Market Overview

Getting Down to Business with Charlie Gasparino, Senior Correspondent with Fox Business Network, Part 1

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Today our guest is Charlie Gasparino, the senior correspondent for Fox Business Network, and author and journalist.

How ya doing today Charlie?

Charlie Gasparino: How you guys doin'?

I'm doing great. I'm in my car as we're doing this and I almost ran somebody over! Cut right in front of me on their bike. But go ahead.

[Laughs] Hey, now we've got it documented. That was your mistake.

Charlie Gasparino: I did not hit him.

[Laughs] Alright. Well Charlie, I know we've got you on here to talk about your thoughts on Wall Street, Washington, so on and so forth. But I also hear you're a great boxer. Have you been putting those skills to use beating up on any Wall Street CEOs?

Charlie Gasparino: I'm gonna clarify: I was pretty good as a kid. One of the lingering regrets in my life is that I didn't fight in the Golden Gloves back in 1980. The reason why is because I broke my nose. I was hurt. But I really should have done it anyway. I was graduating from high school and I got lazy.

I'll never forget, my sparring partner, who I used to beat all the time… I was sitting in a bar, having a beer, and I was watching this guy, they had him on the screen. I'll never forget it, it was the semi-finals of the Golden Gloves that year. And I sat back and I said What the hell did I do? How did I not go through with this?

It could've been you, man.

Charlie Gasparino: After that I've vowed to always finish something through. I'm not gonna quit in the middle or anything.

Have you ever thought about trying to get back into it?

Charlie Gasparino: I workout a lot. I hit the heavy bag. I don't want to get hit in the head. I really think that people that do this, when you get older and you start doing this boxing thing, I don't think it does you any good. You're basically gonna get hurt. While it gets you in good shape, to run the heavy bag and to spar a little bit, getting smashed in the face on a repeated basis is not good for men in their 40s.

Be honest – would Fox Business still put you on if you were going on every night with a bloody lip.

Charlie Gasparino: I don't make those calls. But I tell you what: if I am breaking news, they will put me on. That's the competitive nature of the people I work for.

So what brought you into boxing when you were younger?

Charlie Gasparino: My father was a pretty good fighter. There was a club in town, right down the street from me, where this guy coached a bunch of people who made it to the finals and semi-finals of the Golden Gloves.

One day I showed up in the gym and he started me from the bottom. He became a mentor of mine. He died a year or so ago. He was a tough guy, a really tough old Irishman. He smoked a cigar while we were fighting. He was a reformed alcoholic. He was a guy that saw a lot of tough times. He had a big family; he had eight kids. He turned his life around. He was a great coach.

The past couple of years have been a golden era for the financial press. What has it been like being on the frontlines?

Charlie Gasparino: I remember when I thought I reached the pinnacle of my career. In 2001 through early 2003 I was at the Wall Street Journal, and I was at the forefront of covering all the major financial scandals.

You know, Elliot Spitzer. He was the New York Attorney General. He was cracking down. This was good stuff – Martha Stewart [and] insider trading, that was the big scandal back then. All the sleazy reports that came out of the tech bubble, and I broke a lot of stories then.

And then 2007 came along and you could almost smell that it was bigger. What was interesting about the financial collapse was just how much the people involved couldn't believe it was going to happen, and how it just kept getting progressively bigger. All of a sudden you're staring at it collapse, and Lehman Brothers, right after Bear Stearns, and the whole system coming down.

And then I look back and think, “Thank God I covered that. There won't be any bigger crisis than that.” But you know, one thing about the financial business, it's such a major part of our lives, that it's a big story now. It's almost as big as government. The economy and finances, in many ways it's bigger than government.

Barack Obama's major policy move over the last two years, one was health care – the other was taxes. How now agreed to extend the Bush tax cuts because the economy is [not good]. We have 9.8% unemployment. The economy matters, that's a big story.

What do you make of accusations that the financial press has been constantly saying buy-buy-buy, even when the market did not warrant it? Recently we had on Patrick Byrne of Overstock.com that called out the New York financial press in particular. What are your thoughts on that?

