Skip to main content

tv   Street Signs  CNBC  August 1, 2012 2:00pm-3:00pm EDT

2:00 pm
the best idea. >> it is not. the guys are okay. there you have it. >> spongebob is definitely rolling, baby. kim, thanks. sue? >> "street signs" begins now. welcome and we are just minutes away from the fed's rate call. are the printing presses warming up as we speak? is more nearly free money on the way? so many questions but answers ahead. pimco's boss taking shots at legendary investor jeremy siegal. all that plus the latest on wall street's rage against the machine and herb's here and he's wondering if amazon, mandy, should go on a show room shopping spree. meantime, the markets are standing just minutes before the fed. the dow giving back some of the gains now only about r up about
2:01 pm
13 points. s&p 500 higher on the session but nonetheless kind of flat. and the tech stocks, well, they're strulg today with the nasdaq lower by .2 of a%. all of this on the back of some fairly unusual trading activity at the nyse earlier on this morning. bob is standing by following the trading breakdown. is it time to put traders on the floor, get rid of the machines and try to instill some confidence all over again? >> we're not going to go back to open outcry system but we need to improve the way these machines, these trading systems interact with each other and maybe build in some more redundancy. folks what happened today, massive volume at the open here on the new york stock exchange floor. multiple volumes more than normally occurred. knight capital with a statement saying that there was a technology issue that occurred in the routing of about 150 stocks to the floor of the new york stock exchange. the nyse came out also saying that they were reviewing
2:02 pm
irregular trading activity in the roughly 150 stocks and nyse said they believe their systems and circuit breakers operated normally. the s.e.c. said they're monitoring the situation. bottom line is this. it looks like there's a common thread in three separate instances that we have had rece recently. remember the facebook ipo fiasco and now knight saying that they're having technology issues. the things to connect the three points, these three occurrences is interactions of trading systems and problems occurred an enwhat we need to do is we need to improve the interaction of trading systems and, mandy and brian, we need to build in redundancies to make sure that the systems are intelligent and instead of routing orders to the people on the floor, thank heavens they caught the problem, maybe somebody stopping it from occurring in the first place. >> maybe you need to be in charge.
2:03 pm
you have it figured out. >> are we relearning the value of the human being? >> everybody knows i'm in favor of human beings watch things. we are not going bab to human beings needing trading. we need trading through computers. but we need to build in more robust systems. they're all connected to each other, all these training systems and glitches of cur with problems of software. that's probably what happened today. we need to improve the software. we need to have more people working on that. i do want the people to stay. >> bob, thank you. somebody needs to get the software program a good talking to and a time-out. thank you. we are minutes away from hearing what ben bernanke and company have to say about the company. this time, they're really dealing with mixed signals. steve liesman here. today was a perfect example, too. one good number, one eh number. >> we had the weak gdp report. let's take a welcome at the data brian was mentioning of today.
2:04 pm
adp, pretty good piece of data if it does hold up in the report on friday. construction spending in line with expectations and enough to raise the prior calculation of second quarter gdp up to an astonishing 1.7%. the ism was the big disappointment. manufacturing sector of the economy struggling. vehicle sales in line with expectations according to phil lebeau. 14 million. look at what i think is a key of fed chairman bernanke to act. that's the unemployment rate, 8.2%. he suggested unless we see improvement in the labor market, this was at the hearing last week, we are going to have to move. and then finally, take a look at the gdp report and really key. all the yellow lines are the only lines, only quarters we have had where gdp is strong enough since the recovery began to reduce unemployment. not much. right? finally, let me remind you of the fed survey. 78% looking for qe3 in the next
2:05 pm
12 months but only 56% of those see it happening in september. not announced today. >> do you think that we putting all that data together, do you think we have enough of an argument for the fed to act today? >> i do not. it's a close call. i think it's enough to move the fed closer to action but not enough to pull the trigger. we'll know in ten minutes. >> do you think the ecb is factoring in to what they're thinking today and wait and see the global reaction to that and then do something. >> i have maintained all week that friday should start in monday which means to take it off early. no. that we needed the jobs report first. we needed the ecb second and then the fed could act because they've been doing a lot that's sort of outside its area. >> always a good argument to leave on a friday. >> just combine them. it's the ber-nagie rally.
