♪ ♪ imus in the morning ♪ >> surprise! we're still not creating enough jobs. that means that ben will probably keep printing.

i'm charles payne and stuart will be back on monday. here is the story, 175,000 jobs created in may and the unemployment rate goes to up 7.6%. all of that printing and we're still not seeing a significant growth in the economy or the job marketment you thought the obama administration listening to your phone calls was bad. how about everything from facebook, google, youtube, you name it they're on it and now even the new york times is saying the president has lost credibility. we're all over this story and just when you thought your government has done enough to outrage you, try this. 332 million dollars in bonuses for federal workers last year alone. oh, this is the year of sequester cuts, you remember the cuts of maximum pain and shared sacrifice. federal workers still got big time bonuses. hey, it's your money and your freedom. we're talking about it all morning long. "varney & company" is about to begin.

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. stuart:. can you hear me now? can you hear me now. >> yes, we can and we did. >> good, good, good. >> maybe verizon and president obama want to change their tune. now, one day after a report revealed that verizon handed over millions of customer records to the federal government, the assault on your privacy continues. the guardian report says the government is directly tapping into nine leading internet companies, microsoft, yahoo! google, aol, skype, youtube. the companies are denying knowledge of the program. it's called prism and supposedly only deals with foreign communications and now, even the new york times is turning against the administration when it comes to this issue. an op-ed it from the times editorial board says, quote, the administration has now lost all credibility. we will be talking about this story throughout the entire program, but first, let's talk about the jobs report. we're going to bring in former obama economic advisor austan

goolsbee and paul, the labor chief of staff under george w. bush. austan quick 20 seconds, your first assessment of the jobs report? >> i thought the payroll number was respectible, better than expected, but reflects this fact that we're growing at a modest rate and the rest of the world is growing even slower than that. so it continues to be a tough environment. charles: absolutely. i'm glad you brought up the rest of the world. paul, 20 seconds, your initial reaction? >> ongoing toughness. we agreed that the number one issue to look at was the labor participation rate and it's we're still down from where we were in january and february and that number must grow to see any increase in the economy and that's the number one nut to crack and other issue out there. long-term unemployment. you've got over 4 million americans, six months out. charles: we are going to hit this a lot more. guys, more after this. we went out and asked people a simple question:

how old is the oldest person you've known? we gave people a sticker and had them show us. we learned a lot of us have known someone who's lived well into their 90s. anthat'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. ♪

>> a little bit more than a minute away from the opening bell. joining us from chicago is dan, and well, the jobs report and looks to me it's a ben bernanke sweet spot and thinks he can stabilize what's obviously been a very wild week. >> we've got a goldilocks number this morning, not too hot, out.

obviously, a big deal. and in the meantime, they're hoping that it takes away the cloud over gm and that ultimately the company will issue some dividends and we heard something to that effect late yesterday from the ceo talking about the possibility of giving dividends. the last thing i'm going to say they're doing a promotion for better maintenance so they have more brand loyalty. charles: you know, it's the dividends, bonuses, it looks like gm made out pretty good, but the taxpayers not so. nicole: i think that $53 is the exact number we would need to break even and you know the government said they were just trying to save jobs. it wasn't about making money. charles: absolutely, absolutely. let's talk about making money. netflix, those shares took a hit yesterday and there was a report, rival red box and they announced streeting service. how is that looking? >> netflix is better. they got hit because the idea is that coinstar and verizon were

working together for the set top boxes in the home and to have streaming video in the homes and that would be direct competition in netflix. >> and coin star, which owns red box, how is that going? >> yes, take a look at the it right now. >> not too bad. up 67 cents, hey, it's a huge market and everybody wants a piece of the action and nicole, we'll be back with you later. right now i want to get back to the jobs report with austan goolsbee and ball conway and austan, i want to go with you. you've had a little bit of time to sort of digest it, look at the nuances of the report. what does it tell you about where the economy is going and what changes need to be made? >> well, i think mainly what it tells you is how was the economy doing right now? and as we always say every month, there's a lot of variability, there's under 70,000, plus or minus, 100,000 so you've really got to get a couple of months ago before you can-- -p>> yeah, but we have a lot of months ago and it's pretty ugly, i mean, on this rare occasion,

we have over 200,000, we've got the pom-poms onnand in the past we've seen streaks of 300,000, 4, when are those coming? >> not until the growth is higher. with the fiscal drag, more than a quarter off the point rate, you've got the private sector growing faster than 3 1/2% a year. it's hard for me to see that's going to get up much higher and you've got the public sector side, big negative. largest fiscal drag since the end of world war ii and the demobilization, so i don't see how the growth rate gets that much higher when we're already higher than the rest of the world. so, i think the job market continues to be at this at best modest improvement rate. charles: you know, paul i've got to tell you, it's hard for me to believe this is the best we can do, it really is. >> i tell what you, if you accept the premise that this is the best and this is all that we strive for, i think it's leaving a lot of american initiative on

