who creates software. they all have insurance crafted personally for them. not just coverage, craftsmanship. not just insured. chubb insured. that's it for us tonight. thanks for being with ♪ 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 coming earnings season the banks. jpmorgan getting things started on a positive note this morning

beating estimates, other banks out today but 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 beat estimates but profits slid slightly over news about its sales tactics scandal and we will likely see more fallout in the future results. >> next week we will see 92 s&p 500 companies reporting including more of the country's largest financial firms, morgan stanley, goldman sachs, american express just to name a few. how crucial is it to hear good news from these companies next week? we will turn now to former goldman sachs partner peter kiernan and former dallas fed advisory danielle booth. peter, let's start with you. what's your outlook not only for next he can week but the economy in general? >> the basic challenge we have right now is you have elevated stock prices and earnings growth that just doesn't seem to be measuring up. i don't know how long those two things can be out of balance.

>> so, you know, 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. to me that's the essence of the request he. >> but the stock market has levitated because of what the fed has done. danielle, the fed which has really created this base of asset prices, stock prices, especially, they don't seem to be indicating that they are going to do anything different in 2017, do they? >> it doesn't seem like it. speaking of leaf dating, the fed is also highly responsible for leaf dating the bank earnings. if you look into the weeds it's all the trading revenue surrounding the uncertainty with brexit and with fed speakers going 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 with the earnings out this morning 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. >> hedge funds, too, because you're creating more dispersion. >> of course. >> if you look at what the estimates were jpmorgan beat by a billion dollars in the -- in other trading activities, fixed income. brexit was the gift that keeps on giving to some of these desks, there was so much back and forth. citi and jpmorgan had wonderful news on the fcc side. >> jpmorgan's trading revenue was up 48% over last year. that's a huge number. thank you, fed. thank you, brexit. >> danielle, when the fed governors get together in december, because i think we can all say that november -- nothing is going to 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 september and hold off on raising rates than have to suffer the optics of two governors trujillo and brainard both dissenting if she insists on pushing a rate hike forward in december. >> do you think the fed has lost some of its credibility politically? >> there is no question about it, it's basically turned into a

debating society. what you have is one opinion that matters and a whole lot of other opinions that get voiced. what frustrates me is if you look at the way banks work, but if you look at a money center bank like jpmorgan if rates go up yes 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. >> peter, 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 -- >> these are large company loan growth. small business but no loan growth. >> is that where -- is that it's only happening at the super high end or is it that they're deciding where they want to lend the money but showing loan growth? >> here is the way i look at it. let's look at the small banks for a second. there has been 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 the -- if you hit them with compliance at the same time as loan net interest margin they are really struggling, it's driving a lot of the consolidation and in fact there's some banks that are sharing compliance teams because they can't afford a full-time compliance in their own shop. so i think the small banks are really looking for that rate bump. >> danielle, one of the epitaphs of this whole thing is that the federal reserve has helped the large corporations, the very wealthy, but 97% of the people in the middle are struggling. what would you say to that argument? >> look, that came out in this morning's retail sales data that came out in the consumer confidence data. consumer confidence expectations for the into you too you are

fell to a two year low, expectations, current expectations fell to a one 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. i think households are waving a white flag that the fed is frankly ignoring. >> peter, we started the block talking about the fact that asset prices are up and you're concerned about whether the economy and profit can grow. what are you telling an investing right now, this is a long-term investing program what do you tell an investing they should be thinking about for the next three to five years. >> first of all, don't pay attention to the low volatility. what's going on right now is a change. if you miss your earnings -- because everyone has been saying wait for q3, q4. we're there. we're at the end of the year. if your company does not deliver earnings that stock you earn is going to be punished. there is 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 meet their earnings do not hang on to to that stock you are going to get punished. >> i want toay thanks to both of you. peter has a brand new book out "american mojo" it won the international book award for nonfiction. so thank you for bringing it and please read t it's excellent. "wall street week" will be right back. >> still to come on "wall street week," stumpf out at wells fargo but the scandal right not be over. >> and just what does hillary clinton think of the financial sector? now we know what she says publicly is very different a than what she says to wall street. charlie gasparino and sandra smith dive into those stories next. is it a caregiver determined to take care of her own? or is it a lifetime of work that blazes the path to your passions?

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this clean was like pow! everything well? it added this other level of clean to it. 6x cleaning* my teeth are glowing. they are so white. 6x whitening*á i actually really like the 2 steps. step 1, cleans. step 2, whitens. every time i used this together, it felt like leaving the dentist office. crest hd. 6x cleaning*, 6x whiteningá* i would switch to crest hd over what i was using before. crest. healthy, beautiful smiles for life. embattled wells fargo ceo john stumpf is out. the banking 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 strump of on the hill last month isn't done with him yet though she 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 gasparino and the co-ht of the great show "outnumbered" sandra smith joining us now. >> he is trying to get back on the show. >> every time i'm on the show i have to be on with charlie, is that -- >> every time i'm on "outnumbered" i have to be on with you. >> it's my show. >> it makes the picture look that much better. >> thanks, sandra. >> listen -- >> is it surprising to you that he left? >> surprising, no. the second warren buffett said -- >> he said he wasn't going to talk about it until after the election. >> there were a lot of indication that is led to the belief that he was not going to be -- >> we will say one thing,

