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tv   Closing Bell  CNBC  September 10, 2012 3:00pm-4:00pm EDT

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trying to -- come on air. come, come, come. >> we're on live tv. >> live tv. you're now world famous in seoul, south korea. we love having visitors. we don't know who they are. thanks for watching "street signs." say "closing bell" is next. hi, everybody, into the final stretch. welcome to "closing bell," i'm maria bartiromo. i hope you'll join us for our exclusive sitdown with the prime minister italy, mario monti coming up in the program. >> looking forward to that very much. >> he has some surprising comments on the global economy and, of course, the fed meeting. >> the fed meeting and how long he plans to stay in office, too. i found that very interesting. we'll get to that coming up. i'm bill griffeth. looking forward to that great
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get. we'll give you a preview of what is a very revealing discussion with mario monti. for the markets, a wait and see day, ahead of everything that's still to come. wednesday's fed meeting, announcement on thursday, this week's european finance ministers, the constitutional court ruling in germany, also on wednesday. so, right now stocks sitting near their four-year highs. let's show you how we stand right now. the dow down 15 points. we were lower, we were higher. now trading at 13,291. the nasdaq at this hour is down 25 points. that's the hardest hit right now, down almost a percent at 3110. the s&p is down four points at 1433. let's get reaction to today's markets. investors may be in the holding pattern but debora calls this a teflon market. she says no matter what negative news we throw at it, it doesn't
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stick. we'll talk about that as the fed decision comes down the pipe. our steve liesman and rick santelli join us as well. debora, i mean, you're right. we are sitting here with a weak economy, a bad jobs report and the stock market just continues going higher. what do you make of that? >> my general feeling is that we've started to get past europe. jpmorgan said they're overweight european securities. if we were going to get selling, we would have seen that on friday. like you said, that was a terrible jobs report. we've been in this europe situation for three years now. they've had meetings and meetings to discuss meetings. so, we're starting to feel, you know what, it's going to be okay over there. ben bernanke, he's going to stay they're going to do whatever it takes. they're concerned about jobs. the same old thing out of him again. again, when we look at septembers, going back 62 years, 27 of the septembers have been up and 34 down. this may be the time we'll have
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number 28 september up. >> bill, bill, can we have a discussion about what the world would look like without the european anvil hanging over our heads? i'm afraid to imagine that world. i'm afraid to think about what the right value is of assets of that world because i'll feel pollyanna and it will seem as if draghi has done something to staunch the crisis in europe. just to have a flight of fancy for a moment and think, do all risk assets take a leap up if all of a sudden europe doesn't melt down? >> you want to bring up your sound bite? >> i withdrawal it. >> bring up your sound bite with mario. you got into it with him. >> mario monti says the announcement alone of this esm bailout fund and this new bond-buying program opportunity is enough to keep interest rates in check in italy and in spain. that's why italy's not going to access the esm fund. listen to mario monti because i
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asked him long-term growth in italy, where does it come from and what's the significance of this esm fund? >> reporter: talk to us about how you see this growth happening over the longer term? >> well, i see this growth happening, first of all, and this is not so much longer term. i hope it is short and medium term, through a decline of interest rates. because these unduly high interest rates on italian government securities, not yet reflecting the new and better fundamentals of the italian economy and public finance as interest rates hopefully -- as they started already, do come down, this will create more space for investment and for growth. >> so, rick santelli, there it is. here's a leader italy now saying that it is the threat of ecb intervention that's bringing rates down to more manageable
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levels because he felt that rates were too high and didn't fully reflect the fundamentals of his economy. what do you make of all that? >> well, i agree with him that rates were too high, but i think they totally reflected the fundamentals of their economy. what they're trying to do, you know, steve has a fantasy. i have a fantasy for the money ball world we live in, whether it's the ecb, monti, draghi or the federal reserve, i would like to see them all move to grandstands and get off the field. but there's a flaw in what this comment says. let's substitute europe for the u.s. housing market. interest rates being low should have cured that. it didn't. it's not curing it in spain. interest rates being low isn't the panacea of growth. you need a plan. and it seems to me that he's going to be around till spring, probably will have elections in about seven or eight months. and like our own elections, i didn't hear him with any details other than what interest rates are going to be good in the near term. >> he does go through a plan. we'll bring the interview in the
