tv Street Signs CNBC January 31, 2012 2:00pm-3:00pm EST
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>> can electronics make it in the long term other than showrooms? >> that's the question posed by tyler in his documentary. that will do it for us on "power lunch." have a wonderful afternoon. we'll all see you tomorrow. >> "street signs" begins right now. welcome to "street signs," everybody. as goes january, so goes the year. let's hope so. going to be a big month. we're taking the money and running with our version of financial wheel of fortune. we're going to have winners, losers and maybe some wild cards. would you ask the president to help your spouse find a job? one woman did just that. the president says he's on it. you're going to meet her today. does the shack need a shake-up? we'll have the story and ask if a turnaround is even possible. i'm mandy drury.
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hello, everybody. this is what else we're watching. stocks are getting off to a fast start today before being waylayed by two reports. the congressional budget office says the federal budget deficit will talk $1 trillion for the fourth straight year. the jobless rate will remain above 8% for this year and next. and shares of netflix far and away the best performing stock this year on the s&p 500. it is down today but up 71%. you didn't hear me incorrectly. 71% so far this month. as we all know, investing certainly is not all fun and games, not for like the last ten years or so. but that doesn't mean you can't bring facts in a fun format. with that in mind, today here on "street signs," we're having a little bit of fun. we are playing financial -- >> wheel of fortune!
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♪ >> this is going to be an epic win or an epic fail. we're looking at the winners, losers and wild cards so far this year. two stocks on opposite ends and a little-talked about nation that may be the biggest problem in europe. so let's go. >> let's start with the winner. up 46% so far this year. one of the best-performing mid cap this is year. as for the loser here in the middle, electronic arts, down 9%-plus so far in 2012. is this a read on the fickle consumer? more on that in just a second. and for our wild card, hungary, the country's main index is up 12% year to date. very interesting given its proximity and exposure to the eurozone and all the problems that continue to roll on there. >> about a year and a half ago i said hungary will be the first nation to default.
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nobody's got hungary's back. let's dig in on all of these. we're going winners, losers, wild cards and talk about whether you should by the winners, losers and what to make about hungary. paul, i want to begin with you. we'll start on a high note. let's talk about terex. the sales booming off the recession bottom, above pre-recession levels. good numbers lately. but the stock has also responded. is it too rich to still invest in right now? >> we think it's a little bit rich right now. we have a couple of concerns. there's some upside left. but given the risk level, we're maintaining a neutral rating on the stock. we do think that terex could struggle with chinese competition particularly in the developing world, losing some market share. secondly a lack of pricing power. we think their lack of ability
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to be a price leader will hinder their ability to offset raw material cost increases over the next few years. >> how exposed to raw material prices is terex? there's a fear of china slowdown. some commodity prices have come off pretty good, copper and others. if we see the continued deflationary price spiral in commodity that is we might get and the fed might be expecting, what's that going to mean for terex? >> we just saw oshkosh report today who has a similar business as terex's genie business and they missed on the margins side. they weren't able to offset the raw materials increases in the back half of last year with pricing. those are just from the carrythrough from the beginning of the year. there's still a little bit of lag in that market. both themselves as well as oshkosh are priced similarly. they still definitely need to push a little more pricing through to start improving margins. >> that's the winner. let's move on to the loser here.
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neil, you have a buy rating on electronic arts, which is down about 10% year to date. why has it underperformed some of its other competitors so badly? >> i think the big issue with electronic arts has been concerns about their "star wars" game. frankly, a lot of investors felt that that "star wars" just didn't have the force that it needed to have. but we've seen the opposite, actually. the company's said that there's been 1 million registered users as of december 23rd. that means 1 million games sold. that also does not include people who bought the game and didn't open it until christmas. that data point didn't include that. >> certainly looks as if you're seeing this pullback in their stock as a buying opportunity. we were looking at zynga yesterday and what's happening with that stock. how much do you feel going forward that zynga is treading on e.a.'s turf? >> i think it's marginally treading on e.a.'s turf. e.a. did some out with a game called "similar social."
