YOU, DOUG LUZADER ON CAPITOL
HILL, BREAKING NEWS, FOX
BUSINESS CONFIRMING CHARLES
SCHWAB WILL ACQUIRE AMRITRADE
FOR $25 BILLION, PETER ANDERSON,
IT IS GOOD TO HAVE YOU THIS
MORNING, WHAT DO YOU THINK THE
IMPACT IS AND YOUR REACTION TO
SCHWAB ACQUIRING AMERITRADE?
>> IT'S QUITE A SURPRISE BUT
ZERO COMMISSION THAT'S
HAPPENING, MARIA, WILL CAUSE
THIS CONSOLIDATION IN THE FIELD,
I WORKED WITH BOTH FIRMS AND
CONTINUE TO WORK WITH BOTH OF
THEM AND I THINK IT'S A STEP UP
FROM MOST INVESTORS AND CLIENTS
ON TV BECAUSE I PERSONALLY THINK
SCHAB HAS BETTER SERVICE AND
BETTER RESEARCH, ALL AROUND
BETTER COMPANY.
MARIA: WHAT ABOUT THE IDEA THAT
ONLINE COMMISSIONS ARE AT ZERO,
HOW DOES THAT PLAY INTO IT, DO
YOU THINK THAT FORCES MOVE GIVEN
THE FACT THAT SCHWAB WAS THE
FIRST AND THEY HAVE TO CONTINUE
GATHERING ASSETS?
>> ABSOLUTELY, I'M STARTING TO
THINK THAT IT'S A BRILLIANT MOVE
ON SCHWAB'S BEHALF, PROBABLY
LAYING FOUNDATION FOR THIS KIND
OF TRANSACTION, I THINK IT'S
VERY, VERY START OF THEM TO DO
THAT AND I THINK THAT SMALL E
COMPANIES, SMALLER BROKERAGES
WILL BE IN TROUBLE BECAUSE AS
YOU CAN REMEMBER, 30, 20, 10
YEARS AGO COMMISSIONS WERE THE
BREAD AND BUTTER OF THESE
COMPANIES SO THEY'RE REALLY
GOING TO HAVE TO SCRAMBLE TO
FIND OUT SUBSTITUTE REVENUE
SOURCES, RIGHT?
>> SO I MEAN I WOULD AGREE WITH
YOU, PETER, IT WAS A BRILLIANT
MOVE AND THE REASON I SAY THAT
WHEN I WAS RUNNING UBS WE HAD A
BILLION DOLLAR TECHNOLOGY
BUDGET, IT WAS GOING TO BE A
BILLION DOLLARS WHETHER WE HAD A
TRILLION UNDER ASSETS OR
2 TRILLION UNDER ASSETS AND SO
THEREFORE YOU HAD AUTOFIGURE OUT
HOW TO GET THE MARGINAL REVENUE
UP, ONE OF THE BEST WAY IS YOU
CAN WEIGH ORIGINALLY OR BUY IT,
MOST PEOPLE IN FINANCIAL
SERVICES JUST BUY IT, WE GO BACK
TO YOUR POINT, IF YOU KEEP
GROWING YOU CAN FIND OUT
SYNERGIES AND WHO DO YOU THINK
THIS HURTS THE MOST?
I KNOW THAT YOU ARE VERY
SUPPORTIVE ON THIS DEAL, WHO DO
YOU THINK IT HURTS OUT THERE
OTHER THAN THE LITTLE GUY, ANY
OF THE BIG NAMES?
>> I DON'T THINK THE BIG NAMES,
BUT I DO THINK SAY THE SECONDARY
BROKERAGES WILL DEFINITELY BE
SWEATING THIS OUT BECAUSE WHO
ARE THEY GOING TO MERRY, THEY
WILL HAVE TO HAVE MORE
CONSOLIDATION, AS YOU SAID, THE
TECHNOLOGY OF THIS KIND OF WORK
JUST THE RELENTLESS DEMAND ON
NEW TECHNOLOGY AND CYBERSECURITY
AND BUDGETING FOR THINGS LIKE
THAT, IF YOU HAVE A FIXED BUDGET
FOR SMALL -- SOME OF THE SMALLER
COMPANIES I THINK THEY WILL RUN
INTO SOME KIND OF TROUBLE OR
PRESSURE ON TOPLINE REVENUES
BECAUSE THE PROFIT ACTUALLY TOO
WILL SUFFER BECAUSE YOU'LL HAVE
MORE CAP X AND WHEN YOU HAVE
MORE CAP X THE PROFITS --
DAGEN: TO ANSWER YOUR QUESTION,
ONE COMPANY THAT WOULD SUFFER IS
AMERITRADE, IT PROBABLY SOLD
ITSELF OFF TO SCHWAB.