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next hour. he says he has a plan in terms of making labor markets more flexible. we'll get into that. it occurs to me we're talking about the same thing, whether we're talking about europe or the u.s., because the fact is the federal reserve has been doing a lot of talking and no action. that's what we're waiting on for wednesday and thursday. if the fed does nothing, i'm wondering if we see this market completely reverse course, keep, as an investor who needs to allocate capital in this market, how do you invest in this market? what are you sdmoog. >> we're worried, in fact, all summer there's been this discounted effect, monetary easing here in the u.s. as well as europe. we're afraid when you get thursday's news event we think the fed may announce they're going to dot qe3. that may be the signal to sell. we're taking exposure off the table and looking to take advantage of these higher stock prices to reduce stock exposure because we think the markets are vulnerable at this time. >> you think the market would sell on the news they're going to announce qe3. what if they don't announce any
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more quantitative easing? >> it's likely to be worse. if we don't get what we're expecting the markets will get hammered even more. this market exceeded our full-year expectations and we think it's prudent to take some capital off the table. >> what is your betting here, what do you think the fed tells us thursday? >> i believe there's a low probability they do nothing. maybe even zero. >> low probability they do nothing. >> right. >> so, you're expecting something? >> a high probability they do something, would be the opposite. >> there you go. >> i should state it in the positive. >> too many negatives. >> for this late in the day anyway. i think for sure they extend the guidance. and i think there's way better than a 50% chance that they announce some form of quantitative easing. i think they've basically run out of patience with this economy at the federal reserve. the thing to do is to do more. >> a lot of people are running out of patience with the fed. thank you, everybody. we'll keep following it as we enter the final stretch with the
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market down 15 points. >> keep it right here. a lot more headed your way this busy monday edition of the "closing bell." coming up -- counting your chickens. generation "z" looking to their parents to provide a secure financial future. they may number for a big surprise. find out why straight ahead. plus, stock option. aig moving closer to getting out of the government's hands. former aig chief hank greenberg weighs in on what this means for the company. and the full monti. maria's market-moving interview with italy's prime minister. >> can you categorically say there will be no default? >> that and more is ahead on this special edition of the "closing bell." ♪ [ male announcer ] the first only the beginning. ♪
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welcome back. few people are worrying about
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saving for retirement, paerm. why? turns out they're counting on their parents for inheritance. in reality, these kids may not get much for that inheritance. a new study saying 39% of those who fall between the ages of 13 and 22 expect to inherent wealth. only 16% of parents plan to leave anything behind. >> so 39% expect to get it, 16% of their parents say they're not going to get it -- say they will, so does this so-called generation "z" have unexpected expectations, he asks naively. joining us is wealth editor robert frank. karen, we all would love to get inheritance but if our parents don't have the money when the time comes we aren't going to get any. >> for 25 years i've been a certified financial planner and we've olz told people don't count on inheritances. my god, with today's baby boomers being the epitome of
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spenders, kids, watch out, there's not going to be enough left. >> why are you so horrified? >> there's a little concern about the entitlement of this generation and not the work ethic there used to be. at the end of the day, what's going to happen when social security goes away? pensions are a thing of the past. kids have to start saving immediately when they get their first jobs. >> they will. robert, what's the -- what's behind this disconnect between what you think kids expect and what their parents are planning to give them? >> a couple of macro things. the largest period of wealth creation for baby boomers in our history. so you've got that very wealthy generation. on the other hand, they're kids which is this generation that is not saving. they're growing up in one of the groomiest periods for wealth creation earlier in their lives. i once went to wealth education camp, a camp they teach rich kids how to inherent all the money they expect to inherit.
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>> how were the lunches? how was the food? >> it was pretty good. >> i'll bet. >> what was amazing is that only three people out of a group of 25 kids, these are kids -- i say kid, they were in their 20s and 30s, only three of them had ever interviewed for a job. less than half of them knew what a mutual fund was. i don't blame them. they've grown up in some of the greatest period of wealth creation, their parents are spending a lot, living large. they haven't learned to save. >> what age were you talking about there? >> these were people from the age of 20 to about 30, 31. the people that should have been in the job market. >> what should they be doing? karen, what steps do kids need to take to plan for their future today? >> my mantra is you save 10% of every paycheck for the rest of your life, no matter what, make no excuses and you will not have to worry about retirement. >> good luck with that. >> i've always done that. >> i love to hear that.
