tv Wall Street Week FOX Business November 11, 2016 8:30pm-9:01pm EST
good night. [♪] >> 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 investment. i'm anthony scaramucci. gary: i'm gary kaminsky. a record number of viewers tuned
into fox business to witness the election this week. >> donald trump with no political experience has just won the presidency of the united states. gary: how did the markets respond? to an all-time record high. anthony: will it last? let's ask mario gabelli. welcome to the show. what were you thinking 2:30 in the morning wednesday? >> basically i thought the notion of a unified government finally of the people would work. number one, reform regulation. handle the issue of taxes. handle the issue of student debt. handle the issue of the military, handle the issue of infrastructure. simply stated. take fiscal policy augment monetary policy and restructure the country.
anthony: did you think the market would trade off violently? i called trump at 11:57 too say plets put stuff about the market in there to calm it down. >> i think the europeans were uncomfortable with donald trump as president so they were selling off. but you had certain industries that looked like they would benefit and that provided balance. and the american banksere strong and would start ledging and our tax structure would change and we would examine the inefficient sip of how we were handling money. gary: a lot of smart investors came on this program and said the market wanted hillary clinton because the market wanted certainty. what was wrong with that thesis? >> both of them were the same in that both argued for infrastructure. both argued with regards to the military being rebuilt.
but beyond that there was a lot of different changes. i think the notion of what made america great pant stock market important the last 120 years was simple. a free market system with all the force being reinforced by this election, the rule of law, and meritocracy. creative innovation was back and if you did that nobody would beat the hell out of you, but they would praise you. anthony: the markets being pro-trump, do you think that's a long-term thing? >> i don't know how the markets are dealing. i'm a simple guy. what are the earnings going to look like, what sectors will do well, what multiple do you put on it. that's a function of interest rate psychology. the present value of future stream of earnings, everything else constant isn't worth as
much. we'll have an increase in the economy, a good flow. you will see how ryan handles the ways and means committee and how they unify that part of it. and the notion of applauding for ingenuity is going to come back. anthony: gary said there are not many companies that can grow at 30%. but the tax plan goats through and you have a corporate tax rate reduced to 15, then you have businesses large and small that will produce large earnings growth. will that help the market? >> there is no question there will be stimulation. if we are earning $100 million and paying 35%. if we can reduce that to 5 -- to 25, our earnings will go up.
2002, we probably have spent 20 plus million dollars. and it's more important, it takes away process. instead he worrying about risk taking we worry about checking boxes. anthony: some people say a trump win is a huge upset. but it was predicted on this show in may. >> i have been predicting trump presidency for months. i was on a baron's rounds table in may, i said donald trump. people gasp when you say that. gary: we talked about on that joe at jeffrey and i spoke with a group investors and they laughed at him when he was making that comments. anthony: in the hamptons, they said how many people are for trump. i raised my hands. i was one out of 60.
>> we have been fortunate in our firm. an individual who was the head of the presidential commission on debates. he and his democratic counterpart. every one of our mutual funds board meetings he would point out that politicians were ranked the lowest, even below investment bankers and wall street guys. so you knew there was some basic descent in the streets that was not heard of. there were a lot of missteps by trump. on balance when the voters came to the election, they decided to come out and vote. this is what makes america and the democracy so great. hopefully a peaceful transition. >> when donald trump wasn't going after hillary clinton he set his sights on china and mexico. >> you are losing your factories, they are going to
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stop taking cialis and get medical help right away. oand i'll be right backe seto take your order. thank you. thanks. don't you hate that? when they don't tell you how much something costs? and you have to ask? right. i do. maybe that's why i always make sure to... ..."bring up the costs associated with your services." i know. hey, i'm nothing if not predictable. lemme guess, the salmon? being transparent about our costs. hey, i'm nothing if not predictable. it's a big deal.
and it's how edward jones makes sense of investing. anthony: president-elect trump made it clear on the campaign trail web's not against trade deals web's against bad trade deals. >> the children tons gave us nafta. think of it. the worst trade deal ever signed by any country ever. anthony: what can we expect from a trump administration in terms of trade and economic growth. mario gabelli is back with us. there is talk about tariffs and punitive taxes. >> 60 years ago i took economics 101, and we head about the impact in the 1930s and the impact holly had on the trade.
it was imposed in 1930 and the great depression continued. but ricardo and adam smith, the fundamental forbearers of the system of allocating capital would around wants efficiency. anthony: we had a cat his mick a cataclysmic event this week. >> the markets are quick to adjust. anthony: in the last 48 hours, understood this scenario, higher interest rates, higher earnings growth, who will be the beneficiary. >> let's look at several infrastructure plays. everything that we can think about that we need help on. that's fiscal policy augmenting monetary policy. companies like mueller
industries, mli in memphis, tennessee. >> i actually visited them. >> you also probably visited the elvis presley museum. basically the stock is a beneficiary of construction and copper that they process. hard rocks, companies that rent equipment like united rentals. $45 billion industry fragments, likely to consolidate. companies that make asphalt equipment in chattanooga. there is a whole array of companies. the second area that's more obvious is the banking industry. we'll unleash the power and unleash the loan capability. the ones i selected because i like the trust banks that will be global and dominate the trust department. the bank of new york, state
street, and northern trust. the money managers are concerned over his rules coming out. we need the rules, but we don't need the way they were articulated. gary: there was commentary yesterday morng, thursday morning, commentary related to dodd-frank. is it going to be gone? anthony: there has been commentary from president-elect trump about not liking it. the big issue is community banks. banks are not lending. >> if you are worried about getting over a certain threshold of capital you have to look at the financial interests. but the second part, the second part is that banks and certain growth markets like north carolina, south carolina, florida. they will have to be bought and allow the northern banks to have deposits. >> that's like going back a decade.
