we're expecting volatility on the stock. [closing bell ringing]. usually moves 9% on the following day. david: warn folks thinking about going into bonds. yields are going up. means value of bonds are going down. 10-year treasury yield hit 2% for the first time in a while. we had wild act in german bond trading. dow jones industrials up close to the day high. up 87 points. a lot of that, about 20 points of that had to do with mcdonald's which had very good numbers. s&p up a little more percentagewise. nasdaq up about the same. russell 2000 up as well. liz: coca-cola did very nicely. david: not bad at all. liz: finally managed to move the needle on revenues. "after the bell" starts right now. liz: we are looking at the highest close for the nasdaq

since march 10th of the year 2000. knew tech was hot. let's get to today's action. we have michael wall. michael says he is expecting a breakout in the market soon. is it up or down? he will tell us what he thinks. michael murphy sees plenty of opportunity right now that investors may be overlooking. he will tell us where. ira epstein in the pits of cme. we're waiting on facebook. meantime so much news whodunit with the "flash crash" but a nice rally today. >> yeah, the "flash crash" thing has me. when it happened i was always of the opinion and vocal the chicago mercantile should have bust ad bun of trade the way the stock market did. they let them stand. what would you expect them to say? their own research showed something different but they can't share it with you. not very good. black eye for industry still. as for the market, come on, there is nowhere else to put money. we talked about that.

that is what is going on. see it behind me. every time you drop down to the 100 day average of closes in the indices, liz, you're finding bitter and market goes back up to challenge highs. the difference we're not making new highs on regular basis. been over month, month 1/2 since the last high. that is important to notice also. david: let me get mike murphy in here. mike, there was action overseas, particularly the bond market. the german bund, bill gross says it is time. hold on one second. we have facebook earnings out. who has it? is that adam? >> it is adam, david. david: go ahead, adam. >> beat on earnings per share, 42 cents. street was expected 40 cents. on revenue of 3.54 billion. street was expecting revenue of 3.56 billion. give you a little more what they're saying. monthly active users in the quarter is .44 billion. david, back to you. david: a little bit off on

numbers. that is leading to a little bit of a downside. we'll be talking more about facebook in the next block. i want to go back to mike murphy to talk about what happened overseas. it may affect things here as well. the german bund yield was up 81%. we can put up a full screen of that. bill gross, said it is time to short the german bund. that apparently had some effect on the yield which goes up when the bond goes down. what does this portend what is happening over in europe? >> i think you have to keep it in context, the level it is coming off. it had a huge rally but rallying up to .2%. david: still 81% jump in one trading day. there is no way you can not discount that importance. >> you definitely can't. at some point the yields will normalize. whether the normal rate will be half of 1% or 1%. we know rates will not go negative and stay negative for too long. the quicker we get to normalized

rate levels the better we can stop talking about when the fed is actually going to start raising. i think if we get uncertainty out of the way it's a positive for the market. liz: if he is a bull, michael wall, you could be categorized as bear. you are worried we see bigger correction here. make your case. >> liz, it is really thought that i have. you know as mentioned earlier, the market has not seen any new highs last month 1/2 or so. we've been seeing a trend sideways since november, come closer. anytime that happens we know it will unwind from the positive to the negative. will it go farther north, possible, i don't know. i would hedge bets because it will go down to some degree. we've seen a bull run since '09. when we look at the dow, at some point in time it will unload to the negative. we want to make sure we're wash schuss of that, while still participating in opportunities, if it does rise more as well. david: on the other hand ira, the today nasdaq closed at

highest level since march 10th in year 2000. this is 15-year high for nasdaq. it is trending higher at least today. >> what i think you will be doing, i agree with the other analyst. you have to be careful and fact that we didn't make new highs for that month 1/2 tells you a story. we are not, where japan is. we're not where europe is. we're not in qe anymore. therefore our gains will be very labored. they will still be gains in my opinion. we'll still finish the year in my opinion higher. but it is not going to be double-digit. fighting for a 5% return when other markets are fine. on breaks i don't see any reason on a chart not to take advantage. however, that big thrust, i'm not looking for it. i'm looking for labored gains. liz: mike murphy is with you on this one. just as ira articulated, hey on drops you might want to buy stuff. what are you buying, mike? >> we don't want to chase the market up here at these levels. we're looking at areas that