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e.a.'s seen that game fall down to number 10 or number 12 amongst the total social games world r o social games app. it will take some time before e.a. can get their mojo on social. but i think the stock has been trading off on "star wars" and concerns about whether e.a. can make a big splash in the mmo market. >> let's move on to hungary. hungary recently has done very well to begin the year. many emerging markets have. let's bring in kate moore of bank of america/merrill lynch global research. need to shorten that up, kate. >> i know, it's a mouthful. >> hungary, what's going to happen with the country? they're sitting out there by themselves. looks to me like default could be inevitable. what's your thought? >> let's talk about from the equity perspective first off. the four best-performing markets
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in 2012 were the four worst-performing emerging markets in 2011. we're seeing a traditional reversal in january. hungary is an interesting case. we have a market where 40% of the market cap comes from financials. and that has been the absolute market leader, up about 30% year to date. >> their biggest bank had its biggest month in two years in january. i can't figure out why. >> i think no one was allocated towards banks globally or emerging market banks in particular. it was a place investors had shied away from in 2011 as they were really risk averse. now even after this rally in january, hungarian banks are still trading at less than one time book value. i think that's an important point. we've seen this massive rally but we're still not talking about overenthusiasm for some of these sectors. at this point, we find other places in emerging markets that we like a little bit better than hunga hungary. >> like what? >> we tend to like russia. russia's trading at cheap valuations.
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there's been a lot of bad news coming out -- the political cycle. but in general, we like the consumer side. we like the fact that oil has stayed high. that's very supportive for the overall economy. they have a current account surplus which we think is going to continue to support them in 2012. >> hungary, russia, these are european markets. what about some of the other prompt e.m.s around the world such as europe and asia? >> we started out a little underweight. but we continue to recommend an overweight position for the full year. we like brazil over the medium term and we like derivatives of the growth story across asia. think about which stories in particular can outperform because i think as correlations were really high in 2011, investors took their eye off some of the good single stock stories. >> paul, neil and kate, a wild card winner and loser, thank you
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for joining us. up next, from wheel of fortune to jeopardy! here's some trivia for you. stocks are headed for their best since january of 1997. but is this as good as it gets or just the beginning of an even bigger you're-long rally? and phil lebeau is all revved up about the three-year pinch and why it could have people dancing like ferris bueller. we're only just getting started here on "street signs." stick around. in what passes for common sense. used to be we socked money away and expected it to grow. then the world changed... and the common sense of retirement planning became anything but common. fortunately, td ameritrade's investment consultants can help you build a plan that fits your life. take control by opening a new account or rolling over an old 401(k) today, and we'll throw in up to $600. how's that for common sense?
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nobody's talking about polypore, we're talking about it. down 14 bucks a share. that's a 26% haircut. herb greenberg, you are doing something today. now you're back joining us. good to see you. are we seeing any reason for ppo getting whacked? >> davidson downgraded it -- i'm looking at it. coming up to speed here on stuff. there are a bunch of little headlines. but it's just one of those companies. >> high valuation name, no news out there except for the davidson downgrade to perform -- >> there's obviously news we don't know. but 25% is worth noting. >> love the viewers. they asked and we did it. we didn't do much, but we tried. for the past year, there's been a whole lot of talk about
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doom and gloom about how the world's problems are going to drag the u.s. into the pit of despair and a shattered u.s. stock market. that talk has not come from your next guest. he's been right on. joining us is scott minard. you once coined the phrase, the cleanest dirty shirt in a bag of laundry. are you still saying that or are you a little less optimistic given the run? >> i'm pretty optimistic. the move up has been compelling. >> scary. >> but you look at the trader's almanac and it tells you you have this kind of rally into january, we've never had a bad year. >> how much is due to the old adage of don't fight the fed? >> it's 100%. the amount of liquidity that's getting pumped into the system is mind-numbing. >> and you expect even more liquidity to be pumped into the system, say, q3 of this year, q.e. 3 in q3?
