tv The Call CNBC September 9, 2009 11:00am-12:00pm EDT
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we finally came to a conclusion here after two and a half years of study. >> thank you very much. i'm story that captured everyone's imagination. they are one of the largest popcorn producers in the world -- >> i wanted to ask about it, but we had so little time. largest popcorn producer. >> just piqued my curiosity. mark, so you have anything for barney that you would like to make sure i ask him? >> just be very, very careful. >> we will. we will have barney frank on street signs. nearly 20% of the eligible homeowners have been offered
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help by the mortgage relief program. new figures show that more than 541,000 offers have been sent out. starbuck's chief official officer sites performance at some stores. and it's still too early to consider tightening monetary policy. good morning and welcome to "the call." i'm in today for trish regan. we are 90 minutes into the trading day and stocks have been drifting higher. we're going to be talking about whether inflation is something to be concerned about. melissa? i'm melissa francis, live in vienna. saudi arabia's oil minister just came out to talk. i'll tell you what he said. i'm larry kudlow. president obama trying to regain the upper hand on health care
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reform. delivers a major speech tonight. we'll debate whether he can get any meaningful legislation passed. this is "the call." we are cnbc. at this hour, stocks are higher. they're being led by industrials. general electric is the recipient of positive comments for the second day in a row. commodities also continuing to rally. the dow is higher by 25 points. this comes after three days of gains. the s&p up by four points. the nasdaq has been in positive territory as well. up by just over 14 points. first, we're going to talk about oil. melissa, lots of news coming out of vienna.
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>> absolutely. behind the scenes, the name of the game has been compliance, compliance. the quota slipped to 70%, but the oil minister briefly talked to reporters and played down that angle. >> people are complaining. >> are you -- >> 70% is great. >> it's great? >> $70 price. >> you have $70 price? >> yes. 74, 75. >> but that flies in the face of everything i've heard behind the scenes. last time we were here it was up about 80%, which is impressive for opec. it has since slipped to 70. just rubbing salt in the wound is russia who back in december told opec they would cut production to keep the glut of
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oil off the world market. they've done the opposite. their production now rose to 7.4 million barrels a day. meanwhile, saudi arabia has cut production back down to 7 million barrels a day. but he puts the number a little closer to 8. russia did invite opec to come to moscow to meet with them. so far, we have not heard they've accepted that invitation. the meeting kicks off about 9:30 p.m. local time. they have to wait for the sun to go down. my sources tell me the outcome could stretch until 1:30 or 2:00 in the morning. if you think nothing's going to happen, that's what everybody thought last year. again, it starts at 9:30 local time. let's go to rejbecca jarvis to see how traders are reacting to the meeting. >> in addition to opec, here it's really all about the
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benjamins, baby. this is not a new thing, folks, but it plays into the inflationary thesis that many hold as far as is dollar. with dollar weakness, commodities, many expect will go stronger. also, a couple of pieces of information overseas as far as demand goes, that traders find to be somewhat bullish. out of china, you see these auto figures for august where auto sales in china in august were up 90%. that country sold more there than we did in the month of august. that was the first time ever on that front. the dollar also in grander focus obviously, folks, as it hits. ubs out with a call, "the wall street journal" featuring the dollar weakness, but again, it's not a new story. it just so happens to be a big story because of how low the g dollar has gone and obviously with the dollar going lower, we see gold going higher, baric
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gold making a bet as well on gold continuing to go higher. let's get over to el nesto grande. >> it's all about the hamiltons here. only about 25 points to talk about. it's industrials. if you look at some of the big performers. the best in the dow right now is boeing. the company saying they see growth returning to the air cargo business by next year. led by the u.s. and china. at the same time, ups being upgraded up from neutral. also, we have ge and six other industrial names as well as the sector being upgraded. the price targets go higher on ge, united technologies, dan earth, illinois toolworks as
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well as dover and ranger. on the weak side, dupont was down about 3.5%. and mcdonald's down 11% on the year to date basis. one of only two stocks that doesn't have a gain on the year to date basis. i'll give you the answer to the others. they're out with those disappointing august same-store sales on a global basis, up only 2.2%. let's get to scotty wapner now at the nasdaq. >> thanks so much. nasdaq's up three quarters of 1%. big cap and widely held techs. oracle, ebay got upgraded today. google's higher. semiconductor is up about 1%.
