stage a very, very powerful enforcement response. the first results of which you have now seen. again, the test of any -- >> being the barclays changes? >> ftc, justice, sfa action. very powerful enforcement action. very important to do. very consequential deterrent and more steps to come. they have not fixed the problems at the center of this raid. they took some modest reforms in response to the suggestion in '08 but they didn't go far enough and we have now taken the initiative to set up a broader effort involving all of the countries that matter around the world. have a big stake in this to push and what happens now is reforms that fix the underlying problem. the british, central to that and not leaving it to the british because the world has a stake in fixing this. so we did the right and necessary thing and we did it

early. we were forceful from the beginning and you have seen now a very forceful enforcement response, more to come on that and you are going to see a what i think ultimately will be a very effective reform effort led by a more global effort than the first time. >> when you say more enforcement to come, american banks, that's your particular jurisdiction. >>? i just meant -- >> american banks operating in the london lebor market? >> what the enforcement authorities have said is this is a first of a series of actions they will take. i didn't mean to imply more than that. but i'll say again critical to restoring trust and confidence in our system, very damaged, we dmemonstrate to the world we'll have the best enforcement response anywhere to make sure that investors and consumer haves the protections they need and that requires not just the reforms that we're fighting for but also that there are

resourcresource s available to these agencies and if you lift the agencies underfunded without stronger authority then you leave investors more vulnerable and confidence and more vulnerable and not prepared to take that risk. >> there's some talk about the justice department enforcing criminal actions. what is your thinking on that? >> again, can't speak to that. i would never comment on an enforcement case but i want you to know that the u.s. acted early and very forcefully on this. and you have seen the second act in that just recently. there are more to come. we'll make sure there's a strong, credible reform effort to follow. >> just to clarify the point, the u.s. acted early and forcefully but the critics are saying right now, yeah, you put it out in '08. you made phone calls. always talking to banks. you were on top of it. presumably to the rest of the fed. this is 2012. it's like what happened? that was four years. what happened? why so long?

>> very good point. again, we brought it to the attention of the entire u.s. regulatory community and they initiated in that timeframe what you have seen is -- >> you're not bashful. if you have a mind to say something, you are going to say something. >> exactly. >> you don't really speak out publicly on this. >> no. but we did, again, what we thought was the most effective and i'm confident we did. the most effective and the most responsible responses. again, we brought it to the british attention. pushed them to move on it. they gave us every indication they would be on it. they shared our concerns and we brought it to the attention of the u.s. enforcement community and they acted on that. now, there's some time between that but the cases take some time and you could ask yourself why couldn't the enforcement response be quicker, but there's a strength in that, too, because they wanted to do it carefully. when you bring charges, they're well supported. >> all right.

i don't want to take advantage of your time but i need you for a couple more minutes on two other issues. a year ago my friend former colleague and partner jim cramer asked you if you'd believe the euro currency would survive. you said, yes. do you still believe that? >> i do. i do. but let me just say a bit more about this. you know, there are people who believe that in europe that they'd like their own currencies back and believe the only way for germany to finance a set of unsustainable commitments across the rest of europe. but between those two extremes there is a very strong core group of people that are committed to doing the things they need to make monetary funding work and they have put in motion fiscal unions, banking union in the service of that agenda and of course they're pushing very tough economic

reforms necessary no matter what. but what is very important is that they not leave the continue tent hanging on the edge of an abyss as a device for more leverage for reform because that leaves the rest of the world much more exposed to financial pressure and slower growth of europe. so what they obviously need to do still is to pull the monetary back from the edge and put in place things that are better for growth in the short term, more stability and confidence in the system and enable the countries, spain and italy, to make sure they can borrow. >> have they pulled back from the edge? it is said you have been one of the biggest drivers to get the euro officiallies to move faster. i see that. i hear that. i read that. i congratulate you on that. are you satisfied we are back from the edge in europe? >> they're not satisfied and they should not be satisfied because they haven't pull it back from the edge far enough yet and they have not put in

place a set of reforms to make sure people have confidence in the banks, they have capital deposits are safe and spain and italy can afford to borrow and they're doing things for growth. those things are still in process. they need to do the short term things and not just long term reforms. we can't want it more than them but we have a huge stake in them successfully navigating what's still a very challenging set of problems. >> last one. to my delight, you and i have a good relationship. we talk on the phone. you have been terrific reaching out and for many others. i'm going to assume your public statements that you're coming the end of your tenureship at the treasury at some point in the months ahead. i can congratulate you for your term and we have to all face this, anybody that worked in government. what do you suppose your legacy will be as a treasury secretary during what we'll all know as a tumultuous period?

>> well, you know, the dead don't get to write the epitaphs. they're written by the living. so i'll answer a different question. >> kissinger wrote his own history. did a hell of a job. so you might think about that as a model. >> he's -- he's henry kissinger. as you know, i work with him. let me answer a different thing because this matters a lot. i think it's important to remember that the fortunes of people in this room are tied to the fortunes of all americans and we're not living just with a -- aftereffects of a devastating economic crisis but we have a challenging mix of long-term challenges, not just our long-term fiscal challenges, but remember, even before the crisis, remarkably alarmingly high number of american kids born in poverty. 40% of children born to parents on medicaid.

long erosion in the basic quality of american education. these are concerns should be for all americans and make sure that you help people understand that we need to get better outcomes of washington to fix -- these are things that governments are essential to fix. education, design of the safety net, incentives for private investment, infrastructure. they require better policy and action on the government. can't be solved with governments sitting there doing nothing. >> and so -- >> and so -- >> next chapter? >> for the country? >> for you. >> for me. feels like a long way away, larry. i have a lot ahead of me. >> let me speak personally. i hope for all the group we wish you all the best. we thank you, secretary tim geithner, both for your service an enyour time this morning. >> thank you, larry. [ applause ]

♪ what a conversation between kudlow and secretary geithner. good morning. i'm carl quintanilla with melissa lee at the new york stock exchange. delivers alpha conference in new york. they're gathering in the world of investing today. interesting exchange covering everything, guys, between taxes, the euro, europe at large and that -- probably most vivid exchange on libor so far with the secretary. >> look. i've got to tell you. i interviewed the secretary last year. i found him a little more down beat. i found him a little more worried. i did not get the sense that the crisis is over by any means and, frankly, i feel less reassured than i did last year. >> hard to imagine you wouldn't have when he said the economy is slower than it was a year ago. >> maybe everyone has a keen eye

for the obvious but we never want to hear it and we heard it from ben bernanke and tim geithner and look at the earnings saying, carl, you know, as far as i'm concerned because the earnings take a turn for the worst. the policymakers more down beat than the ceos. >> geithner says that the fiscal cliff is a significant risk to the economy and in the back half of the year. you have to think that perhaps hearing about the companies taking more tempered approach to earnings guidance, issuing more caution with the comments of ben bernanke that things could go to the downside in the second half. >> and the day's just getting going. cramer talking to the u.s. attorney later on. david, of course, wrapping up the session with bill ackman and others and talking more about what delivers alpha brings to us in the course of the session. futures this morning. ben bernanke on the hill again today and might be spicier with the likes of maxine waters, ron paul doing the questioning in front of the house financial services committee.

futures margins lower to the downside on the dow. europe, mixed picture with credit suisse and german two year in a moment. >> the road map for the morning starts with the markets. yesterday, it was a midday turnaround and today see what bernanke brings in day two of the testimony on the hill and better than expected earnings of bank of america and honeywell to digest irks the cfo telling cnbc uncertainty, the big problem in the back half. how does this set up for ibm's report tonight? ceo of per grin says i spent it. the money of customers used to fund a new headquarters, trainee activity and regulatory fees. the plot only thickens there. we begin with b of a with second quarter earnings. a nickel above forecast. revenues a bit shy of consensus. they say the provision for

credit losses down to the lowest levels since q1 of '07 and credit quality continues to improve. good numbers of wells and citi. is b of an in those camps? >> no. the quarter really doing the absolute best to feergt the whale. more of a joe that story than a whale story. they're banking and banking and banks, doing great. citi not that bad. bank of america has the comparison in to the last three and jamie dimon, listen up. bank of america says they have a fortress balance sheet. not just one fortress, we have two. >> two's better than one. >> two is better than one. it could be fort apache. we don't know. don't take the cue of the stock trading. profit taking seems within reason. >> anyone looking for some sort of real pitfall here would be

disappointed. not a great credit but for those saying fings are stable, they're not getting a lot worse might be somewhat reassured. they continue to, of course, have that reps and warranties and reserved an enormous amount. up to $15.9 billion at this point in terms of liability as of the quarter end. that went up a bit. but they also reversed some provisions. overall, a mixed quarter and nothing to -- oh my lord. you know? >> how about merrill lynch? surfacing as being a positive. i thought that was terrific. >> but if you take a look at consumer and business banking, that was down 16% year on year. net business off 54%. beneath the surface it is not a good tell. in terms of not positive on what the bank is doing in terms of its core businesses. >> true. >> at the same time, i mean, you know, this is maybe a joey brown some like it hot.

nobody's perfect quarter. i still think there's momentum going on. nobody -- >> i'm sorry. >> momentum. >> moynihan in drag saying that, jim. >> you know, i mean, hey, listen. the man is a lawyer. he's a banker. perhaps he's a celebrity. but i will say this. it's better than it used to be. i know that's damning with faint praise but still praise in the sentence. >> seeing the same trend of course overall in banking and goldman sachs to a certain extent yesterday. it's a key function of banks these days and cutting costs and where bank of america is focused. on the road and continuing to try to cut as much cost as you can. the overall profitability dynamic has changed. no way around that. it's changed. can't lever up the balance sheet. you have more capital against. fixed income is not the profit center it was. you have to bring down costs. >> the book continues. 13 bucks.

>> net interest margin down some 13 basis points. interesting piece in "politico" today talking about why the u.s. is still a good place to invest. he's going now to demographics. and some broader issues. also says he's in favor of an infrastructure spending program in the country that would be funded by repatriated corporate funds. may be moving the ball today, as well. >> yes. tim geithner i think would agree. larry's fantastic interview with geithner makes it very clear. maybe we are doing better. italy and china down beat. we're flat lining. you could say we're going down but for the banking system, i mean, versus the other countries, our banking system is truly in much better shape. truly. and i actually want to cite geithner for forcing the banks to be able to take capital. forces them to raise and forcing

them to take. >> all right. meantime, we have to move on to intel. watching the shares premarket decline. the world's largest chip maker citing a challenging environment. the forecast reflecting weaker sales and growing popularity of tablets and other devices that don't use intel chips and reporting second quarter revenues slightly below wall street investment. and tech earnings front, wall street bracing for after the bell results of ibm. jim, i'm wondering how much of a read-through you see considering the ibm's revenues are in services? >> it's not intel and not be any of the hardware companies. i take contrary approach. i thought that stacy -- the cfo and presented a much better than expected intel quarter. supposed to be a very big product transition to play havoc. obviously talking about the macro, different not to when coca-cola talks about the macro.

