WHEN: Today, Tuesday, July 28th
WHERE: CNBC's "Closing Bell"
Following are excerpts from the unofficial transcript of a FIRST ON CNBC interview with Omega Advisors CEO Leon Cooperman with CNBC's "Closing Bell" (M-F, 3PM-5PM ET) today. Following are links to the interview on CNBC.com: http://video.cnbc.com/gallery/?video=3000401472, http://video.cnbc.com/gallery/?video=3000401473 and http://video.cnbc.com/gallery/?video=3000401468
All references must be sourced to CNBC.
COOPERMAN ON CHINA
CHINA WAS GROWING 10 PERCENT. IT'S GROWING NOW MAYBE 6. SO THERE'S A BIT OF BIG DEESCALATION OF GROWTH. BUT THE ECONOMY GLOBALLY HAS STILL GROWN. I THINK BASICALLY THE GOVERNMENT HAS SHOT THEMSELVES IN THE FOOT WITH THEIR INTERVENTION IN THE MARKET. WE LIKE MORE TRANSPARENCY, RULE OF LAW. IN FACT, I'D LIKE TO SAY THE GOVERNMENT OF THE UNITED STATES SHOULD GET MORE OUT OF OUR MARKETS THAN THEY ARE IN. THAT'S ONE OF THE REASONS WHY THE ECONOMY IN AMERICA HAS BEEN GROWING SO SLOWLY, IS EXCESSIVE REGULATION.
COOPERMAN ON HILLARY CLINTON
SHE HANGS OUT WITH ALL OF THE HEDGE FUND GUYS AND GALS IN THE HAMPTONS AND MARTHA'S VINEYARD AND THEN TURNS AROUND AND BECOMES LIKE EVERY OTHER POLITICIAN OR MOST OTHER POLITICIANS AND BASICALLY DUMPS ON THE INDUSTRY. I DON'T SEE IT. IF SHE FEELS THE TAX RATE IS TOO LOW, LET THEM DEAL WITH THE TAX RATE. HER PROPOSAL IS RIDICULOUS. SHE WANTS TO RAISE THE CAPITAL GAINS TAX RATE BY 50 PERCENT. YOU'RE GOING TO BASICALLY IMMOBILIZE CAPITAL.
COOPERMAN ON MONEY BEING CHEAP
MONETARY POLICY HAS BEEN SOMEWHAT IRRESPONSIBLE. THERE'S AN ENORMOUS SUBSTITUTION TAKING PLACE OF DEBT FOR EQUITY THAT TELLS YOU INTEREST RATES ARE CHEAP. MONEY IS CHEAP. IF THEY GOT OUT AND THEY BUY A COMPANY FOR $50 BILLION AND THEY PUT 30 BILLION CASH INTO THE EQUATION, THE BORROWING COSTS ARE SO LOW. SO YOU KNOW, WHICH I GUESS IS A GOOD THING FOR THE MARKET, WHAT IS GOING ON BECAUSE IF THE AVERAGE MULTIPLE IS SAY 15 TIMES YOU'RE GETTING AN AFTER TAX RETURN OF COURSE OR EQUITY OF SAY 6 PERCENT, AND YOU'RE BORROWING MONEY AT 2, 3, 4 PERCENT TAX EFFECTED, MONEY IS VERY CHEAP.
COOPERMAN ON ACTIVISM
I HAVE A MIXED VIEW ABOUT ACTIVISM. I'D HAVE TO SAY ON BALANCE, IT'S A PLUS. ON BALANCE, IT IS A PLUS AND IT'S A VERY INDIVIDUAL SITUATION. THERE IS ACTIVISM THAT MAKES SENSE, THERE IS ACTIVISM THAT DOESN'T MAKE SENSE. THE STANDARD COOKIE CUTTER APPROACH OF BUY BACK A LOT OF STOCK, LEVERAGE UP, I DON'T AGREE WITH. YOU HAVE TO LOOK AT IT COMPANY BY COMPANY.
COOPERMAN ON HOLDINGS
EVERYONE HAS THIS COMPLETE INCOME SHOCK. THEY CAN'T GENERATE INCOME FOR THEIR PORTFOLIO. WELL, WE OWN CHIMERA – WE OWN ALL OF THESE I'M MENTIONING – 13.9% YIELD, 80% OF BOOK VALUE. ELLINGTON FINANCIAL, 14.4% YIELD, 80% OF BOOK VALUE. PENNY MACK FINANCIAL, 14.1% DIVIDEND YIELD, 84% OF BOOK VALUE. THL CREDIT, THOMAS H. LEE CREDIT, HERE'S A SITUATION STOCK GIVES 12.3%, TRADING AT 80% OF BOOK VALUE. THE CEO AND THE NUMBER TWO GUY TO COME BUY STOCK AND HIGHLY UNUSUAL FOR AN EXTERNALLY MANAGED COMPANY, BUT THE COMPANY IS ALSO BUYING BACK STOCK.
COOPERMAN ON FACEBOOK
WE OWN GOOGLE, FACEBOOK, PRICELINE. AND THESE ARE HIGH GROWTH COMPANIES SELLING AT RATIONAL PRICES. I MEAN, THE MOST EXPENSIVE IS FACEBOOK, IT'S PROBABLY A 40 MULTIPLE STOCK, BUT WE THINK PROBABLY OVER THE NEXT THREE YEARS IT WILL GROW 40 PERCENT A YEAR AND THEY ARE GOING TO KIND OF MONETIZE THEIR INTEREST IN INSTAGRAM WHICH WILL BASICALLY BE VERY PROFITABLE FOR THEM, MORE THAN PEOPLE ARE THINKING.
COOPERMAN ON EQUITIES
THE PUBLIC IS SCARED OF EQUITIES. IT'S ONE OF THE REASONS TO BE SOMEWHAT OPTIMISTIC BECAUSE I DON'T KNOW OF ANY MARKET TOP WHERE THE PUBLIC WAS REDEEMING OUT OF EQUITY FUNDS PUTTING THE MONEY IN FIXED INCOME PRODUCT. I THINK IT'S ALL THE RESIDUAL OF 2008. YOU KNOW, IF I SAID TO YOU AT THE END OF 2008, BEGINNING OF 2009, THAT WE WERE GOING TO BEGIN THE LONGEST ECONOMIC EXPANSION IN HISTORY, AND THE GREATEST BULL MARKET IN HISTORY, YOU WOULD HAVE ME ARRESTED. NOW, I DIDN'T SAY I FORECASTED THAT, BUT WE'VE BEEN PRETTY OPTIMISTIC – 9, 10, 11, 12, 13. BUT BY IN LARGE, WE ARE SETTING UP FOR WHAT LOOKS TO BE THE BIGGEST BULL MARKET IN HISTORY.
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