‘Fiscal Cliff’ Worries Are ‘Simply Noise’: Kass
Online Producer
Investors shouldn't worry about the market impact of either tax hikes or the so-called "fiscal cliff," Seabreeze Partners founder Doug Kass said Monday on CNBC.
"I think the impact will be less than 1 percent, so effectively no impact at all. I don't believe that either the tax or the 'fiscal cliff' are the cliffs that we should be fretting about," he said. "We should be fretting about the earnings cliff."
Kass added, "Less than 1 percent means that the impact of a rise in dividend and capital gains taxes are simply noise."
On "Fast Money," Kass said that a potential tax increase on capital gains from, say, 15 percent to 25 percent, were not an actual increase because of the amount of money in tax-deferred retirement accounts, long-term holdings and the distribution of unrealized gain.
"The calculation also assumes that everyone has an equal level of sophistication, and we know that's not true," he said. "I would bet that 50 to 75 percent of people that own stocks in this country don't even know that tax rates are rising."
Kass also called out a risk for bears, saying that the business sector is where the housing and automobile sectors were a year ago.
"Demand is pent up not spent up," he said. "If you get a grand fiscal bargain, which I believe is a 50-50 chance, this suggests that you'll see a lift to production from inventory building from the first half of next year."
Trader disclosure: On Dec. 3, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Steve Grasso is long AET; Steve Grasso is long ASTM; Steve Grasso is long AUO; Steve Grasso is long BA; Steve Grasso is long COST; Steve Grasso is long F; Steve Grasso is long GDX; Steve Grasso is long GOOG; Steve Grasso is long LF; Steve Grasso is long LNG; Steve Grasso is long MHY; Steve Grasso is long P; Steve Grasso is long PXD; Steve Grasso is long NVIV; Steve Grasso is long PFE; Steve Grasso is long S; Steve Grasso is long WYNN; Tim Seymour is long on BAC; Tim Seymour is long on INTC; Tim Seymour is long on SBUX; Pete Najarian long on AAPL; Pete Najarian long on BAC; Pete Najarian long on JPMorgan; Pete Najarian long on INTEL; Pete Najarian long on SBUX; Pete Najarian long on FB; Pete Najarian long on MSFT; Guy Adami long on C; Guy Adami long on PNC; Guy Adami long on GS; Guy Adami long on INTC; Guy Adami long on MSFT; Guy Adami OWN AGU; Guy Adami OWN NUE; Guy Adami OWN BTU.
