tv Power Lunch CNBC August 1, 2012 1:00pm-2:00pm EDT
i'm long gld. >> that does it for us today. cnbc following the story about these very volatile trades made in the first minutes of trading and certainly what the fallout is for that. the fed's coming up today, as well. "power lunch" begins now. "halftime" is over. "power lunch" and the second half of the trading day starts right now. a busy afternoon ahead. a busy hour of "power lunch" right now and that right there is the chart that is capturing the attention of the markets. of traders. and investors big and small. something bad happened today involving trades that went through night trading's pipeline and taking it out on night capital, down 21%. we are getting the bottom of it and caused massive volatility and confusion at the open. full details in 15 seconds. now the markets weathering the storm. the dow as you see if i get out of the way the dow up by 41. s&p almost 4.
west texas crude up a bit higher. talk about explosive. wait until you see what these guys were doing and why. here it comes. boom. just ahead. we start with sue and the eruption at the new york stock exchange. >> it's right behind me. real head turner this morning. there's technical glitches on trades through knight's pipeline. the stock as you mentioned is punished right now. it is down about 21% on the trading session and that is off of the low of the trading day. serious technology issues led to major volatility and then some and the halting of about 148 to 150 stocks. bob pisani is working the phones, watching it here on the floor of the nyse. >> there was a regular trading
at 148 stocks. not all of them necessarily halted. knight issued a statement. we had -- >> yes. >> massive volume. mind boggling volume at the open. they have said that a technology issue occurred in the routing of approximately 150 stocks to the new york stock exchange. most occurred right near the open. the nyse for its part also short time ago put a statement saying this is the new york stock exchange saying that they were reviewing irregular trading in 148 stocks. essentially, acknowledging the comment that knight made. new york stock exchange said that they believe nyse systems and circuit breakers operated normally. in other words, the problem was with knight interabocting with e new york stock exchange and the s.e.c. said they're monitoring and in continuous contact with the nyse and other market participants. 30 million shares today. down 3 22%.
pier 1 normally trades a million shares a day. right now, 5 million shares a day. the volume in a lot of stocks is three, four, five and sometimes ten times normal. >> and summer, volume is lighter normally. >> exactly. >> exacerbated the move. >> pier 1 from $17 to $18. that's a huge move for a small stock. this matters. one thing to point out, major indices didn't have any major problems. individual stocks were halted. i heard yelling and screaming at 9:30. people saying, what? what? what's going on? not trying to make excuses but the system seemed to avert a major dip down in the market. >> there was talk this morning new york stock exchange is starting a liquidity platform and might have been an issue with that but so far we can tell it was not that issue.
it was a knight trading software issue. >> it was the retail lick kidty problem. we're trying to figure that out. bottom line is there was a software glitch. this is not appearing to be a human with a fat finger problem but a software glitch of some kind and find out where it occurred. perhaps build in more redundancy. checking to make sure that this was not normal volume. not practiced at the open. >> all right. bob, thank you. see you later in the show. >> ty, back to you. >> sue, at the end of the day, the real market mover for the day is not going to be knight capital. it's going the likely happen in just about an hour. when the fed announces its decision on interest rates and gives us its later perspectives on the economy. we have two important statakes the state of the economy.
phil lebeau. we'll get the numbers in a moment but steve liesman looking ahead counting down to the fed's decision and stick their landing today. >> looking ahead to phil's report and know what he's got. that's an important element. i had it on my list. i don't want to steal phil's thunder. we got a last batch of data ahead of this. unfortunately, it was mixed. let's look at the data from the morning. adp, 163. over the expectation that was out there. maybe 60 over. and then stuck to their june report of 170 so that's over what the bls quoted back then. construction spending right in line with expectations. but more than the government originally estimated. what does that mean? second quarter probably revised up by .2. ism, the big downer of the day. 49.8. less than expectations. below 50. want to show you more of what's in bernanke's cheat sheet for the day here.
