actually, on that news i would be a buyer of the group. >> good. interesting. bk? >> buy the dollar here. everybody's talking about currency problems. go with the flow. >> steph? >> i think cvs. taking market share from walgreens. >> "power" begins right now. "halftime's" over. the second half of your trading day begins now. welcome to "power lunch." the dow down today and oil down again big today. take a look at the two-month chart. it speaks volumes as you can see about predictions for several parts of the economy. it's not a good picture. we'll focus hoeavily on oil and the economy today. this is dan fuss. without a doubt, one of the hottest bond managers in the world. we'll get his advice on keeping your money safe even if the oil prediction is spot-on right. and the president an the banker. you know the man on the left.

the one on the right is the president's biggest fund-raiser but now his bank telling him to cool it. find out why coming up. my partner tyler is in chicago at the morningstar conference. we start with brian shactman at the nyse. >> what a day, sue. thank you very much. the market taking a hit. word on the street is a note from goldman sachs telling clients to short the s&p. some other reasons they're all negative. a little bit off the lows in the dow but 150 points good for more than 1%. nasdaq more than 1.5%. quote, we are recommending a short position in the s&p 500 with a target of 1285. roughly 5% below current levels. made the call with the lower than expected philly fed index. short the s&p today you're up more than 1%. if we take a look at those numbers. almost 3% on the leveraged etf

sds and the dog, one of the best in the business, short the dow 30. joining me on the floor, joe greco. we have economic numbers here. the note out of goldman. we got the spain, banks need. when's the most important thing you're focused on and people at home should be focused? >> you need to put those together and build a story. you know? this morning we were talking to clients as we said looks like heading lower. that's softening up the body. goldman put that is s that in a. spain not a surprise there. people need to focus what's going on over here and less europe because that stays at the looming gray cloud. >> where do we go from here? numbers today confirm qe3 and as a trader moving forward, what are your thoughts? >> they weren't bad enough. philly fed came in pretty

abysmal and not bad enough to spur action after saying yesterday we'll continue it if necessary. not bad enough. the market needs to see a retracement and really test the lows. they have said they want to detach themselves from the market and not lead the markets but the economy and we need to see that strong move lower for them to be involved. >> joe greco, appreciate the time. oilt ta oil taking another blow today. courtney reagan, took a good day down there. >> there's action here. oil, start here with the options, oil trading below the $80 a barrel mark and testing the new levels. new key support level is 74.95. if we close in the seven handle you could see that hit before too long and really it's that fundamental picture of demand to the left and supply to the right

and that's the story here. crude stockpiles seeing the highest levels in more than 20 years and we know that the global growth fears aren't going away. platz saying that china demand grew in may for oil and traders paying more attention to the pmi numbers out of the region opposed to that and brent sliding to the lowest level since 2010. the strength in the dollar, weak in the equities, not helping the oil prices. we continue this slide in to the close. remember, we are not that far away from the oil close today and i'm joined -- i'm going to wrap back to sue i understand. i need to head back to sue. >> thank you very much, courtney. all right. the housing market is squarely in focus, of course. diana olick is live in washington covering that part of the story for us. hi, diana. >> reporter: that's right. sales dipped in may up over 9% year over year. this as mortgage rates hit another record low.

3.66% on the 30-year fixed according to freddie mack. what's the problem? supply. too little if you can believe it. the number of homes for sale dropped 20% and the biggest supply is short sales that investors are hungry for and can't find them now. sales below the 100k line fall over 2% over a year ago and between 250 and 500k shot up nearly 29%. they're still at very low volumes and that served to totally skew the reading on home prices. median price in may up nearly 8% annually and that's entirely due to the types of home that is are selling. it is like anybody's home price shot up 8%. sellers, why aren't they putting the homes on the market? afraid to or in a negative equity position and can't get out of the homes and realtors with a note saying some sellers seeing prices stabilize holding on thinking they get more equity out of the homes and very little to buy. more on the blog.

