as it was. >> we appear to be losing a little bit of steam. the dow is down. the close of trading could be action-packed. closing bell will have all of it, i'm sure, for you. >> it will indeed. see you tomorrow. welcome to the "closing bell," everybody. i'm kelly evans down here at the new york stock exchange. >> hi, kelly. i'm tyler mathisen filling in for bill griffeth. the dow giving back early gains. we'll talk about whether this is a buying opportunity. today bank of america reportedly nailing a mortgage settlement with the government that could be worth up to $17 billion. we'll get exclusive reaction to that possible deal from the former fdic chair sheila bair when she joins us on "closing bell."

another busy day for earnings after the bell. cvs and news corp. will lead the charge. we'll have analysis of all the numbers. before we get to all of that, let's look at where we are in the markets right now. the markets have been whipsawed today by international tensions. the dow down as much earlier in the session as 93 points. right now we're down about 75 so we are headed back towards the low, 16,368 is the level there. nasdaq is off 15 points. s&p 500 is off ten. tyler, it is now down to 1,910. >> joining our "closing bell" exchange this hour, heather hughes, meg green, larry mcdonald, and our very own rick santelli. welcome, one and all. rick, i'd like to go back to something that you showed graphically. might not work quite as well without your graphics. on ""power lunch,"" you looked at the performance of some bond charts versus the equity charts.

would you sum up what you were saying there? >> i will. as a matter of fact, we're going to be showing those same charts right now as i talk. if you look at today in the bund and the treasury. for the u.s., this is potentially going to be lowest yield close going back to june. for the bund, lowest yield close ever. for the gilt, low eest. it's like you're dangling over your skis. these charts are not the type of chart if it was an equity market or your apple stock, you'd be saying wow, i'm glad i'm holding this, let's buy more. they look as though they're going to continue to move lower. then the dax is my favorite. look at the dax, same two-year period going back to august of 2012 and it is knocking three times at 9,000 just like we

knocked three times at 344 ain the bund and three times at 2.50 in the guilty. you need to be careful at this point. goes hand in hand with the correlations of the world's biggest economy equity markets. >> it is perhaps no coincidence that the intraday high for the dow was 17,151 on july 17th, just before that malaysian airliner was shot down. >> right? well, we have a lot of trauma in the world. but you know, i really have to say something. volatility has been very low so when all of a sudden you see a 300 down day, everybody panics. the truth of the matter is, if you look back at 2011, we had 300 down days, up days, constantly. so because we have this low volatility -- i don't know what's going on in the world. i mean i see what's going on but i am very surprised that the markets haven't been super affected by it. europe is a little bit and every once in a while there is a spike. but if you overlook everything,

we still have a strong economy, whether 49% of the people think so or not. we have a strong economy that is happening. it's recovering. and i think if we keep the eye on the ball, you're going to be seeing better markets after a correction. >> larry, we may have a strong economy and indeed that's sort of probably unarguable relative to the rest of the world, but we've also got a world that's fraught with danger right now. do you think that mr. putin has sort of backed himself in a corner from which his only exit may well be to move in to ukraine. and if he does that, what would that do to the global markets. >> well, that's it, tyler. we put a note out to clients early last week calling for an invasion call. we think the market goes down 15% to 20% on an invasion. because of the deflationary economically destruct impact of an invasion, this global economy isn't strong enough to absorb that type of a problem.

the other thing i want to look at in terms of volatility, three weeks ago the bulls were writing obituaries for volatility. if you look at vol, we had 60 days -- 60 days -- without a 1% move. then three weeks ago we had two 1% moves. last week we had a 2% move. in the last four days we've been above 16 on the vix. >> very quickly, larry, what is the percentage you place on the likelihood there will and move by russia and putin into ukraine? is it 100%? 50%? something less? >> i think right now we've moved from say 20%, 30%, up towards 55%, 60% chance in the next month that you're going to see either an invasion or a quasi invasion that they call a humanitarian effort. >> we had jim grant on this program recently. he was actually talking about going long russia stocks because he said this ultimately has to

be resolved and it's okay to bet on a more are positive resolution than what's currently priced in. do you think there's something to that strategy? would you agree with meg green that the fundamentals for the u.s. are strong enough long-term to ultimately re-assert themselves in a positive way here for the market? >> russia is an interesting short-term trade here. i'm not sure how i feel about it long-term. short-term, i think the u.s. is due for a much bigger correction than people think, although after that i think the last quarter of the year could be fairly strong. if you've got a near-term horizon, sell u.s., buy russia, if you're looking more towards the end of the year, i'd probably be using russia to fund u.s. >> interesting. bull verse bear debate on our hands, i guess. look, if you put yourselves in the shoes of a foreign investor, all of the geopolitical tensions, ukraine and russia potential for war, you look at the middle east crisis, civil

unrest in iraq, and the markets really haven't pulled back that much. they've been somewhat resilient in the face of all these geopolitical tensions. so i think at the end of the day, it may not be a bad opportunity to look at the good old usa. you look at mega cap tech stocks. energy. regional banks. water even. amongst all the water shortages going on around the world. >> uri, do you think that we are potentially in a correction right now? i mean you say the market would go down "x" hundred points but we've already come down several hundred points on the dow from the peak. >> i tend to look a little bit more at the s&p which intraday peaked at 1,992. so it is really not that significant a correction yet. i mean i believe that over the next six weeks you could see the s&p trade down to 1,700. then i'd be a lot more enthusiastic about stepping up and buying it than i am here north of 1,900. >> so 200 s&p points in six weeks. >> that's what i'm looking for.

>> but here's what we have to look at. i can't time this market. is it if you sit back and miss the 200-point decline on the downside, but it might be up another 1,000 points before you miss that 200-point decline so is it worth it at the end of the day? >> no. you cannot time this market. there's nothing to time. >> we've been above the 200-day moving average since the fall of 2012. i mean let's get real. that's one of the longest periods in our lifetimes. >> right? and we are due for a correction. can i ask a question? small caps got hammered by 6%. are you going to flee and never buy small caps again? i mean we need these rotations of corrections. constantly. >> we should add -- >> because if we don't have them, it's not healthy. >> there is the move in jobless claims today. one of the lowest in history, by the way, and also relative to the labor force, one that jpmorgan says could go even

lower in the quarters ahead. guys at mkm say it is one of the best indicators we have, frankly, for how the u.s. stock market does. >> kelly, what about benefits? we've changed benefits. long-term benefits have been altered. we need to take that into conversation. >> rick, if that's the case where that's the one time that change outweighs what we've seen in the last two decades zblb people that used to have benefits where they ran out are not coming and showing up again. to me it makes perfect sense and should make more focus really be aimed towards the quality of jobs versus the quantity of jobs. >> rick, you've been pointing out, rick, the 2-year treasury versus the 10 for weeks. the compression has gone from 260 basis points to under 200. that's -- >> it's amazing. >> but like you said, rick, that's not growth. a growth economy, that spread shouldn't be contracting like

that. we're seeing a flattening yield curve. that's not pressing a growing economy. >> is some of the money that's going into u.s. treasuries, i have to guess, just as some of the money that's going into u.s. stocks, it's got to be fear capital or flight capital. >> flight to safety, flight to quality. >> i tell you what, there's definitely no doubt about it, but i still say that if we made geopolitic the antagonist for all these market movements, we are missing something huge. and that something huge is that the globe is being held with rubber bands, paper clips and scotch tape in a lot of ways. in geopolitics really underscores and highlights those weaknesses. to me, if you're pushing the economies off, it's because they're at a place they can be pushed. >> $12 trillion over the past five years globally. the denial of the effects of quantitative easing is starting to change. >> all right, folks. we have to leave it there. thank you, ladies and gentlemen. we appreciate your being with us. we'll see you again soon.