consumer confidence, last week -- the other day was better. gdp weak but in line. home prices strengthening. you can see it's all over the map, tyler. there's no clear direction from the data. bottom line may be the economy is weaker than expected. he's tied it to the labor market. that's why the market thinks he might wait. give us verbal intervention today and then september if the economy justifies it. >> it will know more after today and after those speeches in out jackson hole. >> if you're phil lebeau and vince rhinehart and what good it might do. >> see you then, steve. sue? >> all right. thank you, gentlemen. appreciate it. look forward very much to vince. now the auto sector as the economy tries to gain its footing. a new report card out to, july's auto sales numbers and phil lebeau is live in chicago with the details. >> hey, sue. a mixed bag for july. the numbers of the automakers and putting them up, keep a
couple of things in mind. coming in this line with expectations. maybe a smidge soft. you see toyota and volkswagen there up more than 25%. toyota coming back from the supply issues last year, volkswagen, ramping up production here in the u.s. and overall, as in terms of people going in to the show room last month, looked like the sales pace at about 14 million vehicles and really that's a key threshold. below that, people get worried about auto sales slowing down for the year. here's good news. staying firm. improving a little bit. a couple of specific stories. chevy volt sales topped 10% for the year. second best month in july. volt versus leaf. we like to look at this every month. the volt outsold the leaf four to one. nissan said they'll ramp up production later this year. now, let's take a look at the gm, ford, toyota stocks, all of these. this is a mixed bag in terms of
the stocks today. one last note in relation to the auto sector. bmw with second quarter earnings and drop of 19% in terms of profit for the quarter with price pressures around the world. there's pricing pressure. in fact, this was bmw's first decline in quarterly operating profit in three years and that's why they're under pressure today, down more than -- well, under 3% and showing pressure. overall, sue, it's a mixed bag in terms of of what we're seeing from the auto sector. we'll get the official number in terms of sales pace later today. back the you. >> all right. thanks. it's been a rough year for social media stock but look at the last month. that's a double chart of facebook coming up right here. the white line and zynga the gold line. neither line is particularly appealing if you own them. yuck facebook down 31%. yucker is zynga down 47%.
julia boorstin with more live from l.a. julia? >> reporter: people may be checking facebook and playing farmville but as the stock chart indicates, investors are fed up with the long-term profit potential of the companies and worried there's not an end in sight. zynga continues to drop. the stock down about another 4% today. after the company revealed last week that it cannot convince more of its gamers to pay to play. investors are so angry about the stock decleans they're going to court accusing zynga of not warning of declining and accusing top executives of insider trading. zynga execs and investors sold 500 million in stock after lock-up period ended in march. zynga with no comment on the suits or allegations. it is instead focusing on shaking up the management ranks to focus more on mobile games. meanwhile, facebook continues to suffer after its earnings revealed a slowing growth and
right now analysts are digging through facebook's 10q which is filed just yesterday afternoon. an analyst rich greenfield said today in a note that the shift to mobile happening faster than anyone anticipates and more pressure on revenue growth. the mobile use earls are certainly outpacing revenue growth. tyler, we'll have to see what either of the companies can do to reassure investors and convince them they're growing fast enough. >> thank you. for some of the founders and the early in on the social media stocks, the hit to the share price has been a huge hit to their bank accounts. wealth editor robert frank with more on that side of the story. poor darlings. >> you know, remember the good old days with social media when mark zuckerburg was the $20 million man. there were billionaires. that was a long time ago and now huge declines in these stocks. that's chopped off billions from the fortunes.