sue? >> i'll take it, sue. actually. diana, thank you very much. we're expecting president obama to make a major statement about student debt. without congressional approval, rates will double on july the 1st. right now, $6 billion earmarked to keeping debt low. they want a deal and blame the president for refusing to make deals and making speeches instead of talking. and front page of "the new york times" says a biggest fund-raiser is told by the bank ubs to lay low. suzanne craig is a reporter live in midtown. suzanne, if he had done it qu t quietly, would it be better? is he going to be out of a job? >> no. i mean, definitely robert wolf is not somebody with a low profile and didn't play in to the hand when the edict came down.

ubs was concerned not only his profile, there was all these arguments naming him the president's banker and as well just concerned about being closely associated to one candidate. he's one of the president's big fund-raisers and going in to an election. no secret he had detractors on wall street and came to a head amidst autoll of this. >> what makes it such an issue today? more active? closer to the election? >> we're getting closer to the election. and in april, in the spring, there was a flurry of articles and then at the same time internal politics played as much a role here as national politics. and he found himself with a very high profile and a lot of -- i think there was some issues with that within the bank and then at the same time robert mccann had come over to ubs and the star was rising, a strong personality

within this. and the friction created a problem within the bank and mr. mccann wanted to move to make sure it's codified in a memo sent down from switzerland. >> all right. let's take a look at the statement from ubs. i believe we have on this particular issue. all employees of ubs are subject to specific guidelines when speaking to the media. they want to control that and in our business we know that because we have to go through the guys all the time. suzanne, thank you very much. we're tight on time but we appreciate it. back to you, sue. >> thank you, brian. maria shapiro argues money markets are a threat to funds and made the argument in testimony before the senate banking committee. she said reforms put in place since the financial crisis are not sufficient and she joins us now for an exclusive "power lunch" interview. miss shapiro, welcome. pleasure to have you with us.

>> thank you. >> let's start with the money market regulations as they stand now. you think they pose a threat to the financial system. is that because some of the things put in place after the '08 financial crisis to kind of underpin those money markets have expired or is there something more to it than that? >> no, not at all. i think money market funds are great tools for investors but some structural weaknesses to address. in 2010, we took a lot of actions that really bolstered the resiliency of money market funds so they're more liliquid, more capable, more transparency of holdings. they stress test their portfolios, all of those changes that we made in 2010 really some of the first changes since the financial crisis by any regulator have been enormously beneficial and then helped money market funds weather the euro zone crisis but they didn't solve for a problem we still think we should be concerned about and that is whether our

money market fund could break the buck as a result of a sudden, significant credit event, as the reserve pry their fund experienced back in 2008 when it broke the buck. and then whether there's the potential for a run when the buck is broken. and so, we want to explore some options for potentially making money market funds even more resilient, even more capable of withstanding the pressures of these very, very volatile credit and financial markets that we live in today. >> there are two proposals that you highlighted in your recent testimony. one would be to use a floating net asset formulation and then perhaps limit redemptions or fees on redemptions. can you explain how you think that might make the money market more secure? >> sure. well floating net asset value is simply a recognition they're investment vehicles.

they're not bank products. they don't always have stable $1 value because the assets in the portfolio fluctuate in value. so, while your price as an investor is always $1, and when you redeem your shares you get $1 under normal circumstances, the value of the fund may actually be something less than $1. and so, having a floating net asset value is merely a recognition of the actual value of the portfolio securities that underlie that money market fund so that seems like a pretty logical approach. but we recognize our operational and other issues with respect to getting there and that state and local governments, for example, very much value having a stable value product. >> right. >> that they can use for cash management purposes. so the other alternative would be a capital buffer that would require money market funds that want to maintain the stable $1 value to have a small capital

buffer that would absorb the day-to-day losses and gains that are the losses obviously in particular that are experienced in money market funds. coupled with the potential for some restriction on redemptions if a shareholder goes to redeem all of their shares in that fund they might need to pay a fee or they might need to wait a certain amount of time because they could get all of their assets back out. the value of that is that it means that early redeeming shareholders, likely institutional shareholders who move more quickly, like a small business or retail share in the losses that are in the money market fund. they're not all concentrated on those slower moving retail investors who are left at the end of the day. >> speaking of retail investor, you gave me the perfect segue. thank you, madame chairwoman. in the ipo process in the face of facebook ipo, do you think that the ipo process as it stands now is fair? or given what we saw with