to another story that we have a close eye on, and that is what's going on in iraq. the u.s. now apparently weighing air strikes there. eamon javers has the story from washington. eamon? >> reporter: yeah, that's right, tyler. white house press secretary josh earnest came out and briefed reporters this afternoon. in the briefing he really refused to rule in or out any u.s. military type of response to a humanitarian situation that's going on in the northern part of iraq as an iraqi ethnic minority is trapped on the top of a mountain surrounded by isis forces. they face a very difficult choice there potentially coming down from the mountaintop and being slaughtered by those isis forces potentially. amounting to a genocide of 10,000 to 40,000 estimated people there, or staying atop the mountain and dying of thirst and starvation. the white house was asked whether or not the united states is prepared to intervene in that situation militarily, declining to rule anything in or out,

though earnest did say that the president maintains the ability as commander in chief to order any kind of military strikes that he would like to. however, he did say there were certain limitations to what the united states might do militarily in iraq. take a listen. >> the president has also made clear that american military action in iraq would not include combat boots on the ground. that is a principle that the president laid out at beginning and this continues to be true today. >> earnest said that the president stands ready to act to protect america's core interests but he was pressed repeatedly on this question of whether or not genocide counts as a core interest of the united states of america. he wouldn't say. he he said simply the white house decides these things on a case by case basis. >> eamon, i just have to wonder at what point the u.s. has any other likely options here other than air strikes against the islamic states, regardless of what was said today. >> there are a couple of strategic responses.

could you have an air drop of supplies to those people who are suffering on the top of that mountain, dying of thirst and hunger. potentially the u.s. military could presumably alleviate that. there could be some kind of ground forces which the white house has said it doesn't want to do to create an evacuation corridor for that ethnic minority to get out of the region. or there could be military strikes on isis or potentially a diplomatic solution. the white house today though very clear that there is not a military solution overall to the problems that iraq faces. you get the very clear sense that the white house wants the government in baghdad to get its act together before the white house is prepared to step in militarily. so it seems like they're waiting for a signal from the government in baghdad that they're willing to take the steps that the white house thinks is necessary to bring some stability to the situation before the united states gets involved. >> "the new york times" reporting they'd like maliki to step down before they move ahead with that. but we'll see, eamon javers in washington. thank you for now. we've got about 45 minutes to go. stocks did hit their lows of the session earlier, tyler, when

rumors about air strikes in iraq were going around. as it became clear it was just still under consideration, we've come back though headed towards the lows as we head into the close with the dow off 82, the s&p off about 11 and the nasdaq 20. pimco's paul mcculley will tell us what he thinks will drive the fed to raise interest rates sooner rather than later. pimco manages of course nearly $2 trillion in assets so you may want to listen up to that. also on deck, how worried should amazon be now that google is teaming up with barnes & noble for same-day book delivery. the pros will weigh in. and later with ebola now on four continents, we'll speak with an official from the centers for disease control about whether or not enough is being done to contain the virus and we'll discuss some promising treatment options. we'll be right back. thank ythank you for defendiyour sacrifice. and thank you for your bravery. thank you colonel.

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well, the lows of the day now as the dow industrials have crossed a more than 100 points lower, now just back to 98 points down at 16,343. the s&p off 14. the nasdaq, which was positive at least as of a couple of hours ago, now rather more sharply

negative, .66% down. the death toll in the ebola outbreak now to 2,000. the deadly virus has spread to nigeria. two american doctors have been brought home to the u.s. both improving but it is not clear whether the experimental serum they received is the reason. the world health organization will meet to discuss did and congress getting an update as we speak from the director of the centers for disease control. >> joining us now, dr. beth bell, director of the national center for emerging and infectious diseases at the cdc. dr. bell, welcome. good to have you with us. >> thanks for having me. >> we're delighted to have you here. i understand that the cdc does not treat patients, but what you do do, as i understand it, is you test patients for various infectious communicable diseases. how many samples have you tested for ebola in the united states, and have any of them so far, to

your knowledge, turned up positive? >> we've had up to around 30 inquiries from various health care providers around the country who have questions about patients that they're seeing and questions about how they ship specimens, should they need to. we have tested a few specimens here at cdc from patients who meet criteria that we have provided to health care providers. none of them have been positive, to date. >> dr. bell, what is the cdc's projection at this point for ebola cases in the u.s.? >> well, the ebola situation in west africa, as you said, is extremely serious. as you said, there have been over 1,700 cases there. more than 900 deaths. it is really a crisis in west africa. it's not very likely that patients -- or people who got

exposed in west africa would arrive in the united states, but it is certainly not out of the realm of possibility. we've been, therefore, talking a lot to health care providers, to hospitals, to health departments and to others in the community so that they are aware of what to do should a patient arrive in an emergency room or in a clinic who might have ebola. ebola is not very easily spread and i think that's an important piece of information for people to remember. >> even this strain? i mean we've heard there are some notable differences with the speed and way in which this ebola virus has developed relative to past ones that we've seen. >> no, there really isn't much difference in this strain in terms of its transmissability. there's a lot of transmission in west africa but that's not because of the of differences in strain. ebola is not transmitted through the air or food or water. it really requires close

personal contact. >> dr. bell, i gather that the two individuals who are being treated at emory university hospital in atlanta have received a kind of serum and that they are responding well to that. could you tell us what that serum is, whether it is available or producible in the kinds of quantities that might be very helpful treating the victims of this illness over in africa? >> well, this is what's called monoclonal antibodies. it is three antibodies that bind to the ebola protein. i really don't know whether that treatment has helped, has hurt or has had no effect. it is experimental and we really can't tell based on experience with two patients about whether it is going to work or it's not going to work. >> in other words, they may just be getting well because they're getting well. >> that's right. exactly. . >>

. >> can i think whether the cdc thinks is version of ebola is more deadly? >> yes. there are a number of reasons why what's happened in west africa has been so serious. as you say, this is the largest ebola outbreak ever. and there's a few reasons for that, probably. one is that it's very new to west africa. we've never had an outbreak in west africa, and so the countries are really not used to dealing with it. two is that it involves three separate countries which makes the kind of meticulous public health contact tracing that we need in order to control ebola, makes it that much more difficult. three is that there have been cases in urban areas. this also has been somewhat unusual based on our experience with ebola and also is difficult for control efforts. and four certainly is that these countries do not have strong health care systems and sort of getting around all the various aspects of the sort of

meticulous field work that needs to be done is hard for them. >> dr. bell, thank you very much for being with us. i hope we can come back to you as this situation warrants in the future. >> certainly. thanks very much for having me. sure thing. let's give you a market check now with the dow down, at or near lows of the day now. >> a lot of people watching the 10-year interest rate which has receded quite a bit as well for signals and perhaps some fear expressed out there. google in the meantime opening a new chapter in its quest to take on amazon by teaming up with barnes & noble for same-day book delivery in some markets. should amazon's jeff bezos be worried that an 800-pound gorilla just entered his turf? pros weigh in, coming up. also ahead, game changer -- not so much. dish network wants to deliver tv channels to your living room via the internet by the end of the year. two dish pros will dish it out on the possibilities when we return in a moment.

