tv Mad Money CNBC August 27, 2013 6:00pm-7:01pm EDT
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>> deutsch bank. >> potash. >> potash. >> i'm long unicorns and times square. >> by the way, congratulations, josh, you won the >> my mission is simple. to make you money. i'm here to level the playing field for all invests. there's always a bull market somewhere and i promise to help you find it. "mad money" starts know. welcome to cramamerica. my job is to coach you through these moments. call me. didn't like today. didn't see anything to like about it. you are he intoing asked to buy -- you are asking to buy and you are not being paid much to
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take the risk. the stocks are not done all that far. a 5% decline for the dow and a teenie amount for the nasdaq. that does not entice me. s&p 500 going down 1.5%. and nasdaq 2.16%. no panic, and volume was light. but why the heck did you have to do any buying today? i don't want to give up on the market. no, but yes, the beat down was deserved. and i don't think it's over. let's talk with what is changed that can make us go down and what's the same, that can allow us to balance when the market pulls back a few %, which is where the current news probably takes. first is syria. we don't know what is going to happen in the middle east, but any time anything happens, you get a real sell off, you have to
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assume the worst. we have fought two wars and you cannot avoid the possible of a third. and what is happening in egypt, you cannot imagine of anything good. making matters more difficult is that is becoming a cold-war-esq moment. certainly not a side we are backing that we can see eye to eye with. the instability was not leading to anything beyond worry and selling on that worry, now, though, oil is flying. it feels 1990 like. and not knock the market for a loop. it had a genuine bear market. it's not a situation like iraq 1 or 2. americans are tired of war. using poison gas is a war crime, it's the presidential line in
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the sand. getting ahead of when tmissiles are to be fired is either bravery or foolishness and we do not know which it will be. but the price of oil is spiking. gas will go still higher. that is a bad sign for a strapped consumer. and this morning, john harwood interviewed jack lew and he made it clear that there will be no negotiations for the up coming debt ceiling to keep borrowing for the deficit. that means not only will there be negotiations and the negotiations will be protracted and terrible for the stock market. this morning, i was asked why that matters to the market? what's new there if you wanted to know? isn't that business as usual and the answer is two-fold, yes, nothing new, partisanship and ugliness dog.
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even the most ugly thing in washington like needing to pay the federal bills, but it does matter. it kills the market every time it happens. take a look at the charts. the sequester knocked the market for a loop. does anyone think this time will be different? of course not. we could have been down 1% on the interviews alone. i think it's obvious that they provide no up side, and all down side and the budget battle will be all about raising taxes on the rich, right? hey, come on. and the republicans saying they want to cut taxes but will not present anything that is important to cut. neither side will see eye to eye. that is why we are in this position. it's truly silly that the fed is talking about a tapering before the debt ceiling negotiations. ben bernanke had to see this
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ahead. it's one of the few things that can be banked on is the problem that washington causes. memo to mr. bettrnanke, you hav to come out and say tomorrow, that you will not do anything about tapering until the debt ceiling and the budget is taken care of. they are all about making everyone feel like they should do nothing but hanker down, right at this time, we are also going to get the news of the new fed chair. i'm still worrying about how the president gave bernanke the boot after helping the country. here is your hat, what's your hurry. so, we could get maximum confusion as the it goes into disagreement about the new fed chief. and that is not good for the
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market. and he is not a uniter, he is a divider. injury we do not need. these negatives are not yet priced in the market but they could slow the u.s. economy and when the economy slows, interest rates go down and that's an unmitigated positive, even if we get there by man made, man made, man made events. what a shame that this is happening now since we were enjoying the chinese and european turn arounds. fruits that made it less important that the u.s. has a overall growth course. what is worth doing? how do you adjust? i think we need to expect the market will drop, 2%, 3%, 4% more. will you have to go back to stocks in a slowing economy. my shorthand for this kind of trade, it's the same, repeat after me, it's go buy bristol-myers, because
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nothing in the middle east will hurt bmy, it will protect you. and i think that the oil stocks have not run nearly enough, so if you believe the worse will be worst than i expect. be ready to buy the big international dogs and international ones. i do not like banks. they act terribly. the mortgage market has been crushed here and of course, the markets are bullish. so, let's let things come in. and then get ready to put money to work in the softer goods stocks with high yields and we will have the interest rates coming down. bottom line, a lot went wrong, and the market reflects some of it. you have to be ready to buy the brift on online myers of the world when the smoke clears. you better have cash to raise the exposer. as terrible as syria can be for the stock market. the spector of the republicans and democrats going at it is simple more than this market can
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handle. >> jerry in new york, jerry? >> caller: hi, jim. >> what's shaking. >> caller: first, i want to thank you for your advice and call it economic trends with stock performance. others do it and you do it earlier and better. >> and thank you, i have a great staff to help you, thank you. >> caller: i bought bhm months ago and it dropped, and i know part of the problem is interest rates but analysts said that the rates leveled off and will rally $.15. what whis going on? >> they have your first initial move, and then you have back sliding and then the next move will only happen when the interest rates go to a level that do not hurt sales. the home builders did not come out and say things are bad. they are hanging on and saying things are good.
