tv Fast Money CNBC April 11, 2012 5:00pm-6:00pm EDT
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s&p locked in gains of 3/4 of a percent. the nasdaq above 3,000 with a gain of 25 points. that will do it for the closing bell. i will see you tomorrow. follow me on twitter and google plus. fast money begins right now. take it away, melissa. >> i'm melissa lee and here are the top trades. we are trading the ripple effects on coal, utilities and rails and how to make money on trend. googling for profits. day left to trade. ahead of the earnings report and a monster move on the news. fast money topes great money. bob we're to talk about his new deals from cone certs over the internet with a major tech company. live from the nasdaq market site, this is fast money and let's get straight to the decade
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low. this was on the close. this is an important level and having impacts for stocks from coal, steel, the entire energy complex. >> that gas is going to hell in a bucket. at the end of the day, this was good for usa. what is bad for the producers is also very good for a lot of the chemical names. there is a trade off this to trade. if you look at the substitution effect from coal into nat gas, people are coming back. we talked about the volume and you see the interesting opportunities. shut down by vhp. >> in terms of the input costs. 2011, nas gas about 25%. a huge lift. >> a huge benefit and we love the story on a more broad basis, but to have this cost benefit and to have it extend out
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further and up a little bit, but they are right here. >> we will look at the names as well. with nas gas being so low that, puts coal at a disadvantage. >> it's all about supply. if you see supply coming under constraint, you see names like alpha catching and walters. it's all about met coal. you wonder who has the biggest supply of met coal. those are the two names. the huge short covering in both names, but walter has been the name that was supposed to be the best breed. it has been pummelled. >> the price when you compare it to spring levels of last year. $200 a ton versus $330 a ton. the pricing has come down. are you focusing on it because it's harder to substitute? >> exactly and you are focusing
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on it because people feel as if met coal prices are in the process of bombing. you are a little bit more insulated with met coal and you are looking at names like wlt. >> interestingly there is a note a couple weeks ago saying you have to be careful saying who leveraged up. that would be arch as well as alpha natural. they look the most vulnerable. >> or morning due if you are a grateful dead fan. if you look at the places people tried to buy diversified, this is one of the best exposure. this is a copper producer and one of the reasons why i would own it, the other thing going on is supply and production being taken off the line. you have to look to see where they can respond. bhp, it may not be major, but it told you if the biggest and baddest is doing this, there is work for others. free port that a lot of people have knocked down for other
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reasons looks interesting. got knocked down and the indo earthquake is something people have overdone. all the other guys were up. free port was down. >> that was the reason the bhp headline caught the bit. you see it up 4%. you haven't seen a day like that in quite sometime. >> when you think about it, they are going where the climate suits their clothes. throwing the baby out with the bath water. i know the management. this is becoming really oversold. the company is trading about $6. they are trying to lead a buy out and nat gas has been cut in half, but some of these things where you have deal makers and massive holders increasing their stakes down here, this is a name that i am starting to look at. >> in terms of that, we have a graph graphic and there has
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been a change in the past month for certain of these stocks. consol is one and the short interest increased 46.5% in the past month alone. alpha and going short these names. not an easy thing. >> that's the problem that you are seeing. watch a lost these names squeeze out and they don't have the stomach for it. this light volume days, it's easy to get squeezed out. unless you are committed to this and it's a hard thing for me to say that they have bottom. it's in the process of bombing. you have to look at this. if you are squeamish at all, just dabble in the space and don't get committed. >> when it comes to met coal, there is substitution going on. u.s. steel saying it's exploring replacing the coal with nrt gas and that can reduce the amount by 10%. as companies are exploring ways
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to substitute, that's a head wind. >> another head wind. it can only get worse, it can be a recovery issue. not something where people bank all on these names. it's very risky. >> they have an options trade. >> today is the trade. >> i was taking a look at the energy. this is an interesting situation. when stocks are this depressed, you are concerned about things and one of the ones that wasn't mentioned is regulatory pressure as well. i want to buy these things on valuation, but i am concerned. they are close to fairly valued. a $34 price target and if you own them and try to figure uh how to squeeze more out and you should consider selling a strangle around it. if i was owning, i would sell the june 25 puts i could collect
