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BGC Partners CEO Howard Lutnick on where investors can still find yield for their portfolios.
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Let me pick your brain because our investors love to listen to you because you do make real bets and you do put money behind these bets.
Argued then bearish on stocks what do you like what don't you like going forward knowing what the landscape may look like if we -- that fiscal cliff also.
Everyone loves to say our interest rates really low and -- love to say how much lower can they go and you know what the answer is old or and you -- that can't be.
Germany's thirty basis points lower than us.
Japan.
Is almost a hundred basis points -- to a quarter percent already -- You're -- overnight but our ten year notes are like one point six something that could go to -- and is now point 75 so.
US treasuries as scary in this is.
Are still a great threat -- -- -- -- the place to hide.
You don't love equities right so the stock market's not really fun.
You try to put you money in bonds wanna go by Coca-Cola bonds -- yield like.
Not the right so ultimately what do you do we end up hiding -- hide that's what German covered bonds are zero US treasuries are effectively.
It almost near zero so still US treasuries and then a place.
That's attractive is.
Not bonds for the highest quality companies and not bonds you know high risk high reward FaceBook on -- kind of stuff.
That's still -- but the idea is to find in the middle.
Good solid companies may be -- you know single a triple B aren't there right around that area -- it was about five or 6% you know -- once that you look at Citi your best friends this looks good to me writes I put together sort of a category of about ten or twelve different companies in the not particularly you know famous kind of companies but the good quality companies we know they're not going anywhere.
And it's -- that sort of sweet spot where at least it will get some yield because.
Coming to put your money for ten years and be a one and a half percent how they can help me it's not -- from a kid's education is just not gonna -- what's in that little group.
Well -- you try to spread it out and try to find some Telecom companies but what it is the key is to find that companies that you personally understand select.
BGC you know I know my company is not going anywhere so that is something that I include for these people that large percentage because that's irresponsible but a little bit.
Someone like BGC a little bit of other kind of companies.
And then if you know the company and you understand it.
When you see that business is not going anywhere and that's a place okay.
What -- stand up on commodities for example well you know low interest rates continued to drive certain things -- lousy economy.
And the violently low interest rates are going to mean gold stays high art in diamond stay -- the used to cost.
Which people money to hang art on the walls to that have alternatives now -- it's just another place to hide so investing commodities high.
Right economy commodities lower -- keep going.
-- along in the US at this 2% sort of blab blab -- whenever economy that economists say we're gonna grow faster next year here's my view.
-- can't borrow against perhaps there's no home equity loan -- pleased to have -- -- -- drive the economy.
Without that we're going nowhere fast just -- a long slow and boring US dollar looks better today -- he's still bullish on the dollar.
What you kind of like the dollar but.
Quantitative easing you know we -- Bernanke he's feeling good and strong and we -- gonna be.
QE2 remember QE2 that I saw 103 fulfilling a QE3 isn't this where we did have a get a Q before.
-- QE five they said no interest rates through 2015.
Prayers -- with the US keeps cutting.
When Europe starts to cut which will and rice of those negative things.
That's what drives the dollar higher it's not that we're gonna go lower from -- -- can we go.
It's when Europe starts going lower dollar goes higher so because they are in trouble.
The dollar's gonna be strong place to what I've always felt was refreshing about it was that you always say whatever the regulation is just let me know the landscape and that all work with that I'll win no matter what.
Dodd-Frank obviously not going anywhere now the President Obama is in office for another four years past which can you make money because MPG sees.
Earnings numbers look very good but in part it was your real estate business that offset financial services which have been a little bit weaker -- so.
Financial services as you know the volumes down in the equities market mean people just not trading as much so -- did diversification went into the real estate business.
Big risky business real -- feels good timing was right thank goodness so things are are much better real -- -- with Dodd-Frank.
It seems that what they're talking about will mean that.
We can do things electronically more and more people do electronics which is good for business and then we can keep doing things by voice so generally speaking for what we're hearing from the regulatory front we should be actually in good shape.
The requirements for banks to hold more and more capital and there -- going to treat lessen its people like UBS gonna cut people eventually.
Clients have to find a way to do their business firms that BGC will be that helped them so I think we're in pretty good shape.
No fun to pretty good as -- leaving are you hiring we are hiring all the time right now.
'cause the talent is there Howard luck next saying gold looks good.
-- as well listen dogs playing poker.
Or has it exactly right and ultimately I have got quite -- -- bell but these are the kind of things if you think about what things are gonna hold up there.
Things that must -- cost us money.
To park your money now the royal free so you know a diamond or artwork all these ridiculous things and you wonder why these things going up -- the economy so lousy.
Because they're the ones when interest rates come back that are going to go down.
-- -- thank you so much we appreciate it great to -- -- next chairman and CEO of BDC Cantor Fitzgerald.
