ON THIS FRONT.
THE PRESIDENT IS TINKERED AROUND
WITH THE IDEA THAT SINCE DWIGHT
EISENHOWER.
MARKET WATCHER MICHAEL BLOCH WHO
CAME DECADES AFTER EISENHOWER,
BUT EASIER TO OFFER EXPERTISE.
FOX BUSINESS CHARLIE GASPARINO
AND DEIRDRE I THINK I WAS BORN
UNDER THE CARTER ADMINISTRATION
BOLTON.
GOOD TO HAVE ALL OF YOU HERE,
THANK YOU VERY MUCH.
IT’S ALL ABOUT THE ISSUE OF
PAYING FORWARD IN ALL OF THAT.
DOES WALL STREET NOW -- I’M
SORRY MICHAEL BUT I’M LOOKING AT
JOHN.
DO YOU THINK THE GUSTS UPON THIS
WILL GO ANYWHERE WILL CONCEDE
SOMETHING ON IT, OR NOT.
THE MAC IT’S A REAL TIGHTROPE
HERE BUT I DON’T THINK HE HAS TO
CONCEDE ANYTHING.
THE MARKETS CARE ABOUT THESE
DEFICITS.
THEY MATTER A LOT.
SHORT-TERM WE LEARNED OVER AND
OVER AGAIN.
I’VE BEEN HEARING THIS FOR
ALMOST 10 YEARS NOW.
NEIL: YOU’RE EXACTLY RIGHT.
THE STOCK MARKET LOVES IT WITH
THE BOND MARKET AND A NOTE
EARLIER THERE WAS TALK ABOUT
REACHING A TIPPING POINT IN THE
BOND MARKET.
THERE’S TOO MUCH PAIN GOING TO
BE FELT TO TAKE EVERYTHING DOWN.
THE INDICATION LACK SPEAKS
ACTION, SEEMS LIKE THIS IS ABLE
TO GO THROUGH FROM A POLITICAL
STANDPOINT.
AND SOME OF THESE GOP
CONSERVATIVES NEED TO WATCH
PUSHING BACK ON ON THE SPENDING
TO HURT THEM OF CERTAIN VOTERS
IN NOVEMBER AND THEY HAVE TO
WORRY ABOUT THAT.
NEIL: I DO FIND IT ODD THAT
DEMOCRATS ARE GOING TO PAY FOR
SOMETHING, BUT LEAVING THAT
ASIDE, I WOULDN’T GO THERE.
BUT HE IS THROWING IT OUT THERE
AND IF THE MARKETS ARE WORRIED
ABOUT YET ANOTHER BOONDOGGLE OR
SOMETHING THAT CAN’T BE PAID
FOR, AND I REALLY KIND OF THINK
MICHAEL HIT ON IT.
THEY HAVE A FUNNY WAY OF SHOWING
IT.
>> YOU HAVE TO REMEMBER THE
CONTEXT OUT LAST WEEK WE WERE
HERE A GAZILLION HOURS.
THE SELLOFF IS SO WIDESPREAD AND
THERE ARE WORRIES IN THE BOND
MARKET THAT EVENTUALLY
PRESSURES --
NEIL: THIS WILL PUSH INTEREST
RATES BACK FURTHER.
>> YEAH, I ALSO THINK IT’S A
WORRY OF HOW WE PAY FOR IT IS
NOT A QUESTION I FEEL LIKE WE
CAN IGNORE AND WHEN THEY SELL
DIET, WHO IS GOING TO BUY?
WE ARE THE NUMBER ONE HOLDER OF
OUR OWN DATA.
CHINA HOLLANDS A LITTLE LESS
INTERESTED OR DO WE FACE A
DOWNGRADE.
I THINK THERE’S A POINT OF
RECKONING WHERE WE JUST CAN’T
SPEND AND SPEND, EVEN THOUGH
FROM A CITIZEN’S POINT OF VIEW
EVERY TIME I’M ON A TRAIN, THIS
REALLY NEEDS AN UPGRADE BY THE
QUESTION OF WHO PAYS AND HOW.
TRAIN TO THE PRESIDENT AND HOW
MUCH SHE’S BEHIND IS CERTAINLY
IN HIS COMFORT ZONE.
HE’S DONE A LOT OF THIS
INFRASTRUCTURE WORK HIMSELF.
BUT AGAIN, IT’S ABOUT THE MONEY.
CHARLIE: HE LIKES TO SPEND
MONEY.
WE SHOULD PUT A CHART ABOVE THE
10 YEAR PERIOD TENURE HAS BEEN
SPIKING AND SPIKING AGAIN TODAY.
THAT IS THE DEAL GOING UP.
THAT MEANS THE PRICES ARE GOING
DOWN.
IF THIS THING KEEPS GOING LIKE
THIS, IF THE TAX COMES DON’T
PRODUCE THE GDP AND THE BUDGET
DEFICIT DOESN’T WIDEN OUT
DRAMATICALLY, THIS IS BAD FOR
THE MARKET AND WHAT WAS
HAPPENING LAST WEEK, THE DEBATE
WAS COMING HOME.
THERE ARE TWO SIDES TO THIS
STORY, SOME PEOPLE THINK IT’S
GREAT TREMENDOUS STIMULUS GREAT
FROM THE TAX CUT AND SPENDING.
A LOT OF PEOPLE SAY THE BUDGET
DEFICIT IS GOING TO WIDEN
DRAMATICALLY AND HE HAS TO START
SHOWING BETTER THAN TO .5%
GROWTH SOON OR THAT WILL BE THE
NARRATIVE.
LOOK AT THE DEFICITS.
2016 WE HAVE A $586 BILLION
DEFICIT.
