Host: Amanda Drury

About CNBC Asia’s Cash Flow

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CNBC Asia’s Cash Flow provides traders and investors usable information that helpsthem make profitable decisions. The show creates investment, trading and business opportunities out of the mass information, announcements and decisions that occur each morning.

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( Response of Ken Barker from Q-Group: “Yes. The Fed is trashing the dollar and making it very tough for savers… “Helicopter” Ben may yet surpass… “Bubbles” Greenspan in monetary irresponsibility)

Host: Well let’s now get to Todd Everts. He is President and CEO at Wall Street Global. Todd, great to have you with us today. What is your response to this question of the day whether or not the Fed should be focusing more on the inflation as opposed to the downside risks to the economy which seems to be at the moment?

Todd G. Everts: Well I think Ken hit a couple of points quite directly and that is the fact that economic stimulus has not been proven as a way to prop up the US economy rather when you take actionable measures that provide manufacturers to increase their spending, hire more people, increase their output, that was what will drive the consumer to come back in to the store. Simply handing the consumer a $900, $1200 rebate in the form of a check or in the form of a tax rebate next year isn’t going to drive the economy. It’s just noise and it’s unfortunate that we’re getting so much noise obviously during a year of politics up before the election because it’s really not going to change things and that’s what the US needs.

Host: Sure and the government has to be seen to be doing something, doesn’t it? Otherwise it could be accused of just being a lame duck. So you don’t reckon the fiscal stimulus packages going to have much impact, it’s not going to basically be working its way into the economy into the second half… Anyway, what about more Fed cuts…is that going to help by making it easy for small businesses for example to get a loan?

Todd G. Everts: These Fed cuts are going to help the businesses but it’s not going to drive the economy. The 20th century was about the United States but the 21st century is really going to be about emerging markets and obviously here we are in Asia. The US and the US spender doesn’t understand world markets...they don’t travel like Europeans do or even like Asians are starting to do. They don’t understand that world markets have changed and the US has not adapted over the last 20 years to that change. And so virtually every form of outsourcing is moving its way to India, the Philippines, China…manufacturing is continuing to increase…these “Bubbles” in gyrations in the markets locally here in Hong Kong and across Asia are really temporary. They’re going to have an upward trend while the US and the dollar’s going to have a downward trend.

Host: So Todd what would you advocate the government and the Fed do right now to give the economy a kick in the pants?

Todd G. Everts: Well first of all it’s got to change its immigration policies. It’s got to open up its doors. It still has its knee-jerk reactions to the 9/11 event. People don’t want to go to the US and bring in money from tourism. They’d rather go to some place where they don’t have to be hassled. The US has got a systematic problem of believing that this is the US and the world revolves around the US. It’s simply not that way. The US needs to provide economic incentives for people to go out and start businesses like what we saw in the 70s, in the 80s with firms like Intel and Microsoft. They just don’t have that. There’s no reward for the small business person to invest in themselves today in the US.

Host: But things like changing the immigration laws and giving incentives to people to start their own businesses, I mean, these are sort of longer-term things that will take quite a long time and what would you do right now if you were trying to avert a US economic recession at least mitigate the down side?

Todd G. Everts: I would increase the stimulus of tax cuts on small businesses so they can re-invest in themselves and compete in this global economy because if they can’t invest in themselves because they’re afraid of their tax liability they cant get a loan because banks are tightening credit, they’re just going to continue their course and they’re not going to be able to be competitive in a worldwide market which we live in today.

Host: You know we’ve got a lot of data coming out, but most importantly we’ve got the payrolls tonight. You know it’s interesting that the market at the moment seems to be very much focused on all the problems going on with the bond insurers and that managed to completely shrug off the negative economic data last night. I wonder what will happen tonight when we get payrolls. I think you’re expecting that the payrolls are likely to disappoint. How’s the market going to react?

Todd G. Everts: I think the market’s going to react negatively because there’s going to be one more additional nail on the coffin. When the sub-prime event happened in spring and summer, everyone said that we’re at the end and we’re still not at the end. We’re still going to find losses of substantial portions on US banks and international banks that have exposure. The profit makers, essentially hedge funds and private equity firms who have the ability to go in and buy, they don’t have to report on a quarterly basis in the same way that the US banks do and the US insurers do are the ones who are going to make a profit.

Host: Todd thank you so much for joining us today, always good to hear your thoughts...interesting conversation. Todd Everts, President and CEO at Wall Street Global.

Todd G. Everts: Great to see you.