whether it was a software or whether it was some sort of electrical piece of equipment that's okay. what you do is get in the front of the camera, listen, we're doing everything we can and we apologize and we say we are sorry. "mad money," i'm jim cramer. i'll see you tomorrow. welcome to a special edition of the kudlow report. i'm larry kudlow. called the flash freeze. a technical error shut down trading on the nasdaq for more than three hours. cnbc brian sullivan was on "fast money" anchor desk when this all went down. brian, for viewers who missed the big news today tell us what happened. >> reporter: we're still trying to figure out what happened. i'll give you what we do know and figure it out from there. about 12:23 you started to see this stuff come down hey i can trade, i'm not getting a bid ask, no price. what happened the nasdaq there

was price discovery problem. the trading was fine, figuring out the price was not. that was about 12:23. at first it seemed like a small deal. then bigger. shortly after that the nasdaq halted all nasdaq trade stocks and it wasn't just at the nasdaq because you can trade nasdaq names on other platforms, but all the other platforms were stopped trading because nobody could uncover the correct price for anything, basically around 3:30 stocks started trading again. it didn't affect anything except the nasdaq price itself. we finally got a statement and it said there was a problem, basically price transparency but didn't go into further detail exactly what the problem was or what caused it. >> i got a copy of this thing that you're referring to which came in about 5:30. so it talks about sip, it

basically says the securities industry processor which is responsible for processing all these prices broke down. okay. i don't know. why did it break down? do we have any idea? bob pisani says it broke down because of the software package. they are building software package on top of software package. what's your guess? >> reporter: i want would be a guess. to be honest, bob knows more about this kind of stuff than i do. i'll say this and there's something else in that statement that bothered me a bit. to your point, i guess if they want to call it an upgrade, they have these legacy systems. here part of the problem. exchanges have been buying each other. we know that. all these older systems that companies bring in their own systems, you got all these different software programs stacked on top of each other and oftentimes you see that's where the problem lies. do we know if that's what it was? no. the other thing that troubled me about the statement. if you read it closely it

basically said after 30 minutes they figured out the problem. then for what two and a half hours they couldn't figure out how to price stocks. >> that's what i don't get. let me go to john carney. brian may know more. they knew in a half hour. what took so long for them to piece it together. >> from what identify been told with people that deal with these systems when the system goes down, what you want to make sure when you flip on the switch you don't want it to go right back down. then you have to test each of the parts to see that subsequent parts have broken down because that thing you knew about broke down. sure that's why it took so many hours afterwards because they want to make sure that when they say okay trading is back that it's really back. >> one more technical thing. security information process jobs sip. that's at the heart of this thing that they put out.

do you buy that? that's where the prices come from. why would that -- why would it take so long for it to be fixed. >> that was the initial problem. i suspect there were follow on problems after that. and make sure all the trades in the system and got cleared out. just saying that thing broke doesn't answer any questions. we need to know why it broke and how they are going make sure it's not going to break again. if we're driving along in your car and it breaks on the side of the road well we ran out of gas, well, larry, you have a gas meter right there why wasn't that working you're like orchestrate that wasn't working the. >> you're on the floor during this. >> yes. >> what was that like? >> luckily for the nasdaq it was a slow day. i mean it was a low day in august. if this was the end of october, triple witching or fed speaking could it have been a disaster. as a result the market was strong. the market was up. so we had a good day with the

human, not a human freeze on the floor of the new york stock exchange. >> did some of your colleague, did you, for example, want to make bid and offers on some of the nasdaq stacks? >> we did. >> do it the old-fashioned way? >> yeah. >> would they let you do that? >> we don't know the answer. we were perturbed we couldn't trade them but they shut all the nasdaq stocks down. >> this is a big deal. one of the things we're supposed to have with all these different trading floors is a morrow bust market so that if there's a problem in one place you should be able to trade in the other place. this proves that's not working out very well because when, you know, the nasdaq went down all the nasdaq stocks went down every where. didn't matter we had all these other trading platforms out there. >> where was the back up? >> the answer to that question is the answer to all the questions which is we're not really sure and that's the largest problem here something we were talking about in the green room is we really don't know exactly what happened with facebook.

