so you can make owning business even more rewarding. ink from chase. so you can. stocks up again. interest rates down again. and an investing legend is back again. hi, everybody, big show. pimco's big gross is here along with a name from the past who is back in the saddle once again. we're going to bring you ways to invest in the red-hot world of cybersecurity. and mandy, could the clippers really sell for more than $2 billion? >> that is our question. let's take a look at those markets. we've got the s&p mildly higher. another high for the s&p 500, by the way. the dow transports, yes, okay,

slightly in the red but it did also hit a new high this morning. but all of this focuses on very low volume. it's lower than this time last year. it's lower than the average so far this year. but the real story these days, yes, is in bond yields. as we can see here, the ten-year yield is getting closer and closer to 2.4% even. we're at 2.455. we are around 11-month lows. brian? >> that is incredible, but it also leads us perfectly, mandy, funny now that works out to our next guest. with us, pimco founder bill gross and the pride of virginia's shenandoah valley, the newly shaven mr. paul mccully. it's great to see you back. it's good to see a virginia boy done well. bill, thank you for coming back on. paul, i've got to ask you, why did you come back? >> i came back because pimco has always been camelot for me. 25 years ago i met this man. in fact, he gave me a job when i

was unemployed. and my son was 15 months old. he and i go way back. we've had many a chapters in our life. and we're going to write one more chapter together. and he and i have created a position here that works for pimco first and foremost and also works for me. i get to do the things i love doing, which is thinking about macro, writing about macro, and speaking about macro. now i get the opportunity to do that within the investment committee and also i get to write, and i'll do it with clients. so for me, it's back to camelot. >> so bill, we hear that you're pretty happy. and you've been wooing him for some time. so what are you hoping the poll can do for pimco? >> well, mandy, paul mcculley is known as mr. shadow banking, mr. minski moment and frankly here at pimco, he's been our paul

revere in 2006 and 2007. he warned us about the housing crisis in true minsky fashion, talking about stability flipping into instability. i credit paul with preserving billions of dollars of pimco client assets, and frankly, our growth in total return fund which climbed over $200 billion two or three years ago, i credit paul with a lot of that growth. you know, welcome back, paul. his macro, his anticipation of the event in 2008, 2009 could well be repeated going forward in terms of his forecasting. >> all right. the niceties are over, paul. the world wants to hear -- because you've been off the grid with that beard and the long hair for about four years now, so let's go at it. what the heck is going on with the worreld right now? some yields in europe that are below what our ten-year is yelleding which is an incredibly low 2.4%. stocks continue to go up.

the fed is still continuing to ease. where is the world right now economically? >> i don't think the world's upside down. i think the world is pricing in and coming to grips with the fact that post the minsky moment, which was 2008, and post five years worth of healing in the economy and in the financial markets and in the banking system, that we're on the cusp of emerging from a liquidity trap and that the fed and other central banks around the world are going to be exceedingly low on short-term interest rates. it's a brand-new regime. we are calling it here the new neutral, and i love the phrase. i've been writing about it for ten years. and ultimately, we had to get this point where the marketplace, all asset classes are accepting that cash, risk-free cash trades at par. you get it back tomorrow.

should not provide a real rate of return. its preservation of capital, period. that if you want to have a real rate of return, you have to be in assets. so we're having a once-in-a-lifetime reevaluation of assets. i think it's kind of cool. >> hedge fund manager david tepper recently said a couple weeks ago he said he thinks the ecb will be forced to ease and in a dramatic fashion, do you agree with that? and if so or if not, what is the impact and the result? >> they're actually very close to zero, so it's hard to be dramatic on their conventional policy rate. but as we've learned, over the last five years, there are a lot of tools in the central banks' arsenal. and i think that the ecb has the capacity to do a lot of exciting and interesting and therapeutic things with that balance sheet. because remember, essentially the ecb is doing fiscal union of the monetary authority's balance sheet. so therefore we should be very open-minded and expansive in thinking of the capacity for