facebook, do you think it needs to be reformed? >> i think it raises lots an lots of issues for us. we are looking at them, a broad array of issues and i think the ipo prosisz has probably worked pretty well for many years but that doesn't mean that we shouldn't take this opportunity to step back and look at whether the rules and the regulations that are in place need to be updated to look at whether the technology and the mechanisms through which people participate in the ipo process need to be looked at and so i think there's a lot for us to do over the coming weeks as we explore all these issues from pricing to technology, to access to ipos generally. >> you brought up the pricing issue. do you think or does the commission think that the lead underwriter should have either sole discretion or as much discretion as they currently have now in the pricing and size

of the ipo? >> the commission hasn't taken a position but it's something to look at as we really review all aspect of the facebook ipo and frankly other ipos, as well, as we seek to keep up with the evolving markets and market structures. it is incumbent upon us to make sure at the end of the day these markets work for public companies, they need to raise capital to create jobs, to build factories, to manufacture products. and that they really work for investors who have to make rational capital alocation decisions and we want to participate in the markets in a way that allows them to feel that they've been fairly treated along with every other investor. >> a lot of investors we heard from specifically in the facebook ipo and not only in the facebook ipo, others in the past, they feel as though the retail investor does not get a fair shake, the pricing

discretion of the lead underwriter basically not fair to the little guy out there. do you agree with that? >> i don't know that i have an agreement or a disagreement with that at this point. it's something i think we need to study very carefully. and make sure that we understand all of the facts and implications of the existing model, as well as what would be the ramifications of changing the pricing model. >> one of the other issues was the lack of shared research with the retail investor and i don't know what rule that falls under. it certainly wasn't anything not usually done in other ipos but the retail investor this time what we heard any way felt very much out of the loop. do you think that in future ipos that research proprietary to the lead underwriter or others should be shared with the retail investor? >> well, again, that's another one of the issues broadly in the facebook inquiry we are looking at. >> let me turn you to jp morgan

very quickly if i could. >> sure. >> was the disclosure that jp morgan gave to the scc in terms of the var model sufficient for you? do you think they gave you enough disclosure or not? >> we haven't reached conclusions about the disclosure. i have said as recently as this week when i testified on this issue because we're not jp morgan's primary regulator, at least of the institution or the parts of the business of which this trading took place, our primary focus on whether the disclosures accurate and timely and whether the financial reporting is appropriate and whether their controls over financial reporting are appropriate so we haven't concluded one way or another yet but these are the articles of particular scc focus. >> given the fact of risk management over the years is extremely good, the question was raised by both the house and the senate committees of whether jop morgan and other large banks are simply too big to handle the

disclosures, handle the risk models frequently used in the market. what's your thoughts on that? >> i think risk management is really the lynchwin to so much in the large institution and has to be superb and there's really very little room for it to be anything less than fully resourced and, frankly, listened to by senior management, traders and others. so i think the focus on risk management by the primary regulator in this place is an appropriate one and if you saw the testimony you know they spoke, the head of the occ spoke some to that particular issue. i think for us the issue is i think as regulators collectively whether we can have a level of comfort that risk management processes and systems are adequate and that senior management and the board are paying close enough attention to it.

>> all right. miss shapiro, thank you for spending time with us. we appreciate it very much. >> thank you. ty is over at the morningstar conference in chicago an i'm sure her statement specifically about the reform of money markets was listened to very closely by a number of big managers there, ty. >> that's absolutely true, sue. it is a top topic and yesterday on a panel i moderated there's disagreements of individual companies on whether on the one hand the regulations are adequate as they currently stand or whether new ones need to be put in place. but it is a real hot button topic here at morningstar's annual mutual fund conference. we'll be talk to some of the managers coming up. next up, just how much damage the facebook ipo did to investor confidence. you heard sue talking about it a moment ago. ice on the tomato field? is that a myth?