some weather down 20% to 80% but the last $100 million. tough for these guys but the wealth loss in social media is much more rapid than the2000s. take a look at the biggest losers in social media. mark zuckerberg, net worth over $20 billion at the peak of facebook trading. fallen more than 50%. now the net worth is under $11 billion. the indignity is from 40th to 72nd place in the world's richest list. andrew mason, ceo of groupon, he was a billionaire last fall but the fortune down more than 75%. now under $300 million. next up, mark pincus of zynga. shares down more than 80%. the stake is now worth around $270 million. now, pincus as julia mentioned was smart enough to sell 16 million shares in april which
means he took around $190 million off the table. tyler, presumably, that money is now in the mattress rather than in social media stocks. but alas, he is no longer a billionaire. >> we got stucked? >> we got zucked. that's the new phrase. we got zucked. >> thank you, robert. sue? >> be very, very careful, ty. very careful. how do you trade the social networkers? would you play them? >> no, not at all. it's a little too mercurial. everybody can decide what the son of facebook is going to be. they'll switch to that and there's no real hold on people using these sites so i say just leave that advertising model and go buy a stock that you understand. >> right. what about possibly shorting some of those players? >> well, at fort pit we are not
allowed to short and i still think that's a pretty risky position. good news can come out and depending on how you're shorting them, you know, that could work very adversely for you. i would stay away from shorting them but surely not buy them here. >> all right. kim, see you again in a few minutes. >> okay. it's a volatile ride for gold. lots of ups and downs this year. up a touch, 3% or so. sharon epperson posed two questions on the topic. number one, are gold holders less fearful of the overall market? are they simply tired of holding gold? sharon is live at the nymex and searching on that. hi, sharon. >> reporter: hi, sue. talking to analysts and dealers about this. gold prices basically trading where they were a year ago but the stagnant price action of gold doesn't necessarily mean that investors are less fearful about the financial turmoil going on around the globe. in fact, talking to some coin dealers, they pointed out it's clear retail demand slid for
gold coins and last month it's clear how much they've done so. falling by about half as much of what was sold just a year ago in july. and in fact, six times less than what we saw at the height of the financial crisis in 2008. but this analyst says the slide in gold coins isn't necessarily a bad sign. >> the demand which was, in fact, probably too high in 2008 and 2009 because of worries of the financial crisis simmered down to a sustainable rate and reflects a structural level sustainable and ondoing and healthier ultimately for the gold markets. >> reporter: gold coin sales spiked in times of uncertainty. think of the crisis of 2008, 2009 or during the y 2k scare in 1999 or october of '87 after black monday. but the fact of a slow economic recovery means we are seeing a bit of a stabilization in the gold market analysts say and we have seen prices above the 1525
for most of the year. what's this mean for retail demand? slowed down but it's not faded away altogether. tyler, jim steel of hsbc says with the presidential election coming up, if the focus turns to u.s. fiscal problems, we could see the return of demand in gold coins and start to see it's ka late a bit more. >> terrific. thanks very much. the lights back on after most of india after blackouts left more than 600 million without power. government officials blame the power outage only small towns that took too much power. the worst power outage in that country in more than a decade. the fans back on over there. a follow-up of the shark attack in massachusetts of yesterday. a man was swimming not far from shore when witnesses saw a fin in the water and then heard screaming. marine biologists say the bite marks on the men's legs are
consistent with a great white shark biting. there's been sightings. that man is expected to make a full recovery. a lucky fellow, he. these are the two of the dumbest fishermen in the world. somewhere in russia. wait for it. fishing with grenades. yes. don't worry. they're fine. i don't know how. but they are fine. i don't know if they caught any fish. there they go. well, we don't -- watch this again. here they go. oh, baby! look at the chum. the chum! oh. give me -- teach a man -- give a man a fish, feed him for a day. teach a man to fish with grenades, i don't know. now to mary thompson for a market flash. >> if i can recover. >> the chum! >> oh my goodness. >> think of the chum, mary. >> that was funny.
