HardAssetsInvestor

Mike Norman, Hard Assets Investor (Norman): Hello everybody, and welcome to HardAssetsInvestor.com. I’m Mike Norman, your host. Today my guest is Stephanie Link, chief investment officer at The Street. Stephanie, hello; and welcome back.

Stephanie Link, CIO, The Street (Link): Thank you for having me.

Norman: I should also say you are the co-portfolio manager of Jim Cramer’s charitable trust. So I want to start out with a sort of macro picture. We’ve had a great rally in stocks. And since the recent announcement of QE3 by the Fed, we’ve seen risk assets take off again. But then there’s this lingering concern out there about the fiscal cliff. As we come towards the end of the year, that certainly hasn’t been resolved. And we’re starting to see the angst in Europe percolate again. Where do you think we are now in terms of this cycle?

Link: We’ve had an enormous move, of 15 percent in the last 15 weeks. So it’s easy to take profits. And with Spain and Europe back on the front page for now, it’s even easier to take money off the table. But I would say that you can’t get too bearish, because here in the U.S., the economy is actually getting a little bit better.

Norman: It is, right.

Link: Yes, about 2 percent GDP. It’s not where we need to be. Jobs are nowhere near where we need to be. But housing is definitely improving.

Norman: A big area, the housing.

Link: And also consumer confidence, retail sales, auto sales have stayed OK. The problem here in the U.S. is the manufacturing side of things. And I think that’s the reason the Fed is actually going after housing, to try and offset and lift the housing market because you do have this manufacturing overhead. And that’s tied to the global economies.

Now the global economies, I don’t expect anything in Europe; nothing. I do expect …

Norman: Well, austerity …

Link: That’s right. But I do expect that Spain will ask for money, obviously, and for support. But I don’t expect to see growth in that region for some time; in fact, a recession at least to the end of 2013 into 2014.

But China is kind of interesting. They’ve done an enormous amount under the radar. They haven’t announced a huge stimulus program, but argeted stimulus programs.

Norman: How so? It’s mostly been on the monetary side, hasn’t it?

Link: Well, it has been. We’ve had two interest rate cuts, three triple R cuts, but we’ve also had some infrastructure spending stimulus as well. They’re small, but they’ve done a few of them. And I expect they’re going to do more. And I think that you’ll see 6.5-7 percent growth this year in China. But I do think you’ll see an acceleration into next year. And we’re seeing it already, some of the effects from Brazil, and some of their cuts and their monetary policy from the last few years.

So I think it’s hard to get really negative with the global monetary easing out there. And so that’s why actually on these pullbacks …

Norman: … you want to be a buyer.

Link: Buyer, yes.