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>> kids aren't going to do that. >> i disagree. >> here's a stat that jumped out from the -- go ahead. >> i do give talks at local high schools and every now and then, when you put in front of children what a 10% contribution with a reasonable growth rate will be by the time they're 65, they get energized. i just think we're missing the boat not teaching them. >> i saw the same thing when they introduced 401(k)s 30 years ago, when they were telling us the multimillionaires we would be. you know what happened in the meantime. we had a lost decade in the stock market. let me point out one stat that seems to provide some hope for the x and y generations. nearly 60% make regular automatic contributions to their retirement savings whereas 46% of the baby boomers are doing the same thing. so, it would be appear the generation behind us is doing a better job. >> they've figured it out. sounds that way.
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>> robert? >> yeah. that stat is surprising. one of the amazing thing i've seen is when you look at the luxury business, some of the biggest spenders in luxury are unemployed or underemployed young people. my question is, where do they get all their money to buy luxury? it's often from their parents. >> of course. >> if they're being supported by their parents, a lot of stories about parents buying apartments, especially here in new york city. they're only doing what they've learned. that number is surprising to me. i bet as you get up the wealth level that number drops. >> an important conversation. we appreciate it. see you soon. >> see, i have lots of hope on this. they're young. they'll figure it out. >> i hope so. >> people figure it out when the time comes and a crisis hits, they'll figure it out. >> in the final stretch of trading for the day. 45 minutes until the closing bell sounds. >> drilling for drofts. royal dutch shell goes at it off the coast of alaska and bp
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scales back in the gulf, selling off major assets. we have the trade on shell and bp coming up. plus -- >> following the financial crisis of 2007 and '08, that if i remember well was generated in the u.s. not in europe, the market -- >> italian prime minister mario monti blaming the u.s. for europe's debt crisis. he speaks with me in an interview. we're sitting on a bunch of shale gas.
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welcome back. quick market flash. >> we're watching shares of apple today. we opened a penny above friday's close of 680.45, then hit an infi int intraday all-time high and now down 666.98. could be a warning of a short-term pull back. another level, 617.59, the 50-day moving average. in today's talking numbers, the tale of two energy giants, bp up a bit, the oil company announcing it's selling some gulf of mexico assets to pay for
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that horrible spill in that area of a few years ago. meantime, shell just now starting to drill off the coast of alaska. it's the first time a drill bit has touched that part of the ocean floor in 20 years. so, who's in a better spot right now, shell or bp? let's look at the charts and talk fundamentals and talking numbers. technical side, carter, oppenheimer, and fundamental side, dan dicker. dan, what do you make of the bp asset sale? good for shareholders or not? >> they're getting close to the bill. they've been trying to sell assets to raise money to cover the cost of the bp oil spill. that's getting -- continues to get larger. they thought they might get a deal with the feds for a $15 billion settlement. that was put under the carpet last week. the doj looks like they're going for the full monty, $25 billion in fines. bp has problems in terms of raising money. this may be close to the end of it.
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they got $5.5 billion to what they sold to plains this morning. that's close. they've raised $32 billion in asset sales. that's pretty close to what they need to raise to stay even. >> one of the reasons the stock is up today. carter, let's look at bp and shell and see which one you like better here. >> generally we like the big integrated but of the two royal dutch is better. long-term short which shows the crisis. royal dutch has been able to outperform. individually, if you look at the two charts, also royal dutch shows a better story. maybe we can start with bp and then look at royal dutch. basically, -- and we'll draw some lines to show you there's a lot of convergence here. this korvconvergence is often - this is literally 50/50. in the case of royal dutch, you have the same kind of convergence, higher lows and lower highs but in this case the
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resolution looks like to the upside, much morrow bust circumstance, taking down that downturn. >> you like the royal dutch. dan, who would you pick here, royal dutch or bp? sdpoo i'm with carter on this one. if they had gotten a better deal from the department of justice then maybe the problems would be over but it doesn't look like they're quite over yet. seems to be another six months of bad times in store for bp. shell is making all the right moves. alaska, in mozambique, an lng plant they're going to build in canada. just for the dividend you have to like them better. >> talking numbers on energy today. >> 35 minutes before the closing bell sounds for the day. a market fractionally lower. technology taking the hit as a leadership group on the downside. nasdaq weaker by 26 points. up next the interview heard around the world. i flew halfway around the world to get. >> i believe that what italy is doing in terms of domestic
