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Market volatility is a plus for investors: Howard Lutnick

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    Detected Closed Captioning: INVESTORS WILL KEEP A CLOSE WATCH OBJECT THINGS AND WE’LL SEE HOW IT GOES. MARIA: BCG PARTNERS REPORTING REVENUE UP 18% AND GIVEN VOLATILITY HAS RETURNED TO WALL STREET THOSE NUMBERS MAY GO HIGHER NEXT SUMMER. HOWARD LUTNICK SAYS VOLATILITY CAN BE GOOD. HOWARD LUTNICK: WE DON’T MAKE MONEY WHEN THE MARKET GOES UP, AND WE DON’T LOSE WHEN IT GOES DOWN. THE COMPANY LOVES VOLATILITY. THE NUMBERS FOR THE COMPANY ARE JUST BEAUTIFUL. MARIA: THERE IS JUST NO VOLATILITY. FIRST TALK TO US ABOUT THE QUARTER AND THE YEAR YOU JUST SAW. YOU REPORTED GREAT EARNINGS. I WANT TO GET YOUR TAKE ON WHAT YOU JUST SAW AND THEN TALK ABOUT THE VOLATILITY STORY. LET REPORT ANALYSTS WERE EXPECTING 29 CENTS A SHARE AND WE AVERAGED 39 CENTS A SHARE. THE REVENUES 15%. PROFITS UP 22% PER SHARE. FIRST CLASS NUMBERS ACROSS THE BOARD. WHAT HAPPENS IS SPREADING OUR MARKETS AND SPREADING OUR WINGS. THE ENERGY MARKETS ARE GREAT PLACES TO TRADE. COMMODITY MARKETS, INTEREST RATES ARE BACK. WE ARE TALKING ABOUT THE 10-YEAR NOTE COMING UP. FOREIGN EXCHANGE, THINGS MOVING AROUND. IT’S GOOD FOR BUSINESS. OBVIOUSLY THE LAST WEEK HAS BEEN SPECTACULAR FOR BUSINESS. WE WERE EXPECTING TO CONTINUE THAT KIND OF GROWTH. REVENUES WOULD BE 15%. STARTING THE FIRST QUARTER. EARNINGS MORE THAN THAT. IF WERE GOING TO GIVE US DAYS LIKE MONDAY, TUESDAY, WEDNESDAY, THEY WILL JUST GET BETTER. MARIA: ARE YOU EXPECTING THIS YEAR WILL BE FULL OF WIDE SWINGS AND LOTS OF VOLATILITY SINCE WE HAVEN’T SEEN ANY IN A LONG TIME? DOES ANYTHING YOU SAW THIS PAST WEEK INDICATE THAT IT’S GOING TO CONTINUE? >> YOU HAD TWO BIG THINGS HAPPEN. YOU HAD THE TAX CUT. YOU NOW HAVE THIS QUARTER ALMOST HE COMPANY IN AMERICA SAYING THE TAX CUT COST ME MONEY AND MY GAP EARNINGS FOR THE FOURTH QUARTER WILL BE DOWN. BUT THAT MEANS EVERY SINGLE QUARTER FORKER MONEY-MAKING COMPANY IN AMERICA WILL BE UP. IT’S HARD TO IMAGINE. HOW CAN WE TALK ABOUT HE COMPANY? MARIA: WHEN YOU GO FROM A TAX RATE OF 40% TO 20%, THAT’S A LOT OF MONEY FOR COMPANIES. >> THE 10-YEAR NOTE IS GETTING MORE EXPENSIVE. ALL THE COMPANIES HAVE CHEAP MONEY. BUT THAT’S WAY OFFSET BY THE TAX CUT. WHAT WE HAVE IS A NICE BALANCE. BUT PEOPLE CAN’T INGEST THAT. WHAT THEY HAVE BEEN WAITING FOR, THEY HAD LOW COST OF MONEY AND THE MARKET WAS MELTING UPWARD. NO ONE WAS DEEPLY CONVICTED IN THE ECONOMY OR THE STOCK MARKET. BUT THE STOCK MARKET KEPT RISING AND RISING. NOW YOU HAVE GOT THIS ADRENALINE PUFF OF A TAX CUT AND INTEREST RATES CREEPING HIGHER AND IT’S CREATING