MARIA: EXACTLY, WE WILL SEE IF
WE HAVE MORE DEALS OVER THE NEAR
TERM, WHO IS LEFT TO GET
ACQUIRED, FUTURES ARE MIXED THIS
MORNING AMID REPORTS OF CHINA
TRADE TALKS, TARGET IS STILL UP
AMID STRONG EARNINGS YESTERDAY,
WE ARE EXPECTING BJ'S TO REPORT
WITHIN THE HOUR AND MACY'S WILL
COME LATER THIS MORNING, WHAT'S
YOUR TAKE ON THE CONSUMER?
>> WELL, MARIA, TARGET IS DOING
A BRILLIANT MOVE, WHAT I LOVE
ABOUT TARGET IS THEY'RE
EXPERIMENTAL, THEIR ONLINE SALES
WERE UP 31%, BUT THAT DIDN'T
COME VERY EASILY, I MEAN, IF YOU
READ THE DETAILS THEY TRIED
SEVERAL WAYS OF GETTING CONSUMER
TO CONVERT TO ONLINE SALES,
CURB-SIDE DELIVERY AND THEY
FINALLY GOT THE SOLUTION FOR
THEIR BUSINESS WHICH IS
CURB-SIDE OR STORE-SIDE PICKUP,
OTHER COMPANIES WILL HAVE TO
FIGURE OUT THEIR OWN WAY SUCH AS
HOME DEPOT.
I THINK THEY ARE STILL IN THE
MIDST OF TRYING TO FIGURE OUT
WHAT'S THE BEST WAY FOR US TO
WORK WITH CONSUMERS BUT TARGET
IS THE GOLD STANDARD RIGHT NOW
ON HOW TO WORK THESE THINGS OUT.
MARIA: PETER, WOULD YOU BUY THE
MARKET RIGHT HERE WITH ALL THE
RECORD HIGHS THAT WE ARE SEEING
EVERY DAY?
>> I AM BUYING THE MARKET AND,
YOU KNOW, A LOT OF ISSUES ABOUT
TRADE AND TARIFFS AND, YOU KNOW,
I'M STARTING TO THINK THERE
MIGHT BE AN ACTUAL TARIFF
DERANGEMENT SYNDROME OUT THERE
AT THIS POINT BECAUSE TARIFFS,
THEY'RE VERY, VERY HARD TO
MODEL, PEOPLE ARE ALMOST
BECOMING HYSTERICAL ABOUT THE
DAILY TWEETS OF WHETHER OR NOT
WE ARE REACHING AN AGREEMENT AND
WHEN YOU LOOK AT THE BIG
PICTURE, YOU KNOW, I'M ACTUALLY
THINKING THAT IT'S NOT GOING TO
HAVE THAT MUCH OF AN IMPACT AS
MANY ECONOMISTS HAVE BEEN
MODELING AND ACTUALLY SCARING
THE CEO'S MORE THAN THEY ARE
SCARING THE CONSUMERS
THEMSELVES, WE HAVE SEEN
CONSUMERS DO VERY WELL SO FAR.
>> I TOTALLY AGREE WITH YOU,
CONSUMER NUMBERS AND SPENDING
NUMBERS CONTINUE TO SURPRISE,
THE MARKET IS SO EAGER TO
INTERPRET SOMETHING LIKE A
KOHL'S MISSTEM ASSIGN OF
WEAKENED CONSUMER BUT AS YOU
POINTED OUT ALL THE DEPARTMENT
STORES ARE SCRAMBLING FOR A
MODEL FOR NEW IDEAS, KOHL'S TOO