underperformed. one of the glaring weak areas is the financials. financials have underperformed all year. within there, we look at names like bank of america and citigroup as two names that you can buy at discount. liz: hold that thought. we'll get to the two names in a second. we need a little more detail and color on facebook. adam, you've got it. >> want to give that to you. mobile daily active users, 798 million on average, march of 2015. increase of 31% year-over-year. the thing that everyone pays attention is revenue driven from advertising on mobile devices. 73% of their revenue from advertising comes from mobile devices. liz? liz: that is up from 59%, previous number. go ahead mike. everybody is waiting on your two names. >> bank of america and citigroup are a way to play financials without trading too much they're trading at discount to their book value. industrial space, another area that underperformed really, we're looking at railcar manufacturers.

they make the actual railcars that transport goods on, american rail. arii. earnings out next week. that has a lot of upside pulling back from 80 to $53 today. david: michael, let me talk with you about facebook for a moment. nasdaq hitting fifth teen-year high today. facebook coming in okay, less than expected. not hurting value after-hours as we see right there. would you buy into facebook now? >> in fact we own it, david. something, i look at facebook, kind of interesting. i almost look at facebook as modern day newspaper. remember back in the day, everybody wakes up, drink a cup of coffee and look at newspaper? david: sure. >> facebook is for today's generation. quarterly earnings, every quarter averaged 22% up. they are on the up tick. they figured a lot of things out. they hold a lot of data. they hold the keys to the kingdom in a lot of ways. people willingly post information.

they raised prices on actual advertising they're still making profit. that is a good thing. they raise prices to increase profits. all good all around in my opinion, absolutely. liz: you see on the bottom of the screen, qualcomm beat both on top and bottom line. we wanted to point that out. stock trending lower in the after-market session. ire remarks we're looking at a solid day today. investors are confused one day up, one day we're mixed, one day we're down. are we sideways next couple months here? >> yeah, i think you are. i don't think you will get a big breakout. it will be labored as best. every time we get to the resistance points, the old highs we don't go anywhere. threethree or four times in thet four months, we don't explode. rather we trace. this is like a stairway. you go up a step. fall back one or two. still making higher high but you're not able to run anywhere. sort of running in place. you don't want to get caught in this kind of market buying

highs. you want to buy on pullbacks. >> good to see all of you. ira, thank you. we love michael wall and michael epstein. we appreciate you being here. david: thanks, guys. breaking news. may 6th, 2010, "flash crash" wiped out one trillion dollars of stock market value in just a couple minutes. now the justice department said the crash started in a small house in west london where a single trader set it all in motion will legal trades but do authorities have the right man? harvey pitt, former chairman of the securities & exchange commission. one of the toughest investigators of stock manipulation on the planet is that man right there. chairman pitt, good to see you again. thank you for joining us. first of all this is breaking news we have on this story. the cme is now claiming that their analysis shows that 2010 "flash crash" was not caused by the future market. so you have this disconnect between what the justice department says and what the cme says. who do you believe?

>> well i tend to believe neither. i think the fact is we don't know what caused the 2010 "flash crash." despite the fact there was a report issued after five months on the causes of the crash and no one mentioned this particular trader in that report. so i think we are still in a position where unfortunately the truth remains a bit elusive. david: we're looking now at tickertape what happened on that particular day but let me give you a timeline, if i can, by the minute. all this happened within about 30 minutes. at 2:30 p.m. on may 6th, the dow was down 300 points. then at 2:41, the e-mini, that is a futures market for the s&p, it fell 5% in only four minutes. by 2:45 there was a lot less buying on the s&p. by 2:46 liquidity in all market

was drying up because everybody was selling. by 2:47, the dow jones industrial average was 1000 points to the downside. just a few minutes later, it had regained about 600 points. could one person, one trader in west london have been responsible for this? >> well, it seems a little hard to believe. the official report that the fcc have put out that suggest ad single mutual fund trade contributed to the "flash crash." and i think that is questionable as well. usually, it takes a village to commit a fraud and, the notion that a single trade might do this, or a single trader might do this, is possible, but it is definitely perplexing and the real issue is, what are we doing to make sure it won't happen again? david: well, what we are talking about here is something that has