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shares of palm, it's cut the losses. downgrade from credit suisse today. altera is down. san disk is up, the upgrade from deutsche in demand. and pharmaceuticals -- it's up almost 70%. the stock is just off to the races today and has been a decent year. did you see the news from starbuck's? they say 30 stores that were slated to be closed, larry, are taken off the list now because the performance has been better than expected. stock is up about 3% on that.
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>> much better than expected. thank you. commodities on the rise. gold over 1,000 bucks this morning. the dollar at its lowest levels in a year. is inflation on the horizon and if so, how can you replay the race in trade? our bear, james shelton -- hello, gentlemen. mark, the chinese are wary of our creation. they doubled their gold holdings in recent years. are you a reflagsist trade investor? >> i don't think so. i think what we've seen happen is the deleveraging of the banks. yes, the federal reserve stepped in and filled that void. we put up the money we needed in order to prevent a depression, but to actually see inflation. it's not just minor inflation. that's not a problem. you're talking about hyper
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inflation. i don't think that's the case. certainly not in the next several years and it will come down to that exit strategy and whether the fed pulls it off. you look at the money the bank's got, they put it into treasuries. they have not even lent it out. how do you get inflation if they don't lend? >> have you seen what's happening with gold at these levels? it's telling us that something out there is concerning. you buy into that? >> absolutely. i mean, i think the reason gold is up so much is because of the dollar weakness over the last several months. that's probably set to continue. september's a seasonably weak month for the dollar. i think mark hit the nail on the head that it all depeptinds on fed's exit strategy. at some point, i think wooe likely to see that velocity of
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money tick up. >> so mark, really, whether it's oil or gold or lithium or valium or whatever, the fact remains the cheap dollar is great for energy, commodities, industrials. why not go there? >> especially with oil, we have the inventory numbers. you have to worry about that. there is the seasonal tendency for it to do well. we have higher eer projections gold. i think there's better places to be. the large cap multinational names are doing very well. technology also a way of leveraging that. and like i said, it's a matter of hyper inflation versus inflation. inflation can be good. >> before we get into the inflation forecast, it may be two years away, but the dollar drop is here and now.
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charts look bad. sentiment looks bad. the chinese are critical, the brazilians, the russians, probably the opec ministers. how do you play the falling dollar? that's really right now number one, first and foremost on the investment agenda. >> you play it by owning gold and commodities. owning crude oil. that's the way you do it. you can own gold bouillon. we like the gold mining companies. good leverage play on the dollar weakness. but then i think you need to own a broad basket of commodities as well. >> if you look around and try to figure out why we look so terrible when compared to other places, where's the strongest currency? >> i think that we always go through these bouts where they talk about getting rid of the dollar as the preimminent
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currency then they forget about that and it bounces back. it has been in a down trend. we are at a one-year low. i do think we're going to go lower. i don't think we're going to break the lows from last year and therefore, we're looking at the test of the lows on the long-term and building a base. a stable currency at a lower level improves or exports. multinationals are a great play and here, you benefit from both the recovery in the economy and in inflation. >> jim, let me ask you something. this september swoon. the reality is, let's see, thursday, friday yesterday. s&p 500 is up over 3%. it's puffed up this morning. and mark says all that threat is a bunch of tax law selling to off set taxable gains. give me a little september swoon thought because so far, i'm
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underwhelmed by it. >> this year, your average mutual fund has to have tremendous tax loss to carry forwards that they can use to off set any gains that smart investors that bought this bottom back in march may be looking to unload some of those gains after a 50% run-up. i don't know what the market's going to do the rest of september, but when we look at evaluations and the unemployment report friday as well as consumer credit that came out yesterday and contracted by $21 billion, we wonder where is the fuel going to be to power some gains and earnings for the rest of the year. >> so far, it's not swooning. i just want to say that. >> you're right. >> by the way, i love mark's tax angle on this. i think that's the cleverist thing i've read about the swept swoon. >> guys, thank you very much.
