tv Closing Bell CNBC May 17, 2013 3:00pm-4:01pm EDT
expensive home ever sold. >> and will it ever get sold? a lot of these properties either don't sell or sell for a whole lot less. >> it's great marketing. put a hundred plus, you're bound to get some press. but this property is a huge amount of acreage in a very special place. >> i looked up the property taxes. $150,000 a year. thanks for watching "street signs," everybody. >> "closing bell" is next. have a good weekend. blnk. hi, everybody. we're into the final stretch. welcome to the "closing bell." special edition of the "closing bell." i'm maria bartiromo today coming to you live from the trading floor of credit suisse in new york city. >> i'm scott wapner at the new york stock exchange. bill griffeth is back on çmond. and coming up today, the rally that won't quit isn't quitting, not today, at least so far. the dow posed for its fourth consecutive winning week as stocks continue to touch new
highs. maria? >> and you can be sure this market and a lot more will come up in my exclusive interview coming up with credit suisse ceo, brady dogan. we'll see where he sees equities going, the landscape, and new regulations in the banking sector. ceo of credit swooes with me, brady dougan. >> and the folks in charge of the irs when it was targeting conservative groups before congress today. we will also speak with the idaho billionaire who may have been the first to sound the alarm with the irs when he was audited after backing mitt romney ahead of the presidential election. he'll be here after the bell. >> amazing stories continuing to develop. let's check the market, as we approach this final stretch on a friday. the market continues record setters here. let's take a look at where we stand as we approach this final hour. the dow jones industrial average, once again on the upside. 97 points. we are right now at the highs of the afternoon at 15,330. nasdaq and s&p 500 also looking good today, with money moving into equities consistently. standard & poor's up about 14 points now. and the nasdaq composite also
stronger. let's take a look at that chart, as they are similar charts to the nasdaq. the nasdaq also at the highs of the afternoon, with a gain of 27 and change, 3493 left, trades on the nasdaq. >> maria, in today's "closing bell" exchange, mark, dan, peteç costa, cnbc mark analyst from empire executions all joining us today. so, mark, this really is the rally that won't quit. will it ever? >> well, apparently not, scott. i mean, i've called it a teflon rally. doesn't matter if it's good news or bad, the market continues to charge higher. in fact, we had set out we thought a fairly ambitious target for 1680 on the s&p 500 at the beginning of the year, and i think we're going to get here a little sooner than expected. that doesn't mean we don't think there's some likelihood that we'll get a pullback of equity prices at some point. but nonetheless, i think conditions, given the news we had today, for instance, on consumer sentiment in this well-leading economic indicators is positive and supportive for a higher equity prices.
>> do you debris with that? do you see conviction every time we see any kind of selling? that buy on the dip mentality consistent? >> if you're asking me, i didn't hear you, i'm sorry, maria. >> i said, that buy on the dip mentality, once again proving to be true. are you expecting that to continue, and for how long? >> well, i think that we see that and i think more and more people are getting involved in that situation, but i think that we have to be a little more cautious. and you know, we have been bullish for i can't even tell you how long, but i think that we're going to get to a point, probably in the next couple of weeks, where i think the dow will be around 15,700, and i think 1580 on the s&p is a very good point where maybe there will be the beginning of a correction or a small one. i don't think it's going to be a major one, but i think there'll the next couple of weeks, but the market, as far as i'm concerned, will go higher at the end. year. but i think we'll see that correction fairly soon. >> dan, are you concerned at all about the velocity of the move? you know, the russell 2,000 is
up 9% over the last four weeks alone, as is the nasdaq, the mid-caps are up 8%. the dow's a slouch, only up 6%. that's a lot in a short period of time. >> well, you know, also, scott, laws of supply and demand are also playing in here too. you've got a lot of companies buying shares back, while m&a hasn't been real prominent this year, we think that's just a matter of time before that happened. fbikqfact, the s&p 500 is actuy contracting. the wellshire 5,000 doesn't even have 5,000 stocks in it anymore, because there's so many fewer publicly quoted companies. so there could be going back to a term that i haven't heard, back since the mid-80s rally, which was a shortage of equities with accounting for today's upswing in the market. and we might be heading in that direction again. it's the laws of supply and demand might be what is dominating this, which makes me think that the inevitable
