tv On the Money With Maria Bartiromo CNBC August 4, 2013 7:30pm-8:01pm EDT
bartiromo. hi, everybody. welcome to "on the money." stocks hit new highs, the july jobs report released and what the federal report says now. what it means for you and your port foal low. president obama goes on a cross country tour to bring up support for his economic plan. can washington come to an agreement other a big, new deal? and looking for a genius. the parents of amazon.com's jeff basos. >> this is america's number one financial news program "on the
money." >> here is a look at what is making news. a disappointing job's report for the month of july. the economy created 162,000 new jobbing for the month. that was below the expected 183,000. but it fell to 7.4% as fewer people looked for jobs. job growth was revised downward was well. record setting weekend for the marks. kicking off the month of august with a bank hitting new highs on thursday after comments by the fed earlier in the weekend. the s&p 500 closed above 1700 for the first time ever. those commenting after the open market committee wrapped up a two-day meeting and announced it would continue buying bonds and mortgage backed securities to help keep interest rates low. the fed used the afraid modest
growth rather than moderate growth. that was a light and subttle downgrade. the first reading was released this week and it came in stronger than expected. expectations had been for an increase of nine tenths of a percent. the biggest drag was government spending. consumer spending was relatively strong. here is some of the big companies reporting this week. pfizer, and mastercard beat analyst expectations. what a week, the july numbers are out, what does it mean for the economy and your economy, we have balance, the economics of great powers from ancient roam to modern america. also the dean of the school of business. also with us is david kelly who is a chief mortgage strategist,
what did we learn this week? number one, the economy created 162,000 jobs for the month of july, blow expectations. what does the report tell you about where we are? >> we are not growing very fast in terms of gdp growth. we should not expect block bust ter employment growth. if we want to change, we'll have to give the economy a jolt. >> meaning better long-term policy, real clarity about where we're going that gives business people a chance to say yeah, i want to invest and hire again. >> what about you, i want to talk to you about your theory and when people reach 65 what they're doing. >> i think the most interesting part is we had a mediocre job's report. and the percent came down to 7 president7.4%.
the reason for this is we believe that so many people are hitting 65. when you hit 65, you're eligible for medicare. but i think we're just going to think definitely about how this economy works. 20 years ago i could run a pretty fast 5k and now i can't. it's not more sugar, i just lost the capacity to run as fast. and this economy lost the capacity to grow as fast, so i think we need to readjust to that. >> they could be putting that money to work, but they're not. they're worried about what is around the corner. >> they're worried about policy uncertainty. the cost of obamaca care. >> it's not just that they're worried, it's the uncertainty thatkiller here.
if you don't know about corporate tax reform -- the more the government and washington in general with clear the air about what policy will be, the easier it will be for business. >> let's talk about the markets. while all of this is going on the markets are hitting all-time highs. even as interest rates rose, can equities continue to rise as rates go higher? and can rates go higher? >> i think they can. what we saw in the spast tart w low interest rates, there's a positive correlation between interest rates and stock prices. if rates are going from 9% to 10%, that's a raging inflation problem. but we saw yes, this can happen, and i think that is happening, money is moving out of fixed income into equities. >> and you're still recommending that? >> yeah, still, it's not as cheap as it was, but relative to bonds and cash, we're still
overweight equities. >> so we have the federal reserve coming out with it's statement this week basically revising downward the review of the economy. they downgraded it. no mention of tapering. when do you expect they will begin to taper. can they begin to slow down the bond purchases? >> i think the fed will begin to taper toward the end of the calendar year. probably not in september. i don't think quantitative easing right now is having a very large impact on the economy any way. i think the feds feel quite optimistic. >> and david, you don't think the fed's forecast is too optimistic? >> now, i think they expect it to pick up. again, if i'm right that the economy doesn't have the capacity to grow that fast, even a small pick up really does reduce excess capacity and make it more important that they move
away from quantitative easing. >> the second quarter gdp is coming in slightly stronger. we're still looking at a below 2% grower. >> a typical recovery for a deep, downturn is very sharp, we haven't seen it. we should be doing it a lot better than 7.7%. >> i think it was 180 billion that came out. what are you telling clients to do? >> we just talked about overweights and under weights. in general, just check the portfolio. if they're under weight equities and joer weight fnever weight f incomes -- we feel confident that as investors lose their desire to buy bonds interest rates will go up. >> and you're probably gearing
up for the new semester soon? >> yes. hundreds of students coming in. >> where are the best and brightest going for jobs? >> the biggest growth has been? entrepreneurship. >> and that is going on across the country. >> it's easier to start one's own business. >> washington is making is a little hard, but yes, it's certainly more fun. >> good to have have you on the program. appreciate your time today. up next on "on the money." we will be putting the president's refoesed look at the numbers on the look. and jeff basos. the parents that raised a billionaire that changed how we shop. one they leave here, they want world peace. it's, you know -- we want to
here is the bottom line. i will work on reforming our corporate tax code as long as we use the money as an investment for creating jobs. that's the deal. >> the president says he has a deal. will it work? we have guests joining us, glenn and tony. good to see you, thank you for joining us. the president went to an amazon.com facility day laying out a plan called a grand bargain that would create middle class jobs. glenn, what do you think?
