tv Fast Money Halftime Report CNBC November 4, 2019 12:00pm-1:00pm EST
continue today marriott, shake shack, uber before some of the big media names later in the week. >> it's another 80 s&p 500 companies reporting this week. real, real also is going to be one to keep an eye on, peloton, some of the companies that have gone public and hit hard since then. >> the judge has got lee cooperman, a lot to talk about with lee let's get to the judge >> all right i'm scott whammer in, front and center the war of words between leon cooperman and presidential candidate elizabeth warren, wealth, taxes and the future of capitalism. >> there is unquestionably a shift to the left in this country. they won't open the stock market if elizabeth warren is the next president. >> the 99% in america last year all-in, paid in taxes, all their taxes, about 7.2% of their total wealth the top 1% paid 3.2% i am tired of freeloading billionaires. >> if elizabeth warren is
elected president in my opinion, the market drops 25%. >> we are americans. we believe in making these investments to create lots of opportunity. we are happy to do it. all we're saying is if you make it big, i mean really big, i mean one tenth of 1% big, pitch in two cents so everybody else gets a chance to make it >> now let's welcome in lee cooperman, joining us today from florida, should let you know we invited senator warren to take part in this conversation with us today and we have not heard back from her campaign lee cooperman, as you can see is here it's good to see you >> thanks. you've created all the problems for me the whole thing started at delivering alpha i'm not a political analyst, i'm a financial analyst. >> it was your words, not mine, lee. >> yeah. the only -- i would like to modify my words a little bit first of all, i want to say the significance of an event for the
stock market is a function of what the stock market is discounting at the time the event occurs the market at 3,050 wherever we are at the moment is basically assuming a trump re-election if the stock market -- if it's starting to look like elizabeth warren has a reasonable chance of winning, the stock market already will be down quite substantially and they will open the market if they open the market after 9/11 they will open the market no matter who winses the presidency. >> i think people -- >> she's very -- >> i think people understood you were being a little hyperbolic when you said it wouldn't open and made the point on "squawk" and elsewhere that you thought stocks would go down 25% if elizabeth warren became president. this whole thing has escalated now between the two of you with this letter, why did you feel so compelled to write this letter directly to senator warren, lee? >> well, you know, aristotle i think observed that basically
the last virtue of society is tolerance and indifference, and so i preach engagement and i feel she's taking the country down a wrong path. i noticed today in the "wall street journal" they had an editorial that said warren has a fantasy plan what she's peddling is total complete bull. by the way, that comes from somebody who believes in the progressive income tax structure, who believes the rich should pay more, okay. i have no problem with that. what we have to do as a nation is decide on what should the maximum tax be on wealthy people and move it there and deal with our issues i have no problem with that. as i've said in my letter to senator warren, i have no problem working six months a year for the government and six months for myself which implies a 50% tax rate my guess is she want morse the wealth tax is a bankrupt concept. 14 or so nations that have tried it and they've dropped it. i mean it's a nightmare.
the for 50 years, we've been promised, you know, simplification by the irs. this would be a nightmare. it would be a nightmare. every year you calculate your net worth and give 2% to the government that's ridiculous. gold would surge because people would find gold as a place to hide their wealth. it's just the wrong idea it's a bankrupt concept. i think that her and bernie sanders are presenting a lot of ideas to the public which are morally and socially bankrupt. >> we will get into -- >> i came across -- >> we will get to -- >> forgive me this one second. i came across a quote this morning, beautiful, it's from a economist associated with the hoover institute, an african-american, and he says, since this is an era when many people are concerned about fairness and social justice, what is your fair share of wha someone else has worked for? that's the essence of the argument i have no problem with a
progressive income tax structure, no problem paying more, the fact of the matter is, i read somewhere elizabeth warren is worth $18 million. what is she going to give to society? i plan to give all my money back i have a fabulous family that works with me. they were part of my decision to take the giving pledge i told them at the time my plan was to giveaway all my money, not half giveaway all my money. and then my game plan is half i'm going to giveaway in my lifetime and the other half to my family as a legacy in the form of a foundation where they can meet periodically and giveaway the money >> so -- >> so. go ahead i'm sorry. >> finish your thought, lee. >> well, i don't need elizabeth warren or the government giving away my money. tell me what you think the maximum tax rate should be stop talking about 2% where you are basically misrepresenting the facts. it's 2% of wealth. just think about this. if jeff bezos' wealth with is tied up in amazon stock he's going to be forced to sell every
year 2% of his stock regardless of what the outlook is for the company. it's wrong it's going to lead to inappropriate actions and the economy that are counter productive. >> you're not the only one, by the way, the only one who makes that point in fact, i was going through twitter this morning before, you know, in preparation for our interview and mark cuban, the other day, said a very similar thing. wonders about the impact on the stock and other liquidity markets if people like you, other billionaires or bezos or whoever is forced to sell stock, for example, to raise cash to deal with a wealth tax >> i don't have the problem of concentrated wealth. i'm diversified. my problem is i think what she's recommending or suggesting is morally wrong. i pay taxes on my income while i was earning it i paid 37% federal tax, depending on what state you lived in, your state income could be 10% or more the fica tax the obama, you know, tax on investment on dividend and interest income, i paid the