the table. there's an important player in the middle of this and that's barack obama. he has 44 more months. the american economy is going to be impacted by his policies for another 44 months and the question today, how do you increase the participation rate and create more jobs? and the engine that drives it is small business and medium sized business. the bottom line the president and his policies and his people need to get off their back and let the economy do what does best. ronald reagan understood it, john kennedy understood it and bill clinton understood it. and you have a party, get off their back, back off. and the white house is distra distracted by scandal. and if his policies are on autopilot you'll never see the growth you need. charles: and that brings us to that, and the president is far from the scandals, he's fund raising and the scandals, they keep piling up.

do they have any sort of an impact on the president's economic agenda? >> they probably do. the more time that everybody spends talking about those, the less time that they're spending on, you know, what can we do to get job creation going this year. i mean, i totally disagree with the view that the main thing slowing down growth in the u.s. is policy when, as i said, look around the world. the u.s. actually has a faster growth rate, as modest as it's been, than virtually any other country in the advanced world. it's been a very difficult environment in the world economy and that's what we're sttuggling to get out of. it's not to say this number is a good number. it's just to say, this modest growth, it's hard to see how in the short run it gets higher when everything else is pushing us down. >> paul, you know, i want to get back to the question about the president's agenda because when tte scandals began to mushroom, a lot of people on wall street cheered saying maybe it will

slow down the agenda and maybe ultimately that's good for the economy. what do you think? >> i think it will absolutely impact the agenda. the bottom line, i've got experience under four administrations including barack obama at a transition over at dhs. when you have an administration as mired in scandal as you have right now, not only does the messaging come off the point, but the focus of time comes off and if you don't have people that are constantly assessing what is impacting job growth and job creation, a policy agenda that the president ran on as a distinctive against governor romney, it was his policy. if his policies are not delivering and his people are not focused on it it's absolutely going to impact him and more important, it's going to impact the confidence of people in his competency. charles: paul, austan, gentlemen, thank you very much. we appreciate you taking the time this morning. >> thank you. charles: and the irs trying to side step the spotlight according a washington based lawyer, retiring after decades of service in the irs in the

organizations department. this after cincinnati irs worker told a house oversite committee that it was influence, instrumental in her work in looking at tea party applications. and he told her what questions to ask forest' leaving. is this america? we take care of our veterans, but for a lot of government workers they'd rather take care of their unions. and some are employed full-time time to help not the soldiers. it's outrageous and you will ahear the story in the next hour. right now the 7 early movers. let's start with a negative one. i'd like to go up, but couldn't overlook tivo, they're trying to assuage the street with a 200 million buyback. and tesla, getting in this stock, the idea if it gets above $100, it could probably go to a

new high. old highflier got an grade. brocade. and that would be a pretty good percentage move. take a look at lulu, i fine it interesting when wall street jumps on. and jks, chico solar beat the street and they beat the street by 74 cents and that's why the stock is exploding. and gap stores, another one of my favorite same-store sales, the street was looking for less than 4 old navy rocking up 9%. i wonder who is buying old navy and christopher and banks, maybe people are buying suits to go back in the job market. and not that they have much more in the pre-market. the markets are opened for a little while and take a look at the big board. we're up 68 points and not exploding to the upside. it can turn either way at the drop of a dime. now i want you to take a look at wal-mart and the company

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>> checking the market in the big board, it's lackluster, we spiked up 71 all over the place and everyone is still digesting the jobs numbers, let's put it that way. they're calling it a game changing product in the cigarette industry and you're going to see it first. reynolds america, one of largest tobacco companies announcing they will launch a new e-cigarette called fuse. we had the reynolds ceo with us, and dan, we were talking during the the break about, for me it seems like i'm not a cigarette smoker,,but it seems if you have one e-cigarette, you've had them all? >> i think what we're here to announce is the new cigarette, a game changing product and takes the technology to the next level. we've created an e-cigarette that has a vapor that is more closely or similar to what a smoker would expect from a

cigarette. so, fundamentally creates a different flavor, mouth feel than anything out there. charles: when it comes in, it would be thicker. because we've seen some of these demonstrated and the thickness in and of itself changes the pleasure of smoking or at least trying to, you know-- make you feel like a real cigareete? >> maybe the way to describe it, less after trade off from the regular smoking experience. these cigarettes have come out like gang busters. did it catch the big boys like you off guard? >> no, to be fair, we have been looking at this category for three years and we've designed the product and it's the first product designed and also assembled here in the united states, and so really, it's an indigenous, sort of american ingenuity back to work and a game-changer in terms of the products out there. >> your product doesn't look like a cigarette, it's shaped

