minutes coming out, we'll be back with you tomorrow. >> "street signs" begins right now with as we said importantly the fed minutes. watch for comments on qe. here we go. all right. welcome back. "street signs" starting with the breaking minutes of the fed's june 20th meeting. stevie liesman is on vacation. let's walk through the highlights here. if you're looking for a massive change in language, looking for something really unique and different, you won't get it. folks, the reality is there's sanguine and subtle differences. nothing too major. we've got economic expansion, maybe a little bit more moderate than earlier in the year. improvement in the labor market is slowing. jobless rate is elevated. we know that because the fed said as much in their statement before they released the full meeting here. basically real personal

consumption is up. there were some highlights and highlighting the positives. more positive language on housing and also perhaps auto sales than we have seen for the previous minutes any way this year. but again, and as we know this, more fed members are now suggesting fed rates remain where they are until 2014 or maybe even 2015. previously we had seen some just -- maybe firming in 2013 but now everybody in the 2014 to 2015 camp and most fed participants see moderate growth coming in the future quarters with a gradual pickup. but again, to highlight the macroof this, the fed minutes not that much different than the fed minutes last time. looking for grand hint about quantitative 3, quantitative easing 3, mandy, welcome back by the way -- >> yeah. >> you won't get it from the minutes. >> okay. i've been watching the market reaction of the 10-year yield.

we have dropped quite a few points, though, in terms of the equity markets. brian shactman is at the nyse. getting to rick santelli, as well, in chicago. looks like a marginally reaction in equities. anyone down there said anything in terms of what they're latching on to for the minutes, brian? >> rallied maybe 10, 15 points and slipped back down. down 55, 60 points. bouncing around a range here. the one headline i saw across the board and got people's attention is division over the threshold of more action and says that it's not a slam dunk to do something in terms of qe3 in august and generally speaking volumes remain muted. if you expected a shot trade here, real price action, we have not gotten it but sometimes takes a little while to feed through and people to read through and see what they want to see and in terms of automatic reaction, we have weakened. >> that's right. watching it still as we speak. let's get to rick santelli.

we went in to this just below the 1.5% mark. what else in terms of reaction to see here to the minutes? >> you know, i think brian nailed it. most traders that are proactive here were looking for more qe enlightenme enlightenment. not about the economies as much. we violated the 150 mark due to the strong auction because of record type tension makes traders nervous. what the investors know that they don't know but in terms of the equity markets, it makes perfect sense and i think shack is being kind without qe more defined in these minutes i wouldn't be surprised -- we're down now 74. i think equities beat up more in the next five or ten minutes. >> yeah. i'm absolutely watching this very closely. you're right. it seems as if the market digesting what was going on with the minutes and seeing a

negative reaction. s&p was actually in positive territory a moment ago and now down by 3 points. >> my guess would be, mandy, that's because there wasn't more hints about the possibility of qe3. what do i know? not much. a guy that does is bill gross. he joins us right now. are you disappointed that we didn't get more hints of qe3, sfwhil. >> i haven't read the minutes yet. >> slack. >> i'll take your word for it. let's point out that the minutes reflect a meeting of a few weeks ago and back then the perspect is that the u.s. economy was growing at 2% and now the perception is 1%. i would expect the tone to be different and stronger hints of q e. i'm not sure. >> how much more could the fed do? i'm sure they're aware of this, record low yields. >> they have a number of options. qe is one of them and involve

the purchase of securities, perhaps another 500 billion to trillion of mortgages or treasuries. they could extend that extended period of time to 2015. put a cap on interest rates in the 3, 5 and 7-year area. ben bernanke mentioned that as far back as 2003. they could cut rates on reserves. they have an edge to banks that leave their money with the fed. they could do all of those things but yes interest raits close to rock bottom and not much that can be done there. that's for sure. >> do you think anything changed in the macroeconomic backdrop? have we worsened since the june meeting when they jawboned about this? i don't think materially. i would point out that euroland is continuing to sink and that china perhaps most importantly, you know, moved down from an 8% growth rate to what observers believe is a 4% to 5% growth rate and 12% of global gdp and

