>> hi, everybody. happy monday. welcome to "closing bell." i'm maria bartiromo. >> you are getting your sell-off. >> yes. >> you were looking for on friday. right? >> yeah. >> just a day later. bill griffeth. stocks are lower again. cull pret do cull pret seems to be europe. spain formally asked for help to fix its ailing banking sector. and as a result banks are lead thing market lower along with other owe called risk assets like oil which is down sharply and weighing on energy stocks today. note the dow fell out of the gate this morning and has been bouncing at these lower levels since the open today. that started over a season -- overseas this morning with the european markets after spain made that formal request for bailout of some kind. down 162 on the dow, 12,748.

nasdaq getting clobbered. 2%. now at 2832. almost 60-point decline on the nasdaq composite index. s&p down 23 points at 1311. no obama care decision from the supreme court yet. the markets have been able to focus more on the pinch of europe's ongoing problems. let's get more now on today's market sell-off. >> brian shactman, rick santellsantellis an te tell -- santelli is with us. is the focus europe? what's the next catalyst we should be focused on? >> sure. obviously the upcoming eu summit will be a big deal. from our perspective the only conversation that matters in terms of that summit is going to be the conversation between germany and france. whether they can sort of work out their differences in time to keep european stocks from falling off of a cliff here.

we you this we are at a fairly important precipice. >> maria, you know, i want to point out jim o'neill's comments from goldman sachs are interesting. i'm starting to get chatter. the earnings pictures will be a real challenge to figure out what's going to happen. people are starting to get in nervous. lot of finance a moves could have something to do with that as well. >> jim said something on "squawks box" he is more concerned about the u.s. than europe. more at that coming up in 25 minutes. both sides of that trade. meantime, rick santelli, very much a safe haven play day today. isn't it? >> yeah. you know, we con top see all of the good quality sovereigns, whether it is treasuries and you can look at the intraday chart down six, seven basis points, whether it is boon's, down an even dozen basis points. or the fact that spain, what you just talked about, up an even 25 basis points. no matter how you slice it, our guest just said the summit thursday and friday is going to be important. well, george sorros thinks so,

too. for all the reasons, don't see solutions but see a lot of people running around much faster buzzing around and trying to get to that point but nothing seems to be in their crosshairs. >> let's get back to this earnings. i think this is a really important point that you bring up because we are focused on europe and focused on the slowdown in china. at the end of the day we care about the multinationals that have been doing well with all these cash on the balance sheets. whether or not expectations have gotten too high, how much might estimates come down going into second half as we approach the end of the first half in just a few days? >> you see a lot of companies coming down with reduced guidance. you know, i dealt with kirby company, shipping name that after the close on friday. thinking of all the cross currency. normal what seems to be now an annual summer slowdown. the impact in the eurozone. there is currency for the multinational. to estimate this stuff, i think that honestly, all the analysts

reports i have been looking at is a crap shoot in many sectors of the economy. for an investor, that's scary. >> it really is. >> chris, you know, we are waiting for the supreme court decision on obama care. didn't get it today. could come any day. what are your expectations? what are the markets telling you about expectations for this supreme court decision? >> i think it is fascinating in that if you watch e-trade, it is a -- makes markets on any question that you care to ask. when you look at it, what you see is the probability or at least the market is betting the probability that at least the individual mandate gets shot do down, 40% to 80%, april until now. what that tells me is that the market is certainly piesing at a much higher probability than it was. at least some piece of the bill gets shot down by the supreme court. and -- >> how do you play that? how do you invest that if that is what happens? >> i think the health care

space -- if you believe that will happen, health care space in general gets a bid for a couple of reasons. first of all, i just think that, you know, increased certainty, more clarity and removing, you know, this big overhang from the space could be for a little bit of multiple expansion. and also, you know, i think the feeling among health care in general is that less regulation is better. so i think that would also give the stocks a little bit of a lift. obviously the impacts are different whether you are talking about hospitals which actually in my opinion, like obama care in terms of how those stocks would react to something like managed care which i think would react very positively if the -- if the law was indeed shot down. in general, i think that health care is reasonably priced and should that be the case and this gets shot down the stocks could move. >> we have seen money moving into health care this year. it has been a real reallocation within health care, chris, do you see a bifurcation where the areas of strength and weakness

