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tv   Squawk on the Street  CNBC  August 30, 2012 9:00am-12:00pm EDT

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room for that. we've done everything we can. we had critically important years, '07-'08. let's get on with the growth strategy. >> thank you for your time. pleasure having you here today. >> thank you. >> thanks, governor. make sure you join us tomorrow. "squawk on the street" is next. ♪ good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with kelly evans live at the nyse. melissa, jim and david have the week off. some worries about global growth around the world overshadowing a jump in personal spending here in this country. futures probably the weakest -- meanwhile, in europe angela merkel visiting china. huge delegation there.
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we'll talk about that in a moment. german unemployment rising from a fifth consecutive month. we begin in tampa where paul ryan and condi rice give speeches. ed rendell and carly fiorina. 24 hours away from ben bernanke's speech in jackson hole. markets are wactching and waiting. german unemployment rises again as merkel gets an earful on her trip to china. retailers blow it out in august. gap, pier 1, target, macy's, nordstrom, costco exceeding estimates. will the stocks add to already impressive gains? pandora shows you really can make money in mobile. earnings and guidance were above estimates. we'll hear what the ceo is telling cnbc. tonight mitt romney will accept his nomination for president of the united states. john harwood is at the rnc in
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tampa with the latest. john, your review of ryan and rice and your expectations for tonight? >> reporter: look, everything that's happened so far at this convention is building up to one hour tonight when mitt romney's going to address himself to the american people. and try to forge a connection. he hasn't been able to so far. last night we got the final prelude. paul ryan's speech, democrats and republicans that i've talked to both agreed it was highly ef effective. unlike chris christie paul ryan did not skimp on praise for the man who put him on the ticket. >> our nominee is sure ready. his whole life, his whole life prepared him for this moment. to meet serious challenges in a serious way. without excuses and idle words. after four years of getting the run-around, american needs a turnaround and the man for the job is governor mitt romney! >> now, of course, in this very
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close race with president obama, it's mitt romney who has got to take the ball into the end zone. but he warmed up for that yesterday in indiana with a speech to veterans where he made clear that he is quite comfortable running with paul ryan and gave a little preview of what he's going to say tonight. >> paul ryan and i have a plan to keep america strong and secure, prosperous and free. where the president has failed to lead, we will protect our national offense from cuts that jeopardize critical missions. where he's let down our veterans, we will welcome them home to a booming economy and the jobs they need. where he's dodged the tough choices, we'll confront them head on and deliver a better future for americans of this generation and the next. >> reporter: mitt romney's challenge is the same that it's been all week, which is try to reach out to undecided voters. especially women. and to do it by linking qualities about himself and his experience to the solutions that he's offering to the country. we'll see if he can meet those
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expectations. >> yeah. john, this -- this american legion speech yesterday talking about how he wants to protect defense from cuts even though they're obviously runs so hard on a fiscal responsibility platform, i mean, does he give some clarity on the sequester and what he's willing to sacrifice and what he's not? >> reporter: no, he won't give me clarity to that. this is one of the ways in which both paul ryan to some degree but chris christie even more was somewhat discordant with what mitt romney's message was. both of those men said we'll stand up and tell the truths about our fiscal situation. mitt romney is promising tax cuts, higher defense spending, protected social security and medicare benefits and lower deficits. that is not possible any time soon. and so i wouldn't expect mitt romney to try to square the circle. that's more a challenge for the debates with president obama. i expect this to be at a high -- high tone. and he'll sketch out the agenda
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that they have, but not in any granular detail, i wouldn't expect. >> what about this mystery guest we keep hearing about? is there any truth to the clint eastwood rumors? >> reporter: well, i don't know if the clint eastwood rumors are true. that seems to be where the speculation is focused. that would be an important bit of star quality for this republican convention. especially since clint eastwood appeared in that super bowl ad and seemed to be defending president obama's policies on the auto industry when he talked about detroit being back. clint eastwood is a cultural icon. especially for older americans. and, of course, older americans is a constituency where mitt romney has built a significant lead over the president. he needs to protect that lead to win. >> all right, john. good stuff. going to be exciting to watch tonight. john harwood in tampa this week. jobless claims coming in unchanged for the last week. july consumer spending posted its strongest rise in five
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months. all ahead of tomorrow's anticipated jackson hole speech by fed chairman ben bernanke. guys, good to see you. tom, i keep hearing get ready for disappointment. markets are going to be tis appointed. i wonder how much you think the market really expects something from bernanke tomorrow. >> from all the investors i've talked to, there's a surprising number actually working this week, i think people's expectations have been really dialed down. i think in some ways people are just expecting to hear not much, actually, coming out of jackson hole. >> so if, in fact, that's what we get, is there a downside to this incredibly tightly wound and concentrated market right above 1400? >> you know, what's interesting is almost everyone that i've sort of seen in writing is basically saying that if we don't get anything, the markets are going to sell off. that's basically, i think, a consensus baseline view. my expectation is, look, this has been a sort of thinly traded market. people are underinvested.
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we're seeing some better data on u.s. consumers, u.s. housing, u.s. construction. we've got sort of a, you know, an open window into election day before the fiscal cliff becomes prominent. i think the market probably rallies, actually, if nothing happens. >> maury, we've got some better data today with regard to consumer spending and maybe some of the same store sales strengthening we've seen. but at the same time, it's not all positive in that core pc figure did tick lower. what does this latest batch of data do to alter your view on whether more qe is coming? >> i think they probably won't. it's obviously a close call. but we think the odds slightly are in favor of them not doing the qe. and what you really think will be very important, what you really keep your eye on is the unemployment rate next week for august. we think it's going to be flat at 8.3%. if it goes up, they could do the qe. we don't think it's going to go
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up. one other point is that as you said, the july spending numbers in unit terms were pretty good. so far, at least, these retailer numbers look good in august. if people are spending money, the fed should not be in any hurry to ease policy. final point, he will lay out, though, his options and his willingness to move, if necessary. i'm just not quite so sure it's absolutely necessary at this point. >> tom, i'm curious if the method matters as much as the activity. meaning, is anything that's slightly dovish coming from bernanke going to support the market, or does it matter whether he seems to be talking about qe versus cutting the interest rate on excess reserves versus some of these other strategies? >> well, you know, i think in some ways i think what's important to markets is to know that central banks are really sort of ready to protect markets if we get sort of any downside draft or some downside shock. so i actually don't think the method matters too much.
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in some ways if nothing's happening, it's a little comforting to markets. it really means that things aren't so bad that we actually need intervention. >> maury, you know, there is some chatter amongst some investors that we talked to that qe-3, at least in the short term, might lead to higher commodity prices if the fed is a political animal, that's not what you want to have going into november. is a non -- is a political move to actually lay off a qe-3 and try to bring some of these at least consumer directed commodity prices down ahead of the election? >> well, i think the most important thing for the fed is the unemployment rate. and that it's not as if they're -- the number one consideration has to be the economy. and at any point in time if the economy really, sincerely, genuinely needs help the fed's going to come in there and do it. from a political standpoint, you know, people say the republicans would object. if they do a qe-3.
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i would contend, though, that if the data are so rotten next week, and they need to do a qe-3, republicans can say look how weak the economy is. bernanke had to step in again. >> true. finally, tom, you've been relatively bullish for the remainder of the year. s&p called for 1500 if we punch through 1420. piper talks about the first legs of a new bull market. are you feeling more emboldened on your bullish stance late oi or not? >> yeah, carl, we are, actually. we just published a piece yesterday about u.s. housing. you know, frefrg we've studied looking at past cycles this looks like we're at the front end of a three to five year up cycle in residential construction taking starts towards 1.3 to 1.8. very bullish for domestic cyclicals. i feel very good about really wanting to be long markets into election day. i think the election outcome obviously depends -- really will govern where we end the year,
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though. >> that housing call yesterday was interesting, though. i think you're talking about some names 30% to 200% upside relative to the s&p, right? >> that's right. if you compare the cycle there's nine groups we've looked at to the three prior cycles. it's following a classic road map. it does look like we're sort of seeing a lot of confirmation. you're absolutely right. these are basically going to be doubles and triples over the next three years. >> tom, maury, thanks guys. going to be an interesting day both today and tomorrow. see you later. >> thanks. >> thanks. want to bring your attention to amazon, by the way. bottom of our screen. the company saying the kindle fire is sold out. and that the kindle is now capturing 22% of u.s. tablet sales. hard to read. i mean, it's arguably -- you could argue the stock would open lower if, in fact, they're facing some inventory pressures here. >> how often have we talked about the kindle, carl, in the last six, nine months. not that often. really it's been the slow grow area into market. they've taken significant share
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from competitors. i believe this is an android based system. interesting in light of the ruling we got at the end of last week regarding apple and samsung to see if that has any impact going forward. >> of course, they're very stingy with details op margins and profitability on some of these products. the stock's had a niece run. interesting piece in week in the "time"s about their web services business which some think is maybe 10% of the size it's eventually going to be. >> the focus for amazon will always come back to margins, to operating margins and sustainability. in this case at least with the kindle they are going -- as they so often to. they love to draw attention whether it's a record holiday sales season or record kindle sales or whatever, very consistent with amazon's strategy. >> we'll keep it. that will be one to watch at the hope as well. retails is in the spotlight. costco, limbed cab target, gap, macy's posting better than expected same-store sales for august as families begin their back to school shopping. we've seen some blowouts. i don't think i've seen some of these metrics before.
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nordstrom 20 plus percent on an 11% estimate. >> right. some of the companies, gap, for example, we know they've seen same store sale declines for quite some time. to see a rebound isn't that surprising. others executing well it speaks to strength. comes at an interesting time because in august we know we had consumer confidence falling, gas prices up. yet same-store sales out performing. across the board last i checked we were surprised -- average surprise was two percentage points. in some of the cases you mentioned it certainly has been much stronger than that. >> limited one to watch. if you're wondering what the secret is, it's largely victoria's secret. 32 consecutive month of 7 percent plus growth of same-store sales. at victoria's secret. called one of the most resilient brands in retail. >> you got to hand it to them. over at gap it was old navy who was really there -- we've seen struggles of other teen apparel companies. old navy managed to execute during the back to school
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season. >> gap stock up 90% for the year to day. we'll talk later about whether there's more fuel in some of these names. costco is one of those companies the comps have gotten a little softer in recent months. not bad. 6% above a 4.5% estimate. u.s., 7%. international, 4%. high gas prices helping to some degree. >> of course, that's why it's important to strip that out. at the same time there is no, ma'am indication of broad base straent there. it'll just be interesting as the rest of these estimates come in, going into back to school season you had two diverging estimates. one firm saying it was going to be up significantly and one not so much. this would suggest there is at least some shopping strength out there. >> mkm partners with an interesting note saying why has it been so good in august? some tax free holidays in, like, 17 states. back to school obviously which we mentioned. and skinny leg jeans. >> skinny leg jeans? come on. >> and colored denim. that is literally one of the reasons they gave. >> colored denim, maybe. all right. there may be something to that. i'm not so sure about the skin sni jeans.
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when we come back this morn wk assessing the damage from what was hurricane isaac. ok, now it's a tropical storm. we'll get a live report from louisiana. might actually bring some much-needed rain to certain parts of the country. futures a little bit weak as we continue to be on fed watch. steve liesman is on the ground in jackson hole. we'll hear from him, too, when squawk ton the street comes back. 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 fidelity. at u.s. trust, our expertise extends well beyond investment advice and research analysis. it includes proprietary offerings
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the national hurricane center says tropical storm isaac is moving northwestward over central louisiana.
