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tv   Power Lunch  CNBC  August 11, 2009 12:00pm-2:00pm EDT

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this is the official card... of the world's largest airline. all right. time for "last call," i'm actually really bugged and feel like the ceo of whiting petroleums did not answer my questions. he kept saying we have a 4 million barrel a day cushion, that's fine for now, but what about the countries and companies that haven't been investing as much because the
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price of oil is half what it was a year ago, nothing has changed with respect to the speculators. whether you think they're good or bad, they played some role in driving up the price of oil. my bottom line, is when demand comes back, we're going to see the price of oil shoot back up to triple digits. >> triple. >> you think so? >> what is out there to stop it? nothing. >> one theory. >> okay, larry. >> king dollar will stop oil -- >> look at it today, right? you have the dollar going up, oil going down. >> just my thought. thank you, trish. >> anyway, interesting. all right. we're going to have this debate again, i have no document that's it for "the call" i'm melissa francis. >> have a great day, i'm trish regan. >> and see you tonight on "the kudlow report." now "power lunch" is up next. >> this is cnbc.com news now. >> bernard madoff's frank piscali will be released on a $2.5 million bond and travel restricted on a deal proposed to by both sides.
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general motors says its chevy volt electric car will get 230 miles per gallon in city driving. investor bill ackman has cut his shares of target after his score capital lost a proxy contest to his own slate of directors. that's cnbc.com news right now. i'm courtney reagan. you know, by a strange coinciden coincidence, we are the tv show that gets 230 miles to the gallon. who knew? welcome to "power lunch" -- >> but in the city.ç7 >> but in the city! wide open on the highway. i'm bill griffith. sue herrera continues off. we welcome rebecca jarvis. happy anniversary, the summer rally began one month ago today, but stocks are tumbling at the moment. treasur pressured by the financials leading up to the up side. we're wondering if this is the beginning of the summer selloff. the results of the $37 billion
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three year auction note, coming about an hour from now. that could be a market-mover for this day. >> thank you. i'm michelle cabrusso-cabrera. more economists are saying the recession is over. but one of president obama's key economic advisors says she sees a possible double dip. so who is right? we've got a fed task force assembled. >> hello, i'm rebecca jarvis, president obama's top economic advisor, larry summers is set to speak any minute now, and you can see there, well, he's not up on the podium yet, but we will continue to bring you any information as that comes b. he is appearing before the national bureau of economic research in washington, he'll take questions after his speech. we're monitoring. we'll bring any headlines that cross. here is what is else is on the menu. >> i'm phil lebeau live in millford, michigan where general motors says its electric opinion powered chevy volt will get 230 miles to the gallon. where did they get that number? and more importantly, will they
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charge general motors? >> what we have seen from pennsylvania today, lawmakers' town hall meetings are bringing out an awful loot of people, some are angry, some are cookie. we'll see in an hour when president obama has a town hall in new hampshire whether he can turn down the temperature. >> i'm jim goldman in the silicon valley bureau. the facebook powerhouse buys friend feed, to get more google employees. at the same time, google turns up the heat on microsoft's bing with something called caffeine. competition and innovation alive and well, online. >> i love caffeine. all right. let's get to the market action. stocks are dropping the most in a month led by profit-taking in financials. oil hovering around 71 bucks a barrel. bob pi san see is at the new york stock exchange. and the market could use some caffeine. >> it could. and you're right, michelle, financials, and of course some of the cyclicals were the big numbers last week, and decliners today. 3, 4, 6% declines.
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remember, zions went from 18 to $10 a month ago. keep that in mind. take a look at real estate investment trusts, too, big gainers on hopes that maybe commercial real estate wouldn't be as bad in the next few months, but no matter where you look, the business -- the office reads that retail reits like tanger post properties in the department rooet all to the weak side. finally, industrial cyclical stock all a nice move to the up side last week, last two days, they too have been on the weak side. trader talk.cnbc.com. and brian, techs not helping much either today. >> this does not feel like a leadership group today, 1.3% to the down side. and i think we broke the advanced decline, because we can't pull it up, because it's just about red everywhere. a quick look at big names, dell down 2.4%, 1.8 for amazon. cisco, 2.4. applied materials reports after the bell. the one green among the big names, 1/10 of 1% for oracle, that's how desperate it is. by the way, zion did get a
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downgrade. cumberland pharmaceuticals, ipo at the low he said and down 8/10 of 1%. i do have a couple random greens both to the up side, and we have a couple upgrades, echo star and jetblue in positive territory. mr. nesto with the oil trade where the bears have a little bit of an attack today. >> yeah, interesting, brian. we're definitely weaker, kicked from 70 right down to 69, all week, right on down the charts. if you look here today, heating oil, natural gas, the formulated gasoline all trading lower. but everyone is looking at the price of crude. we had a couple of negatives in the marketplace. they're really watching the stock market for an indicator. and of course the fed overhang is keeping things a little bit in check. and then opec cutting their demand forecast for their customers not necessarily a bullish indicator, although only a slight reduction, as well. so we are down, we're at our lows over about two weeks for the price of crude. let's get out to rick now at the cme. >> thanks, matt. well, you know, if you look at
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what the s&p futures are doing, and you see the intraday chart on your screen, it seems as though the more traction they get to the down side, the more we see a fighting dollar. of that's the next chart. but keep in had mind, as nesto just pointed out, we're seeing commodities get hit hard. it's more the tail wagging the dog. and maybe nothing has changed. the equity markets are giving the dollar a bid, and they're taking the bid away from commodities. and, of course, all of this is putting a bid back in in treasuries, in another t-bill auction today off the chart strong, how much is really changed? we'll see in about 55 minutes. now let's go back to rebecca. >> all right. thank you so much, rick. fed policy makers have a lot of important data to chew on about the state of the economy. they are kicking off their two-day meeting of interest rates today, and bernanke's role as chairman is also a focus there. cnbc's senior economics reporter steve liesman joins us with more. and steve, you've been hobnobbing with everyone up at the lodge, so a lot of anticipation ahead of this. >> exactly. so let me do the data, and then
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talk about what they're saying about bernanke at the lodge, which is pretty interesting. new economic data suggesting the second quarter gdp, the one we had that was better than expected might have been worse than first reported. but productivity, of course, much stronger. let's look at wholesale inventory, inventory a big part of the gdp report, down 17, much worse than the estimate that the bea, bureau of economic analysis, included in their estimated report. and you can see here, look at this. >> wow. >> back to 1985. we have never had inventory runoff like this. so the thinking is fishing goes from minus one to minus 1.8. there are are the activity numbers. productivity 6.4%, much stronger than expected, perhaps leading to greater profitability. may be worse for labor out there. meanwhile, just returned from the annual economists fishing trip. there is the productivity during recessions chart. you can see the last two, much stronger than in the '91, '8 it
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ii recessions. bernanke was a major topic of conversation. a survey of the attendees, two-thirds thought that obama would be reappointed. but won among the vocal minority thinks the economists on all street are kidding themselves. >> the probability of bernanke being reappointed to the fed is zero. bernanke resided over the biggest financial crisis we have seen in a while. wall street's desires are next to nothing, they're seen as the problem. >> he says right now the entire global financial system is essentially in severeship to the political establishment and will be for the next several years. >> so he gives him no credit for preventing the depression. >> he did go on to say, that, hey, maybe he stopped it from getting worse, but his point is the political point in the public's mind, bernanke is identified with the meltdown. and that it would reflect badly
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on obama. >> the majority thinks he is staying in office. what do they think he needs to do to really secure that position? what do we need to hear from him tomorrow? >> it's not tomorrow, rebecca. it's economic results.x it has to be firmly on the path to having turned around and that will secure bernanke -- i don't agree with what friedman is saying. i want to point this out. be careful on wall street, if you're making a bet on bernanke, and that would be an important thing for the markets. be careful not to think about just a whole atmosphere of wall street. what wall street wants, i think is important. it's not important right now in obama's calculation. >> and we have seen this movie before. there have been other administrations that this counted what wall street wanted, saying that's not really important. come on. >> especially right now. >> yeah. >> especially right now, wall street's stock is very low in washington right now. and this idea of the financial establishment being in receivership to the political establishment is one that people should think about when they make these calculations. >> just be careful changing horses midstream.
