tv Fast Money Halftime Report CNBC July 17, 2013 12:00pm-1:01pm EDT
government working together to prevent a big financial collapse. i think the collaboration was needed there, but at no time during the crisis or at any point did the administration, the congress, or -- >> -- equally now as important as we move through the day. let's get to the "halftime report" and scott wapner. >> thanks so much. welcome to a special halftime show live today from the pierre hotel in new york city at the biggest investor event of the year, delivering alpha. we will continue to monitor the fed chairman's testimony and, of course, the q & a session which can always bring interesting headlines. we'll bring them to you if there's anything we think you need to know about. we have an all-star line up with ready to go with one goal in line. to help you deliver more alpha in your own portfolios. within the next hour we'll be joined by steve cune, head of fixed income for pine river. we'll also have live and exclusive coverage of 2013's new
best ideas panel where famed short seller jim chanos and leon cooperman will share their top most active traders. our traders will be along in a moment. we want to go to steve liesman. it seems like the goal today is to make sure from bernanke's perspective that the market starts to understand there's a difference between tapering and tightening and he's going to try to hit that home. >> scott, were you addressing that to me? i'm sorry. i was listening to the testimony. could you repeat it? >> i think steve part of the point that the fed chairman is trying to make today at least speaking directly to the markets is that there is a difference between tapering and tightening and he's going to try to hammer that home until the market understands it or not. >> i think he's definitely doing that, scott. i think it was interesting earlier on today he was asked a question about the dangers of reducing qe. and he answered that by saying, you know what?
we have a lot of tools we can use to affect a policy and the outcome. i think they're sort of on a track of tapering, scott, with the one asterisk i put next to that is if the july data continues the weakness in june, i think that that may take them you a of that track. but what he wants to say is as you said, we can taper, move up and down qe, but we're still accommodative in that context, and, b, it does not mean we are raising interest rates. >> maybe by the market reaction, steve, he's being successful today in a way that he frankly has been unable to be in the most recent past. he says i think the markets are beginning to understand our message and the volatility has obviously moderated. >> i think that he would not be successful today if not for the -- what do you want to call it -- the trail of communicat n communications that we've had beginning on may 22nd and culminating with the mber q & a
last week. i think his objective was to not make any changes to the market's understanding of tapering, tightening, or overin all fed policy. i believe he succeeded. >> thanks so much. i know you will be watching the testimony, the q & a session and you will bring us anything that jumps out from any of those questions and certainly mr. bernanke's answers. the best ideas panel is under way where hedge fund titans lar presenting their top investment picks. let's get to josh lipton. >> you heard leon cooperman of omega advisers giving you his ten picks. let's go through them. he basically broke them down into three different baskets. one he called his quality growth basket. he had express scripts. he liked qualcomm where he said there's too much pessimism. they got $31 billion of cash on the balance sheet. no debt. they can throw 11% or 12%. and then also thermo fisher.
next basket he called his phoenix from the ashes basket. these are basically turnarounds. he would quality corp, a brazilian health care company, baferl he said you get 20% growth for less than ten times earnings. he also talked about sandridge energy. he said that one has the potential to double. and finally his third basket he called growth with high income situations. these are really financials with high yields he thinks can go chaier. arbor realty trust, atlas resources, chimera investment, kkr financial, and thl credits. scott, back to you. >> josh, thanks so much. as lee cooperman gives his best new ideas at delivering alpha. steve weiss, lee cooperman was ten for ten over the last year. most of them were up double digits. what do you make of these picks? >> well, lee doesn't turn the portfolio over all that much.
