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tv   Closing Bell With Maria Bartiromo  CNBC  May 21, 2012 4:00pm-5:00pm EDT

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coming on the heels of the worst week for the stock market last week here in the united states. the dow up 135 point and again, facebook very much in focus. as you will see, coming up here, as the close "closing bell" continues with maria bartiromo. i will see you tomorrow. and it is 4:00 on wall street. do you know where your money is? hi, everybody. welcome back to the "closing bell." i'm maria bartiromo here on the floor of the new york stock exchange. is tht beginning of a market come back? gold man stacks is adding, giving us her take coming up on the program. facebook under pressure. stock set to close well below the ipo price. what it will take for facebook
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to recover. and finishing the day on wall street. they ate those up and in fact closing up higher, up 135 points. 12,504 is where the industrial average settles out tonight. nasdaq composite very strong. 68 points higher. up 2.5% at 2847. s&p 500 tonight, up 21 points, as you can see, 1 2/3 percent at 1315. mark zuckerberg lost a couple billion today with the decline in facebook but he's got billions more. other shareholders are feeling the pain tonight. finishing the day down a whopping 11% on facebook at 34 sent and a penny a share. my next guest says if in is any indication, buckle up far tough week on facebook.
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let's talk about that nathan. you said the realization set in on facebook. what do you mean? >> as reality comes in, you can't be fooled twice. we had the tech bubble but now we have people starting to say, okay, what are the numbers? what are the click throughs. what you find out is if you go to google, you are nine times more likely to click through that ad and buy something than you are over at facebook. here is something else. google is more reliable than the cdc. can you learn more about disease over a google flu tracker than you can facebook. they are just not reliable. as the consumer looks around, they say, i'm goning to be fooled again. you have to show me some things before i put money. this was more appropriately priced at 25 to $30 than it is at $34. that's a cynical view, i know, that i have here. but i think underwriters said we can make more money on this thing. the public said, i don't think so. i don't like the way it played out. there is no gun powder behind this thing. the more you look at it wbt hype
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heard it. the more you looked at it, the worse it looked. >> so you bring up two main point. and i will get bob and kayla's thought on the points. right out of the gate, $100 billion is what everyone talked about to value the company. and the other issue they cannot monitize a hundred million users. can you make money on that, is the question. >> i think that's exactly the question. they came in and their revenue was already going down. my 14-year-old son must have listened to the news clip because he said, dad, my grades for the quarter seasonal adjusted will be a little lower because it is spring time. facebook is saying already they've got shifting consumer patterns. this sound like a bureau of labor statistics coming up with an excuse of why things aren't working well. that's not how you go into an ipo. >> kayla, what about that? talk to us about the fundamentals ever facebook. will they be able to monitize
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all those users? >> i think the valuation looks a little bit rich and you can see the stock settling in at about that $34 level and some change. that's at the top end of what was the previous range of 28 to $35 a share and you have to think that underwriters set that previous range for a reason. is that more rack sat place it price the stock and they got caught up and maybe got ahead of themselves as far as demand coming in from the road show. i think that story that we are seeing in facebook stock today is a deeper than what happened at the nasdaq on friday. if you take a look at the nasdaq shares, not only on the composite but also for ndaq, you see they both have rock star days, ahead of nasdaq shareholder meeting tomorrow. you see nasdaq confronting the liability about that, creating meanwhile, facebook, a lot of selling has been done and that volume is tapering off. >> that's a good point, kayla. i guess what i'm trying to get to, bob, is in terms of earnings
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growth, revenue growth, what are the expectations in terms of whether or not will getity arms around mon advertising some users. putting the val yigs aside for a moment in. >> valuations, it is very simple. if you believe they will find the special sauce to monitize the information they have on people, whether it is 35 or 45 isn't important. the stock will be higher than it is today. i want it make a comment, maria. the important thing here is we don't know what trading pattern would have looked like on friday. had there not many been any trading glitches. the stock possibly could have created much higher because poem didn't trade who had orders in because they didn't know what their status was. there a certain unknown here where this th could have been a bit after spoiler. the other theng i would mention is where the volume? i came down on the floor with 106 million shares of facebook. we did 600 million on friday. looks like everybody who wanted out on friday got it. >> that's what i was hearing.
