thanks for watching. that's it for us tonight. thanks for being with us. [♪] this show has never been solely about investments. we've talked about anything that affected people and their money. ♪ >> from fox business headquarters in new york city, the new "wall street week." >> welcome to "wall street week," the show of record for long-term investing, i'm anthony scaramucci. >> and i'm gary kaminsky. the big worry this season, the banks.

jpmorgan beating estimates, other banks out today include citi group which reported better than expected results, but profit came in slightly lower. pnc, another winner, topping wall street's expectations. investors keeping a close eye on wells fargo which did meet estimates but profits fall and we will likely see more fallout in the future results. >> next week we will see 92 s&p 500 companies reporting including nor of the country's financial firms, morgan stanley, goldman sachs just to name a few. how crucial is it to hear good news from these companies next week? we will turn to former goldman sachs partner peter keir nan and former dallas fed advisory peter booth. what's your outlook? >> for the basic challenge you have elevated stock prices and earnings growth that doesn't seem to be measuring up.

i don't know how long those two things can be out of balance. you look at it, how you -- how are you going to grow your business at 15% earnings with 1% economic growth and nothing happening in europe? that's the essence of the request he. >> the stock market has leaf dated because of what the fed has done. danielle, the fed which has created this asset prices or stock prices especially they don't seem to be indicating they are going to do anything different in 2017, do they? >> it doesn't seem like it. speaking of leaf dating the fed is highly responsible for leaf dating the bank earnings, if you look into the weeds a little bit it's all the trading revenue surrounding the uncertainty with brexit and with fed speakers go in 18 different directions and that's helped drive a lot of volatility in the bond market and in the stock market and those trading desks took it all the way to the bottom line this past season. >> that's a really interesting point. i hadn't thought about that that the volatility which the fed is

helping create actually helps the banks. it doesn't help them in terms of their net interest margin but in terms of their trading volumes. >> you're creating more dis burgs dispersion. >> jpmorgan beat by a million dollars in fixed income and brexit was the gift that keeps on giving so some of these desks. both citi and jpmorgan had wonderful news on the ficc side. >> jpmorgan's fixed income bond market trading revenue was up 48% over next year. that's a huge number. >> when the fed governors get together in december because i think we can all is a i tha is happen in november, so when they get together in december will they be looking at the bank results to give them an indication as to whether or not they pull the trigger? >> maybe. that might be something of a stretch. i mean, right now it seems like

there are quite a few cat fights going on around that big conference table in washington because every single time a fed speaker opens their mouth the message is completely different than the prior and that just -- it's not stopping. >> and what's your take? where do you expect is going to happen in december? do you have a call on that? >> look, i think that what happened in september tells us what's going to happen in december. over the past 21 years, 21 years, that's a long time -- we have only had two federal reserve board governors dissent. all other 67 dissents since 1995 have come from the presidents. so yellen would rather withstand a triple dissent from -- like she did in december and hold off on raising rates than have to suffer the optics of two governors truly low and bray nard both dissenting if she insists on pushing a rate hike in december. >> do you think that the fed has lot some credibility politically.

>> no question about it, it's basically turned into a debating society. you have one opinion that matters a whole other opinions that get voiced. if you look at the way banks work you have to divide them into the small banks and big banks. a money center bank like jpmorgan if rates go up their net interest margin will go up but so will their capital markets. i think this will change if we have a bump in december. >> one of the things that you will at management has talked about earlier today was the fact that loan growth continues. how is loan growth continuing if the economy is not really operating -- >> large company loan growth by the way. small business but no loan growth. >> is it only happening at the super high end or is it that they are deciding where they want to lend the money but they're showing loan growth? >> let's look at the small banks for a second. a lot of merger activity over the last three years. it was running 300 banks a year. this year it's 180 banks and the

multiples have gone from 25, 26 times to 22 times. the other thing that's starting to happen is if you are a community bank you don't have the same loan demand that you're seeing at some of the big banks and net interest margins become really, really important. trying to play the float as narrow as they are they don't have -- if you hit them with compliance at the same time as loan net interest margin they're really struggling, it's driving a lot of the consolidation and there's some banks that are sharing compliance teams because they can't afford a full time compliance in their own shop. i think the small banks are really looking for that rate bump. >> danielle, one of the help taths of this whole thing is the federal reserve has helped the large corporations, very wealthy but 97% of the people in the middle are struggling. what would you say to that argument? >> that came out in this morning's retail sales data, that came out in the consumer

confidence data. consumer confidence fell to a two year low. if you strip out gasoline sales, which were a huge boost to retail sales which households don't want prices going up at the pump but if you look at what they call the core retail sales figure it rose by 2.5% year over year that's the lowest level in 11 months. households are waving a white flag that the fed is frankly ignoring. >> we started the block talking about of the fact that asset prices are up and you're concerned about whether the economy and profit can grow. what do you tell an investing right now they should be thinking about for the next three to five years? >> first of all, don't pay attention to the low volatility, everyone says we have a calm market. what's going on right now is a change. if you miss your earnings -- because everyone has been saying kuwait for q3, q4, we're there, we are at the end of the year. if your company does not deliver earnings that stock you own is going to get punished. there's a special volatility reserved for people who don't