let's take a look at conway. the shares stuck in reverse all day today. down 15%. the earnings and revenue well below expectations and basically tonn tonnage. so much freight in the u.s. by truck. the outlook for the company doesn't sound good. you can see down 15%. back to you. all right. the guys at knight capital behind me asking to see the footage again. everybody's -- hopefully they're okay. here it goes, guys. you needed that? all right. the guys at knight capital say, thank you. they needed that today. all right. you're welcome. coming up next, postal problems. the post office is about to default so what will the news deliver to you? that's coming up next. also ahead, jane wells goes back
to san bernardino. >> real estate struggling in california's inland empire except one area. big. really big. that's a brand new $200 million facility for skechers. a market that's on fire? we go inside the box after the break. d win fifty thousand doll. d win fifty thousand doll. congratulations you are our one millionth customer. people don't like to miss out on money that should have been theirs. that's why at ally we have the raise your rate 2-year cd. you can get a one-time rate increase if our two-year rate goes up. if your bank makes you miss out, you need an ally. ally bank. no nonsense. just people sense. the u.s. hadn't won gold in over 100 years. but thanks to them... and her... and especially this guy, all those years were just a prologue to this.
for future retiree health benefits. what now? return to sender, perhaps? who knows? eamon javers is live for us in washington. hi, eamon. >> reporter: hi, sue. the billions of dollars are due today to the u.s. treasury and the postal service says it will miss the payments. the reason, of course, as you or anybody else that used to send a letter and now sends e-mail knows is the decline, the staggering decline in first class mail and rise in competitive services like u.p.s. and fed-ex. how much does the u.s. postal service owe? starting today, they owed $5.5 billion in what they call prefunding for retiree health benefits and then in september they say they'll likely miss $5.6 billion payment due to the treasury at that time, as well. the post service has a plan to fix all of this, though. they would like to cut back on services in order the make up for the shortfall starting with no saturday delivery as well as closing some little-used
facilities and operating an independent health plan for employees. all of those steps the post office says would be able to cut costs down to a more manageable level. of course, the postal service is an independent service. it does not take taxpayer money but it needs congressional approval for all of the plans to change services. that approval so far has not come. so for the post office like a lot of other people in the town, they're just waiting for congress to get its act together. guys, back to you. >> indeed. eamon, thank you very much. the question to you today is, the u.s. postal service is on the brink of default. should they go to five-day delivery? tell us what you think. finance.yahoo.com. we'll have the results soming up. the city of san bernardino seeking bankruptcy protection. there's some boom in this california city. and jane wells is there to tell us about it live. jane? >> reporter: hi, tyler.
realty track says the inland empire with the highest foreclosure rate in the nation in may but in the land of opposites there's an area of real estate booming out here. really big boxes, over 500,000 square feet. looking at now is skechers state of the art north american distribution center. leading directly from the ports. a $200 million project requiring them to be coowner of the building. not just the tenant. >> what construction loans became such a very difficult thing to obtain, we had to partner for that to happen. >> currently we have 15 transactions in the markets circulating today for facilities in excess of half a million square feet and 4 of those over a million square feet. >> reporter: all right. well, you are looking at now is one of those new facilities for
understood armour. amazon also moving in to california building a million square foot distribution center. rents fell 40% from the perks. now back up to 10% to 15% down. cdr says another 10 million square feet on the docket. the developer of skechers says 3,000 acres more to fill and in talks with people. creating jobs in an area of nearly 12% unemployment. >> how much are these facilities helping what is a really struggling economy out here? >> i think it's probably the predominant sector that's still very active and solid. talking about literally zero vacancy at a time most other sectors are struggling. it really is unprecedented. >> reporter: now, one big challenge -- the red tape. sue, even out here, this is still california. getting these things built isn't easy. back to you. >> well, it would be harder in
new york. i'll just leave you with that one. thanks, jane. appreciate it very much. when we continue on "power lunch," we analyze the analyst coming up next and today's focus on discovery, bmc and boeing. they're all in the red today. before the break, though, five more big wednesday moves and there's little bit of green. we have verizon up 1% and a fractional gain in p&g. we're back in a moment.
