DIRECT STIMULUS IS NOT GOING TO
HELP THE ECONOMY.
WE’LL HAVE YOU BOTH BACK TO TALK
MORE ABOUT LATER.
MARKETS MAY NOT BE WORRIED ABOUT
THIS NEXT STORY IMMEDIATELY, BUT
INVESTORS, ALL INVESTORS
ELIZABETH WARREN IS UNVEILING A
WEALTH TAX ON AMERICANS, A PLAN
FOR A WEALTH TAX, LEGISLATION
WEALTH TAX ON AMERICANS WORTH
OVER $50 MILLION.
LET’S HAVE REACTION FROM FORMER
NEW YORK STOCK EXCHANGE CHAIRMAN
AND CEO, DICK GRASSO.
THANKS FOR JOINING ME.
>> GERRY, ALWAYS GREAT TO BE
WITH YOU.
GERRY: TALK ABOUT THE WEALTH TAX
PROPOSAL, ELIZABETH WARREN MADE
A BIG DEAL THROUGH 2019, 2020,
SHE WAS RUNNING 2% TAX ON ASSETS
OVER 50 MILLION.
EXTRA 1% ON ASSETS OVER A
BILLION DOLLARS.
MOST PEOPLE SEEM TO THINK THESE
WEALTH TAXES ARE POINTLESS AT
BEST BECAUSE MOST, VERY HARD TO
NAIL DOWN.
MOST COUNTRIES MOVED AWAY FROM
WEALTH TAXES.
WHAT DO YOU THINK WILL LAP TO
THIS ONE?
>> WELL I THINK SHE WILL FIND A
TREMENDOUS LEVEL OF SUPPORT IN
CUBA AND VENEZUELA FOR THAT TAX.
GERRY: YEAH.
>> HAVING SAID THAT, I DON’T
THINK THE TAX --
GERRY: THEY DON’T HAVE ANY
WEALTH LEFT TO TAX IN THOSE
COUNTRIES.
NO WONDER THEY LIKE IT.
>> GERRY, I THINK THE TAX IS
JUST FOLLY ON THE PART OF
SENATOR WARREN.
YOU KNOW, IN REALITY AMERICANS
ASPIRE TO WEALTH.
WHETHER YOU’RE AT THE BOTTOM OF
THE LADDER OR AT THE TOP OF THE
LADDER.
CONFISCATING GAINS MAKES
ABSOLUTELY NO SENSE.
IT IS TOTALLY, TOTALLY THE
ANTITHESIS WHAT AMERICA WAS
BUILT ON.
GERRY: WHAT DO YOU MAKE OF THIS
ADMINISTRATION SO FAR, DICK?
YOU KNOW, IT IS STRIKING, BIDEN
WON THE DEMOCRATIC NOMINATION
SUPPOSEDLY BECAUSE HE WAS THE
MOST MODERATE, THE ONE YOU COULD
TRUST THE MOST FAMILIAR TO
VOTERS AND YOU KNOW, WHO MIGHT
HAVE BEEN SCARED AWAY BY ALL THE
PROGRESSIVES WITH ALL THE
PROGRESS SERVES PLANS FOR WEALTH
TAXES AND FOR UNRESTRICTED
IMMIGRATION AND ALL THE OTHER
KIND OF THINGS THAT A LOT OF
THESE DEMOCRATS WERE PROPOSING.
HE COMES IN, SEEMS THE FIRST
MONTH BASICALLY FOLLOWING THE
PROGRESSIVE AGENDA, ISN’T HE, ON
ALL FRONTS?
MARKETS DON’T SEEM TO MIND.
THEY SEEM REASONABLY HAPPY.
WHAT IS YOUR TAKE ON IT?
>> WELL I THINK MARKETS ARE
BASICALLY LOOKING AT THE
ECONOMIC FUNDAMENTALS.
A REOPENING OF OUR ECONOMY.
A FED ACCOMMODATE TOUGH POLICY.
BUT AT SOME POINT THE MARKET IS
GOING TO LOOK AT, AND LOOK FOR
THE MODERATE JOE BIDEN THAT GOT
ELECTED.
HE CERTAINLY HASN’T, YOU KNOW,
PERFORMED AS ONE WOULD HAVE
EXPECTED A MODERATE, A SENATOR
JOE BIDEN, A FORMER
VICE PRESIDENT JOE BIDEN TO HAVE
ACTED.
SOME OF THE THINGS THAT HAVE
HAPPENED IN THE FIRST SIX WEEKS
ARE ABSOLUTELY THE OPPOSITE OF
WHAT MOST PEOPLE EXPECTED.