like one, but you're talking about the sensory importance of it all. but that doesn't look like a regular cigarette. >> no, and i think really, sort of the design principle that we used behind it was to make sure that the vapor was very familiar to a smoker, but everything else was, it's designed to look different and be different. charles: and this industry and the category in the industry is coming on strong. the next obvious question, regulation, it's got to be there. the regulators are looking at what you're be looking at. cigarettes probably one of the most heavily regulated consumer products out there. what are you thinking about with this? >> well, certainly the fda which regulates the tobacco category indicated that they will he'-- not demonizing. but they'll have regular lyings across the space swell. because it's designed in america to high quality, food grade materials, we're candidates. >> there's talk that they're going to apply virtually the

same rules as a regular cigarette. what advantage would it give someone, outside of the health issue. now i know there are places you can take an e-cigarette and smoke indoors where you can't a regular cigarette. if they apply the same rules, it feels maybe you're back at ground zero, maybe the explosive growth comes to a halt? >> no, i honestly don't think so. it's consumers choosing these products. the way i look at regulatory things. the traditional categories and new categories, is the regulatory side is the same for everybody. so that's a level playing field and we've got to out-innovate and do our jobs better than competition. charles: of course when it comes to regulations, and maybe it starts to drift into that category of a sin product and now we're talking extraordinary taxes. i mean, this has got to somewhat about a little concerning for you, no? >> well, i think certainly in our modeling and what we're predicting, it will eventually or may attract some taxes, but

that they're very most likely going to remain significantly lower than at the cigarette category today. >> was it cheaper for you guys, i'm getting a wrap signal. but with the r & d than to go out with one of the established players? >> if you take a look at the players today. it's a generic technology out coming out of china and handmade there. so what we've designed as a superior technology made in the united states, we've created well over 100 jobs already and hoping to create thousands more here in america. >> you cast a very big shadow. if i'm one of the little guys you may get a phone call from me. dan, thanks a lot. appreciate it. >> my pleasure. >> time for your morning gold report. and gold has been hanging in good. looking for a gigantic move, when the dollar fell apart. and giving most of it back, under 14 hr00. i'm sorry to have do this to you on a friday. another outrage story,

government workers are already doing pretty well. why are taxpayers shelling out hundreds of millions of dollars in government worker bonuses? monica crowley and jolene are here and their reaction after this.

♪ ♪ every little step i take, you will be there ♪ ♪ every little step i take ♪ >> well, the obama administration, watching, listening to every little step you take, even the new york times turned against the president. will this be the scandal to stall his economic agenda? could it be a good thing? well, we're going to ask coming up. now this though, staying with washington because workers for the federal government getting a bonus is not new for them. but there's a new report that reveals they've got 332 million dollars in bonuses, and just last year alone. 332 million doesn't account for bonuses within the fbi, departmmnt of defense or congress. what do you make of that the era of shared sacrifice. >> except when you work for the federal government. not only a lower unemployment rate and also you're getting bonuses and incentives. this is what you get when you

have the rabid expansion of government. this is what big government is all about and remember, big government is never benevolent government. we're seeing that with the irs, the doj and nsa and the snooping and surveillance that we're seeing. this government has never benevolent government. it's expensive to the taxpayer. charles: and the president has grown a huge army of worker and compensating them well despite the shared sacrifice and sequestration killing the country. >> i think it's interesting if you look at the foia report, what they got. the number onement an of bonus money went to the veterans health administration and second was the f.a.a. and 7th was fema. how the bonuses are doled out is interesting. the person who made the most is apparently the chief medical officer in new mexico. going across the board. charles: it's going across the board and on the veterans

administration the next hour we've got a big story that dove tailsswith that. here we are with the jobs reports and average hourly earnings were unchanged. a lot of people watching the show not only did they get a bonus last year, they were lucky if they still had a job. at some point the optics are terrible. >> the unemployment picture is clearly not getting better. as you mentioned we've got wage stagnation as well for the people who have the jobs, but this is nowhere near what a he recovery should look like in america. the reagan recovery, 600, 800, a million jobs created every month. >> we're going to talk all about the jobs thing, believe me. next hour, the man who compares the new york times editorial board, get this, to the tea party? that's right, you heard it right. big headline, new at 10, and it all has to do with this. >> can you hear me? can you hear me now? can you hear me now? >> yes, we can and we did. >> good. good. good. good. everybody has different investment objectives,