something dramatic and easing because we're integrating fiscal and monetary policy in the brand-new world that we're living in. >> well, certainly the market is anticipating that the ecb is going to pull that trigger next week. bill, i hear that you are doing something a little different from your competitors to improve your fund's performance. you are betting that five-year treasuries are going to do well because you think that the market is overestimating how much the fed is going to raise rates. explain that. >> well, yes. you know, the front end of the curve, mandy, and that doesn't necessarily speak to the year one to year two, but the front end of the curve in years three, four, five, six and seven, to be specific, you know, we are anticipating that the fed fund's rate at perhaps 2.5% to 3% in 2017. that's a mouthful, i guess, in terms of trying to digest what i just said. but we believe, as paul just suggested, in terms of the new neutral, that the neutral rate, the nominal rate, not the real rate, the nominal rate of fed

funds in 2017 is going to be closer to 2. and if that's the case, then it's the front end. it's the three, four, five, six, seven-year pieces of those maturities that do the best as opposed to the long-term issues. and so that's where our bet is. it's done well over the past month or two. we're at the 90th percentile in terms of the total return fund. come on back, people. and we're doing well. we think this will play out for the balance of the year. and we expect to be the pimco that everybody knows. >> but paul, i mean, you've always dreamed of being on the fed. it's certainly no secret, right? what would you do right now? we just got the print for first quarter. admittedly, a lot of weather, but nonetheless, it contracted. if you were on the fed right now, what would you do? >> i would be voting with janet yellen. i think she's doing a fantastic job. i think the fed wants to get off of the zero lower abound, not because the economy is doing gangbusters, because it's a very

unusual and very uncomfortable place to be. but getting off of the zero is not an urgent issue. and i think what janet and her colleagues have been doing very well in recent months is pointing out that the path for hiking, once they do get off the zero or lower bound will be very cautious. and where we're pounding the table -- and quite frankly ily the fed will be pounding the table once we get to the end of the taper is that it will be a slow progress up. and the destination is going to be dramatically lower than it was in the 30 years prior to the minsky moment. it's both when they start, how they tighten and when they stop. and we're focusing in on all three. and i think asset markets right now are particularly focused on the third point. that is really come into focus in recent months. and it's delightful to actually watch it and see the marketplace except that zero real fed funds

may indeed just be, if i can be wonky for a second, the constant. >> i tell you what, bill, and i hear paul's point. we started the show a couple days ago with the idea that it was making us nervous that people didn't seem nervous. >> mm-hmm. >> when i see the money that's going into high yield funds, into junk. in fact, i think four of the top ten fastest growing bond funds at the end of last year had more than one-fifth of their portfolio holding in below investment grade. arguably, the default rate is effectively zero. do you think we have a junk bond bubble? have people gone a little bit credit crazy? >> well, not too crazy because if the new neutral, you know, is 0% real and 2% in nominal terms, it has a significance in terms of risk spreads. look at it this way, brian. you know, over the past few years, high-yield companies have had the opportunity to term out their debt. that means they've taken their maturities and put it out five or ten years at exceedingly low

rates. that means that these high-yield companies will be doing very well for the next several years because, you know, they have a low cost of funds. you know, it's a different type of atmosphere when you have a fed fund's level at zero in real terms and two in nominal terms because it effectively means that corporates and corporations are doing very well. >> can you give us some confidence, paul, that this is not all going to end badly? >> not exactly sure how you want to define "end badly." the business cycle has not been repealed. if minsky taught us anything is that stability is ultimately it produces instability because human beings extrapolate the most recent paths into infinity. first and foremost, we will have a business cycle. >> but you also know they make the same mistakes twice. i hear the mortgage ads again. you see people using homes a little bit, a little bit, you know, as atms again.

we're at cheap rates again. credit is being flooded into the lower end of the spectrum. and i just worry. >> and you should be worried, but you should not be worried about an extreme like we had in the years. and i want to stress years preceding the minsky moment. that was the ultimate blow-off of irrational exuberance. cyclically speaking, this moves to doom. and right now we're getting flavor of exuberance. and actually, i think, you know, as investment managers, we have to be kag distacognizant of tha. and that will shift probably around the time that that starts tightening, even though they're not going to tighten all that much. just the act of tightening is a new variable that a lot of youngsters have never actually seen. so yeah, i think we will have, you know, an unpleasant sort of experience, but ending badly, i don't think we're going to end badly because we have

permanently, in my viewpoint, gotten to price stability. for my adult lifetime, we've been fighting a war against inflation. we won. now it's time to go home. i flags isnflation is a cycle. there's no sort of war against inflation. we want it. and if you're not having a war against inflation and you have new regulatory called macro prudential rules on extreme systemic risk, then i don't think we have to be worried about the big one. we had the big one. you don't have another big one right after you had the minsky moment. >> i sure hope you're right, paul. >> i do, too. >> before we let you go, bill, personal question to you, have you spoken to mohamed el erian lately?