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but still producing heavy rains and high water levels along the northern gulf coast. senior correspondent scott cohn is in the area of louisiana's plaquemines parish where the worst of the flooding took place. scott, how is it looking there? >> reporter: yeah. this is, kelly, what isaac left behind. it's a situation that we talked about unfolding all day yesterday. it is unfolding again now. let me orient you. this is a floodwall, flood gate that's been closed for the first time ever, trying to keep water from out -- from a spillway that has overflowed into plaquemines parish coming over to this side, the border of st. bernard parish, if that makes sense. then you go up here. the floodwall continues. it joins in with the mississippi river. the green part is the levee there. at the top there you can see some servicemen from the louisiana national guard who are preparing, now, for a search and rescue operation. here's what's on the other side of that floodwall.
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it's the town of brathway in plaquemines parish which flooded badly because of all the storm surge and all the rain from tropical storm isaac, at that time still a hurricane when it came ashore. and they want to make sure that they can -- that they have everybody out of there. they rescued some 40 people yesterday. then they have a problem, though. they have to get the water out of thaty iey eied pumping some out. water is at the same level as the mississippi river where they're pumping it to. they're talking about breaching the levee so they can get the water where it needs to be which is back into the mississippi. it's a very involved and somewhat desperate move here. they've done similar things before. back in hurricane gustav, for example, they breached the levee as well. it just shows you how complicated flood protection is here in the new orleans area.
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in the city of new orleans which is protected by now a $14 billion upgrade of the levee system, they did okay. this is outside that federal levee system. and you've seen what the result is. kelly? >> scott, is there a sense that local authorities there were relatively well equipped to handle the storm, do the rescue efforts, get in touch with people and tell them how to be prepared, or is there a sense they're behind the curve with this storm? >> reporter: no. they certainly were prepared. and they certainly are equipped. the problem is that every storm is different. isaac presented particular challenges because, as we talked about, as it was moving along, it was moving so slowly. which meant that all of the moisture in a tropical storm, and there is so much of it, was continuing to just fall on this one area. so, in fact, some of the flooding here, even though it was a much less powerful storm than katrina seven years ago, the flooding here was a whole lot worse. and what the emergency officials will tell you is that every
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storm is different. so you prepare and you hope, but you prepare for the worst. >> yeah. well said. scott cohn there in plaquemines parish, louisiana. thanks for that report. when we come back this morning, about a week ago art cashin said we had an outside day. basically said could mean a reversal. that's exactly what happened. he's going to join us next on post nine with his take on what to expect today. find out what's on his radar. take one more look at futures. moderate weakness on relatively benign data. a lot more "squawk on the street." back in a moment. hi. i'm henry winkler.
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clint eastwood widely rumored to be a surprise speaker tonight at the republican national convention in tampa. our twitter question for this morning involves mr. eastwood. our question is which clint movie character or quote best suits mitt romney? tweet us. go to imbd and get a full list of his filmography. could be anything from "million dollar baby" to "unforgiven." the guy's got a long, long career. >> that's true. as people look for that we'll turn to markets. just about six minutes here before the opening bell. let's bring in art cashin, director of floor operations with ubs financial services. art, first want to talk, can we mention this, carl, here? art made a call on the program the other day, correct? >> yeah. >> we have the sound, actually. let's listen to what you said a week ago tuesday. >> let's first play this for
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people. take a listen. >> you opened up and got a higher high than the previous day. then reversed and closed and closed with a lower low than the previous day. so it's an outside day. it was outside the extremes of the previous day. and all trader folklore says that often happens when the market's about to reverse. >> that turned out to be a precient call. >> that's the reason people have to watch squawk t"squawk on th." so they get a handle. >> god bless you. >> i think they'll come under a little pressure this morning. so far all it's proven is that the rally has stalled. if we come under pressure, the 1398, 1400 area in the s&p have to hold. if that breaks it means you might be in for a bit more of a correction. >> to talk about come play sensy, yesterday we had the lowest volume day on the nyse, i believe, since may 2007. i think august is on track to be the lowest volume month since
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may 2007. we've had this string that carl mentioned three days in a row now for the first time since late 2005 where the s&p hasn't moved by more than .1%. does that to you signal trouble? >> the first option you can take out of it, it might mean simply that people are undecided. it's also the last big holiday week. but it can be a troubling thing. there are market tops that tend to see the volume kind of implode. you know, people withdraw. it's kind of a change of leadership thing. so with the market stalled and the volume going down, it's another cautionary item you have to keep an eye out for. >> doug cass pointing to a triple top in the s&p this year. is that how you read that chart? >> well, i think you are running a risk of multiple tops in here. you've got a lot of inconveniences. plus, the fact that, you know, the dow theory that transports aren't behaving well. there are cautious flags i think all around to be watched.
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>> art, thanks a lot. nice call. art cashin. when we come back, the opening bell just a few moments away. we'll get ready for a big day of trading. we'll see if we can bust out of this narrow range. back in a minute. growing deficits. failing economies. mounting uncertainty. the stakes have never been higher. the economic conference of the year. steve liesman reports. steve[ male announcer ] drive a car filled with
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nice cheer here at the nyse for the opening bell. take a look at the s&p 500 at the top of your screen. at the big board, wageworks ceo joe jackson. love his music. company listed ipo on may 10th. at the nasdaq, lane christiancy. we've talked about the narrow range we've been in. still confirming this number. last time we had not three, but four days where the s&p moved less than .1%, 1995. >> wow. >> if, in fact, we do that today, that would be historic. >> you know what's happening, so many people, carl, are on the sidelines ahead of jackson hole waiting on bernanke but the
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european central bank's meeting next week. >> week from today. >> great report in the financial times outlining why it is that mario draghi and a lot of those policymakers aren't going to jackson hole this weekend. they are legitimately and have been for weeks now working together on putting together some sort ofe that would allow them to support purchases of sovereign debt. certainly providing much needed help in markets there that could support sentiment. this is such an inprecedented measure there's almost been no meeting of the minds as of yet. >> on a macro note, angela merkel took her delegation to beijing. wen jiabao said -- >> there's a bit of a tit for tat. the overture she makes in turn china sort of says, right. we'll continue to express our own confidence that you are
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navigating your european debt crisis. europe needs people to buy those bonds if it's going to keep costs low without any drastic measures. interesting there. world's two biggest exporters. it comes, by the way, as german unemployment figures rose for the fifth consecutive month. 6.8%. i think we'd take that over here at this point. but still a move upward. >> the improvement in the german economy is happening in smaller and smaller increments. so the worry about slowing growth around the world is real. >> i'd argue that in some ways it almost makes it easier for the european central bank to act. i think the really tricky situation would come if germany was overheating or growing too strongly and there was much more resistance to the central banks jumping in. some of the gainers, not a surprise. top of the s&p, kohl's, gap, starbucks, kroger, coach, limited. retailer are really going to be one of the stories of the day. we mentioned nordstrom up 21%. target beat. macy's beat, 5% versus a 3.6%
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estimate. we'll talk more about why august was particularly strong. september will have some tougher comps. then we get into the back half of the year where actually last winter was extraordinarily warm. they couldn't sell a lot of coats. some of the comps at least on margins when we get into the fourth quarter are actually going to be a little easier. >> could look healthier. absolutely. back to school is going to be the key gauge for that fall. yus want to mention here the latest read we have on same-store sales shows the median surprise is about 1.7%. but really with the exception of wet seal there has not been a miss with nearly every company now turning in those august results. only wet seal has missed. >> also on a retail note but not a good one, sears, of course, being taken out of the s&p. was a charter member of the s&p when it was created back in 1957. it's effective on september 4th. they were in the dow, of course. 1924 to 1999. just one more indignity to eddie
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lampart is having to endure. dupont selling to carlisle. carlisle extraordinarily busy lately. $4.9 billion deal in cash. ellen coleman continues to reinvent this company. if cramer were here he'd have very nice things to aabout her, i'm sure. carlisle now a public company. that chart even though the ipo started out very slow and steady has had a pretty good three months. >> i think a lot of companies would take a chart that look like that right now. >> barclays, you've been watching. replacement for bob dimon. >> new ceo anthony jenkins comes from the retail bank reigniting perhaps speculation over whether there could be a d merger in its future. interesting to be in london and britain. so much political pressure on questions of culture at these investment banks on, you know, resistance to a company like barclays from the general public. even as a lot of measures that anthony jenkins actually
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introduced, the barclays card, contact list payments have been extremely successful. he has a tricky task ahead of him. >> that's an interesting story. finally before we go to bob pisani, pandora last night is really proving you can make some money in mobile. mobile revenues with, i think, up 80% even though some of the royalty costs were up as well. ceo was on with maria yesterday. we're going to hear some sound from him. a big gain for a shock that was heavily shorted. >> yes. the trouble comes when you have a company or an area that's executing well. it starts to get crowded. can they maintain that edge as people start to pile into the space? >> the squeeze is on. bob pisani is on the floor. i see him now studying some notes. >> i'm trying to figure out what the heck happened on retail sales. i've been calling all morning. not only were they wrong, they were wrong across the board and they were wrong by statistically large numbers. kelly, you said nobody missed. i see two companies i think missed out of 20 that reported. it's like a 90% beat. that is astonishing. normally you get 60% beat.
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you get usually 12 to it, 12 beat, eight either equal or don't. here there was only two that didn't. across the board the numbers were strong. 5.4% gain overall for the 20 retailers who report. the estimates were about 4.2%. i used retail metrics. that's 120 basis point difference. that's very strange to get off that much. right across the board. everything beat. the off price stores, tjx was strong. looks like they're continuing to take market share from jc penney. general merchandisers, target and costco, they were terrific. apparel stores were great. you mentioned gap. buckle was strong up 4.5%. nordstrom, what the heck? 21%. that includes the anniversary sale that was in july. that's a remarkable number overall. nobody lowered guidance. nobody complained about the weather. i never have that. we never see that. here's what i think happened. two things. number one, hurricane irene occurred last year in august. remember, that went up the east
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coast, as i recall. i think we're dealing with a little bit of an effect of that. i don't know how to factor that in. but the guys i talked to who've watched this stuff obsessively said that was likely a major factor. the other thing is, i know this is strange, the fashion cycle was strong. i know. i find it hard to believe that bright colors actually got people into the stores. but everybody i talk to said, yeah, they really got it right this time. either the style or the colors or whatever have you really brought people into the stores. that's what i -- i'm sticking to for the two reasons. let me just -- final word on isaac. effect on the stock market has really been very minimal. the numbers i'm seeing for losses this morning, $1 billion to $2 billion including offshore losses which appear to be very minimal. no major rigs appear to be damaged. that's a pretty small number. insurers and reinsurers really haven't moved at all this week. these are well within the losses that they have potentially programmed and saved for. finally on mr. bernanke, i'll tell you why i think the market's down today. i think most traders have now accepted the fact that mr.