within health care? >> sure. i have seen -- first of all, farm has been strong and you can argue that's a defensive call. but i actually like farma as a defensive play from a multiyear basis. i think valuations on the stocks and dividend yields are highly attractive here. also, i think that there are opportunities for people who are willing to stomach higher volatility and managed care names. we don't own any yet in our portfolios but are sniffing around the space. once we get out past the supreme court decision and potentially pass the presidential elections, these stocks look cheap and look like they have a decent depend which way the political winds go. decent earnings outlook the next couple of years. >> it is going to be a fascinating trade to watch. there's onlial small percentage of the analyst -- investment community that knows who is exposed to what and who benefits from the health care reform so far. so based on what this decision is you have to look at stocks to see what the separation will be and if you are out of the market it is going to be fascinating to watch, if you are in the market it will be pretty dangerous

volatility after the decision. >> you know, we had -- mention -- hadn't mentioned oil. look where oil now is. below $80 a barrel. that has to be one positive in the market. any thoughts? >> it hasn't been for the stock market about because it has been one of the leaders in the market this year. it is the -- weakest of the s&p sectors today. energy sector so that has been -- >> huge job creator as well. if there is a macro slowdown, that's in the negative. the prices at the pump would be a positive benefit for the consumer. >> consumer confidence tomorrow is going to be important because in many parts of the word, energy is down. consumer confidence is moving down along with it. >> we will be watching. thanks, everybody. >> thanks for joining us. >> we will see you later. look long and hard to find silver line something the market today away from oil. >> a quick check on the markets. jitters from europe are weighing

on major indices and dow down 156 points. the s&p down 22. nasdaq is down just about 2%. despite the weakness in the market, agriculture stocks are trading higher today. dahlman rose upgrading the sector to attract frif cautious. citing near term catalyst and attractive valuations. cf industries, one specific is up around 2.6%. spiking higher as hot weather is adding pressure to the supply of ag related commodities. with limited supply farmlers spend more on fertilizers. on that note take a look at corn hitting a three-month high today. the same story for soybeans up 2.8%. since we are talking about commoditiesing take a look at the price gold and silver today. hose two commodities did sell off last week on the concerns about a global slowdown. as you can see they are both recovering. taking a look at specific stocks that we are watching today. health care for us. very much in focus ahead of the supreme court ruling as you were

discussing. index trading lower ahead as we await important the decision. medicaid, hmos that could benefit from the law being upheld. had a would mean ain't flux of 16 million to 18 million customers. these stocks trading lower. pfizer under pressure after their blood thinner failed to get their approval of the fda. analysts at bernstein projected -- to be a multibillion dollar drugs. that's why these two specific stocks are under pressure. maria, back to you. >> thank you. we are in the final stretch here. 50 minutes until the closing bell sounds. nasdaq composite positive on the year. down 54 points now. >> big time. and stick around. we have much more ahead as the bears make their mark on wall street today. energy sector fueling a

sell-off. the fears about the eurozone and u.s. economy along with the storm in the gulf of mexico creating a perfect storm for oil prices. forget europe. why somebody here says investors should be much more worried about the u.s. economy. which do you think is the bigger head auction for the markets? europe or the u.s.? tweet us. ♪ [ male announcer ] aggressive styling. a more fuel-efficient turbocharged engine. and a completely redesigned interior. ♪ the 2012 c-class with over 2,000 refinements. it's amazing...inside and out. see your authorized mercedes-benz dealer for exceptional offers through mercedes-benz financial services.

