tune in to a new "american greed" tonight. i want to thank the iconic ceos, great americans. i'm jim cramer and i will see you tomorrow. will see you tomorrow! another big triple digit day for the stock markets, but thankfully, the headliner right now is gold, falling below $1200 an ounce for the first time in three years. it's a deflationary signal that's telling the fed not to tighten and here's a question, are all those people who invested in gold coins now in big trouble? now on to interest rates, will the reese enter 1% rise in interest rates smack businesses and consumers in housing and car sales? we'll talk to actual business owners who are on the front lines. >> speaking of the front lines, we've got a response to president obama's war on coal. a coal company ceo will join us

tonight to tell us yet president is completely wrong to destroy an industry that supplies 40% of our power and responsible for thousands and thousands of jobs. all that on "the kudlow report" which begins right now. >> so are businesses and consumers going to feel the pinch of a swift interest rate hike? in round numbers, treasurys and mortgages and corporate rates all up about one percentage point and it's a big jump in a short period of time. now the question is what's the economic impact for housing and autos and other big-ticket items. joining me now to discuss bill fox, he's the owner of fox dealerships and a member of the auto dealers association board of directors. hal whitman, managing partner of the broward county real estate group, milton missrati with lord

abbott and my good friend steve forbe, forbes media chairman and editor in chief will be co-hosting with me on set for the full hour. mr. fox, i'll go to you. have you seen any discernible slowdown yet because of the job in interest rates in you're in one of the hottest areas of this recovery. >> so far we have not seen a falloff in sales. sales have been robust and the economy is gaining moment up as we go on. however, we do think it's very fragile and we in the car business are subject to an interest rate increase. >> you're selling over 15 million at an annual rate nationwide. that's a pretty hefty number and it's a great jump over last year and the year before. can you hazard a guess for me. what interest rate level would it take for you to see a slowdown or a slump in these big car sales? >> well, i think it's gradual, and certainly the consumers in my area are more interest rate

sensitive because our economy is more fragile. we haven't made the recovery post the great recession that other areas have. we're consistently gaining, but we're very interest rate sensitive. so in my area, i think a 2% or 3% increase in an interest rate results in the consumer's payment going so much higher that it has to extend the terms or he has to shop more for interest rates and that becomes a very big factor in a big part of our dealership services. >> right. we've already had a 1% rise in rates and let's go to bill fox. i hear, mr. fox, i'm told. we'll go to mr. lipman. welcome to "the kudlow report." i have to get everyone straight. i've been told by the data that mortgage refinancings are slowing down although mortgage

applications are speeding up? is that true or is that a function of interest rates? >> i have seen, we're a small builder in south florida, and i have seen starting about four years ago, mostly people are buying with cash because money was so tight, but in the last year to year and a half money has gotten less tight and more of the buyers are financing, and i have not seen a change the last couple of months. actually, i've seen an acceleration in buyers, i guess due to the fear, i'm thinking, of continued increases in the rate. >> right. they worry about higher utsch foo you are rates. what about the price action? home prices have done very well off the bottom. is that getting people to move off and start going off and buying homes? >> i'm a cpa also and have been a cpa for 35 years and four years ago when i decided to go into construction, i have -- prices of real estate were dramatically low, ridiculously

low and interest rates continued to fall due to the weakness of the economy and i recommended to my clients and at the same time decided to start a construction company, and it has been tremendous. prices have gone up and up and up to the point that there are so many investors going into that market. it's been -- the competition has become a dramatic and i'm seeing more individuals getting less scared and getting back into the market besides individuals. >> clearly, the rates have not affected your business adversely. steve forbes, let me go to you. how do you see this? a big jump in rates. a lot of people were scared and the stock market was scared and it doesn't mean the economy. you know that, and i know that. the question is how damaging will this rate hike be if at all. >> the question is what will the fed did next if it allows rates to come back into the credit markets so you get a real flow of credit to the smaller businesses which has been

recently fairly tight. money has staid on the side lines and all is well for the future, but i think what may happen is we get whipsawed and the federal reserve panics and bernanke's successor panics and they go back to really stifling the economy with a credit card -- with a credit policy that ends up distorting and putting the credit markets in a pretzellike position. >> i want to get back to the details, but just a thought, i don't think big companies need to borrow and they've got plenty of cash. >> their balance sheets are in superb shape, but it's the rest of the economy that you want this credit to be flowing, too, and when you have rent controls you hurt housing and you hurt the credit markets. >> what's your take on this story. >> are medium and smaller businesses getting hurt by the rise in rates? >> the thing for them is the easing the banks have in their credit standards and the fed tells us they're easing off on credit standards and that's much