we don't know happened with the flash crash. not that everybody that ever happened is lumped into the same basket. listen, brian was on air doing terrific work this afternoon and at no point was able to say in any sort of definitive fashion what happened. >> brian how long can nasdaq get along with this? >> reporter: that's a good question. don't think we haven't bothered them about it. we've been all over, the whole cnbc team has been saying can you be more specific. they are figuring it out. maybe they know and don't want to say. that's unlikely. to everybody's point, i get the fact that it was a low summer day but to the last point what if it wasn't. what if it was right before the fed minutes. it didn't affect microsoft or google so some people suggest it was not a big deal. one price it did affect is ndaq. should exchanges be public where

they have conflicts of interest and by the way i'll throw this out there to throw a little conspiracy gas on the fire because at the end of the long day, did you look at the intradition day price of apple right before stock trading ended. apple tanked. i'm not saying they are connected i'm saying look at intradition day of apple, look at the timing you don't have to be a conspiracy theoryist. >> we saw that with yahoo! too. >> straight down. >> if i can quickly make a larger point that hasn't been made, either i'm super smart -- >> wait. do you buy the fact that the real damaged party here is the nasdaq company. >> without a doubt. the market reopen. >> prices went up. investors will get shocked tomorrow. we'll talk about that later. but the nasdaq company -- >> today was the second best day of the month for nasdaq. one of the best days over the last three months.

this is a really important point. we're forgetting for a second lost in all of this is the fact this is the capital market. this is where democracy and capitalism thrive and flourishes. capital expand and gross and hire and we're screwing with it and i don't like it. the point is getting lost. >> if i'm london -- >> hang on. i have to go to josh lipton. what you got? >> reporter: listen, we have been waiting for an answer here, some clarity on what exactly happened today. now we have another statement from the nasdaq. leapt me give that to you. they say there was a connectivity issue between an exchange participant and the sip which connects the display. a connectivity issue between exchange parcicy pant and sip that toledo a degradation.

the cause of the issue has been identified and addressed. again the nasdaq colualling thi connectivity issue. >> who is the participant. >> reporter: all we have is an exchange participant. >> brian sullivan what do you make of this? >> reporter: this kind of statement -- good people from nasdaq. they got to be more specific. then what happens is all the news organizations, us included end up discussing and guessing and basically what the situation was. very bizarre language. i'm looking outside. they tore up all of times square. what do they mean connectivity? somebody cut a wire? >> that's what i was thinking. from you look outside -- >> maybe its con ed. >> reporter: they are not a market participant. >> they do all the wiring. what do you make of that? >> i don't know. it sounds far fetched. but i tell you i agree, brian,

that for nasdaq itself they have a lot of problems and i think one of the big problems is twitter. if you're twitter you're saying let me take a second look at this. it's time to look at the new york stock exchange. >> your market participant, i understand why nasdaqing might not want to say it was those guys. >> another exchange. a company. >> i think whoever it is needs to come forward. they need to say look this was our issue, or it was an issue between us and nasdaq. i don't think keeping the public in the dark about public markets is going -- >> i disagree. the operative word there, the confusing part of that sentence is not market participant the issue is what is connectivity issue. >> who unplugged the machine. >> first they are saying in the first release they discovered the problem in a half hour, brian. now in the second release they are talking about this connectivity participant. are we talking about another

exchange? that what they are talking about? will they blame this on the nyse. >> there's nobody here. >> i wonder if this was a fat finger trade that tanked the market. maybe it was con ed, brian. >> we don't know what that term is. it's not even an official term. >> guys, i'll say this. we don't know what happened. listen we often think that the nasdaq and nyse, i'm not picking on the nasdaq because it's all of them, they are these insular, self-sufficient very safe organizations. what we have just learned, apparently is that a third-party, yes a market participant but not the nasdaq, somebody else now that's ability to bring down stock trading for everybody. >> that sounds like another exchange. that sounds like another exchange to me. i could be dead wrong. i think today we learned also that these exchanges, once something bad happens they do get together. whether the sec has anything to do with it i have no idea and

maybe we'll learn that. they do get together. basically the first release said they spent several hours getting together with other exchanges when they got the system fixed. ice the nasdaq itself that will get slammed here and you just said twitter -- if they are having a listing problems companies will want to delist. >> they are the biggest tech market in the world, $5 trillion cap market out there and yet they have the biggest technical problem. they should have had a redundant system, a back up system that kicked in right way. in new york they have back up systems they test all the time. another thing that irks traders we didn't hear from anybody. if this happened at new york stock exchange the chairman would have been talking about it all day. >> mr. greifeld, i don't know

