Discussing whether the IMF will become the “ultimate funder” to a troubled EU, with Richard LeFrak, The LeFrak Organization, and Wilbur Ross & Co., WL Ross, and the Squawk Box crew.
Video and transcript below:
we are kicking off the second hour of squawk box with a couple legendary deal makers. wilbur ross and richard lafrak, president of the lafrak organization join us now. i guess weed be would be remise didn’t — you just got back from europe. can you feel the angst? can you feel the — can you feel the light at the end of the tunnel? or is it a train coming at us? i don’t think that it’s either. i think it’s going to be a very slow moving thing but we’ll eventually get to where we need to be. my own guess is that at some point the imf gets brought in both as the policemen and as the ultimate funder. and probably that will mark china getting a bigger participation in the imf. would the ecb have to — how would it work? if you were to design this, how would you design it? think about itment what it means is two things, big funding source so that people will say there is enough of t.a.r.p. type thing to take care of the problem. but it also needs a more permanent fix. and i think the manifestation of europe is what they’re talking about is the way it should go. and i think it will go. not in a great way, right? it is happening. germans are calling the shots. and we’re worried about china somehow taking us over. and they managed to take us over, too. economically. with that as a backdrop, you’re looking at opportunities more than derisking now. yeah. i think it’s a really great time to start because, you know, i’m so thrilled that the american economy has been so resilient that we’ve kind of gotten past, you know, finance bubble, housing bubble, the ineptitude in washington. i mean even, you know, i didn’t even know. i thought grover was actually a character on sesame street. i find out that — super grover. i didn’t know that he actually was running everything in the united states. so you’ve had all the kind of negative things going on in the country. and, yet, we’re still growing. europe is about to blow up. japan had all the terrible things. the country is still growing. saturday night live had a thing, the most — 20 most powerful institutions in the country. and president obama was as whatever that guy’s name is, hilarious. number one was congress. they don’t do anything. number two is grover norquist. number three was i think the nfl. if i have an address, they will not interrupt a game on nfl between the jaguars and the, you know, the other worst team in the league. based on experience yesterday, joe, i would say nfl is number one. nobody will mess with them. oprah is number four. where is the president? number 11. i’m not even in the top ten. so if you’re a entrepreneur like i am and, you know, wilbur, you have to be in front of everything. you can’t just say okay, things are great now. let’s go. well, you’re going and everybody else is going. you said this last time, richard. and we were less convinced that we weren’t going to double dip like three months ago i think you said i’m — i’m optimistic that, you know, that everything isn’t going to fail. and so, you know, i have to be in front of everything. we have to be before the mob shows up in order to be able to buy. does that mean sometimes you have to have pretty long tall ran tolerance? yes. that means you have to have inappropriate capital structure. right now we’re actually collectively very active down in south florida. because miami already had the beginnings of a great revival. who calls who? on real estate? i call them. you call him on real estate. he calls me. does it really work that way? because you’re in a lot of deals together, right? we’re also friends. independently of business deals. that makes it hard to be friends, right? not so much. we haven’t had enough trouble yet to make it difficult. no. you know, when you succeed, then everybody loves you. it’s only when you fail. you worked at bank united, right? bank united. and i actually own significant piece of the company that participated with wilbur in the irish bank. so i’m derivatively valued. you’ll talk about maybe financial-related companies and he’ll talk to you about real estate? we’ll talk about everything. everything interacts. financial companies have a big stake in real estate. real estate companies need finance companies. and you feel the same way? it’s no longer time to derisk? it’s time to look for opportunities that have been created? we’ve been probably more active the last three months than we have been in most of the last three years. why? is that because the deals came up? yeah. bank of ireland, northern ireland. shipping, we had two shipping deals. so that’s a lot. a lot of that has been coming over many, many months. sure. it takes a while to get things done, particularly need governmental approval. i was in ireland quite a bit lately. and this occupy wall street is even in dublin and in all the other cities. right outside the central bank there is a whole little encampment of occupy dublin there. i have a question since you were just in europe. the anxiety that we have here about what’s happening in europe, is it palpable there in the same way? oh, absolutely. it comes out in different forms. for example, ireland, more or less has fixed itself, at least its put the measures into place. so they’re very worried that having done all that, they’ll still lose sovereignty because of things that greece and italy are not doing on their own. so the nature of the fear varies quite a bit from one part of europe to the other. they’re all worried about something. and your idea — how old is that idea of yours with the stock up the excess housing? two years, isn’t it? i think i mentioned it on the show three years ago. it was an easy, you know, low hanging fruit. easy way to help the housing business on the margin. possible something actually is happening? sure. it’s possible. but those guys can screw up a funeral. you can see it already in florida. i had a dinner party with the brazilian consulate general. he gave me a couple interesting statistics. there are 300,000 brazilians in florida of whom 120,000 are in miami. and those 120,000 constituted 20% of all the residential real estate sales in miami last year. wow. huge. and at the margin, a 20% increment is enormous. and think about it. if we actually tapped some of the wealth in asia what that would do for house prices in california and las vegas. what happened in vegas? they did that in can vufvancouv sfligt. right. there are much more restrictions on the proposals that they put out. many, many more restrictions. the most critical of which is that he’s — not he, but the builder isn’t requiring six month residency. you have to live here for 180 day az year. which exposes you to u.s. taxes. that’s a good way to keep them out. i assume you had a conversation with him about that? i have. did it go well? no. i think that he is very open minded. i don’t think that he has any nefarious motives about this. i really don’t. i think they’re just — it’s mixed up. to make i will politically palatable — right. he’ll speak about it when he’s on. i think any bill that has the support of both senator schumer and senator lee who come from opposite sides of the political spectrum means that there is some merit to that idea. if they can collectively get past some of their internal issues, there’s a good chance it will get done. it’s a no-brainer. it needs to unhinge the tax thing from fixing real estate market. it would be enough if it just fixes the real estate market. then there will be taxes generated anyway because people will spend money when they’re here. that’s the way it’s supposed to be. it’s like going to the mall, who doesn’t?
Equities did well last month as most market watchers have noted that Value outperformed growth. In his March Factor Performance report, Alex Botte of Venn by Two Sigma noted that March was a strong month for the global Equity factor, especially in developed markets. Q1 2021 hedge fund letters, conferences and more He said Europe Read More