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until they say it's bad, it will not bottom. rameal in new york ka. >> caller: kaul with the -- i missed out on the buying of blackber blackberry. do i -- >> when they spin off this and that, that means they have not found a buyer for the whole company. on the fundamental basis, it's worth 7, or 8, and it sounds like it's not worth 10. i don't want to touch it, it's a don't buy, don't buy. a lot has gone on, i didn't like today period, end of story, it's time to be prepared, maybe we get a lift tomorrow. and a raise cash. get the defensiveness shopping ready, that will work. "mad money" will be back. hot dish, fast and fresh start up, noodles and company doubled on the first day of trading and
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took the market by storm. does it have what it takes to serve is up satisfies returns for years to come? and later, dream stream? netflix has tripled this year, is it at risk on of losing its place in the spotlight. cramer is screening the technicals to give his review when he goes off the charts. plus, drug interaction. the take overactivity in the bio-tech busy has the street buzzing. so, tonight, cramer is doing a examination to find out which drug makers could be next to be taken out for a hefty premium. all coming up on mad money. don't miss a second of mad money. follow,@jimcramer. send jim an e-mail [ male announcer ] come to the golden opportunity sales event
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. >> in a tough market, where it seems everyone is freaking out about a possible u.s. strike in syria, could come this week. what is it okay to buy on the way down. you can stock up on the consistent defense of stocks and pick up essential situations. so, could a stock like noodles and company, the rapidly expanding straunexpand ing restaurant that has the ability to build out across the country? it popped over 100% on the first day of trading. noodles and company was heralding as the next chipotle, revenues came in better than
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expected, 18% year or year and the guidance was only a line, when you are dealing with a high flying stock growth like this, they want more, it's now down $5. now it's still selling 77 times next year's earnings. that makes me think that you want to wait for the market to get hit harder before you buy the trigger. but the fresh story with a new concept rarely comes cheap. we need to learn more about this one. that is why i'm thrilled to have kevin ready to talk about his very exciting company and his amazing prospects. welcome to "mad money." have a seat. >> thank you. >> those of us that don't know it and look at the food and go to the website, the immediate reaction is when are you coming to manhattan and where can you blanket new york and new jersey. you still have a lot of runway, you have a lot of places like
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new york that do not have noodles yet. >> yes, we have over 350 straur restaurants and we are confident we can have 2500 restaurants in the country. so, we are disciplined in our growth. >> how about the competition. it was said that there was a story that colorado is the most over restaurant place in america. how is colorado doing? >> you know, colorado is doing great, i will tell you, one of the things i'm most encouraged by is our mature markets where we have better brand awareness. we have not hit a point of diminishing returns, so that guest loyalty is fantastic and we are growing. >> these are not complex dishes. i go to places, and these are not simple dishes to make. >> absolutely. one of the great things about noodles and company, and why we have so little competition. this is complex to do. we have wonderful fresh
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ingredients, as you can see, the plates jim is holding up. they are hardy, they are tasty, great vegetables and we offer so much choice from healthy to indulgent to our guests and we have a ton of dishes under 500 dishes. you can eat favorites kids to adults. and your specials are a-traditional, it's note a happy meal or more sugar or more assault, it's asparagus and corn. we have a real kitchen, we do real cooking. we can, you know, we make things, like you do things in your kitchen at home. >> my sister worked a as a waitress and i worked as a waiter, what kind of tips do i get working in noodles? >> we don't ask for tipping and we don't want tipping. >> it's not just that you don't ask. you don't want. >> we think, we value others and we feel that giving a great dining experience is important and a great value. and we don't need a tip for