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>> mark is not swooning. >> quick programming note. the federal reserve beige book comes out today. we'll have an in-depth look. plus, barney frank joins us live to talk about health care and regulation. it starts today at 2:00 p.m. eastern. coming up on "the call," the debate divides americans takes center stage tonight. will obama regain health care reform? will he ditch the public option? steve jobs' much anticipated apple reveal in less than two hours. we'll head live to the event for a preview.
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merck shares, a judge has rejected efforts to exclude testimony from witnesses in a case regarding fosomax. stock however is up almost 1%. 25 cents. $31.22. apple is expected to unveil its latest product in about two hours. speculation is rampant that we're going to be seeing a new i-pod. the stock's been red hot this year. yesterday, we saw a nice gain. this morning, down by about 46 cents. of course, what everyone wants to know is will steve jobs
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return and how is his health. jim goldman is at the event and has more. >> indeed, today's event might offer incremental improvements to the i-pod, but this will offer investors something more and that could be a glimpse of steve jobs cht not that investors need to see him, but apple shares have done nicely without him. doubling since the beginning of the year, but a jobs appearance today reaffirming his ironclad control on this is the image investors have been waiting for since he took medical leave and underwent that liver transplant this year. insiders are expecting new i-pod touches today with cameras. no mac tablet or netbook from apple expected.
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unlikely also, an i-tunes deal with the beatles, but a revamped i-tunes and apple store with more information and streaming capableties. they will take on a far deeper significance in any of these news items are unveiled by steve jobs himself. of course, that begins at 1:00 eastern. my live blog will begin just before. no matter what happens today, whether steve jobs appears or doesn't, whether the company unveils new i-pods or doesn't, this day will move apple shares. >> ahead of the conference we're hearing there's going to be i-pod price cuts. the touch down to 249 from 299. also, the nano being cut by 30 or $40. does it all tell you this industry is dealing with the
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downturn in the economy by cutting costs across the board? >> cost cutting at anning has been the order of the day at apple. we have seen it with i-phone, mac books. it would no surprise anyone to see significant price cuts with i-pod. remember that this particular product line is maturing and at a fast clip right now. they're trying to juice interest in i-pods as we head into holiday shopping. last quarter, i-pod took a third seat behind i-phone and macs. >> jimmy, real fast. becky's price cuts and apple's profits? >> apple has done a remarkable job of holding profit margins. a price cut shouldn't do anything necessarily to profit
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margins. this is a company that can squeeze dollars out of every sale. i don't think a price cut is anything for people to worry about. >> good. free market forces rule again. thank you. coming up, president obama's high stakes push for health care reform. did he take the public option off the table? and, melissa francis live and in color from vienna. hello, melissa. >> hey, larry. coming up, i'm going to have veteran energy and oil analyst pick apart the meaning of what's to come. we'll have that when we come back here on "the call." in this unusually volatile time,
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to change anything at all. >> last year, they came out in the middle of the night and cut production. you don't think that's going to happen? >> doesn't seem like it. nobody's complaining, they're in good shape. >> it is pretty incredible that we still have oil at $70 a barrel. great for opec, maybe not for the rest of the world. >> you're quite right and nobody's complaining though. it's not interfering with the recovery. >> russia pouring a little bit of salt in the wound. a lot of the press around this meeting has been that they said they were going to cut back on production and they did the opposite. is there tension there do you think? >> no, i think opec at some point has put confidence in russia very much and so they're not paying too much attention to that. there's not a lot they can do about it. >> really? that seems like it's a lot of
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show, saying he doesn't care what other countries are doing, but here they are cutting back and in the meantime russ's made an extra $20 billion. >> but that's not much they can do about it. >> how about the dollar? that's having a huge impact on oil right now. if you look at trading on the nymex. gold has popped up to 1,000 bucks. where do you think it will go? >> actually, the dollar is a wild card. you could see price expectations for oil go up. >> and gold? >> similar thing. it's kind of in turmoil right now. we had an expectation of prices at fourth quarter at about 70, but the dollar could change that. >> you always hear threats they want to price crude oil and another currency. do you think there's a possibility that could happen? >> i don't think so, not at this stanl. >> where do you think the price
