tv Wall Street Week FOX Business June 19, 2016 9:00am-9:31am EDT
and check out our website at foxnews.com/propertyman. i'm bob massi. i'll see you next week. [ woman vocalizing ] >> announcer: we talk about anything that affected people and their money. from the fox business addr headquarters in new york city, the new "wall street week." anthony: welcome to wall *. i'm anthony scaramucci. gary: i'm gary kaminsky. since the height ofof the recession in 2008 housing has
made a recovery with more consistent growth than the overall economy. but as recession risks grow, what will happen to housing. jimmy, welcome to the show. there may not be anybody better than you to tell us what's happening in housing. >> it many a mixed bag. the good part is interest rates are at historic lows. you can get a mort game for 3.5, 3.25% interest. if you understand mortgages, the interest and principle on a mortgage are the principle payments, they are the affordability part of owning a home. if interest rates go up, it's
hard for people to afford homes. if interest rates went up 100 basis points. that would be an increase of 20% to 25% in payments payments. that would knock a lot of people out of the housing markets. with interest rates being very low, that's good for housing. on the other hand, we have issues right now the best mort ghaidges my lifetime. the highest quality mortgages, fanny, freddy, fha, va. they all raised their qualification standard which eliminate a lot of people from the housing market. when i say there is a mixed bag, some people can qualify, some people can't qualify. even if you can qualify, there is the separate issue, does the family feel prepared to own a home. it's the biggest financial obligation of their lives. gary: i know you have been one
of the greatest investors in the world. there are a lot of viewers out here. you know many people took the crisis and opted to rent as opposed to buy. what should people be looking at if the they want to buy? what should they be thinking about about making the investment in a property? >> owning a home is owning an ill-liquid a he set that's not ease lire disposed of. but owning a home is the mostly kid real estate in the home because the underlying mort gangs are liquid -- mortgages are liquid in america. but i suggest before a family makes that investment, can they qualify? and even if they can qualify, do they feel comfortable with
adding this additional economic burden. >> i heard you speak many times about housing being the heartbeat of the economy. and housing lifts the tide of small businesses because most small businesses are tied into housing. where are we now in the housing cycle? are we headed up? are we pla towing or heading down? >> let me give you have my personal view. if you read the papers, they say the last time we had a good housing market, there were 1.2 million single family starts. i believe 300,000 to 400,000 of those starts were because we had mortgages going back six to seven years that no longer exist in our economy. they were arm mortgages, negative amortization. and subprime.
and subject rrp prime will get people in trouble. if you take 300,000 to 400,000 off that 1.2 million number, we are currently at around 530,000. two years ago we were at 310,000. so there is a lot of room to maneuver upwards. i like the trend. gary: if the next president comes to you in january and says, jimmy, i want to grow this economy 4% and i know the housing can be a big push there, what can he or she do to make that happen? >> traditionally what washington has done, and washington's power over mortgages is greater today than at any time in our lifetime because -- gary: is that a good thing or bad thing? >> as long as they are
consistent in issuing high-quality mortgages i don't think it's a bad thing. gary: they are the mortgage issuer since the crisis. >> fannie mae, freddie mac, fha, va. they issue 90% of the mort gauges. if the president came to me and said what can we do to help housing? i would say ease up on the qualification standards. gary: we don't want to go back to where we were in 2008. >> it doesn't mean you will go back to where you were. you had bad mortgages. gary: we moved from here where anyone could get a liar loan. but we have gone so much in terms of restrictions and regulation that we have to move it off. >> qualification standard can be relaxed. one of the areas that will have
to be dealt with is the first-time buyer. the first-time buyer used to be 40% of new home buyers. what's going on? how many much these young people have college debt. and the college debt comes in front of the mortgage debt. how are they going to deal with that issue? that's critical for a first homebuyer. gary: you are an independent director of black rock, great asset manager. you made a significant purchase of black rock common stock after the crash. what do you think about the stock market right now and the overall value of stocks in general? >> my general sense is the stock market is a reflection of very low interest rates. and as interest rates -- if
interest rates go up, if our economy goes better, it will be hard for the stock market to do very well. that's my own feeling. gary: jimmy, thank you for joining us. we'll be right back with more from wall street week. >> announcer: up next our fox business all-stars battle it out over the economy. are we headed for a recession and how will the election impact the market and your money. then as we celebrate father's
sandra: it's a red flag. i look for the market to tell me whether we are in a recession or entering a recession. the jobs report was dismal. we are seeing the average monthly job creation in 2016 less than 200,000. one could make the argument by looking at markets like crude oil, saying maybe these calls are overblown. how do you get north of $55 in crude oil. we have an abundance supply but energy and commodity prices still keep going higher. charlie: no offense. i know you have been on wall street. i don't know how you look at the markets and ascertain recession. the market are not correlated to the economic data we see.
