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tv   Street Signs  CNBC  August 22, 2012 2:00pm-3:00pm EDT

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six stock picks for the 20 and 30-something set and debate the death of the pc and maybe the one thing that can save it and help dell and carnival cruise lines crazy booze cruise plan. is it epic or an epic fail? we'll begin this hour with steve liesman. the key fed minute headline. >> the minutes of the august meeting, many members saying additional monetary accommodation is likely warranted unless the economy improves substantially. the fed offering something of a litmus test for why it won't be additional quantitative easing. additional members saying it could foster rapid improvement and speed up the recovery and expressing support of the forward guidance and deferring until september. looks like a thumb's up or down vote at the meeting coming up. several members with the importance of clarifying the
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economic outlook. more time is necessary they say to evaluate the effects of a decision in the june meeting for operation twist. some members questioning whether the qe would help the economy in the current situation. some members, again, concerned about the effects of additional qe on the market and the fed coming in and taking too much of a given security but the fed is discussing maintaining forward guidance even in a recovery. now, there's a fed staff study that shows there's capacity for additional qe without disrupting markets. that's a big discussion. okay. the minutes saying that the persistent moderate growth to leave the economy susceptible to additional shock and many members expect the unemployment rate to remain high and inflation below the 2% threshold level and studying three new things. the ecd decision to cut the deposit rate to zero. the bank of england funding for
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lending scheme in which they're providing money to the banks to lend to households and rule-based monetary policy. guys, let me handicap this. looks like forward guidance is almost a given from 2014 at the september meeting. qe, it looks like it's on track barring a substantial improvement in the economy. but when's not clear is that on track for september or a meeting thereafter? that's the discussion we'll have. >> kind of spoke with more urgency of the potential need for helping the economy. >> it is this close. the bar why they won't doe it now. they need a negative to stop them. >> we saw the dollar fall as the minutes came out. stay with us, steve. let's bring in managing direct or the and chief financial investment in bank of tokyo mitsubishi. what is your read on this in terms of what it means for the markets? >> just hearing steve read out
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the headlines it sounded interesting to me that they used the word many. >> yeah. >> it sounds like they're very, very close to qe3. that's pretty much the fed chairman's driving this discussion anyway and you know he's very upset about the quote/unquote stubbornly high unemployment rate which is 8.3%. >> chris, might be a moment of a lesson in reading the fed minutes, if you don't mind. many members are voters and participants, right, chris? >> no. i think they're very colee jal. i would say many is all 19. >> many members or participants or in the meeting and members twr voting members. >> because that matters. a fisher in his views -- >> less important, right. right. >> chris, can i ask you this? >> sure. >> seems the economy is in a recovery. almost every piece of economic data have gotten better.
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housing is getting better. unemployment still is high and come down. why do you think the fed is still so much on this maybe qe3 board? >> i think it's being driven by the chairman. i think the unemployment rate at 8.3%, that's upsetting to them. i keep looking at things like business capital shipments, capital spending, industrial production, those two series don't argue for any additional easing whatsoever. i have my own opinion. i'm not one of the 19 on the committee, but for the fed to come out and take additional steps without a downturn in activity i think it's a bridge too far -- >> isn't it too much to say the good news of brian raising gdp forecast like 1.2 to 2.8 and the math is simple. doing below 2.25, 2.5 you don't bring down the unemployment
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rate? >> i don't agree with that. there's a discussion of potential growth. for all i know potential growth is 1.8% gdp growing 2.6 that will be enough to bring down the unemployment rate but, you know, the am missiomunition of the fe hand, rules based, they're discussing. the unemployment rate -- they have to be assured unemployment going to 7.0. i think they have run out of patience, especially number one, the committee run out of patience. >> i want to talk about what this means for the market. there's gossip that bernanke watching the markets and with a gain of about 12% so far this year in the s&p 500 there were some saying there's no argument for qe3. we're currently seeing the dow, s&p cut the losses. nasdaq is positive. not exactly what you would call a massive rally on the back of this, right? does that suggest that the markets factoring in the
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stimulus? >> yeah. that's interesting. i think the washington consultants have come up with the idea that perhaps bernanke is watching the s&p 500 like a hawk and in other words if the stock mrkt's up 12% year to date s&p they do nothing, no qe3. if it's weak they come out and do qe3. i think that -- i'm not sure that's accurate. that sounds more like the greenspan era fed to me. he was very -- always looking at the stock market as a leading indicator. i don't think the current fed chairman is. >> okay. gold spiking, as well. the dollar down on the back of these minutes. steve, thank you so much. chris, thank you to you, as well. over to you, brian. we coined the phrase hopium. well now we are inventing another word. ho home-pium. >> no, no. >> it's a dumb word.