we spoke about qualcomm. he stated high quality company, a lot of concern about margin pressure as they go to lower end phones and the high phone -- high end phone market is saturated. it is phenomenal in terms of their fortress balance sheet. in terms of his market view that's also interesting. he's still positive on equities but he thinks they're fairly valued right here. last year, if you recall, he was a lot more bullish. so to still be this bullish, he's not seeing the downside, although he doesn't expect to see -- he wouldn't be surprised to see major correction. but to have these kind of names here where he's looking at interest rate plays, that's a surprising thing to me. >> joe, what name jumps out to you, maybe one of the new, new plays. >> well, sinnedridandridge ener been talked about. lee can wait it out. but express scripts are clearly stealing market share in the
form si benefits base. that's a name trading to a 52-week high. >> i think there's more upside to that. >> anthony, you look at the performance of some of these stocks and as we said over the last year when these guys of that quality unveil these types of ideas, lee was ten for ten over the last year. >> well, there's three things lee is doing. number one, buy a low multiple stock he perceived growing faster than the people in the market do. number two, he's not afraid to get concentrated on a few big names and one of the things he is highlighting, this is for viewers, is financials. focus on metlife, aig is not on here. that's another big lee name. with the yield curve steepening, with the tapering, i do believe that's stocks have a lot of room to run and lee is not afried to be chunky in a portfolio like this which is why he has had such great performance. >> and sandridge he's playing as a turnaround because tom ward
has met the same fate. he's out. he really used the company as his piggyback. $300,000 in oakland thunder tickets. he expects to see leverage at the bottom line. >> that's called delivering alpha. that's an understatement. look at the performance of cooperman's picks. the returns are quite stunning. let's react to the fed chairman and the comments he's making today, what the market is doing. anthony, you have been probably the most critical of what could happen to the market once the liquidity is pulled. >> not critical of the fed. i think the fed has done an unbelievable job and i think the children is doing a great job today. >> but you have made the prediction stocks are going to fall and fall hard once the liquidity is pulled away. >> okay. so the fed is tapering. i'm going to taper my remarks a little. i'm looking at him today. he looks like sigmund freud burr nan can i. he's sitting there and trying to
psycho their pies a group of people who don't understand what he's doing. my prediction is he will be more successful than i originally thought. so when you're wrong in the business, you have to openly admit it. i think these guys are doing an unbelievable job of jaw boning themselves and create a glide path to the taper. >> what he's had now is the benefit, so to speak, maybe that's not the right word, but the benefit of a 6% correction. the message hasn't always been delivered all that succinctly or clearly but the market has already had its pullback, had its taper tantrum, if you will, and it will get conditioned at some point to the fact tapering -- >> i think it is conditioned. i think the market gets the message now. i think the tapering process begins in september. i think alts nine-month process. i think the expectation is $85 billion to $65 billion in september. but i think when you look cross assets today, the indicator tells you things will be
favorable to the tapering is the u.s. dollar. i take the other side of goldman's call. u.s. dollar is going to continue to move higher and it's on the expectation that growth will accelerate. >> on delivering alpha, ben bernanke, largest hedge fund manager in the world, making money on t.a.r.p., making money on the aig trade, and likely right now making money on the quantitative easing in terms of where bonds are and where he's going to take them off the table. >> let me give you one more data point. bonds the ten-year has recovered. the yield is back down. had a nice move back down. >> 2.47% or something like that. >> can you imagine what the market would do if they don't start tapering in september which has become con ses ssensu. i'm not sure they will. >> let's before we move on take it one step further. is it okay, are you guys comfortable in buying stocks? >> yes. >> the market is conditioned to
the fact that tapering is okay -- >> look, i probably did not pull the trigger fast enough. cr kudos to stephanie link who was buying in the trough of that 6% sell-off. you want to look cross assets and again it goes back to the u.s. dollar. if you believe that you are going to own an asset that's highly affected by global sales, then you don't want to own them. what you want to look at is the small caps which have 80% exposure to a strengthening domestic u.s. dollar and that's where their sales are. the revenues are not 6% like 6% the s&p is. >> you bring up small caps in generals. the russells hit an all-time high seven out of the last eight days. more validation of the moves. >> absolutely. small cap leads you up and small cap leads you down. it happens virtually every cycle. small cap is the place to be. lee has some small cap names and
he's managing i think $7 billion, $8 billion, so those are big bets in terms of betting on small cap when you're running that big front because you have to own more of them. i agree with joe. there's no reason not to buy more bac, not to buy more citi. >> bac up today. >> absolutely. guess what? look at citi. it split at 50 bucks. you're just above that. things are so much better now. why not buy more? >> one thing. the banks have switched from cost cutting to revenue growth. a very big positive fundamental. every major ceo is talking about where are we going to get the revenues from. two years ago it was about cost cutting. you can grow now. >> real quick, you and i talked about this before. a lot of people are waiting for the tech recovery in the second half of the year. i think the markets can go higher without technology but i don't think the tech recovery is coming because i think you will see a strong u.s. dollar.
