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tv   Wall Street Week  FOX Business  September 16, 2017 3:00am-3:30am EDT

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"strange inheritance." and remember -- you can't take it with you. we'll see you monday. good night from new york. >> announcer: from fox business headquarters in new york city the new "wall street week." maria: welcome to "wall street week," the program that analyzes the week that was and helps position you for the week ahead. our special guest this weekend carlisle group president and chief operating officer, glenn youngkin is here. first here are the big headlines impacting everything from wall street to main street. president trump has been working both sides of the aisle to push for a plan on tax reform. though lately this focus has been more on the democrats. he had dinner with chuck schumer and nancy pelosi. the president says his priority is job creation and the middle
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class and the highest earners might not get much out of this. >> the wealthy americans are not my priority. my priority are people in the middle class. that's where we are giving the big tax reduction. we are paying the highest tax rate in the world. we want to bring that to 15%, that would make us competitive with china and other countries. my priority is bringing companies back and bringing money back into the country. maria: apple had their highly anticipated product launch this week including an iphone 10 which features facial recognition. all the phones will have huge camera upgrades and wireless charging capabilities. the iphone 10 ships in november. it was another week of records on wall street all posting fresh highs. president trump toured florida
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to assess the damage caused by hurricane irma. the storm left thousands of people without power and water. glenn youngkin is chief operating officer and president of the carlisle group. we are happy you are here today. welcome. glenn youngkin: thank you, great to be here. maria: let's talk policy and the markets in general. how do you allocate capital in an environment where we are not sure what's happening. we are waiting on tax reform. how do you see things? glenn youngkin: not getting things done is slightly different than actually having a negative bias coming out of washington. so had we been sitting here one year ago, we would have expected hillary clinton to win the presidency, and we were actually expecting a recession in the not so near future. it had everything to do with the
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trajectory of things and the confidence of corporate america and global business. then all of a sudden one year later we have a very different picture. the economies around the world are in good shape. for the first time in over 10 years we have synchronized growth around the world where all the major economies except for the u.k. are growing. they are not overheating, they are just growing. so what do we see out of washington? we seed gridlock. but it's an interesting other side of the coin. we used to sit in business and think well unfortunately what's going to come out of washington will penalize business in this country. now we are hopeful what comes out of washington will help it and that will help the economy. everybody likes to think we are in this year 7 or 8 of this recovery, and i think they mistakenly think economic
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recoveries die of old age. what they die of is overheating. but we are not overheating. with good policy moves out of washington we can sustain this for a long time. maria: you see a tax policy lifting more boats fit materializes. glenn youngkin: we are right after the elect there was the so-called trump bump. and the markets ran in expectation of stronger corporate performance. what happened and it was feeling in the second quarter s & p earning are up 7%. then we are seeing the kind of growth out of corporate america that underpins this confidence it's a very different economic situation we are in than just one year ago. maria: what kind of a tax package would move the needle. carlisle invests in companies
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with what kind of market cap. the small and mid-cap companies will see a boost. but the larker companies less so. the smaller mid-cap companies will see a movement. and i would love to know your thoughts in terms of tweaking this tax bill what your thoughts are. i spoke with ted cruz on his vision for tax reform. he's looking for a flat tax. here is what he said. >> a single flat tax that's fair and uniform for everyone. a big standard deduction. and everyone pays the same rate. going to the postcard has power just because it is small and means congress can't stick a whole bunch of extra garbage on it. you have a lot more time and money in your life to take care of your needs. maria: one key they are talking
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about is the so-called expensing option. he wants that expensing option in a tax bill. if a company buys a lot of equipment. the money goes out the door, they should expense it immediately. glenn youngkin: first of all i do think what senator cruz is talking about from a flat thanks is for personal income tax. and i do think that that is part of just a general theme of simplifying thing. and that same theme for personal income tax translates to what they are trying to get done in the corporate world. i think the principles that all of the -- they call them the big six are getting together to talk about are around simplifying thing. and that is critical to business. can you please just make it more straightforward. while i love the tax accounting and tax legal community, if we
