that is all we have for you. i hope you made "money" today. be sure to tune in tomorrow. its franchise friday. have you cut through the red tape? we will find out right here. ♪ dennis: hello, everyone. i'm dennis kneale in for gerri willis. tonight on "the willis report," i shocking trading date as the nasdaq stock exchange was forced to halt trading for three hours because of a technical glitch. president obama continuing its push to spread the wealth calling once again for college to be affordable to all. is there really a problem with those in the corner office is making more than the little guy? the sec says yes, and of your reactions. or watching out for you tonight on "the willis report". ♪

dennis: that flash freeze is our top story. it was a glitch that ground the nasdaq to a halt. a flash freeze paralyzing thousands of securities at around 12:40 p.m. eastern time today. full trading resumed after 3:00 p.m. the recent string of technical errors rocking the markets is calling into question the computers that run in these markets. joining me now, and shapiro live outside the nasdaq. rob morgan, chief investment strategist at fulcrum securities founder and ceo of dark pool. and director of institutional sales and trading. and adam shapiro, you''e the guy in the know on the scene. it felt like the nasdaq all the law was not telling us anywhere near enough even in the look and as directed now. >> the nasdaq putting on an official statement about the flesh trees matured as an answer

the question of what happened. let me read you the first part of the statement. the nasdaq zero emax became aware the press quotes or not being disseminated by the securities industry processor which consolidates and disseminates of prices for the industry. in english even a whiff storm and the strain for because he could not get the price. they say we are not being disseminated. with the doe said in a statement is why it was a being disseminated. they have not settled a long why the prices were being disseminated. was a software glitch something more sinister? someone from outside getting into the system and creating a problem that would keep prices from being disseminated. the official word is it took them 30 minutes to fix the problem with prices being sent out, but then they had to test the system and coordinate with other exchanges before trading could resent. tonight despite the official statement nasdaq is still not said what went wrong.

dennis: this note because they still don't know which makes it a little scary. although i have to tell you, one thing the surprise me as we watched this unfold, the markets did not panic. this was not a flash crash. it was not a bungee jump. basically the dow continued to rise even a 28% of the stocks were not trading. what you make of that? >> all market came to a complete standstill. no one knew what was going on. it was a lot of information being circulated. everything stopped. from institutional perspective that's exactly what happened. people didn't know where the nasdaq was closed. in new york stock exchange. it was a little bit of pandemonium. people just pulled their orders. i'm not sure what happens to the retail folks. there is no pricing is no execution. dennis: john? >> the same thing. earlier in the morning we saw option buying very late. kind of curious why.

later the nasdaq news broke. other exchanges continued to trade. as nasdaq stock, the exchanges were trading. but then somebody made the decision to close down the other stocks on other exchanges. nasdaq stocks trading elsewhere. want to know who made that call and why. dennis: on montezuma upon that. when an aztecs are having problems they didn't just stop trading. you could trade nasdaq listed stocks like yahoo an apple on a dozen other major exchanges, including the new york stock exchange. the nasdaq rose and asked all the other exchanges not to trade nasdaq listed stocks either. we had one of the come on of a book called broken markets. the decision was smart, but i thought especially in a crisis we lack information, liquidity in the ability it rate eases panic. was it a smart idea or a better idea? >> i would agree with you.

they should have provided liquidity. and in a bigger picture cents, the retail investor has yet to get back into this pool market. glitches like this the way of releasing of the last three and half years that undermine reach of confidence in the market. so i would tend to agree. it probably should have allowed trading to go on in other markets and give that liquidity since. but nonetheless it still would undermine retail investor confidence. dennis: does this have to undermine retail investor confidence? add on trade stocks every day. this had no impact whatsoever. >> investor confidence is already very skittish. so the markets have been doing fantastic of last year's. this is the most unloved bull market in history. by now retell should have been well into the bull market, taking advantage. this is a big probably. yakima any time -- this is of

very publicized, incredible -- incredibly public problem at nasdaq. so investors are looking at this and watching this unfold. what is goong on? and if they are putting their money back into equities with a doing? equity markets are where the money should be going. dennis: and it's not. the money came out of bonds and state in money-market funds. >> it's a problem for our entire economy. dennis: what do you say? >> i agree with that. dennis: stop agreeing and start disagreeing. it's more interesting television >> i like to go back. a specialist on the floor with the pencil on the paperback figuring out. we are to do that. right now we need to get some type of overseer on all the exchanges. you have 12 different markets all trading. one market. there has to be somebody who is in charge, not just one person at the sec making these calls.