welcome welcome back. here's brian shactman. news on directv. >> yes. dish network. thank you very much. there are reports that the department of justice is looking into some of their tv contracts in terms of maybe getting favorable pricing and other terms. these are reports unconfirmed. trading to the down side. especially dish. march yeah, back to you. >> thank you so much. brian shactman. energy among the sectors leading today's declines today, you can blame lower oil prices for that. a look at oil here which actually has crude below $80 a barrel now. sharon epperson. >> this is the third session in a row food prices have closed bell on that $80 mark.

global growth, permeating this market. we do know that the eu is affirming the running oil ban that will take place july 1. some people say that's why it is not at session lows. we heard from the federal government 44% of oil production in the gulf of mexico is shut in due to tropical storm debby. it is weakening but having some impact. still looking at oil prices that have seen probably the worst quarter. we are on track important worst quarter we have seen for oil prices since december of 2008. we are looking at a number of firms lowering their oil price forecast and jpmorgan was among them. lowering their forecast to 106 for the brent contract. then finally take a look at what's happened in terms of what we are seeing in the natural gas market. natural gas popped as we did see shut-in there 35%. up natural gas production shut in the gulf of mexico. that's created a pop in natural

gas that's heavily short market. and the biggest pop in the energy market surprisingly is in gasoline futures today. the contract got a surge of what -- from what looks like shortfall and supply in the northeast in particular. shun have much of an impact, though, on retail pump prices. i know you are worried about that. east coast problem. >> i have been up nights over it, yes. thank you, sharon. speaking of energy, john hoffmeister, former president of shell oil, told cnbc is not surprised about the eu ban on iranian oil. >> i think that there's plenty of oil out there and even if iran's oil is not purchased by as many customers, the obama administration has eviscerated its own efforts to harm iran by granting waivers to many different countries and i cap imagine they would do anything from stopping china from buying iranian oil. >> with the declines in the

energy sector is now the time to start buying on some of these dips? i have to give you your props. it was way back when oil was around $90 a barrel when you were saying we could go to $75. we are pretty darned close to that. are we still heading in that direction? >> i do. people thought i was nuts. thank you very much. >> i would never think that. >> no, not you. >> anyway -- yes. $78, right here where we are at. we got to this morning, the key level for me. we broke it friday. briefly. flirted with it today. looking for it to happen this week. we will target that $74 level. there is more to come here. >> we are seeing declines in the sector. you know, with -- the fact that oil has come down as much as it has, the energy stocks led the market lower. do you see opportunities to get in here on valuations or not? >> i think it is a great opportunity for energy stocks right now.

i think investors and including many of your viewers really need to take that long-term outlook and there is a lot of short-terp issues, no question about it withure open and china and supplies and so forth. but i think that if investors are patient, five, ten years from now they will look back in 2012 -- and 2012 was a very attractive time to buy. >> yeah. i mean, you are looking at this as a long-term play. you feel this is a long-term low for this market. is that the idea? >> i think so. you know, you know, the near term it is very hard to predict a lot of the factors. you know, will europe get its act together? or will it continue to fall apart? and, you know, that will be a main driver in oil prices. mere term you know a lot of moving pieces. we are not trying to predict that too much. >> i mean, do you see any catalyst that turns around the european story? have you the eu summit this week. very low expectations that anything actually gets done there. what's this going to take? a long, drawn-out several years of the countries trying to pay down debt? >> well, i think the european

issue is going to take time to play out here. i do not expect anything to happen really this week. but -- i think as long as the eurozone does not totally collapse, you know, i think oil prices will eventually rebound. i think the markets are pricing into very dire outlook right now. and i think that ultimately the oil prices will move back up. >> john, what about that? the iranian situation, we -- a premium put in for so long that seemed to be coming out of the market. how long does saudi arabia wait before it starts to cut production if prices get too low? play out the scenario you expect to happen here. >> i think -- in the short term, like i said, we are going to break down further probably below $70 a barrel to the mid 60s before this all sorts itself out. right now you reference the perfect storm. run-up to this conversation. right now we sort of have one in terms of immense amounts of production. whether it is our own shale output, u.s. over 6 million barrel as day, saudis putting so much oil on the market. i think they will stick with that regime until they see how