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stuart: here is what is new this hour on "varney & co.." has the tide permanently turned? in new york times says the obama administration has lost credibility. you'll talk to the media watchdog who compares the times to the tea party. how was this for irony? the president meets with his chinese counterpart tonight. how can he looking in the face and tell him to stop hacking us when our own government is listening to our phone calls. before the president meets the

chinese president the guest of fund-raising in california. will hollywood turned against them? and what about silicon valley? what is new apple? nothing to be what have they done? to ask one of our top tech guys. we have the answers. ♪ first, a big story. nearly every single major internet company is being tapped by a secret government agency. we're talking facebook, microsoft, yahoo, youtube, aol, apple, all in the name of national security. the troubling part, the government has direct access to these companies servers. of course those companies actually deny any knowledge of the program. monica, joe, jumping at the bit to get to this one, and he should have been. >> the dimensions of this are extraordinary. we know that a program similar

to this under the picture that was approved after september 11th and services to a dozen six. we know that the government has been eavesdropping. originally this was supposed to be a targeted program. the surveillance was supposed to be directed first international calls coming in and going out of the united states. potential terrorists, terror suspects in potential terrorist suspects. we have seen now is a magic to the massive expansion so that is not just focused on external threats but american citizens. phone calls that are going with in the united states domestic calls, even local calls. the dragnet has become so wide and expensive as to be perhaps who unconstitutionally intrusive. stuart: there is a big difference is five make a bunch of phone calls to afghanistan or, has been in toledo a few times. >> there watching knowledge.

charles: this is the big trade act on steroids and maybe even more >> the most interesting thing to watch right now is of the company's ranks because right now they're all the night saying that there is no direct access, no backdoor access now is the question isswhen they will inform their customers that is the thing to watch. charles: this story, even the new york times editorial board is turning against the president..3 the administration has now lost all credibility. our next guest made this comparison in a box news op-ed today. the latest obama's scandal has even new york times sounding like tea party. joining us now, last time you're wrong he says that the tide was turning against the president, but you said you did not think it would last. this seems like you're changing your tune. >> i still don't think the new york times is going to completely abandon obama.

if you know that they said on this issue that is the key point. what has happened here is a disturbing press people a lot. we have scandal after scandal, and now we find out the government is pretty much investigating everybody who is not 6 feet under. that is the kind of thing that the people would really forgot about. charles: listen, maybe not on this issue, but certainly you are not happy with this with the ap story. they don't come running back into the open arms of the president runaway. >> i don't think the new york times -- i think you called this kind of a marital squabble. when you look at -- yen. they were careful not to say obama broken the laws, but they criticized him for using his utmost power and abusing it. the constitutional reverences',

but they're not going whole hog and bashing the president. thing was going on here is outlandish and disturbing in the think they would have been a lost art. charles, president overcome by ignoring it? this to go back to the normal game plan? is that going to work? >> i don't think it works simply because the people who are most upset other people who are most active. people who use the internet for commentary. people on twitter, facebook realizing everything they're doing gets tracked by somebody furious was on the internet. i think that will keep driving the issue. it will have to, but some sort of strategy. the politics.

charles: you could be assigned qaeda la page in u.s. the president's. you guessed that you had it coming. the other side of love is eight. thanks a lot. we always enjoy your insight. >> lets check on the big board. charles: 127 points. once it revs up really revs up. maybe this tree lexis after all. walmart. >> reporter: you can see it is up. they are authorizing of $15 billion stock buyback program at their annual meeting. they had about $712 million remaining in the prior buyback, some now you see this. this is a news. the other thing we should notice of its stock but the customers. the customers facing higher

payroll taxes, rising gasoline prices and delayed income tax refunds which we know so well. walmart in order to try and keep the customers happy has now put out smaller packages so they don't have to spend as much as well as less expensive products. knowing how the american consumer is thinking and feeling charles: that is why the became number one in the first place. a small company in arkansas becomes the most amazing company in the world. absolutely phenomenal. we will talk to you again. now today's jobs report. once again, more proof that the job market is improving. it is also using it as an excuse to implement more of its policies, which means, of course, more spending. what do you make of that one? >> i think that the jobs report hit the sweet spot. it was not too much so that they will be pulling bond buying back charles: you're talking the federal reserve and ben bernanke >> exactly. but i think it is a good thing

you see the number continuing to go up. this is -- i am not sure because all we keep was all this anticipation,-anticipation. you could see that with the shakiness of the stock market. charles: we call this a sigh of relief rally. here's the problem. forgetting about the markets for the moment, for the american public 175,000 at this stage of the recovery is puny to the point you're making earlier. >> pathetic. set aside the federal reserve and the effect that it has some money printing and the rest. from an objective economic standpoint this is the lameness, weakest recovery in u.s. history. charles: tell us how you really feel. >> that a seller really feel. you should be generating 300 of 500,000 jobs a month. damage and the reagan recovery before. we had one month, over a million new jobs recovery. what we have here is the wet blanket of obama policies that continue to suppress this sayin, well, this president lost all

credibility. he lost credibility and this issue. idle think hollywood is going to turn on him out of. in fact, you had a star trek veteran recently said what an amazing man and wonderful president barack obama is. this, mind you, came after the scandals involving the irs, james rosen, the ap snoozing. so it is like hollywood is so caught up in the 2008 euphoria of pope unchanged. nothing is going to sever the relationship, that romance that they have. charles: even the be-those are shaking their pompoms. monday make? the fund-raising, jimmy, at some point within the the winehouse would feel ashamed. you know, the fund-raising in this sort of environ all the time, just about any sort of guilt at all. >> well, no.