that's one thing. the other thing is we need confidence to come back in the markets. you have people with the flash crash, the flash freeze. that is not instilling confidence. dennis: you want to get in there. one of you guys said something. speak up. adam? tell me something. maybe the surprise here -- go ahead. >> okay. there's a wonderful analogy. the tower behind me, the nasdaq tower is kind of like this green or the curtain and the was a vase. been no attention. there's no trading that goes on. a lot of people think that this is some kind of floor like the new york stock exchange. it's all electronic. when you speak to people who were walking by, some of them are clueless as to what the nasdaq actually is. when you talk about retail investors and confidence, some of these people may be unaware that perhaps half of the mutual

funds and with the retirements are tied are somehow trading with the stocks that are part of what goes on out behind me, but tied to the people who own was beyond me. the end of the day what it boils down to is there has not been a come clean with what went wrong. how're you going to get the people of barely in the stand what's going on behind the curtain to put more money in if they are afraid of what is going on? dennis: transparency and confession. a lot of people could have used this as another reason to say we're too computerized. a miti back to the new york stock exchange system of human beings. we're so far passed that point. there is no way we can let these markets trade without lots of computers. >> i agree with you. we're way past the point. i do think that the sec and other regulatory bodies can regulate it a little better. think there are a little behind the curve.

they continued to gather information. i really don't have any specific recommendations about what they can do before of. dennis: we would like to see them rain in a bed. i found an interesting point to this. while this did not bother me that much, this had to be driving the high-frequency traders crazy. they put in thousands of trades that the never execute just to try to manipulate the spread. do you think it was affected at all or might have helped affect this problem? >> i don't really know whether it affects this problem and not. i don't have much love lost for the high-frequency traders whether they gained or lost. i do think that is very important that we take a look. the sec stop regulating on a crisis basis and start taking a look at the foundational

problems. start putting in something that fixes the problem and it grew. if you have some kind of regulation that says anything that is tied to the exchange has to have some formal quality assurance process. maybe that's something that has to be put into place now that everything is so computerized. dennis: a quick answer. was it a mistake or smart for the nasdaq to ask all of the other exchanges to not trade nasdaq stocks than for those exchanges to agree? >> it's a hard question to answer. they give we know why. >> really don't know why. that's a big thing to ask. and to be granted that immunity from having those stocks trading on the exchanges. that's a big factor. dennis: okay. let's go back out to adam shapiro on the scene.

a normal opening tomorrow? >> what's normal at nasdaq these days? features indicate to open in positive territory. want to read the last part of that. there will work with other exchanges. members to investigate the issues of today. we will support any necessary steps to enhance the platform. macy feel good. dennis: it does. they have been putting an incomprehensible stuff all day instead of saying, look, we messed up to be digested us. or trying to fix it. we will see what happens. thank you for being with us on such short notice. appreciate it. john will be back in less than 30 minutes to give his take on the fed's easy money policies. and coming up all next week in the 6:00 p.m. eastern hour, charles will demystify the stock market. hope he should your fears and prepare for a more prosperous future.

a camera special, make your market. that's all next week at 6:00 p.m. eastern. and a lot more still to come this hour. it's not just big companies like ups that are making major changes thanks to obamacare. small businesses are up in arms as well. president obama on the road today calling for every kid in america to be able to get a college education. >> higher education, an economic imperative. every american family should be able to afford to get it. every day we're working to be an even better company

and to keep our commitments. and we've made a big commitment to america.

through all of ourly energy operations, we invest more in the u.s. than any other place in the world. in fact, we've invested over $55 billion here in the last five years - making bp america's largest energy investor. our commitment has never been songer. ♪ dennis: president obama giving it the old college try today hoping to universities to lower tuition cost by publicly shaming them. the president unveiled his proposal for a new rating system, linking federal aid to college value. all according to the federal government. >> we are going to start reading colleges, not just by which college is the most selective, not just by which colleges the most expensive, not just by which college as the nicest facilities.

