♪ ♪ stuart: watch out. been speaks today. good morning. the slightest hint about how much he will print and where he might stop will have a big impact on your money. he makes a speech and answers questions and everyone will be trying to see what he is going to do. a lot of reading between the lines and you will see the queue

and a year live. don't think for a moment that japan is going to cut back. they are churning out yen like never before and they are getting what they want. the stock market took off last night and their currency is in the tank. they want that. as for here stocks up again when trading starts but what happens when ben speaks? "varney and company" is about to begin. with the fidelity guidedortfolio summary, you choose which accounts to track and use fidelity's analytics to spot trends, gain insights, and figure out what you want to do next. all in one place. i'm meredith stoddard and i helped create the fidelity guided portfolio summary. it's one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account.

stuart: i want to show you this video. rescuers pulling note woman from that collapsed factory in bangladesh trapped for 17 days. rescuers used hand to cut her out. more than a thousand people killed, the disaster forced big-name brands to check how their clothing is made but there she is. make way, 17 day survivor. dare i call this the student loan bailout? president obama pushing a plan that would forgive billions of

dollars worth of student debt over the next decade. you get the bill, a 10% of your income to repay your debts for 20 years, the rest is forgiven. if you work for the government you only have to pay for ten years and the president wants to offer relief to people who took student loans before 2007. that would surely push people toward government work at taxpayer expense. bailout yes or no? to ben bernanke his speech and a matter of business and could move the markets big-time. tres knippa joins us from chicago. it could go either way, the printing, market goes up, he could stop and the market falls, could go either way. >> this is not going to go either way. i will say something that will agitate lot of people but i really don't care. you have to remember who the fed answers to. the fed answers to the member banks of the federal reserve system. what has said to those member banks have on their balance sheet?

it is real estate they acquired in 2007-2008 in the financial crisis. ben bernanke will keep his foot on the gas because it helps those member banks, because housing prices are going up. he doesn't care about inflation, job growth, are we kidding ourselves? all that talk about the mandate is nonsense. the point of the federal reserve is to get real-estate off the hooks. that is it. connell: stuart: the markets listened to you. stocks will go up today at least at the opening bell. tres knippa, thank you. 12 years in the making, a symbolic event this morning, workers attach the final addition to the spire of 1 world trade center, took place at 7:30 eastern, final height 1776 feet, the year of the declaration of independence, 1 world trade is the tallest building in the western hemisphere. you can knock us down but we always get back up. don't we? [ man ] on december 17, 1903,

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♪ ♪ stuart: in 30 seconds to things happen. the start trading stocks on wall street and we will go to peter barnes who will tell us what ben bernanke was ana speech this morning. as we run up to the opening bell i can tell you that we are looking slightly higher for the stock market, looking for a gain

of ten or 15 points, but the market is watching what men will say. that is the big news of the day and the financial markets. russia also studied at the price of gold this way, way down. about $38 as we speak. the price of oil is down $2. the bill is raining debris they will start trading. i will show you where we open up this morning. just a little bit higher. he has seen ben bernanke's speech. he knows of them will say. here is peter barnes. weather headlines? >> reporter: height. we have, unfortunately, about ten seconds here. stuart: all right. we are here. you have to wait just a few seconds. embargoed until such and such a time. go. >> reporter: there is nothing in here on the economy and not much -- no decision of quantitative easing or easier

monetary policy. this is speech focused mainly on monitoring financial systems. however, we could get some news on the first of all things. thank-you. stuart: thank you so much. so nothing on the economy, nothing about printing money, but that is just a speech. that will take about a half-hour. he is about to start the delivery. nothing does do with the economy at all. just financial regulation. however, and about 20 minutes to start answering questions. the combat that every question will be geared toward when will you start printing or how much more are you going to print. i know that mr. bernanke is about to take the podium. when he is finished speaking he will take it to monday, and we will take it live, and you will see it. to the big board, we are up eight points on very modest gain. i tell you now, this market is waiting and watching in that

q&a. that is where you have to look at. all investors are concentrating. we look at toyota as a proxy for all of japan's money printing. i believe that toyota is way up in the early going this morning. tell me precisely where. >> reporter: all right. start off with toyota motor and a new high. that is a nice way to kick it off this morning. $119. rose 159 percent over 3 billion. as you know, over there in japan, the yen depreciation helps toyota be more profitable with exports. stuart: there is an article in the "wall street journal" this morning that says tokyo is making an awful lot of money because they are not reducing prices in america. they're holding prices up there. because the yen is weak there making a lot more in profit.

>> reporter: the advantage of what is going on. they're doing well here. and to your point, they're doing well with the avalon here. also, the tacoma trucks has been a big seller for them. by the way, you know, have to tell you one thing. the possibility, from dow jones headlines, possibility of a run on money markets remains. that is not something a want to year. financial system still struggles that is something and want to year. so keep your ears open to any other headlines, but those of the two that hit me in the face. stuart: good headlines. they may be, some traders will say because of those headlines he will not be inclined to put his foot on the break. he will keep on printing. that is why the dow is now up 26 points. we are keeping an eye on it. thank you. as we said, japan continues to print money. all of that money printing is fueling a huge stock-market rally in japan. what does this mean for the

