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tv   First Business  FOX  November 5, 2012 4:00am-4:30am PST

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away. what issues are coming into focus ahead of the big vote. in today's cover story, why electronic voting machines are raising concerns in some key battleground states. plus, a juicy exit from a top financial firm prompted a tell- all book. the author explains 'why he left goldman sachs.' and, is apple's mini a big flop? first business starts now. you're watching first business: financial news, analysis, and today's investment ideas. good morning. it's monday, november 5th. i'm angela miles. in today's first look: the countdown to the presidential election is on. in what could be viewed as a sign even the market has a case of
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the jitters about the outsome, stocks and commodities all sold off. new york's flagship apple store on 5th avenue reports a sell- out of the new ipad mini friday. but only short lines were spotted outside the apple store in chicago. at the gas pump, prices fell 8 cents last week, dropping to $3.49 per gallon. and an unusual move by the department of energy, which is loaning diesel fuel to the residents in the northest left without power due to superstorm sandy. let's find out what's on the minds of traders this morning. phillip streible of rjo futures joins us on this monday morning. good morning to you. > > good morning to you. > > what was going on with that sell-off on friday? was that classic buy-on-the-rumor-of- the-jobs-number and then sell-
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off-on-the-news? > > it was really interesting. i mean, traders started to jump in and we got some momentum after the number came out. the number was perceived very well, and we saw that push upwards. but as the day progressed, traders became more and more concerned about the election that's going to be tomorrow and what the results will be. so, it felt wise to maybe take some money off the table, stand aside and get back to safety. > > the market hates uncertainty. money though was moving out of gold. what is that telling you? > > that was actually very interesting, because we would have thought that that safety play would have been a push into the metals. but in all reality, it was more of a repatriation back to the dollar, selling some of the risk currencies. it pushed the u.s. dollar index up. we saw gold prices start to trend lower. they broke through $1,700. it seemed like the liquidation continued to expand at a faster and quicker rate, and we pushed all the way down quite deep. we're right around the 200-day moving average now. > > oil had a dramatic sell-off as well. > > that's another. that's more, i think, of the hurricane factor. the issue with that is
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you had a lot of refineries that were shut down at the moment, and we had a lot of products just standing aside. we're starting to see oil start to move through the system, and what's happening is, they're really going to ramp up that inflow into the refineries, and you're going to see most likely a build next week from the department of energy. > > and i'm very impressed that you will be leaving the trading floor in chicago on election day to go to indiana to cast your vote. good for you phillip. > > thank you. today marks the final day of campaigning for president obama and gop presidential candidate mitt romney. friday's jobs number was in full focus when both candidates headed to the midwest battleground states. "today our businesses have created nearly five-and-a-half million new jobs, and this morning we learned that companies hired more workers in october than at any time in the last eight months." governor romney also cited the economic data friday during what he called his "closing argument." friday's jobs data was better than expected. 171,000 jobs were added in october. 125,000 were anticipated. employers are adding 150,000 jobs per month on average. despite more jobs added than expected, the unemployment rate ticked up slightly to 7.9% from 7.8%, reflecting more people looking. and it showed job growth across the board with the exception of the government. government jobs dropped by 13,000. a bigger
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breakdown on the jobs number is coming up later on in the show. voters are paying especially close attention to job growth and the economy. the latest data shows unemployment under 8% and the economy growing with gdp at 2%. president obama admits while the numbers are going in the right direction, he won't be satisified until the nation is back on track. republican presidential candidate mitt romney remains unimpressed. "23 million americans are struggling to find a good job. 1 out of 6 are living in poverty, living on food stamps. "over the last four years, every time we pushed to make change, they fought back with everything they got. they spent millions to stop us from reforming healthcare. they spent millions to fight us when we tried to reform wall street. their strategy from the start was to engineer pure gridlock." among the ideas the candidates are proposing to improve the
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economy, president obama wants tax breaks for u.s. manufacturers that produce goods made in america and tax penalties on companies outsourcing jobs, to raise the quality of education to create a better skilled workforce, and further investments in clean energy as well as investing in jobs that repair u.s. roads and bridges. he also wants tax breaks for the middle class or people earning less than $250,000 per year while raising taxes on the wealthy. governor romney is calling for tax breaks for the wealthy and the middle class in 20% across the board, deep cuts in services and social programs, and eliminating corporate regulations. his job creation plan includes oil drilling. twelve years after the 2000 presidential election, which involved a recount in florida and a lot of concern over "hanging chads," many states have converted to electronic
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voting machines. but as our cover story explains, a lot of states use e-voting without paper back-up - including some of the so-called battleground states. according to verified, a non-partisan advocate for accurate and verifiable elections, pennsylvania, virginia and colorado are among more than a dozen states where some electronic voting machines do not produce a paper back-up. "if 13 states have no paper back-up, that's a recipe for abuse." charles santangelo has written about election outcomes and warns that the potential for electronic ballot tampering is real. "we need to have paper back-up. voting machine companies fought it back in 2004."