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doing it. people are fascinated by you and a guy said, wait a second, how do they expect with starbuck that is developing a new line of foo food? >> 15 years ago, there was very casual restaurants, there's a lot of room. but we think we are a category of one, we offer a world of flavors under one roof and nobody else is doing it. >> the united nations of food. >> absolutely. >> they are doing an asian chop-house kitchen, is this too much like that? should you be worried? >> i don't think so, we are very different, again. global flavors, a lot of variety and choice for the guests. there's a lot of concepts that are niche oriented. >> i have a daughter that is vegan, and kids that are passionate about modified food, are you concerned about these
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thi things? >> i think people today, people want to feel good about the choices they are making. one of the best things about our dishes, we have real cooking and we don't start the dish until you order it. our dishes can start vegtarian and you can have a lot of flexibility. how important is this notion, for instance, food with integrity. is your food healthy for the consumer versus other companies in the sector? >> absolutely. i you will tell you, i think all of us in the restaurant space want to be responsible -- allow people to have good choice. we put the choice in the guest's hands. we don't try to control it. we have hundreds of combinations under 500 calories. you can enjoy dishes we recommend or you can tweak it for your own diet or concerns. >> how do you get people to work without tips? you live by a tip as a waiter?
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>> true in some concepts. for us and i think a lot of us, there's the economic side of the equation, you have to pay competitively and have a good salary and a great part of working for noodles and company is the pride and passion that everyone has, and the opportunity. they have a lot of growth opportunity on the way up. if you hire surprisingly nice people that value serving others they are trying make sure the guests are happy, they are not trying to get a tip. >> let's go to sherrill batchelder. they promote from within. pop eyes, we know that dominos most of the people that own dominos started out as drivers and started out making pizza. i want to work at noodles and own a franchise noodles, what do i do? >> we look at integrity and characteristics, if you are friendly and genuine, if you are competitive, smart and work with slightly unreasonable expectations, we can teach you the skills to be successful in the restaurant business.
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we want folks that are nice and fun and enjoyable. if you enjoy food and serving others, you can be successful in noodles and company. >> this is a great story, and great stories do not come cheap. 77 times earnings, and it has little to do with what is happening in syria. now you see why i'm entranced by this story. i will take a break and do some eating. stay with cramer. >> yeah, i'm married. does it matter?
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you'd do that for me? really? yeah, i'd like that. who are you talking to? uh, it's jake from state farm. sounds like a really good deal. jake from state farm at three in the morning. who is this? it's jake from state farm. what are you wearing, jake from state farm? [ jake ] uh... khakis. she sounds hideous. well she's a guy, so... [ male announcer ] another reason more people stay with state farm. get to a better state. ♪ when we made our commitment to the gulf, bp had two big goals:
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so we can all produce energy more safely. our commitment has never been stronger. . >> this week, we are taking a closer look at cold stocks that are in the middle or improbably moves, higher, it's why tesla motors toppled since the beginning year and that's a classic cold stock in there was one. we are trying to do get a sense of what is next for the market. another big cold stock, netflix that has run up 113%. you know that i think they revolutionized how we see media. it's too much mind share and terrific original programming like arrested development,
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featuring your's truly and house of cards and the very dark and some say funny and my sister doesn't, and i don't think so either, orange is the new black. but there's know way to justify buying this one. we are turning to the charts with the help of bob. a super smart technician, who works at explosive options.net, he looks at the stock and he says, netflix is going higher and it's the best chart in the entire stock market. if you understand how the stock that has tripled for the year can keep on roaring? we are going to explain the mechanics of how it's possible. first, let me point out that he has a stellar track record. especially when it comes to technology. that being said, he looked at the charts and he said that teches would have four new leaders that he acronymed fang. based on their names. white fang.
