tv Countdown to the Closing Bell FOX Business May 23, 2013 3:00pm-4:01pm EDT
and exclusive jailhouse interview. when you hear who bernie madoff is planning now. "countdown to the closing bell" starts next. liz: theft noon, i am liz claman. it is the last hour of trading. weaker than expected manufacturing news out of china overnight started casting a reddish call over the numbers. the nikkei numbers tanked overnight. we have been doing very nicely lately but they fell pretty dramatically and the whole situation was intensified with leftovers of the news on the federal reserve on the bond buying program. feeling angst in early trading but we are moving higher on the
lower third as we watched each index getting closer and closer to the flight plan. new home sales ris rising to the second-highest level since the summer of 2008. number of americans applying for unemployment benefits fell last week, that all helped market recover some of their losses. at a certain point, all of the losses were erased. look at it now. dow jones industrials up 23 points. i will give the nasdaq a flat, but up about a point. and we must include hewlett-packard in the entire picture. shares soaring today, a healthy percentage change of 15% to the upside after better-than-expected numbers yesterday listing what everybody had expected.
company raised its guidance for the year. we have fought back kicking and screaming all the way to the flat line and beyond. nicole petallides, as we begin with our traders, the question becomes how did the turnaround truly happen? go for it. >> we actually saw a lot of people whenever we get these pullbacks in place before positioning back to the long side. starting to come in, starting to buy. we have seen the market ease its way up. stocks went on sale and that is why people bought into it. liz: and then yyu see oil. why would look at oil on a day like this, on the china weakness seeing oil drop to three wicklow but it is a big fight back
mirroring with the dow jones industrial has done. >> given the numbers, in addition we dropped down to the 200 day moving average which has been a solid support level recently and we rallied back off of that, we saw the move up in equities. it gave oil and little bit of a run and you may not want to go into memorial day weekend too short given the start of the driving eason. liz: when you pick out the dow 30, fewer names are to the upside, the ones that are become so strong with a big again, that is pulling us up. procter & gamble look pretty good, verizon, ibm, cisco, and chevron also higher along with boeing and american express.
what do you think is the final left over emotion from yesterday's fed news that could begin in the next couple of meetings? >> they really don't think that is likely. what they heard from ben bernanke talk about the fact monetary stimulus has helped keep this going, significant benefits, take away the stimulus this time could stall the recovery. people are taking what he said and listening to it. you may see a pullback as soon as june. i don't think that is likely. >liz: existing home sales looks good. april sales for new houses reached the highest level since the summer of 2008. what a rally we are seeing with kb homes, toll brothers up, not
a bad picture. we do appreciate it as you look at everything that is happening. gold is moving higher by $23 the aftermarket session. very much the opposite swing. today only backup to hire news. news of the fed particularly the fed minutes from the april 30 meeting. wayne angell was not concerned, a fox business exclusive yesterday but he told me is not often he talks specifically of how fast decisions should be affecting your investment decisions but he was very emphatic about this. >> the market was confused, and that is a good thing because it is a better buying opportunity for those of us that are bullish. i remain very bullish about this
market. liz: my next guest is doing. president of fleckenstein capital. i know you well enough, you are probably shaking her head when you heard wayne angell, very bullish, the market shows real resilience. you were so bearish on the other side you don't like any stocks. why not? >> the reason the world is the way it is, central planners believe they can direct the economy to the future they see based on impression of a button and the right interest rate. if there were so good at it they wouldn't have had a bubble in the 90s leading to a bust leading to more money printing which leads to this now.
interest rates at 045 years and we're cheering a quarter of gdp growth that was a rounding error and we're all excited because the friedman is boosting stocks, only increasing the risk. one giant false premise. liz: you are not wrong except the market is its own market. sell all of your holdings, short something? >> i am not anything to anybody. somebody asked me my opinion what would i do now. i closed my short fund because i knew they would send money. now things have gone far higher than i would have guessed possible. if you ask meetoday would i buy a share, no, i'm not short because the thing takes are on
the loose but we would've had this conversation in september, kissimmee, the summer of 2007 i would've said the same thing because of the housing bubble that would have looked stupid except what happened next almost everybody who watches your show got crushed while the market going up may be fine and anybody who says this is dangerous looks like an idiot until the problems start, and then nobody manages what happens and they say how did this happen? lori: what would you recommend? i'm asking you, what are you doing? >> i would rather buy gold at these prices if i had a portfolio of stocks and bonds. what is called going to do for me?