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all right. time to analyze this with kim forest of fort pitt capital. citi downgraded decision cover ri. the stock is up 21% so far this year. downgrading to sell, kim. you agree or not? >> i do. the analyst also pointed out that costs were going to decline or, i'm sorry, going to increase, as well. that is not a formula for success. flat following revenues. we don't want to own this. >> up 21% year to date. >> right. >> raymond james downgrading bmc software to outperform from a strong buy. this is kind of a mild downgrade. right? >> it is. >> following another of several weak quarters over the past year. that's their note there. over one year, the stock down 10%. what do you say here? >> i would say i would keep it on the list to buy and i guess that's what that analyst is doing with that moderate downgrade. not really a sell or even a soft sell.
it's a weak -- >> like going from strong buy to outperform. >> part of the problem is the sales forces had a tremendous turnaround and about 40% of the sales force has less than a year of experience at the company so they haven't been able to build the pipeline but they have a couple of good products out there. i like them in general and they have cloud management products which should do good things for them. >> still an outperform in that analyst book and maybe even in yours. emperical capital reissuing an in line on boeing noting that, quote, expected slowdown in commercial orders heading in to 213 will limit multiple expansion. year to date, boeing a flat liner basically down 1% or thereabouts. >> right. well, for better or worse, fort pit capital, we buy companies, we don't trade stocks. we like boeing and we like them because they're serving both a developing world with, you know,
the rise of the middle class and people take more planes and benefitting from that. they have a lot of back orders of asia and also the developed world, you and me, want to fly cheaper and making fuel efficient planes. >> reinitiating? like me on the first tee of golf. >> it's a new analyst. >> all right. that's what it means. thanks. all right, sue. take it awe. >> thank you, ty. we'll go to the gold pits right now and prices are closing and the market's very nervous. we have the fed decision at 2:15 p.m. eastern time. sharon epperson is back with us. hi, sharon. >> hi, sue. gold action not much today because they're waiting for this fed decision at 2:15. wefrwe are looking at prices again for the floor session and probably more trading action to be had later this afternoon. we are looking at prices basically traders trying to shore up their positions ahead of the fed but look what's happened to gold volatility
today. we are looking at gold volatility as one trader described it exploding today indicating a big price move is going to happen in the futures market. one way or the other. based on the fed today or the ecb tomorrow so we'll continue to watch that. we're also looking at copper prices under pressure here and a lot of global manufacturing data worse than expected. that is weighing on copper and of course silver as a combination of a precious metal and industrial metal with hard hit today and a lot of traders pointing to the ism data as a factor weighing on the similarer have action. back to you. >> yeah. we can hear it in the background. thank you very much. >> sure. all right. now to mary thompson with a market flash for us. >> sue, shares of source fire getting doused today down 15%. the security software company reported better than expected second quarter revenues and earnings and guidance of third quarter below expectations. look at the tock down 15.5%.
back to you. >> thank you. let's head to the nasdaq. bertha coombs is there. >> hi, sue. parent company of nbc universal and cnbc, comcast today best performer with the big caps after better than expected earnings. company saying it's breaking even on the olympics. meantime, seeing relative strength while tech overall is an underperformer today. rubicon the biggest mover. software, though, systems software real losers. bmc disappointing, lowering the outlook, blaming the sales softness on the sales staff, actually. digital river getting distorted in the cloud area and lowered its outlook, as well. we have seen facebook today plumbing new lows. having an impact on zynga and groupon and down here yelp. among the social media stocks today. that is surviving that downward trend.
tyler? >> thank you very much. much more on the big probable at the new york stock exchange today involving knight trading and that's after a short break. tech glitch causing mass confusion. art cashin walking us through it next and shareholders, of course, paying the price there. at least if you own knight capital. also today, inside the olympic kitchens. see how london is feeding the athletes. and inspires the things you choose to do. you do what you do... because it matters. at hp we don't just believe in the power of technology. we believe in the power of people when technology works for you. to dream. to create. to work. if you're going to do something. make it matter.