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facebook, amazon, netflix and google. fast forward to today and they are up 28% and the s&p 500 up 8% same period. yep, lang nailed the tech. he nailed the casino stocks and a month ago, his chart said by northrop northro northrop-gruman, so we have to pay attention, right? who knows where it's going. take a look at netflix's daily chart. you can see they just broke on out above a powerful ceiling of resistance and lang points out that that happened under strong volume. the more volume the more likely the move is telling the truth. after the break out is a floor of support at 270, six points below where the stock is trading
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right now. that is a little more than 10% away from the all-time highs. and lang notes that every time they dip, buyers come in and buy aggressively, which is something you want to see in the chart. it indicates there's strong demand every time it's hit. that is important. buyers, buyers, buyers, buyers, see that. buyers, buyers, buyers. check out the indicators at the bottom of the chart, please. they are important to lang's analysis. there's the moving convergence to vergence navigator. about a week and a half ago, this indicator made a bullish cross over. that is where the black line crosses, see that. above the red one and this is a powerful boy, a signal that we see lang uses to good effect in many. it's a signal to buy, buy, buy, and it's signaling that the
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stock should be owned here, something that lang finds very encouraging. and then look at the bottom, the last thing. that's the williams percentage r oscillator, that is created by larry williams that is standard that we see in the secretargmen. it's an indicator that is saying that netflix is over-bought. coming up too far, too fast, due for a fall. but the oscillator is what he calls, embedded meaning that they have been stuck in over-bought territory for some time, it can stay there for a lot longer. it looks to lang that people will continue to buy it hand over fist, sending it higher and higher, jackie wilson style. let's take a gander meaning look at netflix's weekly chart. when you look at the oscillator at the bottom of this one. you see what lang means by
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embedded, it's been over bought all year and the stock is roaring higher and higher. i have never seen a stock be over-bought all year. what staying power. right now, they have just completed a huge, one of the largest i have seen, cup and handle pattern that goes back to 2011. this is a giant cup and handle pattern. important, because the company handles one of the most reliable in the bullish arsenal. it's a cup, followed by a period where the stock trades in a fairly tight range. after the handle, you see a fabulous move hire and you are seeing that being experienced right now. it's incredible. the 50-day moving average. the short-term average cost it's 200 day moving average. it's a longer term measure of the same thing. to technicians, this is known as
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a golden cross. because it indicates that a stock is performing better now than in the past and for the chart inclined is practicalally the ultimate. it's the ultimate buy signal. at the end of the day. charters are trying to find the strongest trend in the market. right now, nothing stronger than netflix. for the chart followers out there and the bigger co-hort of markets. based on lang's interpretation of the chart. this could be making all time highs. i had to come back and say, come on, bob, he said it's okay. i know netflix is a cold stock, while it's fine and sensible, if you do not find this one comfortable to own. you never, ever, ever bet against one of these names, that is a recipe for disaster. rose, rosemary in kentucky, rosemary?
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>> caller: hi, how are you? >> pretty good, how are you, rosemary. >> caller: fine thanks, i wanted to get your input and advice on priceline and yahoo. >> price line and who? >> yahoo, i had a debate and my friend said the jury is still out, and i say it's back and innocent. price line, will continue pile on higher. we like it. bob in new jersey? >> caller: hi, jim, booyah. >> buy i can't. >> caller: i bought some stock last week, i like the business mogds. but, then it's going down and now i'm hearing some rumors, what is your view on it? >> i'm getting nervous about pandora, because you have the
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lightening round! and then lightening round is over, are you ready? time for the lightening round, starting with gilbert in new york. >> caller: hey, jim. >> yo yo. >> caller: i want to know about activision. >> it's woke up from the slumber, rather than sell, don't buy. lorain? >> caller: thank you for taking my call. >> you are welcome. >> caller: i listen to you and watch you all the time. i had amx and sold a profit for it and now i'm wondering if i should buy more? >> i don't want to be in latin america right now, it's emerging markets and it will get hit with the rest. dean in washington. dean? you are up. >> caller: yeah, this is dean. >> hi, dean, you are up.