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policies, both budgetary -- i mean, fiscal discipline and structure reforms should be enough -- >> so, italian prime minister mario monti telling me his country willen be dipping into the ecb's new bond buying program any time soon. the interview on this network only. another cnbc exclusive. i'll speak with hank greenberg. he has not agreed with much of the government has done with aig, but what about this? tdd#: 1-800-345-2550 when i'm trading, i'm so into it, tdd#: 1-800-345-2550 hours can go by before i realize tdd#: 1-800-345-2550 that i haven't even looked away from my screen. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 that kind of focus... tdd#: 1-800-345-2550 that's what i have when i trade. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 and the streetsmart edge trading platform from charles schwab... tdd#: 1-800-345-2550 ...helps me keep an eye on what's really important to me. tdd#: 1-800-345-2550 it's packed with tools that help me work my strategies,
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here's something that was hard to imagine back in 2008 during the height of the financial cries. aig is now poised, finally, to end government ownership, get out of the government's hands for the most part. mary thompson has more on this milestone moment for the insurance giant that was bailed out by taxpayers four years ago. >> it is a big moment. with the government selling up
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to $20.7 billion of aig stock its stake in the insured could fall to 20% or maybe less. a stake that small unthinkable to many in 2008 and '09 when a variety of government loans and aid totaling $182 billion left treasury holding a 92% stake in aig. the final number will depend on the price the shares are sold at. add in aig's $5 billion buy back and it could cut the treasury stake to around 20%. this sale, the largest of the four treasuries undertaken since may of last year with the prior three feshing an average share price above the government's break-even price of $27.23. the stock is trading well above its ten-day moving -- or ten-day average on a volume basis. still, jim milstein who worked
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for the treasury on aig's rescue says it's time a big stake like this was sold. the stock representing a smaller and simpler firm than the 2007 version. since then earnings and revenues have been halved as they sold off assets and restructured itself to pay often its debt to the government. paying off that government debt at a profit to taxpayers, one of the promises made by ceo bob benmosche when he took over. treasury is in the money as is the new york federal reserve which made $6.6 billion selling troubled assets it took over as well as as part of the aig rescue. >> we want to get reaction from the man who's been critical of uncle sam's involvement from the get go. joining me is hank greenberg, former chairman and ceo of aig who really built the firm from the bottom up. good to see you.
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thanks for joining us. >> you too. >> did the government get it right here? >> you say right. by that what do you mean, getting it right? >> what's your take on -- >> on the timing? >> yeah, let's start with the timing. >> yeah. well, there's an election coming up for the presidency and they would like to get out of aig as much as they can and show a profit on the bailout fund. from that point, from the government's point of view, you know, it's political, it seems to me. >> so, it's interesting you think this is actually political, even though taxpayers do make i profit on it. let me get your take on the implications of this. it seems to me given the fact they do own the thrift, the regulating is coming from the federal reserve, is this going to hamper cash, hamper the ability for the company to pay a dividend, buy back stock? how much of an issue is this? >> it could be an issue. look, aig owns a small -- relatively small saving and
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loan. they could always sell it. it's not fundamental to the business. not now. it had a value before. so, you can get rid of that. they would be regulated by the states. >> selling aia, the stake in aia, this is interesting. we've talked about this before because this is one of the jewels of the company. did they sell it on fire sale prices? are you happy with the sale of the asian subsidiary? >> look, you can never get enough for aia. it's one of a kind. it cannot be replicated. in my judgment. it's the only foreign life company that's 100% owned. >> right. you just don't see it, in china you just don't see it. >> you cannot do that. so, yes, it's too bad they sold aia. they have a small stake left. and it's -- you know, it's one of a kind. >> how is benmosche doing? >> i think he's doing a great
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job. i urged him to take the job. >> you've endorsed him many times. >> yes, i think he's done a great job given the handicap he's working under. you had a government-owned company. they originally said they would be out of it in one year. this is the fourth year. >> four years it took them, yeah. >> so, in terms of -- my question a moment ago in terms of the ability to pay dividends, the ability to buy back stock and any other shareholder-friendly moves, is it hampered because of this? what's your take on that? >> well, what they're doing, they're buying back stock from the government, which they're selling below book value. so it enhances earnings per share and the valuation from that point of view. but using cash, obviously. you don't get it for nothing. and so it's a buying back your own stock at this point when you're selling it, about 56% of book value.
