WHEN: Today, Wednesday, March 8th
WHERE: CNBC's "Squawk Box"
Following are excerpts from the unofficial transcript of a CNBC interview with Appaloosa Management President and Founder David Tepper on CNBC's "Squawk Box"(M-F, 6AM-9AM ET) today, Wednesday, March 8th. Following are links to the video on CNBC.com: http://video.cnbc.com/gallery/?video=3000599463, http://video.cnbc.com/gallery/?video=3000599458, http://video.cnbc.com/gallery/?video=3000599457, http://video.cnbc.com/gallery/?video=3000599455, http://video.cnbc.com/gallery/?video=3000599453 and http://video.cnbc.com/gallery/?video=3000599450.
All references must be sourced to CNBC.
TEPPER ON BEING LONG US STOCK
WE ARE MORE LONG US STOCK. BUT THE BIGGER BET LISTEN IT'S ALL THE SAME SORT OF BET IF WE ARE SHORT US BONDS WE ARE BETTING ON A STRONGER ECONOMY HERE. THAT'S THE BET. SO WE ARE BETTING ON STRENGTH ONE WAY OR ANOTHER HERE, STRENGTH AROUND THE WORLD IN ONE WAY OR ANOTHER . THE ONLY THING ON HORIZON – DIFFERENT THINGS CAN HAPPEN HOPEFULLY NOTHING HAPPENS POLITICAL BUT DIFFERENT THINGS CAN HAPPEN IN FRANCE, BUT ONCE YOU GET THRU IT, THERE'S NOTHING ELSE IN THE YEAR. YOU'LL HAVE SMOOTH SAILING. THE GERMAN ELECTION IS JUST UPSIDE TO ME.
TEPPER ON THE FED NEEDING TO GET SERIOUS:
TAKE AWAY THE PUNCH BOWL, TAKE AWAY THE COCAINE, TAKE AWAY THE HEROIN, PUT THE MARIJUANA IN THE DRAWER. THE FED HAS TO GET SERIOUS NOW.
TEPPER ON THE MARKET:
I DON'T THINK THE MARKET IS CHEAP BY ANY STRETCH OF A MULTIPLE. YOU CAN'T BE SHORT IN THAT KIND OF SETUP.
TEPPER ON OVERREGULATION:
THEYRE GOING TO GIVE YOU LESS REGULATIONS FOR OBAMACARE. THEYRE GOING TO GIVE YOU A TAX CUT. EVERYTHING IS NEUTRAL TO POSITIVE THAT CAN COME THEIR WAY VERSUS AN ATMOSPHERE FOR THE LAST 16 YEARS, LETS CALL IT, THATS BEEN REGULATION, REGULATION, REGULATION.
TEPPER ON REGULATION:
CHINA, EUROPE, JAPAN, AND US ARE GROWING. THE DAY THAT WE HAD THREE REPUBLICAN HOUSES, THE PRESIDENT OF TWO HOUSES, THAT WAS THE DAY THERE WASN'T GOING TO BE ANOTHER REGULATION PUT ON THE ECONOMY. THAT ALONE RELEASES ANIMAL SPIRITS. NOTHING ELSE HAPPENS, THAT RELEASES ANIMAL SPIRITS AND UPTICKS WHERE EARNINGS AND OTHER THINGS SHOULD BE.
TEPPER ON YELLEN:
ITS CRAZY. JANET YELLEN WAS SAYING THREE YEARS AGAIN FOR 1% REAL. THATS JUST WRONG. ITS WRONG IF YOU GET THE GOOD THINGS HAPPENING. ITS NOT WRONG IF THERES NO TAX CUTS NECESSARILY, CERTAINLY IF THE FRENCH ELECTION GOES THE WRONG WAY, ITS NOT WRONG. BUT ITS GOING TO BE DEAD FREAKING WRONG, WRONG. LET ME NOT PULL A PUNCH HERE. WRONG! IF YOU GET THE GOOD THINGS TO HAPPEN, WHICH IS A DISTINCT POSSIBILITY.
