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Better Markets CEO Dennis Kelleher, Capitalistpig Portfolio Manager Jonathan Hoenig and “The Crash Ahead” author Harry Dent on the impact of the f...
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To break it all downpours let's bring in today's money power panel on the fiscal clip -- what do they like what do they hate.
And worse I mean I don't know Jonathan Hoenig is portfolio manager capitalist pig dot com.
Dennis Kelleher CEO of the Wall Street watchdog group better markets in -- debt is founder and CEO.
Of each ass debt and author of the book the great crash ahead.
Carries that crashed upcoming or did this do anything to keep that broke had to hold -- off.
We know anything that that the doesn't cut government spending is better for the economy is just more stimulus but we've watched Japan now for two decades and they keep.
Growing with stimulus and all this stuff for 34 years then make.
Crash we are really aliens and anything I -- -- -- that first statement anything that doesn't cut spending is is good for the economy that it that implies that we still have to short term down the right OK thank you.
No short term it's stimulus we hate stimulus would he want austerity we wanna rebalance the economy market used to do that's the government will not let the markets rebalance.
So we're carrying way too much private debt and government debt in the future we're gonna be about I'd say 28 at thirty trillion our government debt -- and ten years an end and these cuts.
That even with the with the battle ahead are going to be nothing compared of that and the revenue raisers here were very slight German.
And that seems so clear why -- the market up 300 points.
Well not the stock market mission mention analyst and I think that's the that's the real story here summarizes -- the bond market.
Heard Moody's call it started selling off.
Late last night we -- interest rates start to rise but I'm happy -- to the stock market up today I think some of that was.
Somewhat of a relief rally just knowing that any resolution to this set terrible situation -- was passed but.
I think that's the real story looking -- Moody's as you said and nonpartisan they look at the numbers they're not politicos and they're saying look we didn't cut the spending we didn't even touch the entitlements and that's the US is getting more more closer -- another downgrade this bill fixes nothing it's a tax bill it does nothing to solve the long term financial crisis and -- in the next -- a couple months on the -- Yet Dennis when I look at the market numbers today say you know what the market rallies the Dow rallies on the first trading day of the year almost every year mean you look at the -- in 2012 it was one point 6% 20111%.
3.2 percent in 2009.
I mean seeing it 2.3 5% gain today trigger points we're happy to see it but that's fairly typical for the first trading day of the year.
If you know -- it's like a sugar high that is a little good news happen then you can overstate it is a lot to com.
You know as we really had to speed bump on the way to the real clip from the real -- gonna happen -- about two months when three things come together.
The debt ceiling has to be raised the government funding appropriation ends in about sixty days and the delay draconian spending cuts also.
I'm trigger in sixty days so lot of work has to get done in sixty days and they shouldn't be much of -- relief rally Iran relating to that based on what has happened up till now.
People need to get serious about both revenues and spending but they also have to be smartest Jonathan just alluded to.
Because in the short term what we need most of all is -- and we don't need to be doing anything in the short term.
That's gonna kill growth funny that this.
-- -- or -- -- -- necessary because react to what you just heard senator Brosseau say because he said they're gonna come out they're gonna really fight hard.
We're spending cuts on the back of the debt ceiling.
Do you buy that do you think it's true -- you think -- it that's the way to go.
I think they will fight hard but we served from beginning the Democrats and Obama had more the leverage coming out of elections here then Republicans came out of the 2010 election so.
It was almost inevitable that they were gonna have to cave.
-- some agreed to -- -- my.
What about his next fight over the debt silly do they finally have some leverage now they've given -- on the tax hikes the wealthier getting soaked.
And we're moving on now we have the debt -- do they have some leverage now.
Yeah -- they have some leverage but I don't think you're gonna see big enough -- I think.
-- the American people are gonna lose here the tax increases will be my animal now it's the Democrats.
-- purpose now to minimize the -- the ad spending and entitlement cuts.
So I think we get maybe a couple trillion out of what's gonna be another twelve to fifteen trillion out of the deficit next tenure has not going to make much -- been -- -- job.
Equity bank.
Yeah I mean any entitlements are the core of this problem political -- -- political them both sides of the Dow -- -- said it time and time again.
They hadn't been touched I doubt they'll be touched any serious way with just give YC -- -- your your continue his city's long term trends.
Greater inflation growing a weaker weaker dollar a -- through the marketplace what's gonna reverse that psychology that colossal -- and and in Washington.
I have no idea but until it does I think it's gonna be -- real headwind for this economy moving forward.
-- Dennis you know Moody's says lower future budget deficits are necessary the US negative outlook will be returned to stable but they do see in the coming months.
You know they think measures are likely coming are they being too optimistic they think maybe we're gonna pull it together and the next -- -- bonds and cuts in spending.
I think there's actually reason to be cautiously optimistic I think both the gravity of what's gonna happen over the next sixty days or so.
I'm combined where it's actually the good there's been some real work done in the last couple years on the first deal that they almost did was speaker Boehner at one point six billion dollars.
And the work they've done I think which are now gonna see is some real hard work and -- both revenue and spending.
But hopefully they'll do it in a phased in basis it doesn't hurt the economy in the short term.
But I think you're gonna see a good way and -- -- -- -- grand bargain but may be sufficient bargain to get some real down payments done.
And that sixty days or so which -- -- -- -- the ground work from Sweden.
They -- later than I I got to stop -- -- -- I want everyone to stay where they are don't move don't lose that -- -- -- lot more to talk about on the other.