>> we wish him well and we assume he'll do well. >> but you're on good terms? >> oh, very good terms. >> good. thank you very much. bill and paul. from pimco. >> thank you. >> thank you. our pleasure. >> nice to be here. >> i want to know where the hair went. >> that was beautiful hair. i said that to you. >> the beard. >> i'm not just saying it now because they're probably still listening. i actually said to you earlier in the day, man, that was beautiful hair. >> two people from the shenandoah valley. paul is one. no, not me. patsy cline. now it is time for a story that is too bizarre to be made up. iranian facebook fakers reportedly spying on the u.s. government. we'll have more on that in a second. and later, the one thing america can do right now that could add up to 300,000 new jobs to the economy. "street signs" will be right back. x you probably know xerox as the company that's all about printing. but did you know we also support hospitals using electronic health records for more than 30 million patients? or that our software helps over 20 million smartphone users remotely configure e-mail every month?

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iranian hackers have been using facebook to spy on top u.s. leaders according to cyber intelligence firm eyesight partners. eyesight says they've uncovered a three-year cyber espionage campaign in which iranians create fake facebook accounts and try to friend target victims. the firm says the hackers' target included a four-star navy admiral, u.s. lawmakers and ambassadors. eyesight says it's alerted some of the victims, facebook and the fbi. so this casts more light on the booming business of cybersecurity. but with so many new players out there, where should you invest and maybe make money off this trend? joining us now, fbr capital's

dan ives. anything you like specifically from an investing point of view right now? >> yeah, i mean, the one trend is that we're seeing more and more technology come out of israel, especially on the advanced security threshold. if you look at the idf and what's happening there, i think you're seeing more and more cybersecurity come out of israel. and again, the names that we like here would be palo alto and checkpoint. it's massively grown given the threats. >> is it kind of bizarre, though, despite all of the investments we hear about in cybersecurity that we also hear about daily cyber attacks? >> you have 75% of enterprises that really have not upgraded to next gen security software. we've seen with ebay and target, even though it was atop their priority list, a lot of companies have been lackadaisical here. and now you're really starting to see the threats ratchet up, especially as more go to the

cloud. and i expect this is going to be something that gets worse and worse, you know, over the coming, you know, weeks and months. >> any sign of it slowing down? i mean, of course, listen, dan. this is kind of an uncomfortable question. but if i ran a cybersecurity firm, it's almost in your best interest to make sure that every little sort of problem is highlighted. >> no, it's true. and look, i think to some extent it's a cat-and-mouse situation. but you have more enterprise and more governments having more sensitive data on the network. you have more consumers using their mobile devices. the need for security is as high as it's ever been. and that's why it speaks to a $30 billion industry. and i think we're going to continue to see these high-profile attacks. and that's why you see, whether it's in israel or the u.s., a lot of this technology is really front and center in terms of this next cyber war making sure that, you know, we defend the network. >> and this cyber war is not just -- it's international. without, like, comprehensive international cross-border

cybersecurity law, dan, we kind of are doing this in an -- i don't know. just not a very comprehensive manner? >> well, i mean, look. to some extent, the u.s. government is behind the 8 ball when it comes to cybersecurity. and you see whether it's the country attacks from china, iran. this continues to be just a massive problem that now we really have to, you know, have a surge of spending in order to get our networks, both in the enterprise as well as on the government side, up to date that we stop some of these attacks. because, again, right now you have a lot of these rogue countries, they're basically coming into our networks and stealing data. and it's almost boatloads of data leaving our ports every day. it's just cybersecurity that's really kind of front and center. >> best company or one of the two best companies that you follow, dan, would be who? >> i mean, fireline and palo alto are two clear winners in

terms of cybersecurity. they're miles ahead of the competition here. and you know, there are names like checkpoint. but really they've put themselves in a different severe in terms of advanced end-to-end next gen security. >> dan, thank you so much for joining us. now we'll be digging in on the gold meltdown. yep, it's down again today. plus, perhaps the single biggest thing america can do to bring down gasoline prices, and i promise, it is not what you might think. mine was earned in korea in 1953.