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from the financial point of view, it looks good. but you're giving up a lot of cash. you're in the insurance business. you're in a risk business. >> you need the cash. >> having some cash available is not a bad idea. >> right, right. what about your $25 billion lawsuit against the government, where do we stand on that? you had essentially calling on the government's assumption of aig's stock a violation of the constitution. talk to us about your lawsuit. is that still in place? >> absolutely. you know, it's an unlawful taking. >> very different from the way they invested in citigroup. very different than any other takeovers during that 2008 tension. >> they needed shareholder approval in order to do what they did. they did not have it. they took it over. in my judgment, in violation of the constitutional unlawful taking. >> so, you're suing the government. you don't see that very often. what should we expect the timing of this, how does this play out? what have you been, in
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discussions in terms of your side versus government side? >> i think we're diverged now that we're going to be able to begin taking discovery. and that will be very interesting. now, that's in the hands of the lawyers. i'm not day to day involved in it, but i'm -- i think the unlawful taking was clear and unequivocal. at least in my mind. >> of course, the aig under your leadership versus the aig we look at today, very different companies. >> totally different. >> where does the growth come from, in your view, at aig in the coming couple of years? >> well, aig now is a global property casualty company, a domestic life company. that's the basic businesses. they're out of the international life insurance. that's all gone. aia, american life, they're all gone. and most of the financial services is either gone or being wound down. so, it's a global property casualty company, which is a
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good business, should be good, and domestic life insurance. that's aig. >> do you think they're still in the cutting mode, selling assets? do they still need to raise further capital? what other assets could they sell? i mean, the leasing business has been talked about quite a bit. >> well, they want to unload that. they would are to have an ipo -- >> this is another jewel. >> you would have to have an ipo. is the market ready for an ipo right now? unlikely. not the best time. so, that's going to be around for a while. so, that is an issue. the government will still own 23%, roughly, of the stock, the largest shareholder yet, until that's gone. either somebody buys it or they got to continue do to do what they're doing, selling the stock. so, yes they're under 50% but still the largest shareholder. >> you've been building out cv star globally, obviously. are you still investing in
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insurance-related businesses? where are you allocating capital around the world right now? >> first of all, our insurance business is growing. we're obviously throughout the united states. we're in many foreign countries. we're in latin america, we're in london, turkey, we're in china, we're in singapore, japan and other countries as we speak. and then our investment side, we're all over. we're invested in china, in the united states, obviously. some in latin america. anyplace we see an opportunity. >> finally, hank, no doubt you saw or heard about my interview with eliot spitzer, which at the end of the day, ended up to be a lot about you. what's your take? did you get feedback on that? >> yeah. you won. i mean, his waving around a document that happened to be nothing to do with what we're talking about, because what he was waving around, i'm told, was
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a termination by the federal court. but there was an appeal that overturned that. he didn't tell you about the appeal. >> right. hank, good to have you on the program. >> good to be with you. >> thank you for weighing in on the developments at aig, hank greenberg. over to you. >> we'll head toward the break here. markets still trading a little lower. hello, there, down 27 points now with 20 minutes left in this trading day. we're at or near four-year highs in this market but have we set ourselves up for a big fail if the fed does not step up big later this week? two of wall street's top money pros chime in on that. then after the bell -- >> i believe that we will be able to avoid also other increases in taxation. >> italy's prime minister, monti, tells maria he's trying hard to avoid the value-added tax there.
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welcome back. steve wynn is $30 million richer in los angeles. big jury award. jayne wel jane wells. >> jury ordered joe francis to pay steve wynn $20 million in a slander lawsuit brought by the casino owner. francis said wynn wanted him killed and buried in the desert over a $2 million gaming debt. wynn's $20 million win is on top of $9.5 million francis has already been ordered to pay wynn in two previous lawsuits going back to 2008. so, wynn is 3-0 in court. the key witness in this case was quincy jones, whom francis said showed him e-mails proving wynn
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wanted him dead. jones testified he never said that, no e-mail was produced so apparently what happens in vegas sometimes ends up in court in los angeles. >> holy cow. he only asked for $12 million and he got $20 million. that's amazing. >> $12 million in compensatory and punitive. so $20 million is the total gift. >> now he has to collect it. >> thank you. >> thank you. >> good luck with that. another market monday. dow trying stay out of the red for the 13th monday in the last 14. not looking good right now. down 35 points. this ahead of a full week of key meetings. the fed meets wednesday and thursday. on the other side of the pond, german constitutional court ruling coming up on wednesday. a lot going on this week. >> once again, we are in waiting mode. with us rich bernstein, senior contributor from richard bernstein, and our own bob poe san a bob pisani.