talking about a better fourth quarter. they have the new chips. they're supported by yield. they did return a lot of capital. they did make $5 billion in cash. ibm on the other hand, new ceo. worried they can't measure up with sap, a better comp and blew away the numbers and ibm i'm more tender hooks than reprospect with intel. >> jim, how much of the tone of earnings season will pivot around what ibm says tonight and do you think earnings season so far is enough to offset what bernanke said yesterday, move some investors up along the risk spectrum? >> you know what? this is the best question to ask, carl. it is the question that any of us spent time pouring over these quarterly reports has to say point blank. the ceos, one, more optimistic. no pie in the sky going on here. they have literally decided to

many of the companies averted or minimized europe. ceos saw it more than the policymakers so i'm more upbeat based on what i heard of corporation than policymakers. they sound like, listen, multiple cliffs. the fiscal cliff. the euro cliff. we have the cliffs. the ceos saying, you know what? honeywell, things are pretty good. europe is weak. jpmorgan upgrades ford and gm today. housing really strong. >> oh yeah. >> we are seeing -- not down that much. quarter after quarter after quarter that makes me feel so terrific like a parallel universe. >> wow. >> when worlds collide. excellent book. >> from some like it hot to that. >> it is all about google. >> one of the highlights of course right here of delivering alpha this morning, we started

off with an exclusive interview with the treasury secretary tim geithner. you say it right here if you're watching cnbc which you were. larry kudlow conducted that interview. the host of "the kudlow report" of course and right here to my left. tell us what happened. what his thoughts were. nice to see you. >> nice to see you. nice to see you. i want to say one thing in doing my homework for the interview, i went and got my friend jim kram who are interviewed last year and asked him, specifically, jimmy, he told you a year ago that the euro would survive. do you still believe that today? he said he did and making progress. and that was really the cornerstone of my last segment with him. >> i appreciate that. >> thank you. no, no. i think it was interesting because i have my pluses and minuses. personally i respect the guy enormously. personally. we have a great relationship. on policy, sometimes we agree and disagree. but as i say tried to say i have felt that he has been a positive

force in moving europe in the right direction with fiscal union and banking union and recapitalization of the banks. and the tim geithner's been a guy trying to move them faster. those bureaucrats in europe, move them faster. i think he's a force for good and as i say stayed with the jim cramer comment of a year ago. >> he did also seem to, larry, saying it's not going as well as he might have hoped. >> -- >> they could be doing a lot better. >> and i think it's not going as well as we hoped would be an answer to almost every question i asked him. that's the nature of the times. very hard to develop a clear vision right now. there's fog and some cases there's more heat than light and i tried to parse through it with him on the different subjects. >> larry, a fabulous interview. >> thank you. >> one of the continual themes is administrative officials so

much more downbeat than when you beat a company like a honeywell. broad array of business saying, listen, it is just europe. coca-cola, it is just europe. do you think we have become two euro sen trick or so bad in spain and italy and merkle is playing that we should just write off the rest of the world and focus on spain, italy, germany? >> no. i think we are two euro centric. i like to play a mind experiment. when guests come on the show for stock market investment segments, jim, i say let's put europe aside. if you never heard of europe, okay, if you never heard of europe, tell me what you'd be doing if you just looked at the united states. okay? because i'm from the old school. and i still think the united states is the world economic leader. now, i'm not thrilled about the u.s. situation right now between our downturn or slippage and the fiscal cliff.

i agree. other thing i'd say is i think we do have to look at the emerging countries. i'm not happy what i see in brazil and india and what i see in china. i don't know if i'm going to slit my wrists over it but not happy with it, jimmy. >> don't do that. >> i don't see an upward inflection point yet. this troubles me. >> we wanted to listen to secretary geithner had to say specifically about the u.s. economy. >> good. >> let's take a listen. >> slower mostly because of the trauma from europe, the aftereffects of the rising oil prices earlier this year and because government spending all levels of the government falling quite significantly and those three things are pretty significant drag on the recovery. but i think if you listen to most business economists or people in the markets now, you would say -- i'd say most people think that the economy is growing. still gradually getting

stronger. >> of course, larry, he also threw it back at congress and we heard bernanke today on the hill, yesterday -- >> yeah. >> same thing. guys, you have got it. you have got to try to deal with this problem for us. >> i want to say how impressed i was with ben bernanke's testimony yesterday. he did throw it right back at congress. we have this problem. and tim geithner acknowledges this problem. it is called the fiscal cliff. it is principally a tax problem. partially a spending problem. you don't want a tax hike right at this moment. you don't want that. now, mr. geithner and i may disagree of the ways and means to deal with this but he has problems. listen to me. he has democratic problems. he's got senator pat ri murray of state of washington saying if we can't raise taxes on rich people, the whole game is off. we won't play ball and let it expire. that's no way to do business. you have to try to do business

and what i liked about tim, he said at the end of this thing, we've had worse situations in this country where we have made deals. i like that. i think that there's going to have to be some give and take in washington. look. when i came to washington as a kid working for reagan, '81 and '82 for brutal years for the economy and the stock market but we made deals on taxes and spending. okay? in 2008 and 2009, brutal years. the bush administration, hank paulson is here today, moving in to the obama and geithner administration. we had brutal periods of time. what i'm saying is right now maybe this is to jimmy's point. things are not so bad compared to then. we need to do some political legislative business in washington and make some deals that make some sense if tim geithner is serious about the kind of long-term tax reform we talked about in that interview, then i am all for it.

individual tax reform. corporate tax reform. let's lower the rates. let's get rid of the phony deductions and stuff we don't need. jim cramer and i helped pay through dividend tax cuts years ago. we were driving that process. and we were not working in the white house. we need to do good tax reform now. >> larry kudlow, thank you. >> good to see you. >> back to you, melissa. coming up next, cramer on deck with the mad dash and take a look at the crowds here at the new york stock exchange this morning. anticipating mariana rivera ringing the opening bell. much more "squawk on the street" straight ahead.

all right. cue the sandman from the bullpen to the balcony. number 42, the all-time saves leader in major league baseball, mariana rivera to ring the opening bell and then talking to us first on cnbc. that's coming up in a moment. >> i don't think that we have seen a crowd like this since probably the last huge ipo. >> puts it to shame. >> it is packed in here. >> yeah. the excitement. david? >> thanks, melissa. of course, we got a -- yep. we have a little bit of time. a minute or so before the opening bell. let's use it for the mad dash

and a couple of stocks. one in particular which, man, trading alone vivus. obesity drug approved yesterday. >> let's talk about insanity. one point worries of the fda to not approve the anti-obesity drug. stock dropped 10%. for no reason whatsoever. i'm focused on how bad the holders are in stock. the stock soaring with approval. this is the second one. arena got it last week. david, what does it mean when people are trading on nothing and doing nuts trading on nothing? >> i don't know. yesterday, i had heard it. it's funny. i pointed out to melissa in the show with a potentially big holder selling and knew something. that's what the market assumed and people followed that seller out. >> right. >> only to find out, of course, that, you know, in fact, they should have stayed in. >> i'd rather bet on mariano

rivera. >> that's last night. man. >> guys, there's a look at the balcony and mariano rivera, the new york yankees closer, currently injured and talking to him about that torn acl. whether or not he can come back to the yankees this season. the team seems skeptical. we'll talk to him in a few moments. at the nasdaq, the judges and chefs of bravo's "top chef masters season 4." >> wow. what a day it will be. and again, ma mariano rivera wi join us in a moment. we have a mixed bag in terms of sectors but financials is one trading lower today. we have bank of america trading lower. with a mixed bag on results. and morgan stanley to report tomorrow, trading down by more than a percent. at this point, given the data

points we have had from the banking sector, what do you anticipate of morgan stanley? >> i think morgan stanley has to put up a great number. one of the things that i find that's so discouraging on morgan stanley is a football stock. you will find people trying to color the trading. morgan stanley, the battleground. david, talking about banks and people who are vociferous. >> it takes the brunt of things when it's bad and benefits when things are better. europe figures in the trading of morgan stanley. we got the moody's downgrade out of the way. the stock suffered waiting for that. through those periods of may and in to june. but you see, i mean, all right. i don't know if $14 is a level to see tomorrow. we saw goldman's results and fixed income currency and not great for the first quarter. see humor began did there and

investment banking is not the best place to be but they also do have a huge brokerage force. we'll see how -- >> a brokerage force, what about facebook? >> i can't imagine there's going to be finger pointing. we have heard on our own air, maria sitting down with him sometime back now but, you know, the overall business of selling equities is not a great one. didn't see ipos in june. certainly after facebook. and, you know, we'll see how good the numbers are versus what people expect, of course. not as though it's not incorporated in where that stock is going. rotation to industrials and when i see that activity, i say to myself, that's got to be wrong. downgrade the industrials now? i mean, hello! but the banks had a grumble. i'm not sure if you can exec come son dags. >> watching shares of knight capital and there was an impact,

i mean, as we all know, thomas joyce said in the past that $35 million would be the loss there pretax and seeing that eps. in that eps would have risen slightly had it not been because of the losses of facebook debac debacle. revenues coming in light. wasn't a good quarter for kcg. facebook or no facebook. facebook itself trading higher by 2%. zynga, you like to say that. up 3% today. >> zynga. maybe finally time to bet on spain, italy and zynga and groupon. all the same. one etf. you like this? >> guys, i would love to get your take quickly to promote delivering alpha today. jim, talking and then david later on tonight. your plans at 5:00. >> there was a time in this country where the most frightening words were, mike

wallace online two. that's no longer the case. it's preet bharara online two. grenades in the building. he is the most powerful u.s. attorney we have seen in ages. this is a room filled with people who i'm telling you listen to him because they fear the next grenade. >> i'll tell you, hot enough in the building and everybody's starting to sweat more. >> and they should because this man means business. >> at 5:00, we are going to have a great panel on real estate. not just bill ackman and a lot to talk to him about with nothing to do with real estate. procter & gamble for example. and john grey who you rarely hear from. running blackstone's real estate group being my guest at this time. so much to talk about whether it's the purchases of individual housing units to try to make reits and rental units for an reit to why blackstone is buying warehouses off the side of highways. interesting things to discuss

and, of course, maybe we'll get to jcpenney just for you, melissa. >> remember a year ago, too, david, delivering alpha is a short hong kong dollar trade and really unusual, a change from strategy. that he's taken in the past. it's not worked out and did do it through options and limited in terms of risk. >> meanwhile -- >> i suspect that mr. mcdonald of ceoo of procter launching an offensive soon. they make some changes just like i thought on johnson & johnson's quarter. could be a catalyst for change. not the canning of mcdonald but certainly set in to motion a lot of interesting ur ininteresting events. >> faster than might have been otherwise. >> a nice shot of mariano rivera coming around the floor. talk about a scrum. a lot of cameras. i think a moment ago picked up one of the phones at the post.

maybe placed an order. we don't know. >> do they work? i mean, should they work anymore? >> making the way closer to the set, he is obviously getting a lot of attention in this room this morning. >> he is. markets right now just -- let's see. nasdaq up fractionally. the s&p down fractionally. let's hit bob pisano with more. >> the important thing, guys, mariano rivera is here and brought a chair out for him to sit down. just had surgery a few weeks ago. he's sitting down for a few minutes. now standing up talking to some people in the crowd. here's a little bit of a bright spot. i don't think you mentioned this this morning. housing business. here's something showing incremental improvement. we are not going backwards. housing starts, highest since october 2008 this morning. that's just not just one data point we just picked out of nowhere. that's the only point that's improving. housing market index, that was out yesterday, highest since march of 2007.

housing stocks have been a consistent bright spot for the stock market. in fact, the main housing mark etf that everybody trades, itb at the highest level essentially in four years. let's not quibble. it's essentially right there. the reits, apartments doing excellent. the index near a near-year high right now and not only beneficiary of the real estate recovery but the fact that dividend paying stocks doing very well. let's give credit. i know it's a high anxiety summer. there's a segment that's showing some signs of improvement. elsewhere in the stock market, below the surface and see the leadership groups are the consumer stocks. your health care stocks like merck are hitting new highs and lilly and consumer names doing well partly due to interest in flight to safety a little bit. but also, the fact that this dividend story is continuing to play out throughout the years

and probably the major theme on the air, companies like merck and pfizer are also major dividend payers, as well. as far as the earnings this morning, honeywell, well look at the number here. honeywell did well on aerospace but the area i like to watch, the real estate reporter, automated controls division, organic growth of 4%. they raised the bottom end of their numbers. that's important. you know what that is? stuff behind the walls here. all the stuff that controls heetding and systems and big buildings. when those kinds of numbers continue to show organic growth, meaning not buying stuff but growing, that means there's still growth and 60% of honeywell sales are in the united states. finally, i want to note the ipo market is stirring here a little bit. we have five ipos this week. fender is coming. kayak is coming. but they just raised the numbers on palo alto networks. this is one of a big security company that is are out there.

network securities. that's going to price tomorrow night for friday. that's going to be one of the hot ones. back to you. >> bob, thank you very much. talk to you in a few minutes. now the bond pits this morning. rick santelli this chicago. good morning. >> good morning, thank you. i'm going to say something negative. not about a regulator or a secretary. i'm going to say something negative of yields. more countries now with negative yields. countries like finland have joined the crowd of switzerland, denmark, germany or the euro group. the u.s. in places like t-bills and inflation adjusted securities. but today's auction of two-year notes in europe really raised some eyebrows because they allowed the responsibility of a negative field at auction recently and if you build it, they will show up with their negative yields. about 6 basis points negative.