2:06 pm
feel free to use that. >> not going to charge a royalty? >> no. i need to charge for this. >> there is not a rally. >> who's more powerful, ben bernanke or mario draghi? >> the tale of the tape over the month, the market is much more tightly wound to ecb action than to comments by bernanke. >> okay. what do the markets expect of today's announcement? let's bring in jeef applegate and chief u.s. economist at deutsche banc and a contributor. jeff, you first of al with regards to the market, do you feel that the expectations are pared down in terms of what the markets expect today? >> i think the combination of the comments of the ecb and fed over the past week explained why u.s. and global stock prices are up so to some extent ease of the fed and the ecb, whether we get it this week or gets in to september i think that's pretty much embedded at this point. >> do you feel maybe, jeff, if there was a qe3 today or
2:07 pm
september or august, pick a month, it is possibly going to send a negative signal to the markets because it's saying essentially, you know, things are that bad out there that we need to do this? >> no, i don't think it will. the worst thing for the fed would be to have made the comments you made and then do nothing. for the fed to move on qe3, whale what the fed should do is further increase the size of the balance sheet, take it up on the order of another half a trillion. i don't think that's in the cards and getting qe3 and potentially some moves on making changes in interest on excess reserves of banks to charge to stimulate on the side would be good and positive for the economy. >> joe, the dow's up, what, 50% in couple of years. how much of that was just the fed? >> first half is brilliantly executed. i think the qe3 was a disaster. i think it took about $300
2:08 pm
billion out of economy through excessive food and energy costs. i think operation twist i think further manipulated the market. distorted market signals. the yield curve in the past was a good gauge. i disagree with jeff. it was a sign they don't believe their forecast. the market knows the fed is out of ammunition effectively. there's $1.3 trillion of excess reserves on the balance sheet. i wish they would do nothing else. i think they won't do anything because i think the economy is finally showi inin ining a litt more signs of life. the fed tended to tinker and do things. >> we have gone from 10,000 to 13,000 and about 2 years. how much of that 3,000 is pure fed? >> brian, brian, if you look at corporate profits, corporate profits basically bottomed in the fourth quarter of '08, early '09. the economy overcut labor, overcut capital, overcut inventories. the profit sector margins are very high. that occurred well before qe1
2:09 pm
even took place and any big way. >> okay, jeff and joe, stick around. we'll take a quick break. on the other side of that, we'll be hearing from the fed. >> pimco's bill gross with us, as well. also, ask him about his investment outlook that had everybody buzzing yesterday. why he called the stock market a ponzi scheme of sorts, mandy. we're back after this. the greatest empires. then, some said, we lost our edge. well today, there's a new new york state. one that's working to attract businesses and create jobs. a place where innovation meets determination... and businesses lead the world. the new new york works for business. find out how it can work for yours at thenewny.com. we believe the more you know, the better you trade. so we have ongoing webinars and interactive learning,
2:10 pm
plus, in-branch seminars at over 500 locations, where our dedicated support teams help you know more so your money can do more. [ rodger ] at scottrade, seven dollar trades are just the start. our teams have the information you want when you need it. it's another reason more investors are saying... [ all ] i'm with scottrade.
