David Tepper, who runs $US19 billion distressed debt hedge fund Appaloosa Management, was on CNBC’s “Squawk Box” moments ago.
The hedge fund manager talked about the markets, the Fed and the government shutdown.
Here’s a recap from the show:
They’re opening up talking about the Robin Hood Foundation and it’s upcoming stacked investor conference.
Andrew Ross Sorkin brought up an op-ed from this summer written by Peter Buffett. Basically, Buffett said the system provides immense wealth for the few and they later sprinkle it around via charity.
Sorkin asked Robin Hood’s executive director David Saltzman to respond that that. He said Peter Buffett has a “big heart and a big brain” and ended his response with a big grin.
Tepper jumped in and said, “That’s bulls–t” before explaining why corporate philanthropy actually matters.
Minutes later, Sorkin jokingly told him that he had to watch his mouth.
Tepper responded, “What did I say? What did I say?”
Joe Kernen jumped it, “It’s not broadcast, it’s cable.”
Now the interview is going to get into what everyone had been waiting for — the markets and the Fed.
Kernen is asking Tepper about the Fed deciding not to taper.
“Look, they’re not tapering for a long time. Fortunately or unfortunately,” Tepper said.
He does expect markets to go up, though.
“In the meantime, it might be a little tough for markets to fly up. On the other hand, my basic belief is when you have this large QE the markets will go up.”
He added that there’s no way the Fed can taper because of the shutdown situation in Washington, D.C.
“As far as the debt is concerned, they should just pass something in Congress that says the debt will be paid always,” he said. “Do that and that will make things much, much, much more stable.”
He said if we default then everyone’s mortgage will be more expensive. That will really hurt Main Street, according to Tepper.
As for the default deniers, Tepper called them “so freakin’ stupid.”
“These guys they were great debaters in college. I’m so glad they were great debaters…They’re so smart. They’re so smart. That they’re so friggin’ stupid…so friggin’ stupid…”
He added at his firm they always say, “You have to be stupid before you can be smart.”
Kernen jumped in and said you can use “muck” and call them “muckers.”
Now the conversation has shifted to the stock market.
Becky Quick asked him if they’re cheap or at a fair valuation.
Tepper told CNBC that we’ll get back toward more normal multiples of 18-20 times earnings.