this's the way it happens is that all the money -- >> unfortunately. >> all the money at the end and buys the top. it's a sad reality but that's what happens. >> jim, thank you very much. good to be with you this week. we have you for two more days. that's it for this edition of "power lunch." >> we'll see you tomorrow. and welcome to "street signs." the dow's run keeps on. even a big boom won't always prevent a big bust. we're going show you the three worst market rallies of the past century. the french talking 75% for the rich. we'll debate what the top rate is that won't force workers to run scared. plus, we'll stay on the school district loan story that has everybody up in arms now. and think of a public company pro- mags of hot dog carts and adult toys. this is really -- no offense to

beach boys, good vibrations story. >> hello, everybody. wall street's rally may be running out after steam but may be able to end today at fresh highs and if the dow can finish the day higher it would have the first four-day winning streak in maybe more than two months. s&p 500 also trying for four-day winning streak. not had one of those in about seven weeks now and the nasdaq having the toughest time weighed down by drops in travel companies, priceline and expedia. orbitz in the mix, as well. let's get to mary thompson at the nyse. keeping the rally going but only by the skin of the teeth, right? >> we just turned negative on the dow. >> okay. no skin on the teeth. >> and actually, the s&p is now just holding right above that 1400 level. unl, it's interesting morning. concerns about europe weighed on the markets early on. the euro started to recover. hold on to some -- held on to decent gains and not a lot of conviction behind it as

evidenced by the pullback we have seen so far today. again, the s&p of course closing above the 1400 mark as you see right there just barely holding on right now. quick check of some of the stocks we have been talking about, particularly the retailers because some of them -- sorry, the dow movers first. mcdonald's disappointing same store sales numbers and putting pressure on that stock and hewlett-packard with strength raising the third quarter outlook. those are some of the stories that play within the dow. also within the s&p, we were seeing strength and consumer stap staples in large part because of dean foods but retailers are weaker despite macy's good numbers. different story for ralph lauren. it warned on the revenue for the current quarter and keeping pressure on the stock today and walmart basically dow component, third best in the dow today following along with the strength we are seeing and some of the other retailers and

pretty much is a mixed picture. the dow giving up some of the earlier gains. >> thank you so much. herb is joining us here on set. you say that something feels a little off in this market. you have a great piece out on cnbc.com. everybody can read it if they want to. tell us why the market is plain weird right now. >> weird is putting it mildly. you gate feel after you've been around for a while and everybody i talk to has it, too. as i tweeted out last night. this is one of the weirdest markets in a long time. bad is good, good is bad. a whole bunch of stuff doesn't make any sense. conflicts abound. shorts can't get any shares to borrow. short interest in the qqq etf. this is something that's zero hedge at the lowest point in more than ten years and longs say they cannot find stocks to buy. and then you get all the rest of the stuff piled on with the knight trading snafu. europe and so much macro that it

almost becomes white noise, destabilizing, dysfunctional. >> who is the market good for? >> people who think it's an inflection point. it feels like it's at an inflection point and people say, you know, we're at a point where there could be something good down the road but before we get to something good we have to wash all of this out. get to a more stable place. >> we have been up 100% from the lows of '09. isn't that something good? >> no. but the something good is rest of the other stuff that's making people feel so disstabilize. >> okay. >> stocks are near four and a half year highs. while we can't know how this run will eventually turn out, we can look back at some other boom/bust cycles. over the next hour, we'll bring you the three biggest booms that have gone bust since the 1930s. we are counting you down to what we call the three worst stock

market rallies of all time. the third past, ran in world war ii, dow rose 129% from 1942 to 1946. by the end of the decade, stocks fallen 24% from the 1946 highs. so many that it's the third worst boom/bust over the last 100 years. coming up soon, hitting the second worst run and bust. >> indeed, counting you down and i'm going to see your chart and raise you the stats. five dow compose innocents in the index back then still in the index today. dupont, ge, p&g, exxonmobil, known as standard oil of new jersey and united technologies or known then at united aircraft. how about that? only five. can you believe that? >> no, i cannot. i cannot wait to see two and one but i know what they are. >> because you wrote it. this kind of takes the spence out of it a little. now to another really big story we are following. the allegations against standard