the stock market as 18,000 while we have almost no -- sandra: are you saying supply and demand is not at play in what else determines the price of oil? charlie: sometimes interest rates do. investors buy commodities. sandra: nothing drives the price of a commodity other than supply and demand. you are making the case of why interest rates upset demand, gary. charlie: interest rates don't affect the demand for oil but the stock market historically can predict recessions, but the fed doesn't because it keeps pumping in the money. if we print a negative gdp
number between now and november, there may be a negative gdp number and we may not even print it right. what will that do to the election? gary: if hillary clinton is going to defend the obama economy, that competency argument if the economy falls out, which i think building blocks are going that way. ththe competency argument goes down. the question is why doesn't he hit on that more. that's a psychological question. we need a shrink to ask why he's not hitting on that. gary: it's very, very early. sandra: the number one concern of the american voter is the economy and jobs. why do you think donald trump -- anthony: you will see a blueprint for a renewal in america. and it will be across-the-board
jobs. charlie: let's curry out more economy. tone less curry, more economy. charlie: -- anthony: do you think the arm person who is going to vote feels good? the answer is no. the arm person is more concerned about the economy than anything? sandra: the latest gallup poll shows the economy is the number one driver. the affordable care act. look at the report goldman sachs put out about the involuntary part-time employment rates going up. those are people who want to be in full-time jobs that aren't.
goldman sachs was able to tie that directly to the affordable care act. gary: what donald trump has -- charlie: donald trump has a fastball 80 count middle of the plate and he's winning. in order to make he had people with pretty high credentials. gary: charlie, you have got best source that i know on the street. so yes or no recession before the election? charlie: i would say -- then who would be president? gary: it does matter if we are officially in a reseg for donald to win.
it matters if he can execute explaining it. sandra: i'm going to talk about the yale economist who called it last year. he said the economy will determine the election. anthony: the republican candidate could win. gary: thank you sandra and charlie for joining us. "wall street week" will be right back. >> announcer: we are >> announcer: we are celebratyou both have ay with a
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sunday we celebrate father's day. i wanted to bring on a man who is my personal mentor and a legend in the financial industry. i'm honored to introduce my father jeremy gary kaminsky. dad, let me ask you a question many people asked you the past several weeks. i invested in the stock market in 2000. i listened to experts the last 16 years. i haven't made a lot of money. there has been tremendous volatility. you have been investing since 193. why should people invest in stocks given the vot volatility and low returns. >> there is a big continues between the stock market and individual investing. the longer you own an equity
that has rising income and growth, the probability is that that gives you the greatest part of your total return in equities. gary: distributions and capital gains. >> correct. there is volatility. but off the years, well-managed companies create more wealth thoonter assets available to most individual. gary: you are talking about active management. it's been a very difficult period for active managers as opposed to finding the index. >> the reason for that has to do with the index and people using your phrase, gary, closet indexes. mathematically 55% of the index underperforms the index. people who track the index by definition have to have the 55%.
our objective, our whole thing over the years has been to look for the 45%. that top 45 is going to vary depending on the index where things are over the 50-plus years i have been doing this. anthony: over the 50 years wall street has changed a lot. what advise would you give to a millennial talking. coming to wall street and building a career. what would you say? >> i would certainly tell someone that if they are not going to get pleasure out of helping individual, they shouldn't be in the business. going into business only to make money, the business is going to be under very significant stress, profitability, et cetera, for some time. they will get through it. getting threw it will be fine. but in the end, if you make a difference 20 your client and you get satisfaction from that,
the rest will come along. tone rrp i hav -- anthony: i have known your son for 35 years, but you have known him a little longer. what was he like growing up. >> the calls we got from the nursery school was gary comes to school every day and every day he has i different costume and he's rambunctious. anthony: my mom said i took the bottle until i was 4 years old which was embarrassing. a shout-out to my father who gave me my work ethic. when did you pull him into the business. when did you think he would become successful on wall street? >> i didn't pull gary into the business. we never thought father-son would work together give what happened to my taught were his father.
gary and michael both started with something else. both decided to go into investing. gary went to nyu business school, he worked at a hedge fund, at one point in the summer of '91 he called and said let's talk about going to work together. it so happens at that time i was in the middle of negotiating to go to work with neu berks r gerks r-bergman. they had a rule, anti-nepotism so i stopped the negotiations. gary: we started with 50 million assets under management and grew that from '92 to $13 billion. not only was it a lot of fun working together, but we obviously did a great job for the clients and growing the
business. anthony: do you find managing him as an adult easier. >> absolutely not. anthony: what advice would you give to young fathers about their kid and aspirations for their child. >> having a child is a conscious decision. if you are going to be a father, then you want to spend as much time as you can in the first 7 or 8 years with your child, whether it's a son or daughter. those will come back that time will be quality time that years later will turn out to be key. and in doing that, the values that will be natural, that will come across will hopefully be picked up and improved because what you want is each kid and each generation to be better. anthony: jerry, you have been a wonderful mentor to me as well. thank you.