gold will protect you over time from the folks at the central bank who think monetizing government debt will lead to a happy ending. it will not. the same people who brought you the bubble and the crash will bring you another one. they are losing their bond market, that'll happen here at some point. i don't know when they will hit, you can never know when they will hit, but policies are extraordinarily dangerous and will lead to big trouble. it has been hit so hard in part because people think we have got a financial nirvana outcome orchestrated by the central bank.
liz: if you fight the fed. what about this. why not simply look at the landscape and say i was short the yen, short the dollar because something is going to happen with all of this liquidity. >> what edge do you have analyzing the effect? it is far beyond the skill level of most people. liz: it is such an easy trade. >> by the time something was easy it generally isn't. liz: is just as soon as the heard piles in. >> you you are voting with the central bank. they are debasing the currency. when they expand their balance sheet, that is to basement.
when is the consequence of that coming into play? monetary policy works as a leg. bacap policies that have brought us to bubbles and will bring us to another. you can go a long time before it hurts bbt in the end it will hurt. liz: thank you, it has been a think quite some time since we have a guest call the members lunatics and crazy, but you're always welcome on the program. it is fascinating to watch. we know these are valuable observations every single time, thank you very much. by the way, he is not shortened, but out of all stocks. tesla becomes the first u.s. car
company to pay back its government loans and it does it nearly a decade early. not because it has to. we talked to the man at the wheel, elon musk, but how he's revving up the company at the wake of this bigand shares her e past year for tesla. elon musk warned you it was a bad idea to bet against him and tesla. listen to what he told us in september from silicon valley. >> i think it is very unwise to be shorting tesla. very unwise. ♪ i'm so glad you called. thank you.
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have a discipline to sacrifice the market share to retain profitability. let's get to tesla motors. surprising shareholders by paying off a startup loan from the department of energy nine years early. i asked elon musk, tesla ceo and president, what he felt about paying off that offer. >> it felt like a great relief. really offering tesla as a whole because received a lot of criticism for the loan and that is something that matters to people out there. it didn't actually make sense because we had low cost government debt but this is going to matter the number of consumers that'll make up for it in sales.
liz: they say look, can they stand on their own without the government loan? clearly you have done extraordinarily well. this is enable you to do anything differently, the design of your next line of vehicles? >> we actually raised over a billion dollars and the loan repayment including interest, taxpayers made a profit on this loan. peoole's tax bills went down slightly as result of this repayment. since we raised a billion, gives us half a billion left over for future development like our third-generation vehicle which
is the mass-market affordable car. a car that is affordable, they have a range of 200 miles and that is what we want to get to. liz: can you defined affordable? >> it would be about half the price of the model s, so in current dollars, it would be in the 30 to $35,000 range, however when you factor in gasoline savings, that takes a price down and the 25 to $30,000 range. liz: tha has been a little bit a war of words with you and chrysler. you said you were the first to
pay out the full loan, chrysler said we paid hours early as well. >> to be clear, i actually did say tesla was the first u.s. company to fully repay the government and chrysler is a division of fiat, which is an italian ompany. and the other thing that chrysler forgot to mention is the u.s. taxpayer is short 1.3 billion. apart from that, they were first. liz: we last spoke in fremont, california. you said in response to my question about tesla being one of the short stocks around, since then the stock has skyrocketed 150% year over year hundred 80%. what do you say to the shorts
now? >> it was interesting when we had that discussion last year, i think people took that as some sort of i don't know what, but it caused the interest to increase. i am not really somebody who bluffs. if somebody says there is a freight headed in your direction you should at least look down and see if you're on the tracks. liz: congratulations paying off the loan. elon musk of tesla. we would love to know what you think. with the department of energy loan paid off would you join the wait list for the tesla model s? if not, would you commit to one if the price dropped to about $35,000 which is what he says will be the affordable one he