japanese economy? lets as christian, former member of the bush state department's.3 they seem like they're printing -- i have never seen anything like it. whatever it takes. >> this just caused a key threshold. seems to keep going, and this was a key platform for prime minister, just elected. there is a gap between his last permission ben now. on one hand it is japan's political class taking charge of the economic destiny of the country in a way that has not happened recently. really decades of stagnation. on the other hand, banana republic style. stuart: exactly. occurs to me that everybody is printing. the japanese a doing it, europe is starting to print some big-time money. bin has been at for a long time. how long can you do this? how long can the world's this turnout paper money without some kind of serious inflation summer? >> it will have to lead to acid bubbles. has been done here and in europe

for five years. in that since japan is just catching up to something that we have done unfortunately. of course that has not stopped the obama white house from criticizing japan, even in the middle of the north korea crisis for doing basically what dollar bin has been doing for years now stuart: when you are in the state department and the president bush commented this kind of economic diplomacy play a big role? >> it does in the sense that there is a perception that japan has become of france or germany, which i think is an overstatement, especially if you look at political stirrings in the debt that they feel from china. but the way, the trajectory of a country, whether it is ours or theirs, the economic trajectories taken into account. stuart: would you say that we are printing too much, america, japan, europe combined to this cannot go on? would you make that judgment? >> i think so. if you like it realistic, southern california. you look at 10% rise in one year. we are seeing asset bubbles. gas, food. it is being disguised by our

political class but we have not repeal the law of inflation. stuart: do you think this is a bubble? bubble is a very, very strong word. it implies straight to the men in crash. >> i would not say the market is a bubble. felix and earnings from their lower than historical averages. the american economy was to grow. politicians will keep it down. however inherently we have created people will grow. a market economy that works. it is coming back in recovering after years of being beaten down stuart: answer me this. why isn't gold taking off? >> i think it was run up historically is because you have so many people concerned. sales of guns and ammunition. people worried about the future of this country. as come back a little bit. stuart: when you have expected gold to go? you would have expected that. >> there is no perfect formula. look at gold compared to five years ago. but gasoline compared to where it was five years ago, and is not because of demand. the currency in which oil is traded as been devalued by our

political quest. stuart: well said. smart power between diplomacy and war. christian white. when is coming out? >> september. of course you can get it now. stuart: the 110 advance copy. >> i will get you one. stuart: to more big names the you know. we will quote them for you. amazon taking direct aim at the iphone. according to the wall street journal a company is developing a high and smart phones beach during a screen that allows for a three dimensional images without glasses. amazon is up $2. you buy blue jeans that the gap? the company reported better than expected sales in april. a charles payne stalked back in march. she tells us up another 3 percent this morning. get-40. then we have foreclosure. they are at a 6-year low. did you also know that home prices are rising? when will it all end? will it all and if he stops

printing? heads up, realtors, investors, home buyers. it is realistic date. your licking a for all of you throughout the show. back to it that car. chip adviser. it up. why? >> reporter: it is up, over 2%. so is priceline, up over 2%. came out with their quarterly report. i obviously the to our competitors, but this seems that trip advisor is writing the priceline wave. there were some headlines. as soft batch this year. growth is still ahead. it looks like the long-term growth is looking good. you are seeing up arrows. you asked me if i own a pair of jeans from the gap. guess what? i do. i do. and that have -- i happen to love them. stuart: i'm not sure. i'm sure they're wonderful scenes. okay. how much did you pay for them? >> they were very reasonable. i think they were under $60. they gave them out here at the

new york stock exchange. i could not accept a pair because i'm not allowed to accept anything over $20. at dry them on, like them, went and bought my own bear. stuart: you are so ethical. >> reporter: are anti? em bernanke still speaking to mostly about-regulation. there he is. the market is dead flat. everyone is waiting for the q&a. that comes up and about 20 minutes. it will take you there live. the price at the pump, a gas price. the national average rate on a regular is $3.56, about a nickel this week. the highest price in the lower 48, illinois. the long-suffering people of illinois, $3.909. by next week they could be the for teleglobe. south carolina, 324. we keep a close eye and gas prices for you.

friday morning, seven arleen movers. cannot wait for layaway. sears is launching a lee stone program. home appliances and furniture. sears holding is virtually unchanged. we mentioned the gap. 4 percent. higher profits and disappointing outlook of priceline. let's see what is happening. $758, up 20 today. 2 percent -- no, 3%. more money coming into the mining company. it is up 14%. that is a significant gain. as for the japanese carmaker benefiting from high prices and a lower yen, up 46%. the plot -- company sees sales continuing to rise, but no gain for the stock holding virtually unchanged. the ingenuity. i'm not sure what the stock does. it cut the rating in price target.

down 67. not sure what that company does. disappointing sales at the rosetta stone. what else have we got? and i read the proper properly. everybody waiting for ben. there you have it. and time is money. here is 30 seconds worth. we have three homes to show you. three different markets, three different price ranges. a submissive, workrooms, entire of lawyers with a teenager's. that is what they're calling this the need to monday, may generation. you might not like it. we don't just have fancy homes. how about an andy warhol painting it will go for formally

in dollars and more. you will see it. the painting is right here on set with me. and this was music to my years. the coke rather sticky web taking over the left-leaning l.a. times. al unions such trying to fight it. we get to los angeles after the break. first this. all of on the obama administration response. now it is reveal that the white house revised as talking points of times. references to terrace removed. she met with the president. three days after losing her son. both at that time still blamed the attack on that infamous video. >> hillary say anything to you? the president obama say

anything? >> oh, yes. they all told me about the reason that this happened was the video. >> they told you it was the video? >> yes, they actually did. and susan rice. clies are always learning more to make their money do more. (ann) to help me plan my next move, i take scottrade's free, in-brah senars... plus, their live webinars. i use daily market commentary to improve my strategy. and my local scottrade office guides my learning every step of the way. because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade... ranked "highest in customer loyalty for brokerage and investment companies."

