When it comes to a power lunch, it's not just who you have at the table, it's also a matter of where that table is. New York (Sorry L.A.) is power lunch central. There's no shortage of locations, but our own "Power Lunch" decided to take the show on the road to The Four Seasons.
The restaurant, nearing its 50th anniversary, is as famous for its architectural design and art collection as its clientele of celebrities and power brokers.
Power indeed. For the occasion we invited almost a dozen power players to discuss private equity, hedge funds, the stock market and keeping America great.
Here's what they had to say.
Steve Rattner, managing principal of private-equity firm Quadrangle Group
Rattner recently called the surge in private-equity deals "an accident waiting to happen" and said "of all the bubbles, the bubble in the credit market today is one of the greatest. It is beyond any rational measure."
Rattner talks about an "unprecedented" credit environment of low interest rates and a "liquidity glut."
And despite Rattner's warning, he's confident about the future of private equity, saying it "will be around for a long time."
Michael Steinhardt, Wisdom Tree Investments chairman
Steinhardt is one of the true pioneers of the hedge fund industry. He's managed to return at least 20% over most of his 30 years in the business.
All the more reason to listen to his warning about the stock market. After a period of "glorious appreciation" and with the U.S. market back at the top after a Feburary correction, the "bell is starting to ring." Volatility is about to increase and the "end will not be pretty."
That said, Steinhardt says the relationship between hedge fund managers and clients is a reflection of the "pure capitalist system." Nevertheless, he says moves by some hedge funds to sell shares publicly don't make sense. Investors are flighty and going public "suggests longevity," says Steinhardt, and "I don't think that has ever existed in the hedge fund business."
James Chanos, Kynikos Associates founder and founder/chairman of the Coalition of Private Investment Companies
Chanos says his firm -- which specialized in short-selling -- has been short-selling companies in the student loan sector for as much as three years. He says that those companies will face serious legal issues in the coming months and investigators will uncover "many tens of billion of dollars in fraud."
Chanos made more than $400 million last year as a trader and dismisses recent hedge fund collapses as simply part of the business. "There are going to be continual blowups, continual losses," reminding that hedge funds have "done a lot for investors."
As for industry regulation, Chanos says he'd like to find "a middle ground" with the government; providing information is acceptable but he opposes "full-blown registration."
Michael Eisner, Tornante Company founder, former Walt Disney Chairman and CEO and CNBC host
He ran one of the most powerful media companies in the world and now he’s in the world of private equity and also trying to find a place in the wilds of new media.
Eisner says we're experiencing "the biggest sea change in story-oriented content...since the invention of the motion picture camera."
Right now it's about "user generated and blogs" but it will eventually all come down to content.
Maurice "Hank" Greenberg, CV Starr CEO and former AIG CEO
Greenberg recently warned that London and Bermuda have surpassed New York as insurance capitals of the world. "Public companies are over-regulated, " says Greenberg, adding that both Washington and individual states are to blame.
As for the allegations of fraud against him that forced him to resign as AIG CEO and forced AIG to pay more than $1.64 billion to settle the case, Greenberg declares I'm comfortable I did nothing improper."
Mort Zuckerman, Boston Properties Chairman/Founder and US News & World Report Publisher
The billionaire talks about private equity’s big interest in publishing and real estate, two things he knows a lot about.
Newspapers are 'still a business that can work," says Zuckerman, commenting on Sam Zell's plan to buy the Tribune Company. As if offering proof of that, he adds that his paper, "The Daily News", is still profitable. For all the talk about the Internet crushing the newspaper business, Zuckerman maintains that the "escalating price of newsprint" is the real culprit.
As for real estate, Zuckerman calls it "the best period I have known for commercial real estate." Rising rents and low --in some cases almost non-existent -- vacancy rates have made for strong markets where he owns properties. While Boston and San Francisco are strong, New York is "more than strong."