• This is a partial transcript from Your World with Neil Cavuto, January 29, 2003, that was edited for clarity. Click here for complete access to all of Neil Cavuto's CEO interviews.

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    NEIL CAVUTO, HOST: Wall Street listening very closely and intently to the president's remarks Tuesday night. So, what did the business community think of that speech? We decided to get a mix of corporate heavyweights to give us their respective take. The read from Wall Street with Sal Sodano, the chairman of the American Stock Exchange. From the financial services arena, Muriel Siebert, the chairwoman of the firm that bears her fine name.  And from the high-tech world in California, the ever-outspoken T.J. Rodgers, the CEO of Cypress Semiconductor. And the guy behind many of those multimillion-dollar homes, Ara Hovnanian, the CEO of Hovnanian Enterprises.

    Ara, I ended with you, let me begin with you. Did the president say the things you wanted to hear?

    ARA HOVNANIAN, CEO, HOVNANIAN ENTERPRISES (HOV): I think so. I think, first of all, our business, the home building business has been good anyway. The tax cut clearly is only positive news.  And removing this cloud of the Iraq issue is only going to be more positive news.

    CAVUTO: Sal, the markets had a curious reaction to it today. All over the map, ultimately up on the day, but still concerned about this pall of Iraq. It almost outweighs the economy, or does it?

    SAL SODANO, CEO, AMERICAN STOCK EXCHANGE: Well, the threat of war creates nothing about anxiety and uncertainty, and the sooner we can bring resolution to the Iraq issue, the better we will all be. The markets always react to uncertainty, and it is just simply causing more anxiety.

    CAVUTO: So the sooner we get to it, Muriel, the better?

    SODANO: Well, the sooner we bring a resolution to the issue, we trust that the president will guide us in the proper way and we look forward to having the proper resolution.

    CAVUTO: Muriel Siebert on that point, what do you think?

    MURIEL SIEBERT, PRESIDENT., MURIEL SIEBERT & CO.: Well, the president is sending Secretary of State Powell to talk to the U.N. I think Powell did a wonderful job last week. I think he came out like a real statesman.  Based on what happens there, we should know pretty soon, otherwise there is a good six-month hiatus where they just can't do anything there, because they have to equip them with such heavy uniforms, because they want to equip them with things that are proof, germ-proof, and other things, that the heat would make it impossible for our troops to be there.

    CAVUTO: All right. Now, we should just tell people at home, we are not making ethical or moral statements on war or no war. We're looking at this simply through the prism of Wall Street and what it would like to see or not see. And T.J. Rodgers, to that point, the technology industry has been under its own pall of late, does Iraq just add to that anxiety?

    T.J. RODGERS, CEO, CYPRESS SEMICONDUCTOR (CY): It does for me. You know, you can say that the warfare has gone high-tech and we have the ability to make a lot of money by making high-tech weapons. But war is bad and it's bad for everybody, it's bad for the fundamental workings of the economy.  So I think that is a big damper. I also am not convinced that Iraq is such an imminent threat to the United States. We have to act in such a precipitous way. I am not one side or the other but I am not convinced yet we should be running into a war right away.

    CAVUTO: All right. That issue notwithstanding, is the financial community, your colleagues in the CEO arena, are they saying to you, look, the underlining economy, certainly your industry is very strong, interest rates very low, both existing and new home sales very, very strong. Do they worry that that can't continue?

    HOVNANIAN: Well, first of all, if we do go into war, I don't think the rates are going to rise very soon. But.

    CAVUTO: They could conceivably if oil and inflation racks up again?

    HOVNANIAN: Yes, but you know, during war typically the economy is not as vibrant and it's not typically a time to raise interest rates. But on the whole, the prospect for increasing rates is really only going to occur if the economy is doing a lot better. And generally speaking, from our perspective, we will take a strong economy with slighter higher rates any day. That is a fair trade-off for the home building industry.

    CAVUTO: Sal, what are you guys noticing in the American Stock Exchange. There is a lot of anecdotal evidence to suggest foreigners, maybe the French or the Germans and the Japanese were pulling money out of our markets. I don't know whether it was in silent protest to our position on Iraq or just the fact that they didn't see our markets looking that can promising. Have you seen any palpable signs of that?

    SODANO: Here at the AMEX we have not really seen any specific signs that that is the case, but I really believe that the markets are really going to react to market forces and not necessarily how other countries are going to look at what we are doing and handling the Iraqi situation.

    CAVUTO: So Iraq is not an issue to you?

    SODANO: Iraq is an issue to everyone in this country, to every worker, to every company that does business in the United States, and certainly to the markets. It is absolutely an issue and the sooner we can bring resolution to the entire situation, the better everyone will be.

    CAVUTO: Speaking to that issue, Muriel, there has been talk that the administration, they're going to set up this big thing, February 5, next week, a week from today, Colin Powell spells out maybe some of the proof that people have been wanting to hear. But that an invasion, or anything like that, short of Saddam leaving the country, is not until March. What do you make of it?

    SIEBERT: What do I make of it? More disarray in the market. The public does not have faith in the market yet, in the integrity of the markets. They have not come back to the markets en masse. So this just gives them another reason to stay away.

    CAVUTO: I wonder too some of the other president's proposals, so much dependent on his popularity, so much dependent on what is happening in the economy. He wants to slash completely the dividend tax. He wants to speed up all of the tax cuts, as you know, Ara, to pronto, now rather than 2004, 2006. Do you really think he is going to get all of that?

    HOVNANIAN: Well, it's clearly going to be a battle. But there are a lot of supporters. I know companies like ourselves, I think we would consider a dividend for the first time if this goes through. But because of the double taxation, we wouldn't. And the dividends would clearly be a good thing. It would be great things for the people that are holding the stocks, including many of the older adults. And it would be a great thing for the stocks as well. I think it's going to raise the price, make the access to capital for companies even easier. And make for growth and more economic prosperity because of that.

    CAVUTO: T.J., would you consider a dividend if, for example, you didn't have to deal with the tax issue for shareholders?

    RODGERS: It is possible. It would depend on market forces.  Obviously, in a high-tech industry where capital is prominent, we can't just go give away our capital. But it might be a competitive issue.  I think.

    CAVUTO: Did Microsoft doing it, T.J., prompt you to rethink that?

    RODGERS: No, Microsoft, basically a software company. They don't have to build billion-dollar fabs like we do. So they are a cash-generating machine. And the dividend is a good tactic for them.

    CAVUTO: Muriel, are you going to see more people doing it?

    SIEBERT: I think we are going to see people coming back to the market if there is credit for dividends.

    CAVUTO: Yes. Sal, let me ask you about the class warfare argument against the president's proposals. Many Democrats are citing critics of the president, this is a package geared to the rich, this is a package geared to Wall Street and your buddies. How do they feel about this class war argument?

    SODANO: Well, I look at it this way, if you look at either the Democratic view or the Republican view, they pretty much come to the same end result, the way I see it, at least in terms of dollars for this year.  The main thing we need to do is make sure we do not make a political football out of this, because really what is happening is very clear. The U.S. economy needs help, the U.S. worker needs help, and we need to do whatever we can to fix that. The president has put together a credible proposal to put money back in the hands of the consumer. Getting back to basics again, it's the consumer really which drives the economy. And when you give the consumer more money, that makes things spin. It's the knock- on effect of buying goods and services, and companies being able to put money back into what they need to provide those goods and services. So it is a good plan, and we should be able to support that.

    CAVUTO: OK. Sal, final word on the subject. I want to thank you. I want to thank Muriel Siebert, T.J. Rodgers, and of course, Ara Hovnanian.

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