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the market, of course, waiting for the fed decision at 2:15 eastern time. bob pisano joins me. >> if it wasn't for the crazy trading at the open, this would be a fairly calm day. the major indices didn't move on the news. i want to review knight capital acknowledged a technology issue in the routing of about 150 stocks to the nyse floor right at the open. the important thing is we don't know what the technology issue. the nyse says they're reviewing the irregular trading of 150 stocks acknowledging a problem occurred with the knight transmissions and they believe the nyse believes their systems
and circuit breakers operated normally. of course, knight trading with massive -- knight capital with massive volume today and the stock down 22%. elsewhere, fairly quiet day. put up the stocks. seven halted here. many of them had huge volumes, some five or ten times volume. all of them trading now. not a lot of price and percentage changes but between 9:30 and 10:00, some of these had some very big percentage moves. sue, back to you. >> thank you very much, bob. bob talked about the technology issue can knight capital. art cashin joins me now. you were telling me that there used to be two each summer but i guess my question is, gib that backdrop, is it one more reason for the individual investor to lose a little bit more faith in the system? >> well, actually, maybe you can take a little bit more courage. they were upset by the flash
crash and well deservedly so but this morning we saw the system work a little bit. the software had a little confusion and entered too many orders apparently. but at some point, the humans and the circuit breakers interacted and said, stop. what might have happened this morning is you start to get the volatile trading in the stock and that spills over in to the options in that stock. >> right. >> and then when that gets followed, you get a feedback loop where it pushes back in to the stock market so by cutting that off, we have prevented the risk of a feedback loop somewhat like the one in the flash crash. >> what does it do to the volume? skewed the volume dramatically. >> right now we're running above a billion shares. recently it was 700 million, 800 million. if it holds up, it's billion
shares and adds validity to the day and we'll see. >> art, thanks so much. see you soon. to rick santelli at the cme before the fed decision for us. hi, rick. >> hi, sue. indeed. looking at a 10-year note yield, up about 4 or 5 basis points hovering about where you expect the 150. but maybe the trade of the day to watch is a weird one. here's a chart back topril 1st of 10-year yields minus 2-year yields and flattened dramatically close to 100 to around 130. but even though 10-year rates have come down a lot, today if there's a notion that they could quit paying on reserves as the ecb did, watch for it to flatten even more. back to you. >> thank you. the decision on interest rates less than an hour away. so what can we expect from the fed? joining us is vincent rinehart of morgan stanley and economist
and steve liesman is with us here, as well. welcome. you're in the camp that thinks the fed will do nothing and not announce any new initiatives before the election. why do you feel that way? >> well, i think the election matters in terms of the fed's credibility, how its individual policy actions are judged in markets and the headlines written about it. if something bad in the world happens, the fed will respond. they'll want to do the right thing because the headline's going to say u.s. teeters on break of recession and fed respon responds. when's harder is tactical action where you have revised down the forecast a couple of tenths and the headline may be fed springs early october surprise. >> you think it's possible to tweak the interest rate language either today or between now and the election. how do you expect them to do that and what do you think
they're most likely to say? >> i think the sequence is essentially today they soften up the characterization in the economy and the first part of the statement. maybe at the end of the statement they're even more assertive about their willingness to act. that's going to blunt a little any disappointment of no action today. why people are going to say, ah, setting up for the chairman bernanke's jackson hole speech, priming for september. september they can work on the language. add another year to the forecast. that's a good reason to say you had a review and stretched out your rate commitment. and then the balance sheet is basically in slumber mode until december. >> low rates in to 2015. steve, yump in. >> well, you know, i think vince may have it right. i'm not quite sure that the election plays quite the role that he says it does. although he's spent time inside the federal reserve. i think that if the fed needs to act it will act and i think if the economy goes the way it's been going, it does set up for