2:11 pm
2:12 pm
all right. as the graphic says, we are moments away from the fed decision. a rate move expected. by nobody. but the fed may again push out the low rate policy perhaps to mid or late 2015. let us bring in pimco's bill gross. we'll get to the outlook in a few. we'll talk about it. let's talk about the fed first and joined by jeff and joe and steve. we'll make it happen. bill, your expectation from the fed? >> well, much like we've previously heard, you know, i would look for an extension of the extepided period of time language perhaps by six months. i think it's important to recognize that the fed has to display some momentum here and the economy is slowing and invisibly so incumbent upon them to do something about this meeting and perhaps jackson hole for something else. i would note and i know steve mentioned this before, that the topic that ben bernanke's topic
2:13 pm
at jackson hole is changing policy landscape and might expect some significant events in a month or so. >> joe, do you feel that -- and i know you feel that the fiscal cliff is like the biggest bogeyman out there right now. do you feel that more the fed acts the less washington feels it needs to? >> yeah. the bond market vigilantes are dead. they're not extinct. there's no motivation for congress to do anything. there's no incentive. >> who killed them? >> the bernanke. >> what would bring them back? >> inflation. stronger set of employment data and unless the economy isn't falling out of bed. if the ecb does some good work. wasn't that long ago in the first quarter people worried of 3% yields and now talking 1 to 150 in perpetuity. >> the federal committee kept
2:14 pm
the rate at 0 to a quarter percent and anticipates that economic conditions are likely to warrant low levels so the fed funds rate at least through late 2014. committee decided to continue through the end of the year the program to extend the maturity of holdings and securities announced in june maintaining the existing policy of reinvesting principle payments from the holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities. the committee will closely monitor incoming data and will provide additional accommodation as needed to promote a stronger economic recovery and sustained improvement in the labor markets in a context of price stability. since the open market committee last met, suggests economic activity decelerated. growth and employment is slow. unemployment rate is elevated. business investment continued to advance.
2:15 pm
household spending has been rising a the a somewhat slower pace than earlier in the year. despite further signs of improvement, the housing sector is depressed. inflation is declined since earlier this year. mainly reflecting lower prices of crude oil and gasoline and longer term expectations are stable. committee expects economic growth to remain moderate over coming quarters and pick up garage gradu gradually. strength in global finance markets pose significant downsize risk. the committee anticipates inflation over medium term will run at or below the rate judged most consistent with the dual mandate. the only dissenting vote against the policy statement today, jeffrey lacquer preferring to omit the description of a time period over which the conditions parent w arnt low level of the fed fund rates.
2:16 pm
>> as we were listening to that, the u.s. dollar moved higher. steve liesman, what can we latch on to here? >> not much. looking for fed action. tell me if i'm wrong here. the only thing they threw, well, besides the less -- the more down beat description of the economy is an idea of closely monitor. i think the incoming information on economic and financial developments. i don't think i saw that last time. i think last time said the committee's prepared to take further action as appropriate and now closely monitor. it was in line with expectations. >> didn't get to 2015. >> yeah some. i don't think it was an odds on bet. i don't think that was for sure. as i said for a while here, brian, bernanke would like to do that with the forecast change that is come in september when we get a new forecast -- a round of forecasts. fmoc members. there's not much. i think the fed is closer to doing something if the data
2:17 pm
warrants it and had it right. >> doesn't feel like -- >> and those who said they were -- the fed more likely to act ended up being wrong here. >> bill, do you like the fact the fed is -- you heard lacquer's dissent on the time line. do you like as the world's biggest fund bond manager the fed telegraphing what it thinks it will do? we don't know what happens between now and december 2014, do we? >> well, we don't. 'we don't know who's the chairman of the fed in 2015. and beyond. and so, you know, the extension of the language has a, you know, significant uncertakrcertaintie forward but i think what they're trying to do is hold the front end of the curve very low and twisting the long end of the curve very low and so it's a -- you know, sort of a barbell-type of strategy and which they work on the front end -- >> or even a little longer. i want to show that it flattened. >> bill, i want to chime in a quick answer to that. the fed thinks internally that
2:18 pm
promise is worth a lot. 25 to 50 basis points. internally -- >> we want to show that chart. >> the value of that. >> yeah. i think that's right, steve. i mean, typically, the optionality of the first two to three years in terms of treasuries is worth 30 to 40 basis points and with the 2-year treasury around 22 or 23 basically at the fed funds level that's taken out so i think that's a correct assessment. >> rick santelli, we had a cameo appearance of your voice a moment ago. let's bring in the face, as well. how's the bond market taking this? >> sorry about my voice. i get excited. we were looking at 10s to 2s. the move pretty much like traders thought. we saw the curve flatten from 129, 130 to 126. but by far the biggest mover i saw proactively still moving is dollar index. no talk about extending