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bernanke is unlikely to unveil some dramatically dovish qe-3 type of speech tomorrow. i think you're seeing some modest profit taking ahead of that as traders are coming to that realization. we'll talk more about that and the effects of qe-1 and qe-2 had on the stock market after 11:30. guys, back to you. >> bob, sounds good. let's check in now the latest moves on energy and get over to jackie deang liss at the nymex. >> we're watching wti prigss. they are falling this morning. as bob mentioned isaac, of course, downgraded to a tropical storm. we're seeing it move inland and easing a bit. traders are still watching for reports of significant damage. but those reports are not likely to materialize at this point. yes, we've seen some production shutdowns. but those have been pretty much precautionary. the next thing, of course, to watch for is power outages as we look to restart some of those facilities. traders also looking to bernanke tomorrow and looking to china for that manufacturing data this weekend to get a little bit more of a better grip on what's going
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on with the global economy. of course, weekly natural gas inventories, they are out later this morning. we're looking at natural gas prices slightly lower ahead of that. we'll check back in with you then. back over to you, kelly. moving on now, barclays has picked a new leader, tapping its retail boss anthony jenkins at the british bank's new ceo succeeding bob dimon who stepped down in the wake of a libor rate rigging scandal. kayla tausche is back at hq with more on this. >> i'm hearing anthony jenkins checks all the boxes to fit the bill as bar icalclays chief exe. my sources say the board met its september 1st deadline to have that new executive in place. they gave themselves roughly two months. while the board had been reviewing external and internal candidates with equal weight, they were seeking to satisfy uk regulators by ensuring two characteristics. first, it would be someone british. second, it would be someone without ties to investment banking, unlike barclay's
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previous two ceo. salary 1.2 million pounds sterling with caps for 2.3 million pounds for cash bonus and over 4 million for deferred compensation. he began his career at barclay 30 years ago and returned six years ago to head u up barclays' credit card business. that core business is one that jenkins channels in his memo to employees this morning. saying barclays, quote, must become the go-to bank in the eyes of all our customers and clients. the bank they naturally go to when they want to do banking business. getting there, jenkins writes, will require nothing short of transformation. kelly, as you mentioned earlier, that only further fuels the fire about that transformation that could center on investment banking specifically. we have rich richie who serves as barclays' chief executive of corporate and investment banking
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with lehman alum skip mcgehee running it himself. this morning it was written the big question is who will be appointed to run the investment bank even though richie is already there. freddy suisse saying we would expect anthony to spent a significant amount of time reviewing banking operations given this is the area where he has the least amount of experience. there's not a strategic review going on now. the cultural issues you were mentioning before, they're so strong right now. how can you keep a universal bank like that together right now, i don't know. >> at the same time it's interesting to draw attention to a note out in europe overnight s saying, you know, barclays investment bank would need 11 billion pounds of equity to meet basel 3 requirements. something that would significantly stand in the way of any real action on that front. >> right. it would take a huge tax hit. it's something obviously they just bought and just were able to fully integrate as of last
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wre year. you would think from an operational perspective it wouldn't be efficient to slit it at this time. sometimes it's not up to the board in these cases. >> no. especially when there's political pressure like this. a tale of two lockup expirations. why did yelp get a bounce, a head fake, while facebook fell to all-time lows? we'll talk about that and see if there's even more good news in yelp's store. as we go to break, a look at today's early movers. back in a minute. at optionsxpress we're all about options trading. we create easy to use, powerful trading tools for all. look at these streaming charts! they're totally customizable and they let you visualize what might happen next. that's genius! strategies, chains, positions. we put 'em all on one screen! could we make placing a trade any easier? mmmm...could we? open an account today and get a free 13-month e ibd™ subscription when you call 1-888-280-0149 now.
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have come to us to help build their own legacies. well, there's one dow company in the red right -- in the fwreen right now. it's coca-cola. the rest are pointed lower. looking at about 67 points to the downside for the dow this morning. a little more action, carl, than we've seen in the last couple of days. however, it is to the downside. >> all right. meanwhile yelp as you probably know by now jumped 22% with nearly 53 million shares were released from lockup yesterday. todd showenburger managing principal of the blockbade group. good morning to you. >> thank you for having me. >> talk about a rough lesson for some of these shorts.
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what exactly in a nutshell do you think happened? >> that's right. it's definitely the short covering. you had 97% of all the shares that were eligible to be borrowed that were sold sort. a classic case of short covering. especially with the tech stocks. that was interesting. also i think it shows the discipline of the insiders. they weren't eager to sell. the stock has had a nice run since its ipo price. therefore moving forward there's some tremendous growth prospects. i think insiders are kind of in the wait and see moment right now thinking, look, prospects are looking good down the road. >> yeah. it's cooling off, we should point out, a little bit this morning. down 61 cents. you almost get this mental image of all the insiders around a table saying, all for one, one for all, right? we're not going to do this. you also make the point their cost basis makes the holding here fairly attractive. >> that's right. i mean, you're looking at $1.12 internally. that's great for those shareholder. they already have a tremendous gain. therefore what's the rush to sell? keep in mind in their last
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earnings report, they really did tremendously well. they not only beat on the revenue figure but also in the earnings per share number. going forward their revenue forecasts are looking sensational. they're looking to double revenues in 2013 and they're looking to actually report a profit of eight cents a share in 2013. when you look at that and everything else that's taking place with the company, it's probably a good idea to hold. >> todd, isn't the share performance really the swing factor here when you compare a yelp with a facebook? obviously in a situation like facebook where you have a company that's consistently just moving to the downside versus a yelp where the bottom was hit earlier, people have a more positive view, wouldn't you expect two different outcomes like we saw? >> well, i got to tell you, with facebook keep in mind you have one-sixth of the entire human race that's on facebook right now. they have a footprint that's global. everybody knows about this company. yet when you look at unique visitors to facebook, they only increase 5% year over year. yelp is nowhere near that right now. they're not a household name.
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i thunk they will soon be because of their strategic partnership with apple. but they actually saw a 51% increase in unique view rs year over year. that's sensational for a fwroeing company especially in a hypergrowth mode. you want to continue to see that. it probably explains why yelp has actually done well as opposed to a facebook. >> is there anything, todd, a facebook could learn from yelp? >> listen, i was wondering why facebook just did not actually have their earnings call online on facebook to actually open it up that they can actually attract businesses. whereas a yelp really, they're looking at strategic partnerships. they're not just looking locally. they're going internationally. that's great for growth. you're looking at not just to track businesses and the reviews and everything else, but they're scream lining the process. that's critically important. remember, with all these dot com companies it's about content. you need content. you need the eyeballs. otherwise they'll cease to exist. yelp is is doing a great job with their business strategy by attracting more eyeballs.
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facebook, i think, has some challenges, though. >> yeah. the debate over the montization in mobile continues. we've seen so many companies just have a really difficult time. but then ban dora comes around last night and seems to want to change the debate on that. where is the demarcation line between companies that are dpoigoing to make money on mobile and those that aren't? >> that's a great question. the thing about a pandora which bothers me, they actually have diminishing returns. the more muse you can they sell they see their overhead costs which actually can hurt their earnings per share number down the road. they're not even hadding labor r equipment. based on simple music royalty. that's a concern. for a company like a yelp you have to look for additional distribution. here they're moving in with apple. here they're integrating into the software of ipads and iphon iphones. that's sensational for them. they'll become a household name. increases brand equity. facebook, they're just concentrating on mobile right now. mobile ad.
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that's great. the question remains, how will may monetize. >> the age-old question. todd, thanks so much. great story to watch. let's get to our squawk on the tweet question this morning p it's widely rumored that clint eastwood will be a surprise speaker at the rnc tonight. we'll see if that actually happens. in the meantime we're can go you which one of his movie titles, characters or quotes best suits mitt romney? got a lot of responses. christopher tweets, a fist full of dollars. you knew that was coming somewhere. joe writes if you want a guarantee, buy a toaster. bronze globe tweets grand ta reno. get off my lon. and there are two kinds of people in this world, my friend. those with loaded guns and those who dig. you dig? >> keep them coming. when we come back, a live report from jackson hole ahead of the fed chairman's speech tomorrow, about 24 hours from now. in the meantime as we take a break, take a look at this morning's s&p 500 losers.
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♪ simon hobbs here with a look at what's coming up at 10:00 a.m. >> good morning, mr. carl quintanilla. it's mitt romney's big night. could tonight change the election and america's future? we're going to talk to the press secretaries of both the obama and the romney campaigns. we're going to talk about pandora which clearly is surging in the wake of the results last night. we're also going to have the maker of a new app hotel tonight on the program. it's about last minute bookings. probably under the name of mr. and mrs. smith. i don't know, kelly. back to you. >> we'll keep an eye out for all of that. in a little more than 24 hours from now, fed chairman ben bernanke is scheduled to deliver his much anticipated speech at the kansas city fed's annual conference in jackson hole, wyoming. senior economics reporter steve liesman is on the ground with more. steve, i want to know what the buzz is around jackson. >> the buzz is going to be about qe. the buzz is about draghi's absence. i'll get to those issues in a just a second. first i want to give you some of the news we've been making here
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this morning. we had an interview with atlanta fed president dennis lockhart. i asked him simply are you in favor of additional quantitative easing. here's his answer. >> i think it's a close call, really. if we were to see deterioration from this point, let's say a persistence of job growth numbers that were well below 100,000 a month. if we were to see that. or if we were to see signs of just inflation that could signal the onset of deflation, then there wouldn't be much of a question about policy. but now i think the policy question is how much will you gain and, of course, what are the costs short and longer term? >> he said he was not particularly concerned about the costs. so lockhart is is a key centrist. watched carefully on the board. doesn't sound like he's quite there yet. but he doesn't sound like he's
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too far from it either. let's look at some of the major issues that are out there as we wait for fed chairman bernanke's speech tomorrow. as you know mario draghi is not going to be here. the question becomes what does that signal for ecb policy? does it mean it's more imminent or not? will bernanke hint at additional fed easing? finally, what do researchers say about unconventional central bank policies? obviously this is an academic conference in the first instance. there has been four or five years now of unconventional central bank policy. carl and kelly, we're just beginning the first research on this and what they're saying about whether or not it's been effective. >> steve, we had bill gross on yesterday. he said this is a tough one. meaning a tough one to predict. i imagine you feel the same way. are you willing to make an outside call either up or down? >> i'm kind of 55/45 in thinking that there will be qe. but it is a very close call. i would not be making bets based on that.