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spent less time trying to in fact trying to file and make sure we were complying with this myriad of tax regulations it would make things more efficient. you asked about small and medium sized business. at carlisle we manage $170 billion. and everybody thick they are giant investments. in the second square we only did three that were more than $300 million. we actually live in the middle market. and that -- globally we live in the middle market in the united states and around the world. the ability to have shire cash flows net to the bottom line that companies can reinvest in product expansions, and new facility construction, hiring more people, it will be meaningful. maria: the private market is hot. there was a story in the
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journal:thought bank wanting to put $10 billion in uber. >> announcer: they think cash is king. how powerful is $50 billion. why the carlisle group's dry powder could make the e e e e e
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maria: investors are buying and carlisle is waiting. they are sitting on $50 billion in cash. where is the firm looking to invest that? glenn youngkin is with us. $54 billion in die powder. what do you plan? glenn youngkin: it's a lot of money. we invest $17 billion or $18
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billion a year in new investments and manage funds that give us up to five years to invest the capital. we have 2 to 2 1/2 years of capital to invest. that's standard for us. we are raising new money for funds in new areas of the world where we invested a majority of capital. the great thing about the world today is they recognize the value of private equity and continue to entrust us from this person's humble beginnings, a lot of money. maria: the new fundraising efforts started last august. go through the sick towards and ideas where you wants to be putting that capital. glenn youngkin: first the economies around the world are gleeg a synchronized way for the first time in 10 years. but they are not overheating.
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what that means is finding areas where there is good wind in the sales from a revenue growth standpoint is important. we finds those areas in healthcare and technology-enabled businesses, particularly in the financial sector around the world. some countries are growing faster than others. china is growing at 6%. there are spots where we think there is good wind in the sails. second of all. in corporate america today there is the inevitable reality big companies have division they don't love quite as much at others. that gives us the chance to do corporate carveouts. one of the benefits of being private capital is we can goin these companies. we've bought du pont specialty coating. and it wasn't a high priority for dupont.
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but for us it was a high priority. private ownership aloud us to invest in facility expansion and turn it into a growth company. in the private setting we can do these corporate carve-outs in an interesting way. the third opportunity for businesses that haven't fully participated in this economic revival, the primary example is the energy industry. it's the one place in the overall global economy where we see prices have declined over the last few years and we think that creates opportunities particularly in the united states today. maria: when i look at the energy space i'm thinking there is a lot of supply and the u.s. will start tapping into new areas. if we have more supply in the u.s. and if the u.s. does become a major producer for the world. wouldn't that send oil prices
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lower? wouldn't that send valuations lower? you have been invest, all in on energy for a long time. glenn youngkin: we were lucky. we started to amp our investment pace after prices reset. what we saw going on from the world was what has played out demand for oil and for natural gas continues to grow. and that is in spite of the rapid penetration of electric vehicles and all of the renewable efforts. it's just the growing global population and the increase in the emerging markets of the middle class is increasing demands for oil about a million barrels a day for year. maria: do you want to own drirls and the service companies? glenn youngkin: if we had been sitting here 10 years ago oil in
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the united states was a declining industry. we produced 5 to 5.5 billion barrels a day. but it's figure out how $45 and $50 a barrel we can make money. we have a saying around carlisle. every deal is a technology deal. maria: i think you are right. glenn youngkin: even the somewhat boring energy industry which we all think of as old wooden dereks with a pipe going down and grease everywhere. that's not the case that all. some of the leaders of the companies we are investing in today are in his 30-40-year-old sat where they can go to work in the industry. maria: i want to you take us
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around the world with the investment opportunities elsewhere. >> announcer: glenn youngkin breaks down carlisle's acquisitions. and now the company is and now the company is positiononononon