that's going to impact -- >> and demands what you were talking about. i could come at you and say sam z -- amazon is at -- >> that's a consumer discretionary. >> the head of fixed income trading at one of the top performing hedge funds, steve kuhn will be right here live on set. he's bringing his playbook for success as well when we return to delivering alpha live from new york city. in today's markets, a lot can happen in a second. with fidelity's guaranteed one-second trade execution, we route your order to up to 75 market centers to look for the best possible price -- maybe even better than you expected. it's all part of our goal to execute your trade in one second. i'm derrick chan of fidelity investments.
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we continue to track all of the big movers from the best new ideas panel right here at delivering alpha where hedge fund titans are presenting their top investment picks. josh lipton is watching all of that. what stands out, josh? >> let's get a couple highlights. we'll toss to chris hahn. eads, a liquid large cap company. he said the stock could double on a two-year horizon. talks about porsche saying it's a holding company. he thinks those two companies
will merge at which point if they do you could double your money. and aurizon, calls it a total turnaround story. stock on track to double he says in the next three years. we heard from mark kingdon. he likes japanese stocks. toyota, it's an innovative leader in hybrids. fuji heavy taking production away from low margin to high margin. finally maz zdmazda. has more efficiency and best mileage in class. leon cooperman, we highlighted some of the names he's touching on. he had ten, two i would touch on. one would be qualcomm. he said too much pessimism. look at the balance sheet, $31 billion in cash, no debt. and sandridge energy he said, that one, according to cooperman, hat the potential of doubling. scott, back to you. >> josh, thanks so much. the kingdon toyota pick is right
in your whom house. >> it is and japanese autos given the fiscal policy from japan, that's a place you want to be. we talked about tata motors. i'm surprised you don't see bmw on that list. if you like porsche, you have to like bmw. you're getting a little bit of a recovery in europe and the expectations are so low. all people want to talk about is a u.s. >> recovery and a european auto contraction. >> bond yields dropped below 2.5% today for the first time in a couple weeks. the big question is where do they go from here? steve kuhn is head of fixed income trading at pine river capital. last year his fund returned 35%, and he's right here live on set. that's great performance. the fund has returned 36% each year for the last five years. that's a lot to live up to. >> thank you, scott. that's a very kind introduction. >> you're a great voice to talk about fixed income, what's happening in the bond market.
give us your read on what bernanke had to say today. we saw the ten-year yield drop below 2.5% for the firster first time in a couple weeks. but 2.47%, 2.48%, where does it go from here? >> if i knew that my job would be a lot easier. >> i don't know. your performance say you do. >> i don't always know which way markets are going but something we twri to do, we try to find mistakes in markets. i view myself as similar to billy bean in "moneyball." someone looking for markets where people have the wrong way of judging what value is. in baseball they looked at-batting average, not on-base percentage and people were making a mistake. we find similar mistakes in financial markets. we found large ones in the mortgage markets in the last few years. >> where is the value right now, given the move we've had in the mortgage related fixed income space. >> i haven't been able to watch all of the bernanke testimony this morning but i saw part of
it. a lot of discussion today about the future of the gses. and i think some of the congressmen are suggesting that we should fully private advertise fannie and freddie and we should have that private entity have schz 10% capital. that's a fine idea but practically there's a challenge. fannie and freddie guarantee $6 trillion in mortgages. we'd need to raise $600 billion in capital. and we've had five years of great performance among mortgage hedge fund managers, not just oursds, but many other names in the space, and main the whole sector has raidsed $30 billion. to raise $600 billion to a daunting task. >> you have been investing in fannie and freddie preferred. >> we have at times. i know it's a topic of controversy right now. richard perry -- >> you have some hedge funds suing the treasury over that
very issue. >> we definitely have an opinion. our opinion would be that the real area where -- the first time where the mistake was made or where there might have been a wrong to investors really happened in 2008, not in 2011 which i think is the basis of perry claim. we do believe that there is a legitimate claim that investors were not treated as well as they could have and -- but that's a topic maybe for a deeper conversation on another day. >> i understand. joe terranova. >> conversations i have had with taxable fixed income managers, they have suggested to me over the last couple years there's been a search to go outside the u.s. and look at emerging market debt. now all the focus is coming back domestically to the u.s. right into your wheelhouse. is there an absence of supply? >> it depends what market you're in. >> in mortgage reits let's say. >> that's an interesting sector to talk about. obviously they have suffered with the back up in rates.