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>> q.e. 3 in q3. after william dudley's comments last friday where he said there was a lot more that needed to be done. that's a clear signal from the fed that they've got a whole laundry list of liquidity. >> let's dig into this. by all measures, we know that almost every major economic report has gotten better over the last six months. we know that the job market's improving a little bit. nobody's saying we're booming but we have certainly gotten better. we're looking at what the fed says late 2014. the only thing i can come up with is they see major deflationary problem, maybe with a china slowdown or something. i can't understand what they're looking at to be as pessimistic as they are. >> is it an insurance policy as opposed to to anything reactionary. >> i think it's going to be inflationary. alan greenspan said one time he was taking out an insurance
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policy by reducing rates one more time. >> expensive premiums, right? >> right. >> helped housing. >> really helped housing. but here, ben bernanke's worst nightmare is that he will wake up one day and discover that while he was at the fed, there was a major deflationary spiral. this man is a student of the depression. this is what he's done all of his work on. and he sees all this crisis and turmoil overseas, the potential of a hard landing in china and he just doesn't want to be the guy. >> it seems depressing the only firewall they have, the only insurance policy they have is pumping more liquidity into the system. >> we have no fiscal policy left. we've spent our treasury draw. and so there's only one policy mechanism left. that's the printing press. >> let's defend big ben. i know you like the taylor rule. if you go to the taylor rule now, i think the numbers haven't looked -- it would suggest a fed
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funds rate of negative 1.5%. it's changed a little bit. >> actually it's approaching zero now. >> it's come back that much. >> it has. the employment numbers have helped us a lot. the inflation numbers have helped us. >> let's dial it back for what it means for investors. what else do you like, commodities? >> love commodities. equities are the place to be. high yield right now is the place to be. commodities, i think, we still have to get through the economic cycle in europe. i think that we are entering a severe economic slowdown in europe. we have to resolve the issues in china. i do not think that -- i don't think we'd necessarily pass the bottom in china. >> the euro could also be lumped into the risk asset basket. and yet you've been on the record saying you think you're/dollar is going to go to parity. >> it has to. the only way out for the europeans is to devalue the currency to help the periphery. >> they're going to do that?
quote
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>> they have to do it. and i think mario draghi is right out of the script of the fed. he and ben bernanke and mervyn king all went to m.i.t. together. they were schooled -- >> and the similar types of lessons they thought. that's an interesting point. silver, you still see it going to $50. >> yes. >> gold, $3,000. >> easily. it's going to be -- >> a lifetime. >> exactly. >> which is about two weeks. >> the way you live, in the next three years. enjoy the rest of your life. >> scott, thank you very much. >> i'll be holding the fort down. >> herb, are you talking to yourself? what's happening? >> i was talking to our producers. i was looking at some names i want to discuss and just point out because what i like to do is take a look at some of the companies that are trending on stock picks. it gives us an idea of what
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people are talking about at this moment. some of the names that are in the news that are moving and actually getting attention include a.r.m. holdings because the company announced earnings. we have endeavor international up there for insider holdings. that's the only headline i could find. then we have michael kors, it's there because's michael kors. right now, it's hitting the conversation arena. and then it's just the great bull/bear stock she's there because it exists. zag international, they make cases for cell phones and things like that. earlier i was telling our producers, this is what i'm looking at and they were trying to get the charts in there. and they got them in. >> we thought you were going crazy, starting to talk to yourself out loud. >> i have also gone crazy. just ahead on "street signs," time for our "disaster du jour." today, it is not a stock but
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rather a hedge fund. a bunch of sports fans and not such smart ones either. what happens when you hit your wireless wagons sprint? you get radioshack? stock's been a stinker. has been for a while. time to exit or maybe time to buy radioshack? plus, tonight on "the kudlow report," a big florida primary night with senator marco rubio and governor rick scott. "street signs" will be back in two minutes. but there's one... one that's always eluded me. thought i had it in the blizzard of '93. ha! never even came close. sometimes, i actually think it's mocking me. [ engine revs ] what?! quattro!!!!! ♪
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polypore is going to have a competing plant up and running by the second half of 2012. the market is saying, okay, we're going to have some more competition come on sooner than expected. do not have the d.a. davidson note. maybe they referenced this. but we're talking about a third of the value of this name is being wiped out. >> gordon johnson of axiom capital initiated with a sell yesterday and a $26 price target. >> there you go. you tweet and we listen and sometimes get stuff done, sometimes. "disaster du jour" time. we're doing it differently today.