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about $1.10 and sell the june 31 calls for about $1.10. collect $2.20 and gives you an opportunity to scale in at lower levels. you can have the stock put to you. out of the $20.20 you collect, you can have it hauled away. the real thing to look at too is if they remain in this area, you will collect $2.20 on the trade. that's a good yield in 66 days. >> i think you nailed it. if you think they are range-bound, those are good trades. you have to be prepared to buy the stock at that put strike and for those who are looking to average in, they maybe think they are range bound, those sorts of trades make a lot of sense. >> you can catch more "options action," follow the show on twitter and they concentrate updates. let's get more on the trade. bring in the commodities king and the author of the
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word-renowned letter. great to speak with you. you have never been enamored. >> it's interesting that we finally put the one handle, the obscene number and i waited for a long period of time. who knows where the bottom is going to be, but the most important thing to carry away from this is how good this is for the united states. how good this is for the north america. karen is spot on. the input cost of fertilizer has been cut by 80% over the course of the past year. it's probably not going to go any higher. it's going to the benefit of agriculture around the united states and canada. there is going to be great benefits to be derived there and think about who benefits from beyond agriculture. if you are a fleet owner, you will be making the changes to nat gas as quickly as you can.
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i have to imagine the fedex is moving 10 or 15 automobiles every night. we watched rick santelli show us how easy that is. the benefits to the count rye are just phenomenal and long standing. we have 400 years and we have only begun to look for it. >> what are makes the tush here? i'm a big believer food shortage trade. they have been friends of the devil so to speak. how do you make the call on the fundamentals when the trade has been working sideways at best and with a head wind for the most part? >> all you can do is cast them down on the charts and see when they break them. none of them have yet, but i suspect they shall in the not too distant future. one of the things i learned in the short 35 years is to try to understand one or two fundamentals that may drive the trade and wait for the technicals to turn around. they have not turned around yet, but they shall, especially in
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the fertilizers. >> what do you make of the current spot price versus the forward curve and where do you expect the disconnect to happen? >> the term structure of nat gas is what's happening in the term structure in wti crude. there is plenty of it around and crude or nat gas is bidding for storage. you have one year trading here and it allows for continued drilling and hedging. it makes it difficult to belong. you know you will have to pay up. where are the implications? i think you are spot on with looking at the fertilizers. when you talked about that at the beginning of the show, i think that's probably the best and most redly understandable trade and it combines what's happening in nat gas to the benefits that will accrue.
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that's the real trade. >> i want to switch gears and the trade you are bringing to us today. you are long against the euro? >> yes and that's a great idea. the fundamentals and the circumstances and the fact that the world has to come to canada for stuff for wheat and nat gas and crude oil and tongueston and all the things that canada has and the political circumstances i think you turning in canada's favor. we all know about the circumstances that are prevailing in the euro. i want to err upon the side of canada being short of euro. all week it felt as if the euro rally from 130.50 and all it could get to was $131.50. it can't sustain itself and probably to be sold. sell euros by canada. the risk is probably no more
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than maybe one or two euros at the most. on the downside, you will probably pick up 15 to 17. >> great to see you. >> good to be seen. . >> i thought he was going to say he owned it in yen terms. he loves to at that. >> world renowned dennis. coming up, will google redeem itself after last quarter's earnings miss ahead of its report tomorrow. stay tuned. [ male announcer ] this is the at&t network...
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report first quarter earnings and they are looking for big numbers out there. joining us now with a preview. john? >> welcome google. this is one of the slower quarters. revenue of 8.1 billion, a far cry from the 10.6 billion in the holiday quarter. they are looking for $9.65 up from $9.50. margins are expected to hold steady at about 33%. thing i keep hearing is that analysts will be looking for cost per click. that took a dive and they said it was driving more clicks. they are lower revenue clicks. then you have the question of growth versus cost. assuming the deal goes through in the current quarter, they will have a massive cost control. they have never done anything like it and they want assurances that they will not play with
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their food. google is looking to invest money and talent along with the warning. there many questions. >> just yesterday we were talking to brian pits and he said cost per click will be less and less important because there is so much more revenue on the sides of the screens. is that rationalizing this as not important and when in reality wall street focused like a laser beam on this? >> wall street is still focused on this. the search is google's core business and they get a lot of revenue from there. they don't want to see the metrics moving in the wrong direction. without an explanation that they believe. the explanation last quarter, i don't know if it holds up. they tweaked a few things and made it sound like a short-term issue. they want a fuller explanation.