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robert johnston, an engineer at argonne national laboratory, says, "the voting manufacturers are in denial. they are not doing anything about these problems, but their customers are not asking them to, either." "after 2000, a commission said paper back-ups should be in place. twelve years later we still have places without it. that is a real failure." no one says electronic voting fraud has happened. two manufacturers we tried to contact but didn't get a response say on their websites: "we employ extensive internal security monitoring to ensure data integrity and maintain public confidence." and another: "we offer the best and most reliable voting solutions to elections administrators and voters around the world." a number of officials at county boards of elections say they're confident their machines are tamper-free because they're not connected to the internet nor
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left alone long enough for sabatoge. but officials in hamilton county, surrounding cincinnati, ohio, say they were not satisfied with electronic systems and chose a paper-based system that scans ballots. voters in battleground states can expect loads of lawyers that will be watching at the polls tomorrow. the republican and democratic parties are mobilizing thousands of attorneys for the election, according to the new york times. they will be watching for intimatidation, sabatoge or incorrect information given to voters. attorney presence will be heaviest in wisconsin, virginia, florida, pennsylvania and, especially, ohio. the political season is turning into a huge plus for tv stations. stations reportedly will make a $2.8 billion haul on political ad spending this year, a 68% jump from $1.6 billion in the 2008 presidential election. states with the most spending on political ads include ohio, pennsyvlania and florida. wall street is under fire from the government. the federal energy regulatory commission is targeting jp morgan, deutsche
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bank and barclays for oil trade manipulation. barclays could be fined $470 million after 19 questionable trades in the last two years. jp morgan was asked to turn over emails that may shed light on alleged market manipulation in california and the midwest. the bank turned over some documents, but is still under investigation. the firms call the allegations over-reaching and plan to fight back. big businesses are struggling to stay afloat after hurricane sandy. downed cell towers and power outages put a damper on cell use. verizon says the effect on its fourth-quarter results could be "significant." airlines lost $190 million. delta alone cancelled more than 3,500 flights, which cut $45 million in revenue last month. and about 300,000 auto dealerships were forced to close due to power outages. hyundai and kia are working to resolve a gas problem. both car companies admit overstating fuel effiency on the stickers in
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the windows on 900,000 vehicles. epa officials say the mileage was wrong and needs to be corrected. hyundai and kia are lowering the miles per gallon estimates on most 2012 and '13 models. the companies are offering gas cards to some customers. in ipo watch, restoration hardware and delek logistics hit the market on friday. the upscale home decor store priced in at $24 and traded as high as $31 before closing at $31.10. meanwhile, energy company delek logistics priced its ipo at $21, but traded upwards of $23 friday. and, groupon is celebrating a very public anniversary. the daily deal company started publicly trading a year ago, debuting november 4th, 2011, at $20 per share. friday, shares dropped to a new low of $3.85. the u.s.a. turned into a hot destination for travelers from other countries during the summer. foreign visitors spent a reported $13.8 billion in august alone this year, up 3% from last year.
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the historic address of 1600 pennsylvania avenue is worth more as of late. the value of the white house is up - to $284.9 million, from $280.8 million in 2008. that's according to its jump is said to be due to higher momentum in the d.c. housing market. still to come, a very public exit from a tight-lipped financial firm made this man infamous. we'll talk to him later on. but first, bill moller tackles the numbers. what the jobs data could be telling us about tomorrow's election. that's next, after this "in the know" message.
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w election is tomorrow, and if
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job creation is a key component to which party will do best tomorrow, a lot of people are paying attention to the numbers that just came out on friday from the bureau of labor statistics. let's talk with brent schutte. he is the market strategist for bmo global asset management. once again a split decision: we have the unemployment rate ticking up 1/10th, but job creation also up. > > sure. this number was actually a little bit better than the ones that we've commented on in the past.
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184,000 private payrolls were added in the month of october. the household number, which is used to calculate the unemployment rate, was also up, but more people were coming back into the labor force, so you actually had the unemployment rate tick up by 1/10%. > > it's funny how, statistically, a lot of people would say it's not that significant this change, but politically, everybody jumps on it and tries to peel back the onion and figure out who does this benefit? > > sure. i guess i think it's a little late in the equation for it to make a huge difference in what happens on tuesday. if you look right now, the polls are very divided, and largely they're divided because who you think is actually going to come out and vote. so are more democrats going to vote, or are more republicans going to vote? > > let me ask you about the numbers, though, brent. you're talking about job creation, and in your view, you feel that this is not a cyclical problem,
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that it is structural, therefore it will take some time to gain traction. > > sure. i do think it's a structural issue. that's why i think monetary policy is not all that helpful with solving the problem. if you actually look at the nfib, which is a small business research firm, they actually had numbers come out that 41% of owners are actually having trouble finding people to qualify for their jobs. > > even as the pool of the unemployed is that much greater. > > sure. 41% is the same number that it was in february of 2007, so before the great recession. the unemployment rate then was 4.5%. today it's 7.9%. there are 5 million more people unemployed today, and yet they're having problems filling these jobs. > > interesting. and here we're likely to have a twist 2 - would it be 2 or 3 or what? - from the fed. > > so operation twist winds up in december, and that's the program where they sell their shorter-term securities and buy longer-dated securities. that wraps up in december. and they have clearly stated that they are leaning toward actually doing more. so what they may actually end up doing is actually just outright buying treasuries. so maybe buying $45 billion more longer-dated treasuries per month on top of
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the $40 billion in mortgage- backeds that they're buying today. > > we'll see what the impact of that is, not to mention tomorrow's election. brent schutte, thanks so much. > > thank you. coming up, the man who wrote a tell-all about one of the most private firms on wall street. we'll hear from him - next.