medicare tax i paid all the taxes what i have left is tax paid money. she wants to take another bite at the apple and it's wrong. i'm big on quoting people this morning. will rogers had a great quote. if we got one tenth of what was promised to the state in the state of the union speeches, there wouldn't be any inducement to go to heaven. will rommers basically she and bernie sanders are promising things to people not achievable we have the best economic system in the world yes, rich people should pay more in taxes the question is how much more. you mentioned "the wall street journal," warren has a fantasy plan that was their op-ed about how she plans to finance the medicare for all people are coming to your defense. an op-ed on cnbc.com who used to work for you who comes to your defense, but a piece from "vanity fair" over the weekend, headline, cranky billionaire scolds elizabeth warren for not
being nicer to rich people i mean you do realize that you're giving elizabeth warren an opportunity to hold up your letter and say, see, and she's going to say similar things, here's another billionaire who is unhappy with paying their, in her word, fair share in taxes. >> she's picking the wrong -- look i mean, i can't use an expletive, you'll blank me out and get mad at me. it's bull. complete bull. she's screwing around with the wrong guy because basically i want to give it all away, not 50, 60%. i want to control the decision i don't need the government giving away my money and the idea of vilifying wealthy people is so bogus they're appealing to the masses. every billionaire i know made their billions by providing a productive, useful service or product. that's why they made their money. and then they take that money and they give it back to
society. whether it's bill gates and mel lin ga gates, whether it's warren buffet, whether it's mike bloomberg who developed a fantastic machine that is ubiquitous in the financial community. everyone i know that struck it big, i've written in my letter about bernie marcus. he and ken langon gave back billions to society and employ 400,000 people and 3,000 of the employees are millionaires you know, 25 years ago i was honored by a charity, at my request, congressman jack kemp who is deceased, spoke at the dinner and he said, in america, people don't hate the wealthy. they want to be them and warren and sanders are basically trying to make boogiemen out of wealthy people. i just -- it's counter productive it's wrong >> you said you think that the wealthy should pay more. you don't have a problem paying more you're in favor of paying more in taxes than what you pay right
now? >> yeah. i would say so i have no problem with that. we have to agree, i think i said this on your program, september 19th, my effective tax rate 34.2%. florida res tent the only different is long-term capital gains. seven or eight years ago on "squawk box," one of your segments i basically said, they should get rid of the carried interest it's not justified seven years later carried interest is still in place irs section 1031 that allows these real estate guys and gals to roll over their property sales into other property cost basis, get rid of it, okay tax rate change. i have no problem with that. i just have a problem with vilifying the wealthy. they should not be vilified. they shouldn't be praised. they should be treated like everybody else also i have a problem if you ask bernie sanders what the marginal tax rate should be on wealthy
people he would say 90%. elizabeth warren, peddles this 2% bologna 2% of wealth, not of income. there are other things we could be doing it's going to be impossible to enforce. just think about it. every year somebody is going to calculate their net worth and write a check to the government. it's crazy. >> you said you're in favor of a sur tax on millionaires, the so-called buffet rule. wow ho how would that work? >> well -- >> -- i once asked -- i don't want him to get upset with me, it was a private conversation, i asked warren buffet what he thought, if you make a million dollars a year, 35%, over $5 million, i think he said 40% i have no problem with that. as i said in my letter to elizabeth warren -- by the way, since she never read the letter, never gave me a thoughtful response, the letter was respectful of her position
very conciliatory. a desire to work together, which i want to work together, not confrontational in any sense we have problems in the nation, have to deal with the problems and the question is how do we deal with them basically, i never heard from her. she's repeat 2%. leon, you were able to succeed because of the opportunity in the country gave you, why don't you pitch in a bit more as everyone else has a cans at the american dream i don't want to talk about myself i'm a philanthropist with a small "p." bernie mark, ken langon, michael bloomberg, david ruben stein, they're philanthropists with capital "p." i only wish i had their money to giveaway more. >> would you meet with senator warren >> in a heartbeat. i don't have any amenity towards her. whatever you know they just have a different philosophy and they're in the
sound bite business. i'll repeat what i said a moment ago, i don't want it to go past anybody. if we got one tenth of what was promised to us in the state of the union speeches, there wouldn't be any inducement to go to heaven. will rogers. this economist, again, i repeat, since this is an era when many people are concerned about fairness and social justice, what is your fair share of what someone else has worked for? i have no problem giving it away in the end i want to control the giving but, you know, my plan i basically said before, and again this is not about lee cooperman or elizabeth warren per se, it's about what's the best system for the country to operate with. we have a lot of problems. we have a lot of division and we need somebody to bring everybody up >> lee -- >> let me do this. our satellite feed is giving us a few fits let me take a quick break. let us work on that for a second and come back and get more of
our conversation into this i want to make sure that technically speaking, we're okay because we're having a little suthe. we'll be back with lee cooperman after this this is the age of expression. but shouldn't somebody be listening? so. let's talk. we're built for hearing what's important to you, one to one. edward jones. it's time for investing to feel individual.