the iranian situation unfolds with the eu embargo and other countries that are, in fact, complying with the u.s. request to buy less. so -- i do think that longer term, obviously, it is -- i agree it is some of these issues are a good play. spoke earlier about buying refineries, looking at the refiners. they are flat. you saw sharon talk about how gasoline is up today. cheap input they are going to have with crude oil will help their bottom lines as well. there will be strong demand in the second half of the year, too. china and heating demand and transportation. so there are some good spots to pick here. i think eurozone mess is going to continue to put downward pressure for now. >> john, good to see you. brian, thank you for joining us as well. >> thank you. heading towards the close. 40 minutes left of the trading session. with the dow coming off the lows. down just 133 points. >> quiet day. volatility index having one of the biggest gains of the year. should you look at this fear

spike and believe this is going to indicate gains going forward? what the move says. >> also the chairman of the house financial services committee is waving red flags on cnbc about the state of the banking industry. find out what it is saying and whether that will be the next shoe to drop for the markets coming up. >> here is an eye opening statistic. half of americans have not saved enough to weather our personal financial crisis. is it the bad economy or just bad financial habits? we will zero in on the savings crisis later on "closing bell." choose control. introducing gold choice. the freedom you can only get from hertz to keep the car you reserved or simply choose another. and it's free. ya know, for whoever you are that day. it's just another way you'll be traveling at the speed of hertz. how do you know which ones to follow? the equity summary score consolidates the ratings of up to 10 independent research providers into a single score that's weighted based on how accurate they've been in the past.

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okay. welcome back. 35 minutes to go here in the trading session. let's do a quick market stat check to get you caught up on the action. trim loss necessary the final hour of trade. down still looming large at this week's european summit on thursday and friday. we will make little progress in solving that region's debt crisis. right now the dow is down 135 points. you can see we are off the lows. down 182 at the lowest of the day. dow posting its fourth decline now in six sessions. all ten s&p sectors have lost ground. energy, technology, financials all duking it out as the worst performing sector of this day.

very much a risk-off kind of trading day. >> risk-off but yet volatility on the upside. we are here in final hour of volatile trading day. we want to point your attention to the vix index. fourth biggest move of the year. talk about what's behind this surge and what it means for the performance of the market. we keep on talking number news on the fundamental and the technical side of things. we have carter worth here. chief market technician at oppenheimer. fundamentals, brian scotland is with us and one of the largest vix makers. you can testimony us what is behind the spike. >> you mentioned it is higher by 15%. it is a measurement of demand to put to the s&p 500. we are seeing traders today grab those puts and wanting to own them to protect their portfolio. that's why you are seeing the vix spike. there is pier coming into the marketplace.

my concern is if we see the dow have another 150-plus point drop, we could really see the vix spike into the mid to upper 20s. >> all right. that's what we want to see. see if we are going to see that spike. let's talk about what the charts tell new terms of volatility. do you agree what's behind the volatility spike? >> fear gauge. that's what it is doing. what's interest sing the current price right now at 20 is the price it has been since inception on average. since 1992. anyway here is the complacency. great period of collapse in vix, market making the high. we spiked off the low. we broke the downtrend. but maybe a little more history to put this in context. a long-term chart will show you that where we are now, 2035, still quite elevated. relative to the lows of '04 and '03. just to really put this in context go back to when the vix was first created in '92. and what you will see here is that we are, again, this is the

exact average price since the instrument was basically first traded. and the spikes what you see when you get to 35, 40, intervals between them. it would be too quick to have another spike back towards pa 35 40. i think we have seen our spike for now. >> in in other words, based on just this alone, would you want to buy or -- you don't want to be a buyer? >> no. we think the vix moved up in advance of what was a great collapse. and now it is fair money dead money. >> you can understand why there is so much fear in the market. >> heading towards the close. a little more than 30 minutes left. dow continues to move a little bit higher here. we will watch this down 127 points. are investors worrying too much about europe? one of our guests said they are and should be much more concerned about what is going on right here in the united states. do you agree that the u.s. is now the bigger headache for the markets? or is it still europe?