2:19 pm
anything. and the dollar index basically went from unchanged up about a third of a cent. and i did see something, steve, maybe i'm wrong. i don't look at the minutia. talking -- >> yes, you do, rick. you love it. >> will provide -- opposed to may. i did see a will provide. am i wrong in thinking that -- >> let me take a look. i did not look at that. look. i think he's been clear that if we don't get momentum on the labor market, if it looks like this economy is decelerating more seriously he's going to take action. i think where the fed is now is between two assessments. one on the economy and the second is what to do about it. i had never seen, rick, in a long time more people in the camp of i don't think that if the fed even does something substantial that it would have a substantial effect. there's a lot of doubt out there. i don't think a lot of the way the fed acts as you know, rick, gets the market to do its
2:20 pm
bidding for it. it never wants to be where the market doubts it and won't do itsds bidding for it. >> you are saying i was all alone six meetings ago and now a roomful of people that agree with me. >> you were dead wrong then. you're right now. >> one more is the ocot-box. jeff, we have shown how the fed pushed stocks up or suggested and risen. as an equity guy primarily, what are we looking at with the stock market? go long and strong to 2014? >> no. i think, you know, central bank is overwhelming influence on the market. if you look -- very near term basis. now down a bit. that's a signal to the fed, okay, you now need to move, act on that will word. i think this paves the way for the fed to move in the next month or in september. >> certainly looks like some disappointment out there in the stocks world. >> no question. >> joe, you must feel vindicated. you dant want to see any action.
2:21 pm
didn't think there's a feed nor action. why you are confident that the second half economy is going to be better than the first? >> joe, explain why that is and why that matters. >> sure. thank you. gdp less inventories, less government spending, less net exports. the core measure of private domestic demand. not booming but growing at a consistent 3% rate. i think we're seeing the state and local sector finally showing some signs of growth. that was part the construction data today. we're seeing jobless claims back almost at the entry year low and observed in the past few weeks employees receipts of labor income closely. we have seen them accelerate. we could get in the high twos in the second half. similar to what we saw last year. this is not a boom but it's a better economy than i think many investors currently believe. >> we have to leave it there, gentlemen. i hoe to throw up another face of bill gross. it's done before.
2:22 pm
don't go anywhere. >> rick, i'll check on the made for you and let you know. >> thank you. >> all right. we'll talk to you about maybe that bomb you threw out there about the stock market anyway. that's coming up. >> it is. should amazon buy best buy? herb explains why it could be a very good buy for the online giant. all those things coming your way on "street signs."
2:23 pm
2:24 pm
2:25 pm
welcome back. bill gross is still with us. let's put the fed aside, bill. >> all right. >> talk about the investment outlook you put out yesterday and took some big shots at the stock market saying the cult of equity is returning and return rate of 6.6 the this market is similar to a ponzi scheme and took shots at jeremy siegal and he joined us on the show yesterday. here's his response. >> lots of things to say. first of all, you definitely can have the return greater than gdp return. there's nothing uneconomic about it. he looks at the period i think 1914 until the present calling
2:26 pm
it an anomaly. we have the same data from 1802 all the way up to the beginning of the 20th century. we also have 6.5% to 7% after inflation returns. so it's not an anomaly. >> all right. he's looking at history. he's going around the world. bill, your response? >> well, he wrote the book and should be proud of it. he has a term called the siegel constant named after him like a comet. should be respectful of that. what he said over the past 100 years of his book the stocks for the long return is return 6.6% real higher than inflation and i don't dispute that and i don't dispute and didn't in the outlook the fact that stocks overall long-term do better than bonds and i wanted to bring to the attention of investors is 6.6% number relative to 3% 3.5%
2:27 pm
real growth over the same period is an extreme level and for those expecting 6.6% real and 2% inflation and 8% to 10% return on their stock portfolio going forward, a low growth environment, they should expect less. >> one of the things that the professor said in response and defense is you're always stock pessimist pessimistic, bill. i guess the temptation to say you're talking your own book here. that's the cult of equity's dying. but there are equity funds under pimco, right? you have pimco equity funds. i would like to know how does that affect your strategy plan? >> well, you know, i'm not always equity pessimistic. in my personal portfolio, i own more stocks than bonds. yes, we have a thriving equity business at pimco. we have three or four new funds and all doing, you know, very well. i did point out and i think it's fair to suggest that the outlook
2:28 pm
for bonds, you know, going forward for the next ten years or so was low, as well. it was probably 1.5% to 2% relative to an outlook for stocks at 4%. so i'm not dissing stocks. i'm suggesting that the double digit returns of investors grew used to over 20 or 30 years is a thing of the past and boomers used to letting money doing the hard working instead of like donna summer implied working hard for the money. we grew used to buying apple stock instead of inventing things like the apple ipod. we have the consequences of lower returns. >> i can't match your donna summer reference so i'll move on from that although i like it. is the s&p 500 cheap historically? >> well, it is relative to 10-year treasuries. certainly, the pe ratio if you take it at 15 times, you know, you would expect, you know, a
