listen, natural gas is done going down. then mark sebastien is saying the biggest signal that we hit the bottom today is a bigger call in the world for that one? they did it right last time, there is always a bull market somewhere, i'm jim a major stock sell-off as the dow drops more than 200 points. this isn't just fears about the taper anymore. now the market is reacting to new inflation fears. even more dramatic than the drop in stocks, the surge in gold and silver prices. they soared today on safe haven investing. and also because of global political upheaval. we're talking about the prices in egypt, which worsened dramatically the last 24 hours, have become even more deadly and more volatile. the country may be on the verge of all-out civil war and it's unclear the u.s. can do anything about it. all those stories and more coming up on "the kudlow report" starting right now.

good evening. this is "the kudlow report." larry is off tonight. first up, huge market sell-off. the dow falling 225 points, s & p 500 down 24 and nasdaq fell 63 points. so what's the biggest reason for the sell-off? fear of the fed taper or disappointing profits? joining me on set are larry mcdonald, david goldman, currently president of macro strategy, and alec young, global equity strategist with s & p capital iq. you focus on equities, that's another way to say the stock market. it dropped dramatically today. here's what i don't understand. we got the weekly unemployment claims, people filing for jobless claims for the first time. lowest level we've seen in years. at the same time, we have heard from all these retailers that things aren't very good. what is the story? >> i think we're back into a situation where good news is bad news from a taper perspective.

the other thing that i think has investors worried is as the data's come in, it hasn't been great but it hasn't been weak enough to get bond traders to back off the idea of the september taper. so they're taking the ten-year yield through the roof and the stock market's worried that the higher rates are going to kind of break the back of this recovery and hurt the earnings recovery, and that's really something that markets -- >> sounds like a very bad combination. so corporate profits not getting any better, yet the economic data is not bad enough so that way interest rates are going to keep rising because the fed is going to pull back. that's a bad combination. >> yeah. i'm thinking it comes down to the fact the market's worried that higher interest rates are going to kill what's still a fairly fragile recovery. and the reason that would be bad is because it would hurt corporate profits, then you have walmart and cisco, two bellwethers, you throw it all together and it's not a good day. >> david, are interest rates going to break the back of the recovery? considering today they hit the highest level in two years.

>> absolutely not. i don't think rates are the problem at all. the problem is that we're getting the wrong signal from the unemployment claims. we have a part-time employment recovery with about a million part-time jobs created this year, according to the household survey, and barely 170,000 full-time jobs. so what obama care and the weak economy have done is shift employment into bottom of the barrel low wage part-time employment so the claims are low because there are tons of part-time jobs out there -- >> the data point we got today that looked so good isn't so good. >> because the world has changed around us, thanks to the obama administration and other structural weaknesses. that's why walmart and macy's are showing such rotten results. the consumer's very weak even though we are seeing a lot of employment because it's extremely low grade employment. you can't have a consumer boom without macy's and walmart participating. you can't have a capital spending improvement without cisco improving. we still have an extremely weak

economy, very poor revenues in the s & p, very weak profit growth and the likelihood -- >> why is the fed talking about taking their foot off the pedal? >> as greenspan said, you have to taper at some point, whether or not the economy is strong or not. you can't keep up this bond buying program forever so you might as well start tapering now. like somebody said during the vietnam war, they're going to declare victory -- >> and go home. regardless of whether or not they've won. larry, your assessment of the market today? >> biggest concern today is after a month and a half of dovish comment after dovish comment after fed -- >> let's explain to the audience what that means. a dovish comment means that me as a fed governor, i want things to be easy, i'm going to keep money cheap, i'm going to help the economy in every single way. a hawk would be somebody who says we're not going to do that anymore, we think the economy's strong enough. they have been dovish for months now. >> they have, and mr. bullard came out today and he was dovish. so after all that dovishness, they're losing control of the

yield curve. the ten year treasury broke out of a critical range today. we were going between 2.45 up to 2.73 for the last month and a half, two months. we broke out of that range today and i think it's because foreign buyers for the first time, really there's a buyer's strike. there was a $40 billion reduction in demand of treasuries in the most recent data that came out this morning from chinese and japanese buyers. so the foreigners around the world are not buying as many treasuries. sdha that scared the market today as well. >> so if we can explain to the audience who doesn't spend the day immersed in the treasury markets, the government borrows money all the time because we have such a huge deficit and spend so much money. whenever they borrow, they have to pay certain interest rates. historically we have been able to sell a lot to foreigners, the chinese, all kinds of folks. bring up the ten-year yield. what the government has had to pay to borrow money over a ten-year period keeps rising and rising and rising and this level, what we saw go up, what,

