show early. waiting for the headlines. sort of a guide as to the regional economies as per those regional feds. listen, folks. the beige book moved the market before. find out if it does this time. >> absolutely. meantime, we have a nice little rally here. yesterday the second time in nine sessions that we were higher. today would make it the third. meantime, hampton piers with the headlines. >> the latest survey of economic conditions in the 12 federal districts finds economic activity expanded as a modest to moderate pace. most noted strength in the sales were in auto sales with demand for fuel efficient vehicles going up. all 12 districts saw housing markets positive with sales in construction increases. only philadelphia reported disappointing home sales. manufacturing expanded slowly with the deceleration in new orders in some districts, demand of nonfinancial services stable

in most regions. hot weather hurting retail sales in some districts and agriculture where the picture is mixed. drought conditions in some areas impacting prices and production. chicago and kansas city reporting deterioration of corn crops. price pressures, however, easing in most districts as energy costs decline. employment improvement described as tepid. again, back to the employment thing, finally, on the jobs picture contacts citing discall policy uncertainty and weak demand as reasons for a conservative approach to hiring. beige book in front of monetary policy making on july 31st. >> hampton, thank you for that. ben bernanke said in two day on capitol hill with regards to the unemployment situation, unemployment is largely cyclical but a risk the problem could be structural, as well. >> there's fear of retail sales

lately. i was going through the summary of the beige book. retail sales increased slightly in all districts except boston and cleveland and new york and sales softened but car sales which we have talked about a lot, car sales higher in almost all the 12 fed districts. not a negative. maybe slightly positive beige book. >> auto sales is a bright spot and housing increasingly, as well. having a look at the data of today. meantime, what's happening with the markets. heerl's something that you haven't seen too often lately. a two-day winning streak for the dow f. the gains hold up, it's the dow's first two-day streak of july where the dow and s&p positive for july. despite having more down days than up days this month and the s&p could be on track for its highest close since early may. as for the nasdaq, gone positive for the month of july with today's rally. let's hope it all holds. let's get down to bob and rick. bob, what kind of reaction to

the beige book? >> nothing we can't seen before. housing and autos two bright spots on the economic news recently. tepid employment levels. i think important that the beige book noted the drought conditions affecting prices. the agricultural secretary on earlier with president obama noting that food prices continue to increase in the summer as a result of that. so this is now an issue that's showing up on the president's plate as well as on the federal reserve's plate here. retail sales increasing slightly. we saw the june numbers, they were rather poor. maybe a little bit of a longer term per sespective on that. meantime, the s&p 500, hit 1375 about 2 hours ago and enough for an intraday level, the highest since september 4th. a nice move up in several days. s&p up about 1.5%. the market leaders today are industrials and some of the big tech names. mandy? >> thank you very much, bob. let's get out to rick santelli. i noted this morning the yield

on the 10-year not far from 1.442%. the lowest since the early 1800s. how are they looking right now after the beige book? >> not much changed. you know, whether you look at 2s, 3s, 5s, 7s, 10s, 30s. the road map to the next fid meeting. dollar index up 3. euro currency. very little change. the big talk today, mandy, and it's large, are how many countries have or are moving in to negative yooelds and the coupon part of the curve beyond bills. finland, denmark, switzerland, netherlands, euro benchmark, france and austria very close. so the dynamic of why is filtering in to our markets, as well, with an extra helping of demand on a time when housing data is good. yields, still down. >> yep. what does that say? bond market seeing that the

equity market is not. >> yeah. >> i think what part is insurance. many believe that removing interest rates, the last ecb move, helped push forward some of the negative yields and also considered insurance should the euro currency run in more trouble. >> rick, very quickly, scanning the beige book, a headline. overall loan demand grew modestly in most districts. hard to hear with the bells there. are we seeing low interest rates? you are not a fan of getting there but a low interest rate finally helping out? >> well, i'll answer it in two ways. first of all, most addicts are babies drinking milk. cause effect is very, very iffy here. loan demand picking up doesn't mean this it's coming necessarily from any of the fed programs although it could be. as for the fed programs, all of the trillions of balance sheet excesses sitting there, the issue is how to put them to

