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tv   Maria Bartiromos Wall Street  FOX Business  January 27, 2019 8:00pm-8:31pm EST

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inspiration. they should be certainly -- to all of us as are you. candice owens thanks so much. >> thank you. that's for us tonight we thank you for being with with us. good night from new york. ultimately triumph. i think i can promise that. >> from the world economic forum in switzerland, this is maria wall street. >> happy weekend. welcome to the program that analyze the week that was in helps position you for the week ahead. a special program coming from the world economic forum in doubles, switzerland. we have an all-star pack program this weekend. will be talking with wall street titans. also needs nato secretary-general coming in will join us to discuss multiple hotspots across the globe. finally i sit down with the company's outlook. first, my guest, founder ray
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dalia. ray was on the program and said the federal reserve would have to rethink raising interest rates. looks like he was way ahead of the market. >> in 2019 i don't think they should raise rates. i think i am very glad that they learned, there is a change. >> there is a pivot. >> now, we are on a situation where they are attuned to those issues. so, i think that is much better. i think you will see is slowing more than they would expect and you have to look at ourselves within the context of europe, it slowing, china, it is slowing. when those things are happening and connected i don't think they will raise rates. it is conceivable that if you were to take another year or so,
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they might need to ease, then, we deal with the question of europe, how does your fees when you have a negative interest rate and it's already done most of what quantitative easing can do. >> the implications of a slowdown in china and what it does is all of the debt it holds of the united states has real real implications on the marke markets. >> china's going through two drags. it is dealing with the deleveraging. deleveraging is a good thing. in other words, it is controlling and restructuring its debt. in the other short-term negative is a conflict with the united states. it went from a bit of a bubble from this adjustment. longer-term, it's making
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dramatic reforms in ways that has raised its living standards by 20%, 20 times. if you look at the longer-term productivity movements it's very good. i think people have to realize it will be a negative on growth. europe has a negative growth and the united states will have a negative growth. i mean slowing of growth in a material way that could be close to zero and 2% over the next 18 months. we are going to be in a slower growth environment and that affects capital flows in the issue of capital flows, the other side of the trade deficit is a capital deficit. in other words, they bought our
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goods, then at the same time, they lent us a lot of money. i think we should always be mindful that capital issues, capital flows have a big effect on the world and the economy. because they can change things a lot. so, i'm not saying the chinese are going to react by changing that, i do think they will change the mixes of their assets they are holding. i think that has implications. i think it has implications as we are going for the next year, and or two, or three when we have to sell the u.s. dominated debt. as a result, we'll have to sell an enormous amount of corporate debt into world markets. that will be a pressure on those world markets. we have to think about who are the recipients of that in the capital flows will be a big deal.
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>> you not the only big-name concerned, stephen schwartzman also said he is expecting a slowdown but not a recession. i asked him if we could be headed that way here's what he told me. we have a large number overseeing the economy is slow a bit. remember it was at 4.2% growth which is almost unheard of for a country our size in the second quarter. then in the third quarter we were at 3.5%. it is going down for next year, somewhere in the mid to use, maybe it will be 25, 26, 27. but that is not a recession. we have confirmed to the best of our ability that's what our ceos are looking at, part of the
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reason the markets so adversely is that profits will probably only be up in the 567 area so that shocked the market and results in a ratio where it could be lower but still growing. it's not going backwards, it's growing, but slower, then the p has to come down. that's how you get declining markets. >> maria: what about the political environment. i wonder what you think about the new ideas and new focus by younger generations of socialists. you have alexandria ocasio-cortez talking about a 70% tax rate. that would be double where we are now in terms of the highest earners. we know they already pay 80% of the tax. your reaction to some of the new focus that we are seeing from the democrats on socialism?
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>> i think we need to go back and look over time as socialism, and see what the outcomes have been. for those kinds of economies. for the most part, i think that has not worked out well. as you go further out towards communism, as you go further left, that has resulted in feeling almost everywhere, economically. so, it seems to me that the balance of evidence says that would be not a wise thing. >> you have given so much money away, i made the point yesterday that when you have millionaires and billionaires giving 70% of their income away, you have to question if you will see the kind of philanthropy we have seen in the world. >> philanthropy aside, just in theory, if you move tax rates
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high enough, then you basically discourage people coming to the country who were entrepreneurs and other types of things. but, it is a broader question than that. socialism is a system that for the most part simply has not worked. >> markets caps off the week with the game. in reaction to the federal reserve. now discussing it may not unwind the 4 trillion-dollar balance sheet as much as expected. that is something ray told me. >> maria: at the end of the year markets were reacting to the unwind of the balance sheet as well as the raising of interest rates. so, i ask you, do we even have the wiggle room, if what you will in terms of cutting rates where they are? >> no. i think you could look at the level of interest rates and compare that to zero. think about that times the duration of the assets.