issues squared away. thanks for your patience. >> i hope my perils of wisdom have not fall on deaf ears >> you say you are in favor of eliminating tax loopholes and talked about philanthropy by yourself and people you admire what about when it comes to loopholes around charitable giving you wrote an op-ed in the summer you took issue with the way some are awarded through charitable giving how do we deal with that >> i don't think that we need anything new i believe, you have to ask an accountant, you can't giveaway and get a deduction for more than 20% of your adjustd gross income, depending on whether it was a public or private charity. we have enough rules we have the rules in place we have a 37% tax rate at the top end. they want to make it 40 or 45. god bless them
you know let them be voted by congress. i think the wealth tax will lead to unnatural actions and makes no sense and peddled as a soft 2% it's 2% of your wealth every year in 50 years, jeff bezos will give up all his interest in amazon to the government i have a distinct feeling that bezos will giveaway his money over the years as mike bloomberg is, warren buffet is, and they're probably better stewards of their capital than the government as simple as that. >> how do we deal -- this comes down to the heart of everything that we've talked about and why senator warren has talked about the policy and the manner in which she has, how do we deal with -- >> she is trying to get elected and she's going to sound bites it's unsound economics. >> but there are other -- there are -- that may be true and that's your point of view, that's your point of view and perhaps some others but it gets to the heart of the issue of income inequality in this
country and how are we supposed to deal with that? in your letter you say the focus should be on income opportunity more broadly rather than inequality do you think income -- >> and education and education. >> do you think income inequality is an issue that needs to be dealt with >> yes but the income inequality has been part created by the government strangely enough. you know, in 2008 mr. bernanke understood the economy was going down the toilet and had to rescue the economy and determined the best way is to get wealther the economist wrote about, 5% of change in wealth works into consumption. the best way to get wealth up to get the stock market up and succeededed in doing that in grand fashion. the trouble with that is, that a vast bulk of the stocks owned by a handful of the people and so there's been a disproportionate benefit to those of us that own
stocks i believe -- look, there's no one answer, no one answer, but promising people things that are not achievable don't make sense. you have to ask yourself, what kind of economic system do you want to be in? do you want to take 90% of the wealth away from the people that have made the wealth doesn't make sense to me we have a prosperous economic system and tweak around the edges to improve it. my answer has always been faster economic growth absorb the labor force and basically education. my family and i are very involved in something we call cooperman scholars where we're providing college tuition money to 500 qualified children, newark, new jersey, largely of color, and, you know, the average lifetime earnings of a college graduate exceeds by well over a million dollars over a lifetime than non-college graduate not everybody should go to
college. some people are better off being plumbers, carpenters, electricians, automobile mechanics but we have to provide that opportunity to those that are academically qualified and give them that education >> but you just said we have a prosperous economic system the problem some say is that it's not prosperous for enough people, that those at the top -- >> i don't know. last time i read the figures basically, you know, say what you want to say about donald trump, but what he can say very fairly is since i became president 5 million more people are at work. we have the lowest level of unemployment amongst black and minorities in our history. we have the highest level of employment in our history. okay i have other issues with the president but basically i have to say on the economic side, he's accomplished a lot. is it perfect? no we don't live in utopia. >> do you support his re-election? >> that's a different
conversation let me just say this, that if i was the president, now i pissed off warren and sanders now you want to me to do the same to the president. >> i think it's a natural -- it's the natural question, the place to go. >> okay. well, we have a closed ballot system but i'm a guy that's will to wear my heart on my sleeve, okay if i was the president and, of course, i'm not, but if i was not prepared to change my dialog and treatment of the people, you know, mitt romney is not a jackass. he's a distinguished american. rex tillerson is not dumb as a rock he was a bright guy that ran exxon. you know, john mccain was a true war hero but, you know, he has to become a president for the entire country and not just his base. so if i was him, if i'm not prepared to change my behavior, i would take a victory lap and not run again.
