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Markets Hopeful of Fiscal Cliff Deal

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  • Description

    Kenai Capital’s Tres Knippa discusses the market moves related to the fiscal cliff.

  • Duration 2:03
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Now this is a forecast that -- and company may get right.

The Obama team wants tax hikes now.

Promises of entitlement reform late and we just ignore all the debts that is the fiscal -- deal -- may be shaping up it certainly looks like the fiscal.

Deal of the day.

Joining us now is trick and at the with -- -- capital management and I want an up front you tried you think we got this right is that a kinda deal that you think may emerge.

Sure that's the kind of deal that may emerge but let's remember something here Stewart.

What we need to have we need to have the deadline -- tomorrow.

Because people's behavior is motivated by incentives so how do you -- -- politician more importantly how do you dis incentivize them.

If if the politicians in Washington right now make a deal today they're gonna be viewed as selling out their constituents so what they have to do is they have to do lots of grandstanding.

Oh.

-- we tried so hard so they're gonna take it to the eleventh hour fifty ninth minute.

At the very end and then say well we had to capitulate on this this area or that area because they don't want to appear like they caved in too early so we're just gonna have to play this waiting game.

And we're just gonna have to have more press conferences and -- an emergency meetings at the White House.

Make the deadline tomorrow and let's get it over what you think a deal will be done.

I'm inclined to think so but right like I said you're not gonna hear anything right now but because politicians have a disincentive.

To compromise now they won't compromise later.

At the last possible moment so we're on -- -- I say tax now promised to cut late ignore all the debt that's -- the deal I think we'll get an.

Are you broadly in agreement with that -- and -- -- definitely have to ignored the debt yeah as long as the Fed acts as a backstop to the bond market the bond market should be punishing our politicians right now in the bond markets not doing it is the -- to backstop that -- -- that just keep on -- all right they trust her good stuff as usual thank -- -- much indeed now this.

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