the man. at 5:30 they put out a technical thing and then at 7:00 another technical thing. >> this is a public company with shareholders and has a bigger public responsibility to the broader markets. their leadership should have been out there. should have been out there immediately. >> this is public relations management. >> reporter: can i defend. why not. i'll take the other side. i'll defend the nasdaq. it's august. i have anchored so many shows this week everybody is off. that's the way it is in america. executives, pr executives are also gone. >> i totally disagree. >> reporter: i expect you would. i'm throwing this out there. >> they didn't have a phone? >> the pr executive is not on vacation on mars. he has a cell phone. let's be clear. we shouldn't be surprised about this because based on the nasdaq's response to the flash crash, the nasdaq's response to

facebook, this is par for the course. >> reporter: i agree. but what i'm saying is what we've learned, again, in second oddly worded statement is effectively this, it wasn't the nasdaq. it was a third-party participant with some weird connectivity issue, apparently. so i'm only pushing back a little bit not because i'm standing here. nobody is here. nobody will throw me out. it would take two twice to do it anyway. it's a third-party maybe they didn't know. >> tom, founder of staples talked to me tonight on a differentict but we went through this a little bit. he used to be a board member. a very big supporter of greifeld. he said he didn't know. and the reason there's no statement they are waiting for precise information as to exactly what happened. you buy that? >> reporter: i do buy that. you're greifeld what's worse to put out nothing than to put out the wrong thing. >> you can put out something. >> there's a good way of

handling this. put your guy forward and he sit there's and looks the camera in the eye, the american people and says we're looking in to this, we'll get to the bottom of it and get you all information. >> reporter: john, i agree with you on that. >> something is better than nothing. >> take leadership and instill confidence. that's your job. >> thanks, everybody. you guys are alter fix. brian sullivan, thanks you've had a long day. now, folks, cnbc steve liesman at the jackson hole conference. we'll find out what all the vps are saying about the nasdaq flash freeze. these are the fed guys. steve and i will discuss some news i'm getting about the race to replace ben bernanke at the fed. wait until you hear who identify been told about may be a new front-runner for the job.

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. could there be new contenders, new names in the race to replace fed chair ben bernanke? over the past few weeks we've seen a fiery debate over the believed front runners larry summers and janet yellen.

but a source, a very good source tells me that other people may be involved. i want to get my pal lease in on this right away. steve liesman is out there in jackson hole, wyoming. steve, i'm not saying that 100% but here's the story. an excellent source, a source who told me way before larry summers' name was going to be in that larry summers' name was going in. that's how good his source is. he said there's so much bloodshed now between janet yellen and larry summers that two other names are surfacine s until quite -- tim geithner. geithner is in charge of the search. he's the guy that coordinating the search. the other guy is kohn. is geithner our next fed chairman? >> so identify reported some of

this before, larry. not on air because i didn't have enough to go with any of this stuff. i know tim geithner has been advising the president on the issue of the fed chair. whether or not he's leading the search, i think it's more than i've been able to establish is the best way to put it. there's been a lot of thinking it's always been tim geithner ears job to have. i think he refused it several times and said he was not interested in the job. so i'm skeptical. what i do know, larry, you are correct, that the list has as i always understand has been longer than two names. there were more than two names under consideration for a while and the media is focused on what probably are the two front runners, janet yellen and larry summers. >> you know, there's too much bloodshed, steve. this is another important thing. you got all the what i call the

robert grogan clinton people in the white house. they are the ones who are pushing for summers the whole time and still pushing for summers. i'm also told that geithner himself is not happy with janet yellen as a possible choice. now that leaves don kohn a name used by president obama. but don kohn, i know he's a good guy, good man, a smart man but he's a 70 something guy. that's why i'm coming back to geithner who has run the search. that much i know. >> absolutely. if you run the search. if that's your reporting i have no reason to doubt it. what i would suggest, those is don's name has been mentioned. i think what you're getting as more than anything else the white house has bungled this affair from the beginning. i don't know how it quite spun out of control but they certainly didn't control the process. they let janet yellen hang out there for a while and then