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it's sort of the worst possible numbers that you could imagine for policymakers. this kind of limbo data that we're getting. 1.7% on gdp. maybe we ratchet up above 2% in the third quarter. jobless claims are a perfect example. 375. 350 is good. 400 is bad. where are we? directly in the middle. a tough, tough time to make a call. if you ask me what i think the fed should do, i don't think it should do qe with such a close call. i don't think it make sense. we have a bunch of people coming up. charles plauser later this afternoon. john williams tomorrow morning. we'll get all their perspectives. of course, talking in the hallways and trying to get a feel for what are the costs and benefits here and do they really think it can do any good. >> looking good. beautiful shot. look forward to a lot more. steve liesman in jackson hole. when we come back, so far the sound of pandora's quarterly results are music to wall street's ears. we'll explore how to play the online radio service. up almost 20%. back in a minute. it's a golden opportunity]
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around for another hour. hit the road map. august retail sales numbers surpassing estimates. everything from the high end to the low end coming in strong. what's leading us to these blowout numbers? is there room to run even more on the retail trade? >> from retail to social media, pandora hitting it out of the park after beating the street's estimates and raising its outlook. with the spotifys of the world hot on pan dor ya's tail how can the company stay say head of the competition? paul ryan receiving praise after his big speech at the rnc last night. what does team obama have to say? we're going to have your official obama campaign response when ben la bolt, national press secretary for the president, joining us live. in the meantime, though, some tech news. amazon reporting this morning it's sold out entirely of its $200 kindle fire tablet. company also saying it captured 22% of the total tablet mark share to date. cnbc's jon fortt has the latest on this. >> this is just amazon's way of saying not only at this event next week that we're having in
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l.a. should you expect to hear about kindles, but you should expect to see us shipping them pretty much immediately. that's how we should read into this. interesting heading into the season where we're expecting to see in a couple of weeks a new iphone from apple. getting new devices from nokia. new devices from motorola. now part of google. very important leading up to the holiday season what the various companies are doing with hardware. amazon's strategy, of course, to sell hardware just about at cost and really pile on its services after that. people who buy kindles, kindle fires, really do buy media afterwards we've seen in amazon's earnings over the past nine months. that's what this is setting up. that's what this pres press release they put out this morning, sort of a surprise, is about, kelly. >> jon fortt, thanks very much. let's talk about retail. retailers almost across the board doing very well in august on the fresh data we have out this morning. standout sales numbers certainly from costco, target and the gap. let's bring in charles grom and
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patrick mckeiffer. patrick, what are the highlights here for you? >> for me, simon, continued very strong momentum in the off price apparel space. we got an 8% same-store sales increase from both the tjx companies and ross stores. target as you mepgsed had a good month. up a little over 4%. the one i would also highlight would be kohl's. a little bit of an acceleration from july. they comped up over 3% in august. you know, business seems to be picking up at kohl's and the stock's pretty undervalued in my opinion. that's a name i like. >> are you changing your view of any of the stocks, patrick, you cover as a result of what you're now learning about august? >> no, i'm not, simon. most retailers reported their second quarter results during the month of august. and they gave some guidance for
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the month. and much of that was reaffirmed this morning. so you've got that fresh data point. and so not a lot of major surprises this morning. and no major change in view either at this juncture. >> charles, where are you? would you mirror that? >> yeah. i think if you look at the department stores in particular which tend to dominate same-store sales for me the group up 8% in the past month versus the market up about 2%, i think a lot of today's news was discounted. although, you know, from target today and a couple others we heard the second half of the month was better. we think there's a major retail conference next week where people will get more clarity on what happened in the month of august. we think there's room left to run. we do caution, though, you get into that october period you could see a little bit of a cnn effect ahead of the election. the third quarter when it's all said and done could start off strong and end a little bit softer. for now we're going to stick with the winners. >> what's the cnn effect? do we have an effect, too?
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>> maybe we'll call it the cnbc effect, too, carl. consumers tend to get a little distracted around the election and lose focus. >> guys, let me ask you. do the comps get easier or tougher as we work our way into september. >> in september for my group, i'll go first, pat. group that's harder, couple hundred basis points harder. they get easier into the october period. fourth quarter is pretty consistent. we actually think the fourth quarter could be shaping up pretty good here once we get past the election. there's a couple extra days between thanksgiving and christmas. we think the fourth quarter probably is going to be better than the third quarter. for the most part retailers want to get off to a good start. it's better for marginmargins. having a good august at the end of the day is not a bad thing. >> what about the effect of high gas prices, what it did to hurt consumer confidence, these numbers are perhaps more impressive. going forward is that going to be a head wind? do you expect that to change
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shopping patterns at all? >> go ahead, pat. >> i think it will be a bit of a head wind for retailers that cater to lower income consumers. a little head wind for the dollar stores. a little head wind for walmart. it's a concern. it's certainly something i'm watching. because gas prices have been going consistently higher week after week for the past several weeks. we're now moving back toward $4 a gallon. it's a concern. but there seem to be some other things that are going on with the consumer right now that are a little bit more powerful. i think there's some -- there's some newness in the fashion area. it's not just about colored denim and whatnot. there are other things as well. a lot of color out there. i think the merchandise in some respects is helping to drive sales right now. >> you see, charles, i wonder if something more important actually is happening now. as a major dynamic in the economy, you're seeing the american consumer strengthen and strend strengthen. if you look at the revision we have to second quarter gdp consumer spending was slightly stronger in that. look at the beige book we had
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yesterday where members of the fomc were worried about consumer spending decelerating, most districts reported retail activity had increased since the last survey. and, bang, this morning you now get these individual stores coming through. i think -- forgive me. maybe i'm completely wrong here. this looks to me like a major fresh dynamic for us on the upside. >> i think all yearlong you've really seen the consumer continue to defie expectations. it tends to be, you know, it tends to go against the rhetoric that you hear out there with the consumer and people pulling back. and you're right. with rising gas prices, you still saw a strong august comp. i think when consumers have a reason to shop, they shop. and they're selective. although i want to make sure we focus on the fact that it's not completely broad based. there's retailers like fred's, like big lots. one could even say walmart's 2% corp. in the second quarter was disappointed. i think from a stock perspective you need to be selective. the winners in our opinion
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continue to win. look at costco. look at nordstrom. look at a macy's. look at a target today. to me those are the names you want to own into the back half of the year. >> got it. i suppose the flip side is strong consumer means less likely we'll get qe-3. we'll leave it there. thank you very much. meantime, shares of pandora flying high. up about 20% this morning following the results that beat expectations last night. while the company sees improved results, they're still not making a profit quite yet. the ceo joined closing bell last night saying he continues to see strong revenue growth. take a listen. >> we're seeing very strong revenue growth. we're seeing very strong continued adoption of pandora by consumers. and we're seeing our montization strategies particularly on mobile continue to get more and more traction. and that is reflected in the continued improving results. >> anthony declemente, internet media analyst at barclays has an
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underweight on pandora. $9 price target. and mark mahaney. good morning to both of you. given your stance on the stock, i got to imagine, anthony, you think this is all kwesqueeze to? >> yeah. i can see we've been wrong on the stock recently. we're sticking to our thesis. content costs continue to increase as a percentage of revenues. overall advertising dollars and listener hours are decelerating. that content costs don't change but mobile monetizes at a lower level versus desktop. they may be making some traction. even bulls don't expect pandora to be profitable until the fiscal year that ends 2015. >> mark, some have tried to argue mobile revenue up 86% means montization is improving. is that true or do you actually want to see a net profit before you start getting positive?
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>> we don't need to see a net -- a profit before we get positive. but we definitely need to see those content costs contained and mobile montization really start to rip. it looks like it's stabilized. there's still a big gap. doing about $60 per 1,000 listener hours off desktops, 20 off mobile devices. that's all right. you need to see the $20 move up dramatically to $30. you get that kind of inflection point that creates a buying opportunity. we don't see it yet. >> anthony, forgive me. explain to me if you would why it's so problematic for pandora to move to mobile with the advertising. because, okay, i see that they have display advertising on laptops. >> yeah. >> effect live they're a radio station. effectively they could go to mobile and just have audio add verts running on that service. it shouldn't be a problem, should it? >> that's fine. today the majority of their ads are variable, actually. display advertisements. when you go on to a smartphone or mobile device you have a smaller screen, right?
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that's first. in terms of audio i think that the consumer is getting accustomed to play lists. itunes play lists that are commercial free. in terms of creating a market for much shorter duration ads in an audio format, that's something pandora has to work very hard in terms of sales, technology and marketing to develop. so they're taking the right steps on the way there. i think the market at four times next year's revenue on a multiple is already giving the company quite full credit for getting there. >> so, mark, is this -- i mean, the dynamic that anthony's laying out, does that bedevil everyone or is a siri a better play to the degree -- is it a share question with spotify. who is winning if not pandora? >> i don't think in internet radio anybody is really winning other than pandora. or i think a couple of winners here. i think they are the clean leader in the space. there's nothing in the underlying metrics about users and hours of listening that indicates there's negative trend going on here. the bigger picture question here is mobile montization.
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this was a question that's been dogging google since the end of last year. it was a big part of that social network ipo. pandora's really the poster child for this because they disclose so many metrics around it. we think it's almost inevitable that mobile montization will rise and will rise nicely over time. we're fwoing to try to pick that. we're going to try to time that in order to think about whether this stock is a buy or sell. that's really the big issue here, that usage switches to mobile devices, it clearly monetizes less. there is potential here in internet radio. as far as we can tell the only real good play today. >> anthony, curious quickly about amazon and this cloud player which, to your point, features, i believe, more of a play list than -- play list format so you don't have to quite deal with those advertisements. >> yeah. if you think about different business models for media online, i think about ala cart which really itunes dominates. subscription where you think about netflix and media. and then also advertising supported which is more pandora.
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amazon's trying to breakthrough in terms of that ala cart and streaming model. remains to be seen if amazon can get traction there. one other thing i wanted to mention on pandora in terms of trading, if you look at every quarter of earnings for pandora since it's been a publicly traded company, the stock has actually traded off in the 5, 10, 15 and 20 days following earnings if you exclude price action on earnings today. that's actually a trading pattern that might bear worth watching. >> wow. that's a very, very empirical and attractive metric. thanks. good to see you both. >> thank you. when we return, we are going to head to the big easy to take a check on tropical storm isaac's aftermath. heavy rains and floods continuing to slowly ooze north. we're live in new orleans, next, with the latest. during mattress price wars at sleep train,
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tropical storm isaac is expected to weaken further as it heads north today. the former category 1 hurricane is now likely to become a tropical depression later on this afternoon. but it is still bringing very heavy rains and flooding which for many people is formidable. cnbc's scott cohn is in braithwaite, louisiana. the area of plaquemines parish where the worst of the flooding hit. it's been a rough 36 hours for
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many people, scott. >> reporter:ed the, simon. you'll forgive a little bit of condensation on our camera lens. one of the hazards of reporting in a hurricane with a rapidly changing condition. let me give you a sense of what's going on. the other thing, all of the water from hurricane ike -- or at least former hurricane ike creates some tough choices when it comes to what you do with it. behind me is a flood gate that is closed for the first time since they put it in a couple years ago. normally that would be a road going straight through to a subdivision, basically, here in braithwaite, louisiana, in plaquemines parish. that is now flooded. what's going on now from video we shot earlier is search and rescue operations to see whether there are people in there. they tried to rescue everyone about, i think, 75 or so rez te dents in that area. they rescued at least 40 of them that did not evacuate even though they were told to before the storm. now comes a problem, though.