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welcome back. the dow jones industrial average shedding another 100 points today, 16,343 is the level there as the nasdaq is off 31. the s&p off 14 at 1,905 right now. so tyler, the next level people are watching could possibly to see if it holds 1,900. >> yeah, look at that. five points away from breaking that barrier. dish network making more deals with content companies to offer television channels over the internet by the end of the year. and it may have some bigger

plans even beyond that. morgan brennan who just doesn't have enough to do is going to give us the dish on dish. morgan. >> thanks, tyler. well, dish plans to launch its over the top pay tv service, its streaming service, by the end of this year. so far disney and a&e networks are on-board but there is something else to watch when it comes to dish. for months folks speculated the satellite tv provider could be an acquisition target thanks to its valuable wireless spectrum. but investors may need to start looking at the company as a buyer instead particularly now that sprint's not acquiring t-mobile. dish chairman charlie ergan has previously said t-mobile would be a "strategic interest." here's what he had to say yesterday. >> we remain interested in working to enhance our overall business and that could include looking at a number of companies out there.

obviously the deirectv/at&t dea probably reduced some options we had. >> reporter: but the company that dish may now be most interested in is actually sprint. ergen pointing out several positives about sprint on the call, including recent management changes. and today wells fargo arguing partnership between dish and sprint rather than between dish and t-mobile could actually make a lot more sense. back to you. morgan, should you be buying dish here with the possibility? >> two analysts one one bullish, one not so much. scott, is the bullish case predicated here on an acquisition? >> well, not necessarily. i think you have to start with what's embedded in dish's equity today. right now it is about 11 times cash flow on the satellite business and the street's paying

a little over $1 per mega hertz pop for the spectrum. what gets us excited is this upcoming auction coming up this fall, aws3. we think it going to be an incredibly robust auction that will likely buoy the equity value of dish networks. >> so matt, what do you say? why are you down on dish? do they have to do something? >> well, i think a merger -- or acquisition with t-mobile would make a lot of sense and i think that would be the most bullish scenario for dish. what i'm wary about on the aws3 spectrum is that spectrum is certainly worth a great deal to at&t who i regard are as the most likely buyer. but just more dish's spectrum at that level when it is dependent on their developing business most likely in concert with a partner such as sprint, i think it is pretty problematic. particularly in this market that's showing a little bit of signs of strain, i don't like to get too fancy on the up side from things like the spectrum development unless it was sold at astronomical price.

>> where do you think -- what's your price target? >> slightly below where they're a right now. i think i have a full and fair valuation on the spectrum holding. i think the core satellite business is certainly quite mature at this point. >> jason, what about you? where do you think the shares are going and what about the points matt just made? >> well, matt's very smart and he made some good points. i tell you what matt and i think the street is doing more broadly incorrect incorrectly. the street is using a spectrum comp sheet, which are about $1 per mega hertz pop. which is my he thinks it's fair. what the street is missing all of those historic cal spectrum transactions were based on the spectrum. most of the traffic is down link. that's where the traffic will go on these mobile devices. when you go through the math, you have to almost double what past spectrum transactions have gone for to get a real mark for

what dish's spectrum is worth. that's why the stock we think is worth $79. >> jason, i want to come back to the idea of whether dish needs to do something. can they grow organically or do they have to do something to go out and acquire customers, acquire somebody else's customer base and then try and migrate them to dish. >> well, let me give you a couple facts. t-mobile -- well, let me start with this. their base video business is actually quite mature. the question is what do they need to do for growth with their spectrum holding a lot of people think that's where they'll go. the challenge for dish, someone like t-mobile has 40 million mobile customers and they don't generate free cash flow. dish networks has 15 million video customers. right? that's in a three-player video market. what you're essentially arguing to argue that dish is going to go into this new busy, which i

think three times more wireless subs than video subs in market that's going to have five players instead of its existing video market. that's a daunting challenge. can you rule out an acquisition to sort of help them get a little bit of scale in the business? no, you can't rule it out. but from a stock perspective, all i'm focused on is between now and the aws3 auction. that's when you're going to get the real mark. you don't even have to ask the question what happens next. >> lastly, to you, matt, just a final word to reply to that. also does it raise the question for anyone who wanted to buy dish to what price they'd have to pay? >> i am giving them the 2x mark-up on the spectrum. i would agree with jason on that. again spectrum is worth "x" amount to at&t. if have you a nascent business you are trying to work out with a partner it is a lot trickier. i agree with a lot of what jason said, i think it is a little

early in this. there is a lot of directions that this can go in. i think i'd probably be a little bit careful here. >> we'll leave it there for now. thank you both. tyler, y tyler, i just hope navigational systems don't go away. dow industrials down 98 points. the s&p off 13. nasdaq down 29 points. coming up, former fdic chair sheila bair giving us her take on the settlement with the justice department in the neighborhood of $17 billion, according to reports. find out if they thinks banks are finally out of the woods ear. and, cbs, news corp. and lionsgate both on deck to post earnings after the bell. we'll preview numbers to watch and deliver those results the second they hit the tape. back if a minute.

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16,344. the s&p lower by .75% and nasdaq by a similar percentage. united health one of the names weighing on the index. dominic chu is covering today's big movers for us. >> we'll start off our check with stratasys. quarterly revenue help boost its arrival in the sector. a different story for aetna which is falling after goldman sachs downgraded the health insurer to a knewle trneutral r. other health insurers are falling as well. cigna, united health, human that, all to the downside. deutsche bank coming off its highs and moving to the downside on a dow jones report that u.s. regulators are krith the baciti for risk control deficiencies. stock down about 1% on the trade. we'll end with netflix which is

climbing today as the day wore on. in a facebook post, the chief executive officer said the company's subscriber revenue totalled $1.15 billion last year, edging out hbo's $1.14 billion. he said they are at least kicking "as" in profits and awards in terms of hbo but they are honored to be even in the same realm. >> did you have to censor that? >> i did. because even though we're on table i felt compelled to do that. >> we are family programming. that's very much appreciated. thank you very much. covering the big movers of the day for us. google and barnes & noble are teaming up to throw the book at amaz amazon. as of today, buyers can get any

items shipped to their door. >> do we expect more partnerships like this in the future? let's bring in google analyst gene munster from piper jaffray, and ben par, co-founder of the dominate fund. gene, google has this same-day shopping service. how much do they want to compete with amazon? >> i think they do very much want to compete. i think that one of the competitive fields is going to be around sail-day delivery. ultimately if you think about the big picture, huge markets that google has now been successful in, e-commerce is one of those. they're trying to find an edge to try and get more involved in e-commerce. the announcement today, even though the reality is people don't buy books anymore, is more symbolic -- >> hey, i buy books! am i the only one left to buys books? ben? >> i buy books. >> well, there you go. >> it's not just buying books though. it is buying -- like google's

been testing its shopping thing with not just books but other grocery items for the last six, eight months. i agree with you, it is a really huge market. books is just another aspect and layer of that. this competition's going to only be good for consumers. >> i buy books, too, ben, but i tend to buy them on amazon's kindle. >> i mean so, absolutely, there's more and more of the buying on ebooks, on apple's platform and especially on amazon's platform. but there's still actually a decent amount of books that are being bought in physical form and that's not going to go away. growth of ebooks has slowed over the last couple of years, compared. so it is still a very big market, it is still a shot across amazon's bow. >> what do you make of the fact that google employees will now be in some of these barnes & noble locations. yesterday we were visiting a home depot in atlanta, georgia. it just seems to me like increasingly whether it is a home depot store or a barnes &