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and don't get heartburn in the first place! [ male annouer ] e pill eachmorning. 24 hours. zero heartbur ♪ stuart: it is on hold. the stock market on hold until ben bernanke starts talking about whether or not he is going to keep on printing money, when he might stop. that will be about ten minutes from now. you will hear it live, and then you may see the market moved. to billionaire conservatives are looking to buy the very liberal l.a. times. talk about an anxiety attack. the unions and the left are organizing to repel the invaders. joining us now, the conservative radio host in los angeles. a very welcome guest on "varney

& co.." after this that you. public employee unions called a big stake in the company which owns the l.a. times. they say if the koch brothers take the times they will sell their investment in that company . they're putting on heavy pressure to stop this. >> well, they are, and one of the reasons is that the koch brothers are known to be conservative. actually, their libertarian, pro same-sex marriage, pro-choice on abortion, as i might. i am praying that the koch brothers by the l.a. times. your basic the left-wing newspaper. was born and raised here. this is my backyard. i have four books, new york times best sellers. they even made the l.a. times best-seller books every day and never reviewed any of my books. cover and hundreds of columns. they have never carried them. i cannot get arrested. part of the reason is i . out the liberal bias all the time.

one example, article two years ago. their efforts to dick armey as a hard-line conservative. fair enough. surely there must be hardline liberals. in five years the l.a. times used the term hardline liberals twice won time to refer to the gorbachev. this is the kind of crap that people in l.a. have endured. there is not a single regional conservative columnist in that newspaper. stuart: at the end of the day we have not had a date yet from the koch brothers. there is no been there. high anxiety in los at the end of the day what is all worked out, you'd think it is going to happen? i am with you. i am praying that we get a bastion of intelligence in southern california. i am praying that the gate. the end of the date you think it will? >> that is a good call. depends on terms and conditions, of course, and whether or not a more conservative newspaper would survive in this left-wing

place. i have no idea. one other columnist faced obamacare, it is legitimate because of the preamble of the constitution which says provide for the domestic tranquillity. never anybody use that argument. this is the kind of left-wing columnist the people in l.a. have been reading year after year after year, and it is time to stop. stuart: one leading democrat says that he will not tolerate the rigid ideology of the koch brothers. last word to you. >> again, their libertarian, pro same-sex marriage, pro-choice. what they are is living in low taxes, lower regulation. supporting the keystone pipeline. therefore we did our draft evader. you are an evil individual that is to be run out of town. it is disgusting and we need to have a different voice..3 increasingly left-wing country. stuart: that is why we like you. you don't hold back. i know what you're really

thinking there. they stuff. thank you for being with us. a half to run because i have been coming on cent. >> my pleasure. stuart: where is all this morning? we have a stalemate on the stock market. look at this. down $38 an ounce. that is a sell-off. 1430 is the price. we cannot hit the story enough. the obama administration revising its talking points 12 times, removing any reference to terror, even after the cia warned that it was a terrorist related attack. fox news contributor monica crowley will join us. we will get her response. do not miss this.

♪ stuart: this is putting it mildly. they still not looking get the postal service. based -- posting a loss in the latest quarter. the postal service lost less money than a year ago. a bunch of cost-cutting measures. remember, the postal service tried to shut down saturday service to save money. ultimately being denied and could not reform and congress would not let them. you have to look at the big board. the dow jones average is downn17 points. everyone is waiting for band

seven is the speech. on page 14 are 15 of 17 page speech. you're still talking. when he's done he goes state q&a. at that point people get to asking questions. could be that he will want a hand the weather are not he is going to quit printing money at some point in the future. that would move the market. a couple of individual stocks that you really have to look at. a huge gain yesterday. back up another 13 percent today why? well, it's making money, serious money, real profit. and is stored in 99 of a possible 100 on the consumer reports test. they said it was the best car that they had never tested. not a bad recommendation coming there. and we have amazon. where are they this morning? there is news. they are going to come out with

a 3d image of their own smart phones. i am not sure how of woodwork or certainly what it would look like a mall but that is from amazon. that news broke yesterday. stock went up to my going a bit more, of $262 per share. as we told you, the gap is sharply higher, well above $40 per share. news on the gap. we have priceline, that is 41 on the gap now, up 5%. they were in the dumps for a very long time and it looks like it is coming end of it. priceline is up $24 per share. 3 percent. $762. okay. now winding down yet. no, he's not. he is on the last page, and told. he has been talking about so far is financial market regulation. very technical stuff. he has not release said that much. he has not said anything really about the economy.