wants to build. we will share your answers later in the show. the closing bell ringing in about 39 minutes. three other senior executives considered to be the inner circle received subpoenas today. charlie gasparino has the latest on the government increasingly tightening grip into the hedge fund. that is next. and adam shapiro speaks with bernie madoff and he told adam hughes changing his story. joining us with the details. histay tuned. ♪
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liz: charlie and liz battle here. are you feeling her biceps? why? many confident the big hedge fund and the founder will survive even as the subpoena continues to fly. three more today. >> i think that is a secondary system. the bigger story is what is going on between investors in the fund, fund managers and senior officials, they are basically going to get through this. he will not be going to jail, that is what they believe. somehow survive, they can reopen it, israel and with a big fine when you read the tea leaves, three executives, when you
executives were getting it. the question is did they subpoena portfolio managers versus who they subpoenaed. they subpoenaed the president of the sec. it looks like when you look at the subpoenas, it is the fund itself as opposed to maybe steve cohen most in jeopardy. sac capital, it looks like maybe they're looking at trying to close that down, basically, considering that a corrupt organization. by the way, to do charges against sac capital, rico charges, you can take a lot of money out of that. you can basically take billions of -- liz: right now how much is in the fund? >> 14 billion. liz: nine of it is steve cohelp's. >> maybe they force him to give half that back. it looks like they're going after the fun -- in this particular case -- rather than
him. steve cohen got a subpoena, right? generally you don't subpoena targets, if you're a direct target of a grand jury investigation. my view is there is a dual track that this information's going on -- investigation's going on the. they would like the portfolio manager indicted for those suspicious trades back in 2008 who made the suspicious trades right before he had a phone call with steve cohen. they think that is key to what insider trade. that's their main focus. as a side thing, they're looking at potential rico charges and maybe closing down the fund. and that's what these subpoenas kind of give you more sort of -- it sheds more light that that is another strategy. i will say this, you know, here's the other thing that i think viewers should consider when they're following the story, so much of what we, what we're saying, we don't know the full story here. and i'm doing a book on the relentless pursuit of steve cohen, it's called "circle of
friends," it's coming out in a month or so. i talked to a lot of former justice department people who say what you hear and see in the papers sometimes, it's not the full story. you know, this story is slowly coming out. we're going to get more soon. i always say we're on the 10-yard line with a lot more to go, you know what i'm saying? liz: sure. >> clearly, what i do know is what inside sac they're saying, and maybe it's wishful thinking. they think they're okay, broadly. they don't think steve cohen is going to go to i'm not saying it's true. steve cohen says he's innocent, hasn't done anything wrong. they think that the fund is what is at jeopardy here, what they're looking at. and i can tell you just by reading the tea leaves of these subpoenas, that's what it sounds like. steve cohen gets the subpoena himself from the grand jury. the people that got the subpoena now, tom conhini and the compliance guys are not portfolio managers. so it's the fund.
i'm just reading tea leaves and telling you -- you're distracting me. liz: you heard the thunder, and that was from my guns. >> you do have guns. liz: take a look. we've got a massive thunderstorm going right up sixth avenue. >> it's called rain, it happens sometimes. liz: that was a big thunder clap..3 >> this is what we're calling the news for? liz: well, you're dumb. >> by the way, it's raping in new york. [laughter] @- it's raining in new york. we have great news judgment here at fox. i want everybody to know that. liz:@liz claman, follow me, not him. closing bell ringing in 29 minutes. new home sales up nearly 30% from last year, and home prices are soaring to record highs. it's good news for this guy, the ceo of the newest home builder to hit the publicly-traded market. he's joining us in a fox business exclusive. but there are still a few sink holes in the housing landscape.
