm thinking of growth stocks, the earnings will be terrible. everybody knows it but if we get kitchen sink clearing events they might be something to watch, netflix will be the first toeport. i would keep an eye. jack: you had a busy week, carleton. you are on the banking beat and most reported earnings, but headlines were bad and you looked into the nuance and found it is not easy to

characterize them. carleton: a lot of them missed on earnings projections. when you look at what is going on you wonder why were prophets so high a year ago. a very unusual phenomena and, banks are releasing billions of dollars in reserves because the economy was improving. what we have now is a weakening economy, banks are building up their reserves but not to the degree they had been before. i don't think the wall street community wants to do with the reserved build in a more normalized situation. jack: a lot of that is accounting. what do you see in the financials? carleton: it improved double digits, expect to see that the back half of the year. we did see a drop in advisory revenue. we've not seen many ipos, we knew that would be the case with the bank so you will be looking at things proving

durability, might be tricky spot to be in but still getting high dividends. jack: you got but goldman and bank of america. carleton: we had lower advisory revenue, bank of america has been slow and steady. i would expect to see loan growth improving interest and that would be the main story. jack: let's talk about s pac, investing is hard when you can pour over the financials, you literally don't know what you are buying. bill ackman said i am giving you the money back. jack: may be is the beginning of the end but they might go away for a long time. we had a boom 40 years ago was we called them blind trust, now we call them blank check

companies, recurring financial rash with a 40-year dormancy period, in the 2016s we will see our next room and call it mistry merger companies or something but investors purchase without knowing what they are getting, doesn't sound appealing but you would be surprised at the things people will purchase when everything is going up and the back operators use this money to buy hot garbage like crypto, genetics, space platforms, the biggest category, but he tried to buy universal music, steak and it and was not permitted and the reason is is special-purpose acquisition company, not special-purpose by a little bit of what you feel like company but he did the right thing again to give the money back. i wonder about the 600 that are out there that haven't done their deal and haven't returned the money, i hope they don't try to bottom fish on the crypto space.

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proposal, you say they already require disclosure of material climate risks. >> the sec does require them to disclose all kinds of risks that are material including climate risks. i don't see the need for special rules to do that. we are in the process of reviewing comments now and a lot of commenters agree with me they are concerned about the proposal so we will see where we go from here. jack: the crypto boom has turned into a bust, investors lost billions from crypto currency lenders who declared bankruptcy. you compare the situation to the children's book are you my mother, crypto is looking for its regulator. why should the sec regulate crypto? >> the regulator, existing rules might cover crypto,

cryptos again, a very broad topic, certainly things we could have done by crypto lending, one area where we might have written rules and might have prevented what happened from happening, there are other areas they could help people buying these crypto tokens to get disclosures to make decisions about these tokens but congress is considering whether they want us to have regulatory authority, and looking at other agencies, whether they have the authority to other agencies. i hope we would be able to step up and show we do a better job if congress decides to give us more of already. jack: a lot of problems, counterparty risk, wasn't actually sustainable.

to many other asset classes. one specific thing the entire crypto industry is thinking about that desperately want an exchange traded fund that owns bitcoin or whatever. where does that stand? >> the last four years, bitcoin has been around a long time and people are wondering about a product they can get exposure to bitcoin the same way they get exposure to other types of assets, something like gold and exchange traded products, why not one for bitcoin? i argue the standard we applies different from the standard for other products so i don't have a good answer why we don't have one. ibly1

jack: gary gensler wants to rein in payment for order flow to assure retail investors are able to buy and sell the best price and this issue was highlighted during the commission free craze when all the names stocks were going up but could it mean the end of commission free trading of companies were no longer allowed to make money for order flow? >> you are right that the chair has spoken publicly about making big changes in the market structure space. we need to see details to understand what would happen but there could be big changes for retail traders and what i take as baseline requirement is what we do makes things worse. she can go to the market and she can buy and sell when she wants to and that is very important, commission free trading is important to all investors as well.

we have to bear in mind we are improving things, not making things worse, it can be tricky in this area. as noted there's a lot of detailed regulation in this area, tweaking one piece is elsewhere. not to try to rewrite all our rules at once, the sec is aggressively working on different rules from climate to equity market structure reform. jack: investors have it good, that is not the case. one more question, with elon musk, he disclosed his position later than sec rules require and claim to be passive but was actually proactive.

what is at stake? what does the sec need to do to say you've got to stop messing around? >> i can't speak to particular situations or individuals, a lot of things, we are watching out for the market. we've got a lot to do and there will be no shortage of interesting issues. jack: commissioner hester pierce, thank you. pierce, thank you. >> i appreciate it. you'll always remember buying your first car. 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.