more important on rates and even 100 basis points. rates today, they started off so low that on a historic basis relative to the economic fundamentals even to this rise there's still plenty of room. so i think it's the credit standards and that easing will help the small to medium-sized businesses and much more than the hike in rates will hurt them. >> when is this going to happen? when is this credit ooet easing going to help the small business. >> if you follow the fed that does the quarterly reports on bank lending they've shown the easing and the banks are terrified for reasons that we can all guess about, but they're all beginning to lend. we've heard commercial industrial loan growth and the real estate, both commercial and residential, but we've seen commercial in industrial loans and i think they are easing and that's the small and mid area. >> bill fox, it's going around the horn and it doesn't sound like the rise in rates has had any negative effect. what i want to ask you is are we -- is the next rise in rate,

there is one coming, all right? i may be the only guy on this panel, but i think the fed will clamp down some time this fall, probably in september as they quit buying bonds, rates will go up some more, how much more, i don't know, but it could be a goodly amount, question to you in terms of the car business and everywhere else, will the next round of higher rates cause great economic damage? >> i don't know, larry. >> i think any rate increase will detract from our momentum and our car sales. again, these consumers are very fragile. they are in the midst of a recovery, but they have clear memories of 2008 and 2009 and interest rates are right at the forefront of the auto industry. we sell cars, based on payment and when payments are subsidized or are given at low interest rates and are readily available,

we can sell cars and you take away any of those incentives and we lessen the ability to sell cars. certainly if we -- certainly if we go up 3% or 4% it's a dramatic effect. >> all right -- >> you go away from 15 million to 12 million. >> i'm not looking for 3% or 4%, but i do think you'll get a full percentage point or more. hal, let me go to you. you talk about the boom in housing. what with about credit? are people having trouble getting loans and home loans? it's starting to loosen up before you even had excellent credit from my standards people were getting turned down. there had to be tremendous value in the property and even then there has been times which i don't understand the bank, but lately they are getting a lot more easy in their terms. >> where is the dmz line for race? >> say 30-year mortgage is 3.5%,

and up about a percentage point and it gets to five, five and a half, six, where is the line drawn that will hurt housing? >> i don't know where that line is, but i can tell you, for example, we had a sale today where a person was pre-qualified and it was kind of a bidding war on it and if rates were any higher, he wouldn't have been eligible for the house. so obviously, as rates go up, the amount of people that can afford homes will go down. >> steve forbes, do you expect rates to go up? >> i think they will if bernanke has his way and another 100 basis point, but the key thing is and these panelists have tufrped on it if standards become more reasonable, you will see more housing activity. you will see more mobility and when you also have rates being more realistic and that means more capital creation and savers have interest again and that stem lates this economy, does

all of this lead after the turmoil and they've overleveraged and done deals they shouldn't have done counting on low rates and when that gets squeezed out, i think are we going to get a better economy? >> what about the credit standards? let me stay with the credit standards issue? let's stay with dodd frank. all of these bank regulators that have overreacted a lot during this recovery. i understand the problems going back to '07, '08 and '09, and i am told it's trickling down, pardon the phrase to community bankses are and mid-sized banks and that's where the loosening up has got to be, too. if they have the regulator looking over their owners and if the let the banks decide, and one of the biggest inhibitors is that they now live rent-free on

your premisis. >> they get nice silverware and meals. >> it's nuts. that's a real inhibitor and regulators have typically been pro-cyclical on the upside and pro cyclical on the down side so they made this downturn even worse. >> i think the verdict here, gentlemen, if you don't mind me recapping. so far the jump in interest rates has not hurt. i think that's the verdict. i think the front-page story in "the wall street journal" was just a little bit too risque. i don't think it's there yet. anyway, thank you, bill fox, hal lipman, i appreciate it all. i've seen these gold ad says on tv and you've seen it too. >> you don't have to watch your hard-earned savings shrink to nothing. invest in gold. >> many investors have protected themselves and are still buying gold and silver. it's never too late. >> take the first step in creating your happy ending today. >> yeah, yeah, yeah.