noble store, that it is almost an inversion in the way we've been talking about inversions and other ways, but that you are going to have products flowing to the store locations, then perhaps delivered to people's doorways here instead of the other way around. >> that's exactly right. it is one way to kind of get around the fulfillment problem, building that big infrastructure that amazon has built is to go right to those retail locations and distribute from there. just for fun we called handful of barnes & noble stores to get a flavor of how many actual books. they got an answer from a thousand to a million. they simply didn't know. ultimately my point is, yes, that's happening but you do have a restriction in the amount of inventory that these individual retail locations can carry. >> ben, if you had one stock out of these three that you'd like to own, would it be google? amazon, or barnes & noble? >> they're all -- they're all

good stocks, but if i had to choose one it would be google but it wouldn't be because of it coming in to the shopping space. it would just be because the rest of its fundamentals are strong. right? i think amazon will be just fine, but it is going to take a little bit longer, because as we already know, bezos has a long-term kind of vision. barnes & noble i just don't think is as high growth in any way as, say, google which can launch into lots of new markets at any time it feels like. >> gene, are you going to have to start covering barnes & noble? >> i hope not. >> a lot of people wonder whether barnes & noble can survive, gene. >> yeah. at the end of the day, it clearly -- the book market is still a large market. it's not a growth market. i think that players like barnes & noble i think ultimately it is going to be a tough road for them. let's just be honest. over the next 20 years, paper books are going to slowly decline and people will still read but they're going to do it digitally an barnes & noble is

going to be hurt by that. >> understood. gene, last question. is there any prospecting with going back to the point it is ultimately going to be about giving product to the consumers in the quickest way, wouldn't amazon look at a barnes & noble an say they've got a lot of stores we could use for that very purpose instead of building out our own footprint? >> probably not just because they've got a history in books, amazon does. ultimately bezos is about driving old competitors in the ground. i think it is going to be a slow dwri grind down. we've got about 16, 17 minutes before the closing bell. the dow bouncing off its lows of the day. but nonetheless, with a decline of about 89, 90 points as you see there. and pimco's paul mcculley is coming up on the bond market and fed policy. find out what he thinks what could drive janet yellen and company to drive interest rates

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pressure across the board. pressure on the 10-year as well. lots of international tension here as a backdrop. >> kelly, julia boorstin has had a very busy week. right now she's gearing up for today's after-the-bell onslaught. in the media space, julia, what numbers have you got your eyes on? >> it will be a very busy afternoon for media giants in the heels of fox withdrawing its bid for time warner are and better than expected results for both of those companies. cbs is expected to report earnings of 71 cents a share, but that along with revenue is expected to fall from a year ago on soft advertising an tough comparisons. the question is how much lower ratings will impact results. rupert murdoch's other company, news corp., is expected to show a decline in revenue on weakness in print advertising as the company works to re-invent itself for the digital age. meanwhile, studio lionsgate is expected to suffer from a lack of a big quarter and tough xir

sons. revenue expected to drop 15%. these companies will report after the bell and then i'll be back with the headlines. >> good stuff, julia. it all kicks off in just about 15 minutes' time. there are about 13 minutes to go before the close. dow is off 88. united health, one of the underperformers in particular there. but again it is a pretty broad-based decline and these are near the lows we've seen of the day. nd much more ahead. pimco's chief economist paul mcculley and former fdic chair sheila bair. we'll talk about the fed, the government getting tough on banks, bank of america. a lot more. do not go anywhere. financial noise financial noise

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markets bouncing off their lows now, down 76 points, nonetheless, at 16,366. the s&p is off 11. the nasdaq, which was briefly positive earlier in the day, is now down by .5%. joining me now, oliver porsche and jeff cox from cnbc.com. jeff, you've had your eye on something known as the death cross. why and what is it saying? >> tyler, seems like hardly a day goes by where i don't get

the doom and gloom dujour indicator. i was attracted to this death cross. talking about the 10-year treasury yield. it is when the 50-day moving average crosses below the 250-day moving average. what does it matter? basically it is a sentiment indicator that we saw a quick drop in how the market's viewing things. one of the things that caught my eye about today is that we have been reporting over the last hour that we're at market lows not seen since april. now that's when we had this death cross in the treasury bond. it's been a pretty good indicator over the last six or seven years of an impending market crisis. >> that's very interesting. oliver, you think that the s&p can go higher from where it is today by the end of the year. in just the last half-hour, one of our guests said he saw potentially a 200-point fall in the s&p, and rather quickly.

>> well, i doubt that very much. look, to me there's two kind of base case scenarios with regards to the economy. it either strengthens sufficiently that the fed can take its foot off the gas pedal some more an things continue to progress, though there might and short-interpret hi short-term hiccup. or the fed says we're going to maintain rates lower for a longer time. so i think that's kind of the two-case based scenarios for the economy and the bottom line is right now we are looking at pretty decent job growth, pretty decent gdp growth and great earnings growth. those are all very positive. >> i'll stipulate all of those points. but isn't the banana peel here what -- in the short term what could happen in the eastern ukraine, what could happen in northern or central iraq. what could happen elsewhere around the globe. >> well, i think they're all regional problems right now but they haven't spread to europe,

they haven't spread to north america so it is unlikely to have a deeper impact. >> i think oliver hit on an important point before. he said about investor sentiment. major investment surveys, bank of america, merrill lynch, showing big drops in investor sentiment, a lot of bearishness out there. that could of course end up being the contrarian indicator but investors clearly are leery about a lot of things that are happening. i think they are not convinced still about the job market. the gdp numbers look like it was a big inventory build. so there is still a lot of wariness out there in terms of where we are really going from here. >> final thought, oliver? >> i agree with jeff. i thought it was a great article. but one thing that's important when you talk about death cross and some of the historical indicators that people like to point to when they are getting bearish, all of those bets are somewhat off the table with the heavy fed involvement. we live in a new world -- at least for now. so right now the trend is up. we're 3.5% off an all-time high

in a 5 1/2-year bull market. not a bad place to be. >> appreciate you both being with us. let's look at where the markets are right now. as you see, dow industrials have come back off their lows. at one point they were down 105 or so, now down 67. but the s&p pacing those kinds of declines and the nasdaq as well. up next, we'll be right back with the closing countdown. and get ready for another flood of after-the-bell earnings. we'll have numbers the second they hit the tape. ♪

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with thinkorswim from td ameritrade. let's take a look at where the stocks stand right now. or sit. because they are sitting. they're down 67 points on the dow industrials. about 19 points for the nasdaq and roughly 10 for the s&p 500. back with us from the floor, is bob pisani. bob, take it whichever way you would like but our markets team just sent me an e-mail, and probably you as well, showing that six of the dow stocks are in correction territory. 28 of the stocks are down more than 5% from the expected 52-week highs and the dow itself is off about 5% from its high. is there it is an ugly august. so far august is living up to its reputation. bank stocks had been weak. europe is a mess.