putting that in combination, we have global growth now at 1% to 2% opposed to typically 3% to 4% and the danger, of course, of a global recession, you know, not in negative terms but something close to the 0 line. >> do you believe that the united states by this time next year will have entered recession? >> you know, that's a technical definition of two negative quarters. i think by this time next year we'll see unemployment higher than it is. we'll production relatively flat. i mean, this economy and the global economy itself, brian, needs credit. and it depends on credit and credit expansion which is a basically our system and it's banking dependent and, you know, the fed's bank and -- >> unemployment higher, though. dig in to that more, bill, because the fed, one of the two mandates to maximize employment. they have been cutting rates. they have been doing qes. they have been doing operation

twist. it doesn't sound like you think it's going to work. >> well, increasingly, you know, these options, these policy provisions, you know, which began in november of 2008 basically although fed funds were cut, you know, far before that, but these provisions have increasingly grown weaker and weaker and weaker. basically the reason for that is simply that as interest rates move down to the zero line and this is sort of a twist in terms of logic, but as interest rates move down towards the zero line, it's not necessarily positive but it has negative implications, as well. business models, money market funds, pension funds, you know, are all imploded based upon the low rates opposed to high rates they're used to so there's a negative twist to the twist which i don't think fed policymakers are factoring in. >> at the end of the day, bill, i mean, whether or not technically we enter a recession or not, for those in cities bankrupt, filing for bankruptcy

protection, it really doesn't matter to them, right? they're feeling the pain and in a moment's time speaking with someone about san bernardino, california's third city in a matter of weeks authorized a bankruptcy filing. are you concerned about one by one seeing the headlines, cities just not able to pay the bills anymore? >> well, of course we are. predominantly they're in california at the moment. san bernardino last night as you mentioned. it reflects an inability to pay liabilities and the liabilities come primarily in the form of pensions and past employees opposed to future employs. san bernardino, can't meet the payroll in mid-august and so declaring bankruptcy. there's a hair cutting of liabilities going forward to rectify the situation, as well as as i mentioned, you know, an injection of liquidity of the central bank that allows this transition to take place

gradually opposed to suddenly like greece and spain. >> bill, on a different note here, i'm so disappointed you didn't read a 25-page document in the 3:30 we gave you but as i'm going through here, i don't know if this is a new comment. even if it's not new, comment on it. it says one participant expressed concern of protracted term of monetary policy of a build-up of risks in the financial system. i know you have been all over that theme for a while. obviously, libor-gate going on. we saw what happened with jpmorgan chase. do you feel there's other big banks at the risk of, i don't know, going under? >> well, i won't speak to the banks specifically, brian, but the system itself, you know, the united states, i mentioned we have $50 trillion worth of credit. as interest rates move lower and lower and returns on bonds,nds, returns on stocks, you know, become limited, then the tendency of the system is to try

and lever, to take advantage of that cheap financing and buy anything that produces a return and a yield and so, yes, that's the danger of low interest rates and it's a complex that goes back way in to the early 20th century but certainly it's an observable fact of history. >> you know, just to give a quick market check what's going on here, just bear with us for a moment, bill. we have the u.s. dollar at session highs right now from the lack of qe hinting and the dow sitting at 12,614 going in to those minutes. it's now dropped down to 12,574 so some disappointment from the equity side of things about those lack of hints. bill, i want to get back to you. i asked you about the number of cities one by one having to file for bankruptcy protection. do you think we're staring down the barrel of a credit rating downgrade at sometime in the next 12 months? >> not the next 12 months,

mandy, but certainly over the next few years. we have to be cognizant the liabilities are not just the $15 trillion of visible debt that the u.s. treasury issued. liabilities come in the form of medicaid, medicare as well as social security and put them all together and you have a $60 trillion to $70 trillion liability basket that produces a debt to gdp ratio similar to greece so, yes, the u.s. has got to get the act in order. it has to basically start to work on those forward liabilities that san bernardino is having a problem with. yes, increase taxes in my opinion. yes, begin to balance the books. not quickly but over a longer period of time or else, yes, the united states will gradually move from an aaa or aa-plus in to the lower grades. >> yeah. we are getting headlines as the crack team dissects the minutes here. more of the fed members are saying perhaps stimulus is