the problem with that whole story is these guys have given them a bum steer. in fact it's a $700 collapse bum steer as the yellow metal fell below $1200 an ounce today. this is a deflationary event and the fed better keep an eye on it. that's next up. don't always buy these coca maimy ads. i'm for free market capitalism and advertisements and truth in advertising and there say risk when you buy these securities including gold. i'm kudlow. we'll take a risk when we come right back. [ male announcer ] with wells fargo advisors envision planning process,

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gold actually peaked two years ago at almost $1900 an ounce and falling ever since. at first i think it signaled the end of the end of the world trade. then i think it signalled that the dollar was not going collapse. lately, however and this is the point of our segment tonight, i think this gold drop which may go further is actually a deflationary signal. it's down more than 12% since bernanke signaled an end to qe. and it's a market price warning, to the fed not to tighten policy yet, and that's my take. i have an even better idea. let's let gold drop to $25 an houns and i'll make it easier for the fed to target nominal gnp and keep us on the right track. so let's talk and what's this gold collapse mean? what is it telling us? >> i am joined on set by global strategies bob cinch. steve forbes is still with us. >> all right, robert, what's your take? is gold going to $1,000? the marginal cost of gold is

1,000 bucks. it's down to that level and i think there's some big support levels not too far away and 1155 i think is a big fibonacci retracement level and it's a low back in 2010. if you get through there the next target is sub-1,000. >> i love 1,000. it's a nice, round number. if you go back and look at gold, '70s, 80s, '90s and so forth. you'll come out not too far from $1,000 an ounce. that's steve forbe, why i wanted to link it to king dollar. people will think i'm nut, but i don't think i'm nuts. i like to see gold linked to the dollar. >> it's the only way to go and eventually it will happen, larry. we did it for the first few years of our existence and it provides stabl they nothing else does. all right. what happens if the fed tightens more. you may not agree with me, but i think this is a deflationary

signal. what's your thought? >> i think the market's realizing what the fed has done in the last couple of years and that has dam individual of this money that's created and it hauls it back in and the question is as rates start to go up, will it start raising rates that it pays on reserves and how much reserves over 2 trillion and will they trickle back to the real economy? >> you're saying, okay. the fed's payment of all of the reserves. the fed buys bonds, pays for them in cash. the banks take the cash and put it on deposit at the federal reserve and they get 25 basis points. >> you're saying that's stifling credit creation because they're letting it sit there. is that your point? >> the tightening of credit standards made it very hard for this economy to have credit go to the people that create the jobs. >> this is a key point, money is not circulating and it's actually not really true and stuff like m-2 has gone nowhere. the reserves have, but not m-2.

should the fed get out of this interest payment policy on reserves. would that make the money circulate throughout the economy? >> i don't think that will change matters that much. i think the run-up in gold is the creation of liquidity from the fed and the big drop in the value of the dollar and the second part of that process was that going to turn into money in the economy and would that generate inflationary pressures, the liquidity creation process and the loan process has been stifled and so you haven't gotten the growth and the second stage of that process, and i think what's happened now is the realization that the money that's been put into the system hasn't so far turned into inflation. it hasn't gotten into the economic system and now, you know, one of the things we used to say we worked together in the '70s and '80s was that you don't want to own gold. there was an opportunity cost and it didn't cost you to hold

gold and now with this backup in yield, interest rates have been very low. suddenly there is an opportunity cost of holding gold. so it is now being squeezed out of the market. >> you would not recommend going back into geld as cheap as it is. >> i wouldn't chase it right now. do i have a little as a hedge in my portfolio, and i don't think it's the kind of thing you want to is jump on, until we see whether the dollar continues to hold value reasonably well. >> the dollar's done extremely well. it's funny. the things that hard-money people want which is to say, falling gold, i guess we'd prefer stable gold, but at least from those astronomical levels and the strong dollar are happening. my question to you is the fed going to look at that? i want to ask you your view. should the fed stop qe? should the fed stop buying bond

which is is really what bernanke's signal was a month ago? >> the fed should. what does it do? >> they should stop buying bonds. >> what if that drives up long-term interest rates to 3.5%, 4%, 4.5%. >> the fed should look at interest rates and they've made that transition, and they should let the market set those rates and the key is if you have the king dollar and the stable dollar where people started to trust it again as they did in periods in the past and that means a more vibrant economy and you don't have to worry about where rates will go. markets will set it. >> you are not worried, though if they quit buying bondings. >> make it very easy for companies to get cheap, cheap financing and we're talking about investing in gold and why in the world would you buy gold unless you're a jeweler? stable environment means you don't have to worry about gold. >> they've got to get out and we'll get out of here for a