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. ♪ muck. >> i'm dennis kneale with your fox business brief. boeing's 787 dreamliner, once grounded, is again taking to the skies in china, at least domestically. the civil aviation administration of china also is expected to give clearance on international flights in coming months. regulators from other countries including the u.s. and japan have cleared the planes for takeoff after a three-month
global grounding. american workers are saving more for their retirement. fidelity investment says the average balance hit a record high of $80,000, that's a 75% jump since the stock market's low in march '09. and also smash burger's co-founder wants to serve pizza chipotle style, oven-baked pizzas that are made and served within minutes of ordering, already planning more outlets following its launch in the denver area, and now we continue our "countdown to the closing bell" with liz claman. ♪ ♪ liz: as we watch the indices are lower but could change in the next 23 minutes or so. let's yet to two tech names that are bucking the trend, hitting all-time highs. let's talk about it. >> reporter: fun to look at a couple of names, western digital and also ce technology.
a couple of things worth noting, these are disc drive maker, and deutsche bank raised their rating to a buy from the hold today. and talking about sea gauge technology, it's pretty amazing considering that we are seeing at these highs at this point, these are disc drive makers. when you think about data storage, these are the names of the pros in the technology world. maybe not the average joe, but these are really the names we watch so closely. year to date western dig is up about 48%, and also seagate a stellar performer, up 41%.% both, clearly, outpacing the major market averages. liz rez very interesting because the famed short seller has recently said he wanted to short the disc drive makers. getting crushed today, certainly. nicole pet lee cease. the most hated man on wall street speaks, and bernie madoff
is changing his story. fox business reporter adam shapiro is the one to whom he spoke. he had a one-on-one sit-down with mr. madoff this morning. adam joins us from the federal prison where madoff is in butler, north carolina, with more on this story. and, adam, how much credibility do we put into anything this man says? >> reporter: well, most people don't give bernie madoff any credibility, but he was at the center of the biggest ponzi scheme ever, and he's now claiming before he told his brother or his sons -- which has always been the story that he told them first -- before he family confessions, he claims he called sop of his big -- some of his biggest clients. but he's alsootalking about the role of the banks in the complicity. in particular, he's talking about jpmorgan chase, and he said because his accounts are there for over 20 year, quote: there's no question that
jpmorgan is guilty. they would have had -- they would have to be idiots to not realize what was going on. and then jpmorgan chase, a source closeeto the bank told us, liz, that madoff has made these false accusations many times in past interviews. what he's getting to in this discussion of jpmorgan chase are the monthly sec documents, the focus reports he would file with the bank that would have missing information about client funds. he says the fact the bank never asked him is a sign, in his opinion -- and also, by the way, in the opinion of the trustee that the bank turned a willful eye away from mr. madoff. finally, you talk aaout him being the most hated man on wall street and main street, he has no love for wall street. bernie told me today, quote: wall street is a viper's nest. so are the banks. the banks are walking around without accountability. so says the convicted billionaire crook. liz? liz: adam, tell me what he looked like and what the
atmosphere was like in which you spoke to him. what was that like? >> reporter: so i met him, you know, on television when you see lawyers meeting with clients, it was in that kind of room, a stark, white room. he looks pretty healthy for a 75-year-old man. he wears the prison tan outfit, it's like a work shirt and work pants. he is in a medium-security prison. he talks about it, he referred to it as a kind of camp. this one's surrounded with fence, chain-link fence as well as razor wire. but there's a degree of freedom here that he enjoys as opposed to a maximum security facility. but he seems to be in good health, and he looks healthy. i don't think that'll bring joy or pleasure to his victim, and he knows that he is a hated man. liz: or his son who committed suicide and blamed his father for sneering the -- smearing the family name. the whole story is just an epic tragedy, but most for the family and, certainly, for the victims as well.