looking at a chart we are down a couple and need to close under 145 to make a new houistoric lo and you can see on the two-year chart they have negative yields. when did all this start in the secondary market? see the chart at the second and you can see shortly thereafter that yields started to move negative. what does this all mean? it just underscores that the safe harbor oasis now has a lot of bodies so looking for other little itty bitty puddles of oasis to hang out because they believe investors if there's safety, must be a compelling reason to give your money to somebody and give you less back. think about that when you think about what ben bernanke said yesterday about the u.s. economy and europe. back to you. >> all right. i'll take it. >> what a day, huh? >> thank you, rick. let's check out the latest moves in metals. going to sharon epperson at the

nymex. >> attention paid to the q & a with bernanke on the hill and whether's some signs of more monetary easing on the horizon. that is what the gold market is looking for because that is what the moves in the gold market hinged on over the last several months. looking at lower gold prices. the housing data that bob mentioned better than expected by some measures and looking at the fact that gold is now at the lowest level we have seen in about a week's time for the lows of the day. the 1570 level is key here for gold trade and interesting to see whether gold is able to hold at that point. we have also seen copper an enthe rest of the met 58s complex, copper showing signs of life as the housing data is showing signs of life and see whether that's able to hold in that positive territory. as we look ahead to the oil inventory data coming out at 10:30 a.m. eastern time, we have little movement here in the oil market. dwe

again, a lot of that may hinge on bernanke more than the energy department at 10:30 a.m. back to you. >> thank you. coming up, five championship rings to ringing the opening bell here at the big board. major league baseball's all-time saves leader mariano rivera here at post nine as we head to break. take a look at this morning's early movers at the open. ♪ ♪ ♪ ♪ [ male announcer ] what's the point of an epa estimated 42 miles per gallon if the miles aren't interesting? the lexus ct hybrid. this is the pursuit of perfecti

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conference moments ago, bank of america cfo bruce thompson addressing the involvement in the libor investigation. >> we have received and cooperating with the inquiries we get from both the u.s. and the foreign regulators. we are also one of a number of defendants in some of the other libor-related litigation and just given the fact that these are active matters there's not a

lot more than we can say than that. >> down a percent or so right now. joined by a special guest, yankee pitching great mariano rivera. leader in all-time saves, five-time world series champion. rang the opening bell at the nyse this morning a. pleasure to have you. good morning. >> thank you, carl. good morning. >> i was asking you during the break why ring the opening bell. you said the relationship between the yanks and the nyse has a long history. >> that's wonderful. yes. we wanted to keep the door open and make sure that that relationship still remains intact. an experience for me. you know? it's a privilege and an honor to be here and wonderful time. >> we should point out we're surrounded by literally hundreds of people. >> a crowd. >> i'm sure most of whom may 3rd and remember when they heard the news of that ligament of yours. you have not ruled out a return this season. how confident are you that it's

possible? >> well, carl, i haven't ruled out yet. but i mean, i'm positive and always optimistic. i want to take it day by day. if i don't -- it doesn't happen, i'll be disappointed. i just take it day by day and hopefully it happens. >> you're optimistic and you need about a month to work out in game situations in the minor leagues and august, september or so. so the timeline is running out, isn't it? your time is running out. >> time is precious. it's running out. i have to do -- i mean, but the important thing of this is you cannot rush it because i mean, times will heal everything. so i mean, if it was up to me i would be pitching already but i can't do that so, i mean, i have to wait. >> meanwhile, the team's playing great. best record in baseball. soriano's having a terrific run.

could it have an impact on your impact? >> i have more time to relax and be focused on what i have to do to some back as soon as possible. soriano has done a tremendous job. the team has done a tremendous job. you know? we lost a few guys, key guys for the long term and we are still in first place so, i mean, that say a lot about the new york yankees being the type of players that we have. >> meantime, how are you spending your time off? working on charitable projects. >> definitely, carl. that's important for me. thank you for mentioning it because, i mean, besides the rehab, i've been working on a project with the new york church, north avenue. and that's my passion, my goal. this church will be helping a lot of people, not only on the spiritual but also the need of

the community. talking about learning center, talking about after school program. that's our hope. that's our goal. you know? and doing that, i mean, makes me happy. so i mean, we have been raising funds to do this. and i know it will happen. so i mean, we have a lot of good people and especially here in new york. you know? a lot of people to help. a lot of people that give. and with the help of them, they're going to -- this will be complete. >> a lot of people these days think they're so busy and don't have time for charitable work. how much time do you spend there? >> i'm most of the time there. >> really? wow. >> yeah. most of the time. again, i have to make sure that i put my job with also the services i want to do, the help, the foundation, the needed. all that stuff. so i mean, when it comes 8:00, 9:00, i want to go to bed

because i'm beat up. >> before we let you go, where can people go to help donate? a place online? >> i don't have it with me right now. >> we can say it later. jeremy l in, i know it's a different league. would you have let him go? >> you're going to put me in a tough position. are you a next fan? >> i am. definitely. he was bringing a lot of energy to the city, to the community. but i think that -- i know that the next will be making the decision. they made it already. and i think it's best for the team. so i mean, i think for the sake of new york and lin, i think that was the best decision. >> yeah. it is a business. a tough business. >> it is a business. yes, it is. you can't forget that. >> thank you so much for coming by.

a pleasure to meet you. >> thank you. >> get better soon. on behalf of the entire world. >> i'm trying to do that. thank you. >> mariano rivera, of the new york yankees. dow down 15 points. cramer's final points from the delivering alpha conference coming up. take a look at this morning's s&p 500 losers. i don't spend money on gasoline. i don't have to use gas. i am probably going to the gas station about once a month. drive around town all the time doing errands and never ever have to fill up gas in the city. i very rarely put gas in my chevy volt. last time i was at a gas station was about...i would say... two months ago. the last time i went to the gas station must have been about three months ago. i go to the gas station such a small amount that i forget how to put gas in my car. ♪

let's go to simon for a look at next hour. good morning, simon. >> busy, busy program this morning. waiting for two day of ben bernan bernanke's testimony and asking whether the fed's dangerously painting itself in to a policy corner and news on bank of america conference call. we'll look at that stock in detail. can it build on the 42% gain this year and more from the delivering call that conference and maria's panel. back to you guys. >> thank you very much, simon. the turnaround of chips despite intel last night. >> intel opened down a percent. it's up 2% and bringing along the entire sector and the chip companies that had warned before like amd and q uallcom.

strong demand for fertilizer and originally brought the sector higher and now looks like a specific story out there, jim. >> yeah. i mean, agrium is telling the right story, i think. look, we have the take numbers up big and other chatter of the fertilizer move is played out. weakness on home depot and the garden supply business and maybe i'd be careful of tractor supply. focus. what matters is gross margins. 63% to 64%. usually not the peak. i don't understand why people are getting intel wrong. it is a really good story. stanley works downside surprise? short queez and big raise in dividend. important situations.

industrials on fire today. >> as well, honeywell shares up over 5.5%. as you say, industrials, that's one of them. >> i cannot wait for my guest. dave coty raising gings and saying do not give up on industrial america. aerospace really strong. flies in the face of what airbus said. the u.s. advancing. >> we talked about retailers yesterday, jim. and the downgrades. today it's tiffany. goldman taking it to a buy from a neutral saying it's rock solid. do you believe it? >> adrian shapiro is so good. the fourth quarter will be the easy comparisons and side stepped the move down. i'm back with adrian. she is the best! >> we should note, of course, bank of america shares, guys, not really doing much of anything. but there are a lot of talk about it being a low quality quarter. the quality of earnings strained as we used to like to say to quote shakespeare in part of the

reserve lease of the eps that showed up. >> this could be fortrez. they talk fortress. every man dead or alive to do his part. >> jim, you are going to be here, of course, preet bharara. >> i cannot wait. this is the most frightening man on wall street. also funny and terrific and a great, great interview. i'm betting on that. never been interviewed. >> "mad money" 6:00 and 1:00. >> thank you. >> we have a lot more coming up here from delivering alpha in new york and fed chairman ben bernanke back on capitol hill. round two of the semiannual testimony on the economy. we'll bring you the q&a session. we'll be right back. of -- fidel. 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.

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good morning. welcome to the second hour of "squawk on the street." you are looking at a live shot of capitol hill where the chairman ben bernanke will take the stand again today. day two of the testimony. in this case, the house financial services committee. we'll bring you the coverage live as it gets under way in a moment. first send it to manhattan and our own david faber live inside the pierre hotel here in new

york city at the deliveringal fan conference. things are just getting started, david. >> they are. uptown from where you are, of course, carl. we have many interesting guests and more many here at delivering alpha. the pension pitfall with the 1% annual returns of call pers. 7.5% bogey, what will happen there? we'll have a best ideas panel including jim chanis, lee cooperman, rob capito, president of blackrock and more. so you'll want to stay tuned for all of it. earlier this morning you are own larry kudlow had a chance to sit down with the treasury secretary of the united states, one timothy gaiteeithner and centern the libor investigation. if it's been going on so long, why did it take so long to reach

the seemingly critical mass? here's geithner's answer. >> it took some modest reforms in response to the suggestion in '08 and didn't go far enough and we have now taken the initiative to set up a broader effort involving all of the countries that matter around the world. to try to make sure we push and what happens now is reforms that actually fix the underlying problem so we -- the british central to that. we're not leaving it to the british because the world has a stake in fixing this. we did the right and the necessary thing and we did it early. >> all right. well, you hear that, of course, he went on to say that they had brought it to the attention of the british, pushed them to move on it. they shared their concerns but, you know, in terms of enforcement response, we said there's a strength in the fact that you take a long time here because the incredible enforce response means they're well supported. simon, back to you.

>> what was interesting, david, yesterday when you saw the mps talking to regulator and bank of england placing the americans for appearing to have pushed harder than the british at the time. interesting. david, thank you very much. what were you going to say? >> no, we're good. we're good. >> we should note that david faber's got a special panel of guests coming up today. talking rae esta ining real est repercussions with bill ackman, jonathan gray and barry sternlicht and carl saving the very best for last. this is the climax of course of today's delivering alpha conference. >> ackman loves to play. ben bernanke getting ready for day two in front of the house committee services and asked

about risks at the delivering alpha conference. listen. >> we have the two big risks still. i think we talked about it in the last year. the trauma, the crisis in europe, the second is this deep sense of political dysfunction. part of which is the looming effects of the tax increase and the spending cuts and the two things are the dominant risk to the expansion of the united states. >> bringing in steve liesman and rick santelli to the reaction and color on the day two of chairman's testimony. good morning. >> good morning. >> good morning. >> we have bernanke and geithner talking about policy and about libor. i just wonder where you think the discussion goes today on the house. >> you know, i think that he will be pressed on the issue of libor. i think bernanke's answers were unsatisfying to senators and at the end of the day to press him to answer the very question that geithner was asked, which is,

what happened between '08 and 2012? i remember what happened in '08. this is not really said but i remember that wall street journal story came out, carl, and i remember thinking there's more important things to worry about at the time than potential manipulation of libor. whether or not that was true 12 months later is unclear to me. >> rick, your thoughts on that? and you know, i mean, this is supposed to be a testimony about monetary policy but there's -- it's not out of the question that even perigren is brought up today. >> in terms of monetary policy i call them spitballs. thi i think the other topics eke on to in the agenda but the libor thing is overblown. >> huh? >> you're missing the point here! you're missing the point! >> always. >> okay? i think of a bank of america, jpmorgan chase and citi. did they receive t.a.r.p. money,

carl, yes or no? >> yes. >> carl? okay. do they help set libor rates or not, carl? >> yes. >> my tax dollars went in to the t.a.r.p. the banks took it. in my opinion i didn't agree with it. if you're going to save the banks and talk everybody on cnbc in to investing in the financial sector, now you come back and you make the libor a big issue and claw back so states that misappropriate their money don't have money, almost like a strong arming the banks to find money. they're on a money search, the attorney generals, bad mortgages or way to take money from the banking system. so here's my problem. if you fix the banks, and you knew about the libor issues before you dealt my money to t.a.r.p. and before you got all the shareholders back in then you should have indemnified them against the issues. four years passed and geithner

might have yelled fire but he didn't see if the fire genereng were missing from the room. i think it's disingenuous to try to claw back this money. that's my opinion. >> steve, the fact that we are discussing these things aenl not qe3 today, really leads one to believe that this is more about buying time at least until jackson hole. yes? >> you know, i think that's a part of it. i just would say with the libor scandal i think the financial industry is part of what gets hurt here and its reputation but what's missing in all of this thing is a victim in terms of the people who are hurt. if the issue has been that people have been -- the banks lowballing the libor numbers hard to say people paid higher interest rates and the interest of both parties in pursuing this is more, well, can the republicans score points on the administration? can the democrats score points on the banks? i'm not sure that gets us anywhere where we need to get to in terms of fixing the problems of this country.