perform. this has become a market of stocks not a stock market. be incredibly careful where you invest. if you have somebody who looks like they are not going to make their earnings get rid of that stock. >> peter has a brand new book out "american mojo." so thank you for bringing it and please read it, it's excellent. "wall street week" will be right back. >> still to come on "wall street week," stumpf out of wells fargo but the scandal right not be over. >> what does hillary clinton think about the public sector? charlie gasparino and sandra smith dive into those stories next. from long island to buffalo, from rochester to the hudson valley, from albany to utica, creative business incentives, infrastructure investment, university partnerships, and the lowest taxes in decades

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well, embattled wells fargo ceo john stumpf it out the banging giant announcing news this week as more of the bank's practices come under scrutiny following the scandal that employees opened up unauthorized

bank accounts in a scheme to generate fees and meet sales quotas. >> senator elizabeth warren who grilled stumpf on the hill last month isn't done with him yet though thee tweeted a bank ceo should not be able to oversee a massive fraud and simply walk away to enjoy his millions in retirement. >> our fox business all stars charlie grass perino and the co-host the great show outnumbered sandra smith. >> thank you. >> he's trying to get back on the show. >> every time i'm on the show i have to be on with charlie. >> every time i'm on outnumbered i have to be on with you. >> it's my show. >> thanks, sandra. is it surprising to you that he left? >> is it surprising, no. the second warren buffet said -- >> he said he wasn't going to talk about it until after the election. >> there were a lot of indications that led to the belief that he was not going to be --

>> charlie, you know i've been somewhat critical of buffet over the years. i think the ways he handled this was very un-buffet like. i think it had some impact. >> what we reported on fox biz is behind the scenes he read stumpf the riot act and let him know -- he said not happy. once that happened you knew his days were numbered. at first i didn't think it was going to kill him. >> we talked about on the show i said he was not going to survive. >> and here is why i said he was going to survive. it's a 2 million sooich$2 milli. he didn't do well during the hearings. what it really comes down to banks are being run by elizabeth warren right now. >> you know that. >> which is what we talked about today. >> which is the scariest thing in the world. i reported the day before when i saw the management change i said he's done, it's just a matter of time. i thought by the end of the

year. >> what do you mean banks are run by lids beth warren, she wants to run the banks. >> she just fired a ceo of a major company for no reason but a $2 million scandal. she runs the system. >> the banks do their thing and show main street who is outraged over seeing this -- i don't know if they really are but apparently we're supposed to believe that main street is outraged. look at the stock rice of wells fargo, it is down 10% from the overall banking index. is that the type of hit that you would have seen coming for wells fargo or would you have thought it would be much bigger in the wake of a scandal like this. let's let the stock price tell us how bad this is for the bank. >> what caused this scandal, okay, you have a degree of regulatory after by trash, you couldn't do proprietary trading, all this stuff because of dodd/frank, so they had to focus on the retail side and ramp up cross-selling. now that's gone. if you're playing the stock market on this bank earnings as bad as they are -- by the way,

wells fargo hasn't had -- none of these banks have done well the last five or six years, take down all your earnings estimates on these banks because they just got squeezed on a line of business which is legal, cross selling. >> the banks are doing the right thing without government stepping in and government overreach and creating new laws that are going to stifle -- >> what are you talking about. >> jpmorgan's cfo said we've found cross-selling issues but nothing systemic, we are conducting a deep dive. that's the appropriate thing to do. >> i believe my comment to you when we were here -- my comment to you the day this broke because we were doing this show is i said to you, charlie, cross-selling that's the nature of the business. you and i both know -- >> et cetera be real clear -- >> when you talk about mary ann lake remember fooz foot is on her neck, elizabeth warren. if elizabeth warren wanted to --

>> the biggest issue on the table right now is if elizabeth warren gets a senior position in the next presidential administration is she going on a full scale witch-hunt, if she does that will be a half a percent reduction in gdp growth. i was in washington yesterday interviewing two sec commissioners both of which seems that she's ridiculous in terms of her overreach. >> because of your favorite candidate and her favorite candidate, donald trump -- >> whoa. i don't have a horse in this race. thank you. >> the republicans are going to lose the senate and elizabeth warren will be chairwoman -- >> i will make a bet on national tv the republicans don't lose the senate. >> you better pray they keep the hous house. >> charlie, we will get to the election after this block. let's keep this block on the banks. if elizabeth warren wanted to target every single institution,

every single institution cross-sells, every institution cross-sells. the fact that wells fargo was the one that was the poster child right now, every single institution if they wanted to could be investigated and called out. >> what is she saying she's going to do? she's got all the answers? what are her answers? >> but the cross-selling of the fact that you are basically -- >> they got paid to cross-sale at lehman brothers all the time. >> remember new ceo -- >> your guy screws up the senate. >> charlie, the new ceo, sloan, of wells fargo on a call earlier this morning said, quote, matters will get worse before they get better. so they're telling their investo investors this isn't over now. you always want to set the bordallo -- >> the most critical thing -- >> set the expectations low. >> absolutely. >> that's the most critical thing the obama will be known for is that they've changed the rules in these corporations. they're scaring the people, they've broken legal precedent.