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looks like the bidding war for the clippers, the latest entrant, steve ballmer. also news that we reported on yesterday which is that david geffen along with some of the guys behind guggenheim partners and oprah winfrey and maybe even steve jobs's widow are one group. there's a third group out there as well. let's talk about money from "nos "forbes" and mitch. welcome back. michael, we're hearing ballmer, $1.8 billion. i've even heard -- and i'm sure you have -- more than $2 billion for the clippers. we all want the clippers sold. but do you think there's any -- any way that 2 bils is going to be reached? >> absolutely. i'll tell you why. as you just said, ballmer's at

$1.8 billion. you guys reported yesterday that you have groups partnering up. we saw this scenario when the los angeles dodgers were sold two years ago. just like with the dodgers, the ownership group is fronting and running the sale. so groups are now partnering up. they're doing a blind auction. so what's going to happen is somebody's going to come in higher than ballmer. and i think the final bid will be at least $2 billion. >> at least $2 billion. but here's the thing, right, mitch? donald sterling is coming out swinging. he is not taking this lying down. he is fighting. he's going to the law. but if it stays in his hands, doesn't it just actually shoot himself in the foot? because it's going to lose more value? >> absolutely. this is a fight that he cannot afford to win. if the asset stays in his hands, he faces the possibility of the players walking out of these playoffs and almost certainty that his players would walk out of next season, that the sponsors would walk away.

and all of the value that you're seeing in this bidding war, because people want to own the clippers and be seen as the saviors taking it away from the sterlings, dissolves. and people may not want to own a toxic asset that's been tainted by strikes, boycotts, those sorts of negative repercussions. >> yeah, but this is a guy, mitch, as you know, who has used the legal system as a weapon. he has sued almost everybody. he has no problem being in court. listen to the language of the statement. mr. sterling has no remedy but to, you know, protect his legal rights. like now he's the victim. i mean, this is a guy that will use the courts to his advantage. >> well, he has the advantage that everybody thinks he's crazy and nobody knows how crazy he is. if he is crazy enough to take this to the 11th or 12th hour, maybe he can extract something more. that is the question. i don't know how much it is worth to the nba to get a global

settlement instead of exercising what i think are pretty clear rights to take the team away from him and then have to turn the money over to him, but still face the possibility of litigation. >> but i bet, michael, sports team owners around the world are watching all of this and probably rubbing their hands with glee because doesn't it just set a precedent to maybe push up other teams' valuations at the same time? >> i think that's a very good point. and one of the ironies in this is i don't ever recall a time where you had an nba team and an nfl team on the market for the same time where the nba team is likely to sell for a higher price. the buffalo bills are on the market right now. and the number that we're hearing with that team is somewhere between $1.2 billion and $1.5 billion. now, it's still early there, too. but if the clippers go for $2 billion, it's going to be the first time where -- >> they'll never make money on that, michael! they'll never make money on that, owning the team, $2 billion. they've got a terrible stadium deal. i think the lakers get almost all the concession stand money. >> well, the clippers also pay

no rent. they're sort of the low-cost team. they also have a much higher tv contract in two years. and if you're going to own a team for 20 years, you know, and you have a salary cap in there that's limiting player payrolls to 50% of revenue, then at least you know you're not going to have any capital calls. unless you do something real dumb, you're not going to lose any money either. >> michael and mitch, it was a real pleasure. >> thank you. >> thank you very much. i guess five days from now we should have answers. >> june 3rd, right? don't look now, but herb greenberg is fired up. oh, what a surprise. over one company's $150 billion mistake. he'll explain. and a big bank giving a big-time boost to a burrito. "street talk" coming up. i make a lot of purchases for my business. and i get a lot in return with ink plus from chase like 60,000 bonus points when i spent $5,000 in the first 3 months after i opened my account. and i earn 5 times the rewards on internet, phone services and at office supply stores. with ink plus i can choose how to redeem my points.