work. not so much. of course, creating more excess balances. >> well said. i do want to note that texas which is the number one state for business continues to kill it. in fact, dallas noting especially strong demand for mortgage lending and a healthy backlog of loans. >> i'm feeling vindicated here to choose the right state then. >> absolutely. according to the beige book, fantastic. all right, the other big head lines of the second annual cnbc institutional investor delivering alpha conference. we have heard of treasury secretary tim geithner and the most powerful names on wall wl and some trading ideas. kate kelly is there. she is here with the recap of what you have missed so far. kate? >> reporter: thanks so much, brian. so i have been focused on commodities today because i will be moderating a panel later on in the day but it's been an actually sub text to a lot of commentary today. i want to draw attention to trade ideas coming up. first of all, we heard this

morning from the woman that runs the harvard endowment, that's jane mendilio and talking about natural resources of the favorite best idea right now. i asked her what she meant by that. she is invested in physical assets within natural resources, a bunch abroad, some here. talked about people with expertise they have forestry degrees looking at timber land and farmland. >> aside from timberlands, what are we talking about in the natural resources? >> farmland. things related to as i say the demands of a growing world population. growing middle class population. people, you know, more infrastructure. more food, energy, water being used and consumed and demanded over time. >> reporter: so interesting thoughts of jane mendilio there and then heard about a different type of come modify from

kathleen kelly. she's recently started a new hedge fund of queen anne's gate. one of the ideas with platinum and the other with sterling and getting in a minute. here's the idea on platinum. with slowing auto sales in europe and the fact that platinum is a key element of auto manaufacturing she his thee will be a drop in futures and possibly cash prices. take a listen to what she had to say. >> another way to play weakness in the eurozone and fundamental reasons to be short it is platinum market. there's three sources of demand in platinum. the largest is diesel catalytic converters for car and slower demand in europe is a slow in the demand. the slowing sales suggests that prices moves lower from here. >> reporter: so kelly actually showed us a chart of eu auto sales and platinum and seeing a

correlation there and an indication that platinum is going to move lower in the near future and she said she's short sterling and the u.s. dollar might be the commodity currency of choice and that sterling is overvalued far variety of reasons and seeing a downdraft. maybe 30%. let's quickly listen to what she said about that. >> i think that the u.s. is moving to be more of a commodity producer and i think the u.s. dollar's probably going to be the next commodity currency to talk about so i don't mind being long the dollar against sterling. >> reporter: so essentially, with all the talk of europe today, we continued the conversation with tim geithner. we talked about europe quite a bit on the first panel with mary urdos to short the euro among others. it is an interesting point she is making and giving us bullish signals on the u.s. dollar and same time saying the british pound is headed for a tough time. >> kate kelly, the late nest a

strong dollar year so far. see how that plays out. let you get back to the conference. one of the biggest head lines of that conference is legendary short seller jim chanos is short selling hp calling it the ultimate value trap. he also noted that more apple ipads sold in the fourth quarter than the biggest pcmaker shipped in that quarter and with the stock down 44% over the past year, is shorting it a good idea? let's bring in sha wu with a buy rating on the stock and joined by herb greenburg. what do you take of the big short on hp? >> first of all, i want to say we have a ton of respect for jim chanos. one of the top hedge fund managers out there. he had a great call. the stocks caved in quite a bit but the stock here trading at four times earnings we think there's more upside than downside from here. >> why do you think, shaw, that

there's not more of a negative reaction to the call by jim chanos today? i believe it's the second best dow stock for the day. >> because, frankly, the stock has come in quite a bit, right? and if you're short the stock, you know, why not cover here? near the low. and the other thing is that you look at intel, right? intel reported numbers last night. they're okay. and they guided down. and in the stock's up so it tells you that bad news is kind of priced in to the stocks at these levels. >> shaw, this is herb greenberg. if you look at the company and the products it makes it's still some of what of a commodity business and comparing with ibm with a strategy, you don't know what the strategy of hewlett-packard is at this point to try to move the needle away from commodity and away from appears to be dysfunction. >> yeah. you know, that's a fair point. i mean, we like ibm for that reason that you stated. we have a buy rating on that. we like apple for that reason but hp is trading at four times