i'll tell you the one thing that people are focusing on here is really not so much stocks today, it is the incredible shrinking 10-year yield. remember, pisani's law -- when stock traders start talking about something else, including the bond market, pay attention because normally they're focused on how to save money in stocks. we're at 242 last time i looked. we got great unemployment numbers this morning. we had great job creation numbers last week. we've had good ygdp numbers so far. those yields should be going up and they're not. a lot of people feel this is an obvious flight to safety from europe. this whole idea we're insulated from ukraine and some of the issues over in europe is really not quite true. we're starting to see some of the effects of that. >> yeah. i really agree with you on that. i was making that point with our prior guest. the economy does seem to be getting better. a lot of good things are afoot in the labor market and elsewhere. but the banana peel are those

international things that could come up at any point and really cause a slip more drastic than we've even seen so far. bob, final thought. >> well, we are bottom line here. earnings are up almost 10%. >> all right. there you got it at 4:00 p.m. on the east coast. there's the closing bell ringing down a session with the dow industrials off about 76 points. that will do it for me. thanks for joining us for the first hour. and kelly will take it forward from here. thank you, tyler. welcome to the "closing bell," everybody. the dow off about 75 points. the lowest today we were off about 100. the s&p off 10. the nasdaq off about 20. there were some buy orders on the close to help put a little bit of an upward bias to the last few moments of trade. earnings are coming up in just moments. joining me, zachary karabel,

mike santoli, and our very own jon fortt. johnn najarian. >> i think the way to look at the last week and a half in the markets is a catch down move by big indexes to a lot of stuff that was actually weak before this. obviously everyone's talking about small caps. high-yield debt market is probably the biggest key in addition to the situation in europe. it stabilized today. that could have allowed for the stock market to do better. i honestly think this risk aversion reflex we're seeing right now, might have a little more to do. one thing it looks like a lot is the january-february move. it was 5.5%, 6% decline from top to bottom. we're not there yet. >> shares of zynga appear to move sharply lower after hours. zynga appears to be the first to hit the tape here and our morgan brennan joins us now with the

numbers. >> zynga reporting non-gap earnings of zero. that's zero per share. that's in line with expectations. here's where it gets ugly. revenue, $153 million. that's much less than estimates of $190 million. bookings light as well. $175 million versus estimates of $191 million. active user metrics. short of expectations. one bright spot -- zynga is launching a sports category, signing a multi year licensing deal. the ceo says they're making decisions with medium and long-term in mind, not for the benefit of one quarter especially a quarter like this, that the investments zynga's making now should be realized in earnings in 2015 so taking a look at those numbers, shares are just falling, down 8% in the after hours, kelly.

>> morgan, thank you so much. dr. j, a quick thought here? >> well, this is one that i don't think a lot of us were expecting a lot from, kelly. glue mobile of course with that wildly popular kardashian game -- >> i knew you played it. >> their numbers came out last week. >> oh, yeah, it is on my phone every day. no, actually my daughters do though, kelly. it is still number one in the app store. but, they don't have it. that's one of the problems, of course. coming up with the next new thing they haven't been able to find that lightning in a bottle. it seems like it will be a while before we hear szynga bragging again about that lightning in a bottle. cbs earnings are out. julia boorstin breaks down those results now. julia? >> cbs earnings beating estimates with 78 cents of earnings per share versus expectations of 71 cents per share. revenues though coming in lighter than expected at $3.19

billion versus expectations of $3.24 billion. >> julia, i'm going to jump in because i think we have an audio problem. we'll work that out. just so people can take a look at those numbers she just reported. it looks like a beat on the bottom line. a little bit after miss on the top line. cbs also reporting -- this also has a rupert murdoch, anything you can do, we can do feel. increased its buy back program to 6 billion mr. that's on par with a figure we saw from 61st century fox earlier in the week. we'll wait to see if there is more action here as people dig through the results. revenue, $3.19 billion. compared to the estimate of $3.23 billion. looks like the free cash flow number is $4 million. publishing revenue is $211 million. the quarterly dividend is now 15 cents a share. thoughts, guys? >> obviously cbs is a lot more important in the greater scheme of things than zynga.

that's in all due respect to zynga. i know when people say "in all due respect," they don't have any respect at all. as a macro reality, cbs matters more as a read on the media space. in general this has been a decent time even with bad box office. that's not a cbs issue. fact that people are spending some discretionary money on media and that the advertising base is no longer completely imploding. i'm not unbelievably excited by any of this but i'm also not radically depressed. >> these shares, one of the best performers out there. until about march when they hit the skids and have been underperforming the broader indexes since. >> i'm interested in looking at these a little bit more deeply. i was looking at viacom. i'm feeling sort after canary in the coal mine when it comes to what's happening with ad spend online versus on tv. the demographic for so much of viacom's programming is that younger demo. your "south park," comedy

central viewer. you would expect them to be moving online. a lot of advertisers seem to be holding on from the up-fronts, maybe waiting for a scatter. is it because they are using online for targeting and just looking to pick up tv on the cheap. but i want to mention zynga. the reason why i think these results are so diss heartening, the whole social gaming story seems to be falling apart. the one business model advantage they really seemed to have was the ability to buy and expand users. now with tiger woods, with nfl, with kim kardashian, they're having to spend in marketing to grow users. once you are doing that, you're just a video game company. >> is this just partly because they don't have a video game that they can come up with outside of having to rely on some of these better known brands that you got to pay up for? >> maybe that's part of it. you see king with candy crush. that big game sort of takes over their entire balance sheet. now they are trying to figure out how to make that the marketing vehicle for the rest

their games. but there isn't an overall system that any of these companies seems to have figured out for making every game work better than gaming has in the past. >> hang on just one second. i think we have news corp. results hitting the tape. a busy afternoon for julia boorstin who's back with those numbers. >> kelly, i hope you could hear me now. news corpse earnings miss estimates of earnings per share of 1 cent versus expectations of 3 cents a share. revenue beat estimates coming in a $2.19 billion versus $2.17 billion estimates. this is the fourth fiscal quarter for news corp. and they say that the revenues for the full fiscal year were down 4% from the prior year and this basically is because after decline in advertising revenues. >> julia, thank you. i hold this near and dear, i can't lep it. you look at the old employer and you want to see the polishing business doing well. >> people not used to looking at news corp. this way, this is the

old publishing business. obviously top line challenged. if you want to look for something heart rning, the market was sort of selling off in advance of the numbers. they basically traded up lightly there after. i don't know if it is going to be very much to extrapolate from these numbers in particular. also not much to talk about in terms of media m and a which is what everybody cares about when it is going to come to cbs and viacom. >> what a convatrast to 20th century fox. >> advertising, online versus print, people holding back. i think a lot of what ts says in a way that's in those businesses is will is no model that you're going to have right now that's going to be like this is it, this is what works. it is changing so quickly. spending is changing quickly. consumer habits. >> remember it was car ads that were a profitable place for newspapers back if the old -- >> in the gaming space, like

take two is still around. meaning would you have thought that that model of really heavy investment, studio-like investment, would be -- would be -- would no longer work. we have to do a huge reduction in value orstantly re-inventing the wheel. >> dr. j, your thoughts on any of the numbers that have just hit. >> well, of course, i think of these -- news corp. is perhaps one of the least interesting because of the medium that it is in. the other to jon fortt's point, and zach, those are very interesting to me because seeing how you could try to migrate those folks over on to that screen and whether or not it can translate, whether cbs with their demo can actually get that two-screen sort of read. that's interesting to me. news corp., not so interesting. >> sad. >> tears. thank you. >> you got to look at this next to netflix, next to facebook, next to twitter and their

outperformance. then see what's happening here and wonder when does the next shoe drop. >> we'll leave it there for right now. dr. j, thanks for your perspective this hour. everybody, much more "fast money" coming up at 5:00 p.m. on all of these earnings. we'll send it over to dominic chu for a quick ""market flash."" >> we're watching shares of gap which is moving higher in the after hours. probably 3%, 4% the last we check. it is reporting a better than expected 2% rise in july xash store sales. it also guided second quarter earnings higher than wall street was expecting. you can see the shares are up towards after-market highs now up 4.5%. gps shares certainly ones that traders will watch this afternoon going into tomorrow's trade, kelly. back offense to you. >> can we quickly just show gap year to date, if possible? this has been a name that it seems every month is the opposite of what the market expects. >> i think all of this. many of the retail earnings, i don't think anybody was expecting margin expansion, revenue growth, earnings growth, which has been just much, much