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what do you think, is this going to be the catalyst? >> in the short term i think people will be disappointed. we have a ten-year that's 1/60th, give or take and the political, i'd be surprised if the fed goes full bore. i think people are psyched for something big from the fed. they may be disappointed. >> are we setting ourselves up for a fall here? >> it's very dangerous to argue against the fed going into a fed announcement, as you well know. i think what the real problem is a lot of strategists have had very conservative numbers. we're bushing against their price targets for the end of the year. you don't have to put out a price target anymore but a lot -- the average one last week was 1425. we're at 1435 on the s&p. so, calling for a modest pull back would be sort of normal at this point. >> don't you think, though, that if they -- i realize that they always say, we don't decide until we meet. there's no decision at this point. but don't you think if they really kind of felt like they weren't going to do anything
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they would try to telegraph that ahead of time? >> especially friday's employment report, which was hardly strong. they're bound to do something. the question is, in the near term, let's forget about a year from now, two years from now, in the near term are they going to produce something that would surprise people on the upside? is it going to be bigger than what people are expecting? i think that's hard because expectations are pretty big right now, the fed and ecb --. >> we're talking about a market that's been trading up, this teflon market, one of our guests called it earlier, on this whole central bank intervention story. what could they do? >> well, first of all, i would argue with the teflon part. but i think what could they do? i mean, they could -- they could start buying anything they wanted in the fixed income market. i think that would surprise people on the upside but they're not going to do that. people have argued the fed's balance sheet is pretty substantial as it is. do they want to create a whole political issue around that? i think what's more important is they want to make sure that people know they're there in case the economy meaningfully
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weakens going forward. if you're really bearish on the economy, they're telling you they're going to step in. >> what do you think the rotation in this market has told us? obviously, telecom has been one of the areas. you're seeing a move out of energy. where's the rotation? tell us about -- >> the last four or five days, the hand over fists they're going after financial and material stocks. >> materials, yes. >> it's funny, financials are value stocks these days. some of the value indices have been doing well as people move into them to try to move up on that scale. energy stocks have been big. >> bill gross said last week or the week before that whatever mario draghi is doing over there will be inflationary. and gold has been going up. >> did increase his inflationary expectations. >> i think it's interesting. everybody equates central bank easing with inflation. i think we have to remember what causes inflation is abnormal credit creation. all the fed can do is set the groundwork for an inflationary
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environment. the question ultimately is, will you get lending and does the lending spur demand to be greater than supply so prices go up? that's the big question mark. the fed has set the table for real inflationary environment. and i think if you pushed them, they would have to say they're disappointed you're not getting it in the economy. >> the demand is not there yet. >> you're not getting the credit creation. >> i love this story, money moving into financials. is that where you would put your money? >> we have small u.s. financials. i'm not sure i love the big multinationals because of the bubbles in emerging market and things like that. if you like the u.s. economy and you think it's going to continue to improve, you definitely want to play small u.s. financials. >> in trmz of trading don't be surprised when the fed announcement comes out, you'll see strategists calling for a pullback. deutsche bank was talking about a 5% to 10% pull out in the near term. in is small numbers here for a pull back, but i think you'll hear more about it in the next -- >> i would argue that's fantastic. they're all worried there's going to be a pull back, i think we're still in a major bull
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market and people don't realize it. >> we'll see you on the countdown. >> thank you. heading toward the close. a slight downside bias in this market. the dow near the lows of the day, about 45 points. >> stick around. we're going to find out if one of the major players in the europe crisis is actually sticking around beyond the deadline. >> reporter: would you stay on f asked, after april? >> my horizon is really long-term concerning the reforms that we have implanted in the italian economy. >> find out if prime minister mario monti will be leaving in the spring, opening the door for perhaps a return of berlusconi? teaching america a lesson. 26,000 chicago teachers walk the picket line to protest massive cuts by former obama chief of staff turned chicago mayor, rahm emanuel. is this the beginning of much needed bashlash?