and some of that suffering is justified by the decline in book value. they have legitimately lost a good amount of value but they have suffered more than that. the stocks have i think in some ways overreacted to that news. we're now seeing names in the space, some of them are trading as low as 80 cents on the dollar. you're buying $1 worth of assets for 80 cents. mtg is a name in the space that's managed by a gentleman named gary cane. we think gary is one of the best investors in the mortgage space and you can buy a gary cane managed fund and by $1 of it for 80 cents. that seems like a pretty good idea. >> steve, there's some contention that capital reserves are going to be going up at the commercial banks all across europe, possibly in the u.s. people are saying that's going to affect the mortgage reit market. are you concerned about that or are you not concerned? >> it's very dangerous for me to say i'm not concerned about anything. i'm paid to be -- i'm paid to worry and i'm probably a pretty
good worrier, but i would say there are far, far things that concern me more than the mortgage reit sector. >> another question, by the way, we're investors and i thank you for your great performance. is this a one-way trade? a lot our clients say to me you guys are long a lot of mortgages at skybridge and we own them through you. is this a one-way trade? how are we going to exit this trade properly? >> i still think you're getting paid well for taking mortgage risk. we created a situation in 2008 where the need for capital in the mortgage space increased dramatically and at the same time fannie and freddie, who were the two biggest hedge funds in the world at that time, exited the space. we're seeing the investment banks also are getting their capital reduced. you talk about the volcker rule. and put that all together and the supply and demand in the space has been very much in our favor. now we're talking today with bernanke about needing $600 billion more capital.
i'm optimistic that the long run future of our business is strong. >> let me -- you mentioned your billy bean-style of investing. you have this big presentation that you've put together based on that and the use of analytics and trying to find value where others don't see it. if you could make one pick right now, where is the greatest value right now within fixed income? bring it down to a level that everybody can understand. >> municipal bonds here. municipal bonds got incredibly beat up in the last few weeks. there was an issue recently from the texas permanent school fund, and if you know what we call psf, it's one of the safest issuers out there. it's backed by land and oil revenues in texas. they bake a 30-year bond at a 4.6% yield. compare that to the treasury at 3.6% you're getting 100 basis points extra. sounds pretty good for a credit quality that good. you're also getting the tax break.
4.6% to a lot of investors is closer to 8% tax adjusted. so you're getting 8% tax adjusted for an incredibly high quality issuer when the treasury is up 3.6%. we love municipal bonds. there have been times that bond has traded through treasuries because of the tax benefit. 100 basis point tightening is a 15% increasing in price. >> 2013 would you touch a sub prime bond? >> we are still long sub prime. >> it's now called credit sensitive. isn't that what wall street does when we blow up one group of thiges, we change the name? when value vet gent down we changed the name to air-tran. wall street does that, too. >> steve, it's good to see you as always. thank you for spending some time with us. again, congratulations on your great performance. steve kuhn, pine river. we've been talking about the best new ideas panel behind us in the room behind us. jim chanos is on the stage. let's listen in to the famed short seller.
