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Gary Kaltbaum, “The Investor’s Edge” author, on companies moving up their dividend payments ahead of the fiscal cliff.
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Pat won't more companies are accelerating their dividend payments so we heard today from Campbell Soup and -- some of the latest getting -- -- -- -- Early of course ahead of the fiscal clip and Oracle taking a step further actually moving up three dividend payments before the end of the year.
So for more and all this joined by Gary -- -- president of cap on capital management and of course Fox News contributor.
-- -- here because look this is got to backfire at some point especially we're hearing some companies actually taking loans.
To make a dividend expect that be good at the end of the day.
Well look capital is gonna flow and move to -- street -- -- treated best and when it's treated best and right now is when.
I can tell you next year taxes are going up so they've taken advantage of -- -- with taxes this year somebody like Larry Ellison.
I think it's taken out out maybe a quarter billion dollars and he gets the pay less taxes on it it's actually a good decent moving just realized.
These companies with the Fed keeping rates down and up bond yields weighed down they cannot help -- -- -- very you low yields.
Almost the cost the money is zero so why they're okay with what they're doing and I'm seeing yields on ten year corporates it.
Wanted to -- 2% for some of these companies so their happiness -- Great and that's -- thing right we got the Fed keeping rates so low who's gonna -- their money up for ten years at 2% so.
I don't wanna buy that corporate debt banks -- alone it's in because they don't want to lock me in at that rate for thirty years on a mortgage what kind of on a stalemate -- aren't we.
Seattle I think of the big Bob bubbles in the bond market the Fed is forcing people and they're just buying nothing ton of the bond funds which are buying up.
You know the bonds and the distortions in the market and in bonds right now -- -- yields.
-- an absolute joke and I think they'll be a lots of pain once the up bubbles burst I just don't know when.
I think -- probably a couple years off but there's going to be a point in time with a market doesn't listen or care what Bernanke does anymore.
Right so that bubble bursts.
But prior to that it.
And they're basically pushing us on to the equity -- -- -- -- got nowhere to go out and they are you got earnings and revenues both kind of really flat.
Well -- quarter's earnings and revenue not very good Lotta company -- a -- IBM's sales down 5% Harley-Davidson's.
Sales down 11%.
Those dogs aren't gonna -- the long term that has to get better.
So the Fed can do whatever they want to do right now eventually people gonna focus on earnings and sales growth and if it's not they are.
Market's gonna pay a penalty for that and by the way who will look a little news is that on September 13 was the last announcement by the Fed.
About QE3 -- QE for whatever number there on and the market is no longer listening it's actually down pretty decently from there.
I've always been worried what happens if the market stops listening to the Fed.
I'm not so sure we're there yet but certainly the market hasn't been too good sense.
Right because then there's no place to go you know I've got to ask you about the -- fiscal -- You pretty much resuming again higher taxes next here aren't -- so let it is it just any deal at this point is better than no deal.
Any deal is a bad deal look at Tracy we've talked about this all the time on weekends off.
Nothing is going to change this is a big con game the big shell -- Taxes are gonna go up and I have news the spending is gonna go -- this talk of a trillion here -- -- trillion they are spending coming down.
That's -- above ten trillion already accounted for in the next decade so while we're gonna be in the twenties as far as deficits going forward.
And -- just I think they're poor -- markets on just hope that we don't wake up one day in the markets look at what's going on here and you know fire right back at them.
Yes and you know what you're not wrong that's -- -- so between now and then.
Bond bubble bursting we get lots and look forward to in the new year get -- comment -- -- capital -- think he's there expect.
My pleasure thank you.
Now trying to --