some maurice and what would happen to the financial institutions of we have a problem with the economy, but other than that he is not touch the subject of money printing. reliably informed he is close to the end. people will start asking him questions. it is at that point that we are going stag have him -- you're going to see him. you will hear him. on the other side of the screen we will have the dow jones industrial average. if he says something you will see the stock market move just as he says it. you can watch the reaction as he makes his statement. we hope he will make a statement of some sort about not to supply money but the printing of money. the big board. that is pretty much dead flat. up two points, 15,085. he just finished. let me tell you, the dow is up three. where will it be when he stops answering questions? let's listen in because he is

about to start. >> the chairman has agreed to take a few questions. if you have some cards, if you pass them for now will get started with some questions that we took at a time. you talk about monetary markets. a major cause of the recent financial crisis was the value to identify the housing bubble, and he spoke on that. could you expand a little bit more on what is being done to identify current and future asset bubbles and are you optimistic that we have identified them? >> there are really two parts. the first is that we do, in fact, do what we can to try -- the word bubble is a very created word. let me just say, we tried to identify situations where asset valuations we have an extensive

program to try to mss whether major asset glasses are in fact with an historic and oranges. the focus can assess whether it is appropriate and not. a more complex as german such structure credit products, like in a variety of things including the terms and conditions, for example, as we are in some cases, white types of agreements in certain kinds of structure credit products. we do try to identify much more so than in the past whether major asset classes by deviating

in terms of their price evaluation from historical norms. that being said, two comments. one is that i think it would be futuristic to believe that we could always identify such deviations. on the one hand, sometimes changes in price earnings ratios are justified by some fundamentals. you know, microsoft, the stock is worth more than that was some time ago, and it may still prove to be a bubble, but so far so good. at the same time -- it is not evidence that having a misalignment or historical the unusual relationship is a problem, though it may be. we can also miss changes in valuations that are in some sense not fundamentally justified. but importantly, and what i tried to emphasize in my

remarks, we are not relying our ability to identify such things as our first line of defense. the distinction i made in my remarks was between triggers and vulnerabilities. this sub prime mortgage market, and i think -- and i'll speak for myself, the reason that many of us understood the impact of the sub prime mortgage market was because the sub prime mortgage market itself was quite small. if you assume that every sub prime mortgage in the world when bad the losses would still not have been in themselves not that large. what created the crisis was not in some sense the narrow problems in the sub prime mortgage market but the implications of that and related subclasses for the stability of major financial institutions and major financial markets. and so the question then is what other vulnerabilities that could transform what might be a relatively modest ms. valuation or moving asset prices into a much broader crisis, and so we look for things.

we ask ourselves, it's up only a question of whether a particular asset has a pricing structure, but other highly leveraged, liquid, the second line of defense is the extent to which a sharp movement would in turn transmit problems throughout the financial system. even if we can identify and room to admit there will be times a week can't identify a bubble or some other miss valuation, our hope is to make sure that the system itself is sufficiently robust that there is a problem it won't be amplified into a major systemic crisis. >> related topic came up during the conference yesterday.

some have concerns that regulatory reform efforts today have focused on financial entities. however, certain types of transactions and markets may be vulnerable to a significant risk should we move toward increased regulation of particular transaction types or markets rather than institutions types? >> it is not an either or. it is very important to make sure that the largest and most complex to most interconnected financial institutions are strong and stable and if not, if it is a problem that there resolvable. these issues respective financial restitution is an essential and remain a big part of what we're trying to do. at the same time, there are activities that themselves, even if they are not being conducted by a large firm more complex firm could under certain circumstances have systemic

implications. to an extent it may not be recognized by the broader public. dodd-frank does address a number of those areas. for example, derivatives, trading, standard as derivatives have to be traded on a central counterparty. various requirements of transparency, nonstandard derivatives have to be traded using various margin requirements. so there are a number of rules that try to make derivatives, the use of derivatives in the trading of derivatives a safer system effectively. a number of changes including the skin in the game requirements.

strengthening credit ratings as a lot. a lot of work being done on the try party repo market addressing certain systemic concerns. money-market funds, as i mentioned. a range of different areas to what is at issue is not a particular individual firm, but rather a class of activities. typically funding activities which need attention. a lot of international work on this subject as well. the financial stability board, international regulators a looking at shadow banking in a variety of other aspects of wholesale funding.

beyond that in the same way that dodd-frank allows the financial stability oversight council to designate a nonbank financial system important. is also in law that we felt was necessary if the existing rules did not cover a particular case. they could also designated particular activity as systemically critical or systemically important which would then create certain authorities to take action to address those issues. my colleague talked a little bit the margins spiral that we saw the crisis. so the answer is yes. [laughter]

>> very good. okay. all right. let's have led to big to fail question. this is a topic of great interest always. and at this conference, but recently that is the case. a very interesting panel yesterday. he made -- i think he said hypothetical case that we should consider the fact that big is not necessarily bad. a number of people arguing the financial stability. does the other viewpoint. limit the alternative. >> there is no confusion. i think that too big to fail is very big issue. and we will not have completed the goals of financial regulatory reform unless we have adequately addressed this issue. that is -- too big to fail, as

we saw during the crisis, the distress or near failure of the so-called too big to fail is systemically importance. major knock on a facts for the rest of the financial system. even during more normal times, the too big to fail imprimatur create an unlevel playing field with other types of institutions. it creates a lack of market discipline, excessive risk-taking and so on. very important for the long-term stability of long-term stability about financial system. i just want to make sure it is clear that i believe that entirely. now, how to do it. i think it is important. others said this spirit is important to know that dodd-frank may or may not be sufficient, and that is something we need to talk about. constitutes an important set of steps toward addressing the too big to fail problem.