>> -- your program and fort polipol -- portfolio. >> it's an honor to be here. i have known mark for a long, long time. almost as long as he's been running money. i agree with you on the japanese auto stocks. i think that another thing people forget about japan, by the way, is that even an economy that has grown 0% over the last 20 years with a declining population has a risine ging -- gdp per capita. you see that when you go to japan. it's a very wealthy company. chris, we met last year. we instantly liked each other because we agreed on a lot of longs and shorts. it's a frightening proposition, but we are in the
volkswagen/porsche trade and coupled it with a short in europe that you know of. and i agree with you also on the australian situation. australia is a very interesting market because i think it's a market that actually we're finding real fundamental research can pay big dividends. a lot of misconceptions about that market both long and short. lee, what can i say? we've known each other a long, long time. last year i was happy to hear you give your portfolio because i had two of my longs in my long short fund in your portfolio. they have done very well. thank you. this year i'm unhappy to hear your definition of the word struggling. >> high class struggle. >> it's a high class struggle, lee. but anyway, when i was asked to join this panel a year ago, they said do not talk about china. so i dutifully gave an iconic american company,
hewlett-packard, that has not done well in the intervening year other than the 40% drop it suffered in the first six months i gave the idea on accounting concerns. i will just briefly touch on the fact we are still short hewlett-packard for all the reasons we gave you last year and the extra reason now that the services business that everybody loves and i referred to this morning on "squawk" i think is beginning to deteriorate as well. and all you need to do is look at what ibm and accenture and others have said and at the end of the day services is tied to hardware and that's a business that is going to be declining as well. so for everybody that hopes and prays that hewlett and dell and others have a savior in the services business, i think they're going to be disappointed. but enough about that. let's take on another iconic american company and talk about china just a little bit.
i believe that the commodities super cycle which has been built on the back of the chinese construction boom is coming to an end. now, keep in mind that the chinese construction boom shows no sign of ebbing despite the credit problems that are beginning to appear. but if you consider that one company in the dow jones has 30% of its revenues tied to global mining cap x and 50% of its operating profit tied to global mining cap x, and global mining cap x, which grew 8% per year from 1990 to 2001, the first sort of upleg in the global commodities super cycle and then grew in the last ten years or 11 years at a 24% annual clip from $14 billion to about $145
billion annually, when you consider that basically one-third of global mining cap x is equipment, well, that lands you in peoria, illinois, at the doorstep of caterpillar. we are short caterpillar. iconic american company, leader in its class, but tied to the wrong products at the wrong time in the cycle. caterpillar is a cheap stock. trades at 12, 13 times earnings. earnings are not expected to grow reasonably at all in the next few years. the bulls expect cap x to decline in mining, but here is the problem. they expect it to decline gradually, 10% to 15% per year. but if you realize that cap x in the mining area was $30 billion
in 2006-2007 and got to $145 billion a couple years ago, the declines they're talking about are still meaningfully above what were historical levels. 20 years ago it was a couple billion dollars a year. so these are really staggering numbers that the globe has taken on basically to build out the chinese real estate and infrastructure bubble. caterpillar has seen margins which used to go into the red in the downturn basically elevate so even at its worst a number of years ago operating margins got as low as only 4% versus going into the red. now they're at 13%. i would point out that one of the simplest aspects of economics that seems to have been suspended tying back into lee's comments is reversion to the mean. corporate profitability is
elevated in this country and it's interesting that while all of us by and large tie our efforts to the stock market which is the ultimate economic arbiter, the one aspect of capitalism that seems to have been suspended in this cycle is corporate profit margin reversion to the mean. i suspect that's not going to be the case in the global capital equipment and particularly mining equipment area. i think it's going to revert with a viciousness in the next ten years. if that was the case and caterpillar were to go back to even historical median operating margins, earnings estimates would come down into the $5 to $6 area we believe. if they got even lower than that, they could get down to the $3 or $4 area. now, nobody is counting on that for caterpillar whatsoever. on top of it, there are accounting issues. the company has negative free
cash flow the past year and a half after dividends, so it doesn't have the financial flexibility as a lot of large corporations do for buybacks and others, but more importantly in buying bucyrus a couple years ago it took huge charges prior to the merger. you know that's one of my favorites is looking at companies that write down net tangible assets to either zer o or negative when they buy a company. it gives them a certain amount of flexibility going forward but for a very short period of time. we think that has benefited caterpillar in the last 12 to 18 months. in addition, bucyrus had bought tyrex before that and did similar accounting transactions. we think that that may have boosted earnings. we're not sure. it's hard to tell, but whenever you see a company claim earning synergies by buying another company and then writing down its net assets to below zero, you have to say, well, either that company never earned money or you're being overly
aggressive on your acquisition accounting to give yourself a little bit of flexibility or as my friend herb greenberg would say, a few cookie jars in the future. all in all, i think that caterpillar, while an amazing american success story down through the decades, is going to be facing a series of super commodity headwinds that i don't think its supporters really appreciate, and given that all this is happening in the backdrop of a china that's still expanding its investment, i think there's a couple different ways you could win and that there's probably long term to intermediate term disappointment for the bulls in this stock over the coming few years. and with that i know we're in a hurry to get to lunch. hopefully there won't be too many questions. thank you very much. >> there will be a couple. i think we want to change out our mike so there's a gentleman coming because your mike is losing power. do we have anybody on the panel want to address a question?