charter bank. the uk bank accused by a new york state regulator of laundering iranian money. steve is here with the update. seems like the feds aren't happy with new york about all of this. kind of airing their dirty laundry, right? >> there's a don't of different regulators at different levels, not just the federal level but the state level. and these serious allegations, mandy of money laundering and iranian funds and doctoring documents are overshadowed by allegations of overstepping bounds to go public with charges of standard chartered bank. some regulators criticizing benjamin lawsky's decision for action against standard saying he jumped the gun on other agencies and in the words of one regulator, hijacked the investigation in to standard and saying that could affect the outcome of the case. the office would not respond publicly to these allegations. officials said there was an ongoing multi-year investigation

of standard that was very active before lawsky went public and said to have given other agencies little or no notice of what he was going to do and pulling standard's new york banking license as overly colorful an enthe official said an investigation turned up serious issues and more complex than has been portrayed. another official said settlem t settlements with banks have yielded $1.8 billion in finds recently. going public before a settlement, the person said, especially with charge that is are difficult to prove in court can diminish the government's leverage in negotiations. guys? >> i was saying standard charter won a little bit of backing of the governor that drew and plays in to the segment of yesterday whether or not u.s. regulators are treating foreign banks too harshly and the boe governor saying, you know, before you get this out there, be on the same page and don't start putting out

allegations without knowing what's going on first. >> regulators are the ones that want to do that. they feel like it's a much cleaner thing to go to the bank, create a settlement and been some really big fines against the banks and the banks have been meaningful. the fines meaningful. there's another allegation of maybe the regulators too cozy with the banks and doing the settlements. adding up the fines, that's been real money that by the way helped plug some deficits at the local level to begin with. >> certainly has. thank you for doing dirty business. >> one of the complexities to talk about is this idea that some of the things that they're accused of doing in the order may have been legal at the time they were done. so there's that issue which is on the table. the u-turn transactions. >> still a lot to come out. august 15th the hearing. >> yeah. >> thank you. there are still some many facts left to be uncovered in that case and the libor scandal, as well. with everything going on, is it time to buy?

you buy when it's darkest before the dawn some say. let's ask antone putz. are you buying on these negative headlines? >> i'm not buying the companies affected by the negative headlines. morgan stanley and goldman sachs do not set libor pricing. >> how do you know a headline isn't coming on something else? >> you don't, you don't. the interesting thing is particularly the big uglies as we call them trading really, really cheaply. very low. single digit earnings multiples and they have very strong balance sheets. they have actually never had stronger balance sheets in the history so these companies are in pretty good shape. we'd love to get them out from the negative headlines and statements of breaking them up. may be a lot of value unlocked to break themselves up. >> is there a case at all, though, antone, to play maybe

only in the short term a bit of a punt? standard charter straight after the news broke dropped about 24% in 24 hours and come back since then and the allegations. someone could have made money out of that. >> absolutely. i have to give you another example that didn't work so well. if anybody bought knight securities starting to trade again and then the subsequent days you would have lost a lot of money so until you have the facts, it is very difficult to make an investment decision. you can see a fact and go, no way. this is fine. it can handle it. this is a situation where you don't really know what the facts are and how big the facts are. >> doesn't sound like you like any of the big uglies as you call them. what about the mid-sized banks? >> there's room for consolidation in this industry. it's not happening at the bigger household names. we saw a deal in georgia. south carolina bank buys a company in georgia. a good deal for both sets of

shareholders. lots of transactions like that and make money for both sets of shareholders. >> can you give us a tip-off which small or medium-sized banks are most likely to get in bed snogt. >> real interesting thing is there's a policy not to talk about the really small under 500 million at market cap and you want a basket of small, healthy banks in the portfolio. you actually want a bunch of them spread out. new england has great pricing. companies going for 1.5 to 1.8 times book value. >> look for small cap names. >> yeah. >> in the new england region? >> it's a good spot. obviously -- >> probably have like a bay or a crab or a green in their name somewhere? >> exactly, exactly. >> real quick, real quick question. moving forward, a low interest rate environment with lots of regulatory overhang, is this still a difficult environment for banks overall? >> it is difficult. so tough on these companies to grow earnings, the mid banks buy