needed. we have known that. some on the dovish side. bill, i do want to ask you this. the bond vigilantes. we can keep funding the deficits as long as the bond market agrees. right? >> right. >> when do the bond vigilantes if ever step up and say they've had enough and raise the cost of funding significantly in the united states? >> well, it's looking at it this way. the bond vigilantes used to be number one in terms of enforcement list. the fed is buying 70% to 80% of the issuance. they buy them almost every day. chinese and other countries for purposes in concern of maintaining the level, as well, the pimcos of the world, we're perhaps number three and are we cognizant of the fact that interest rates are low?

yes, we are. but we take our cues from the fed, the qes. you know, the forward policies and we take our cues as well from what foreign countries such as the chinese are doing with their dollars. >> bill, always a pleasure to have you on the show and talking of bonds i'm watching the 10-year yield is now popped above 1.5%. did you know yesterday below that second time in history below that mark. incredible. >> it is an important story for housing and a big deal and a real or the and doing very well. that's a good thing. all right. up next on "street signs" we talked about this with another bill and another california city bellow up. the third in two weeks. we're going to head to the town to find out what's behind the dire straits. and herb is coming to life over herbalife. hearing the rare buy case for this beaten down stock. that's all coming your way. do not change the channel. [ male announcer ] at scottrade,

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welcome back to "street signs." we are watching the jeans makers today. lehe vie's is hitting the rest the folks listed today. morningstar says guess has a big exposure in italy. back to you. >> popular in asia, as well. clearly not offsetting it enough. thank you for that. herbalife is down more than

2%. it is down 16% over the laz year. herb, of course, raising a lot of red flags over this company and you've been looking at it closely for a number of months now. a bullish analyst coming out of the woodworks and got in to it becoming a distributor, as well. >> yes, this is tim ramie. he's been a big bull on the stock for quite a while. full disclosure, as mandy says, tim, you are an herbalife distributor? >> perhaps the worst one in the world. i have never bought or sold anything but, yes, i am. >> so you would -- so there's a been a lot of controversy around the company. you would buy the stock here. why? >> i think prima fascia looking at the company on the numbers, cash flow, growth, that is raving buy. it is a very, very cheap stock

for the growth it delivers over 26% rev knew growth last year but obviously there's concerns raised, questions raised about model. and so, we've been trying in our last couple of research pieces to go back and methodically go through the mechanics of the model, how the compensation system works. quite frankly, i think if there was abuse that's where you would find it. in the compensation. >> you write in the report today, ten pages to try to explain how the company works and you say its business model is complex in structure and somewhat opaque to those outside the distributor network. opaque. that is not what you want to hear from a company to invest in. >> well, the 0 pastie if you will is about how to distributors get paid and i think you probably find that in any company you looked at. how does an employee get paid at cnbc? i don't really know. but, you know, in this case,

they do make available their documents and you can go through them. it's a couple hundred page long document. >> my head was spinning after reading your report trying to explain this. >> i'm sorry. >> in a report in may, you said that you were confident that the pervasive success of the network marketing system is legal and ethical. how do you really know that? >> well, herb, as i think you probably know, the test or the definition of something that's illegal, a pyramid marketing scheme, would be something that compensates disto be or thes towards getting others in the door. there's no evidence of that in any of the three companies i follow. they compensate people on the growth of the business. all volume-point driven and so i think they pass that test. >> well, tim, in belgium, the courts deemed this company a pyramid scheme and the company

says in its filings without saying it in so many words it operates in a grey area of the law and no bright lines in how they operate so you look at this and say what happens if the ftc decides to take a closer look? >> well, i'm hur the ftc has taken a closer look. there's 15 million people involved in as you said network marketing, you know. multi-level marketing in the u.s. so it's not an undiscovered corner of the world. and in fact, these companies did have scc invest investigations kind of a last time of a bear rate on this in 2008. >> but it's an ftc issue. one other quick thing here. one of the big issues about this company is company doesn't tell you how much of its sales to outside customers. in fact, it says it's irrelevant how much to customers outside of the company. i talked to one of the top officials of the ftc about this and i said, what would you say if a company, we were just talking generically in the mlm