nearly 2.8% today, that's the highest level in two years. that means, right, when the u.s. government has to pay more, by default, everybody has to pay more. >> that's right. >> right? that's not good for consumers or mortgage buyers, et cetera. >> that's why if you look at the home builders, the home builders that focus on first time home buyers have massively outperformed kind of the longer term kind of sector home builders. in other words, different sectors are massively starting to underperform the market relative to this rise in rates. >> anything sensitive to interest rates, i would think, would be -- >> but i really -- >> you specialize in interest rates. >> i agree. i think that bonds are a good buy at these yields. i think we've got a 1% to 1.5% real economic growth environment, 1% inflation, so 2.5% is a pretty good yield for the ten year. >> so if you think that these are a good buy at these levels, that means you don't think yields go higher. you don't wait to get even more interest.

>> i'm not worried about bond yield at this point. >> why not? >> the economy is much weaker than people thought. >> but before the fed meeting, i think -- i don't disagree with you that we're getting near a good buying opportunity on long term bonds. but i don't think it's quite yet. i think we could be at 3% or 3.25% within 30 days. >> whatever they think, we have a five dip, six dip move -- >> basis points for the novice. >> which is a relatively small move. we had a big rise, it came down a bit. the decisive news today was lousy reports from walmart on top of macy's yesterday and cisco. i think that the expectations built into soft prices that a second half recovery and profits have been deflated and people are looking at flat profits and maybe sagging revenues as far as the eye can see which makes the stock market expensive. i think it keeps going down from here. >> anybody else agree with that? when it comes to equities?

stock market from here does what? >> i don't think most people are willing to throw in the towel yet on the second half recovery. for gdp it's pretty modest, the expectations. for earnings, the cap iq consensus, q 3 is 4% earnings growth. q4 is a little higher at 10 but they will beat that bar down. >> do you buy here or sell or -- >> we would be buying in the low 1600s here. goes a little lower but i don't think cisco and walmart are enough to convince most investors that, you know, earnings are peaking and it's time to jump out the window. >> stay put, because coming up, we have to talk about the big surge in gold today and also silver. we will look also at some big individual name stocks. we talked about it a little here. we will dive even deeper into them. that's where a lot of the market mayhem happened today. later, we go live to cairo, get the latest on what is starting to look a lot like a civil war in egypt. don't forget, free market capitalism is the best path to prosperity. "the kudlow report" coming right back. when we made our commitment to the gulf, bp had two big goals:

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a huge rally for metals today, gold closing higher by 2%, silver up more than 5%. what does this tell us about the market sell-off that happened in stocks? wouldn't gold be slipping if this was all about taper talk and the fed not being as active?

back with larry mcdonald, david goldman and alec young. why did gold and silver go up so dramatically here? >> we have a moment in financial history they will talk about in 25 years and it's all happening in japan. the government is backing away from a tax increase that's been talked about for the last couple months. it goes into effect very soon. it's a massive consumption tax. essentially what it means to the viewers watching us is it's a classic all-in krugman like keynesan move where the government of japan will take the departme the debt to gdp, up to 260, not raise the taxes, extremely inflationary, and they're trying to grow their way out of this. >> let's make clear to everybody, they want inflation desperately. they have suffered with deflation or disinflation for 20 years and it's been terrible for their economy. this would be good news, right? why is that good? because it's essentially like

printing? >> well, think about it, they have been printing -- you have two elements. you have this printing press that's been going on over in japan and it's colossal. they are doing $7 billion a month on an economy that's smaller than ours. they are doing all this printing but on the fiscal side, everyone is worried about this tax increase because the tax increases over the year in japan have been horrific. >> got it. if they don't do that, that moves in the opposite direction. >> it's a major, major move for gold. >> why today, david? >> they felt the giant sucking sound you hear is the disappearance of american political influence in the middle east. anything that's bad for american political influence is bad for the dollar -- >> you're saying this is egypt. >> absolutely. but other metals besides gold, there is a huge turnaround in chinese demand for iron ore, copper and other metals. china has surprised massively on the upside. last week when we got the import numbers, their iron ore imports were up nearly 20% year on year and there's a big surge in copper demand as well.