qe3 i think is left to the fed. i think both sides expressing the preferences with the republicans saying they don't want to see anymore of it. the democrats wanting more of it but i think that the story for the federal reserve is that hay need to monitor the data. i don't think they're 100% convinced that we're in a 1% world. >> steve? >> i think they think at the heart we are in a 2% world and want proof of which one is the. >> isn't the fed because of the timing getting itself in a potentially dangerous position? if you believe that the data has to improve for them not to embark on qe because the likely results as the journal said this morning is probably given where interest rates are so low to push people in the equity market further, in other words, to juice the equity market as some may see it in advance of the november election? that's a dangerous position to be, isn't it? >> i think so but the chips are falling where the chips are falling and the time -- the chronology of events is not in

the fed's control. the data weakened when the data weakened. the uncertainty is something they can't control either. they're mindful of politics and the end of the day they have to take the action they think is necessary for the u.s. economy. >> i love how -- >> steve, do you think today is same general testimony? are you looking for anything? >> absolutely the same. there's no change at all. i think more importantly, rick, i don't think he has anything from a policy standpoint to redirect. i don't think he said anything yesterday he feels uncomfortable with. what i think is interesting is geithner with a forceful response of the fed's actions with libor than bernanke and watching to hear if bernanke adopts geithner's long wage of an early and enforcement action of geithner. >> that was a good one. thank you for that. we should mention five years ago today -- by the way, also,

steve's going to sit down with hank paulson and bob rubin today at the delivering alpha conference. benang five years ago talked about the jobless rate, 4.5. at that time, it was a much different picture he was talking about. subprime losses, potentially numbering in the hundred billion mark. it was more costly than that. >> really -- absolutely. meantime bank of america with earnings that beat the street's expectations. shares are trading lower this morning down by 1.75%. eric ojo currently has a hold rating and a $9 price target on b of a. great for you to be with us. >> thank you. >> the earnings, a decline in revenues in the consumer and banking business now, 16% year on year and the lack of quality in the earnings because of the credit loss release, the reserve

release, what is your assessment of the quarter? >> i think the quarter was a little bit worse than expected. i would say about 14 cents of the 19 cents that they earned in the second quarter came from reserve releases. that's good in the sense that credit quality is improving but it's bad in the sense that earnings quality is low and then let's talk about shrinkage. the loan portfolio shrank 1% from the first quarter. jpmorgan and citigroup grew 1%. >> right. and then add wells fargo and u.s. bank corp. specifically looking at the other bank results and pnc this morning, they set a lot more aside for mortgage repurchase reserves. the putback problem. granted a very low reserve in the first quarter of $33 million and then 438 million and then from your perspective does bank of america have enough set aside for that issue specifically? >> no, they don't. their mortgage repurchase -- the

mortgage repurchase requests ju jumped to 22.7 billion in the second quarter. they've only put aside about 16 billion. that's far below an i would expect they'll have to put aside much more this year. >> eric, on the subject of what they might need to put aside, we are concerned of libor. the chatter in london is bank of america may be the most exposed. we do not know. $4.2 billion is a projection of where they might be and kbw said they're speculating. what kind of figure would youest snat. >> i don't have any estimate for the libor exposure. for all u.s. banks total about $10 billion but i don't -- >> that's lower than $morgan stanley was way above that. >> i think it's early in the libor investigation. >> interesting. so where do you think the stock is going to trade to? we had suggestions earlier on the network that actually further down the line, citi

could easily $2 a share on the sort of base, the revenue base it now has. can you get additional moves on the stock price given that it's up 42% so far this year? >> i don't think so. i have a $9 target price. i think they're going to earn $1.03 next year and that's depending on the shrinkage. bank of america is still a shrinkage story and i think this late in the economic cycle why not just buy citigroup or jpmorgan which are actually growing? >> erik, they talked about cost cutting. has the stock moved beyond the asset sale story and about what else they may or may not have to unload? >> well, i still think that there are some questions about whether or not they're going to stay intact. i don't really know yet. they have done most of the low-hanging fruit for asset sales and the big question coming up is whether or not merrill lynch will stay part of

bank of america. it's very early. i would venture to say that they would stay with bank of america. >> all right. thank you for your time. erik oja. next, we'll hear from president and ceo of jane mendilio in the first interview on cnbc. that's after the break and live bernanke to come. and retire wi? then don't get nickle and dimed by high cost investments and annoying account fees. at e-trade, our free easy-to-use online tools and experienced retirement specialists can help you build a personalized plan. and with our no annual fee iras and a wide range of low cost investments, you can execute the plan you want at a low cost. so meet with us, or go to etrade.com for a great retirement plan with low cost investments. ♪ ♪

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welcome back to "squawk on the street" live from cnbc, institutional investors delivering alpha conference here. becky quick sat down with harvard management president jane mendilio. richard perry from perry capital. and pete briggert. great group. >> yeah. >> europe was a dominant theme to the conversation. >> what's amazing is three of the four have spent significant amounts of time on the ground. in fact, mary just got back this morning from europe. they have all looked at things and come away with a slightly different perspective. because, of course, it depends on the investments you are making. looking to buy sovereign debt, if you're looking in to the private capital markets, if you're looking even in to the stock market there, they came away with the an idea of investments to be made. probably most interesting is pete briggert an idea of, look out. there's really big, big problems

in europe and not worth the risk. the reward ratio that you are getting for any of this so he says steer clear but richard perry gets the sense they know this is a problem. that the ecb will come to the table. angela merkle will come to the table an he likes sovereign debt with italy and spain right now. he says, look, a really good yield on this stuff and it's probably a good time to jump in to . >> interesting. people very negative on europe, becky, tell me it's difficult to make money from that trade. so you might expect he would say pull away. don't necessarily look to short. >> exactly. >> short sovereign or other things. what are the ideas in terms of investment ideas to have. what struck you as perhaps most interesting? >> mary is to short the euro and an out there call. she's sticking the neck out. this is not something to tap dance your way around and she says short the euro and likes a

lot of stocks that you can find the individual companies and stocks that trade in europe, short the euro is single best idea on that so i'm guessing she thinks that means that more and more trouble to come and you could see some countries putting out at some point potentially. >> europe is still foremost for so many investors, regardless of whether they're even choosing to try to play in the markets because it colors so much of what you do over here, as well. >> right. i would like to talk about jane mendilio. this is the first time we got to sit down and talk with her. she came in this july of twalgt to the harvard endowment. the day before she started is the peak of the harvard endowment and did major retruck which aring. they were tied up in ill liquid assets and trying to diversify and the single best idea right now is natural resources. why don't you listen this? >> there are parts of the alternatives assets market that

is we really, really like and where we're growing that portion of the portfolio. >> which parts? >> natural resources is our favorite area and happens to be a favorite area where we feel that we may have an advantage as an early entrant in to the asset class, but the main reasons we like it are it's -- if you look at timberland, producing products that the world is going to increasingly demand and is increasingly demanding. still inefficient markets when you look at properties and how they're bought and sold and how many are bought and sold. it takes expertise to execute well. >> so again, that's what she was saying was the single best idea. she did point out timberlands is an area of this and trying to move and more and sees the middle growing class for not only the united states but around the globe and these people are going to need more and more. that's one way the kind of serve that demand that she sees. >> don't hear often $32 billion

at the forefront of course of endowments and people know. you mentioned the private equity where a number of endowments stuck in that key period and need it to fund and having a hard time doing so and they have to pay out 5% a year or so to support the school. >> they ran in to trouble of 2008 to freeze teachers' salaries and do things on campus that really caught attention there so they're under more and more pressure to make sure that something like that doesn't happen again. >> thanks, becky. >> thanks, david. >> back to you, carl. >> all right. thanks so much, david. chairman bernanke about to begin the q&a portion. we'll take you there live when we come back.

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want to get a check on the markets this morning. the dow. what seesaw action we down. closed up 78. even after the chairman of the fed speaking on the hill. jim mccoggin has more than 250 billion in assets under management.

jim joins us from des moines this morning. good morning to you. >> good morning. >> it's been an interesting week. clearly, top line growth in earn sgs a little bit challenged. bernanke did not have great things to say about growth or policy yesterday. and yet, your advice is still to say up to weight. why? >> yeah. stay up to weight in u.s. equities. chairman bernanke has repeatedly identified the very slow economic growth. it was inevitable that this recovery would be slow given the state of the housing market and the need of consumers to save and deleverage to rebuild the nns shl position. grow sloet. the chairman bernanke and fed did what they can in terms of injecting liquidity in the economy. the problem is the fiscal cliff. it is a fiscal problem. not a monetary problem. and that problem is a washington administration and congress problem. not a fed problem. so, i think there's very little

constructive that the federal reserve can do. what i expect chairman bernanke to do this morning is to talk about the slow economic outlook, the fact that the fed stands ready to do anything that they can to improve this. but i'm both expecting and hoping that he won't give any particular hints on qe3. >> we had the imf recently talk about the fiscal cliff. there's been some forecasts saying it could cost a couple million jobs. probably a recession. and yet, you're still willing to buy u.s. in the face of a potential lack of compromise on the hill? i mean, isn't that a bit of russian roulette going in to the second half? >> there's some danger in that but what i hear and what i believe is likely to happen is that after the election in the lame duck session and this depends very much on the results of the elections but almost any outcome likely you will get an

agreement on the fiscal cliff. the republicans in the congress, you get the bush era tax cuts prolonged and ke79 in place for lower income people only. if the republicans are in charge, they'll probably put the tax cuts in place for all. you'll have some more structured compromise most likely on public spending. so although the cliff will get close, i do believe that it will ultimately get punted and neither side will see it's in their interest to provoke a recession next year by really just basically inept public policy so it's going to look dangerous and really part of my thesis is that there's pretty good buying opportunities between now and december. but you shouldn't lose faith in u.s. business which continues to do pretty well. >> with that, jim, which sectors are you looking at? are you looking at the sectors that will have the most upside, the most beta from where we are now? >> yeah.

i'm kind of skeptical of buying too many of the highly operationally leveraged sectors. i think you stick with the successes of the u.s. which are basically technology, capital goods, transportation equipment and anything to do with those kind of areas i think is actually pretty attractive. you're seeing tax stocks do quite well even on bad days in the market and i think that reflects the success of large parts of american business. i don't think my -- i mean, my case on u.s. equities is not about some kind of boom happening. i do think we are in several years of deleveraging by consumers and hey we -- you don't really want too much of a sugar fix on the economy coming from more leverage. i think this is more sustainable than that. and that's really i think at the root of my long-term belief that the u.s. equity market in particular and the u.s. economy are actually pretty strong places to invest. >> jim, we are running out of

time. but back to the very important point of why you think that qe3 would be a mistake. >> yeah. yes. thank you. i think that was simon. yes, thank you for that. qe3 would be injecting liquidity in to an economy where the problem is not a sharp fall of liquidity. it's treating the wrong disease. the problem is fiscal. if qe3 were done, i believe that the excess liquidity would simply push the u.s. dollar down unnecessarily just because the quantity is available and that the liquidity would tend to go to relatively unproductive places like commodity investing which if the oil price went up would raisin put costs for u.s. business. so i'm of the view that qe3 right now would be a pretty serious policy mistake. and i think from the careful way he's describing it there's evidence that chairman bernanke is of that view, as well.

i think most of the people pressing for qe3 are those that own too many mortgage bonds and want someone to buy them. >> you might be right about that, jim. thanks so much. joining us from principal global in deman. >> thank you very much. let's go to sharon epperson. breaking news on crude oil inventory. >> the latest report of department of energy showing that crude supplies fell by 800,000 barrels in the last week. crude supplies were down by 800,000 barrels. gasoline supplies, surprisingly, fell by 1.8 million barrels. gasoline supplies down by 1.8 million barrels. the analysts expecting an increase in the past week and greater than expectations, up by 2.6 million barrels. we're also looking at refinery runs now down in the last week. a lot of analysts expecting an increase and still looking at relatively high rate of refinery runs for this time of year.

the fact remains that we are looking at kind of a mixed picture here with a greater than expected decline in gasoline supplies and not as great a supply in crude oil market. crude market up at 89.40. the greater momentum is continuing to be in the brent crude market which is above $104 a barrel and traders are paying close attention to the middle east, particularly syria and syria's defense minister killed in a suicide bomb apparently. that, of course, escalating some of the concerns about what will happen in the middle east with oil supplies there and we're looking at brent crude that is headed perhaps for its highest close since the end of may. back to you. >> all right. thank you very much, sharon. watching the markets here. we'll see. might see the wild swings we saw yesterday because especially with the house line of questioning, you are not sure what topics will come up. >> gets spicier. a little bit more testy in terms of market moves and the major indices seeing very small moves

in terms of percentages and pretty big moves with the financials, for instance. bank of america down by 2.4% just off session lows and a steep decline there. morgan stanley down by 1.7%. as for the look ahead to the earnings tonight, ibm trading higher and quallcomm part of the major chip turnaround today. a powerful rally with the chip sector. the philadelphia semiconductor index up by 2.6% and a big gain on shares of intel. intel shares up by 2.6% right now. >> and we are more or less 7% from the june 4 lows. we should say that, as well. just lost it slightly on the s&p. financials and energy driven us on that rally from the lows. again, 10% during that -- i think 6-peek period. >> china is a source of concern. the number of chinese companies barning about the quarter. air china.

