Fears East Coast 'super storm' could drive gas prices higher

Fears east coast 'Super Storm' could drive gas prices higher

Hurricane Sandy barrels towards east coast

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GOVERNOR ROMNEY PUSHING PLAN TO OVERHAUL TAX CODE TO CREATE JOBS

GARY B SMITH: It's going to be great for jobs. Overhauling the tax plan is the single most important thing that Governor Romney and hopefully, President Obama can do. The tax plan motivates every individual, organization and corporation out there. It provides the path of what they're going to do and what they're going to pay. If the tax plan is simplified and overhauled, it will get rid of a lot of special interests which will take government intervention out of our lives. It provides a clear playing field for everyone. This could turn around our economy if done soon and done right.

JONAS MAX FERRIS: Moreover, neither plan really addresses the deficit and the need for revenues. Let's leave that problem off the table and let's just talk about the jobs situation. I like what Romney wants to do. The code has a lot of deductions that shouldn't be there, but does it lead to more job creation trying to fix that? If you paid twenty-five percent and then you deduct your mortgage or you don't deduct your mortgage and you pay twenty percent if your net is not getting taxed anymore I don't see how that's going to lead to more spending. It's a little dangerous in the short run, and to pull out major deductions with the mortgage deduction being one of them, it's a problem.

JIM LACAMP: Of course it's going to help! We've got the most sadistic, complicated tax code in the entire world. It's made us uncompetitive. The U.S. keeps falling on a competitive basis and a lot of the reason for it is in fact, our tax code. It's made small businesses at a big disadvantage to big businesses because what happens is big crony businesses get their loopholes and their deductions from Washington in exchange for higher rates and it becomes way too complicated for small businesses. They have to hire lawyers and accountants just to figure it out. Stephen Hawking couldn't even figure this out. It's not going to fix our economy immediately, but it's going to remove the biggest obstacle to growth and that's a complicated tax code. Focusing on little things like the mortgage deduction masks the problem. The problem is that it's just way too complicated and small businesses cannot figure it out.

STEVE MURPHY: Our economy is transforming. When we're dealing with consumers we're not going to prompt them into picking up the negative savings rate and spending that we had before the Wall Street collapse in 2008. They know better now and they're not going to be burned again. Exports and manufacturing are picking up and we need to stop consuming more than we produce and start exporting more. Making our businesses more competitive is critical to that. I would get rid of every single corporate deduction, bring the rate dramatically down and cut it in half by fifteen percent. They have to pay it on domestic and foreign profits minus what they're paying locally. It should all be about making the American business more competitive and exporting and increasing our advanced manufacturing for exporting.

TOBIN SMITH: We have a bizarre tax system that we started in the nineteenth century that taxes me as company on money that I've made overseas twice. We're the only country in the modern world that continues to do that. We also are the only country in the world where you can deduct mortgage interest from your home. Canada has never done it because they have a much healthier homing system. We have to get into the 21sr century, and that would get countries to unleash these two and a half trillion dollars in cash that is sitting on the sidelines.

FEARS EAST COAST "SUPERSTORM" COULD DRIVE GAS PRICES HIGHER

JIM LACAMP: It could get really bad. The easy answer would be to say that this isn't a big deal because usually these types of things aren't, but let's take a worst case scenario. If you had a category one storm hit the east coast - we're completely unprepared for it, first of all. Even though gasoline prices have come down recently they're still too high. This storm would be kicking our economy at a time where we aren't circling the drain, but are standing at the edge of the toilet. I don't think consumers right now could afford the increase in gasoline prices nor can they afford the economic hit that they would take in that region rebuilding at a time when things are difficult in the first place.

GARY B SMITH: The East Coast, the area that might be hit by the hurricane has about six percent of refining capacity. That'll put a little spike in prices. We've been through this before multiple times - Hurricane Katrina, Hugo, and the snowmageddon that hit the East Coast. Each of these times people thought that this was it and that gas prices were going to spike. They do spike for a little bit for twenty-four to forty-eight hours and then they come back to where they were before.

JONAS MAX FERRIS: In this case no, because when Hurricane Isaac hit last year you couldn't drive anywhere because there were trees down everywhere. Your mobility goes down to the point where fuel consumption will drop as much as refinery capacity. If there are major power outages you're not consuming energy when you can't turn on the power and you can't get to work in your car. It will keep the gas prices from going bananas in the first place.

STEVE MURPHY: I don't think it's going to be a very big hit. The prices may well go up even if just one light bulb at one refinery gets knocked out because they rise and fall based on expectation of demand and supply, not the reality. We could have a big one day jump. They'll correct in a couple of weeks, and people won't be driving in this mess. Just stay home, be safe and don't worry about gas prices.

TOBIN SMITH: I'm looking to those speculators because there's a futures market in gasoline. If the people who know the business best thought that gasoline was getting knocked out and that there would be a huge super spike, you would've seen the futures on our gasoline go up accordingly. It would have to be quite a disaster of lasting effect.

REPORT: NEW REGULATIONS ON LENDING MAY BLOCK HOUSING RECOVERY

JIM LACAMP: They're talking about tightening mortgage standards again because of the standards being put forward by Dodd-Frank. Lending standards are already too tight even though the housing market is improving - you talk to mortgage and title companies and they'll tell you the same thing over and over again. These deals are very difficult to close right now - even though they are closing them. This is the reason the housing market has not moved the needle on the economy like the statistics would suggest. Keep in mind that thirty-one percent of homeowners are still underwater anyway. If you tighten certain standards now it's going to have a deleterious effect. The mortgage market is becoming the same monster that it was under Fanny and Freddie. We don't need this and it needs to be settled by individual banks, not by the federal government.

STEVE MURPHY: Mortgage lending standards should be tough. You should be fully capitalized to offer mortgages. The standards for the bar should be high and the standards on the derivative should be tough so that we don't have it all happen again. Where is the money going that would be going to pay mortgages? It's being saved right now.

TOBIN SMITH: If they all come in it'll be draconian and they're absolutely going to hurt registration. The government should not be in the private mortgage business. This new legislation keeps the private market out and I just don't agree.

GARY B. SMITH: This is the same government is in cahoots with the federal reserve that puts so much free easy money out there and causes the housing bubble. So now when things are finally starting to look a little green they want to clamp down on it. Get the government out of the housing business!

JONAS MAX FERRIS: The government is still the loose lender and last resort. It's called the FHA program where you can still put three/three and a half percent down to buy an entire house for three or four hundred thousand dollars. That market still exists and it's because of the government. Private lenders are the ones who became tight first. The government is still throwing away money with three percent down payments. The lenders almost all went out of business because of their own lousy credit system.

PREDICTIONS

JIM LACAMP: (SIRI)

JONAS MAX FERRIS: (GLW)

GARY B. SMITH: (AMZN)

TOBIN SMITH: (FB)