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>> you can do better, bri yn. >> so good at this stuff. >> maybe he can't. >> good news today. toll brothers saw 46% increase of profit in the third quarter. they delivered more homes at higher prices. that takes a big truck and existing home sales up 2.3% in july. can it last? let's ask patrick new port at ihs global insight and lauren chun at national association of realtors. lawrence, we have seen pretty good numbers, not great. i'm surprised at your comments to us preinterview were not more optimistic. >> well, the housing market is improving and but it's an incremental improvement. the's still a lot of friction in the marketplace. the mortgage availability still remains overly stringent and holding back the recovery is lack of inventory in certain markets. fewer homes available for sale, fewer homes will get sold.
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>> when do you see a real turn then? or do you? >> well, the market is improving but it is underperforming in relation to what it could be given the job figures, the jobs market is not healthy but it's improving. we have added roughly 4 million jobs in the past 3 years. that's expanding the pool of eligible buyers. then you have the rents rising. extremely affordable condition. a typical home in many middle part of the country, $130,000 at a current mortgage rates one is looking at $500 per month mortgage so these are extremely affordable homes for people with job, decent credit. yet, the mortgage underwriting standard is continuing to hold back the recovery potential but having said that, there's more upside than downside potential. >> we certainly hope so. but it feels like years, patrick, asking similar questions, too. have we seen a convincing bottom in housing? are we seeing a convincingup
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turn in housing? can you answer that for us? >> hopefully yes. i think the market started to turn a year, a year and a half ago and the improvement so slow and hardly noticeable. now with housing prices recovering, everybody's taking notice. but we are definitely seeing an upturn in the housing market. it takes a listening time to get back to normal. we have 5.5 million homeowners behind in the payments and over 10 million underwater. and it's going to take a long time for those numbers to come down. >> i want to ask you as a follow-up to that, patrick, seeing mortgage rates creep up on the back of higher yield and mortgage rates last week at the highest since late june, do you see mortgage rates moving higher and snuff out the recovery? >> we see mortgage rates very low for quite a while, at least until the fed raises interest rates. if they go up, if they go up because the economy's improving, that would be good news for the
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housing market. low mortgage rates haven't done all that much to stimulate, for example, existing home sales. we have record mortgage rates and existing home sales have posted the second lowest number of year and haven't improved that much over the last year, year and a half. >> lawrence, something i brought up in the past is i worry about the low rates long term locking people in to homes if the rates recover. could what's good now be very good bad five or ten years out? >> most of the moves are due to changes in job circumstances or changes in family. you know, people have additional child, they want to expand. even though rates lock in effect will be present, the general movement and people improve their economic position over their lifetime and improve on the residence they live in and continual movement. right now, still underperforming but i should say that home sales are roughly 10% higher from one year before prices up high
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single digits. so these are very improving signs but further news to be done to get us back to normal. >> you know, things are improving, lawrence, but at the same time, you feel like the government is still out there trying to help the distressed segment of the market. i want to bring up something announced yesterday to make it easier for month of november to be able to make our homeowners be able to short sell their homes. is this something to potentially depress prices in neighborhoods where there will be potentially a lot of short sales? >> no. this is a very positive because short sales are taking place but it's taking extremely long time. three months, five months, six months so this new government rule will shorten the process and furthermore some of the second lien mortgages is wiped out and holding back negotiating for on the short sales but now with the new rule you will make it much easier to complete the short sales so actually it is a
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positive development for the housing sector. >> and patrick, last week kind of quietly had fannie and freddie changed by the federal government. some people don't like the word nationalized. i spoke with a couple of people fearing that could result in principal write-downs. what is your take? >> that's not in the cards they want to do as far as i know and ultimately it will be -- that's going to be their policy. they haven't said they're going to do that and until they change the head of fhfa that's probably not going to happen. >> patrick and lawrence, gentlemen both, thank you. with a market flash from the lovely courtney regan. >> thank you. speaking of homes, williams sonoma with profit up 10%. sales the best they have seen in a year. haverty furniture and pier 1 and bed bath & beyond trading higher
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on the news thank you very much. next on "street signs," young money stock plays y. the 30-something investor should stock up on barbies, beamers and baby books. pc certainly on a death watch. tablets hammering sales a. white knight may be around the corner. we'll tell you who or what that is, coming up. 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. with scottrader streaming quotes, any way you want. fully customize it for your trading process -- from thought to trade, on every screen.