pullback may not be terribly tradeable. that you don't have to be completely out of the market. it could be a churning process among sectors, and you might see some sectors outperform and others underperform. we saw some weeks ago, but so quick unless you were incredibly nimble, you wonder if those are even worthwhile getting involved in. you should have your list of stocks to buy and just buy them when you think that they're attractively valued. >> andrew, let me bring you in here. because i was hearing, actually, just this week and last week, that 30% of accounts at a number of wealth managers, 30% of accounts are actually sitting on cash. i'm wondering if, you know, what you think about that. because, to me it looks like that means that there's such potential for this bull market to continue, if a third of the accounts in wealth managers today are actually too cautious to put money to work in stocks, do you think that money comes into equities? >> yeah, absolutely. that's shocking for me to hear. you know, i think the stock
market is headed higher. if you look at the way we've been trading, we haven't had two straight down days. we've had three since february. the market can be more overbought and more insolvent. i think the stock market's headed higher, but that doesn't mean there aren't short opportunities. last time i was on the show, i was talking about being short the gld or gold. that's been a nice trade. i'm short the clt. there are things there in the global growth story i don't want to be long any of those stocks, anything linked to copper and to gold and to letter "x," u.s. steel. i don't want to be any of those. i want to be long stocks that are working, the airline stocks, those are all working to the ç upside. we saw huge risks today in qualcomm, also in sandisk. when i go back to the dax, i'm going to buy some put spreads in apple. i think apple is headed lower as well. >> mark, is that the strategy? stick with what's working? or do you like certain places in the market over others? >> scott, the previous guest made mention of something about
the rotation within the marketplace. and i think we've already seen that. we saw for the better part of the first four months of this year, the defensives that were leaving, consumer staples, telecom and utilities, and it's been over the last two to three weeks that you've seen a very strong rotation into the more pro-cyclical sectors. and i think that's good sign, because i think those are the sectors that are stepping out into the acceleration and the economic activity in the second half of this year, and as a result, we will actually be fading those defensive sectors that have been strong year-to-date, and actually nibbling as those pro-cyclical sectors, which i think will lead the market higher over the remainder of this year. >> thanks, everybody. great conversation. we're watching this market now, up in the triple digit. we appreciate your time today. thank you. and scotty, as i mentioned a moment ago, i'm coming to y today from the credit suisse equity trading floor in new york city. credit suisse has nearly 14% share of the equities trading market.
one out of every seven shares traded in the united states passes through this floor. the firm a huge player in the c ipo market. in fact, credit suisse was the top underwriter of u.s. ipos this year. coming up, we're getting the state of business and how the company is adjusting to anticipated higher regulation around the globe. when i talk with brady hughes, my guest, exclusive, next right here on "closing bell." scott? >> we look forward to that. there are about 50 minutes to go before we ring the bell and close it own this friday. we said the dow is up triple digits now, 100 points. >> and next, facebook has been public for exactly one year. what a wild year it's been. we'll take a look at the surprising timeline. find out from the experts where this company heads next. then we're going to go live to six flags to get a closer look at this comeback stock. do you have the stomach for it? and again, up next, my exclusive interview with credit suisse, the ceo, brady dougan. stay right here on "closing bell." back in a moment. ♪
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ed welcome back. stocks surging and are now on track to post their fourth straight winning week. bob pisani has a front row seat for this one. hey, bob, we're up just about triple digits now. >> yeah, another day, another late-day lift in the market. take a look at the dow, folks, we have moved 50 points in the last 45 minutes. i put up an intraday of the dow. that's what i'm talking about. not a lot of news out. the head of the minneapolis fed was out making comments a little while ago. a lot of fed officials in the last couple of days saying it's hard to raise rates with unemployment above 6.5%. he is the dove, casting some doubt on the time lyme some people have speculated. take a look at a couple sectors. the whole market has lifted in
the last hour. there's energy stocks, xle, you can buy that ecf. that listed in the last hour, but more defensive names have lifted as well. the xld, going back to the health care sector. look at that in the last hour. the whole market has been slowly moving to the upside. the bond market has been selling off. this is the first good economic data point that we've had all week. so there's the agg, which is representative of the bond market, selling off today. finally, we had one of the biggest ipos, one of the wildest ipos i've seen in years. this is big data, they help companies crunch data. they started pricing at 31 overnight, opened at 47, holding up near the highs of the day at $49. maria, back to you. >> bob, thank you so much. once again, we are having special coverage today live from the credit suisse equities trading floor today. this isç a firm that has been under transition, among the first to deleverage to meet the demands of today's stricter regulatory environment.