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welcome back to "streets signs." i'm phil lebeau with breaking news from ford. two more recalls have just been announced by ford. one for 196,000 2010 to 2014 taurus vehicles. potential corrosion issue when it comes to the lamp for the license plate. that corrosion could ultimately lead to a fire. the other recall from ford, for 82,000 2006 to 2011 models. we're not going to name them all, but a number of them, there's an issue with the

floormats coming in contact with some of the pedals on the driver's side. when you take these two along with the two recalls we announced last hour from ford, today, with these four recalls, guys, ford is recalling 1.39 million vehicles. let's put that into some perspective. all of last year, ford recalled about 1 million vehicles. guys, back to you. >> phil, i'm wondering, are these serious issues, or is this ford basically taking a leaf out of gm's book and trying to be preemptive? >> it's everybody. it's everybody. >> license plate lamp corrosion? >> well, okay, brian, let's look at this. somebody tweeted to me, they said the world has gone nuts. these are not safety issues. look at it from ford's perspective. if they look at this and they blow it off and say look, what are the odds you'll have corrosion that leads to a fire in the vehicle, let's not do a recall, and then something happens. in this environment right now, given the national highway traffic safety administration being much more rigorous in terms of looking at all potential recalls, they're all doing it. ford is following gm's lead.

and they're not alone. all automakers are going to be issuing recalls. and by the way, guys, the record number of recalls, 2004 when this were 31 million. this year we're already looking at 20 million, probably closer to 22 million or 23 million. >> we're watching the stock here. it's actually going up since you started your report there, phil. it's actually gone up slightly. >> yeah, none of the recalls announced today, mandy, involve accidents or deaths. there's a big difference between recalls in that environment and other recalls that do not involve accidents and deaths. it doesn't mean that they're not serious. it just means that people look at them differently. >> i guess our point, phil, if i'm speaking for mandy properly, which is that you have to be safety first totally to get it. listen, we all want to keep our families safe. >> right. >> but at some point, you run the risk of getting the public to expect perfection. that, you know, that the car, which is probably made of, what, 100,000 different parts, right -- >> you also run the risk -- brian, the other risk you run is

that the world, the audience in the u.s., becomes numb to the idea of a recall. people sit there and say, i heard about a recall. recall last week, two weeks ago, i'm still driving my car. that's the other concern. and sergio marcione said, look, some of this should not be a recall. some of these things being announced should not be recalls, but we're all scared so we're all doing it. >> phil le breaebeau, thank you much. time for our stocks, views and analysts' recommendations. premier is getting an upgrade from citi. >> the stock up 1.4%. coming to defense of a stock down 17% this year. they upgraded it to a buy from neutral. you do the math, america. >> okay. as the burrito boost is rbc raising its estimates for chipotle. >> yeah, it's not an upgrade, but it is the estimate hike. they are reiterating their outperform, but here's the news.

$680 reiterated price target. that's 25% higher than the current price on cmg. >> stock three, getting an upgrade at jpm. >> yeah, upgraded from overweight to neutral. target increased by $75 to 375 bucks a share. folks, that's about 15% above biogen current price. that's even with today's move and the 30% gain over the past year. >> home away is next. and a vix call. remember, we actually had the ceo on with us the other day. getting a downgrade. >> they do downgrade the stock. they see an increased likelihood for higher marketing spend. but even with the downgrade -- and i don't like these kind of calls -- the target was cut to 38, but the stock's at $31.15. it's still 6 and change above the current price. >> under-the-radar name of the day, exam works. that's an atlanta-based company, and it's focused on independent medical examination. >> yes, initiated buy at deutsche bank.

their target on exam works, $38 a share. that's about $8 worth of upside. nice percentage pop on examworks, exam. now to our "talking numbers" segment, a look at one stock from a fundamental and technical perspective. that stock is costco. shares of the warehouse club recovering after missing street estimates today. let us talk numbers. richard ross, reewe've got stev cortez. richard, i'm going to start with you on the charts on costco. this is probably one of the more volatile of the retail names. not saying much, i know, but technically, how does the stock look? buy or sell? >> well, you know, brian, retail has been a very poor place to be this year. high end, low end, in the middle. there's been no place to hide, and costco is no exception. on the charts alone, i'm a seller. let's start with that daily chart, brian. and you can see that while 2013 was a fantastic year for the stock, you can see that big run-up which culminates in that blow-off top. we established a