earnings. >> but i think jim's point is it can trade at four times earnings and as we have seen so many times with companies where there is an issue, it goes from four times earnings to two times earnings. >> yeah. i mean, that's always a risk, you know, but at the same time these businesses aren't going to zero. i mean, they have always been in the commodity businesses and the difference is that the reason why they did well is because they were well run. right? hp is arguably not well run. we think it's fixable and they can still do well in the commodity businesses aez we have seen and we think the stock will trade higher from here. >> shaw, i don't want to get too wonky in the accounting but chanos said hp is hiding spending in r&d by making acquisitions and by his math it's cash flow negative. your response? >> yeah. i mean, the accounting they have, i'm not going to argue. it could be better but on the

flip side, you know, these -- they're not like hiding anything. the acquisitions cost money, right? and frankly, you want to see them make acquisitions. they need to change the strategy. >> but if you're making acquisitions and the r&d via acquisitions, you have to hope that really pans out and this is not a company with a track record of that panning out. >> yeah. they need to do something, you know, arguably bigger. the problem is $100 billion company. >> on top of that, the issue of printing where you have some analysts saying fewer people are doing printing. you saw the lexmark news and the question is how does that translate to a very big part of hp's business? >> i think the key there is the people who are positive on this name, you know, they're not looking for growth. right? just looking for stability and one of the things in the printer space, we have said this in the past to fix is more friendly for people to print on tablets and

sma smartphones. they can't do it. it's too difficult. right in they have to make -- that's to us a fairly easy fix making software, making it easier for people to print. >> great for your thoughts on the show. thank you very much. he has a price target of 31 and a buy. let's get a market flash now of mr. brian shactman. >> debacle is not dead in terms of knight capital. they reported earnings today. down sharply at and at the lows of the session. basically a 23 cents a share charge because of their trading losses of the facebook ipo. missed on earnings. they would have beaten decisively with the 23 cents back. back to you. >> thank you. on deck, andrew ross sorkin just sat down with henry kravis. we'll speak with andrew. investors lost confidence in the market. they think it's rigged. is it? and -- >> mad man jim kram we are the new sheriff of wall street.

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are always on the move. so they can't get to the bank to deposit a check. instead, they use citibank mobile check deposit. it's easy. they just snap a pic... ♪ hit send... and their checks are deposited right to their account. well almost all of their checks. stand back. seriously? [ male announcer ] citibank mobile check deposit. easier banking. every step of the way. welcome backs. let's talk eurozone. secretary geithner stressing that he thinks the currency will survive but that europe pan officials must act quickly. >> what is very important is that they not leave the continent hanging on the edge of the abyss as a device for more

leverage for reform. >> let's get the view of london. joining us is louise parker. good to have you on the show once again. are you confident that policymakers in europe pull the continent away from the edge of the abyss? >> absolutely not. mr. geithner, come over. if you think you can do it, smack some heads together. i love the idea of teetering on the edge of the abyss which we plainly are and only there because they want political -- using it as a political maneuvering to sort of force countries to reform. no, i don't think that's the case. i really don't think that's the case. none of them can make up their mind what the solution will be. >> do we go over the cliff? in to the abyss? >> we're not too far away from it, to be honest. look at spain. so what happened with greece? austerity was imposed on greece.

the gdp figures collapsed and what happens with austerity and the debt position out of control. a downward spiral of austerity, gdp, debt. downward spiral. what do we do to spain? guess what? we're doing the same. 65 billion year of austerity last week. spiral down on the gdp figures and spain is following the same path as greece. why are we not learning? >> but here's the problem, we don't have to get to december 31st at midnight for there to be a problem, right? we are talking about it. we are talking about on msnbc, fox. the general news, if poithe poi this. isn't the risk being pulled forward as people clam up on the spending terrified, right? the fiscal cliff's impact could almost already be here now. >> and that's without the effect of what's happening in the

eurozone. that could be a global ka it is a proall by itself. we have china, the biggest economy in the world. slowing down quite dramatically. i almost feel -- been reading history and i feel like in the '20s and '30s and loads of crises at the same time and the politicians and central bankers were not taking the right actions. to be fair to you guys stateside, you have done a much better job of sorting out the mess than we have here in europe. >> so far. >> the ceo of saks had a few comments about this approaching fiscal cliff. let's take a listen to that. >> fiscal cliff as a major uncertainty on the world is responsible for a real burden and a real diminution of wealth