the country of western singer kenny rogers his song "the gambler" know when to hold them, know when to fold them tell the president why are you putting up with all this abuse, all of it is not unfair, some of it is fair, some unfair. i'm waiting for walter cronkite to come back from the grave so i can get my news objectively. i don't need it from cnn or msnbc, i don't need it from fox news we don't have news services anymore. we have propaganda machines. but the stock market is at a record high. the economy is growing i mentioned a moment ago 5 million more people at work created in his presidency. we have a record high employment, record low unemployment amongst minorities. taken a tough path of opening up trade dialog with china. i focused the discussion on illegal immigration, reduced government red tape and promoted deregulation i bolstered our national defense. we need a unifier in that
position and because the country is being torn apart. so let him make his own decision i am not in favor of the impeachment inquiry. i want the american people to decide in november of 2020 what the future should be >> i think -- i mean i think people can not only see the emotion on your face but hear it in your voice when you talk about this, lee. why? >> i care. that's it. >> all that you have said of where the economy is, where the stock market is, the wealth that has been created since the president was inaugurated through the stock market appreciation, you still think it would be a better idea if he did
not run for re-election at this particular time? >> what i think i said, you know, you're looking to get me in trouble but what i said if he was not prepared to change his dialog, and his treatment of the people, okay, he could accomplish what he's accomplished by being presidential the way i say it is following, you really are going to get me into a lot of hot water, okay, but, you know, his program is very analogous to ronald reagan, a beloved president. when reagan rap ran for president he said i will get the government off the backs of the people ditto for president trump. he said i will restore the lost prestige of the united states of america after the carter years by rebuilding our defense. ditto for trump. the third thing reagan said, he couldn't do, balance the budget. he figured out quickly you couldn't balance the budget, you couldn't balance the budget if you're building defense and lowering taxes so he said the hell with the budget and bankrupt the soviet
union. the comedian that made a living mimicking ronald reagan in his period of office was joe piscopo. reagan invites him to the white house for a drink. okay president trump says, alec baldwin and meryl streep you have no tall lnts, "saturday night live" your ratings suck, it's not presidential. what would it cost him to say i'm sorry you feel the way you feel, give me the next four years to prove you wrong and i enjoy your talent. we need a unifier. >> let me -- >> and i don't need elizabeth warren telling me that i'm a deadbeat and that billionaires are deadbeats. the vilification makes no sense to me. the world is a better place because of bill gates, michael bloomberg, david ruben stein, ken langone. this is idiocy this is appealing to the lowest common denominator and basically trying to turn people's heads around with promising a lot of free stuff
you know the world doesn't exist. i don't know if the transmission came through well or not, but i want to repeat for the third time, thomas sowell's comment since this is an era when many people are concerned about fairness and social justice what is your fair share of what someone else has worked for? i'm going to give it all away. she's picking on the wrong guy what is the fair share is it 50%? 60%? 70%? let them state it that way the wealth tax is crazy. it doesn't make any sense. it's going to lead to unnatural activities >> it's been tried in a lot of other countries and should be noted it hasn't exactly had the most successful outcome in other places as well. >> it's tried in 14 countries, if i believe 10 dropped it just think of the nightmare it creates. every year you calculate your net worth. i don't know what the hell my net worth is and i don't care. i care -- i don't care about all these "forbes" 400 surveys i'm interested in what people do with their money, the
creativity, the use of the money and the helping of less fortunate people >> let me ask you about this whole idea of capitalism if i could. ray dal leo who by the way is going to be on the network tomorrow and i'm sure is going to not only react to the things that you've said but expand on some of the things that he has said himself in the past, including from a recent "60 minutes" interview where he said, quote, i think the american dream is lost for the most part we don't talk about what is the american dream and it's very different from when i was growing up. he said he was in favor of the rich paying more in taxes. he also said -- >> so am i. >> he said the current form of capitalism isn't sustainable what are your thoughts about that >> too intellectual concepts for me america has done well since 1776 with a capitalistic oriented society and we are the most
prosperous economy in the world and we think the model somehow is broken. it's ridiculous. we have to try and arrive at certain fundamental beliefs. if i said to you, i worked all year long and everything i worked for the government took away you would say that doesn't make any sense if i worked all year long and took away 90% that would make sense to bernie. if i took away 70% it would make sense to somebody else the majority of taxes in this country are paid by wealthy people as it should be as it should be. i believe in the progressive income tax structure what should the maximum tax rate be on wealth epeople somehow the idea of working six months for the government and six months for myself appeals to me intellectually and the other 50% that i'm keeping i intend to giveaway what's wrong with that picture i think bernie marcus and ken langone and michael bloomberg and warren buffet would all say the same thing i'm not authorized to speak for them but i know what these people are doing