they have ran -- for two dozen date and in 2012, the two most expensive presidential elections in history. so they need to have these buber donors, wealthy donors are fund-raisers kicking in the money. by and large the press is going to give them a pass. you had dan gainer recently set after a week or so viscerally died down. what i do think, this massive data mining and data collection you have and with companies like apple and microsoft, you could have tech firms could turn on the president. you did have eric schmidt, chairman of bull who was instrumental and barack obama's 2012 election. i think just because there are some many people, americans are not even interested in politics among may not have voted for a rock obama or mitt romney, but they're using the internet. you may have to will say, this is a big problem.

a major concern. you can have these tech companies who are instrumental in the 2012 election start turning on the president. very uncomfortable. charles: i have to tell you, we talked about his role with the election. he was so entranced u.s. part of the campaign office. and they were using this amazing technology to micro trend. i am thinking, here is karl rove. he is going into the computer system, going to rip -- during some revolutionary things. it's hard for me to believe that they're going to turn on the president to be don't forget, earlier this week he changed some of the laws with respect to even being able to sue these companies based on patents. i think he offered them of some sort of offering even before this other news came and. >> did such an invasion of privacy that affects everyone regardless of your republican, democrat, communist a dozen

matter. the potentiality of the government snooping and erie mills and literally watching your thoughts as a form. kugel and microsoft may have no choice but to put up a buffer between them and the president. charles: that is a great point. joe brought that up earlier. once the financial aspect because no matter how great the bodies are, and the stars to hit the stock. hey, we have to let you go and get back to nicole. charles: christopher, 23% same-store sales. shares are up. >> reporter: they are jumping. targeting women over 40 based in minnesota, under a billion market cap. we should note that. it denies job. five &. working on marketing, closing the unemployment. good news here. charles: thanks a lot. well, we all know it by now. the chinese have been stealing our most viable defense secrets. they act as all the time.

now we know that the obama administration has been snooping on everyday americans, maybe the president could take a few pointers and the chinese president. that's next.

♪ charles: right to the jobs report out this morning. 175,000 jobs were created last month. the participation rate, 53 percent up slightly from april. the unemployment rate actually takes up a little bit. and that is a relief rally. take a look at the dow on these numbers, up 145 points. jobs and technology. samsung's took a hit after reports that its latest smart phone is not selling as well as the company thought. samsung's stock is down $12 billion on the news. netflix took a hit yesterday also. verizon and red box for hooking up monday streaming service. ready to roll out this summer. shares of netflix remanding today at the dallas 28. the president obama taking a page at of china's own surveillance playbook? the president has done toniiht. a lot to talk about next.

charles: i have been thinking about you. time to try to make some money. e-commerce. it is and since right now. having a huge week. britney and $7.50. i'm looking at an inflection point, losing a lot less money, operating margins are going up. tremendous, tremendous amount of growth. if you think you're chasing it, keep in mind, january 2011 this was a $33 stock. starting to live up to the hype. on the verge of a big move to

the upside. how is this for irony? president obama is going to look at the chinese president right in the eye and ask him to stop acting u.s. citizens and the obama administration is doing the same thing. let's bring in a former state department's senior adviser. does this surprise ul? >> well, there is nothing like a meeting with china's new top tired to talk about how to use government to go after your political opponents and the media. i would not actually expect obama to be that tough on china. there has been a lot of hoopla that we will raise cyber issues, cyber theft, i teach death, but the most rear asking is that they agree to some sort of discussion on standards. it is like if you wanted bill clinton to come and join a discussion on being faithful to your spouse. charles: okay. we will skip that one for a second. but you really understand this area. he's been a lot of time reporting on it. you don't think there's going to be a major confrontation over

this? >> they're is new book out on china. the opposite that this type of meeting will end up being something called admit nothing in deny everything. so basically talk about the topic with not so much meaning behind it, not so much productivity. it certainly will be on the list, but even though it is out right now and the media is not knowing to be top priority. charles: admit nothing and deny everything. but not grovel. the chinese president is not going to grovel when it comes to president obama. >> oh, no. let's remember that china holds a lot of our debt. in many ways china and sustenance of that don't have to explain anything, and it certainly won't do it in this conversation. there are strategic issues about the growing assertiveness of the chinese military. they're pouring a lot of money to advance the military. also economic issues. the chinese economy has been softening for quite awhile. charles: the idea that their economy is only growing at seven

and a half percent. i think we go crazy. this story, china buying our assets. a lot of people worried about that. >> frankly, it puts us in more of a position and power than we think. the debt is noncallable. means we should play hardball with them. this is the big thing. a recent report puts us he 300 billion. maybe we need to start talking about subtracting that from the amount that china thinks we'll look. no, the economic issues, we do a little bit of carving. say something about the valuation. appreciated significant. bellyaching about this issue. this is being called we will roll up our sleeves and form some relationship. nothing really is going to come of it. the idea that obama is going to have some new magical relationship.

