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Growing Signs of Optimism for U.S. Economy?

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    UBS Chief Economist Maury Harris on the state of the economy in U.S. and Europe.

  • Duration 4:43
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Turning to the economy in the markets my next -- is optimistic that our economy can cope with.

Well even the folks.

That we said to Washington DC joining me now is the chief US economist for UBS investment research -- -- -- Glad to be -- happy new year to you and with that.

With that and depending of optimism here.

You don't have to scratch your head when you think we haven't had a budget is -- for over thirteen hundred days out of the senate.

But they're still trying to negotiate -- resolution of sequestered we're not quite sure what they did of that fiscal quarter.

Help -- -- here.

Well first evolve fortunately the players in the US economy the businesses that consumers have their act together a lot more than the politicians in Washington.

And I think that people you know look at what's happening they don't like it but they shrug that off and go ahead with business.

This seems to be what happened in the fourth quarter.

In the fourth quarter we're seeing a continuation of what is -- And apparently no one can call -- robust but -- -- a surprisingly.

Positive economy.

-- people kept saying during the campaign you better off than you were four years ago.

Which is one of the dumbest questions I've ever heard asked by campaign when the answer was categorically and clearly yeah we're a lot better off we're word 2008.

We're actually a lot -- -- we were in 2011 right.

That's right because we finally started to see -- drop in the unemployment rate that was significant last year.

We got a long way to go let's face it there's still a lot of people -- work but at least -- -- that that's heading in the right direction now.

And and despite than us and Washington businesses will look ahead.

And still wanna get ahead and that that's the good news that they're ignoring that some of this crazy stuff that happens.

And and amongst the best of the news -- what's happening in housing.

Give us your outlook for housing picture.

You know have great -- housing -- produced two means.

Last year in the complex computer -- -- down about a half means we think you're gonna head up over a million units back next year.

Possibly better than that.

And and your sense of the job.

Our outlook because we -- where her body in Washington are not there the president says.

He's not gonna negotiate.

Debt ceiling and there Republican leaders in the house the speaker Boehner saying I'm not really gonna talk to the White House.

The little like the way it's worked out of the sport apparently.

What is going to transpire and how important are those discussions.

And what would happen if we actually did see threatened.

Shut -- support -- Well if you're gonna have the threatened shut -- -- the government we're hits -- is probably in the defense area.

And ability bracing for that.

But I tell you what I think is more important -- in Washington is what's going on with monetary policy.

And when you can have all this clowning around on fiscal policy that -- that he keeps printing money.

Now that may be a big problem way down the road but for the time being the banks are flush with deposits -- -- with reserved.

The lending more money you -- these very good November consumer credit numbers today.

And people would go -- about their business of lending and borrowing and moving ahead even though the politicians are.

We give us your outlook.

On a couple things one is I'd like -- -- what you think Europe.

And how strong it will be this year.

And then if you will translate that.

Everything we've talked about to an outlook on both GDP.

And interest rates for this year.

Well the first things back Europe.

Is that -- he did something very good when he -- almost no matter what.

And standing up and the banks in Europe that that was a real turning point and this isn't to say the Europeans -- better.

But it seems to be slowly stabilizing.

It's it's not getting worse which is a step in the right direction.

Meanwhile here in the United States again as -- said earlier the Fed is pumping -- money.

People would start the -- houses and -- and there are going back to the old living standards.

Where that you didn't have as much doubling up -- she did the last couple years.

And you put all that -- gather.

And I've got to GDP number of 2.3 percent this year it would be better than that if they had raised taxes -- the you know part of this so call.

Tax relief in fact that included a tax increase and you we have -- fact factoring that -- our outlook that you know outside of fiscal policy.

Think you're looking pretty good.

Partners always good talkers are show art Harris -- -- expects.

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