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darren rovell is going to tell us why sports is not exactly peanut butter and jelly. >> mark cuban started this blog about starting up a sports betting hedge fund. it made a lot of sense. we have more information about athletes and games than we do about a lot of companies on wall street. they have to report everyday injuries. cuban never took that up because of a lot of different things. but in 2010, an investment company in london launched a sports hedge fund called g galileo. the director told me at the time the hedge fund is now out of business, as its page on monday showed a "not found" error message. the initial investment in the fund was $150,000 with the goal of growing assets under management to $100 million by april of 2012. they told me the sports fund's projected rate of return would
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be 15% to 25% after fees which include add 3% management fee and a 30% performance fee on net profits. so i think the idea of, hey, these teams have to report who's injured who's not, who's refereeing, who's the officials in the game? you seem to know more every day about sporting events than you do every day about companies, at least this one didn't work. we'll have to see if there's something else that comes down the line. >> it's guessing. it's just guessing. >> but people like to think that there's skill. that's what gambling is about. >> that's what it is. it's just luck as opposed to skill. >> is the stock market guessing? >> no -- there is some guessing in there. but if you do your homework -- warren buffett didn't get where he got to by guessing. >> but sports bet betters say they do their homework. >> it's a crap shoot. >> is sports gambling luck or
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skill, twitter question? you have enough followers, man. the super bowl can be seen on nbc. coverage starts at noon. darren will be reporting from indianapolis later this week. cool gig. time for a little sunshine and also some barbie power. mattel sharply higher today. better-than-expected fourth-quarter earnings rising 14% on improved margins despite slower-and-expected sales growth. upping its dividend by 35%, increased sales in recent quarters aided by merchandise tied to movies and also the resilience in barbie dolls. the little doll that just will not die. still to come on the street, president obama becomes the headhunter in chief. meet the woman who asked the president to help her husband find a job. and the head of the biggest ipo since google. a company called felix investments in a controversy. herb on the case when "street signs" returns.
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the dow and the s&p on track to post their best january since 1997. the dow also pacing for its fourth consecutive monthly advance. shack attack, radioshack down nearly 30% today after a big earnings miss. the electronics retailer warning that fiscal fourth-quarter profits will be much lower than expectations. and call it the shipping surge. u.p.s. reporting today that domestic business has gone way up. profits here at home far outpacing those abroad. fourth-quarter earnings beating expectations. let's talk about cars, shall we? i believe we're going to phil lebeau right now who is in chicago. phil, are you there? >> i'm here, brian. can you see me? >> i can't see you. i can see me. it's killing the rate zblgs there we go. we're going to talk about what's known as the three-year pinch. it's all about the supply of 3-year-old vehicles that are out there in america, those that might ultimately be sold in the used car market.
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well, it is falling off and falling off substantially. deutsche bank says the supply of 3 to 4-year-old cars for sale in the u.s., that dropped and it's expected to spur new car sales. we'll explain why in a bit. here's part of the problem. look at the price increase in 3-year-old cars over the last three years. almost 3,500 bucks and pretty much the same thing when you look at 4-year-old cars. on the wholesale market for just over $11,000. how does it impact new car sales? the january sales rate is expected to be between 13.2 million and 13.8 million vehicles. the reason this impacts it, without that demand there, people in the new car market either go to new car or if they go used they look in the three to four-year range. if it's a tight supply, they end up going to a new car. the sales rate being the same as expected in december portends that we could have a pretty strong 2012. want to quickly take a look at
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shares of honda motor corp. the stock is down today. earlier today, the company reported its quarterly earnings for the quarter that ended in december and the annual profit outlook, listen to this, guys, they're slashing it, the expectation by 60%. and that's the kind of year it's been largely because what started with the earthquakes and then the thai floods. >> phil, thank you very much. appreciate it, bud. >> you bet. back to the shack, radioshack disappointing guidance, stock crushed. it's krading at march 2009 levels. let's bring in alan ripkin. thanks for joining us. comp store sales, not too bad. mobility sales up 16%. that's about the three most positive things i could find in the release. >> and you've taken them all.
