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What we have two major threats to the economy there on horizon were we all know about the fiscal cliff tax increases for everybody deals not -- this week.
But there is also a potential port strike longshoreman threatening to walk off the job 151000.
On ports on the east and Gulf Coast.
This could disrupt billions of dollars and shipments joining us now is Ed -- house he had a hell of a way to begin a week with the threat of a strike now just to -- -- in context.
When when LA had a strike a dock workers strike about ten years ago it cost a billion dollars today this is gonna affect ports in new work.
Used in Miami this could be several billion targets.
Every day to work out of -- and -- And it I'll tell you we look at it it's really very similar -- some parallels to the fiscal cliff discussion because.
With the arguments about are these royalty payments.
That the dock workers get for bringing a merchandise on board and unloading the cargo.
And what that -- similarity is really that we're not they're not talking about more business to talk -- how -- we split up the same hi Cindy with the fiscal -- -- I -- about growing the economy we're talking about how do you split up the money the economy is already -- us from tax revenue.
And the same thing that's happening right now what the -- longshoreman strike which is probably gonna happen because they're they're saying there's absolutely no negotiation on this they absolutely wanna see more money coming to them the other side says -- in no way in the world so that's gonna take -- from me all the way down the Texas much bigger than that the -- strike that we had on the West Coast.
Ten years ago to president's state the president usually sides with the unions we all know that but in this case strike that really could have devastating.
Are consequences on the economy particularly in the in the middle of this fiscal cliff negotiation do you think the president might be more even handed here in dealing with the unions.
-- I really don't know I mean you never know what this president's gonna say and and and what policies are gonna come out but the longshoreman is a very influential union and to see him go on the other side of it would be very surprising he'll probably just take a step back and not really intervene too much.
So so you know -- a look at CNN in on a waiting CTO quite frankly.
But if this does happen the ripple effect is going to be tremendous because you're gonna see prices go up there as well and that's gonna be passed on to the consumer.
So either way we're talking about more money out of the pocket of individuals regardless.
You know how this thing you know comes to be this could also have effects serious effects on the commodities markets particularly oil one of the ports affected are -- -- a lot of oil goes in and out of airport.
Yeah I mean did when will we hear these news reports instead of just looking -- -- -- with most people do in the just you know going onto you know the next story understand that these stories are direct you know.
Impact on your wallet so if these if it's a longshoreman win you're gonna see prices rise across board it's all inflationary.
And as a result of that -- passed on to use the consumer so it doesn't matter how these things get resolved it is a problem in the last time we really -- big strike was in the late seventies during the stagflation period which is very similar to what we have right now possible longshoreman on the East Coast last time they struck was in the late 1970s very similar economic conditions what we have right now it's all about dollars and cents right now OK well right now the markets are down the futures are trading -- -- a couple of moments when the markets open exactly how they.
They shake out but that the real concern right now I think one of the reasons the market is down.
In futures trading is concerns about the fiscal cliff what happens after the first of January to the markets if we go over the fiscal -- Well you know it's you you're gonna see a sell off because it's gonna be I hit on earnings always have to look at these new stories and see is that affect earnings.
Forecasted earnings -- interest rates.
And this does all of that so this'll be a negative on the stock market -- forecasts -- anywhere from -- ten to 15% drop in the stock market based on earnings expectations and it hit -- earnings this will be devastating to the economy to the stock market and it needs to be you know fix it doesn't look like it's gonna -- -- it looks like we're just gonna get a little bit of you know an extension of those -- you know the tax of the bush tax credits -- of the bush tax cuts.
We're gonna see unemployment benefits you know increase you know extended for about two million people.
And as a result we're gonna see a lot of discussion -- we're gonna see very little result except higher taxes that's for sure.
Add one thing that has surprised me we know that taxes will remain the same till the end of the year.
We assume that taxes are gonna go up after the first of the year so why are people cashing out right now if they have gains.
Cash out right now collector gains at the lower tax rates and buy back again in January depending on what happens with the fiscal cliff.
Yeah and I actually have a lot of clients -- we are literally selling their portfolio of capturing their cost base is now in reestablishing -- new cost basis could we know for a fact.
We're gonna see -- three point 8% increase next year.
I just from the obamacare tax and then some other taxes so we are seeing people do that you're not necessarily seen in the market because about I think it's something -- close to very very small percentage of the individuals actually affect the stock market you are seeing that with -- individuals -- does not seeing reflected in the market as much because big institutions really controlled stock market how many of your clients in a percentage wise how many -- your clients are doing that cashing out this year.
-- to lock in their gains at the lower rates.
Yeah I would say about half of them on getting called -- time.
How about yet -- I will tell -- everybody is concerned about this in their -- thing what do we do as a result of this and I'm giving him the best advice I can and that is we've got some nice gains if we're thinking about selling over the next two or three years any of these positions company if we have enough money to pay those taxes now we go ahead and do it got -- Ed you -- great to -- he had thank you very much good stuff YouTube when we.
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