and today, the stock is hitting a 52-week high. it has done incredibly well, post the financial crisis. how will credit suisse keep growing the top and bottom line? we're talking about that right now, a cnbc exclusive with ceo brady dougan. thanks for joining us. >> thank you, maria, a pleasure to have you on the floor. >> we love being on the floor. thanks for being so welcoming here. you have such a deep and liquid market place, the electronic mark book. we have another market rally today, 100 plus points higher. i was astounded when i heard that 30% of accounts at the private bank, as well as other private banks, are in cash right now. big family, you know, wealthy families, sitting in cash, 30% of your account. do you see it that way? >> yeah, well, we have about $1.3 trillion in client assets and they still have a significant percentage in cash. so we've seen some of that move
into equities. we've seen them maintaining their allocations to fixed income, actually. so i think that there is still room for money to flow into the equity markets, which i think, you know, gives you the view that perhaps the market certainly has further to run. >> it seems like there's that buy on the dip mentality, but you've got a lot of people chasing it. so how do you get those clients to movw money? even though you see aum up 8% year over year, asset thunder management, revenue and earnings have been flat. so people are scratching their heads. they see credit suisse is gathering assets, yet revenue and earnings flat. why is that? and given this is a high roe business, what do you do to get more money moving into those higher yielding assets? >> actually, our earnings up quite a bit, partly, as you say, our revenues have been relatively flat, but our costs are down quite a bit over the past year. as we've restructured for the new regulatory environments, we've also taken cost out of the business, and that's been a tremendous benefit for the business overall. in the first quarter, we made a
16% return on equity, which was quite a performance in the quarter. i think, generally, though, our private banking customers are looking for continued consistency in the markets. so we're increasingly seeing them become more opportunistic. but this is still a process which will take some time. >> let me ask you about this, the cost-cutting efforts. because you certainly were earlier than others on the street to start deleveraging, start getting into a different, you know, re-sizing of the business, given what was to come on the regulatory scene. are the cuts done at this point? do the further cuts come from technology or are you expecting to continue to deleverage in the investment banking side of the business? >> well, our view, coming out of the crisis in 2008, was that the regulatoryç changes in the market, along with both market and client changes and their behavior were going to have a pretty significant long-term impact on the industry. and so we have been proactive around cutting cost base, around transitioning our business to
the basel 3 requirements. so we've completely transformed our business over that period, and we've gotten to a point to where as of january 1st this we're, we are operating fully under the basel 3 requirements, which i think is one of the first banks in the world to get that to that point. in the first quarter, we had a very good performance, 16% roe. very strong performance out of the business. and our view is that that is a sustainable business model. now, we have set a continuing efficiency goal going forward. we are going to continue to drive efficiency throughout the business. and that does mean increasing reduction in cost. as you mentioned, a lot of that is shifting out of the front office to more of our shared services and our platform-type costs. and those are things that we think we can just become more efficient and do better over time. that's where the bulk of the cost reductions going forward will come from. >> you mentioned the basel 3 regulation. that, of course, a regulation on capital, largely, but there are other regulations. let's talk a bit about that. it seems that you've got regulations far and wide and deep. regulators all over the world.
you've got vitter's proposals on too big to fail, you've got the proposals from the federal reserve. let's start with capital. you say you areç basel 3 compliant. does that mean you wont have to raise anymore capital, or will you be raising more capital, >> as of the end of the first quarter, we're about 9.8% on our swiss corps cash roish, which puts us close to the 10% we want to get to. we think we're very close on capital, and in fact, we think we'll be able to return significant amounts of capital to our shareholders over timeasz our business model continues to perform well. >> of course, these proposals make it tougher for a european bank, because it's forcing the european banks to hold more capital, competing with the u.s. banks. is this going to be a risk to earnings? >> i think, as you say, the different jurisdictions have proceeded at different paces and have different requirements around capital.