zte. the big sportswear maker echoing nike and tcl making televisions and then of course the premier talking about how the labor market is more severe. >> severe is the word he used. >> hugh henry out overnight -- oh. we have live news. ben bernanke wjust beginning hi testimony. >> the federal reserve needs to be transparent and accountable. i would argue at this point we are quite transparent and accountable on monetary policy. besides our statement, besides our testimonies, we issue minutes after three weeks. we have quarterly projections. i give a press conference four times a year. there's quite a bit of information provided to help congress evaluate monetary policy as well as the public. also, very importantly, the federal reserve's balance sheet, its finances, operations

thoroughly vetted. we produce an annual financial statement which is add itted by an external accounting firm. we provide quarterly updates and a weekly balance sheet. we have independent ig. we have additional scrutiny imposed by the dodd-frank act. and very importantly and this is i think the crux of the matter, the general account -- the government accountability office, the gao, has extensive, broad authority to audit essentially all aspects of the federal reserve and the federal reserve accepts that and is cooperative with the gao's efforts. there is, however, one important exception to what the gao is allowed to audit under current law and that's specifically monetary policy deliberations and decisions. so what the audit the fed bill would do is eliminate the exemption for monetary policy deliberations and decisions from

the gao audit. in effect what it would do is allow congress, for example, to ask the gao to audit a decision taken by the fed of interest rates, for example. that's very concerning because there's a lot of evidence that an independent, central bank making decisions based only on economic decisions and not political pressure will deliver lower inflation and better results in the longer term. so, again, i want to agree with the basic premise that the federal reserve should be thoroughly transparent and accountable. i will work with everyone here to make sure that's the case. but i do feel it's a mistake to eliminate the exemption of deliberations and at least to some extent collie yate a political influence or a political dampening effect on the federal reserve's policy decisions. thank you, mr. chairman. >> thank you. i'll note that that bill did not

come before the financial services committee which surprised me. throughout your tenure as chairman, you have warned that the committee -- you warned this committee and others about the dangers of the u.s. miss call position, the annual deficit and the growing national debt. and now we're facing what you call correctly a fiscal cliff next january. i mentioned in my opening statement the need for long-term restructuring of our entitlements and i was talking about medicaid and medicare and to a lesser extent social security. would you tell us why you're concerned about the fiscal cliff? what will happen to the economy if we don't do anything to address it and what long-term strategies congress should be thinking about as we adepress these issues? >> certainly, thank you. first i think there's very little disagreement that the u.s. fiscal situation is not sustainable. under current law, deficits will continue to grow. interest will continue to

accumulate and ultimately we'll simply not be able to pay our bills so it's very important over the long term to make decisions collectively about tax and spending policy that is will bring our fiscal situation in to a more sustainable configuration. on that i should add is a very much long run proposition. many of the issues that affect our long term fiscal sustainability are decades rather than months or quarters in the future. and therefore, i think i would just suggest if i might that in looking at these issues you might want to go beyond the ten-year window which is usually the basis for fiscal decisions and at least consider implications of actions for even longer horizons. so it's very important for fiscal stability, for financial stability, for congress to provide a credible plan for stabilizing our long-term fiscal

situation as soon as possible. that's a long-run proposition, however, and the way the current law is set up we're going to have a very, very sharp contraction in the fiscal situation, increased taxes and cuts in spending that are very dramatic and that occur almost simultaneously on january 21st of 2013. as i discussed in my remarks and the cbo detailed in some detail, if that all happens that will no doubt do serious damage to the recovery and probably cost a significant number of jobs. that's -- it's not essential to do it that way. i think the best way to address this is to attack the long-run fiscal sustainability issue seriously and credibly but to do it in a more gradual way that doesn't have such negative effect tons recovery and i think most of goals met simultaneously. i believe that's the correct,

broad approach for addressing our fiscal situation. >> thank you. ranking member's recognized for five minutes for questions. >> mr. chairman, you say on page 6 we should address the fiscal challenges in a way that takes in account the need for long-range sustainability and the fragility of the economy. some argue in the congress it's important in the appropriations we're now voting on that we substantially reduce what we're committed to spend. is that what you're warning us against? is it the timing issue to not be trying to do this in the immediate next fiscal year but put in a place a longer term situation? >> i'm talking about the collective impact of the tax increases and the spending cuts which together come something close to 5% of gdp which if it all hit at the same time would be very negative for growth. it is important to combine a

more gradual approach with a, of course, a longer term plan to address the sustainability. >> let me ask you. you have been doing a great deal with your colleagues to try to provide an impetus to economic growth, at least an offset to the headwinds i think would be a way to put it. a number of people from the beginning of your reference to do this, quantitative easing and the twist and trying to make more money available, have warned that you were risking inflation and some have said that this might worsen our fiscal condition because you might be losing money. you're aware of the criticisms. this many -- i don't know, couple of years in to this. what's the record? were you wrong? >> i don'no. we're not wrong. i have a collection of op-eds and editorials of 2008 and 2009 about hyper immediate inflation, collapse of the dollar. none of that happened or going to happen. federal reserve is responsibly

using monetary policy to try to support the recovery. we are very cognizant of our responsibility for price stability and we have the tools to withdraw the policy stimulus at the appropriate time but markets reflected in interest rates and in inflation adjusted treasury securities suggest that markets are quite confident that -- >> thank you. i will share with you insight i'm sure you have already figured out for yourself, but being able to say i told you so is one of the few pleasures that improves with age. and you are certainly entitled to do that with the people who were calling wolf. part of the problem, though, was that it was ideologically motivated, some criticism. we have legislation that's been introduced, holding it off until after the election because they don't want to i think be seen supporting it too popularly but people will advance it if they can which would cut in half your

dual mandate. you are mandated under the law appearing today to be concerned of price stability and employment. and there is some who argue that's inconsistent and you have, in fact, been distracted of your focus of price stability by this equal mandate on employment. i believe by the way that's part of what people are trying to get at with the audit because as you said we have auditing of the financial transactions, any action with a private company is sometimes public. i believe it's part of undermining the dual mandate indirectly. they'll try to do it directly later if they can. have you found inconsistency of the mandate? has the concern of employment and i admire you for showing interfered with the ability of price stability? >> as you say, as you noted, inflation is low. it's in fact below the 2% target and not an evident inconsistency and i think the dual mandate has served us well and that we do

have the ability to address both sides. that being said, of course, we'll do whatever congress tells us to do. >> but you have found any inconsistency in meeting boths a suspects of the dual mandate? >> generally speaking, no. in particular, low inflation does contribute to healthy employment in the longer term so they're complimentary in that respect. >> your efforts to help the economy overcome the headwinds has not led to any inflation? >> no. >> another argument we have seen is that it's regulation that's slowing things down. you talked about the headwinds. i noticed you did not mention the committee meeting you're about to go to as a headwinds. having talked to us about the headwinds in your judgment the financial reform legislation we passed srks that one of the headwinds? >> i wouldn't want to rule out the certainty. >> i don't mean in theory. i mean the one we have adopted. >> well, it's possible that some of these regulations have some

impact on the cost of credit but there have been a lot of analysis that suggest that the benefits in terms of reducing the risk of a financial crisis are extremely large and whatever costs are involved are worthwhile. >> i thank you. i hope with that analysis of the bipartisan appointee here some of my colleagues who preach the virtues of cost benefit analysis will not ignore the benefits as you have mentioned them. thank you, mr. chairman. >> thank you. dr. paul for three -- five minutes. >> i had a question but i better follow up on the question you asked, chairman bernanke, concerning the audit of the fed because when the fed talks about independence what they're talking about is secrecy, not transparency. and it's a secrecy i don't like and that we have a right to know about. what the gao cannot audit and i believe it would be the position of the chairman is it cannot

audit monetary policy and you expressed yourself on monetary policy or agreements of central banks and governments and other banks, transactions made under the direction of fmoc, discussions or discussions between the board and the federal reserve system related to all those items. so it really -- it's really not an audit without this. it's still secrecy. and why this is important is because of what happened four years ago. it's estimated that the amount of money that went in and out of the fed for the bailing out overseas was $15 trillion. how did we ever get in this situation and congress has nothing to do say about trillions and trillions of dollars of bailing out certain banks and governments through the currency swaps? and the chairman has publicly announced that he's available. there's a crisis going on in

europe. part of the dollar crisis going on, building, unique to the history of the world in the monetary policy. and we stand ready. who stands ready? the american taxpayer just going to print up the money. as long as they take our dollars, we'll bail them out and destroy the middle class. the middle class is shrinking. the banks are richer. the middle class shrinks. they lose their houses and their mortgages. the system is biassed against the middle class and the poor. so i would say that this is -- if we protect this amount of secrecy it is not good policy and it's not good economics at all. it's very unfair. but my question is, mr. chairman, whose responsibility is it under the constitution to manage monetary policy? which branch of government has the absolute authority to manage monetary policy? >> the congress has the authority. and it's delegated to the federal reserve.

that's a policy decision you made. >> but, they can't transfer authority. you can't amend the constitution by just saying we'll create a secret group of individuals and banks. that's amending the constitution. you can't do that. and all of a sudden allow it to exist in secrecy. whose responsibility is it to for oversight? which branch of government has the right of oversight? >> congress has the right of oversight and we certainly fully accept that and we fully accept the need for transparency and accountability. but it is a well-established fakts that an independent central bank will provide better outcomes f. you want to go -- there's no constitutional reason why congress couldn't take over monetary policy. if you want to do that, that's your right to do it but it wouldn't be good from an economic policy point of view. >> yeah, but, if it's allowed to be done in secret, this is the

reason why i want to work within the system. what i want to say is congress ought to get a backbone. they ought to say we have a right to know and an obligation to know because we have an obligation to defend our currency. it is the destruction of the currency that destroys the middle class. there is a principled and free market banking that says if you destroy the value of currency through inflation, you transfer the wealth of the middle class and gravitates to the very wealthy. the bankers, the government, the politicians. they all love this. it is the fact that the federal reserve the facilitator. you couldn't have big government. if you love big government, love the fed. they finance the wars and the welfare and it doesn't work and ends up in a crisis. it's solvency crisis and can't be solved printing a lot of money so i think the very first step is transparency and for us to know. we have a right to know. you may be correct in your assumption or at least i'm sure you believe this.

but maybe i should be talking to the congress. that we should stand up and say, yes, we demand to know. trillions and trillions of dollars being printed out of thin air and bailing out the friends. they stand ready to do it. the crisis is as far as i'm concerned my opinion is it's an early stages. it's far from over. we're in deep doldrums and we never changed policy. we never challenge anything. we just keep doing the same thing. congress keeps spending the money. welfare expends exponentially. wars never end and deficits don't matter. and when it comes to cutting spending, republicans and democrats get together and say, oh no, we can't really cut and if we do cut we cut proposed. >> regular order. regular order, mr. chairman. >> and facilitate it all. >> thank you, dr. paul. congressman clay for five minutes. >> thank you. >> could we get the answer in writing that question. >> may i just comment?

congressman paul, your objections to the structure of the system as you mentioned. but all of the actions we took during the crisis, the swaps, all of those things are fully disclosed. it's not a question of information. it's a question of whether or not you want to give the fed those powers. if you don't want to, of course, congress has the right to take them back. >> thank you. >> will the gentleman yield me ten tekds seconds? we repealed a section in the federal reserve act which was the sipgle biggest fwrant of power to the federal reserve to lend money wherever they wanted if they thought there was a chance to do it. the aig loan. this congress in 2010 made a substantial reduction in the federal reserve's authority. >> mr. chairman bernanke, the national unemployment rate is 8.2%. lower than it was a year ago. as i said, it's important to put all americans back to work.

but i'm troubled by the large disparity between -- >> q and a between the house financial services committee and ben bernanke. you heard ron paul on what will be ron paul's last chance to cross the chairman as he is retiring. bernanke warning, of course, against auditing the fed further than what the gao already does. he says he has a collection of op eds from 2008-2009 warning about hyperinflation and the dollar collapse. took some joy in mentioning that as well. want to send it back other to cnbc. institutional investors delivering alpha conference where david faber is standing by. >> we are, in fact, back here on what's called the floor. our own floor here. having a litle break behind us. hence, it is quite loud. our own kate kelly has been running around, tracking down panelists. sometimes hallway chatter at these events can be quite informative, kate.