our president doesn't have strong relations with any foreign leaders on the left or right. charles: i am reading reports that we're going to try to block them out of a new trading organization commit trading organization cooperative and that to monica's point we have to say something. recently the philippines high-ranking official said he would like to see japan get rid of article nine and rearm themselves. did you imagine someone from the philippines saying that? does the president stand up to any of this? >> hopefully. it is a major change the you are seeing in asia where people are growing concerned. i hope japan does continue to take steps like that. sign it is not just have a gripe with the philippines. it is pushing the border is not only in cyber, but all of its maritime and territorial neighbors. india, even vietnam, malaysia. we have been basically standing on the sidelines say we don't get involved and territorial

disputes. all of these countries are looking to american leaders. it is going to cause people to be more deferential to beijing. charles: 250 billion. china wants all of it. thanks a lot. we appreciate your time. 150-point rally. someone who is bearish and someone who is bullish. both sides. a great debate. it will square off next. ♪ with fidelity's options platform, we've completely integrated every step of the process, making it easier to try filters and strategies...

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charles: that's right. we have a bonafide rally now turning positive for the week. nicole, give me wonder. >> reporter: right. it's exciting. every time you're worrying. the traders are not that worried. they know this back-and-forth action. home depot, boeing, proctor and gamble. home depot and bollinger adding about 23 positive points piquancy the majority of the names are in the screen here, up 1602 points. the major averages with the exception of the nasdaq into positive territory.

for the week snaping obviously the losing streak that we have been on. charles: of course a few hours left in the trading session. yesterday was a wild rollercoaster, right now looks fantastic. i want to stay on the markets. two guys i love. both of these guys are fantastic. they will go head-to-head. monday morning in los angeles. and for the bears, we have dan schaefer in studio. we will start with you. you have been bearish for a long time. >> the deal is if you take the stock market out of this whole economy what is really doing well? forget the stock market. manufacturing is bad, employment is bad, most unemployed since the 60's. interest rates down to basically nothing and we have no inflation which is what they're trying to do. air going into an inflationary depression. charles: in place their depression? >> lumbers down, corn is down, copper is now down.

it just doesn't make sense what is going on. we should have taken all by now. the federal reserve frankenstein experiment is just not working, and we're going to become the next japan. charles: before i go to sean, to your point, there may have to keep his experiments going because this is the worst thing that could happen to this economy. >> here is the funny thing. if they do stop the economy is going to slow down so much that it will keep interest rates down my prediction, we will make a new low on the tenure treasury. it is not over. the fed can basically handoff the low interest-rate environment to inflationary depression. you know what, we can't control this anymore. interest rates will stay down by market forces alone. that is what he is now seeing on the horizon. charles: he makes a fantastic academic argument for being bearish. i like up in the dow was up 165 points. what is the missing? >> in an academic sense i agree with a lot of what he's saying.

fundamentally he is wrong. the fact is, you cannot separate those markets from reality in terms of the economy. you have to separate. he looked at the stock market, its acting on its own, on behalf of the fed doing its duty. rising on earnings per share. can nonetheless, when investors look at the markets they see rising prices and want to jump in. charles: here is the thing. this week we just talked about christopher and banks, same-store sales. this week cracker barrel, everyone is going for that chicken fried chicken in the country fried steak. this is a company that just license for its close. of 20% just on wednesday alone. is that a good sign? people a spending real money and drive a real profits. >> that is a good sign. on mustang of the market is not a bit frothy. i'm saying that fundamentally they have more buyers and sellers and you have to continue

to follow the trend. you're going to get hurt. anybody who has been on the sidelines, anybody who is tried to short this market away at best and hammered. you have to ride this bowl until it turns tail. charles: some people stick to their guns. because of the fallacy of private e-mail. do you feel sometimes, you are right on paper. the market eeps going up. >> interesting concept. this narcissism that is going through the economy. we are seeing now with this irs issues, government politics. people are becoming this trustworthy. similar things happened in ancient greece, this power that people think they have. that is usually the end of a great economy. we are seeing it today. in the 1920's we had the same experiment with the federal reserve. a brand new entity. there were trying to manipulate the economy. the stock market rally that. charles: lowering 20's.