been called spoofing by the way. which is when some trader puts in a lot of orders with no intention buying, pulls them out before he pulls the trigger, there for giving impression the particular market is freaking out on a particular day about a particular market. is there anything you can do about spoofing? >> spoofing is a criminal activity, there is no question about that both under the commodity laws and under the securities laws. it is market manipulation to spoof. and the sec has been bringing actions alleging that. but one of the things that can be done is to identify who is putting in the orders and making certain that if the same person is putting in numerous orders, that aren't being addressed and responded to, that, that person is halted in his tracks, or her trcks, and the market has a

chance to react and function normally. david: finally, harvey, again there is a split between the cme and the justice department. the cme does claim it couldn't have been one guy in the futures market. the justice department says it is. justice had five years to investigate this guy. they have been criminally investigating this guy for five years in west london. doesn't that indicate to you they must have a lot of evidence indicating this one guy as opposed to what the cme says? >> yes, i think it is likely that justice has put together a complete dossier on this person. what i don't understand why the cme decided to come out with a statement at this point lar point in time. they must have known about the investigation. i'm sure their records were subpoenaed and the like and this seems to be just the defensive effort on their part to avoid any accountability if in fact the justice department's charges

prove out to be correct. david: very interesting that there is this battle going on now between the cme and justice. harvey pitt, what a wonderful pleasure to see you again, former chairman of the sec. we appreciate you being here. tell us what i think, folks. could one person in west london have started the 2010 "flash crash"? that is a trillion dollars. was it started by one person? liz: i like what harvey said. it takes a village to create a fraud. david: but it could start with one person pushing a snowball down the hill. liz: 100% that's true. facebook in the red following a profit beat but a revenue miss. up next we have the analyst who was bullish on the stock way before the rest of the street was and he has been right. what does he recommend now? david: plus one reality tv star who you may have seen is making millions with his off-camara roll, being a whistle-blower. are we becoming a nation of snitches, ladies and gentlemen? do they really deserve bigger rewards and labels like heroes?

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>> ebay out with a beat on both lines. beat of 77 cents. when the street was expectingp 0 cents. -- 70 cents. read from the report. strengthening dollar is giving them a hassle. dollar significantly impacted first quarter results and reduced 9% organic growth rate to 4%. we get. >> paypal. revenue growth negatively impacted by foreign currencies transactions at ebay and pal pay. with benefits from foreign currency hedging partially offsetting the impact at paypal. dave and liz? liz: thank you very much, adam. let's get back to facebook. facebook reported earnings a few moments ago, the social networking giant, it's a giant, beat on eps and missed on revenues. the stock slightly flat from

where it closed. we have the senior analyst at axiom capital management. victor building you were on board with facebook well before others. original ipo spook ad roll the people. it didn't go well. where are you standing on the stock? they missed on revenue. does it concern you? >> no, a large part of the miss from what i'm looking at was tied to currency ex-the currency impact the revenue growth would have been 55%. so it was just a slight miss, less than 1% miss. so i'm not too concerned and easily splined r splinedded by fx. -- easily explained by fx. liz: by a whisker here. the mobile ad revenue number up 73%. i'm sorry, it is actually 73% of all the revenue that place book makes. mobile was always that can they

do it issue. it appears that they have. are you seeing any breakouts for anything like instagram or whatsapp? everyone is waiting to see how they monetize those. >> we won't get any color on those until the call at 5:00 p.m. today. those, whatsapp, they're not monetizing whatsapp. instagram they just started testing ads. it is early innings. both will be significant revenue and profit opportunities for facebook over the next several years. liz: how did you like the daily active user number, 936 million, up 17%? >> that is huge. almost a billion people come to the platform on daily basis. i don't know another platform that exists. that is huge. engagement increases sequentially. people are still using facebook. that is the investment thesis. everywhere i go i'm logging on to facebook. at end of the day you can build complex models and valuation models but at the end of the day are people using the platform? everywhere i go people are

