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00:00LET ME TALK WITH ALL THIS -- START WITH ALL THIS TALK ON BUYBACKS. WE ' RE SEEING MARCO RUBIO TALK ABOUT REFRAMING THE BY THAT. THAT COULD HAVE HELPED IN THE PAST. IS THIS A CONCERN RIGHT NOW? > > IT IS NOT A TERRIBLE IDEA FROM AN ACADEMIC PERSPECTIVE. DIVIDENDS AND BUYBACKS ARE ESSENTIALLY THE SAME THING TO A SHAREHOLDER. SO IT IS NOT A BAD IDEA TO HAVE THEM BE TREATED EQUALLY FROM A TAX PERSPECTIVE. THE REASON I WOULD SAY IT IS UNLIKELY IS THAT OVER THE LONG RUN, IT MAY MAKE SENSE AND IN THE SHORT RUN IT MAKES ZERO SENSE. WHAT I MEAN BY THAT IS, IN THE SHORT ONE, STOCKS ARE GOING TO SELLOFF FAIRLY MEANINGFULLY IF LEGISLATION WAS PASSED IN THAT DIRECTION BECAUSE OF THE VALUE OF ANY ASSET, PARTICULARLY THE STOCK, IS THE PRESENT VALUE OF ALL FUTURE CASH FLOWS. IF YOU SAY YOU ' RE GOING TO STRIP DOWN ALL FUTURE CASH FLOWS BY TAXING STOCK BY THAT, IT ' S GOING TO HAVE A MEANINGFUL IMPACT ON SHARE PRICES. FEW POLITICIANS ARE WILLING TO MAKE SHORT-TERM SACRIFICES FOR LONG-TERM GAINS. I THINK IT IS UNLIKELY, NOT A HORRIBLE IDEA, BUT I JUST THINK IT IS POLITICALLY NOT FEASIBLE IN MOST INSTANCES. SHERY: SO FAR WHAT HAS BOOSTED THE MARKET HAS BEEN THE DOVISH STANCE COMING OUT FROM THE FED. THIS CHART SHOWING FINANCIAL CONDITIONS AGAINST THE FED FUNDS RATE. IF WE ASSUME THAT TIGHTER CONDITIONS MAY HAVE SPARKED THE RECENT DOVISHNESS CON KNOW THAT WERE SEEING FINANCIAL CONDITIONS BOUNCE BACK DRAMATICALLY. > > IS A GREAT POINT. IN DECEMBER, FINANCIAL CONDITIONS TIGHTENED MEANINGFULLY. CREDIT SPREADS WIDENED. THE DOLLAR HAD BEEN STRONG THROUGHOUT MOST OF THE YEAR. A LOT OF THAT WAS DOING THE WORK THE FED USED TO DO. THEY RAISE RATES AND SAID THE BALANCE SHEET WAS AS EXCITING AS WATCHING PAINT DRY. ALL THAT SPOOKED THE MARKET AND WE ' VE SEEN THIS MIRROR IMAGE IN JANUARY AND FEBRUARY WHERE FINANCIAL CONDITIONS HAVE LOOSENED, THE FED HAS PIVOTED. IF YOU GO BACK TO 2016, THERE WAS A SIMILAR SCENARIO WHERE OIL PRICES FELL, THE STOCK MARKET FELL ABOUT 13%, AND THE FED PAUSED. THE ' S FOR ALL OF 2016 AND THE MARKET REBOUNDED, AND -- THEY PAUSED FOR ALL OF 2016 IN THE FINANCIAL MARKET REBOUNDED. IT COULD BE THE ENTIRE YEAR THAT THEY. -- THAT THEY PAUSED. THE FACT THAT THE 10 YEAR IS AT A POSITION WHERE IF THE FED HIKES, THEY WOULD INVERT THE YIELD CURVE. WE THINK IT IS UNLIKELY THEY WOULD DO SO UNTIL YOU START TO SEE THE CURVE STEEPEN A BIT. IT ' S UNLIKELY YOU WILL BE IN A POSITION IN THE NEXT COUPLE OF MONTHS WHERE THE FED WILL FEEL ANY PRESSURE TO HIKE. HAIDI: THE OTHER INTERESTING REACTION HAS BEEN IN THE U.S. DOLLAR. THIS CHART LOOKS AT THE DOLLAR AND HOW OVERBOUGHT CONDITIONS ARE AT THE MOMENT. IT RALLY EVERY DAY EXCEPT ONE CENTS THE FED MEETING. IS THAT COUNTERINTUITIVE? WHAT DOES IT REFLECT AT THE MOMENT? > > THE DOLLAR WEAKENED FROM WHEN POWELL SPOKE IN JANUARY. AFTER THE ANNOUNCEMENT, OTHER CENTRAL BANKS AROUND THE WORLD FOLLOWED SUIT. BANK OF ENGLAND STARTED TO PULL BACK, ECB, BRAZIL, RUSSIA, ALL BECOMING MORE DOVISH. IT ' S A RELATIVE A. TALKING -- A RELATIVE GAIN. IT IS ALL RELATIVE.

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Fed Will Not Invert Curve, Whittier Trust's Silsby Says

Caleb Silsby, chief portfolio manager at Whittier Trust, talks about Senator Marco Rubio's announcement of a bill to tax buybacks on equal footing with dividends, Federal Reserve policy and the implications for financial conditions, and the dollar. He speaks with Shery Ahn and Haidi Stroud-Watts on "Bloomberg Daybreak: Asia." (Source: Bloomberg)

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