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tv   Maria Bartiromos Wall Street  FOX Business  September 30, 2018 8:00pm-8:31pm EDT

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truthfully will show some of the inappropriate behavior that has happened at the f.b.i. and d.o.j. >> lou: thank you. good night from new york. see you tomorrow. from new york. have a great weekend. >> announcer: from the fox studios in new york city, this is maria bartiromo's "wall street." maria: happy weekend, welcome to the program that analyze the week that was and positions you for the week ahead. my exclusive interview with treasury secretary hank paulson. but first susan li is standing by. >> the senate judiciary committee voted to recommend brett kavanaugh for the supreme
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court. they agreed to delay the vote for one week while the fbi investigates the allegations against brett kavanaugh. >> this country is being ripped apart and we have to make sure we do due diligence. i think we can have a short pause and make sure that the fbi can investigate. reporter: more trouble for tesla founder elon musk. he's being sued by the sec. tesla stock has fallen over 20% this square. the fed raising short-term interest rates for the third time this year. the fed raising rates from 2 to
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2.25%. they are expected to raise rates three times in 2019. markets also finishing mixed for the month. trade and regulatory concerns. facebook is seeing its worst month in six years. the shaky september didn't stop the record bull market as markets finished in the green for the quarter. maria: the federal reserve raised interest rates this past week by a farther percentage rate. from 2% to 2.25%. it's the second of three -- it's the third this year and three more expected next year. you expected the feds to raise
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rates? >> we did. y timesr. they will tighten next year. they are plotting four, in my opinion that would be too many. inflation is still quite calm. but i think this is a good process because you are getting the fed out of the way. you are using more than monetary policy to stimulate the economy. maria: later we'll talk with about this. third quarter earnings begin flowing next week. what are you expecting the rest of the year? >> i think the standard consensus view on wall street is we are in the late inning of the business cycle and the most non-consensus view is we mayor
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in the 6th not 7th inning. the -- the supply side impact of the tax cuts have not been fully seen in terms of capital spending and hiring. the earnings picture couldn't be much better. even with the fed raising rates. it's still very accommodative. there is a lot more to go in the bull market and the business cycle. the news will be good. i think investors will have to be more choosey. but i think it's going to be a good period for the economy and the market. maria: i think i agree with you. we just saw another revision to the gdp. we had a great third quarter and we are expecting earnings to back it up. one thing with this economic policy out of the trump
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administration is the rollback of regulations. doesn't that correlate to businesses investing in the economy and their companies. >> business confidence and business round table, big companies round table confidence spiked after the election and stayed very, very high. that bodes well. when you have profits up 22% for the third quarter, and you have business confidence that's high, so in my opinion, this is not over by a long-shot. and hopefully we don't make any self-inflicted errors. but the rollback in regulations is a big part of the reason why business confidence has been higher. it's not just the tax cuts it's the fact that you are not a small business owner knowing regulations won't be worse. that in and of itself inspires
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confidence and makes you focus more on your business as opposed to keeping regulators happy. >> i think there is a long runway here in terms of the economic policy. obviously some valuations have gotten stretched within technology, elsewhere. how do you want to allocated capital knowing this backdrop is strong. >> you want to be in similar places. two sectors that with benefit most of from that would be financials and energy. there is 11 sectors. but we are overweight financials and industrials and technology. in my opinion financial energy will benefit the most of from the deregulatory process we are seeing. i think it's a very, very -- it's a very important policy goal to get the velocity of money out and get banks to lend more. maria: thank you so much.
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stay with me. my one-on-one with hank paulson is next. >> announcer: how close did the great recession come to become an actual defletion. >> there were many, many tense moments. exbut are you gettinglot enough of their nutrients?, new one a day with nature's medley is the only complete multivitamin with antioxidants from one total serving of fruits and veggies. new from one a day. is important to me so father being diagnosed with advanced non-small cell lung cancer made me think of all the things that i wanted to teach my kids. (avo) another tru story with keytruda.
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maria: welcome back. we are just about 10 years away from the worst global crisis in a generation. in a fox business exclusive, i sat down with hank paulson. he tells me he's amazed and relieved how far we have come in just a decade. >> obviously our economy is quite strong today. the financial system is better regulated, better capitalized. so there is a lot to be grateful
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for. but the enemy is forgetting. the crisis placed a very heavy burden on many americans, particularly those with modest incomes or at least able to bear it. i think we don't want to forget where we were and we also need to recognize how much worse it might have been. >> are there days or instances, issues you remember to be, that was the tale signs? >> the crisis really began in august of 2007. and it had been grinding on for a long time before we saw the bear stearns failure. but there had been a lot that happened up until that time. i would say there were many, many tense moments that i underestimated the extent of what we were dealing with every
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step of the way right up until we got the tarp authority from congress. when i think of the tense moments, there are plenty of them. there was lehman going down. the first time congress voted on the tarp. there was the time when the money markets were imploding and commercial paper funding was drying up for major industrial companies. it was a tense time. but we -- i think we can look back on it and while recognizing how difficult it's been for so many americans, recognized it could have been far worse. we were very, very close to a real economic catastrophe that could have rifled the great depression. maria: fannie mae and freddie mac, you stabilized them at one
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point. that's an area where people feel it could have gone in a terrible direction. >> i think the thing we did that was most of impactful that's least noticed today, these two agencies are huge. they have $5.4 trillion in securities outstanding. they were insuring half of all mort gangs originated. their securities were sold and held all around the world. and when they began to implode, it could have been a disaster if we hadn't couple with a way to stabilize them and nationalize them. can you imagine if we had not nationalized fannie or freddie before lehman went down? the roltr -- the other thing that's not generally recognized. i believe putting fannie and
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freddie into concern toreship did more -- into conservatorship, by nationalizing fannie and freddie, it's the only source of financing during the crisis. just imagine if they hadn't been nationalized how much farther home prices would have fallen and how many people would have lost their homes. maria: investors in fannie and freddie today say i am shocked they are still federalized. and federal officials were using money from fannie and freddie and taking it out and putting tonight other places. >> when we nationalized fannie and freddie, no one thought they were going to continue in their present form because it was a flawed model. no one was defending it.