you can get all of that on the existing rating systems. what we want to do is write them on who is offering the best value so that students and taxpayers get a bigger bang for their buck. dennis: to ask you? i don't want the federal government involved. i want you to work on job creation. will this plan work or backfire? here to weigh in, we have ron meyer, republican candidate for congress. it looks like you like the idea. please explain yourself, sir. >> first like to thank president obama for adopting something we have been championing for a long time. hold higher education accountable. under president obama's policies and then a student loan nationalization program tuition is, up almost 30 percent. the problem is president obama and his policies have driven up costs. so at least this is a slightly

better system. frankly it is like mcdonald's offering a weight watchers plan. they made these colleges and universities of these. it's better than what they have right now. of the gets a perfect system, and we needed. he's at least talking about tuition and not just interest rates. dennis: with the thing that kills me about this is what president obama is not admitting he is the one by having the federal government overtake the college loan program and push out private lenders entirely, he's the one in his inflating college costs. $407 billion in federally guaranteed easy money loans. people out checking credit ratings. why do we need federal government to issue some rating system? isn't this nothing more than federal pressure to put price controls on tuition? if harvard can charge and

astronomical amount, why should be allowed to? >> i think the problem is that the money comes from moss. they're giving away taxpayer money and use with the government does. they write a blank check to higher education and students foot the bill. students don't have to pay for five years, said there and take on thousands of dollars of debt. it's a pretty perverse program that hurts young people and taxpayers and those young people the fault. it really is a system we need to look at. we really should get back to the private market. no private lender would look you in the and give you a hundred grand for a college degree. that's the problem. a lot of people made during for your degrees. no private lender would allow you to go to a bloated college charging too much money and then let you major in something that is not productive. dennis: of that today bus tour.

in favor of expanding everything he is already doing. the default rate of over 20 percent. >> and he's not taking responsibility for his own policies. basically this generation that we have now is so much worse off the last generation. these policies in obamacare and these terrible economic times, the highest youth unemployment since the great depression. like us said, putting strains on colleges and higher education which is been running rampant is a good thing. but here is the thing no place to talk considering he is been the biggest player. dennis: may be white thing said everyone should go to college.

it doesn't turn out that some people simply should not go to college and all? >> apprenticeships, different two-year degrees or they can learn. i talked to people in the tech industry. distorting small businesses. some general studies, liberal arts major is not going to help people get jobs. we have to start looking at higher education reform and not allowing the system to go on as is. it's hurting the job market, young people, and frankly business because they cannot find what they need. plenty of business that wants to offer jobs to americans. engineering and math degrees. we have to look to something to get this going back in that direction. dennis: some big changes. i don't think jawboning universities for raising tuition thank you for being with us. thank you for being with us. good luck in your run for

congress. >> appreciate it. later. dennis: regulators are still mad that ceos make more money and they do. instituting a new rule. we will explain. next, obamacare strikes again. this time how it is putting small business in the red and leaving you out in the cold. ♪ in today's markets, a lot can happen ia second. with fidelity's guaranteed one-second trade execution,

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♪ dennis: obamacare is crushing profits that small-business is. coming up next, a few ways that maybe you can prevent that.

♪ dennis: let's go. there may be a delay in the obamacare employer mandate, but that is not stopping small businesses from getting crushed under the weight of all those new regulations and higher

premium cost. more on this. he is ceo and co-founder of maxwell help which is helping small businesses navigate the way to obamacare. plus we really like his name. it just makes me think of speed and going here and there. is the obamacare burden even tougher on small businesses? >> i think very much so. small businesses typically have not got the resources to look for solution. they have not had them catered for them unbelted in specially. have to figure out on their own. they're is a real opportunity to serve those organizations well so they can make it through the transition. dennis: this is how you build your business. i thought that if i were a small business -- and i have on the ten employees. if i have some part-timers. obamacare says your full time, a small dad did have to worry about this. >> the regulation is complicated. so you have to understand where you fit and what you need to do to be compliant.