damaged her by putting in larry summers name. then larry summers has been out there and made him available to be whacked in the press and media and become a magnet for political controversy and criticism. so you may be right here they have to move on. one of the things about the fed is the guy who or the woman who is appointed chairman should be universally agreed to be the very, very best person for the job. and now that you have had this political discussion about both yellen and summers, it may be unclear either one can. one thing i hear a bit, larry, is everybody seems to be resign it's going to be summers, but not everybody is happy about that. >> yeah. first of all my source may not be right. i'm just saying. i'm putting it out there because he's a very credible source. but i think the problem with yellen and the problem with summers, steve, is that there is too much bloodshed. as you say this thing has gone way too far. so whoever comes in there, i

mean they are saying -- you got people saying it's actually affecting the markets, that it's affecting long term interest rates and things of that sort and adding confusion to the whole fed process of eventually tapering down on their bond purchases. are there any other names before i lose you? beautiful jackson hole, wyoming? any other names surfacing? >> i've been told not to discount the possibility of roger ferguson. i haven't talked to roger in a while. but roger certainly has the credentials. >> he does. >> and his time in the private-sector, i think something that helps out his candidacy. and he did what everybody agrees was great work when he was at the federal reserve. so i've been told not to rule out that name as well. >> roger ferguson another great name. thank you steve liesman. we appreciate it. cnbc's josh lipman will join us with the other big headlines. later in the show we'll get back to the top story of the day with

harvey pitt. he has strong ideas about nasdaq's flash freeze and,000 restore more toward the markets. he'll join us life in just a couple of minutes. i'm larry kudlow, please stay with us. it starts with something little, like taking a first step. and then another. and another. and if you do it. and your friends do it. and their friends do it... soon we'll be walking our way to awareness, support and an end to alzheimer's disease. and that? that would be big. grab your friends and family and start a team today.

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the sip. we do know this morning the nyse told traders that it's all electronic trade exchange was having tech issues with certain nasdaq listed stocks. those issues seemed resolved but within the hour the entire nasdaq halted when nasdaq reopened arca did have some connectivity issues. maybe a clue here on this connectivity issue. >> arca. what's arca? >> electronic exchange for the nyc. this may be a clue as to what happened. you had this news this morning, came out with these headlines they were having issues with certain related nasdaq stocks. >> so, in terms of the earlier release that nasdaq put out -- >> which was a little gray as you guys were talking about -- >> we were trying to figure out who the other are participant was. the other participant might have been the new york stock exchange. >> there was this vague language

of an exchange operator. now we're getting more clues, more insight into what that operator could be. >> that's pretty heavy stuff. anything else? >> later. you have more? i think president obama out there is selling something. >> listen. speaking at the university of buffalo today the president wants to create a new rating system for colleges. schools would be evaluated on tuition, how many low-income students enrolled, graduation rates and the debt of graduates eventually financial aid would be awarded to schools based on these ratings and hopefully that would be enough to convince schools to slow down the increase in tuition. now separately president obama has asked u.s. intelligence to look into wednesday's attack in syria, it's believed president assad's military used chemical weapons in the attack and as many as 1300 people were killed. one year ago yesterday president obama said he would take action if syria crossed that red line. moving on, san diego's mayor bob

filner is resigning. it will be official once the city council accepts his resignation letter. 12 women have accused him of sexual harassment. through it all he tried to keep his job even going to rehab but he's giving up and resigning. we'll end here with an ugly story. jason lee a goldman sachs banker arrested and charged with rape. according to police a 20-year-old woman claims she was sexually assaulted at the hampton house lee and his wife is renting. hee a managing director denies the allegations according to his lawyer. you know, we need some good news. >> i hope i can bring you some later. >> this guy, filner, san diego mayor, he went to treatment center for three days or something and he came right out. at least he resign. thank you. now we're still waiting to find out exact why all the trading on the nasdaq was halted

for more than three hours today. former sec commissioner harvey pitt has some strong words about this. he's about to join us as we continue our team coverage of the nasdaq flash freeze up next on the kudlow report. vo: two years of grad school. 20 years with the company. thousands of presentations. and one hard earned partnership. it took a lot of work to get this far. so now i'm supposed to take a back seat when it comes to my investments? there's zero chance of that happening. avo: when you work with a schwab financial consultant, you'll get the guidance you need with the control you want. talk to us today. license and registration please. what's this? uhh, it's my geico insurance id card, sir. it's digital, uh, pretty cool right?

