tv Maria Bartiromos Wall Street FOX Business September 15, 2019 11:00am-11:30am EDT
if you have your own hit or miss, treat to us at je are on fnc. that is it for this week show. they can especially quality for watching. i hope to see you here next >> from the fox studios in new york city, this is maria bartiromo's" wall street." if. maria: happy weekend. welcome to the program that analyzes the week that was and helps position you for the week ahead. i'm maria bartiromo, thanks for joining us. coming up, former chairman and ceo of the new york stock exchange, dick grasso, is our special guest this weekend. but first, as the number of central banks cutting interest rates continues to grow, three more central banks cut rates this past week, u.s./china trade talks remaining in a stalemate although there are some signs that maybe things are easing and the two can come together. more and more investors are still starting to discuss that r-word, the recession. where are we? we've got some very good numbers on retail this week when we had
better than expected retail sales numbers coming out, up four-tenths of a percent. the odds are as high as 75% for a recession, but is he right? former imf chief economist joins me right now, ken, it is great to have you. thank you for joining us. >> thank you for having me. maria: we've got the federal reserve meeting on tuesday and wednesday. it's pretty much baked in the cake that the fed is going to cut rates by a quarter point, 25 basis points. do you expect that and what is your view of the broad economy right now in. >> well, certainly expect that. there's just no inflation, and they don't really know how much more they can cut it and still not have inflation. maybe it's the trade war, maybe it's a global recession going on outside the united states, but whatever. i think the u.s. economy is pretty healthy except the trade war's absolutely weighing on cap x. it's hurting china a lot more
than it's hurting the united states, but china's important. china hurting, hurting germany and europe, so the rest of the world is very weak at the moment. maria: the fed is in a tricky spot. you've got the president pushing the federal reserve to lower rates more. he wants a full, a point over time. and yet you have ab an economy that is showing -- an economy that is showing very strong signs. so the consumer retail sales out on friday, up four-tenths of a percent. what was your aisment of that? -- assessment of that? >> absolutely, consumer confidence is high, and i think it's reflected in the retail sales, and it's probably high because employment's very strong. it's, we have wages growing faster than inflation, so the u.s. economy, that 70% or so that's consumption is doing very well. but on the other hand, businesses are nervous, they're not investing as much as we would like them to, and that hurts our growth going forward and out years beyond.
maria: i had treasury secretary steven mnuchin on this week, and he said, look, you know, it's not because of trade. it's because the global economy is slowing. i pushed back on that because i'm not buying it. i do think in the uncertainty around the president's trade policy is causing managers to sit on cash a bit because you have cap x actually showing a decline. >> well, absolutely. that's one of the ways that it's ricocheting back at us, because our firms get a lot of profits from abroad. it's a very important part of corporate profits, and the uncertainty in trade is absolutely hitting everybody else. it's one of these things where it hurts us, it hurts them more maybe, but it's absolutely the reason why businesses are uncertain. maria: so china is not going to tax soybeans and certain pork products. no surprise, they need pork badly. they've got swine flu going on over there, by the way. but what do you think about the china/u.s. trade talks? the president signaled this past week that, well, maybe i'll look at a shorter deal, smaller deal,
but i'd rather a big one. we know that the chinese want to separate national security issues from the trade issues, which i cannot see how the president can do that. >> no, he can't do that. a lot of the debate is over how we protect our intellectual property. it's perfectly okay they don't want to debate defense size or something, but, no, i think we have to understand we're probably in the first inning of the u.s./china trade talks -- maria: there's a long -- >> this is going to go on for decades. maria: yeah. >> it's the -- showing, coming to the surface much deeper problems that aren't going away. maria: this week we learned that mario draghi and company has a stimulus plan, they called it a major stimulus plan. they cut interest rates, they're going to be buying more assets. look at all the central banks that are cutting interest rates right now, there's easing going on globally. what's your reaction to the ecb, what does that mean going
forward? >> well, the ecb has sort of reached a point where it can't do much with monetary policy. it cut interest rates a little bit. it needs to make interest rate more negative, but it can't right now. so what they're doing, it's not monetary policy -- and i'm not criticizing it, but it's fiscal policy. they're basically helping the poorer countries borrow more money, stimulating those economists. economies. but very much the way the fiscal authorities do. and the risk is, of course, it may be very small, but some say they run into trouble and the german and french taxpayers have to pay for it. maria: rick reither was on this program a couple months ago, he said when christine lagarde gets in there, they're going to start buying equities. don't they need structure reform in terms of labor laws, in terms of tax rates? i think there's a sales tax of 50%. [laughter] >> i don't know about that. maria: 50%. i don't know if it's the sales tax or some tax -- >> in france taxes are something like almost 60% of income.