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of oil will be by the end of the year? >> calculating it would average $60, which means about $70 for the fourth quarter, but the dollar could change that. >> and we could really see oil take off when the economy recovers. >> there's still a lot in inventory, so i think that's a balancing factor. >> thanks for standing out in the sun. i'm going to send it back to you. >> thanks very much, melissa. up next, the debate dividing u.s. lawmakers and american public takes center stage tonight on capitol hill. >> will president obama gain control of health care reform and is pushing the public option the best plan? that is straight ahead in a today's "call of the wild." 'wfu
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bullish. >> industrials have been doing very well. yesterday and today. >> the september swoon ain't swooning. >> we'll take it for now. we're getting there. president obama is set to deliver a major speech on health care reform. cnbc will be covering it live. this is happening as he tries to regain the upper hand at getting reform passed. can the president get meaningful legislation passed? let's bring in our guests. and mr. secretary, let's start with you. take a look at what's been happening and how things are shaping up, when president obama speaks tonight, is there a good chance that he's going to be able to find some sort of bipartisan agreement on this or is this something he's going to have to go alone with the democrats? >> i don't believe this is being done to affect the outcome in congress directly.
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i think he's looking for a game-changer. momentum in the public has moved against him, his party. he's like the manager of a big league ball club. they've got to do something to change the momentum of the game and i think they're pulling out this big stick hoping to do that. i don't think they'll succeed. i think momentum of the country is moving against them. >> let's stay with that larger government role. the obama people are saying he's going to stick with the government's so-called public insurance option. what is your take? is he going to stay with the government option? >> i think he will -- >> let me get myrtle, then mike you can react. >> yeah, i actually think that he definitely needs to be very specific about this plan and his ideas about this plan. clearly, the public believes
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that the poor need some type of coverage and in his mind, providing more cost effective options relative to health insurance companies, that was really very viable. i think the mistake he made early on was that he left it up to congress to put the details around his vision for the public option, but tonight is his opportunity for him to put his vision out there for the american people to take in. >> secretary, you can insure the uninsured, you could create cross-competition with interstate insurance. do you need the massive government option? >> every american needs access to an affordable insurance policy. we do not however, need to have a government operating that system and i think that's what the american people have said. this started out as a debate about 47 million people who at
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some point during the year, didn't have health insurance. it has transitioned to over 250 million people who do that worry that a far greater hand of the government will affect in a negative way the coverage they have. >> myrtle, we're talking about two very different problems. one is uninsured americans and the other, the costs with existing programs. medicare and medicaid. is there a way to address both problems or is this too tricky of a problem and only one side can get it addressed? >> no, i think we have to address both sides and the president has been very clear that he will not sign a bill that doesn't address the issue of cost. it means that the president is going to have to take a lesson from ted kennedy. he's going to have to broker something that both sides can deal with. what he can do is heal the
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fractures within the democratic party. he can drive unity there. but costs have to be dealt with. >> you're talking about both sides of the democratic party. >> absolutely. the fractions within his party has really hurt him. he started this out with a real mandate from the full democratic party, but has not been able to control the conservative folks. i think what would not be a good outcome would be to have the democrats, who are liberal from the house, come back and say, boy, i won't support a plan unless we have a public option, and still have the democrats in the senate who are conservatives say i'm not going to support a plan unless a public option is out. >> as former secretary of health and human services, does the government option plan essentially amount to a government's takeover of the system? >> there's little question.
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i don't know of responsible economist who don't believe people will migrate from private plans into the public option at a very high rate. we will then see private insurance become less viable and employers will again to flee. costs will go up. as you read the house bill, it is all designed to funnel people into the federal change. the public option is only available through federal insurance exchange. this is all about moving people toward a system of single payer. >> ms. potter, i want to also ask you about the price tag. part of the protests, it's a twofer, where does that end? >> i have a very different opinion than mr. leavitt.