2:29 pm
stock in terms of its earnings yield to return 6.5% to 7% relative to a 10-year treasury. the problem is a high risk premium based upon deflation potential, based upon the delevering of the global society and so the risk premium in terms of stocks is higher than it normally is. if we can solve those problems and that's a whale of a task pes expand relative to the treasury rate. >> there's so much distrust in the stock market. like you saying it's a ponzi scheme. how do we get participation and trust back? >> that's the trust. creditor is a word for trust. what the fed is trying to do, what the ecb is trying to do is encourage the private sector back in to the marketplace, to have some animal spirits to buy stocks, to make investments, to buy bonds at the relatively high
2:30 pm
yield spreads and the task of policymakers. the private market and to some extent pimco in terms of quality orientation basically has been moving towards what we call the cleanest dirty shirts in ar tis pags of continuing delevering. >> you hug it out with jeremy siegel? >> he's a great man. i talked to him on the phone and he should have a high level of respect. he just expects too much. he should expect less. >> if you have a beer, invite us, as well. thank you, bill. >> best team in the business. bill, this is for you. ♪ she works hard for the money >> that was just for you, bill. thank you very much for joining us. you have heard the phrase lipstick on a pig. it's lipstick and pigs or hogs. >> and iceberg ahead. facebook is already down over 40% since the ipo and could be more big trouble ahead for that
2:31 pm
stock. a real sign that wall street's anti-social? "street signs" is back in two. it's something you're born with. 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.
2:32 pm
make it matter. that bringing you better technology helps make you a better investor. with our revolutionary e-trade 360 dashboard you see exactly where your money is and what it's doing live. our e-trade pro platform offers powerful functionality that's still so usable you'll actually use it. and our mobile apps are the ultimate in wherever whenever investing. no matter what kind of investor you are, you'll find the technology to help you become a better one at e-trade.
2:33 pm
is it stock talk time. welcome back, everybody.
2:34 pm
let's start off with -- we have to start with knight capital, right? and the possible fat finger trades this morning. >> yeah. big story, guys. obviously kcg impacted. the stock now down 23.5%. the company saying it's looking in to really what happened today. a lot of stuff, rumors and chatter at the market open when the stocks, 148 of them, mandy, went crazy with volatility. they have come back. knight capital has not. so just an important update on kcg. by the way, remember, they're the ones going after -- not just them, going after the nasdaq about the facebook ipo debacle. >> i think temporarily -- >> now they're caught up in their own debacle. >> sort this out and then the shares around seven-year low. you wait longer to get a google streaming special media devices. it's the nexus q? >> yeah. it's a ball. a little -- the apple tv is reck
2:35 pm
tack lar. there it is. nexus q. those that preorder it get it for free. they'll halt the nexus q. doesn't mean it's over but halt it to work out kinks and the issue and google stock up today. but i thought it was interesting because they're waiting for the oncoming, you know, streaming media apple-google slugfest. this is the media slugfest and google -- >> just to back up a second, just to let you know for people like me technological dunces, what does it do? >> like the apple tv to stream shows, you can buy programs, basically, and come on the tv. ala carte issue. this is meant to be the android-based competitor to the apple tv. >> if you don't like it, it's excellent ball. >> really does. >> avon, feeling the pain of not just the recession we have been having. obviously in places like here and globally things are really slowing down for this company. >> yeah. the stock down, too, more than
2:36 pm
2%. second quarter profit fell 70%. 9% dro in sales. impacts them and lowered demand for the skin air products. avon saying it's beginning talks with federal prosecutors to possibly settle a probe of allegations of bribery overseas. down about 11% year to date. new ceo mccoy taking over recently from andrea young and still there i think executive chairman is the title. >> pressure on her to turn things around. hogwash profits for harley. >> a play on the tick tler? >> no. what? just kidding. >> the stock down, down about 1%. come off the low for today. the sales in the u.s. rose 4% but dropped 9%. where? europe. there we see some of the euros. harley-davidson better than expected numbers overall. but i should say profit rose,
2:37 pm
however, not as much as people thought. europe the drag there. so harley-davidson down there. >> in the meantime, look at garmin. we have really better than expected numbers here. >> i love this story. right? not touting the stock but this is a company people said it's a buggy whip. they basically raised their profit outlook. garmin saying that parts of the divisions i think marine doing better than some thought. >> fitness, golf. outdoor. >> folks that use the watches, track gps running, upload it, brag about it how far you've run or not run as the case may be. garmin raising the forecast. people said they're toast. you know? >> getting lost on a big golf course, can you find your way back? >> all it matters is hitch a ride with the beer cart.
