Posted on 12/13/2008 12:33:39 PM PST by SeekAndFind
Charles Schwab, 71, has a better perspective than most on the recent Wall Street free fall.
He's seen a lot in 37 years of running the company he founded and has navigated successfully through expansions, recessions, irrational exuberance, and crashes. He has also managed his firm through revolutions in the financial industry, from deregulation of the brokerage business soon after he started to the advent of the Internet.
Today Charles Schwab & Co. (SCHW, Fortune 500) holds close to $1 trillion of client assets (the figure fluctuates as wildly as the markets), and Schwab himself is a multibillionaire.
His role has fluctuated too. He handed the CEO job to company veteran David Pottruck in 2003, then took it back in 2004 as performance faltered; on Oct. 1 of this year another longtime company executive, Walter Bettinger, became CEO while Schwab remains chairman.
Fortune's Geoff Colvin talked with Schwab about what investors should do now, who's to blame for the financial system's crisis, the economy's future, the keys to being a successful entrepreneur, and much else. Edited excerpts:
How is the firm doing through this turmoil? You have a bank, which some people may not realize, and you're even in the mortgage business.
Schwab has been and is in great shape. We never got into some of the more toxic things that you read about. We have a $25 billion bank, which we started five or six years ago, and we do provide mortgages to our clients. We don't go outside of that, and fortunately the correlation between saving and investing on the one hand and having a high credit score on the other is very high. We have a very teeny delinquency rate. We're a pretty conservative group of people.
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(Excerpt) Read more at money.cnn.com ...
And there you have it!
Am I the only one whose a bit annoyed about the way the economy is being talked about. You would think this was the first deep recession we’ve ever had in this country. Come on. What are we a country of wimps. Oh well, if one good thing can happen out of this maybe people will get off this idea of living so dependently on credit. Living within ones means. But given who just got elected that seems along way off.
We have his word. Did the investors with Madoff have his word also? What else would you have him say? He’s in the business of convincing people to invest with his company. Trust - but verify.....
I’m not sure if Mr. Schwab’s reasons for optimism about the markets are founded. They are based on the following understanding ( his understanding) of the way things will be. He believes :
1) Obama has his team together and is able to submit to the public what he’s going to do. He’s got some wise people around him who will probably put together a pretty comprehensive and thoughtful strategy, and I think that will add exactly what we need to improve confidence.
2) He has said he would reduce taxes for 95% of the population. I would have him keep that pledge but announce that for the other 5% there will be no change in their tax rate for at least three years.
That would probably send the stock market really turning around. A tsunami of uncertainty has been created by the election and by the agenda he suggested in the campaign. Lots of people are worried about taxes and have been selling.
3) I would then suggest that he come out with a strong agenda with respect to infrastructure investments. It will probably cost well above $1 trillion. This is bigtime stuff. It might even go toward $2 trillion, but we’ve got to make that investment. I think we could handle it.
So, if those are his reasons for believing the stock market will bounce back, I am not certain that they are good ones.
Uh, yeah....He’s in the biz of selling stocks, and he swears that tomorrow, everything will come up roses..!
My prediction: his words will have an effect opposite to his intent.
Right now, I’m not in the mood to trust anyone that doesn’t make their living where some amount of sweat earned through honest labor isn’t involved.
LLS
Well, a lot of stockbrokers have been sweating lately.....
That’s not ‘honest’ sweat.....
I use Schwab. The fees are decent, the trading software is good, and they have a record (so far) of avoiding the kind of shennanigans that most brokers get into.
But I wouldn’t put too much weight on this statement. For one thing, his company has to live with Obama for the next four years, or eight years, or maybe 20 years if we’re going to be ignoring the constitution. So he wants to speak optimistically about him and take him at his word from his campaign promises.
I think we’re in for a major depression, and that Obama may well be worse than FDR at handling it. But then again I’m not responsible for a large company and thousands of employees who might lose their jobs if Obama took out his hatchet.
If you can call inflationary roaring.
Non ones’ words have any effect on my right now. We have yet to see the bottom of this mess and I’m predicting it will be years before we get back to “normal”. Wells Fargo said earlier this year, expect 10-15 years.
Either Schwab is a bigger sucker than your average Moonbat, or he was simply being PC in saying all will be well when ‘obama gets his team together...’. In a reality based world he’d admit he’s just doing well by default...Etrd went under, and Amertrd went Canadian!
Yep...simply using the word ‘investment’ the way he did kinda shows his leanings. The market may go up but it’s not gonna be because of those reasons! It’ll be because america may have finally turned the corner on Savings and Investment (the real kind), Cox may be (finally) putting the kabosh on naked shorting, and the plethora of layoffs as a result of the 2006 Pension Relief Act will give a big boost to productivity.
The economy is no where near as bad as has been portrayed.
A little tip for you - DON'T say this out loud in front of Zero.
some of these “posts” makes me wonder what the avg net worth of “Freepers B”?
Don't worry in about 6 weeks the news will get much better. The economy won't have changed but the news will be much more optimistic.
The bad news is, the stock market is in the tank big time. The stock market is a leading indicator that usually points to where the economy will be in 6 months to a year. Six months ago it was about 40% higher than it is now, which suggests that in 6 months time the economy will be about 40% worse off than it is today. But don't worry, the news will be much better.
I feel a lot of negativity here,
aren’t we a bunch of FREE market believers?
Why you’d almost think some of these folks
want the market controlled so there wouldn’t
be so many chances for a down turn.
Shame Shame.
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