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>> the back of last year and the disappointment and last quarter, we did see a huge move in the stocks. when you look at the options, what is the implied whether we are seeing up or down. >> we are seeing a move around 6% in terms of manage tud, about average. that's mostly one of the things that interests me. with so many unknowns, i almost would have expected that that number would be higher than it is. are. >> a lot has been said about cost per click, but if you x out the cash that we will get value for and this valuation that extremely compelling and tremendous market share. >> it's fantastic. the dark hollow that has been to the clicks and even concerning acquisitions, mmi and what not. the eyes of the world are on the
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core and emerging businesses. the broadband and the android are doing exciting things. they have not shown that. this stock under performed and despite the fact that it had a big run from late january to february. this stock is mired in value-trapped territory and has been that way for a long time. the peers are continuing to show. we will talk about nokia. that part of google's expansion is something that is not set in stone. >> as far as price action, stock is down on the year versus the nasdaq. to me there is something slightly alarming when you have the wall street analysts. they are positive. 35 buys and zero silence. they have 19% earnings growth and it tripped under 15 times. there is a disconnect between what investors are expecting and wall street is expecting. that can set up dangerously as we saw. last week with san, it was a
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stock flying under the radar and massively under performing. >> android is gaining traction more than we think? >> yes. i would point out here that in nokia, you have a software guy with a hardware company. you are about to have that in google as well. you can lose massive amounts of money in margin in a hardware very quickly. you just hope google has things in place to prevent a nokia situation from happening. >> i'm sure we will be seeing you a lot tomorrow on this show. joining us from silicon valley. this brings us to the poll of the day. can google get their groove back. another big miss or perhaps a surprise to the upside. logon to cast your vote. we will bring you the results next on the halftime report. plunging after the company lowered the services outlook for the quarter. sighting dynamics to negatively impact and india, china and the
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middle east. that is presicily where they are. >> that's the hot bet. dire kofl time for the guys. when people talk about what's going on and the exciting thing is that this is their new 900 phone. it's a phone that is able to give a lot of the same upper end features as the iphone. really these guys are not doing it in the markets where they are supposed to. they are the largest smart phone producer in the world and when you talk about the mideast and definitely in india and definitely in china, this has been the hot bed because the price sensitivity is very, very important. if they are losing ground, they are losing a lot. this stock is lost and at times we called this my girl. she no more. >> officially broken up. no hope for her. >> she hasn't been for a long time. this is not me selling the bottom. i don't have any interest. i am encouraged by the microsoft
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aps development kind of business and that is mostly benefiting microsoft. >> standing on the power world at your manned. we are almost done with these or no? >> if we are talking about the ability to weed grateful dead songs into the show, we have just begun. >> they are talking about the competitive dynamics, it's android giving the phones away for free. we keep hearing this about apple and what they are doing in china and the market there. maybe the low hanging fruit has been pick and there so many people who can afford those sorts of phones. >> they are giving away because of the software bug. it costs $100 for the phone. they are giving a rebate because it has a software glitch. >> it goes to show you when someone describes their own business. >> you can't get the imagery
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back. >> i read this on cnn. you went to all sorts and they are selling the lumias. they asked them, me about the lumia. here's what one said. the windows phone is all right, but it's no iphone. they were pointing people in the direction of the iphone instead of the lumia. >> the upper westside, those people will be buying iphone. >> they are your people. >> they may not be. >> more and more people are buying iphone. no one wants the second choice. in nokia's experience, no one wants the 18th choice. jumping back quickly to google, i would be remiss not to point this out. with the headlines and apple on an interday basis, it took down all of the high flyers. priceline, google and amazon. everything fell off the cliff.