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take a look at the markets post fed minutes.
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currently down and a little bit better than before the release of the fmoc minutes. the dow was down 83 at the session low and s&p 500 off the session lows and both dow and s&p experiencing the largest two-day losses since august 1st and 2nd. the nasdaq bouncing back after the fed minutes somewhat briefly edging the way to positive territory for the session even and let's get straight down to mary and rick. i'm going to leave rick to mr. hope-ium but, mary, what are they saying as far as the trades? >> they were saying it shows it's baked in to the markets so, of course, what you have is the additional easing could come soon is moderately bullish for the markets and off their lows of the day and down now about 10 points higher than prior to this. still under pressure today and did see larger moves in some of
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the riskier assets. s&p materials group, one of the weaker performance bouncing back strongly on the minutes and dollar moved lower. below the 79 yen level and we saw a recovery in both oil and gold which were weaker ahead of those minutes. mandy? >> okay. i'll hand it over to brian with rick. >> rick, i want to ask you something. i was told in the last segment of principle reduction you were listening and i want to read a comment of a hedge fund manager that doesn't want to be named. he responded he said both sides of the aisle want them dead so they're dead and thinks this paves the way for principle reduction at fannie and freddie preelection. your thoughts? >> anything can happen in front of the election, especially if the polls change dramatically. i think that's sad but what i believe. and in terms of housing, i think
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principle reduction is an absolutely horrible reprehencible terrible idea. the rule of dow contracts, bondholders, it's terrible. and i hope that the notion of the rule of law is a platform for this election because i think it's one of the fundamental cornerstones of why the last century has been all about the united states of america. >> thank you, sir. i appreciate that, rick. we'll move on from there, i guess. the segment comes courtesy of the great producer kevin flynn in his late 20s, early 30s. he won't say. he says his friends want to be in the market and facebook stock scares them and nearly 700 a share apple is too expensive for them. what strategies should the cocalled young money investor use? let's bring in howard lindsen and is it bet tore buy one share of apple, call it $700 or 100 shares of a $7 stock?
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>> it's the question that always gets asked. first of all, sparky. maybe the first asu alum on cnbc. thanks for having me there. i'm always for my clients and kids even is buying the best companies so with google right now and apple if you can afford two or three shares, that's what you should do. they're the best companies and happen to be a lot of great companies and a lot of great companies in the $10 to $30 range and so it depends. what you have affinity to, what you feel you are watching, trends that you feel you're a part of and that feel unstoppable if they're $10 or $20 stocks i'm all for it. in software and in the toy business, i think there's some great ideas out there. >> robert, do you agree with a young investor like kevin flynn and better off buying one good quality stock like google? >> yeah.