head-and-shoulders pattern. we do get a breakdown. we take out the 150-day moving average in the process, establish key support at 110. but importantly, brian, that prior support from the 150-day is now resistance up around 116. look how it acts as a ceiling there, brian. and when we pull back, we look at it weekly a little bit longer term, more cause for concern. you see for the better part of the last four years, a very well-defined trend channel. we've now broken below that trend channel and taken out the 50-week moving average for the first time in over three years, brian. i think you want to keep one eye on the exit and retail in general. i would be a seller here. >> so technical cause for concern with costco. what about the fundamental side, steve? >> mandy, i certainly respect richard's charts, but at least in the cortez household, costco is definitely a buy. my wife spends so much money there each week that i'm convinced she might have a crush on the store manager. i will tell you, listen. a fundamental reason to love

costco here i think is that they have incredible customer service. speaking of their employees. there was a recent survey by glass door, and they asked employees what firm they rate highest in terms of compensation. and it was second of all companies in america. only second to google. i think those well-paid, happy employees are producing a customer service experience that is far above other retail peers. >> the stock's already doubled in the past four years. i think that's richard's only point. everyone agrees it's a great company, but does that have to mean it's a great stock? >> i does, i think. also they're servicing the right customers. the wealthy are doing very well. main street is having a tough time. it's a muddle-through situation, at best. primarily costco's customers are a higher-ticket, wealthy customer. so when you combine employees that care and are well paid with a customer base that right now has money for discretionary spending, i think this is one of the few among retail which, again, has been a wasteland. but among the retail stocks, this is one of the few places think i you can safely put

money. >> steve, real quick, brian, keep in mind, retail has been disappointing even with the markets hitting a appreciate all-time high. when the markets do pull back, do you think retail is where you want to be in the weakest sector in the s&p? i don't think so. i would avoid the consumer. i would avoid retail, even though admittedly this is a great company. but there's a difference between a great company and a great buy on the stock chart. >> gentlemen, thank you very much. but i will tell you, brian, what kind of customer costco is now starting to go after. they just -- >> what does that mean? i don't even know what that means. >> antipedes. on the other side of the world. there were lines to be the first ones in to get the big boxes of toilet paper. >> there's that many people that want to buy kangaroo jerky? >> there are that many people. okay. be sure to check out the online edition of "talking numbers." >> koala os. crocodile skin boots. hereb is here and you are

fired up over one company, what you call $150 billion mistake. what's the mistake? >> with a "b," that is, yes. the mistake is something that a ceo of valiant pharmaceutical's ceo michael pierson said on january 7th, he made a big deal out of saying that the company was going to triple its market cap to $150 billion within three years. he said it on an earnings call, in the scripted part of the earnings call. he reiterated how they were going to do it in the earnings call, and he further discussed it a little later that same day with a goldman sachs analyst. roll the tape forward, actually, to just yesterday. if you want to look at it that way. the company had its analyst call. what does he say? by the way, we're probably incorrect in saying that -- giving you the $150 billion figure. and then he said on the other call later, he said that $150 billion figure was a mistake. he used the word "mistake." mistake? it was scripted.

that mistake caused the stock to rise 12% that day. go even further beyond that. a mistake, incorrect, this is a classic case, in my opinion, of a ceo who is so intoxicated by his stock's own performance that he sort of confused the stock with the company, got caught up in it. and now $150 billion, that may not happen because he's trying to get this deal with allergan done? >> i don't know. listen, if i was an investor, okay, we're not buying stocks here. i'll tell you this much. i would have sold the stock. and i'll tell you why, herb. because when a guy like that says we're going to $150 billion, the only way to get there in three years is to do what? is to buy other companies. is to spend, spend, spend. you're not going to get there organically. you're only going to get there by paying up and buying companies, maybe even ones that are bigger than you currently are are. >> let me tell you something. >> i don't understand why the stock rose when he said that. i like the optimism, but he's saying i'm going to blow the bank to get bigger.

