tv Wall Street Week FOX Business October 15, 2016 9:00am-9:31am EDT
thank you so much for watching the show tonight. email email@example.com. that's it for us tonight. thanks for being with us. [♪] >> announcer: this show has never been solely about investments. we talked about anything that affected people and their money. from fox business headquarters in new york city, the new "wall street week." anthony: welcome to "wall street week," the show of record for long-term investing. i'm carr. gary: i'm gary kaminsky. jpmorgan getting things started
on a positive note beating estimates. other banks include city group and the profits came in slightly lower. investors keeping a close eye on wells fargo which did beat estimates but profits slid lightly over news of its sales scandal. anthony: next week we'll see 90s & p 500 companies reported. goldman sacks, just to name a few. we'll turn now to former goldman sachs partner partner danielle dimartino booth. and peter kiernan. >> you have h elevated stock prices and earnings growth that
doesn't seem to be measuring up. i don't know how long those two things can be out of balance. how are you going to grow your business at 15% earnings with 1% economic growth and nothing happening in europe. that's the essence of the question. gary: danielle, the fed which has created this base asset prices, stock prices, they don't seem to be indicating they are doing anything different in 2017, do they? >> doesn't seem like the. the fed is responsible for levitating the bank earnings. all the trading revenue surrounding brexit and fed speakers going in 18 different directions. that's helped drive volatility in the trading and stock markets. gary: that's an interesting point.
the volatility the fed is helping create helps the banks in terms of their trading values. anthony: it helps hedge funds becauser creating more dispersion. >> brexit was the gift that keeps on giving. because there was so much back and forth. both citi and jpmorgan had good news on the fixed income securities. >> the trading revenue was up 48% over last year. that's a huge number. thank you fed, thank you brexit. gary: nothing is going to happen in november. when they get together in december will they be looking at the bank results to give them an indication as to whether they pull the trigger? >> maybe, that might be something of a stretch. right now it seems like there
are quite a few cat fights going on around that big conference table in washington. every single time a fed speaker opens their mouth the message is completely different than the prior. and it's not stopping. gary: what do you expect is going to happen in december. do you have a call on that? >> i think what happened in september tells us what's going to happen in december. over the past 21 years, we only had two federal reserve board governors dissent. all other 67 dissents since 1995 have come from the president. so yellen would rather withstand a triple dissent like she did in september and hold on on raising rates than have to suffer the optics of two governors dissenting as she insists on pushing a rate hike in december. anthony: do you think the fed lost its credibility
politically? >> no question about it. it turned into a debating society. what frustrates me, if you look at the way banks work. if you look at jpmorgan, if rates go up, yes their net interest margin will go up, but so will the capital markets. this will change if we have a bump in december. >> one thing all the management talked about earlier today is an growth continues. how is loan growth continuing. anthony: in small businesses there is no loan growth. gary: is it only happening at the super high ends? they are showing loan growth. >> let's look at the small banks. there has been a lot of merger activity. it was running 300 banks a year.
multiples have gone from 25, 26 times to 22 times. the other thing that's starting to happen is if you are a community bank, you don't have the same loan demand you are seeing in the big banks. net interest margins become really important. trying to play the float as narrow as they are. if you hit them with compliance at the same time, they are really struggling. there are some banks sharing compliance teams because they can't afford a full-time compliance in their own shop. anthony: one of the things is the fed helped large corn races and the wealthy but 90% of the people in the middle are struggling. what would you say to that argument? >> that came out in the retail sales and consumer confidence data.
it fell to a 2-year low. current expectations a 1-year low. if you strip out gasoline sales which were a huge boost to households, if you look at what they call the core retail sales figure, that's the lowest level in 11 months. i think households ar -- are wag a white flag. gary: what are you telling investors right now. what do you tell an investor they should be thinking about the next three to five years. >> don't pave attention to slow volatility. what's going on is a change. if you miss your earnings. everyone has said wait for q3, q4. if your company does not deliver earnings that stock you own is going to get punished.
this has become a market of stocks, not a stock market. if you have somebody who looks like they are not going to meet their earnings, do in the hang on to that stock. you will get punished. anthony: thanks to both of you. peter has a new book out "american mojo." it won the national book award for non-fiction. "wall street week" will be right back. >> announcer: still to come. dumped out at wells fargo but the scandal might not be over. what does hillary clinton think about the financial sector? we know what she says publicly this man creates software, used by this bank, to protect this customer, who lives here and flies to hong kong, to visit this company that makes smart phones, used by this vice president, this little kid, oops, and this obstetrician, who works across the street from this man,
who creates software. they all have insurance crafted personally for them. not just coverage, craftsmanship. not just insured. chubb insured. we ship everything you atcan imagine.n, and everything we ship whether it's expedited has soovernight...ommon. ...or shipped around the globe, ...it's handled by od employees who know that delivering freight... ...means delivering promises. od. helping the world keep promises.
who grilled stumpf isn't done with him yet. though she tweeted a bank ceo should not be ableo oversee a massive fraud and simply walk away to enjoy his millions in retirement. joining us charlie gasparino and sandra smith joining us now. anthony: thank sandra on this. was it surprising to you that he left? sandra: no. gary: warren buffet said he wasn't going to talk about it until after the election.