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welcome back. this market is selling off, headed into the close. a lot of chatter ahead of this week's meeting with european finance ministers. i had a chance to sit down with italian prime minister, mario monti. bill and i wanted to show you what he said about serving as prime minister beyond next spring. >> reporter: your term, of course, ending in april, but people are celebrating your leadership and your credibility. would you be poised to stay on if asked after april? >> my horizon is really long term concerning the reforms that we implanted in the italian economy in order for them to generate benefits also in the long term, but my personal horizon in this current occupational end definitely with february 2013. >> reporter: no doubt about it? >> no doubt about it. >> do you believe him?
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he says, come april, he's done. >> i don't think so. i mean, first of all, you don't have clear candidates out there that would replace him. berlusconi has been hinting he wants his job back. i don't see that happening. so, i think mario monti has gone into this job with no loyalties, just loyalty to getting the economy in italy back on track. >> exactly. >> and i think that's really created credibility around him. he says, absolutely not, he's leaving in april 2013. i still push back and say he stays. >> he is the master negotiator and this may be the first salvo in that to say, hey, you know, there's -- real possibility i'm going to be out of here come april. >> he's had the support of both sides, parliament really supporting him, even though i have to say, people have really bought into his plans, even though that has meant higher taxes and meant cutbacks. but they still buy into it because they see him making a difference. >> more willing to do it for berlusconi. >> absolutely. >> we look forward to your
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interview, the full interview with maria and mario monti in about 15 minutes. we mentioned the market is selling off going into the close, down about 45 points on the industrial average. closing countdown after this short break. after the bell, does general motors lose $49,000 on every volt it builds or doesn't it? our phil lebeau says it depends on who's doing the math. bob...
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welcome back. four minutes left in the trading session as we go into what's a pretty busy, we think, mow men to us work for the markets. as this point the bets have been placed and we're in wait and see mode. here at the close we did see a bit of a pull back for major averages in the stock market. at least for the dow. you have two major components, coke and general electric, with some shares for sale on the close here. that seemed to be what caused some of the selloff here. for the most part, wait and see mode has begun. same thing for treasury markets. the ten-year yield was higher. it has come down a little bit. a little buying coming into the
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close but we're still hovering around the 1.665 yield. we're at 5.74%. i'll ask rich bernstein about that in a moment, whether he would buy spanish bonds. his answer may surprise you. gold also a wait and see mode here. that's what you call a tease, rich. gold today down $13. a bit of a pull back after very good gains the last few weeks here with the ecb making signals it will buy bonds over there. the fear indicator is starting to move up here. we'll watch this carefully, the vix with an 11% gain. as for sectors, strength last week is the strength today. materials and telecomes still among the leaders, although we aren't seeing a bit of erosion in gains early in the session here today. but that telecom sector still high on a lot of people's list in part because of the dividends
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that that sector pays right now. rich bernstein, if we believe that the ecb is there to lap up the bonds in europe, why wouldn't you want to buy a spanish bond that's yielding 5.5% right now? >> the first thing i said is if one believes. i'm not sure i believe the ecb is going to be there. >> they have to ask for it first, don't they? >> if one believes and you're tempted to buy a spanish bond, i would say you should buy spanish banks. >> you would buy the stocks. >> i would buy the stocks. i think the returns you'll get in the very risky spanish equ y equities will far outpace what you'll get in the yield on the spanish bond. >> warren myers, this week, momentous we say, the fed, constitutional bank in germany. what are you expecting on the floor? >> there's such an amount of data and information coming out this week. what you said earlier this week is correct. a lot of people have placed
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their bets. a lot is built in. the german government will determine the ecm is constitutional, maybe with some caveats. the fact that the fed might be coming out with stimulus is already baked into the market. i think a lot of that is baked into this market already. >> somebody made the point earlier that no matter what the fed does on thursday, you're going to see a selloff. was that you or somebody else that said that? >> i think there's room for disappointment here. not that the fed doesn't act, i think they'll act, but can they produce a positive surprise for people? i think that's very difficult. >> i agree with that. although bernanke put is still in this marketplace. i think that downside is ultimately limited. it's not going to -- you know, it won't be treacherous. >> good to see you. i'll see you on the floor at the new york stock exchange. we are going out near the lows of the session here. but not a huge selloff, obviously, with the dow down about 55 points. by the way, over at the nasdaq market site, ringinghe


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