i know you were listening closely to a number of the panelists on becky's panel and caught up with a number of of them afterwards. >> i agree. hallway stuff can be the very best stuff. ripping off of the best ideas panel, a couple of fascinating things came up. i was able to get more detail. i liked what jane mandela has to say about natural resources. she manages the harvard endowment. her favorite idea is natural resources. i tried to get a little elaboration. she said they're investing in physical assets internationally as well as here. on the panel she talked about what some of those are, specifically timberland, farmland, energy, water. essentially, as she put it, anything that would support a growing population or growing middle-class population. i asked her to get information. are we talking india, china? she didn't get more specific than international. pete rigger actually caught a lot of people's attention. he's from fortress investment group. he talked a little bit about what he described as financial services garbage collection. what did that mean?

i talked to him afterwards as well. he said essentially you've got a swath of opportunities in the u.s., certainly also in europe, where you've got commercial real estate, residential real estate or even corporate debt that is trading at gutter levels well below what its valuation level might be. you have a prospect of the government stepping in to help bail out. those are situations that bear looking at. he thinks it's a great time for what he calls transitional financial. financially, a stock picker's market. if you're willing to do research enjoy massive returns again in europe. she also said her best idea is to short the euro. jim, i know that was an idea thought your attention. let's talk about why? >> first of all, is there an outfit that has been more front and center newswise involving europe and a bank? what i feel good about, this is very clear. if you're shorting the euro and you're jpmorgan, you've pretty much wound up anything related to the whale, i believe. you certainly hedged your

situation. more importantly, we have this tremendous conference. tim geithner saying to larry cud l low, the euro, it's not going to survive. gold's not going up. i'm thinking this bet by jpmorgan is the unraveling of the euro. that's the way you would make your biggest money. that is the largest piece of news i've seen come out of this conference. >> you could argue they continue to go down that road. maybe they don't get to the precipice of the euro ending. but you continue to see a move towards parity, ala what barrons had on its cover saturday. >> how much would you want to own european industrials? these guys would become more competitive. you know what's so weird about this conference? people act as if europe's an opportunity. i say weird because david and i joke every single morning. is there an opportunity in europe? these are very smart managers we have. they are spending a lot of time

trying to find the opportunity. they haven't written it off. if you could hedge it against the currency, that's smart. >> that's an interesting point. there was a lot of talk with richard perry about the nuance. nuance matters. why is there such a bipolar approach to the markets? it's either risky or not risky. you're switzerland or italy and nothing in between. worth white doing fundamental research and figuring out what the opportunities are even though, of course, you have to size them and figure out what happens if you have a bad stress test. >> right. i also want to point out. you can play these at home. >> that's what i was going to ask you. you have harvard management saying natural resources. they do buy timberland and forestland. didn't get well for calpers. they were down 11% on that. if wha can you do at home? >> wi. warehouser. they are just a vast depository of land. plum creek timber. very nice. most of these are reits now.

when you hear these things, look, there's nothing new under the sun. i always say, you want to go buy timber? why don't you buy a company that knows timber better than anybody in the world? wi. you want to own water? the only guy i've ever seen make money in water is in chinatown. it has been one of the biggest loser investors ever. simply impossible to make money in water. >> what if you want to make money in grains? people are super bullish on corn and wheat. >> agrium, unbelievable quarter. mo somedayic conference call last night. they're talking about the growth thesis. remember, the fertilizer companies, i've never seen them bearish in my whole life. >> jim, thank you. we'll be seeing you, of course, coming up. kate's going to continue to monitor that important hallway conversation for us. she's going to be back with more as well. by the way, a lot more of chairman bernanke's live q and a in front of the house financial services committee. that will be right after this break. [ male announcer ] at scottrade,

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two very important conferences happening today. delivery alpha in new york city. chairman of the federal reserve testing before the house financial services committee. let's go back to capitol hill. >> the excess reserves are not the issue. the issue is the state of financial conditions.

we are still able to lower interest rates, improve, broadly speaking, asset prices, and that provides some incentive. if i might -- >> are we not essentially in a negative real interest rate environment already? >> let me just agree with you on the following. that monetary policy is not a panacea. it is not the ideal tool. part of the problem is that we hit the zero lower bounds. we can't hit the usual practice of cutting short-term interest rates. i'd like to see other parts of the government -- >> in the very limited time i have, mr. chairman, i got to tell you when i'm speaking to either fortune 50 ceos, world class investors, small business people in east texas here's what i hear. number one, uncertain federal regulation and certainly harmful federal regulation is crushing jobs. number two, the threatened single largest tax increase in u.s. history. number three, a nation on the road to bankruptcy. and, number four, rhetoric out

of this president that vilifies success in the free enterprise system and monetary policy is not going to solve that problem. >> thank you. >> chairman bernanke, first of all i want to thank you for your steadfast commitment to taking action as you deem appropriate. i'm not any different than anybody else. i haven't agreed with everything you've done. but in today's -- today's another day of it where everybody gets to criticize everything you've done for the last ten years. i may take my shot here or there. i just want to say thank you for not giving up. thank you for not withering under this. we still need you and the fed to be actively involved even if there are things you do that i disagree with. i think i'm going to talk a little bit, first of all, the libor situation. for me, and i'm not asking for a decision. i know it's not technically -- one of the things i've heard

from the fiscal crisis of '08 is so many people walked away scot-free. the general government thinks we turned our back on potential wrong doing. in this particular situation if it turns up that our largest banks in the world repeatedly, intentionally lied in order to manipulate the market, do you think it's appropriate for them to be held to account? >> of course. >> either civilly or criminally, whatever might be -- i'm not asking you to make a judgment. if others make a determination that's appropriate, would you think that's appropriate? >> currently there's any number of enforcement agencies including the department of justice, cftc, sec, foreign and state regulators looking at this. i'm sure that they will apply the law appropriately. >> because i appreciate it. i think the american people would appreciate it very much if somebody who intentionally lied to manipulate a worldwide market on something that affects every one of our daily lives would be held accountable. i want to shift a little bit to the fiscal cliff item.

again, i'm not asking you to tell us what to do. i respect the difference of opinion. but this whole fiscal cliff thing is revolving around give or take $450 billion, $500 billion that will be shifted around give or take january of next year. that's round numbers, round dates. $500 billion, i mean, the fed itself changed the fiscal situation in this country for over $1 trillion in a matter of less than a year between 2000 and 2008. to suggest that $500 billion in an economy that's $15 trillion is going to change the dynamics of the world, i think it's a little concerning to me. but i guess i'd like to ask if it's not going to be $450 billion, $500 billion, i'm not asking you to tell me whether it should be tax cuts or spending cuts, what's a number, do you think, a general number, if that's -- to me, that looks like approximately 3% of the economy. i think you said 5%. whatever the number is. what do you think is an acceptable number either in tax cuts or tax increases or spending cuts to shift?

because we're not going to maintain the status quo. we're going to do something. that something may, of course, be the reaction of doing nothing. but something will change. i'm just wondering what's a number that you think will not dramatically throw us off this cliff? >> first, the federal reserve's actions are buying and selling securities. not spending and taxes. they're very different. the cbo says that the fiscal cliff is in the order of 4% to 5% of gdp. that biggest shift would have a significant effect on real activity and employment. so i'm in favor of an aggressive plan over a period of time to -- the $4 trillion gets tossed around sometimes over the next decade. i'm in favor of that. i can't give you a specific number for the short term. i think there ought to be a more gradual approach. i'm not saying you shouldn't consolidate the budget. i just don't want it all to happen on one day essentially. >> as i understand this, i mean, it may happen in one day. it won't impact on one day like everything else. federal spending doesn't end that day. we have obligations that we have

to continue. you know, sequestration cut is not going to happen like that. tax increases, i don't all of the sudden give the federal government $3,000 more that day. it's a slowly, gradual item over a year. so i think that some of the fiscal cliff thing really needs a tone of reality. i'm asking you this because up until now, i've seen you as a person of reality and conservative approach towards the real impact of whatever we do. >> the cboest ma estimates it c cost 1.25 million jobs next year. >> i you said. i've read the cbo report. i know exactly what they say. at the same time the cbo is one source. you're another. you're not telling me you fully embrace everything the cbo says in that report? >> i'm just saying that that order of magnitude in terms of jobs and gdp seems reasonable to me. >> i think everybody wouldn't like that. there is a serious question. i would argue with the cbo report on other issues. but they're not here today. you are. i guess what i'm asking is, it's

unreali iistic to think nothing going to happen. either we're going to do nothing which will mean tax increases which will mean massive spending cuts, or we will do something. we probably will not do everything. probably not kick the ball down the road and just extend all the tax cuts and get rid of sequestration altogether. we're going to do something in the middle. the question is, what's in the middle that is a reasonable number? >> thank you. >> i'm not looking to jeopardyize the economy. >> don't have a magic number. i just think you should take a smoother approach to achieving fiscal sustainability. >> thank you. mr. jones? >> mr. chairman, thank you very much. mr. bernanke, thank you for being here. two of my worst votes in 18 years, the iraq war. we didn't have to go to iraq. the second the repeal of glass-steagall. if i was not going to yield my time, i would ask you about reinstating glass-steagall. i think i will write you a letter with that question, sir. but at this time, because he's one of my dearest friends, i

supported him for the republican nomination to be president of the united states, i yield my time to dr. ron paul. >> all right. we're going to take you away from capitol hill. seems like most of the important q and a, at least, barney frank, ron paul, has already happened. of course, if headlines continue we'll go right back. meantime, welcome back to "squawk on the street." you've been listening to the fed chairman testify in front of the house financial services committee. the dow is up some 69 points. interestingly up 78 points yesterday on bernanke. a few moments ago we were up 78 points again. the s&p on track for the second highest close in about ten weeks. led in this case by technology. the dow up 68 right now. s&p is up almost seven. nasdaq up almost 27. want to get to rick santelli for some reaction on how the chairman has spoken today. rick, any headlines popping for you? >> no. but, you know, i think a lot of people around me enjoy the exchange. not only between ron paul, of course, and the chairman. that's always interesting. but i think especially barney frank. that was very interesting.

you know, let me tell you something. don't ever underestimate barney frank. very, very, very astute official. remembers things very well. i thought when he was pointing out various issues regarding what the fed should or shouldn't do and how they arrived at the authority, talking about issues that were broken open with aig. but i think, you know, we've seen also that he has selective memory when it comes to gses, comments like rolling the dice. i remember those well. but i guess the point of the matter here is, is that when we talk, for example, about all op-eds he saved about hyperinflation, i remember that time well. i remember a lot of debates on our very channel where i used to go out of my way and say, no, no, no. let's not call it inflation. let's call it commodity prices. i would ask the chairman once again to weigh in on the influence he had on things like oil prices and food prices that seemed to correlate highly with

quantitative easing programs. so these are the issues. and it made me a bit nervous, i'll be honest, carl. as a trader of t-bills and certificates of deposits, futures which no longer exist and euro dollars, i remember all too well the comments in the '70s that led to the hyperinflation in the '80s and all the denial we heard that was followed by very significant inflation. >> well said, rick. you mentioned ron paul. regardless why the q and a between him and bernanke is always riveting, he's back on the dais speaking. let's go back to capitol hill and listen once again to congressman paul. >> if it's the money supply increase, if prices going down of houses is not deflation, i wonder why it is that inflation is measured by the cpi going up rather than the money supply going up? our argument is that once you distort interest rates and increase the supply of money,

you end up with this gross distortion that is demanding some correction. so i would -- i've worked on this for years. we're not going to solve it today. the definitions would be much better if we -- if prices of houses going down is not deflation and cpi going up shouldn't be inflation. but we've had trouble five years. the monetary system, you say, this is not end all. can't solve every problem with monetary system, monetary policy. we've had this for five years and we're still in a mess. is there ever a time -- let's say we go five more years and we have the same problems but much worse. is there ever a time you might say i have to reassess my philosophy on monetary policy? or do you think it'll be the same no matter what kind of crisis? can you foresee any kind of problem that we would have that you would reassess your assumptions? >> i can't conjecture what

specifically. of course, yeah, evidence based. i'd look and see what happens and try to draw conclusions from that. certainly. >> the definitions, obviously, to me are, you know, very, very important. and if we don't come to this conclusion and we use these terms, inflation demands corrections, and the market wants to correct, so this is why we believe that we're going to have perpetual doldrumdrums and finally have a big one. do you consider this recession today something that is significantly different since 1945? much worse and different in any way? >> yes. because of the financial crisis, yes. >> thank you. thank you, dr. paul. that was a double dose you got. that was pleasantly unexpected, i guess.