stronger in this entire space. we had it with -- >> are you willing to say that for the retail space? >> i think. you've had a number of names performing amazingly well. i don't recall anybody a few months ago saying you're going to have margin expansion, revenue growth and earnings growth. >> gap is never seemingly valued for any growth. it is just kind of valued as a cash cow, buyback story, dividend story but they are honestly doing an excellent job online. their online sales have been really impressive. i do think it is continually kind of an underdog or underestimated. >> clothing. the clothing industry. >> gap shares up 4.5% on that news after hours. we've got more ahead on cbs earnings. sumner redstone is the executive chairman of both that company and viacom. he hand-picked the ceos of both. how then is cbs doing so well when viacom continues to struggle? that's up next. and bank of america reportedly near $17 billion

mortgage settlement with the government. sheila bair reacts exclusively to this deal later on the "closing bell." you're watching cnbc, first in business worldwide. just take a closer look. it works how you want to work. with a fidelity investment professional... or managing your investments on your own. helping you find new ways to plan for retirement. and save on taxes where you can. so you can invest in the life that you want today.

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welcome back. let's begin with more on cbs

earnings hitting the tape just minutes ago. julia boorstin. julia? >> that's right. cbs announcing that it's increasing its share buyback from $3 billion to $6 billion. it also announced that it is increasing its dividend from 12 cents per share to 15 cents per share. so that coming in, in addition to those better than expected results. back over to you. >> julia, thank you. cbs shares dipping a little bit after hours. speaking of media, in the wake of 21st century fox's non-deal with time warner, there has been a huge focus on media companies of late. viacom once seen as a potential suitor for time warner and cbs, potential bidder for time warner-cnn, but with no deal in the offing it leaves majority owners of both companies. sumner redstone. les munoz viewed as a better corporate insider. live voting right now on cnbc.com/vote. here's the question -- would you

rather buy shares of cbs or viacom at this point? with us to discuss their picks, rich tula, and tuna amobe. rich, which name do you like better here? >> we done cover either of the names. but if you look at the two stories, it seems like viacom's at the bottom of a content cycle and cbs is towards the top end of a content cycle. therefore, we'd like to buy low, sell high tohigh. contrarians. >> we think over the last two years cbs has been able to change the narrative and kind of focus away from more cyclical revenue streams like advertising into kind after more steady stream and new revenue stream. that's what wall street is kind of bought into. that's why you see the long-term outlook for cbs actually higher than viacom at this very moment. >> let's bring in the panel here.

jon fortt, what do you say? >> my question is, it seems like it is a question of old people versus young people. right? cbs, you've got some sports programming, some things older people like. viacom trying to be younger. the content for viacom should be more valuable but will they be able to monetize that in this fractured environment. is that how you guys see it, a matter of monetizing what seems to be popular content? >> joe torre said the only reason he got into the hall of fame is he had good players. it takes about a decade to turn around that story. they've start ared doing like around 2008. it is going to take a while. they are starting to do the right things on an excuse basis but it is going to take a while. one of the reasons why investors should look at the stock as a value point of view, they got a huge buyback program in place. they have plans to buy back $20

million worth of stock, bought $13 billion worth already, $7 billion worth to go. very healthy company. billion in free cash flow. compare to netflix. significantly more profitable than net application with a lot of opportunity on the up side. >> but i'd be more concern about the youth praling part of viacom. you got a lot of pre-teen stuff which hasn't really been refreshed, as well as the fact that that market is completely fracturing into a million different channels and sources. then you got things like mtv and the rest which may turn around but are in deep profound need after turnaround. >> nickelodeon's biggest problem is they are getting very good competition from disney. disney has shows right now on its cable networks that can run on abc and get killer ratings. right? at the end of the day, disney has got a very good marketing strategy around it.making omnimt

like lfltiv and maddie. >> keep in mind, viacom is targeting a much morphiclele demographic in the young adults. that's incredibly harder to monetize than the older -- >> you have a buy on the share, you were saying. >> i do. >> so why? >> well, the main reason is that the ratings have been recovering from the low points that we saw back couple years ago. they've made a very, very good effort to invest aggressively. they're spending north of $3 billion. that's going to translate into ratings momentum. overall i think the volatility that you are seeing is really mainly due to the film division. the underlying media network's business, advertisement

affiliate revenue growth we think is pretty much intact. over the long term with the film pipeline looking much better, "transformers 4" north of $1 billion now, that should begin to translate into much better results. >> real quick, what's your price target on each? >> $93 on viacom and $70 on cbs. >> okay. our polls closed, by the way. cbs has won 56% to 44%. >> that's fine. we're contrarians. >> thank you both. we have a "market flash" with our dominic chu. >> here's what we got now. lululemon which is moving higher in the after hours now. this is not earnings per se related. its founder chip wilson has agreed not to wage a proxy contest in return for two additional board director positions. as part of this agreement, he will sell half of his 27% stake in lululemon to a private equity

firm called aide vedvent for $8 million. lululemon, chip wilson gets a couple more board seats. doesn't want to wage a proxy battle and sells half his stake to a private equity firm. >> thanks. what are you saying? >> it just kind of sounds to me that he just put lululemon in play. >> in play. >> yeah. >> perhaps that's why shareholders are bidding it up 6% after hours. up next, an exclusive interview with former fdic chair sheila bair. her take on everything from the reported $17 billion bank of america mortgage settlement to the bankruptcy plans of 11 big banks. and it is not often employees shed a tear when a top executive at their company is fired but hundreds of workers are protesting against the firing of one grocery chain's president and risking their own jobs at the same time. we'll hear from an executive fired for supporting the protests later on the "closing bell."

from td ameritrade.

bank of america reportedly nearing a landmark settlement with the government that could be worth $8 billion. >> the details appear to be krit talizing. $9 billion in cash penalty. the culprit was risky mortgages

backaged into investment securities during the run-up to the financial crisis, then allegedly presented to investors as relatively safe bets. in some cases, at least. bank of america itself marketed relatively few of the securities in question but it has paid some $60 billion so far to settle various claims that other companies it bought, namely countrywide and merrill lynch, did. already it has paid $9.3 billion to settle charges with fannie mae and freddie mac. $8.5 billion to private investors and a portion of the $25 billion deal that a number of banks struck already with regulators among other settle many payments. while this expected doj deal is likely to settle many remaining legal issues, some other investigations on these mortgage issues are actually still pending. >> so there could be more. $60 billion and counting, kate. thank you. some reaction now from sheila bair who joins me now exclusively. she's the former chair of the federal deposit insurance corporation. sheila, good to see you again. >> thanks for having me. >> a couple of issues this week

that all come to a point that we'll get to, i think. first start with this bank of america news. first of all, is this proportionate, second of all, what precedent is this setting? this is the larger teheme, i think, for future financial crises. >> it's been very sad. this has been a huge drag on b of a. they were a pretty good bank prior to the crisis. really did buy its trouble. but it made these acquisitions, it paid a very high price for these acquisitions. both these institutions frankly should have been run through an fdic or bankruptcy process. losses should have been imposed on their shareholders and their creditors but instead they were bailed out with the b of a acquisition. and it took taxpayer support to stabilize that transaction. i think it is very sad. i think going forward it is a good lesson about why we need a resolution process for basic institutions, put them in a