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thank you, steve. bernie madoff's right-hand man is in the hot seat. a familiar sight on pearl street in new york city. she has the latest for us. mary? >> reporter: that's right, bill. we just had these headlines crossing that mr. dipascali, the former cfo of madoff securities is pleading guilty to ten counts, including conspiracy, wire and securities fraud, as well as mail fraud. of the hearing, of course, today starts at 3:00. that is when we are expected to hear from mr. dipascali. now, it is expected he has struck a deal with the government. this has long been rumored. and earlier today, we had the details coming out about the terms of the bail that had been agreed on by both sides. that bail including a $2.5 million personal recognizance bond that mr. dipascali surrender all of his travel documents, including his passports, as well as limiting his travel to the eastern and southern districts of new york, as well as pennsylvania. additionally, there has been a
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proposed sentencing dated made by the two sides for about nine months from now. that being may 2010. of course, would suggest that mr. dipascali could possibly serve as a witness for future cases, that the government actually might bring to fore. but again the headlines is that he has agreed to plead guilty to ten counts, including conspiracy, wire, and securities fraud, as well as mail fraud. the hearing starts at 3:00, and we'll have updates. >> thank you. next hour, we go inside the mind and world of bernie madoff. there are three books hitting bookstores today. we have the authors of two of those books to talk about their findings. who knew what, and when? we'll ask all of the questions that are still being asked about the bernie madoff scandal next hour here on "power lunch." no snickering but today is actually the one-month anniversary of this summer rally. so is it over? where do we go from here? we'll get to the task force in a moment. >> we'll take the milestones as we can get them, right?
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and also the fed is meeting right now. is the recession over, or are we going to see a double dip? and job losses, a struggling economy all heading pressure to the budget deficit. with our debt out of control, is now really the time for health care reform? that's coming up on "the power grid." >> and get ready for the "fast money" halftime report. the summer sell off, is it heating up here? we're back in two minutes. when this shoe store added aflac
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welcome back. president obama's top economic advisor, larry summers, set to speak approximate about the state of the u.s. economy. he'll be appearing before the national bureau of economic research in washington. he'll be taking questions after his speech. you see the room right there. we are monitoring it, and we'll bring you any headlines. michelle. >> thank you, rebecca we're hee at the telestrator to point out the decline we're seeing today's, the nasdaq has actually bounced back 50% when you look at the retrace maniment. let me explain. back late in 2007 to all the way down to march of 2009, this was a 1600-point decline. but now what's happened here? an 800-point retracement. so we have had a 50% retracement of those declines. some see that as a significant market event, because bill, when you get a 50% retracement, what happens, usually the end of the
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rally or sometimes the end of the rally, right? >> indeed that's what happens. let's ask our task force, joining us mark pedo, brian battle, vice president at performance trust capital partners. hi, guys, welcome back. >> thanks, bill. >> what do you think, mark? we've had this classic 50% retra retra retracement, at least for the nasdaq. is the rally over? >> if you talk about the short term, i think we're going to say another may-june consolidation right in here as we go through the late summer, august september. i still think you're setting up for a very strong fourth quarter in terms of market performance. so the rally itself, the long-term rally, the bull market is not over. >> why, mark? >> why? i think that the big thing here is, we have super-low inventories. we have seen the last six quarters deplete $300 billion. capacity utilization at 68%, you saw those productivity numbers. that is talking about profit margins, that is going right to the bottom line. even a small increase in sales
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will relate to big profit. >> brian, if the buck doesn't continue to break down from here, what do you see as the outcome for the markets and particular commodity centric names? >> yeah, i sort of disagree on that point. >> in the short term, sure, we could have a correction or a rally. but longer-term, you have to look at the global economy, the stocks project to earnings power going forward. and there is really not a lot organically that is making the u.s. economy better. we have a lot of stimulus money pumped into the economy. we have the fed and the treasury artificially holding rates down. and companies are firing people as fast as possible, so their margins are increasing, but where is growth in the pie going to come from i think is a longer term question. we don't know. certainly not seeing it in china. >> and speaking of stimulus, what about brian, this big auction today, and all these huge auctions this week? how is this ten-year going to go, this 30-year later in the week. is there concerns about whether or not the government can borrow that much money? >> exactly. today's auction is a three-year auction, it can sell 2s and buy
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3s, only $2 billioner than the last one. that's no problem. the problem is tomorrow, the ten-year auction is right before the fed announcement. the fed probably won't change rates, but they might say something, and is this is a big might. they might say something about whether they're still going to buy treasury bonds or mortgage bonds and agency bonds. so is the quantitative easing program still on. if the fed starts backing away from buying treasuries, that will raise rates, because they have been the gorilla in the room buying treasuries. so that's also going to hurt the stock market. >> before we go, if we're replenishing inventories to rebuild this economy, what are you buying here? >> well, we've been pushing technology, especially the core -- the semi conductors and a lot of the manufacturing. in the last quarter, we rotate to the consumer sensitive to retail and the manufacturing going into the fourth quarter, technology still on top. >> thanks, mark, brian. see you later. more breaking news on the bernie madoff situation. let's go back to mary thompson in lower manhattan.
