Bloomberg had a great article out today. They must have interviewed Jim Tisch because these are not quotes from the call. Either way, he tells it like it is, and I agree with him 100%.
Regarding the hotel industry:
Jim Tisch, the leader of Loews Corp., said the U.S. did a “good job of killing” the hotel business by lambasting corporate travel and hurt American International Group Inc.’s ability to return bailout funds by curbing pay.
“The criticism that took place of group travel was really a death knell for the industry,” Tisch said yesterday in an interview at an office of the New York-based holding company, which owns hotels. “It’s easy for the politician to get the sound bite. What they are doing with those sound bites is putting maids and bellmen out of work.”
Loews also owns natural gas exploration operations and the majority of commercial insurer CNA Financial Corp., which competes against AIG selling commercial insurance. Loews reported its third straight quarterly profit yesterday on improved results from gas exploration and Chicago-based CNA.
Loews has hired AIG staff, primarily to manage investments, who “do a phenomenal job for us,” Tisch said. New York-based AIG has a harder time retaining the “best and the brightest” managers after lawmakers criticized the company’s retention bonus awards and the Obama administration limited compensation for top executives, he said.
“Last time I looked, we don’t have indentured servitude in the United States,” he said. “The situation is such that the good people have every incentive to leave to maximize their income.”
Regarding the new bank tax:
Tisch joined billionaire Warren Buffett in opposing the Obama administration’s proposed fee on lenders to repay bailout funds. He said it is unfair to penalize financial firms when regulators, mortgage brokers and borrowers contributed to the recession as well.
“It sounds good when you say it fast,” Tisch said. “To take out this retribution solely on the banks makes sense from the populist politician’s perspective but is not necessarily good economic policy. If they put this tax in place, it will simply make it more expensive for people to borrow money because banks are in the business of earning a rate of return on their capital.”
This is one of the main reasons why Loews is so attractive to me. Not only does the company have great assets, and is trading at value prices, but their management is top notch and knows how things really work. These guys are conservative managers who don't over leverage their businesses, but know when its time to deploy capital and take risks.
Disclosure: Long L