receivership and clean them up. i think angelo mozilla is probably out there playing golf somewhere while ryan moynihan is struggle with all of this. it is very sad. >> ouch. that does raise this issue separately of living wills for banks that were issued. let me quote the "wall street journal" for a pekd. after banks this week apparently failed to convince regulators they can go bust without bringing down the financial system. it says the officials were surprised by the public rebuke. one senior executive got the memo less than three hours before the public release, said there was no communication with regulators beforehand and that this widens the gap of trust between banks and their regulators. >> right. well, there's always two sides to the story. i think about a year ago the fed and fdic did release some very pointed guidance, very specific details about what they expected in these plans. i do know that the banks feel that they didn't get enough individualized feedback. from their perspective this

stuff is expensive. they need to do it and i was delighted that this joint statement was so strong in directing them to do it. but it does cost money so they want to make sure they were on the right path before they start committing those resources. but i think these let remembers very strong, very clear. they follow guidance that was very specific. so i do think the ball is in the bank's court now an hopefully these letters, whatever guidance they felt they needed, they've got and now will move ahead with these structural changes, especially the changes to the derivatives contracts. that's really what you need to make sure they can fail. >> are you confident -- this is a question that elizabeth moore should have raised with janet yellen when she testified on capitol hill. she said these things are hundreds of pages long, regulators haven't even read them. there is no way this should give anyone confidence this is actually a way to resolve these banks should they go under. >> right. i think if we had a failure now we wouldn't use title 1 which is the bankruptcy process of dodd-frank. we'd use title 2 which is a special fundamental dic resolution process where the

fdic, as they said, would take control of the holding company. they do have the ability to fund the operating subsidiaries to keep them viable. all the losses are imposed on the shareholders and creditors and the industry as a whole, if necessary. i think in the short term that would work. it would be messy and hard but it would, and could, work. but longer term, clearly we want them to be able to go into bankruptcy like anybody else. that's really what the title 1 process is about. no, they could not go through bankruptcy now. everybody knows that. it was really refreshing that the red andfed and fdic publicl sa. >> the pendulum is swinging though. we've seen it in other countries, whether it is argentina, portugal or other parts of the european union or even here in the u.s. idea theoretically is that it is not taxpayers on the hook, it is shareholders, investors in the companies going forward. but are you confident that that's really going to happen next time around?

and how much are shareholders really reflecting that possibility here at these prices? >> you're absolutely right. we don big institutions are on the hook, not taxpayers. i do think the regulators need to get a fire in their belly on this. we've got it at the fdic. the current chairman of the fdic has done a wonderful job of pushing this ahead. there are more mixed views at the fed, let's put it that way. some are very strong on this. others it is pretty low on their to-do list. i do think it needs to be made a priority at both the fed and fdic. it can get done but it is very hard work and it needs to be a top priority. >> going back to the central issue here, which is too big to fail, it doesn't just come in bank stripes. >> no, it does not. >> whether it is ag, some ig, wt is asset managers, i notice they're kind of escaping this

designation. what do you make of this move? >> well, there is kind of this argument being made in washington that this crisis is all about the evil banks and insurance companies are pure an asset managers are pure an leave them alone. that's just kind of nonsense. asset managers, especially big bond funds, benefited from the bailouts. they were the ones that got bailed out. we didn't impose losses on them when the taxpayers stepped in. so no, mr.'s pl w, there's plen to go around. as to asset managers, i think the issues identified so far, it is probably better to tackle them through activities regulation. across the board regulation, especially of leverage -- i think larry fink has brought up leveraged etfs, i agree with him, i think that's a problem. some insurance companies have been or are in the process of being designated. there i think it is more problem mat fix they get into bank lock. if they just do great and butter life insurance and property and casualty, probably not a systemic issue. but some of them are into a lot of different areas, they're

interconnected and they need to be more heavily regulated. >> sheila bair, former fdic chair and a busy week for this too big to fail issue. president vladimir putin banning food imports from the u.s., europe and other countries in retaliation for the sanctions issued. paul mcculley weighing in on the potential impact putin's moves could have on the global economy and if he's worried about that death cross in the 10-year treasury. (vo) watching. waiting. for that moment, where right place meets right time. and when i find it- i go for it. (announcer) at scottrade, we share your passion for trading. that's why we give you the edge, with innovative charting and trading features, plus powerful mobile apps so you're always connected, wherever you are. because at scottrade, our passion is to power yours.

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news corp. posted weaker than expected fourth quarter profits but revenues came in a bit above forecast. news corp. shares up by .5%. nvidia posted better than expected second quarter earnings of 22 cents a share. revenues were matching wall street forecasts. stock trading up 3.5%. lionsgate entertainment posted better than expected first quarter earnings but sales coming in a bit lift animght of analysts forecast. russia and iraq making late day headlines. as important as it was, it was a huge market story burning up the "lot list." allen wastler joins us now with a look at what's happening. >> it certainly was hot for a while but it sort of burned out now. people seem to be looking at the longer term a little bit. our partners at the "financial times" did this interview.

we put it up on the website. people are gobbling it up. 28,000 people have read it so far. basically he's looking out. he sees big things coming in 2020. mainly a return to qe. that's kind of interesting. people seem to like it. number two, we had the late news on argentina, went to the hague and wants to sue the united states. argentina has been one of those things, the readers are just in and out of it. with every little turn of the soap opera, they just gobble it next one. finally, we have basically what i call a thumb sucker. looking at how congress funded the highway bill and they did that with that pension smoothing little gimmick. basically we took a look at what does that do to the pension picture in the united states. the short answer is, it's not pretty. a fun fact for you -- the 100 top pension funds in 2013 are

underfunded by $122 billion. >> allen, i am so glad to hear it because the demand by pension funds for assets is part of what's been driving this market and will continue to do so. thank you very much. we're going to leave it there for now. i want quick reaction here from our panel. >> the argentina story is truly a soap opera of geopolitical dimensions but it doesn't have the drama of human lives in gaza and ukraine. but this story is just going to keep going on. it has interesting implications for sovereign debt as did greece in 2011 but this is much more -- >> taking the u.s. to the haig effectively to say you're violating our national sovereignty? the u.s. has to agree to let this case be heard. >> sure. you hope that even if it creates a precedent we don't have any more situations where it is going to matter that much. it's been such a spectacle all the way around. i feel like because it is a small part of the even the emerging market bond indexes,

nobody's got any skin in the game. it is just more just amazing. i think the economy still has the potential to grow by about 3% for the coming quarters. i'm not prepared to buy into the view that structurally the economy is just slower than it was in the past. up next, we'll get exclusive reaction with pimco chief economist paul mcculley. find out if the death cross in 10-year treasuries is keeping him up at night. we'll be right back. chocolate is very individual. white chocolate lovers don't like dark chocolate. milk chocolate lovers don't necessarily like dark or white.