so the fact that china, which is the world's biggest metals consumer, has surprised on the upside is pushing the base metals. >> so that's incremental and we have been watching it now, but today, 2% to 5% is egypt. why? >> because the obama administration has dramatically misplayed its cards in egypt, alienated our best allies and made itself look impotent and silly. >> it's become a safe trade again so people around the world are terrified that what, the middle east explodes into more disarray than we'vestein and gold is a safe place to put the money? is that the idea? >> the dollars reserve status has always been linked to america's global prowess and strategic influence. if we lose that influence the likelihood that the dollar will lose reserve status increases and gold is an insurance policy against that eventuality. >> got it. >> i would agree with both of those excellent points. i would add maybe some financial haven demand because i think people are starting to wonder about the recovery in earnings

and the economy so there is just that traditional financial safe haven movement into gold. >> what do you tell people? you're an equity advisor. do you tell them a little bit of gold, some gold? everybody ought to have some? >> we have always been in the little bit of gold camp. i think having a 1% to 5% bullion allocation can add diversification to a portfolio. by the same token, gold is extremely volatile as we have all seen. we don't think it's something that really warrants a massive allocation like you would fixed income or equities but i think it can play a role and we do like it tactically given the carnage we have seen year to date. >> i have been very vocal late june, i was a screaming bull on gold. i was one of the greatest capitulation moments on the quarter end of june. that's why a lot -- >> dramatic sell-off. >> i called buying gold very publicly. i sold two-thirds of my position. i think over the long haul it's moving higher. the very short haul, i think gold is done. >> gold is an insurance policy

more than it is an investment. i don't think i'm good at trading it. but i think everyone should own some. i think 5% is a good allocation. if -- >> the idea being basically, you never want that position to work very well. because when it does, that means everything else -- >> right. you don't want to collect on your own life insurance policy. >> let's move on to the big earnings story today. we talked about this a little bit. walmart reported disappointing quarterly sales, lowered its full year outlook. the stock fell more than 2% today. what does this mean for the nation's largest retailer? strong position on walmart? >> i think our analyst has a buy on. i think he upgraded it. he downgraded it to a hold in february which it kind offan performed the last few months. he upgraded on weakness today. i think he thinks people have gotten too negative on it. as a strategist i look at it more from a macro perspective. i think the rule of large numbers is a big challenge for walmart. obviously they're huge. i'm not ready to extrapolate their problems to the rest of corporate america or even to the rest of the retailing space. >> but the rule of law numbers

is very simple, when you're a very small company you can double your profits immediately. when you're a huge company, even growing them by 5% can be a struggle. >> i'm waiting to see how their online phone sales and other new ventures do in china and other places overseas. i think that's where their growth occurs. >> if they're going to get any kind of big growth it has to be somewhere other than here. >> absolutely. as i said, i'm very negative about the employment and consumer outlook because so much part-time and low quality employment has replaced full-time employment. >> but increase in the social security tax as well. >> doesn't help, either. i don't really have enough information at this point. i'm waiting to see the details. >> oil has made a $20 move since april. $20. >> right. >> every ten dollars is half a percent of gdp. you're talking about a major, major move in oil. gas hasn't gone up by that much but oil is finally starting to hit the retailers. >> your point is that that hits the consumer, walmart consumer

in particular, because it's directly out of their pocket paying more for gasoline. >> you think of it, the scary thing is we have delevered a lot since lehman. >> people have gotten rid of debt. >> very true. over the last nine months or so we added about $10 billion of credit card debt. so the consumer actually is tapped out. you can tell that incomes are flat to down year over year. they are dipping into the credit cards and it's really a sign of they're just maxed. >> great discussion. i really enjoyed it. thanks for coming in. now, hold everything. athe postal service says it may not need a bailout after all. that's coming up next. right now, 7 years of music is being streamed.

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finding a solution will take all of us. but at coca-cola, we know when people come together, good things happen. to learn more, visit coke.com/comingtogether welcome back. despite losing $12 billion last year, the head of the postal service thinks he can avoid a federal bailout. listen to what the postmaster general told young finance. >> we do not want a bailout. we know that what we're proposing is very workable and we have been up on the hill explaining that, and the fact that congress is moving now is very encouraging, and we need them to get across the finish line. >> he wants congress to end saturday delivery, among other changes. we're waiting, hoping that blake ziff, the politics editor at salon.com joins us. there has been terrible traffic in the new york city area tonight. he's a former obama campaign aide and also the liberal