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i have a lot of stories on, sort of investor stories, on the facebook deal. nathan, let's talk other areas. are there areas you want to allocate capital to or are you negative on stocks. >> think like them as long as they are big solid american stocks. as long as they pay a dividend and have a couple of things that facebook seems to be missing like cash flow, and good projections moving forward and real customers that they can sell something to. i love america. i don't like the far east. i don't like emerging markets. i don't like europe at all and i love good quality high american bonds and i like appreciatories even though we certainly squeezed a bunch of juice out of the turnip when it comes to treasuries. >> ever since the u.s. was downgraded, money started moving into treasuries ironically. >> we are the best looking pig in the slop house compared to europe. >> oh, well thank you so much. we will check in later. facebook is the hot story but not the hot stock. would you buy it?
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we asked, you answered. here are some comments. nicholas wrote in, still not worth it. too much risk, too much down side ahead because of early investors. just wait until it can be shorted. michael write, i will buy it when the media does not think it is a a story any more. too much hype. boot camp he is yes i'm going to buy as much as i can, no matter how much it banks, it'll come back up. taking to us on closing bell, getting in the hot seat in the cnbc exclusive next, with the unique position he is in in sharing the top spot at the bank ease well as j.p. morgan's crises and where the banking industry goes from here. then controversy, in chicago. anti-business demonstrators swarming street as president obama and global leaders wrap up the nato summit. the president is expected to
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welcome back. deutsche bank, europe's biggest
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bank by assets, at a time when other banks are shrinking, deutsche bank actually grew. it is leading in every segment of trading. in u.s., europe and asia. when risk and regulation is getting tough er er to navigaten deutsche bank keep up the pace? joining me, head of deutsche bank's corporate and investment bank and he will take over as co-ceo of the company this june. good to see you. >> good to be here. >> we look forward to you taking on a new role at the bank. i want it ask you about the conference today. a lot of buzz going on. jamie dimon spoke at 9:30 this morning reaffirming the company's risk business. what can you tell us about the sentiment of bank stocks and what about the jimmy dimon talk? >> we had 00 people there. 600 investors, 300 investors, 20% of the world's total market
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cap. and a sector absolutely at the heart of everyone's attention. >> it looks like investors want a reason to by these stocks because of the value that they present. but there aresome head winds in the way right now. >> there is a lot of questions to answer and hopefully our conference went a long way towards answering them and yes, the sector is trading at value which is one of the things that makes it very interesting. >> let me ask you about europe. that is one of the big concerns on the part of investors. on friday we heard $316 million come out 6 deposits. are you seeing any kind of run on the banks. where would you say is the sentiment right now in terms of the european banks and how much more capital needs to be raised? >> oh, i wouldn't say we are anywhere close to talking about runs on banks, maria. i think it is very important when you look at europe to take a broader view and all of that has been done in the last six months. if i was sitting here six months ago, we didn't have lto, size of the monitor is much smaller.
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undoubtedly the situation in greece is creating worry. and it is legitimately a source of concern. but i wouldn't nearly talk about runs on banks. >> but of course, you know, moody's began the long awaited downgrade of globe at banks last week. we still see such pressure there. cutting the 26 italian lenders. >> i would say the relish in europe is all about sovereign debt. it start with greece. i would say away from greece we have a pretty encouraging situation. so italy, government in spain, portugal, ireland, made tremendous progress towards significant reform. so really, the real issue is the what the resolution to greece would be. if we can get through that, a big if, i think there is reason to be long-term optimistic about europe. >> what are you expecting out of basal 3? are you at this point ready? are you still in capital raising
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mode at deutsche bank? >> deutsche bank is fine. we have a capital ratio exactly where we with like it to be. 10% crd3 which is considerably higher than where we are required to be at this point, maria. basal 3 is done. we know what the rules will be. there is a straight forward set of rules which we need to adhere to and we are highly confident we can get to all of our targets without raising capital. >> so you are not seeing the uncertainty that other bank executives, certainly in the united states are sai seeing, where we are unclear about the volcker rule, unsure about how it shakes out. >> let's not forget deutsche bank is one of the leading banks this this country. 11,000 employees. 20 locations. we are a leading foreign exchange currency house in this country. all of the rules which you just talked about are highly relevant for our franchise as well. exactly where we find up with the volcker rule.
