high, and supply is tight. >> i have so many things to say, but there's just ten seconds left. better uses of the money. >> i agree. >> it's going somewhere -- >> i grew up -- never mind. thank you for watching "street signs," the "closing bell" is coming up next. good afternoon, welcome to "closing bell," i'm maria bartiromo at the new york stock exchange where a downgrade of the banks are sending shock waves today. >> bank stocks are hard hit right now and that's leading markets lower aclose. >> eddie: cross the board. a downgrade is eminent maybe after the close, maybe tonight, maybe tomorrow, many are expecting it to happen, they're preparing just in case, and we

have this story covered from all angels. meantime, energy stocks are weighing on investors thanks to a continued decline in oil prices. present is at an 18-month low today. here is the dow, and it didn't help that on the open this morning we had weak economic data. the philly fed report was lower than anticipated, so the dow now down 2616 points, and the nasdaq down almost 2% at this time, and the s&p is flirting with support levels and traders are watching right now around 1328. we're going to show you the s&p, i think, which is trading at 1330 right now. so the number to key an eye on there is 1328 as a support level, maria. >> and the banks leading the market lower, let's get into this sell off and what is possible for downgrades.

we have mary thompson, steve leisman, doug pebels, and rick santelli. >> did you say steve? yes, there he is. it appears the markets are suffering and asking the question you were asking yesterday. why not be more aggressive to help prop up the economy? >> i think that's right, but i think there's more on the markets now. i think part of what's on the market's mind is the global downturn. what we saw with the chinese pmi, those are worry some numbers. i challenge the group here. tell me a story where the u.s. grows at 3%, and where job growth goes 150,000 to 200,000 a

month. it's a very difficult story to tell right now with the underlying data we have seen. it's based solely on oil prices and i can't tell it from there. >> don i want to get your take on whether or not this is going to have a big impact on the banks. we knew this was coming, we were expecting it after the close tonight, but we have been talking about it for months. >> that's right. >> so how much is it priced in or not. i'm looking at the major banks that are down between 1% and 3% a piece. >> i think what we're talking about here particularly when it relates to institutions like morgan stanley, if they lose their status what does that mean for counter party risk and the like. >> it races the borrowing costs, they're suffering as a group from low interest rates right now, so this does not help the equation, does it? >> no, but people have known this for some time now.

>> when i interviewed james goreman, two-and-a-half weeks ago, he said it will be a two notch downgrade or three notch downgrade? >> it's really hard to predict what rating agencies will do. they don't operate on a model you can figure out. there's a lot of human intervention here. >> and mary thompson, it's not just financials, lots of sectors are sharply lower today. >> that's right, a couple things to touch on, while financials are part of the downdraft, the things we're seeing is the data on china. and that slerlted the decline and the call for goldman sachss. as far as the ratings goes,s a maria pointed out, we know they were considering action against

the banks, the banks said much they may cost in collateral or payments for certain derivative contracts. this is something we know about. the question will be will there be any surprises. i want to say one thing on times. a source say it's will happen after the market close, and to support that all of the other actions that the moody's has taken. >> let's get into fixed income here, what move are you seeing? >> the markets are pretty smart about this. this is the worst down fall for the stock market in terms of triple digits since june 1st. that's ironically when we have the 145 low lose closing yield in tens. at that point they rebounded and

interest rates moved higher. the context of the times we're in right now, whether it was goldman and our outlook for stocks. the two day meeting, all of this coming at a point in time when there is an anxiety in the marketplace. many times the rating agencies -- the main talking point on this floor seems to be changes. i think we're at the point where they will make more difference to the ultimate trade than they have in the past. >> i want to add from the press conference. he made noises about liking what england was doing which is more direct investment. i think the fed is coming up rapidly on a choice here to either abandon, not abandon, but not push interest rates down further, or to make more direct

interventions into the economy because i don't think the current process is one that's going to lead to more growth right here or lower unemployment. >> real quick, would you buy the banks or sell them here? >> i'm a bond guy, so we're comfortable with the credit quality from bond investor's point of view. equity is different. i think what's going on at the fed is very, very important. monetary policy is not the only tool to get the economy going stronger than we're going right now. >> doug peoples, good to see you, everybody else we'll be czeching back with you. so investors not having much luck finding safe havens, mandy has details on the story. >> that's right, normally the weak data around the world and here as well might have helped safe haven gold, but not now, not these days, and certainly not today.