they're not fully implemented. real working hard and doing that , but just to briefly -- i could talk about this for a long time, but between dodd-frank and also three rules we are first strengthening the capitol liquidity requirements for large financial ostentations, including those which may not even the banks. dodd-frank 165166 sections increased the supervisory stringency, addressed a number of activities, counterparty credit limits, stress test, living wills kamal variety of other new supervisory requirements to make sure that large institutions are internalizing and sunsets the externality they create. the orderly liquidation authority, fdic, the federal reserve is developing.

taking the lead. providing for the first time with a set of rules and a framework for safely winding down a distressed systemically important firm which, of course, is the essence him if you want to correct too big to fail you have to make impossible to fail, evidently. this is the first serious attempt to put together a way of really addressing how you would wind down a distressed systemically important firm. a lot to be done there. international coordination, but think progress is being made. and i would finally mention that too big to fail is in part a credibility issue on the part of the government's. the markets believe it notwithstanding what the rules might be that the government will, in fact, go through with its commitment to one down an institution. various laws in dodd-frank which

led to some of the authorities that we had in the past. and on top of that the various measures that i strengthening the resilience of the financial system more generally light will -- derivatives rules and so one that would make it more plausible that the winding down of the financially suspect firm believe the problem has been solved. if not solely one direction that we could go forward would be in my view one constructive direction. the capitol direction. rather than arbitrarily saying

the banks to be no larger than such and such a size. it gives them an incentive to reduce our simplified the firms if, in fact, the economic as opposed to too big to fail in advantage is not justified. this is something that is already for example, there will be supplements of our basel three capital rules with large banks surcharges. discretion in terms of the leverage ratios that we apply. the stress testing. said sell whole new set of capital standards. we are looking at the requirement that bank holding companies have a certain amount of senior debt which could be used to protect taxpayers in

other counterparties in a wind down. so we already have a number of tools that we will be applying and could apply to even a greater extent to make sure that a large institution is very adequately capitalized. multiple benefits, both in making them safer, but also in giving them a strong incentive to reduce their size, complexity , interconnectedness if it is not justified by the fundamental economic proposition . >> thank you. that was very thorough response. more questions than we have time for. one more question yesterday. we have a discussion about money market firms. the brokers, the importance of

liquidity, clearing houses as well, periodically the suggestion is made by many that while witnessing -- if the fed could somehow be a source of liquidity for some of these entities during a variety of circumstances, will be the consequences of expanding the discount window to brokers are even money-market mutual funds are clearing houses does under in a crisis been -- changes that were made then a sense retaining the 133 emergency lending authority which we use during the crisis to lend it doesn't oppose the vertical so and is a -- you can i use that authority to lend some to affirm.

that's part of to anything like that. instead in the use of that authority has to be broad based across the whole class of potential borrowers. so in the crisis we still have that authority, but it is limited in other respects and requires the treasury approval and so on. so there have been changes. there has been some extension of our normal lending authority. you might even say normal, but as you probably know, we are going to limit the circumstances . we're able now, the federal reserve is able to land to critical financial utilities, clearing houses and the like is already contemplated by dodd-frank. but of course just as always a trade-off is between on the one hand making sure the financial

system has adequate liquidity in the crisis and we are all familiar now, many people had not heard of that before 2008. we think of him as a next-door neighbor. the basic ideas of having the ability to provide liquidity to the financial system during the crisis, the panic. these ideas to go back several hundred years. the use of the value of the enduring a crisis. of course been on the other side of that is the impaired -- inherent moral hazard. you want to make sure that financial restitution some markets are adequately providing for their own liquidity, that they are not relying on the fed to say then if they have not provision for their own liquidity and capital. and so to the extent that you have any kind of change in the

orders, the parameters of fed lending authority or central bank lending authority, this is an issue that is not just a u.s. issue. as a global issue. you have to match that with appropriate oversight, rules, requirements that mitigate the moral hazard. for example, i think it is a step forward that unlike the previous agreements which focused almost entirely and capital, now we have a very significant component of equity management as well so that banks and others will be required to me their requirements for how much liquidity they hold so that there will not be able to simply rely on access to the central bank. instead they will have to be sure that they themselves are doing everything possible to have adequate liquidity in advance of any kind of problem.

so that is a balance that we always have. moral hazard verses the support for the system and the crisis. finding the right balance is obviously something that is an ongoing discussion. >> thank you. everyone, let's think chairman bernanke. [applause] stuart: there you have it, ladies and gentlemen. very sorry to say that was the total budget. we thought he was going to answer questions from the floor. we thought he would be peppered with questions about when they're going to quit printing money. not one. it was all about the financial regulation, the bonanza restitutions, too big to fail. did not move the market and all. i'm very sorry about this. you can wake up now. the dow industrials are up 24 points, there were up three money started. up 24 refinished. that is a dead. however, we do have a big winner on the stock market. its name is tesla, and the call

as details like i sure do. take a look. moving to an all-time record high. this comes on the heels of yesterday. up 15 and a half%. if you were sleeping, i wish i own test love. stuart: we're sitting with someone who actually has -- by nasa's embarrassed about this. her name is tonya. the listener to bottom by one. you still like this thing. stuart: well, servicing and. i know. i love the car. here is what is else.