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it is as much interest for deutsche bank as for any of the u.s. majors. >> how do you see the company changing in a couple of years given this new set of regulations we will be seeing. u.s. business, you said the most important or incredibly critical to everall bank. 11,000 people in the united states. how does the bank change. how does that business change in coming years? given the regulatory backdrop? >> if you look at investment banking sector, four sets of change is coming. very quickly, capital, lots more, liquidity, we have to hold more. business model, much neyorer. and ability to move capital between centers. much harder. all four will be big challenges. but frankly for us, at deutsche bank, that's an opportunity to challenge the status quo and cement it it as one of the leading in the world. >> what changes will you make two years out? are you done cutting expenses? are you still in cutting mode?
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how do you grow? >> we are happy with our u.s. franchise. it took us a long time but finally two years ago we became number one fixed income. we are on the verge of cracking into the top five on equities. we made tremendous progress in fie finance. we have to keep growing and growing selectively, and efficiently, i should say. >> what is your take of what happened at j.p. morgan? i know jamie dimon spoke today. are we going to see this kind of significant loss elsewhere? what was your reaction? >> jimmy dgym jamie did a terri this morning. it is way too early to do most mortem and draw conclusions. we will learn more as the days go by. jamie was very forthright as he characteristically is, in talking about from his vantage point of what happened.
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i think it is crucial for banks to recover. it is important we restore credibility, which has been so damaged the last five years. >> how do you do that, anshu? that's the million dollar question or so? how do you get sentiment changed on the banks? >> i think in many ways we have taken a lot of the steps that needed to be taken. we needed to be better capitalize. we needed more liquidity. we needed to be more focused on client and not make egregious mistakes. some accomplishment of that for a long period of time is what is required. but i don't think there are any easy answers. i think we did in some ways wined up letting a lot of people down as an industry, now we have to make up for that. >> it nerms terms of allocating capital, we heard in terms of stress tests, that industry would be able to start paying back shareholders. what are your plans in terms of buy backs and dividends? >> at deutsche bank, as i have
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said, we are very much in capital accretion mode. we want to be sure we hit our targets in short run. but at this point, it is capital accretion. organic capital accretion. >> organic growth. are there assets that look favorable to you in europe or elsewhere in the world given the trouble and the upset around the banking sector that perhaps are good valuations? >> i think you have to keep an eye on events and feel comfortable to the possibility of extreme event is not very high, to start venturing forth and buying assets on an opportunistic basis. >> while equities look reasonably val i'd, credit spreads look wide given how low the nominal interest rates are. we are constructive in many classes but are we looking to accumulate assets? that's really not our model. we are looking to service our clients as do as much flow that we possibly can. >> where is deutsche going to be in the coming years.
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>> we think we can do better. in terms of products. in terms of geographies, this country here, do more in the u.s. >> more in the u.s. there is not combinations to see happening? it is all organic. >> all organic. we bought post bank in germany which was crucial for us. it is the dominant retail player. in our home market, let me say the importance of the home market is greater now than it's ever been before. sorry. >> you please go i a ahead. >> i was going to say, there was a time when banks floated above countries. you didn't look at nationality. at this point, country of origin is more important than before. so for us to get it right in the home market and emerge in home markets and u.s. those are the three priorities. >> does greece leaving the you're why impact the bank? >> first of all, it is in no one's interest for greece to leave the euro. i don't think it is in the best interest of greece either for that to happen.