the u.s. dollar is quite a lot higher, up over 1% against the euro, and gold today is currently down by about $48. let's round to about $50. the biggest one day fall after the fed disappointed those looking forward to qe 3. gold is certainly reacting very strongly. i want to show you how some of the gold miners are reacting as well. you have barrett gold, and we don't have the boards there for the moment, but this is one we're keeping an eye on, and staying with the strong u.s. dollar theme, recently we have been hearing from a number of multinationals who have been giving negative commentary due to what they call foreign exchange head wins. we heard commentary to that effect from pepsi co. today, the largest commercial distributor of lenox is really

tanking. it may lead you to, guess what, 4 x head winds. back over to you. >> all right,man i did, thank you very much. well, here we go, into the final hour of trade, anything can happen and the market starts to show it's hand. do they bring it back or sell it off with a flourish. the dow is down 212 points. >> we're very close to that right now, don't go anywhere, we have reports for moody's. we're on it. it's very important to understand 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, i have a career that speaks to that passion. thank you, mr. davies. ♪music plays throughout summer in new york state has something different for everyone to love. discover what you love. visit ilovenewyork.com to plan your summer trip now. [ creaking ] [ male announcer ] trophies and awards lift you up. but they can also hold you back. unless you ask, what's next? [ zapping ] [ clang ] this is the next level of performance.

the next level of innovation. the next rx. the all-new f sport. this is the pursuit of perfection.

welcome welcome back, we have 45 minutes to go in today's trading session. we're at session lows right now. the dow jones industrial average down. a big sell off today with the

market extending early losses on worries about a imminent downgrade for moody's from the major banks. right now it sits down. that's one and three quarters percent lower. all ten s&p 500 grounds in the red today led by energy, materials, utility. tech has been a bright spot in the markets lately and we're looking at a rolling over there as well. we're talking to the best money managers in the country. >> yes, we are joined now with george gash, and ty, a tough day on the markets here. >> george is overseas $400 billion in investor assets. many people watching the show probably have money in the jpmorgan accounts he overseas.

he spends a lot of time traveling around the world in europe and the united states, and george welcome, good to see you here. on a day like this when the market is down 220 points, the nasdaq down 2%, there's a lot to worry about. what do i, as an investor, need to do? >> i think it's important to remember that you're a long term investor. we have become caught up in c t castlysts around the world. the most important decision you can make is how much you have in cash, bonds, stocks, and alternatives, and then sticking to a approach. >> asset allocation, as you point out, and one of the things that you're worried about, frankly, is how people have

their assets allocated right now. specifically that they have too much in bonds. primarily on a day when the market is down saying i want to get out of my bonds and go into stocks, but you think that's what they should be doing. >> you've seen the level of uncertainty and valuety reflected in a lack of balance. in the last few years over a trillion dollars have flowed in in the united states. that's over a period of time with the stock market up over 120%. >> talk to -- talk to me a little bit if you would about the idea of confidence. when we see that people have lost confidence in the government's ability to do things, i don't mean the u.s. government, but the governments around the world and their ability to do something.

there are a lot of banks, in particular jpmorgan chase, that hurts confidence. people don't feel like the institutions they have come to rely on are reliable. >> investors don't like uncertainty. in choppy seas. the best place to be is in the center of the boat. our recommendation for investor social security to diversify portfolios more effectively. we think it's a time people revisit their fixed income portfolios and think about all of the options available and products available to help investors. investors are too concentrated in fixed income, and concentrated in too few minds. >> might i turn if i could at the stock exchange for a quick thought. >> great to have you with us during this market day when you have the dow down 222 points.

as an investor looking for the long term, what would be your instinct? do you want to buy them here and look for value, or do you want to go with the trend and sell? >> my recommendation to investors would be that now is the time to rebalance your portfolios. look at your strategic asset allocation. the most important impact on your long-term returns will depend on your asset allocation decision. if you sit down and get the appropriate amount in cash, stocks, bonds and alternatives, you get that decision right the rest will pay off. then overtime as market volatility, and there's been a lot of it, continues use that as an opportunity to rebalance your portfolio back. as the stock market declines, we can buy stocks and sell bonds, fwou do it in a cyst mzitmatic .

