Glenn: From From Radio City in Midtown Manhattan, the third most listened to show in call of America. Hello, you sick, twisted freak. Glad you're here. Dan, you don't want to hang up on Neil Cavuto.
Dan: No, I don't want to hang up on might be.
Glenn: Would you like to call him the wrong name? What's what you did with may major Mayor Giuliani.
Dan: I think I said mayor Mayor Giuliani.
Glenn: And then told him to call back a little later and then when he did call back, Dan hung up on him, which is -- in fact, let me go to Neil Cavuto. Hey, Neil?
Cavuto: I sent Glenn some anti-Italianism with Dan.
Glenn: Do you? Now, if he called you Neal Cavuto. And then said call back later and then you called back and you said, Hey, I'm just calling back, it's Neil Cavuto and then he hung up on you?
Cavuto: It wouldn't get farther than that initial dismissal, you know. But, I mean --
Glenn: You think this is the way a show like mine impresses presidential candidates?
Cavuto: I think not.
Glenn: How are you, Neil?
Cavuto: Good, good.
Glenn: I'm -- quite honestly, I'm in a state of shock that Countrywide's earnings are down today. I didn't see that coming. How is Stanley Steam Engines doing?
Cavuto: Well, I mean, there should be no surprise on this. This was well forecast and, you know, the company which will soon be part of Bank of America kind of threw out the baby in the bath water, everything, to try to let people know that this just might be the worth of it. I'm not smart enough to say, Glenn, but I think this was pretty well telegraphed.
Glenn: You think? I hear Enron is doing poorly, as well. Stu, what show were you watching yet where Jim Cramer made this wild accusation?
Stu: I will say it wasn't me, Glenn, but thanks for bringing me into the conversation.
Glenn: Somebody I know was watching it -- oh, it was Chris. It wasn't his show, it was like High Net Worth? Okay. And he was watching the show -- oh, crap. Neil, that's not your network, is it?
Cavuto: That's okay.
Glenn: He wasn't watching it on that network.
Cavuto: Well, clearly.
Cavuto: The mispronounciation, now my network. I'm sure there is a third insult coming.
Glenn: Dan wrote this question. So, anyway, he said that he believes that in six months it will come out that a major bank called the Fed up on the day they cut the rate and said, we don't open our doors today, we're done, if you don't cut the rate. Do you believe that?
Cavuto: Well, you know, there's always that corporate crowd that suspects that something more sinister in the Fed prior to the opening of the trading day on Tuesday last week decided to do something dramatic. People always say that. There are a lot of people who subscribe to, you know, grassy knoll financial theory. I don't think you would have to need or -- you know, that might be proven to be the case. I think the Fed was responding to the markets more than suspected panic among banks because, as we know, the interest rates don't -- folks who make them at least immediately better because the Fed had been cutting rates prior to this and we saw in the earnings reports in the banks out in the latest quarter, it didn't make a big hell of a difference. So, I'm not sure I buy that.
Glenn: May I put another shooter in the tree?
Glenn: I believe that -- hang on. Is that a black helicopter I hear? I believe that the Fed knew about the bank in France and knew that that would just cause even more panic in the market.
Cavuto: You're referring to the rogue trader who lost about $7 billion. That might be because now we know in retrospect that a lot of the selling that day in the financial markets -- it was Martin Luther King day. So, markets are closed here -- had, in fact, been triggered -- again, I'm not smart enough to know. I think that the Fed is really -- what worries me isn't so much whether it responded to a French bank and it's potentially going under or rogue traders or any of, that it's responding to the markets at all.
Glenn: I mean, you say you're not smart enough to know, but I'm dumb enough to guess. Won't you be dumb enough to guess?
Cavuto: There will no many other factors, though, Glenn. I mean, why assign it to a rogue trader who absconded or tried to with 7 billion bucks?
Glenn: Can you explain, because I still don't really fully understand what this guy did and how he did it and I understand now that the bank held on to this information because there was actually, like, $70 billion or something. Can you explain this?
Cavuto: Well, he fixed trades, essentially, to make them look a certain way and to take advantage what were swings in the market. I'm vastly oversimplifying it but when the trend was his friend and we saw, you know, particularly real estate investment trucks, which are a vehicle for investing in real estate, doing very well, he was brilliant. When that turned on him, Glenn, he looked stupid and there's some thought to the notion that society's officials knew that maybe something weird was going on but when they were making a ton of money, they didn't complain. When it went the other way, they started complaining. I think it's ironic that this happened a little more than a week after the European because their financial institutions don't know how to deal with it and then all of the sudden comes this.
Glenn: I wondered that very thing. I was thinking, because, really, the problem -- I shouldn't say the problem, but a lot of the problem that we're going through right now is just out and out greed. People don't care. Any way they'll make a make, they'll make a buck or, you know, on the other end, anyway you can get into a house you know you can't afford, you just take the money and --
Cavuto: You know, the trend is always your way when it's going your way. You know, no one ever complains or bitches, you know, when those who -- you mentioned Enron earlier and they were money hands over fists when the stock was rising and it was the only stock in their 401(k) and people had become millionaires, no one complained. Even though a lot of people were requesting.
Glenn: Here's a guy that grew up in a house with cardboard walls, not kidding, and is one of the richest men in the world, a multi billionaire and that guy never compromised. It's right or wrong. How do you -- it's driving me crazy, these people in Congress. I mean, Hillary Clinton is talking about very strong, rigorous government, and all kinds of meddling in private business. That's not the answer, but how do you get the business community to embrace, oh, I don't know, something I like to call ethics?