>> you know why? the president said, we are not going to bell of companies. they let the natural forces of the economy run and it worked. it was great. now this experiment is causing a 1928 bubble, and it's about to explode. charles: real quick, i have to give you the last word. what do you say? >> you have to be in it to win it, stay in the market as long as the trend is up. we all know when things are turning around. otherwise you have to ride it all the way. charles: righted tella drops. i hear you. but fantastic. appreciate it. it will do this again soon. al with the new coming in with the old. so what if anything can this company do to get its mojo back. find that after this. i want to make things more secure.

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charles: today marks the 54th anniversary of the publishing of george orwell's 1984, the classic novel points to the big brother controlling government, start society. sounds a little familiar. snooping on everyday american presidents. well, this brings me to this,

apple's famous 1984 super bowl ad. [inaudible] charles: that was the old apple. ground breaking, bold. that was the steve jobs apple. now not so much. the world wide developer conferences next weekend. as we expect the company will unveil a new iphone operating system. similar to microsoft and maybe even as streaming music service. nothing earth shattering. the apple that we all knew nothing is out of reach. maybe it will never come back. >> a scary thought, but i think it might be true. we're talking about the tim cook era, and that is very boring,

very corporate. profits are good. the company is doing fine, but it is of the interesting company that we know and love. charles: what happened? >> frankly, i don't know. charles: the same cool people work there. there was not a gigantic mutiny. they work there. they must be -- the right direction. >> there is one fewer person there, and it is a very important person. never knew exactly hoo much he was responsible for coming up with all these cool ideas. the rumors that we have heard, i think we will be very disappointed. >> is it a management issue were the need someone to come in and actually get these designers to be able to rally around one design. charles: wide use it wisely so.

the swashbuckling attitude. why is overly cautious could now? >> infatuated. they still sell an incredible number of phones. computers are doing gangbusters. ipads is still running the market. don't mess with success. however, you have to innovate to come out with something new and different. that is what we live from these guys. >> that is what keeps the market so strong, anticipating the next product. obviously there was a small technology improvement, but there is no sense of movement. is there something and maybe they're sitting of related we could all get excited for? i can like their products. >> to doesn't. i want to tell you that there is some great stuff coming, but the reality seems to be that we are going to see on monday is gging to be some really boring stuff. incremental updates to what we know. maybe it streaming music service. we already have a loss of those. >> is the irony here that maybe competition has killed apple?

will we saw this great innovations, apple was so far ahead of the curve. they were designing things that no one had ever seen before. you have samsung, android. they get into the market, started an invading, and the competition has kind of driven apple down. >> i think it comes down to one word, innovation. everyone loves talking about it. apple has for a long time now not been the source of innovation. is there an apple version? ever seen it. charles: often people, against confirmation greece. agent grumman america. you can of to say it is a comparison to apple. this giant dominant empire. they stopped doing what made been dominant in the first place. you think it's some point if it's not the stock coming down, not samsung taking market share,

what wakes them up? >> hopefully what happens on monday is a big wake-up call. i think america loves this company. all of us here are big fans. at think that they must realize that. they have a lot of good will, but eventually it will go away. charles: you mentioned one important person mentioned -- missing, what about the person it took his place? do you think it's some point people say maybe tampa castillo? >> i think he is great for what he does. he runs the ship. charles: don't they need a visionary? >> they need some sort of a visionary, and he is is that it. charles: we will see you on monday. thanks a lot. sandino, it has been one of the real causes for the economy, talking about the housing market. but is austria creating another bubble? think about that.dist next. ♪ [ indistinct shouting ]

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♪ charles: walmart announced this morning that it will buyback $15 trillion of their own shares. right now stock is up $1.7655. cisco, motorola, and time warner, but the settlement was must -- much less than expected. shares are down big time. the market's rallying big time. the dow is up 182 points, making a huge move.

it continues up the east coast. the storm is expected to bring very heavy rain and strong winds until saturday night. the san antonio spurs to a game won in the nba finals. the housing market may not win. this is america.

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the stock is not even moving yet. linkedin recently get hit on an earnings report and has created a buying a virginity. just absolutely amazing. all facets of the business of doing well. u.s. and international presence. over the next five years the street thinks it will grow by 53%. as a volatile stock, but i think it does at least say 200 ultimately a lot higher. speaking of wall street, going big time into the real-estate business, joining the company now, for reporter morgan brennan who wrote about it. no, if you ask a question, are we looking at another bubble? already? >> i think the potential is there. think it will still be a little premature. probably two years and said the recovery and coming from the bottom. a lot of potential.