mr. miller? >> thank you, mr. chairman. chairman bernanke, you've already been asked about the need for accountability if libor was, in fact, systematically gamed. but we frequently hear -- >> chairman spencer back saying we got a double dose of ron paul. that is true. another member of the committee actually ceded his time to ron paul who was already done for the session. and, once again, an interesting exchange between the congressman and fed chairman bernanke. we're also live today from the delivering alpha conference in new york city. our own gary kaminsky is there. a lot of interesting panels going on. gayry, what's up today? >> carl, given my background, of course the biggest focus i've had this morning here is on the news that came out of calpers a couple days ago. it came out their hurdle rate on that big pension, 7.5%. came out with a return of 1%. broken down it wasn't a big surprise. fixed income return last year 12.7%. real estate 15.9%. essentially the equity, the public equity, private equity

down. obviously that's going to be a focus here. you listen to bernanke. you think about interest rates. i'm going to be moderating a panel which i'm quite excited about later this afternoon, lessons euro. a lot of the younger people don't remember. that was once a good movie and a good book. you probably do recall. lessons euro. how do you try to invest in fixed income in a world listening to bernanke which essentially says interest rates are going to stay low forever? that'll be -- there'll be some good insight there. i will say that the panel is about to start right behind me. will be the best investment ideas panel. maria bartiromo will be moderating that panel. lee kuperman, no surprise. just saw lee on the way in here as he was getting ready to speak. he thinks stocks are cheap. he ran through his scenario call on why the s&p multiple if you look at it right now, the s&p multiple is giving you historic -- long-term historic opportunity to buy equities. i went through that with him. he points out to me, look at where the 10-year is. last time s&p was here in terms

of a multiple, the 10-year was trading at six and a fraction. he also is going to present here later and we'll have that data after that panel. he's going to have some interesting data in terms of how many stocks in the s&p 500 are yielding now more than the 10-year. and he will compare that to various time periods. what stood out to me was looking back 2008. world was coming to an end. financial crisis. i think those are some interesting numbers when you look at what is happening with the dividend yield within the s&p 500. vis-a-vis today, 2008. >> cramer made a point a few moments ago that the conference is basically a bunch of men and women, very smart, trying to unearth the truffles, the opportunities that are in europe. where the macro picture is so bleak. do you think that is a difficult argument to make right now? having been there in the not too recent past? >> yeah. listen, this conference like many of these conferences, i

attended them for tech kads. we were out at the salt conference with a lot of the same people in may. you're always trying to make the big bet, home run, to generate the biggest alpha by going where everybody else doesn't want to go. it's not a surprise a lot of the panelists, guests, attendees are trying to focus on europe. you want to focus on what you think is the disaster tu jour. not a surprise there. if you went to a conference like this as an example call in late 2000, early 2001, everybody would say they're focused on trying to find value in technology after things blew up. so i'm sorry. are we here? sorry about that call. trying to listen to everybody. that is really the focus. the focus is that that's where you probably think about five years out that the opportunity be. i'm going to tell you, jim is also going to be on that panel. i bet you he's not going to say there's a lot of opportunity there. we'll report back and let you know later. >> thanks, gary.

analysis on intel's numbers last night. their guidance for the year. a lot more of ben bernanke testifying on capitol hill when "squawk on the street" comes back after a short break. chances are, you're not made of money, so don't overpay for motorcycle insurance.

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it's been a long couple of days for the fed chairman answering questions on the hill. he is almost to the finish line. let's go back to the house financial services committee. >> i'll pay the $2,000 fine because i'm well over 50. those business people have money. large corporations have money.

and have you heard about the uncertainty out there with the businesspeople over the president's affordable health care act and the impact that that has on the recovery? >> we get lots of anecdotes. the reserve bank presidents around the country come to the meeting and talk about what they're hearing from their contacts. contacts frequently cite various kinds of uncertainty including regulatory uncertainty. as i said, though, it's hard to judge whether this is a small factor, large factor. >> from what i could tell it's a very large factor. i spent most of my time in this place working on manufacturing issues. and couple that uncertainty with the weak orders coming from the eu, which i think is our second largest trading partner besides canada, and the institute for supply management is now below 50. it dropped, i think, a dramatic

six points just in one month. if the manufacturing sector isn't going to lead the recovery, what will? >> well, i noted in my remarks that manufacturing seems to have slowed somewhat. part of it is the global economic situations. >> demand. >> demand. slowing in europe and asia. and that was part of my earlier point. there are multiple factors involved here. well, one sector which is doing a little better is housing. over time that will be a contributing factor. but it is true, as pointed out, that growth has been slow. part of the reason is that following a financial crisis, some of the factors that normally lead to a strong recovery, like a housing recovery or extension of credit, have been affected to some extent. >> what i've been seeing is that those manufacturers involved in

mining, oil and gas, exploration, anything to deal with energy, they're actually expanding. because they see the need for that. and banks are lending based upon that. but the massive uncertainty in the manufacturing sector, the fact that companies are unwilling to make decisions is, as you said, compounding everything. i met with a bunch of european union parliamentarians yesterday. they believe, of course it's in their best interest to say so, but i really believe that they think that things are stabilizing in europe. your opinion of that? >> i -- i don't think they're close to having a long-term solution that will solve the problem. and until -- until they find those long-term solutions, we're going to continue to see periods of financial market volatility,

i think. >> okay. thank you. i yield back. >> mr. scott, i guess? no. >> thank you, mr. chairman. >> mr. carson. i'm sorry. mr. carson? >> thank you, mr. chair. chairman bernanke, in previous testimony before this committee, you have mentioned that one of the best ways to strengthen our labor force is to improve the quality of education, especially in disadvantaged areas suffering from persistent unemployment and underemployment. some encouraging news that i found in the new monetary report is that consumer debt has shrunk. it's not clear to me whether our u.s. savings rate is increasing in proportion to the decrease in consumer debt, but i'm very interested in your assessment on the role of financial education, particularly for young people and especially students. the disturbing aspect to me of current consumer debt is the alarming increase of student

loan debt. do you believe, sir, that investments and financial education can help strengthen our economy, and are there any successful models or programs that you see as being effective in this area? >> the federal reserve is very committed to financial education and economic education more generally. i mentioned yesterday that i'm later this summer going to meet with -- on video with teachers from all over the country who are doing financial education to talk about different approaches and the value of that. it's clearly very important, the crisis showed that many people made bad financial decisions. that hurt not only them but also hurt the broader economy. so it's extremely important. at the same time, i think on the other side of the ledger it's important that we make sure that financial information such as credit card statements and the like are, you know, understandable. that they're not full of legalese and small print and those kinds of things. so it's really two sides to it.

so, yes, that's -- that's very important. there's still a lot of work going on about trying to figure out what works in financial education. and i would say that the record is mixed. one of the things that -- that we've learned, i think, is that financial education should be introduced in school. it's also important to have a lifelong opportunity. and many folks don't pay much attention to these issues until the time comes for them to buy a house or make some other big financial decision. that's when they're most likely to listen carefully and absorb those lessons. >> i yield back. >> thank you. mr. finch, five minutes. >> thank you, mr. chairman. privileges to the lowest ranking member myself, i'm close to the action. thank you for coming in today. to the chairman's opening question, mr. bernanke, about auditing the fed, none of us are

challenging -- i'm not challenging the transparency that you've given to us in seeing what is happening. but moving forward to the future, not the past, the ranking member's opening comments about playing politics, most of -- i know the freshman class, we're not here to play politics. this is about trying to prevent or hopefully build a better america than we have now. and auditing the fed to most of the american people seems like something that's responsible. if the political games wouldn't be played. can you just kind of comment? i mean, are you that opposed to auditing the fed? >> very much so. i think the term audit the fed is deceptive. the public thinks that auditing means checking the books, looking at the financial statements, making sure that, you know, you're not doing special deals and that kind of thing. all of those things are completely open. the gao has complete ability to address all the things we did during the crisis, all of our books are audited by an outside

private -- deloitte & touche, a private auditor. we have an inspector general. if there's anything that congress wants to know about, our financial operations, all they have to do is say so. the one thing which i consider to be absolutely critical, though, about the bill, is that it would eliminate the exemption for monetary policy and deliberations. the nightmare scenario i have is one in which some future fed chairman would decide to say to raise the federal funds rate by 25 basis point. and somebody in this room would say, i don't like that decision. i want the gao to go in and get all the records, get all the transcripts, get all the preparatory materials and give us an independent opinion whether or not that was the right decision i think that would have a chilling effect and would prevent the fed from operating on the a political, independent

basis which is so important, which experience shows is much more likely to lead to a low inflation, healthy currency kind of economy. >> is there anything that could be done? any kind of compromise in your opinion that needs to be done any more than is being done now? >> i think everything in the bill is basically fine except for getting rid of -- for getting rid of this exemption for monetary policy deliberations and operations. i think that's the part that is critical. and it's nothing to do with our books. that's the thing i hope to convey. >> okay. the second question, since the financial crisis of 2008, the federal reserve has put into play several measures to help stimulate an economic recovery like quantitative easing, operation twist, et cetera. do you see these measures as temporary solutions to stimulating the economy, or would the federal reserve continue these measures on a more -- z >> the fed chairman there wrapping up the closing end of his q and a with the financial services committee, talking about europe saying they're not close to a long-term solution. saying housing's doing a little bit better.

we did get good housing starts numbers today. on our way to break, take a look at the s&p for the last couple of months. we're just around 1370 here. just a few points away of taking out the july highs which is generally considered a pretty important technical level. we'll keep an eye on that. the dow, of course, off the highs but still up about 55 points. we will take a break. a lot more of the chairman's testimony on the hill coming up. don't go away. this is the first car that i've been totally in love with in every way, shape, and form. it's my dream vehicle.

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all right. our eye is still on capitol hill

as we watch the fed chairman testify in front of the house financial services committee. we'll bring any more headlines that he delivers as they become available. meantime, dow is up 60. shares of intel as well seeing a nice pop after the company beat on earnings after the bell last night. did fall short on some revenue expectations. world's largest chip maker also cutting its 2012 revenue growth forecast, reinforcing some fears that global pc sales may be worse than expected. alex gahn a senior analyst at jmp securities. good morning to you. the guidance would not suggest that the stock would be up today. but it's not doing too badly. nice turnaround mid session. why? >> i think on the contrary, i think some fears had been elevated coming into this. we all know it is a slowing macroeconomic economy. we also know intel in its legacy notebook categories is competing with tablets for the beleaguered consumers' very precious dollars these days. i think with the up guidance still of 3% to 5% growth, that's

a reasonably healthy guide in an environment like this. >> a lot of people know as margins go, the stock follows. is there room on the margins side to suggest that either the share price itself or the multiple might still expand? >> well, that's another great point. yes. absolutely the company reiterated its outlook for 64% gross margins plus minus for the year which implies a strong fourth quarter. 65% or so gross margins then. the other thing that helps intel is when they do invest in capital. they've reiterated their $12.5 billion commitment to next generation technologies. this is something the company has done in downturns past. you invest to grow out of it. >> tech has obviously been a laggard. in fact, the biggest laggard for the past few months. we're going to hear from qualcomm tonight. later in the week, i should say. ibm tonight. is there any sense that tech as a sector may be beginning to

turn or at least not be the absolute worst laggard? >> well, carl, yeah, i do think the tech sector overall was oversold. it's an economically sensitive group. as global macroeconomic concerns elevated, the group underperformed. those concerns are still there. but i think we've got very healthy product cycles on the way. you mentioned ibm, a leader in cloud computing. that segment should perform well. intel's data center revenues were up 14% quarter on quarter, 15% year on year. vm ware had positive things to say yesterday about cloud and virtualization. qualcomm, the other hottest trend in technology. mobile computing, qualcomm very well positioned in every single major global oem. they're going to perform reasonably well as well. >> we'll see what happens tonight with ibm ands be looking for comments on europe and so forth as well. ail educatio alex, thank you very much. want to bring in bob pisani watching what's moving today. in a lot of ways it does sort of echo yesterday's action.