the bank consolidation is gone? you see it coming back? >> yes. anthony: who will be the acquirers. >> pnc with their blackrock, even though they have that investor larry fink. they will be able to do that. but the moneyman like waddell and reid. t. row price. i remember 1873, 1919. 1929, 1930. anthony: great opportunity to be an investor. >> capitalism gets a big tail wind and that's important in a way to allocate capital. the notion of the free market, the rule of law where anyone that can grow up in the united
viewers to go to cash. you warned the markets would be volatile. but you are concerned despite what mario was talking about, your main concern is what's going to happen in terms of the deficit. >> we have to be focused on the morning after within not the giddiness of the two days after. two things happened this week that are shocking the political, economic and financial earth. it's gone out of its orbit. one was the asteroid that hit tuesday night. that hit washington, d.c., the ruling establishment like nothing we have had in 100 years. anthony: did that surprise you? >> i was un0 million who said enough of this, it's got to change in a big way. we want an outsider. anthony: were you surprised? i was hoping it would get there. i laid out two days before the
election a way to 270. what shocked me was wisconsin. but i think it was a weathervane of what's going none the country. gary: why if the growth that is forecast now happens and we still have to actually pay off the deficit after we grow it, what's wrong with that? >> there is $20 trillion ticking time bomb called the debt ceiling right in front of us. that will happen in march. the new trump administration is going to inherit that mess. i call it a stink bomb left from last october when they made that deal, boehner and barack obama wore the new president, and it's going to consume the entire first 100 days, trying to get that thing through. republic can't won't want to -- republicans won't want to vote for a $20 trillion debt ceiling. he will have some say no on
obamacare, no on a big tax cut for the wealthy. we'll argue with you on the tax cut for corporations and how we are going to do it. my point is, the market was giddy on the view that washington is come together rescue with a huge new fiscal stimulus and infrastructure. that is dead wrong. the newsflash is that washington is out of business. the imperial city is in smoking ruins. it will not function, it will be acrimony, confrontation. brinksmanship. that means we'll hit the next recession with nothing to break the fall. washington -- the fed's out of dry powder. gary: part of this election message was mr. trump, president-elect trump knows how
to negotiate and do deals. isn't he going to be able to go to the congress and deal in a way that hasn't been done? anthony: i'm optimistic because in the transition meetings i have been in and the conversation i have had on him post election. he's looking to do what is right, not focused on left or right. what would you give him? what kind of advice would you give mr. trump? >> the advice i would give him is that he cannot rebuild the fence, build a wall, enforce the borders, spend more on veterans, have a massive tax cut, a huge infrastructure program and not touch social security, medicare or other entitlements. that's reagans fiscal follies on steroids. we could do it then because we only had a $1 trillion national debt. we have a $20 trillion national
debt now. there is $10 trillion ready coming frowh's aeady there. you can't add -- gary: let's go to the deficits on the budget. are the growth projections realistic. l will there be the kind of gdp growth with the changes he suggested? >> it's the skunk in the wood pile. the growth in the baseline is unrealistic. the cdo baseline. if you did everything trump wants to do and it works as well as supply siders say, you will be lucky to get what is already assumed. there is no extra revenue or deficit reduction if he do everything he wants to do. you have to do that to reclaim. the cbo baseline assumes we'll go for 208 months without a recession. it never happened in human history. gary: why did you vote for him? >> because i'm totally fed up
with the fed. i think the national debt is a ticking time bomb. i think he's realistic about our interventionist war-oriented policy. he's smart enough to say i'll negotiate with putin and not argue that he a latter-day hitler. there were items in his list. gary: you mentioned the fed today and you mentioned the fed last time you were on. whether he keeps janet yellen, there will probably be a new head of the fed. >> if you wanted someone who knows what they are doing, it will be jim grants. he's a student of central banking from day one, and he understands that we don't need price controls on money and debt and the stock market. we need price discovery. we need to let people -- millions of people out in the market determine what the interest rate is, what the money market rate is. >> i know jim is a legendary
newsletter interest rate. >> we need to get the keynesians out of there. i think they made a mistake when they said we'll replace janet yellen and fisher but let them run their term. huge mistake. big mistakes will be made in 2017 unless they get those two keynesian money printers out of there and they can. all they have to do is say i have no confidence in you. the bubble is going to crash. i would like to you do the decent thing and resign. that would wake up wall street to the fact that the days of the fed keeping you in ever rising prices are over that we are in a totally new ballgame. the thing want to summarize with is we are entering a chaotic period of non-governance.
of a central bank that can't function anymore. it's out of dry powder. there is nothing to rescue this economy. i fighter irs, not the bls. the irs tells me how much money it's collect. it has been flat the last 10 months. that means the economy is slipping into a recession. when the confrontation over the debt ceiling happens. i will say we'll be in recession in 6 months. the deficit will slow to over a trillion annually. they won't be in a position to do all these huge things? i don't blame donald trump. he's inheriting a mess, a rigged system that's far worse than even he imagined. anthony: i can't leave it on that because it was a great victory and we did call it on
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>> i love this country. john: trump did it. almost no one thought he would. as polls closed, hillary was favored by more than 90%. but a few minutes later trump was up. a few hours later he won. >> i look have much forward to being your president. john: president donald trump for the next four years and maybe 8 years. what will happen? what promised will he keep? >> we cannot be the policemen of the world. we'll build the roads, rescue kids from failing schools. john: now what happens?