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we can't think of many more things other than that. when you look at the company's balance sheet, as you said, they have nearly $6 in kashgs more than $7 in inventory on their balance sheet. while operating performance was very disappointing in q4 and one would have to expect the trends to continue for at least another two or three quarters, we don't think there's upside in the shares at these levels. >> why did you just upgrade it only a week and a half ago? >> certainly as brian said, we had a sell on it for 9 1/2 years. we haven't recommended purchase of the stock at any point, including the last couple of weeks. we certainly did not foresee today's -- yesterday's announcement. but with that being said, mandy, we felt with a dividend yield at 5%, we thought there was limited downside. >> it's interesting, you talked about the cash on the books, the
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cash flow, et cetera, it's gone down. it's always been out there. is this a buyout candidate, obo? >> anything is possible. i've been following radioshack for nearly 19 years. and over that time, there have been many rumors about radioshack. >> it's perpetual. >> it is. microsoft, dell, gateway, some of these companies aren't even around anymore. however, we can't in good faith tell an investor to buy shares of a stock potentially because of a white knight running in. you have to look at the fundamentals on assessing whether to buy or sell the stock. >> a retail turnaround is notoriously hard to pull off. thank you, alan. let's go to the floor of the nyse and get a quick check on what's happening with stocks. bob pisani is standing by. i want to talk about the january effect, bob. it's been a good january so far. >> it's sure working. >> absolutely.
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and it just does feel as if people are starting to feel we're due for a pullback, that maybe stocks are starting to run out of steam. >> that's a good way to look at it. it's been a great start. nasdaq is up 7%. thanks apple for that. i think your point is well taken. the issue here is what happens now? if you look today at what happened, we had three big companies reporting. they all beat and they all traded down very, very quickly. some of them have various reasons. if you look at pfizer for example, pfizer had generally poor guidance. exxonmobil, good refining numbers but the margins were weaker. u.p.s., the stocks's been up 24% in the last few months. so it's a little tired. we're not getting big earnings beats in the second half of the earnings season. that's a very big sinn issue. and the economic situation is a big issue. the numbers today were disappointing. the case-shiller numbers were disappointing. the consumer sentiment numbers were disappointing. the chicago pmi was disappointing. we've had great numbers in the
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last couple of months. now we're starting to get disappointing numbers. i think that's going to be a little bit of an issue. >> it would be an issue. i want to also ask you about volumes, it's like, hello, hello, hello, where is the volume? we might have been up over the course of january but still feels as if there's not a lot of volume there. >> when is it going to be over, talking about the volume? here's the bottom line. it's not coming back. it has not come back in january. this whole idea that we were going to get this big volume push hasn't materialized. proprietary trading desks have gone away. the high-frequency traders, the volatility has pulled back. they're not trading as much as they used to. and finally some people are still worried about what's going on in europe. you could pick one of those three or all of them and more than likely it's all of them. >> euro-sis! that's what we saul it here. europe hanging over our heads. bob pisani, thank you so much. up next a must-see herb
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called felix investments has stir add storm of controversy over its promotional sales tactics of facebook. herb sat down with the chief executive of felix investments today and he had a few questions. >> indeed i did. you've probably never heard of felix investments. but in the growing so-called second market for private shares and companies likely to go public, it has carved out quite a name for itself. buying shares in those companies from ex-employees and packaging them into private funds, grabbing a lot of attention. but it's the way felix and his partner promote those funds that just -- i just couldn't make sense of. like the one last week, in an e-mail from -- that cnbc obtained. this e-mail said, facebook will file on tuesday. we believe and price the ipo in may in the mid $50s and we believe the stock will be north of $100 when we can sell in november. the e-mail also says, you need to let me know asap because the stock is going very quick, i
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actually braved the snow and came into the office just to wrap this up. >> frank, that sounds to me more like a penny stock boiler room than a respectable broker dealer. >> that's your opinion. our customer are accustomed to the way we communicate with them. we don't cuff anything. we're very opinionated. we let them know exactly what's going on. they've become accustomed to us. that's the way they interact with us. if they don't like that, they don't do business with us. >> for all of its aggressiveness, felix has acknowledged an s.e.c. inquiry. and frank received a notice regarding possible violations of rules regarding sales activity in 2010. >> we were looking at the finra, we saw things about the wells notice. what was that all about? >> when finra and the s.e.c. ask