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welcome back. 30 minutes until the closing bell sounds. market p under pressure. courtney reagan is at the big board with the late rest we have been talking about energy. i do want to point out that this pressure we are seeing on crude prices because of the global growth concerns among that oversupply of crude stockpiles, we are definitely seeing follow-through in energy related stocks and energy one of the hardest hit sectors today. look at the oil services index. down five over the last six sessions including today down nearly 4%. just off those 52-week lows. we are going to continue to watch this. then if you look at shares of chesapeake, company cannot seem to get out from under itself when it comes to negative headlines. reuters is report chesapeake colluded with another arrival over land prices to keep the

prices low in what they were particular lynn interested in. i'm sure we will continue to get more details on this. as of now those shares are under continuous pressure. >> thank you. european concerns once again front and center for the markets today. this morning on "squawk box," jim o'neill said the u.s. economy should be the bigger concern for investors. >> the market -- a lot of concerns about issues. just as importantly to the dashes personfully my opinion and what's going on with weekly job claims and the -- growing evidence that some in the u.s. that's a function that concern meese more than the european stock. >> well, as jim owe -- was jim o'neill right? tim leach, chief investment officer with u.s. bank wealth managementme manageme management. >> first of all, the united states is the -- is its biggest

consumer market still in the world. therefore, the looming depression level of unemployment in america is vitally important. and secondly, the -- he said that the -- european union does not run the world. in that case totally correct. politicians and central banks that do. most importantly, bis, central bankers, central banks, said yesterday that politicians and central bankers have created the illusion that they can put -- finance growth and redress imbalances and that means coming collapse of the european union would affect the united states very badly. >> okay. >> you have to believe if we were to see a collapse of the euro the u.s. definitely gets affected. the whole world gets affected. tell me how much more pain you are expecting coming out of europe and is there a way to protect yourself if you are a u.s. investor? >> maria, certainly -- there is quite a bit of pain yet to come

because the europeans have not yet stepped up to the more difficult structural questions. when we think about the u.s. stock market, for example, about 45% of s&p 500 earnings are driven from abroad. and about almost a third of that is from europe directly. so yeah, there is a large european influence and so what we are doing is we are advising clients to be much more focused domestically, investment point of view in stocks, and we are, though, diversified into more -- some of the emerging market economies with an emphasis on emerging market debt which we think is a unique opportunity. >> even that has slowed. right? >> certainly slowing. slowing. but that is where the majority of economic growth is today and we think that's going to be the case for the next several years. >> john browne, one of jim o'neill's concerns was the u.s. slowing down now, when it is slowing down. i mean, you know, europe has been a problem a while. why is the u.s. slowing down now

and why isn't the -- our federal reserve doing more about it? do you agree that the fed can take some of the blame for not being more aggressive now? >> well, i think the fed can take a huge deal of -- blame under greenspan for creating the problem. now this is what the bis said yesterday. it is an illusion that central banks are pumping money and can create real economic growth. and -- they can redress these huge debt imbalances. basically they created a crisis of confidence for consumers. worldwide. the dollar is worldwide. europe is heading for depression and america section heading for severe repression and affecting the developing world. find it hard to justify holding equities in such a situation. >> this gets me so angry. we are all talking about the fed, the fed, the fed. yet, we see all of these evidences around the world that things are slowing. why is it all on the fed, bill? is there any -- fiscal policy

that can be put into place that actually, you know, moves the needle here? makes a dent in things? we keep wanting -- stimulus from the federal reserve. how about tax policy? how about energy policy? why is it all on the fed? >> i agree with you completely, maria. it cannot be on the fed. that's the -- one leg of a multileg piece of furniture. and -- in answer, my view, relative to why the -- u.s. is slowing down, is we have seen a dramatic curtailment of government expenditures this year to -- so far. we have seen kind of a precursor of some of the fiscal issues, fiscal drag, when you have a fair amount of spending curtailment. >> maria, you hit right on the nail. that's what the bis has said. this is an illusion. and that is creating your anger. because people are turning to the fed but the fed can do