charlie you know i've been somewhat critical of buffett over the years on a number of things. i think the way that he actually handled this was very unbuffett-like. the fact that he did not come out and publicly support him had some impact with the board. >> what we reported on fox business is behind the scenes he basically read stumpf the riot act, let him know not happy. stumpf had to report that to the board. 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 and i said he was not going to survive. >> i said i hope he survives. >> i said he was going to survive. when you look at it materially it's a $2 million screw up here. it was obvious he didn't do well during the hearings and, you know, what it really comes down to, banks are being run by elizabeth warren right now. you know that. >> which is what we talked about. >> 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 being run by elizabeth warren. she wants to run the banks. >> no, she runs the banks. >> she's petitioning 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. >> let 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 price of wells fargo. we got their earnings this week, the stock price is down 10%. is that the type of hit that you would have seen coming for wells fargo or would you have thought it would have been 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 on one side. the bank had to he can to us on the retail side and ramp up cross-selling. no you that's gone. i think you've -- 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 over the last five or six years. take down all your earning estimates on these banks because they just got squeezed on a ro profitable line of business which is legal, cross-selling. >> we got word that the banks are doing the right thing without government stepping in and government over reach and creating new laws -- >> what are you talk being? >> mary ann lake jpmorgan's cfo said we've found cross-selling issues but nothing systemic. we're conducting a deep dive. that's the appropriate thing for these banks to do. >> 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. >> okay. >> you and i both know because -- >> let's be real clear -- >> when you talk to -- >> when you talk about mary ann lake here remember whose foot is on her neck, elizabeth warren. >> every one of these institutions -- if elizabeth warren wanted to -- >> there is a bigger issue. >> what? >> regulation is off the charts.

>> 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. >> she doesn't need to be in the position. >> it will be a half a percent of reduction in gdp grow et. >> i was in washington interviewing two former sec commissioners both of which think that she's ridiculous. >> overreach. >> because of your favorite candidate. >> bipartisan. >> 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 is going to be chairwoman of the banking econocommittee. >> i will make a bet on national tv the republicans don't lose the senate. >> you better hope they keep the 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.

>> right. >> 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 to 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 -- >> we got paid to cross-sell at lehman brothers all the time. >> remember new ceo -- charlie, the new ceo sloan of wells fargo on the wall earlier this morning said, quote, matters will get worse before they get better. so they're telling their investors this isn't over now. now, when you are a new ceo you want to set the bar low. >> set the expectations low. >> absolutely. >> that's the most critical thing the obama administration 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.

>> and now they're roughing them up and bullying. >> it would be good if your candidate could talk about that than other things. >> don't go anywhere. more "wall street week" right after this. ywhere. 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 taxes. >> 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."

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 trail wikileaks got ahold of those speeches and here are some of the things that she said.

to a goldman sachs symposium in 2013 about the banking crisis, i think there is 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. >> and we are so shocked. >> charlie, you said it all along nobody is surprised by any of this but why is it not having a systemic impact in the election and also 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 this week 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. could you imagine what elizabeth warren would have said about that if that came out during the primaries when she was going up against bernie sanders. listen, some of this is the fact

that 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. >> allegations you have a judge, jury and execution squad. just allegations >> which allegations? >> whichever allegations are being made. in the case of mr. trump they act like he has been tried -- >> he did say what he said. it is on tape. >> i'm talking about the groping. >> that's a whole other issue. >> let's stick with clinton with the wall street stuff. 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 is that picture. charlie, thanks. 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. >> you sign things and so you can't discuss the specifics. here is the important thing, the public is being led to believe that these speeches were all cozy and warm and they're fuzzy and nice. she doesn't want to be there. she doesn't like the people. >> why is she there? >> she wants the money. charlie, she is contractually obligated to take a certain amount of pictures. she wants a certain -- the way these things work -- we talked about this on "outnumbered," they say they're going to stay a certain amount of time and they want to take a certain amount of pictures, come in and get their check. >> she wants her check and wants to say what they want to hear and that is that she sympathizes with wall street. >> of course. >> and she wants wall street to thrive because if they don't she doesn't. >> i love having democrats at our event even though i'm a republican. i wouldn't sign that contract because of the stipulation -- the only reason -- >> then you wouldn't be there. >> the only reason she didn't

speak is he salt conference is she wanted to be there for 59 minutes and 59 seconds. >> i think the public would be surprised -- >> the money. >> charlie, the public would be very -- my read on the whole thing was that the public would be very surprised the kind of people she surrounds herself with. if you watch the impromptu press conferences at the back of the plane you are not that surprised. there are a lot of people saying to her we're pilling you out, you are a minute overtime, you know, you did what you had to do, you came in here and it's time to leave. >> you're absolutely right but let's be real clear, the lloyd blank fine the head of goldman sachs is very close with hillary clinton. the other thing is we should point out that the clinton staff is 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, i mean, 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. >> these e-mails did reveal she talks out of both sides of her mouth, one side is very private and you are said not to release details of those wall street speeches, publicly she condemns wall street, she wants to break up the banks, she wants -- >> we also learned from wikileaks she gets fed the questions and answers when she goes on msc. >> does she want to break up the banks, though? i bet not. >> elizabeth warren does. >> let's see. >> they have differed a bit on their take on that. >> my answer to that and a 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

kranefuss and pain capital founding partner ed conard are our guests next week. we will see you then. ...as a combination of see products.. and customers. every on-time arrival is backed by thousands of od employees, ...who make sure the millions of products we ship arrive without damages. because od employees treat customer service... ...like our most important delivery. od. helping the world keep promises.

>> the government is too big and it spends too much money. john: they cover his mistakes but ignore much of the argument. they ignore his good ideas. >> parents get a choice where their ildr attends school. john: the media talk about donald's and hillary's health but never talk about gary. john: they praise donald trump's