the small and cut costs. the small fatigued. the boards are fatigued. tired of regulators beating them up. it's really a great time for them to go seek a partner and to buy -- get a stock of a partner that's cheap because all of these valuations are so low that not only getting a pop sold but currency in return with upside, as well. >> thank you so much. >> international man of mystery. antone schultz. mystery banks. now to a market flash with brian shactman. >> huntington, not bank shares but inalls. they're up almost 24%, 28% year to date. back to you. >> thank you. well, up next on "street signs," a nation of wimpies. we'll gladly pay you tuesday for a hamburger today and town after

town adopting that mentality and cost us big time. >> big time. if you think your taxes are too high, wait until you hear what might happen in france and why it could be, in fact, good for the good old u.s. of a. rade? with scottrader streaming quotes, any way you want. fully customize it for your trading process -- from thought to trade, on every screen. and all in real time. which makes it just like having your own trading floor, right at your fingertips. [ rodger ] at scottrade, seven dollar trades are just the start. try our easy-to-use scottrader streaming quotes. it's another reason more investors are saying... [ all ] i'm with scottrade. it's another reason more investors are saying... this is new york state. we built the first railway, the first trade route to the west, the greatest empires. then, some said, we lost our edge. well today, there's a new new york state. one that's working to attract businesses and create jobs.

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yesterday on the show, we told you about a california school district that took out a $105 million loan to upgrade the school and that loan will end up costing taxpayer $1 billion, the

loan won't be paid back for 40 years. so is this just another example of our buy now, pay later society? with us is contributor michael farr and herb for another serve. michael, you first of all. we might be a buy now, pay later society but not like we have great role modeling. the government is setting a back example, aren't they? >> well, of course, you were talking about the governments in california. the u.s. government continues to print more paper and not like we can pay back those loan obligations, those bonds that are coming due to today. we just refinance them with more bonds. we're creating more bonds and a bigger and larger amount of debt as we go forward. the good news is that it doesn't cost a lot right now to do that. fairly cheap. interest rates are fairly low. so whether you look at the government or state governments or even the consumer, you take a look at the consumer saying their debt coverage ratio is the number that economists look at.

it's more affordable. but the level of debt is still really high. we aren't solving the problem making it affordable and nobody's offering a responsible long-term solution. >> never solve debt with more debt, do you? does it cost more than a billion dollars for some of these counties? maybe some of the counties will go bust. >> well, you know, i think if they budgeted it, if they included it as part of the long-term financial plan there's nothing wrong with financing with a zero coupon bond. >> at 40 years, michael? >> well, but herb, it's a -- is that sully? i'm sorry. >> this is herb. >> got it. i'm staring at the blank screen. 40 years is a long time but if you're the state, wait a minute. i got money for myaa rating in california and spread it out over 40 years so, yeah, accrue and cost me a lot more but like -- part of it is like

signing on a mortgage. 30-year mortgage. i called mark richards at td, the mortgage guy. $417,000 loan at 4.8%, over $700,000. we all do it. >> this is public money and the other issue here, i'm getting harangued by people on this saying, you know, in the en, it is going to work out for the guys and look like geniuses. the bet is fabulous. inflation takes over. property taxes go back up and making a mountain out of a mole hill. >> they might be right. but i mean, i think the larger point is we're creating more debt and we're not curtailing debt. right? i mean, we are not -- we say we know that we're going to have a fiscal cliff. we know we'll have to accept authority. but on somebody else's watch. at the end of the year, after the election, every day we want to push all of this stuff off to tomorrow. we as consumers kind of do, too. we took on a lot of debt and we're paying it off slowly.