in the country. everything is worth less. >> just so -- so much skepticism, isn't there, out there amongst everybody. business leaders, krleos, about whether or not to get this fiscal cliff situation sorted out. to what degree do you feel it's right now one of the biggest things stopping people from investing in the market? >> i think it's always at the back of people's minds. a bit like qe. there's the things that, you know, always are in people's minds thinking about whether to invest or not. what i think is interesting and what we have forgotten is that -- and again, look back at history. when you become an indebted nation, a massively indebted nation you are giving away the power to control your own destiny. and that's what i think is happened to the states and to europe. we have lived beyond our means. we particularly in the states you don't pay enough tax to fund the welfare state, you know, the

medicare that you have. you know, how many cities, how many states in america are teetering on the financial brink of catastrophe? >> forget the fiscal cliff. what about the demographic cliff. look at the growth of medicare and medicaid spending over next 25 years in this country. right? i mean, there's -- >> but it's the same here in europe. it's same. >> no way to pay for it. who buys our debt in ten years unless we clean this balance sheet up? >> and history shows you that when you are indebted, if a crisis happens then everything goes horribly wrong because you no longer have the power over your own destiny. look at, you know, there's so many examples in history where a country, you know, what people forget is that banking system has to be strong for an economy to be strong. but actually, a banking system and a financial system is strong for country to be strong politically because if you're indebted then you cannot be strong politically. you cannot throw your weight around the world and you are

left at the mercy of your creditors. >> thank you very much. >> we have all forgotten this. >> thank you very much for reminding us. on that happy note, let's just all go slit our wrists. thank you for joining us. >> yeah. it's tough, folks. demographics. we coined it. did demographic cliff. just ahead, the human lie detector. an expert tells us what he thinks big ben really feels about the direction of the economy. plus disney hitting an all-time high, up 32% for the year. is it a buy? mamama

uh, i'm in a timeout because apparently

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hi! how are you? [ male announcer ] learn more at isitlowt.com. [ laughs ] hey! disaster du jour is rvoi. cut the forecast for the quarter and the year. blaming weaker sales of consumer electronics and entertainment businesses and cited delays of new patent licenses and launch of products. i didn't know the company. it is in our world. making digital tv guide products and try to help find better

content. on the web with compression of video. really on the back end of the online video type world and tough day for rovi. >> johnson & johnson is the sunshine stock. j&j not seen at these levels since 2008. it was actually herb's pick in the stock draft and congratulations to you, herb. get your congratulations because it's the best performer since the draft. up by 7% since then. ur in the middle. i'm in the lower half. >> i had 12. i'm 6 or 7. the reason he picks j&j is using their products. >> not going to say which ones. >> another dose of sunshine. >> an older gentleman. >> auto sales, the fed said in the beige book release sales beginning to rebound. let's bring in phil lebeau. i want to talk about auto sales in a second but i have to start with something else. this probe in to the ford escape

seems to be getting some steam in terms of unintended acceleration and probing the escape made '01 to '04 with a crash that killed a 17-year-old. any fire behind the smoke? >> reporter: too hard to say. i know that's not the answer people want to have but, you know, when these investigations take place, it's a long time. especially unintended acceleration. when the whole toyota thing happened, people said we have runaway cars and ultimately a number of investigations that found that most of these reports were due to driver error. so it's simply way too soon to know if there's something here or not. >> i want to bring up talking about earlier with the beige book and the comments of auto sales and the fact that autos and now increasingly believe it or not housing as well are bright spots in a fairly sluggish economy, how much longer to shine the torch in terms of that bright spot. >> reporter: the average age of