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grown that's the tell. if there is a skiddish market at all, you will see all these to give it back. i may be born cross eyed, but apple's sell off in the market strength is an encouraging sign. we start to get the new leadership. we haven't talked a lot about the market itself. everybody felt like they were pressing the replay button. it is not. a lot of people thought there would be a shallow pull back and today's price action was very -- >> if it was a bigger scheme of things, you are 100% correct and today with the headlines, it was ans ailated event and they were more concerned with not falling into the abyss. it was a one off. >> in terms of market leaders, microsoft was one of them and feeling a little bit of an impact from the nokia warnings. >> microsoft made their bed with new york that ya and it's a risky proposition. when the market was raging,
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microsoft was down about 8 and 1/4%. january 25 puts were active and enrolled out of the june 28 puts and bought the january 25 puts. that's a good ways away. we have been talking about it for a while. this was up almost 30% at one point. windows 8 product cycle was in the stock. a lot of people are getting nervous here that their mobile bats with nokia will run dry. >> that's note a giant part of the business and they have a tremendous franchise. >> it is. think about what we talked about with google. why were the prices and all this stuff, mobile is where search is going to. if google can't monitize search and they can't monitize the search. >> for they are having problems and the margins are much worse. >> they are tremendous.
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i don't see google -- >> if we are making this transition from the desk top notebook world, 3 1/2 inch devices and the metrics are different, we may have to revalue the companies going forward. >> good to be. coming up next, going shopping for retail stocks and up next, name that is say buy right now. what high end name they think is heating up. later, the founding member of the grateful dead is here with an announcement you won't want to miss. much more straight ahead. #
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spain's economy could go the way of greece and is going the way of las vegas. reportedly willing to spend up to $35 billion to create a mini vegas in barcelona or madrid. seems like an interesting contrarian build out. >> a fight between barcelona and madrid over who will get the casino. 24% unemployment. people look more upon what he said. they will give that more credit than what he is doing. if you look down the numbers, they have 4.9 and sing more. 1.7 in vegas. whoever classifies them best in group. they are missing the action. they lock at them as a vegas play. 3.8 and 1.5 in vegas.
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nowhere near what you are looking for in growth. >> the only thing i would say is there is a ton of money in spain. their issues are not necessarily a poor economy. the reason why i am encouraged is these are governments that had the ability to get money out of their people. people may not like and go back to today's market action driven by the fact that the central bank made enough comments that they are ready to support spain and through the ability to buy bonds from spain. getting back to spain, this is a very troubled economy. austerity will be with them for five years and there seems to be high conviction and political follow-through. i don't know why you are going there for growth. you have monte carlo and other places where people can gamble. this may be an idea for a one-off shop. i don't think there is a place for a new vegas strip. >> shopping for retailers. our next guest said increased spending puts premium stores in
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fashion. let's bring in the research analyst who joins us from chicago. it's great to have you with us. i wanted to start off with macy's that you initiated. that say contrarian call and there is so much love for macy's. probably the best 1 and why they regard to capture market share from jcpenney which is going through a turn around of course. you did seem bullish on macy's and saw upsides to the same numbers. what makes you cautious here? >> the title was most improve and well-embraced story. macy's came out of the recession and they have done a good job and executing a good playbook. everybody knows it. most of the banks have the stock and most investors get it and this is the momentum play. we are looking for the next leg up to get more bullish on the stock. >> let me ask you something. in the competitive landscape.
