GAMCO Investors CEO Mario Gabelli spoke with FOX Business Network’s (FBN) Connell McShane and Dagen McDowell about the economic climate in both the United States and China. Gabelli said that the US needs to unleash “the power of technology through penetrating the shale area,” in order to create jobs and revenue. He also disagreed that the Chinese economy is headed for a hard landing, saying, “I believe if the inflation rate in China can slow down, they’ll take their foot off the break and start pressing on the accelerator. A soft landing.” Excerpts from the interview are below.
On what will stimulate the economy:
“Unleashing the power of technology through penetrating the shale area, both for oil and gas, will create jobs creates revenue, makes us energy independent and doesn’t allow us to transfer our wealth to the Chinese at the margin. We need to regain the economic and moral leadership in this country. And one way to do that is in our energy policies. Unfortunately, I can’t argue strenuously that we have to have a crisis to get a wake-up call.”
On the need to “unleash the power of technology”:
“Things like selling parts to Airbus and Boeing. But even simpler than that, the United States buys about $400 billion of oil and imports. We could become more self-sufficient. But where does that money go? Into our deficit, and in the hands of the Chinese. That is not a good formula for the next ten years for our children. Do we want our children and grandchildren to migrate and have this meeting in Shanghai versus having it here in New York? So unleashing the power of technology through penetrating the shale area both for oil and gas. That will create jobs, creates revenues, makes us energy independent, and doesn’t allow us to transfer out wealth to the Chinese at the margins.”
On other investment opportunities in America:
“The vendors to Boeing and Airbus because they are finally starting to ship their airplane even though they had issues with regard to relocating a factory down in South Carolina. They could have gone to Vancouver. We have to help American competitiveness in globalization. Globalization is where the jobs are.”
On if he thinks China’s economy will have a hard landing:
“No. I believe if the inflation rate in China can slow down, they’ll take their foot off the break and start pressing on the accelerator. A soft landing.”
On what the appetite is of investors:
“One baby step for investors is utilities. Electrics, gas, water companies have a rate of return, they are paying out about 60 percent of their cash flow in earnings and dividends, they get a current return. And companies are making love to each other, lots of deals.”
On the need to invest in American farmers:
“Another example is the Chinese. What do they want? What do they need? Food? Corn? We have a comparative advantage in corn that goes into feeding chickens and pork and the vendors to that, the American farmers are the most productive in the world. We have to nurture that.”
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