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even after they make certain they got everybody out, they have a problem with the water. they tried pumping it out, but they could only pump it out into the mississippi river to the point where the floodwaters in the mississippi river waters were at the same level. so now they're talking about actually breaching the levee, intentionally breaching the levee that -- that is attached to this flood gate i was showing you. that, they hope, will get some of the water out of the subdivision into the mississippi river where it belongs. again, a storm like this that was so slow moving and dumped so much water on this area, in fact, worse in this area, flooding, than seven years ago with hurricane katrina, as i said, creates a lot of tough choices. guys? >> scott, are many people obviously given what happened seven years ago that you've met actually saying they will throw in the towel and perhaps move from the area as a result of being hit so bad again? >> reporter: i seriously doubt that, simon. you have to know a little bit
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about the -- the constitution of the people here in louisiana and along the gulf coast. they endured hurricane katrina. and those who stayed, stayed for a reason. they love it here. there's a lot to love here. and this was a category 1. yes, it's tough. but they deal with it. and they move on. i suspect that's what they'll do this time. >> scott, thank you very much. as we continue to track tropical storm isaac, soaking the gulf coast, the storm is making its way farther north today. we're joined now by the weather channel's paul goodloe live in gulfport, mississippi. >> reporter: good morning. we're to the east of louisiana along the mississippi gulf coast. take a look at the mississippi sound of the gulf of mexico behind me. still very angry today. i tell you what, the water is far lower than it was. in fact, i'm maybe 40 yards from the seawall. the water was up to the seawall yesterday during the height of isaac. take a look at this tree here. this tree survived hurricane
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katrina. seven years ago yesterday. but there was a tornado that, again, tropical storms and hurricanes making landfall have the risk and always do usually spawn tornadoes. one came through here. the backside winds knocked this one down. we're going to pan around here. you can see more debris, more limbs being brought down here. and then you see this home which is pretty much a total loss now. again, i talked to the builder. this home was under construction. they were making it to be more hurricane resistant. we had possibly two tornadoes. one came through around 2:00 in the afternoon. a second one came through close to 5:00. again, we had a neighbor behind this house who witnessed that second tornado. we have video on our website,, that shows the second tornado that was clearly a tornado hit this house under construction. also another house about two blocks from here. again, we always have that risk. by the way, the entire mississippi gulf coast, parts of alabama, portions of louisiana still under a tornado watch until 4:00 p.m. that could be extended. yeah, isaac is not done with
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this area. so far we've had some minor damage, lots of trees down. last count over 50,000 customers without power. but, again, now that the rain has stopped temporarily, it's clean-up time here across the coast of mississippi. carl, back to you. >> we can see that. thanks very much, paul. let's send it over to kayla tausche were a quick market flash. >> we're watching shares trading here in the u.s. reaching its 52-week high of 22% this year. just this morning jpmorgan raising its price target on diageo traded in london to 16.30 pence saying fiscal year '12 results were solid and the overall sector should see a lot of growth. back to you. still to come on the program, the obama administration's take on vice presidential candidate paul ryan's speech last night at the republican national convention. back with that in two minutes. [ male announcer ] eligible for medicare?
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the market is knocking down almost 100 points today. see it on both sides of the atlant atlantic, actually. an increasing focus on where we're going to growth and a big concern about china. retail is interesting. of course, you've had great retail sales figures. same store sales for august. the rtf climbing for four days up to 52-week highs. we've retrenched. within that sears is a component. sears is down heavily today. >> i also wonder in this case if there's not a buy the rumor, sell the fact. the outperformance with some of the consumer discretionary stocks this year. you want to take the opportunity to sell into the strength. >> it's easy to forget. beginning of the year we were talking about execution issues at gap. which is largely about inventory and marketing and stores. they retrenched, if you remember.
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now gap is 5 percentage points away from doubling for the year. it is the third -- >> that's remarkable. >> it is the third best performer year to date on the s&p behind only sprint and pulte home. >> again, do you jump into that trade now? >> what i was going to say -- >> you've already missed it. >> on the 12-maonth track it ha more than doubled. up about 125%. it's about design. it is changing the personalities, doing the deals with other designers. >> you guys were wearing brightly colored skinny jeans here onset. that helps explain the success. >> don't tell what happens under the desk. none of their business. let's move on to currencies. euro is trading higher this morning ahead of ben bernanke's jackson hole comments tomorrow. traders also anticipating next week's meeting of the european central bank. let's get to money in motion. mcneill curry with bank of america merrill lynch. he joins us now on the newsline. what's your call on the euro? do you expect either of these events to really push it out of
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this sort of narrow 1.25-ish range? >> sure. in the near term we've got conflicting arguments on which way it's going to break. on the topside the event risk obviously tomorrow. potentially later next week as well as a continuation of the unwind of carry trades which have transpired over the past couple weeks, couple months where people have been selling euros and buying commodity currencies and emerging market currencies. on the flip side don't forget we're still in very much -- the larger trend is still clearly to the downside. we are very much a bear market for euros. as we move into the month of september we have very strong negative seasonality for euro and risk assets generally. those two factors at this stage in the game are offsetting one another. within this range we'd rather hold a bit of a neutral bias but hoping or expecting ultimately a bearish resolution to the range. >> how low could it go?
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is this going to be a move we see play out in the next three to six months, shorter than that? >> much shorter. i would expect over the course of the next two weeks or so we start to take out the range lows. let's say 1.24, the low end of the range, we'd be looking for a move ultimately back to the lows at 1.2040 and ultimately below. >> behind the analysis you're giving us now, is there an assumption that draghi will fail and the sovereign debt crisis will get worse? >> if you look at what's tran spiring with respect to european fixed incomes from the peripheral debt markets, the market suggests things will probably get worse before they ultimately get etter. >> mac neil, i think you mentioned this. i wonder if some of the relative decent performance for the euro and even the pound given the softness in the economy has to do with this rotation. the australian data this morning wasn't that encouraging. china mining commodity cap x
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story is soft. are we in the early stages of that move? >> with respect to aussie/dollar weakness, yes. that looks like it's going to continue to depreciate. as you pointed out, you know, over the past couple months one of the big more popular trades in foreign exchange space has been the selling of euros to defund long positions. not just the australian dollar but things like the mexican peso or just commodity currencies and emerging market currencies. you're starting to see that shift where these emerging market commodity currency longs are coming under duress. most notably with the australian dollar. that in turn is giving a bit of a bid to the euro as people unwind those trades. >> real quick. i have to go back to london at the end of the week. i want to know at what point my dollars are going to go further in britain. >> i think that trend is still turning to the downside. we have seen decent weak -- sterling strength over the course of the past couple weeks. as you go back and look at price
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action from june, it does ultimately look to be countertrend. and corrective. don't forget, there's another side to this as well. if you start to see a bigger move in risk assets to the downside, the dollar is going to be one of the major beneficiaries. it tends to still be the ultimate or one of the ultimate safe haven currencies. the sterling should depreciate. if we start to see -- >> that's the situation. thanks for your time. for more currency trades be sure to catch money in motion currency trading tomorrow at 5:30 p.m. eastern. of course, if you want more education about currencies, you can also take currency class. that's >> to be clear, you've gone to london and you're still paid in dollars? >> i'm struck dhuturally long t dollar. >> one of the risks of being an ex-pat. >> i don't even do the conversion. you can't. it'll just kill you. we've got crude inventories yesterday. let's get nat gas inventories with jackie deangelis.
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>> that's exactly right. the eia releasing natural gas weekly inventories report moments ago. the number coming in at 66 billion cubic feet. that is above expectations. traders were looking for a range of anywhere from 58 to 64. compare that 66 number with 47, an injection of 47 billion cubic feet last week. traders are watching this report very closely because we saw some expiration day positioning squaring yesterday ahead of this. now the nymex october gas contract is beginning its tenure. right now we're looking at prices of natural gas. they are slightly lower. keep in mind we saw a big slide this month. 70 cents. we're looking at the market now, putting the brakes on here a little bit on further declines. also keep in mind that we're seeing a little bit of light volume in the contract. traders are shrugging off the above average normal temperatures across the major gas consuming region. they're expecting these temperatures to come down a little bit as we go into the
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rest of september. but, again, we're looking at this number having an impact, sending gas a little bit lower to spot 6.73 now. we were saying earlier in the morning how we haven't gotten very much range this week. we're getting it now. dow down 102, almost 103 points. being dragged largely by strims, utx, cat, alcoa and some banks as well. citigroup and jpm. when we come back, the official obama campaign response to paul ryan's speech last night. back in two minutes.
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just over an hour into trading at the floor of the new york stock exchange. 7:35 on the west coast. 10:35 on wall street. fwood morning. shares of hitting new all-time highs. announcing the kindle fire tablet sold out in just nine months. different story for groupon. declining to new all-time lows. $4.22 a share on today's session. groupon now down more than 79% year to date. orgt freddie mac, the average rate on the 30-year fixed mortgage falling to 3.59% up to four consecutive weeks of increases. can i just say one thing about selling out on amazon?
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i many years ago, just to give you a perspective on what that means, many years ago i had a dvd of interviews that i'd done released by cnbc. indeed, we did sell out on amazon. only there were only ever two boxes available. when they say sold out on amazon, it doesn't necessarily mean it's a vast volume. >> people wanting more. that's what they're saying. >> at least they gave the market share figure, too. they're saying it's 22% of total tablet sales. you're right. it's not as if there's a volume -- no unit number in there. amazon, we want to know. all right. tropical storm isaac is expected to weaken further as it makes its way north today. let's get an update from cnbc's brian shactman who joins us live now from norco, louisiana. where are you in relation to the storm? >> reporter: i am about 130 miles south of it. and i'm dry right now, which is a feeling i haven't had in about 36 hours or so. but i do want to tell you and everybody that we talk about the
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energy sector. we just lump gas and nat gas and oil together. this is a gas story. yesterday was the biggest one-day spike in oil and gas in 15 months. they want to get refineries up and running. the shell one in norco behind me is running at a reduced ri erate three others in the region. five shut down completely. yesterday in terms of what happened only phillips 66 reported losing power in plaquemines parish. the hardest hit of the parishes. other than that no major damage. today is really a day of assessment. just to remind people who's at stake in the refining business, around 1 billion barrels a day of refining capacity. about 5.5% of what we can handle in the entire united states is offline at the moment. it would take anywhere from three to ten days to get that going again. offshore it's a little murkier. that has a lot more volume involved here. 95% of all oil produced in the
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gulf is shut down. 72% of all natural gas is shut downright now. in terms of reports it's hard to get information from the oil and gas folks. there are reports that shell wants to do flyovers today, the likes of bp and chevron, they want to wait to see what's going on with the weather. wind over the water is a it willle stronger. in just the last few minutes we see a little bit of blue in the sky. we are west of the city. the winds are still pretty strong. but there is a chance, maybe, they could get out there today to have a look. >> all right. brian, thank you very much. brian shactman joining us from louisiana having done a lot of good work over the last couple of days. appreciate that, brian. meantime, paul ryan accepted his party's nomination for vice president in tampa last night in a speech that took direct aim at the president's leadership. >> i have never seen opponents so silent about their record. and so desperate to keep their power. they've run out of ideas.
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their moment came and went. fear and division is all they've got left. with all their attack ads, the president is just throwing away money. and he's pretty experienced at that. >> ben la bolt, national press secretary for the obama campaign, joins us this morning from tampa. ben, good to have you back. good morning. >> thanks for having me. good morning. >> the veep is normally an attack dog. certainly he took on that mission with some relish. the speech was, you know, reviews have been good, ben. are you willing to give him any of that? >> well, i'm not here to critique style. it may have been long on style and short on substance. but from the candidate that governor romney has identified as the intellectual leader of the republican party, we heard a lot of vitriol, a lot of recycled, false attacks against the president. he blamed the president for the
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closure of a gm plant that was slated to close during the previous administration. he attacked the president for medicare savings that he preserved in his own budget. but what we didn't hear from congressman ryan was one idea to create good pay wk sustainable jobs for the middle class or restore economic security for the middle class. which are really the core questions of this election. that's been the major problem with the gop convention. is that in the past two days, nobody said what mitt romney would do to create good paying, sustainable jobs for the middle class. instead they've recycled all these sorts of false attacks against the president. they talk about hard truths. but none of those have showed up here in tampa. >> ben, i mean, a lot of their rhetoric, i'm sure you would agr agree, stems from frustration over a gdp that gets revised to 1.7%. jobless claims that aren't improving much at all. aside from a housing market that's doing okay, an economy that's sputtering along. when does the president start answering for that? >> let's take a look at their alternative. let's take a look at the
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romney/ryan budget. because independent economists have said that it would eliminate 1 million jobs. and that it could hamper the recovery. it cuts investments in key areas like education and research and development and infrastructure. all the pillars in an economy that's built to last. this is the same congressman who's obstructed in the house a vote on the president's jobs act that economists have said could create 1 million jobs right now, help us to grow the economy, put teachers back into the classroom, cops back on to the street, construction workers rebuilding our roads and bridges. so let's take a look at their alternative. we haven't heard much about it here in tampa because it wouldn't help the recovery. it would hamper it. >> ben, i'm not clear. on this central accusation that paul ryan made that essentially your team has run out of ideas, what is the big idea for the next presidency? i mean, i appreciate that you're saying you'll extend the middle-class tax cuts. but beyond that, what does the president now stand for?