it was very early and had very tough capital requirements that were put out a couple of years ago. being compliant with those capital regulations is the most important issue, because that allows us to be well-positioned for just about anything that happens around the world. now, these individual country requirements are also something we're going to have to take into account. we think, generally, we've got a pretty good structure of that. we've had subsidiaries set up in many of these countries as opposed to branches, that are already capitalized. we have some liquidity. we think we're in pretty good shape to be able to accommodate those over time without materially impacting the business. now, that's not necessarily true for the whole industry, because jjrp+e different structures. we think we're pretty well set for that. at the end of the day, we're very well positioned on capital, on liquidity, on leverage as well with regard to the basel 3 requirements. and that puts us in a really good place to have a sustainable business model. whereas we think a lot of industry still has some work to do. >> and of course, all of these questions lead me to the question of a dividend and a
stock buyback. investors know you want to pay a dividend, you want to get to your return on equity target of 15%. they're waiting for that. is a dividend from credit suisse a 2013 affair or a 2014 affair? >> well, i think we've said that we clearly do want to return significant amounts of capital to our shareholders over time. we think that given our capital position, given the way the business is performing, you know, our belief is we will be able to do that. but obviously, we'll have to see how the business performs the rest of the year. but we've said, once we get to that 10% level, we will be able to return cash to shareholders and that's our current plan. >> so we could see a dividend this year, then? >> again, we'll see how the year progresses, but that's our hope, certainly, yeah. >> let me ask you about fixed income. you mentioned that a lot of your clients want that fixed income exposure. i wonder, you've got a very highly-regarded fixed income business, but how do you compete with the gorillas out there, larger fixed-income businesses, when you do face this pressure
from regulators, that they want more capital? >> asç you say, we have some excellent franchises in a number of different areas, the structured products area is one, our credit and finance business is another, our emerging market franchises, and i would stack those franchises up against any in the industry. we have, clearly, top market shares there, top positions, very, very strong positions there. but what we've done, we've really focused our efforts on those areas, so we can drive high returns, drive very high market shares, and serve our clients extremely well out of those areas. and we think that's the key, going forward with the capital regulations that come in. all the banks will have to look at all their businesses and determine where they can make the returns that are necessary. >> do you think we'll see more asset sales as a result of that? >> i think as banks continue to evaluate, as different countries continue on the path to basel 3 and banks evaluate their businesses in that context, i think you'll see people making decisions. they may get out of certain businesses, may sell certain businesses, but i think you'll continue to see an evolution as we go forward.
>> switzerland has been particularly hostile when it comes to business in my opinion, and the regulatory environment there. let me ask you about that, because this latest proposal about compensation, where they're talking about, you know, paying your highest paid person at a cap, and that cap is 12 times your lowest paid person. this seems incredibly onerous to me if, in fact, you're trying to retain those, you know, highly paid top-levelç dealmakers tha of course, you want to. so what is your backup plan, your plan "b," if in effect this rule takes effect where you'll have to tighten up on compensation and pay your highest guy 12 times what your lowest guy or gal is? >> the first thing to recognize with switzerland, for instance on the capital regulation, even though switzerland was very early and came up with very tough capital regulations, it's been a very stable environment since then. we've known what the capital regulations were really since late 2010, and we've had a very
stable progress towards that. that's actually been an advantage for us. whereas, as you know, in many other countries, they continue to debate issues about regulation, of splitting up the banks, you know, how much capital is required, etc. that's one thing from a banking point of view, we actually view the stability of the swiss system as being something that's actually a positive for us. with regard to some of the other issues, as you say, you know, recently there was an initiative passed that was more around corporate governance, we're fine with that. we think we have state of the art corporate governance anyway in terms of say on pay for the agm, et cetera. we feel very good about that. this issue, as you say, which will be voted on later this year, the 12-to-1, we don't think that's particularly good for switzerland, it obviously applies to all industries in switzerland, so we'll have to see how that progresses. but obviously if that happens, we'll have to work through what the implications are for the business. >> so maybe raise base salaries or arey)u looking at alternatives? >> we'd have to look. obviously, it's very, very preliminary now, so it depends on how it actually happens and