>> this is bill, you talk about middle ground, is there middle ground? we hear from a lot of other money managers that say go with the big dividend payers and the big yielders. that's the place to go right now. it's something of a defensive move, but you're paid to hold the stocks, what do you think of that strategy, george? >> i think one of the biggest issues we find and our clients are having is investing in income oriented securities. our recommendation is to think more flex apply aibly and dynam. to think about it globally. they provide very attractive yields at higher risk. to think across asset classes. it's very attractive opportunities and income producing equities and other nontra tigsal asset classes.

we think there is a great opportunity in capital structures that thinks about different types of securities, convertible bonds and stock that's provide attractive income with some level of downside risk. >> thank you for being with us, we appreciate your time and insights on this very busy market day. >> thank you so much. >> in the final stretch here, we learned the downgrade is coming at 4:00 p.m. eastern today. we have been anticipating it, now we're learning it will be happening at 4u 00 p.m. eers. and the market now down 230 points on the dow jones industrial average. >> oil is also trading lower. it could be bad for consumers. energy prices may be cold, but what about the banks?

we look at risks and rewards for this downgrade? we'll keep following these markets and a lot can still happy, stay with us, back in a moment.

. welcome pack, the market at the lows of the day, the dow jones down 232 points. we're anticipating a downgrade of the major banks after the close. we're being told that downgrade

will happen at 4:00 pm eastern time. that from moody's investor service. all of the stocks are down today across the board between 1% and 3%. stocks hit as fears of that downgrade circulate today. let's get to mary thompson. >> thanks, it will involve five u.s. banks along with ten other banks, nine from europe and one from canada, the downgrade anticipated after the close today. let's just run through quickly. this is what's expected to happen, b of a is expected to be cut by one notch, jpmorgan, and then the question is what happens with morgan stanley, will it be two or three notches. so where does that put them?

for citi it would put them at baa 2 which is two above speculative. still investment grade, but two notches above that. if morgan stanley is cut by three, it without put it on par by city and bank of america. and goldman and jpmorgan would be above both of those as well. the short term ratings with the exception of jpmorgan are under review as well. again, expect it after 4% today. >> thank you so much, equity is not alone in terms of a yell off today. oil is feeling the pain today, and if you want to see it, look at silver, this is also looking at a big move, kourtney reagan.

>> yes, just paving the way for us to hit that next key support level, and so much of is that is fundamental supply and demand. you add in the strength of the dollar and that adds more selling pressure. also making headlines is rbob gasoline. we have not seen the levels since february of 2011. you don't want to go in against inflation or to hedge, we're down more than 5% on silver, we will continue to watch these two that are reacting fairly aggressively to any economic data moves. >> thank you, many ways to characterize this decline in silver today, aren't there? oil also moving lower today. we want to talk about that from a technical and fundamental standpoint.

here we are back again flirting with that $90 level on oil -- >> $ 80 in new york, it's $80 in monday. >> right, so we were on a month ago talking and $75 to $80 is the five-year level. you can see crude had a strong up trend, and most recently we stayed below that trend. in the short-term i'm expecting a bounce, but i think crude entering a new bear market. >> what kind of price are you looking at here? >> i think $70 or $80 will be support for now, but i think $50 is an achievable target in the year. >> what does that do to gasoline? >> it's highly correlated. if you look at the two year chart it had more strength

earlier in the year, and it formed a double top program. having said that one man's pain is another man's gain lower gas is good for the american consumer. do you agree, are yo we going lower here? >> i think without a doubt. the only reason you would be bullish on a day like this, tomorrow, or last week for that matter is if you believe that israel was about to attack iran or -- >> do you agree this is a long-term trend? how much lower could we go do you think? >> i'm not buying into that, i think we could see 66 but we would have to get through 75 first. the problem gets to be that the saudis start to feel some pain, and they're doing all they can to keep the market well supplied and they're benefitting from beating up the iranians who they don't like very much. you get an oil price down, a wti

