Nov 14, 2012|
The First Look - Andy Cinko, Bloomberg
Transcript - Not for consumer use. Robot overlords only. Will not be accurate.
Morning and welcome to the financial exchange normally when we open the program we do an update from what the market had done in the previous day. Not sure it's really worth doing today there was virtually very little volume trading in stocks yesterday I think it will learn that it was. A fraction of the norm and the market was flat almost across the board and I'm looking at the results from yesterday's. Returned him is a flat market yesterday. But we're not so lucky day I think at the end of today we might be wishing we had a flat market on Tuesday as the futures are in negative territory across the board. And I get some -- this morning good morning everybody Dow down 68 NASDAQ future down seventeen. S&P down seven gold down 480. Tenured US treasury down bit as well -- at one point 591. -- let me interpret that for -- because when you've got the ten year treasury at one point 59%. That would be an indication that the bond market and big investors large institutional investors banks. Sovereign funds pension funds. They are betting June they are wagering when the ten year treasury goes to 159. They are making a large wager that we are gonna go over the fiscal -- -- that's what it means. So we're gonna go to New York if they are people in DC let us. Jump off that -- in fall off that fiscal cliff. Well you know what I -- smarter people than me available to ask that question I think and his name is Andy cinco -- Bloomberg News in New York. That's my interpretation -- I look at the ten year treasury 159 I say all that means it's going to be like Niagara Falls are grown in a barrel right over the -- We're gonna get very wet. Yes you have Barry you know it it is so far no real major progress towards a deal on a fiscal cliff but that -- leave -- -- guessing as to what will. You know with Stephen -- Hewitt the former chief economist Morgan Stanley he was -- A rival network this morning he was just saying that that the fiscal cliff is related pediatric on the part of Washington lawmakers -- wanna get -- to detention. You know he is one of many who think lawmakers will he even if it comes to them but the short term deal they will come up with something to avoid it. -- the ball that they want to avoid it however they haven't come up with -- solution so you know kick the can down the road seem to be the the optimal plan. Take McCain ain't it the real clip this mid February right that that's the that that's when we have to have a deal done by before the EU we see this massive contraction in the American economy. Gap pretty much you know is that it setup that as of January 1 rate would rise if there was a deal though. Yeah -- you've got to bit of time to come up with something before the actual rate kicked into the takes awhile for them. For the government to put -- all of the various pieces of that plan that the place though again they have some time and a few weeks here but really it would make no sense to get to January 1 with huge headlines that tax increases and spending you know they've they've probably would like to get that done before. Anything like that. It seems like there's a lot of sell side pressure on stocks because from what I've heard you've seen. You're seeing a lot of lemonade deals getting done you're seeing a lot of sell side on on him really on on any type of asset. And it's largely being pressured beat by he had to changes in the tax rates that are anticipated on January 1. If there is certainly. Pressure on stocks from the from the anticipates that capital gains and dividend tax rates will go -- Barry it's just difficult to keep out. How much of that is causing the decline because of the same time. That were talking about tax rate and what may happen. You know we have Greece again. Circling the drain of that word you know there's news headlines out this morning that briefly held -- the European market but now those markets have backed down. You know the story overnight was that big UT being -- it would be sent to agrees. But like. Current money put a down payment on future payments. I think the idea being that Greece would hopefully use that money to fix the economy get them better path. But judging by the market reaction nobody thinks that's really gonna help much that it has been a lot of money decreased. And then we'll be in crisis mode in a couple of months down the road but of course don't forget Spain's Catalonia outlet. Headlines this morning that they will continue to need money from the central government in Spain in order to keep operating -- being one of them. Three -- you know you have all three things coming together at the same time. And that people -- just very nervous. Speaking of Spain and Greece away at what point does the government just say well we can't send out your Social Security check in euro's anymore. Nearly -- isn't that where it largely the problem they've got too many people on entitlement programs and he simply don't have enough money. Their economy is shrinking at a rate of you know eight. 510% per year and they've got this -- at large group of people that are waiting for the checks every month. And that's why this Spanish government would very much like the Central Bank in Europe BE CB to buying lots of their bonds because. But at least they would have an outlet you know they would have some sort of money coming in. I think private investors to getting much more reticent to -- Spanish bonds. To your point there was a recent story and I don't know where this is gone but in the last couple of weeks there was this story about. Pharmacies in Spain matter shutting down because the government has not been paying for prescriptions though it has gotten more difficult than Spain to get a prescription. And no matter what that is whether that aspirin -- something you know needed like IP treatment medication. So it seems there are some. Cutbacks in Spain I have not seen any widespread reports -- that might be an indication that he barrier that you know they've breached some point of no return where there are beginning to cut back. Slowly but surely. But just not on the the until security checks that they might send out there doing it in them but in a more. On the margin that he will. All right last question and we we heard Dick capital gains tax rates are going to somewhere between 20/20 5%. What about dividend tax rates what if you own shares of AT&T and you're seeing yourself -- like that 5% dividend 'cause I only have to pay 15% income tax on it would -- great gonna be next year. Well it can be as high as 43 point 4% buried because. According to lead the -- White House's. Planned they would like that tax dividends at your income rate which of course I -- I think now thirty is going to be could be 39%. And then they want to attack on -- three point 8% additional taxes on the wealthiest Americans -- -- In that wealthiest. Pantheon and you could pay a pack of 43 point 4% on any dividend income. Well Andy we the it's just sounds -- we get to pick from our -- are bad news story. -- yeah -- which attach rates are going up and which ones are going up the most rapidly thank you very much. -- -- -- He has electricity use in New -- those cities still thousands and thousands of people in the -- -- New York area without electricity engine. A lot of them I know I think it was on Long Island it's have actually gotten it back 99%. On -- a Long Island and jerseys in tough shape right so -- heck yeah yeah I'd sure -- -- have our tech question of the day in our prize of the day stay with us that's coming up next on the financial exchange.