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mary? >> phil, we want to clarify something that i brought to our viewers' attention earlier. first of all, what we have been reading from is a summary of the charges that the government is expected to file against frank dee pascaly later today. this is not a formal charging document and we don't know what charges mr. dipascali will plead guilty to. on friday, the u.s. attorney said he is expected to plead guilty, but didn't detail what charges he was expected to plead guilty to. these are the charges filed against mr. dipascali on conspiracy, securities fraud, investment advisor fraud, falcons fighting books and records and falsifying books and records of an advisor. wire fraud, international money laundering, perjury, and federal income tax evasion. these charges carry a combined sentence of 125 years in prison. again, these are the charges expected to be filed by the u.s. attorneys office. that will han at 3:00 when the hearing begins for mr. dipascali, the former cfo of
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bernie madoff. we do not know what charges mr. dipascali will plead guilty to. his lawyer, mr. mccasey, declined comment to cnbc. back to you. >> it will be interesting to see what he does plead, and whether he says anything beyond that, as well. that will be -- 3:00 eastern. thank you, mary. >> and i want to hear from these authors we have on later. what's -- can he tell us anything about who else was involved there? where does this end? >> and where is the high stakes game of this? because, you know, we've got the funds but also the family. so there is a lot out there that could possibly be unconferred. also, the fed kicking up it's two-day meeting today, doesn't look like there is a rate hike, but do they think the recession is over? what are they seeing in their statement? >> we'll get to that. and also in a few minutes, the eye-popping mileage numbers for the chevy volt. it looks great, but is there real business in electric cars at this point? we'll get to that when we continue on "power lunch." these days, wouldn't it be great
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welcome back. one of president obamas economic advisors has warned that the recovery will be slow, and that we could see a double dip recession. so as the fed meets today and tomorrow, we're pondering whether we're facing a double dip, and whether this will be on the feds' agenda. joining us, john writing, and bob mctier, former president of the dallas fed, and cnbc contributor. good to see you guys. do you agree with laura, or what do you see for economy here? >> i can't see around corners, so i'm not sure about the double dip. i do think the recovery when it starts will be fairly weak. we'll be along the bottom for a while. >> john, you think the recession is over, right? do you think a double dip is possible? >> well, the recession i think will be dated as ending in june. this quarter looks to me to be fairly spritely, as we rebound
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from the inventory liquidation, which we learned today got bigger, and we could see maybe a 4% growth number. but then i think bob's scenario plays out that we kind of languish a little while, and that will promote fears of a double dip as it did in the 1 991, '92 recovery. and the fetd will be cautious. >> what message should bernanke send tomorrow? >> well, he should -- of course, he's not going to do anything with the rates. he should give the impression that they are considering all alternatives for the end game, whenever that comes. and it won't come real soon. i disagree that june will be the -- considered the end of the recession. the business cycle dating committee started the recession when employment started declining. and in january of '08. i don't think they're going to declare an end to their recession until payroll
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employment starts rising again. >> wow, that gets late in the cycle, doesn't it, bob? >> pretty late, yes. >> and the indications we have seen lately of the depletion of inventories in the gdp report and elsewhere, the depletion of housing inventories, doesn't that -- doesn't that speak to a little stronger recovery than you guys -- >> a v-shape? >> we can get an inventory bounce this quarter, i agree. because we've had two or three quarters now declining inventories. >> what about you -- >> i don't think that's sustainable. >> john? >> well, i think we do get that bounce, and also, the cash for clunkers is a program that looks to boost consumer spending in the current quarter. >> on cars. >> on cars. up 4% in -- at an annualized rate. so you have very depleted inventory, you get a bouncing consumer spend -- could get a positive dynamic going forward. the big fear we all have is the recession, either the recovery falters or the recession ends. i don't believe we'll wait -- it
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may not date the end of the recession until employment is rising. but i think when they date it, the recession will be dated in june. because we're going to have, say, a 4% gdp quarter, and maybe 2% in the fourth quarter. . >> and bob, when we talk about the classic definition of the double dip recession comes when the economy starts to recover, maybe the fed tightens a little early, and then we start to see a slow down again. let's put the fed aside. what about all this dealt debt coming to market, piles of debt. what if the bond vigilantes come back? could that induce the double dip recession if we start to see interest rates rise? >> well, if the market has trouble absorbing all that debt, it will show up as slightly rising interest rates. i don't think it will be a calamity, but that will be what will happen. and that's better than the alternative of the fed monetizing all of it. the fed is not really monetizing that much, much right now. >> very quickly. when will the fed begin raising
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rates? john ryding first. >> well, not until the unemployment rate has peaked, and i don't think that peak is going to take place until sometime in 2010. much and even then, it will be a 10% -- the fed thinks unemployment is at 5. my guess is early 2011. >> bob? >> 2011! >> 2011. >> yeah, at least sometime in the middle of 2010. but i would like to make the point that interest rates and monetary policy are not exactly the same thing. and i think they ought to get short-term rates up a little bit to stop the distortion of markets. without necessarily easing monetary policy in the sense of the growth of the money supply. >> you mean tightening monetary policy. >> yeah, i can they ought to leave monetary policy fairly easy, but adjust interest rates up to 1 to 1.5% or so. >> they say they're going to proactively do it in the future. >> becomes a self-pro filling front of see. . >> thanks for joining us today. new numbers coming out on the deficit soon.
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could be worse than expected. huge. the president begins a series of town halls on health care a few minutes from now. so you have the exploding red ink. can we perform a health care reform at the same time. our power grid dpbt today. >> and at 12:45, get ready for the "fast money" halftime report. melissa, what are you watching? >> lots of carnage on the street, we will pick through the carnage and tell you where the opportunities are specifically in the financial, as well as in the oil trade and the pit boss is hot and heavy on the engineering stock floor but on earnings, the stock is weak. we will ask pete najarian. all that and much more in the halftime report. but first, more "power lunch," right after this. tdd#: 1-800-345-2550 if i'm breathing, i'm thinking about trading. tdd#: 1-800-345-2550 i always have my eye out for a stock on the move. tdd#: 1-800-345-2550 doesn't matter if a company sells computer chips
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welcome back. almost halfway through the trading day, and in the headlines at this hour, the "wall street journal" says tim barucet is giving $3 billion back to investors, closing down a flagship fund, along with a smaller investment vehicle. atticus was one of the
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high-flying hedge funds but hit hard times the last year. raising jpmorgan share price targets of 50 bucks from 42, saying bank is likely to be first to get back to normalalized earnings and likely to be the among the first in the group to raise dividends or buy back stock. and we have a deal in the software sector. privately held spring source for about $360 million in cash and stocks. >> right now in washington, doctor larry summers, top economic advisor at the white house, is speaking at the national press club, the national bureau of economic research. michelle, i went to their website to see if i could find out what they're goings to talk about. nothing there, but they did have titles of various working papers. my favorite? a simple, nonparametric estimator for the dribs distribution of random coefficients. something i'll be poring over after the show today. >> my favorite. >> we'll monitor the speech and let you know what they say there. >> i love being coefficient.
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all right, minutes away from president obama's town hall meeting on health care reform. it comes as secretary geithner urges congress to raise the national debt limit. according to "usa today, oh , it could be much worse than expected. so given that dire news, can we afford health reform now. firing off in our "power grid," jam berkman and antonio. mr. antonio, you know how it works. can we not afford to do this now? >> we have to do it. tea baggers have put away their paul reveer outfits and now have hospital scrubs on. their outfit this time is being paid for by the insurance industry. here is why. they want another excuse for why we should do nothing. first excuse was, we're going to turn america into a socialist country. the second excuse is, we have two wars to pay for. here's the truth about deficit. if it really comes down to it -- time is up. >> 20 seconds. all right, mr. berkman, jack.
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>> i remember, speaking of larry summers, when he would argue for balanced budgets, i guess that's out the window now. what i would say to my liberal friend mike, why do we have to do this all at once? even he who believes in this stuff, t.a.r.p., cash for clunkers, and god knows what else the government is doing, why not just pick one or two? >> well, mr. antonio? why not just one or two? >> here it is. first of all, the deficit spending issue is a complete red herring. ronald reagan -- >> why? >> here's why. you look at debt to gdp ratio. >> so you want to raise the deficit? >> let me finish. ronald reagan's debt was 8%, george bush senior was 12%. let's say everything goes wrong, his debt to gdp ratio is 16%. >> that's a bad argument. >> that's below the people who you supported for years. >> let mr. bergman reply to the
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18% under reagan. >> it's a bad argument on a number of levels, one is the gdp -- the country has grown so much. i'll give you the best argument against health care. let's make some news here. high costs are a good thing. the reason why the price point on the curve is so high is because we have the best drugs in the world. we have the best care in the world. the price -- >> yeah -- >> that's a good thing. that reflects quality. >> but you are -- every day -- you're lobbying for know this, as well as we do. the cost to americans to do nothing is $200 billion a year that your drug industry and your insurance industry is goblg up in our health care system. >> hear not doing it -- >> they're not in my industry. but i will tell you, the people you're talking about -- >> last word -- >> created the miracle cures that keep these people alive. let me throw this question out. >> not now jack, sorry. next time around. for the conspiracy theorists, we did not make mr. antonio look smaller on purpose.