industry didn't how many of the sales to outside customers. he said, boy, that would be a big red flag. why isn't it here? >> it isn't a red flag. a statistic -- >> it is a red flag, tim. it is a red flag. they can't tell you how many of their sales go to outside customers. that is a red flag of this company. why is -- i don't understand how that's not a red flag. >> well, costco can want tell you whether they're selling soup to restaurants or to -- >> prior case law, prior case law here through the ftc made this a very significant issue and some of the other companies in the industry the tell you how many sales go to outside customers. this is something the ftc says the companies should know how many sales to outside customers in an mlm set-up. >> out of their 2 mf plus million distributors over a million never trance acted with

the company at all. they simply are somewhat invisible in terms of buying habits with the company so it's not -- if you really look at the structure of product flows and orders flow it is not odd at all. and a vast number of the distributors are simply buying for themselves. they're discount buyers. >> agree to disagree. fair statement? the country song. you and me and we just disagree. >> watching in terms of reaction to the stock currently at session lows. in all of this, what does the company say about this? tie company is not speaking to me. they have rescinded an invitation. i have said this on air. they will not do a significant interview which i would like to do so what are they saying about this? well, whatever they're saying they're not saying it to me. >> talking of lows, further down on the dow right now. i think sitting around 12,566 at last count there so continuing to drop because i guess we

really didn't get any new info of qe3 and people were hanging their hats on that. >> i believe we're still higher for the year, are we not? >> we are. still higher for the year for the dow and the s&p. closing down for the dow and s&p today, that will be the fifth straight day in the red just a few little factoids for you. straight ahead, 401(k)-0? workers do not put enough in to the 401k for the full match. are they on to something or a best bet for young money? this is a tragedy of a story. one of the most expensive cars in the world crashing in to the record books. you will want to hear this story. >> it hurts me so it must really doubly hurt you. >> we'll tell you coming up. stick around. the greatest empires. then, some said, we lost our edge.

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now you can test-drive snapshot before you switch. visit progressive.com today. at 2:00 p.m. here, we broke the fed minutes to you and some disappointment over there in the equities market. the dow currently sitting at session lows. 114 points to did downside. nasdaq off by over 1%. brian? all right. yesterday we talked about

cash-strapped scranton, pennsylvania. the city in serious financial trouble and former governor ed rendell said we'll see more of these headlines unless local governments get with the program. >> we've got to determine as a society what we want for our cities, for our local governments. but again, the first, the ball is in the court of the local government and this city council and municipal unions have to understand we're up against it economically. it's not their fault or the workers' fault but changes have to be made. >> more headlines today. news that san bernardino, california, filed for bankruptcy. in danger of missing payroll. third california city to go bankrupt in just two weeks. phil wilon is covering the story for us. covering it for the "l.a. times." it's your story. sorry about that. but you know what? i'm going through the 2009 fiscal budget of san bernardino earlier today.

they were in trouble then. when's changed for the worse now? >> they were actually in trouble in 2006. that's when the -- some of the revenue problems started happening. what got worse was the tax rev noous plummeting. they're dependent on sales tax and property tax and with the foreclosure crisis, that caused property taxes to decline even more. and people had no money to spend so they weren't buying anything and that caused sales tax revenues to decline and exposed the problems in their budget there for years. >> to what extent have the problems not been exposed over the past number of years and what do you make of falsifying the documents presented to the mayor to basically mask the problem and say our deficit spending isn't nearly as bad as it really is? >> yeah. i mean, we are trying to find out more information of the allegations and basically

insinuating criminal wrongdoing. i haven't seen really any evidence of that. i mean, what some of the reports and the analysis that were done of the finances exposed was that their year-end audits, numbers different than the budget numbers. in other words, i mean, auditors said the city had so much money and the budget people preparing the budget had a different number. whether or not that was criminal is something that will have to be looked in to. as far as i know, no investigations going on by the fbi or anything like that so this is all kind of new information. >> phil, thank you so much for joining us. tomorrow, we'll have complete coverage on the crisis. we are calling it bankrupting america. that is going to be all day tomorrow. in the meantime, over to the corn-undrum. after a bleak crop report, prices are lower on the session. corn and its by-products are everything from snack foods and