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but it worked so well that there was no, you know, compelling reason to change things. as you said, once they are stabilized, they generated income which helped reduce the deficit, went into the national coffers. so am i unhappy, am i surprised there has been no permanent reform put in place? yes. do i expect anything to be done in the near term? no. maria: do you worry given your experience in china in terms of this spat going on between the two largest super powers? >> it's a grate concern that trade wars ultimately will hurt everyone involved. but it's totally and completely unacceptable for china not to move to open up its markets.
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this is an untenable position for them to expect the rest of the world to keep our markets open for their companies if they don't open up for foreign companies. so they need to do more to open up. maria: my thanks to former treasury secretary hank paulson. >> announcer: the markets are hitting new highs. hitting new highs. so what could geico has over 75 years hitting new highs. so what could of great savings and service. with such a long history, it's easy to trust geico! thank you todd. it's not just easy. it's-being-a-master-of-hypnotism easy.
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maria: welcome back. we just heard from hank paulson
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10 years after the financial crisis. my next guest is predicting a recession for the first time in 10 years. are there hazards on the horizon? joining me to discuss, economist nouriel roubini. he's called by "foreign policy magazine" one of the top 100 global thinkers. he predicted the 2007-2008 housing collapse. you have concerns about where we are on the horizon. but characterize where we are in terms of the economy. >> the economy in the u.s. and globally is doing well. next year the will be slightly less than 2%. but i expect a slowdown and likely a recession by 2020. the next two years things are fine, but then we'll have a
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significant slowdown in growth. maria: why? where -- how do you get there for a slowdown and recession in 2. > in -- in 2020. the third quarter looks like around 3%. the economy is growing around 3%. this year and next year, 1% of gdp. consumer confidence is better and business confidence is better. but most of of the movement from 2 to 3. the way they designed it to 018-2019. and it's a cliff. the stimulus goes away and the
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beginning in 2020. and it will get bigger and bigger by 2025. the 3% pushes you below 2%. around the, and the by 2020. they have no other choice, you have the trade war, you have trade wars, not just trade friction. it will slow down growth. lack of spending, and the rest of the world is weaker. maria: there are many people who feel the roll back regulations was so significant because under the obama administration you had a scenario where businesses were sitting on cash. this administration rolls back regulation. that's why they believe there is a long runway, that it will
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continue to impact corporate america. they will increase cap x because of the lack of threat of new regulation. you don't buy into that. i believe reziewtion regulation might have economic growth in the short time. the ceo is. 0.1 over a decade. 0.01 every year, then the drag after 2020. but there are other times of regulation that slow down growth. immigration, not just on countries from arab. it slows count potential growth of the labor supply. we'll start not just a trade war with china. but into the u.s. from china and other countries. we'll restrict the ability of
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firms to invest abroad or hire abroad. the whole motto of trump is hire american, buy american. so you will have the allocation of labor capital will be worse. that will slow down growth. maria: you said inflation could be an issue. we have the ppi and the cpi in the last two weeks paint was nonexistent. >> wage growth has started to pick up from 3%. the inflation last we are bottomed out at 1.3%. close to the fed. where fiscal sometime st. louis was overheating of the economy. yes there are some changes in trade. but the policy of trade restriction, migrationw and
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other -- migration and other things will lead to higher prices. i'm not speaking about high inflation. 2.2, 2.3%. and we'll have to gradual think raise the rates all the way to 3.5 from 2%. maria: thank you very much. nouriel roubini. more "wall street" after this. ♪ this is loma linda, a place with one of the highest life expectancies in the country. you see so many people walking around here in their hundreds. so how do you stay financially well for all those extra years? well, you have to start planning as early as possible. we all need to plan, for 18 years or more, of retirement. i don't have a whole lot saved up, but i'm working on it now.
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earnings for cal main foods. we'll get the latest on jobs with the services pmi. thursday we'll get initial jobless claims and earnings from costco. the big event in the september jobs report will be out. be sure to tune in for "mornings with maria." earnings will begin to flow fast next week and the following week as the fourth quarter kicks off. coming up next week join me for home depot co-founder. and tray gowd why is my special guest on "sunday morning futures."
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be sure to follow this program and facebook, twitter and instagram. get the latest videos and pictures from the program. send us a >> i'm bob massi. for 35 years, i've been practicing law and living in las vegas, ground zero for the american real estate crisis. but it wasn't just vegas that was hit hard. lives were destroyed from coast to coast as the economy tanked. now it's a different story. the american dream is back. and nowhere is that more clear than the grand canyon state of arizona. so we headed from the strip to the desert to show you how to explore the new landscape and live the american dream. i'm gonna help real people who are facing some major problems, explain the bold plans that are changing how americans live, and take you behind the gates of properties you have to see to believe.


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