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that was a camera problem. thank you, guys. >> thank you. >> good discussion. >> whoa. when we come back, a jolt for the volt. gm revealing the incredible mileage for it's all-electric car due out late next year. it sounds like a great idea, of course, but can it be a real money maker for the automotive business. phil lebeau coming up. >> and minutes away from a market-moving $37 billion bond auction. yes, the government is trying to borrow a lot more money today. how are they going to do? we're going to be all over that when "power lunch" is back in a flash. people are on sprint on mobile broadband. 31 are streaming a sales conference from the road. eight are wearing bathrobes. two... less. - 154 people are tracking shipments on a train. - ( train whistles ) 33 are im'ing on a ferry. and 1300 are secretly checking email... - on a vacation. - hmm? ( groans ) that's happening now. america's most dependable 3g network. bringing you the first and only wireless 4g network. sprint. the now network. deaf, hard of hearing and people with speech disabilities access www.sprintrelay.com.
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a highly anticipated announcement from general motors today. mileage for the all-electric chevy volt and there is a lot at stake. but can the volt give a jolt to general motors in the nbc's phil lebeau in michigan with. hey, phil. >> it provides a halo for general motors which says we believe this car will give you 230 miles per gallon. but keep in mind, that's a gm estimate. that has not been certified by the epa which sets the fuel regulations and the fuel certifications for all models. this morning at a press con fwrens in detroit, company ceo fritz henderson announcing that in their estimation, based on their formula, the volt will get 230 miles per gallon, cost aboue
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3 cents per mile to drive.th but keep in mind, even when it comes out late next year, it will be limited volume and have a limited impact on gm's bottom line. >> this is a small volume at this point, anyway. it's a small volume vehicle. so the impact will obviously be in public relations and goodwill. >> and, again, gm says the volt mileage was based on a formula it received from the epa, although, again, the epa has not certified the volt's mileage, and that lithium ion battery pack is being developed here in the detroit area. guys, check out more on the impact of the voluntarily's mileage. check out the blog, at cnbc.com. certainly a number that gets you talking, bill. much i heard you talking at the top of the show. you get 230 miles to the gallon? >> we do here on "power lunch." the question we have, though, is the infrastructure that it will take. you know, there are no -- there are gas stations around the country, but there are no electric stations for these
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cars. is that going to be a build-out that happens over time, or what? >> well, keep in mind, the volt is going to be marketed as a vehicle you drive around in your area. it's not one you're going to take on a cross-country trip. for example, you drive it less than 40 miles, it's completely electric. you charge it in your dwra garat home at night. the 300 mile range comes when the gas assist engine comes in and kicks in power to the electric motor. that's how you get 300 mile range. this is not a vehicle gm plans to sell to people who are going to be driving all over the place long distances where they need to find an outlet at a motel or hotel. this is for people who plan on staying relatively close to home, and remember, two-thirds of americans drive fewer than 40 miles a day. that's why gm set that mileage. >> we want this quickly. we know they're looking at a small audience for the initial buyers. how important is this for general motors? >> it's important, but it's not going to hit the bottom line. they're only going to sell about 60,000 models. >> how much are they going to charge? >> over the next few years, once
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it goes on sale. >> do you know what the retail price will be? >> estimated, about 40 grand. we'll hear about that early next year. >> thank you, phil. >> one of the criticisms, it's going to be expensive. all right. see you guys. >> we appreciate it. coming up just minutes away, it could be a market-mover. much we're talking about that $37 billion in three-year notes. they're up for auction. plus, you have the president holding a public meeting on health care. is it going to be a town hall, or a town brawl? >> probably get some fireworks there. we'll keep an eye on that one. up next, the bulls waiting on the sideline at the fed. the halftime report is coming up next. we'll see you after that at the top of the hour. get the best mileage.
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well, do they know this malibu offers an epa estimated 33 mpg highway? they never heard that. which is better than a comparable toyota camry or honda accord? they're stunned. they can't believe it. they need a minute. i had a feeling they would.
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welcome to the "fast money" halftime report. we're getting to the heart of the action as it is happening. market losing steam as we celebrate the one-month anniversary of the summer rally. have we officially begun the summer selloff, and if so, where can you go to protect your profits? let's get to the word on the street right now. our "fast money" crew today, the negotiator, guy adami, and patricia edwards of store house partners and brian kin elli of research. guy, nice close-up. >> i'm doing the best i can. >> you're looking good, guy. the large drop in inventory that really suits investors out there, but you had been calling for some sort of a pullback, and specifically last night on the desk, talking about the nasdaq down 1.25% today. >> yeah, michelle talked about it, too. if you look at the nasdaq going
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back from 2007, we topped out in 2007, crashed some 1600 points, bottomed out in march. of now we've made basically a 50% correction. much it comes in at a great trend line. i tell you what, i think techs are short, and i know a lot people think tech will lead us out, but i think the short term, it's going down. >> you're nodding vigorously in agreement. are you short technology, or are there are other areas you see to the down side? >> i'm actually short the entire market. i don't like what i'm seeing, and i do believe tech will eventually lead us out, but i think we're overdone at this point and need to take a breather. >> when you say short, are you talking about like the srf? >> the sh, which is just one-time shorts. >> and jerad levi, we're seeing a volatility come back into the market. how do you interpret this 6% move higher in the vix today? >> we have to look back. the earning seasons, as good as it was, there is still a lot of negative growth. the vix itself is predicting
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about a 17-point move in the s&p. we're only averaging 11 or 12. what that means is options traders and market participants are pricing in big events, probably to the down side and that might come with cpi this friday or potential the fed tomorrow. i'm negative, as well. >> another negative event, the treasury auctions, $75 billion in supply to hit the bond market this week, today alone, brian kelly, we're expecting $37 billion in three-year notes. you're long the tbt going into this auction. >> right. i'm short -- long on tbt, which means i'm short the long end of the curve. i think what you're seeing is the fed has engineered the steep yield curve i don't see any reason for them to change that over the next day or so when they come out with this f 1 c statement. there are two possibilities that come out of that. they can increase quantitative easing in which case i think bonds lose their bid and say that's it, it's over and start pricing the tightening or don't do anything, in which case bonds lose their bid, the long end curve lose their bid and bonds
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go lower, so i think it's a louisiana gore for bonds. >> how long do you ride this trade here? >> i think this is a longer term trade. when you talk about a tightening cycle, talking about the next six months to twelve months, easily. >> all right. let's move on to the next. financials weighing on market today with all of the major names, goldman sachs trading lower now, except goldman sachs, i should say. analyst dick beauvais out with i note today saying now may be the time to take profits and we are in for near-term correction, earnings will the second half of the year will not improve. guy adami, do you go bottom fishing? >> no, it just turned negative, and if you watch the chart, they have been down the last week and a half. of petey talked about it last night on the show. wells fargo had an interesting reversal the other day, a lot of chatter they were going to earn their way back to pay the t.a.r.p. but now there is talk about a secondary. and if wells prices the secondary, this is probably a name you're going to be short, as well. i'm not a doom and gloomer by
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any stretch of the imagination, but i agree with the panel. i think we're going down. >> in the short-term at least. next to energy, believe it or not, financials had the highest ratio of losers in terms of earnings versus winners. and not just that, but the bkx, up 33% in the last month or so. i think statistically price wise. >> the kdw banking index down by 4.25%, so the bigger loser we are watching. pat trisha edwards, probably a big concern is the exposure of the commercial real estate for those smaller regional banks. that could be the next shoe to drop. is there an ancillary play? you want to go short, perhaps, the kbw, or do you go short the commercial real estate index? >> you know, i think you could probably do either, though i know that commercial real estate has had a pretty decent selloff already. i think what you've got to realize, since this wall street versus main street and main street is not going to jump into this market, as long as they're seeing their small little banks
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around their neighborhoods go under. and i think that's the next wave we're going to see of. >> okay. want to >> we have to move on to the next trade. the lower move in equities. the demand for oil which is 1.65 million barrels. we are seeing the commensurate weakness in the ail weaknesses. are there opportunities here? >> if anything, i want to be short. probably the cartel . >> yes? >> oil the kmotsities, yes. >> and the equities. >> in that space, i want to be short with the oil drillers and the service names as this commodities comes down. >> you do the same? >> yes, if you go back and look, they have been trading 54 or so for the last week as crude went from 64 up to 71. it did not participate in the crude rally. you have to wonder if they will
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revisit 48 1/2, 49. i happen to think it will. it will get interesting and if you want to make a short-term bet, you can short the service names. i happen to think crude is going lower and i will be looking for places to buy. i don't think it comes in for 10 or 11%. >> one quick note, the negative rule will benefit you in a declining market. each month, you will be losing a little bit. uso potential short and the cover with good yields there. >> we are projecting lower oil and gm announcing that the rechargeable car due out late is expected to get a whopping 230 miles per gallon. that has to stay near home that you can plug it in and charge it back up. patricia, edwards, this is the game changer. you are beating the place and it is higher slightly. >> ford is going to be one of the winners. i know it's a chevy car, buford will be there with them.