some action in september. i think if we don't see improvement in the unemployment rate, i think it kind of forces the fed's hand in the sense that when bernanke took to the hill last week, he said pretty explicitly we will need to act and considering how to act. i think the other key to the action and the timing of it is i think he wants it to be in most circumstances around the time that the fmoc is putting out the forecast and complicates changing the language. when i think that through and think what if the forecast for the first fed rate hike in september is different from that, why would he pull this ahead a month. september sets up for action in the course for going forward, going on in my opinion. >> vince, a fair number of people in the press lately saying that the fed is quote out of ammunition. they don't have arrows. choose your cliche here. i'd turn it a different way. do you feel that the fed may be
at a point not where they're necessarily out of ammunition but where the impact would create diminishing returns? >> most things in life have diminishing returns and balance sheet returns has, too. qe1 to 2 and operation twist, there's a sense of lessening effect. look. i wrote a couple papers with then governor bernanke about eight or nine years ago and the fed can make the balance sheet bigger, tilt the composition and remember, this was a fed that was pretty darn imaginative in 2008, 2009 in creating facilities. >> oh, yes. >> and so, that the chairman did note that he was following with interest the bank of england's funding for lending scheme. i think if they get to the point where they think the traditional monetary transmission mechanism is blocked then they'll do an
end round-up through a credit type program. they're not out of bullets. >> terrific. thanks very much. steve, thank you, as well. of course, steve, you will be back at the top of the hour to carry us through the coverage of the fed decision at 2:00. sue, to you. look at that picture. how would you pay for the 8,000 square foot penthouse in new york city? could be a record breaker. we're back in two minutes' time. [ male announcer ] every day, the world gets more complex. and this is what inspires us to create new technology. ♪ technology that connects us to everything the world has to offer and vice versa. ♪ technology that makes lightweight stronger, safer, and faster than ever before. ♪
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with scottrader streaming quotes, any way you want. fully customize it for your trading process -- from thought to trade, on every screen. and all in real time. which makes it just like having your own trading floor, right at your fingertips. [ rodger ] at scottrade, seven dollar trades are just the start. try our easy-to-use scottrader streaming quotes. it's another reason more investors are saying... [ all ] i'm with scottrade. team usa on the basketball court yesterday. they played tunisia and they won big time. you'd expect that. but this you might not expect. after the game, one of the players of tunisia humbly pulled out a sharpie, took off the shoe and had kobe bryant sign it. he obliged. we move now from the fields, the courts and the pools of play
to the kitchen feeding the fans. sue, go ahead. >> indeed, we do. and kelly evans joins us, she's live in london with a great story for us. hi, kelly. >> reporter: sue, hi. you know, ahead of the games so much of the focus was here on security around olympic park but, you know, today's the safety of food that's increasingly in focus. thousand loaves of bread. 19,000 gallons of milk and 250 tons of eggs will be served to the athletes in olympic village in these games. overall, 14 million meals will be served at olympic park this summer. u.s. bio tech company life technologies does the bulk of its business in dna coding but here in london the company's machines are being used to test for bacteria like salmonella in the food served to both athletes and visitors. the company provided a similar service at the 2010 world cup. here where every nanosecond counts, success is running
effective tests very quickly. >> a test you use needs to be effective, quick and get a quick answer so you can stop any spread of infection. and it needs to be easy to use and that's what we offer. >> reporter: the personal genome machine, the same used for dna testing, makes sure that the food served at olympic park is safe to eat and results four times faster than traditional methods. outside of the sporting arena, they're in labs at universities, hospitals an food manufacturers around the world. in the meantime, the uk's food standards agency is overseeing hygiene inspections of nearly 15,000 food vendors in the country. all this to make sure that those olympic concessions are clean. well, sue, before the games started, there were reports that a couple members of the badminton team suffered from food poisoning but they say that facility was not one of the official training bases so five days in, there have been no
major food issues yet. the process seems to be working an we should mention that even at mcdonald's is not excluded from the food testing. still, life technologies which was the maker of those food testing ma shoons, out with earnings yesterday after the bell and lowered forecasts for the third quarter citing a more conservative outlook for european operations and the genetic analysis revenue, the main part of their business, was down 6%. still, though, in terms of the food safety issues over here, no major issues so far. >> we hope that continues. kelly, thanks so much. good to see you. >> good to see you, too. coming up, as we continue, who would purposely try to lose in the olympics? well, we'll tell you who and why right after a quick break. [ male announcer ] it's a golden opportunity...