the rest of this hour. stuart: serious stuff. a been gauzy bombshell. a new report that the white house added eight cia memo full-time. it will be a train wreck. one hundred high-paying democratic donors compare stopping the keystone pipeline to lincoln freeing the slaves. and five and half million dollars. i repeat that. what does five and a half million dollars by you in phoenix? we have a special focus on real estate. how much do you think the value of this mention that you're looking at, how much is it gone up in the past seven years? it questions for one and all. but we begin with serious stuff on been gauzy. abc news now reporting that the talking point used by the white house will revive it -- or revised 12 times the four former

ambassador susan rice appeared on all those sunday morning talk shows five days after the benghazi attack. monica crowley joins us now. let's be clear. this has absolutely nothing to do with the financial world and all. it is a major news event and it affects our political life. >> a major scandal under way right now. as you know, i work with president nixon during a last four years of his life. one of the things we often talked about was watergate. one of the big lessons of watergate, not just for him, but for the country and any politician who is thinking of going down the road of a cover-up is it is never the actual crime or original event that causes the politician the most problems. it is always the cover-up. why anybody in this day and age would think after watergate, iran-contra, why any president would think that they could go down the road of a cover-up and keep it going without having it completely unravel the way that been gauzy is is beyond me. stuart: during that, you were

under smart phone reading these e-mails. >> it's incredible. stuart: does it amount to a cover-up? >> absolutely. some many dimensions. stuart: did we point the finger at? >> right now i think that focuses primarily on the former -- in a former secretary of state. what we now know is that there were 12 revisions. you don't want to even say talking points because that minimizes it. that makes it sound like someone went in and edited speech. what they actually did, at least 12 times the memo we now know is it was the white house as well as the state department intervened to edit the basics back -- basic facts of the attack. is not just talking points. they changed the attack. the white house, the state department, at the highest levels went in and changed all references, eliminated all references to the group that claimed responsibility on twitter immediately as well as all references to islamic terror

stuart: and then there's this. on bill o'reilly show last night, the mother of one of the victims of the september 11th attack spoke out about what president obama and hillary clinton told her three days after the attack. it was at a memorial service for her son. >> hillary clinton say anything to you? did president obama, did they say anything to you on that day? >> oh, yes. they all told me about the reason that this happened was the video. everyone of them. >> they actually told you that it was the video? michel doo was the videotape? >> yes, they actually did. in susan rice. stuart: all right. that meeting took place three days after the attack. the president and hillary clinton bill said it was the video and at that time they must surely have known it was not. >> well, it's of look at the victim's family size they lost their loved ones.

to their faces. stuart: a strong word. >> in the president line in the last debate when he said the idea that anybody on my team, the secretary of state, un ambassador, anybody on my team would mislead or deliberately tried to change these talking points is offensive. you know what is offensive? line to the victims' families. stuart: strong stuff. thank you. thank you very much. now, a total different topic. let's move completely away. here to talk the business of real estate. you brought us three houses to look at. the first one is in phoenix. let's put it upon the screen. it is our real mansion. >> a gorgeous house. stuart: you are selling this thing. >> i am. it closes on the 15th. stuart: use all this.

now, five bedrooms, six and a half bathse feet. how much is a selling for? >> five and and a half million dollars currently. stuart: what do you mean currently? >> absolutely not. they have 13 offers on this house. absolutely. my client ended up. stuart: was a bidding war? >> it wasn't. the prices were all the same. they pick the person that likes the most. stuart: had sold seven years ago for just over 3 million. so that is interesting. seven years ago was right as the boom was really getting going. it really got going big time. you are telling me that this thing now sold for two and a half million dollars more than at the height. >> the current owner and proved it with about a million dollars with the renovation. stuart: that is still a huge increase. >> a huge gain. stuart: that is not true of the overall market. >> we are still selling houses

between 70 and $100,000. stuart: what about compared to the price at the bone? >> we are about 40%. so this is the exception. >> it is. stuart: what percentage you take? >> three. >> rather modest. 3 percent. check the big board. ben bernanke. no impact whatsoever. the dow is up three when he started, 2420 finish, now of 17. true religion. that is a charles payne stalked. you recommended it, and it's up. stuart: you know he is right on the money. right on with this one. up almost seven and a half%, and that is because true religion will be acquired by tower board's capital partners. this is a 52% premium to the october 9th shares.

that is the day that the company announced that began exploring options for strategic alternatives. $32 per share deal bell unit 835 million. the u.s. me if i own the scenes? stuart: about a hundred and $80 a pop, maybe more. >> ahead to buy another pair. and then i also have my true religion jeans. stuart: what a modern woman doesn't. i'm sure you have more than that. thank you. we should you a chart there, the stock went straight up. started going straight up to the point where charles started to recommend it. you want to listen. now a new report from the gop senator shows that the women could face financial trouble when obamacare kicks in. the report suggests the law will hit women with low income or those planning to marry. it will hit them hardest.

monica, real fast, is that accurate? >> select the report and make a couple of really big point to a special regard to women and now they're out going to be affected by obamacare. women of all incomes if they marry could be hit with higher taxes. most of us will be hit with higher taxes anyway. lower-income women might, if they marry, lose certain subsidies that would be coming to them if they remain single under obamacare. finally, the bigger impact, lot of women could see their -- losing their jobs entirely. they have to meet all of these new cost. stuart: one more hit. and now this, president obama's decision on the keystone pipeline is comparable the president lincoln's decision to end slavery. that comes in a letter from more than one and 50 major democratic donors and clean energy investors. they're urging the president to deny the pipeline.

don't build it. i can't get over this. how long i've can you relate the keystone pipeline to freeing the slaves? >> just so you think you have fertile. you can't even read the mind around it. to compare some of the keystone pipeline to what abraham lincoln did with the 13th amendment to abolish slavery and free the slaves is completely averages. meanwhile they have an environmental agenda on the keystone pipeline. they could get toward energy independence and creates a helluva lot of jobs. a serious unemployment problem. they're looking at it from the single lens of the environmental impact which we now would be nil stuart: my bet is that the president says okay, build it. but you cannot export any of the soil. we will tax it more. so they are all kind of caveat spirit we will build it and bring it down. but watch out. stuart: you're probably right. he will try to split the baby.

stuart: time magazine calls than the me, me, me generation. entitled teenager's. it could be the parent's fault. you won't believe how it could be the parents pull. you won't believe how they're spoiling them just to keep them home. that is next.