but in the u.s. since 1980, household debt versus personal income doubled so we as americans have doubled our debt load in the past 30 years. we're kind of come police sit in living beyond the means and got to stop somewhere. >> the average size of an american home is gone up 40% since the early '70s. right? we are a nation of people debt and house poor. oh, i don't have any money. but there's more cell phone and cable contracts than there are people in this country. >> and it's everything poor. we have to have a flat screen tv. we are this consumer society. and the solution now is let's get rates really low so maybe we can borrow more and buy more stuff. that doesn't solve this problem. it solves our short-term economy. it gets things moving better now but it doesn't help the long-term problem. we had an economy that expanded with a lot of leverage. it hasn't been allowed to contract and still has to go through the difficult stage of

finding that elastic point. >> the bottom line is you have to pay for the stuff and this's the dilemma. >> you know how you pay for it? i know how. i solve the problem right here. opm. >> baby. >> other people's money. >> our kid's money. >> works every time. michael, thank you. >> unfortunately. >> i need other people. where do we find the other people with the money? >> france. >> there's a way to get elected here in washington. you've found the form will. >> i got the middle reliever. >> you got it, baby. >> practicing hugging babies in the spare time. thanks, michael. still to come, a milky smooth sunshine stock. >> our reporter will take you on a wild ride on the back of a motorcyclely mo throu ly ml lly london.

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disaster du jour. as mandy might say. it's the type of move that the segment was invented for. price -- look at that. $109 down in priceline. more amazing is less than 20%. >> kind of bad news for william shatner. he decided to take stock in priceline.com instead of money for the ads and sold a whole bunch of it before the dot-com bust and still, you know, not good for him. time for a buttery sweet sunshine stock that's also good for your bones. just like the way we like it. check out dean foods. best performer on the s&p 500 and clocking in at a begin of just over 38%. investors are over the moon for this company this year. the stock is up over 50%. >> you milked that joke. competition at the olympics in london runs through sunday and then the evening, the games will end with the closing ceremony. now, london is a city that's

very difficult to get around on on a good day. and with the olympics in town, some people are turning to rather unorthodox methods of transportation, including our own michele caruso-cabrera live in london. we showed a tweezer video. you got on the back of a ride and took a ride. >> reporter: yeah. it's virgin limo bike. a motorcycle that acts as an l imo. a pr stunt dreamed up by richard branson in 1995. we found out there's demand to get around the city of london as quickly as possible. ♪ >> virgin limo bike limited is a motorcycle passenger service based in london. >> reporter: people use motorcycles like taxis? >> exactly. exactly. you can't hail us on the street like a taxi but you prebook and we turn up and take you wherever you want quickly. only nine bikes in our company. only 12 or 13 in the whole of

london and we get booked up fairly quickly. but yeah. i mean, during the olympics it is insane, nonstop. traffic's terrible. that's where we come in. >> reporter: on days of heavy attendance, it can take more than two hours of central london to the olympic park. on this limo park, a mere half an hour. see you later. you are exciting on a motorcycle. >> it's fun and, yeah, a bit rock n roll, a bit sexy. >> reporter: that's so british. how much does it cost? >> we're not cheap. >> 84 pounds it would take for that half-hour ride. that more than 100 bucks. guess what? if you guys work for the bbc, they're on contract to bring some bbc presenters to the office every single day. back the you guys. >> what a plus. you looked like you were having

the time of your life. i have to say. >> reporter: it was a lot of fun. >> okay. >> reporter: it was great. >> thanks. we continue to count down the biggest booms gone bust and number two is -- the disco rally. stocks soars from 1974 to 1976 with the dow gaining 76% over 2 years and the party over come 1978 with the dow giving back 27% of the gain. okay, guiles. okay. olivia newton-john, boeing took over in the '70s gaining 1,054% but boeing wouldn't have direct impact of the dow until a decade later finally added to the index in 1987. >> so that's number two. and later on in the show we'll bring you the single biggest boom/bust stock market run of all time. can you guess? tweet us with the guesses. number one is ahead.