if it happens. >> let me ask you about the litigation part of this story. obviously, you were free of the libor scandal, your guy did not participate, which is a great thing for you, but what about the tax situation as it relates to the private bank? we saw that ubs paid a hefty sum, $800 million to settle the charges that they helped their client avoid paying u.s. taxes. we're expecting a settlement from credit suisse. a lot of people saying you're going to be paying $1 billion. can you give us any clarity on that? is that the right number? when is this going to be settled? >> it's actually hard to give much clarity, because it's a complex government-to-government issue, so there's a lot of discussions going on. we're obviously one of a number of banks that are actually involved in it. as you know, we actually took i think a year and a half ago now, a provision of 300 million swiss franc ss against this. our hope is we will get a
resolution, and hopefully it's not too material to the overall position of the firm. but it's really hard to predict, it is a more flex issue than a credit suisse issue. >> do you think it happens this year? >> again, hard to predict, i would hope so. but it's hard to predict. >> and final question here. we've all heard the rumors about you. let me ask you personal ambitions here. there were a lot of speculations and rumors that you were on your way out the door last year. are you planning to step aside this year? are you here for the long-term? >> look, i think we've made a lot of progress. i think we're in a great position. i'm completely committed to the firm and continuing to take it forward. as you mentioned, ting share price has shown that the market is also, you know, supporting that, in terms of our strategy and our direction. but we still have a lot more to do. so i'm very enthusiastic about continuing to take the firm forward and hopefully continuing to show even, you know, more progress as we go forward. so, i'm completely committed to that. >> and you've got your targets. you're going for that target of 15%? >> yeah, absolutely. >> think you'll hit it this
year? >> well, we hit 16% on an operating basis in the first quarter, so if markets cooperate, i would certainly hope we could. >> brady, good to have you on the program. thanks so much for your candor and for having us on your floor today. >> thanks, maria, it was a real pleasure. >> brady dougan, ceo at credit suisse. >> 35 minutes to go until we close it up. dow jones industrial average, highs of the day, up 109 points. s&p nasdaq also positive. up and next, jackie deangelis talks about six flags. >> this 128-mile-per-hour roller coaster with its 90-degree angle and 40-floor story drop is one of the things that will get people to this great adventurp theme park this summer, but is it enough to get the stock soaring?
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talk about a thrilling ride. shares of themeç park operator six flags up better than 600% since emerging from bankruptcy in may of 2010. jackie deangelis takes an up close look at this amazing comeback. >> it is a staggering return on share prices in just three years. and a couple of things i want to highlight. the first is a strategic hand-picked management that's led this company back from the
brink. they have a strategy shift that increase revenue and the bottom line. and they've done it by trying to boost sales of all-season packs. consumers feel and see that in the parks here. they say it's the ideal regional destination this summer. >> the kids have a lot of fun. we come here for a few hours. so season pass is perfect for us. plus the meal plan and the parking pass, so we're all in here. >> reporter: in addition, the company is aggressively bought back stock, 404 million shares last quarter. it's also a company that has a 5% dividend yield, so that makes it attractive. so they also just announced that they're doing a stock split. that will be effective june 26th. >> we've already done this one. when the shares hit in the $70 to $80 range. although there's no empirical evidence to suggest that stock splits are a good or bad thing, we tend to find that they're highly favored by aç smaller
investors who want to be able to take a first step into a stock. >> and as for us, we spent the day here and had to test out some of the rides. one of the roller coasters that we teased from ahead of the break, i do have photographic proof that we actually rode that roller coaster. it go from zero to 128 miles per hour on the way up and it does it in 3 1/2 seconds. so certainly a big draw. going to get a lot of people in the door this summer. scott, back over to you. >> i'm getting nauseous just thinking about that. jackie, thanks. jackie deangelis for us out at six flags. so should you buy six flags on its turnaround story or are investors in this stock in for another roller coaster ride? let's start talking numbers. on the technicals, j krrc o'har. how about it, jc? what do the technicals tell us? >> all you have to do is look at a picture of jackie's face at the park. she is happy.