second and the fed's got to get out. i was never crazy about this policy and we're stuck with it and i think this crash in gold is coming right out of various statements. he said basically the same thing and in about a yearee time we're out of the bond market and i think that means you're not going to print money and you're not going to put cash in? what's your last take on this? the fed has to get to that point. the transition process from here to there is probably not going -- it's got to be gradual and it's got to see a good economy. >> markets aren't slow. they see something coming they do it right away. they will. how about getting a lower tax rate reform on the way? >> i think that will work. bob come back later for more discussion. you're not buying gold now? >> not at these levels.

>> the senate made its final vote on the immigration reform bill today and federal regulators said jon corzine was betting with customer money as he tried to save the sinking ship at mf global. seema mody will be here with all those stories and much more next up on kudlow. [ kitt ] you know what's impressive?

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good evening, seema. >> good evening, larry, by a vote of 68 to 32 the senate passed the so-called gang of eight immigration bill. 14 republicans voted for it. the vote would legalize millions of immigrants who are currently here illegally and increase border security and don't expect house republicans to go along with it. they have their own bills and have voiced opposition to the senate version. a deal to keep student loan rates steady fell apart in the senate. the deadline is monday. if nothing gets done before then, rates for federally-backed loans could double. there are several options on the table including a proposal from senator john manchin. his plan to is to tie rates to the ten-year note, plus one percentage point and the commodity futures trading commission is suing jon corzine. the cftc wants to ban corzine from trading in the futures market and make him pay an unpress spied penalty. corzine failed to supervise mf

global before it collapsed. >> we're out of time, but i want to get you one line on the immigration bill. should the house pass it? >> they must pass an immigration bill. they can tweak it, but pass it. >> i love it it. i just love it. it's been so hard to find somebody that agrees with me. it's good for growth and it will be good for border security and thank you, seema mody, and i'm sorry i spoke. the war on coal now has been joined by the other side. coal ceos are not happy with the president's attack on their industry and they're working now to neutralize it. one of the ceoes are is joining us to equalize for it that's responsible for 40% of our energy. please stay with us. she's still the one for you - you know it even after all these years. but your erectile dysfunction - you know,that could be a question of blood flow. cialis tadalafil for daily use

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welcome back to "the kudlow report." i'm larry kudlow. in this half hour another triple-digit gain for the dow and more speeches from fed officials, but nothing's changed. listen to me. they're going to start ending qe in september. the markets may be highly volatile and struggle to get back to year highs. trust me on this. later on we have the latest developments in the irs scandal. one of the big talking points

from the left has just been completely disproven and we're going to explain that a little later. now, there is no denying president obama has now declared war on king cole. he was president obama he first tried to portray himself in a different light. take a listen. >> i don't think that we can dismiss out of hand the use of coal as part of our energy mix. >> nobody's been a bigger promoter of clean coal technology than i am. >> we have seen increases in coal production and coal employment with respect to something like coal we made the largest investment in clean coal technology to make sure that even as we're producing more coal we're producing it cleaner and smarter. >> well that was then, but this week we're seeing president obama's true coal colors come out. take a listen to this. >> today for the sake of our children and the health and safety of all americans, i'm

directing the environmental protection agency to put an end to the limitless dumping of carbon pollution to the power plants and new and existing power plants. >> it's a real simple question. is king cole ready to fight back. here now is colin marshall and he's president and coo of the largest coal producer and, and we appreciate it very much upon are you going to fight back? thank you, larry and thank you for having me on. i think it's a long-term battle, i guess, that goes on and yes, we're very keen to make sure people understand the importance of coal in the american economy, and i think one thing that is concerns is that currently people would suggest that you can do without coal. coal makes up 40% of america's current energy? any projections from the