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you have to watch the fact that we are talking an electric battery. we have seen charging stations where we are really green. i there issues. >> i feel like gm is the guinea pig. it's an expensive car and the better technology is note like intel. i believe that two or three years from now, infrastructure will evolve. gm will be a guinea pig situation for gm. >> guys, i will be seeing a nice run up for cash for clunkers. that stock has run up on the back of that. >> i think no. you don't short for it. we had that for a while up to 8 1/2. if you look back, ford had three tremendous volume days. 150 million shares and around that 8 1/2 level. that was a capitulation buying. i am not shorting for it, although it might go g lower.
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>> that was not pete on the line, was it? >> it was actually. >> we will get to the pit boss on the other side of this break on tonight's fast money much the one, the only, reg. regis philbin will tell us what he is trading in these volatile times. bernie madoff's right hand man gets set to appear in mind and we go inside his mind with the authors of two new books. we continue after this break. >> are you a double dipper? some think the economy is. what you do about it. and the ambassadors stay at home for a change. a once beaten down trade back from the dead. plus, is that your final trade? game show and talk show host and trader regis philbin gets put to the test to become a fast money millionaire on america's post market show tonight.
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>> time for the "power lunch" trade to go. let's bring in the pit boss, pete. you have been giddy about this for sometime. we are seeing a pull back and miss on the revenue side. what do do you with the trade now? >> in the case, it had a huge run. you had kbr and foster wheeler and the various numbers. dermott put up nice numbers as well. this is a $46 stock a month ago that was $58 in the last couple of days. expecting a pull back. much more of a pull back and it gets too cheap. the bookings look strong and they have $30 bill kron in the back lot and they continue to build and not seeing any major cancellations. it's an opportunity now that you don't have to chase it. now that it's back 5%, there is an opportunity to get in. >> what is the implied ball on
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the stock? is it expensive some. >> everything has risen a little bit, but you are still getting a good value for yourself. the volatility is coming in and you have the event and now that it's over with and you get back to much more tolerable levels. two days ago, i would have said to use the options for your benefit to sell. you actually could use them to buy. >> see you tonight on the desk. >> thanks a lot. >> time to call the close. buy or sell? >> little rich here. i have to be a serial. >> patricia. >> i'm short and staying that way. >> brian? >> a buyer. >> i'm with patty. i think this set itself. >> that are does it for us on tonight's fast mone. do not miss amateur trader reejic philbin going head to head with our traders and playing who wants to be a fast money millionaire. instant reaction from the bond pit as the government releases results of $then billion
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three-year note option. what else are you working on? >> a huge cnbc fan. >> fast money fan specifically. >> at the top of the hour, president obama may face angry americans and set to take part on health care in portsmouth, new hampshire. the other town hall meetings have been going. more clues about home prices in america and in the banking system. details in a few minutes. "power lunch" is back in third seconds. >> shares up about 2%. the new osteoporosis drug increases bone density and could increase risk of infection. frank depascaly expected to plead guilty today for his role
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in the multibillion dollar ponzi scheme and charged with a total of 10 counts. cnbc.com news now. i'm courtney reagan. >> we know you are watching regis. weekend to the second hour of "power lunch" and stocks are lower. one month ago the summer rally began. we will be talking about that and also the results of that $37 billion auction should be coming up any moment. we will be checking with rick santelli. >> other big event and bernie madoff's number two and go to guy in court facing fraud charges. we will speak with the authors of two new books about what knew what and when. >> i'm rebecca jarvis and president obama may face heat on health care and taking part in a
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town hall meeting at this hour. cnbc is monitoring it and we will bring you the headlines that are taking place right now. >> singing the national anthem ahead of time. if you saw the meeting in pennsylvania with arlin spector, there were fireworks there and people were in his face, screaming about the health care reform as it stands right now. >> the white house went out of their way to say the tickets for this town hall have been given out the same way all the other tickets from previous town halls have been given out. you go online and sign up saying you want to be there. the question we are wondering is, so many of president obama's events have been very script and controlled. is there a chance we will see the same intensity at this today with him as we have seen it? >> it's a big audience. >> 1800 people. it seems like a bigger group than what we have seen at the other meetings that erupted.
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that will be the key word. we will monitor it and let you know. we have a big bond auction going on right now. rick san teley is waiting in the chicago pit to see what it will look like. we have three-year treasury auction. $37 billion. a, b, c, or d? >> i'm going to give this one an a minus. the bid to cover is spectacular at 2.89 i believe. i had to take a double check and 62%. the yield is 178. one basis point under where it was trading. lower yield, higher price and more importantly, he told me it would be the 10-auction average. i always just liked to scan over the last several years. the 27th auction since the five-year hiatus on this three-year note. we see the equity a little less negative and see that there is buying going on in treasuries. an a minus auction and the
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indirect bid suggest important, but don't make too much of it. in large institutional clients and yet on some auctions when that is lower, it gets taken down by dealers. there a lot of issues there. a minus, let's move to the next round. >> this is an easy one. >> we said that for the two-year. >> everyone said that. the d that backs up the grade they gave us. this is the response we are expecting and maybe not this robust, but the two-year auction we had. it did come and that's why rick gave it the low grade in context of how well it can do is well-deserved. a minus is probably right. it's also significant that it's not as heavy of a week. >> that are explains the disparity. >> i think part, you have to hold as a deal you are expected to step up. you have to step up and provide liquidity and a bid to the
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auction by the government. if you don't, you are out of the game. you have to step up and where do you come in? on the curve this is an example on a week where there is not as much. what can be done at the shorter end. >> either of you guys have a prediction on the 10-year and the 30-year. we have the 10-year tomorrow before the fed's announcement when it comes to the fed meetings. i have to imagine there is a lot of indecision out there if you want to get in on the action? >> this is huge. especially since about four hours ago, something unique happened. the november fed fund futures and trade the highest price. 9978. september is supposed to be the run off month for quantitative easing. should i connect the dots? they could have a boat load of wild cards that affect the perception of asset purchases and that could make the auction go rackably well if people thought that was going to be in the statement. >> this is a big issue.