component tonight. just you and me as conservatives, noelle. author of "branding america." good to have you. should one of us play the liberal? i don't know what to do here. put it all on me. what do you think of the postmaster general and getting rid of saturday delivery, et cetera. they have pension issues, though, is my understanding more than anything. >> there are two provisions that he had kind of talked about, and i think that ending the saturday delivery is just really not that big of a deal. >> it doesn't save enough money. >> here's the bottom line on that. this is what i feel. i feel that he has done a lot to get the postal service back on its feet. look how much -- i think it was $1.9 billion in debt and it's gone from that to 700 million something. so he's done a lot. i don't want them to get a bailout. he's telling them that he doesn't want a bailout. so for congress to pass this, i think it might be, this is just

my feeling, i just think it might be in our betterment. i think it might be a good thing to do. >> all right. a group of 87 federal judges writing a letter to congress complaining about the sequester. here's a quote. funding reductions have forced us to slash our operations to the bone and we believe that our constitutional duties, public safety and the quality of the justice system will be profoundly compromised by any further cuts. what do you think? >> you know what, what do they expect. it's a sequester. we had to take cuts from everywhere. this is showing you the ramifications for doing this. they couldn't get along, they couldn't come to any sort of agreement, and hence, we have the sequester. we have a spending problem. >> right. here's the one thing, though. there are things governments should do, right? government should defend the borders, should maintain law and order. it should foster competition and enforce private contracts. two of those require a justice system and a good one. an efficient one.

what government spending should be about is what should we spend money on. the justice system is probably one of them. >> it's one of the most important things that we have, and the fact that they are, you know, seeing cuts and they have an overload on work, there was something i think awhile back that said that maybe they needed to condense some of the courts. there was a way of looking at the workload in that some people had a lot of workload, some people didn't have much workload. >> reducing demand would also be helpful with a lot of reform when it comes to all of these ridiculous lawsuits. when i get called for jury duty it's inevitably for some slip and fall or some junk, right? so it's incredible demand. if i reduce demand. also potential changes coming when it comes to drug legislation as well. >> absolutely. look at what happened with the faa. everybody was clamoring around, very upset about what was going on with the tsa, but they found money -- >> a way to do it.

>> they found a way to do it. so maybe each agency cries loud and sees how they can find the money and different ways to go around it. >> we will have an out loud tv moment here. here is blake ziff running to the set as we are supposed to end this segment. what does the control room want to do here? you may think i'm in charge, but i'm not. blake, come have a seat. okay. we are wrapping but here you are. do you even have a microphone yet? >> i'll boom. >> you're so loud. >> so happy to be free from the car. hour and a half. >> that traffic is horrendous tonight. big accident on the george washington bridge. >> just agree with what i said. >> i'm blake. nice to meet you. >> should we continue to try to bail out the post office or the postmaster general says he doesn't need it anymore, he's got other ideas. end saturday delivery. do you even care about saturday delivery? do you -- i don't care about getting mail every day. it's junk mail, catalogs, credit

card applications. okay. let's move on. >> talk about traffic. >> so judges, 87 judges have written to -- >> can i say something about the post office? >> go for it. >> if i may? what's really interesting, i don't know if you guys covered this already, is do you know the trouble we're in with the post office? >> because of the pension system. >> who did that? >> congress. >> which congress? >> probably under bush. >> right. >> considering you're a liberal. >> but this is an interesting thing. let me tell you something. bush asked his republican congress to do this, because it was a poison pill. the idea was put this thing in where you have to pay for 75 years of the health benefits for the retirees and do it in ten years. so the idea is load it up so that the postal service has no money and they're in the hole and have this huge problem, and then what does that do, it ends up where we're in the situation now where they want to cut saturday service, they want to cut all these other things, then what does that mean, then you start having a conversation about do we privatize usps and do this kind of stuff.

as the poison pill, they got what they wanted but it's interesting to note how we got here. >> your thoughts on the sequester when it comes to the justice system. 87 judges saying the cuts have been too devastating, the justice system when it comes to the court proceedings aren't as efficient anymore. >> i think we are probably going to agree on this which is to say that obviously we need a court system that works. i think we can all agree on this, right? >> yeah. we do. >> there's very few areas of the government i think should be funded. there's only certain roles for government. i think absolutely, the justice system is part of it, enforcing private contracts, making sure we have -- >> we can't operate without a good judicial system. everyone knows that. >> we're agreeing. just like you asked me to do. >> i'm so sorry we've got so little time. the traffic gods were not with you. you're coming back. that's right. you're coming back. we're about to take you live to cairo, where the muslim brotherhood is vowing revenge for killings over the last 24 hours by the egyptian military government. president obama says we don't take sides.