i look at this, and i say, well, jpmorgan must be shaking tear heads or rolling their eyes, or they're a little bit concerned. because if you've got some prosecutors out there or other lawyers who are pointing the finger, is there any risk of that for this company? >> reporter: well, the problem for jpmorgan chase is, for instance, the picard suit lays out very clearly troubling information the bank poosessed before the ponzi scheme became public. a man by the name of matt zanes is quoted by a bank official in 2007 saying that a cloud hangs over bernie madoff, that's a quote out of the actual suit against the bank. now, that suit as it winds its way through the system has been partially dismissed not on the merit, but on the grounds that the trustee doesn't have legal grounds to bring the suit. so individuals would have to bring that suit and use that information. but those kinds of things are clear to understand inside that suit. liz: adam shapiro live in north carolina. having spoken with bernie madoff
in a fox business exclusive, thank you very much. really appreciate it. adam shapiro. closing bell ringing in about 17 minutes. as the housing market continues to head toward recovery, where are the home builders running to -@for the best profits? we talk to tri pointe homes' ceo doug bauer in a fox business exclusive. and we asked you earlier, remember, with the department of energy loan paid off by tesla motor, would you join the wait list for the tesla model s? if not, would you commit to one if the price dropped to about $35,000 or $40,000? here are your answers as we head to the break. ♪ ♪
thank you orville and wilbur... ...amelia... neil and buzz: for teaching us that you can't create the future... by clinging to the past. and with that: you're history. instead of looking behind... delta is looking beyond. 80 thousand of us insting billions... in everything from the best experiences bew... to the finest comforts above. we're not simply saluting histor.. we're making it. how old is the oldest person you've known? we gave people a sticker and d them show us. we learned a lot of us havenown someone who's lived well into their 90s. and that's a gat thing. but even though we're living lger, one thing that hasn't chaed much is the oicl retirement age. ♪ the question is how do you make sure you have the money you need to enjoy all of these years. ♪
liz: breaking news on sprint. sprint says the california commission has voted to approve the deal with japan's soft bank. the commission found that soft bank's investment in sprint, they say, will lead to increased competition. that was the last major hurdle for the deal with soft bank and sprint to proceed. california was the last of the 23 states that had to sign off on the deal. stock is moving slightly higher for sprint.been a very nice keep in mind dish wants a part of sprint, so we haven't heard the last of this story just yet. new home sales, as we told you, topped expectations. home prices soared to the second highest level since the recession began. so we thought we'd bring in the
very first home builder that had the guts to go public since the crisis began. the first in nearly a decade. tri pointe homes went public january 31st, and, of course, what was interesting there was that 2004 we hadn't seen, we hadn't seen, doug, an ipo of a home builder, and then here came tripoint. what gave you the guts to do something like that during what was still very muchha touch and go time for the housing industry? >> hi, liz. you know, it was a touch and go time, but we had a strategic partnership that we formed with barr rhode island and starwood capital in september 2010. and the markets as we were winding down 2012, we were looking at some capital-raising ideas, and one of the options to us was the equity markets. and they came together quite nicely, obviously, in completing, you know, the first ipo of a publicly-traded new home builder in ten years, as
you mentioned. liz: well, you're different from many home builders. you don't just pick a point on the map. you're tending to go toward areas that are not coastal, because there isn't a lot of property in those areas at the moment. plus, it's getting more expensive, is it not? what makes a perfect, fertile building ground for a company like tri pointe? >> well, i think our business model is a very good, fertile model for home building. we're building in northern california, southern california and now denver. and we're building along all ale major transportation corridors which feed all the employment growth here in california. so our model is a new home-building company in this business without any legacy outfits and a clear runway as is set up perfectly for the growth of this business. les -- liz: we just showed a home in san jose, and they're not entirely inexpensive. of course, in new york everybody would grab this in two seconds,
but as you look further away from those stories to plays like southern california, irvine, riverside, tell me what you think about colorado. colorado was hit hard by the housing crisis. how's that doing? >> colorado's doing very well. builders right now are selling anywhere from three and a half to four homes per month, and we've seen pricing power of up to 10% year-over-year. and, again, the denver market is very strong because of the housing -- not the housing growth, but the employment growth that has fed into the housing growth over the last two years. liz: well, that becomes an important point about whether we see a true recovery. and as you look at what you're seeing sort of nationwide, what would you avoid? what regions do you say we're not interested in going in there? [laughter] >> well, you know, our focus is really the southwestern region. right now we're in california, as i mentioned -- liz: right. >> and in colorado. and as you look at our playbook for this year, you know, our