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stuart: espn limiting the use of its customers to watch sports on their phones and tablets without pulling data, up what espn really wants is more traffic on its mobil site and is considering paying wireless carriers directly for all the extra service use. espn owned by the very profitable disney. back to the business of real estate and other home for you, actually from tanya and this one too and this one in seattle. let's see it please. what is that? >> it is an open house. don: if you want me to be quiet -- show me the pictures. >> in seattle, great

neighborhood. it is 2400 square feet, but taxes, $3,400 and in september of 2006 old for $400,000 and selling for 450. that is okay we are moving in the right direction. don: stuart: 2006 would be the height of the boom and in seattle another 50 grand on the $400,000 home. >> a renovated this as well. however, in seattle, nothing is the same. >> there are 2500 homes in foreclosure that have not hit the market yet currently to date but there are 433 homes, that is it. stuart: put that picture up. i want to see the exterior of this $450,000 house. and won't be nasty, but this does not look like much to me. >> really did a good job inside so in a cellar's market who

calls the prices? stuart: you couldn't sell that on the exterior. >> the interior is gorgeous. stuart: we will move on. the cover of time magazine talked-about of the me generation, narcissistic millennials still living at home, but are the parents partly to blame for this meet me me generation to justines to getting older and once more time out of the house some parents are finding that by designing elaborate spaces at home just for the teenagers. the wall street journal's mention reporter is with us. >> thank you. stuart: the people you have pictures and you are showing your readers in the journal, they have gone completely over the top, specifically for teens.

and the team--. >> thinking about ways to keep their kids when you want to be out with -- video games and watching movies. stuart: that is a team wound. sons and daughters of rich people. >> one spare room. and -- stuart: if you go down market -- stuart: teen sleep over sweets. and terence are wealthy parents and sleep for their children that are 520 feet, tweet thousand square feet gerri: and hanging bunk beds.

and a lot of space to play out. they will be with their friends. stuart: but logic seems over the top. would you make that value judgment? will you say this is over the top and outrageous? >> i am covering what is happening. i don't have a judgment on it. stuart: homework room. let's see a picture of a home work room. more than a desk. >> very popular in these days as parent grapple with how to design their house around the technology that kids are constantly interacting with. the war room is one solution. it gets computers out of the bed room and into a space parents can keep an eye on. peter: when you sell this stuff. you get big bucks, would you want this as a feature? >> the home work room you are seeing more and more because parents do not want the computer closed door in kids's bed rooms so that is a great idea and the

big screen so parents can see what kids are doing. fantastic idea. i do not want this, you are dividing the family again and even though kids come together at the house we did that and didn't have any of those things. we played at our house and stayed home and we were taught a work ethic. when do these kids ever leave home? how would you go to a college dorm room after you had a 2,000 square foot sweet in your home? stuart: the way we live now is to move further and further apart. i don't think families want to be jammed in together around the dinner table. >> i showed a house to the couple that bought the mansion and it had a man sweet, woman's office, man's office, women's living room, man cave, everything. where do you convene as a family any more? we already have issues, obama doesn't even want us to get married as women, where do you

convene as a family? stuart: let me tell you a story about john lennon, he was the beetle, he bought a house because he got tons of money, he bought a house in syria, nice part of england, gigantic house with all kinds of rooms and facilities, he lived entirely with yoko ono in the kitchen. he lived there. that is all he ever did. came together in the kitchen. how much for these team wounds, sleep over sweets and the rest of it? >> they can arrange the gamut, parents spend a couple thousand dollars to furnish a cool room up to almost a million for the most elaborate or over a million. stuart: where was the house with a million dollars week? >> there's a house in beverly hills marketed for $50 million in each team has a 2,000 square foot space. so i have a feeling -- >> my first house was sixteen thousand. >> you would love that.

>> things like that. peter: when you would sell it. janice jackson, wall street journal managing report, thank you for joining us. check this out, the second piece of and the warhol art work we have had on "varney and company". it is coming up and we will unveil it next and it is selling for millions of dollars, that after this.

stuart: when gas prices creeping up but will be up 4 sense in the past week, $3.56 on regular, oil down to the big time, up $ at 93, amazon could be thrilling it had into the smart phone rang, recent reports suggest it was working on a fund that has the 3d screen. images are seen to flow like a hologram. no confirmation for amazon, stock is up $1 at $1.61, look at the dallas after the fed jordan board us throughout the morning, he didn't say anything, was a real some northwest. we expected something to say, some market reaction. we are down 19. 1 world trade, the tallest building in the western hemisphere. workers attached the top part of that building. it is 1776 feet tall.

are you still sleeping? just wanted to check and make sure that we were on schedule.