we may not have a choice. we will look at what's happening and debate what our policy should be next. geoff: i'm the kind of guy who doesn't like being sold to. the last thing i want is to feel like someone is giving me a sales pitch, especially when it comes to my investments. you want a broker you can trust. a lot of guys at the other firms seemed more focused on selling than their clients. that's why i stopped working at my old brokerage and became a financial consultant with charles schwab. avo: what kind of financial consultant are you looking for? talk to us today. and experience the connectivity of the available lexus enform, including the es and rx. ♪ this is the pursuit of perfection.

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welcome back to "the kudlow report."

in this half hour, 47 days until those obama care state exchanges are supposed to be open for business. only one problem. lots of states don't know just how much this is going to cost customers. is this a case of if you have to ask, you probably can't afford it? egypt's government promising to crack down again if muslim brotherhood protesters attack government buildings. the official death toll for yesterday's violence is now up to 638 and with a large protest planned for tomorrow, it could get a lot worse. eamon mulhadin is live in cairo with more. >> reporter: good evening. it is the second night of a mandatory curfew that has been imposed across the capital, cairo, and across the country. that right now has a very uneasy calm on the streets of the capital, but tomorrow morning could be a very different story, given the fact that the muslim brotherhood has organized or is calling for nearly 28 different marches across the capital, all to descend on to the streets following friday prayers.

now, if anything like today was an indication, we can expect certainly some violence. that is because some of the protests that we saw today did turn violent. supporters of the ousted president allegedly attacked a government building here in the capital but other demonstrations were relatively peaceful. this also comes on a day that hundreds of people across the country were mourning the more than 600 people that were killed in attacks yesterday. so it is a very volatile situation. for their part, the egyptian government has a zero tolerance approach to these demonstrations, now that they've declared emergency law. in fact, the egyptian government says it has authorized its security forces to use live ammunition in the event that protesters attack government buildings, police stations, courthouses and even churches. so you get a sense that something is unfortunately brewing and given the tense anxiety that's been on the streets for the past 48 hours, it will certainly continue on friday after friday prayers. >> you mentioned churches. we have been reading that in response islamists have set fire to churches, christian churches,

across the country. do you know any more about that? >> well, we are getting reports from both the churches as well as independent human rights organizations here in egypt. by some accounts, as many as 20 different churches have been attacked, either set on fire or vandalized and damaged, across the country. now, many people are blaming that on supporters of the islamist president and the muslim brotherhood. however, they have publicly denied their role in any of these attacks and more importantly, they are rejecting them. but given the fact that over the course of the last several weeks, many of their leaders have been accused of inciting violence against christians in this country, many people here believe that to some extent, they are responsible for allowing their supporters to carry out some of these attacks on churches, either directly or indirectly, they are being held responsible in the eyes of many people here across egypt. so it is an unfortunate situation that has drawn very strong condemnation from the government and from human rights organizations. >> thank you so much.

so is canceling the military exercises in egypt enough? that's what president obama nou announced today. or should he do even more, pull full military aid as well? here is former deputy assistant secretary of defense, peter brooks, p.j. crowley. gentlemen, thanks for joining us. let's first explain to people. president obama comes out and announces they are canceling what had been huge military exercises next month with the egyptian military. secretary brooks, please tell people what does this mean when the president announces the cancellation of this? how significant is it? >> well, it's very symbolic. it's very public. it's certainly pushing back on the generals in egypt and egyptian military. i mean, it's the least he could have done considering the situation there in egypt. i don't think he would have been -- would have received a lot of criticism for allowing american troops to train with

the egyptians considering what's going on in the streets of cairo, alexandria and other places, but in the long run, it's really not much at all in terms of influencing the egyptian generals and i would submit that it won't affect -- they don't really care. they have plenty going on. >> what if we take away the money? >> that's another issue and i think the president missed that opportunity when he decided not to call it a military coup. first of all, they didn't say anything about it. they didn't want to call it a coup and then the state department said we're not going to call it a coup. if he changes his mind on that, it challenges our credibility although congress, when it comes back in september, certainly will get involved with this. >> we should point out to people the reason you don't call it a coup because this is actually a legal designation. the minute it's called a coup, legally we have to stop assisting the military in egypt. secretary brooks, what is in the national interest right now? excuse me. secretary crowley. excuse me. >> well, egypt is very important to the united states.