A DYNAMIC OF MOVING THIS MARKET AROUND. MARIA: SHOULD PEOPLE BE WORRIED ABOUT THIS? WHAT’S YOUR TAKE? WHY ARE WE SO WORRIED ABOUT 3% ON THE THEN YEAR? >> IN 1987 AND 2007, IF YOU LOOKED OUTSIDE IT WAS BRIEFLY SUNNY. ’07, IT’S ALL ABOUT THE 7s, I GUESS. IT WAS SUNNY BUT YOU COULD SEE HUGE BLACK CLOUDS WITH LIGHTNING BOLTS AND YOU WOULD SAY LOOK, KID, WE HAVE TO GO INSIDE, IT’S GOING TO GET NASTY. RIGHT NOW ON THE MORE WRY ZON, BLUE SKIES. THERE IS NO FEAR. THE CONCEPT THE 10-YEAR COULD BE 3%. DOES IT MATTER IF THE DOW IS 26,000 OR 25,000? OF COURSE NOT. BUT IS SOMETHING BAD HAPPENING? EVERY COUNTRY THAT MATTERS IN THE WORLD IS GROWING. BAR WERE SYNCHRONIZED GLOBAL GROWTH FOR THE FIRST TIME IN A LONG TIME. YOU ARE TALKING ABOUT VOLATILITY AND TECHNICAL-TYPE THINGS. FUNDAMENTAL BACKDROP THATTERS VERY STRONG. >> YOU HAVE A VERY ATTRACTIVE FUNDAMENTAL UNDER PINNING. THE WHOLE WORLD IS GROWING AND THEY WILL BUY YOUR STUFF. THE WORLD IS GROWING. BUT YOU HAVE GOT INTEREST RATES RISING WHICH WE HAVEN’T SEEN FOR A LONG TIME. WE HAVE UNEMPLOYMENT AT 4%. AND IT WILL START PULLING PEOPLE WHO HAVEN’T BEEN LOOK FOR JOBS BACK INTO THE WORKFORCE. YOU WILL GET VOLATILITY FOR BGC BUSINESS. THEY FEEL COMFORT ABILITYD SAYING REVENUE WILL GROW IN THE RANGE OF 15% PROFITS. OVER 20% NEXT YEAR. THIS IS NICE FOR BUSINESS. OUR YIELD, WE HAVE A BIG DIVIDEND. 5%. MARIA: HOW DO YOU GROW A LARGE COMPANY. WHEN YOU GET LARGER DOESN’T THE LAW MUCH LARGE NUMBERS FORCE YOU TO SLOW DOWN? BGC SHAREHOLDERS OWN 50% OF NEW MARK. >> 90%. MARIA: TELL US ABOUT THE IMPACT OF NEW MARK ON BGC. HOWARD LUTNICK: BGC IS A GREAT BROKERAGE COMPANY. I’M AN EXPERT AT BROKERAGE. SELLING BUILDINGS, FINANCING BUILDINGS AND LEASING BUILDINGS. THAT’S OUR BUSINESS. AND OFF WE WENT TO BUILD A SPECTACULAR BUSINESS IN NEWMARK. SO WE’LL GROW BETWEEN LIKE 24%, 25% NEXT YEAR IN REVENUE GROWTH. FAN PROFITS PER SHARE WILL GROW 30%. AND THE WAY YOU GROW THAT KIND OF BUSINESS IS JUST TAKE THE SQUALL STREET DATA, THE THINGS YOU ARE SO USED TO, REAL ESTATE BROKERS HAVE NEVER SEEN BEFORE. THEY HAVE NEVER SEEN A COMPANY ANALYZE THE DEMOGRAPHICS OF THE KIND OF PEOPLE THAT WALK BY THE STORE. HOW MUCH MONEY DO THE PEOPLE MAKE WHO WALK BY YOUR STORE? THE KIND OF THINGS THEY LIKE TO BUY IF YOU ARE A HE THEY COME COMPANY. WHEN YOU LEARN THE AVERAGE PRICE POINT WOULD BE LET’S SAY $60. THEY RIGHT AND THE SALES WENT UP 12%. THAT’S HOW YOU GOT A 250-STORE CLIENT. YOU KNOW WHERE TO PUT THEM. IT’S TAKING WALL STREET ANALYTICS AND DATA AND YOU ARE GOING GROW YOUR BUSINESS AND YOU ARE GOING TO WIN. THE PRODUCTIVITY OUR PEOPLE, THE SAME PEOPLE, UP 1% YEAR ON YEAR.

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