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what is the vision now? >> well, he's laid out a vision for an economy built to last. we build the economy from the middle class out through investments in education and research and development and infrastructure and manufacturing. that's different from governor romney and congressman ryan's vision, we should build the economy from the top down, assume that would trickle down to benefit the middle class. >> forgive me. >> assume the market will take care of the rest. those are the differences between the visions. >> i must not be paying attention. i don't see a big infrastructure plan on the table from you guys that is likely to get through. i don't see any huge, great push for manufacturing on the table. sorry. have i missed a major development? >> yes, i think you've missed -- i think you've missed the blueprint for an economy built to last. that the president has proposed and that the republicans have obstructed. they've obstructed both the short term vision to create jobs now which is filled with ideas that democrats and republicans have supported in the past, addresses specific weaknesses
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we've seen in recent employment reports since public sector employees continue to get hammered hard. and they've obstructed that long-term vision. that's why voters on election day will have the opportunity to break the stalemate between those two different visions. we've passed those tax cuts for the wealthiest before. it didn't unleash job creation. it led to the slowest job creation we've seen since world war ii. so we can't keep doing the same thing that republicans tried over the past decade. and expect a different result. the burden is on romney and ryan to explain why we should expect a different result. they've taken a pass on that explanation here in tampa. >> ben, i'm going to ask you to wade into an area you might not be comfortable. i'll ask anyway since we're talking stocks and business. bernanke speaks tomorrow, right? market has huge expectations both ways for what he might say about additional policy from the fed. if we had the president on right now, ask him what he would prefer that they do, what would the answer be? >> i'm not going to offer any advice to the fed. it's obviously independent.
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and i'm not in a position to weigh in either way. >> i mean, but it does have ramifications on things like gas prices. there is one area there, ben, where you could be looking at a potential liability come election day if they rise a lot from where they are right now. >> i know you want me to say something that might move the market. but i'm not going to offer it up today. >> i opened the door for you. you refused to walk right through it, ben. i hope you're having a good time in tampa. look forward to seeing you again. >> thanks for having me. talk soon. a quick markets check. you can see that we are on negative territory. all members of the dow are low. down 102 points. slightly off earlier losses. getting the big moves coming back now, carl. we've said for a long time how we hadn't had big ranges. indeed, the volumes have been very slight. volume yesterday was, i think, the lowest we had certainly for the year that we actually had on the exchange.
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>> we're now negative for august. the break even is 13,008. slightly negative for the month. the dow had been hanging on for a few weeks here. >> it had. coming up on the program, did your mother-in-law unexpectedly drop in for an unannounced visit? if you need to find her somewhere to stay in a hurry, we're sitting down with a guy you might want to talk to. sam shanks, ceo of hotel tonight joins us next. stick around. you'll also find us in person, with dedicated support teams at over 500 branches nationwide. so when you call or visit, you can ask for a name you know. because personal service starts with a real person. [ rodger ] at scottrade, seven dollar trades are just the start. our support teams are nearby, ready to help. it's no wonder so many investors are saying... [ all ] i'm with scottrade. the economy needs manufacturing. machines, tools, people making stuff. companies have to invest in making things.
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shipping's complicated. not really. with priority mail flat rate boxes from the postal service shipping's easy. if it fits, it ships anywhere in the country for a low flat rate. that's not complicated. no. come on. how about... a handshake. alright. priority mail flat rate boxes. starting at just $5.15. only from the postal service. welcome back to "squawk on the street." i'm julia boorstin in los angeles. as we head into the busy labor day travel weekend we want to tell you about a new app designed just for spontaneous travelers. it's called hotel tonight and allows you to book hotels at the very last minute right from your smartphone. users can search based on location, price and category.
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securing tis counts of up to 70% as hotels look to get rid of extra inventory and the start-up, of course, takes cut. you can't plan ahead. it only works for last minute bookings. in the past two years hotel tonight has been downloaded 3 million times and has rolled out to about 50 cities and 16 airports. it started its international push by adding london just ahead of the olympics this summer. the company has raised over $35 million from venture capital firms including facebook backer excel partner. the thing that really distinguishes hotel tonight from all of the other travel services is that it was built as a mobile app from the ground up. that also means that you can't access it from the web. you can only access it from android and apple platforms. back over to you, simon. >> interesting. okay. let's bring in, then, the ceo of hotel tonight, sam shank joining us now live on cnbc. welcome to the network, sam. thank you for joining us. what's the -- what's the unique selling point here? because as i understand it, all
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the big online travel agencies have already started launching exactly what you have, these mobile apps in your space, in your backyard, backyard, if you >> they have, but we're totally focused on mobile last minute and when you turn on hotel tonight, you'll see that it looks a little different than the other guys. instead of presenting you with a hundred different options where you have to find the best hotel and which hotel is even good, we even done all the groundwork for you and legwork for you and we've presented a few options where we've vetted the product personally for you, quality hotels, and they compete every day for the slot space, and the spots on hotel tonight to sell those rooms. so they're providing us with their very best deals. what happens is we get the best details and prices for these rooms. >> one of the untold stories is the relationship that exists between the owners of hotel and online travel agencies. i heard of one hotel owner
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recently who was basically getting gouged by online travel agencies. they wanted 25% of his revenues for a room for the night and therefore he rushed into the arms of one of the big chains so that they could do some bulk deals. i'm getting the impression you may be trying to pick off some of those smaller hotels that are not part of chains. what are your margins? how much of the price of a room do you aim to take by clearing it at the last minute? >> well, we charge -- we don't charge 25%. we charge what's very standard for hotel bookings. it ranges based on the contracts. again, what we're focused on is just that incremental last-minute demand. every day the hotels we work with, we take the unsold rooms and put them on hotel tonight. we're the last-resort sellers. if we can move them, the commission that they're paying is something that's purely -- it's something they're happy to pay because they're happy to get somebody in these rooms.
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>> just one last comment then. why are you different from all the other bigger apps that have been launched by the bigger travel agencies? aren't they doing exactly the same thing? >> well, in terms of the way we work with hotels, we're completely noncompetitive with them. all the big guys, they really want to get this advanced purchase bookings, which is what the hotels really focus on getting themselves. if a hotel sell as room through expedia or priceline or hotwire, what do you say? it's great we fill the room up but we'd much better do it ourselves. we're saying we can sell rooms for your you you can't sell or if you couldn't have sold them yourself, you can close out the inventory on hotel tonight. from that perspective, it's a lot more aligned, much more competitive. >> thank you very much. the ceo of hotel tonight. >> the market continues to add to the losses here.
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down some 120 points. we wonder if ben bernanke they' send a message to ben bernanke. >> keep an eye on the maria to s on the euro to see if that is, in fact, what's coming up. a live report from jackson hole as he mentioned. is it what the markets want to hear, especially given the latest action. we'll be back in two. at onsxpeate easy-to-use, powerful
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one of the world's most media capitals, on the latest $5 will get you d latest platinum record or block buffeter movie. worldwide the movie industry loses $1.6 billion a year to street boot legging operations like this one. >> reporter: this detective preps his troops. for three months now they've had their sights set on two pick houses, warehouses that media pirates use to stash their goods. >> we identified two locations where the pirate cds might be
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located. >> reporter: the unit is armed and ready. >> we have a search warrant. open the door. >> i'll go in first, okay? >> reporter: there's no one here, but inside o stacks upon stacks of pirated of music. officers seize nearly 5,000 boot legged cds. >> to find out more about some of this tune in to the premiere of "crime inc.:hollywood robbery." the penalties are relatively light, profits huge, so they use the cash to go into more pernicious dangerous businesses. mexican gangs are getting hang of this which funds much more deadly kinds of crimes, but we do a good job of going into it and talk about how easy it is to
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look at a movie in theaters now in high-def on your computer for free tonight at 9:00. >> okay. in the meantime the markets are kind of stabilized but we're down 120 points. we'll have more on exactly what's happening today next. [ male announcer ] while many automakers are just beginning
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welcome to hour three of "squawk" on the street. here's what's happening so far. >> we have an opportunity to be a net energy exporter in terms of what we have in terms of gas, urani urani uranium, oil, coal. >> the solution is not the intro durks of paper. the solution is changing structure. >> now i think the policy question is how much will you gain and of course, what are the costs short and locker term. >> i think people's expectations have been really dialed down. i think in some ways people are just expecting to hear not much actually coming out of jackson hole. here at the nyc for the opening bell. >> they saw v 1% increase.
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>> we think the fourth quarter is going to be better than the third quarter. having a good august at the end of the day is not a bad thing. >> this is the same congressman who's on strukted in the house a vote on the jobs act. the president has said it could help us grow the economy, put teachers back into the classroom, cops back on the street, construction workers rebuilding our roads and bridges. >> good thursday morning. live here at post nine at the new york stock exchange. we want to get a check on the markets. it's largely to the downside. the dow right beneath 13,000 and the s&p right below 1400. it's happened in spite of the fact that retailers, some of the big icgest gainers came in bett
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than expecting. oil and gas stocks, though, falling with the broader market today. there's anadarko, hess, occidental, and chevron posting some de-carolinas. our roadmap for this thursday, mitt romney expected to take center stage at the rnc after a ringing endorsement from hpaul ryan. then ben bernanke, the highly anticipated headlines from jacksonhole. we'll check in with the co-chair from the economic summit. plus the new innovation that could make phone chargers obsolete. we've got your first look at intel's completely wireless charging technology. and facebook feeling the heat from wall street. is the social network testing more ways to make money from advertising and is that going to be successful? all that and more is going to be coming up in the next hour. first, the dow down. haven't gotten that on the s&p since the middle of july.
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gordon is here to talk more about what's driving this. we were joking whether or not the market is reminding the fed that, hey, we'd love a little help. what's going on? >> an interesting mark as we head into the holiday weekend. we see volatility up a little bit. we see this and we see rates coming in a little bit here. so all these things are indicating people are hedging, setting up for the feds tomorrow. all eyes are on tomorrow. >> data has been good, housing, retailing? >> yeah. we've had that and that's been well received. nonetheless, if this election is reminisce end of '92 when george bush was beaten by george clinton, the focus on the economy, if we do get qe3, that may just tell -- that might just be a statement on the political
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climate that, you know what, carl, the economy is the focus and the republicans are going to ride that to the white house. some would say bad news would be good news. at least investors are feeling that way. >> meaning the feds see sufficient weak ness that they have an argument into november. >> right. i think the feeling down here is the republicans would do more to stimulate the economy than obama has been doing as of late. at least the investors i've been talking to seem to feel that way. >> levels here, what connotes a real reversal below 1400? >> yeah, look. i think we're kind of finding a spot right now. i think the hedges are done. i think we'll hold at this level. i don't think we'll see it continue to careen.
