Oct 4, 2017|
Transcript - Not for consumer use. Robot overlords only. Will not be accurate.
I don't know if tax reform is going to pass through to talk about that topic with James mackintosh from the Wall Street Journal. Good morning James. I'm not James what does it too big unknowns facing investors today. Well this is this is how markets work in general but it is always to date on the irons and they are you know what can happen in the future campaigns the future. And when he does happen what authorities you don't really know official the market will respond. Because sometimes you can be pretty convinced you know how the market to respond to. A United States and come at a better than expected a little bit into it and. Here's I was talking do some investors yesterday and they were asking me the question as to whether or not tax cuts. Were already priced into the market today. I think they are very least partially. Priced in what are your thoughts. Yeah I think I think they all partially priced in but I think probably less than most people saying it is time to. To I think they be based Costa beat price gain from a little bit wells had about ten days. Standing solidly. But I think that them also believe in the market after the full collapse warned about pricing in the tax cuts it was up lamps. Taking a wait a risk of federal default because the debt ceiling was raised to petrol crisis to the destiny was raised to back committee's September. And then it was up laps. Be suitable positive news general positive economic data that we've been getting. And also by the idea it's the we lapping. A positive reaction to the Fed rate hike Roland negative reaction. Bank stocks have rallied tremendously since the election is it reasonable to expect that interest rates are gonna rise. If you if you mean do you mean when you play interest rates you mean that's total contract. Well federal funds rate but also mortgage rates in the the auto loan rates credit card rates banks savings rates CD rates just interest rates in general from a consumer standpoint and also. He debtor's standpoint. Simon I think is that you should expect to bring mortgage rates of course applied to what happens at the very long understandable on the market that he would. All. Priority to tournament what happened symbol betray. Additional term interest rates I think he should be expecting to rise. It has been that and put it that it's on. I didn't know what. To expect. All right we're gonna let you go James and their connection died on us there but thank you very much three time you know the one thing that I would be worried about as an investor. Would be these tax cuts. Utility the the trump the administration is suffering from very poor favorability ratings leader and regardless of which poll you look at truck with a you're talking about. You know Rasmussen and Gallup the favorability ratings and his ability to championed tax cuts through congress. As an investor you have to be looking at that as a statistics I know I'm looking I look at the polls. At least once a week and you say to yourself OK how does a president with a 39%. 30% favorability rating. Get how how does he pushes congress to it to do what the things he wants them. Well I think the real question also has to look at congressional leadership because Paul Ryan and Mitch McConnell have not shown the ability. To get the or any kind of big legislation and the notes Paul Ryan in the house has not been able to. Put together a strong coalition of Republicans to get anything done there. In the senate obviously you have very different make up in the house but they have not been able to get anything through you look at what's been done and we've got to continuing resolutions to keep the government funded. And one debt ceiling resolution. It's all been because trump went over to Democrats and said hey look here's what we're gonna do but none of it was done by Republican leadership in the house of the senate and so I think. You know the smartest personally would back five years from now out of all this. But the John Boehner said look I'm not going to be able to control this caucus on get out of town when I can and handed Paul Ryan the the bag effectively and now like. I just I don't know how with all the different factions that you have with in the Republican Party right now is Hoff. Well that's what I'm Gary as a consensus there and that's yet get optimistic when I talked to Larry Kudlow and then I think about it and I look at the research and see. Are they gonna get this done what it is they want to be the they want to eliminate. The backing office a little bit but they're talking about eliminating. The the ability deduct your sales tax your property tax your mortgage never gonna happen. Well I understand it then we'll never it's a bargaining well okay if that's the case chuck then you're not getting personal tax reform boy gonna get as corporate. And here's where I've kind of backed into is of looked over what they outlined last week yeah. OKC got a couple things that are bargaining chips the estate tax I think is one I think the deduction of state income and property tax I think is another so you know you back all those out and say what we have to do. Eventually get to formally there's nothing they can do in this framework and like what they I don't think they put anything together in this framework. That they can get through congress and that's. That is my fear on this is that you know acting C anything at least on the personal side on the corporate side. I think he can get things done because it's more opaque and people don't understand. The people are gonna reason that I'm gonna. You know way I'm gonna resent the fact that IBM gets a tax cut. Barry Armstrong doesn't well here's the question is you gonna resented that fact what if GE elves and start paying more taxes or higher I want attacks. I I paid too damn much tax on taxed enough already. I know. I want to act I know. It's an audience like feels that way every if you get a pole right. If you walked around the office straight yes twenty people you want a tax cut how I wanted to know what I was gonna say no. But the question is if you say OK in order pay for the tax cut you're gonna have to get rid of deductions XY and Z and almost I don't want that almost an out of those same twenty people it's. 11 that I don't want that either I you know what I want is less federal government wasteful spending. How about we cut centers like he's a million ways to cut expenses right. Let's cut some expenses and reduce taxes that I we don't need to pace senators would pave underneath and years and and and it's in that ballpark like once of the five when he I mean it's ridiculous what we spend on politicians be a terrible people drop in the pocket. I don't believe that there's other ways that you can cut back on government spent yeah the course of security and Medicare and good care good and military and military. Cut at all at all and might earn taxes give me more my money well spent that's what is traditionally happened. If you could if if you want more money the places to cut our social security and Medicare and no one will touch them and military the military I don't think there's a ton of fat trim that you run a pretty slim down unit there right now and.