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jack: there are rising mortgage rates but prices are not coming down.

prices seem to have stopped climbing, the cost of ownership is up. mortgage rates have jumped making things worse, there are not enough houses to meet demand. carleton: we are seeing a cooling from a frothy market, not our call's. the housing market was estimated to be 3. 8 million coming down a little bit from their. there. you are seeing hot areas during the pandemic, austin, texas, there's been a slow down and the price increases in housing compared to where we were a year ago. jack: what is hot and what is cooling? carleton: austin, texas, boise, idaho, the metro area, connecticut, all those areas are cooling. some of the areas are still seeing high price increases.

we see a cooling from the crazy exuberance we saw before. jack: they are raising rates, what does that mean? carleton: if your buyer you will not qualify for a mortgage or as high as it was before. with the rising interest rates, mortgage right around 3% a year, it might not seem like a big jump but what that does for monthly payments, $300,000 mortgage, $500 a month. that will push a lot of people out of the market. jack: we see the age-old debate, is it better to buy or rent? an economics professor said a house is a piggy bank you live in. the specific market doesn't hold. carleton: we had the headline this week where average rental price in manhattan is $5000 a

month. we get noisy numbers going for $150,000 a month. jack: i'm waiting for that to come down a little bit. carleton: not my type but you compare the total cost of home ownership against the cost of renting because your monthly mortgage payment might be lower than that but depending on where you live, you look at condo fees, taxes, you may find it is cheaper in some markets to rent. jack: i'm picturing an actual house in the shape of a piggy bank. 60,000 homes sale contracts went in june, buyers walked away, 15% up from 12% a year ago. with mortgage rates, is that part of a lasting trend? carleton: it will look like a one time shift.

what happened in the first or second quarter we saw interest rates rise so quickly, faster than expected so you had people putting a bid on a house, the mortgage rate went up, the market is understanding rates will go up and we may see mortgage rates increase a little more but not the same degree. jack: how can the seller protect himself? carleton: you can collect multiple bids on a property and that means you have a buyer less interested but to force your first buyer to accelerate the process, secure financing, show that you have intend to close the deal or move to another buyer. ben: there might be opportunities for investors. carleton: not everyone is looking to buy or sell but might have exposure to real estate. one area that looks good is

lauren foster wrote a story, as interest rates go up a lot of people get pushed out of buying, rental properties look a lot better and the number of apartments are trading at 20% below the net asset value. you might look at equity residential land avalon. jack: when prices go up to an annoying degree you got to look at the other side and say an investor. investor. roundtable members give thth alright, limu, give me a socket wrench, pliers, and a phone open to libertymutual.com they customize your car insurance, so you only pay for what you need... and a blowtorch. only pay for what you need. ♪ liberty. liberty. liberty. liberty. ♪ ♪ (queen - we will rock you) ♪ ♪ ♪ ♪ ♪

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jack: as commissioner pierce and i discussed there is troubling crypto land. we have another bankruptcy,

crypto lender celsius. you say we should not call this the crypto winter? >> winter implies seasonality suggesting a spring that is definitely coming. i call this a crypto extinction event. if you want to see what financial winter look like look at the stock market. bank of america cut its price target, another bull market until the fed starts cutting rates possibly in the back half of next year. stocks will come back, things like dividends and assets the become more attractive as prices fall, crypto doesn't have that. all it has is price momentum, it becomes less attractive. people hate when i say this but the lowermost room a couple thing is not that it is down from $60,000-$21,000 but internet tokens that were conjured into existence less than 15 years ago are going for 20 one thousand dollars a piece. i caution people not to double down here.

what you need to know is the floor for crypto is 0 and there is no such thing as a crypto blue chip. jack: you made yourself very clear, the time for actionable -- jack: the crypto artery -- jack: let's go for action ideas. ben: mattel reporting earnings on thursday, probably going to beat, they are not dealing with the same inventory issues other goods sellers are and they will possibly have lower prices for plastic and shipping going ahead. so they can keep their guidance where it is. could be interesting. jack: like in plastic is fantastic. you have the best actionable idea we are going to have all year, lay it on us. carleton: take a trip to europe. finding a flight that will get you there might be an issue but we have $0 parity for the first time in two decades.

go to do holiday shopping. i am a theater not, go see some shows, take advantage of this. it has been a while. who knows how long it will last? jack: enjoy a lot of great meals. great ideas. check out this week's edition of barron's.com. a lot of great stock picks. follow us on night. from the fox studios in new york city and back office. welcome to opposition to the week ahead i can. inflation continues back in the white house fix the economy almost by have zero business experience? steve moore coming up. plus democratic senator joe doing a major blow to his parties last