and if you own this stock, you would be happy too. take a look at a price chart of this stock. up 200% from the 2011 lows. up 30%, just year-to-date. now, yes, i know, it's always hard to buy a stock when it's at a 52-week high, let alone an all-time high. but i would love to say buy it on a pullback. this 50-day moving average has provided great support. longer term trend lines, right around 70. but my fear is this stock is on fire and we might not get a pullback. so it's hard to say buy here, but i would be willing to participate at these levels. >> abigail, what about the fundamentals? what do they tell you? >> well, from a long-term perspective, scott, six flags really looks like a winning ride for investors. ceo james reid anderson is making all the right moves, tremendous operator, really superstar, and he seems to be doing everything to take the company toward its goal of achieving $500 million worth of ebitda in 2015. however, when we take a look at the stock, jc pointed out, it's
up huge, it's on a ride that i don't know that exists, a one-way roller coaster ride up. i think it looks overbought here. it's certainly fairly valued relative to its competitors, and investors are not pricing in any kind of possibility that the consumer could become weak. this economy is not strong by any chance. i think that you're going to see these shares pull back. i think you could see some consolidation, giving back all of this year's gain of 30%. so i would not -- >> it seems that you think this roller coaster ride is going to come to an end and come careening dan. but we have to understand, consumer confidence is up, consumer spending is up. with the moderate price in gas, this is a perfect happy median between a staycation for a family, and packing your family across the -- >> i think we've actually seena story pretty similarly. over the long run, i think this is a beautiful ride up. but i think that the roller coaster ride is going to have a little bit of a dip in the
near-term to the medium term and i think it will offer investors a very nice buying opportunity. some of the sentiment is up, but there's so much uncertainty right now in washington, i just don't think that investors should be so sure, you know, that this stock is going to continue up after 100% move into the year and 200% coming out of bankruptcy. i think that it's time to maybe take some off. >> all right. appreciate the debate, you guys. have a great weekend. talk to you again soon. >> thank you. >> right now the dow is hanging on to that triple digit gain, up 116. s&p is positive as well. we are just shy of 30 minutes to go on this friday on the street. >> actually, not just hanging on, but we're at the highs of the day right now, scott. we continue to see this market blow the cover off the ball. up next, did bloomberg mishandle its now-infamous breach and what lessons can be learned from the bloomberg breach scandal? >> and speaking of scandals -- >> this is wrong to abuse the tax system. this screams out for tax reform.
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welcome back. from the credit suisse trading floor today, bloomberg isç appointing tom pam sanno to his board of directors as the company tries to recover from the scandalous breach. steve liesman following this story. >> criticism of its handling of the controversy surrounding access of reporters to private client information. bloomberg announcing today it has appointed former ibm chief sam palmisano. he has been tasked with those in the past to assist palmisano, bloomberg hired the law firm of hogan and the consultant group separately. clark hoyt, the former public editor of "the new york times," conducting a review of the news operations, its relationship to the commercial side, including privacy and data policies. now, criticism of bloomberg's response has been growing in the week after controversy went public, which is a month after the first known customer
complaint from goldman sachs with key questions left unanswered, both jpmorgan and goldman saying they're still waiting for a formal response from bloomberg. asked if the reviews were made public, a source at the company says we will be transparent with our client and other constituents about the conclusions and recommendation of the review. and it's supposed to be done as quickly as possible. on cnbc.com, cnbc details six questions bloomberg has yet to answer, including what executives knew and when and whether even now, appropriate changes have been made. maria? >> all right, steve, stay right there. we want to bring in our next guest toç talk about how bloomberg handled this breach of its customers and what needs to be done next. and we are welcoming to the program, at this point, on the bloomberg breach, chris raush, he's a professor at the university of north carolina at chapel hill joining us right now. good to have you on the program, sir. chris, how do you think bloomberg handled the situation? >> well, i don't think they've handled it very well.
they've not been really very forthcoming in terms of what their reporters knew, what they used, and how they used it in story. so i would like to see a little bit more transparency from bloomberg. >> chris, what do you think about the palmisano appointment? >> you know, the palmisano appointment is fine. i think that will assuage some of the concerns from a lot of their wall street clients. i'm not very enthused about clark hoyt's appointment. clark was an employee of bloomberg, so i'm really not sure that hiring somebody that was already on the payroll of bloomberg is going to comfort a lot of people who would really like to see an independent review of what happened at bloomberg news. >> what are the unanswers questions at this point? i guess a question for you both. steve, what are we waiting for now? >> i think one of the big questions is, again, the issue of what executive knew and when they knew it. there's a story out there,
mari@< that in 2011, one of the anchors came on and used this information. we've heard changes were made, but we don't know what kind of changes. and then there's an interesting question, maria. why after that disclosure weren't journalists prohibited from seeing the data, but they were after goldman sachs complained. so i think there's this issue, and i will say, bloomberg seems to be getting at this in their reviews here, which is -- and that's what hoyt is charged with doing, what are the rules for the newsroom and what governs them and what are the rules on the commercial side and what's the relationship between the two? there's an appearance here, maria, at least at the outset here, that the ethics were dictated by goldman and not by the journalists inside bloomberg. >> maria and steve, i would really like to see bloomberg take a more proactive approach here. you know, when you think about major ethical scandals in journalism in the past, the way that media organizations diffuse these is by really opening up and being very transparent and reporting about this themselves.