2:38 pm
>> facebook shares, they're trading at new all-time low since the may ipo. will facebook's slide continue? let's ask dennis berman. i guess it's supply and demand, right? >> yeah, hi, guys. supply and demand. right now basically 420 million shares of facebook to be traded right now. by the end of the december, after lock-ups expire, you are looking at 2 billion shares in total and you've sort of do the simple math and see where it's trending now. and you have to think and options traders are betting this way, that the stock is going to continue to fall for sometime. >> i'm wondering considering we have known about the lock-up expiration, is it possibly built in to the shares? >> that seems right that people anticipate the number of shares coming on but i would caution sort of looking at that way for two reasons. one, a lot of the shares given
2:39 pm
to facebook employees were restricted stock units and those essentially are taxed in a different way where you get taxed whether you, in fact, have sold your shares or not. so that will force many employee selling as the lock-ups come off. secondly, the downward pressure puts pressure on the venture capital firms. they themselves want a lock on the return and trending lower, their natural impulse is get out while we can and lock in very big gains from some very low initial prices and for those two reasons the stock is unpredictable and moves it to the downside of where the stock should trade in three months. >> if the extra shares have caused part or maybe all of the stock's big drops since the ipo, that once those shares are absorbed down the road, that the stock could recover? >> well, that would make sense but right now there has to be a great catalyst for facebook.
2:40 pm
the earnings as we saw a few weeks ago were not up to par. when you have 1.5 billion additional shares, you just have to make the market better for yourself. and we're not seeing it out of facebook right now. i do think, though, should there be a positive earnings surprise in any way we see growth tick up in the way the market is not expecting right now. there's great opportunity there and not seeing it right now. >> we need to see a catalyst to make it the stock that everyone wants to own all over again. are we smarter after all of this? as an investor. >> smarter? i guess relative to the '99 period. i would say, no. we like to create the stories in the media people are staying away from stocks, staying away from trading because they don't trust the system. but in some ways i don't buy that. for the following reason. if there's an opportunity to be had, people want to take it. so many of the segments on cnbc about the low interest rate environment, the low return environment. bill gross talking about it.
2:41 pm
if you see an opportunity, you will take it and ipos down the path. the question is valuation. but hey, people are watching cnbc to make a buck. and that impulse i don't think is going to go away no matter how bad facebook returns. >> you are half right. watching because of us. kidding. there's social haters out there right now. people saying, yeah, a flop. in five years, will the social advocates be proven right or wrong? >> such a tough question. >> i'm sorry. >> he asks the tough questions. >> an easier one. i'm kidding. >> i would say, you know, it's about valuation. still, if we think about facebook as a company, it's worth more than news corporation which is my employer. worth more than nbcuniversal which is your employer. there's great opportunity here. the real problem and the failing we saw of facebook was about setting expectations and those expectations set too high and back full circle -- >> maybe the price was set too
2:42 pm
high. >> that's right. that's putting downward pressure on the stock and downward pressure feeds on itself when the lock-ups coming up. if you have a stable stock that started stable i think the lock-ups would have less of an effect. all about expectations. those poorly perhaps in the long term an excellent business and not where the expectations were set. >> might have been a tough question but you gave a very good answer. you'll be back on in five year's time. >> i want to catch fencing. >> dennis, thank you so much for your thoughts. >> all right. seems to be another epic fail for the machines. we'll see what the traders think about today's trading trouble. best buy may be running on empty lately but is it time for amazon to buy best buy? herb greenberg argued that point today and we'll hammer him on it after the break.