nothing. >> thank you. >> good to see you. thank you for joining us today. come on now. you know why -- >> all fired up focusing more on the fed than the fiscal issues because the fiscal issues are determined by people who are elected by -- if they want to be re-elected they won't touch that until after the election. come on, maria. >> people are so sick of that. >> i agree. >> i'm over this. make a decision and create leadership. >> it is not going to happen. >> it is not going to happen. >> i'm telling you. >> vacuum. >> there you go. whoever said that, voice out of nowhere. what do you think is the biggest headache important the markets now? you guess we will stick with the question of the day. is it the u.s. or is it europe? >> i want to ask our viewers why it is all on the fed? >> that's still to come. not today. europe or the summit? tweet us. >> we are just getting start ed. market lower. better than what we were seeing

earlier today. >> with both the u.s. and europe both a threat to the markets, where should you be investing right now? top strategists weighing in just a moment. >> we are in a saving crisis in this country. shocking quarter of all americans have absolutely no money in savings. somebody here says that we have nobody to blame but ourselves. we will get into it. >> before we go to break, the dividend. which company stock is outperform thing year? goodyear tire and rubber? newell rubbermaid or whirlpool? one a day men's 50+ is a complete multi-vitamin designed for men's health concerns as we age. ♪ it has more of seven antioxidants to support cell health. that's one a day men's 50+ healthy advantage.

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we we asked which company stock is outperforming this year. goodyear tire & youer, newell rubbermaid? or whirlpool? now the payoff. whirlpool which has risen over 15% year to date. >> let's get to brian shactman. >> the there is something going on with super value sbu. take a luc at the intraday chart. had a huge spike around the start of closing bell today. it has since pulled back a little bit. just some perspective earlier in the month.

multidecade lows in this name. persistent shatter of a possible takeover target. we are chasing the news to see what was behind it. it pulled back. just a fascinating move here in the late part of trading. back to you. >> that's a big move there. thank you, brian. keep an eye on had a for us. tax sector is weighing the nasdaq down today. down about 2% overall. outperform other major averages. jackie deangelis has details. don't scare the kids now. >> hey there. yeah. technology shares continue under pressure here at the nasdaq. let's take a look at worst performers on the day. starting with rim. can't ignore that that one. suffering a downgrade to underweight $7 price target. this ahead of the earnings target on thursday. trouble with rimm continues with restructuring and concerns that the company may be up for sale. then anything chip related or seem write related today under pressure as well. take a look at broadcom and intel and call cqualcomm.

bio tech no exception. vertek is taking a hit along with other names good performers. last week we are seeing profit taking here as risk is coming off the table. >> thank you very much. equities getting hammered today. while the markets continue to react to headlines out of europe. listen to this now. cnbc contributor dan greenhouse says the looming fiscal cliff remansz the number one concern. >> mine, too. how can investors protect themselves against head winds from both sides of the atlantic? dan greenhouse joins us with sean from jefferies. good to have you on the program. dan, let's talk about this. bill and i have an ongoing bet here. i said i do think they are going to come to some kind of an agreement before the election. i just don't think they are that stupid. >> not going to happen. >> to allow this to go into the election and have just one month to actually fix this towards year end. what's your take? >> i think that it is -- you are always on the losing side of things when you win a bet

against congress being stupid yeah, i guess so. >> but generally -- listen, when you talk to people up on the hill, they will even tell you there is no -- at least right now no scope for an agreement before the election. the possibility certainly exists. our working assume sings not that the cliff hits in full. i don't think most people's base case scenario is the cliff hits in full. indeed a -- probably a six-month extension is the most likely scenario. what we have been advocating to the clients is merely the uncertainty of the cliff enough to depress at minimum the p/e ratios. >> for those who don't know, living under a rock or something, fiscal cliff we are talking about are the tax cuts from the bush era set to expire the end of the year along with spending increases that are expected to be eliminated. we would have spending cuts, tax increases and happening simultaneously as the economy continues to muddle along. >> you take the defense companies, for example. they are going to -- when those programs end they don't need

