Good afternoon, We very much appreciate your time on this. Americans obviously have a great interest in understanding exactly what is going on out there in the markets today, and how it might impact them. Not to mention what is behind this turmoil. You were there on the scene in New York.
Q: Can you tell us what the mood was like? Can you describe how things went down this morning, up close?
A: Worst day on Wall Street since 2008, but when I talk to the Wall Street players — this doesn’t feel like the financial crisis. Meaning that the selling has been orderly, there hasn’t been a credit freeze and there wasn’t this concern that the financial markets would collapse. There is no panic with many believing that this is a steep price correction. Wall Street doesn’t like surprises — they like certainty so last night the oil price collapse was a big surprise and a big unknown. And that led to the first time circuit breakers were used to halt trading since 1997. Saudi Arabia cutting oil prices while continuing to pump at current levels means there was a lot more oil then bought at those higher prices.
Q: The most obvious question, the one being talked about on social media and at the water cooler, is the one to which the answer seems to depend on which news you watch or read. Namely: what's behind this? Some called today a "bloodbath." The President has pointed at the dispute between Saudi Arabia and Russia, as well as "fake news" about the coronavirus. But in much of media, the coronavirus itself is largely blamed. How would you describe the cause or causes for the plunge, if you were to sum it up?
A: This has been called the most unloved bull market run in history. That’s because a lot of people called the end of it seemingly each year and last year many were talking about a possible recession. Despite that — we saw the longest economic expansion in US history extend into an 11th year and an 11th year for the record bull market. Markets tend to try and gauge how the economy will be doing 6 months out & they are concerned coronavirus might cause consumers to stay home & not spend. And given that the US is more than 70% consumer driven — the fear was that economic growth would slow down. The oil price plummet last night just exacerbated already tense & unsure global stock markets. But we need to temper some of the calls of recession in the US since a recession is defined by 2 straight quarters of shrinkage in the economy & we haven’t even seen one!
Q: The stock markets are of course always affected by world news and events. In your view, is there even a remote possibility that, as President Trump has implied several times now, the international and domestic media has intentionally used fake news in order to tank the world economy to hurt him politically? Is that a realistic concern at all?
A: Well I think the reality is — it would be good for President Trump’s re-election odds if the economy and the stock market continued to power along to new record highs. And it’s also conversely true that the Democrats chances of winning in 2020 improve if the economy and stock markets falter. However it should be noted that despite all the calls of recession and stock market drops since Trumps election in 2016 — the average investor is still up double digits since then.
Q: On the subject of that oil shock, which was apparently caused by the dispute between Saudi Arabia and Russia over target price and production: Is this a long-term problem? Or is this something that can more or less go away if one or both sides change their minds and decide to hammer out an agreement? And if they don't come to a quick agreement... how big of a problem is that?
A: There’s time to work out an agreement between Saudi Arabia and Russia since the oil price cuts don’t kick for a few more weeks and today’s major selloff is definitely a wakeup call to both countries the turmoil they can cause. But long term — I always believe that free market price discovery is always better than cartel constricted pricing! Prices are artificially propped up by restricted supply which causes market distortions. So it may be a good thing that Saudi Arabia is striking out on their own from OPEC!
Q: Last week, Mediaite asked Fox News Channel medical correspondent Dr. Marc Siegel about the coronavirus, and whether we are seeing a panic, and whether the virus outbreak qualifies as a "pandemic." He said that global attention of the media can be good as long as it is supporting public health. But not so good if causing hysteria without helping fight the virus. Extending that to the markets, and watching the coverage today, how do you think the reporting overall is shaking out? Good and helpful? Causing hysteria?
A: The biggest single day selloff since 2008 and the first trading halt since 1997 is definitely influenced by some hysteria. The blowout jobs report in February was largely ignored last Friday despite the US creating an average of 243,000 jobs a month from December to February which is much better than the 173,000 a month last year. Also US companies reported profits growing 4% in the first 3 months of this year instead of being down 0.3%! And the US is the most popular place for global investors to put their money because they still have positive interest rates and the economy is still growing at solid levels. This might be a steep price correction but not another 2008! Remember we haven’t seen major companies go under like Lehman Brothers and Bear Stearns did 12 years ago.
Q: You've been very generous with your time, and we only have one more question. If you were going to tell ordinary investors today just one thing about what's happening and how bad or not bad it is, what would you tell them? Not advice on what to do, just one thing you would tell them about what they are seeing?
A: I would quote Warren Buffett — when people are being greedy he fearful but when people are being fearful be greedy! Worked for him!
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Susan Li joined the FOX Business Network (FBN) as a business correspondent in January 2019. In this capacity, Li covers breaking financial news based out of FBN’s headquarters in New York. You can find her on Twitter here. 
