The government is crushing interest rates to push people to take risk, but instead the equity market is "melting-upward" because of all the uncertainty that the market players feel, Howard Lutnick, CEO of Cantor Fitzgerald, told CNBC.
“They [the government] reach around to their children, the banks, who drive the economy and grab them by the neck and say, 'you guys have to hold on to more and more money'," Lutnick said.
Take Goldman Sachs. The government is forcing the firm to become more and more of a bank. Historically they had such superb quality people down the food chain because they were able to take more risk, he said.
For this reason he thinks giant banks in general, like JP Morgan Chase, will began to play on a more even playing field.
And with no Bear Stearns and no Lehman Brothers in the picture, Cantor Fitzgerald has been able to "fill the void" and take care of the middle of the market, Lutnick said.