the vehicle out on the road in america is all-time high averages 11 years. now, yes, vehicles are made better. they last longer. so you can drive that car longer. but that pent-up demand, that's really driving things right now. if you get any kind of real momentum in the economy, people expect auto sales to take off. people are saying, okay, in that 14.3, 14.7 annual rate term is to be expected. >> let's talk about who's losing, winning, doing well. i purchased recently a relatively new jeep wrangler unlimited. the four-door one. trying to buy america and help the good men and women in toledo. who's killing it and hot and who's sagging right now? >> reporter: looking at who's hot right now, jeep and chrysler. benefiting 0 of a couple of things. one, rotating in to a new product cycle. that jeep that you bought, remember, the jeep just a few

years ago when sergio and fiat took over they were dogs, really, really old dated models and seeing the new cadence as they say, new models and brought people like you and others in to the showrooms and looking at the chrysler group and brands, they're the hottest. in terms of who's struggling right now, hard to say anybody's struggling and not a cop-out answer. everybody's sales generally speaking moving high we are the demand out there. are there others who are running faster? like chrysler. absolutely. there are those. even the brands that have struggled, the japanese brands, they're doing better because they have more supply. >> i love the jeep. got the roll-up windows. the thing about as bare bones as they come. >> a hamster in the back running the wheels. >>ly need one with hand. did you know this? there's a cult of jeep. not just the grand cherokee. the wrangler or wrangler unlimited to wave to everybody. >> yes. >> like being on a boat. hey, hey, hey. >> reporter: you talk about the

cult of jeep, this's the one brand and there's -- you know, when you talk to sergio, the one brand to grow around the world, jeep. recognizable around the world and long forgotten in terms of the brands that can grow. >> i have jeep elbow. >> i like it. we should have more brands. >> thanks, phil. meantime, jim chanos' hp call one of the best ideas of the very smartest money minds. grab a pen because we'll run through the rest of them for you. and up next, jim cramer's exclusive interview with wall street's new sheriff, preet bhrara bhrarara. we are back live at the delivering alpha conference. "street signs" will be back in a moment. tdd# 1-800-345-2550 we're hitting new highs. tdd# 1-800-345-2550 the spx is on my radar. tdd# 1-800-345-2550 and i'm on top of it all with charles schwab. tdd# 1-800-345-2550 tdd# 1-800-345-2550 i use streetsmart edge and its tools like... tdd# 1-800-345-2550 screener plus. tdd# 1-800-345-2550 i can custom build my own screens

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it is time for street talk. if you're wondering why i'm so small today, so many people say, gee, how tall is that guy? is he a giant? are you a midget? i took the heels off. normally this high. this is how small i am. there you go. the twitter verse is now -- >> yeah. you're short or i'm 8-feet tall. >> anyway, before the break we told everyone to take out the pens and write down the best ideas. this one is courtesy of leon

cooperman. >> a little different. from the delivering alpha conference. a hong kong based stock as the top for the year. here you go. i'll read you through the names or you can just look. capital one financial. express scripts. gannett. a tough day a couple of days. halliburton. kinder morgan. metlife. qualcomm, watson pharmaceuticals and western union. that's the best nine stock ideas. >> wrapped up in a blue box courtesy of taf thatny's. >> here's the first name. upgrading tiffany to a buy saying while the near term is quote shaky their long term franchise is solid. they think they command five bucks a share in earnings power down the road and investors willing to withstand near term volatility. >> what's that?

30% upside from here? >> yeah. >> i think leading the retail sector gains for tiffany. on the other hand -- >> you are there every day. >> huh? i wish. i wish. i wish. every single finger and toe. on the other hand, goldman downgrading another luxury retailer, saks. >> exactly. saks bound by the environment. they think consensus likely coming down because it doesn't reflect the tough macro background enough and margin contraction at saks, down .7 of 1%. goldman raising tiffany, cutting saks. >> citi cut shares of macy's, nordstrom and saks recently, as well. obviously souring going on. vivus really soaring. they have a new weight loss drug. another one recently from arena pharmaceutical giving us more choice. >> it's qysmia.