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absolutely agree. apple and google are both fine companies but there's some people, young investors and might have only a couple hundred bucks to get going and plenty of good names in the 20s and 30s that investors get started with, equally as fine as apple and google. >> like, like? give us names here, robert. >> a company we like right now is an aspirational company. bmw motor corp. bmaxy. the thing we like about bmw, young investors, not necessarily speculation. 90% of the returns have come from dividend and dividend growth so while speculation could play a part they should focus on high quality dividend-paying stocks, bmw pays a 2.6% dividend and covers the
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gam gamut. they have bmw and mini and for the 1% of the 1%, they even own rolls royce. >> howard, you have three picks and share one thing in common. they're all in technology. >> they're in technology. but technology's a broad term. the first one that could be interesting to everybody is a stock i recently bought around the toy theme of leap frog. i don't use their products and i don't necessarily love their products but i love the industry. when we talk about china and outsourcing, well, right now the most powerful toys in the world are in everybody's hands. that have ever been created, china can't make them. they're 3gs. iphones. refurbishing apple toys around plushes is a company that i invested in but i think start-up and leap frog and acquisitions in the toy space. i think leap frog, hasbro mattel to name three of them benefit as
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apple continues to dominate with the tablet and toys move beyond the ipad to actually living, breathing things that kids use and smile and learn from and then the other two companies, cornerstone on demand and enterprise technology companies, both cloud based. software's eating the world and i agree with them on many levels there and two companies underdiscovered, underloved, recent ipos. really doing well. near or at all-time highs so don't chase them. when you're young, build a list and three names that you can start with. >> i believe just real quick, howard, you have a stock app to help young investors, as well. right? >> yes. thank you, mandy. the stock iphone app, easy. open it up. look at what's trending every day. check it twice a day or build a very simple watch list. red, green. learn context.
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single important thing for young investor is prices matter. you learn how to read the market and then learn the language of the market. >> robert, you have got votophone and mattel on the list and another barbie on the barbie -- >> yeah. >> sick. >> two quick comments to you, horde a. i just tweeted that out. also on stock twits and i love arizona state because you're the only school that has worse uniforms than mine at virginia tech so thank you for that. >> i'm sure he's always pleased. >> howard, robert, thank you so much for your time. >> thank you. coming up, the ads are nasty, rhetoric is real confusing. next a weekly segment that tries to separate fact of fiction in the presidential campaign. with corn prices soaring we'll show you an under the radar high flier helped by higher corn prices. that name ahead. ll. look at these streaming charts!
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from now until election day, "street signs" the home of our team on a fact checking patrol. every wednesday we'll be trying to separate fact of fiction in the presidential campaign and this week the welfare to work and president obama tried to
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distance himself from the steelworker blaming mitt romney for his wife's death. a lot of things to get through. senior correspondent scott cohen is here for us. >> wading in to nice easy territory. nothing risky. paul ryan admits requesting stimulus money for his district and said the staff drafted the letter and regardless it's clear that the obama stimulus did nothing to stimulate the economy. so we decided to check on the project that is ryan or his staff helped get funding for. the most ambitious was a $20 million grant in the wisconsin energy conservation and the letter said create or retain 7,600 jobs over 6 years. two years in, the agency reports shy of 156 jobs and counted under the law the actual number could be a lot less a. grant to the milwaukee area technical college created four jobs and retained another 20 according to the college and $190,000 grant
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for energy research is 1.3 jobs. altogether, about 182 jobs but at a cost of around $21 million. the romney campaign is out this week with a new ad accusing the president of e lem nating the welfare to work requirement. >> on july 12th, president obama quietly ended the work requirement cutting welfare reform. >> this is what the administration did, a memo of health and human services testing alternatives as long as they're designed to improve employment outcomes, the memo specifically says the work requirement remains. in the news conference this week, president obama distanced himself from a superpac ad linking bain capital with the death of a steelworker's wife. >> i don't think that governor romney is somehow responsible for the death of the woman that was portrayed in that ad. but keep in mind, this is an ad that i didn't approve. did not produce.