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research group tab firm say it is failure of the facebook ipo is almost as bad as the flash crash for investor confidence. almost a third investors say the

confidence in the u.s. stock market is weak. half say ipo teblg glitches are a major concern to them. i'm sure they're talking about that in chicago. that's where ty is with people greatly impacted of market confidence or the lack thereof, right, ty? >> oh, absolutely the case. "power lunch" live from the morningstar investment conference here in chicago. joined by the manager of the $60 billion templeton global bond fund for franklin templeton group. there are more stars than in the milky way. your fund if i had put $10,000 in it 10 years ago, that would have grown to $27,000 in a bond fund. that's nearly a triple. how did you do it? >> should have put more than 10,000. >> i wish i had. >> combination of things. we have a pretty big global platform under which to operate under and looking for opportunities in currencies and sovereign credit and beyond the big markets.

for example, really focusing on the opportunities in asia and looking away from the home country bias that we often have here it issing in the u.s. >> i heard your presentation here yesterday. let's talk a little bit about europe. one of the this ings that you said and made news with yesterday was your view that the european debt crisis is a blessing in disguise. what do you mean? why? >> politicians only act with a gun to their head and there's a big gun to the head of european policymakers and so it's instilled a degree of urgency we haven't seen for a long time and seeing changes of government in italy. the monty government is coming in that wasn't possible a year or two ago. the spanish policy makers are moving forward with bank capitalization, moving forward with controlling the regional finances and now finally the germans and the french are beginning to talk tangibly about what a fiscal union actually means. >> you think that should happen? >> it has to happen. >> has to happen or the euro

isn't going to survive basically? >> yes. >> you are not buying -- don't own european bonds right now except for ireland. why ireland? >> i think ireland is really a template about what the rest of europe should do. because ireland addressed the problem of growth and austerity. >> austerity? >> yes. >> you can use that word. >> i will. and that means you deal with the finances. you have to control total debt levels and austere budgets and you need growth-enhancing policies. not just spending money to get growth but having labor markets are that are flexible. if the rest of europe could follow half of what ireland did, i think we would be a long way to resolving this. >> the labor market issues in italy and greece have been really one of the things to absolutely been sort of constipating the process there. one of the fascinating things you said yesterday in your presentation was that you thought in terms of fixed income investments that now was the

time to stay away from dollar-yen-euro related products and move in to ones that weren't. that basically means emerging markets, asia. what? >> basically, looking for countries that don't have huge fiscal indebtness problems and countries growing an higher interest rates to earn return and that's parts of latin america, asia and eastern europe. >> singapore, korea. i can't do the research myself. i need a fund to do that. you talk about the dollar. you worried about the dollar? what happens to the dollar over the next five years? >> i think over the next five years the dollar declines a fair amount against many emerging market currencies for the reasons mentioned earlier. now against the euro and the yen the dollar looks reasonably attractive. it's worse in europe and japan.

>> we saw you when you won the 2010 fixed income manager award. keep up the good work. >> thank you. >> thanks very much. now let's go back to brian. >> thank you. next up, on cnbc, investigations protecting your money. >> what made you think that you could get away with ripping off the federal insurance program? >> i'm sorry. no comment, sir. >> no comment. fraud on the farm. when we come right back. ♪

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if your bank makes you miss out, you need an ally. ally bank. no nonsense. just people sense. gold prices about to shut down and gold prices about to shut down and lookingality almost 50 bucks to the downside, courtney, at the nymex. what is going on? >> what a slide today. a trader explaining a stair step up with gold and on an elevator on the way down. we are riding that elevator. broken through two key technical levels today. so next up is 1550. that's what traders are eyeing and the technical selling exacerbated the earlier losses starting with the factory numbers out of china which then was also accelerating losses we saw yesterday out of the fed and what the fed said and we want to pay attention to silver, acting like an industrial here. very, very quick react to data

domestically and abroad. ray carbone says it's very, very quick to react here. whether it's here or overseas. ryan and sue, back to you. >> thank you, courtney. down better than 5% on sill veer right now. this could be the biggest change in u.s. foreign policy. the senate is considering a bill that would eliminate most direct assistance to farmers a enreplace it with crop insurance. but investigations inc. found there could be unintended consequen consequences. scott is here with that story. >> ready to put it. the current system, how often we talked about this? taxpayers you and me sometimes pay farmers not to produce and controversial and now there is bipartisan support to change the system. to replace a lot of those direct payments with crop insurance which is supposed to save money but for some crop insurance is already a big money maker.