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>> caller: okay, hey, jim, i told my son to invest 40 years ago and now he is my investment guru and he recommends the intel 5 star and microsoft 3 star. what is your opinion? >> no, no, no growth. intel is by the dividend, that's great. but these are not stocks i get behind, they don't have the growth i'm looking for in a stock. art in wisconsin, art. >> caller: thank you, jim, for taking my call. >> absolutely. >> caller: on myl -- >> i'm surprised it's doing as well as it is. sell, sell, sell, that name. i don't see the value add ed bo in florida, bob? >> caller: yo, listen, jim, jim, first i want to thank you, we have a group of investors here and down here in florida and i'm from new jersey and you are responsible solely for putting three of our grandkids through
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rutgers university. >> that's fabulous, thank you, thank you. >> caller: thank you, baby. now, sandrich? >> it's a problem. when he was on the incredible panel, they said that it's a terrific speck, but i regard it as a total speck but it's dangerous in this market. it's a pure spec, accept it for that, and move on. thank you for the find comments. amy? >> caller: last night, you talked about check point. >> right. >> caller: and on the advice of my son, i bought the israeli check point in april and it's up 20%, and i was wondering why you did not mention it, it's a security company and what's the difference. >> well, i don't know -- i just know this check point is check point, it's an israeli company. i do want to point out, that one of the reason is interesting
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because the bring your own device movement is making the cloud hard to police. but i would go with port net. >> caller: the ceo for my stock bailed out today in ing do i sell? >> it's a big thing to be the ceo and acting cfo, it's a wait and see, i want to see who they get as a cfo, i did not like this. i like dan very much and i have been behind the company for a long time, i'm calling the red flag. alex in wisconsin, alex? >> caller: with the pull back in stock this is week because of syria, do you think it's a good time to buy urban outfitters? good bingo, that is what i was thinking. circle back to the winners in these markets and urban is one of the markets. keep your eye on tjx, that would be another. urban is right.
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you have got horse sense. kevin in illinois kevin? >> caller: hi, jim, big northwestern wildcat booyah. >> absolutely. we hardly see them in the tourney anymore. >> caller: my question is about nrz, new residential. >> yeah, you know what? i mean, it's just one of these residential housing mortgage related plays, and i got one thing to say about all these. sell, sell. it's a taper, a taper nightmare. a nightmare to a taper would be what a kcougar or something? this is jaguar paw. if anybody knows that movie. and that is the conclusion of the lightening round, ladies and gentlemen.
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>> in the wake of amgen's huge ten billion dollars take over of onyx pharmaceuticals, we need to ask a simple question, who is next? i think we could be witnessing the beginning of a merge wave, where small bio tech tirms with terrific pipelines get acquired by big drug companies that are in need of sources of growth. there's a lot of reasons they are coming. these mergers are win/win, the stock jumped $8 and 7% on the
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news that onyx had accepted the offer. if you had bought it before this merger, you made a bundle. it's not just this one deal. another bio tech that was growing slow at the time shelled out $11 billion in cash for a little drug company that was valued at $5.5 billion until they swept in and offered big money. they were universally condemned for over paying but they have rallied 226% since the deal announced in november 2011. and now the critics look like jokers because trades on that. it's worth it for these big companies to small through the nose for small bio tech companies with a big pipeline. this kind of acquisition can breathe life in a old dog by fuelling growth and increasing the earnings and giving management something new and
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exciting to talk about with investors and the bidding war did not develop. company went from being a pitiful helpless giant to being a sexy anti-case of franchise. including the liver and cancer drug and the big drug. both of them are on the market. and an outstanding line of drugs in the works. the other companies not blind to what is happening. they know they need new sources of growth and a smart bio tech acquisition could be doing just that. the 100 billion doctors drug company said, consider a $10 billion purchase to bolster the business, and he said he would do it. we know they have been interested in onyx and now they have to find something else to buy. merck could ford it and bristol-myers and all of them would benefit from such a
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transaction. which brings us back to the question, who is next and when i say that, i'm not talking about "the who," anyway, we want to find out which of the smaller bio teches are going to get snapped up. what amgen paid for onyx, in the wake of what they paid for other companies, we did a market analysis, the cohort names you better write down. mdvn, seattle genetics, and brn, let's start with mdvn, it's in the cancer fighting business. nine months ago, in partnership with another company launched x-tandy, it's a drug for men with prostate cancer. as you can tell, castration
