tv MONEY With Melissa Francis FOX Business April 2, 2014 2:00pm-3:01pm EDT
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the cofounder said it had to create a brand new device for the u.k. because of the country's high voltage electricity and britain's gas powered heating systems. google you recall bought nest in january for $3.2 billion. we're at the end of our show "risk & reward to deirdre boat ton. i will turn it over to my colleague, melissa francis. "money" starts right now. melissa: we're going to epicenter of 1% and everyone else. protests are about to start in san francisco. the high frequency trading fallout. we have charlie gasparino, and former bush economic policy director todd buchholz is here as well. even when they say it's not it is always about money. melissa: first we have breaking news about major cyber attacks on bank atm machines across the country. peter barnes is in washington. peter, how bad is this?
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>> melissa, the secret service is calling this a major cyberattack, that may incur quote, large dollar losses at banks, especially small and medium-sized one. a recent cyberattack on atms netted cyber crooks $40 million, using just 12 debit card accounts. state and federal regulators are warning, criminals are able to withdraw funds beyond the cash balance in customer accounts, or other atm control limits. they used stolen debit, prepaid or atm card account information. the crooks get into bank atm networks through employee emails to plant malicious software that obtains employee log-ins and accesses atm control panels. with the crooks can change settings to permit greater or unlimited cash disbursements and atm machines and change other fraud and security related controls. cyber thieves themselves organized simultaneous
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withdrawals of large amounts of cash from multiple at moves over a short time. according to authorities, usually four hours to two days. and regulators have put the banks on notice that they need to address this cyber threat by reviewing their computer and card security systems. melissa. deirdre: wow, that is a huge story. >> huge. melissa: thanks for that breaking news, peter. >> you bet. melissa: so we reached a boiling point in san francisco of the battle between the 1% and 99%, is at a fever pitch. silicon valley pricing everyone else out of the bay area market. we have a protester in the heart of the fight. erin, i know you have a protest getting ready to start. i'm hearing everyone out there that is really where it is coming to a head. what do you hope to gain today? >> yeah, we'll be participating at 11:30 pacific time. benito santiago, a disabled resident is being evicted by
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someone from the tech industry so they can move in his house. melissa: we'll show you. er rin, when the protest gets underway, we'll get back to you in the meantime. ipo no. virtue financial delaying long-awaited ipo amid rising scrutiny of the market. is michael lewis to blame? we have fox business's charlie gasparino and economist, todd buchholz and "wall street journal's" jayjames freeman. charlie you have breaking news. >> why are they doing it? is it all lewis's? lewis's book did heighten this. what we learned from a couple days ago we were first to report the u.s. attorney's office is looking at had issue and sec is looking at this issue, this is the rub poverty u, they had to basically repact their ipo. their you'd like must be
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disclosed in the ipo documents. that is why they delayed it. melissa: this is one of those ipos talking about for a while. how there was so many excitement. to now hear it is pulled basically because of this book, shows the power that it is having. are you surprised by that? >> look, michael lewis is a terrific author. any book he publishes becomes a event and often become as movie. no surprise it gets a lost publicity. i think the "60 minutes" interview, i have not read the book but read enough to hear the word rigged often enough. melissa: that keeps getting played. >> that is way overblown. the average investor, nobody watching this program on this network except rupert murdoch perhaps a billionaire would have any judge against what has gone on. >> he wouldn't either. >> nobody, charlie, if your aunt harriet, i say aunt air yet because you remind me of batman. >> thank you. >> if you're aunt harriet -- melissa: i don't know what he means. >> 100 shares, don't take out
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the cape. 100 shares of google nobody cares that aunt harriet buys 100 shares of google but in rupert murdoch buys 100 million shares of google, then the computers want to figure that out ahead of time. so i'm not in favor of the front-running but i don't think it affects 99.9% of investors. melissa: i think what i find really irritating about this, high frequency trading, we all know it was going on. virtu made a business model basically out of it. they were going great guns. the ipo was about to happen until this book came out, basically we didn't learn very much that was new. isn't that irritating a book by somebody financial industry could derail all these folks that have this ipo coming? >> you mentioned the sec is looking into high speed trading. they created this. this is the system the sec created. as far as this great conspiracy, absolutely, individual investors are better off under this system. one of the apparent victims under the michael lewis thesis was writing in our paper today.