gary: charlie i have been critical of buffet over the years on a number of things. the way he hand this was un-buffet like. the fact that he did not come out and publicly support him has an impact. charlie: we reported on fox business behind the scenes he read people the riot act. stumpf had to report that to the board. once that happened you knew his days were numbered. at first i didn't think it was going to kill him. gary: i said he wouldn't survive. charlie: when you look at it, it's a $2 million crewup. but he didn't do well during the hearings. when it comes down to it, banks are being run by elizabeth warren. i reported the day before when i saw the management change, i said he's done, it's just a matter of time.
sandra: what do you mean banks are being run by elizabeth warren? gary: she just -- charlie: she just fired the ceo of a major company. sandra: show main street who is outraged over this. i don't know that they are. but we are supposed to believe they are. we got their earnings this week. thstock price is down 10%. is that thtype of hit you would have seen coming from wells fargo or would you have thought it would be much bigger in the wake of a scandal like this. gary: you have a degree of regulatory as. they ramp up cross-selling. now that's gone. if you are playing the to be market on this, bang earnings,
as bad as they are -- none of these banks have done well the past 5 or years. take down your earnings estimates on these banks because they just got squeeze on a profitable line of business, cross-selling. sandra: we got word the banks are doing well without government overreach and creating new laws. mary anne lake said we found cross-selling issues, but nothing systemic. we are conducting a deep dive. charlie: my comment to you the day this broke, i said crossover. that's the nature of the business. you and i both know -- when you talk about mary and lee, remember who is on her neck. gary: if elizabeth warren wanted
to -- anthony: the biggest issue on the table is if elizabeth warren gets a senior position in the next presidential administration, is she going on a full-scale witch hunt? i was in washington interviewing two former sec commissioners both of which think she is ridiculous because of overreach. charlie: because of her favorite candidate and her favorite candidate. the republicans are going to lose the senate and elizabeth warren will be chairwoman -- anthony: the republicans won't lose the senate. charlie: let's just keep this -- [all talking at once] gary: let's keep this block on the bangs.
if elizabeth warren wanted to target he single institution. the fact that wells fargo was the one that's the poster child dp. sandra: what does she think she is going to do? she has all the answers? what are her answers. gary: the cross-selling. sloan of wells fargo on a call earlier this morning said matters will get worse before they get better. they are telling their investors, this isn't over now. when you are a new ceo you always want to set the barlow. >> set the expectations low. the most critical thing the obama administration will be known for is they changed the rules in these corporations. they are scaring people. they broke legal precedent and
now they are roughing them up and bullying them. charlie and sandra, don't go anywhere. more "wall street week" after this. >> announcer: hillary clinton doesn't like wall street, ght? >> wall street corporations and the super rich should finally pay their fair share of taxes. >> announcer: not so fast. now we know what was in those
you do all this research on a perfect car, then smash it into a tree. your insurance company raises your rates. maybe you should've done more research on them. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. and if you do have an accident, our claims centers are available to assist you 24/7. call
banks on the campaign trails, wikileaks got ahold of her speeches. here is some of what she said. she said i think there is a lot that could have been avoided in terms of misunderstanding and politicizing what happened. gary: to goldman sachs this ways she said about the dodd-frank banking bill. there was a need to do something for political reasons. charlie gasparino and sandra smith are back with us. nobody is surprised by any this. but why is it not having a systemic impact in the election. charlie: i wrote a col number the "post" particularly about the goldman sachs stuff. she was saying use the power and clout of your campaign contributions to influence washington. can you manage what elizabeth warren would have said about that during the primaries?
the donald trump revelations about the tape and his vile language is about sex and it has a higher rating. the other part is pure liberal bias. the "new york times" thinks it's their mission in life to get rid of donald trump. anthony: judge, jury and execution squad. whatever allegations made in the case of mr. trump. charlie: he said what he said. anthony: i'm talking about the groping. gary: you tweeted out a picture -- i was interviewing hillary clinton at a wall street event. which obviously -- there is that picture. i look good, right? becan't discuss -- -- you sign
things so you can't discuss the specifics. but here is the important thing. the public is being led to believe that these speeches were cozy and warm and fuzzy. she doesn't want to be there. she doesn't like the people. sandra: why is she there? gary: she wants the money. she is contractually obligate. the way these things work. tay a certain amount of time and they want a certain number of pictures and they want their check. sandra: she wants to say what they want to hear. that is she sympathizes with wall street and she wants wall street to thrive because if they don't, she doesn't. anthony: i love having democrats at our events even though while a republican.
she wanted to be at the salt conference for 59 minutes and 59 seconds. gary: my read on the whole thing is the public would be surprised as the people she surround herself with. but there are a lot of people saying to her, we are pulling you out, you are a minute into overtime. you did what you had to do. you came in here and it's time to leave. charlie: the head of goldman sachs is close to hillary clinton. if you saw the emails they were in love with each other. the clinton staff is very close to wall street. cheryl mills is on the board of black rock run by roy block. don't think that larry fink, hillary clinton.
they won't get together. anthony: what about elizabeth warren say if larry rock. charlie: be prepared for her having a say in every financial decision of these banks. sandra: she talks out of both sides of her mouth. one side is very private. and you can't release details of those wall street speeches. publicly she condemned wall street. she wants to break up the banks. anthony: and she gets fetd questions and answered when she goes on msnbc. gary: hoo who does she surrounds herself with? charlie and sandra, thanks for joining us.
that's it for us tonight. thanks for being with us. [♪] >> announcer: this show has never been solely about investments. we talked about anything that affected people and their money. from fox business headquarters in new york city, the new "wall street week." anthony: welcome to "wall street week," the show of record for long-term investing. i'm carr. gary: i'm gary kaminsky.