i read the gifts they've made. i mean, ken langone is possibly leading the whole change in medical school education by being the leadership gift of $100 million for $600 million fund that provides free tuition to medical school students at nyu. that's on top of a gift he gave of $250 million. bernie marcus who is into fish, marcus aquarium in atlanta, $250 million. and michael bloomberg -- i can't keep track of everything he's given away terrific human beings. >> there are many people watching and making maybe to most, i don't know, who are watching this who agree with you. we're a network that champions capitalism and all it stands for. but there are people like dalio and benioff -- >> excuse me i don't know what dalio is saying i will listen intently when he appears and says the rich people pay more i have no problem with
that i'm advocating for that. >> sure. >> you don't do it through a wealth tax you do it through coming to an agreement what should a tax rate be on wealthy people. >> how do we fix, if you indeed think it needs to be fixed, how do we -- >> education and faster economic growth faster economic growth and education. education. as said to you before, the average lifetime earnings of a college graduate is well in excess of a million dollars more than non-college graduates it also gives these kids a sense of self-respect. there's no free lunch. you know you can take all the money away from the wealthy people and not still deal with the problems, you know you can take all the money away from the wealthy people. we're running a deficit of over a trillion dollars a year. nobody is paying attention to that we're going to be in the soup one of these days, you know, the amount of debt being created is enormous i don't have all the answers
i have a view of the stock market, i have a view of the stocks i own i don't want to be involved politically. never given serious money to politician, i would rather give it to poor kids and medical care i'm not into the political system if you check the records, i'm not a big political contributor. >> you have -- you have a knack for finding your way into it, though, whether it was your letter to president obama years ago -- >> it was your fault it was -- >> or elizabeth warren. >> if i see something that's being done that's wrong i have to -- i have an obligation to speak up i'm not looking to pick a fight. i can only tell you that i got hundreds of e-mails, i responded to all of them by the way, in the last several days, and all but one agreed with me one i thought needed to have an improvement of his vocabulary the way he referred to me. i wrote the letter to president obama went viral on the internet and had thousands of elon mus-ml agreeing, one guy said i wish i
knew where you lived i would put a bomb in your car i didn't call the fbi. i didn't take him seriously. i feel i have an obligation to speak out. i'm a qualified guy to speak out. i'm giving it all away they can't threaten me they want to raise the taxes raise the taxes. you see what's happening in new york, the out migration of people, you know, governor cuomo says people are leaving new york because of the weather bologna. they're leaving new york and new jersey and connecticut because of tax burden. okay and so there's an adjustment process. there will be an adjustment process to the wealth tax. the wealth tax is morally wrong. you're taxing money accumulated by people after they paid their taxes. you're penalizing success. that is not what made america great. we should give more opportunity for poor people to become rich >> i hope -- >> penalize -- >> i hope we have the the opportunity to hear from senator warren about many of the issues that you raised in your letter to your point you feel she
didn't address really any of the points she made in her rebuttal. >> i was told by somebody -- i won't tell you the person who, but the person i say this knows who i'm talking about told me she was very appreciate of my letter because it focused more attention on her, not my game plan, my game plan was to focus attention on her idea, and that she did not read the letter. she gave the letter to a staffer and that -- and i can only say from a behavior i could believe that because all she did is retweeted the same tweet she didn't say hey, lee, it's very nice that you're a generous, wealthy guy. you know she just tweeted the same tweet. i'm only looking for 2%. 2% is not the issue. the issue is get rid of the loopholes. they can't -- the government is paralyzed, get rid of carried interests. seven years of discussing this and nothing has happened section 1031 get rid of it take the 37% and raise it. okay on wealthy people.
i believe in the progressive income tax structure i believe on my brother's keeper i have no problem with any of that i get emotional because it's so stupid, the dialog it's very divisive and the idea of vil linnizing billionaires you explain it to me guy like bill gates, i don't know bill, i had dinner with him once, mike bloomberg and warren buffet over the giving pledge, but, you know, he dropped out of harvard, he had a vision, about a computer system, he's worth a zillion dollars, he's got the gates foundation, that's supposed to be, you know, admired. not criticized what the hell did he do that was wrong? he improved the world. you know i try -- i ordered something on amazon yesterday jeff bezos not made it more convenient to shop and brought down prices? you know, he should be praised for what he's done, not villainized. just the world is upside down.