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talk to your doctor and visit humira.com. this is humira at work. welcome back. is the federal reserve behind the curve when it comes to inflation? atlanta fed president dennis lockhart gave us his take on this yesterday. >> the inflation expectations are very well anchored. the public i think is now very used to a pace of inflation around 2%, little lower recently. but over the long term, i think they have been convinced, the public has been convinced, that inflation is under control. >> so we'd like to get some reaction now from pimco's chief economist, paul mcculley. paul, it is good to see you again. is inflation under control? >> yes, i think it is. i think dennis hit the nail squarely on the head that inflation expectations are

around 2%. i stress "around" 2%, not on the decimal point. and have been there for a long period of time. >> jeff gunloch thinks the fed will have to do more easing before 2020. you think that's a possibility. >> 2020 is a long distance out and actually, we could have a full cycle between now and 2020. i'm not exactly sure jeff's anchoring his time horizon do. but we will have another recession in our lifetime, hopefully a long, long distance down the road. and inevitably in a recession the fed eases. i don't know if jeff's forecasting a recession comes 2020 or not. >> what do you think about the fed's policy moves right now? what would you say is more likely? that they do something more dovish or more hawkish from here relative to what people are expecting? bill gross tweeted this today -- buy treasuries because the russia crazed situation is

detearating and russia is potentially going back into a recession. >> i think the fed is exactly where they should be right now. they've been at effectively zero for over five years. they've had row but tbust forwa guidance telling us they're going to be near zero. they are phasing out qe3 on an automatic pilot effectively that will be at the end of october. they've also very explicitly told us there will be a considerable period between the end of qe3 and when they actually think in terms of lift-off, it's called these days, from zero. dennis put it some time in the middle to later half of next year, and i have no problem with that. but that's not a commitment on the part of the fed to hike rates. i think the fed wants to be very, very patient with this economy, reflecting in many respects the negative global influences that my partner bill mentioned. >> do you think the u.s. 10-year is going back below 2%?

>> i think we'd have to have something pretty nasty happen for it to go back below 2%. that doesn't rule out nasty things happening. stuff does happen. but to go below 2% would have to have expectations, i think, shift downward on the economy and also have a negative surprise on the inflation side of things, negative being too low. so i don't envision us going below 2% in this cycle again. >> how strong do you think growth prospects here are heading into the back half of the year? >> how strong are growth prospects for the second half of this year? >> yeah. >> actually, i think they're weaker than they were in the second quarter. i think you have to average the first two quarters of the year. so i think something approaching 3% is a very reasonable expectation, which is somewhat

faster than potential. so therefore, we should be pulling the unemployment rate down a few ticks as well. so it's not a gangbusters economy but clearly we have underlying momentum in the economy now versus a couple years ago. and the most important thing is we're creating jobs. and jobs are unambiguously the strongest urge to drink in an economic recovery. >> last question -- do you think a lot of the weakness we are seeing in markets here is because of europe and do you think the central bank should be more aggressive there? >> i think some of the weakness we're seeing is indeed a bit of a risk-off trade as people recognize that, while the united states economy is doing well, that we're living in a troubled world. so i think some of it is reflecting the negative vibes, if you will, from around the world, which are very negative. and i think also some of it is just simply recognition that the economy is doing better, the fed is going to end qe, and some

time in 2015 that we will say good-bye to zero. so i think it is both influences, both the new influences of the negative vibes from the globe, as well as just acceptance, if you will, that the days of free money will not last forever. >> which, you've got to say, surprising the 10-year at still at 2.4%. >> i think it is a combination of the global influences, the low inflation, and the fact that we are in a permanently lower interest rate environment. when the fed lifts off from zero, some time next year, the destination after lift-off is more likely to be around 2 trs -- atr2%. if your destination for a tightening cycle for the fed is 2% on the overnight policy rate.

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switch to comcast business internet and get the fastest wifi included. comcast business. built for business. . welcome back. this may sound like a story from the dog bites man file, up in new england, there are thousands of people protesting to get their because reinstated. it caused chaos at a grocery store chain market basket. they got them to fire his cousin an key executives. some of the fired executives are calling for the return of arthur t as president. one joins us now, he is a former facilities and operations manager where he worked for 40 years, steve, you've just lost your job? >> correct. a week ago sunday about 8:00 at night. >> so this is worth it to you?

arthur ts to bring his livelihood back? >> ar tur t is the boss. make no mistake about that. he's a co-worker, a friend, a mentor. the big difference is he cares about people employees and customers, for the question. >> i want to bring in the panel, steve, just to be clear, it sounds like what market basket's strategy is, is to pay its customers more, make up for that work in other words because employees are so much loyal to the company, has that been your experience? >> correct. we make up with low prices with extraordinary volume. we have definitely the biggest folks around we have the both local customers. we are well taken care of. >> i have been following some of this story. i can't say i understand what it means to be there, the ins and outs. it's rather col that you have that kind of loyalty and this is going on. i do have a question for you,

though, do you have any reasonable hope that the board would change their mind just because this has created a more likely outcome, a real decline of the business? >> well, i think the reason that most people don't understand the scope of this right now. right now, we've got 700 employees out of work at the office in the distribution centers. we got 71 stores effectively shut down. on an average week 12 million customers now. we've lost 1.8 million customers this week. the board continues to beat us over the head the last year. they do everything with a fiduciary interest of the company. the best interests of the companyt. right now revenues in every store where down 90 to 95%. these customers, god love them, they're not coming back until we come back. >> will they come back with the cheney, steve?

>> you know something, we only had one demand from the beginning, ar tur t comes back, no authority, no restricts. it can only happen one of two way, either the board brings him back or the a shareholders all or part of them tells him to run the business again. as far as hasn'tneford and dell hayes, we want to make it clear, our loyalty is not going to change if someone else wants to spend $2 billion to buy half of this business. we will cooperate with arthur t. >> we have to say we want to leave it there. my afollowing, you have made your loyaltys clear to everybody in this country. it's one of the more unprecedented showings, in fact, that we've seen. so we really appreciate your explaining to us why it's worth it and arthur t i'm sure is watching closely as well um up there at market basket. thank you, steve polanco was the

former manager at this chain. we have breaking news from the fda on a new drug to treat ebola. >> this is news on tekmura. the stock has been halted. it's modified the clinical hold in testing to a partial clinical hold which potentially would enable it to be used for ebola patients. the company is say anything a press release it just crossed t. stock is halted. it will be reopening at 15:15, a modification on the ebola program to a clinical hold. kelly. >> meg, thank you, that's one to follow up. next, we wrap up the day it was and ask our panel which one would be willing to resign if the ceo got the boot ewill be talking about a developing situation there. we'll be right back.

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raiding the stock price is not the only fiduciary responsibility. customers are loyal and employees are content. >> that is a part of the shareholder value that has dropped off the marketplace. >> let me add walgreen's decision not to invert and go outside this country was a similar one. pure shareholder value said do it. there were other concerns. >> there are a lot of businesses that have this idea or promote i. silicon valley, for instance we don't talk about shareholder value a lot. there is free meals, things like. that they put their emphasis on serving the customer. maybe it's a stage of customer thing. >> did you say outside of new york? >> i think it's a little big, though. >> talk about the money. >> so truchl thanks, guys. "fast money" is coming up in just a few seconds. melissa lee, what's on tap? >> one of our traders shorted

one of the widely held stocks in the u.s., we'll tell you why. >> it's it's not tbt? i'm doing the math, inverting the inversion. >> all right. >> it's not that. >> over to you, guys. >> tanks, kelly. "fast money" starts right now. nasdaq site in time's square. i'm melissa lee. turning against america's favorite stock one of our traders is shorting, apple. >> oh, god. >> the details on this shocking trade coming up. zynga moving in after hours trade. sell-off into the close, stocks down as low as 107 points, minutes before the bell. the ten-year treasury yield slumping, 13-month low, this on the heels of russia's decision to ban food imports in retaliation for western