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>> maybe not but we found a slide show on the obama campaign website quoting an employee of 28 years whose wife died of lung cancer after he lost his health plan. that slide show remains on the obama website entitled romney economics and, mr. president, you did build that. you can help us with the fact checks because the e-mails are nice and polite and courteous. >> you will be back next week same time, right? >> yep. >> get fact checking. thank you very much, scott. all right. ahead, it is a mall rat edition of "street talk" and ikea's plan to take over the world. and bringing in the business, all the booze details coming up ahead.
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it is time for your wednesday edition of "street talk" so let's get straight to the first one. more rat stocks for you. american eagle moving higher on the teen retailer expects to what? meet or beat third quarter estimates? >> yeah. you know with respect to dickens, first two stocks 0 a tale of two companies. first one here, american eagle higher. in line. they raised the fiscal year 2013 guidance. best thing is they're able to sell more goods without discounting as much. right? higher margins. they also said they were, quote, really pleased with how well back to school is going. that stock up 42% year to date. >> i did my back to school already. >> you're going back to school? >> yeah. giving up the career as an anchor and learn something again. a speedy safe to express not such good news for this e tailer. >> other side, right? not the exact same store as american eagle but clothing
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retailer, mid priced. sales grew slower than expected. stock down 11% here. they cut the full year earnings discount by a dime and same store sales growing but less than initially forecast and p promotional activity, having to discount. by the way, only opening up 28 stores instead of 30. that stocks's down 32% year to date. >> another mall staple, williams sono sonoma. their shares up over 10%. >> there's an aussie angle here. pottery barn and both seeing sales up over the quarter. they also as a company guided the third quarter higher plus going to open up a first company operated stores outside north america in -- >> sydney, australia. bondi junction. >> whatever that is. >> come on. you cannot be my co-host.
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>> near the beach? >> not far. >> close enough. >> the junction by the beach. >> killing it. >> okay. let's move from the mall to sin city. las vegas sands. also a bounce today. >> mario on "squawk box" said it was oversold and liked it here and also upgraded by imperial capital thinking the stock is cheap on a relative valuation to total enterprise value. less than 12 times tev and attractive. on monday, stern and ag made positive comments about makau and mildly higher for the year. >> and positive comments of macau is relief and worried of the chinese high end and whether they would come or not. let's wrap it up with clear wire taking it on the chin. the stock already selling -- oh, like that. $1.66. >> rbc capital markets
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downgraded it and slapped a $1 price target on the name. that is about a 40% drop from here. you have the ceo filing to sell 63,000 plus shares. downgraded two weeks ago. that stock down nearly 8%. >> what i don't get, this is a growing industry. how's it not making money? >> massive capital intensive. you have to spend a lot of money. >> yeah. the drought gripping the nation still. hurting crop farmers and cattle ranchers. a business that's booming in the dry times are rendering companies. rendering down animals in to feed and other goods. darling international is the country's largest and the only publicly traded rendering firm and ceo joining us now. the stock up 25% year to date. thanks for coming on the program. we have grease prices higher. we have corn prices higher and good for you and farmers maybe move to more of your feed stuff and you got energy prices lower.