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how do you view the jcpenney turn around story and i think you said it was neutral? >> they brought in the visionary from apple to do drastic things and you don't know what brands will be sold in the stores and you don't know what they will look like until back to school time. it's hard to say this is a really winning long-term strategy for us. it's a smard approach to an everyday value and something that has been tough for the department stores to do. time will tell. they will latch on to the strat strath gee. >> second half of the year you are look for traction in the turn around. >> they will start moving in to be part of the new strategy. >> you have a one-buy group. nordstrom. >> we're cover apparel and branded names. one story we like is ralph lauren and the high income
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consumers have a better bank account and they are out there spending. from 03 to 07, we highlighted that economy. they outcomp bide about 500 basis points. this is a good economy when jobs are getting better and they are feeling better about their budget. for nordstrom to trade up to our brand for the other brands you have gone to, it's a good economy to them. thanks a lot. >> joining us. do you agree with this? i know you don't agree on macy's. >> i sold it too early so i generally agree with him. jcpenney, i can't get on board. >> you cannot? >> nordstrom said people continue to buy what has been working. starbucks and mcdonald's and domino's pizza. i know i am throwing in breakfast pizza, but when you look at somebody like a macy's, whenever you speak to anyone with boos on the ground, they
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have so much leverage over the suppliers and it's nothing but a buy signal. they don't have a negative thing to say. they manage the square footage better than anybody else. the overlap will benefit because they have the most stores in the same locations. that's a huge factor. they have a trade and sacks is fully valued here, but again for the last 12 months or at least post the real bounce out of the 2009 trade. to get luxury trade working, if we are getting a stronger economy, the theme attic trade. you start to see the names start to be sold, i think sacks valuation, that's what you do here. >> coming up next, the moment you have been waiting for. the founding member of the grateful dead joins us with a special announcement on a new deal. find out who he is teaming up
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with and get the new details on the venture straight ahead on fast. [ male announcer ] how do you trade? with scottrader streaming quotes, any way you want. fully customize it for your trading process -- from thought to trade, on every screen. and all in real time. which makes it just like having your own trading floor, right at your fingertips. [ rodger ] at scottrade, seven dollar trades are just the start. try our easy-to-use scottrader streaming quotes. it's another reason more investors are saying... [ all ] i'm with scottrade. how math and science kind of makes the world work. in high school, i had a physics teacher by the name of mr. davies. he made physics more than theoretical, he made it real for me. we built a guitar, we did things with electronics and mother boards. that's where the interest in engineering came from. so now, as an engineer,
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>> bob we're is known as a member of grateful dead and go well beyond rocking out on stage. he joins us along with bob we're and partner from tri studios. take it away. >> i'm here with bob from the grateful dead and president of tri studios. you want to have a company meeting right now and get to that later. >> whenever they are looking for another drummer. i'm ready to go. >> you talk a good game. first we want to lay the ground
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>> you bet. we have and the broadcast facilities. >> we have the most capability on the net. >> we send out audio for instance or video that -- the video is 1080. we can send out. the audio is right now we are only limited by the internet. what it can handle and deliver. we can do much better and as the standards for the internet. >> now people can give me and
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they used to go to tri studios and now there is a different portal going on. that makes sense to us. we partnered with a boutique advertising agency. we are giving brands the opportunity to be patrons to the yard and bring as muchas the deals and venues around it's free to the amusement. >> the problem is the internet has not been good to the artists and no revenue model for making it so that people can get paid for doing the music online. >> that's correct. the only way fans are making money are through touring or merchandise sales. we are offering an opportunity to monitize and performance and
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it's not directly through the consumer because they are not ready for pay per view, but it gives good exposure to an audience and allows brands to reach a vast audience. >> they are known for being business innovators as well. they are the first to build your own label. you made music free and that turned into the idea that turned into huge business. right now, is this idea a business concept or as a lover of music and a guy that spent his life trying to make it better? >> you know, with art, your tools are important. the grateful dead was always interested in finding the best tools to make the music through.
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this is just a logical extension. we want the best quality representation of the music that we make to be available. you know, it used to be back in the days of analog music that music was enjoyable to listen to. now music is not so enjoyable to listen to as it used to be because of the digital era. but the promise of improving the standards is here now. if we were to take the model of the gaming industry for instance, they have improved the standards immensely.