>> particularly banks. >> now they're roughing them up and bullying. >> it would be good if your candidate could talk about that other than other things. >> more "wall street week" after this break. more "wall street week" after this. >> hillary clinton doesn't like wall street, right? >> wall street corporations and the super rich should finally pay their fair share of taxs. >> not so fast. now we know what was in those speeches to wall street banks and it was more like a love letter. so what's the real story? you will get it next on "wall street week."

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hillary clinton refusing to release the transcripts of her paid wall street speeches and now we know why. >> while she was publicly bashing banks on the campaign those speeches and are here are

some things that she said. to a goldman sachs symposium in 2013 about the banging crisis, i think there's a lot that could have been avoided in terms of both misunderstanding and really politicizing what happened. and also to goldman sachs, this is what she said about the controversial dodd/frank banking bill, there was also a need to do something because for political reasons. >> our fox business all stars, charlie gasparino and sandra smith are back with us. >> we are so shocked. >> charlie, you said it all along nobody is surprised by any of this. why is it not having a systemic impact in the election and why is it not being reported the way you would think it should be? >> we did a lot, i wrote a column in the post particularly about the goldman sachs stuff which is historical. in some of those things she was basically saying use your power and clout of your campaign contribution to influence washington. can you imagine what elizabeth warren would have said about that if that came out during the

primary when she was going up against bernie sanders. some of this is the donald trump revelations about the tape and his vile language is about sex and that usually has a higher rating, the demographic likes that. the other half i believe is pure liberal bias. "the new york times" in particular just -- they think it's their mission in life, every reporter, to get rid of donald trump. >> judge, jury and execution squad, just allegations. >> which allegations? >> whatever allegations are being made. in the case of mr. trump they act like he has been tried -- >> he did say what he said, it's on tape. >> i understand that but i'm talking about the groping and these other issues. >> that's a whole other issue. >> let's stick to clinton for right now. you tweeted out a picture earlier this week, i was interviewing hillary clinton at one of these so-called wall street events, right, which obviously -- there's that picture. charlie -- i look good, right? we can't really discuss -- >> i like the glasses. >> she looks better than you, though. >> that's a low bar. >> that's exactly why charlie

and i grew up in the same neighborhood. low bar. >> you sign things and so you can't discuss the specifics, but here is the important thing, the public is being led to believe that these speeches were cozy and warm and it's all fuzzy and very nice. she doesn't like to be there, she doesn't like the people. >> why is she there? >> she wants the money. >> charlie, she is contractually obligated -- >> she wants a certain -- the way these things work -- we talked about this on outnumbered, they say they are going to say a certain amount of time and they want to take a certain number of pictures, they want to come in and get their checks. >> she wants her check and wants to say what they want to hear and that is that she sympathizes with wall street. >> of course. >> she wants wall street to s survive. >> i love having democrats at our event even though i'm a republican. i wouldn't sign that contract because of the stipulation -- >> then you wouldn't be there. >> the only reason she didn't

speak at the conference is because she wanted there for 59 minutes and 59 seconds. >> ihink the public would be surprised at the kind of people -- >> the money -- >> charlie, the public would be very -- my read is the public would be surprised with the kind of people she surrounds herself with, if you watch those impromptu press conferences at the back of the plane you are not that surprised. there are a lot of people saying we're pulling you out, you are a minute overtime, you did what you had to do, you came in here and it's time to leave. >> the head of goldman sachs is very close with hillary clinton, they're friends. if you saw some of those which canny leak e-mails they were -- they were in love with each other, they were talking about how great each other thing. the clinton staff is very close to wall street. cheryl mills is on the board of black rock run by larry fink the ceo who by the way wants to be hillary clinton's treasury secretary. don't think -- by the way, he is on the short list -- don't think that larry fink, hillary clinton, lloyd blank fine they

all don't get together -- >> and morgan stanley -- >> what is elizabeth warren going to say if larry fink is the secretary of the treasury? >> that's a good question. i think elizabeth warren -- if the democrats get the senate she is going to be running wall street so just be prepared for that and be prepared for her having a say in every financial decision of these banks. >> e-mail did reveal she talks out of both sides of her mouth, one side is very private and you said not no release details of those wall street speeches. >> we also learned from wikileaks she gets fed the questions and answers when she goes on msnbc. >> does she want to break up the banks, no you? >> elizabeth warren does. they have differed a bit on their take on that. >> my answer to that and you will know early next year if she's elected who does she surround herself with. >> charlie, sandra, thanks for joining us. tune in next week 55 capital partners founder lee crane fuss

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