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so just what will today's

nasdaq malfunction mean for investor confidence and government oversight of trading systems. we better ask former sec chairman and also with us the senior vp and senior vp of kkm financial. harvey put yourself back in your shoes as your old job as chairman of the sec. you watched this travesty go on. what's your next step? >> i think there has to be a complete revamping of the way the exchanges are dealing with these issues. this is nasdaq's second problem. it had the fiasco with the facebook offering as well. technology will always have glitches. but exchanges have to be prepared for them otherwise our capital markets are going to crumble and that's simply not acceptable. >> i want to get this right.

reg sci, securities compliance and integrity. that apparently is, i don't know whether that's a promulgated rule from the sec or something being discussed but i'm told, i heard the exchanges themselves are dragging their feet. this amounts to a lot of technological change which we reported on our own bob pisani. what's up with this? is it true? have they dragged their feet and why? >> they are opposed to this because they are concerned about excessive costs. but if you are the nation's marketplace, you have an obligation to have a market with integrity. if something like this could possibly happen, you need continuous testing, not a quarterly or semiannual or yearly testing. you have to be testing all the time. you have to be upgrading your software and you need a crisis management plan for exactly what happened today.

>> so these guys are trying to dodge all that that's what your signing? >> that's apparently what they've been doing because this should not have happened, and the inability to tell people which securities would trade and which were opening ahead of others, that's pure chaos and totally unacceptable. >> jim, with it all, prices did very well today, right? the dow is up 66 ts, the nasdaq super39 points if you believe the pricing in the nasdaq. and the s&p was up 14 points, jim. what do you think about that? >> well, look, i agree with everything harvey said. fat finger trades and software problems and people use these things to talk about oh, yeah the market is manipulated, dark pools, high frequency trading, it's all manipulated. the fact of the matter is there are companies that have done extremely women out there, made a lot of money for investors. if you want to shoot some slings and arrows, shoot them at the

smoke screens we get out of washington or shoot at the federal reserve board that's manipulated the markets more than any other entity in the history of financial markets. but the reality is if you're not going trade because of this kind of thing then you're not a serious investor. the markets are doing pretty well. stocks have done pretty well. you need to look at these things and while these systems need to be improved, that's not retail investors or institutional investors really need to be focused on. >> jeff, we don't know, we don't have foresight but what do you think will happen tomorrow? i mean the price action today was good. i don't know if the nasdaq rallied the last half hour is credible or not. i don't know if all the rises are workable or not. let's assume they are. what your looking for tomorrow? >> a lot of people shrug this off due to the fact the markets were up today. just because there was no harm and no foul i think they really have to look into this. so tomorrow we're going to be

interested to see what comes in. a lot of people were leary putting in trading in the last 30 minute of the day. this is something we saw last week in china, a 6% spike in the stock market. these computer glitches or connectivity issues that the nasdaq is describing, this is something that needs to be addressed. the average retail consumer, the investor joe, investor jane are being sacrificed here due to fact these high frequency trading -- we don't know it was high frequency. >> haven't heard that. >> nobody was sacrificed. nobody lost money because of these glitches. >> the retail guys are in etf. they are mostly in etfs. nothing happened with the etf. >> agreed, larry. we don't know the ramifications. we ask describe the "titanic" as having navigational problems. a lot of folks here in chicago, you know, on the night situation they are out of jobs due to

those glitches. there are issues that need to be addressed and people should be aware of this. >> harvey pitt, let me come back to you. is our stock market system, harvey, too fractured? do we have too many exchanges which makes for too many electrical micro circuits and connectivity, if you'll excuse my whatever, i'm not a technological expert, but are we too fractured. do we have too many exchanges. is the whole system unworkable? >> well, i think there are two separate questions there, larry. first of all, i don't think the fact that we have competing marketplaces is necessarily a bad thing. but the big problem is the lack of connectivity in the marketplaces, and the fact that there's no redundancy planning on the part of the exchanges when things like this happen. and we also have a lot of other venues that aren't technically exchanges like atss and other

electronic systems and the result is just as you were saying earlier, prices that are posted on nasdaq may or may not be real because they pay to be able to post some of the orders that they carry. >> i know. we'll see about all that tomorrow. but this other one, harvey, is it time for the sec -- i know they will investigate this whole thing. should they handout fines? i mean should there be some cost to this travesty today? >> i think there needs to be huge fines on this, but i also think the system has to be righted. if we allow this kind of thing to continue, we're going see more and more of this and the excuse will always be, we had a connectivity problem or a software glitch or what have you. investors have the right to have markets that function. >> jim, real fast, buddy because we're out of time. what were your own customers and