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is this really sort of a perfect storm time in terms of good news for your industry? >> yeah. for our industry i would say it's a perfect storm and down from the record setting year here in 2011. clearly the drought this year once again set us up for all very, very positive fundamentals in all sectors of the animal feed, the renewable fuels and fertilizer sectors. >> is there a point of which high corn prices start to hurt? >> i think the answer's yes and i mean unfortunately we do benefit with higher corn prices and soybean prices and global commodity prices but kind of where we're at, territory we're in, the disaster out there in the midwest. i've had the luck of going out and seeing a lot of these corn fields and soybean fields. we have not seen anything like this. it's being compared back to 1988 but from my survey i think it's
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probably worse. i don't know that the animal production side is going to be able to sustain the levels that it's at without a shock and being able to pass through some of the higher ingredient cost to the consumer eventually. >> we look at grease prices, a staples and doubled in the past 15 or 20 years from 20 cents moving up over to 40, 45 cents. are they peaked? >> well, the interesting thing is for about 25 years we spent more time underneath 20 cents and now for the last 5 years more time over 30 cents. the interesting thing is that while this was a by-product that was pretty much destined to be an animal feed now it's become the cheapest btu in the world to convert to renewable fuels and so at the end of the day whether we're at 35 or 45 cents we're still quite a bit discount to the edible oils throughout of soybean oil and palm oil and i think we still got more upside as we as darling international
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and volero start their facility diamond green diesel this winter. >> what's the biggest risk to darling right now? >> right now, i would put them in three categories and three would be the regulatory risk. any abrupt change in washington relative to regulation from alternative fuel to animal feed. the second would be just the impact of grain prices on our supply base. i mean, we are in a partnership with the supplier base and the protein production companies and they came through some tough quees in '08 '089 and rebounded and hit hard again and then the third risk is any abrupt change of natural gas prices as the company has some pretty good exposure to higher energy as as we evaporate or process the material. >> do they overstate the risk of mad cow. one cow dies and makes headlines and whacks the rendering
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industry and shines a spotlight on it. is the risk over or sitting back there? >> dates back to 1997 and ten years to eradicate the disease for the most part it's eradicated. occasionally a sporadic animal, amazingly some of the media out there seem to find the old video clips that date back 15 to 20 years ago and show us but at the end of the day the consumer recognizes this our food supply chain is safe and probably the safest in the world today. >> randall, thank you very much. appreciate this. >> i want to bring up what's happening with the euro and watching while you were doing that interview and back over 125 for the first time since july 5th on the back of the minutes. remember, as soon as those minutes released we saw the dollar fall back as i guess there's an expression of a little more urgency of the members of the fmoc about the need for accommodation in what they see as a weak economy.
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coming up next, ikea-topia and the latest cruise line of an all you can drink plan and not talking about water. were they drinking when they created this idea? >> coming up, that refinery fire and the spike in oil prices hitting california, particularly hard. any relief in sight for the most populace state in the country? we'll investigate that coming up. 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. who have used androgel 1%, there's big news. presenting androgel 1.62%.
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i'm bill griffith. at the top of the hour, hewlett-packard shares down this year. should you buy the beaten down tech giant ahead of earnings? we'll look at the charts on that. who is to blame for overvaluing facebook's ipo? facebook or lean underwriter morgan stanley? you wouldn't throw money in the garbage so why do americans throw good food in the garbage? shocking details of a new study coming up. see you at the top of the hour from the new york stock exchange but first "street signs" and mandy. mandy? >> getting oil shock this summer. oil on a steady march higher since the end of june pushing up
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gas as you can imagine going to the pump. just as drivers hit the road just before labor day. california always feels the most pain at the pump, though. but it goes beyond that. our jane wells is live at the gas station in burbank. jane? >> reporter: you know what? mandy, take a look at this. cheapest gas is just shy of $4.20. any spike is exaggerated here. partly because we have to form late our gas specially in the summer and we have to ship in crude for much further distances than anyone else and then the refinery fire earlier this month in the bay area and california now one shutdown away from a crisis. european prices in the two weeks since that fire gas up 40 cents here and the national average is $3. 0 a gallon, $4.12 in california and happened fast. >> it goes up like that. and then it never goes down. >> horrible.
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>> it's horrible? >> i'm paying a fortune. i must pay, you know, a couple hundred a week. and that's a lot. >> it's ridiculous but i walk a lot, too. i'm very environmental. >> not like you go to 99 cent store and buy a banana cheaper than it is. you need gats. >> we're kind of stuck here. we don't manufacture here in california. we can't import because of the requirements of our air pollution problems. >> reporter: the oil price information service says the biggest fallout isn't gas prices. >> refinery makes a lot of diesel jewel and jet fuel and the prices that i think in the second half of this year maybe they're not going to attract the attention of many americans but they're going to attract the attention of people who watch inflation because those are the number that is are going up. >> reporter: he says that when
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gas above $4 it impacts decision cession their spending. what do you think of gas prices? >> kind of high. >> reporter: they are. ucla forecast says that the refinery keeps gas 30 cents a gallon higher an shaves a half point of the growth for the year of california. back to you. >> driving like $100,000 s class mercedes. >> reporter: beautiful. i don't think it's his. i don't think it's his. >> whoa. that's an s. >> nice line. >> for someone at one of the studios. >> wait until he goes in to buy some chips and jump in there, jane. thank you so much for that. >> reporter: you got it. all right. disaster deyour time. what else can we say about rim? herb? >> the stock keeps going lower. >> and? >> it's -- no and. >> or -- but? >> there's no but here.
