Brexit Exclusive With Nick Sargen & Bill Wilby On Consuelo Mack Wealthtrack

Consuelo Mack WealthTrack “Investing In Turbulence, premiering nationwide beginning tomorrow Friday, July 15 at 7:30 p.m. ET on public television (check local listings**) and on wealthtrack.com, features an exclusive interview with two veteran investors who say turbulent and volatile markets are here to stay and require some unusual approaches. Fort Washington Investment Advisors’ Chief Economist and Senior Investment Advisor Nick Sargen and private investor Bill Wilby share their strategies. Former mutual fund star Wilby retired as portfolio manager for Oppenheimer Global Fund, which was No. 1 in its category for the 12 years he ran it.

Nick Sargen and Bill Wilby tell WealthTrack Anchor and Executive Producer Consuelo Mack why Brexit could represent a political turning point in Europe with political and economic ramifications far beyond its shores.Wilby thinks Brexit “reinforces the kind of budding trend away from globalization and towards nationalism which is not a positive for the global economy long term.” Sargen fears “that the politics are reminiscent of what was taking place in the 1930s.”

See transcript excerpt below for an interview preview.  


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Nick Sargen & Bill Wilby
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Transcript Excerpt from Consuelo Mack WealthTrack “Investing In Turbulence, premiering nationwide beginning tomorrow Friday, July 15 at 7:30 p.m. ET on public television (check local listings**) and on wealthtrack.com:

Bill Wilby: “Well I think, Consuelo, it kind of reinforces the kind of budding trend away from globalization and towards nationalism which is not a positive for the global economy long term.”

Consuelo Mack: “Explain why it isn’t because what’s wrong with nationalism? What’s wrong with looking out for your own interests?”

Bill Wilby: “Obviously globalization produces winners and losers, and the losers get injured by it, and everyone feels their pain, but the question for economics is, where is the maximum good and where do you end up with the largest share of the pie? I think globalization has resulted in the lifting of six billion people out of poverty around the world. Now people in the developed world like those in America may not have seen the spoils of that process nearly like those in some of the emerging markets or other countries.”

Consuelo Mack: “Asia for instance.”

Bill Wilby: “Asia for instance, but the overall global pie has grown… I think the primary thing with Brexit is it’s a political development. The economic part of Brexit is too early to tell, and it depends on how many things play their way out.”

Consuelo Mack: “Nick, you were one of the few people that I know of who actually connected the dots pre-Brexit that this was going to be a significant, market-moving event. What is your view now?”

Nick Sargen: “Well, first my view was — and it’s somewhat similar to Bill’s — is that I viewed this primarily as a political event and not so much an economic event, meaning most Brits if they realized the consequences for their economy and voted self-interest would vote to stay.”

Consuelo Mack: “To remain.”

Nick Sargen: “But they said, ‘We’re mad as hell with bureaucrats. We want our sovereignty back,’ and that’s what just made it close, and I didn’t understand why the smart money thought everybody was going to vote with the economics. So in addition to what Bill has said — he gave it’s anti-globalization — but why is it important to Europe?  Here, Consuelo, the whole post-war order in Europe was we are tired of fighting each others world wars, so basically economic union was viewed as a way to end warfare in Europe as well as economic integration. We’re going to be stronger if we unite just like the United States did when we were colonies. So that was the post-war trend, and every move has been toward integration. So to me the significance is this is the first move in the opposite direction.  If I was confident it stopped at Britain’s borders, maybe the consequences would be limited, but there’s a whole series of events unfolding including a French election next year, and the real questions…”

Consuelo Mack: “There are nationalists who could become even more popular than they are now.”

Nick Sargen: “That’s it. So right now if it was contained at the UK’s borders, maybe the damage will be contained, but I think politics is going to rule the roost over the coming 12 months.”

Consuelo Mack: “Nick, I know you told me on the phone a couple of days ago that this was the first time that you can remember in your long career on Wall Street where politics mattered as much as they do to the markets and to the economy. Just explain what’s changed.”

Nick Sargen: “Well first, often people will talk about elections, and I say, ‘Listen. It really depends on whether policies get changed.’ So what were the transformational elections positive? I’d say Thatcher, Ronald Reagan. They made a difference. A lot of other times it doesn’t matter. What I think is so concerning to me, and it comes back to Bill’s theme of globalization giving way to nationalism, when did we last see this? Folks, study the 1930s where people were mad because of the Great Depression, and we went nationalistic and, by the way, tariff barriers went up around the world, and that’s what took a recession into a Great Depression. So my fear is not that we repeat history, but my fear is that the politics are reminiscent of what was taking place in the ’30s.”