maria: exactly, that's what i'm saying. >> they need reform, absolutely. they're not going to grow fast without structural the reforms. and buying equities, the problem in europe is the poorer countries, the less fast-growing cubs need more -- countries need more financing. the ecb's trying to find ways to do it. maria: is a recession on the way in the united states? >> i think that's less than 50%. i mean, we could have the first global recession that didn't include the united states. maria: ken, it's great to have you. >> thank you. maria: thank you so much. ken rogoff. stay with me, my one on one with the former head of the new york stock exchange, dick grasso, up next. >> back from the brink, dick grasso helps return the new york stock exchange to glory after the tragedy of september 11th. >> everyone was on the same team; get the stock exchange back up. >> maria goes one-on-one with the wall street legend when we return. ♪
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♪ ♪ maria: welcome back. this week marked the 8th anniversary of -- 18th anniversary of the attacks of september 11th, a day that changed the course of the country and the world. in spite of the devastating blow, it was important to send a message that was u.s. was still standing. 2,977 americans died on that fateful day. less than a week after the attacks, former nyc chairman dick grasso was tasked with opening the exchange and signaling that the country was open for business. i spoke with dick on 9/11 this week about that fateful week. >> it was a very, very difficult day, or obviously, for all americans, but for those of us who were there, the tragedy was
magnified to the nth degree. my greatest recollection was talking to my colleague, and that was in tower two, almost 150 people having -- he having just received notice that a small plane had hit the north tower, that everyone in tower two should stay where they are. and we were in that space during the '93 bombing. and our people got trapped in the building for six hours. and as i was speaking with him, the visual came on from a tv camera pointed towards the north tower, and i said to him, david, i'm no expert, but that's no small plane. all four corners of tower one were black. i said get 'em out now. and what i really, you know, on this day and on every september
11th since, you know, stop to remember and say a prayer for those 403 firefighters, new york city police officers and port authority police officers who gave their lives that day so that 25,000 people could flee those towers. the greatest rescue in the history of this country. it was the darkest day, certainly, in my life, comparable only to pearl harbor day. but it was a bright day in the sense of america coming together. the firefighters going up the stairs, assuring people you're going to make it, just keep going. and they going up knowing that there might not be a happy ending for them. days, you know, days followed that were very dark, but the financial community came together, the city of new york had the blessing of a great leader in rudy giuliani.
the con ed people led by then gene mcgrath and verizon by ivan seidenberg and larry babio, everyone was on the same team, get the stock exchange back up not because of stock trading being important, but rather as a signal to the terrorists that you've killed thousands of people, you've destroyed billions in the property, but you could never defeat the american way of life as evidenced by the new york stock exchange. maria: that's right. and that's what was really felt, and that's what resonated the following monday when you reopened the new york stock exchange. facing pushback to do so, i remember. 2,977 people lost their lives on september 11th, and i'm wearing this pin today because you gave me this pin, and on this pip you designed it -- pin you designed it with london jewelers, and you've got the two towers on the
pinker obviously. that's what this pin is. and then the number is 343. that's the number of firefighters we lost. 37, that was the number of police officers from port authority in new jersey and then 23, the police officers on the nypd. you designed this pin, i'm honored that you gave me this pin. you're wearing the pin as well. you only wear it on this day. this is when i wear it, every september 11th. >> it's in memory of those incredible men and women. you know, there are 25,000 people alive today, okay, that have to thank and pray for those firefighters and police officers because, without them, who knows how many would have perished. maria: i always say remember, when they were coming out, the fire department of new york was going in, and they were going off that 100 -- up that 100-plus floors. and you mentioned bringing the country total. that is also my one important takeaway from september 11th, it's september 7th, it's the --
17th, it's the day that you red the opening of the new york stock exchange. you had the first responders, the firefighters, the mayor, the golf, the senators -- the governor, and everybody on that podium and all i could think, you all came down to the floor, and i interviewed a rot of you afterwards, and all i could think was, okay, we're down, we're mourning, we lost our loved ones, we lost our friends,but we are not out. we will rise again. the resilience of america is what i remember. >> that was the message. the proxy for the american way of life, it's the american economic system. and the american economic system, at the heart of which is the new york stock exchange, you get that going, you've sent the signal we will not be defeated. maria: stay with us, more with dick grasso when we come back. ♪ ♪ >> rejected, the london stock exchange says no to hong kong's takeover bid. what's dick grasso's take on the offer? >> it's a logical move.