logging on to facebook. >> the stock at 84.63. it closed today. it is straddling that. your price target, give it to us. it is triple digit price target. are you going to raise it or lower this. >> i will have to update my model to see where it goes. i have a $103 price target. the stock is flat today. that is reflective of revenue potential i see them generates over next several quarters of this year. liz: mark zuckerberg has been unafraid to spend a lot of money on a lot of things. whether it be instagram or something like oculus. where do you suspect he eventually will use oculus to be part of all that might happen in the future with virtual reality? >> virtual reality is more of a longer term plan. i definitely see advertising opportunity for virtual reality. i could see them using it, to, you know, for movies, on plane rides, for, any sort of long

distance learn something another opportunity for virtual reality. definitely as a media platform, yes. more longer term mobile opportunity. still in investment mode for them. liz: samsung is trying to deliver the same thing but it is quite an emersive experience and clearly facebook is emersing itself in a lot of different platforms. thank you very much, victor anthony. >> thank you. david: well showdown with iran. will a show of force by the u.s. navy stop iran from trying to get missiles to the rebel friends in yemen? our all-star panel has answers coming next. seeking fortune, then fame. how one reality tv star made millions as a whistle-blower and why some say he really didn't deserve it. don't go anywhere. we'll be right back. ♪

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liz: we have breaking news on the nfl massive concussion settlement. a federal judge just approved this deal, forcing the league to pay, up to a billion dollars to

thousands of retired players. the lawsuit accused nfl hiding what it knew about the long-term effect the of concussion. the nfl denies that. retired players could get between one million to five million each. this ruling came just hours after another major development involving the nfl in los angeles. a second city council approved construction for a new stadium that could lure an nfl team back to l.a. for the first time in two decades. david. david: a lot of big stories we're covering with our panel today both foreign domestic. we have reason.com senior editor. carey sheffield, forbes contributor and competitive enterprise inches taught fellow and larry shover, sfg alternatives chief investment officer. great to have you all here. first confrontation between a u.s. carrier force and iranian navy, could this lead to war? iranians want to deliver surface-to-air missiles to

houthi rebels in yemen which they could blow saudi aircraft out of the sky. will the u.s. use force to prevent iran from delivering those missiles. peter, what do you think? >> i think the administration is in really a tough spot right now and they're not saying exactly what it is they want to do. the military is saying we moved the carrier into the place to give us options. what options are they? they're not saying. the state department says well, they're not there to actively board any iranian ships. on the other hand it is not clear they won't be there to board ships later. that might become their purpose. and so given the talks are ongoing with iran over the nuclear deal, this is a really difficult spot for the administration. they don't want to be in a shooting war but they also have got to do something or feel they do and put up a show of force. david: carrey, it is relatively simple. these are surface-to-air missiles, if they deliver missiles to houthi rebels they

would use them to blow saudi aircraft out of the skies. they are our friends, our allies. should we use military might to stop the iranians from delivering those missiles? >> we've told the saudis to back down. they have actually backed down from pursuing, as aggressors here. we ought to stand firm. we have to protect our allies. peter is right, we can't look at this in isolation. not only is it involving the nuclear iranian deal, but iran giving more money to gaza with hamas and more money in lebanon to hezbollah. obama's nobel peace prize is totally premature and we'll see whether it will escalate. david: whether the president would sacrifice for nuclear deal to go to war with iran who might shoot down our saudi allies. this is from the "wall street journal." i will put it up. will he risk the nuclear deal

standing up for a incident. the iranians doubt it. this is why they are testing u.s. at sea. are the iranians right? >> i definitely think this is iran testing the united states and testing the limits and i don't think president obama actually knows what he is going to do and knows where his own limits are. i suspect internally in the white house they're having this discussion, they do not have an answer yet. david: we will all have an answer pretty soon, because push is going to come to shove within next couple days. meanwhile, ge's exit from the banking business will earn or save them, $85 billion over the next five years but instead of investing that money, ge is using it in stock buybacks and dividends. so is ge management stripping the company of wealth, rather than building wealth? carry rhee, what do you think? -- carrie. this. >> ge capital is victim of the,

