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tv   Wall Street Week  FOX Business  July 8, 2016 8:00pm-8:31pm EDT

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everybody, from the people in louisiana and minnesota as well as dallas. tom: we have to leave it there because we are out of time. thanks for joining us tonight. louis back from vacation. >> announcer: this show has never been solely about investments. we talked about anything that affected people and their money. from fox headquarters in new york city, the new "wall street week." tone were welcome to "wall street week." i'm anthony scaramucci along with gary kaminsky. a big news week for hillary
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clinton escaping charges. it was a bumpingy -- a bumpy week for the stock market. how should investors gear up for what's shaping up to be a volatile summer? we are joined by former morgan stanley wealth management president greg fleming. welcome to the show. let's talk about the brexit. do you think it was a good move for the uk long term? gregg: unfortunately for england and the uk, it was not a good move. you look at 18 to 32-year-olds, and many of the people in the manufacturing districts voting to leave. it shows in england and the
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united states and other developed economies. we need to do a better job of working with the people displaced by globalization and technology, getting them retrained and into jobs that they are happy with. anthony: is it just retraining? i feel retraining may not be enough in certain circumstances? >> the global world, the technological innovation, the speed of change. one of the things i would like to highlight, if you look at the developments 50 and 100 years ago, things like the lightbulb and television, how long it took those things to become mainstream. from the time you could buy a lightbulb in the store to half the united states being lit in their homes -- by the was 50 years from the time the lightbulb started to happen and
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to half of the american households having it. we have to make sure the people who feel like it's not work for them don't do things that say it's better for the uk and england long term to be out of europe. gary: anyone who follows your career knows you were the epicenter in 2008. we go to see what happened in the uk, will it have a contagion in terms of global markets? that seems to be the fear this week. >> i wouldn't draw a linear line between brexit and global meltdowns. there was a runup before the vote when everybody thought they were going to vote to stay. then they gave all that back, and then a rally. it injects another thing to
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worry about, and this is a reasonably large topic. not just the uk in england. there are questions about the euro and how merkel and the germans respond. that uncertainty will increase volatility in the marketplace. anthony: six exchange -- fixed exchange rates do not last. the euro was a fixed exchange rate among those nations. do you think it's sustainable long term? >> i think it will come down to germany and what comes out of merkel and how the germans respond to this. i think from a larger policy perspective. what they tried to do in europe the last few decades is a good thing. i think pulling markets together, increasing trade, we
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have pressure on trade all over the world it's in the u.s. election. by and large a globalizing world with free trade and flee movement of capital and labor. that's a better thing for humanity. we need to make sure we are dealing with the people who feel that's not working for them so we don't end up having countries retract, trade decline. the short answer is i think it could hold together. because you are dealing with one of the most successful largest economies in the world in germany. gary: some say interest rates is the language of business. we have talked about interest rates for 15 years together. the headline is negative rates. more rates around the world are now negative. record lows in the u.s. what is the bond market telling us that we don't know about what's happening. >> one, growth is going to be
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lower than it was in previous decades. so a fast-growing economy and this is a challenge for china. a fast-growing economy will be 4% to 5%. not 8% and 3-4 percent. so growth has been pushed down. and given the uncertainty and the challenges the central banks are dealing with, rates are not going up anywhere even here.mise window to take rates up. i think that will be a problem over time. >> you think they should have raced rates earlier? >> the underlying business cycle at some point will wind down. it's the second longest expansion on record. now you have got a strong dollar and all the challenges around
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the dollar. i think they weren't even inclined before this. what will happen, what is the fed going to do when the economy slows because the business cycle slows at some points the next year or two or three? anthony: gregg fleming stick around. we'll be right back. >> announcer: coming up, greg fleming speaks about life after morgan stanley. more after this.
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gary: welcome back to "wall street week." we are tal talk with greg flemi. charlie gasparino has questions of his own.
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charlie: i covered one of the best investment bankers. you were at merrill lynch a long time doing deals. you did the deal for black rock. you got reversed during the financial crisis. but the big thing for you was you saved merrill lynch during the financial crisis. merrill lynch was about to head to insolvency, you made a bunch of last-minute phone calls including to bank of america, and you saved the firm. that was an amazing deal. that gets me to where i want to go with this. you were there for the consolidation of the industry, of the financial services industry with the big banks in '08, you were there afterwards in a different capacity, wealth management, now you will go out
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and do something else soon. and you can tell us what that is. but is there any big left in the big banks? can they make the money they made before? can they pay the people like they did in the past? and will they be important institutions like they were in the past. merrill lynch, morgan stanley, city group, bank of america were important institutionally to the u.s. economy. it seems like they are less so right now. greg fleming: a healthy financial sector is critical for any economy. let's go back down history in terms of talking about the industry today. between 1980 and 2006 you had a golden era of growth in the financial industry. the financial industry went from roughly 3% of the economy in the
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1950s to a high of 8% or 9%. charlie: smalled by the democratickization of wall street. greg fleming: the economy grew by five times and financial sector profits grew by 16 times. so you had growth that isn't sustainable going forward. we are in a different take. the game is about capital restructuring and making sure your business model is focused where you can see a legitimate return on capital. you will see institutions that narrow their focus. charlie: every business ma tiewrs.
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technology isn't necessarily maturing. what scares me about banking is that there is no -- there are no employers in banks except for small players who come in and try to do niche deals. they are either being consolidated or downsized because of regulations. greg fleming: what happens in any industry. when returns are challenged and the growth trajectory is changed, there will be restructuring. it will look different 5 to 10 years from now than they do today. you look at the transfer from research and motion from the blackberry to apple. in apple the growth rate may be slowing. anthony: are the profits gone? greg fleming: they are not gone but the trajectory of the growth curve is done.