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questions, you have to answer them. it is a whole process and that process is still open. and so i really can't go -- >> the wells notice suggests that something is coming down the pike fairly soon. where is that process right now? >> it's open, so i'm not going to talk about it. but i do believe if there was anything the s.e.c. or finra saw that would be a concern for investors, fraud or anything like that, me and you wouldn't be seeing here. >> what you have, guys, is this interesting situation which really caught my attention because the company can't promote an ipo, the underwriters can't promote an ipo. but this is sort of like an outfit out there that has these shares and they're aggressively promoting it. they say what they're doing is they're sending the e-mails out to accredited and qualified investors which may be the case. i just think that with everything that's been going on, this adds just another level of intrigue and -- regarding second markets in general. this is sort of over here on the side, remember, it's a broker dealer on the side. >> which is a member of finra,
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sicp. when will we see more of this? >> we'll see more. we're going to be following it as it goes on. it's going to be interesting to see what or if the s.e.c. does anything here. they talk wells notice. there's a wells notice that's been served. but -- >> a lot of people at the s.e.c. might be too busy being on facebook. did i say that out loud? >> i think you might have. but it was quietly so it doesn't count. up next, we'll check the pulse of the real economy and jobs across america with our small business all-stars. plus, we talk to the lucky woman who got the ultimate job reference for her husband. find out if she's followed through on the president's request. that's all coming up. what makes scottrade your smartphone's
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i'm bill griffeth at the new york stock exchange. coming up at the top toft hour on "closing bell," it's all about metals mania. we look at where the biggest opportunities may be in the metals, both precious and industrial. all of them have seen big gains so far this year. plus, we'll get the inside scoop on the new $1.5 billion venture
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capital fund from co-founder ben horowitz. and here comes amazon's earnings. can the kindle fire, fire up the company's numbers? see you at the top of the hour. check this out, who says presidential town hall meetings are boring? >> why does the government continue to issue and extend h1b visas when there are tons of americans, just like my husband with no job? >> that was jennifer waddell of texas. she got a rather surprising answer from the president. >> we should get his resume and i'll forward it to some of these companies that are telling me they can't find enough engineers in this field. >> there you go. mr. president, the head hunter in chief, if you will. the president doing his part to get americans back to work one
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job at a time. jennifer waddell joining us from ft. worth. did you send the president your husband's resume? >> absolutely. we had it to him that very same day. google promised us that they would make sure that it got to the white house. and i have confirmed about an hour and a half ago that it is in the white house's hands. >> are you confident that he's going to be on the case? are you confident something will actually come out of this in terms of finding a job for your husband? >> if not, obama himself definitely, his people, i think if he weren't to do something, especially after so much media, that it could possibly look negative. so i am hopeful that my husband will get a job. >> you're in a growth area, right? texas is one of the fastest growing states. your husband was in the technology business, an engineer at a semiconductor company prior. >> correct. >> seems like it's the perfect blend. he's been out of work for a couple of years. what do you think the issue has
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been? >> correct. i think it's a number of things. texas, we were fortunate -- we weren't hit as hard as some of the other states. but it's still an issue. i think a lot of it is outsourcing and the cap -- with the question that i asked the president for h1b, the government is letting 85,000 foreigners in with h1b visas per year. and that cap has not been reduced. now, i don't think at all we should do away with it. but we most certainly should re-evaluate how many we're letting in and give americans the chance to get a job. >> so you think if that was changed and we didn't have so many foreign workers, you think he would have a job? >> well, i think it's a number of things. what i do believe in is if we have any avenue to look for jobs, if we have any crevice or corner, anything, i believe different parts can come
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together and we can create more jobs. so does it necessarily mean that he would -- that i believe absolutely he would? quite possibly. but i believe if we have anything out there that we can do to help promote job growth, then we need to look at it, absolutely. >> jennifer, how does your husband feel about it? i know he's not there, it's you, not him. you asked the president. >> right. >> i didn't see his name. i saw a couple of people with your last name, but most were women. and the two that were there were already employed. so i assume he's not on that either. what does he think about this? is he mad at you? >> oh, gosh, no, he's not mad at all. he has -- he's trying not to get caught up in the media storm. i think he will do some interviews. but we believe that the h1b vis a is being backed by corporations. and that wouldn't make him look too good when he's trying to