energy,a you will say that coal will remain part of the energy mix in america and it produces the low-cost energy that's so important to the economy, so i think it's very important that coal's place is taken care of and that we make sure it maintains its production of low-cost energy that supports the economy and jobs and the power we need. >> look. i think your analysis is spot on, but the way i understand it, first the epa basically wanted to put new coal plants out. you won't be able to produce the coal even to export around the world which is where i see your great market growth is going to be. what can you do about this? how can you fight back? >> what we've got to do is make sure that the elected officials actually understand the importance of this and people who care about the economy and they want to put money into clean coal capture and storage, and they actually do that and take a sensible time scale to do

this, and it will take a long time to change the energy mix of the country and make sure coal is going to be part of the future and we have to make sure that it's the right part and the technology developed and it will support the jobs and the economy. >> can you raise money for that capture? i've heard this story before, and i also know that wall street may not be able to put up all of the capital for you. >> well, unfortunately at the moment the technology at this stage when there is no development and it's not the coal companies who are actually developing the technology. we don't burn the coal. it's burned by the large utilities across the country and i think it is important that the government and the administration put some money into supporting those companies to actually develop the technology and bring it up to commercial scale where it can make a difference and can capture carbon and produce reliable, steady electricity for the long term using america's energy sources and having a minimal impact on the

environment. >> colin marshall, it's steve forbes here and in terms of the politics. how many democrats in the house or the senate do you think are on your side on this and are willing to go in the white house especially with the president becoming a lame duck. is there a way to stop the epa? how do you do it with the courts? through congress? >> and it's difficult to get through congress. it's ridiculous that this country doesn't have an energy policy that can lay out the certainty that we need. >> the current administration is doing things through regulation which is a piecemeal and inefficient way. and do you plan to stop the epa so sanity can return. >> it will slow down just by litigation and not maybe from us and from coal producers and i think for us what we're trying to do is make sure that we get the message out to people who do care about this so they can

bring their views to bear about people who care about the economy and affordable energy. >> colin, what about the science? we know there are carbon emissions. i don't deny that. we know that. >> the question is are these carbon emissions pollutants and are they damaging the health of people around the country because that's the epa's mandate, as you know. this whole business comes from, i think, a bad supreme court decision on the clean air act and allowing these epa to take these actions and how do we know with certainty that the pollutants are bad for our health? >> well, i think at the moment depending on who you talk to and there's a lot of people involved who got some skin in the game on climate now or whether you're for climate change or against it, there's a lot of people and a lot of money involved. what we've got to do is make the distinction between near-term weather and long-term climate and most skient firsts do make that distinction and an awful lot of politicians and pushing their own agendas think the weather has to do with climate.

climate change is a political reality. i think we're very keen that we deal with that and acknowledge that and deal with it, but i think in terms of where we will be in 100 years where the long-term impacts where people will fix in one political term might come to bear, i think the range of uncertain owe any genuine scientists' projections is vast. i think we need to acknowledge that. >> we've got to close down -- i'm sorry, steve. in terms of public relations, you run the risk, it seems to me, colin, that you let the epa and the people in power in washington get basically criminalizing coal. you know that? they're criminalizing coal? you're a legitimate company and you're a corporation, and it's been a legitimate industry and it's as american as cherry pie. it employs tens of thousands of people and they're going to try to criminalize you. they'll try to do it to you in public relations and that's what

the white house is awfully good at. i don't have enough time, but what's your response to that? that's when you've got to fight back. i think we've got to do what we can. when your industry becomes something of a political football it's not much fun and it's a reality we have to deal with it and we have to make sure we do everything we can to make sure that people who do care about jobs and the economy and coal is placing that and america is using its own natural energy as resources does something, but the reality is we are in the political crosshairs as it were and we've got to accept that and there are a lot of people whose jobs it is to be on coal and to mine coal, efficiently and we're dragged into the political agenda. >> we'll leave it there. >> carl marshall, i wish you all of the best of luck and thanks for coming on the show. >> we've had more fed speak, today, believe it or not. it seems like the stock market kind of liked what it heard, yet another triple-digit gain today. all right, fine. we have the latest from cnbc's

steve liesman and our investment experts are coming back. please stay with us on "the kudlow report." i want to make things more secure. [ whirring ] [ dog barks ] i want to treat more dogs. ♪ our business needs more cases. [ male announcer ] where do you want to take your business? i need help selling art. [ male announcer ] from broadband to web hosting to mobile apps, small business solutions from at&t have the security you need to get you there. call us. we can show you how at&t solutions can help you do what you do... even better. ♪