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in the event a scenario like that were to unfold, the question you need to ask yourself, which mode of departure would it be? uncontrolled and rapid devaluation or orderly? in the latter case, i could imagine, a nondisruptive way of moving on. clearly, there is a risk event associated with a dramatic devaluation. which frankly, we don't foresee. >> anshu, good to have you on the program. >> loverly to see you. >> incoming ceo at deutsche pank. up next, my next guest says get ready for days like today. the legendary abbey joseph cohen is joining us. she joins us for a cnbc exclusive after this break. plus, president obama taking the podium minutes from now for a rare conference. president live in chicago. we will take you there, you're watching cnbc, first in business worldwide. [ male announcer ] the inspiring story
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welcome back. president obama set to kick off a short conference in chicago. following the nato summit. as soon as it gets under way we will take you to chicago live. meanwhile, the pop in the markets back, away from correction territory. even with the move on the upside today, since april 30, dow nasdaq and s&p lost better than 5%. goldman sachs strategist abby joseph cohen says the last three
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weeks will be a distant memory. she joins me to talk about this environment. good to see you, thanks so much for joining us. >> thank you, maria. >> what about the catalyst? you said there would be a spike in equities and downturn in bonds. >> i also didn't indicate the timing by which that would happen. it's been very clear that my colleagues here at goldman sachs express concerns about the near term outlook. we see lots of volatility. we also see a number ever things to be nervous about. but on a long-term view, we see a u.s. economy where gdp growth will be 2, 2.5%. inflation is under good control and with the pe raich ratio of about 13 times earnings it seems good value in the stock market about you there is a difference between valuation models and timing devices what about europe, abbey? how worried are you about europe and europe impacting the u.s.? >> we look at europe in many
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different ways. as your last speaker just indicated. there are concerns about the direct impact on the financial markets but there is also the impact with regard to the economies themselves. europe has been very important trade customer of the united states. but what we are hearing from most u.s. companies is that they are doing pretty well anyway. even in export markets, they basically see that u.s. companies are selling value added goods and services that have been in demand even with sluggish activity over all in europe. >> so abby, what sectors to you like? i know you like tech in the past but did facebook dampen that for you. >> tech has been good the last month or so on average. nor have financial stocks. nor have energy stocks. so we have been looking for valuation opportunities in those sectors. we also think it is important to select stocks on the basis of the good quality of the companies themselves.
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fortunately following the first quarter reports, there are quite a few companies where not only were earnings upwardly revised but so too were revenue expectations going forward. so we are looking that in combination with balance sheets and cash flow generation. >> that's certain lay ps. because we are all wondering about revenue. that certainly tells a different story than earnings, right? >> it certainly does. and it tells, we think, a story that may be more important with regard to longer term sustainability. the other thing to keep in mind is that while gdp growth, we expect to be in the 2, 2.5% range, industrial production gains in the united states this year, closer to 5%. and the reason for that, is that there are some sectors of the economy that are looking much more vigorous. this includes for the first time in several years, residential construction -- >> abby, we are leaving it there. thanks for joining us. the president joins us live. >> the mayor of the city of chicago and to all my neighbors
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and friends, the people of the city of chicago, for their extraordinary hospitality. and for everything that they've done to make this summit such a success. i could not be prouder to welcome people from around the world to my hometown. this was a big undertaking. some 60 world leaders, ton mention folks who were exercising their freedom of speech in assembly. the very freedoms that our alliance are dedicated to defending. and so it was a lot it carry for the people of chicago. but this is a city of big shoulders. ron, his team, chicagoans, proved that this world class city knows how to put on a world class event. and partly, this is the perfect city for this summit because it reflected the bonds betweensome of our countries. for generations chicago welcomed immigrants from around the world, including an awful lot of
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our nato allies. and i just add that i've lost track of number of world leaders and their delegations who came up to me over the last day and a half and remarked on what an extraordinarily beautiful city chicago is. and i could not agree more. i'm especially pleased that i had a chance to show them soldier field. i regret that i was not able to take in one of the cross town classics. although i will note, that my teams did okay. now, white sox fan in the back. right on. now, as i said yesterday, nato has been the bedrock of common security, freedom and prosperity for nearly 65 years. it hasn't just endured, it has thrived. because our nations are stronger when we stand together. we saw that of course most recently in libya where a nato
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afforded capabilities that no one else in the world could match. as president, win of my top foreign policy priority has been to strengthen our alliances, including nato. and that's exactly what we've done. two years ago in lisbon, we took action in several areas critical to our alliance and we pledged in chicago that we would do more. over the last two days, we have delivered. first we reached agreement on a series of steps to strengthen the alliances defense capability over the next decade, in keeping with the strategic concept, we agreed to in lisbon and fulfill our article five commitment to elective security. we agreed to acquire a fleet of remotely piloted aircraft, drones, strength intelligence and reconnaissance. continue air patrol over baltic allies. we also agreed on a mix of
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conventional, nuclear missile and missile defense forces that we need, and importantly we agreed on how to pay for them. that includes pooling our resources in these difficult economic times. we are moving forward with missile defense and declare an interim capability for the system. america's contribution will be a phased adaptive approach that we're pursuing on european missile defense. i want it commend allies who are stepping up and playing leadership role in missile defense as well. our defense radar in turkey will be placed under nato control. spain, romania and poland agreed to host assets. the nsince this system is neithr aimed at or undermines russia strategic deterrent i continue to believe that missile defense can be an area of cooperation with russia.
