once youve been in this business for decades and youve covered fed meetings in and out run me through what the initial thinking is this morning while the initial thinking is that the 25 basis point increase was completely unnecessary thats our view actually i mean europe has been tightening for a year 400 basis points into an inverted yield curve into a situation where real money supply is declining and now we have a banking crisis and a increase in interest rates its really hard to understand at the same time inflation seems to be coming down because whats going to happen now with the banks is theyre gonna land a lot less theyre going to see a credit contraction and that is deflationary not inflationary and inflation will take care of itself over the coming months in other words the market is doing the feds job when it comes to inflation so this this rate hike in our view was was misplaced not a single participant projected that there would be lower rates by the end of the year and that tells the story that the hurdle for easing is actually incrementally higher right well yes but i think i think whats going to happen is there will be a fed pivot at some point i dont know when it will be but it will be based on an impending recession were going to have to be up to governing an earnings recession already in the stock market and given the lag effect that youll have from this tightening cycle if you will thats yet to come this is this has not impacted yes its just the beginning so when you think that silicon valley bank and all these banks that folded over the last week is an isolated incident i would remind you that in march 2008 bear stearns failed and was taken over by jp morgan we heard the same stories that this is isolated its contained and so on so im not convinced about that and i think the fed will have no choice but to loosen monetary policy later in this year man you see the full impact of this previous tightening cycle want to get back to something i talked about at the beginning of the show and that is that you had the fed chair the treasury secretary speaking at the same time on a similar topic powell saying that basically all deposits are safe yellen saying hold my beer are we reading too much into this or is it alarming that they werent more coordinated im not sure what to read into it i think its its simply impossible to guarantee all deposits i mean just like look at the numbers were talking about trillions of dollars potentially but its communication wise its not very good its actually pretty much it creates more uncertainty than it should so i think next time maybe when they speak they should maybe a little bit more coordinated so that does not necessarily instill confidence in a situation like now where confidence into the banking system is being eroded by the way this is not 2008 let me be clear the banks a much better shape than they were a day and especially the big banks but if you have a run on deposits that you had in some banks you can have the healthiest banks bank in the world you cannot stop that so even if your balance sheet is healthy confidence is gone that thats thats the risk here its a question of trust and trust is built then you communicate clearly and this happened this did not happen this case if trust is so quintessential to your approach what do you trust in terms of investment strategy which assets what kind of exposure within portfolios okay i mean if our thesis is correct and of course we always can be wrong but if we dont get the recession and if inflation comes down as vix back then you want to be in long dated treasury bonds i mean you can get in treasuries already because at the short end you get over 4 percent which is a huge competition to equities but i think we can increase the duration here with a view to the fact that inflation is coming down inflation expectations so come down so long that its 10 year treasury bonds for instance are a pretty good place to be than you have in the equity market you have certain sectors that are doing better than others obviously we think that aerospace and defense you know if you look at the geopolitical uncertainty defense spending will continue to go up thats a certain thats a sector we want to be in we want to be in gold gold mining because if you are banking problems there will be upward pressure on gold gold is a bit overboard right now ready for a pullback but i think gold has entered a new bull market and i think other than that when it comes to equities you want to be in defensive industries and companies have strong balance sheet if they will cyclicality one of the stories trending with our global audience is a memo seen by bloomberg news from the julius baer ceo and hes talking about a balance sheet that is rock solid highly liquid hunts i want to lean on your years as of course swiss citizen and being on the ground at the heart of pun on the floor how much damage has been done to the swiss banking industry thats a very good question i think too few people are talking about it im not sure whether this was the best solution to that youll be or force ubs to take over credit suisse there might have been other possibilities like central bank taking over credit suisse but what can be said is that the fact the way it was done by us government failing regulators failing central banks failed the whole political thing has failed because the law was just simply broken i mean if this on shareholders stays on bondholders even if it goes the way this was executed it was absolutely horrific and this is a huge dent to the confidence into the swiss financial markets im not saying it cannot be repaired but this is a crisis of confidence and you can i can assure you there will be lawsuits and the way this is going forward you dont know yet hopefully theyre gonna spin off the space business of credit space maybe least its apparently and so on but you have to watch this very carefully because what you dont want in switzerland is to create a bigger bank with that francine lacqua problem that you have to have a bigger bailout even