TEPPER ON REGULATION:
TEPPER: SAY YOU'RE A SMALL BUSINESS GUY IN THE UNITED STATES OF AMERICA, OR ANY BUSINESS GUY. YOU HAD REGULATION UNDER BUSH. THERE WAS A BUNCH. I CAN'T REMEMBER THE NUMBER. THEN OBAMA DOUBLED THOSE REGULATIONS. THE DAY YOU HAD THE THREE HOUSES WON, THAT WAS A DAY THERE WAS NOT GOING TO BE ANOTHER REGULATION. PEOPLE SAY PEOPLE ARE HOLDING BACK BECAUSE OF UNCERTAINTY. BULL (bleep. )
KERNEN; BULL SHIHTZU.
TEPPER: BULL SHIHTZU.
TEPPER ON WAKE ME AT 4%:
LET'S SAY WE'RE 2.5% ON THE TEN-YEAR. YOU'RE SITTING WITH AN 18 MULTIPLE. WAKE ME UP AT 4%, OKAY. JUST WAKE ME UP. YOU CAN CALL MY NUMBER. I'LL GIVE IT TO YOU. YOU CAN WAKE ME UP. WE GOT A LOT OF ROOM UNTIL WE HAVE TO WORRY. IF THEY DO THE TAX STUFF AND YOU GET A LOT OF THINGS AND INFLATION LOOKS LIKE IT'S PICKING UP, IT'S ONE OF THOSE THINGS. THE LONG END OF THE MARKET IS GOING TO GO THE LONG END OF THE MARKET IS GONE WHEN IT STARTS TO LOOK LIKE THEY ARE REALLY BEHIND A CURVE. SO I THINK THIS FED HAS TO GET REALLY NERVOUS AT SOME POINT IF YOU HAVE SOME OF THE FISCAL STIMULUS YOU'RE GOING TO GET.
TEPPER ON THE FED NEEDS TO RESPOND:
NOTHING TO GET IN THE WAY UNTIL POTENTIALLY INFLATION STARTS PICKING UP AND PEOPLE START GETTING WORRIED ABOUT THAT. WHICH, BY THE WAY, CAN HAPPEN A LITTLE BIT IF THE FED DOESN'T RESPOND TO SOME OF THE TAX THINGS THAT MAY HAPPEN. THE FED HAS TO RESPOND. HOPEFULLY THE ECB TURNS THE CORNER A LITTLE BIT. YOU'RE GOING TO NEED SOME BALANCED INCREASES TO KEEP THIS ECONOMY FROM GETTING OUT OF HAND ON THE INFLATION SIDE, I THINK, AT SOME POINT.
TEPPER ON PHARMA:
WE THOUGHT IN THE FALL THE PHARMACEUTICALS WENT DOWN WAY TOO MUCH. SO THATS WHY WE MADE THE BET. THE BET WAS PREDOMINANTLY – WAS PROBABLY - PREDOMINANTLY LEANED ALLERGAN. THE MULTIPLES WERE TOO LOW. FOR SOME REASON, BECAUSE IT WAS TIED IN SOMEHOW WITH THE VALEANT, THE NONSENSE WITH VALEANT, ILL SAY IT THAT WAY, IT ALWAYS GETS KIND OF FALLEN WHEN THOSE STOCKS GET HIT. I DONT KNOW WHY IT'S KIND OF CRAZY BUT IT DOES. WE BOUGHT THAT. THE STOCK IS UP A BIT HERE. WE STILL OWN QUITE A BIT OF IT.
TEPPER ON BEING POSITIVE:
YOU ARE SO FAR BEHIND, IN MY MIND, THE CURVE NOW FOR THE POTENTIAL UPSIDE, DOWNSIDE POTENTIAL. WE CAN TALK ABOUT THE FED. WE CAN TALK ABOUT THE ECB. EVERYBODY STILL LOOKS ON THE NEGATIVE SIDE OF LIFE ON EVERYTHING FOR SOME REASON. ALMOST TEN YEARS, NINE YEARS AFTER THE DOWNFALL. IT'S NOT JUST A NEGATIVE SIDE OF LIFE. YOU HAVE TO BE ON THE POSITIVE SIDE OF LIFE.