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a hedge fund manager saying i'm not a victim. we do better. >> we should point out, this is "alien versus predator" in terms of victims. we should point out we're dealing with the obama justice department. they look for any reason to attack wall street and attack big business. i do know this, they have been looking at notion of high frequency trading for a long time. why would they come out, let me make this point because it is important point. we reported on monday they were looking at this for middle of last year. melissa: but they weren't bothered. >> the fbi goes on the record, on the record with, within an hour or two of our initial report and says we are looking at this. we want to take credit for cracking down on this. a lot of this is public relations by the obama administration justice department to basically say, tell the public, we got your back. this has no impact on the public. melissa: they wiped out billions of dollars in value. this company was about to go public. >> don't go too far. they will still probably go public. melissa: but what investor could invest not knowing what the
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thing is actually worth? you have to know where the fbi is going to come down -- >> not even the fbi. melissa: sec. >> the sec who imposes the regulations. >> bad timing. it should be pointed out this company is largely a black box in terms how it makes its money. they were vulnerable to this moment which is being seized by michael lewis to spin a tale of -- >> they're actually not a black box. what they do, everybody knows how they do it. this is not a secret how these sort of high frequency trading firms work. i will tell you this, the obama administration -- melissa: it is an algorithm. >> the ability of to generate consistent profits. >> you could say that about anything. >> not really. >> what morgan stanley props are going to be in the future. i'm just saying this, michael lewis, put out a book, a very well-written book because i've read it. 90% of i think base loan any. but the baloney. but the obama administration reads this book. >> they read? i didn't know they read?
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melissa: let have todd have the last word. go ahead. >> look, you remember there was a tv episode, "60 minutes" years ago about audi and acceleration of the audi vehicles. and it turned, they create ad whole scandal. audi's business collapsed in the united states. they basically pulled out of the united states. it turned out it wasn't the fault of audi. it was stupid pushing on is being accelerator and brake at the same time. melissa: you're blaming "60 minutes?" >> there was little bit of lack -- the guy just bought everything lewis said. melissa: talk to the nyse. didn't talk to bats. didn't talk to anyone else. didn't even try. >> another problem with lewis's book, why don't he talk to vinnie viola who runs vir tough. u. melissa: thank you to both of you. we appreciate it. elon musk, new details on spacex and money rolling in. cashing in on kit cats, the
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candy bars like you've never seen them before. more "money" coming up. i've always had to keep my eye on her... but i didn't always watch out for myself. with so much noise about health care, i tuned it all out. with unitedhealthcare, i get information that matters... my individual health profile, not random statistics. they even reward me for addressing my health risks. so i'm doing fine... but she's still gonna give me a heart attack.
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soaring right now. trader james romelli is at cme. i understand not that high of a price but still 80% is 80%? james? oh, james has been robbed of his voice. can anyone hear him? i don't think so. darn it! we'll go back to him in a bit. hopefully, elon musk's spacex is reportedly in the final weeks of new investment round that could raise up to $200 million. is it safe for investors to invest with "iron man"? jonathan hoenig, a fox contributor. monica mate at that and spencer abraham from "wall street journal" thanks for joining us. i will start with you guys. spacex looking to raise a lot more money. do you think they're a good bet? would you give them more money? >> there is reason why elon musk was the dell for "iron man" movie character character in the
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movie. he thinks bolder than anyone in technology today. melissa: that means you can cash boldly as well. >> yeah. it does. spacex almost went bankrupt in 2008 because they couldn't launch these rockets. melissa: sure. but they got a great contract from nasa. >> they have several billion dollars in order backlog to launch these satellites to bring cargo to the space station. first time ever a private commercial company has done that so i would say he's proved, he has redisked this a lot. he is on a really safe path right now. melissa: monica, what do you think? would this be like getting in on tesla before tesla's ipo or is it riskier than that? >> it is way riskier than that. if you look at tesla, tesla is not even earning a profit today. melissa: no, it is not but investors are happy with the investment. so the stock is doing well. there's a difference, you're right. >> this is very speculative. i agree i think he is kind of like the next steve jobs. he has got grand vision. he takes big bets and can take
