You're watching...
Cantor Fitzgerald CEO Shawn Matthews on the opportunities for investors despite the negative news from Europe.
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
What does that road forward look like for investors in the USO here's a guy.
Who works at a place that just looks -- things differently that's Cantor Fitzgerald Shawn Matthews -- that we CEO but I'm what it took -- out of high -- about that yeah.
Credit of -- I don't think the exclusive interview but you know -- a wedding is a hugely busy day for the retail or investor who's watching right now you look at today how.
Well certainly did the banks that are going to be downgrade -- -- the close of business are forcing a little pressure on the market -- at this point in time.
The -- that's out there is really all Europe.
And the European crisis even take a long time to solve its going to be here for the next year -- we just have to live within DO that.
But it's not going to be an easy solution at at this point.
You guys though at cantor and I followed you for more than a decade look at something and flip it around and see it a different way.
How do you how are you profiting from the fear and the worry that is Europe and everything in between.
When -- is that a massive long term opportunity for us in the three to five your -- -- -- -- that massive long term opportunity.
And there's an opportunity here.
The financial services world is changing aggressively larger institutions are gonna have to get smaller the smaller institutions really -- -- because of regulatory environment is changing.
That leaves a few people in the middle that can take significant market share were one of those were actively taking market share.
And we look at this is it a very good time for us -- things are cheaper now.
There are cheaper than others in human capital it's out there is certainly more available you have opportunities that.
Five years ago certainly weren't here here now so.
This is really good time for -- show -- a good -- Cantor Fitzgerald but but you've got an audience here that's listening and saying you know I don't some widely held stocks at the moment to people get rid of them or just trying to preserve capital is -- -- mistake.
Just with the equity market is reasonably priced so.
If you look at the fixed income market right now you have the government market basically trading at -- frontman.
Ten years that near one and a half percent.
I'm not a big buyer -- over the long -- -- -- it's really about preservation of capital for some people and the reality is right now the equity market is fairly cheap.
Okay you -- also taken a stake in emerging markets now of people brought that term very loosely defined emerging markets on what you find sexy right now.
I think a lot of interesting opportunity so we're actually looking in Eastern Europe we're certainly looking in South America there -- -- lot of places where you had.
Banks that all had capital markets divisions have clearly pulled back into gonna continue to pull back to get other business entirely.
That means I -- -- can go down there and take the market share that was available OK and when you look at say for example South America.
Like costs they do business they have trading relationships with Europe which is of course down for the count at the moment and as you say will be for more than a year.
But not enough to destabilize them a lot.
I think the.
The marketplace is still acting pretty efficiently so the reality is the business cycle which ever when used to trade.
Is no longer in existence right now because -- have -- interest rates at zero so no one has -- business cycle to trade which means volumes are going to be lower.
Put the business cycle will come back in May take two or three years but it will come back in when it does we want to be there and pick up that market share.
The debate over financial regulation and you know Howard look -- -- -- chairman has been here many times -- what ever it is just tell us and we'll deal with that work around it will do business through it.
Is there anything in particular that you look at whether it's derivatives.
Regulation or the fall -- what you say you know what.
That part of it is actually can hurt the market.
I think it's taking some liquidity out of the marketplace so the larger financial institutions.
Are gonna have to act differently so that immediately implies that -- is going to be less liquidity in the marketplace but from our perspective that's -- When you look at the potential for Moody's to downgrade and again folks it could be after the bell this could happen seventeen.
International and American banks could be downgraded by Moody's.
Do you roll your present say I'll give me a break or do you say Moody's is finally doing -- job.
I think Moody's is acting accordingly when you really look at why -- downgrading it certainly because of the capital issues.
But think about the return and equity characteristic of these banks are gonna go through they we have it.
Double digit return profile for the longest time.
Not against have to look at and say based on the regulatory environment out there it's a six -- 8% return profile that straddles less margin of error for these banks.
One last question because that we got to -- it but.
June of 2012.
Let's go fast forward to a year from now we turn around we look back and we say was that a great time to invest.
I think he equitably and market will be up about 10% in that timeframe and I think you would be a you'll at best be at the same interest rates I think -- do actually.
Much different probably fifty or hundred basis points over the whether or -- says to me by.
Correct okay John great to see you they have -- profit shot -- -- this -- -- FitzGerald and company CEO.