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we'll see some activity then. we'll continue to see activity as the ecb and fed continue to make moves over the next couple of weeks, so it's going to be an interesting time. a lot of volatility starting to pick up. >> it's interesting how it's weighing on the market. is the general chatter that there'll be more headwind than tailwind or vice versa? >> still the volumes are muted. so i think more importantly than which way is where are we going to see conviction? if we continue to move to the upside, will it be the volume accompanying it that will have investors saying, hey, listen, i've got to get on now because i can't buy the dips or will we see the reverse. >> interesting. someone said the last time we had three days of s&p moves less than a tenth of a percent was 202
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2005. 2005. that was when we could go on vacation in august and not worry about the world. >> that's exactly right, carl. it's been muted down here. i haven't seen it like that for quite some time. i've been down here on post nine for quite a few years. >> time for ""squawk" on the beat". what's behind those? courtney reagan is back at hq with a deep dive into retail. hi, courtney. >> hi, carl. marking one of the most universally upbeat months all year with 91%. a good sign for the first read on back-to-school sales, and that's despite a drop in consumer confidence readings. i think color and newless for full price selling success. well, not considered a back-to-school retailer, nordstrom's doubled very bullish expectations thanks to a response in its anniversary
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sales. macy's poefgt brosting broad-ba chance. store sales up 9% and limited showing 8% in comp sales on top of an impressive 16% gain last august thanks to a boost again for victoria's secret, posting 32 straight months of same-store sales gains of 8 ppt 2%. both averaging monthly percentage gains of more than 6%. and while target is on a number of analysts' lists for school, food was among the big box retailer's strongest growth categories. now, jeffries points out,
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they're better your under control this time, too, which should drive topline growth. carl? >> courtney reagan talking retailers. meantime paul ryan accepted the republican party's nomination for vice president last night and used his speech to take aim at president obama's economic policies. >> you would think that any president, whatever his party, would make job creation and nothing else his first order of economic business. but this president didn't do that. instead we've got a long divisive all-or-nothing attempt to put the federal government in charge of health care. >> ed rendell, a former democratic governor of pennsylvania, a cnbc contributor joins us this morning. governor, good to have you back. >> good morning, carl. >> i heard a couple of different things. one, the speech was very effective, very disciplined. the other is that it was loose with the facts, blamed the
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president for an s&p downgrade when, in fact, s&p was largely blaming republicans, not mentioning the word "voucher." do you agree with all that? what was your take? >> i thought it was both effective and disengine was. chris christie appeared angry and almost like a bully. paul ryan looked like the guy next door, everyone's favorite son-in-law. he was terrific in his manner. the clip you just showed. he said president obama should have made jobs his first order of business. wrong, congressman ryane. first order was the stimulus package which you attacked but which the cbo said was responsible for keeping the unemployment rate down by 1% to 2% points so from the get-go, he
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told things that weren't true. on the auto bailout, he blamed president obama for the factory closing in jamesville. it closed while president bush was president. on stimulus, he said it with us the largest expenditure in the history of the country and yet he didn't tell people that $350 billion of it, 40%, were tax cuts, the same type of tax cuts that he and other republicans had advocated. on the medicare, that was the biggest hypocrisy of all. he attacked president obama for taking $750 billion in costs out of medicare when he in the ryan budget did the exact same thing and he didn't tell the american people that those $718 billion didn't come from benefits. they came from reducing payments to private inshires and reducing reimbursements to hospitals. >> governor, i've heard people say this might actually be an election where people vote for the vp. others say that just doesn't happen in mod everyone politics. is that a possibility?
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>> it just doesn't happen in modern politics. they only vote against the vp as they did in sarah palin's case. paul ryan is not going to lose mitt romney any votes but he's not going to gain him any either. >> how high is the bar tonight for mitt romney and what would make his speech truly effective? >> honesty. everyone says he's got to connect with the american people. he's got to show the kind of person he is. he conditioned be warm and fuzzy and homey because that will come off phony. carl, i know i'm not allowed to ask you a question, but do you think mitt romney loves wearing the shirts his wife bought him at costco? >> do you expect me to answer thatsome. >> sure. this is cinema, this is tv. he can't come on tomorrow and say he's a warm and fuzzy guy. if i was giving a speefrp, you know what i'd said, i'd say, look, i know i'm not the most likeable guy in the world, i
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know it's not easy to warm up to me, but, folks, squlould be interested in a guy who get use back to work. do you care whether i'm awkward? that's the truth. people would say, dag gone it, he's got it right. i don't care if he's a stiff. if he can do it, let's do it. let's go with it. >> have you been talked about as a potential transportation secretary? >> for which administration? >> for the romney administration. >> romney and i got along well as governors. i went up to massachusetts to learn about his health care plan was. by the way, he bragged up how much his health care plan was in front of three aides. no. i love my work with mayor bloomberg and being a tv commentator for you guys and for
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msnbc. you know, i would be flattered if any president asked me, but, no, i'm here to say. i want to be on "squawk box" for the next four years. >> before we go, jets oosh eagles, jets by five. do we need to get vick some armoira armor? i think this is one where we give the fans their money back. >> governor, we'll see you soon. thanks for coming on. >> thanks, carl. bye-bye. >> let's get back to kayla for a flash. >> rising just into positive territory briefly, now it's off its lows today and back in the territory. the balance came out when they said they support nasdaq's plan to reimburse those who lost on
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facebook. voicing their criticism with the s.e.c., which is currently reviewing the plan. of course knight had bigger problems earlier this month when it faced a capital crunch, but as far as the facebook investment. it should get some of the money back for investors. >> when we come back, when mario draghi decided to skip jackson hole, she had to deal with it. meantime, befr we go to break, one more look at the markets. we haven't seen a 1% move in a few weeks. this might be it but for the time being, s&p is down 11 points. a passionate belief, and the foundation on which merrill lynch has been built. today, our financial advisors lead from a new position of strength. together with bank of america, they have access to more resources than ever before. a steadfast commitment to help you achieve your financial goals in life. that's the power of the right advisor.
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fed chairman ben bernanke expected to speak tomorrow at the conference in jackson hole. the big question is whether the fed will decide to further stimulate the economy. our reporter steeve liesman is n the ground and joins us with a special guest. >> i'm here with the dean of the ford school of university of michigan. thank you for being here. >> thank you for having me. >> it's the flip side of the argument, should they or shouldn't they. you have an opinion on this. let's start off with your opinion. should the fed do additional quantitative easing? >> i think the fed should and can do more.
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it's not just want tative easing. it's how it communicates its policy which i think is hugely important in terms of making a difference. >> how should the fed communicate its message differently. >> well at the moment the fed has said it will keep the interest rates low until 2014 as long as economic conditions warrant it. but inflation is running around 2% and most people interpret that as meaning there's relatively little room for expansion. so what i think the fed really needs do is boldly communicate what its goals are. one of the boldest ways to do that would be to shift to a n nominal gdp targeting. >> let me stop you so people understand. it's the reporting of the inflation. >> absolutely. >> we report the inflation number. so the nominal would be how fast
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it's running. >> absolutely. the point is there's a duo mandate to achieve maximum employment which we are clearly far from it as well as price stability. >> let me come back with the classic argument. interest rates, 165 say on the ten-year. mortgage rates down 3.25, 3.50. is there any additional scope? is it really interest rates are the problem with the economy? >> well, it's not just interest rates. so much of it has to do with people's forecast about what's happening. if you don't think they're going to be able to expand and the demand constraint i think is what's holds things back, then there's little incentive for firms to be hiring out there, et cetera. so essentially how it's communicateding a vnld some space so it could have more temporary inflation until it's able to get the gdp growth going. >> we'll have charles on this afternoon who has different
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views. a very quick question here. should the fiscal side of the equation be doing more and do you expect to go over the fiscal cliff door you expect an agreement? >> absolutely they should be doing more. the political gridlock means little is expected to happen. i think we could work things out. >> you'll be chairing one of the sessions tomorrow. >> yes, i will. >> look forward to that. susan collins who's one of the chairs of the session tomorrow, the dean of the ford school at the university of michigan. carl. >> steve liesman, thanks so much. when we come back, how you could be charging your phone without a power cord sooner rather than later. we're back after a quick break. ♪
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the cables. our jon fortt has more on this. jon, trying to figure out the technology here, is the power cord going away? >> well, you can certainly hope so. who likes to carry around all this stuff, i mean let's get rid of it. idt, a small company in silicon valley is working on technology. intel is interesting this this because the idea is you can put your phone next to your laptop and it will sort of wirelessly charge. but there's a catch. there's a transmitter and a receiver there. the idea is you can put it in the laptop as a chip or in the wall. so phone makers would have to build it into the phone or the back battery cover for the phones that have that. so it's a little tricky adoption-wise exactly how this would work out, carl. >> you make a point and it's a good one. this has been sort of seen as the holy grail or one of the
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holy graks y grails for it now. >> yeah. they have mat yos ku put your phone on to get it to charge but the problem is it's kind of an efficient technology. this would take away the charging mat. it's not so much the table that's the problem in this big charging dilemma. it's finding a place to plug in. if you end up with some kind of a device that ends up with a receiver, it would work. my guess is you don't end up having the receiver built in. i'm thinking you have it in your battery and it's charged or in your airline seat, stuff like that. but these things aren't even sampling until the beginning of next year. it usually takes a couple. google, motorola, somebody who makes a lot of gadgets. >> i was going ask you about the
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time line here. it doesn't sound like it's going to be on the shelves in time for the holiday season. >> no, certainly not that soon. >> jon, thanks so much. i think about all the money we've spent on chargers and adapters over the years. what a waste. >> good business. >> yeah. jon fortt in san jose. thanks a lot. bob pisani has a message for the markets. you might be careful what you wish for. he'll explain that. we'll get the action live and review the economic data out of germany when we come right back. at optionsxpress we're all about options trading.