>> it rose because that's been the story of this company. and at that point in time, no one wanted to step in front of it because he's telling you he's going to make the stock go higher. i came out a few weeks later on "reality check" -- >> ceos can't make the stock go higher. only the market can. >> but it can if the company can triple its market cap because he's basically saying if you're tripping your market cap, your stocks going to theoretically be a lot higher. now you have him coming out and talking about this mistake. and i think when you look at that -- when i did my big piece on this in "reality check," i said to the company, we're a rollup. they said you're not a rollup. i said you're not a rollup? they said we're not a rollup. a rollup is like the fine hall home industry where there's a finite amount of companies that you can buy. we have an infinite number of companies we can buy private and public around the world. all i could do as i was shaking my head, i kept saying --

>> smdh. >> you've got to have the money to do that. in walks bill ackman. >> the only good rollup is grape. >> yeah. >> by the way, herb, can we pan out a little bit on herb's shot? what's that mangy dog over your right shoulder? >> i was wondering the same thing. whoops. >> oh! my eyes are stinging! my eyes are stinging! oh! >> i'll tell you one thing, herb. >> i'm working this thing. >> it took me a second to realize those were flesh-colored pants. let me just say. >> let me tell you something. >> go back. go back. what's that dog in the photograph? what is that? who is that? is that a chow? >> that is my dog, gatsby, who's actually over to my left a little bit. >> my dog's name is carewraway. maybe we'll get together and

throw a party. >> i can't run this thing. >> is it safe to look? it's safe to look. okay. >> you're not supposed to see the short pants, guys, but i will show you this one thing before we go. that is the beautiful view. >> don't make us -- don't make us cry. that's so mean. that was a mean and low blow. sboo what the heck is the street paying you? and you came in in poor pants. >> i'll see you again next week in the studio. >> with pants on, i hope. the biggest transfer in history is now under way. one study says that $59 trillion will be given to heirs and charities in the next 50 years or so. bill griffeth hopefully who's weari ining pants is coming up "the closing bell." >> i'd like to have you pan over here and show you kayla tausche will be with me here. i don't have a picture of my dog. >> did you see that? was that freaky? >> that was incredible. i want to see herb's whole house. of course, he wants to show us the coast of california, too, just to rub it in that he's out there and we're not.

$59 trillion will be passed on to the next generations over the next 50 years, guys. of that, $36 trillion will go to the heirs. $27 trillion expected to go to charities. and $5.6 trillion in the form of taxes to the federal government. now, we have somebody on the show today who says this is too much. he's suggesting there is -- should be a cap on how much people are allowed to inherit in the future. i'm just the messenger. but we'll kick it around coming up today on "closing bell" here. that's a lot of dough. that's a lot of money. >> thank you so much, bill. we'll look forward to it. >> see you at the top. the u.s. economy contracted in the first quarter, so why is the economy still so sluggish? can we really blame it all on the weather? famed economist john taylor is coming up. and the one thing that may help drive down oil costs even though it seems like it would do just the opposite. that's coming up. tdd#: 1-800-345-2550 trading inspires your life.

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steve liesman is at the fed policy conference at stanford university. he joins us now with hoover institution fellow john taylor. steve, you lucky dog. >> yeah. thanks, brian. i'm here with one of the

brighter economic minds in the country. maybe in the world. john taylor, inventor of the taylor rule, undersecretary of the treasury. professor at stanford and a fellow at the hoover institution. john, thanks for joining us. >> great to be here. >> and we only have about four minutes. i need you to explain off the bat, negative 1% gdp. that's a pretty big number. does it make you more worried about the underlying economic growth? >> i think weather's a big part of it, and we're going to get a bounceback from that. it's not the only thing. if you average the first and second, it's probably going to be under 2% growth rate, and that's a disappointment compared to what many people thought. i view it as, again, the average -- average at first and second as disappointment. >> john, you go down one, you come back three or four. looking beyond the decline and the snapback, what's trend growth? what can we expect realistically in this country as far as growth goes? >> i think we should expect, with the right policy, a trend growth much more than we've had. you can get a better trend

growth with regulatory reform, better fiscal policy. i think even better monetary policy. and we have not only had this slow recovery, we haven't even kind of caught up to where we were before. >> i want to get back to this better monetary policy. before i do, i want to ask you about the ten-year, which is trading at 2.44%. and people think it's sniffing out weaker growth out there. what's your read about why the ten-year is trading so low? >> i would say that's the factor to get going back and just average the first and second quarter. it's below than almost all forecasters five or six months ago. and that lowers your forecast for the rest of the year. so i think a lot of it is that. and of course that affects what people think the fed's going to do down the road. and affects short-term interest rates in the future, and therefore affects these bond prices. it's a factor. there's also a lot of talk about maybe the eventual interest rate's going to be lower in the future. and that drives the rate down as well. >> how much of an inflation concern do you have for this country? >> i have a concern that if the