and so far, bloomberg news is not really worried about this. >> but chris, what about this rule that bloomberg seems to have, which i've never heard of any news organization, about not writing about itself. and that is really, at this point, either been a cover, or a real reason for not reporting on the story. and i think one of the questions that's out there, maria, you asked about them, is where's the coverage from bloomberg ofç it own story. >> so you're saying there's a rule that they will not talk about themselves? >> that's my understanding, maria. i have asked the company for clarification of that, but they've not actually responded. we've heard from several sources that there's an internal rule, that bloomberg does not write about itself. >> i think that bloomberg needs to change that policy. i think that their credibility is at stake here, you know, bloomberg is an outstanding news organization, but if they don't expose what actually happened and what their reporters knew
themselves, i think they're hurting their own credibility. >> chris, i don't know if we have to go, but did you hear what the statement -- >> we do. >> is that they're going to let their constituents know about it. it wasn't clear if they were going to make it public. i would like to know your comment on that. >> i would like that constituency to include the general public and the people who read, you know, the bloomberg news service around the world. i think that we deserve that. a and just to underscore for former bloomberg reporter. just so everybody knows that. we appreciate our coming on, chris. chris roush down at the university of the north carolina, chapel hill. all right, maria, 15 minutes to go before we close it up and we have a nice gain on this friday. what a run it's been over the last four weeks. >> unbelievable. meanwhile, facebook, the worst-performing nasdaq 100 stock since it went public one year ago. coming up, we'll hear from one investor who says he would not touch the stock, no matter how low it goes. wow. >> and if investors had if investors had put their money in the airline index instead of facebook a year ago, they'd have a profit of 60%.
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facebook ipo flop. with the one-year anniversary tomorrow, kayla tausche takes down memory lane. >> scott, year one as a public company for facebook was notable, indeed. aside from its many operational milestones, though, its initial public offering, now notoriously bundled and its stock yet to recover from that long slide that started on day one, right out of the gate. >> may 18th, 2012, ipo day for facebook. ceo mark zuckerberg and company ring the nasdaq opening bell at its menlo park, california, headquarters. >> this is a moment in american business, and we do not know how it's going to turn out. >> reporter: at 11:00 a.m., facebook stock priced at $38 per share the night before is scheduled to make its debut, the opening delayed by technical problems at nasdaq. >> you say you're going to do it at 11:00, and now 11:05 within all this makes me feel a little less certain. >> 32 minutes, it opens, at
$32.05. >> there we have it. facebook, opening for trade. >> only 30 seconds in, and 82 million shares wereç traded. 7 minutes later, 110 million shares. but 20 minutes in, prices tumbled below $39. rumors swirled as to why. >> apparently nasdaq's system was clogged. >> four hours in, despite the technical glitches, the facebook ipo breaks records. its volume passing the 458 million share record general motor set on its first day of trading in 2010. >> facebook has broken the record for volume. >> reporter: swinging up to $45 a share at one point, down below $38 at another. >> there's the closing bell. ending a tough day on wall street today. >> reporter: huge volumes, but roughly flat, facebook's closing $38.23, leaving the future of facebook unclear. >> not at all what kind of opening that many were hoping for and expecting from the most
highly anticipated ipo in quite a while. >> now, the suspicion was and is that that $38.23 level was only held because it was underwriters who were in the market buying it. morgan stanley declines to comment on that front. but what happened next for facebook? well, the flurry of litigation, a rocky earnings report, and a blame game that continues today led the stock to a low of $18 a share last august. since then, the dismissal of several of those lawsuits related to the ipo have removed a big overhang, butç the stockt $26 still far from where it started. scott and maria, we'll send it back to you. >> kayla, thanks so much. maria, we are in the home stretch. 114-point gain ander with counting it down with about ten minutes to go on this nice friday on wall street. >> so what do you do now with the market here? is it time to rotate into cyclicals like so many on wall street are recommending right now.
morgan stanley's david boras will weigh in as our regular friday guest stay with us. ♪ et toujours ♪ me amour ♪ how about me? [ male announcer ] here's to a life less routine. ♪ and it's un, deux, trois, quatre ♪ ♪ give me some more of that [ male announcer ] the more connected, athletic, seductive lexus rx. ♪ je t'adore, je t'adore, je t'adore ♪ ♪ ♪ s'il vous plait [ male announcer ] this is the pursuit of perfection. but we can still help you see your big picture. with the fidelity guided portfolio summary, you choose which accounts to track and use fidelity's analytics to spot trends, gain insights, and figure out what you want to do next. all in one place. i'm meredith stoddard and i helped create the fidelity guided portfolio summary. it's one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account.