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our own senior economics reporter steve liesman joins us now with the details. >> good evening, larry, the federal reserve is rolling out one of its bigger guns today to tell markets that are probably misinterpreted ben bernanke at the press conference last wednesday. bill dudley, the new york fed president saying that market expectations have an earlier fed hike, the previous he believed were quite out of sync with the statements made by the fomc and the chairman and a rise in short-term rates is quote, likely to be a long way off and the fomc can hike rates of 6.5% and it's not a target, it's a threshold and the fed could increase quantitative easing and as long as the fed is buying assets and even if it's reducing that amount, dudley said it is still easing and not tightening

and as it holds assets it's likely to not sell mortgage-backed securities for a lock time. he did repeat the outlook of the trajectory of quantitative easing and it's appropriate to moderate the pace of qe later this year and it is in 2014 if the forecast comes out the way the fed expects. that moderation would happen in measured steps and the policy depends on progress toward objectives and it is dependent on the outlook and not on the calendar according to dudley. back to you, larry. >> we appreciate it. so markets may have rallied on dudley's comments and he said what bernanke said a month ago, exactly and it's the drop in long-term interest rates, and i think it's driving up stocks right now and providing investors with a good relief rally, and let's bring in our investment advisers and the president of the stock market manor.com and the very

distinguished steve forbes is still here. dennis fitzpatrick, he didn't say anything different and he said exactly what bernie coup said. they'll stop or slowdown bond buying and i'm guessing it will be september and as they slow down bond buying because of the fix they're in i think it will be very rough on the stock market. what's your take? >> no, i agree. frankly, i think mr. dudley could have saved everybody a lot of time and he didn't say anything different at all, but what's really been happening to use a common analogy. the fed has thought that it was the dog wagging the tail, but what the bond market is telling the fed is that it's actually the tail and the big dog's in control and that's the bond market. the bond market anticipates these moves. the fed has been horrible at anticipating just about anything. we can go back for decades on that. they're just wrong all of the time. the bond market is anticipating

these, you know, the tightening. they just are and you can't mess with markets. >> but we've got a relief rally. the treasury rates which jumped up and jumped up and jumped up have eased back down, i don't know, 260 to 240 or 265 to 245. that's what's driving stocks up right now. how long is that going to last? >> probably not too long, and i think that while it's semantics, and the fed has this view that what they're doing and the impact on the market and the bond market is the stock of treasurys they hold. the markets think it's the flow. >> right. the change, right. >> historically, all of the markets we've looked at over the years and it's the rate of change and of expectations and the rate of change of liquidity. >> the rate of change the money supply and the rate of change for the credit loans and they got that story wrong, too. they don't even know the difference between flows and stocks. i want action. first of all, would you buy bonds right now?

>> you know, a couple of days ago i did increase holdings of longer term debt and i thought it sold off too far and as we age we need to shift our portfolio and it's more interest-earning assets. so i think with the long bond up around 355 and 360. >> the long bond is going from 3.5% to 4%. i've said it on air. in the next year, maybe the next 18 months. steve forbes, would you buy bonds right now? >> think bob hit on it. you only do it as a trader. you don't buy them to hold them. you buy them to trade them and the institutions like life insurers may have to buy bonds for regulatory reasons and that's by force. no one in their right mind would get security. >> long rates are going up by a couple of hundred basis point, minimum. can we be serious about this? a couple of hundred basis points minimum. >> dennis fitzpatrick.

i think this is exactly right and it may not be the peak. you may run up to 4% or 5%. normally that might signal a healthier economy. in this situation with the fed driving rates i'm not so sure. i see a lot of stock market problems as well as bond market problems. >> we're in this really strange, weird place right now where nobody really knows what is impacting the flow of funds. right now i'd say rates have peaked as a trader. as a trader, i think the short-term rates have peaked and we're going to fall back a little bit, but with the s&p, the s&p'sec broen support. we're in a sideways trading range for quite a while in equities as well as bonds and i think you'll just have to buckle up and let the volatility continue because it's going to, i think, for the next few months. >> as we get closer to september. ask me why september? i just intuitively think that