even if you're under 50 employees, although law may say you do have to worry about coverage, that does not mean there is in a societal expectations. it forced a lot of companies to rethink how they manage benefits and what role they play. we traditionally as a society have expected our employers to pay -- play that role. those who are going to have to take into account whether there will be less competitive. it's not just the law and economics but the role you want to play. dennis: an interesting wrinkle. a big company. ups came out and said, we have a whole bunch of white collar employees not covered by union contracts. we're going to stop covering health benefits for spouses of employees if the spouses work somewhere else and get coverage. then ups directly cited the rules for obamacare. what did you think? >> we might see more of it.

laws are created, organizations will find ways to adapt and mold around them. ultimately as a society we have to ask a question of what role to employers place in health care? in that particular case of organizations are taking on a burden they might not have because they now have to provide health care to the spouses. we are just shifting the movement around. the question they have to ask is how to their employees now see them as an employer? a deliver packages, but i hope you want to be there. enjoy working for the organization. dennis: feel they care about your family. >> exactly. the important part is to be concerned about their health and welfare. you have to ask that question before you make that kind of decision. dennis: plus a from wearing that really striking out it and my wife works at a company where they have insurance, had one of the per employer will say you have to -- card company starting

to push this burden back on to each other? >> that's what happening. there is a coordinated approach. we have to put thought into this. at the same time we have to realize the laws are in place to set guidelines. but as companies have to be thoughtful about what role we when to play and how we want to be perceived by society. dennis: of, small-business what is the biggest burden of obamacare right now? is it the uncertainty or are there actually rules that are coming in? >> you have to think about the regulations. what are you supposed to do? what kind of care must to offer, whether you're under 50 employees, certainly rest -- less regulation. i think the bigger thing going on is that it's forcing companies to rethink their role in benefits. rethink where they fit in the equation. that is forcing organizations to think about the impact on the bottom line, how they recruit talent and how they succeed as

an organization in the broad scope of the marketplace. so we need to ensure that they are getting the advice they need in a timely manner so that they can make the right choices. my concern is that a much to those smaller enterprises there are resources out there to inform them in a way that makes sense. dennis: which is why you came into come up with a whole new happen only thing to commodities small businesses and handle a lot of this stuff. >> and help them save money. ultimately we get health care costs under control. we did americans healthier and we spend our dollars more wisely dennis: maybe you help us get there. for now it's quite a struggle. thank you for being with us. okay. stay right there. coming up, the fed seems to be controlling just about everything these days. what does that mean? next, you probably don't make as much money as your ceo.

we will tell you about a new sec rule. dennis: in

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with that? is this proposal and that igniting in the and creating some kind of class clash? >> absolutely. that is exactly what it is. dodd-frank was created to prevent another economic meltdown like we saw in 2008. and all this regulation is nothing to do with preventing another financial meltdown. it's simply an extension of the liberal agenda, kind of a 1% occupy wall street. >> we just showed viewers it chart. 371. and instantly people want to assume there's something very wrong with that. now senator robert menendez of new jersey as a sponsor of this. says that this whole rule about

shareholders to better monitor the size and incentive structure of executive compensation helps investors and the public evaluate whether companies pay practices are fair to average employees. tell we have all kinds of disclosure of ceo pay packages? plenty them permission. isn't this a little bit of a different -- is this a socialist thing to do? >> she took the words right out of my mouth. this is all being done under the guise of transparency. a lack of transparency rather. as you said, this information is already available publicly. by law every company that is traded on the stock exchange, on a public stock exchange has to list the executive compensation packages. in fact, the afl-cio has the highest -- you know, the top executive compensation packages listed on their website is well. all this is is merely the first up down on executives, capping

ceo pay wages -- the liberals would be joyous and the streets if that ever happened. that is the ultimate goal. dennis: the afl-cio role in stoking in pushing this is particularly galling because unions in this country now represent only six and a half% of the private sector. they have no dog in this fight. they represent 40 percent of government employees, and that aussie afl-cio saying we ought to do this and look at how much the director of an apartment in government turns. of like to see how much the afl-cio orange and how that compares with the rank-and-file of the union members. where will this go? do you think it will actually become policy? >> well, it's opening up for a public comment. people will comment there. you know, ultimately i think it will go into effect. if i had to say. really it's not going to do

anything other than create, as you said in the beginning, envy already in companies between the regular workers and maybe the executives. you know, what is really good for a company is a qualified, talented seal. and you have to pay, under the current economy, a lot of money to attract a qualified talented ceo. like steve jobs. he was getting paid hundreds of millions of dollars, but at the same time he created billions for the apple company. dennis: for shareholders, one last point. these paid performers coming in here so upset about this, some of the same people a dictator two decades ago said we want to tie ceo pay better to the performance of the company and run. we want to tie compensation more the stock price. the reformers did that. a huge stock rise.