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i don't think there's some big conspiracy to drive all patients into a public plan. the president's been very clear in that his goal is to provide options for people. we're a capitalist society. options are very, very important and up until now, the very poor or chose who had lost their health care coverage had not necessarily had the kinds of options that you and i might have given our financial standing. so this issue of cost is really a tricky one and along the way i think part of the debate got out of the hands of the president. but he's been clear he is not going to pass a plan that will put the country in a worst position economically than -- >> or fiscally? or financially? that's the big one. you look at these town hall debates. people are very, very angry at the volume of spending, borrowing and implications for the higher taxing.
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>> absolutely. and you know what? they should keep their eye on it, but they also need to listen carefully to what the president has to say and let him have an opportunity to share his thoughts on his vision for the plan. >> thank you. programming note by the way. we are jam packed tonight beginning at 7:00, i will preview the obama speech in the kudlow report. we have senators lamar alexander, bayh, corker, grassley. then we will take the obama speech live. that is on health care reform of course. at 9:00, special reports. it's all beginning at 7:00 eastern. i will grab a sandwich sometime this evening. >> five senators. lined up ready to go. coming up, we are going to
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get an inside look at where bernie madoff was living large before he was thrown into a big house of different sorts. first though, to melissa. >> remember becky, don't call him a cartel, they don't like that. coming up, oil at about $70 a barrel. a lot of people saying that's the sweet spot. will it stay there? we'll debate it when we come back. this debate over leverage and inverse etfs has been heated. federal regulators are concerned that financial advisers may not be explaining what they do and don't do. financial advisers are concerned they may leave themselves open to potential lawsuits. all are going to be tightening their language. here's the problem. tracking errors. they're designed to give you
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leverage. so if the index goes up 200% in a day, you make 20%. inverse etfs can be the opposite. so if the index goes up 10% in a day, you lose 20% and vice versa. but because etfs reset at the end of each day, there is the potential for significant tracking errors. in other words, your 200% leverage etfs will make 20% if it goes up, but only for that day. it's important not only to know what you're holding, but how the gains or losses are calculating.
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da when thistheir employeect addebenefits package,ment guess who became the new teacher's pet? aflac, aflac, aflac, aflac, aflac find out more at... aflac! for business.com and the duck says... aflac! let's look at shares of talbot. that's down by about 2.5%. they're posting a loss of 45 cents a share. the stock over the course of the last year has nearly tripled. right now, it's at 692. let's get back to melissa.
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>> the price of oil is up 60% year to date. people think that might explode when we see demand come back. joining us now, dan vicker, independent oil trader. and we have steven shork. thanks for joining us. dan, what do you think is going to happen at this meeting when it lets out tonight? >> i think you hit it on the head. everybody's expecting nothing and i think you'll get nothing. opec ministers are there and it's about compliance. as you mentioned with your last guest, particularly in venezuela and with russia where compliance has gone under 70%. i think it's more about compliance than new quotas. >> steven, do you agree? >> absolutely. i'll also throw in here the value of the dollar. this is something opec takes
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into great consideration. they get paid in dollars, but spend a lot in euro, yen and so forth. it's not only adding fuel to the speculators, but it's certainly going to be a topic of discussion when the ministers meet this afternoon. i agree with dan. i don't expect anything other than the status quo and obligatory nod to compliance when they're done, but i am confident that if the dollar continues to weaken, the rhetoric out of opec will be more hawkish. >> dan, i mean, they're kind of getting hit in two ways on this move from the dollar. it's going down, that's hurting them. they're getting paid in dollars. they're paying for other things in other denominations. at the same time, a lot of people are using gold as the hedge instead of oil. >> actually, i kind of disagree.