i got a couple. as soon as he's ready. >> jim, what about -- >> jim chanos unveiling his new big idea right here at delivering alpha and that idea is caterpillar. the stock was down some 2% on mr. chanos' comments and steve weiss, i guess you're not surprised by this but somewhere the ceo, his lunch isn't going down as easy as it was some 15, 20 minutes ago, is it? >> i have a feeling he's probably been on a diet anyway given the problems they're having. let's not forget they bought a company in china for $600 million, a mining company, and then they announce the write off of it because of fraud of $600 million at 5 o xlok on a three-day weekend hoping nobody would notice. to me this should have a deduction in the valuation also for management. i think jim and i would both say he's a cheerleader. they just have major, major
issues. case to old valuation which would be eight to ten times earnings and you're going to see at least a six in front of the earnings, not the seven. they have had a terrible track record of guiding. >> you have made the point before on this very program, and you allude to it here as well, is that the credibility issue with management sort of hangs over this story and has for some time. >> right. there is none. and then you add in addition to what 1yi78 taljim talks about, fact you now have stronger competitors. you can buy an excavator in china for a substantial dits count versus what cat charges. hitachi heavy equipment. it goes on and on and on. those didn't exist in prior cycles. i agree with the short. >> i'm not here to pick on jim because i think he's a brilliant guy, but we did debate at this desk last year the
hewlett-packard story. i remember saying hewlett-packard with meg whitman in charge was going to be just fine. we're a year later and it's doing quite well. i will say this to viewers, meg whitman is a totally changed manager. the failed gubernatorial election in california has changed her as a human being for the better and i think hewlett-packard will be higher a year from now and hopefully you will invite me back and we'll debate it again. >> look, that story has changed several times. there's been a few different chapters. what initially was a good pick by chanos last year here, the stock was down and then they've been able at least somewhat to turn thing around at hewle hewlett-packard from a perception point as much as any others always chanos will still point to the metrics that exist as he said on this stage, that he's still short for all the same reasons. >> he's a brilliant manager. i don't want to bet against him but one person i don't want to
bet against is meg whitman. you can look at a situation and underestimate the talent of the management team involved. >> i don't know enough about cat to comment on it, but i believe hewlett-packard has recovered very strongly. they have a lot of cost cutting they put in place and she has changed the dynamic. >> with the declining revenue base, at some point cost cutting is not going to get you where you need to go. >> we know that people can make money with a declining revenue base for shareholders. >> i will disagree with meg whitman. ebay, some critics say she did a phenomenal job, some say she did an okay job. i can't forget the fact she was a prominent member of the board when they spent more than any other tech company acquiring companies. i'm not just talking about autonomy. i'm talking about palm as well. they spent enough on r & d but those still haunt me. i think there's a lot of low hanging fruit but at some point
you have to rely on a declining pc market. >> and look, the performance of the stock speaks for itself. >> i have been wrong. it's been great. >> as we head to break, look at hp and caterpillar on mr. chanos' comments. part of the best new ideas panel right here at our own delivering alpha conference. kate kelly will come up and add some color as well, some commentary on the action-packed interview with wall street's top watch dog, preet ba rar ra. he had some very interesting things to say. plus, the fed chairman is still taking questions. he's getting his answers on capitol hill. there it is to the right of your screen there. we're going to monitor all of that, bring you the very latest headlines and the market moving action as a result of them when we come back.