2:43 pm
this is new york state. we built the first railway, the first trade route to the west, the greatest empires. then, some said, we lost our edge. well today, there's a new new york state. one that's working to attract businesses and create jobs. a place where innovation meets determination... and businesses lead the world. the new new york works for business. find out how it can work for yours at thenewny.com.
2:44 pm
looking for a better place to put your cash? here's one you may not have thought of -- fidelity. now you don't have to go to a bank to get the things you want from a bank, like no-fee atms, all over the world. free checkwriting and mobile deposits. now depositing a check is as easy as taking a picture. free online bill payments. a highly acclaimed credit card with 2% cash back into your fidelity account. open a fidelity cash management account today and discover another reason serious investors are choosing fidel and discover another reason
2:45 pm
orgdoes your cauliflowernic have a big carbon footprint? not at all. that's great. melons!!! oh yeah!! well that was uncalled for. uhh... mr. gallagher. incoming!!! hahaha! it's wasteful. you know jimmy. folks who save hundreds of dollars switching to geico sure are happy. how happy, ronny? happier than gallagher at a farmers' market. get happy. get geico. fifteen minutes could save you fifteen percent or more. i'm bill griffith. coming up, full market coverage of the market's reaction to the fed's latest meeting, as well as the new details of this
2:46 pm
morning's irregular trading here at new york stock exchange. we'll try to get to the bottom of that. took a decade to get the audit the fed bill through the house. does congressman ron paul believe there's any chance it will become law? former new hampshire governor and romney supporter john sununu explains why president obama's automotive bailout cost many americans their jobs. maria is back with me today. we'll see you at the top of the hour from here at new york stock exchange. back to you. brian? >> thank you very much, sir. was today's trading glitch a wake-up call? joining us, john brady, managing director of global institution sales at rj o'brien sales. you are not on the floor of the nyse, not on a computer banging out a buy and sell order but what was your take on what happened this morning? to me it seems like maybe yet another black eye for the computers. >> well, not so much a black eye, brian, but it was certainly
2:47 pm
an elevated risk off tone to the market in early trade. what traders fear most are the gaps that can take place during electronic trade. s&ps as you know down to 1270 level. held it and then found a range between 1270 and 1280 but from the opening through the fed meeting so there were few moments of anxiety and not so much as a black eye and the markets seemed to hold in there in material i trade. >> talking of the fed meeting, what was your take, john? what would you be doing on the back of this? >> well, mandy, i think you have seen a tremendous flattening of the treasury curve. the fed did interesting things here today and at the margin they disappointed the market. first, the five paragraphs in the fed statement, the second and third of that statement were unchanged. they left their time frame through 2014 and reminded the markets if volatility gets out of hand they can go ahead and move when they want which sort of raises two dates. august 22nd, the 50% date
2:48 pm
between today and the september 12th meeting and the friday august 31st speech by dr. bernanke at jackson hole. at the margins maybe disappointment for traders long 2015, 2016 treasury paper. >> how much could everything change tomorrow with draghi? >> it's a game changer. suggesting the markets really leaning towards draghi having that carte blanche, that blank check from the bundesbank to change the debt and the fed will be in a position to react. >> as liesman said, it would be great if the week is back to front starting with payrolls and then draghi and then the fed. thank you. >> thank you. herb is here for the case of why amazon may want to best buy. plus, the coolest story of the day, a group of die-hard who
2:49 pm
fans getting the chance to rock it out 33 years later. we are back after the break with this very interesting story. [ ] when she takes the starting block this summer, she's not just natalie coughlin. she's every 5-year-old who ever jumped in a pool and didn't want to get out. ♪ every coach, every rival who ever pushed her. she's the tip of a spear that goes all the way back to the beginning. it's amazing how far you can go with a little help along the way. td ameritrade. proud sponsor of the 2012 u.s. olympic team.