the world is upside down and is what it is and we have to come together we have to come together >> why don't we leave that part of the conversation there. i think you've -- >> good, good, good. >> you certainly made your points what's not upside down is the stock market right. we hit -- dow hit a new high today. you've said many months, as far as i can remember, lee, that the market is fairly valued. is it fairly valued today? is it overvalued or given all that's going on is it undervalued? >> let me say this, firstly, the conditions for a big decline as i've said consistently are just not present. the declines come about because of accelerating a problematic inflation, they come about because of a hostile fed the fed is too easy, furthest from hostile the market smells an oncoming recession. it comes about because of
investor exuberance. the market has been disciplined. i have to give it credit you know, i've given a lot of of visibility to john templeton, but he said, bull markets are born in pessimism, grow in scent missile, mature in optimism and die in euphoria. you know, the only place i saw euphoria was the ipo market but that's been corrected. look at bhaepwhat happened to w and beyond meat. so the market has been very disciplined. i would say i think the market is fully valued. i don't think the conditions for big decline are present. >> do you feel -- >> speaking -- >> you don't feel like the conditions for a big upside run are there either i mean if i tell you the fed is - >> you could >> engaged -- >> you could get it, but i would say a big move from here quickly, 5, 6, 7% quickly, by the end of the year, call it
3250 you're knocking on doors on euphoria and i would get a lot more defensive personally i think the big decline will come if we have a recession or if we see a big change in the washington leadership, we fail to get a deal with china or we see a big spike in the price of oil. china and oil will dictates the near term performance of the market and oil has been very well behaved and china, the president seems intent on coming up with an acceptable deal beyond this year, i have to say i'm becoming concerned i think the aggressive policies that we're pursuing are pulling demand forward which should mean the returns would be less. so, for example, we have a reasonably fully employed economy, yet the deficit is going up that should not be happening the deficit should be going down we're running a definite of a trillion dollars and pulling demand forward i don't understand -- i agree with eric rosengrin, i believe
his name, and easter george, i don't understand why we're cutting interest rates the economy is growing a trend, wealth is at a record high, consumers are reasonably optimistic, businessmen are buying back stock -- >> they're buying back stock because they're not investing their money elsewhere. that's one of the problems with the trade war, right >> exactly you know, in a perverse way, the slowdown of the economy was caused by donald trump in the sense that he threatened tariffs. against china, i understand. against the eu against canada, against mexico, i don't understand okay this created a great deal of uncertainty in the business community. the business community did not know where to put the supply lines, where to build their plants they cut back on capital spending okay once this clarifies, you know, cap x follows demand if demand rises and cap -- and
utilization rise cap x will pick up but right now the economy is being carried by the consumer. but we have a situation where the three major central banks are easing, eu, china, and america, valuations are not extreme and recession doesn't seem to be in the cards. profits are rising at a modest rate the conditions of big decline. you're asking me how high is high, i don't know but i would say 3250 this year would represent to me euphoria a constant theme i've had with you as recently as september 19th is we're in an abnormal world depending on the day it's 12 or 15 or $17 trillion of sovereign debt we're in negative interest rate. that doesn't make any sense. you don't rent money to germany 30 years and get back less than you lent them. it's crazy in the height of stupidity, keep doing the same thing and hoping for different results. that negative interest rates for
japan hasn't helped the economy. negative interest rates have been exported to europe. europe interest rates where they are should resort to a trillion dollar fiscal stimulation plan to get the economy growing they're getting free money but they keep dealing with monetary policy that's being exported to the united states. we don't need negative interest rates in the united states. >> i have the gang here with me --s the gang is here with me today too. i know they have have questions for you if i can bring them into the conversation i would love to do that. start with joe terranova sa rat is here piece najarian, jenny as well. let's start with joe if we could. >> good afternoon, lee i've listed on to all the conditions that you've highlighted whether it's the china trade dispute, the potential headwind from oil, and it seems to me it all comes back to the election as the biggest concern. if you go back to 1949, i'm sure you know third year of a presidential cycle the average return for the s&p 500 is 16%. the problem is when you get into that fourth year, so really, it
becomes about the election and lee, can we have an election, because i can't remember one, where you have social justice, a referendum on the deportment of the current president, versus the economy, versus the stock market doesn't the performance of the economy and the stock market always win out in the final result >> well, the stock market reflects the economy if the economy continues to grow the stock market will be fine. you know let me say this, i have a cautious appraisal of 2020 i'm not bearishly situated 30% cash, 70% invested i'm dealing with real money, my money. when i was a kid if you why told me i would keep 30% of my money in cash when yielding is 1.5% i would tell you you're nuts i'm worried about the shift to the left in the country. i'm worried about market structure. you know, the market structure has been destroyed when i came to wall street 50
odd years ago and joined goldman sachs and had a great run and fabulous firm, basically they traded stocks at 50 cents a share and the volcker rule didn't exist commissions are zero and we have a volcker rule so the brokerage community doesn't stabilize. 50 years ago the new york stock exchange handled 80 or 90% of the volume today 80% of the volume is off the board. the specialist doesn't stabilize. no longer an uptick rule which gives rise to all the high frequency quantitative traders running wild and basically exaggerate the upside, buy strength and exaggerated the downside, sell weakness. the market structure has been destroyed. but at the end of the day you have to go on the assumption if the economy does well, the stock market will do well. i'm worried about the debt buildup and there's nobody out there, nobody is talking about debt you know, stan druckenmiller and ken langone spent time talking about it on college tours.