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all right. welcome back to the pierre hotel in new york city for delivering alpha. let's bring in now kate kelly to break down son-in-law of the headlines fr headlines. john paulson's keynote is about to start. we have heard from jack lew and also richard perry along with preet bharara today. >> one of the most interesting moments i thought this morning was, of course, as you mentioned listening to u.s. attorney preet bharara talk about what he's been doing of late. there were questions, of course, about his case against sac capital. he issue what had appeared to be a series of warnings to them and any other perceived wrong doers without actually commenting
directly on them. during the course of a half hour he told jim cramer that despite the words to the contrary from other justice department officials, nobody is too big to jail. that was definitely one of the big takeaways and the statutes of limitations or the time period within which he must bring certain cases is actually longer in many situations than some people seem to think. on bank fraud, wire fraud, and other types of fraud. that no matter how careful you are, just about any method of communication can make a bad actor vulnerable to charges. he's known for his innovative use of wiretaps in insider trading and he also said this despite not actually knowing what snap chat, a quick messaging service favored by trade thaers kind of vanishes shortly after you use it, was. he i should reiterate he declined to comment on sac. given the series of sac related cases unfolding right now and the concerns that hedge fund founder steve cohen might be indicted as a result of them, his seemingly general comments are fair game for a little bit of guessing.
the statute of limitations issue was particularly relevant given the perception that a pair of sac related statutes will run out in a matter of weeks and he seems to be suggesting right here that he has another five years. one other thing i want to draw your attention to, he said something that could be read as a shot across the bow about the reportedly rigorous compliance program at sac. >> there are lots of situations in which compliance programs are simply lip service and they're on paper and nobody actually cares and everyone understands that they're not to be followed and they're just to be used in a conference room with prosecutors when you say don't indict us because we have this thick compliance program and people understand what that means. >> so plenty to di just here, scott. >> you can only wonder what the topic of sfertion and what the thought process is inside sac capital as a result of these kind of comments as indirect as they were. >> no, absolutely. and bhara ra has been very
strong about now he's not letting anybody leak. if he finds a prosecutor that's speaking to the press, that will be the last time they'll ever issue a subpoena, he said. so, you know, very hard to know where information is coming from. obviously this was, if nothing else, at least an indirect warning to sac and any other financial industry scoff laws, perceived scofflaws. >> we still have a constitution in the united states. >> we do. >> and people are still presumed innocent. we have twitter and social media and sound bites coming, but we are still a free country? >> absolutely. >> i'm just asking the question because i want the viewers to know we have a constitution and you're innocent until you have been accused of being gialty beyond a reasonable doubt. >> you're making it clear yourself but you're a supporter of steve cohen. >> i'm a supporter of steve cohen because i think he's a great guy. when the billions of dollars were paid in commissions around
wall street, i don't understand why anybody else is not out there supporting him. he's a great guy. he's been -- he's the largest taxpayer in the state of connecticut. >> yet there are some serious -- >> he had ten years to bring the case. >> just to put things into context. sac -- bharara himself is fighting perception his case has not come together, that cohen has not been indicted. from what i hear internally confidence is returning. >> i respect the public service announcement that the attorney general just gave and if you're doing fraud, stop it. but if someone is not doing fraud, let's leave it alone. >> okay. >> and you are innocent until proven guilty in the u.s. >> right now we don't know how all of that is going to play out. there are some serious questions being asked about some of the conduct within that place. and i'm just going to leave it at that. >> i respect that, but i think people should hear both sides. that's what makes good television. >> and they just did. before we head to break, look at a few big movers on the back of jim chanos' short call.
there's caterpillar. down 2%, but there are other stocks moving as a result of this in sympathy. there's joy global down nearly 2%. look at de. that being deere, down 1.5% as well. caterpillar is one of only two dow stocks down on the year along with al co-what in what as you know has been a great year for stocks. up next, it was the billionaire brawl heard round the world. >> i appreciate, bill, that you called me a great investor. i thank you for that. unfortunately, i can't say the same for you. >> this is not an honest guy and this is not a guy who keeps his word and it's a guy who takes advantage of little people. >> herbalife is on the move again. we'll tell you where it could be heading next as well-lots more "halftime report" live from delivering alpha is back after this. she's always been able to brighten your day.
