ed yardeni >> i'm giddy about the market the reason is because i'm been listening, and corporate managements are giddy with the cash they're getting i think they all went away on holiday and came back in january, whoa, where did we get all this catch from? we're going to buy back shares, paid dividends, we're going to pay workers some more. they're going to do everything >> does this environment play a role >> i think inflation is dead i may get buried by that forecast >> i think it's been expected to come back for the past 40 years. >> because of demography, very powerful structural forces i mean -- >> now you have a very powerful forces on the other side, which are reflaying the economy. >> it's a real tug of war here i'm on the side that believes inflation will remain low. i think it's going to remain low for the factors i mentioned. by the way, you've been talking a lot about technology it's extremely disruptive, extremely -- innovators are always trying to figure out how on to do this better, cheaper, to put -- tech literally eats its young. as soon as they're successful, they have to t

you can intimidate everybody guys, back to you. >> i didn't know it was ed yardeni who coined the whole out a report called bond vigilantes it's a focus on the bond market. it implies what it means we saw what happened in greece, for example, right you can't spend anymore money and we're going to tell you why you can't, because it's going to be way too expensive. >> you imagine pitch forks and flames when you talk about them. >> basically, yeah except they're sitting behind desks and trading pits >> if you told ed yardeni that the bond vigilantes would be scaring the heck out of the markets because the ten year might go to 3%, that that is hanging over your head, he wouldn't have believed you, i don't think. >> you know, it is amazing the article that i quoted you from from 1993, it's very funny. they describe the bond market as arcane because not that many people know about it quotes larry kudlow who was an adviser at bear stearns. it's very didactic and something that we talk about so easily on a daily basis back then was very, very unknown to a lot of people. >> i don't know if that'

he is ed yardeni good to have you here. >> thank you. >> how did you come up with bond vigilante. >> back in 1983 we had just come out of a severe recession and the economy was starting to recover rather nicely, but everybody was paranoid about inflation making a comeback and sure enough in '83, '84 we saw bond yields go up again. and that is when i said, don't get too excited here the bond market should be kind of ticking on a regulatory role of the economy and it will go up and the economy will slow and then bond yields will come down. and we had three episodes like that in the 1980s. and because of that, as you brilliantly outlined, clinton got the message. i don't think we're getting the message now in the administration. >> that is my question are the bond vigilantes back and should they be back? >> well, they had been sort of put under lock and key by the central banks, the fed has lowered interest rates down to zero in terms of short-term rates and that pushed bond yields down and then they bought up the bond yields and the bond field should trade around the growth rate of nom

lets bring in ed yardeni, thank you for joining us this morning. >> thank you very much >> you have been constructive on what earnings have been doing, are you of the mind as this is reasonable >> well, i think the sell-off. it makes sense of a bit of a hindsight, clearly the margin was going straight up in a multiple fashion i have been arguing that this particular month is unusual of earnings we monitor what analysts are thinking of earnings every single week. since the tax cut, s&p 500 earnings expectations increased by $9 a share. that's a big, big number >> and that's where the company, ubs have done some nice work c consensus are going faster than those companies not. >> that's right. we'll get the first quarter in april, i think there is still plenty of room for good use and the next earnings season and not just this one. look, the other thing we want to trade closely as analyst expectations for rev lenue we a flabbergasted, what are the tax cuts of corporate earnings have to do with revenues? the global economy is doing extremely well >> dollars been pretty weak. >> yes >> you se

more money to paying interest on its debt and away from the polyiciepolics the term was coined by ed yardenie is talk because the federal reserve is reducing how many bonds they buy. and the tax cut means less revenue for the government to use to pay back their debts. and this week the decision to do a big spending package which means deficits of more than a trillion per year in the coming years. now, still the bond vigilantes haven't reared their head in the u.s. since bill clinton's time as president however, they were search out in force during the european financial crisis the power of the bond market often surprises politicians who are unfamiliar with it there is it a very funny quote from james carville well-known adviser to bill clinton, he told the "wall street journal" in 1993, i used to think if there was reincarnation, i wanted to come back as the president or pope or a .400 baseball hitter, but now i want to come back as the bond market. you can intimidate everybody we may be feeling that right now. >> yes maybe getting intimidated again. michelle, by the way a very colorful quot