Cavuto: Well, I mean, I think the days of the John Huntsman types whose company, you know -- the petrochemical concern, you could describe what it does in a sentence. I think with Enron, when it became this kind of weird cross-trading energy, contract swapping, I didn't understand it entity that went from traditional energy to God knows what, you couldn't explain it anymore and I think that was enlarge part the problem. When we took just black and white clarity out of investing, we also added a lot of grays and the grays added a lot of problems and I think Huntsman was and is right when he says when they get too fancy, maybe they are.
Glenn: Did you see the President's speech last night?
Cavuto: I did.
Glenn: What did you think?
Cavuto: I thought it was a very good speech. I'm always amazed at the people who say he's a lame duck. You know, Glenn, he has almost a year to go and I can remember everyone saying that, right up until September 10th 2001, Rudy Giuliani would go down as a disastrous mayor and then in the final three months of his mayority we all know what happened. So, a lot can happen and change and the last time I checked, Glenn, we only had one president at a time and he's the guy and I always like it in the end. We were commenting about this on fox business network, the network none of you guys apparently bother to watch.
Glenn: I'm watching you right now. It says Amazon results due Wednesday. Google reports Thursday. I'm watching you right now.
Cavuto: You mock me.
Glenn: No. I'm watching you right now.
Cavuto: Dan adds to the mocking. So, I will let the mocking go, but in all seriousness, the one I think thing I got kick at is they say the president doesn't matter, but look at all the people, democrats and republicans who are yapping and wanted that moment to shake his hand and sign something. It means a lot.
Glenn: Yeah. So, Florida, I know you're not smart enough to know, dumb enough to guess?
Cavuto: You know, I could be wrong. I think Romney's going to win it. Again, I could be wrong and I'll erase this tape and I hope you do, as well, if it doesn't turn out, but even if he doesn't win, it looks like it's so close that it's hardly this huge sort of push for McCain and I think there are a lot of republicans who are looking -- and I'm not quite sure whether Romney's the guy for that but so far he seems to be -- a dedicated turn around businessman who, say what you will of his bank capital days, that's what he was in charge of, has a record with this, but I do find is interesting, Glenn, that every since Romney started pushing those business roots in Michigan, he turned around a deficit and he turned around what had been a 10 percent deficit into a real horse race. I think he edges it out. Even if he doesn't, I think it's very close. I don't think it's over on the republican side by any means.
Glenn: I think it's interesting that the No. 1 issue now is the economy and John McCain is doing so well when he's been so wrong on the border but on the economy he says it's not really his strong suit. Can we afford to have a President who says, not really my strong suit, the economy? Do we live in a time when he doesn't need to know, really, he can just get somebody else?
Cavuto: Well, he can't have it both ways. He criticized Mitt Romney about saying he would have to talk to his advisors. I do think that Presidents are oftentimes their economic team. I think it's by assembling a good team of market folks who at least had Wall Street's ear and respect. That counts for a good deal early on?
Glenn: Wasn't Bill Clinton's first two years an absolute economic nightmare?
Cavuto: It was, but to be fair on the issue of a credible economic team, they got kind of whacky as time went on, but he did have that. I mean, Bob Ruben was very much respected and he had the kind of team that Wall Street paid attention to and whether he did it because he had pressure from a republican Congress after '94, you're right, history could judge that any way it wants, but in retrospect, his economic team did matter. So, there might be some truth to what McCain says and the advisors you have but the street is all about credibility and if you have that, that can get you pretty far.
Glenn: Do you think any of the hits that we're seeing now in the market and everything else, in business, is because they believe that Hillary Clinton is going to possibly get the election? I mean, that she's more likely or a democrat is more likely to win at this point and they just know what a nightmare is coming our way, taxes and everything else?
Cavuto: Well, I think a lot of them fear, you know, eats not a homogenous. But I always say, you know --
Glenn: But is there a -- I don't care what party you're from. Is there a businessman out there that thinks socialism is the way to go for --
Cavuto: Well, you know, it's funny, when you talk to these guys, they're neither red nor blue. They're green. They like money, but they look back at the Clinton years fondly. They say maybe it was especially fondly because markets took off and the economy took off post '94 and they're quite right, but they don't really split hairs here. I do think you're right insofar as most are leery. At least the things she has said, she is for ending the tax cuts for at least the upper income. She is for tinkering around with capital gains and dividend relief.
Glenn: Did you hear what she said, a week or two ago, that she wants strong government and vigorous regulations.
Cavuto: At least I tip my hat to her about being very clear on this, that everyone should get and be included in this nationalized health plan of hers. That is the most equivocal statement you could make, especially on Wall Street say, you know, wait a minute, wait a minute, but I think, you know, Wall Street goes through phases, Glenn, that they sell and panic ahead of something, then they resign themselves to it but by and large, Wall Street is an inherently optimistic group because they always try to find a way to make money and they will -- you know, when a democrat takes over, they avoid defense stocks and avoid drug stocks but they start buying food and casino stocks. When a republican takes over, just the opposite. So, it's not black and white rules but enough that they will try to find a way to make lemon aid out of the lemons they're dealt.
Cavuto: From fox business, the channel that I'm watching right now, always great to have you on, sir.
Cavuto: Well, you know, Glenn, I've always said that if you just give me your money to invest, I will get back to you in three years --
Glenn: I would like to compare our bank accounts, Neil?
Cavuto: With a tidy profit, Glenn.
Glenn: Dan would just like to say good buy.
Dan: Yeah, Mr. Sabudo, thank you for coming on.
Glenn: I'll talk to you again. Neil Cavuto, a friend of the program and always glad to have him on.