sing a lot of cheap money coming in to housing, specifically single am -- single family rentals. a lot of room for that to grow and grow quickly. charles: typically smart investors awaited first. as far as single-family homes, this is the first time ever seen wall street's jump into single-family rentals. charles: what about the stairs you? >> nothing just yet. i actually think you're right. we need institutions. compresses have come down 60%. he did have homes that were vacant and sitting there deteriorating for two years. charles: too afraid to buy. >> to afraid. i do think you need to see investors come in and bring a bottom to the market has stabilized things. as that bottom -- home prices

start to come up from the bottom i do think we need to step back and let consumers japan. charles: i think who would love to see consumers step in. >> as long as it is the market that is dictating this. what worries me is we are seeing government policy go back to the old days of 2006, 2007 that led to the collapse of the housing sector which ultimately led to the collapse of the broader economy. i worry about that. sub prime lending, of the things that led to the initial crisis, the government is now starting to do that again. it is good news if you have government policy warping the market, i think we are in real trouble. >> if you looked at the mortgage market, more than 90 percent of it is backed by the government. he looked at how artificially low these interest rates are, it is a big reason we're seeing institutions for maastricht come into single-family housing. they can leverage of money to make double digit returns. charles: to be quite honest to deal with the average person would come in there.

morgan stanley, goldman sacks. some of the tory minister to slice and dice it all up. right now i think it is natural. a lot of people get nervous. this is america. we're supposed to take care of our veterans. about 200 veteran administration employees it is all about taking care of their union. surprise. i'm a careful investor.

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charles: to senators are now questioning why. 188 veterans affairs employees were paid taxpayer funded salaries and benefits to do union work full-time. the company now, liz macdonald who has written about this and is on our site. just outrageous. >> we have -- there are nurses, medical workers, psychologists, pharmacist, dental assistants and even security guards are supposed to protect and hospitals doing full-time union work. a day after the white house press secretary said the president is deadly serious about cutting back. they're moving aggressively to do that. here's what they're saying. this is really troubling. it will compromise the well-being of our nation's best. it could impact veterans.

oh we're talking about is very high employment rates among 18 to 24 year olds. a lot of homelessness. the question is, what are they doing, these workers? read a getting pay raises for doing full-time union work? are they getting stepping increases? those are the issses surrounding it. this is a story broke earlier in the year. government workers during union works. charles: i was shocked that we could they give the workers to do full-time union work. >> some of the outrageous parts to the story. one of the things the federal government should be doing is taking care of our military veterans who keep our faith and preserve our freedom every single day. the fact that we have so many of these employees working for the viejo he should be doing that who are, instead, protecting their butts and the unions but by doing full-time union work that we're paying for it. that is outrageous to me. that is a scandal of epic proportions.

>> the viejo is advertising to fill openings such as nurses . they already have workers doing union work. so they are talking to us and saying they are aggressively moving to cut the backlog. they will have a new computer system in place. the question is, how widespread is this problem throughout the government? we still don't know if these workers, and again demanded pay raises are allowed to work for mount. the other issue but, they are not allowed to the -- this is about handling grievances on the job. charles: enter your point, this surge and backlog, now they have to pay people overtime to address it. you have these veterans who are waiting. you talked about the job market. 20 percent unemployment. what about the suicides? did some people, go out there and help these guys. the suicide rate is through a roof.

you have 188 people working on the union behalf. i don't get it. >> they are doing it voluntarily. the office of personnel management is saying the taxpayers to pay them for their full-time work. this is a story that is getting some legs and traction. charles: joe pointed out earlier on the bodice thing, government bonus command of the a is at the top of a list. >> veterans of the ferris is receiving the most. >> sets a great point. charles: thanks a lot. president obama can definitely hear you now. he began every day americans. more on that next. a simple question: how old the oldest person you've known? we gave people a sticker and had them show us. 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. ♪

can you hear me now? >> can you hear me now? >> can you hear me now? >> can you hear me now. >> yes, we can. >> some americans are saying this is the renewal of the patriot act. this is a massive expansion of the intrusion of what we sanctioned with the patriot act. it was not to do this huge dragnet against every american. charles: not to mention the amount of hypocrisy thrown in there. >> he has expanded some of them. >> president obama should be glad that it is his second term. unfair to the average consumer.

certainly, i think it comes down to being very unfair to the american people. charles: google wanted no part of china. guess what, google, you are cooperating now. >> i think we will have to get onto those companies and see what they have to say. >> there is one outstanding question here. in 2012, they ran what they called a big data campaign. google, facebook, very intimately involved with that campaign. charles: already an outrageous story. connell, we will pass it to you. connell: we will pick it on.

the government could be looking in. we want to know what it means for you. will it change the way you use the internet? not bad, not great either. the jobs report. we will take apart the jobs report. the president of russia in a multibillion-dollar breakup with his wife. this is a story. just how much the divorce could cost him. broadway's biggest night will be sunday with the tony awards. we will be talking with one of the board decorated producers on broadway. those stories and more coming up on marketow