Top strategist Kenneth Fisher says the “fiscal cliff” drama is far overblown, and that the overwrought fears about budget cuts and tax hikes are actually a bullish sign. “If there’s no deal, it’s not a crisis. The fiscal cliff is fake,” Fisher says in an interview with Forbes. “A political invention, arbitrarily put at January 1 because it was politically expedient in 2010 to stick it there. Now it’s politically expedient to push it past the 2014 elections. Democrats have more to lose in 2014 than is commonly perceived now and they’ll want to compromise.” Fisher says that the “cliff” […]
In his latest Nasdaq.com column, Validea CEO John Reese takes a look at stocks that might be getting hit too hard by “fiscal cliff” fears. “What if we don’t go off the cliff, or we do, but the impact on the stock market isn’t as severe as expected. Despite what you may have heard, those are both legitimately possible scenarios,” Reese writes. “And if they do play out, the stocks that are supposed to get hit hard could instead take off.” Reese says that if investors are willing to take on some short-term macroeconomic risk in their portfolios, they should […]
Warren Buffett says that even if the U.S. goes over the “fiscal cliff”, he doesn’t think it will lead to recession. “I don’t think that’s going to happen,” Buffett tells CNNMoney. He says that even if it takes a couple months after the New Year for Congress and the President to reach a “cliff” deal, the U.S. will continue to grow. “We are not going to permanently cripple ourselves because 535 people [in Congress] can’t get along,” he says. “There are things that will disrupt the economy …. but we have a very resilient economy.”
Charles Schwab’s Liz Ann Sonders says that a rebounding housing market will have more of an impact than many believe it will have on the economy. “People are still underestimating the impact that this is going to have,” Sonders said at the Schwab Impact 2012 conference, CNBC reports. “What people are underestimating is the ripple effect of confidence.” Sonders says that “just about every metric in housing is starting to turn here,” pointing to builder confidence, home prices, and household formation, among others. “We’re finally having a surge in household formation. We have the right kind of supply and demand […]
PIMCO’s Mohamed El-Erian says policymakers trying to address the country’s fiscal problems should focus on getting businesses and individuals to put the “ton” of cash now sitting on the sidelines to use, both via investment markets and capital spending. “If you make that your objective, you’re going to move not only just on fiscal reform but on labor market reform, on credit market reform, and on housing reform, and that’s what this country needs,” El-Erian tells CNBC. He also says that he thinks tax reform should involve both increases to rates and an expansion of the tax base.