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big losses. depends on your risk appetite, the conversation is always solarcity. that is the third child. harder to believe in that one than any other one. would you buy any of these? >> they're tremendously speculative, melissa but that is what investors do. they take risk and voluntarily. the whole notion without government there would be no investment in space and no investment in basic research or science. if it is valuable to people, it is valuable to investors. there is plenty money in space but unfortunately a highly-regulated environment. i would like a homestead for space. the government says first person gets there or own parts they colonize and i think musk would be first. he is visionary and making it happen. melissa: on the point that jonathan made you could do it without the government. none of these companies are doing it without the government. nobody would buy a tesla without that subsidy. solar city, obviously no one would put in solar paneling without of rebate. spacex, the biggest customer is
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the government. maybe the guy is all about making the most arbitraging the government. making a buck off the government, bod love him. >> but they're paying customers. they're not getting grants from the government or loans. >> they are getting credits. >> getting some credits for solarcity but spacex -- it's a commercial contract. an agreement. >> 85 million in credits for emissions and greenhouse gas credits from california. that makes a big impact on tesla. if it shows a profit and how close it is to a profit. melissa: which is your best bet of the three companies, monica? >> i think tesla is closer materializing a commercial investor that could be okay. melissa: jonathan, if you had to pick one, what would it be? >> we all benefit and even if investment blows up and society benefits from research, exploration an innovation that those investors will enable because of investment. if i had to bet on one i would bet on spacex because of exactly the reason you outlined. it is not so dependent on government intervention. these are highly speculative.
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investors take the risk. melissa: not dependent on government intervention? the government is its only customer, jonathan! >> only because nasa monopolized space travel in this country. if they got out of the way you would see spacex. melissa: spencer would buy a ticket to mars. >> do you know how much it would cost to space. melissa: no one has done it. >> $63 million. said he will do it for 20 million. it's a bargain. melissa: from the u.s. to every corner of the globe, are we not doing that? money has been flying around the world today. starting in germany, lieutenant towns that canceling nine hundred flights because of a three-day pilot strike. travelers in and out of the country are scrambling to get on to other airlines. estimates close to half a million people could be delayed through friday. over to japan where kitkat lovers are going crazy over new bakable variety of kitkats, are you kidding? pizza restaurants are loving the idea. some are offering it as a special topping.
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one chain is selling a kitkat in mango pizza. 1 bucks. why would you want that? japan is famous for various kitkat flavor, rum raisin, purple yam and red bean sandwich? i'm sold. i don't know. the significant lord thrown his helmet into the ring -- significant lord. a dart vader inspired candidate was chosen as official leader ukrainian internet party which wants a transition to electronic government and wants to give free computer courses to all citizens. still not as scary as the other guy across-the-boarder. just saying. we're going to james row memory from the cme to see if he found his voice. james, can we hear you. >> yes. melissa: great. what is behind the meteoric rise of mankind. >> it was trading up over 100%.
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it sold off as investors take profits. turns out the fda did side the drug should be approved for treatment of patients with diabetes. this is inhalable version of the treatment that would compete with injectible versions of the drug. the top two injectible versions are huge, huge market. five billiondollars in sales every year. it is interesting, today in the options market we're seeing a big spike in options market driven by put sellers as traders selling protection and buying upside calls through january. implying $2.40s through april expiration. we should hear approval for that. i have like the stock for long. melissa: thanks, james for sticking with us. next up, why do you need a 3d printer at home. affordable models are available. we're giving awe first-hand look because at the end of the day it is all about 3d printing. ♪
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deirdre: you just can't escape it. the wave of 3d print something upon us. the latest turn is companies jumping into the market to make affordable 3d printers for everyone. but do you really need one at home? joining me ceo and founder of solo doodle. thanks for joining us. we have your 3d printer going up there. why do i need one at home. >> we think everyone should have a 3d printer. melissa: of course you do. that is your business. why? >> when i founded the company in 2011 my goal was to put a 3d printer in every home in the world. we're 10,000 towards that goal. we have dads printing out toys for children. schools using for teaching aids.