clients telling you today as this thing drew on. >> everybody was yawning because the prices didn't look like they were cratering. this is not a big issue right now. what will be a big issue if this market gets hot been like we saw in the late '90s and everybody trading and you have computer glitches then you'll have a real problem. >> let me bioto jeff. jeff, is it possible, this is a little cynical on my part. we had these glitches. it is the age of electronics. things go down, right. my e-mail goes down and there's nothing i can do about it until microsoft tells me the system is fixed. are people just going to become sort of inured to this. no harm is being done. we under in the technological age stuff happens? >> well, i think this does erode confidence. this will be on every newspaper tomorrow morning and get the

average investor. it will be a demand from the sec. they need some type of answer, they need to address this. here in chicago fortunately we had the futures market up and running. different animal and serious losses, that's a very scary scenario that could be pinned on another connectivity issue. >> thank you gentlemen. now, staples founder happens to be a former nasdaq board member. he's about to join us with his take on the flash freeze. and also his stellar op-ed piece today in the "wall street journal," why regulations are killing new business in america. tom stenberg up next on the kudlow report. she loves a lot of the same things you do.

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. call it death by regulation. thousands of federal rules strangling american business. get this. the federal code swelled to near lie 175,000 pages last year costing companies roughly $1.8 trillion and if that's not enough regulations have speck during the obama administration, thousanding of new rules in the first term alone costing businesses $70 billion. what if we can actually get rid

of bad regulation. that's the message of this op-ed in the "wall street journal" today and here now is its author tom stemberg founder and former own of staples. he's managing partner of the highland consumer fund. tom, welcome back to the program. before we tackle the regulatory issues i just want to get your reaction as a former nasdaq board member to today's three hour flash freeze. what do you think happened here? >> well, it's a glitch in the system. but i know bob greifeld. he's one of the most logically savvy ceos identify ever experienced, problem the most. he's also one of these guys who doesn't shirk responsibility. if they screwed up they will tell the whole story. the fact is nyse has had issues as well. i still prefer the computer over the human intervention. >> a lot of people are talking about software problems in this and software that should have been updated, quote-unquote

legacy software has been around for a long time piled on other software n-at the integration is no good. is that possible because some people are saying that nasdaq and the exchanges repointsed any changes in software. >> well interestingly, larry there's some software issues. nasdaq is a very inquisitive company. the issue here was price reporting. if you go back underneath that i believe from my days there part of that is a regulatory issue. you got to make sure every exchange has a fair shot at your business and full transparency. they had to shut down because they couldn't offer that transparency to other exchanges. >> just last one on this and i'll get you to your regulatory proposals. we didn't hear anything from nasdaq today. late in the day they issued a press release but it really didn't say much. we didn't hear from mr. greifeld

at all. it's bad pr, bad crisis management. why was nasdaq silent during this whole period? >> again, i'm not speak being for nasdaq. i have a lot of respect for nasdaq. and it's ceo bob greufeld. he's the type of guy that doesn't want to cop out with a shoot from the hip explanation, get the full answer and come forth with a total answer which at the end of the day is good pr strategy. >> i want to talk about the overregulation and liberating american business your greet piece in the "wall street journal". senator king and senator roy blunt have a bill that regulatory improvement act of 2013. can you tell us about that? will that solve our regulatory problem? >> well, we got to start somewhere and right now there's nothing that stops the regulatory industrial complex in washington, d.c. from grinding out more and more regulations to affect more and more businesses.

i invest in small businesses. these small businesses have a heck of a time. we have a pet products company dealing with the epa and the fda and the ftc, it's almost impossible as a big company let alone an emerging company. we got to do something about it. one way to the it is force decisions on stuff that's obviously bad and this notion of up and down decisions, not a lot of amendments, particularly special congressional interest mumbo jumbo, ability to put things up for a vote. i was flattered that senator from maine called me this afternoon and talked about it. he's one of these guys who actually wants to shake up the washington establishment. i just have a lot of respect for people like that as well as senator blunt who again is willing to shake things up. >> up think basically this thing is like the bates closing

commission. >> the beauty of this is, since congress is so beholding to special interests, this allows them when regulation is put up by an industry as being bad, and the industry shows you why, makes their case congress now can vote up or down without a lot of pressure from a lot of special i wants to modify in some way shape or another for their personal interest. that in itself makes for a very healthy process. >> if you look back on it, you'll start this thing over again. given the regulatory burdens which continue to explode, could you start staples. could you make a successful go of standpoint snls what do you think? >> the answer is yes. we would have succeeded but not gotten nearly as big as fast. give you and example. staples like many other retailers have lots of part time employees. think of what obama care does to you.

