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Centurion Holdings CEO Joe Grano on Europe’s economy, U.S. government spending and the fallout from the Facebook IPO.
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Joining me now the chairman CEO of -- during holdings Joe Brown also the former chairman CEO of UBS PaineWebber -- good to have you here.
I'm I'm terrific what and these markets how do you judge them -- -- I think they're gonna remain lackluster and more on the downside in the up.
Too much event risk in the world and our GDP growth is colonel -- between one and a half to 2% I think this year possibly back.
By comparison for much of the world and in particular Europe.
A which is a controllers significantly larger economy than that of the United States were looking at growth there that is anemic two contracting.
Well I think they have.
The likelihood of another recession.
And whatever happens in Greece can accelerate all of that there in a depression.
And we're not going to be improving assuming 35 or so percent of -- -- so we will not.
The insulated from those issues little -- our economy down to a bit.
Could cook it costs this appointment GDP -- And and that that might be however offset by the deficits the trade deficits that we've been running went from -- the level.
And of drag on GDP.
As a result of those trade deficits but they've been persistent stubborn long running chronic.
We have the opportunity it seems to control our own destiny in this country should we make important decisions about.
The federal budget.
About monetary policy in the way we're going to do business.
And the way in which we're going to move forward to a vision that's been.
At this point not articulated by either the Republican for the democratic president I like you hold them both accountable.
Your earlier comments about the deficit when Obama took office that the national debt was -- -- there's not 61.
Point two trillion was the war.
I'd like an explanation on the other five trillion dollar -- -- -- -- and in terms of getting our own collective act together.
This congress -- you take the US constitution.
With 27 months.
The total words of of of what's driven our democracy for over 200 years.
Is 8000 students 7818.
Words the Dodd-Frank legislation is.
-- 100000 words fifty times bigger than the constitution and all.
Of its amendments on how do you inculcate change when you have that kind of nonsense in congress.
And outside congress there is also ample nonsense to try to constrain control and rationalize.
Including -- 600 to 700 trillion dollar derivatives market.
That -- -- -- real economy globally.
We have a a very limited regulatory.
Architecture in this country.
And we have unlimited genius working on what -- to devise.
Escape routes due to -- greater financial return.
The point being here.
Are what are we to do about these institutions we've just -- -- more go public.
All right and and cries now that IPOs be fair when in history they have never -- -- what is going on.
In terms of expectations in these firms that -- frankly many of them to be operating.
Always with Reid.
Is a as -- gold on purpose and and driver.
But there seems to be incompetence rising at these institutions.
-- I look.
Than the synthetic derivatives in the esoteric products have evolved in the last decade.
I think the industry stepped back at Citi.
You know.
-- JPMorgan very very well.
Managed firm that was two billion press overreact frankly against -- 127 billion.
But -- that particular case there is a lesson.
When you dominate a market you become the market when you become the market there is no market.
And without liquidity there is no hedge the underlying security and a derivative will divorce themselves immediately happen -- 87 happen in 98 and it's happening now.
The regulators instead of looking at this concept of too big to fail.
Should be focused more on any position.
That's so big concentrated in levered that it can create a systemic risk exactly come from one trader.
One person one small -- -- largest and to put in the kind of different program I was saying here we're talking about.
Literally 80% of commercial banking assets in this -- this country.
Control by six institutions.
That is overwhelming by any definition to be seventy.
-- and it's not likely to shrink.
And less the continued to make idiotic trades like JPMorgan Chase made here which by the way is their privilege of their purpose are not going to whenever wanna watch this -- by two billion.
But in commercial banking where -- cost of funds is effectively zero right now in this in this market place to go out and figure out a way to lose two billion dollars is.
Is Jamie Dimon the CEO said troops to -- I don't to -- -- at a major bet.
And one of the functions of very low interest rates is that.
Fixed income spread -- it is harder for an institution make money so what kind of encourages them take additional leverage in this congress which ultimately forced.
FaceBook very quickly all sorts of efforts -- everywhere are gonna have congressional hearings.
NASDAQ -- SEC or bodies in.
Folks who lost money going to retain money did the firms themselves lose money or make money given the way this.
Are offering went to market well.
Absent settlements they've made.
But in that particular case.
There was a lot of controversy as to whether or not they had a revenue engine company that was sustainable could grow given that.
As -- pre requisite.
When they were told their revenues are going to be softer and they reduced the revenue.
Expectations for the company at literally the last moment going that we're told version of told the retail client as well as what -- -- -- -- -- -- -- -- -- -- -- --