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melissa: i don't know a single person who has a 3d printer at home. who are you talking about? who are these people? >> we have 10,000 customers in 60 different companies. entrepreneurs are starting businesses with 3d printers for small niche markets who can't attract manufacturers. melissa: the one we're taking a shot up how much does that cost. >> you can buy it in retail stores, it costs 999. melissa: one how dollars for the printer. we have stuff on the set thaw printed it. what do i is this and why do i need it? >> this is sheep. it's a children's toy. melissa: i don't know that my child wants to play with this this is hard as a rock. >> we have a lot of children that their parents buy printers around print out toys for children. it is made of recycled mrs. take tick, it is renewable resource and you can recycle it when you're done. melissa: how much do i spend to put in the printer to make this
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happen? >> it is very economical. this toy would take three hours to print and cost 2 to $3 in material. very economicable and affordable. >> can i see the hand here? >> this is prosthetic hand. there are number of children in developing country that is can't afford full prosthetic hands. a typical prosthetic hand costs $60,000. melissa: who would have the printer in this poor country where they can't afford anything? who would have the printer? >> there is non-profit. someone bought unof the printers around using them to create prosthetic hands. we have a plan to distribute printers on widespread basis, this is our week where we see where do you see a bubble. first thing someone picked on monday is 3d printing. is this a bubble in the industry? >> our sales doubled year-over-year since 2011. the whole market as consumer 3d market is growing 40% a year. we're seeing very strong growth and i'm very polish.
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-- bullish. we have exciting things i think will be game changers. melissa: thanks for coming on, sam. we appreciate it. i hope you leave the lamb or sheep. >> thank you. melissa: before we head to break, listen to this, american smartphone users are spending 2 hours and 42 minutes a day on our devices. two hours of that time is spent playing with apps. whether it is on instagram or on twitter, apps are turning into the new television when it comes to sucking up all of our free time. very interesting. two hours! not me. up next, gm's rough ride debut on capitol hill for mary barra. tweet me if you think she is helping or hurting. listen to what our power panel has to say. can you imagine your boss being banned from contact you anything work-related after business hours, no emails? you know you love it. wait until you hear this one. "piles of money" coming right up. ♪ i ys say be thman with the plan
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melissa: general motors ceo today is on capitol hill again at how the stock is doing recovering up 1.2%. for the down load on mary barra testimony let's go to washington and. >> it did not go much better they end date number one. with cot sixth taking questions what exactly has happened over the last decade. do gm failed to disclose information? schaede met with the same answers as yesterday essentially she has ordered a review of the entire issue in both get the results of the investigation within the next faugh 45 for 60 days but that is not good enough. they said she has been there a couple of months long enough to know little more what is going on or what had happened before she took over. and demanding immediate
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transparency from gm. >> i am very troubled you are not willing to commit to ending this culture of secrecy at general motors of >> i did not say that. >> yes you have. i know this because i have tried year after year for more than 10 years to have legislation passed that would require of the disclosure of all this informatiinformati on. it is the automobile industry that kills my legislation a year after year. >> also asking if gm one had survived right before they went bankrupt and she said she cannot answer that. melissa: of course, not. the story comes down to me with this e-mail exchange. is that the smoking gun. >> this is any real exchange between delphi employees to 2005 discussing the changes to the ignition switch.
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it notes a gm engineer is asking for information because quotation kobold is building up in their face and in regards to you turning the car off with the drivers the spirit there is a lot that has happened in statements made as it relates that is why we have hired a complete investigation of this process. melissa: joining me now our power panel. geoff corbett and and former federal prosecutor, i welcome to all three of you. i will go legal first. that e-mail exchanges really bad. is that the smoking gun and? >> that was the torpedo. but here is the problem. gm declared bankruptcy in the discharge of all obligations for these lawsuits. if i am a lawyer representing somebody injured now i find out they have in the mail like that i would be looking at fraud.