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it's not that often wall street employees go public with what happens behind closed doors of investment firms. joining us now, someone who did. greg smith, author of the new book "why i left goldman sachs," joins us this morning via
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skype. thanks for coming on the show today. > > thanks for having me. > > you famously submitted your resignation letter in a scathing op-ed piece in the new york times back in march. you talked about how bankers there were ripping off clients, calling them muppets, and were morally bankrupt people. since then there's been a media backlash, with even forbes saying that your story doesn't add up. are you surprised by the negative reaction? > > no, i'm not surprised. i am a little surprised though that the media is not actually asking goldman the hard questions: "are you riping off teachers' pension funds?" "are you selling charities products they don't understand?" and "are you betting against clients?" and the answer to all those questions is yes, and unfortunately there has been an element of character assassination going on. > > other than what you wrote in the book about goldman sachs, what else did you want people to know? i know for one thing, this is a firm that is shrouded in secrecy.
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> > yes, and that's one of the reasons i wrote the book. goldman is a very mysterious place, so i wanted to, in a certain extent, pull back the curtain and show people how goldman and wall street make money - and not just the bad things, the good things and the bad things, because there's certainly a value of wall street to society. but i think if there was one or two messages i would like to leave with your viewer, the one is, there seems to be a perception that the financial crisis, the problems that led up to it, have been fixed. i would like your viewers to know that less than 1/3 of the legislation has been passed, and more than 3/4 of the deadlines have been missed, and frankly, wall street has spent $300 million lobbying against the harsh rules. so, the problem has not been fixed. and secondly, people don't realize how closely this affects them. the real big players on wall street are the pension funds and mutual funds that hold people's retirement savings. > > we reached out to goldman sachs, which referred us to the company website, which includes
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the statements "mr. smith's op- ed portrayed a firm that is unrecognized to us, and following its investigation concluded mr. smith appeared to be frustrated about his career and future prospects at goldman sachs." do you agree with that? > > not at all. i was actually doing very well in my career. > > other than being an author, are you working right now? > > i focused a lot of time writing the book, but what i want to do right now is i actually want to be a very vocal, loud voice for financial reform, because i think there's a real place for people from within the industry to reform wall street for the better, to make it more transparent and more sustainable and less dangerous to society. > > good to have you on the show this morning. that's greg smith, author of "why i left goldman sachs." a suggestion on the best price to buy apple stock, coming up next.
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apple had what was called its broadest launch ever with its mini ipad on friday hitting 34 countries. trader andrew keene
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of joins us now for chart talk on that stock. good morning to you. > > good morning angie. > > apple stock was down about 4.5% last week. what is going on here? > > i have been talking about it for a while. if you took away the ticker on top or the name of the chart and you just put up a random chart, it is clearly in a downtrend, and it is not stopping any time soon. it's down again on friday over $20. ipad mini demand isn't necessarily there. i just bought the ipad 2, the one with the retina screen, and i was going to buy a mini, and i was like, "the mini doesn't even have the retina screen." it's basically the same product. yeah, it's a little smaller. i'm starting to think that i don't want to start buying products going forward, because they're not really making them that much better. i have the iphone 5 as well - it's not really that much different between the iphone 5 and the 4s. the steve jobs model was make one product and make it the best possible. isn't really staying in place. maybe his playbook is actually over, and
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tim cook has basically taken a playbook that's not there and is running with it. i think he's cannibalizing his own products. > > andrew, we took our camera over to the apple store on michigan avenue, and virtually no line there for this mini ipad. that does not bode well. you mentioned the price of the stock, but at what price does this become a buying opportunity for somebody who did not get in on apple the first time around? > > it broke through that 200- day moving average of $588, so now my stop is going to be above $588. but i think it can go down to $571 first, then i think it could possibly have a date with $520. > > thank you andrew. have a good trading day. > > thank you. that does it for today. coming up tomorrow, how to get your portolio election-ready. from all of us at first business, have a great monday.
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