they're going to move in september. >> it's a month on the calendar toward the end of the year and get to qe altogether by june of 2014. >> so they're not going to end qe in june and they're not going send in july and they're not going to end it in august and they'll play around with bonds and stocks. you know what? one thing we're not really talking about here is what earnings are going to be like in the third quarter, and a lot of consensus that earnings are not going to be that great and that could absolutely skew the way folks are trading right now and the way they're looking at equities. i think really, the market is still pretty cheap. we're a little bit -- we're just kind of struggling right now. i think we'll have consolidation that we'll see and the third quarter earnings are what's

really going to be driving the market. the fed looks at that stuff. >> i do think that growth and earnings will be important and i think it will be important with the asset purchases. one thing that really hit markets hard is that this announcement that has just been made and the schedule that was laid out took place in a time that it was actually slowing. overall growth was slower and so the markets are saying, and it's data dependent and the data has slowed down and now they make this announcement and i think there is a lot of confusion and the fed overestimated how big the slowdown will be early in the year as a result of sequestration. and they took some anticipatory easing this year. >> second quarter gdp, 2%. second quarter gdp, 2% at best. there's nothing going on here. this whole recovery, 2%. 2%. what did the fed expect?

they're just looking to get out of this disaster called qe, but the economy is going at 2%. the the the regulators going to allow banks to start making loans again? will they have more reasonable standards? you start to do that this economy will start to perk along. people are sick and tired of the slowdown and they're ready to move ahead and people know there's a lot of opportunity catch-up out there so start to get a regular credit market and i think you'll see very nice things. >> we've got to get out. there have been good numbers and consumer confidence is up. this investment is not doing very well. consumer spending and bob cinch, thank you. dan fitzpatrick, thank you very much. >> the treasury inspector general pours cold water on the democrats plain that lefty groups is also targeting with unfair treatment and we have the latest on that scandal just ahead and there is no such thing

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>> fireworks on capitol hill today as congressional republicans criticized acting irs commissioner for the agency's report on the tea party targeting scandal. take a listen to this exchange with congressman peter rosscam. >> it might be junk, but it's

sensitive taxpayer information. >> it's not and we know it's not and i'm telling you, i'm putting you on notice. this committee intends to uphold the 1998 act and we'll follow through on it to make sure that the irs is forthcoming and not creating a bunch of nonsense hiding behind bureaucratic double talk. >> all right. it may be worse than bureaucratic double talk. it may be werfel's first lie. the political targeting was not limited to conservatives, but it included progressives as well. it turns out it was a falsehood and the treasury inspector general, russell george had to contradict werfel. my co-host is here. this guy werfel, this is the worst i've heard from him so far, okay? they're basically arguing that the proprogressive liberal groups had just as much scrutiny as the conservative groups and the inspector general had to come in and this is a whole

report werfel had. six progressive groups were targeted, 292 conservative groups were targeted. 100% of the conservative groups were scrutinized, only 30% of the progressive groups. now werfel was, therefore, selling horse manure for the first time in front of this committee. that, to me, makes him as bat as the rest of them. >> it's a shock given at this stage of the cannedal that they think they can talk their way out of it. a lot of those so-called progressive groups were groups targeting and opposing the obama administration's anti-israel policy. if you opposed the administration, whether you call yourself progressive or whatever, they're going come after you and they did. they were wrong. >> i think werfel now has really exposed and i'm questioning his integrity and i'm questioning his character. he tried to slip this phony

report on and the treasury aig, good for them. treasury aig straightened him out and gave real numbers. i've got to get out of here. thanks to my co-host, steve forbes and always an honor to have him. thanks for watching. i'm larry kudlow, and i wish one of these irs guys would just stop lying for a change, you know what i mean? just quit fibbing. i'm kudlow. we'll be back tomorrow night. out there owning it.

the ones getting involved and staying engaged. they're not afraid to question the path they're on. because the one question they never want to ask is "how did i end up here?" i started schwab for those people. people who want to take ownership of their investments, like they do in every other aspect of their lives.

>> narrator: in this episode of "american greed: the fugitives," luis ferreira claims to be selling an opportunity for financial security. >> you can buy gold. we put in in a storage vault. it's safe. then, when you want to sell it, we sell it. >> narrator: could this be a golden parachute in a falling economy? >> it left me with nothing. i have no money. >> narrator: ferreira admits he's a con. but rather than face prison, he disappears. >> he was missing. nobody knew where he was. >> narrator: but first, a chicago executive leads the life of a king. >> he would call downstairs and tell them, "bring all of side one and side two of the menu," and tuxedo butlers would come up and serve your breakfast with