this east tennessee farm was the site of a natural disaster. and the farmer had the pictures to prove it. but look closer. those aren't hailstones. they're moth balls and ice cubes. >> what made you think you could get away with ripping off the federal crop insurance program? >> i'm sorry. no comment, sir. >> reporter: that's robert warren. he pleaded guilty to conspiracy after filing false crop insurance claims for years. >> reporter: on the ice tomato field? though he still calls the ice cube story a myth. you said -- is it a myth? >> that's a myth. >> reporter: how's a myth? an insurance agent and claims adjuster pled guilty, too. robert warren and wife ordered to pay more than $9 million in restitution. multiply the farm by thousands and you begin to get the scope. under the new farm bill, the primary means of assistance to

farmers is the very federal crop insurance program warren ripped off. supposed to save money but the government accountability office says even before the expansion, federal crop insurance has a problem. fraud. >> we have looked at usda and what it's doing to try to identify any potential fraud and found that it really could be doing more. >> reporter: a jury in california convicted the owner of this farm, gregory torli on 16 fraud counts. he claimed this desert scrub land was a wheatfield. >> i would expect that he -- and this is my own personal opinion -- suspect he's the tip of the iceberg in a lot of ways. >> federally s ll lly subsidize and wells fargo and archer daniels and deere with crop insurance arms. there's a trade group and they

say it's the safety net of choice because it works and less fraud in crop insurance than other kinds of insurance and subsidized by the taxpayers. next hour on "street signs" with millions of acres out there, how do you catch a fraudulent farmer? you can get more at cnbc.com. >> that is fascinating. terrific. thanks so much. all right. coming up, the market is selling off once again and not at the lows but we are down about 163 points on the trading session. but the dow down 1.25%. s&p down 1.5% and the nasdaq off. and gold is -- oil, rather, down just under 3%. complete market coverage when "power lunch" continues. this is the first car that i've been totally in love with

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let's get back to the head of the class. let's solve this.

welcome welcome back to "power lunch." we are less than ten points off the lous in the dow jones industrial average. hi there, mary. >> hi, brian. stocks turning south since 10:00 in the morning. we had a call on goldman on the s&p 500. you can see it around 10:00 it starts to fall off.

after disappointing numbers on may existing home sales and disappointing reading from the philly fed. that reading prompted goldman to say short the s&p to 1285 and you could see the declining accelerate from there. a risk off trade today meaning we are seeing weakness in energy and material stocks, pacing the decline as commodities in general rit h wit the weakness seeing in gold and oil prices. we have seen a little bit of a move to defensive plays. utilities and telecom. if there's bright spots in the market, these have been the two areas. drugs stronger earlier but they, too, given up the gains and utilities, as well. we want to point out the nasdaq which was on a five-day win streak looks to break that today seeing weakness in tech across the board today and dow components. intel and sisqo and microsoft under pressure today. the dow at the lows of the day,

brian, 1264, 649. back to you. >> down 174. thank you, mary. now the little more with art cash with ubs. art, you know, i looked at the bond market. not like there's a flood of cash there. they're just raising cash. the question is why? >> well, there's a couple of things. there were rumors round about a couple of firms putting out technical notices that the s&p might be vulnerable. that caught some people off guard. you would come in with a growing belief headed possibly toward a global slowdown. you got bad pmi data out of china and germany and there's a growing sense around that the spirit of angela merkle may be like the ghost hung over the meeting of the fmoc yesterday. and that the fed held its powder because it was afraid if it made a big move it would possibly

destabilize things in europe so -- >> bernanke doesn't want to be too aggressive and being differential to the people in europe handling their own issue and having a negative impact here. i mean, you have a dynamic where they want to keep rates low to maybe encourage some risk appetite and obviously in the near term not working at all. >> that's the problem. the low rates haven't done anything and almost trapped. they're handcuffed. can you imagine if rates started to go up around the world? europe would be in desperate shape. if it went up significantly, we couldn't fund the national debt here at a higher rate. there's a great deal of concern. bernanke's concern is there's plenty of liquidity around and can't get it to the people that need it, the people who are underwater in houses, bad credit ratings. he's got to find a way to stimulate the money, not get more of it but moving around. >> in the right place. thank you, art cashin.

