Fox Business
Expand
Browse All Video
Watch Live

You're watching...

Do Higher Taxes Spell Disaster for U.S. Economy?

Details

  • Description

    Cumberland Advisors CIO David Kotok on the impact of higher taxes.

  • Duration 3:19
  • Date

Clips

Also in this playlist...

Latest Video

Auto-advance: ON

Auto-advance
View All

Transcript

This transcript is automatically generated

Alert for you on the fiscal cliff and the markets if it means securing -- tax hikes and the rest of senator Patty Murray says go -- that fiscal cliff if you have to.

The Democrat from Washington stated position become the next chair of the Senate Budget Committee and with that a quote from her over the weekend on.

ABC news saying that we have to make sure that the wealthiest Americans pay there fair share if the Republicans will not agree with that.

We will reach a point at the end of this year where all the tax cuts expire and will start over.

Next year physical -- here -- of Cumberland advisors specs for a tough environment to invest.

Oh gosh we don't know what palace plays out the charade the part B.

Dysfunctional Washington continues.

There's a good reason to invest and and we don't talk about -- were busy on the fiscal cliff.

Monetary policies predictable now for years.

Prior Obama election has given us an interest rate outlook on which we could depend.

Four years.

That's the driver for investing that's very interesting did you -- the -- Bernanke and company stay in place and a similar.

A strategy even when Bernanke leaves if -- leads will be put in place so you how do you balance that then we're talking about to go with all the odds of whether Obama would be reelected and how they -- in place.

You know before the election and people would -- whatever.

This is much more difficult because it's basically gets are they are they gonna come together before the end of the year -- not balancing with what you know on the monetary policy of the monetary thing -- clear -- -- Bernanke -- and is replaced the policies Bernanke's policy.

For 345 more years right but the fiscal thing is okay difficult so you take the fiscal thing you say what's the worst case we have a 6800.

Billion dollar deficit we raise taxes slow economic growth.

And put us back in recession and other well -- see that's a debate cut that's -- -- I don't think it'll be as bad as others like to hit wring their hands are certainly slow the economy okay.

What does that mean the interest rate policy remains lower longer.

We may go the whole decade within zero short term interest -- And a long term interest -- use a ten year treasury at one and a half percent to the stock market goes up no matter what exactly.

Assets rise when real interest rates inflation adjusted interest rates.

Are -- zero or negative.

That's where they are and that's where they're gonna be for awhile com we always have to separate and support to do -- sometimes the economic outlook from.

Financial market outlook so you're saying.

With some certainty it sounds like that the stock market remains a pretty good that the whole thing -- you still have to be very very well I think you have to choose we use exchange traded funds we diversify around the market we do it in the rest of the world to.

And we're also very heavily in bonds lengthening duration bind tax free bonds at 3%.

That's a yield tax free above the treasury yield.

This is going to be this some day.

In my lifetime my hope -- when it re purpose it must be worried about something you know that this all comes crashing down at some point this day where.

This day of reckoning I'm worried it was Albert -- I'm worried about the -- we stopped worrying.

That's and I loved the worry if things are going to be OK I want matter of fact I think a lot better data -- that has we -- watching him climb the proverbial war wall of worry but after the -- the studio thanks good to see it but I don't see it impacts of our.

Load More