2:50 pm
2:51 pm
2:52 pm
. die-hard fans of "the who" are going back in time. the band cancelled a show back in 1979 because of safety concerns, but any fan that saved their unused ticket can use it for the who show in february. the old tickets will be auctioned off on e bay and remember, the song is the not "teenage wasteland." >> we've all done it, you've gone into a best buy to book at the products that you plan to buy online. herb is here to tell us why amazon should buy best buy.
2:53 pm
herb, explain. >> this is such a nutty idea, it may make sense. i was talking to one of my retailing sources about this today, he was talking about the concept, that you want to touch and hold it, but the show room is already there. why not go out and buy the bricks and mortar. if you're best buy, think about it. the sales tax issue is becoming less of an edge. the stock price is really high, they can come in there, restructure the thing, take all sorts of charges and it may not matter at this point because they're always thinking about the future. so you end up with something -- >> it would be a great deal for a best buy, but a bad idea for a amazon. >> it would saddle them with a lot of long-term issues in leasing. they have less traffic, but it takes amazon away from it's core
2:54 pm
competency. it's an internet retailer, not bricks and mortar. what they do better is warehouse products, ship products, collect money. and operating a fully fledged store with sales people and payroll is a big deal. >> it may not be the same type of store. you may create a show room concept. when i put this out on twitter and facebook, many people said this makes great sense. i was surprised by their action. there's something there, and let's not forget amazon is toying -- >> are they just welcoming walmart? >> maybe they need to compete with walmart on a different level. the bricks and mortar people are getting into their space, and amazon is -- >> best buy, they're biggest growth has been in their bestbuy.com, people buying
2:55 pm
online and picking up in the stores. i'm one of these people that likes to go look at a television set. >> you're not, why does everybody go into an apple store. >> to see it, touch it, see what it can do and see what it does. >> and amazon is toying with opening some physical stores because i want to show off some of their products. there's a point -- >> what does amazon have that you can't already show room zoom place else? >> that would be have very small store, my friend. everything else is -- >> no, they've become -- it's the same product, who is next, that you can get at bob's record store. >> i have to tell you something. i think the idea is not as far fetched as it sounds.
2:56 pm
let me say one other thing. it may not be that they buy best buy, but perhaps the show room concept for them is important, and if amazon wants to get to a $100 billion revenue, you get $50 billion here and $50 billion there, and then you get $100. >> we can read more about this on cnbc.com. and it's not a totally nuts idea. >> you're going mobile. >> why herb is not -- >> up next we'll gabrielle giffords you a home where the ghosts roam. tdd# 1-800-345-2550 account service fees. tdd# 1-800-345-2550 and the most dreaded fees of all, hidden fees. tdd# 1-800-345-2550 at charles schwab, you won't pay fees on top of fees. tdd# 1-800-345-2550 no monthly account service fees.
2:57 pm
tdd# 1-800-345-2550 no hidden fees. tdd# 1-800-345-2550 and we rebate every atm fee. tdd# 1-800-345-2550 so talk to chuck tdd# 1-800-345-2550 because when it comes to talking, there is no fee. 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 to receive your free dvd and booklet with no obligation. it answers questions like how a reverse mortgage works,
2:58 pm
how much you qualify for, the ways to receive your money, and more. plus, when you call now, you'll get this magnifier with l.e.d. light absolutely free. when you call the experts at one reverse mortgage today, you'll learn the benefits of a government-insured reverse mortgage. it will eliminate your monthly mortgage payments and give you tax-free cash from the equity in your home. and here's the best part -- you still own your home. take control of your retirement today. ♪ ♪ it's something you're born with. 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.
2:59 pm
to dream. to create. to work. if you're going to do something. make it matter. an american ghost town is up for grabs. you can buy woodside, utah. they peaks in the early 1900s. you'll get old buildings and a geyser. >> and apparently, that guy lives there. >> and bob. >> stocks go up after the fed announcement, what will the final hour of trading told? we don't know but the markets

101 Views

info Stream Only

Uploaded by TV Archive on