price down around 80 and the saudis are starting to feel some pain pain. >> thank you, both, maybe next time we will see a lower price. >> bill, holding steady at lower level social security where we are. dow jones down 220 points right now, we're at the lows right now. we're following the market sliding ahead of the close. moody's investor service will come out with a 4:00 pm eastern downgrading of the major banks that will make their cost of capital go up, we will be talking with jack vogel next.

welcome back, if you're just joining us, stocks down today, weak economic data overseas, and gaining up this morning, now we have the word that moody's is set to downgrade some major banks. you know what we really need

right now? a voice of reason from somebody that knows what's going on. >> a long-term investor. somebody that always looks to the long term. that's what we have for you right now. jack vogel joins us, a great voice to hear from on a rough day like today. thank you for joining us. >> good to be with you. >> we know you're a long-term investor and do not worry about knee jerk reactions and short-term trading, but what do you want to do in a market that's down here. >> number one, in moments of panic, or deep disappoint want are usually terrible times to make investment decisions. don't get carried away by today. we have seen in the last couple months more days i can count where the market was down, and the next day up 100 or 200. then we have to realize that this is a great day for buyers

and a terrible day for sellers. but it's always good for somebody, depends on your point of view. and the fact of the matter is that i'm a -- i get involved in these emotions too. i think i have too much in stocks when they're going down, and too much in bonds when stocks are going up, so i read an early book and i feel good. it's like vogel group anonymous. >> we have a lot of investors not in this market. we just had george gach on, he thinks people are in bonds too much right now, you can't blame him really, but what do you say to people to get them back into stocks? is this the time to be buying right now do you think? >> i think most investors should just stick where they are and that's a broad generalization but it gets to acting at times of crisis or extreme

bearishness, and it's better not to act. my rule has been don't do something, just stand there, because this too shall pass away as very hard to do, but it's discipline, it's emotions, it's stick to your long-term plans, and stick to the tried and the true, the funds down the middle, and don't get any speculative funds about hot days and cold days. we don't know what they will do when the market goes up and down. >> you know what, jack? that seeps obviously very long term and sort of prudent. having said that, some of the worry that we are watching here is because of a bigger problem, because the global economy is slowing, because the unemployment story in the u.s. has gotten worse, because the banks are having trouble given the regulatory environment. they may very well have to raise more capital because of the derivatives portfolio, all sorts of worries going on right now.

do you worry about some of the larger structural issues behind these knee jerk sell offs? >> that is exactly the right question, and in the long-run the intrinsic value of stocks, and the price earnings are not big today, but there are big question marks out there about whether we're at the new normal in economic growth around 2%, and we may be lucky to get that, we don't know that, but most of the things you mentioned, and the list is far longer than that, u are i think in the market now, anybody that is surprised we get this downgrades a half hour from now or whatever is someone not listening to your show or reading the wall street journal. we know it's coming, and i think the reaction may be

overemphasized. that's what investor has to balance out, and that is will a world economy, more than any other single factor, be a hospitable place in the next decade, and i believe it will be in part because the only reasonable option is bonds and yields and the bonds are not very good. >> does this period of time right now remind you of any time in the past. i'm curious on your thoughts on that. whether we're back to 1980 or 1974, pick your time frame, and what it says about where we may be in the investment cycle right now, jack. >> you know, that's really a great question, and this one is different. most of the extremes that you mentioned, and the most extreme of all, was the end of 1999, the beginning of 2000. and that is valuations were just extremely excessive. that's not the problem today.