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resistant prostate cancer is tough to beat. taking it led to a 37% reduction in the risk of death. and the drug has generated $23 million in sales. on top of that, they have a big pipeline. and they are testing on earlier cancer patients who yet to receive chemotherapy. and the same time, they have tested it against j and j's prostate cancer drug and many think that the medivation is the best drug. meanwhile, the company has an ongoing breast cancer drug for the same trial. cancer data comes out in the next couple months and if it's
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positive. i can imagine them catching a big. a big one that comes at a major premium. and next up, seattle genetics, they want targeted anti-cancer drugs. and they use anti-body drugs without poisoning the rest of the body. this stock has killed 68% from december. we like the stocks, because we like targeted drugs. the big drug is adcetris, it's proved for relapse hodgekin's. it's in four trials, and it's been fast tracked. beyond that, we know they believe in the platform, because so many drug companies have licensed it from them.
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and pfizer is included in that. thanks to these partnerships, they aring -- they are looking at a $3 billion deal. wow, will the big boys pay big money? too pie in the sky? hey, pharmacet, 56% premium. and i can seattle genetics going up. this is not a syria worry store. last but not least. actually, last and best. i don't know. bio marine, $9 billion drug. they have a number of these drugs on the market and more in the pipeline and a novel breast cancer treatment. it's the better play. i don't think that management would accept a $10 billion take over bid. 11, 12 billion.
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here is the bottom line. i think we are in the beginning of a wave of big companies that are starved for growth. and we need to consider whether the fundamentals are found, we have gotten in a spot of trouble with the market because of syria and the man made problems in washington. so there's no big hurry to buy them. i think mdvn and seattle genetics are right in the sweet spot. mad money is back after the break. [ male announcer ] it's time.
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what's your policy? >> time for harsh truth, listen, every time you produce energy, you hurt the environment in some fashion, when you extract fossil fuels from the earth, you have a hazard us reaction. that is why i was not surprised to hear about the problems with fracking. 600,000 barrels per day they are discovering to be precise. i'm not saying that earthquakes and patrolmtremors are not a pri am real. we need the energy from somewhere. oil and gas cause global warming, spills, pollution and now earthquakes. and it uses up another
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appreciatprecious resource. you cannot get energy without doing damage. now we could decide that what we want do do is import from other countries to make our country more clean. but that will cause other problems. the oil money has at times been used to finance terrorists. i'm not saying we can avoid syria if we were energy independent. but it's less worry. energy independence allows us to have far freer action to defend ourselves and improves our trade balance and creates jobs, the penalty? tremors and spills. when we use our own fuel, we promote jobs and use nat gas and it's the least dirty gas around. less harmful than coal or oil,
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it's not a huge win. but it's better than a loss of getting the fuel from the countries that are our enemies. coal causes 13,000 premature deaths. i think every coal plant should be a natural gas plant. i love it in principal but not in action. before we eliminate fracking, could we stop the black lung and all the other things why isn't that the focus? it would be great to power cars with solar and wind, but it's not practical. we can hook them in the grid and use as many teslas that we can manufacturer. but we do not have the technology for everyone to hook up in cheap fashion. so i read this story and it's like the one for gas land and water contamination. all bad. in a world where energy extraction is all equal, it's
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remain here until we have the all clear. there's no republicason to do a swinging. i'm jim cramer and i will see you tomorrow! cause a syrian sellout. nbc news is reporting that a u.s. led three day military strike against syria could begin as soon as thursday, but it could go longer. and the markets are already reacting very strongly. stocks finished way down while oil and gold shot up. we have the latest on this story from the political and financial angles including the call by wall street journal columnist stevens to kill bashar al assad. mr. stevens will be joining us in just a few moments. "the wall street journal" editorial page, meanwhile, is calling for regime change.
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