you would like to work your employees as many hours as possible. many of these part timers are young kids, college kids working a job. they don't care about health insurance. so now you're saying if they work more than 30 hours a week you have to give them health insurance which by the way costs rough liu $7,000 or $8,000 per year, dramatically increasing the cost of the employee. what's going to happen? as posed to 35 hour week jobs we'll now have 28 hour a week jobs which is worse for the retailer, certainly worse for the student who wanted to work 35 versus 28. regulation time and time again gets in the way of building businesses. now luckily when i started staples i didn't have to teal with obama care. today i would have to. it's not a good thing. >> okay. we'll leave it there. tom stemberg we appreciate it very much. so after this flash freeze what should you look for in the overnight trading in asia and tomorrow morning when they ring the bell on wall street? are we in the clear now? that's next up on kudlow.

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so what should you expect tomorrow from the trading day after today. what's your guess on that? how about the opening? >> think it will be fine. i don't think this will disturb this rally one iota. we're still the best house in the worst neighborhood. not that it's a one day event

because it's certain lie more than that. i think it has ramifications for nasdaq. we have great news out today. the economic news very positive. >> manufacturing index, europe, china. >> all good. >> usa. >> transport is up 125. >> how much? 125 points transport. good day. >> you think the correction is over? >> we might have had that correction. they rotated in and out of stocks. you saw it. walmart down. apple down. i think we're back on the way up. i still like this market. >> josh, in between your excellent reporting of this nasdaq fiasco, was anybody talking markets and market prices today? >> sure. listen, it's interesting because listening to al you have a lot on your plate tomorrow. new home sales. benchmark yield. so to alan's point does that balance continue from what tr e

traders are calling over sold commissions. >> s&p stayed over 50. all cyclicals. you said transportation. all cyclicals which is the forecast of better economic growth ahead. all right. >> i think so. i think this market -- i think you get to the s&p at 1750 by the end of the year. >> 1750. still got a good run. >> i still like it. josh can i come back real quick to this arca and connectivity. "wall street journal" is reporting earlier in the day when this was actually before, this was before the nasdaq halted trading. >> right. this was this morning. >> that's correct. nyse, euro next operator of the rival new york stock exchange told traders it's arca electronics stock exchange was having technical issues in issues starting alphabetically

through zs. so yes, this arca thing has got to be front and center. >> you have that report and then the nasdaq puts out this statement which we broke on your show which comes out and says listen we had these connectivity issues with an exchange operator and the sip. that's all they said, exchange operator. this arca release that came out this morning is a clue. we'll keep digging and find out more clues about this. >> do you think that nasdaq wanted to keep the nyse and keep arca out of it for now? do you think the sec is involved in this? do you think there are going more names coming out tomorrow >> that certainly -- if you talk to analysts that cover these exchanges, they are worried about the nasdaq, listen what's going to happen next. what's the next liabilities and penalties. why if you have this news from arca why would you keep it so vague and say an exchange operator when you know this is out there. >> you know the sec is on the

war path. >> mary jo white releasing this. >> didn't get him in '08, or '09. i appreciate it gentlemen. that's it for tonight's show. thanks for watching. good luck at the opening tomorrow. i'm larry kudlow and we'll be back tomorrow evening. in the last five years - making bp america's largest energy investor. our commitment has never been stronger.

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>> in this episode of " american greed." they thought they were giving to god. >> if you can't trust the baptist, who can you trust? >> instead, they were taken on faith. >> i didn't understand. i didn't. how could this happen? >> thousands of investors, out hundreds of millions in an elaborate deception. >> as the debt grew and grew, more and more people had to be lied to. it must have been a nightmare. >> and later... when the feds find a podiatrist milking "medicare" for more than a million. >> just glaring fraud. >> a doctor banks on his patients to lie for him. one doesn't. >> that was her mission, is to stand up. >> then, turns up dead. >> a 54-year-old woman is found murdered inside a church basement. >> would a doctor kill for cash?