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second, we're now unified behind a plan it responsibly wined down the war in afghanistan. a plan that trains afghan security forces, transitiones to the afghans and builds a partnership that can endure after our combat mission in afghanistan ends. since last year we have been transitioning parts of afghanistan to the afghan national security forces. and that has enabled our troops to start coming home. indeed we're in the process of drawing down 33,000 u.s. troops by the end of this summer. here in chicago, we reached agreement on the next milestone in that transition. at the meeting this morning, we agreed that afghan forces will take the lead for combat operations next year. in mid 2013. at that time, forces will have shifted from combat to a support role in all parts of the country.
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this will mark a major step toward the goal we agreed to in lisbon. afghan lead in security by 2014 so afghans can take responsibility for their own country and so our troops can come home. this will not mark the end of afghan challenges, obviously, or our partnership with that important country. but we are making substantial progress against our core objective of defeating al qaeda and denying it safe haven while helping afghans to stand on their own. we leave chicago with a clear roadmap. our coalition is committed to this plan to bring our war in afghanistan to a responsible end. we also agreed on what nato's relationship with afghanistan will look like after 2014. nato will continue to train, advise and assist and support afghan forces as they grow stronger. and while the summit has not been a pledging conference, it's been encouraging to see a number of countries making significant
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financial commitments to sustain afghanistan's progress in the years ahead. today the international community also expressed its strong support for effort to bring peace and stability to south asia. including afghanistan's neighbors. finally, nato agreed to keepen cooperation with partners that have been critical it alliance operations. as in afghanistan and libya. today's meeting was unprecedented. our 28 allies joined by 13 nations from around the world. europe, the middle east, north africa, and asia. each of these countries has contributed to nato operations in different ways. military, political, financial, and each wants to see us do more together. to see the breath of those countries represented in that room is to see how nato has truly become a hub of goel global security. so again, i want it thank all my
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fellow leaders. i think the bottom line is, is that we are leaving chicago with a nato alliance that is stronger, more capable, and more ready for the future. as a result, each of our nations, the united states included, is more secure and we're in a stronger position to advance the security and prosperity and freedom that we seek around the world. so with that, i'm going to take a couple of question answers i'm going to start with julie pace of ap. where is julie? there she is. >> thank you, mr. president. you said that u.s. can't deal with afghanistan without also talking about pakistan. and yet there's been little public discussion at this summit about pakistan's role in ending the war. in your talks with president sadari today, did you make any progress in reopening supply lines and if larger tensiones with pakistan can't be resolved does that put nato coalition gains in afghan stat risk.