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that is the power that you can have and having financial assets impacted by using the monetary policy. then, you have to ask yourself in terms of the balance sheets, how much can the balance sheets be increased. what can be purchased? what scares me the most longer-term, we have limitations to monetary policy which is our most valuable tool. we have important limitations. at the same time, we have greater political, social antagonism. >> maria: my special thanks to our guests. don't go anywhere, my one on one with nato secretary-general is coming up next. stay with us but some give their clients cookie cutter portfolios. fisher investments tailors portfolios to your goals and needs. some only call when they have something to sell. fisher calls regularly so you stay informed.
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>> maria: welcome back.this weed a bipartisan bill to prevent president trump from pulling the united states out of nato. the bill is in response to the president's frequent criticism of the alliance. the secretary-general of the union had a different take. >> over the last four years, from 2016 to 2020, at the end of next year, european allies will add 100 billion more for defense. so, they send a clear message from president trump is having an impact. i welcome that. we need fair burden sharing in nato. those allies who are spending too little have to increase their defense spending. that's what i was taught to do. they still have a long way to go. it's encouraging to see they are moving in the right direction. at the nato summit when trump was in brussels meeting the other heads, we made decisions
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to provide plans for how to increase. now, we see the results. 100 billion more by the end of next year. >> are there countries are members up to the 2% target or do they have way long to go? >> some allies have reached the 2% target. we have more reaching that guideline than we have in many years. some allies still have a way to go. we have a planning horizon up until 2024. the majority have pledged to be there at 2%. what really matters is the money on the table. and what we see now is hundred billion more over four years from 2016 to 2020, that helps. if you expand that to 2024 which is our planning, then it's 350 billion u.s. dollars. this helps this significant, and
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it is necessary because we need not fear burden sharing the lines. it is good for europe but also good for the united states. they have 20 friends and allies that stand together. something china doesn't have, russia does not have. >> the president has also criticized germany for russia. when he was complaining about the 2% target he said what good is nato a if germany is paying russia billions of dollars for gas and energy. the u.s. is paying for europe's protection then loses billions on trade. what's your reaction to europe paying russia? does that not make europe more vulnerable to russian aggression? >> nato has 29 allies from both sides of the atlantic with different parties and different
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culture. some neighbors,'s of russia, some are not. there are disagreements. but, the strength of nato is despite the differences, on this pipeline from russia, we have always been able to unite around our core task. one for all and all for one. again, this is good for europe but also for the united states. now the united states is focused on china. in china's big economically and technologically. also when it comes to increasing military capacities. if you have europe, then we are close to 1 billion people. we are 50% of the world's economic. compared china with the whole of nato, then actually we are big.
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nato is good also for the united states. >> a special thanks to the nato secretary-general. coming up my sit down with the ceo. ♪ ♪ you got a side that wants more space, ♪ ♪ 'cause every day starts like a race. ♪ ♪ you got a side that loves that style, ♪ ♪ but to fit in those shoes gonna take awhile. ♪ ♪ today life's got you runnin'. ♪ ♪ tomorrow big things are comin'. ♪ ♪ that's why nationwide is on your side. ♪ ♪ to be nobody but yourself in a world which is doing it's best to make you everybody else... ♪ ♪ means to fight the hardest battle, which any human being can fight and never stop.
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we talked about the economy where we wer second an economic slowdown was coming. just how steep it is ranged greatly. some, like ray said a recession could happen in 2020. he thought become a slowdown would not be able to raise rates at all this year. maybe even change the balance sheet. where did this recession idea come from. most were focused on issues like china and brexit. another key take away, china wants a deal. it will open up its markets to foreigners. they are seeing a better situation versus a few years ago. i bet we will see a china u.s. steel sooner rather than later. most important it will include foreigners having a chance to own their own companies in chi china. that's a huge deal given the
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population of china. also i observed artificial intelligence. these are real and the growth engines of the world. many business leaders are worried about that. they realize technology will replace jobs. there are many and he is being performed about how to best train people. it's a good thing. but, it requires training. my final observation. the conversation about socialism taken place. most independents and moderate democrats doubt very much 70% tax rate will materialize. the top 10% pay 71% of all income taxes already. thanks for joining us. we appreciate it. you can catch us here every friday on foxbusiness. i'll see you on sunday morning futures. were talking with ranking member, devon nunez.
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also, start smart every weekday on foxbusiness. tune in right here at 6 - 9:00 a.m. eastern's with "mornings with maria". that will thank you for joining me. have a great weekend. i will see you again next time >> hello and welcome to chilly,. this week, i'm here at the side of the world economic forum. the annual gathering of the people why they viewed, certainly by themselves, as the global elite. for a few days of earnest discussions, dealmaking sessions and brief chance encounters, all fueled by copious helpings of swiss fondue and otheriq


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