Reuters Insider - Breakingviews: Predictions Panel 2014

Great American Financial

15/01/2014 21:22

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 Source:             Thomson Reuters                                   
                                                                       
 Description:        Rob Cox is joined by Kevin Warsh, Tony James, and 
                     Paul Taubman to discuss what to expect in the year 
                     ahead from global markets, economies and corporate 
                     finance.                                          
 
 
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 Short Link:  http://reut.rs/1djYJLv  
 
 
Transcript (May be auto-generated)

 Good morning. I'm Steve Adler editor in chief of Reuters and like to -- commute 
this morning programs celebrating breaking news 2014. Predictions. You'll have 
the predictions look at your table as many -- greatly through it and then you --
but in. Some suggestions of a trait to like make this morning that's appropriate
that is public. Public reports this morning program because the breaking news 
team is really good at making predictions. And it is not that familiar with 
breaking news it's a group of about thirty correspondents all over the world. 
Who provide expert agenda setting commentary on what's going on in the financial
industry based -- the most important financial news stories. Every day. This 
morning's program will look ahead and will take a peek at what's going on them 
in a stock market. What's going on corporations what's going on with 
governments. We have an expert panel to. Talk about all of this with you today. 
Our host that he knows rob Cox. Editor in chief of breaking news -- the 
co-founder breaking news of pounding it in London 2000. And dropped in -- year 
and develop the US. Part of breaking news in 2004. In US editor. Reuters 
purchase. -- -- Reuters purchase very confusing at nine and drop in energy. In 
December 2000 well. -- -- doing a terrific job in the wonderful hosts and the 
reports this morning's program so that any further introduction. If erupt Cox. 
If it. Hurt everybody coming out today on this rainy. This rainy January day. 
When people ask. Great news editors what how our predictions have performed 
everybody does ask that question. I have a simple response is basically that we 
that we nailed a few we missed a couple but they were all interest. I think this
year you know that guiding philosophy I think we we we hit that that mission. 
Last year we argue that US stocks would best. The world that was indeed correct 
we said central banks need to fight to retain their independence from 
politicians and you can look no further than this summer's tussle over who would
lead the Federal Reserve. For evidence of that we predict the Japanese yen would
crest above three digit mark against the dollar and we have who wrote a sign 
that the Bank of Japan -- dollar views hit the mark. I think we said that the 
CEOs Goldman Sachs is important Credit Suisse. Might see their ten years 
abruptly come to an end. That of course did not happen. George Osborne still 
reigns as the British chancellor of Exchequer despite skepticism a year ago. And
while we predicted a great American newspaper we changed hands and when he 
thirteen we should have opted for the Washington Post. Which was sold to -- -- 

We chose the New York Times. This year our views which you'll find in the books 
in front of you which I hope you'll take home and chair. Forever. I've been 
divvied up into about in six broad sections of money and markets people in power
buys and sells. Fees and fortunes mergers and mania is -- odds and ends. I 
thought -- structure conversation a bit around. Six broad themes. Today and I 
have -- us I'm really delighted to have them here three of the most states. 
Practitioners of the dark arts of finance. It whose skill sets. And experiences 
offers extraordinary range tackles topics to my right is Kevin -- Kevin. Albany,
New York native. 

Who worked at Morgan Stanley for many years before taking a job in the bush 
administration's National Economic Council. In 2006 he became the youngest 
appointment the Fed board history. Where he looked worked alongside Ben Bernanke
to fight. All sorts of fires during the crisis he left in 2011 is now -- 
civilian life. Teaching at Stanford helping. -- -- -- mile and best money and I 
believe truly doing. Tony the middle I believe I first met Tony Gwynn he was a 
corporate finance -- at the most entrepreneurial Wall Street firm that state 
Donaldson Lufkin and Jen and after it's -- Credit Suisse. Tony ran its global 
investment banking business and eventually moved to Blackstone today the largest
alternative asset manager and world. Paul Taubman was the co head of 
institutional securities business of Morgan Stanley until November 2012. And 
he's been very busy since last year Paul managed the extraordinary feat of 
becoming one of the top ten -- advisors in the world I think if you look at our.
Another plug for Thompson Reuters the tables you'll see Paul probably in the 
list of options for his. 

Work on Verizon's buyout. Vodafone's stake in its wireless. So without further 
ado let's get to work. Start with a story on Sunday. I installed a nest 
thermostat in my. Actually didn't -- had a friend and how to operate schools do 
-- and in -- I offered him a man which -- -- with. Maker's mark -- We went 
upstairs and then watch the football game on Time Warner Cable. Yesterday. -- 
Time Warner Cable and and the owner of maker's mark beaming all acquired. It was
a big day I think sixteen billion for being 3.2 billion for Nast. Time Warner 
Cable was sixty billion dollar deal. So either like consumer habits are highly 
predictive. In which case we shall see what happens today when maker of I don't 
know. I won't say guys acquired depending what I ate for dinner. 

Or there's something going on and -- -- I thought well start with you on this 
we've had four light years pretty much of them. We've got a pretty good. Start 
to January is. Are you prepared to predict. That I say that like many people in 
your industry you predicted every year that we'll see -- uptick. That this year 
will be different -- -- me -- Well couple things. Every year it seems that 
there's a flurry of deal activity in the everybody wants to jump on the 
bandwagon and the reality is -- Islam. Many of the transactions. That you read 
about had been in the works for a significant period of time. And I don't rushed
to extrapolate from that. Having said that you do start to get a little bit more
momentum. Given how the market has traded the stocks of U core hours and what 
I'm most focused on is the fact that the stocks that require wars. Have gone up 
graciously. Upon announcement and that does create a virtuous circle that does 
yet. Others into the market so you think about Internet trying to look at it top
down and -- if you look at it top down. And its thirty years of history for an 
activity I think you need to throw out the -- people. 

And the credit all and sort ask yourself where there's a steady state. And if 
you look at it on that basis I'd argue we're probably 30% below. Where a steady 
state emanate environment should he. And I think the reason we haven't gotten 
there in large part is that there is a risk aversion. On the part of many CEOs. 
And the fact is that. If they're not -- transactions it's very hard to create. 
Activity and I would argue that ten or fifteen years ago. You have CEOs leading 
the charge and boards of directors holding you back. Today it seems to some 
extent the boards of directors of pushing management to move forward. -- 
management teams that are holding back and I do think. That. That's starting to 
change as we get further and further from the dark days of 20082009. Reversals. 
Shipped in the sense that you -- in the boom years it was mentions pushing war. 
Always -- I think I think I think managements were much more comfortable sort of
daring to be great and I think there was boards that were. Trying to provide 
some oversight I think today and management's -- exactly the opposite position 
which is that I wanna stick there necks out. They wanna make sure that the 
transactions are thi