Transcripts

"Two Ways to Play"-Kevin Depew of Minyanville

SUSIE GHARIB: From signs of stabilization to green shoots, there's lots of buzz about a recovery in the making. Tonight's "Two Ways to Play" takes on economic enthusiasm. Here's Kevin Depew of Minyanville and Minyanville's Kevin Depew.

KEVIN DEPEW, EXECUTIVE EDITOR, MINYANVILLE.COM: Hey, sorry to interrupt, I know you're hunkered down over there with extreme pessimism, but while you're focused on the bad, I'm seeing signs of a new credit cycle blooming. You want proof? The Federal Reserve's April survey of loan officers shows fewer banks tightening lending standards. In fact, almost anywhere you look, agency securities, mortgage-backed securities, commercial paper -- all these credit categories are showing signs of improvement. Look, it's fashionable to be a prophet of doom, I understand that, but the reality is that the credit crisis is over and the stock market has turned the corner. It's true. The Fed has been able to shift psychology and convince people that things are stabilizing, but they've done so at a tremendous cost. When you hear people say credit is improving, it can clearly be shown that the only areas of improvement are where the Fed has stepped in and become the market. The Fed's balance sheet is not only massive, it's a mess with credit risk. It's possible the Fed continues to support credit indefinitely, but this will result in destroying the currency. Then, sure, your stocks will go up, but they'll be worth nothing in dollars. So congratulations.