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we are trying to push through the whole music side of entertainment. further up so that it is a greater quality experience. >> is capital running away from music, not towards it. that's one of the problems. not as much is needed for music. >> because of the internet, you can put up your own song and own music on the internet. have millions of users see what you do. getting back to tim's question when it am cans to the patrons, are you going to be making money off of this venture or is it for the love of the arts? >> in true grateful dead fashion, there is value in receiving an unlimited budget. they have always done that and we are fining that value. anything can post anything on the internet. we know that. at a certain time, you want the highest quality. we believe people are not going to stand for the lower qualities
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when they get to a certain level. there is a way to monitize this. there is a social media component where the audience connects women have live twitter and facebook feeds. our last stream was to 182 different countries at once. there was a way to connect that. there was a way for brands to reach to their consumer and engaged consumer. bring them what they want in attempts to monitize later. >> i didn't know there were 182 countries. >> you mentioned social network. in some ways it has been dead for a long time. you created one of the first viral social networks in a lot of ways the world over. in a lot of ways as the grateful dead or dead fan, you have a lot of experience. when you mention this, the opportunities are endless, especially when you think about it. >> when you watch tri, they stream twitter and facebook on the side. people are talking to each
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recollect while the concert is going on. >> they can call songs on and they answer questions immediately and get interactivity and they bring it through skype where you can see parties going on. we will be able to see the audience. >> can we get tonight's set list? >> tomorrow night. >> tri, thanks so much, bob we're, founding member of the grateful dead. nice to speak with you. >> can you replace me as rhythm guitarist in my band. the other guys want me to ask. >> he has other things to do nowadays. much more straight ahead. this at&t 4g network is fast. hey, heard any updates on the game? i think it's final seconds, ohh, down by two, shoots a three, game over. so two seconds ago... hey mr. and mrs. harris, where's kevin? say hi kevin. hi. mom, put me down. put...the phone...down. hey guys. did you hear... the choys had their baby? so 29 seconds ago. well we should get them a gift.
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[ choys ] thanks for the gift! [ amy and rob ] you're welcome! you're welcome! [ male announcer ] get it fast with at&t. the nation's largest 4g network. at&t. ♪ at&t. or creates another laptop bag or hires another employee, it's not just good for business, it's good for the entire community. at bank of america, we know the impact that local businesses have on communities. that's why we extended $6.4 billion in new credit to small businesses across the country last year. because the more we help them, the more we help make opportunity possible. you know, typical alarm clock. i am so glad to get rid of it. just to be able to wake up in the morning on your own. that's a big accomplishment to me. i don't know how much money i need. but i know that whatever i have that's what i'm going to live within.
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>> you have been one of the unlucky investors caught up and you may want to rethink your strategy. buy equities. let's bring in the senior analyst to explain. ron, this is double negative. don't short bonds. would you buy bonds? >> when we were on and the final trade was to buy the flattener which was taking advantage of
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the drop in interest rates can which was where they were. five reasons not to short bonds. we have seen what? the world is thick as a brick. the brick countries are not doing well. they are slowing down. we have spain infecting europe and the possibility of contag n contagion. we could have another as we did in 2010 and 2011, a stock market that buys bonds. real risk is ben bernanke is not telling you that qe 3 is off the table and he has not said that. you don't go for the bonds until bernanke and dudley find out. they will get crushed in that trade. starbucks and mcdonald's and ibm. >> scale in. if we have a sell off in the
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spring, take advantage of lower prices to buy the caps you love. >> ronnie, always good to see you. ron insana, much more fast, straight ahead. [ female announcer ] it's time for the annual shareholders meeting. ♪ there'll be the usual presentations on research. and development. some new members of the team will be introduced. the chairman emeritus will distribute his usual wisdom. and you? well, you're the chief life officer. you just need the right professional to help you take charge. ♪ yeah, scott. i was just about to use... that's a bunch of ground-up paper, lad! scotts ez seed absorbs and holds water better. it's guaranteed to grow grass anywhere, even if you miss a day of watering.
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>> coming up next hour, cramer is looking for the property in the pipes. his week long hundred dollar for growth continues in a deal that could help you with the volatility. final trade is next. zap technology. arrival. with hertz gold plus rewards, you skip the counters, the lines, and the paperwork. zap. it's our fastest and easiest way to get you into your car. it's just another way you'll be traveling at the speed of hertz. the teacher that comes to mind for me is my high school math teacher, dr. gilmore.
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