Mario Gabelli on Economy, Stocks and Politics [VIDEO]

It’s Columbus Day, and CNBC’s Maria Bartiromo is hosting Manhattan’s 68th annual Columbus Day Parade. Mario Gabelli, Gamco chairman/CEO, discusses the state of the U.S. markets and economy.

Video and computer transcript below:

i’m back with mario gabelli. i’m sorry about that, in the middle of the conversation the satellite went down. you were talking about earnings as far as putting money into the market. 36 billion under management. it’s all in equities in your company. that’s what we do. obviously, from the point of view of being loyal to the money that’s with us, that’s what we focus on. every day we read an annual report — for instance, yesterday, i read the annual report of a company spun off from sara lee, called hillshire, that’s going to be veryattractive. it’s a yummy. somebody will want to buy it, jimmy dean, hillshire brands, ballpark franks. consistent growers regardless of the economic back drop around you. do you worry the economic backdrop has actually worsened? that this market keeps going up and we’re heading into the earnings period which is actually going to show contraction? the markeoe dts fluctuate. you know, 50, 60 years ago bernard veruke said the market goes up. yeah, the markets will fluctuate. we can’t worry about that. that’s background noise. what’s it going to look like in five years? short term the markets had a big rally. you want to keep your seat belts fastened. next 35 days in united statesdeleveraging on a global basis and a lot of speed bumps. any anticipation going into the election? does that dictate how you’re allocating money right now? like any other businessperson, i’m looking at what happens after the election, so i have to have options. during this period of uncertainty i’m not pulling the trigger, so i’m not hesitating. do i raise capital, make adividend, make a distribution, buy back stock? larger companies are looking at simple things like makingacquisitions, splitting up the companies. i think that’s on hold.for example, the warren act precludes individmpl couaaniesfrom saying, we can’t lay you off right away, sequestrationissues. lots of uncertainties that can be clarified after the election. in terms of m&a, you think it’s going to pick up after theelection? absolutely. smaller companies that are unique and have certain characteristics and an opportunity — water-related,fracing, health care, banking industry is starting to look atdeals. as you look into 2013, you want to say, hey, i can borrow money. i’m an lbo firm, private equity has lots of money. they can borrow money p. stocks are cheap. if they get cheaper, you’ll see more deals. going into the election, thatsequestration, the fiscal cliff, how important is this in terms of investing? even the martians know about sequestration. it’s nothing new. but the answer is, if it happens, you may have another issue because it does create a speed bump in 2013.looking into n2014, if we can pull it off a year from now — a year from now at this date, 2014 could be very bright. all right. we’ll leave it there on that bright note. mario gabelli, chairman and ceo of gabelli funds and this year’s grand marshal for the columbus weekend. thanks, mario. great to be here. great to raise money for the great cause of education and everyone’s dreams. mario gabelli with me here in new york city. michele, i’ll be back on the closing bell tomorrow and i’ll send it to you for now.