tv On the Money With Maria Bartiromo NBC June 16, 2013 5:30am-6:01am PDT
>> hi everyone, welcome to "on the money" i'm maria bartiromo, volatility coming back to stocks, what everyone is watching interest rates and thousand keep your money -- and how to keep your money safe right now. i will talk to a former technology ceo who was himself a i am gran immigrant, why the government is all wrong. the secret motive behind google's billion dollar by, "on the money" begins right now. >> this is america's number one financial news program, "on the money," now, maria bartiromo. >> here is what is making news. it was a wild week for the
markets. the dow jones industrial average had the first three-day losing streak of the year. after a spike in interest rates for the ten-year bond and big losses in japan that made investors nervous. things bounced back on thursday with a nearly 200 point gain, with hopes that the federal reserve will not slow down their bond buying program any time soon. retail sales in the month of may came back better than expected with strong auto sales. important because consumption makes up 2/3 of the economy. the treasury department said that the shortfall was more than 25%. it's part of the reason that stoo standard & poors raised the rating of the u.s. to stable. the product line of the mobile operating system at the annual
developer's conference, the software will be developed this fall, and has easier sharing of photos. it's a nervous week for the markets for sure. worries about the federal reserve and other concerns, do you stand pat or make changes in your portfolio. good to see you both here. thank you for joining us. let's talk about this week, rebecca, it felt like there was a change in feeling this week, we know the fed will stop at some point, but really, really volatile markets. up 200, down 200 and then a big bounce back on thursday. were you surprised at the volatility this week? >> a little bit, yeah. we all knew this day would come, but we never knew what it would feel like, because we have never lived through anything like this before. the easing and the monetary policy in u.s., across europe and japan is something that
there's no precedent for. we knew there would be a reaction when the tone started to change. but it was bigger than most people expected. >> what does the world look like, jason, when the federal reserve makes the -- the fed is meeting next week, what happens when in fact we know that the fed will not buy the $8 billion in bounds every month. >> it depends on why. if it's not going to be buying the $85 billion, because real growth is getting better, then it's not a problem. it will be associated with higher earnings, if it's because inflation is getting out of control, that would be a very different story, that would suggest that interest rates would be back up. the good thing is that inflation is coming down and inflation expectations are also coming down. so, i am really quite bullish. >> and i just add to that, the u.s. consumer, despite fiscal tightening is showing amazing
resiliencey, retail spending has held up well and consumer confidence has held up well, that is coming from weltalth effect. >> i want to get your take tot economy broad lly speaking, lisn to the former ceo of ge. >> things are not bad, things are not bad. this is a 2% he economy. it's not a disaster. it's a 2% economy and we will not create enough jobs with this level of economy to get out of the 7s. >> so 2% economy. do you think the market is ahead of itself knowing we are in a 2% grower? >> personally, i don't think so, the phrase we have been using is tina, there's no alternative. and i agree with rebecca, that you are not in a situation where you are going to be getting high real rates from bonds. i think the back up in bond
yields was a reminder that you can lose money, particularly in bond funds. so it's a very strong environment. i think, it's a strong reminder that equities are an important part of the total return that investors are seeking. >> and i think one of the good things that he said about unemployment rate and it not coming down quickly. you know, consumers doing well, businesses are still cautious and we are in a global economy and a lot of u.s. companies today, depend on sales overseas. the u.s. is doing better, but overseas europe is trying exit recession and china is growth rate slowing, brazil is facing pains. and even if the consumer is doing better, overseas is still a little bit tricky and that seeps through and effects the corporate sector more than the consumer sector. >> let's talk about the fed, they are meeting next week, what you expect to see? >> i expect to see fed chairman bernanke trying to calm it down. he will not say, don't worry
bit, we will not exit qe, my hope is that he says it's coming and it will be slow and gradual and calm the market down. that's the best case scenario for me and it's likely. >> i think rebecca is right. >> that is why i spoke first. >> i mean, i think bernanke has been the most transparent central banker of all time. there's a lot of people like me that try to make it complicated to make themselves useful. he is giving you the playbook and he is saying 6.5% unemployment rate is a marker and 2.5% inflation is another marker. they will stay accommodating until the statistics come in play. until then, there's hand wringing and nashing of teeth. i don't know if it will mean a whole lot. he will calm it down. market? >> i am bullish on equities.
