Thursday, October 30, 2014

Money Show 2014 - BNN Presents

BNN did a special event at this World Money show. This event was called "The Confidence to Invest". The panelists were Andrew Busch, Peter Schiff and Jose Schmitt. The moderator was Pamela Ritchie. This is to air on November 13, 2014.

  • Schmitt: Investor confidence is low as there are problems in fairness and transparency.
  • Busch: Have retail investors come back? No. Investors freaked out in 2008 and have not come back. The banks are looking at growth in wealth management.
  • Schiff: People are fearful of losing money. However, by keeping it in cash you will lose money.
  • Busch: volatility is great for trading. For investors it can help them get stocks at great prices.
  • Schiff: People are used to buying on market dips. He thinks there will be another QE.
  • Schmitt: You need a game plan to handle volatility. You should not panic as volatility is part of our world and we need to manage it. He is worried about today's intraday volatility.
  • Schiff: The problem in the US is that people think that QE worked. We got monetary heroin. The Fed will be forced to do more QE because QE doesn't work. If the Fed stopped QE and raise rates, we will be in a bear market.
  • Busch: Unless the US changes their tax rates, the US is going to have trouble. US tax rates are higher than anywhere else. Because of the difference in US and Canadian Tax rates differences, we have mergers and acquisitions that are not good but they are done because of tax rates. Canadian Tax rates are better, but not perfect, of course. Valeant is trying to buy a US company. Valeant is run out of Quebec, but it is a New Jersey company.
  • Busch: US companies could be taken because they will be worth more money if outside the US (that is domiciled outside the US). The US taxes their people wherever they go.
  • Schiff: There should be no corporate taxes. Instead we should tax executives, tax workers and tax customers when they buy.
  • Schmitt: When companies make decisions based on tax, they are not adding value to a company. We need to find the right balance in taxing companies.
Taxes: Canada's corporate tax rates are lower than in the US. Ireland's corporate taxes are lower than Canadian taxes.
  • Busch: Britain lowered the corporate tax in the last recession.
  • Schiff: The US has capital tax and income tax and the worse system. It is a good idea to have competition in taxes. Because of tax havens, it keeps taxes lower everywhere.
  • Busch: Regulatory rules are expensive and are a real problem. If the republicans get both houses there will be a slowdown in new regulations.
  • Schiff: The tax return is 125 pages for Federal taxes alone. It is rules and regulations that are driving US companies out of business.
Where will investors go?
  • Schmitt: I am a born optimist. Things will improve. We have to live with geopolitical events. We live in an over regulated world. We need principled regulations not macro regulations. Problem is often unintended consequences to regulations. We cannot control everything, but we can control some things.
  • Schiff: We have QE infinity and phony economics.
  • Busch: The US is still the place to go. Energy is really good. There will be low energy prices for a while. If we get tax reform half right, the US will do better.
  • Schiff: The US needs debt devaluation. The politicians will not step up and do what is needed.
  • Schmitt: There is a positive side. We must believe we can change things for the better.
  • Schiff: Government is betting bigger and bigger and promising more and more that they cannot afford. It will end in a crisis. Scandinavia has recognized problems and is lowering regulations.
On my other blog I am today writing about TransForce Inc. (TSX-TFI, OTC-TFIFF) ... continue ...

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