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look for a job. his name is darren. we don't have anything to hide, obviously. >> jennifer, thank you for coming on and telling your story. grass roots approach. >> good luck to darren as well. >> thank. >> hope he finds a job. >> thank you so much. bye-bye. >> the president also trying to give small businesses a lift by eliminating tax rates on capital gains while deducting costs of equipment. let's get a real read on the economy and ask people who actually run small businesses. the ceo of kimmy candy. from new york is co-founder of abc language exchange, where you exchange english for her. and the owner of half moon outfitters. elizabeth, we're going to begin with you. obviously you're probably not a capital-intensive business, i assume. abc lang wang exchange. >> no. >> when the president says this stuff, do you think it will
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help? >> we're a service industry. i have to give credit where credit is due. ond for us, what i found that's really affected our business is flash marketing. i haven't really found that any of the government initiatives have helped our business. i haven't seen any effect. definitely i've seen an increase in my business and i have to give credit to the flash marketing. >> what about you, joseph? do you think if passed by congress, these breaks on small businesses and investments would help your small business? >> yes, i think so. what we're doing is i'm very optimistic for 2012. you know, we've seen our normal time between december and february as a slow time for our industry, and this year we've actually kept all our employees working full-time through that period. and i've decided here about two weeks ago, that we are into an expansion mode. and i'm actually going to invest in some equipment, and put on a few new people here in april by the time everything gets installed. >> can i just follow up with
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that. when you say you're going to go into an expansion mode, would you also be looking to get a loan? we heard loan demand from small business is now at its highest since 2005. would that be something you would be looking at? >> you know, i'm actually doing that. i'm looking into it. you know, we've been pretty well self-financed for the last few years. when i came from offshore in korea, and brought our manufacturing back to nevada, in 2008, you know, it was -- we came into some tough times. and i wasn't really qualifying for bank financing. so we basically financed ourselves. but what we're doing this year is we don't need bank financing, but we're actually going to go work with the banks and through our accounting. we're in a position now i think we can qualify for some money. and i think we're going to get into the system. but, you know, we just have to keep working along, and making the gains we have so far. and i think 2012 for me is the year we're going to really grow. >> we hope so.
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beazer, your business is purely discretionary. people love to do this stuff. but it's stuff they might cut if things aren't good. you have a good read on how the consumer feels. from your view in charleston -- which, by the way, an amazing city" is the economy much better than it was a year ago? >> i think so. we had a fantastic 2011. truly, like we broke all records. it was a wonderful year. coming into december, december was the only hiccup, and that was weather related. if you're in a seasonal business and selling seasonal goods, the weather sa major factor right now. >> considering how mild this winter has been, is it having a negative impact on your sales? >> yes. it has. but that's coming off of very good 2011. we were up 14% overall. even with a down december. december's just such a big month that, you know, it feels like losing the game at the buzzer,
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so to speak. but in general, consumer demand is great. and the attitude is great. we're having a lot of traffic. and -- >> that's great to hear. where's all the doom and gloom? we're on the stock market channel. we have people coming on saying the united states is doomed. and europe's going to drag us down. you're running an actual business, you're doing pretty good. where is all the doom and gloom? >> i don't know. it's not here. here in charleston, and in our other markets, savannah, greenville, columbia, the atmosphere is really upbeat. and maybe there is a little bit of hesitation on consumer sentiment with regard to the election. but in general, it seems like, you know, it seems like people are sensing that things are turning around. and we sense a lot of optimism, and we, too, are going to be growing in 2012. always looking for owner occupied real estate opportunities. we're buying a van, i think today, which is the last day of our fiscal year.
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>> right. >> and we're feeling very upbeat about things. >> that's good. elizabeth, beazer, joseph, thank you for giving us a look at your businesses. >> we have a news alert. california controller saying this hour, the state will run out of cash in march if it doesn't delay payments. so the california controller moments ago coming out and saying, two months' time. i assume he means the end of march. we'll run out of cash unless we delay payments. if the facebook ipo happens, should get a nice pop there. it was a state i was born and raised in. state of california, fiscally run like greece, it's a train wreck. update on porter international. the battle continues there.
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let's get an update on poly fora. d.a. davidson downgrading it. lg chemical, a client of polypore, lg chemical, building a factory that would basically turn it from a client into a type of competitor. and the market obviously feels they would remove some of the sales in what's called the separator business. i'm learning all this stuff today. >> the company out with that statement, you know, just effectively saying they don't see any news that would cause their stock to react
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