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maria: fox setting fresh records. tensions between the u.s. and north korea. a lot of news happening. we are back with glenn youngkin the coo of carlyle group. uber wrestles with a some of the bank offer. they want to put $10 billion in uber. they say but we want a better
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price. we want a discount. it shows you what private money is all about. glenn youngkin: it's another example of the dynamic ecosystem of the private capital markets today. 10 years ago, 15 years ago, it was every company's need in order to fund its long-term growth. the wilshire 5,000 only has 3,700 members in it. they concluded they don't have to go public. because there is not 5,000 companies to put in it. maria: they are staying private longer. glenn youngkin: it's because of the private capital that's available to them. softbank is an extreme. but companies can actually evolve, grow, fund and fulfill
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their ambitions in the private markets. maria: they don't have to go through the red tape of filing this and filing that. glenn youngkin: the interesting thing about the technology evolution in healthcare is it's not only affecting the product offering. the use of big data through pharmaceutical development processes and understanding the impact that these drugs can have on outcomes is extraordinary. and that has its own set of real benefit. but the technological advancement is also for the user. now we have real transparency. we put in the palm of my hand the ability to not only understand my issue much, much better. but also shop for the best provider. understand my understand situation much better. so you have technologies changing the service, the products, but also the user
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experience. maria: when you are monitoring blood sugar, blu glucose. president trump made it clear he thinks china is part of the problem with north korea. i have got to get your take on china and north korea. >> i worked out an executive order that's ready if the president wants to use it. we can stop trade with any country that does bits with north korea. bret: stopping trade with china? >> stopping trade with anybody. nobody would be off the table. maria: wham your take on the provocation from north korea, another missile launch over japan. and china sort of getting boxed in. glenn youngkin: first and foremost of, the issue with north korea is a global concern. it is severe, and i'm absolutely
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convinced that the level of attention necessary attention it's getting from all the global leaders is critical. president trump's desire to pull in china into the solution of course is critical. and i think everyone recognizes that an unconstrained nuclear presence in the korean peninsula is a terrible thing. maria: if we put sanctions on chinese banks, doesn't that impact the u.s. economy? glenn youngkin: the short abc is yes. but the -- the short answer is yes. but the long answer is we need to make sure the chinese know we are very serious about this. i think this is the natural evolution of escalation of an extraordinarily important issue. as a result, i do believe there will be a unified approach in order to addressing this.
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i'm -- i manage investments. but what does that mean? from our standpoint first and most of, we investn a lot in china. it's -- we invest a lot in china. the economy is performing extraordinarily well. as a result we see great opportunities there. we believe the practical requirements of the u.s. and china to get together and help resolve this situation is just absolutely going to compel the kind of actions that we need. the chinese economy is enormous and growing at 6% and they will want to maintain that. maria: it's been great having you on the program. maria: glenn youngkin is the president and coo of the carlyle group. more "wall street week" after whoa that's amazing... hey, i'm the internet!
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maria: let's take a look at the big market events that could impact your wallet. we get the latest numbers for new home sales and exiting home sales. the federal reserve will be releasing its report and the manufacturing pmi. we look at household names like adobe system, fedex. and general mills all reporting quarterly earnings. president trump is at the u.n. tuesday where he's expected to give a speech on how he plans to deal with north korea. monday the 25th we are expecting the house version of their tax plan. that in the coming week and a half. coming up next week on "wall street week" join us. bridgewater's associate director will be here.
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i will see you sunday morning. catch the program at 10:00 a.m. that will do it for us >> i'm bob massi. for 35 years, i've been practicing law and living in las vegas, ground zero for the american real estate crisis. but it wasn't just vegas that was hit hard. lives were destroyed from coast to coast as the economy tanked. now it's a different story. the american dream is back. and nowhere is that more clear than the grand canyon state of arizona. so we headed from the strip to the desert to show you how to explore the new landscape and live the american dream. i'm gonna help real people who are facing some major problems, explain the bold plans that are changing how americans live, and take you behind the gates of properties you have to see to believe. at the end of the show,


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