jackie deangelis, almost 2% to the downside. >> that's exactly right. tech under pressure today but the worst performer on the nasdaq 100 actually bed, bath & beyond. first quarter profit jumped and the second quarter outlook for the company the problem and margin compression there and bed and bath down 16% today and taking a look at shares of celgene down after the company withdrew an application to sell its blood cancer drug for a wider patient population in europe. they asked for more information proving the benefits versus the risks and micron down almost 7% and said that flash memory market is still weak. seeing some pricing down, sleepily quarter on quarter. not just pressuring micron but also lsi and sandisk.

brian? >> thank you very much. talking with rick, are you surprised there isn't more money going in to the long end today or what? >> no, not at all. i'm not so sure there's a boatload of money going in the long end. i think there's some and some selling that ensued that may be unwinding a bit. start at the real beginning here. really in the beginning it's a foreign exchange story to some extent. look at a 24-hour chart of the euro versus the dollar and then the mirror image, the dollar index. obviously, they're the mirror image and fairly synonymous with what they're telling us. take everything that sage gentleman known as art cashin said, pmis in china and germany, weak philly fed and weak equities and my opinion a fed that did the right thing and seeing the markets recalibrating a bit and maybe the real story

is affect on interest raits. if you look at intraday chart, low yields now making new lows as we speak with the dow down 190 and if you look at a boon and this is a 2-day chart see the dynamic we are now under the yields of the low yields yesterday on the big fed day. and i think that's very telling at this point in the session. back to you. >> all right. thanks, rick. the dow down about 190. let's go to the market flash. >> brian, disappointing existing home sales report showing a fall in may. it's casting a dark shadow on home improvement stocks. fortune brands, shares of home depot. massively underperforming the markets to name a few. some of these stocks sitting at session lows an the catalyst is that existing home sales report. sue, back to you. >> you give me the perfect segue to the market boards and shows the fact that we have really had a selloff in place now. down 1.5 opinion 0 the dow.

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gourmet burgers of why the stock is on a diet after sizzling at the beginning of the year. >> thanks, mandy. tyler joins us again from chicago. the best of the best in the business joins ty right now. >> you know, sue, the procession of stars continues here with one name that's really synonymous with bond and bond fund investing, dan fuss and megan walsh. welcome to both of you. both of you four-star managers. it would seem to the uneducated like me given the state of corporate balance sheets this ought to be the golden age for dividend-paying companies and for bond issuing companies. do i have that right or wrong, megan? >> i think you have it right. looking historically, the cash on balance sheets are historically high levels and balance sheets are good condition and two dynamics going on here.

historically very low payout ratios and high cash balances. that should bode well for dividend growth going forward. >> so dan, you have literally seen it all. we were just talking. you have been in the business since 1958. >> right. >> have you seen it like this? >> no. no, i haven't. tyler, this is tie he unusual. >> what's difference about it, the environment? >> the rates are so low and over that timeframe, of course, the nature of the bond market changed completely. many corporations that wanted to issue bonds even 30 years ago couldn't have. today, they can. things that used to go to the banks for lending and maybe, maybe to life insurers of placement is straight to the market these days. >> you agree basically with michael who we just had on about

ireland in terms of the sol convenience, right? >> yeah. that should worry michael, we do agree. >> hardly. i think he'd find that comforting. you don't like american treasuries? >> i don't think the value, the price of them. >> you like them as a -- >> paying the bills. >> pay the bills. >> pay the bills. >> where do you -- what part of the market right now do you love the most? >> there's no part i really love to be blunt. i'm talking bonds now. dividend-paying stocks, that's another matter. this's a good idea. but as far as bonds go, the corporate market clearly far better than governments. and as far as government tech goes, a few places like ireland, like new zealand, maybe australia, canada, no value there. but a good currency. >> buying the fiscal and monetary crises? tell me yes. >> oh, yes. we will. how, i don't know right now. >> taking a while to work out.