those workers. there are thousands of layoffs there. just defense. there's construction and there's unemployment benefits. lots much spending programs going on. >> sean, does that worry you as well? >> it does indeed. i think, unfortunately, just about -- every side of the atlantic is -- has programs which are pretty much negative for global growth. i think the last three, four trading sessions, both in u.s. and europe highlighted the fact that even though risk appetite is being -- quite strong, unfortunately, once you take away the growth part of the equity markets, start deregulating very quickly. >> but dan greenhouse, isn't the more fiscally responsible route right now austerity with the debt levels everywhere as high as they are, we can't afford growth initiatives now, can we? >> well, this is a much longer conversation than we will have right now. i would implore you to ask the greeks to ask the spaniards and ask the italians how austerity is working for them now. i'm generally in favor of less

spending and lower taxes. but if this episode has served to do anything, it has been to destroy the myth of what we call ex-pansz pangsary contraction. in the face of weak private sector demand if you cut government spending you somehow unleash the private sector and that has been proven false. so going forward, you see this with the growth initiatives out in europe. we are going to have to rethink how we go about doing this. last point i will make before we get to sean, maria, to the last segment, where you were talking about why we were talking about the fed, why are we talking about the fed? there is a legitimate debate whether the fed is doing too much or too little and i would argue that most people are on the side of the fed not doing enough right now. >> i don't know. not doing enough. do you worry about inflation given what has gone on with the federal reserve, all of this monetary easing that we have seen? you know, jim grant has been on this show and says eventually we are going to have to deal with inflation and that's the biggest worry here.

>> he already is. if you look back in history from 1945 to 1980, the u.s. and uk ran negative interest rates. they actually promoted inflation to get rid of very, very large public debt over -- the second world war. you need some inflation to get rid of this huge debt burden that we have got. europe has not followed that course of action. it never got to grips with the level of debt and neither has promoted an inflation policy and you see now what's happened both in spain and throughout the banking system in europe. suffering massive debt deflation. >> if i could jump in quick here and build on what sean was saying. you want to send the stock market screaming higher. the federal reserve endorsing for the short term, slightly higher inflation target, in order to do exactly what sean is talking about, there's a -- legitimate not just -- opinionated case but there is a legitimate academic case to be made that if the fed tolerated

4% inflation for a short period of time, it would be extraordinarily beneficial to not just the u.s. economy but to stocks as well. >> ben bernanke was asked that very question during his news conference last week and his answer was we don't have any inflation concerns right now. there is no need to raise our expectations because they just don't exist right now. do you agree? >> i think the problem is the fed was looking at the page book from april and may and it was actually still relatively strong there. you have seen all of the -- signals from europe and emerging markets and seen all the commodity prices telling you growth is now stepping very, very quickly. i think real rates have got to go very sharply negative globally and it is going to be done coordinated. equally will dump -- done with delays towards austerity measures as well. otherwise a very, very difficult fourth quarter for global -- >> very quickly, dan, a fed that's overestimated growth and overestimated inflation for years now. >> with that happy thought, thank you both.

very thoughtful conversation. we got a lot covered there. thank you both for joining us. sean, i will see you later on the countdown as we head towards the close with the dow down 125 points. >> coming up, make sure you don't go anywhere with the way the markets have been behaving. recently, students from 31 countries took part in a science test. the top academic performers surprised some people. so did the country that came in 17th place. let's raise the bar and elevate our academic standards.