company's going to grow from doing 350 closings this year compared to 77 last year, so we're really a growth company in california. liz: nice. >> and colorado. our revenues will top out at about $250-$260 million compared to $77 million last year. so we think we're very uniquely positioned for the growth here in our core markets. liz: what about the mortgage rates? suddenly we start to see, what, 30-year fixed, i was just checking. it's still in the 3s, but then you start to rook at the jumbo -- look at the jumbo loans. to get the 4, you have to do a little fancy footwork, but are you worried about what the fed may do? you just heard ben bernanke hinting they might slow down what has been a very friendly behavior on behalf of the fed to the housing industry. >> actually, my personal opinion is i do believe that the fed needs to slow down some of their
bond purchases. i mean, the attractive interest rates have definitely been fueling the housing recovery, and i think a gradual let-up on actually create a more consistent recovery in the housing business. if you look at interest rates today in our average loan, it's about $450,000. at 4%, that mortgage is only around $2100 a month. you compare that to represent -- to rents throughout california that can peak up to as high as 5,000, the ratio of renting to owning a house is very much in our favor. liz: we're looking at the other home builder ipos that came after you, taylor morrison, william lyon as well. your most recent quarter you swung to a profit. we're watching, barry's a very smart guy. you are, too, doug. good to see you, and we'll follow this story closely. thank you for joining us on fox
we're not in london, are we? no. why? apparently my debit card is. what? i know. don't worry, we have cancelled your old card. great. thank you. in addition to us monitoring your accounts for unusual activity, you could also set up free account alerts. okay. [ female announcer ] at wells fargo we're working around thclock to help protect your money and financial information. here's your temporary card. welcome back. how was london? [ female announcer ] when people talk, great things happen.
luckily, he found someone who gave him a fresh perspecte on hisortfolio. and with some planning and effort, hopefully bob can retire a more appropriate age. it's not rocket science. it's just common sense. from td amitrade. liz: we have some breaking news, ande will get to that in just a moment. it's involve offing the country of iceland -- involving the country of iceland, bold comments about the country which, of course, as you know, had certainly been in dire straits, but they did something different than what the u.s. did, they did not bail out their banks. let's get to nicole on the floor of the new york stock exchange, and you're looking at hewlett-packard because it's kept the dow barely afloat. >> reporter: right now in positive territory. hovering around this nchanged
line, we're down one point. don't forget, we were 15,180, but hewlett-packard alone is adding 27 positive dow points, and that's what's really been helping the dow stay near that unchanged line. david: nicole petallides, it's david asman. how are you? good to see you. electronic arts, they were popping today. at one point up over 4%. i think they still are. >> reporter: they have a new game, need for speed. they're jumping on gamestop's good quarters, also waiting on numbers as well. my kids are can we go to gamestop, i need pokemon black and white. david: yep. and by the way, we have a little later on in this hour the head guy there at electronic arts who's the ceo, the head at the moment, peter moore, he's going to join us. we're going to have the numbers and the coo. liz: and, nicole, you know we're waiting on gap. of course, the stock has had a
nice runup over the past year, let alone the past three months, but what do we need to hear as they go forward with these firms? >> reporter: you want to hear same-store numbers and lineup. trying to move that inventory out, a lot of the retailers talked about a cold winter into spring, and that put a damper on things. we'll see whether or not we hear that same rhetoric out of the gap which has done well over the last three months, up about 27%. david: all right. well, pandora's up over 32%, so they're doing great gun, but thai got a new business model where after 40 hours of listening you have to pay up. a lot of people are wondering whether that's going to be successful. today we find out. >> reporter: right, exactly. in the meantime, we're watching pandora hitting a new high again, so it's certainly one that is making those shareholders happy. liz: okay. as we bump up against the numbers here in the closing
bell, we are looking at a market that is down but certainly not out. the dow had been down 120 points, and the s&p had been down a full 20 points. so when you see where we are now, it is a fightback with the s&p down just four, the dow jones lower by 11. david: what a turn around. liz: take a look at the russell 2000. it's been a real performer over the past couple weeks, moving higher by just two points. david: keep in mind that the japanese market went down over 7% overnight. everybody thought it was going to weigh on this market. it was down about 141 points early on in trading and then turned around. you could consider it flat based on what it was. let's take a look at the front page headlines. positive data on the jobs front. initial jobless claims dropped by 23,000 to 340,000 last week, that beat expectations. the four-week moving average is now sitting near a five-and-a-half year low. liz: look at gold surging today, finding support on the back