breakfast cereals to alcoholic beverages. a lot of it to ethanols and explosives, as well. jane wells joins us from a cornfield in rockford, illinois. we are near all-time highs, right? >> reporter: well, we are close. still much, much higher than normal. talking about the trickle down effect of this. what is grown here goes to feed the rose beef in this sandwich and the wheat and the usda saying there will be less of it. look at prices. corn popped this morning and then starting to fall. i saw december corn under $7 a bushel again. same thing happened with soybeans and up and down. after the usda report and bullish for all three. the reason may be that the usda declared over a thousand counties disaster areas offering low interest loans to farmers this need help and congress which is figuring out what to do with subsidies and crop

insurance is taking up the corn bill. >> i said this many times before but it's worth saying again. a safety net is written for bad times. these programs should not guarantee that the good times are the best but rather that the bad times are manageable. >> reporter: well, we'll see what happens. the usda predicting those raising life stock buy less corn and that's hard with hogs to feed. s&p lowered the opinion on smithfield to strong sell. cattle ranchers may switch to wheat. some cows could be slaughtered early and provide a short-term glut and maybe bring meat prices down in the near term for consumers. a rancher tells me the drought caught everyone off guard and what about hay? hay is for horses. guys, he says hay is quote virtually nonexistent because of in drought.

>> we hope it breaks soon. coming up next, a developing situation. yeah, one jersey shore gorilla juice heads plan to get to the bank. shares of nbia with a huge tumble yesterday. why one of the analysts that still covers the name says now is the time to buy. stick around. to put your cash?ter place here's one you may not have thought of -- fidelity. now you don't have to go to a bank to get the things you want from a bank, like no-fee atms, all over the world. free checkwriting and mobile deposits. now depositing a check is as easy as taking a picture. free online bill payments. a highly acclaimed credit card with 2% cash back into your fidelity account. open a fidelity cash management account today and discover another reason serious investors are choosing fidelity.

quick hit on the markets. sitting at session lows right now for the dow because i guess people hoping for clarity. >> i need clarity on where i stand. i busted my butt. >> we put that hole there for you. street talk time. we walk you through five stock stories to know about. digging beneath the surface here. hh gregg. kicking off the street talk. >> shrinking demand. higher cost. down 46% year to date. downgraded who cut the target from 20 to 10. i believe that's in half. right? hh gregg if you're not aware, a discount. they opened one near me in new

jersey. indianapolis i believe based. a tough year. >> both really suffering from the showrooming situation. right? where they look there and then go and buy online. places like amazon. office supply stores on the downturn. >> bernstein downgrading staples and office depot. target cut on staples. target cut on office depot. office depot down 44% over the last year. who moved my stapler? >> yeah. everyone needs a number of staplers. okay. dendreon looking for a cure for the recent slump. >> down i think 82 some percent has of right now over the past year and dropping the company to an underperform from a neutral. slicing the price target.

thanks a lot. 13 to 6.25. cut it to 6. anyway, it's been a traders' favorite. unless you are on the short side and now down 84%. you've been slaughtered. >> there are internet you hrumo circulating. let's slice through what's going on. >> here's the story. i don't know how significant of a blagojevich or news organization, i never heard of it. it went around in china that maybe some prohibitive additives in mead johnson baby products. everybody freaked out. chinese authorities basically said, mead johnson products are fine. william blair adding this to the better current values shat. outperform. chinese company, you know, rumors or speculation or whatever. authorities saying squelchi ini the rumors. >> we have real battleground stuff here. i know you're powering and

closing belling yesterday. whatever. shares of mbia crushed yesterday and today bouncing back slightly. the stock down 11% yesterday. little less than that. but here's the point. it's very complicated story an i promised the viewers to do it. let's bring in mark palmer, managing director at btig. one of the few analysts to cover this name still and he says it's an opportunity. we talked extensively on the phone yesterday. mark, in a nutshell, a lot of fear of a potential missed debt payment yesterday. you say don't worry about it. how come? >> well, we believe that the fear is misplaced because the debt payment relates to the company's 14% surplus notes housed within the mbia insurance subsidiary. frankly initiating on the company and put a 22.50 price target on the stock, we assigned zero value to the subsidiary. we see a tremendous amount of unlocked value in this company.