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>> well can be my talk with the president was very brief as we were walking into the summit. and i emphasized to him, what we have emphasized publicly as well as privately, we think pakistan has to be part of the solution in afghanistan. that it is in our national interest to see a pakistan that is democratic, that is prosperous, and that is stable. that we share a common enemy in the extremists that are found not only in afghanistan but also within pakistan. and that we need to work through some of the tensions that have inevitableably arisen after ten years of our military presence in that region. president zarzari shared with me his belief that these issues can get worked through. we didn't anticipate that supply line issue would be resolved by this summit. we knew that before we arrived in chicago. but we are actually making
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diligent progress on it and i think ultimately everybody in the alliance, and most importantly, the people of afghanistan and pakistan, understand that neither country is going to have the kind of security, stability and prosperity that it needs unless they can resolve some of these outstanding issues and join in common purpose with the international community in making sure that these regions are not harboring extremist. so i don't want to paper over real challenges there. there is no doubt there have been tensions between isef and pakistan, united states and pakistan, over the last several months. i think they are being worked through, both military and diplomatic channels. but ultimately, it is in our interest to see a successful,
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stable pakistan. and it is in pakistan's interest to work with us and the world community to ensure that they, themselves, are not consumed by extremism that is in their midst. so well keep on going at this and i think every nato member, every isef member is committed to that. hans nichol. >> thank one mr. president. yesterday your friend and ally, cory booker, said in an ad that your campaign release waesded was nauseating. is that your view that romney is personally responsible for job losses while comments from booker and your former auto czar steve ratener criticized this ad calling on you to pull back a little bit. three-part mr. president. can you give us your -- could you give us your sense of just what private equities role is in
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stemming job losses as they seek return on investment for their investors? thank you. >> well, first of all, i think cory booker is an outstanding mayor. he is doing outstanding work in newark and helping turn that city around. and i think it is important to recognize that this issue is not a quote, distraction. this is part of the debate that we're going to be having in this election campaign about how do we create an economy where everybody from top to bottom, folks on wall street and folks on main street, have a shot at success. if they are working hard and acting responsibly, that they are able to live out the american dream. now, i think my view of private equity is that it is -- it is set up to maximize profits. and that's a healthy part of the
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free market. that's -- that's part of the role of a lot of business people. that's not unique to private equity. and as i think my representatives have said repeatedly, and i had say today, i think there are folks who did good work in that area. and there are times where they identify the capacity for the economy to create new jobs or new industries. but understand that their priority is to maxmize profits. and that's not always going to be good for communities or businesses or workers. and the reason this is relevant to the campaign is because my opponent, governor romney, his main calling card for why he thinks he should be president, is his business experience. he is not going out there
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touting his experience in massachusetts. he says, i'm a business guy, i know how to fix it. and this is his business. and when you're president, as opposed to the head of a private equity firm, then your job is not simply to maximize profits. your job is to figure out how everybody in the country has a fair shot. your job is to think about those workers who get laid off and how are we paying for their retraining. your job is to think about how those communities can start creating new clusters so they can attract new businesses. your job as president is to think about how do we set up an equitable tax system so everybody is paying their fair share that allows us then to invest in science and technology and infrastructure, all of which will help us grow. and so, if your main argument
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for how to grow the economy is, i knew how to make a lot of money for investors, then you're missing what this job is about. it doesn't -- it doesn't mean you weren't good at private equity. but that's not what my job is as president. my job is to take into account everybody, not just some. my job is to make sure that country is growing not just now but ten years from now and 20 years from now. and so to repeat, this is not a distraction. this is what this campaign is going to be about. is what is a strategy for us, to move this country forward, in a way where everybody can succeed and that means i have to think about those workers in that video just as much as i'm thinking about folks who have
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been much more successful. [ inaudible ] >> what i would say is that mr. romney is responsible for the proposals he's putting forward for how he says he is going to fix the economy. and if the main basis for him suggesting he can do a better job is his track record as the head of a private equity firm then both the upsides and down sides are worth examining. [ inaudible ] >> hold on a second. alister bolt. >> thank you, mr. president. i would like to take you back to, not this summit, but the one you hosted at camp david a few days ago. whether you can ensure investors
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there are contingency plans in place, to cope with greece leefrs the leaves the euro, a lehman like shock to the u.s. and global economy. >> we had an extensive discussion of the eurozone and everyone is keenly interested in getting that issue resolved. i'm not going to speculate on what happens if the greek choose to exit, because they've got an election and that th is an important debate inside of greece. everybody who was involved in the g8 summit indicated their desire to see greece stay in the eurozone, in a way that's consistent with commitments that have already been made. and i think it is important for greece, which is a democracy to work through, what their options are at a time of great difficulty. i think we all understand, throw, what's at stake. what happens in greece has an impact here in the united states.
