nasdaq is down more at this hour i speak to jeremy grantham, the chair and chief investment officer. as concerned as he is about a collapse in stocks and housing, he thinks inflation could stick around for the next couple of decades and we're running out of labor. here's what he told me >> the fed, as everybody knows, are completely hamstrung if everyone is worried about the economy, they are even more worried about inflation. inflation has always been the great fun fest of society in general. and it takes precedent over everything else. and you can hear that. they have to put that at the top of the agenda. and that takes away, pretty well all the ammunition they had back in 2000 with greenspan and in the housing bust with the '90s they just don't have that flexibility. rates are still very low debt levels are unprecedently a high and the combination of that with inflationb , it's very tricky they have to tread more carefully in terms of stimulus than they could before >> it sounds like what you're saying is if inflation takes precedence, then they should solve that so that they can

. >> pippa, if people missed it they should catch jeremy grantham this week he's bearish on the stockclimate change so he called out lithium and a few other areas of opportunity here in the energytransition where he thinks people should put capital to work. >> long term investors say this is a buy the dip opportunity because there is a disconnect with lithium specifically about where we are now and where our plans to be in a decade time and the amount of raw materials and the metals are important for future technology that will require this big energy transition push. so on a day like this and the market like this why there is volatility and it is definitely pick your specific companies because all of these names have very different plans and do very different things so you have to do your research. >> exactly i said to him, these are some unproven business models and he said there will be a high failure rate and they'll continue to grow their top line and will continue to do so pippa, thanks very much. pippa stevens, thank you today things like car and credit cards are starting to mi

the brontosaurus is a reference to yet another british guy jeremy grantham, who in 2007, as the housingket had already turned in subprime mortgage dealers were beginning to go bankrupt, i asked him why is the stock market still holding up so much. he said the stock market is basically like a brontosaurus. a brontosaurus, if you get its tail, its nervous system and brain was so limited, it would take a long time to know it's tail had been bitten, to feel the pain. in the same way the stock market's take an extremely long time to catch on to what has happened elsewhere in the economy and the markets. ed: i have always wanted to do that, talk about dinosaurs and financial markets. you have made my day. bloomberg opinion columnist john arthur. this is just a snapshot in time. thank you so much for your time, coming up we continue the market volatility coverage. u.s. stocks tumbling as investors assess the impacts of higher prices on earnings, future rate hikes. have we seen this before? that is the big question with the next guest. this is bloomberg. ♪ what's it like having xfinity internet

. >> jeremy grantham calling the market selloff back in a conversation with bloomberg in january. our next guest says the very sentiment is overdone, chief strategist at asset management form for howard group. mark, good to have you with us. we have seen the latest survey saying that the fund managers are the most various since 1994. is it too much? >> it depends. it is a recession imminent? that's the big call. i think it's difficult to see given where the u.s. consumer is now. the u.s. consumer powers 70% of the u.s. economy, the largest in the world. the biggest risks are exhaustion is. china slowdowns. china is entering a technical recession that will give the fed some point -- at some point a reason to back off from peak hawkish nets. >> i want to get there. but when you talk about consumers we saw a retail numbers today with target plummeting, walmart. how big of a risk is that? that these prices are now starting to hit people? let's it's interesting because we have all been waiting for the pivot from goods to services. that was one of the reasons last year to be very bullis

. >> someone like you, could end up with the same conclusions as jeremy grantham has drawn which makes him bearish, sees the valuation reset by 50% or more are you more constructive, certainly you are on individual names? >> yeah. this is where we are always very quick to say that you can't talk about the stock market because there are lots of different kinds of stocks. the kinds of stocks that will get hit hardest if we're right where inflation stays higher, the tech stocks, the stocks trading at high multiples because higher discount rates hit tech and growth stocks much harder than value stocks value stocks are pricing in some inflation and then a recession we think the chance of a recession is up from where it was, but still less than 50% so if we get a world of pretty high inflation, but a reasonable economy, our value stocks are going to continue to do well because they're being priced at very attractive levels. >> apa corp, an energy name, mosaic, fertilizer materials play, mohawk, berg warner, one final question for investors who are concerned about political interference with

. >> and gmo cofounder jeremy grantham calling the market selloff in a conversation with bloomberg in january. >> here is a check of the latest business flash headlines. he plans to wind it down melvin capital management after billions of dollars of losses and a botched plan to regroup the farm. -- the firm. the once highflying hedge fund told clients about the plans to liquidate funds and return cash to investors. the assets are worth of an $.8 billion at the end of april. tesla lost its spot on the esg version of the s&p 500 index. the ev makers score on environmental, social, and government standards has been fairly stable but slid down the ranks due to improving global peers. working conditions were also cited along with tesla's handling of investigations into deaths and injuries of the driverless system. >> let's look at how we are faring when it comes to the set up. there is no chance that asia will escape that huge crash in sentiment we saw overnight a horrible session for u.s. stocks, particularly consumer discretionary facing names. nikkei futures just shy of 2%. cash trading

. >> mother of all bubbles or jeremy grantham, if you remember what's a little bit concerning or frightening i'm not saying we're anywhere near '87 you're down so much at one point that you figure you've done almost all the work you need to do on the down side, and then for that final capitulation you get the levels that are just beyond what you even considered possible and people are looking for this, you know, real violent final capitulation i don't know where that would take us. that would take us down to levels in some of the averages that would be frightening if this really is the end of a mega bubble because inflation and rising interest rates. if it's the end of an era, it could get much scarier or not. maybe we are making a slow bottom where you don't get that final panic. >> it can happen, obviously, either way it's been pretty orderly i know it maybe doesn't feel that way in terms of the overall indeces. you're down 17% or something like that. it's happening in this ratcheting fashion you're right one definition i like to use of a bear market is the overshoots occur on the down sid