is this market moving too far, too fast? >> let's ask david darst of morgan stanley wealth management. this question of too far, too fast, i read some stats at the beginning of the show. over the last four weeks, you have the russell, the mid-cap, the nasdaq up almost 9% in four weeks. that's fast. is it too fast? >> scott, the banks, u.s. stocks, with listen, there's ten bad things and there's seven good things. the ten bad things, the empire state manufacturing, weak. the philly fed, weak. factory orders, durable good orders, weak. ism manufacturing, ism non-manufacturing, greece and china are slowing. you have the new jobless claims, that number, nine, they jumped by 32,000 to 360. and you had the fed guyç from n francisco talking about, when are they going to start reducing and john williams, the stimulus,
the monetary stimulus, the quantitative easing. those are the negatives. the positives are quite good, too, though. number one, you have the reduced perception of tail risk. greek bonds are yielding 8.6%. a year ago, they were yielding 30%. they've gone in price from 13 to 60. that's amazing. they're the best-performing asset in the world. >> and we heard out of salt, when we were both out there, that some of the world's smartest investors were in on that trade. and did real well. >> i love knowing that. that's number one. reduced perception of tail risk. number two, the search for yield. people have started to migrate out of bonds and fixed income cash, into things with dividends, okay? number three is the continued monetary stimulus. then you have hdrd, housing, energy, recovery of manufacturing, and "d" is that deficit reduction down by 30%. those things, maria, confer the lift of the market. but it gets ahead of itself --
>> let me ask you one question here. this is something that i just asked brady dougan, the ceo of credit suisse. and that is that 30% of the accounts in the private bank and a lot of private banks, by the way, 30% of accounts are sitting on cash. they are just unwilling to put their money to work in stocks. what do you think that tells us? does that tell us that people are more cautious thanç they er have been or does that tell us that this has whole, huge amount of potential, 30% of accounts, that they will ultimately put their money in stocks and chase this market? >> maria, we would see the glass as half full by that number, and it's very consistent with what brady dougan of credit suisse told you with our numbers at morgan stanley, where, basically, their cash balances are very, very high. the equity balances, for everybody, all combined in the united states, 34% of the portfolios are in equities. but japan, which we've always talked about, the japan number is only 6% in equities. we love japan. it's up 40%. the u.s. market is up 16 and 16
last year. we would say, take it easy, be very disciplined. let it back off a little bit. then you go back into your health care, into your oil drillers, and into your consumer staples. but it's really run quite aggressively here. so take it easy. that's all we would say. >> all right. >> david, have a good weekend. thank you. >> and maria, we'll be back with the closing countdown in just a minute. and then new evidence wealthy americans are getting audited more under president obama. we'll break down the numbers and hear from one top republican donor who says he's been a target of the irs because he's a republican, period. back in a moment. my mantra?
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all right. all right. welcome back to the floor of this new york stock exchange on friday, as we set for the closing countdown. we're just off the highs of the day, but we're going to go out more than likely with a triple digit gain. four straight up weeks. so there you go. the bs performer within the dow on the week. there it is, cisco. did it almost all in one day. remember after the earnings said the outlook was so good, cisco shares were up by 13%ç in one day. well, it's held on to that and certainly been a good week for that stock. so does this continue? >> i think it does. there's so much momentum that's built into this marketplace, also of people think it's over bought at this point in time. every time they come and short it, they get their faces ripped off. when you have this kind of momentum, you think it's
overbought. >> still seem to get upset anytime anybody from the fed says anything about tapering. >> that's right. and that's what the market's been trading on right now. if you look at the economic data we got, it was not great, especially with manufacturing. this market is really moving on noises that are coming out right now. >> have a great weekend. maria, the second hour of the bell. have a great weekend, everybody. >> and it is 4:00 on wall street. do you know where your money is? hi, everybody, back to the "closing bell." i'm maria bartiromo, coming to you live from the credit suisse equities trading floor in new york city. it's the rally that just won't quit. both the dow and the s&p 500 tonight closing at another all-time high. we are finishing the session on wall street with a rally. take a look at the markets here as we end the week on wall street. the dow jones industrial average, up in the triple digits today, as we settle out, the dow at 15,353, a gain on the session of
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