the problem is the underlying intrinsic value of stock in the world economies. it's different this time, they're never totally different, and it's a time when vogel is concerned about the economic outlook well ahead. so i have been cautious, i advised people to be cautious, by i would never tell anybody to get out of equities because i don't know how to tell them that at the right time and they will forget to call me when the right time to get back in is. it's such an emotional thing. so you need the self discipline, but we all want to recognize a fairly conservative stance, typically a 60/40, or a 50/50 is

something we should think about. >> very good. >> jack, good to have you on the program, thank you so much. >> thank you, we'll see you so. we have 20 minutes before the closing bell sounds on the market, the market is standing down 220 points, materials, energy, and financials seeing a rough time today. >> is a rough day like today creating an opportunity to get into this market? a couple different opinions on that coming up next. >> and the moody's is likely to downgrade some of the biggest banks now. we're hearing it will happen at 4 p.m. we'll have all of the details we'll have all of the details s.d what is means.

welcome back, stocks lower across the board as but wait for the downgrade by moody's. various major banks expected at the top of the hour, technology has also been a weak spot. jackie has the details on that. >> absolutely, lots of red here at the nasdaq. look at the worst performers, the first one is bed bath and beyond going lower on a down beat second quarter, and seeing it down nearly 17%, and celgene

taking a hit today, and micron, weakness in the flash memory market hit hard, and green mountain and seagate as well. >> thank you, with the expected bank downgrades, we bring in larry canter. let's talk first about the banks. we're expecting the downgrade from moody's at 4:00. 17 major bank social security what they're looking at for capital related firms. what do you think the impact will be on the banks? >> probably not that much in the sense that everybody has been aware of this for quite awhile. and the ratings agencies have become a lagging indicator.

the only thing that is specific is it can increase funding kors because certain buyers have to pay attention to ratings in terms of what that can and can't buy. i think it has been largely -- >> could this be a buy on the news then -- let's see what happens in the immediate -- >> i have to say i hear what he is saying and i think that's largely in there, for example, morgan stanley, if they get the three notch downgrade, it's a risk, it's what market has been watching carefully as one example of that list. that will be a surprise. we both appreciate that. >> i'm glad you brought up morgan stanley because we spoke with james gorman, and i asked him specifically about this downgrade, and how he is anticipating -- what he is anticipating. he said it's most important to look at how big of a downgrade it will be. will it be two notches or three

notches, listen to what he said about this downgrade coming. >> the fear out thereto is that you will see a two to three notch downgrade from moody's, and that will mean a $5 to $9 billion call. how much capital will you have to raise? >> we won't, we have the liquidity to cover the collater collateral, we expect a downgrade, we have liquidity, that's why we built the pool to take in all potential outcomes, it won't have an impact on our capital at all. >> do you agree with that? $5 billion to $9 billion capital call. >> i think it's more around that, i think it's more the question around things like otc derivatives and the questions that will come out of it. again, not anything representing the banks, but it raises the

concerns and raises more questions, it's another overhang for the lack of a better way of putting it. >> that's right, the banks have not done well for a long time. both for market conditions and regulatory uncertainty, this is -- >> mark is exactly right. >> the business model is under attack. lower rates hurt their ability to lend in a profitable way, regulations make it difficult, they're having to raise capital, everything is against them right now. >> right now the market environment is such, unlike november where a lot of people were putting shorts on. this time around they didn't just writhdrawal. >> what about citi, he pushed

out -- he will not even decide on the dividend until 2012. listen to vikram pandit. >> we're ready for anything that comings out of here, take the worse that cops to mind and we're ready for that one of the things that changed is people with instruments are doing their own work. you don't have the same direct mechanical linkage, and i think that's a good thing, we're seeing more and more of that happen, it's not something that's happening uniformly, but we don't expect the impact to be material on us. >> what about that? citi seems to be the unloved step child of the whole sector. do you think they're ready for

anything? >> in general, everyone is positioned much more cautiously. that's true of investors, the banks, and everybody is checking their risk models every single -- that's contributed to the weakness and the -- it makes you less vulnerable. >> before we let you go, let's talk about the markets overall. we have the banks covered at this point, we're down 237 points, mark, and the markets are not pleased about a lot of things right now. are you ready to step in here or are you ready to step aside? >> it is difficult. i would love to tell you there are screaming buyers out there, but presidential elections, debt ceiling debate coming up, frustration, from a u.s. equities market, it's a difficult hargt to make to step up right hire. the one thing that helps, is the idea that where else are people going to go, are they going to fixed income markets?

