Edit Module
Edit ModuleShow Tags

Taking Stock

Charles Gasparino rose from a blue-collar life in the bronx to become the tough-talking reporter for Fox Business Network. Here’s how he did it.

photograph by bruce plotkin

Charles Gasparino might be one of Fox Business Network’s star correspondents, but this ambitious and sometimes abrasive media professional prides himself on simply being a reporter. He’s got the scuffed dress shoes of a newshound who tirelessly works the beat, and his blend of Bronx street smarts and Wall Street wisdom has proved to be a natural for TV. People who regret his investigations include Elliot Spitzer, Martha Stewart and, most recently, Bernie Madoff. Not long ago he and his wife, Virginia Juliano, a marketing executive for Showtime, made Rowayton their second home. Gasparino recently took a morning off to tell us about the path that led him to the combative halls of high finance.

NCDR: You boxed a lot as a kid. That would seem to be good training for cable-news discussions.

CG: I boxed between the ages of fifteen and nineteen and I broke my nose often. Anytime I got touched there, it would bleed. The doctor told me I had broken it too many times.

I was going to fight in the Golden Gloves when I was eighteen. My biggest regret is that I didn’t stick it out. I started getting into girls. I’d rather hang out with women than get my head bashed in. Yet that was a defining moment in my life. I never wanted to say “What if?” again.

When I went into TV journalism, I’d been a print reporter for nine years. I had worked at the Wall Street Journal, and along the way I’d guest on TV. CNBC asked me numerous times if I would like to work for them. I told them I didn’t know if I was good enough.

When I was forty-three, I said to myself, if I’m ever going to do this, now’s the time. Back then,  I had a pretty cushy job at Newsweek.

So, I found myself getting up at five or six in the morning to do Squawk Box [on CNBC]. The first six months were horrible—I hated it. I didn’t like television and I hated driving out to New Jersey. But then I started getting into the rhythm and flow and I began to understand how news works today. It’s different. It’s instantaneous. It’s writing and it’s the confluence of all media. [It was at CNBC] that I developed this process—I’d break news on the air, I’d write about it, and then I’d comment on it. And I could do it on three or four mediums.

And you still thought like a boxer?

The boxing may have helped me in journalism. After all, I was not the person people looked at and said, “That guy is going to be working at the Wall Street Journal.” I went to Pace University in Pleasantville. I was at the student newspaper when the editor said, “I don’t think Charlie is smart enough to do news.” Because of my background, people downgraded me right off the bat. So part of my tenacity stems from have being told no.  I worked my way up from a sportswriter who couldn’t do news to editor of the paper. Now, did I get that from boxing? Maybe. Or maybe it was because my parents didn’t think I’d be very good at this.

Where did you grow up? 

My family is from the Bronx. Later, we moved to Westchester. I came from a very blue-collar family. When I lived in Yorktown Heights, there was a UPS plant behind my house. If I had gotten a job there coming out of high school, my parents would have been happy. My dad was a construction worker, but because of the fiscal crisis in the seventies, he was out of work a lot. His biggest project was when he worked on the World Trade Center for a bunch of years. But he bartended, drove a cab. He never missed a mortgage payment. My mom died when I was in my twenties.

Going to college was a heavy lift for me. They didn’t tell me not to go, but they weren’t thrilled, particularly when I said I was going to graduate school to study journalism. By then my dad had died. I saved up, sold my car, went out to the University of Missouri with a suitcase and a typewriter, literally.

Was there a story you reported that really opened your eyes?

[Back in 1984] I read about some families of Vietnam veterans who believed the MIA soldiers were still alive. The parents of these vets didn’t like the way the government had treated them. And I thought, that’s an amazing story. I did it purely from a human-interest angle. What is it like to be a parent who wonders if his kid might still be alive and yet there’s nothing he can do about it?

It was an eye-opener for me on how people react under stress. It helped me develop a certain empathy for people on the other side. I try not to forget that, because I can be real tough on people. That story got tremendous play. There were groups and families of these MIA/POWs, and they passed the story around. It had impact. That’s when I knew I wanted to be in journalism and that I wanted to be writing about news.

It seems you did something right when managing your career.

No one ever gave me a break in this business. I came out of university and was a beat reporter for the Tampa Tribune. But I left because I hated living in Tampa.

I started working for trade magazines on Wall Street, where I learned, from the bottom, how Wall Street works, how information is used, how sleazy the Street can be.