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there is a lot of hurdles but to me answer your question that is brutal. melissa: james you made a good point as well. >> the question is if you want to believe the coulter that the government said we have to preserve. this company would have failed. there is a reason companies fail when they are not making good products cannot well-run they fail other companies take their place. the government did not let that happen so markey ought to ask the auto task force of obama about why did you decide this culture had to be saved? >> i am looking at it from the communication single. right now the company is clearly in a quagmire. all eyes on gm to the extent congress looks at them what does the future hold? how will they deal with the reputation in to ensure potential customers a
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investors? melissa: how to recover from that e-mail? to make it is just fact from other testimony that will cover all. from the communications perspective they need to think about safety and. >> i have looked at their communication they have lawyers fingerprints all over them. i find them not reprehensible but they are not consistent with the image they tried to portray. melissa: isn't that always the problem that the lawyers hold you back from excepting play because they don't want you to read reliability. listening yesterday it sells accius trying not to give away too much for what they will say later at the expense she is holding things back. >> lawyers may like that. i don't. i understand what the lawyers are doing pate have the obligation to avoid these things and will call for the corporation but
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sometimes you just don't double blended is time to eat. melissa: i like that. >> there is no liability is a public-relations issue since the bankruptcy got a bit of its. but what you are seeing is a company that did not want to spend the money apparently to fix the problem. they were structurally on able to make monday making cars. >> people 24th able come out with first quarter earnings they have a short window to be prepared to explain what has happened because mary barra will have to get off the phone to the use of the tough questions not only congress but to the investors. melissa: thanks to all three of you. the fight over the 1% is picking up steam in the sand francisco to speak to the woman they will start a
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carriers. chrysler has a recall of 90 to thousand vehicles all because of a defect in the brake system to put drivers address. some customers have been in complaining about brake pedal speeto firm chrysler says it could be water carl rochelle in. more debt -- bad news for the tempo fund has see the 11th straight month of outflows with $3 billion of investor from withdrawals in march balding 95% of its peers last month. this is the latest from fox business, giving you the power to prosper.
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melissa: whether wall street orreries tree here is who is making money today. falling after the debuts streaming device we have more on that the stock is down half a percent but 84 million shares? he lost $150 million today alone. he can afford it. making money this california retirees it winning $425 million jackpot he waited intel april fool's day to claim his prize. he said he was not able to sleep for days.
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losing money s.a. the new audit says it is wasting more than $6 million per year on unused office space and many buildings are only half full identify hundreds of thousands of dollars spent on vacant workstations alone. not surprised at all. back to the battle between the deletes a and 99% we are back with aaron. i have been hearing from a lot of folks you think the fight between 99% and 1% the san francisco and the bay area is the fever pitch. why are you turning up the heat? >> thanks for having me. convictions are up 170 percent asian and they're targeting long-term residents.
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we're seeing a lot of speculators to the investor is taken to stitch that the tech industry brings to the city and then the housing is upwardly mobile that can afford right now the average income is 36,000 but somebody at technology is over whether to thousand nbc speculator such as by now paul blake take every stage of this political economy through eviction of the other seniors and disabilities. melissa: ion to stem the problem you have to earn $62,000 per year to afford a one bedroom is and sampras is still. brendon is out of control but attacking the 1% is up the way to rectify that? >>. >> the people that are being targeted are people who are get out of their homes.
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people are feeling the heat what is theing guilty. solution? i understand the outrage but but raising the minimum wage what is the solution to the problem beyond protesting and raising awareness? >>. >> putting a moratorium on no-fault's the evictions just like not letting pineapple boy yvette would be helpful in to prevent that type of eviction and also to see people in the tech industry live closer to where they work not drive up the rent in san francisco. melissa: then that what happened with the peninsula. what about other people displaced in palo alto? >> we don't want to save people displaced right now live speaking for my community we are at ground zero this is called the quad
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area that the realtors target the most to create housing. right behind the and the protesters, of google buses packed up employees' everyday. by the hundreds and transport them. melissa: is a fair to target those employees? they have a job in supporting the city paying taxes they are not doing anything wrong. they get off the bus to encounter protestors who harass them and make them feel bad. they are workers also. >> we're not attacking the workers we have signs that say joining us and some are organizing with us but we are targeting the ceo's or as a company that is not paying federal taxes or as much as it should use the public infrastructure. melissa: thank you so much. we appreciate you coming to the answer those questions. good luck.
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melissa: experts calling british bosses to follow the lead from banning managers to call staff outside of work hours saying employees need to be shielded from undue stress. experts say such a move leads to better work life balance and increase productivity during work hours. what you think it? could your workplace still function? liz claman has a champac show. what do you have? >> i would be more stressed if they could not reach me. >> i bluefield nonessential. that is my insecurities. >> the amazon story has unveiled up brand new fire tv gadget we have been reporting on this all day but we have two experts that will talk about the u.n. sources and who should be worried.