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rich was not a four-letter word? a few survey offers an interesting look at how the well-off view the world. robert frank joining us with the detailless of that. >> thanks, brian. i call it the fear and loathing of the 1% a. new survey shows -- this is a survey of american express and harrison publishing group says the group is going up for the affluent and most among the super earners. they're savings rate is now 34% of their income. that's triple the rate of 2007. saving's a good thing, right? not so much with this group. most of their savings is going in to cash accounts, also known as under the mattress. less of it's being invested in companies or jobs, les of it's going in to stocks. 1% holds more than half the stocks in the u.s. most say the market today is more of a risk than an opportunity. if we look at the 1%, they also say we're currently in a

recession and this recession will last more than a year and the world's going to end tomorrow. no, they didn't say that. one respondent did say, quote, i'm not spending which is bad for the economy but i like having a wide mote around me. their protection may be our barrier to recovery. >> mayan 1% said the world will end tomorrow. the more you earn the less you save because, obviously, the more you earn, the bigger house and bolt. this is a flip-around, right? >> right. this group supposed to have the most confidence in the economy, we have a paralyzed people that don't want to take risk and invest in the economy. >> how do they feel about the push to let the bush tax cuts expire? >> this is where this is really interesting. we hear and assume that the 1% don't want to raise taxes on themselves. in fact, this survey found 62% of them feel their taxes should be higher. i don't want to talk about this

in isolation and feel that government should be cutting spending and feel like the uncertainty that's the problem as opposed to the actual tax rate. >> they're in favor, it's conditional, though? >> correct, correct. >> they want to get out of the head loons. right? they're being told every third day they're not doing their fair share. >> right. >> let the dialogue go to something more substantive. >> and having a psychological impact. they don't want to be perceived or seen as wealthy anymore. >> in the private planes. >> but that's a big change of two years ago when more than half of them said they preferred, liked being seen as successful, wealthy people. a big change. >> buffett shopping at kohl's. >> he might buy kohl's, the whole company. as you probably know, the french president hollande is calling for a 75% top end marginal tax rate on anybody

that makes more than 1 million euros, about $1.2 million per year and you can go to cnbc.com and check it out. will they leave the country? "the new york times" story last night, mandy, highlighted that french tax lawyers are getting a lot of calls of rich saying, can i leave? and if so, how? >> so, at what point does taxing become a disincentive to work, start a business or spend money? could super high tax rates for the rich in france actually help america by bringing people here? well, let's ask the director of tax an budget policy for center of american progress started by a top bill clinton adviser. you say 75% is too much but by the same token, 35% is too low. so what would be right? >> that's a great question. that's the debate we should be having. if those are the parameters, 35's too low, 75's too high we could have a serious debate.

the president said 39.6. under pst reagan, six out of eight years it was 50. that's probably the top end and 15 percentage points to be doing better. >> okay. let's get to how we define taxes, though, mike. i the end to agree with you. i argued in print and on this show why to pass the buffett rule to move on. the added revenue isn't that much. the problem is state taxes gone up. property taxes have gone up. sales taxes have gone up. not just 39.6. it is like 50 when you add in everything. if not higher for some. >> yeah. there's definitely some states where that's true. some states have progressive income taxes, some have no income taxes. but it looks like there's academic research that suggests in the 60s is where you kind of get that break even point where you raise taxes and you end up hurting overall the economy. such that you don't actually get more revenue. we're really nowhere near that even with state and local taxes.

we do have a little bit of room. again, we can go too far. i think 75's too far. letting the bush tax cuts expire on the top end is not close to that. >> here's the question. what we are trying to figure out, maybe you know. i don't know. what point does the donkey die? right? won't pull the cart anymore. >> well -- >> is there a magic number? >> i don't think there is. there's okay demonstrate research of nobel prize winning economist peter diamond. he said it's in the 60s. but, you know, it is hard. it is hard to know exactly. definitely not 35. probably 75 is over the edge. but, you know, we have got a little room. >> you know, i want to ask you what bli yann also posed in the cnbc.com article and is that 75% in france going to be good for america? they'll come over here, get through their lawyers and the lawyer says go to new york. i mean, isn't this going to be good for america and other places? >> i don't think you're going to