i don't know how to pronounce it. here's the thing. approval for the weight loss drug. right? that stock up 9.5%. management said they're looking far partner in europe, a sales partner in europe. they said the drug likely forsale here in the fourth quarter. didn't talk about pricing. you mentioned arena and probably throw it up. basically a name on the other side of the trade, right? >> bad news for them with competition. >> yes. that stock down 7.9% today with their own drug. basically they're going to go head to head. right? >> yep. >> here's the thing. very quickly. we don't know if they're covered by insurance. that's key, folks. even the ceo of vivus said he's not sure of that. covered by insurance more people use it. >> take a look at fed chairman ben bernanke on capitol hill today and answering questions of the house financial services

committee. can you detect his true feelings? eamon javers joins us from washington with a man who says he can. >> reporter: phil houston spending 25 years inside the cia as one of the experts in creating their deception detection techniques. that is, ways to tell when somebody's hiding something from you. you can see how that would be important in intelligence. but now he offers his services to businesses and financial firms and he says it's important in business, as well, to be able to test whether or not somebody's hiding something from you. we put that to a real world test. phil houston watched the press conference for us and here's what houston made of it. >> how much worse will the situation in europe have to get before it starts seriously denting the prospects for recovery in american economy and thus really changing the direction of fed policymaking? >> well, we hope it doesn't get

worse. i think it's already one of the factors that has been a drag on the u.s. recovery. >> first of all, we saw a very large deceptive cluster, meaning a high volume. quite a few indicators. let's start with the nonverbal indicators. we saw several. what we call an inappropriate level of concern. or what the psychologists call duping delight. >> reporter: mandy, we also asked about what he thought of ben bernanke's comments on european leaders and whether or not they could manage the european financial recovery. take a look at houston's comments there, as well. >> clearly suggest he has a lack of confidence that they can get it right. at a minimum it end kaits he believes it could get much worse. >> reporter: it is interesting to see how an ex-cia psychological approach approaches the task we do, what is ben bernanke mean testifying

or talking to reporters. he's a co-author of "spy the lie" and gives you tells or indicators verbally and nonverbally of how to tell when somebody is holding back some information from you, mandy. >> fascinating stuff. i'll be on the watch-out of deceptive clusters. >> reporter: yes. >> eamon, phil, that was really interesting. i don't know a deceptive cluster. you don't have to be phil houston. he is sitting there going are these really the questions you are doing? do you have any idea how you sound to anybody with a little bit of financial knowledge? just guessing that. >> when he's pausing, there's an inner sig going, again? >> reporter: you know what phil houston says -- >> no, i'm kidding. >> reporter: those pauses when you see somebody really delay in the first couple of seconds after a question, that is an indicator of deceptive behavior and they look for these clusters so they look for verbal and

nonverbal indicators all coming at once and within five seblgds there's something here. if you have one, maybe you throw it out but if you see a bunch of them at the same time, this's the deceptive cluster and where they drill down and got to ask questions of whatever it is he was focusing at this time of the deceptive cluster happened. >> absolutely fascinating. i'm sure you can do with the color of tie, as well. thank you very much. thank you, eamon javers. let's get to courtney regan. >> crude oil topping $90 a barrel for the first time since may 30th and just slightly below the mark and brent crude oil that topped $105 in futures and also some pretty heavy volume there and all of this is because of the geopolitical risk. we're uncertain of iran's next move and paying attention to what ben bernanke said and he said there is no fear of that

double dip recession. that helped us prop up the prices and natural gas up more than 6%. it is hot out there and part of the reason. mandy, back to you. >> blame it or the weather i say. thank you. still ahead, jim cramer's exclusive interview. not good at this job. exclusive interview with the -- >> deceptive cluster. >> new sheriff of wall street and what it takes to restore true investor trust on the street. plus the all-star decoding alpha panel. putting the actionable investment ideas here in focus for us and they have got their deceptive cluster radars out. see you then. at u.s. trust, our expertise extends well beyond investment advice and research analysis. it includes proprietary offerings like our eldercare program, which helps provide for those who came before you. and our financial empowerment program,

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coming up at the top of the hour, u.s. airways is doing its best to fly toward a merger with american airlines. the ceo doug parker will explain why a deal in his view could help profits take off. plus, not one but two former treasury secretaries set to help investors navigate the challenges in this economic environment. hearing of hank paulson and robert rubin live from the delivering alpha conference.

is the interest rate rigging scandal another reason to stay away from the stock market? we'll see you at the top of the hour near at the new york stock exchange. guys? >> thanks, bill. in the meantime, the biggest names really the biggest names on everything from the health of the u.s. economy to the best stock ideas from wall street's brightest, they're all gathered in new york city with us today for our delivering alpha conference. andrew ross sorkin, steve liesman, david faber standing by for an old style all-star panel. you're decoding it for us. andrew, what's the biggest takeaway for you? >> i think the hottest news of the conference thus far the hp news and i throw it to david faber. as i know one of the hp resident experts, the fact that jim chanos is shorting this thing.