>> slowly moving to the upside. i want to emphasize the one great economic bright spot. that's housing. because we're now getting consistently better data points. this is really the only ones that we're getting. i want to make sure people are aware of what's going on there. we did get housing starts numbers in here. take a quick look. the trend is improving. remember they kept telling you, oh, multifamily is doing better because everybody's renting more. now we're seeing single family doing even better. housing starts overall, single and multifamily, at their highest levels since october 2008. look here. it's not just multifamily. single family starts up 4.7. the highest levels it's been in an absolute sense in a couple of years here. very consistent now with the strong order trends we have been seeing from some of the home builders. we've been getting excellent numbers. i'm talking not april or may. i'm talking some of the june numbers.

bea beazer talked about orders up. we had yesterday the housing market sentiment index by the homebuilders. highest level since march of 2000. as a result of all this, housing stocks have been holding up very well. they've been a bright spot. look at itv. keep bringing this up. the etf you can buy if you want to own housing stocks. goes back four years. we're almost at a four-year high. that's investor sentiment telling you that the market's getting better and slowly improving. i've also had a lot of questions about real estate and investment trusts. a lot of questions about whether this should be a sell the news kind of announcement. this has been the biggest thing people have been writing into me. bob, we're at a four-year high. hasn't the market played this out? very interesting question. they're anticipating even better numbers. here's that particular index. that's the major debate right now. if you get significantly better numbers, our numbers are a fraction of what they were at the height for homebuilding, the answer is homebuilding stocks can go a lot higher. if you think this is the top,

absolutely housing stocks are at a top. i don't think so, though. i want to move on and talk about timber reits. over at the seeking alpha conference there's been a lot of discussion about what's going on with natural resources. i heard timber brought up. jimmy brought up warehouser earlier. i want to look at some of these timber reits that are out there. this is a play on the housing recovery as well. if you believe that the housing market can do a lot better, then timber reits is a very good sort of side way to play it. this is a four-year chart of potlatch. one of the big timber reits. they own timber on behalf of their investors. you can see it's been going nowhere for four years. look here. recently that's the little blip we've been seeing. those are people who are trying to get in ahead of the housing recovery. and this has been an underplayed sector. you can see some people already starting to play that. put up another one here. plum creek timber. another one. symbol is pcl. a timber reit. again, they own vast tracts of timber land on behalf of their

investors. another four-year chart. hasn't done much. look at the short-term period in the last few months, it, too, is starting to move up. my point is this is a sort of quiet, back door way to play the real estate recovery where there hasn't been an enormous move to the upside. one you want to look at, not a real estate invest trust, rayonier. >> permits weren't as good? >> that's right. however, multifamily permits were down. but single family permits were actually on the upside. my point here is everybody's poo-pooed the housing starts story because people are building apartments. i don't think that's bad. that puts people to work. now we're continuing to see strength in the single family even in the permit. >> even got the chairman's attention today on the hill. thank you very much, bob. speaking of which, we'll check back with ben bernanke on the hill. dow posting the highest of the session, up to 80. back in a minute. big splash with the employees.

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want to draw your attention to procter & gamble. the independent directors of the company making a statement saying this. the board is overseeing a plan to return p & g results to levels that produce the best long-trm value for shareholders. unanimously supports the plan and the ceo bob mcdonald as he leads its implementation and is monitoring its echktiffectivene. the dow itself positive for the month of july along with the nasdaq and the s&p. something to watch.

12,888. want to go back to the fed chairman who is still on capitol hill. >> the employment part of your mandate, is that correct? >> well, we can continue to evaluate the situation, evaluate the outlook, look at the tools that we have. and we're committed to make sure that we continue to have improvement on employment. but i don't want to imply we've done everything we can. we may do more in the future. >> so there is more that you might do? >> it's certainly possible we will take additional action if we conclude that we're not making progress towards higher levels of employment. >> thank you. there seems to be little reason for concern on the price stability side at the moment? >> for now, inflation seems to be well in check. >> you also said that progress has been made in terms of the e recove recovery, but unemployment is

still too high. the recovery has stalled and is not as strong as maybe you had hoped at this point. >> the recovery has decelerated recently. it's sort of a pattern we've seen for the last few years. things seem to be stronger in the beginning of the year, then slow down around spring and summer. so we'll try to assess, you know, whether this is just a temporary slowdown or whether something more fundamental is happening. again, we're committed to doing what's necessary to make sure the recovery continues and employment continues to grow. >> at one point you said that two big risks to economic growth were the european situation and the effects of the u.s. fiscal policy, so-called fiscal cliff. so -- your response to that, you said the most effective thing that congress could do would be to address the fiscal cliff. i think you said the sooner we did that, the better. what do you mean by that? the sooner we did that, the better? >> one of the issues, this is

not explicitly accounted for in the cbo study, is that even putting aside the effects on activity of the fiscal cliff, there's likely to be as time passes, as we get closer to the end of the year, we're likely to see increased uncertainty both in financial markets and among people who are making investment and hiring decisions about what -- what programs will be in place, which ones will not, what the tax rates will be and those kinds of things. >> so certainty and confidence are a big part of that, right? >> absolutely. >> and i know -- i'm going to try not to ask you to suggest things that we should be doing. because i know you won't, you know, answer those questions. but i'd like to ask you once to go back to a question. really a sense of what gradual mea means? can you describe that numerically in some kind of way as opposed to prescriptively in

policy? >> there's a range, people have different views about whether you should be more proactive or avoid the cliff. a range of views there. >> come back to the fed chairman in a moment. in the meantime some of the biggest names on wall street are gathering in new york today at the delivering alpha conference. want to go there live where our own maria bartiromo is leading a panel looking for the best ideas in this market. panel includes lee kuperman, jim chanos, robert capito. want to listen in for just a moment. >> good morning. i hate to start out by disappointing you, but i'm going to get to that at the end as opposed to the beginning. to me, asking for my best ideas is like asking which of my children, grandchildren or daughters-in-law i love the most. since i love them all i have to play a little bit by different rules. but i want to set a table. because over the years we've learned the expression that the bull markets, who needs

analysts, bear markets, who needs stocks? receiving tide lowers all the ships. let me tell you the environment i foresee. then i'll get into what i think makes the most sense. i would call myself moderately, underline the word moderately, constructive about the u.s. market. the answer, why? number one, we do not have a recession in our forecast horizon. typically bear markets precede recessions. secondly, to say -- it would be modest to say we have extraordinarily accommodative monetary policy, plus with a more active third, valuations are very reasonable. fourth, in my opinion, investors have derisked and the pain trade is up. i can't see my slide. basically i think i say at the end there, a little cloudy, to me stocks are the best house in the financial asset neighborhood. it's still, however, not clear whether it's a good neighborhood or bad neighborhood. in terms of specificity, you know, we have to understand,

economic expansions tend to persist for a period of time. you look at the middle column. the average economic expansion in the post-war period has been about five years. you know, essentially i think i can come up with more arguments that this economic expansion will be longer than average rather than shorter than average. i don't want to make the argument at the moment. all i'll say is we're about midway through a typical economic expansion. look at the points i've enumerated. with so many sectors of the economy operating below potential, one could argue this economic expansion could be longer than average. next point i would make, we have kind of sluggish continued economic growth. i think our s&p earnings are $104. the index about 13 times this year's earnings if you look at the next 12 months' earnings going forward the multiple in the market is about 12.5. i'll put that in perspective in a moment. number one, the economy is okay. not great. i have only seven minutes. maria is going to give me the hook. i don't want to explain to you

that the growth is too slow to reduce unemployment, therefore we're going to continue to be in a very stressful environment with a lot of social stress. secondly, monetary policy, the federal reserve board writes a -- every other day mr. bernanke tells us he wants higher stock prices, low interest rates over a persistent period of time. it's not just a u.s. phenomena. look around the world. look at the balance sheet of the ecb. look at the balance sheet of the bank of japan. if you look at the balance sheet of the bank of england. i don't have the balance sheet for the chinese banks, but they're now moving the same direction. i think something like 260 easings globally. okay? monetary policy clearly on your side. this is an interesting exhibit. in the 50-year period, 1960 to 2010, the multiple and the s&p average 15 times. current multiple according to 12 month forward earnings about

12.5. when the multi. and average 15 times -- 10-year u.s. government bond averaged 6.67. i got to point here. you can see this. >> all right. that is lee kuperman who's had a bunch of winners in the last year. giving some of his best ideas. we're going to hear more from that panel. in fact, brian sullivan is on our delivering alpha desk continues to monitor that panel and will bring us more of the ideas as they are revealed. that's the delivering alpha conference in nye thai city. want to take a break. get back to the fed chairman, his testimony on the hill when we come right back. home protector plus, from liberty mutual insurance, where the costs to both repair your home and replace your possessions are covered. and we don't just cut a check for the depreciated value -- we can actually replace your stuff with an exact or near match. plus, if your home is unfit to live in after an incident,

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if you like theater from the house financial services committee, you can look no further than maxine watters. talking to the fed chairman. >> could happen, certainly. >> okay. that's good to know. let me just segue into something that, perhaps, you had not anticipated. out in california, we have a number of cities that are filing bankruptcy. a lot of this has to do with the housing crisis and the problems that they have. san bernardino is one. of course, stockton. some time ago it was viejo. san bernardino they've come up with some interesting conversation about -- about -- about how to use eminent domain

in order to get these -- keep people in their homes. from what i can understand, they would access to properties through eminent domain and then they would pay the fair market value. but the fair market value is different than what the mortgage agreement. because they are now under water. they would keep people in their homes. and, of course, try and stabilize the housing. what do you think about that? >> i think it raises legal issues that i'm just not qualified to comment on. it's a very difficult set of problems that they're facing. i'm very sympathetic to their attempts to try to address it. whether this is a good vehicle or not, i'm simply not qualified to answer the question. >> well, do you believe that these cities are taking action because they're just basically tired of waiting for us to solve the problems of the -- of the housing crisis? there's one thing that i think you were involved in with the

occ. and it had to do with the mitigation process for dealing with some of the issues of getting information out to some of the people who had been harmed. and getting them compensated. >> that is disappointing. maxine waters talking to the fed chairman about libor and some of the ancillary effects that the scandal has had on some financial instruments here in the united states. we will try to get her back and bring you back to capitol hill in just a moment.

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dow is hanging on to some gains here of some 80 points led in some cases by some auto parts suppliers. with that we want to turn to our own phil lebeau. phil, what's moving and why? >> a big move by the parts suppliers, carl. we want to show you some of the biggest mover. these were all stocks beaten down between 10% and 30%. today jpmorgan initiatining coverage on a number of the suppliers and some of the automakers with buy ratings. they've been beaten up so dramatically. everyone from harmon, tenego, borg, warner. we're seeing a snapback if you will. these stocks have been beaten up so dramatically that jpmorgan

and others on wall street have said it's time for people to rotate into the parts suppliers as well as the automakers. a little too bearish is the belief over the last six months. back to you. >> plus, phil, stay with me for a little bit as we talk a little bit more about your beat in general. it's been a rough ride over the past couple of weeks in terms of headlines for the likes of ford. for the likes of gm. is the picture on europe going to crystallize any more than it already has? >> it's going to take some time. the hope is that it would crystallize soon. but it continues to deteriorate. in fact, i talked with somebody yesterday in detroit. they told me, listen, it's getting worse in europe right now in terms of sales. until they can predict the bottom, carl, i don't think anybody's really confident we're going to see much of a move by the auto stocks. with that said, shares of gm, back above $20 today. under $20 for several days. in part because of this jpmorgan initiating coverage. others on wall street are saying the same thing. we're getting close to finding a bottom for ford, for general

motors. can we say it definitively? not yet. >> yeah. it's been so interesting to watch the difference between auto sales here which have been pretty up beat, and things they're saying about europe which are difficult. >> two different worlds. there's north america and there's europe. >> thanks so much, phil lebeau in chicago. meantime, brian sullivan has been watching the delivering alpha conference and some of these best ideas coming from the likes of lee cooperman, brian, who has you know had some great calls last year. >> the biggest one there was apple. a bad one, too, in boston scientific. apple well outperforming his pick last year. this year the picks leon cooperman giving just in. get your pens. i'll give you three seconds to get your pens to write down these names. you got them. capital one financial. express scripts holding. ga net. halliburton. kinder morgan. metlife. qualcomm. watson farm. western union. a lot of names there.

leon cooperman's best ideas. he also recommended a1a group, carl. a hong kong listed company. 1299.hk is the hang seng ticker. waiting on more best ideas from jim chanos and a couple of others. as soon as they do i will jump in and bring them to our viewers. we are delivering alpha today. >> talk about a hodgepodge of picks. i'm trying to look for themes. >> ganette had a bad day yesterday. >> a core holding for some big managers. they've stuck through it. even as we've seen newspapers endure some tough times. metlife, capital one, qualcomm. >> i don't see a trend, do you, carl? i'm trying to find a trend here. a couple health care related. express scripts, watson farm. couple financials. metlife. capital one. western union. not a real big sector bet trend. very stock specific.

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