but it comes entirely from national which is the company's municipal bond subsidiary and not affected by this. >> your point that we talked on the phone. okay? number one, if they don't make the payment, it is not a default because it's not like they can't make it but they won't be allowed to make it but you said even if they do not make the payment the stock still has a lot of intrinsic value. why did the market miss that yesterday? what's the fear, then? >> well, again, it is a complicated story and not all that well followed and, frankly, when investors hear of a missed coupon payment the next thought is there's a bankruptcy. >> default, bankruptcy, whatever. normal thinking. >> right. that's not the case here. these bonds housed in a subsidiary and there is no cross default up to the holding company. there's not a default if the regulator doesn't allow them to

make the payment. >> very quickly. huge litigation with bank of america. merrill lynch. people buying the stock and the options just purely based on the expected outcome of a court case or a settlement. do you believe that mbia will win the case with bank of america or settle? >> yes, i do. and in fact, any day now we may be hearing the outcome from the article 78 proceeding one of the cases in which bank of america is suing mbia. we believe that mbia will prevail in the case. frankly, i wouldn't want to be short the stock when that headline comes out and ultimately we believe there's a settlement because it's in the best interest of b of a to do so. >> all right, mark, thank you so much. >> certainly. still ahead, the 401k plans the best buy for retirement savin savings? and then back to the story we talked about, the $30 million

ferrari that crashed the way in to the disaster -- >> kids starving out there. this is making you weep? >> well, listen. thanks a lot. i get your point. you're right. okay? i'm an incensive jerk. you know what? still newsworthy headline. >> we'll be back. we're bringing out the violins. [ male announcer ] this is our beach. ♪ this is our pool. ♪ our fireworks. ♪ and our slip and slide. you have your idea of summer fun, and we have ours. now during the summer event get an exceptionally engineered mercedes-benz for an exceptional price. but hurry, this offer ends july 31st. a passionate belief, and the foundation on which merrill lynch has been built. today, our financial advisors lead from a new position of strength.

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welcome back to "street signs." bringing up a gold chart for you now. interesting thing is we did manage a bit of a rebound today with rising grain prices, rising energy prices. we have lost the gains and down by about 8 bucks. in fact, we did lose 3% over 4 sessions. why? i guess some people feeling no monetary policy easing coming any time soon. and today when we got the minutes kind of confirmed that. no clarity in terms of the fed's going to do next, brian. the next story is a disaster with a capital "d." one of the world's most expensive cars crashing to the record books. we have the details. listen. mandy's point, a rich guy. >> just poking at you. >> children starving all over the world. i get it.

>> people treat the cars like kids. well, last week an american businessman was driving his car in france and he got in to a small accident. not that unusual. but made this accident different is the car may have been worth more than $30 million. it was a 1962 ferrari 260 gto. it is considered the picasso of the auto world. per ra ri built about 49 of the cars. the green one sold for $35 million and set a new world record. now, the owner of the car that crashed chris cox is reportedly okay after the accident but we don't know the financial damage. most car collectors insure the cars. they're the special policies to allow them to drive them to special events and rallies like this one that happened last week. this car was with 20 other gtos last week and it was probably covered by insurance. now, if that's the case, there's an insurance company at the other end of this problem as one

commenter said to me, the geico lizard was just keeled over. your probably shouldn't drive your investments. if you want to preserve the value, best to keep them in the garage. >> such a pity, though. you have to take it out and show it off, right? >> yeah. i mean, this is the issue. people say cars are investments. collectibles but prone to these huge crashes and if you're going to really treat it as an investment, like a piece of gold, you should just keep it in a safe rather than -- >> how expensive would the insurance premiums be like that? >> they're special policies to restrict where they drive them and probably had one of these. >> not feeling sorry for christopher cox. >> no. >> i rescind my earlier comments. just when you thought his 15 minutes were up, the jersey shore's situation rears his tan little head again.