for the individual investor, we have been saying it for a long time. be careful in bond funds. individual -- >> out-flows from bonds? >> because it's a first time in a while that people have started to lose money. >> the last two weeks was the biggest outflow since 2011 in bond funds. yeah, no, it's been a big run for the exit recently. >> why are we so focused with japan. it feels like the u.s. is tracking japan tick by tick. i know they have not been investable in 20 years. >> markets react to what is not priced in. we have been used to japan not doing anything, what has priced them in is them succeeding. you know, when primary minister abe last fall, december, when he got in office, started launching the three april orrows, people thought, this is a big change. we didn't expect this.
so we have seen them expand the monetary base. the central bank of japan of the balance sheet, the money they are printing has gone from april to today, from 60 trillion yen to 75 trillion yen. in a month and a half. it makes the fed look benign, the market is paying attention to it because it was not expected and they are a big economy in the world, if they get positive growth, it effects all of us. >> we will leave it there. thank you both for being with us. up next "on the money," the senate starts an -- we will explain why washington's approach on immigration is all wrong. is google mapping a new way to get you what you want. how it changes the road for navigation and the smartphone wars, is it time to make a turn here.
>> this bill would provide a pathway to earned citizenship for the 11 million people in the country illegally. so that pathway is tough, it will take 13 years before the vast majority of the individuals are able to even apply for citizenship. >> that was president obama urging congress to pass the immigration reform bill being debated on the senate floor, it's a hot button issue for former amd ceo, hector ruiz. he used to cross the mexican border to go to school here. he rose to be the fearless chip maker amd and now he is known for challenging the rival intel
in one of the largest anti-trust suits ever. he details it in his new book "sling shot". >> one of the things that was important for me to understand and i hope the book explains it a little bit is that fair competition is an incredible source of innovation, if you take fairness out of it, then you get what i call incremental innovati innovation, which is good but not great. if you keep fair competition in play, and it leads to transformational innovation, it will change an industry and transform it, the whole premise of the book really is to tell the story about what happens when fair competition is not at play. and i think personally one of the reasons perhaps that intel is struggling today so much, they were hurt as much as amd was by not playing fair. >> that is a great analysis and you are right, you need fair marketplace for the competition and the innovation to really
thrive, a lot of people are expecting that laptops and pcs are on their way out. we see what is going on with dell and the mobility trend really over taking the pc trend with everyone wanting devices. what does that do for the chip makers? >> i think we are going to see a shift of value creation in chip makers and probably a good example if i can use this, is in the last three years or so, there has been the change to mobility, where people want things they can carry with them. and so, what that did is, it shifted the opportunity to a company in taiwan, a manufacturing company, because they are the only ones that were really making the products that are used in mobile products. all of a sudden, they are doing wonderful. if you look at their market values, it's almost the same as intel's market value and it jufrt happened in the last -- it just happened in the last three years. there was a shift because of the
shift in mobility. i think we will see more of that going forward. >> i want to talk about your story, you have an amazing story. you are from mexico, and you used to cross the border every day as a child just to go to school in the united states. tell us a bit about that. >> first of all, i was so fortunate to live in a border where the american side of the border was so enlightened that frankly they invited mexican students to come across and go to school. you probably would not find that today. but, so i was fortunate to do that and they allowed me to do that and i was thrilled to have that opportunity, so i was nervous, as a young teenager going across, but it was wonderful and i'm grateful to the people that made it possible. >> let me ask you about the immigration part of the story. there's a new bill in the senate to provide provisional legal status to unauthorized immigrants, this plan means it will be 13 years before they can apply for citizenship.
now it's 2 to 4 years. do you think it's the right approach? >> i think it's terribly unfair for the 11 million people that are here already. they are paying taxes and obeying the laws and you think of the they will pay a fine and spend ten years in probation and then three years more before they get a chance to do that. you know, you have to think of a very serious crime for someone that they can commit to have to pay that kind of of a price. i think it's an unfair situation. >> yeah, no, i think you are not alone in that obviously. let me ask you about this proposal to on raise the cap on h 1 bv visas, do you think we need to raise the cap? do you find that you can find the skill-sets required in workers when you are looking for employees? >> i think the challenge we have, first of all, i'm probably the only one in silicone valley who does not agree with expanding the visa, it's wrong headed and short sighted.