ge capital is having to shut down because it was designated systemic important institution among dodd-frank. all the capital is being shriveled. consumers will lose here because money is not invested into the economy. david: peter, a lot of companies are doing this, spending cash not to build the company but to do stock buybacks and other things that increase the stock value. at the risk of cutting their legs off in terms of growth. >> well, look, shareholders are incredibly influential kind of constituency when it comes to making business decisions. so they have, you know, they have obviously a very big role. they're very influential. but i think systemic important designation for ge capital is huge part of this story here. it basically made it so that ge was not best positioned to be the operator of what was essentially a bank being regulated like a bank. it put ge's capital business under a huge amount of

regulatory constraints. david: yeah. >> at this point it's a bad time to be a systematically important institution. david: carrey, i wonder if it's a bad time to invest in banks. what do you think? >> banks are being sheltered from competition from the funds less regulated. liberals are cheering the fact that ge capital is being shut down. it is ridiculous as peter wallison says, cheering we have prison reform when the prisoner is hanging himself in the jail, that means we have fewer prisoners. we have fewer people are investing and giving real value to consumers. david: less competition in banking which makes the consumer worse off. coming up reality tv star is making millions by being a whistle-blowers. are these whistle-blowers heroes or just snitches, liz? liz: google will start offering phone plans for 20 bucks a month. sounds great, right? we have an expert to tell you how it works, how much you can save. a competitor is always --

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david: we are back with our panel now. one of the stars of "the real housewives of new jersey" is a multimillionaire because he twice received big awards as a

whistle-blower. first, snitching on a pharmaceutical firm he worked for. then against a bank. so are these professional whistle-blowers heroes who deserve big payoffs, or are they just snitches looking for a quick buck? carrie, what do you think? >> it is not just black and white. we look at this guy's case. he recovered medicare fraud. medicare fraud is huge problem for taxpayers. we want people stepping forward to. he was under suspicion for creating fraud and blowing whistle on himself. david: in the end he did win -- >> his hands were clean. we did have to make sure this isn't a problem and peep cashing in reporting on it. david: number of whistle-blower lawsuits are increasing enormously. the amount of money they're being paid is a lot of money too. $400 million paid to these whistle blowers in lawsuits. >> like carrie said, it is hard to fault a guy too much for uncovering what is alleged to be

millions of dollars of medicare fraud. this program has $50 billion a year. david: peter, let me push back a little bit. hold on a second, peter. he worked for a pharmaceutical firm and was whistle-blower. he worked for a bank and was a whistle-blower. what are the chances of that? >> look, somebody who understood how the system works and was willing to use it in both cases. obviously there are incentives for someone to do that. we need to make sure the incentives are not too much for people to -- david: well, that is the point, larry. that the government now wants to increase the incentives enormously. of course incentives matter. the more you put out there, the more bait you put out there for whistle-blowers, probably more whistle blowers you will get. >> but if you're catching -- david: that is for larry. go ahead, larry. >> no, it definitely will but the fact is, a hero in my mind would be somebody that takes money and donates it to charity or takes much less.

i mean, i'm not a person that should tell somebody how much money they take as bounty tore doing something. increasing might increase snitching but inappropriate snitching. i don't know anything about the pharmaceutical business. i could do a lot within the hedge fund industry or equity business. i don't need to be snitching on other businesses i know nothing about. david: bottom line, you shouldn't do it just for the money. that is something we all agree. >> right, yes. david: let's move on. new york city's council is thinking of decriminalizing, subway turnstile jumping and urinating in public. they say these actions hurt no one. could little crimes lead to big crime? could that lead to violent crime moving back in and businesses moving back out? peter what do you think. >> you have to ask yourself whether or not police resources, which are scarce, are better expended going after, somebody standing on the street doing something a little bit unpleasant or going after big crimes, violent crimes, the kind that are really hurting people?

old theory of broken windows theory you stop bigger crimes by going after smaller crimes but it is not, it is not as clear the drop in crime from, during the '90s was actually caused primarily by -- david: well, i would, hold on a second. i lived through that era here in manhattan. tell you what, carrie, they just arrest ad guy for jumping a turnstile. they haven't put in new rules. when they padded him down they found a gun on him. a lot of big crimes are committed by people who first commit small crimes. carrie? >> right. i'm very passionate about this. i've done a lot of research on this, in new york city, state of new york, we saw arrests and crime eventually went down but we also saw incarceration went down. which means that it served as preventative measure. once you catch little things, it deters people from doing worse things. this is good. if we want prison reform, broken windows is a form of prison reform. david: larry, if you stop the little crimes you eventually stop the big crimes.

