tv Maria Bartiromos Wall Street FOX Business May 20, 2018 7:00am-7:30am EDT
thanks so much for watching "strange inheritance." i'm jamie colby. remember -- you can't take it with you. and good night from new york. >> announcer: from the fox studios in new york city, this is maria bartiromo's "wall street." maa: welcome to "wall street." i'm maria bartiromo. coming up in just a moment. my interview with the home depot founder who has a new book out called "i love capitalism." later on in the program we'll look at interest rates and the fed. jim grant will join us. ken langone is a legend on wall
street and the business community. his new book "i love capitalism, an american story" includes the story of how echo founded home depot and sounds the warning that capitalism is the world's best hope. but its popularity seems to be on the decline in some circles. ken, thank you for joining us. the book is incredible. i'm so happy you wrote this book. i want you to tell the story why you decided to write this book. you had been watching bernie sanders during election season. >> i had been encouraged to write a book, and i said it's not my thing. then in early 2016 i noticed there were a lot of young people attracted by bernie sanders. and i said, oh, my gods, these
kids are giving up before they even start. like it or not, nothing is perfect, but capitalism is the way ford. look at america. look wait has done for us as a nation. do we have problems in america? income inequality. entitlements. public education is a disaster. but capitalism against everything else out there, capitalism is it. when i look at my own life what happened to me. this couldn't happen except in america. i say to my grandparents. i say thank god for coming to america grandma and grandpa. you know it, and we are a nation of immigrants. maria: we are lucky our grandparents did come to america. >> exactly. one time i asked my grandfather, have you ever been back to italy?
he said no, why would i go back? there was nothing there for me, that's why i left. mire grandfather insisted that his children speak to his grandchildren only in english. i regret that now. i wish i could speak italian. working in construction i learned a few bad words. and the biggest date year for him was memorial day when he hard with the sons of italy, and they had their caps with the lodge, and that was the biggest. he was so proud to be an american. and when world war ii came and his son and grandchildren were in the war. he was frightened, but he was so proud. maria: you were the grand marshal of the columbus day parade. >> my dad was a plumber.
maria: your mother worked in a school cafeteria. can you explain to your audience who wants to achieve success and wants to get ahead, the lessons learned. >> let me be crass. i wanted to make money. 11 or 12 years old, i would look to to see if i could deliver newspaper, and i did. i sold christmas leaves. i had two kids younger than me, they each hold the broom handle and we put the wreath on that. i remember one time i persuaded a jewish man to put a wreath in every window. he brought 8 wreaths for me for every window of his house. you know, the guy that ran the liquor store, lovely man.
i made a deal. he hire made for 50 cents a night to take the boxes that the liquor came in to where the garbage man picked them up. i found out you could sell them. i said don't pay me, let me break them down and stack them up on your back porch. when i was getting ready to go to college i was walking paths store one day and he said i want to see you. he said are you going to college? i said yes, i am. he had an envelope -- he put a dollar bill in every week. he says i hope this helps you in college. he put away the buck a week he was paying me that he didn't have to pay me. i am anything but a self-made man. there are a lot of self-made people out there -- maria: you are saying people helped you. >> hundreds. i worked my butt off. maria: take to us your
professional life. you were at nyu business school. >> it began when i was at bucknell, i used to go to the library and read the for "for "fortune" magazine. there was a man named maurice art. maurice hart said to me, i want to tell you the secrets of wall street. we have jewish firms for jewish kids. we have wasp firms for wasp firms. he said go learn about the business, find a job in even
institutions. i got a job for $82 a week at equitable life. i went to nyu at night to get an mba. i got called back into the army. i said i'm going to wall street. my partner was upset. he said these are bad times. i said no, i have got to do it. this is the time to go. crash just happened. i ended up talking myself into a job for $150 a week. that's what they were paying secretaries. i give him $150 a week. i said pay me that. by then i got a job teaching at nyu at night. my wife has bee my partner every step of the way. while i was slaying dragons she was cleaning diapers and doing
all the stuff mothers do. what i can tell you is i truly believe i'm the american dream. maria: you and your wife elaine have been giving back even before you had the money you had today. where does that come from? is it because you were at one place and you got to another place and you recognized you have to help those people get a shot? what you have done for nyu, langone medical. what elaine does for animals, the veterinarian hospital. >> my father had nothing. but my father believed that you are on charitable when you sacrifice something yourself to do for others. he really believed that. i have known and elaine has known for all this money that was given away.
we have given up nothing, sacrificed nothing. when she goes to a boy's club meeting, that was type she spent reading a book or playing golf. so people reflect on the time i give because that's a sacrifice more than the money i give. the money is in the abstract. there is nothing elaine or i need or want that we haven't got. maria: i want to take a short break then fast ford to where you see growth in the world. stay with us. >> announcer: as ken langone watched over home depot his good friend jack welch was overseeing general electric. he tells maria where g.e. went wrong when "wall street" returns. so, you guys have recently started dating...