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♪ ♪ maria: welcome back. in 1994 dick grasso made the decision to allow me to broadcast from the stock exchange floor, first time anybody had done that regularly. we spoke about that as well as the many changes that the exchange has gone under since then. in addition, we talked about news of the week. we had a bid and then a rejection. hong kong made a bid to acquire the london stock exchange this week for $36.6 billion. london came back and said, not happening, we are rejecting this bid even though dick grasso said
it was very rich. watch this. >> first, let me say cnn's great loss, the loss of maria bartiromo, was cnbc at the time and the nyse's great gain, because you became the ambassador of the trading floor to the millions of people who watch financial news. and i was always very concerned that the insular image of the new york stock exchange -- here's this private club owned by 1366 boys, if you will, all right -- needed to be further understood in middle and throughout america that it was america's institution. because in those days you had 100 million people who either owned stock directly or had, you know, 401s or iras or insurance policies. they were indirect investors. but they didn't understand what the floor of the new york stock
exchange was, what a stock was, how an order got executed. maria bartiromo became the ambassador, the interpreter and brought us to the living rooms and kitchen tables of hundreds of millions of people. maria: it was incredible. it was the first time that, you know, you you could actually wah somebody on the floor on a regular basis, and i was honored to be that person thanks to dick brass sew. >> you were that person, and you were exclusive for a period of time -- [laughter] and the other networks hated it. will[laughter] maria: they would call me up and say how do you allow those people to bump into you? next day they're calling, they wanted to be on the floor as well. there's news this week, the hong kong stock exchange trying to acquire the london stock exchange. look, you've seen a lot of consolidation on your watch. you've done deals in terms of this sector. what's your reaction to hong kong wanting to acquire london? >> it's a logical move that there be fewer but larger, call
it transaction managers. we call them stock exchanges. hong kong, i think strategically positioned with london creates the opportunity for a 24 hour a day, 5 day a week or more marketplace. i think it's a very interesting price level. i think it's high -- maria: it's rich. >> it is high, and, you know, i wouldn't be surprised if the bid gets changed higher. because i don't think london is going to accept the first bid it gets. nor do i discount the possibility that london turns around and bids for hong kong. maria: there are fewer companies today public than there ever have been, by the way. and the private market is also heating up. give me your reaction to what's going on in the public -- >> i think what we've experienced in the last call it ten years is that companies stay private longer. why? because there's plenty of capital in the private markets.
and, you know, in the private markets you're not subjected to the rigors of public ownership; disclosure, corporate governance, all the things that are earmarks of publicly-owned companies in america. i think the marketplace is starting right now to discern the winners from the losers. and when i say that, i don't mean in terms of their stock prices, but investors are looking at companies that want to go public and saying this company's not profitable, doesn't have the prospect of becoming profitable, why should it be valued at x, y or z billions of dollars? you know, it's an interesting phenomenon going on with well, - we-work. one of the largest shareholders has said don't do it. maria: soft bank. >> that's soft bank. if you look behind the curtains, it's pretty predictable why they would say that. they were a private investor at a much higher price.
now, if they go at the level they're kind of indicating -- which is half of what soft bank paid -- soft bank is going to have to take a charge. now, soft bank's a public company, and i think going public is a good discipline if you need capital, if you want script shares to incentivize employees, to bring on new employees. but you have to be prepared for what the public marketplace wants; transparency, clarity of reporting, clarity of business definition. something's going public -- some things going public today are undervalued because they haven't done that properly. some companies going public today have no business being public. maria: do you think it's all going to go digital? i mean, you oversaw -- when i first started on the floor of the new york stock exchange, i believe there were more than 5,000 people in five rooms, right? >> that's correct. maria: you're talking now one room, 500 people --
>> not even. maria: okay. so what -- >> there's a plus and the minus to that. the plus, of course, is that technology has been a great driver of bringing the marketplace on a democratic basis -- maria: not a political statement. >> right? to a broader spectrum at a lower price. that's the positive. the negative is the transaction -- price discovery, i don't think, is as fair as it once was. now, the public always came first in terms of price discovery at the new york stock exchange. whether it was 100 shares, my grandmother in tennis shoes or 100,000 shares, a big institution. today it's who gets to the market fastest. and traditionally, that's not the small investor. and that's a loss. of course, even greater loss is defined in the human loss. you're right, 5,000 people once;
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trying to do good all the time because your rivals are improving. so yeah, i really like everyt just did. ♪ ♪ gerry: hello and welcome to "wall street journal at large." this week another high profile trump administration official was showning the door. now, what he was fired or quit, national security adviser john bolton is out apparently after months of bickering with the president over foreign policy. mr. bolton was said to be unhappy with a number of the president's diplomatic initiatives including his plan to hold secret peace talks with the taliban in an effort to end the military involvement in afghanistan. the president eventually did cancel those talks. there were also tensions over iran and possible talks with that