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we know the fed said we will buy up to $300 billion worth of u.s. treasury debt, but wasn't that always conditional on the state of the economy and the state of the markets and hasn't the market gotten better? is there a chance they will tell us that maybe we will not going to buy all 300? >> they continue on and do that 300. they have another excuse that makes sense. they really had depleted the stock of treasuries and they bring it back up to the level it was before. the stock market in general what they say about the future after september, i was going back and read the minutes of the last meeting. whether this program should continue. didn't strike me as something the fed's top successors and the policy to fight the crisis. >> the dollar is holding to the
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lows and we have seen the last few days. the stock market as well. >> this is an interesting dynamic and the stocks have a correction in and of their own world and race moving up or down could impact the retracing. steve, thank you. the president is just beginning his health care reform. we should refer to this the way the white house refers to it. health insurance reform. >> they changed the phrasing. it used to be health care reform and now it's health insurance reform. even now as we see a lot of documents coming out of the administration, they changed the wording. >> a rousing welcome to the president there in portsmouth, new hampshire. >> he is certainly getting a respectful introductory welcome and we will see how the rest plays out. what we are seeing, we saw it earlier today in pennsylvania
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where senator arlin spector had a town hall meeting and it was democracy in action. one of the things is that most people are fairly passively attached to the system, but very well organized. it is intensely idea logical minorities that have a disproportionate voice. they're louder and frankly cookie and we saw that. some of the people screaming at arlin spector were nuts. what barack obama wants to do is to turn down the temperature and try to get the debate in a place where he wants it to be. no so emotional and see if he can rise above the lawmaker's town hall. he has three of these this week. we will see what happens in the individual districts. >> i grew up in new hampshire
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and on the license plate it said live free or die. libertariani libertarianism. stay out of my private life and pocket book. how might that influence the kind of tone he sees today? >> you will see some of that new hampshire spirit reflected in the questioning here. we actually saw earlier today a gentlemen who had a gun attached to his leg. >> he had to get his lunch later. >> exactly. look, new hampshire is a state as you know. there is no income tax. >> it's great. >> that is a state -- a different view of government and -- they don't like it. >> neighboring massachusetts where they have an ongoing experiment in health care reform along the lines and what barack obama wants to do. he will get all points of view. >> obviously he is taking a risk and talking to this audience at
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a time when there is tremendous skepticism. it's clear about the health care reform package as it stands. how much of a risk is he taking not only starting here in new hampshire, but holding as many town halls as he is. >> i don't think he has a choice. the greater risk is if this central administration were to collapse in this month of august or over the rest of the year. that would have a much more damaging effect than anything he is risking here. he has to sell this thing. it's tough to sell health care reform and it is complicated economically and politically. we have a diverse country with people. some people love the care and some hate it and some who don't have health insurance, there is a reason why it hasn't gotten done for 70 years and he is fighting through that. >> we will be keeping an eye on it and check back with you as warranted as the town progresses. thanks. see you later. >> another hot topic that begins with an h.
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home prices might be falling, but that is good news. hey, diana. >> that's right. home prices are falling but falling less drastically. foreclosures are standing in the way of meaningful recovery. we will go to zilo.com that gets local. u.s. home values posted their 10th straight decline down 12.1% and the rate of decline is slowing ever so slightly because before it was down 12.4. zilo finds 39 markets where sales volume is up year over year. that's a big measure. we have seen mostly month to month sales gains. miami, l.a., denver showing big jumps up. granted, you know you are saying that the market is showing sales jumps are the most distressed the activity is the most foreclosure. sales are up 40% year over year,
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but in june, 67% were foreclosures. not anything wrong with that, but prices are down by half and putting 83 percent per of all las vegas homeowners under water on their loans. >> in four americans are under water on their loan somewhat. a lot of americans can't qualify for making homes affordable and a loan modification or caught up in the paperwork and bureaucracy of what it takes to modify your loan. >> one more stat from zilo.com is that in june, 30% of the sales made were sold for les than the owner performed the home for. that doesn't mean these were all investors flipping homes. they could have been holding homes for several years and still seeing big drops in prices. that will show up when a lot of folks try to refi. go to realty check.cnbc.com. >> how do you refi if you are
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under water? >> under the making homes affordable you can at 12525 percent of your loan to value. a lot of people are beyond the negative 25%. >> that's the program i qualified for, but i was at 40%. that's why it only took two weeks. >> thank you, mr. president. diana as well. a softer stock market after a roaring one-month rally and round up the all-stars and take the pulse in a moment. >> wendy's along with young planneds. jim kramer and slipping after a down grade from ubs. he ran off with his secretary! she's 23 years old! - oh, come on. - enough! you get half and you get half. ( chirp ) team three, boathouse? ( chirp ) oh yeah-- his and hers. - ( crowd gasping ) - ( chirp ) van gogh? ( chirp ) even steven. - ( chirp ) mansion. - ( chirp ) good to go. ( grunts ) timber! ( chirp ) boss? what do we do with the shih-tzu? - ( crowd gasps ) - ( chirp ) joint custody.
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- phew! - announcer: get work done now. communicate in less than a second with nextel direct connect. only on the now network. , hard of hearing and an people with speech dischities accessac.sprintrelay.com.
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bob has just begun remarks on health reform. we have been monitoring it during the commercial. a sympathetic audience and right now he is just making his introductory remarks. we will wait until we get into the meat of this town hall and monitor it and if fireworks or news has broken, we will get their lines. stay tuned. >> stay tuned. meantime we know about $37 billion took place. rick santelli gave it an a minus and the markets right now are trending to the downside.
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we begin with bob dasani. the lows just barely. the three-year auction not really helping stocks at all. a little bit of jitteriness and the volatility index. that's the highest level for over a month. this is an indication of the s&p 500. the options are picking up. the stocks are weaker and commodity stocks which were leaders have been weak. over in brazil and the chinese stocks like aluminum is on the weak side. most commodity stocks are down 2% to 4%. they were the big leaders and down this week and the last couple of days. bank storks trading on fumes. those were his word presidency and he recommends taking short-term profits. we are not getting any help at the nasdaq as well. >> we are not getting help from
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the nasdaq. we are under performing today. take a look at the big names moving to the downside. you can take a any of them. research in motion and ebay and apple for example. there is one green arrow and i will point it out. oracle with no particular news of note for that. it's only up about a 30 of a percent. i want to point out applied materials reports after the bell under as well. not going to report a profit, but we will see what they have to say moving forward. the chip sector and seeing recovery down 2%. am jen has been talked about and initiated the document and that's up 1.5%.
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they will push the price down and we are still down sharply for the price of oil. the weakness in the dow and the fed overhang in the air as well. that's it from the nymex. back to you. >> thank you. as we were telling you, president obama at the town hall meeting in portsmouth, new hampshire. he made a statement about the u.s. economy saying there signs investment is coming back and the economy is not out of the woods. we will monitor this and bring you any further headlines.