mike aka the situation is ready to cash in on the catch phrase gtl. if you watch the show, you know it stands for gym, tan, laundry and known as the only three things that clan knows how to do real well and opening a chain of gtl salons to be with a laundromat, a tanning salon and a gym and open in miami and new jersey to start. lucky us, america, plans to expand in the future. i wonder if i 'll make it down to melbourne, australia. not that my parents are up for gtl. >> gtl, baby. >> qutd g" for geriatric. >> tan, black and tan. fosters on the brain. because that is australian beer. we have great -- i'm hurrying up. videos of hazards of drinking and gtm'g. >> whether 401(k) plans are the best savings vehicle for your golden years. aka geriatric.

here's today's "return on retirement." assets total nearly $24 trillion. according to the investment company institute. so what is the total assets under management for u.s. mutual funds? the answer, when we return. we don't have a word for retirement. in the latino community the word that we use is jubilation. as you're getting older, you should be able to do the things that you love.

today's return on retirement question, what is the total assets under management for u.s. mutual funds? the answer: $11.6 trillion. or 49% of the world's assets according to the investment company institute. of that, $4.7 trillion is from mutual fund retirement assets. for more, go to retirement. cnbc.com. >> this is the video of the day, a guy in china is in trouble for betting up an atm f.

that's a good video, i could watch that all day. american's youngest workers are the first that will retire entirely on 401 k and no pensions. joining us is ivory johnson, herb is also with us. let me get to you first of all, we cannot depend on our 401 k, the younger generation even more so, what do they do? >> they're in a lower tax bracket, a long time horizon, and most have come to the realization that they will have debt left to them from the years and that makes the roth 401 k particularly attractive. you can put up to $17,000 in.

>> ivory, this is herb, one of the things they have to understand is how to invest and what they're doing. i have to tell you as a not young guy, when i go to my 401 k and i try to dig into the few selections i have, i want to rip my hair out because just the interface is difficult. how will these people get in there and know what they're doing? or will they go to a default investment? >> i think it's unique to the younger workers. people in their 40s and 50s have the same dilemma. go to the hr department, ask for professional device and ask for professionals to help navigate that landscape. the second option, where clients will can me if i can speak with their children to help them put together a diversified portfolio to help them along. >> what about the baby boomers,

to what extend are they taking a more active role in their 401ks not to make money but not to lose more money. >> yeah, they saw it happen in 2008, and they're thinking more in terms of the return of the principal not on the principal, so protection becomes important. >> when i went into my 401k plan, one of the things that got me so upset, is when i did research, i realized that one of the investment options i had was a fund with a 7.5% yield. . it had not been trading at five-year highs. it gave me a little comfort, and i wouldn't have known that because they -- think about this, i'm a baby boomer looking for income even in my 401k and i can't tell there's any income there because they don't lay it

out for me. >> the providers actually have to give you a diversified mix of investments. and then they have to monitor them. the advice is out there -- >> do they manage for individuals or for the companies? >> for a individual. >> how much do i pay for that? >> i think it's a flat rate, less than $400, maybe more -- >> social security like a built in pension fund? >> yes, advice for a flat fee. >> how concerned show we be about the younger generation. most don't contribute enough, many are saddled with student debt as well. they won't have the pension to back them up, will they be broke when they get to the old age? >> they will have to work longer than a previous generation

because of the things that you mentioned. and taxes are higher. ten years, 92 cents of every dollar generated by the government will be used just for the interest on our debt. but the good news is they understand they will be on their own. >> do they really understand they're going to be on their own? >> if they don't, they'll get the memo here very shortly. >> maybe the bottom line here, i suspect, and there are different opinions on this they should go to the default target fund, do they really want to do that? >> if the option doesn't avail itself to have a diversified portfolio, then you can go to a target fund. you can roll it into an ira, and now you have access to etfs and other third party managers.

coming up next, how can you really be the ball this summer?

i spend a lot of time bowling, and i have never done this kind of bowling. check it out, it's the human bowling ball game. you have to go inside a giant blow up ball and you run toward the pins as fast as you can. it will