Roger Altman, Chairman of Evercore Partners Inc. (NYSE:EVR), spoke with Bloomberg TV’s Betty Liu today to discuss a number of topics including the situation in Ukraine, mergers and acquisitions in 2014, and the Moelis IPO.
On Moelis, Atlman said, “I don’t see any reason why this won’t be successful and why the public markets won’t be hospitable to Moelis…[the] timing is reasonably good.”
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BETTY LIU: I want to bring in my guest host for this hour, Roger Altman. He’s a former Deputy Treasury Secretary under President Bill Clinton. And he’s also the Founder and Executive Chairman of Investment Bank, Evercore Partners. Also with us is Republican Senator Ron Johnson of Wisconsin who serves on the Senate Budget Committee as rwell as the Homeland Security and Government Affairs Committee. He joins us as well from Washington.
But Roger let’s start with you on this. As we just highlighted, some tough talk coming out from Secretary of State John Kerry. Does he have the firepower to follow through on this?
Evercore CEO Roger Altman: Well Betty I think this is going to take a while to play out. But let’s put it in perspective. First of all Putin’s move into Eastern Ukraine, particularly Crimea, is a move out of weakness, not a move out of strength. Because look back three months ago. Russia had reached agreement with the then Ukrainian leadership on a $15 billion rescue package–
Evercore CEO Roger Altman: Where Ukraine would reverse its previous commitment to the EU, align with Russia and in effect reconfirm Russia’s protectorate so to speak–
LIU: Exactly. Like an alliance.
Evercore CEO Roger Altman: That’s where we were three months ago. Then of course the Ukrainian leadership is overthrown in effect. Democracy in one form or another breaks out or a form of Democracy breaks out and Russia is way back on its heels and it’s previous agreement with Ukraine is blown up.
LIU: So you think it’s a desperate move by them?
Evercore CEO Roger Altman: I don’t know about the word desperate but it’s born out of weakness, that’s number one. That’s number one. Now I think Putin has made it clear already he doesn’t want to move into the Western part of the country because he knows that would bring a much stronger response from the US and from the West. So I don’t think that’s going happen, that’s number two.
So number three is the question of what sanctions, what costs, to use President Obama’s term, Putin is going to have to pay for this. And I don’t think it’s clear right now. Because we’re seeing various forms of equivocation from Europe. We’ve seen Germany indicate that it’s not in favor of some tough sanctions.
LIU: In a very difficult spot, yes.
Evercore CEO Roger Altman: Because of the economic and financial ties between Germany and Russia. So the question now which I think will take a while to play out is what are the costs which Russia will pay? And I don’t think it’s clear. And I don’t think it’s clear that they’ll be that high.
But are going to see Putin withdraw now from the Crimean region? From a military point of view? I think the answer is no. And again, putting this in broad perspective, the Crimea represents the one warm weather naval base, major naval base that Russia has. And from Russia’s point of view it’s a strategic asset of the highest importance.
Evercore CEO Roger Altman: So I don’t think Mr. Putin given the uncertainty of where Ukraine as a whole goes, and does Ukraine align with the West, is going to give that up. And I think that’s where it stands at the moment.
LIU: Let me bring in the Senator in this. Senator you were just listening to Roger Altman’s analysis, would you largely agree with it?
SENATOR RON JOHNSON: Good morning Betty. I’m not sure you take a look at what Russia did and call that a move of weakness. I realize that Russia’s not a strong economy and it’s certainly dependent on its oil exports and certainly kind of enjoys world chaos because it keeps the price of oil high.
But you know, I appreciate what the administration’s trying to do. I want to try and be unified here. I want politics to end at the water’s edge so that we can, you know–
LIU: But what bothers you?
SEN. JOHNSON: Definitely send the signal, well what we need to do is we actually need to act. Now I think we should act in measured fashion. I don’t want to escalate, I want to de-escalate, but Vladimir Putin has to pay a price for what he did in Crimea. We’ve got to take some action. Hopefully we can force him to withdraw from Crimea. We certainly don’t want him to advance any further.
And of course what Russia’s been doing is they have been putting pressure on all of those fledgling Democracies, their former client-states of the Soviet Union. And they’re going to continue to try and put pressure, trying to destabilize those regimes which is not good for the West. It’s not good for economic world order.
Evercore CEO Roger Altman: Well first, Putin’s move into Crimea of course was not a weak move, it was a military move. But the reasons for the move in my judgment were weakness.
LIU: You say are out of weakness.
Evercore CEO Roger Altman: Right.
Evercore CEO Roger Altman: And I think Senator Johnson and I agree. The question is now, what cost will Russia pay. It isn’t clear to me what that will be. And whether we can actually impose large costs on Russia. We have the tools if we wanted to use them. After all we could freeze Russian assets in Western banks or even just American banks and other steps which would have a very, very punitive effect. But I don’t think the United States wants to act alone.
LIU: Well let’s look at the aid package though that the US is helping put together with the Europeans. And Senator do you expect the aid package worth up to $15 billion, is that going to clear Congress? And if it does, do there need to be conditions placed on it?
SEN. JOHNSON: Well this is no time to be pennywise and pound foolish. What the administration has to do is make the case of why it’s important that Russia does not continue to proceed and gain greater influence in Ukraine. Part of the reason that they were gaining influence was because America, the European Union was kind of asleep at the switch. Just kind of assuming that Ukraine was going to join the Eastern Association.
SEN. JOHNSON: So those plans kind of collapsed. We have the opportunity