it's very important to the middle east. it's the political heart of the middle east. if egypt's transition goes forward constructively, that has ripple effects. if egypt implodes, that has dire consequences for the region as a whole. i agree with peter, six weeks ago i would have called it a coup. i do think the president will get the egyptian military's attention through his very public rebuke today regarding brightstar but the real challenge here is if the goal is to return to civilian rule and to deepen democracy within egypt, it's a worthy goal. the real question is how do you get there. and the dilemma here over the next several weeks, because egypt has a very aggressive timeline within the next seven months of re-writing of the constitution, parliamentary elections, presidential election, and quite honestly, the conditions are not ripe for that to go off smoothly. >> do you think that is even possible? they are massacring people here, secretary crowley. >> it is very, very difficult. and obviously the situation is

going to get worse as eamon just outlined before it gets better. and you know, we are -- our criticism of the morsi government was it wasn't governing inclusive enough. well, so part of the challenge here is not only what message do you send to the generals, it's how do you entice the muslim brotherhood back into the political process when they have this rising list of grievances, in their minds. >> right. right. secretary brooks, what do we do at this point? >> well, it's not clear to me that the obama administration has any comprehensive plan. in fact, i don't know if they had a plan since hosni mubarak was overthrown two years ago. i think our influence is limited. the only influence we really have is to cut military aid to the military there to try to get them to do the right sort of things. i agree with p.j. that i don't think that egypt is ready for elections. we're going to have another set of -- they may have been free and fair but they'll end up

being flawed. it's very important that people understand that elections and democracy are not necessarily the same thing. one is a subset of the other. you need other things. freedom of the press, freedom of assembly, political parties, et cetera, to have a real democracy and regular elections. >> as a former member of the defense department, how do you feel about the fact that the military -- how much have we done for the egyptian military through the decades and the fact that they just completely blew off the united states and every request from us? what does that say and how does that make you feel? >> well, you can't be happy about it at all. but you have to understand that people act in their own national interest and you may have some leverage, you may have some influence, you try to develop personal ties, but in the end, the egyptians are going to do what's good for the egyptians and their own sense of perceived national interest. >> secretary crowley, secretary brooks brought up a very good point which is just because you have elections doesn't mean you have democracy.

we have seen this in certain parts of latin america, where someone is elected and then very quickly begins to dismantle democracy. it's almost like they've learned oh, dictatorship got people in a lot of trouble. you know what, i'm going to get elected and then i'm going to hold up that election and use it to justify everything because i was elected. what do we do in situations like that? >> sure. peter's exactly right. this is the challenge of a generation. and two years ago, when this started, we understood that the path to democracy in egypt was going to be stormy and a lot of mistakes were going to be made. the egyptians were making mistakes right now. but i think one of the challenges here is when you're building a democracy, do you build it on the back of an election, potentially, do you build it on the back of a coup, that's less likely to be successful. i think the other aspect of this is the longer this goes on, the inability of egypt to stabilize the situation, the other dimension here is the economic

situation in egypt was very dire before the last six weeks. it's becoming much more dire here. so you really have to get a government that you can negotiate with so that you can have international assistance flow to egypt through the imf, through the world bank because ultimately you need to produce an economy in egypt that can handle opportunities and jobs -- >> i'm glad you brought that up. i think one of the great untold stories in egypt is just how much of the economy is controlled by the military. i think that's their ultimate motivation here. i don't think they actually want to rule. they don't want to rule -- >> the egyptian military, you're right, the egyptian military wants to protect its own status within egyptian society but also you have a situation where one of the pillars of the egyptian economy has been tourism and that's been decimated over the last couple of years. so egypt has to help itself so that the international community can step forward and help it create the opportunity for a restive and young population. >> gentlemen, thank you so much for joining us.

now, more evidence that obama care isn't quite ready for prime time in several states. still -- they still don't know just what people are going to have to pay to get those health insurance exchanges, on those health insurance exchanges, when they want to buy their health insurance. there's 47 days before they supposedly open for business. don't you think we ought to know something by now about the price tag? we will tackle that story and more with our political panel next. when we made our commitment to the gulf, bp had two big goals: help the gulf recover and learn from what happened so we could be a better, safer energy company. i can tell you - safety is at the heart of everything we do. we've added cutting-edge technology,