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businesses are more hesitant to invest. if they see a lot of uncertainty looming across the atlantic. because they're not sure whether that's going to mean a further global slow down and we are already seeing very slow growth rates and in fact contraction in a lot of countries in europe. so we had an extensive discussion about how do we strengthen the european project generally in a way that does not harm world economic growth but instead, moves it forward. and i've been clear, i think, in not just this week, but over the last two years, about what i think needs to be done. we've got to put in place fire walls that ensure that, you know, countries outside of greece, that are doing the right thing, aren't harmed just because markets are skiddish and nervous.
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we've got make sure that banks are recapitalized in europe so that investors have confidence. and we've got to make sure that there is a growth strategy to go alongside the need for fiscal discipline. as well as a monetary policy that is promoting the capacity of can countries like a spain or italy that put in place very tough targets and some very tough policies to also offer their constituencies a prospect for the economy improving job growth, increasing incomes, expanding, even if it may take a little bit of time. and the good news was, you saw a consensus across the board. from newly elected president to canceller merckle to other members of the european community that that balanced
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approach is what is needed right now. they will be meeting this week to try to advance those discussions further. we've offered to be -- to be there for consultation. to provide any technical assistance and work through some of these ideas in terms of how we can stabilize the markets there. ultimately, what i think is most important is that europe recognizes this euro project involves more than just a currency, it means that there's got to be some more effective coordination on the fiscal and the monetary side and on the growth agenda. and i that i there was strong intent there to move in that direction. of course, they've got 17 countries that have to agree to every step they take. so, you know, i think about my one congress, then i start thinking about 17 congresss and
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i start getting a little bit after headache. it's going to be challenging for them. the last point i'll make is i do sense greater urgency now than perhaps existed two years ago. or two and a half years ago. and keep in mind, just for folks here in the states, you know, when we look backwards at our response in 2008 and 2009, there was some criticism because we had to make a bunch of tough political decisions. in fact, there is still criticism about some of the decisions we made. but one of the things we were able to do was to act forcefully to solve a lot of these problems early. which is why credit markets that were locked up started loosening up again. that's why businesses started investing again. that's why we have seen job
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growth of over 4 million jobs over the last two years. that's why corporations are making money. and that's why by have seen strong economic growth for a long time. so acting forcefully, rather than in small bite-sized pieces and increments i think ends up being a better approach, even though offerusly we're still going through challenges ourselves. some of these issues are ones that built up over decades. all right? steven callson. where's steve? >> thank you, mr. president. as you try to continue the work of stopping afghanistan from reverting to its former role as terrorist haven, terrorists today in yemen massacred a hundred soldiers. are you concerned that despite u.s. efforts, yemen seems to be slipping further into anarchy
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and what more can the u.s. do to slow that process? >> we are very concerned about al qaeda activity and extremist activity in yemen. a positive development has been a relatively peaceful political transition in yemen and we participated diplomatically along with yemen's neighbors in helping to lead to a political transition. but the work is not yet done. we have established a strong counterterrorism partnership with the yemeni government. but there's no doubt that in a country that is still poor, that is still unstable, it is a attracting a lot of folks that previously might have been in the fatah before we started putting pressure on them there. and we are going to continue to
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work with the yemeni government to try to identify aqap leadership and operations and try to thwart them. that's important for u.s. safety. it is also important for the stability of yemen and for the region. i think one of the things that we learned from the afghanistan experience is for us to stay focused on the counter terrorism issue to work with the government and to not overextend ourselves and operate smartly in dealing with the issues. it's not unique to yemen, by the way. we have similar problems in somalia and what's happening in mali. so this is part of the reason why not only is nato important, but the partnerships that we are establishing is important. there going to be times where
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these partners have more effective intelligence operations and more diplomatic contacts in some of these parts of the world where the state is a little wobbly and you may see terrorists attempting to infiltrate or set up bases. i'm going to call on jake. he told me that you have been talking to troops in afghanistan and so much of the topic of this summit has been on afghanistan, obviously none of this would be working with the extraordinary sacrifices they are making. >> thanks, mr. president. i put out an invitation for the troops and families i know. i will give you two or three of them. mr. president, if the handoff and withdrawal proved premature, what plans necessary place for an afghanistan that is falling
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apart or under taliban rule and i will do one more. do you feel that the reporting you received from the pentagon fully represents what the on ground commanders assess and is there disconnect between what they feel that the public and the president want to hear versus what is occurring on the ground. these are from troops i met and served in the province. >> let me take the second question first. i think that one of the things that i emphasize whenever i'm talking to john allen or the joint chiefs or any of the officers who are in afghanistan is i can't afford a white wash. i can't afford not getting the very best information in order to make good decisions. i should add, by the way, that
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the danger a lot of times is not that anybody is purposely trying to downplay challenges in afghanistan. the military culture is we can get it done. their thinking is how are we going to solve this problem and not why is this such a disaster. that's part of the reason why we admire our military and love our troops. they have the can do spirit. i think we set up a structure that tries to guard against that. because even in my white house, for example, i have former officers who have been in afghanistan who i will send out there as part of the national security team at the white house and not simply the pentagon to interact and to listen and to go in and talk to the captains and the majors and the corporals and the privates. to try to get a sense of what's going on.