>> that was interesting. >> not an apple opportunity. >> if you can, just -- >> i think the idea is it's not a company with huge cash flow. that is not the type of innovation that ultimately we needed to get there. that the industry unto itself, computers, full stop are going to be a struggle. he also talked a little bit of dell, by the way. hp one of a piece. and so the real question is, can they revive their fortunes or is she a one way train going one way? >> meg whitman would take issue with that thesis, no doubt. having taken over the title only six, seven months in october and that being said 300,000 employees, better hope that they figure it out there. andrew to your point and perhaps to his, it could take years and a lot can happen in that period of time to turn around a company of that size. the ink business is still not a bad business. that being the printing business, referring to ink. does deliver a lot of margins still. and but to the point about r&d, you know, we'll see because

that's where they're going to have to create the value if they want to stay relevant. >> anyone in the tech business have years? maybe weeks. thinking about things i'm buying or what tech i want, hp doesn't come to mind. i have to tell you that. >> other highlight of me. you saw it, too. >> kravis was a highlight. never talks. >> never talks. >> i mean -- >> talked about carried interest. >> one takeaway. all this time, you finally got him in public. what's the takeaway? >> i tell you this. i actually thought that he was willing to give up carried interest if they could get a real tax reform on the plan. >> he kind of punted that. >> you thought so? >> that's a pat answer for him. tax reform. >> tax reform. >> not answering directly about the question. >> he did try to suggest he was open to it. you don't think? >> i think you could infer that. i don't know. because he hasn't really answered the question. >> remember what buffett told us

last week with becky? >> reform is the cop-out word. nobody answers any questions. i 'm in favor of reform. right? by the way, i have rubin and paulson coming up and -- >> i want them. i'm going to -- i'm in the room for that one. i mean where they disagree and agree and have to say given i think there's not that many -- could be no holds barred if they chose to. >> i tell you my thinking on this and pulled the panel together is free fly fishing trips with both. no, no, no. the reason why is i think so much debate at the extreme edges. right? i i see them as two guys close to the center on different sides of aisle and thinking is there something out there we're missing? is there some proposal, is there some idea, for example, avoiding the fiscal cliff, dealing with the deficit, getting the economy on track that guys can agree on and then start out -- i think similar to that. >> don't give away the best

question because if there's one thing to expect they might walk away holding hands on it would be what? >> might be raising revenues. and i don't know -- >> coming at it from two different ways. paulson >> but you're coming from it two different way, paulson is okay for raising revenues i think, he just doesn't want to raise taxes. >> that's right, they want corporate tax reform. it is the simpson bowles idea. i'm also interested in talking about the past a little bit. they were luminaries of wall street and washington. where do they think it went wrong? we think about the financial services industry today, it's in receivership to the government. not in fact, but theoretically. how did we get here? i don't think anybody thinks wall street is getting back to the godle years or the golden age. is there a way to get to it from

where it is now, the -- >> i will be interested to see if they think there is any road to that with the libor scandal. quickly if i can tease what i have coming up, we're going to be talking real estate. >> that's not nothing, that's something. >> and not to mention, akman's p and g. >> i have to jump in here, we have our exclusive interview with jim cramer, let's listen. >> 65 and 6 is your record. what percentage of the people in this room, beside you and i, are wearing a wire? >> that's your first question? >> yes. >> could i take a second to say it's great to be here -- just say that i'm -- it's really interesting because i have never