THE LITTLE OMEN IS THERE.
2018, 873 AS THE PROJECTION.
201994.
EVEN 2020 THEY ARE PREDICTING OF
987.
NEIL: THEY SUBMITTED A 10 YEAR
PLAN THAT DOESN’T BALANCE
ITSELF.
DO YOU THINK THE FACT THAT THE
STOCK MARKET IS UP, BONDS ARE
BUDGING TODAY GIVEN THE CHART
NOTWITHSTANDING THE LAST WEEK OR
SO, WHAT IS GOING ON HERE?
>> REALLY WHAT IS GOING ON AS WE
SEE SCARY NUMBERS.
A 7 TRILLION HANDLE AND A
DEFICIT WHEN WE GO OUT TO 10
YEARS BASED ON WHAT WE THOUGHT
TODAY.
DOES THAT MEAN I SELL MY STOCK
IN THE CLOSET AND IS SURE TO
BOND WHILE I’M AT IT.
I WANT TO TALK TO THE GUY
SHOOTING THE JAPANESE BOND
MARKET 20 YEARS AGO.
THAT TRAIT HAS NEVER WORKED AND
IS NEVER GOING TO WORK.
NEIL: THEY’RE NOT WORRIED ABOUT
INFLATION?
>> I AM GUARDED ON NOW.
I SEE WAGES GOING HIGHLY TO .9%
YEAR-OVER-YEAR WAGES OF MORE
DATA COMING WEDNESDAY.
WILL SEE THAT THE VALENTINE’S
DAY MASSACRE.
WHAT I AM LEARNING TODAY --
WEDNESDAY MORNING THE CPI TREE
INTO RETAIL INFLATION.
>> WHICH IRONICALLY IS A
SEQUENTIAL DANTE.
CHARLIE: I DON’T THINK WE’LL GET
THESE EXISTENTIAL MARKET ANSWERS
IN THE NEXT THREE WEEKS.
TAKE A DEEP BREATH.
I DON’T THINK IT’S ARMAGEDDON
NOW.
I TELL YOU IF WE DON’T GET, IF
THIS THING REALLY GETS WIDER
THAN 800, 900,000,000,028 TEAM
IN THE DEFICIT, YOU REALLY COULD
HAVE AND WE DON’T GET DECENT
GROWTH.
NEIL: THAT IS CRUCIAL.
WE NEED GROWTH.
>> I DO THINK STATE TAXES HAVE
TO GO HIGHER, LOCAL TAXES HAVE
TO BE HIGHER.
WHEN THEY TALK ABOUT ALL THESE
BREAKS FOR CORPORATIONS HAVE
GIVEN PEOPLE THAT MATTER.
>> THE WAY I LOOK AT THIS FOR
STOCKS RIGHT NOW, WHAT SHOULD WE
DO AT THIS, WHAT YOU MENTIONED
IS IMPORTANT IN THE DEDUCTION IN
STATES LIKE NEW YORK AND NEW
JERSEY.
WE COULD SEE CONSUMER
DISCRETIONARY HEALTH CARE AND
HOUSING HIT A WALL.
I’M USING THE SELLOFF AS A GIFT.
THE BIG STIMULUS NEWS GREAT
INDUSTRIAL STOCKS AND TRANSPORT
STOCKS WHICH WERE REALLY
OVERWHELMED HAVE COME IN.
THAT IS A GIFT.
>> I THINK THERE’S GOING TO BE
BUMPS AND BRUISES ALONG THE WAY.
THERE’S A LITTLE MORE BROKEN
GLASS.
>> A CONSUMER, TWO THIRDS OF
U.S. GDP, IF YOU ARE PAYING MORE
IN YOUR STATE TAXES THAN LOCAL
TAXES AND NOT JUST NEW YORK NEW
JERSEY.
>> IT IS A BLIP.
CHARLIE: TO SAY THE CORPORATE
TAX CUT DOESN’T HELP GROWTH, YOU
ARE NOT GETTING ABOUT 3% GDP
THIS YEAR, WE ARE IN TROUBLE.
>> WHO WANTS TO BUY OUR DEBT IS
WHAT I’M SAYING.
>> WE HAVE TO SELL A LOT MORE
DATA, RATES WILL SPIKE HERE THEY
ARE NORMALIZING ON TOP OF THAT.
THE CORPORATE TAX CUT DOESN’T
PRODUCE THE BANG FOR THE BUCK.
DO COMPANIES SIT THERE AND WERE
THE CASH?
>> EVEN IF IT DOES PRODUCE, WILL
IT OFFSET THE HIGHER RATES?
>> THAT IS A TUG-OF-WAR.
I’M IN THE CAMP THAT SAYS THE
GROWTH IS GOING TO WIN OUT.
YOU KNOW THAT ABOUT ME.
>> THERE’S CONCERNS ABOUT THE
CONSUMER.
>> IS 1.5 TRILLION ON THE
CORPORATE SIDE.
THE INDIVIDUAL TAX CUTS,
NEIL: BUT THEY ARE PAYING IT
FORWARD.
THEY ARE GETTING MORE FOR LESS
THAN AMBITION.
>> INDIVIDUAL TAX CUTS ARE
GIVING TO THE PEOPLE ON THE
LOWER END.
IT ISN’T STIMULATIVE
THEORETICALLY.
NEIL: I TOO HAVE HAD MY RUN-INS
WITH THIS WHITE HOUSE.
I AM JUST SAYING, WE COULD BE
UNDER GAUGING HOW MUCH OF THIS
TAX CUT.
>> I HOPE.
THAT WOULD BE GREAT.
IF THAT’S THE CASE, YOU BUY THE