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maria: welcome back to "wall street." home depot co-founder and author of the new book "i love capitalism." what i love about you are the principles and loyalties you have. not to mention you have this marriage of 61 years and you are so loyal to each other. but you have principles to do the right thing. >> i give credit to defending my judgment and why i thought as a member of the committee that happens co-incidentally that this benefited dick.
but i knew how we did it. we had a process we followed and i knew everybody else knew and everybody else agreed. all of a sudden the sergeant schultz from mash, i could have forgotten. maria: i watched the firsthand how dick kree aired the such an event when somebody rang the opening bell. >> when dick took over there were 1,200 listings. he got 1,600 more in 7 years. maria: then there is g.e. long time board nebraska o -- le board member of g.e. >> jack built a company that was made to withstand the test of
time. maria: what happened? >> the culture first of chawl anged dramatically. there was a evident by the leader to unseat jack. jack was meticulous. he would go quarterly to every major business unit and get a complete review. who is your successor. what are you weak on, what are you strong on. it was unbelievable. and he was relentless. jack also had a great relationship with all this people. maria: when i was at cnbc i loved hearing from jack welch. he would send me a note and say good job on this, i'm glad you did this. that pushes a person ford. >> the key is to motivate people. maria: will g.e. ever come back?
>> not like it was and a whole lot smaller than it was. >> it's easy to second guess the other guy, and i don't want to do that. i think some of the strategic decisions made at general electric for horrible. asset capital allocation was a disaster. to me they got out of the financial services business at exactly the wrong time. maria: and energy. >> that was done to accommodate wall street. wall street didn't like them being in that business so they got out of that business. look what jack did with gevment capital and the enormous contribution it made to the
whole game. maria: where do you find growth right now? and where you are allocating your capital. >> i'm look at small to medium-sized companies. i can get to know them better. i can get to know management better. if you are right, one of the companies i like is first data corporation. i think they are in a sweet spot right now. i think more importantly they came through a rough patch. he kept it together. he's cleaning up the balance sheet. maria: and he's a great man. >> frank has all the time in the world to do it right and he is a great man. i think in the next five years the stock will double. if that happens, i'll get 14% on my money.
it will be difficult to get higher compounded interest on your money. i like the public storage business. i like oil and gasor developed and proven reserves only. i'm not a speculator. i love the medical field. we are living longer and the longer we live the more healthcare needs we have. maria: ken, thank you, and thank you for writing this book. my special thanks. >> announcer: the two-year treasury yield spiking this week hitting 3.1% for the first time in almost 7 years. is this cause for alarm. >> the era of lower rates is almost over.
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maria: interest rates have been rising. the 10-year treasury yield hitting 3.1% high since july 2011. jump grant, it's a pleasure to see you. this market gets so afraid of 3%. your thoughts offer where treasury yields are going. >> i'm guessing they are going higher. the interest rates tend to trend in long cycles. they decline for the better part of 35 years until july of 2016. and before that they persistently rose for 35 years.
so just maybe we are embarked on a lengthy cycle of rate rises. so they have to rise quickly. so you are not getting pai that much to lend to companies or governments. we draw in our breath, 3.1%. so old am i. i remember with it was 5%. i remember when it was 15% and up. i don't think the 3% number itself is especially frightening. but wait indicates, i think, is the era of predictably low and lower rates is perhaps over. maria: do you worry that the federal reserve blows it? this is unprecedented given the
balance sheet. >> there is a mike tyson line. everyone has a plan until they get hit. the fed has a plan. that plan is to raise its tiny federal fund rate three or four times this year. what if things don't go according to plan as sometimes happens in life. what if the emerging markets or if italy steps in front of a bus figuratively speaking and there is a euro crisis? i think that the chances are the fed is not going to follow through on its plan. the fed would like us to know it's no longer prepared to flinch in the face of a falling stock market. i think the fed would flinch in the face of a falling stock market. it's unlikely it's going to do wait stated it's going to do.
things are more in flux. maria: do you think we'll see a serious sell-off in the stock market? >> oh, yes. what these low rates have done is to flatter earnings and projections much earnings, very low interest rate, counting future cash flows. rates have allowed companies to refinance apartment advantageous rates. they allowed the leverage and flattering earnings and expanding them. but i think that particular phase of our financial cycle is ending. the bond market is going to become not a source of comfort to the stock market but rather a problem. >> how significant a sell-off would you expect in equities? >> i don't know. but i would say sell-offs are
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and tune in week days on the fox business networks for "mornings with maria." a jam-packed program bland all week. thank you for watching. >> i'm bob massi. for 34 years, i've been practicing law and living in las vegas, the center of the recent real-estate crisis. lives were destroyed from coast to coast as the economy tanked. now, well, it's a different story. the american dream is back, and nowhere is that more clear than theunshine state of florida. so we headed from the strip to the bea tshowyou how to live the american dream. i'm gonna meet real people who are facing serious problems, take you behind the gates of properties you have to see to believe, and give you the tips that everyone needs to navigate the new landscape, because information is power, and the property man has got you covered. [ woman vocali