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i trade like me. i'm with scottrade. (announcer) scottrade... ranked "highest in customer loyalty for brokerage and investment companies." the clock continues to tick toward the opening of the obama care health exchanges. people in a state like illinois don't know what they're going to have to pay when the law goes into effect. they haven't been told a single thing about what their health insurance will cost come october 1st. it's not the only state, by the way. state officials haven't shown anything to the public yet. we welcome back salon.com politics editor blake zeff and republican strategist noelle nickbor. what's the problem with illinois, amongst many? what's up with the health exchanges? >> okay. the first thing here is this is just for the exchanges. this is not everybody in illinois is not going to know how much their health insurance costs. this is for people in the exchanges. >> who have to buy as individuals. >> right. a lot of people get it through

work. let's just colllarify. >> the vast majority of people get it through work. >> we're agreeing already. this seems to be like a bit of a screw-up. why haven't they come forward with this. i agree. i don't know if it's because they're negotiating with the companies and haven't figured it out yet. it is a deficiency that they have not come out with the rates yet. i will concede that. >> may just be illinois. illinois has all kinds of -- >> it could be an illinois thing. it could be an illinois thing. >> all the governors in prison and jail. >> from both parties, might i add. >> bipartisan. >> one of the things i think that is really true that nancy pelosi said, she said we're not going to know what's in the bill until it's passed. surprise, i think we're finding that out because as it inches along and gets towards the date, we are unraveling new things and they're not working and we're canceling this and postponing this, as you can see with the mandates, et cetera, and i think that as far as illinois's concerned, the biggest brouhaha

to me was the fact they spent $35 million, $35 million taxpayer dollars to hire a p.r. firm in illinois to make this thing -- to put a spin on it so it's going to be good. >> to get people to sign up. >> if it's this good, why are you force feeding it? >> because you want -- two things. if you have a big massive bill, there are two things i would say. one, you will always have implementation difficulties at the beginning when -- this happened with social security, medicare, people liked those bills and -- >> but if we don't know what's in it, how is this p.r. firm going to put a spin on it? they don't know. >> i was just responding to your first point. that was point one. point two about the p.r. firm is you do want to teach people it is as you would say, as i think many conservatives would say this is a complicated, oh, it's so long, the bill, i couldn't read the whole thing. well, so you want to teach people about the process. it's a new system, so it is normal to have a p.r. outreach effort to try to teach people about it. >> that's nice, but $35 million when they had to cancel white house tours, when they -- we

had -- >> justice department isn't working. >> yes. sequestration. i agree. get rid of the $35 million. let's bring back head start and all those -- we're in agreement. >> big news ought of marcellus shale. it has changed where many of us get our natural gas. naysayers always said estimates were too high. turns out they weren't high enough. does that change the debate? what do you think? >> oh, my gosh, this is fantastic. this decreases potentially our dependence on foreign oil. one of the things that makes us weak in my opinion is the fact that we are dependent on foreign oil and energy and we are spending our dollars. now, if we can take away some of those dollars that we're spending on foreign oil, then it will increase the value of our dollar. >> blake? you hate fracing, i know it. >> here's the thing.

the question wasn't really would this produce gas and oil. that wasn't the issue. it was that you're killing people by tainting their drinking water, you're throwing methane into the environment, you're killing people's livestock. if you go to the communities where fracing is happening, these are not liberal communities. these communities tend to support this kind of thing, exploration. they're complaining in droves because their drinking water is tainted, they are having all sorts of problems. it's true. it's true. this was never about can you actually extract oil. that wasn't the question. the question is what are the public health and environmental effects of this. >> i think that's a weak argument. >> we haven't answered that question. >> i think it's a weak argument. >> i'm not sure the science is there at this point. >> that's just it. we need to do more science to figure out how the effects are. >> more money spent? >> we have people who are complaining for the fun of it? my water's terrible and we're dying? >> the california state legislature has passed a bill to protect children of celebrities from paparazzi. that's great news for the celebrities who pushed the bill like halle berry and jennifer

garner but does the california legislature have bigger issues to contend with? jennifer garner cried as she explained how her children are pursued when they go to school. >> boo-hoo. let's think about this. yes, nobody wants children being exploited and children being made fun of and anything that would cause emotional damage to children. but let's think, this is a very small community. california's a huge state. this is absolutely ridiculous. they have got -- that state is in bad jeopardy, has a horrible economy, it needs to focus on things that are going to turn it around and not this junk. >> blake? >> why couldn't your answer just end with nobody wants bad things to happen to children. why did you have the "but"? we can agree they have famous parents with lots of privilege -- >> because why spend taxpayer dollars on a very, very tiny community, women who maybe two years from now would love to be chased by paparazzi. >> what do you mean taxpayer dollars? just a law saying you can't do certain things to the kids.