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i think the reports we get are relatively accurate in the sense that there is real improvement in those area where is we had a significant presence. you can see the taliban not having a foothold. that there is genuine improvement in the performance of afghan national security forces. but the taliban is still a robust enemy. the gains are still fraj i'll. that leads me to the second point in terms of premature withdrawal. i don't think that there is ever going to be an optimal point where we say this is all done. this is perfect. this is just the way we wanted it and now we can wrap up all our equipment and go home. this is a process. it's sometimes a messy process. just as it was in iraq.
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think about it. we have been there now ten years. we are now committing to a transition process that takes place next year, but the full transition to afghan responsibility is almost two years away. the afghan security forces themselves will not ever be prepared if they don't start taking that responsibility. and frankly, the large footprint that we have in afghanistan overtime can be counterproductive. we have been there ten years and i think no matter how much good we are doing and how outstanding our troops and civilian and diplomats are doing on the ground, ten years in a country
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that's very different, that's a strain. not only on our folks, but also on that country which at a point is going to be sensitive about its own sovereignty. i think the time table that we established is a sound one. it is a responsible one. are there risks involved? absolutely. can i anticipate that over the next two years there going to be bad moments along with good ones? absolutely. but i think it is the appropriate strategy where by we can achieve a stable afghanistan that won't be perfect. we can pull back our troops in a responsible way and we can start rebuilding america and making some of the massive investments we have been making in
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afghanistan at home, putting people back to work ask retrapping workers and rebuilding the schools and investing in science and technology and developing the business climate. there going to be challenges. the one thing i am never doubtful about is just the amazing capacity of our troops and their morale. when i was in bag ram a couple of weeks ago, you have so much determination and stick to itness and professionalism not just from our troops, but all the coalition allies. it is a testament to them. it's extraordinary and we are proud of them. since i am in chicago even though may press secretary told me to the to do this, i will call on them to ask a chicago question. >> mr. periresident, chicagoans
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look at you standing there with chicago, chicago, chicago on the wall behind you. there is an undeniable sense of pride. in your view, how did reality matchup to fantasy in welcoming the world leaders to chicago? and did the demonstrators in any way on the streets undermine your efforts, mayor emmanuel's efforts to project the image of chicago you would like to have seen? >> i have to tell you, i think chicago performed magnificently. those of us who were in the summit had a great experience. if you talked to leaders from around the world, they loved the city. michelle took the spouses down to see the center where wonderful stuff is being done with the early education and they saw the art institute and i was just talking to david cameron and he was sneaking off
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doing sightseeing before he heads home. i encouraged everybody to shop. i want to boost the hometown economy. we gave each leader a small model for them to remember as well as a football from soldier field. many of them did not know what to do with them. people had a wonderful time. i think the chicagoans couldn't have been more gracious and hospitable. i could not have been prouder. i think with respect to the protesters as i said, this is part of what nato defense is. free speech and freedom of assembly and frankly, to my chicago press, outside of chicago, folks weren't all that stressed about the possibility of having

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