see too much of that. there may be a few high profile cases but we know from the research, if you look -- forget about internationally but within the united states there ice some states with higher income taxes and some states that raised the taxes or cut them. tax migration or tax flight is actually very, very rare. there are high profile cases but in reality in terms of overall impact it's very, very minimal. >> you know, we have seen some states, though, maryland and oregon had millionaires drop off the rolls. we don't know if that's because people didn't sell capital, you know, stocks and whatever to get to be millionaires but the number of millionaires dropped precipitously in maryland and oregon raising the taxes. >> yeah. there's a lot of complicating factors. the best study of new jersey raising the income tax for people making over $500,000. >> i'm aware and people i know

in new jersey, no kidding, moved to pennsylvania. i won't name them. i don't want to call them out. >> don't want to get them in trouble. >> moved 15 miles to pennsylvania. i can name three people that i know that did that. >> okay. so brian, so that's three, you know, anecdotal stories but if you look at the actual overall data, turns out that people did leave new jersey and people making less than $500,000 left at about the same rate and not affecting by the tax increase at all. the truth is people probably leaving new jersey for other reasons, nothing to do with tax and that comes from stamford soesologist and probably the best study throughout on this. >> thank you for your thoughts. interesting topic. >> thank you. >> the topic that keeps on giving. a smarkt flash now with brian shactman. >> select medal. sem hospital operator. they preannounced in july and didn't announce the eps guidance and well above consensus. stock up 18.25%. for the week, 22.25.

guys, brian, the founder and chairman, one of the best executive names out there, rocko a. ortensio. >> that is a great name. >> founded it with his son. >> that's my new tv name. from right now. tough travels for the online tip site. something rarely said in the same sentence with research in motion. today's rise in rim. but maybe it's for all the wrong reasons. stick around to find out. mamama

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it is "street talk" time. electronic materials first off the black. >> bizarre story. to stock's up 10%. the stock is up, though, because it was better than some feared. company says it won't guidance for the rest of the year. stirl down year to date. whacked by the solar glut. not as bad as we thought, 10% jump. >> not as bad as we thought. a big theme this earnings season, as well. what's this doing? up 8% now. >> 8.5%. not that bad day, right?

soaring. 43% profit in the third quarter and analysts breathing a sigh of relief a product roll-out doesn't crush growth. fears of slowing down. it didn't. pacific crest upgraded the stock. now up 24.5% year to date. >> we were talking about priceline.com and a rival is orbitz. a stim sind imilar kind of stor? >> earnings fell 48%. and it pulled in the forecast for the year. sees revenue about $197 million to $203 million. the estimate was $213 million. they're big in europe, as we know. the ceo talking about europe, so orbitz getting slammed there. >> absolutely slammed. >> that little gnome -- different company. >> different company. verifone systems, moving but why? >> you know, there's a ubs

downgrade. ubs downgraded the stock and raised the price target and says most of the negative catalyst is behind it. the people i've talked to think verifone is down with the square starbucks deal. they make the machines at the supermarket. that's what they do among other things and if everybody's paying for stuff on the phone, there's concern of what does that mean for the physical machine? >> take it away from the systems. >> just do the -- with the smartphone. >> do the what? >> doot-doot. >> yours does that sound? mine doesn't. research in motion as we said in the tease, this is kind of a thing we don't often say and that's research in motion, shares are higher. quite a lot higher. >> wanted to make sure they were still up. they were up earlier today. jeffries analyst who comes on and on today and on with us. right? he says he believes -- this is one guy's opinion. that rim is beginning to realize they need a partner. he think that is rim's internal review completed about september 27th will come out with rim and

heinz ceo going, you know what, guys? we need a partner. either a partner or a company, maybe a samsung to buy us. >> yeah. >> i think that's -- that's the sound they make. >> korean companies in particular make. this is not the first samsung in the same headline with rim. remember, the end of the line, rumors out there that samsung interested in licensing rim's new os at the end of the year last year and i think it was management indecision at research in motion that basically scuttled those talks. doing a groundhog day situation there. we have been counting you down for the biggest boom rally that have gone bust since the 1930s. it's time for the mother of all market meltdowns. stocks climbing and the dow from just 41 points, can imagine that? dow at 41 in 1932. to 194 points by 1937.