YOU KNOW, YOU LISTEN TO SOME OF
THE COMMENTARY OUT THERE, GERRY,
I SUSPECT A LOT OF AMERICANS,
WHO SUPPORTED PRESIDENT BIDEN,
ARE NOW IN A PERIOD OF BUYER’S
REMORSE.
GERRY: DICK, LET’S SWITCH GEARS
A LITTLE, TALK ABOUT REGULATION
WHICH IS ANOTHER THING THAT THE
DEMOCRATS OBVIOUSLY GENERALLY
SEEM TO BE VERY ENTHUSIASTIC
ABOUT.
ROBINHOOD AND GAMESTOP MANIA WE
SAW SO MUCH A MONTH AGO THEY’RE
EXPECTED TO TAKE CENTER STAGE IN
WASHINGTON THIS WEEK AS
PRESIDENT BIDEN’S TOP
WALL STREET WATCHDOG PICKS FOR
BOTH THE SEC AND THE CFPB, THEY
HEAD TO CAPITOL HILL FOR
QUESTIONING.
THEY BOTH SEEM TO BE QUITE
ENTHUSIASTICALLY RECEIVED BY THE
PROGRESSIVES IN THE PARTY, GARY
GENSLER AND CHOPRA.
IS THIS A SIGN OF ADMINISTRATION
LOOKING FOR A PRETTY AGGRESSIVE
FINANCIAL REGULATION APPROACH?
>> I THINK, LET’S START WITH THE
SEC AND GARY GENSLER.
HE HAS LONG EXPERIENCE IN
FINANCIAL MARKETS BOTH ON THE
EQUITIES AND ON THE FUTURES
SIDE.
GERRY, IT IS IMPORTANT TO HAVE
HIGH QUALITY INVESTOR SENSITIVE
REGULATION.
NOT A POLITICAL THEATER WHICH
WE’RE GOING TO SEE IN THE
CONFIRMATION HEARINGS, BUT THE
TWO NOMINEES FOR CFPB, GARY AT
THE SEC, TAKING A REAL
CONSTRUCTIVE APPROACH TO WHAT
HAS HAPPENED, WHETHER ROBINHOOD
OR ANY OF THE E-COMMERCE
PLATFORMS AND ASKING A SIMPLE
SET OF QUESTIONS, WHAT PEACE
GOOD FOR PUBLIC CONFIDENCE IN
THE MARKETS?
NOT IF YOU WILL, DRACONIAN
REGULATION BUT INTELLIGENT
INVESTOR PROTECTION AND IF THEY
DO THAT IT MAY NOT SATISFY THE
PROGRESSIVES BUT IT WILL
CERTAINLY SATISFY THE MARKETS
AND HELP THIS NEW GENERATION OF
INVESTORS THAT WE’VE SEEN,
WHETHER IT’S ROBINHOOD OR SOME
OF THE OTHER PLATFORMS.
SO I HAVE ALWAYS BEEN A GREAT
ADVOCATE OF QUALITY INVESTOR
PROTECTION REGULATION BUT YOU
KNOW, DRACONIAN MEASURES JUST
DESIGNED FOREPOLITICAL PURPOSES
MAKE NO SENSE.
GERRY: VERY BRIEFLY, DICK, GOT
TO GO, BUT THE EPISODE OVER
ROBINHOOD WITH THE CONCERNS
PEOPLE HAD, DID YOU THINK THAT
REVEALED FUNDAMENTAL MARKET
FAILURES THAT NEED CORRECTING BY
REGULATION?
>> WELL THERE ARE A COUPLE OF
QUICK OBSERVATIONS.
NUMBER ONE, WHEN YOU HAVE
HYPERVOLATILITY, GERRY, THE
MARKETS AND THE FED SHOULD WORK
TOGETHER TO IMPOSE 100% MARGIN.
THAT TAKES AWAY THE BORROWING
CAPABILITY, WHETHER INVESTORS
ARE BORROWING FROM THEIR BROKERS
OR FROM THEIR GRANDMOTHERS.
ON THE FLIPSIDE OF THAT, THE
SHORT SELLERS, THERE HAS GOT TO
BE ENFORCEMENT OF THE SO-CALLED
PRIOR BORROW OR LOCATE RULE.
SO THAT YOU DON’T END UP WITH
150% OF A MARKET CAPITALIZATION
OF AN ISSUER BEING ON THE SHORT
SIDE.
THAT’S AGAINST THE LAW.
THAT IS NAKED SHORT-SELLING.
JUST THOSE TWO PRINCIPLES I
THINK, THEN ALLOWING THE FREE
MARKET TO FUNCTION, EVERYONE
BENEFITS.
GERRY: DIRK GRASSO, THANKS, GOOD