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what about cable? you remember this name? he is the kind of guy who only buy stocks that everybody hates we will tear him up and we will do this my way or the highway which is better for the investor? melissa: i cannot wait. amazon is on fire. it predicts what you want to watch a and accuse it instantaneously we're taking your life to the big defense. you cannot have too much money. i've always had to keep my eye on her...
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melissa: before we move on with the new york stock exchange we are with nicole petallides. >> watching the ipo kickoff up 35% shareholders are cheering this is the digital advertising company to put together buyers and sellers and news corporation as the investor venture partners and looking at this because the display immobile digital video market is expected to grow through 2017 with its advertising company. melissa: amazon sets the tv world on fire. spend it on the new home
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video system that and fail the the defense case -- the device just a little while ago. we are live at the amazon yvette in downtown manhattan i have apple to be. why when i want this? >> amazon said it is three times faster. it is the small box it works very quickly also we see the gaming con sole. added is $99 for the set top or $40 for the gaming handle. this is the way for competing with apple and to roku. it is $99. not necessarily bad amazon price member looking for. it is shipping today on the united states. melissa: what are you expecting? cheaper?
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>> amazon has put itself in a smart plays with the amazon kindle. they dropped the device but bring in the digital compact -- content so experts were expecting a of a cheaper device even the google chrome works very well for only $35. melissa: it is called a fire tv but if you go there on the web site via tv.com you'll find something very different. >> i was unaware of that but it is true amazon is trying to keep the amazon can dull brands alive but in line with that but they have banned advertising but one of the critics talk about not just the price point but how we will revolutionize content consumption in going
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forward. here you can get netflix or amazon prime with subscribers but what comes next? how will amazon revolutionize? this doesn't just bring them into the game. melissa: i threw you a curve ball and you just prove to you did not watch pornography. that is what i was setting you up for. >> i am aware. [laughter] >> i don't know what to say now. >> amazon is not to google. they don't have the same search capabilities. melissa: thank you very much. [laughter] we're still bursting the bubble you have to hear this one. you can never have too much money.
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melissa: we are back to burst the bubble one could see a big crunch coming. what to do you see ready to burst? >> the master bubble the bond bubble of interest rates created over the last six years specifically with the federal reserve intervention. effects real-estate or commodities a and stocks so i see this as the of master bubble and has ben just like
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ethanol or student loans or housing the reality asserts itself. >> i hear you. as we look at the charts popping up but you have to get the tie be right and people have been calling this a bubble for years. >> i remember the late nineties the stocks went on a lot longer than anybody thought. the best indication i have in the market itself with last year the bonds went down there was the first time and people actually lost money. that is the best example now is a good time. why over at capitalist pig we own funds that actually go up with long-term interest rates in terms of allocating assets.
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melissa: we have spent all over the bill grow story and all over the newspaper to use fake fat is another side or symptom? >> investors are not idiots have. they look what they know is a rigged or manipulated market. the federal reserve did miss it. ethanol comes to mind once the government's interference goes away that market collapses in reality asserts itself. cannot tell you when but i keep betting on bonds is too much for the average investor that is why i'm doing at capitalist pig.com. >> it is a question about timing. if you look at the monday speech from janet yellen, you would have to take away that rates are not going up any time soon
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unless the market forces her he nonetheless we have terrible policy from washington which we had you would not have risk taking the money will lot slosh around so i am not sure this bizarre situation will stick around for a while. eventually there will be a reckoning. now? i don't now it could be of a lot of things. it could be economic activity where the money will flow out of the fed and forced to raise rates then obviously bond investors are suffering as rates rise. but we could go on with this type of slow growth and pessimistic economy for a while. melissa: the logic that jonathan said has been out there for a long time and people have lost money betting it will burst but it just continues to not have been just like inflation. it is limited to it would have to be but to what is
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the catalyst? >> weekend slide along for awhile because maybe some people are excepting and do normal for even the yellen speech it is up to monetary policy the politicians will fix this. melissa: we have to g. today. from your mailbox to your living room, amazon unveils the new gadget to fulfill all the entertainment needs. the plan to take a streaming competitor like gole
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