it's, you know -- >> you'll fund a reason to invest in the market, right? >> if you're jack vogel telling us it's different, they're low and enticing, the under lying fundamentals are not good, and he is ready to step in -- >> mark hit the nail on the head, where else are you going to go? it's one thing so say you should run for the hills and run for cover, but everybody has done that. so you get nothing. you're guaranteed a negative real return if you stick long term with bonds. >> this mark is at the lows of the day, we're about to hit 250 points on the downside, if this market closes down here or lower, low of the day, what does that tell us about tomorrow morning? selling continues in the morning? or any indication how we close here? >> if you look at it from a

technical standpoint, you know, they're view on it is we have a bit more downside from here, i don't think it's a selloff or 15% down, but you will sea more weakness. >> i'll get your thought on this in a few minutes here as well. >> as we go to the break, we're at the lows of the day down about 250 points on the dow jones industrial average. >> yes, we're getting ready for the moody's downgrade. [ male announcer ] we imagined a vehicle

that could adapt to changing road conditions. one that continually monitors and corrects for wheel slip. we imagined a vehicle that can increase emergency braking power when you need it most. and we imagined it looking like nothing else on the road today. then...we built it. the 2012 glk. see your authorized mercedes-benz dealer for exceptional offers through mercedes-benz financial services. ♪ [ female announcer ] you're the boss of your life. in charge of long weekends and longer retirements. ♪ ask your financial professional how lincoln financial can help you take charge of your future. ♪

>> >> okay, a little less than ten minutes left as we are waiting for this downgrade by moody's for major banks and that seems to have sparked a major round of selling right now. >> we really had the leadership on the downside today, financials, technology, tech has been the leader of the year.

it is down sharply. so with that downgrade fuel another day of selling tomorrow? we want to get to that coming up, and bill, i think technicians look at this market and say if you're losing, you see about a buying that bodes well for tomorrow morning. >> we are below what one trader told me earlier was a key support level for the s&p, he was looking at 1328. we're below that right now, and it doesn't look like we're coming back at that point. we'll keep an eye on that coming up in a moment. we'll take a break. >> and don't go anywhere, we're watching moody's, it's eminent, we'll have all the details for you, very important to recognize if it's a two notch or three-notch downgrade.

the last few minutes of trading here, let's show you a

recap of what happened today. this is the indicator we were keying off of this morning. everything pointed to weak bs here, and the dollar was a very safe haven day as investors ran for the hills and the dollar was one of those with a gain of 1% here on the dollar index. the other safe haven play was the treasury market. so yields were coming down and on the ten-year note wean dower to 1.16%. were were in the 1.59 range for a period today. what does that do to stocks? it pushes them lower. we're going out on the lows of the session here. it's taking a toll with the stronger dollar on other investments as well. the price of oil continues lower below $80 on crude here in new york, and below $90 in london, but we're down 3.75 here.

and you were the guy that told me to keep an eye on 1328 and we're below that. >> yeah, we have a global slow down, and i think you forgot to mention we got two technicians that came out that said i would sell the market for safety here. >> goldman sachs saying it could go to 12 something. >> yeah, what do you do here, larry? >> i think the thing to go here is to stick with your risk allocation and avoid getting whipped around, you point to the dollar going up. things are tough and they're probably worse elsewhere. you could go to emerging markets. so i think that's the problem

and i think you're just going to get whipped around, it's tough to make any money in bonds, that's for sure. >> i'm struck by what jack vogel said, and he still can't find a reason, realisticly, to invest in this market here. certainly he is a long material investor in this market, but valuations are good, he says, but under lying fundamentals are not that great right now, there's a reason you want to stay out of stocks, right? >> yes, thank you links globally. you're linked interest rate wise and other ways. we're probably stuck at zero globally for a long way -- >> of course the banks, we'll see what they do with this downgrade coming up in a moment here. >> very good, thank you both. as we head toward the close of trade, we're moments away we're told from a word from moody's to downgrade the major