You're watching...
Cantor Fitzgerald CEO Howard Lutnick on how the fiscal cliff deal and debt ceiling debate impact investors’ portfolios.
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
-- market so with that in mind what does the game plan for 2013 and what does it mean for firms tied to capital markets.
Perfect person to have on this to Fox Business exclusive with Howard -- that Cantor Fitzgerald chairman and CEO of the chairman and CEO of BGC partners.
I just through about twenty different things that you put you are the guy who has a broader picture of everything from commercial real estate.
To trading volumes to what's happening with the dollar and treasuries you know 2013 -- -- outlook first part first.
The economy continues to grow at this boring 2% rate we're just.
There we're keeping going number two interest rates dead low.
On into the future so you have real short term interest rates really really -- -- commercial real estate that's excellent for commercial real estate.
Let's talk about.
Enough fiscal cliff that's coming.
-- the nonsense was December 31 that with a fiscal left and wanna see the fiscal let the debt ceiling.
But the debt I see you again next month it starts next month -- starts -- the Republicans.
Are not going to give they're going to say.
I gave you tax hikes I wanna see spending cuts and where Obama says are not -- spending cuts without more tax hikes.
You gonna see the Republicans crossed their arms and say.
I'm not playing we're don't want all that clip.
What is the trade if that is indeed the scenario have to sell long term treasuries looked and treasuries are bad deal.
-- you saw these sort of reports -- that.
On -- deploying that -- all yeah trillion dollar for a thing about that they imagine if the government printed a trillion doesn't just stuck it in in the treasury itself we have.
A trillion last.
That is so what irrational or a country like ours cross -- -- say we're not gonna pay that is so irrational.
To -- -- mean one thing long term interest rates up.
Right bond prices down into the ten year note.
Keep going down down interest rates -- US in the long term.
Continue to jump up but in November when you were last year you said that the best thing going was really treasuries and added that not the best necessarily thing going but that it it was sort of that safety play.
Right they want reform very very well make -- right but now but you well thought it would have been a grand plan you would've said some spending cuts.
Right some tax increases and getting rid of the debt ceiling nonsense how how they could make a deal -- December 31 and allow the debt ceiling nonsense to come -- first quarter it just seems ridiculous so we're about to go into.
Never never land again.
So you believe that that the longer end starting where.
I think anybody -- -- -- -- -- -- NAFTA fight is a little weak tenure as weak and long bonds weak again they're gonna trade down.
Until this fiscal the real fiscal cliff.
The debt ceiling gets resolved you have predicted here on the show more QE3 for infinity -- What we've got more QE except -- new latest minutes from the Federal Reserve indicated that at least.
More than one person.
On the Federal Reserve report has -- you know what at some point we've got to stop.
Adding liquidity has never been a great I don't know what -- well in what way and what are you -- that's the case.
Fiscal responsibility says duration taking notes and the US government buys them all I -- confident -- made in any financial overnight if they got.
Aren't -- the lowest interest rates as a -- of an -- for very long it seems kind of silly but.
With the 2% growing economy.
It's gonna take us a long time to stop QE3 so the said parties QE3 is gonna go on in India -- -- we're not really there yet and it's gonna keep going up.
You have.
Nonetheless managed to do very well in your earnings in particular when it comes to commercial real estate because you've made some very Smart acquisitions in fact he just made -- to.
The the Smith back.
Acquisition -- and so tell me where this goes -- it was more than 30% of your earnings for the recent quarter.
Four of the fact that you guys have made some Smart investments in commercial real estate but we love -- real estate was had low interest rates.
A rebounding.
Economy you know at least it's hanging in there -- 2%.
You've got.
The ability to be able to borrow on real -- growing and building last year.
Two years ago was 25 billion -- she was fifty billion next you probably 75 billion dollars people able to finance real estate that allows them to.
Two transactions of commercial -- great business what two companies one in Philadelphia -- back.
What one in Denver Frederick Ross at the end of the year so really just continuing to build a commercial -- business idol I love this story.
And -- -- -- and we think that Cantor Fitzgerald the beaches -- great story Bloomberg comes out with this report about how so many of your new higher since 2009 have left.
This at a time -- -- don't know when you eventually decide to go public.
There are concerns about what's what's really going on in -- and then you've got one of the ratings agency saying maybe there's a downgrade just because of trading volumes day.
Will trading volumes get back up to speed.
And what's what is it as far as employee retention.
To speak to those -- it's OK so investment banking.
About two years ago we decided we were gonna make a big push it went into five different businesses and in those two business like obviously which -- -- -- -- most successful commercial real estate.
-- -- last year we get all 10%.
Of the commercial mortgage backed securities market -- so we've had great success of mortgages.
Excellent and realistic in general excellence success in health care.
Pretty good in technology and we have some underperforming people who left about forty as compared that you know -- -- daily let -- 16100 people I'm glad if I like a forty people in march of last year.
It gets in the news isn't -- -- now but.
I'm -- I'm OK so.
You know with respect -- that we're always gonna let underperforming people go what we're building.
Howard this company has been through the worst of times of course 9/11 you lost more than 650 employees and you always have the relief fund for -- families.
Today you guys have made a huge announcement about giving billions of dollars to hurricane sandy families families who -- terribly affected public schools.
What are you doing them well you know you.
Are so kind and you come and join us on a charity day every year effort on -- -- -- and you watch just raise twelve million dollars and you were there helping us this year -- -- -- -- -- -- What do they do with that much.
Well this is the examples -- of five million dollars from that.
And five million dollars next as we put ten million dollars -- and we got basically this credit card.
Welcome to this credit card what does that -- -- debit card to get -- -- of 1000 dollars on it we adopted in nineteen schools.
Right -- about the nineteen schools would go to those schools public take public schools obviously of lesser means.
Right and we keep each and every family in those schools one of these -- -- thousand dollars 101000.
Families.
A thousand dollars each that's ten million dollars.
And you know we put the money in the hands of the parents and tell them to do with they think is best that they need -- new caps because they're couch was destroyed and that's fine but if they wanna go by -- For the -- to make it -- happy.
You gotta let parents do so this is our way of saying.
You know we do all that -- charity day something happened in New York we've got to be there to help them.
And we do -- our way which is direct he'd put the money in the hands of the parents.
That's that would Cantor Fitzgerald BGC corporate conscience of you guys thank you so much of going public with Canada's -- with -- The market when we got in the generally just before we sit down volumes of death and at 70% of normal how we get the 100% -- normal then that it.
They concoct -- -- -- -- in the market condition that -- thank you -- very much greatest power but.