megan, let me turn to you and ask you where you're concentrating your search for value right now. i notice that you seem to have a lot of sort of consumer discretionary stocks, some food makers like general mills and others. why are you finding them to be so appealing right here? >> sure. well, firstly, i would say that in terms of our outlook on margins, as you know, corporate profitability at a high, as well. we spend time in the process stress testing the downside scenario and looking at the durability of that margin profile and right now we think it looks most attractive in consumer staple stocks with a limited downside and also some consumer discretionary areas. >> one of your big holdings is general mills. >> under pressure with the loss of market share, in particular in yogurt. we think that's a short term issue and will right the ship and shareholder friendly historically. >> one of the things in the panel you did that stuck to me,

i don't know whether you heard it, dan, was this. when corporations have as much cash on their balance sheets as they do, sometimes the managements do dumb things with that cash. true? >> very. it's a major credit risk. >> does that worry you right here? that they're going to do deals that they shouldn't be doing? >> to a degree. i don't worry as much as i normally would in this situation because more people, particularly in the credit side watch for it. but the names held in the dividend-paying stock portfolio, yeah. that could happen because those companies buy and large can ignore the bond market. >> do you like the financials as a category? >> as a category, no. within the category, yes. >> meaning? explain. >> meaning that there are a lot of them i don't like. and -- >> a lot of -- i'm sorry? >> a lot of financials i don't like. >> right. >> and there are some i do like because they're very cheap. you can argue about them and that's why they're cheap.

>> what are the cheap ones you like? >> they happen to be the major banks. >> big banks? >> yeah. >> big banks? you take the opposite approach, don't you? >> i do a little bit. we're willing to be contrarian supported by the research and more biassed to the regional banks as opposed to mega money center banks. >> all right. final word, dan? >> i agree on the stock side. >> right. >> but the reason i would also agree on the bond side is the major banks have to really strengthen their balance sheets as opposed to strengthen the cash flow to the shareholders. >> all right. dan fuss, thank you very much. great to be with you, nice to be with you and meet you today, megan. let's go back to go. >> first a market flash. >> the fda panel voting 11-0 in favor of a blood cancer treatment getting approved. legang pharmaceuticals has a

component used in the cancer treatment and a market cap of $330 million. onex pharmaceuticals, developing the drug, also moving sharply to the upside. the fda expected to make a decision on the blood cancer drug on july 27th sue? >> thank you very much. not a lot of winners today. the markets deteriorating and this afternoon we have the dow jones industrial average down 185 points. that's almost 1.5%. down 1.67% on the s&p. and the note from goldman basically drove the market to the downside and it took with it the russell 2000 down about 2.25%. we continue to follow the markets. oil finishing the downside, as well. gold lost about 50 bucks on the day so there's a downside drift in the markets all across the board. we are back in two minutes' time. optionsxpress, where you can trade your favorite products

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i'm mary thompson at the new york stock exchange. the dow jones industrial average off the session lows. still concerns of a global

slowdown is gripping the markets today. also pressuring the markets, look at the s&p 500. a call of xwoeldman sax after a weak filly fed reading today saying short to 1285 putting pressure on the s&p. risk on trade is off. today. the nasdaq also under pressure looking to end a five-day win streak today as the big tech stocks are taking it on the chin, as well. once again the dow down 175 points. we'll have more on "power lunch" coming up.

at the markets flash desk, commodities under pressure and more concerns about a global slowdown. take a look at the price of silver down more than 5%. the worse day in two and a half months. now, in response, silver stocks as you can see right there moving sharply to the downside. look at sil, down 5.6%. back to you. >> all right. thank you very much. listen, sue. we are about 177 to the downside. >> right. >> it's almost one of those things where it's hard to tell what's going to be the next catalyst to move us here. >>l,