>> absolutely. all the studies have proven it. we know homicides, rocky in new york have gone down by 80, 85% compared to maybe 50% in the other nine largest -- in the country. we also know it is hard to believe, do we want proactive police force or reactive? i think in our mind we want reactive police force but a proactive police force will catch people urinating in public and probably more susceptible to doing other things. david: i wish we didn't have to talk about this stuff in public but we do because it does affect crime! peter, carrie, larry shover, good to see you all. liz? liz: did you know that the average cell phone user wastes $330 per year in unused data? google has a service which aims to change that. we have the breakdown next. google is not only tech giant with breakthroughs up its sleeve. amazon ups the ante to get your packages to you even sooner. how? you have to see this when we

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liz: what a novel concept, how would you like to pay for only exact amount of data you use on your phone instead of going with one flat rate?

google unveiled today project phi, enabling users to do just that. joining me with today, i'm sorry, the and republic wireless ceo david morgan. he has been doing something like this for quite some time. he is a republic wireless. to you first, dylan, the announcement from google, we knew it was coming because they had announced they would do some type of fiber project more than a year ago. now they unveiled it. only for the nexus 6 phone for the moment. >> that's right. liz: what surprises you, what is disruptive of what google is doing? >> that is great question. days like this i love to be in this business. it is disruptive in an interesting way. it is not a huge value play. we ran all the numbers, on low end if you're low data user you will get a comparable rate from like walmart family mobile. on high-end, like eight gigabytes, 10 gigabyte bracket users you find plans from at&t

and verizon very similar. so why, then, did google stock go up a percent today? because branding in google is so powerful. that speaks rather than a value play. liz: that's it. >> that's it. liz: $20 for that first gigabyte, or whatever. then they give you a credit if you don't use it? >> $20 through base service. $10 gigabyte. $30 out the door for one. when you consider family plan, who is using one, right? you can get good value plans. sprint even as 20 gigabyte plan for $100. there is a lot of value in the market on wireless. liz: david morgan is sitting out there in raleigh, north carolina, saying tell me something i don't know. you guys at republic have been doing something similar, $15 for a base plan? >> we have been a wireless company four for years. a wi-fi first. monday we announced we will pay cash back to our customers

crediting next month's bill for any unuse cellular. that was monday. we got to enjoy 48 hours being first and that's it. liz: 48 hours. do you think google is watching what you guys have been doing? >> you have to ask google but a lot of people are. we tripled subscribers in the last year. we're growing in exponential rate. precisely as your other guest said. we have high value service that uses wi-fi first. only uses cellular if you have to. most of our subscribers are using enormous amount of wi-fi. yes, people are watching. >> dylan, at&t, verizon might be watching. >> i'm sure they are. liz: i've got guys at google breathing down my back. you have republic also trying to do something similar? >> this will be phased. this is the just for nexus 6. google hedged a little bit when they announced it. this would be a slow development.

google puts stuff out in the marketplace to test. we can brand this a beta test if you will but definitely no way that people at verizon, at&t, are not looking very closely at this. liz: i would love to know, david, what inspired you? i look at the trend. you have verizon trying to come out to bundle certain channels so people don't have to pay for things they don't want. there seems to be a trend towards the customer gets to decide. >> that's right. and that is what inspires us. we're on a mission here in raleigh, north carolina and our whole republic team are focused on innovative ways not just do network force but support. every aspect of the service. dylan is exactly right. it is an experiment. it is important experiment. what it clearly says, there is something going on in the world and the world essentially is a wi-fi first one. liz: david, how many customers do you have signed up? >> we have multiple hundreds of thousands but we're growing as i said, ex-penext rate. so -- exponential rate, so things are good.