TEPPER ON APPLE SHARES:
THE STOCK IS UP SINCE WE SOLD -- TRIMMED IT. I THINK WHEN WE TRIMMED IT, WE WERE PROBABLY -- LIKE I SAID, WE WERE A LITTLE CONCERNED ABOUT WHAT CHINA POLICY MIGHT BE IN THE BEGINNING OF THE YEAR. THERE WAS A LOT OF RHETORIC AND THINGS THAT WERE -- IT WAS THE ONLY THING SPECIFICALLY -- WELL, I DON'T KNOW WHAT WILL HAPPEN WITH BORDER TAX. IT WASN'T EXACTLY AS TRUMP SAID. WE'RE WAITING FOR THAT SHOE TO DROP WITH CHINA, WHICH IT NEVER DID FOR DIFFERENT REASONS. WHICH IS PROBABLY GOOD OVER TIME BECAUSE IT IS COMPLICATED. BUT UNFORTUNATELY I PROBABLY TRIMMED A LITTLE BIT WORRYING ABOUT THAT BECAUSE OF APPLE'S EXPOSURE IN CHINA.
TEPPER ON THE BORDER TAX:
I THINK A LOT OF TALK ABOUT THIS BORDER ADJUSTMENT, TO ME, IT'S JUST A MECHANISM TO RAISE REVENUES OVER TIME. IT'S SOMEWHAT EFFECTIVE DOING THAT, RAISING REVENUES. I THINK IT'S A LOT OF NOISE ABOUT IT. IT SHOULDN'T BE A NEGATIVE TO THE PEOPLE WHO THINK IT'S A NEGATIVE IF THEY SPREAD IT OUT.
TEPPER ON CHINA:
TEPPER: I THINK THERES BEEN A STABILIZATION OF THOSE RESERVES TO A CERTAIN EXTENT. THEY ALWAYS HAVE RESERVES COME DOWN AROUND THEIR NEW YEAR. I THINK YOURE HAVING A STABILIZATION OF THOSE RESERVES. YOU SAW THE TRADE DEFICIT WENT THE OTHER WAY. I DONT KNOW IF THEY FUTZED -IF THEY PLAYED WITH IT A LITTLE BIT.
KERNEN: FUTZ IS GOOD.
TEPPER: ITS ACTUALLY SO GOOD IN CHINA ITS MOVING THAT WAY.
TEPPER ON 3 PERCENT GDP:
I'M GOING TO SAY IT. ILL SAY IT OUT OF MY MOUTH. I THINK WE CAN GET INTO THE THREES. I DONT WANT TO SAY NO DOUBT ABOUT IT, BUT I THINK THERES A HIGH PROBABILITY WELL BE IN THE THREES IF -- AND BY THE WAY, ALL THE PROBABILITIES STACKED, YOU HAVE TO BET AGAINST THESE REPUBLICANS SCREWING IT UP. THEY SHOULD BE ABLE TO GET IT.
TEPPER ON TRADE:
THE OTHER SIDE IS IF WE DONT DO ANYTHING STUPID ON TRADE. DONT FORGET THAT. HOPEFULLY WE DO SMART TRADE POLICIES HERE AND DONT GET CRAZY ON TRADE POLICIES. DO THINGS THAT ARE MUTUALLY BENEFICIAL FOR YOUR PARTNER TO DO A GOOD DEAL. THATS HOW YOU GET A GOOD DEAL DONE.
TEPPER ON HEALTH CARE:
THIS PROBABLY LOOKS TO ME LIKE IT WAS AN IMPROVEMENT IN OBAMACARE. WHETHER ITS OBAMACARE 2.0, WHO CARES. IT MAY BE AN IMPROVEMENT OF WHATS THERE. WE COULDNT PAY FOR IT BEFORE. IT WAS GOING TO GO BANKRUPT. IT WAS RIDICULOUS THAT YOU WERE SUBSIDIZING TO PEOPLE OUR AGE, MAKING YOUNGER PEOPLE -- A TAX ON YOUNGER PEOPLE TO PAY FOR US. THATS CRAZY. THATS WHAT EFFECTIVELY WE WERE DOING TO OUR CHILDREN.
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