>> the legislatures get paid every day to go legislate. >> this isn't an opportunity where they're voting for this, they can't do other stuff. they voted on something. >> when there's a movie they want to promote, they are all in the paparazzi. they are pleased to have it. >> they're adults. they're saying -- look, i don't care about defending them so much. i'm just saying if their kids are being, you know, exploited -- >> if you harm a minor and you infringe on a minor's rights, there's other laws to protect a minor other than having a whole new legislation, whole new bill created just for this one thing. >> i will agree with you on this point. >> we're done. >> only because these people are wealthy they have much more influence with the legislators. if there was something going on with our kids and we wanted to get a law passed it would be a lot harder. they are being more responsive to these people. >> stay put. once again, our top stories tonight, wild sell-off on wall street today. another round of severe violence in egypt. we will take a look at what you need to look for tonight and tomorrow morning on both those

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let's go back to today's big news, that the dow dropped more than 200 points. what's going to happen to the markets tomorrow? we're back with alec young, global equity strategist with s & p capital iq. blake zeff and noelle nikpour are still here. what do you think happens tomorrow? tomorrow, do we get a reprieve? >> i think we may get a positive

open. we bounced off the 50 day moving average, around 1656 today, kind of held that. so i think some people may come in and nibble a little bit but ultimately, we don't think this pull-back is over. >> [ inaudible ] has worked all year. you think it still works from here? >> no, not in the sense i think this pull-back isn't quite over yet. it may work tomorrow morning but i think that would fail. ultimately we do think this will be a fairly minor pull-back and that you do want to buy the dip. i just don't think it ends tomorrow. >> the other huge story, egypt. now more than 600 dead, potentially a lot more protests and violence tomorrow. how much does the market care about egypt? >> i think the key with egypt is the suez canal. egypt is not a huge exporter, but everyone else in the region's oil flows through that canal and the canal is strategically located very close to egypt. as much as the two sides in egypt are really at each other's throats right now, neither has an interest in seeing that flow disrupted because egypt earns income from that oil flow.

so i think you can tell from the oil market, it didn't really spike -- >> it's climbed pretty steadily. >> in the last couple days since egypt blew up, oil's up like a buck. i think unless this crisis in egypt stays at a fever pitch for a long time, i don't think -- unfortunately, markets have bigger problems than egypt right now. >> right. that's saying a lot. so with the situation there, you can be sure that members of congress, democrats and republicans alike, are going to start weighing in about something. what do you think they should do, will do? >> i think the aid, i think whether we continue giving aid's going to be on the forefront, number one, and number two, i think that your point is right with the suez canal. i think that's a main concern. that's one of our interests as well as some other countries' interests. the third thing is keeping the agreement, the original camp david peace agreement a long time ago which i think -- >> protects israel. >> right. absolutely. and i feel that this is something that we need to watch and watch closely. >> this is one of those

interesting rare political issues where there are not predictable liberal and conservative sides on this necessarily. i agree it will be very interesting to see how this shakes out. you have some conservative critics saying stop giving the aid but then you have people like john bolton saying don't do anything. >> the conservative party has pretty divided. some people used the disparaging term isolationist to say -- those are people who don't think we should do anything and cut the aid and didn't think we should be doing it in the first place. >> you have to watch the muslim brotherhood. these people are radical. this is not really a political group to negotiate much with. you have a very different animal here. >> all right. lady, gentlemen, it was really great having you tonight. we really appreciate it. on this big news today. remember, tune in tomorrow because the situation in egypt is certainly going to be on the forefront. alec, thank you so much. blake. thanks so much. that's it for tonight's show. thanks for watching.

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>> in this episode of "american greed," in the war on identity theft... >> this is a legit account? 'cause you know i'm gonna check it. >> there is a new enemy. >> the drugs sit there and i fight the temptation and the temptation. >> one who is dedicated, resourceful and addicted to meth. >> i had gotten addicted to going into a bank and using somebody else's name and walking about with $1,000. >> and later-- >> when he enters a bank, he's very commanding. >> he immediately takes control of the situation. >> a mysterious bank robber who's not afraid of violence or the police. >> points a gun at people and tells them he will shoot them. i believe that he will follow through on those threats, if it comes to it. >> who is "the wheaton bandit?"