>> after the peak, though, the market crashed as you know. the dow back in the double digits. gave back 52% of its gain. it is one of the biggest boom/busts this market, any market in the market ever seen. it was our number one worst market rally. greatest head fake ever. >> during that time period, procter & gamble, dupont and united technologies added in to the dow. up next, what lessons can we learn from history and is history about to repeat itself? >> history always repeats itself. we never learn. we're human. "street signs" is back after the break. idates the ratings of up to 10 independent research providers into a single score that's weighted based on how accurate they've been in the past. i'm howard spielberg of fidelity investments. the equity summary score is one more innovative reason serious investors are choosing fidelity.

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coming up at the top of the hour, forget the government's programs, good old-fashioned supply and demand principles actually helping the housing market make a comeback? think second quarter earnings were bad? major red flags of q3. find out how to protect your portfolio against the earnings fallout. is the u.s. conspireing to undermine london as a financial capital? we'll get to the bottom of that controversial story. but first, more "street signs"

with mandy and brian. >> thank you. we have been showing you some of the biggest rallies that have since gone bust. can we climb or is it history o history about to repeat itself? let's bring in david lutz, great to have you on the show, also jim cramer and herb is jumping in as well. it feels like we were talking about this is the one hated rallies in history? are all rallies hated? they are distrusted, people feel we're rolllying for the wrong reasons. and then when people get happy and complacent it signals a top. >> you're right, it's always full of disbelievers in the

market, and as it goes higher you convince more and more people. we saw it in the tech bubble, and in housing in 2005. right now sentiment is extremely negative. if you look at market sentiment indicators where we are now verses a year ago, they're all lower. but when you look at economic sentiment, like polls of where people think the economy is going they're all more positive than they were a year ago. >> so if people are not on board with this rally, is it a signal to go higher, a continued boom, or a bust. >> a negative sentiment is a positive backdrop but that won't make the market go higher. people refer to the death of

equities in 1979 and what an indicator that was. the s&p was 4% lower than when that cover aim out. from '80 on it was a huge bull market. >> jim cramer will this end in tiers? >> no, i don't think so. i don't even no if it's a rally. i believe it's a rally, i think this series you're doing is fabulous because without some perspective, people don't realize people are making condition. >> are they distracted by the negative headlines? >> yes, today, mcdonald's -- he'd and shoulders, proctor and gamble is up head and shoulders,

you have be 3.8% yield. geez. >> are your clients becoming believer believe believers, david? >> no, many people are still bearish. there is not the retail that's bullish and the institutions are not bullish. major asset strategist have some of their lowest towards equities on record, and bank of america had a big report showing hedge funds had ten basis points and the market jumps 10%. that shows me the market is just keyed up still. on the other side of that, the street has up with of the lowest shortest allocations on bonds on record. so everybody is bull on bonds and bearish on stocks and the

market will do whatever has the most participants. so the paint trade is the ten year popping back up close to 2%. >> you know, that's what gets back to this whole issue of dysfunction, destabilization in the market. right now you talk about the stocks, i'm watching sow kaliber -- sodastream or others -- >> it's the volatility in the springs. >> they no longer have principal stock -- >> the market is smarter than you think. why did it m in 1942, what happened? >> well world war two is going on. why did we bottom then? >> it was the beginning, the war didn't think it was going our way. that was the beginning of the end of the nazis.

there is a rally you don't like. >> what does it most represent from a period in the past? >> you see comparisons to '82, and we had the cold war, and the 1990 bull market, a recession then that was very middle, and in 1992, u.s. news and report was saying the worst is yet to come and you ain't seen nothing yet, and that was a year after the recession ended. >> hold on, i want to go back to dave, i love the point about everybody hording up on bonds. when will people jump bonds and go into equities, because they

can hold them for a long time. >> they can, we've seen a move recently. we have yields in u.s. and german bonds close to one month highs right now and a lot of it is due to the economic activity acceleration. allen greenspan said it begins and he needs with housing. there has been credit easing and prime borrowing at 14 year highs. these are all positives for the market. i tend to think as the market grinds higher we're seeing the beginning of the signs. we saw treasury activity. >> dave, i have to jump in here. coming up. serving up racy fare.

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