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Joining me now -- and Saunders senior vice president chief investment strategist Charles Schwab.
I have to say let them personal it's great to see you and I -- -- -- and -- -- -- it's -- market firm up a bit here.
Our is that is it realism blasting.
Well I think the markets move is always real level people say the markets got it wrong the market is the market I think it reflects a number of different things are probably reflects maybe the earnings bar having been -- a little bit too low as it was easier hurdle.
Sentiment has been incredibly washed out tremendous amount of pessimism investors I think of -- are ready.
So you don't have a lot of fuel for additional declines and I think when you get big moves you then get some more on the short side saying what if this continues so.
I think it's kind of classic you get washed out technically it from a sentiment perspective and the market gets a bit under it.
And at the same time I I miss Europe.
We're not hearing is much more nowadays about Europe and I and I worry about those people because they were dominating our news -- they were dominating the markets and suddenly there.
All but irrelevant.
It is a little bit of bureau exhaustion I think a more habitable lull in terms or post the EU summit where -- the decision that that Germany will have to make of September 12 so.
Attention has gone back to the things that we are all dealing with here domestically now not least being of course the fiscal cliff would you talked a lot about what I think -- the number one issue.
That is certainly -- -- business and consumer psychology right now.
My god if if you -- the fiscal -- demo and Vietnam after senator Murray took ownership.
But through her threats in the democratic.
Party's threats to -- the country into recession that the Republicans don't raise taxes on the wealthy.
I mean this this is such a a big deal that I can't of mansion the -- when you look at everything business was facing in terms of uncertainty.
Or whether it was -- programs -- on credit markets -- capital markets economic growth.
-- slowdown and emerging markets and we'll include China in that.
And now look at this 600 billion dollar I suppose that awaits us.
And depending upon the Democrats to come to their senses I mean that's gotta be scary is that -- well.
Then we -- know as we know it's coming it's the most goal -- obvious crisis that faces that's where we can actually do the math.
To an incredible precision and figure out what the hit is going to be.
The problem is we are dealing with Washington and an election year and and I have very few hopes.
There were gonna get anything pre election I have some hope that we'll get something in the lame duck session because of the bipartisan realization of just how big this says it's problem that the the frustration is that we can't get something done before that you know.
And I wish I shared your your optimism about a lame duck session.
A because all I hear is blame when we talk about lame duck sessions these are people who in the course of a regular -- this year.
You comport themselves and anyway.
That seems vaguely rational or if -- truly in the national interest.
This is an astonishing period and to think that they would compress all of that.
High level intellect and energy into the good of the nation in a short time like -- duck session.
I find it frightening to think that they're actually saying things about reforming the tax code and -- -- As it could have -- a single profound thought about what should be you that policy.
Look -- Two things one reforming the tax code is an incredibly arduous process is absolutely and something very very necessary.
Cigarette and later I was on the 2005 tax reform commission.
I was eleven months long I know how hard it is to come up with bipartisan set of agreements which we did and it makes me also wonder why we are not.
Focus more on the Simpson Bowles recommendations so we have this commission formed I thought they did what is very rare for a commission to be able to do which -- Very very bold.
That seemingly have bipartisan support but even not -- not being seen as some sort of near term framework and it's amazing.
Simpson Bowles I'm not as much an enthusiast this many.
In part because I don't believe they the fiscal policy that they -- -- is either.
Sufficient in terms of constraining spending.
And government and perhaps a little too enthusiastic that they seemed a little too enthusiastic about taxes.
But we could talk about that another -- -- talk about these markets.
We worked pretty serious -- through the remainder of this summer and this year.
I you know I think -- the kind of volatility we've seen recently which is nowhere near what we were experiencing last fall but certainly.
Up off the very low levels of volatility early this year are probably with us through the election.
Because you're not only dealing with the fiscal -- broadly it will probably that you're dealing with the uncertainty as components of that not least being what's happening to.
Tax rates on capital tax rates on dividends and I think that in that -- influences investor behavior we've got -- greater slowdown in China which is calling.
Our recovery is anemic as it is into question so.
You know I'm a long term optimist but it's it's it's hard for me to be really optimistic in the short term other than what we -- he talked about which is.
When you get sentiment to such a washed out level and technicals to -- -- level he get a bid under the market.
But the same time that can bring sentiment back to too much optimism and that's what I'd be watching in the short term to try to gauge may -- -- trading -- environment that we're going to be -- We're gonna take from all that you said the most positive elements and -- that we will close off.
Well that's plotters source good -- about --