kevin wash but nobody is talking about it the republicans aren't talking about it the democrats aren't talking about it they're talking about social justice and the right tax rate >> they'll be -- >> i believe in capitalism, i'm a capitalism with a heart. the best economic system is capitalism and winston churchill said, you don't make poor people rich by making rich people poor. okay he also said, to paraphrase, the main vice of capitalism is the uneven distribution of prosperity the main vice of socialism is the equal distribution of misery i respect ray dalio, a man like myself took the giving pledge i believe and done very good things with his money. i don't think he's recommending socialism. we have to deal with the problems this is why i took the giving pledge i want to give it -- i have -- the greatest joy i get in life, is to see my kids and grandkids
grow up in good health philanthropy can do. excuse me. the last i have to be is emotional but i don't know if i answered your question i think the election is very, very important and if we tilt to the left it's going to be a very big negative for the stock market it will be a negative for multiples. it will be negative for profits. i think elizabeth warren comes across to me as a hater basically. she wants to do something damaging to business, damage to wealth people, she seems to resent wealthy people. bernie sanders the same. i see it differently >> let me -- the final question because we're having some technical stuff again. since you're ending with what you just said about elizabeth warren given all that you said and how you think about it and how others think about it maybe who are watching this interview do as well, her message is
resonating somewhere she's in some polls leading vice president biden. that in and of itself must say something about the way that the country or certain parts of the country are thinking about issues today do you think she can win >> i would say i only know what i read in the polls. i hope not, but the polls say 40% chance or something like that we can't afford her because i can't imagine that congress will go along with her ideas. so we'll have four more years of gridlock but as the president trump has shown, a lot of latitude, you know, initiatives that they can do without the support of congress we need different kind of leadership and she's not the leadership that the country needs. there are many democrats who, you know, i'll be honest with you, i'm apolitical. amy klobuchar impresses me as
being a sound person look at how poorly she's doing in the polls because the democratic party is so far to the left i'll tell you a conversation i had four years ago, i went to michael bloomberg, i've known michael 30 odd years, very worthy competitor, was a partner at solomon and i was at goldman sachs, i said michael, if you run, i'll work for you, i'll vote for you, and i'll give you money. his response was, very gracious of you lee, i'm not running. 5'6" multibillionaire divorced jew running as an independent can't win, i'm not running, i am not [ inaudible ] the democratic party are too far to the left. [ inaudible ] i'm not a left or right i'm a centrist [ inaudible ]. republicans in the past. in 2016 i effectively wasted my vote and wrote in for mitt romney okay i'll vote the man and vote the issues the president has done a very,
very excellent job on the economy. he's not done a good job -- people he has to fix -- got to be a -- of his base. i don't want to be auto subject of his tweets. >> i know. >> it is what it is. >> let me do this. because we're having some technical problems i apologize to you and to everybody for that the last part of your answer there i hope to talk to you soon and i thank you very much for coming on "halftime" to talk about your letter, this conversation that's so important and i have a feeling isn't going away any time soon. hopefully we'll do it here. >> thank you thank you for having me. >> you're welcome. that's lee cooperman, joining us today. coming up shares of under armour taking a beating we'll talk about the reasons why and your trade is on it, mcdonald's as well today "halftime report" is back after this change healthcare is the leading independent healthcare
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mcdonald he's confirming its global chief officer david fairhurfai fairhurst is leaving this is after easterbrook is leaving after confirming a relationship with an employee. the stock is down 3% >> stock was already kind of broken, right? recently what now what now for mcdonald's? >> i think away from the issues that easterbrook had and everybody can draw their own conclusions, i don't think it matters all that much. his relationship with the franchisee frayed a little bit because he was putting so many cap x requirements on it but the guidance coming in wasn't in charge of the u.s.