Charlie Gasparino: Not everybody is saying buy. One of the things I've steered clear of is telling people what to do with their investments. I report on stories and try not to get into the investment thing. I'll leave that to other people.

I don't think people should be buying individual stocks. If this insider trading thing has taught us anything, it's really telling you how rigged the game is. Even if those expert networks, just to say they don't get insider information. What average person could ever afford an expert network?

On that note, you must a lot to say on these scandals. Steve Cohen – he used to be thought of as the untouchable investor because of his success – was just subpoenaed. Do you think he's involved more than what has been reported so far?

Charlie Gasparino: Was he subpoenaed or was his firm subpoenaed?

Well, SAC was subpoenaed.

Charlie Gasparino: I think SAC was subpoenaed, not Steven himself. And that's a different picture because it shows that he himself is not targeted, his firm is. [But] it's clear that they're after a big fish, and it's clear that that big fish is him.

Insider trading is nebulous – there's no one rule. It's kind of like what they said about pornography. I can't remember who said it, but it was one of the Supreme Court Justices. Or for an obscenity, I think it was – ‘I know it when I see it.' There's a little bit of that in insider trading.

The other thing is, I also worry from a public policy standpoint. Are we wasting too much time on this when there are so many bigger pigeons for investors to worry about. If you're an investor, the average guy is not trading in health care and these other stocks where you can get an edge from insider trading. He should be in mutual funds. Let the professional guys duke it out with expert networks and things of that nature.

That said, what I think is interesting is that there is a law here. I don't think the regular news realize how many people violate the standards that govern the market, whether you agree with them or not. I honestly don't agree; I think insider trading maybe shouldn't be that big of a deal. But that's the law on the books. There are people violating that in a major way.

Whatever you think of insider trading laws, you can't blame people for wondering if the little guy has a chance anymore.

Charlie Gasparino: That's the point I was trying to make. Take insider trading out of it and the little guy doesn't have a chance. And that's why trading individual stocks – I'm not keen on that. I'm sure the stuff that most of these expert networks do is perfectly legal. I'm sure there's problems around the edges. But they all force their experts to sign agreements. A lot of ‘em are doing market trends and things of that nature. But having access to all that gives you an advantage.

The average little guy, little gal, doesn't the money to pay for that type of analysis. They never could. So without inside information, don't be fooled into thinking you can compete with the big guys. You can't. Put your money with professional investors. Let them duke it out. Let mutual funds duke it out. Don't say that you think that you could compete, ‘cause you can't.

You've been reporting on the WikiLeaks fiasco, finding that Bank of America (NYSE: BAC) has set up a war room for the coming release that many have speculated has to do with Bank of America. Is this the confirmation that we've all been waiting for regarding who Julian Assange was referring to when he said he would take down a bank?

Charlie Gasparino: I have a source, [it's] a good source. He says he's seen the documents and that those documents – that are allegedly about to be leaked – clearly point to Bank of America. However, this source has no idea the scope, the danger of the documents to Bank of America.

I think you have to ask: why is Bank of America so scared? They know there's a lot for them to be scared about.

Is there going to be anything that we'll be surprised about? The robo-signing stuff has already come out.

Charlie Gasparino: That could be it. It could be robo-signing. Robo-signing opens up the door for liabilities for BofA. Not only were there maybe homes foreclosed upon improperly, because that's what robo-signers do – they allegedly stamp these foreclosure documents, they don't do the due diligence they're legally supposed to. Not only that but [there may have been] loans that were given out improperly.

Countrywide made a lot of loans. There's a lot of speculation about them giving loans to people who couldn't really afford homes. If that's true, those loans are in bonds already, so the bondholders that are holding Countrywide mortgages in those bonds are threatening to clip those bonds back to Bank of America. And the most prominent investor doing this is the New York fed. ‘Cause the New York fed owns those bonds through the blowout of Bear Stearns.

So [Bank of America's] response is interesting because it tells you they're worried about stuff.

Part 2 is available here.

Posted-In: Benzinga Podcast boxing Charlie Gasparino Fox Business NetworkMovers & Shakers General

 

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