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>> less than two hours from now, bern may dove's tut expected to plead guilt to fraud charges. what knew what about the scam of the century. >> we will get the inside story from the authors. >> two new books out. [ engine revving ] [ engine powers down ]
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gentlemen, you booked your hotels on orbitz. well, the price went down, so you're all getting a check thanks. for the difference. except for you -- you didn't book with orbitz, so you're not getting a check. well, i think we've all learned a valuable lesson today. good day, gentlemen. thanks a lot. thank you. introducing hotel price assurance, where if another orbitz customer books the same hotel for less, we send you a check for the difference, automatically.
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we see the dow off about 95 points and an a minus and the-year note auction going off with an a minus and that is not helping the stocks and neither
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is the forecast. that is stock in the words of bill griffith. getting caught. it's weaker than expected for earnings. they managed to beat expectations. >> a lot built into that price. >> the stock is not marking time, that's for sure. >> nice. >> stay with me. we're here all week. >> about an hour and a half from now, the cfo who hoped to run madoff's business expected to complete guilty on various fraud charges. we wonder as a backdrop, who else knew what was going on. as it happens, books about bernie madoff is comingly out and we have the authors of two.
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we give the most points to the title madoff with the money. how did he do this? >> most people didn't ask a lot of questions and it wasn't as complicated as it sounded. he was writing fiction. there wasn't a great skill he 4. he had a lot of low paid secretary on the 17th floor writing things out based on stock transactions. not a very difficult crime. >> did he do it by himself? >> no way that bernie operated this biggest ponzi scheme in history by himself. he is not a mastermind. my research really shows that in fact through the years from people he grew up with to people he went to college with from associates said the man was considered a dummy. >> wow.
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pascaly is in court today and going to talk maybe because he is pleading guilty. does it end with him? >> he will hopefully name some close associates. >> what are about his sons? >> it's hard to tell if he is going to go after the family. he is like a member of this madoff family and been with bernie for 30 years. whether he is going to drop a dime on them is hard to know. he will go after the people and they made a lot of money with bernie over the years. >> one of the most vivid stories took place on the day that everyone learned about this arrest. december 11th when they were watching cnbc in a state of shock. one of the people watching.
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when he saw the image of the ponzi scheme along the bottom of the skpreen he ran to the bathroom and threw up. that's because frank depascaly saw it coming. >> what can you conclude? he was scared to death he was going to go to jail or that he knew everything or knew his life was over. it doesn't tell me how much he knew about what. >> he ran the operation for bernie madoff down stairs. he knew everything and had complete license around that office. he walked around in blue jeans and violated the dress code. he was larger than anything at that headquarters because he knew everything. >> one of the things that was interesting the day bernie was arrested is he rarely saw frank associating with any employees in the firm. he issued orders and everyone
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keep quiet and don't talk to the media. it was the first time they saw him really acting as bernie's right hand man. >> sorry there anyone we haven't considered and hasn't been talked about at this point that you think could be central to the crime in the future as the story unfolds. >> everyone is looking to the family. when it comes to the family, the question is not whether they knew, it's how much they knew. after a couple of stories, mark madoff is up on the desk and said his father was not a crook. what happened, that was the seven years ago. what happened after that? how many questions did he ask? it raises the question of willful ignorance. even if bernie madoff didn't take them in and walk them through the ponzi scheme, if all the evidence they had was the wrifl blowers from the outside, they had all that information
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and more. what questions are they asking? >> are they facing jail time? >> they are under intense investigation. he had close working arrangements with them and knows a lot. >> they know him or they don't? >> i think it would be hard it figure out the guys who are raking in huge money didn't know that something fraudulent was going on. they knew something was wrong. >> have you figured out where the money is? is there much more to be retrieved? >> they are serving through all sorts of offshore bank accounts. bernie madoff was not an idiot. the guy was running a ponzi scheme and not doing it for the benefit of the people he was paying. they only found $300 million in the account. he had to store money away. >> which of you interviewed the drivers? >> andrew did. >> that's right. >> one of the drivers told this
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incredible story in which every morning he would go to the 17th floor and give them a check for a friend of bernie madoff's and the checks would be for several million dollars. sometimes $10 million. his name was norm leavey and he was a mentor to bernie madoff. a middle age jamaican driver would walk these checks over to the jpmorgan chase building where he had an office and put it in his account. there is no logical or reasonable explanation why bernie madoff would give someone tens of millions of dollars a day unless perhaps he was parking money. >> what was interesting here is that these guys, these feeder fund guys who we are talking about today were actually dictating to bernie how much of a return they were going to get. these guys were part of the
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experience that bernie had. >> the one thing was the law enforcement side. on the regulatory side of things, did you uncover where the ball got drop and there were experience theories out there. did you find merit to that some. >> i think there is merit. the sec dropped the ball and i think we know that by now. when you have one of the madoff family members actually marrying a former sec attorney and was involved in the investigations, you have to wonder what was going on. >> did you connect the dots? was there bearing on the sec investigation by the fact of this? >> it is being investigated and looked at. >> i love the stuff you have about this. why didn't you listen to him? he sounds like a nut job. >> i'm not going to call him a nut job. >> they thought he was going to be killed. in e-mails, he read like a nut job. >> he did have the fears.
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>> if you read his e-mails, his internal e-mails to colleagues, they are filled with cloak and dagger language. intelligence networks and -- black helicopters. >> there was a huge paranoia to his effortsful the other thing that the world doesn't know is all along he talks about trying to profit from the madoff case. one of the things i learned is that he actually wrote a memo to some of his colleagues and friends dictating how they could profit, an investment they can make and options they can take in case they went down. >> here actually expected a whistle blower pay off from the government. >> andrew's book is betrayal and
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the life and lies. madoff with the money. >> still ahead, we are monitoring the president's health care town hall in new hampshire. so far no fireworks. john will have a play by play in a moment here. >> we will head to the floor of the new york stock exchange to get steve's up to the minute take on the markets. stay with us. thththththththththh
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>>us productivity jumped by 6.4%,s biggest gain in six years. much the result of cuts in jobs and workers's hours. shares of cit getting hard hit after the struggling lender announced it was delaying the release of the quarterly report to the sec. act viv investor bill ackman cut his stake in target to 4.4% to 7.8% and lost the hotly contested proxy battle it elect new directors to the company's board. >> for more on the market moves, let's go back down to the floor of the stock exchange where steve is. grit to see you. we are looking ahead to
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tomorrow. what are you on the floor expecting and what could make a more bullish statement for the market. >> don't step in front. fed. i don't think anyone thinks it will do with the rate. i don't see anything positive about talking about the unwind of the fed johnson sheet. i can't see that being a bullish comment. >> whether or not they stopped by on the 300 billion worth of treasuries, etc. >> exactly. i don't think there is a scenario where that is a positive. >> just profit-taking? >> definitely. at some point there has to be a dose of profit-taking and that's what you are looking at right now. people have to just lighten up and i know the analysts have made their calls. you have to lighten up with the market place. we had an incredible really. >> how would you play the option tomorrow and the fed announcement as well. what would you do going into the key events? >> i would buy the dips. that's what's worked in the market place. the bears get run overtime and
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time again. i would be buying the dips. >> which sectors of the stock universe do you see getting the biggest push going forward? >> one has been health care. i'm a little shako it. longer this process goes on, the more we have to look at it. i caught a glimpse of president obama speak today. if they are clapping, that was a hand-picked audience. i have yet to find anyone who likes the plan. health care is on waivers for me at this point. >> i don't know who is worse. you or michelle. >> how come when a liberal speak out against it it's freedom of speech. when a conservative speaks out, he's nuts. >> come on. >> somebody throw a flag. let's go. >> in new hampshire, i grew up there, crazy libertarians. we are. >> i'm right with you. >> they have beena applauding the president in the town hall meeting in portsmouth, new hampshire. let's listen for a moment.