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it looks to me, melissa, that oil was back for a while. under $70. looked like it was going to take a break. then over the last two days, the dollar got creamed yesterday and again is getting hurt today. the dow is up another 65 today and what happens? oil goes up 3.5 yesterday, over a buck today. it's really about the dollar. the only difference i see is that the dollar looked to be getting overshold here. short term, i'm looking for the dollar to make a strong technical rally and oil to come down a bit as well. >> what's your prediction from now to the end of the year? do you think it's going to reach triple digits, steven? >> this is the technical rally. not fundamentals. the reason why, oil hasn't risen is there no demand for it. we're going to fall turn around.
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demand for products is falling. demand for crude oil is falling and if we look at con sumts of gasoline, we spent an additional $7 billion in august. we are at the limit. $75 is the limit. we go beyond here and i'm not saying we can, you're going to cause harm to the consumer. therefore, the prediction is i think we remain in the current range. oil at the top in the mid-70s. >> dan, real quick, you adwree gree? >> i have to agree. i know you wanted an argument, but i can't give you one. >> thanks so much. larry? >> thanks very much. "power lunch" is coming up at the top of the hour and no one better than bill griffeth to tell us what's in store.
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>> we have high drama today. the apple event gets underway. is it a new i-pod or will the beatles finally come to i-tunes and will steve jobs make an appearance? we'll get to that, plus, an analyst gives us six stellar stocks for your portfolio. stocks you want to consider for your portfolio. and we talk with real estate reporters around the country in strategic locations. how's the health of your housing market? we'll look at three strategic markets around the country and see whether housing really is in recovery mode right now. becky, different shows. >> i'm a pinch-h hitter this we. up next, the for sale signs are going up soon for bernie madoff's properties. we'll take you inside where he
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was living large. you're watching cnbc. first in business worldwide. here some 45 years ago.onde actually, 47. ladies and gentlemen, mr. larry mccarthy. amidst today's financial turmoil, our sophisticated wealth transfer strategies... and philanthropic expertise ensure your legacy... is passed on to family or your favorite pastime. ♪ northern trust. wealth management. asset management. asset servicing.
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listening to arguments that could change the landscape of what kind of corporate contributions may be spent on television add ver tieing during the last 90 days of a presidential campaign. this includes hillary the documentary. the issue for the supreme court, should this type of corporate speech, if you will, be restricted all together or is there a to craft the narrow ruling in the federal election commission has not been able to deal with through the finance laws. how perplexing a case is this? from chief justice john roberts quote, we don't put our first amendment rights in the hands of bureaucra bureaucrats. from stephen briar, what if we were to issue a broad ruling lifting -- what would be the
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consequences of the press if labor unions are allowed to spend as much as they like during the closing days on television advertising. we should expect a decision in the coming months after the court reconvenes on the first monday in october. >> thank you. all right. it was penthouse to pen. for sales could go up this week for bernie madoff's properties. mary thompson joins us outside his manhattan apartment with all the details. >> earlier this morning, u.s. marsh marshals leased video tapes and from what we could tell, he had a liking for great views and liked shoes. as for the homes, the two-story
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penthouse was bernie and ruth madoff's main residence. only one bedroom. the wrap around terrace on the 12th floor offering secluded seating and eye-popping view of manhattan. inside, a custom closet. the government thinks it would list between 8 and $10 million. >> we've seen apartments like this listen in the 10 millions in this area and we're not going to skimp out. we'd like to get market value for this. >> the price for his 8700 square foot home in palm beach. not known. the home features stellar views this time overlooking the intercoastal waterway to downtown palm beach.
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the closets held his over the top collection of shoes. >> that's where he had again, nine shelves that would accommodate the 40 plus pairs of handmade belgium shoes he would wear down here in south florida. >> in total, the government is hoping to collect a total of $21 million from the sale of these two properties. of course, the proceeds from the sales is going to go to a fund for victims of the ponzi scheme. back to you. >> thanks, mary. let me ask you something. furniture. furniture art. is that going to be included? >> all those shoes of mr. madoff's, the artwork, the proceeds are going to go to his victims. >> i know for a fact that becky
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is very jealous of his closet space. she may wish to comment on that. >> no. but if i had closets like that, i would be more organized. we'll get a list of stocks to watch this afternoon.vi you are watching cbnc. first in business worldwide. [ engine powers down ] 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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