fed is not able to undo the policy it's in, do something to its balance sheet, catch up if it needs to with the interest rate that the inflationary forces, i've always been concerned that this policy is kind of a two-sided risk. we basically felt the downside risk of it, i think, already. but downside risk of it already but that upside risk in the sense of higher inflation is still there. the fed has time to make the correction. >> john, you. put together this panel, this conference here. there are a lot of critical factors about the fed. you're critical on the lender of last resort. critical about the policy rule that it is following now. could you tell us if you were to set fed policy right now for what it is, how would you shape it in terms of quantitative easing and the interest rate? >> i would go back to the kind of policy that worked so well in the 'ites and '90s until you had this recent moderation. a lot of papers at this conference will show you get much better performance with that kind of policy. how would you get there? i say advertise back to normal policy.

janet yellen said some things about that already. i would say to outline a plan or strategy to get there and not to be ambiguous about when it is going to occur and how it is going to occur. >> where would you set the fed funds rate right now? >> right now? 1.25%. >> not 0%. >> monetary policy is very delicate. you have to be careful, and be clear. you jump in quickly, that would be a mistake. if you have a policy that would have generated this 1.25% by now, money market and bond market would be operating better. there would be less concern of this big player dominating the markets. i think the economy would have been actually performing better. >> john, thanks for joining us. we look forward to the conference. brian and mandy, we'll have reports from the conference, fascinating papers being presented here that are critical but very interesting of the federal reserve. they'll bear some talking about in the weeks and months ahead. >> we just want to see the tree. the creepy tree mascot, steve. that tree mascot thing that

stanford has. bring that boy out and we'll talk about it later. thank you very much. with gas prices at $3.65 a gallon, is now the time for the u.s. to start exporting oil? yeah, you heard me right. would that really lower the price at the pump? a lively debate coming up. care what age you are.

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as the graphic says, it is hard money time. it has been getting harder to make money in gold lately. gold down again off 10% over the past 52 weeks. chart watchers say may be near some crucial support. down .4%. should the u.s. start exporting our own oil? gentlemen, great to have you with us. chris, has this ban outlived its purpose? >> yeah. i think that when the ban was put in place in the '70s we were operating in an era of scarcity and fear of supply. think those times are definitely gone in the united states and we should be able to export oil to the global market. >> ethan, do you think we should be allowed to export oil and gas? i anticipate your answer would be no. >> no, you're right. it is no. this would be a great deal for the oil companies but it won't

help consumers or the u.s. energy picture and won't help solve the problems of climate change and global warming. we are opposed to lifting this ban. >> why wouldn't it help consumers? we are hearing reports it would actually lower prices? >> when you look to put oil on the global market you look to increase supply. i think it would reduce gasoline prices by 5 cents, 10 cents a gallon but you are allowing oil prices po align with the global benchmark and i think that will help consumers out at the pumps. >> on one hand you could say export would take away oil from us and could raise prices. but you could say that will increase production, with new markets that should bring down prices. you would disagree. >> we have seen a dramatic increase of oil in the u.s. there's no correlation. price of gas is still pretty high. oil companies are doing great. consumers are suffering. the planet is suffering. climate change is getting worse. this is not this magic bullet that companies say it is.

it is going to help them but it won't help consumers and it won't help our energy future. >> ten seconds, chris. the obama administration is weighing whether or not to live this ban. will they? >> i think they will. i think it is a matter of time. i think conversation after the mid-terms will start picking up in d.c. and i think next year we'll hopefully have the conversation and get the ban lifted. >> sorry we had to boogie through that so fast. we appreciate your points of view. chris, good luck with the new book coming out in a few weeks. we'll be right back.

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thank you for watching "street signs," everybody. >> "closing bell" is coming up next. we leave you with the markets ever so slightly on a positive note and a record are high for the s&p. >> and herb's pants. "closing bell" is coming up next. oddly enough, this is the "closing bell." welcome, everybody. i'm bill griffeth here at the new york stock exchange. >> the dow could still finish out record highs for the s&p. the s&p needs to close above 1,91 1.09. the dow has made a move to the up side. nasdaq still