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Interview With David Brancaccio

Aired April 15, 2003 - 15:24   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


KYRA PHILLIPS, CNN ANCHOR: While the president believes tax cuts will spark an economic upturn, Fed Chairman Alan Greenspan believes the economy may return to full strength as soon as action in Iraq comes to an end. But not everyone agrees with Greenspan or the president. New York Mayor Michael Bloomberg is facing a budget crisis and says the future is dire unless the federal government steps up to help.
(BEGIN VIDEO CLIP)

MICHAEL BLOOMBERG (R), MAYOR OF NEW YORK: There is a national recession that has impacted this city's ability to pay its expenses. And we are trying to act responsibly, given the situation.

(END VIDEO CLIP)

PHILLIPS: Joining me now: radio host David Brancaccio. He joins us from L.A.

David, good to see you.

DAVID BRANCACCIO, RADIO TALK SHOW HOST: Good to see you again, Kyra.

PHILLIPS: All right, well, the war obviously winding down. What do you think we can expect here economy-wise? Not much happened when Baghdad fell.

BRANCACCIO: On the stock market, all the speculation that we were doing on our radio show -- perhaps you were here on CNN -- about what would happen to the stock market once things quieted down. And, what was it, yesterday, the Pentagon said that the big fighting pretty much is over. And we have the Dow Jones industrial average 100 points higher today than it was before the fighting began.

That is nice, I guess, 100 points, not exactly a spectacular rise. I think what is happening is that market players are looking at the real economy, as New York City Mayor Michael Bloomberg was, and saying they don't like what they see; 465,000 people dropped off of payrolls, losing their jobs in the last two months, according to the government.

And, still, when you talk to business leaders, what you get is a certain degree of caution looking forward, war or no war.

PHILLIPS: Well, let's talk about what you've been talking about on your radio show, other analysts have been talking about. As you know, I just got back from the USS Abraham Lincoln. And I have to tell you, these strike fighters were coming back and checking their money constantly, logging on online, buying constantly. They were convinced it was time to buy. It was an interesting perspective from overseas.

What about you? What do you think? What are you talking about here?

BRANCACCIO: The U.S. military was day-trading during the day?

(LAUGHTER)

PHILLIPS: Yes. Pretty interesting.

BRANCACCIO: Cause for concern, I think.

Well, certainly, things didn't collapse during the war. That's a good thing. Moving forward, there are some signs of optimism, some things that do bode a little bit better. For instance, retail sales figures came out late last week, more robust than expected. Some folks said, well, that was due to an aberration because of car sales, 0 percent interest rates and so forth. But at least it wasn't down.

Also, oil prices in just about every place except for California are trickling down. And what that means is that the potential extra tax that are high oil prices is not being felt on the economy, although, I must say, on my way in, gasoline was still running about $2.09 a gallon out here in California. So it hasn't trickled down everywhere.

PHILLIPS: Well, the job market has had people worried, too, yes?

BRANCACCIO: Of course the job market -- as I say, it's 465,000 jobs.

And that's the key. If you are watching this now and you are a business professional and you are saying to yourself, I'm about to make bold investments, bold moves now that the war is over, that suggests the economy may pull out of this some time soon. If you have friends who are business professionals and they are saying, "I don't know. I'm still waiting to see. I'm still being cautious. I'm not sure," that is what will hold us back.

And if you take a look at where share prices are now, they're still betting essentially, the share prices that we're seeing out there now, on pretty robust profits through the remainder 2003. I hope those bets are right. If they are not right, it could mean further trouble ahead for the stock market.

PHILLIPS: And we'll be talking again. David Brancaccio, thank you.

BRANCACCIO: My pleasure.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com







Aired April 15, 2003 - 15:24   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: While the president believes tax cuts will spark an economic upturn, Fed Chairman Alan Greenspan believes the economy may return to full strength as soon as action in Iraq comes to an end. But not everyone agrees with Greenspan or the president. New York Mayor Michael Bloomberg is facing a budget crisis and says the future is dire unless the federal government steps up to help.
(BEGIN VIDEO CLIP)

MICHAEL BLOOMBERG (R), MAYOR OF NEW YORK: There is a national recession that has impacted this city's ability to pay its expenses. And we are trying to act responsibly, given the situation.

(END VIDEO CLIP)

PHILLIPS: Joining me now: radio host David Brancaccio. He joins us from L.A.

David, good to see you.

DAVID BRANCACCIO, RADIO TALK SHOW HOST: Good to see you again, Kyra.

PHILLIPS: All right, well, the war obviously winding down. What do you think we can expect here economy-wise? Not much happened when Baghdad fell.

BRANCACCIO: On the stock market, all the speculation that we were doing on our radio show -- perhaps you were here on CNN -- about what would happen to the stock market once things quieted down. And, what was it, yesterday, the Pentagon said that the big fighting pretty much is over. And we have the Dow Jones industrial average 100 points higher today than it was before the fighting began.

That is nice, I guess, 100 points, not exactly a spectacular rise. I think what is happening is that market players are looking at the real economy, as New York City Mayor Michael Bloomberg was, and saying they don't like what they see; 465,000 people dropped off of payrolls, losing their jobs in the last two months, according to the government.

And, still, when you talk to business leaders, what you get is a certain degree of caution looking forward, war or no war.

PHILLIPS: Well, let's talk about what you've been talking about on your radio show, other analysts have been talking about. As you know, I just got back from the USS Abraham Lincoln. And I have to tell you, these strike fighters were coming back and checking their money constantly, logging on online, buying constantly. They were convinced it was time to buy. It was an interesting perspective from overseas.

What about you? What do you think? What are you talking about here?

BRANCACCIO: The U.S. military was day-trading during the day?

(LAUGHTER)

PHILLIPS: Yes. Pretty interesting.

BRANCACCIO: Cause for concern, I think.

Well, certainly, things didn't collapse during the war. That's a good thing. Moving forward, there are some signs of optimism, some things that do bode a little bit better. For instance, retail sales figures came out late last week, more robust than expected. Some folks said, well, that was due to an aberration because of car sales, 0 percent interest rates and so forth. But at least it wasn't down.

Also, oil prices in just about every place except for California are trickling down. And what that means is that the potential extra tax that are high oil prices is not being felt on the economy, although, I must say, on my way in, gasoline was still running about $2.09 a gallon out here in California. So it hasn't trickled down everywhere.

PHILLIPS: Well, the job market has had people worried, too, yes?

BRANCACCIO: Of course the job market -- as I say, it's 465,000 jobs.

And that's the key. If you are watching this now and you are a business professional and you are saying to yourself, I'm about to make bold investments, bold moves now that the war is over, that suggests the economy may pull out of this some time soon. If you have friends who are business professionals and they are saying, "I don't know. I'm still waiting to see. I'm still being cautious. I'm not sure," that is what will hold us back.

And if you take a look at where share prices are now, they're still betting essentially, the share prices that we're seeing out there now, on pretty robust profits through the remainder 2003. I hope those bets are right. If they are not right, it could mean further trouble ahead for the stock market.

PHILLIPS: And we'll be talking again. David Brancaccio, thank you.

BRANCACCIO: My pleasure.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com