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welcome back to delivering alpha. it's a stock that had two of wall street's biggest heavyweights duking it out right here on "halftime" on live tv. today herbalife is on the move once again. josh lipton with the story from hq. >> hey there, scott. watching herbalife today enjoy that nice move since that billionaire brawl on half theim in january. ackman and icahn battling it out, just slipped now into the red. you have the fdc reportedly calling herbalife's practices, quote, disturbing at a meeting with consumer activists. the sdc is concerned that the company is taking advantage of hispanic immigrants, high percentage of its distributors are hispanic. the fdc did not say it had launched any kind of full-fledged probe. hlf off session lows but down
0.2% right now. scott, back to you. >> josh lipton, thanks so much. not a huge move lower for that kind of a story. >> it's not, and all i can share with you at this point is how these two gentlemen must feel managing the position, and i don't think mr. ackman can feel very good. he's not had many days when this is working in his favor. >> i don't think icahn has had to manage the position. watch the television and watch the charts. >> this is a stock that's 3 bucks from a 52-week high. listen, i'm sorry, right now, you just said carl icahn is feeling great about the position, doesn't have to do much with it, and if you're mr. ackman you've got a problem. >> plus the ftc, if they come out and say this is our issue, sales practices in terms of they are mistreating some people, people are breathing a sigh of relief and that's why it's not down more. >> i'll tell what you it will do, it will make the conversation i have with carl icahn this evening right here at delivering alpha all the more interesting as if there wasn't enough going on with the entire
dell saga, the shareholder vote held tomorrow, at least schedule at this point so tune in tonight for "fast money" at 5:00 p.m. eastern because, you know what? carl's also big on twitter. he tweeted about delivering alpha. i was also lucky enough that he followed me on twitter. >> how many people does he follow? >> he follows three now, but he followed me fir. thank you, carl. he's excited about twitter, i can tell you, because he made the point to me over dinner. he wants to give insights into the market. this is not some fly-by-night thing. he wants to give insights into the market and he wants to -- >> i'm just absorbing that you're the first guy he's following. give me a second to digest this. >> what he calls no-brainers, right? he's ready to talk to the very shareholders that he says he fights for every single day. >> i've got to ask you this. looking forward, can you challenge him because i know he'll see the opportunity, the domestic emps. why is there not more activism like we see with hess, paul singer at elliot management.
i guarantee carl is looking at those. >> what i want to know there's so much upside in dell and michael dell is saying we're not raising prices at all. why doesn't he go 20 cents, 30 cents above the bid and put it to bed. the board's got to come out if it's all cash. >> i want to know what the athletic prime is for an investor. is it 81? is it 82? >> i'll tell you what. >> 77. >> i don't think he's reached his prime yet, and i want to know from carl what prime is. >> he is as active if not more than he's ever been. we look forward to that tonight at 5:00 from here delivering alpha. final trades when we come back. [ indistinct shouting ] ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box.
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most important thing that moynihan said was taking advantage of the european banks for market share, emerging market growth. buy it. >> at a multi-year high. that does it for us. don't forget to catch more "fast" tonight at 5:00. don't forget carl icahn live with me here. right now "power lunch." ben bernanke says quite a bit. markets on the move and full details. cnbc is delivering alpha. jim chanos, leon cooperman, carl icahn to name a few. this hour we have john paulson, legendary investor. it's perhaps the best lineup in financial news history, and it is only here on cnbc. plus, europe versus corporate america. it seems like there's a new case against our companies almost every day. today the europeans are zeroing in on credit -- on american credit cards in particular. tyler is at delivering alpha and
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