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and they have to readjust. anthony: focus on efficient use of capital and generating returns on capital of 20-30 percent which existed for a long time is not there. gary: you brought the financial industry back and did it well as much as you can in this environment. where do you see your next move? do you see yourself going back to a big bank? greg fleming: the need for leadership, strategic thinking and execution has never been higher. people in many different places as this industry unfolds -- i'm working in a deliberate methodical fashion because i'm working with an industry that's doing several things.
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charlie: i want you to do a deal, i would hire this guy. greg fleming: the financial service sector will undergo a lot of change so there is a need for leaders to plug in different places. gary: great answer, you have a future in politics as well. anthony: one thing we have spoken about and everybody at this table realizes, the millennials for whatever reason have showed no interest in being an investor class. you thought about that. how does the industry attack this problem and what does it mean? greg fleming: one thing about the millennials, and the numbers move around. there will be a transfer of wealth -- we are in with the
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millennials. there are 78 million millennials. in 10 years there will be 40% to 50% of the workforce. so they are here to stay. but one thing about the millennials is they will inherit a lot of of money from baby boomers. as a result of that they will need to put it to work somewhere. my view is millennials will fun differently -- will function differently. they on text. they don't meet in person as much. they are connected by device. but how they do it -- gary: whatever the next institution looks like. greg fleming: the way you deliver that information is important. >> announcer: hillary clinton escapes charges. >> our judgment is no reasonable
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prosecutor would bring such a case. >> announcer: that means the matchup is locked trump versus clinton. "wall street week" returns. your dentures seem to fit fine when you first put them on. but, during the day, they can move! in the morning... noon... evening...
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[ barking ] [ washing machine running ] party's on! know what your pets are up to with xfinity home. xfinity. the future of awesome. see the secret life of pets, in theaters july 8th. >> there is edthey were extremely careless in their handling of highly classified sensitive information. though there is evidence of potential violation of the statutes regarding the handling of classified information, our judgment is no reasonable prosecutor would bring such a case. gary: with that decision from the f.b.i. director james comey the presidential matchup is all
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but set. hillary clinton and donald trump. deirdre: i think it's all about the economy and all about jobs for most americans, especially in manufacturing. if they are getting a raise it's not moving the needle for them or their family. that's why donald trump has appealed to so many voters and pass * who is no longer officially in the race. but it's the same mess and. jobs. and you can see the anxiety showing up in the markets. gold is going higher. japanese and chinese debt. there are signs of anxiety about the economy. gary: wall street is usually a moderate group of people not sure where to go. greg fleming: wall street and
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the country, all americans want to see a substantive debate around the deissue. there are main challenges in front of the united states and the global economy. there is a lot of nervousness. as we talked earlier. the brexit vote is a lot of nervousness by people being displaced by globalization and technology. we are in the 86th month of this business cycle. you have a business cycle that will turn at some point. you have a fed that at some point it has to go down. you have a fed that's got to figure out what it's going to do. there is a lot of uncertainty and nervousness across the landscape. wall street doesn't like uncertainty and they wanted to see a substantive debate. gary: do you think we'll see a substantive debate? greg fleming: i hope so. look at the united kingdom on
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the brexit vote. on the right and the left, a lot of what's happened in these campaigns has been around americans who are nervous about jobs, progress, how do i fit into this global economy. gary: explain to the viewers why hillary clinton can bash wall street constantly yet raise vast amounts of money from the industry. greg fleming: the criticism of wall street post-crisis has been widespread. gary: obama called them fat cats. greg fleming: what wall street is focused on is what they think they are going to get. if they think they have a sense of what an elected leader will bring, they think they know what she'll done that's part of the support from wall street.
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charlie: in any banker did 1/8 of what james comey said she did in terms of keeping a private server, doing your business on a private server -- deirdre: having your lawyers essentially erase your private server -- charlie: you would be fired, drawn and quartered, hung from the highest tree. you would definitely be indicted. i talk to bankers all the time. where is the double standard? james comey when he was u.s. attorney for the southern district indicted frank quatrone which could have been taken two ways over two emails. greg fleming: i think the election is moving forward and
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the discussion we had around the substantive debate will take place. let the keds engage now on $20 trillion of debt in the united states. on an economic recovery in its later stables. deirdre: 15% corporate tax and 5% income tax. anthony: you predict the cycle will turn down? greg fleming: not in the near term. charlie: do you think it happens before the election? greg fleming: no, not before the election. the american economy has been fantastic. unemployment under 5%. charlie: under employment. greg fleming: that's why there is a lot of anxiety. but we adjusted better and quicker than other economies. look at europeans.
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gary: a lot more to discuss. charlie, greg, deirdre, thank you for joining us. next week donald trump will be here. have a great weekend. it's the little things in life that make me smile. spending the day with my niece. i don't use super poligrip for hold, because my dentures fit well. before those little pieces would get in between my dentures and my gum and it was uncomfortable. even well fitting dentures let in food particles. just a few dabs of super poligrip free
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thanks for joining us tonight. louis back from vacation. >> announcer: this show has never been solely about investments. we talked about anything that affected people and their money. from fox headquarters in new york city, the new "wall street week." tone were welcome to "wall street week." i'm anthony scaramucci along with gary kaminsky. a big news week for hillary

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