no wonder ceo pay is way up. i just don't think this holds a lot of validity. we appreciate it. and now we want to know what you guys think. here's our question. should ceo pay be tied to stock performance? log on and vote. all share the results of the end of the show. remember, that is what as these people up in arms. you're lucky enough to have a job with good pay you may be on like you when it comes to your co-workers. tonight's top five, the jobs with the most annoying co-workers. health care workers. this is most likely the result of long hours and stress on the job. number four, grounds keeping an means workers. this is often a dirty and think this job. workers have little patients for co-workers to don't pick up the slack. number three most annoying worker, production workers spending long hours standing side by side. on your nerves. a slow worker equals a slow assembly line.

member to come of food preparation workers and servers. many staff required. they all better be pulling their weight. the co-workers will be annoyed. the number one job with the most annoying co-workers is not me. installation and repair workers. they have so much -- such annoying co-workers. maybe we should treat the plumber a little nicer. as long as the types of. and the jobs with the best co-workers and the social workers, teachers and librarians when we come back, more evidence government regulations are hurting the banks and they're for hurting you. and it now seems to be a matter of win not if the fed will stop the using money policy. looking out for you and your money next. ♪ my mantra?

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♪ dennis: an update to the flash freeze and halted nasdaq trading and thousands of securities paralyzed for three hours. when you have the hammer everything looks like a nail. when your regulator you respond. mary jo white responded saying a word to advance rules that the commission proposed earlier this year regarding new standards for trading and other systems that are central to the integrity of our market. never mind that the nasdaq doesn't even know what went wrong yet. we have no idea whether these rules have anything to do with it. she also said she would surely convene a meeting to accelerate ongoing efforts to further its strength in the markets. she called the freeze serious which would not have known as the regulator not told us. thank you. all eyes on the fed. bernanke looks to september for

pulling back that easy money policy. one thing certain following the latest meeting. the question is not if but when and by how much. joining me once again, the csi group. how much you think it will pull back and win? >> the market consensus is 15 billion in september. that's basically if they have to deviate from that figure they're going to have to have an explanation as to why. the primary report cannot. the new york fed, an extensive report asking everything from how much in b.s., how much treasury out until what they think for 2017. the economic output teeseven -- dennis: was the upshot? >> well, basically there will do a lot earlier in terms of tempering. it will be done by next june. then the fed funds will stay really know for a long time

obviously. there's a big decision after we passed 2015 as to whether there will go court-appointed. the range in 2015 to 2016. dennis: we don't want any more. expect the fed next month to start cutting back by 15 billion. the $85 billion a month the fed has been spending the buy mortgage-backed bonds and to buy treasury government bonds from middleman dealers. the reason they're buying 85 billion a month is because it creates more demand for bonds which keep interest rates low and is good for the economy. they go from 85 billion down the 70 billion. this is the end of the world. >> well, the fed also and san francisco reported that basically the effect of qe has been to venice on the economy meeting that basically it is on the added anywhere between zero to 1/4% in terms of gdp.