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. heading towards the close. markets continue to come off the lows, 119 opponents. one thing i'm interested in as we go into what will be a critical week. supreme court ruling on obama care. the eu summit coming up. all of these things are looming out there right now. the euro, for what, i'm going to look at this in the countdown coming up as well. ure okay let's remember going into the critical greek elections a few weeks ago, euro rallied into that. now the euro is coming down out of the eu summit. the vix going into the greek elections was going down. meaning less fear going into the greek elections. now it is going up. the markets are sensing something is coming right now. i think. >> they have -- the summit this

week. maybe we will get something. what kind of solution may we get out of these guys? >> what solution can they have? >> exactly. then you see spanish and italian rates moving higher again today making it even more costly for them to pay their bills. >> it comes down to germany once merkel saying if there is going to be any bailout money there needs to be control of that money. that's the side of that trade, countries that would receive this bailout money don't want strings attached. then want to be able to use the money as they see fit to bail out their banking system or whatever. that stalemate still exists and i don't see that logjam being cleared at this summit. >> no. i agree with you. this is the focus now. as we sort of pick apart the meeting and try to figure what's the solution coming out of the meeting which probably won't get. maybe next week the focus turns back to the united states. of course, we are wrapping up the quarter. first half of the year. the end of the week, major averagers are poised for worst performances since the third quarter of last year. that is something i'm working

on. our observation today. 4:00 show. just feels like there are more head winds ahead. >> very interesting you point that out. because the trading pattern for this year has been very similar to last year. they sold them off in may. we went into the summertime, had a very volatile period. let's all remember what happened in the month of august last year. consecutive 4%. the debt deal that never happened. now the result of that failure that of a debt deal means the fiscal cliff looms. we could get more volatility this summer as well. >> that will be about the election, lot of mudslinging. you know that will happen. >> aren't you looking forward to this? are we scaring you enough yet? >> how does it impact your investments? how does it affect your assets? a quick break and closing countdown after this break when bill takes you to the close. after the bell, facebook flop ruin the ipo market? we will break that down in the next hour of "closing bell." [ male announcer ] this... is the at&t network.

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for those of you out there keeping score, 93% of the s&p 500 stocks trading lower today. and isn't interest interesting, obviously, a very safe haven kind of trading day. i want on point -- pointed this out to maria. with the euro down, going into this eu summit, it was trading fire going into the greek election. they are not looking for a lot of hope coming out of the eu. if this is what the euro is telling us, down a half percent here at $1.25 and change. that has taken a tool on our markets and dow coming off the lows of the session. down 129 points. we are down about 182 right at noontime, eastern time, wall street today. ten-year yield there foregoing lower today with the safe haven play. a lot of supply coming to market. $99 billion of twos, fives and sevens coming over the next three days. yield on that ten-year right at 1.60%. oil, we have already highlighted. continues lower. below $80 on new york crude.

down about half a percent. hurricane debby turned out to be a nonevent. focuses on supply and demand. and demand is going lower. supply is the high. that's why prices are going lower. $79 thousand now. okay. gold today. gold, let's see. gold is now a safe haven play. it is not a risk asset. so that's why it is going higher even as the dollar is stronger. sometime haven't figured gold out. $17 back above $1580. and the vix moving sharply higher today. gain of 11% right now. that's not even the high of the session. there it was there. back above 20 raising that yellow flag. what's this market telling you now? >> it is telling me that -- coming up. >> why now? >> i mean, you know, it is -- >> eu summit? >> i think the eu summit, some of that is factored into today's trading. i think that, you know, we are highlighting the world now. as you look at what's going on for us, it is not that pretty.

the u.s. economy to me even with the -- growth is still looking better than anywhere else. we are looking at the bigger picture. >> sean, didn't get to ask you before what you would invest in. what r there opportunities? >> they have fallen in global commodity prices and good for the emerging markets. particularly china, starting to get back on their growth path they had. >> you mean by commodity relate. >> i would probably -- look to -- the en countries, china and asia at the moment. they welcome a falling crude oil price. great banking systems. strong balance sheets. great economies, just being hit by high inflation over the last couple of months. >> all right. thank you both. heading towards the close. peter, sean, nice to see you. one of the more popular bell ringers today, executives from harley davidson ringing the