we have hundreds of thousands of engineers that need to be repurposed here and they would say some investment on the part of industry. mark zuckerberg and others have demonstrated you go not need a degree to be in the software business, we can do a lot with what we have here. i'm not sure, that portion of the bill is critical. >> it really is, i guess there's a debate on that. hector great to have you on the program. thank you so much. good to talk to you. hector ruiz joining us. up next we are "on the money," whe what is the best way to get your
>> well with, you don't need a treasure map to find the next big thing. navigation is a major target in the smartphone wars, joining me right now is joe brown, he is the editor for wired magazine. let's talk about the deal of the week, what is ways? why is mapping such a hot target right now. >> it's a real time mapping service, it shows you do not get on the bridge, it's jammed up. take the holland instead. it does it with a active user
system, they submit reports, heavy traffic, accidents, speed trap. google is interested in getting the engagement from the users, it's different from the way you use google maps on the phone. google wants you to love the products and use the products so they can advertise to you. when you talk mobile tiezment, you want location, and it knows where you are and what age you are and gender you are, it can target you effectively. >> what is the user experience like on the different applications. for example, what does finding the nyse look like on ways for example or on google maps or apple maps? >> the thing that sets ways apart, it's friendly. you know, when you send a report, you get points. it looks like a game. your icon is a cute cloud looking guy, and that is a lot different from the stark kind of bland drop lets you see on
google and apple maps. when you are navigating toward the nys evee, for example, it w show you a path in a 3-d perspecti perspective. >> and the drivers talk to each other, and the data is creating a whole registerry. >> because basically if i'm google and i see that you are talking to my application, i know you are engaged and i know if i put an ad for dunkin' donuts on your way, you will see it. >> and a lot of discussion on privacy in light of how technology is used. how are companying balancing protecting the information. the bottom line is you can be tracked anywhere you go. first it was because you had easy pass, now you have a phone in your pocket, we can locate you in a nano second. >> if you are using google, you are being tracked and you agreed to be tracked. you are being advertised against
basedaare, google services are reading your e-mails you know that because when you send a e-mail to your aunt about a rug, you get advertisements for a rug on the side of the e-mail program. this is nothing new. >> it's scary. >> but google, you do not pay for g mail, but it's not free. you do not pay for facebook, but it's not free. you are trading your privacy to use the services that you enjoy, it's not the nsa listening, i guess it is, but google has always been listening. >> what is the next big thing in the mobility story? >> it's what you were talking about, health care. >> i wrote about the marriage of health care and technology. it's fascinating. >> wearable technology, the jawbone up are allowing people to use the powerful computers in their pocket to crunch the data they have from activity trackers. it may not be 100% accurate but
they give you a sense of what to do to stay healthy and everyone is wanting to stay healthy. >> qualcom makes all the chips in the devices we love, and they are backing a clinical trial, where you inject a substance in your bloodstream and it will a letter you that you need to go to the doctor, you are about to have a heart attack. is that the growth that is to come for smartphones and is it going to be bigger than what we have seen in the consumer space? >> that's a hard one to pin. you know? but the reality is that the smartphone despite whatever app you have on it or whatever operating system you are using. the core is a powerful computer that you can bend to whatever purpose you want and that's the -- that's what the health care companies are able to take advantage of now. so, the flexibility that it offers and you know, the flexibility of the interface with the touch screen, opens up more possibilities that we can ever think of. >> thank you, joe brown of "wired." check out my op-ed on linked in.
google +, here is a look at the stories coming up in the week ahead that may move the markets and impact your money. a few companies will report earnings, monday, world leaders will gather in northern ireland for the g8 summit and then monday we get the may index and housing starts, they track new residential construction for the month. and the big story of the week, tuesday, the meeting on monetary policy, chairman bernanke's news conference starts on wednesday, and that typically is a market moving and thursday, home sales are due out. and a wake-up call for a desk jockey everywhere. a man fell asleep while making a $62 million transfer, the banker accidentally with drew 222 million euros, the bank
corrected the error soon after it occurred but a german labor court ruled the man and his supervisor who verified the transaction be reinstated in their jobs, still, an expensive nap. my guest next week, the world's foremost architect. keep it right here each week where we are "on the money." have a great week every body and happy father's day to all you dads out there. i'll see you next weekend.
good morning. good morning. new overnight, an egypt air flight arrives safely this morning in new york hours after being diverted to scotland when a note was found on board threatening to set the plane on fire. this morning, the dramatic stories from passengers onboard. violent clashes, riot police using teargas and water cannons to clear anti-government protesters. rich eng l caught in the middle. he'll have a live report. and fashionably early, it's a baby girl for kim kardashian and kanye west. their bundle of joy arriving four weeks ahead of schedule but just in time for father's day sunday june