dennis: who said that? >> the san francisco fed. dennis: that particular way. >> and the real issue that there are trying to address is the fact that our deficit is going down. that means the treasury came out today and several going to have to issue treasury two years. so as the treasury cuts back on their issuance -- dennis: that does this apply. >> exactly. dennis: the price stays hire. the industry stays lower. that's a good thing. >> also the fed does not want to be the only one behind the bonds. they continue. >> only issuing less and less bonds because the deficit is getting better and better. no one likes to talk about it. that helps. dennis: were talking about it. these bonds are buying every

month. the quantitative easing. the other half is the interest-rate. zero to 1/4 point for several years. which is all street fair more? cutting back on a quantitative easing, bond purchases or a rise in interest rates that the fed imposes? >> well, now the market thinks that because they are tapering on the treasury's, that's going to lead to a tightening cycle. csn as the market thinks that they automatically price and the tightening cycle. right now we see it actually i was myself. 2015, actually pricing anywhere between 75 to 125 basis points. usually they traded up 15 basis points lower than actual fed funds. dennis: ultimately europeans are saying that our interest rate

goes from a quarter to what? >> no. they're saying that it will be much higher now than before. dennis: which thing as wall street fear more? wise to have rising interest rates are reduced bond purchases? >> what happens right now -- dennis: just give me one now. >> i think that you can't just have one of the other. they go hand-in-hand. dennis: that's the way wall street is. >> expectations are for more tightening and the fed would like. dennis: i'm out of time. you squirm away. thank you for being with us. kendis see you. still to come, government regulations and not just turning small-business. banks are feeling the heat and they're passing the pain on to you. details next. ♪

♪ dennis: the way we pay for things is changing. the government's archaic rule book isn't. huge advancements and innovation in the mobile banking industry are facing setback after setback , and it's basically banks to uncle sam. joining me now, burke, editor in chief at american banker. we're talking specifically about the idea of using your cell phone to by all kinds of things to pass it over some reader for a cup machine. i thought basically that the limit was technology. you guessed the reason story

that said it's more regulation. >> people think of technology for innovation in terms of technology, all the gadgets and computers and everything, but a lot is going on in payments and how you pay for things. you go the starbucks, swipe card. swipe your cell phone. just like before, a lot of these things are created by start-ups. companies here in new york in every orioles. but what we have is this patchwork of market regulation on the state level and then another on the federal level. in a lot of cases this is stifling what these companies of trying to do. part of the problem is the fact that these are regulations from the age when western union was help people sent money around in a credit card was not moving. dennis: have the regulators tried to keep up? >> they have tried some of the we have also gone through this era. one of the problems is we have a lot of rules and regulations

related to money laundering, terrorism. the u.s. a patriot act and also in california one of the big problems, the fact that the state of california in 2011 signed a much stricter money transmission loss of that this captured a lot of these start-ups. dennis: all right there in silicon valley in california which is why you could do lots of self on purchases in europe but hardly anything here. you guys talk about a guy named airing greenspan, no relation. okay. he and the company. there were trying to do is basically swipe a card. they're within like your face instead of a signature or jurors lessons. anything else. navy was a great idea, maybe it wasn't. he goes to the regulators and the stole the has to pay thousands of dollars in fees just to apply.

before it can apply yes, to sit down and talk with regulators to be you can't even figure out what exactly he needs to do. finally a regulator says, if you go ahead with this business you and that the federal prison. dennis: gully was trying to do is make it easier for us to buy stuff. it might help the economy. >> there is legitimate consumer protection issues. give someone your money and you hope it goes where it's supposed to. their reasons for licenses, reasons to be worried about terrorism. again, we have this huge patchwork of regulations. they're from a previous era. the level of 50 different states. dennis: thank you for bringing it to us. hopefully someone will do something about that. we will be right back to the answer to cover the answer to the question of the day. ♪

join us at projectluna.com

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dennis: have to move fast. the nasdaq just came out with a little bit more of a statement saying basically it's a flash freeze with the result connectivity issues. the issue between the a exchange participant and the sip, the standard system for sending information which led to degradation and the ability of the sip to issue. this is a statement of how sign to combat lead the nasdaq is handling his picks have no idea what it says. we don't have time to get your comments. it's too bad because now we have to run. that is it for tonight on "the willis report." appreciate you joining us, especially at daylight today to be done for it to record the show if you cannot catch us live have a great night. ♪

lou: in. lou: good evening, everybody. thank you for joining us. you are looking at just some of the estimated 1300 victims of what syrian rebels claim or chemical weapon attacks by president assad forces. the united nations has taken up the issue with no word of any response as yet. the u.s. state department contradicted themselves today on whether syria has chemical weapons. general jack keene is here to assess the situation. also tonight the nasdaq halting trading for more than three hours today. it still remains silent on what