the first technology of its kin.. mom and dad, i have great news. is now providing answers families need. siemens. answers. stuart: you can track the one with the wi-fi smart phone to see which departments you visit and how long you stayed there. simple solution, turn off your wi-fi when you go into stores. >> very good advice to everybody watching, they are tracking on the other hand. stuart: what is wrong with somebody tracking your movements within a sport to see what you

are buying? >> why not send someone to stand next to me. or you like those towels or this, the whole idea is this is the wave of a future, you need to get used to because it is invasive, big brother way of life is everywhere with everything we do. stuart: you sound like judge andrew napolitano more every day. congratulations. thank you very much. dow down 20 points, no reaction whatsoever to anything ben bernanke said, he said nothing, the dow is down 19, $15.63. itself portrait of andy warhol, has never been for sailed before, never been on the market before. let's bring in robert manley with christie's who is going to auction this painting on wednesday evening. is that correct? it is in new york.

>> 20 rockefeller plaza. stuart: this particular portrait has never been on sale before. >> never been on auction before. stuart: there you have it. you can see it now. self portrait, and the war all. how much is it going to go for? >> estimate is 4 to $6 million which we feel conservative given last time there was a painting of this quality it sold for $6 million. stuart: a painting of this quality. define quality. >> the quality of the screen and the market tends to favor the ones with brighter colors, we have this very beautiful red and blue, it is how the elements come together. stuart: when you have got to be an artist to look at it for color, balance, style, that gives it the quality or talking about making it worth $6 billion. >> ultimately it is what people

want to pay for it. stuart: there are 41 of the self portraits painted by and the warhol himself between 1966-67. just turned them out. they are now worth $6 million. >> some of anti-war all's most famous scenes are once he repeated again and again for example the jackie ceres terror over 200 or the -- don: campbell's soup can. >> in various iterations between paintings and trends there are hundreds of them he did again and again. 41 is a relatively modest amount and when you start breaking it down most of those in museums or public collections where they are not going to be shaken loose. stuart: this can be bought privately. you have a warhol self portrrit that instils value in it. >> the fact that it is fresh to the market certainly does. stuart: the market in general is really hot. >> we have the best year in the history of the company and specifically the best year in the contemporary art department

selling $1 billion, in new york alone. stuart: right after the great recession like 2008-2009, what did you sell them? >> severe contraction in the market after 2008. in 2009 we sold $100 million. stuart: you have a tenfold to $1 billion last year. i will give you a commercial. this goes on auction at christie's in new york wednesday of next week. correct? >> it does and we go on view to the public starting tomorrow morning. stuart: the man with the hammer is you? >> no. i would get too a angry. stuart: thank you for joining us. foreclosures and a six year low, home prices higher, there are still deals out there, moron that after this. the wright brothers became the first in flight.

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stuart: we have one more home for you, this one is in atlanta. i will show you what you get for $145,000. we will put it on the screen and you will sell it.

>> yes i am. stuart: $140,000. >> almost 3500 square feet. of five bedroom free, over an acre. it is a foreclosure. it is not sexy and cute, and $230,000. stuart: from december of 2007 to now, to 145, that is a huge drop. the bottom cashing out of that market. >> a lot of funds going down because they see the potential. it is 550 and will rent for $1,500 a month. stuart: state there for a second. according to realty track, foreclosures it is 6 year low in april, as been continues to print inflating the market isn't homeowners buying up the houses. investors apparently are buying.

if you have got foreclosures down to a six year low, does that -- is that good for the housing market? does it put more houses out there for sale? >> they need to get rid of them. they are just over 1.4 million homes in some sort of foreclosure and only 874,000 homes on the market so we need to get rid of that 1.4 million homes. we have a lot of investors in the market but they are personal family home buyers, they are just being lifted out of a position where they did short sell or foreclose five to seven years ago. stuart: if you get foreclosures to a six yellow, foreclosure activity, out of the house or get out of the house, is that good or some bad for the supply of homes on the market? >> is gray because the price is going to. stuart: more homes on the market. so you are at the. >> i am. it is a good market. build of your inventory. >> interest rates are low. i was having a conversation with

someone of the $40,000 for house and told him to the mortgage on it. stuart: i will close out with this. oil and gold down 3% because the dollar's strong. back in a moment. we learned a lot of us have known someone who's lived well into their 90s. and that's a great thing. but even though we're living longer, one thing that hasn't changed much is the official retirement age. ♪ the question is how do you make sure you have the money you need to enjoy all of these years. ♪

[ whirring ] [ dog barks ] i want to treat mo dogs. ♪ our business needs more cases. [ male announcer ] where do you want to take your business? i need help selling art. [ male announcer ] from broadband to web hosting to mobile apps, small business solutions from at&t have the security you need to get you there. call us. we can show you how at&t solutions can help you do what you do... even better. ♪ ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dingi ]

...you'll bust your brain box. ♪ all onhinkorswim from td ameritrade. ♪ be to look at this for a second. that action is not in stocks this morning. gold is up $44 an ounce. we really appreciate you being here today. >> i always enjoy being here with you. stuart: will you come back? >> absolutely. stuart: dagen and kabul, it is yours dagen: i love talking about

property. if you believe that the housing market will drive this economy back, you are right where you need to be this hour. connell: we bring you the business of real estate. ♪ dagen: say it again. you cannot ask for for bigger names when it comes to real estate. connell: i am so excited. dagen: we usually do not have people on for the full hour that we like. [ laughter ] connell: we will get to them and about 30 seconds. let's start