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watching this. one of the stories of the journal looking at the declining cash in the -- >> what else are we watching? >> declining cash overseas i want to say. >> that was not the disaster deyour. >> that was your disaster du jour. >> now we have three including the segment. what is your yours? >> blithe. take a look at blyth. direct marketer of candles. down 7% earlier. down 6%. there's no reason to tell. this company announced to spin off visalus a fast-growing multi-level marketing company. i did a piece about it here and talking about it the other day and no sooner did i do that than people, some of their distributors put that clip on the website edited as if i was saying positive things about the company. tells you a lot. raises questions. >> they did what? >> in my mind. >> edited it? >> now that's pulled off the
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website and you can go to the distributor websites and looks like i'm endorsing the company. >> wow. >> no, i'm not. >> wow. >> i'm not happy about it. >> i bet you're not. new hotels and now ikea with a commercial district in germany. we're talking shops, parents, office space and another project for london and we told you about the to ray in to building 100 hotels around europe and now it is the city. in germany. >> all right. coming up, the big drop in dell, hp lower ahead of earnings. >> can anything save the pc? windows 8 perhaps. or is the appetite for apple insatiable? oahhh! [ male announcer ] it made a big splash with the employees. [ duck yelling ] [ male announcer ] find out more at... [ duck ] aflac! [ male announcer ] ♪ ha ha! [ woman ] welcome to learning spanish in the car.
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take a look at dell down almost 7% today. so we're asking, it really adds fuel to the death of the pc, but could windows eight be the white night? we have a two guests with us now, great to have you here, david, is the pc did or will
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windows eight save the day. >> the economy, globely, is going into a slower economic growth hoed. and our view here is that a recovery will not be lead by old technology, but the desk top pc's and laptops, but my smart phones and tablet pcs. they're going to make sure that windows eight is on all of the devices. microsoft don't want to be wedded to old form factors. >> so, amid, what do you think? >> the one point i would add to that is the new success in apple, but i would say broadly is we still think there is growth in the business, a three to five% low growth industry. i think someone like dell and hp is reality that guys like acer
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are getting increasingly aggressive in pricing. you know, we do see growth, it's just coming to different vendors, but not dell. >> i want to follow up, dell, i guess sort of sees the writing on the wall here, and it has been moving itself away which are half of it's revenues. it's been making acquisitions in places like store rage and software, will it be able to save the stock. >> the question comes down is can they get away from the pc department. so far, the answer to that has been no. we may see a potential benefit with the stock getting more aggressive and doing bigger deals verses the smaller deals. that will be an exit out of the
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business model. >> spending more money is not necessarily the answer, spending it smarter is. and i don't contest the idea that these two companies, hewlett packard and dell, but for intellectual property. rim and nokia, i would argue, are companies with known franchises and substantial intellectual property port foal yous and both companies could be acquired for not a tremendous amount of money. the argument that they should do bigger deals is not one that holds a lot of water. one has to be more intelligent about how they spend shareholder funds. >> it's not quantity, it's quality, right? thank you for joining us, amit has a sector perform on dell but he cut his price target to $14.
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day package. it turns out royal caribbean already offers a similar program they have been doing for about a year. we wanted to know what you thought about all of this. >> paul stephen said not all that different than inclusive resorts, downside is more people and you can fall off the vote. good check? bad, check. >> and one is that i went on one in mexico and met my wife of 38 days. >> chaz, have you been married for 38 days or did it only last 38 days. it proves the point about shots shot, shots. >> i also feared the boat wl


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