balk us through it. >> the plan is a little bit of a mix up of left overs. he had this idea for a drop in the bucket of the $it trillion to $3 trillion we have seen. she dedicating it to a corporate tax return. it is a new idea, but it's intention is more political than false. she trying to split the tea party folks away from those that believe in infrastructure improvement, he needs everything he can to shift the dynamic which is stagnation. >> more politics. let me ask you this, tony. while they support the idea of a lower corporate tax rate, they
say the plan doesn't go far enough and a lot of businesses will file as individuals and small business is not really included in there. >> i think they would say it doesn't do enough for large corporates also. i think he is talking about 28% and they would like maybe 25%. and they're not talking about the territorial tax system either. we know that the investment firms file as individuals, sole proprietorships. you can't deal with corporate tax law changes and not deal with that group. you will not win enough friends to get the ball past the finish line. >> even the language, grand bargain, has been the term used
for the cooperations. it is a legacy move? an economic plan with legs? >> i think it is not a hail mary, it's an attempt just to get back in the game. he has been nowhere for the last six or seven weeks. he has been dealing with scandals and we're entering a massive debt ceiling debate in the fall. tooeny was pointed out false issues, but i don't think the white house is thinking in those terms at all. i think they want to start a conversation. >> when he talked about changing the dynamics of the conversation here in washington and gets the president in a position to talk about things other than the scandals and the irs, i think that is where it is, his poll
ratings have trended lower as the economy has gotten modestly better and the da sta is better for him. going into the fights in the fall, i think he is tried to lay the predicate a little better. but not -- talk about grand bargain, it seems to enter dead on arrival. if you talk about big fiscal plans or tax reform plans, i don't see any momentum for it at all. >> what is the metric to look at for success. what will it take to move the needle on the middle class? >> the joobs numbers are -- jobs numbers are not where they would have liked. they took hold and they talk about cutting spending. we have seen those efforts go down in the house recently. but i think they want to keep their foot on the accelerator to keep this recovery going.
what i would say that i'm hearing from democrats is he needs to have a more coherent message into the fall. >> good to have you on the program, thanks so much. we'll see you soon. up next "on the money." the secret to raising a game changer child. the parents of amazon.com's founder. jeff bezos, your son, tried to take his own crib apart with a screw driver, what did they tell you? that's not much you think. except it's 2% every year. does that make a difference? search "cost of financial advisors" ouch. over time it really adds up. then go to e-trade and find out how much our advice costs. spoiler alert: it's low. really? yes, really. e-trade offers investment advice and guidance from dedicated, professional financial consultants. it's guidance on your terms, not ours. that's how our system works. e-trade. less for us. more for you.
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if your son grew up to be one of the digital eras most successful entrepreneurs, you may be happy just basking in the pride. not for jeff bezos parents. they invetted in future leaders with the bezos scholarship program. >> we came from can-do people. we came from people who thought most projects were things you could solve in the garage. i think that is what humanity strives to do is understand your surroundings. >> we're looking for students that are going to be leaders.
bring them to aspen to the idea's festival, but then we ask them to go back and put on their own ideas festival in their community. >> the scholars are 12 students and teachers developing local ideas from exposure to global thinkers. >> it opened up a universe of ideas that i never would have had access too. >> the idea for the foundation shortly after amazon went public. we realized as a family we had an opportunity and also what we refer to in the family as a joyful responsibility to do something beyond ourselves. >> what happens when they leave? >> they have to apply for a grant from the foundation. we work with them. if the proposal doesn't look too polished, we work with them till it's a stage where it can be
given consideration, and the festivals they pull off are nothing short of fantastic. >> there are kids succeeding and going very, very far and there are kids not getting the education they deserve. hopefully i will create a festival that will help close that gap. i can't wait to take an abstract idea and put it into action. >> we have to fight for it. we all have different interests. we're going to bring them together, children and youth opportunities. for my festival, i want new discoveries. >> when they leave here, they want world peace. it's, you know -- we want to solve all of these problems. we try to narrow it down to something that is achievable, doable, rather than being -- >> but we want them to reach. >> yes. >> you have the resources to do
a lot. what is it about a student that attracts you? >> we're very interested in the youth voice. we saw in our own family that our children were ready to be cocreators of solutions much earlier than they were giving public opportunity. that's what we wanted today provide for young people today. amazon.com founder jeff bezos has made a $25 million fortune. it's a company now worth more than $140 billion. i was reading that your son, jeff, tried to take his own crib apart with a screwdriver, what did that tell you about the future for him? >> that i was in trouble. he would not take no for an answer. i tried to dialogue, and say you're not ready for a big boy bed, and he couldn't really
dismantle it, but it was a can-do spirit. most people have that but i don't think all people have the doesn't to use it. >> you invested your retirement savings in the early years of amazon.com, what was a big risk. what made you take that risk? >> it was all of it, but a large part of it. jeff approached us with a crazy idea of owning a bookstore on the internet, and we believed in jeff and what we could do. >> it was an investment jeff, not in a named company. if he had followed my original suggestion, we would not be buying so much ynl right now. the investment we made in young people has paid off every much as bit as the investment in
>> for more on our somehow and our guests, check out our website, and i hope you will follow me on twitter an google plus. here are the stories coming up that may move the markets. eastern season is slowing down, the big names you'll hear from is disney, 21st century fox, and time warner. monday we get a snapshot of economic activity with the nonmeasuring sector. on tuesday, paul allen will release his new album "everywhere at once." on friday, apple goes back to court to argue for a product banned on samsung smart phones. are the french shrugging -- the
average frenchmen are eating less french bread and it has led to an awareness campaign modelled on the "got milk" ads. that is the show for today, thank you for joining me. my guest next week, actor and technology investor ashton kutcher. he plays steve jobs in a latest bio pic. keep it here, we're "on the money." have a great weekend, see you next weekend.
>> this company has blood on its hands. >> he's talking about chiquita, the banana company which paid nearly $2 million in protection money to a murderous paramilitary group that killed or massacred thousands of people in colombia. >> these were extortion payments. these were payments that had to be made to protect the lives of our employees, and so it's one of those situations where you just simply had no other choice. either you pay or your people get killed. >> and you decided to pay? >> and the company decided to pay. absolutely. [ticking] >> billions of dollars is coming from this office to help bail out the u.s. economy.