been interviewed by somebody -- probably the only person in the country who is more caffeinated than i am, and let me also say that i know you told me there would be a lot of people here from the hedge fund industry and other folks, i department appreciate how many people, i want to apologize in advance that i don't have enough subpoenas for all of you. obviously, i am kidding, i do have enough. what was your question again? >> okay, how prevalent is it, the insider trading, that we can make a joke -- you're making a joke about subpoenas, and the answer is you have to have a lot of them because it's more systemic than we ever thought. >> yeah, when we began looking at insider trading cases, which were being looked at, a lot of the cases we brought, the

investigations began with the fbi and the ftc before i got there, and we continued them and got many new ones. a year and a half ago, i said given everything we had seen, and how casual it was, and how arrogant people seemed to be acting, that it the rampant. i think that was proven by the number of cases that we brought. we brought 71 cases and we have 65 convictions and 6 are pending. it's dishartening the level of insider trader that we have proven for a lot of reasons because i think people need to believe that the markets are fair, and the same rules apply to everyone, and every time you have a case of insider trading, you're showing confidence and that belief is misplaced, and

it's disheartening because of the cases brought by my office and others that it's not limited to one industry, not limited to one type of person, or geogra y geography. you have it in all of the industries, and when you see the kind of insider trading cases we have been bringing of late, which is different from the classic insider trading cases you have seen before, you get concerns about culture at trading entities and companies, because what we have have shown from cases proven in court, is they are people developing networks of sources so if they don't get the information from one source at particular company, they might get it from another source, if they can't get it from that source, they have a stable of other sources from places called expert networking firms, so the problem and the concern you have about culture and this problem is far

beyond the fact of a single insider trading indication or act, because we're bringing, in individual cases, multiple count prosecutio prosecutions, and i think in the old days you would not see that level of pervasiveness. >> why should we buy a stock again. i don't want to buy a stock, because i have a feeling that someone knows more than i do. i do my homework and i do my best. >> i don't think you're allowed to buy stock -- >> recommend. [ laughter ] >> look, part of our job, is exposing these cases and showing we can have an effect, is to bring people back to a level of confidence in the market. i was once asked at a forum like this, isn't it the case that these cases are under mines

people's confidence in the market. that's an od question, it's the conduct that we're uncovering that should be bringing people's confidence to a lower level. and i think if you have open, aggressive, fair and proper and proved cases that you bring, and you show you're having an effect, which i believe we're having, i think that's the kind of thing that overtime gives people confidence and tells them they will get the same fair shake as everybody else. >> as somebody who tried and failed to get a job in your audience. i am continually amazed how business people believe that the u.s. attorney's office is the repo repostory of people that could not get a job in public practice, and they don't fear you. >> do these people actually say that? look. the kind of people that come to

my office are -- and i'm blessed to inherit an office that include former secretaries of state and people who ran for governor, and people's whose names are in law school buildings, some of the smartest and most indegty filled lawyers and prosecutors that the country has ever seen. i don't think they're second tier to anybody, and i have seen very much people who are incredibly privileged and smart, and lowers sitting in jail cells because they thought they were too smart for public servants that engage in law enforcement. the other thing i will say about your question is it is true some people don't have a business background, and we appreciate that. in the say way there are members of boards that don't have subject matter expertise about companies they're supposed to be overseeing and monitoring.

and the same is true when ceos go from one industry to another. we take great care to make sure we understand the facts, we have discussions -- i have at in the library of my office on a number of occasions when we're talking about the state of play for a financial organization or orz, and the cfo or ceo comes or the general council comes, and we have experts, and we consult, and we talk about what business model is, and if people say to us you don't understand what you're talking about, we say prove us wrong, you know what? cheating is cheating and lying is lying, and if it's masked behind 17 pages of powerpoint presentations of why a tax shelter is okay, i think our folks are smart enough to see through that. >> let's talk about business

models, you bring it up in this room. i'm sure we have a lot of people who are worried -- i hear people worry so much about fiscal cliff, what it could do to their firm. they worry about what the break of the euro could be, the italian bond market, but there is a systemic risk they're not worried about, and that is you rolling that grenade into their office, why don't they put it in there with the euro and the fiscal cliff? >> so, i think you're right. i'm agreeing with you a lot today. i spend time not only talking to groups like this, but business schools, board of directors, and security lawyers about this very issue. people spend a lot of time thinking about external things and thinking about the bottom line as they should, and a lot of timenk