One of the best interviews of Art Cashin I have heard.

King World News (KWN) recently interviewed Art Cashin.  KWN gives his bio if you don't already know who he is.  In any case I think it is worth everyone listening to.  Here are my notes from that interview:

• Press is talking about a miracle run in useless stocks like Facebook.
• Side note: as a result of hearing this, I checked the FB chart.  I'll do a post on FB in the next couple weeks as soon as it reaches a critical point.  In short, it is much closer to being a sell than a buy.

• "There is no alternative to the stock market" given the underfunding of pension programs.
• Believes that Yellen will be tested in her 1st year "by some market event".
• Mortgage rates are up, mortgage applications are back down to the level of the Lehman crash.
• Fed may have to reverse tapering before it even gets started.
• Doing that would trash the confidence in the fed. 
• "If markets lose faith in the fed then many strange things would happen" (con game)
• Europe has been talking calm into the euro markets but the sovereign debt issues remains even though it has been papered over.  Europe may become an area of concern again.
• Art clearly thinks China is a leveraged bubble.  They have a shadow banking system that they are trying to rein in.  The fed's tapering does affect liquidity in China.  Turkish markets is being pounded by the fed's promise to taper.
• Watch Chinese food prices.  This is the Achilles heel of Chinese monetary policy.  If they get food price inflation then it can be destabilizing.
• China has stepped up to become a pretty big buyer of gold.  "People should be concerned" about China buying so much western gold at these low prices.  Europe has had a history of invasions where an invader changes the currency overnight so they value gold as well.
• Art warns about complacency by Americans in geopolitics.  "That's when it comes back to bite you".  He also warns that velocity of money might take off which would require even faster tapering than the fed hoped for in order to curb interest rates.  Note: I recently warned that the VOM chart looked to be putting in a 5th wave.  I'm sure Art looks at charts every single day of his life.  If you heard the interview, you will note how sharp his mind is at the age of 72.  Analyzing charts is like doing crosswords or Sudoku.  It's like push ups for your brain.