franchisees. if i own the stock i wouldn't be selling it because of this >> stock is a double under easterbrook. >> i wouldn't be selling he put in a lot of good things he brought this giants he mentored this guy i would stay with him. i don't know if i'm buying because there's another shoe to drop maybe this other person leaving is that other shoe >> the lesson here -- >> fundamentals have weakened somewhat >> can the lesson of investor psychology and how to react in situations like this parallel at all to intel you got bob swan now stock has been a home run. >> a home run. i don't know that this one is necessarily in the same shape. the problem i'm seeing this was a stock trading at 213 a share a month and a half ago the idea is right now what did they do on earnings? they missed. they missed on revenues. was it getting stretched a little bit
my opinion was yes i have been in mcdonald's a long time i got out early. i felt like where was trading in territorial of a multiple of far too high they attacked everything exactly like they should under easterbrook. i think they can continue to do that the game has now changed it was different than when easterbrook took over. everybody is in chicken. everybody is going into breakfast. so this is not the same company that it was when he took over where they made this 100%, 90% run. this is a much different mcdonald's with huge competition. >> i also think given the valuation of 24 times earnings if you hold this and look where the market is you'll have people take money off table because you don't know what's going on >> natural sort of disruption of a well regarded ceo. >> it's a perception, but for new capitalyou're going to wai and see to where the new direction is you know the ceo will have his own --
>> it's mcdonald's >> the head of the u.s. has been driving it >> like you said if there's another shoe to drop, there could be a kitchen sink here when you miss earnings there's more behind it history will tell you something is going on. >> something going on and history the telling you is separate from the situation and i think you can look at mcdonald's or intel or general motors or proctor and gamble these are professionally managed companies. i don't think you make your decision based on this i think you make it on earnings, on the multiple. >> let's kick around this under armour deal. it's getting hammered, joe, today. no one owns under armour on the desk >> i've traded it many times >> it's egregious overvalued how you can own under armour with the history of missing w-the governance issues that they've had. kevin plank just insured not
that long ago by putting in different class stock. lulu is growing. nike is growing. hasn't had these same issues under armour's revenue growth is negative why would you own it at this multiple that's many times what the stories are? >> and the fact that they are still massive short. this is why it's a trade the idea is as you watch this stock move around mostly to the do you know side it moves to an accelerated move to the upside there's a lot of reasons why this is a great trading stock. >> where there's smoke, there's fire even if it turn out there's not there will be so much sentiment overhang on it >> who knows what comes out of the federal accounting probe it's disclosure aspect of the probe itself that is seemingly the most troubling >> jim kramer was great this morning. it wasn't a disclosure
hey we got caught. now we're going disclose it. they didn't come out with it firsthand. in both instance under armour and mcdonald's, again, it's about perception not about what strategy is you're in such a good marketplace right now, why do you need to buy yourself down in both of these public relation nightmares >> let's kick around another stock. we'll get to final trades. one oak. you guys own it. up grade to a buy by goldman sachs. talking energy >> it's great. one of the best. up 15% this is about natural gas liquids and the lead that oneok has in it. it's performing well it's late stage in the cap x cycle. i've been long for about six months and i'm staying with it >> we've owned this is in 2017 i think what i like so much
about this particular report is it highlights there's a lot of value in mlp space a lot of these stocks have a 5% yield, a lot have 6 p- 7 p- 8% yield. there's value to be had. >> let's do final trades >> i got some absolutely massive stuff going on in efxi huge i mean massive beyond what you could ever expect. but on top of that how about baba i like what we're seeing 35,000 upside calls bought baba very short term. >> you have unusual in the eem and efxi >> massive too not just little trades these are 250,000 trade. huge, huge massive trades. >> okay.
we're getting a little more offensive. >> yeah. >> steve >> on baba, it was good. started buying it last week. when the offering comes maybe this monetary hong kong will drive the stock higher ross was quoted as saying they could soon started selling to huawei >> are you over your limit >> pretty big position apple still my biggest position. >> nice. >> jenny >> company diversified this company reported earnings last week. well managed company the management is consistently excellent at allocation. they always put shareholders first. >> i like chevron. you saw the move in exxon as well this is a high quality company >> jpmorgan in my opinion continues to be the most important stock in the s&p 500
>> you said that before on "squawk" the other day >> the yield curve continues to steepen. federal reserve is telling you not so much that they are not going to cut again but they will not raise for many years to come we got leave it. thanks so much thanks for watching the prom the xchange begins right now thank you. welcome, everybody here's what's ahead. from industrials to tech to financial stores hitting all time highs what got us here, what pushed us even further and is there still value out there. under armour having its worst day in two years there's a revenue cut and weak sales hit the stock. a look ahead of what's in it for the company. retail sector worst enemy may be the calendar we begin with today'srecord breaking rally >> a lot of positivity out ther