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>> you can't have this procedure or that procedure. why is it that people prefer having insurance companies make those decisions rather than medical experts and doctors figuring out what are good deals for care and providing that information to you as a consumer and your doctor to make the decisions? i just want to be very clear about this. i recognize there is an underlying fear here that people somehow won't get the care they need. you will have not only the care you need, but the care that right now is being denied to you only if we get health care reform. that's what we are fighting for. >> bring in john harwood. >> definitely selling it hard. i want to give an answer to my friend who said that he wanted to throw a flag when liberals complain it's freedom of speech and conservatives are nuts.
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there nuts on both sides and confronting arlin spector and raising the spector of communist china are as nutty as the people on the left who think everybody on wall street say criminal. in this particular case, barack obama has gotten a respectful reception and he is trying to turn down the temperature and saying let's fight over the real genuine disagreement about the role of government rather than the made up stuff out there from the nuts i'm talking about. let's take a listen from a few moments ago. >> where we disagree, let's disagree over things that are real and not the wild misrepresentations that bear no resemblance to anything. par. >> when had been was trying to enact social security reform, it died a horrible dmeath part because of either a bad sales
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job or a terrific sales job on the opposition's part. there a lot of misrepresentations and understandings and a lot of misses. >> social security like health care is say hard thing to change. that's what we have in common. obama made the point if it was easy t would have been done. for president bush he tried to push a partial privatization of social security right at the moment when americans were beginning to feel more insecure economically. they looked for more support from government and that was the beginning of the period where democrats began to make a come back because of that anxiety. president obama thinks he has got the wind at his back and there is a long way to go to the goal line. >> thank you, john. what is frustrated is we talked about the right and left and they both make the same mistake. they both want to rely on the third payer. either your employer-based health care or government-based.
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they are both the same issue. we are not the customer. either the government is or the employer is. what is their incentive to lower cost and deny you care rather than satisfying your needs. if we were in charge of our health care, things would be better. >> the question is, how do you organize the we? >> it's tough because you have to have benefits to push that away and people hate that. >> entitlement issue. let's find out what the most widely followed stories are on cnbc.com. the managing editor is stepping in. >> darren has jumped out there and poked the blogosphere, critiquing the media plan as in there is not much of and exclusivity. he is getting a lot of comments of people taking issue. it's a spirited debate and let's make another hot one of the day. the hotter story broke this
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morning like phil did. it's about the 230 miles per gallon for the new bolt. people are fascinated with it. it's kind of a neat idea. a car that gets 230 miles an hour. the number one for the past three days. the cash for clunkers slide show. we have taken out the cars that are the top 10 trade ins under the program.j that would be ford f100s and jeep cherokees and paired them up with the corolla. >> facebook makes a deal to muscle up against twitter. google is testing to one up mike soft bing. >> bing versus caffeine. we will round up the hot stories for you in our one neat bundle. a lot of people talking about google versus microsoft.
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a couple of stories that caught our eye. facebook shelled out $50 million to buy social network friend feed. facebook's founder posted this photo on his account. celebrating the deal's close with the former google engineers who fun toed friend feed in 2007. >> that looks like a fun photo. >> that are does. even more casual than steve case.
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>> the only thing missing is the pizza. google unveiled a peek at a newer faster search engine code named caffeine. red bull is already taken. this is in a bid to fend off microsoft's upstart of bing. silicon valley bureau chief, i love saying bing. >> you do. we noticed. >> jim goldman is with us and we have yulia as well. what does facebook get from friend feed? >> as the product it was never successful and never got more than about 900,000 unique visitors a month. by integrating, this could be a useful application. friend feed allows you to aggregate your different social information whether articles your friends have digged on the journalism or twitter feeds and facebook is doing some of this to make it much easier to get
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all of your social information through facebook. facebook is key and hub and means you won't want to leave facebook for another upstart start up that comes along. >> i thought the commentary about this transaction getting done was interesting. facebook is a place where the best engineers come to build things quickly and lots of people will use it. is that a side armed jab at google and maybe things go slower and they are becoming more of a dinosaur in this ultimate silicon valley picture? >> i don't think it's a jab at all. i think it's a direct smack in the face. facebook is trying to position itself to say we're the heart of innovation and all kinds of searches from here forward will be social while everything over at google is far more boring and dry and al go rhythmic. >> what do you think of this?
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is this the flavor of lemonade or something? >> i think facebook has twitter envy and wishes they stepped in early enough to buy twitter back. what's twitter up to? $35 billion in only a million users of this service. almost nothing. to try to get in there for a song doesn't seem like a song to me. it's the four google engineers. >> sure. dennis, i think that's a good point. you are talking about the former googlers. let's not forget we are seeing a trend right now as far as searches concerned. you are talking about not only social search, but realtime search. it's lacking in that and -- >> what is the realtime search? we get a response and what can be more realtime than a google search now? >> you bring in the stuff before you search it. >> you are getting stuff stored
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on servers. what's happening in realtimes as far as what your friends and colleagues are up to and what they're doing right now as we speak. it's about getting stuff there. >> tmi. >> what am i getting from caffeine? what does it bring to the table? >> they benefit on twitter and see what people are saying on realtime. they are bringing information that is being put on the web and getting the search results faster and there is a little bit of a lag and maybe you don't notice, but it will perhaps integrate what google talked about and the realtime search. is it going to slow down bing? >> i just don't want to know what is being said about me by my friends instantly. a lot of that hurs your feelings.
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it's not a direct answer to bing, but it changes the way companies are going have to basically describe themselves and if you are a real power searcher right now. >> president obama is saying we may need to get more than the pharmaceutical industry. he promises and gives back, but maybe we can get more and came up publicly and said the white house promises behind closed doors and congress is going back on the deal. now president obama. >> the way he said it and we may be able to get more and suggest there have been discussions otherwise that get signals that they may be able to get more. >> they will come from better technology.
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maybe the ads min station to the pharmaceutical industry to give up the next 10 years of the overhall. congress learns more and maybe we request k get more. are we seeing an index. what's the latest? >> the report from the tarp committee, it's a mixed bag.
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but smaller banks need additional capital to deal with billions in toxic assets still on their books. >> the treasury has not been focusing on the small banks. let's keep in mind they are the ones who hold whole loans. they are not directed towards them or getting the bad assets off their banks. they hold the commercial real estate mortgages electric like big trouble in the next few years. the banks very have under 600 billion and the figure is closer to $1 trillion. >> risk is the key word here.
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one of the things that is deeply troubling is that there is no good estimate of how much toxic waste is still left on the books of even the large or the small financial institutions. >> there is a center on the oversight panel and the report might be a justification for a possible additional government bailout going forward. >> all right, thank you very much. we have a surprise bestseller and a ritzy men's suit company making t-shirts. >> a full serving of our empty calorie segments after this. [ engine revving ]
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