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got a lot of news to cover with simon hobbs whether it's news on unemployment or germany and angela merkel. >> of course, we've fallen further toward the end of the european seg. we saw wall street. two developments in europe. the first is that the prime minister, one of the smaller members of the eurozone has said there's a 50/50 chance they can break up. don't pay too much attention to that. he aligns himself closer with russia and serbia arguably than the rest of europe. it became apparent during the news conference afterward that we do have something of a standoff between this man and the ecb president mario draghi because draghi has said, okay, ask for assistance, a and and i
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come in and buy your bonds, but the spanish are saying, hang on. we want to see what assistance you're putting on the table. as we head to that important ecb meeting one week from today, we'll see how things move forward. it was a down session. there are concerns about what happens to corporate earnings as europe clearly heads into recession. carl, you mentioned the edging up. of course, in spain and greece, you already have one in four people unemployed. that's only about 6% or 7% in western germany. moor began stanley reportedly came through today with a warning on automotives. it's saying that the july auto sales in western europe were
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down or running about 8% lower than the first half of the year, europe accelerating down. the last time you had this depressed level or consistently depressed level was years ago in the mid- to late 1981980s. you might see substantial downgrades to some of the big stocks. certainly germany has done badly today because of the german automotive makers falling into negative territory and those losses have accelerated as the markets moved lower. daimler, vw, volkswagen, the french, big automakers and fiat in negative territory. because of what's happening here in europe and the united states is suggesting that you won't get 4% growth on advertising sales to continued of the year. it will be closer to 3.5%. so you see some pressure there and that's come through to other
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members of the advertising fraternity like publicis. there is a serious issue in china which is being exacerbated with iron ore. they suggest it's going to be bleak for three to five years. basically they have the capacity to produce a billion tons of steel a year but there's only demand for a hundred. the price has fallen by one quarter in just the last month and this is why everything is circular. angela merkel was actually in beijing today and she met with the chinese premier. he said he felt more confident
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about what was happening in europe as a result of what she said to him behind closed doors. he said they might buy european bonds moving forward but the chinese have cede that before. >> and they said they will continue to do it after looking carefully at the opportunity. >> if you can convince me that the eurozone will survive and i won't lose money or you bon you i will buy your bonds. another circle law argument. >> so true. let's get o check from jackie dean jell lis. >> 94.41 is the selling price right now. traders are not as worried about the damage by isaac. now downgraded from a top cal storm to a hurricane. now the focus has shifted to restarting those operations and
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the power outages that may or may not hamper that process. meantime traders are celebrating. they're concerned a little bit about some of that data coming out over the weekend in china. we're expecting some manufacturing numbers. any more negative numbers coming out of china, of course, could send these prices down further. last but not least, i want to touch on the prices that came in higher than expected. we actually saw a little bit of a turnaround here and we're extending some of the larger losses we've seen over the last month. carl, back over to you snoop jackie, thanks a lot. bob pisani is joining me at post nine and we do have some weakness. >> and i a agree with carl's comment about spain wanting to know what they're signing up for, conditions. but really this is about mr. bernanke. the market has convinced itself in the last couple of days and particularly today that mr. bernanke is likely to unveil qe3
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and therefore there is some understandable profit-taking. the trend is now slightly to the downside given what's going on today. that's a ten-day chart you're looking at. the other thing you look at in daylight today is how much interest there is in shorting the market. so look at the s.h. this is one of the ones i watch. in a day when it's been lousy, you can short the s&p 500. this is the one everybody uses. not only is it up, that's understandable. it's the inversion and the volume is up. that's what we're looking for. people are coming in trying to play a little bit on the short end. everybody hates quantitative easing. they think it's wrong. they think they're distorting the markets. it does distort the market but if you don't understand how it distorts the market you're going to get in trouble. try to get a tight shot of this. this is q e.on the stock market. here is qe1.
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the second one, june 2010 to june 2011. look what it did to the markets here. right here, up. then it stopped. that's what happened to the stock market. and then here is qe2. now, i'm not a statistician. i'm a poor italian kid from the bronx. if you're not watching here, qe2 moved the market. look at material stocks put up materials here. i'll show you. it's even more pronounced, the movement in the market. here we go. material stocks, this is the gray area. then no quantitative easing and again want tative easing, which starting here. in august he announced it at jackson hole, okay? look at the effects and since then.
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we're looking at it sideways. here's quantitative easing since then. it's moving very poorly. quantitative easing, i'll wrap this up. we don't have it but the threat of it has held the market up all year. you're crazy. the s&p is up 13%. nobody's performing 13% on the year because there is a draghi/bernanke put that is holding the market up. and, carl, my point is i'm agnostic on this. i have some problems with qe. i'm not particularly happy with it but people who stamp their feet and say this is distorting the market, they're right. the question is are you going to play this or stand there with your arms crossed and id logically say you're staying put. >> it's time to put up or shut up. that goes for draghi and bernanke. >> that's right. qe does play the markets. >> when we come back, former hp ceo carly fiorina talks about
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her role with the republican senatorial committee and what she thinks about the romney/ryan ticket after a break. take the privileged investing tools of wall street and make them simple, intuitive, and available to all. distill all that data. make information instinctual, visual. introducing trade architect, td ameritrade's empowering web-based trading platform. take control of your portfolio today. trade commission-free for 60 days, and we'll throw in up to $600 when you open an account. i've got a nice long life ahead. big plans. so when i found out medicare doesn't pay all my medical expenses, i got a medicare supplement insurance plan. [ male announcer ] if you're eligible for medicare, you may know it only covers about 80% of your part b medical expenses. the rest is up to you. call and find out
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up next on the "halftime
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report." what's happening in just the last hour to cause the move? will it force big ben's happened this weekend? plus, piper jeffrey says facebook one of the best stocks to own right now. gene munster explains his call exclusive will i to us. retailers report huge, back-to-school sales, but what does it mean for the holiday season? what happens is never good enough, carl. see you at the top of the hourly. >> thanks a lot. mitt romney will be on tonight with his speech. joining us carly fiorinfiorina,c contributor. a couple of things have been pointed out by our own larry kudlow and that is a lot of talk about debt reduction. not enough talk about tax cuts. people have got to want to embrace this message. any truth to that? >> well, i think, first of all, we have another speech tonight,
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which is romney's speech tonight, and i'm quite sure that he will talk about tax reform as well as entitlement and regulatory reform because all of those together are not only key to reducing our deficit, they're key to reigniting the engine in our growth to economy. >> what do you think the main narrative for romney will be? a lot of report this week talking about his team in massachusetts, just this week talking to the american legion talking about defense spending. all of those things run counter to a very disciplined paul ryan-like fiscal policy. >> well, i'm not sure i agree with the premise of your question. first of all, what paul ryan's saying is obviously what's true. we're spnding more money than we have and we have to get our fiscal house in order. but what paul ryan is also saying is we have to have clear priorities and i think romney is laying out his priorities. and, yes, it is a priority for
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him to protect spending in an proposet way and invest where necessary. there are real roles government has to play, so it's not about let's just cut everything discriminately. it's about making strategic choices and priority calls. that's what you learn to do in business and that's what there's not enough of. now we need to be strategic in where we spend. >> governor christie talked about making tough choices and so did paul ryan. but so far, carly, the speeches have not mentioned medicare vouchers. they've not talked about leaving medicare to states. they have not talked about budgets for 28 years. but isn't there some room to admit some of the tough medicine that people are going to be taking? >> well, i think first of all you're going to see that roll out as the campaign gets under way. i know it sounds strange to say
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the campaign is getting under way because those of us who are political junkies have been talking about it forever. but the truth is they're getting under way for the vast majority of people. i think you're going to see a lot more specificins in the debates. these debates coming up, even romney and biden, i think, take on huge significance because they're the opportunity to have a really substantive debate and i think that's the most important thing that romney has signaling with his selection of ryan. he picks someone for purposes of governing and he picks someone who is not going to shy away from the specifics and the big ideas. and so now this is going to be a campaign about choices and priorities and ideas, and it won't be enough to just throw adjectives around slogans around. >> now, as far as you're concerned, do you think you were asked about a possible appointment, treasury was one example, at a lunch not to
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recently and you didn't exactly brush it auchlt is that something you would consider. >> of course, it's an honor to be considered for any cabinet position. to say anything other than that would be less than honest but talking about priorities. my priority is to help elect a republican majority in the u.s. senate. a republican majority is key to accomplishing the romney/ryan platform and my priority as well is to help get a romney/ryan ticket elected. >> carly, so much more to cover with you. wish we had time to talk sop hp as well but we'll save it for next time. thanks for coming to the camera. >> great to be with you. >> carly fiorina in tampa. mark zuckerberg and company feeling the heat from wall street. can the social network find some ways to make more money? before the check get a chek bren the markets. down still down 98 points.
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the dow's hanging on to 13,000. joining us now richard bernstein, a cnbc contributor. good day to have you on, rich, good morning. >> good morning, carl. how are you? >> good. the fact that the s&p is coming right before jackson hole, what is the market trying to tell us today? >> well, i think, you know, carl, the market's pretty
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nervous about a number of different things. one, you've got the fed, and, you know, i think people were too optimistic about the probability of quantitative easing. you're starting to see parts of the economy responding. i never thought the feds were going to be as eager to ease as other people were, but think people are nervous about that. i think on the fiscal side, though, people are nervous about what they're hearing from the convention. this will be no difrp than what you hear from the democrats. they'll say we want to compromise but we want it our way. that is spooking people because it says nothing's going to get done. you know, i think that's got to be wearing people. again, this is nothing against republicans. democrats are going to say the same thing next week. >> no, believe me -- >> you would hope with the cliff looming they would be a little
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more counssnciliatorconciliator >> some are saying romney is more willing than he's letting it on. where's your head in terms of sector rotation if any. >> yeah. well, carl, china is a major issue and i doan think u.s. investors are paying enough attention what's going on. you guys send michelle all over europe. you should send her to deal with europe's merging markets. there's really serious issues going on in the emerging markets. so it's not just europe. it was a global credit bubble, carl, and we're seeing the effecting all over the world. >> can i pretend for a moment you're back at mer ill and you're talking to the thundering herd? what is your manage to them?
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>> maybe i should be like a politician, carl, and say i don't answer hypotheticals, but i'll say i tlirng are some actually reasonable things happening in the united states. we are, you know, the best house on a bad block, the best cool in summer school. some real serious things are going on outside the united states. the u.s. economy is doing quite well given that backdrop and think that's why the s&p has done wait's done up until last week, of course. but, you know, it was close to a four-year high last week and think that's what's going on. so i would say to people there's plenty to worry about outside the united states, but i think within the united states, you should be pretty bullish right now. >> rich, always good to talk to you. poli please come back. >> thanks, carl. from the beginning facebook
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didn't want that cluttered look of myspace with ads splashed across the page but now they're doing something. joining us is paul sloan, editor at cnet. good to have you. >> thanks for having me. >> somebody said it's a good thing facebook bought instagram because everyone is graduating to instagram. how's the evolution? >> they're gradually doing things you'd thing they wouldn't. they're letting people put their ads on other people's new s fees with other social connections and they're letting developers of apps actually buy ads for their apps and put them on your news feed and these are things you would not have seen, i would argue, if the stock is doing better. >> what do you think an
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advertiser's response is to that? do they want to see those avenues open or are they, too, worried about the user experience, so to speak? >> i still hear from advertisers. i talk with them all the time. they just want more access to facebook. there's all kinds of things they can. do and mark zuckerberg, to his credit, has been focus, focus, focus, on his experience. obviously with the stock half of where it starts there's tons of pressure. they did the logout ad where when you log out of facebook, you see the logout ad. >> we have the big debate about mobilization here. pando pandora's news last night wasn't all that bad, but zynga, it's tough to put an ad on a tiny screen when you want to play the gape. so it all subject to the content, the type of content?
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>> i think it is subject to the type of content. facebook isn't alone in having this mobile challenge, but, you know, i -- and i think zuck zuckerbe zuckerberg's approach is correct. the early signs that their signs that they started rolling out a mobile have very good but they're very limbeted in what they can do. is wall street going to wait around for these kinds of projects to start turning in the mud. >> one thing that was sort of a medial centric argument, but the degree they have not spoken to the street, to trade, to magazines i think is beginning to get a little puzzling here. >> you'll notice in the past few weeks there have been a series of stories focusing on the team. they've been going out there trying to feed the message, saying, hey, wall street, we're at work of this.
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let's face it. facebook went public sort of late. >> some say they dragged kicking and screaming. paul, thank you so much. clint eastwood to be the speaker tonight. we're asking you which clind eastwood move title, character, or quote best suits mitt romney? we'll get you answer after this break. ♪ it means cleaner, cheaper american-made energy. but we've got to be careful how we get it. design the wells to be safe. thousands of jobs. use the most advanced technology to protect our water. billions in the economy. at chevron, if we can't do it right, we won't do it at all. we've got to think long term. we've got to think long term. ♪
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tweet" for this thursday it's widely rumored that clint eastwood will be a surprise speaker at the republican convention tonight. we're asking you which clint eastwood movie title, character or quote best suits mitt romney? >> throw your arms around this honky tong man. right turn, collide. i have strong feelings about gun control. if there's a gun around, i want to be controlling it. there's a lot of nrs


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