liz: if people are watching in different parts of the country can they signed up for public. >> we're not invite only like project phi. any company can join republic at republicwireless.com. we have three phones. there is a bit of a unsung hero behind both stories. motorola is powering project ph iphone. shoutout to risk a the motorola. they're pushing innovation. liz: so is lenovo. who wins in the end? >> we have to wait and see. don't forget, google has a funnel. how many times a day do you interact with google? each single time you use it is opportunity to put it in front of. >> that is called a funnel. good to see you both. david. david: sign up with republic. pretty good. raymond james financial earnings out just minutes ago. coming up we ask ceo paul reilly about the results and where the

firms high rollers are putting their money. you could be too. it is a fox business exclusive, coming right up. >> hi, everybody, i'm gerri willis. coming up on my show at the top of the hour verizon says it is new a la carte cable tv package is a great deal for consumers. we will put that claim to the test. that is one of the big consumer stories coming up on "the willis report" in just a few minutes. ♪

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. >> what if you could peer into the accounts of high net worth people to see how they're doing and investing? we're about to do that. raymond james released earnings moments ago reporting quarterly revenues and assets at records. what do today's numbers tell us about the health of the financial services sector, but also where the retail investor is going? joining me paul reilly, raymond james financial ceo. paul, a record first quarter for net revenues. that's impressive. >> two big factors. great recruiting, and more importantly just great retention. we have very, very little turnover. our culture is adviser friendly, great advisers and they choose to stay. when you get very good advisers that continue to grow and have you good net recruiting assets

grow. so if you focus on doing good things for clients and helping adviser, my job is pretty easy. >> 6380+ advisers, doing the job with 2.6 million accounts, as i understand it? >> that's about right. >> so what are people investing in right now? many account holders are high net worth people, and i'm just wondering, do you sense from your clients that there's a constant fear of the correction coming, like a dark cloud above their heads or bullish now, somewhere in between? >> if you look at the investment portfolios, they're up about 200 basis points across the board into equities. clients from all stratas of worth have been moving more into equities over the last couple of years. and high net worth clients are both playing investing mainly in equities and making bets. you see a lot of people make bets in oil that oil is down, oil will recover, and looking at commodities in other

sectors. the play is in equities because it is higher than the fixed income returns and people think the risk reward trade-off is still there. >> do you get the sense your clients are gutsier to say oil or europe looks cheap. europe is less cheap now, isn't it, paul? let me go in there and advise clients and advisers to do that? >> we advise first to not overdo risk. they are making the plays in equities, oil, europe, i mean they'll look for value, and willing to invest there. >> we're all getting older, aren't we, paul, and people are worried about retirement. interesting to see the sweeping changes saying if certain advisers are helping people with retirements, they have to enter into quote best interest contracts with clients. first of all, the government getting involved in anything gets people a little concerned. we have quite a bit of

regulation. how did you take that and shoe it affecting your advisers? >> we've been outspoken, the early draft from the department of labor was unworkable. it just disallowed commissions the fact it was based on commissions. it's a cheaper cost for the client. we agree there should be a judiciary standard, we agree advisers should be acting in the best interest of clients. the question and our concern in the latest draft is we're studying it, is the almost bureaucracy and the amount of paperwork you have to do to make an investment, and our fear is that there will be a couple million clients unserved in the country because we can't afford to give them advice. >> in a way, while you may be doing the right thing, there are a lot of advisers steering people into high-fee opportunities. i saw it with my mother's adviser. you got to stop that. double fees. mutual fund fees, it was

ridiculous. >> and you know where that happens? whether the advisers are anywhere, if they were with us, the regulators should come down hard. >> we got tend to that. thank you so much. paul reilly. >> and "the willis report" is next. gerri: hello, everybody. i'm gerri willis, and this is "the willis report." the show where consumers are our business. the man who took on the federal government's wasteful spending. >> inside the waste book this year is 30 billion dollars of stupid, what i would consider stupid or at least poor judgment. gerri: former senator tom coburn is here with a message for lawmakers. defeating the clinton machine, possible presidential candidate governor mike huckabee says it can be done. >> i know the clintons all too well. they play to win. gerri: he's here to tell us how and talk about his big announcement in hope, arkansas in two weeks. americans getting squeezed. we'll break down a new report on