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it's a disgrace to the sport. i myself may never play again. >> what were they doing? trying to manipulate the draw or brackets? >> right. trying to lose on purpose so they wouldn't have to meet the second tier of players until the final round. >> until the final round. what do you think? >> it's -- >> it reminds me of when in the super bowl the giants' runner tried to sit down and not score at the end of the game. >> sandbagging is for golf scores and eps. okay? >> when you think about this swimming and the issue with this swimmer who beat michael phelps and ryan lochte's time, i don't think that's relevant. probably should have checked the passport after the issue in beijing with the ages. >> all right. let's move on. and talk about the post office on the brink of defaulting on a big payment. should goit to five-day delivery instead of six?
i know how i feel. how do you feel, kayla? you ever get mail? >> you know, not really. >> really? >> find a doorman and probably get mail. since i don't, it's hard to get it. i just feel so sad. i think about the front of the post office near penn station and says nothing, no rain, nor heat or gloom of night stays the curri curriers. should shay nothing but a missed -- >> five days or six? >> keep it to five days. what do they do about wages? that's a key concern if somebody's working one day less. ben franklin rolling in the grave. another $5.6 billion due in september. deeply in debt. post office raised the stamp price to a dollar. why not? >> why not? >> stop the two, three penny increase. >> what is it now? i don't know what it is. 46 cents? >> from a deli 86 cents right now. >> take it -- >> to the gath. the garfield the cat. >> five days from six and we have to move on.
moving us on. finally, the higher end real estate market in new york getting higher. $100 million penthouse hits the market. kayla, what is this a sign of? >> talk about the price. it sells for. because bagter for $4.5 million. granted that's in the early '90s so account for inflation. >> $9 million or $10 million in the house? $100 million in this market? >> that's impossible. >> do the math, though. let's say he get what is he's asking for. 8,000 square feet. let me break it down for you. the average american home is about 2,30 square feet. call it 2,000. this means in a 2,000 square foot home, it would sell for $25 million. put another way -- >> my average home. >> a studio, a little tiny box is $6.5 million at this price per square foot. >> not even in that desirable of a neighborhood. >> it's an octagon. >> it's an octagon.
>> walking in circles. >> a big kaleidoscope. >> all right. good luck to the seller. we hope you do well and we hope the buyer is happy. folks, thank you. sue? coming up, as you know, the countdown to the fed decision is on. don't miss bill gross, the co-cio and founder of pimco. ant♪ [ breathes deeply ] ♪ this is where the dream begins ♪ ♪ i want to grow ♪ i want to try ♪ i can almost touch the sky [ male announcer ] even the planet has an olympic dream. dow is proud to support that dream by helping provide greener, more sustainable solutions from the olympic village to the stadium. solutionism. the new optimism.™ ♪ this dream and i'm here to tell homeowners that are 62 and older about a great way to live a better retirement. it's called a reverse mortgage. [ male announcer ] call right now
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all right. this is the favorite video of the day. these poor guys. >> a moment, a moment that's destined to live on youtube-ski in russia. >> the guys on the floor down here, they love that video. i think everybody needs eneeded little lift. >> teach a man to fish with grenade as bob sellers of youtube said there -- >> feed him for life. >> don't worry about the rest of the day. >> they're hoping that the fed doesn't, you know, drop some sort of -- >> the fish didn't look so good afterwards. looking at gm. to find out if, you know, consumers are still buying cars and also kraft to see if consumers are buying processed food. we'll see, won't we, now? >> we will. >>