When the financial crisis was going on, there was a lot of esoteric stuff that led to it. I’ll give you an example: the repo market. Firms essentially financed themselves every day because they repo in money. They lent out collateral and took in cash. They took in thirty times more cash than they lent out. It’s called leverage. It’s the way the Street worked. It caused their downfall. They borrowed much more than they had on hand in collateral. And when people stop lending you stuff, that’s when you go out of business. That’s what happened to Bear Stearns, Lehman and everyone else. I knew how scandals were created in the repo market. Firms screw each other based on this esoteric knowledge. I knew it at a granular level, so I was able to understand the crisis earlier than others.

It’s been said that your reports have actually moved the stock market.

I never intended to move it. During the lead-up to the financial crisis, the markets were on edge. This was before the big firms blew up. I remember saying on the air, “Well, you’re going to get some commentary from the ratings agencies.” The companies that were insuring all the big banks just didn’t have the money to insure them. So basically they all lost their triple-A ratings. I said that and the market moved about 200 points. I remember walking into San Pietro, a restaurant in Manhattan where a lot of these guys had lunch, and I saw [former GE chairman] Jack Welch, who came up to me and said, “Charlie, you’re doing great, but watch this whole notion of moving the markets. Just watch it or you’ll get your brains blown out.”  I said, “Literally?” He said “No, but it’s a dangerous, dangerous thing.”

Lehman Brothers collapsed on a Sunday. On Monday everybody thought it was going to be better, but it wasn’t. Tuesday I got a tip — and I confirmed it — that the government was planning a bailout of AIG. I went on the air at ten o’clock, and right away the market moved 200, 300 points up. [CNBC correspondent] David Faber came out and said, “No, that’s not likely.” Down 200 points. I came back on the air and said, I’m sticking with my sources. Within an hour it was clear I was right. The market was back up 300 points.

After the crisis, the TARP bailout and all the revelations, some people wonder if the Dow is still a good barometer for gauging the health of American business.  

I think it is. But now you have these 400-point swings because of these high-frequency traders. I was always dubious of the stock market as a short-term barometer. I remember one of my best sources during the financial crisis telling me, “Don’t believe these stock traders, they’re all morons. They trade off the headline.” He was a bond trader. Greece gets bailed out? Buy. The next day it could go down because the bailout looks kind of crappy.

With high-frequency trading, the moves up and down are more vicious. Also, there’s the fact that you don’t have floor brokers. The way stocks are traded now, mostly electronically, it doesn’t get filtered through the floor on the New York Stock Exchange. You once had specialists stepping between the orders, preventing the volatility. That’s largely gone. But over the long run, the markets do provide some sort of broad indication of where they think the economy’s going.

How do you keep perspective around high-pressure people working in what you call “crony capitalism”?

When I was talking with [TV host] Neil Cavuto the other day, he said, “I don’t know why guys talk to you.” I hammer them consistently. But I also have connections with them. You also need sources. You need to know what’s going on in these companies.

What brought you to Rowayton?

I never would have moved out of New York City but my wife wanted to. It was after my first book, so I had a little money. We came to Rowayton in the middle of the real estate boom, in 2004. I thought, if I’m going to live outside Manhattan, I’m going to do it in a place that’s close to the city, that’s country and has a nice feel to it. And I’m not going to spend an arm and a leg. My wife said she had heard about this beautiful town and asked me what I knew about Connecticut. We came up and went to Rowayton Seafood and that basically sold me.

At night you gather tips at the top Wall Street hangouts. Where do you go when you’re in town?

Ten Twenty Post in Darien. A lot of Wall Street guys go there. In the city, there’s San Pietro, Sistina, Campagnola, Bruno’s, and Club A Steakhouse. A lot of guys go to Brooklyn, too. But here’s the thing. I cook on my own a lot. I have the grill in back. The steaks from Whole Foods and Stew Leonard’s are amazing. When I was a kid, going out for us was going to a friend’s pizza place, or maybe Chinese.

I really thought about the day I’d be able to go out to dinner.

You seem like a thrifty guy.

Very thrifty. I’m a good saver. As someone who covers Wall Street, I’m really scared of the stock market. I never invest in individual stocks—you never know when I might cover it.

Your 2005 book Blood on the Streets described an out-of-control banking industry. The parallels with today are striking.

The parallel is that Wall Street is a conflicted mess. The average guy, unless he really knows how the Street works, can’t compete. Understanding conflicts of interest is key for any investor, whether it’s a mortgage broker, a used-car salesman or Bernie Madoff. When it comes to Wall Street, it’s as if people are afraid to ask questions. There’s something about finance that makes people think the SEC is going to be watching them. The government is not watching. There’s not enough of them to monitor everything, and they’re not that smart, anyway.