David Tepper Says Raise Retirement Age And Hike Taxes [VIDEO]

David Tepper, of Appaloosa Management, hedge fund says that the President needs to do the “common-sense stuff” to push legislation to deal with the “fiscal cliff.” We need to make a down payment on an escalating problem.

Video and computer transcript below:

welcome back to squawk box. let’s get back to our specialguest david tepper. founder, president and cio of $16 billion hedge und appaloosa management. when we last left you before the commercial we were all trying to get a read on where you were going with this in terms of the equity market. i think you were suggesting that it’s weakly priced. you can tell me. you think? that’s what i thought. you are a keen analyst. you were waffling. i was waffling? you were giving signals. i was giving signals? the bond market was too high. listen at 12 times next years with these interest rates, with these fed, yeah, of course it’s cheap. but you still do have the stuff that’s going on in washington that’s holding back everybody and everything. the question is how much does it mean, what will it do, when you’re holding back people from the end of the year, because if it does blow up, the market will probably go down 2% or 3%. okay?that’s what’s going to happen. 3% you downsize right now.could it be 5%? sure, you know. if there’s other things that canhappen. but i think there’s very limited downside. i think thket –on the upside. a lot. listen, you had fisher on here on friday.fisher basically told you that. when i listen to fisher, i don’t know if you were listening to him. you talk but — i’m sorry. tough morning. it is a tough morning. i’m sorry, i apologize. fisher, you know, when he was on there, what i kind of viewed what he was talking about, how good the economy is. how good it could be.you know, when he was talking i got the sense from listening tohim that he’s nervous that so much money coming in will pushus up beyond what we should be in growth. beyond what we should be, you know, push us faster than inflation. although we have no inflation. unlikely to have inflation at the capacity utilize with the unemployment rate we’re at. he had that nervousness.he’s always been a little more — but he sounded like hawkishbut a real bull on the economy. okay, a real bull and every guyyou have that’s there, you know, will talk about the economy, will say how good it can be. people don’t want to believe it but it can be really good. listen you keep that these guys cannot mess it up. what should happen, why say 3%, i really think there’s nodownside in some fashion. because i think what they’re going to do is they’re going to do the plan b, the senate bill, and the senate bill looks like they have to do that. if i were the republicans, and they don’t do the senate bill, they’re committing suicide. and i have to tell you one thing about politicians, they like to get elected. so i think they’re going to do that. on the other hand you have a guy that’s not up for election that really should be making suggestions and getting things done. okay?you know who that guy is? the president. i think you’re indicating the president. the president of the united states of america, yes. he’s the guy, everybody knows certain things have to get done. listen, taxes are going to go up in some fashion or another. everybody knows it. everybody knows, my grandmother and my grandfathers all lived to 72, 73. okay? my parents, you know, my dad’s dead now, but he lived into his 80s. my mother is 80 and she’s going to live a long time, i’m sure of this. okay?but, you know, that’s ten more years. i mean, there, you have this — i guess medicare was 65 was passed, something like that? this is common sense stuff. take the age up to 67. come on. this is commonsense. i don’t want to hear about coalminers. make the coal industry pay for it or some industry to somebody will talk to. exclude them from the generallegislation. that’s what simpson-bowles does. it’s so easy. it’s so easy. and the president has to put this forward because people are afraid to say the words to put it forward because they were afraid of getting elected again. it is so easy. so, hopefully the president of the united states does what’s easy and does what’s right, and does try to fix his long-term problem because, look, here’s the way the numbers work out. you guys know this and everybody knows this. if you do the senate bill you have no problem for ten years. you really have no problem. your debt to gdp is not going up for ten years. can you do the numbers. it’s not going up for ten years. after ten years when joe is, you know, retying and other people are starting to retire you have a real problem. you start escalating problem. we should really make a down payment on the problem now. if this president wants to have a legacy, if he truly wants to have a legacy he should attack this problem. you guys see that lincoln movie? yep. i haven’t seen it. you saw it? you know what i’m talking about. you get it done. he should get it done with the democrats. get it done. now, if — didn’t see the hobbit. can i ask something? you remember when the first time you made the, what we keeptalking about, your first appearance here, the tepper call. either the economy will improve or the fed will act, in hindsight i think i saw the markets react to what the fed did. did the economy actually react to all that? absolutely. so we would have — is it acounterfactual or it did get better? it didn’t get worse. it’s pretty good. look, you know what i hear? it’s amazing how many people said the money didn’t matter. the fed didn’t matter. they shouldn’t have done this. they shouldn’t have done it to begin with. the fact of the matter is you have incredible, we’re justtalking about the credit markets. i can tell you what the creditmarkets were then. ivory coast was nine. these credit markets are anything but robust. they are robust. they are absolutely robust right now. and not just the credit markets in the marketplace. in auto loans, you’re now seeing subprimes, sensible subprimes. because you should do some subprime in auto loans. sensible. that is getting done. that’s why you’re seeing — the deleverage. but the economy itself — is sub2%.but you still have other things that can happen. and now the thing holding back the economy, i do believe, the economy is going to grow faster if we can get through this — okay, so — i think now it’s washington. you add the trillion dollars of the stimulus to what we’re getting something positive out of washington, then it’s not just the stock market that reabilities.you actually will see 2 1/2, 3, 3 1/2 — see some gdp growth. the stock market just reacts. people are getting auto loans. you do have — 8% unemployment. stocks come up a long way since you — will we get down to 6 1/2? the question about stocks ishow much have they come up but they haven’t come up that much in the p/e. that was 2010. we’re going into 2013. so we have had years. so this is not crazy — it’s not. but i’m asking, is it as cheap relative to what we were looking at back then in it is really, really interesting. and i they to say how cheap it is because the money, and we could talk about it. you have another break? we’re going to. buy all the commercials. much more from david tepper still ahead.