. busted ipos, interest rate hi didjinx. can wall street be trusted? and one of the top experts in social media isn't want you to talk about social media. our reporters from tech crunch this week on "press: here." i spend a lot of time telling people how the dow industrials performed or whether the nasdaq -- excuse me, the he can heavy nasdaq gained or lost a few points. however it has crossed my mind more than once that perhaps

nobody cares. people used to care. mom and pop investors would put their money in the market with the anticipation that money would grow. and with the understanding that they would be treated fairly. everyone in the market would play by the rules. but it's not clear either expectation is true. recently there's talk the historic assumption that you get a 6% return is simply unsustainable and as for the rules, banks have been accused of laundering money, an exchange botched an entire ipo, the nation's biggest bank lost $2 billion or was it $5 billion? there's even evidence the fundamental measurements used to calculate interest rates were simply made up. >> vice president of charles schwab based in san francisco, one of the world's biggest

brokers. and also joined by lena and eric. let me make it clear right off the start, as we list all the things that have gone wrong, you didn't do any of them. nor are you here representing the entire financial community. that said, i do have some questions for you about how investors should feel. i open up the newspaper or i watch television and there are people joking on e-mail would changing the libor, but most people didn't even know what that was, but when they find out it has something to do with their mortgage and car rates, they say, hey, hold on. that's not fair. >> investors today have gone through an awful lot. not just in the past six months. but also in the past five years. and they get more and more confused by all of the different media that comes through about like you said the libor rate. but what i'm finding with

clients right now is they're really trying to educate themselves and understand how everything is working. and does it really matter to them. are these different stories that come out in the news even viable to them and their investments. >> that's a good question. investing in an equity does not necessarily -- could be -- not necessarily affected by the libor rate. so the financial community in general, did j perform morgan chase lose $2 billion or $3 billion, as an investor, surely you must know where that billion went.not necessarily related, but it is bad press. >> and that's what's caused investors to freeze and stay in the money markets at the incredibly low rates. >> it feels like this is a pretty good example where what investors should be doing is following the principle of keeping it simple.

you probably shouldn't be buying ipos, that you probably shouldn't in most cases be buying individual stocks or individual bonds. that you ought to take a very simple approach, buy index funds and not get too complicated. >> and i think what they've done in the past couple years is go to money markets and cds where they're earning nothing and now their layer of risk is let's buy the s&p index fund. >> explain an index fund to the viewer. >> it is a fund that follows an actual index, a financial index, and it has a low cost embedded into the industrial fund because it doesn't meet an active manager. >> i'm not asking somebody else to manage that. >> absolutely. it's just mirroring a financial index. >> if the s&p goes up, i'm hear. if it doesn't, i'm not. >> is it like a perfect storm sort of, a combination of we

mentioned some of the tech ipos, they haven't done as well. some of these other issues with banks. is will this just like a perfect storm of issues that are creating this investor sort of distrust? >> i think in the past five years so much has happened that when we add one more thing, it just cripples them more. and nobody knows what the next thing is going to be, so then the sublime becomes bigger to the investor. >> there's a whole another risk that people forget about is if you do nothing, if you hide out in cds and getting less than 1% interest on your money, you're damaging your own long term financial health. you need to save for retirement or college tuition. >> if you had hung out in very small returns, you may have been actually protecting your -- presumably that's what's

everyone's doing. i can't even fathom would hy wo that -- there are some that are negative. well, it's less negative than the rate of inflation. that's a bad sign. >> yes. and testifyhey've gone to the vs for absolutely no return. and i think they're recognizing that it won't keep up with their lifestyle to be in retirement. >> so this is a long term ultima plan. >> absolutely. >> the "wall street journal" said the hearts of many investors have been broken by the serial set backs of a few years. and then there was a study, chicago booth kellogg school, 15% of americans trust the stock market. what do you do to bring that trust back and say presumably free market capitalism is the way to go? i'm certainly behind it. how do you communicate it's going to be okay and you should

trust us? >> that's hard. it's difficult. but the one thing you have to do with investors today is really get them to look at are they ipo buyers or are they index buyers and where is their risk level. and you have to bring them back to before 2008 to determine that. and it's about your spending. how are you spending your money today. and that has to change. so you really have to go back to square one and then i think education is important. we all pick the people we want to listen to around the financial markets. stay with those people that make you feel comfortable, that mirror your idea of investingnd be in it for the long run. not trading cards. >> i bring up a good point in that baby boomers right now you who are set to retire pretty soon will be able to be less risk averse than 20 or 30 --

>> more risk averse which is why they're getting into the bonds. >> more. right. >> we knew what you meant. >> you touch on stuff that people feel that the game is in some way rigged, that they can't win, that the smart money knows things that they don't know. i think in some ways that's always been true, but it seems risky to take that point of view and go i can't. >> i think you bring up a good point which is with all of the information that investors get today, they don't have to pick up the wall street to get it anymore. they hear it on their smart phone or sirius radio and what's happening is it's information overload. you don't know what to believe or what to think. and then you start to believe everything and it completely freezes you.

>> vice president of scwab.would he appreciate you being with us. up next, a tough week for two big companies.

it was a strange week for social media as progressive insurance and united airlines both faced definite investigation stating criticism online. both were the subject of separate blog posts repiecedinvn stating criticism online. both were the subject of separate blog posts repieced repeated and retroowhooete etwe thousands of times. we have one of the world's leading experts on image and

social media. he advises fortune 500 companies. he'll give us advice this morning for free and perhaps que convince us to buy his latest book. to the viewer i want to say progressive, you can look it up what happened or may not have happened. youunited airlines, i'm less interested in who is right or who is wrong. how did the companies perform in this crisis. start with progressive. >> i'll be very fair. i think they performed poorly. i think that social media is a front for reputation management when what we're really looking at is what's behind twitter or facebook. whereas crisis happens because of those issues, not because of blog posts.

>> the progressive issue had to deal with the death of one of their clients. and one mistake they made i think is they continued to use the flow icon, the young woman on the commercial in their twitter feeds. and as they would deal with very serious subjects, you saw the smiling flo, which eventually they figured out we have to change the icon. >> i would have advised to think about what the issues and allegations are and to think about what's a real honest approach that we should publish. but i don't even think it's something you can solve on twitter. in fact i think it's better to stay quiet while we look behind the scenes and say what's really going on because there there are serious accusations. >> that's my question. in a situation like that where you've lost control of the story, thousands of people are out there tweeting about the tragedy, you don't want to be out there responding to

thousands of people tweeting about your situation and jumping into the fray. seems like it's a disaster waiting to happen. >> and social media works for you and against you. a lot of companies are yubd estimating its power. they're using it as a marketing vehicle, but there's a crisis looming behind will every company. social media sparks the conversations, sparks the ability for your reputation to go down. until companies start to look behind the scenes and fix the issues that could come up, they'll always be at risk of something like this happening. >> i don't understand why this keeps happening over and over again, though. it seems like they should learn from some of the past issues. it doesn't make sense why they

can't learn from some of the other companies that go through these mistakes. >> because marketing silos social media and marketing doesn't talk to customer service and customer service doesn't necessarily talk to -- this is why i call it the end of business as usual. or dealing with fundamental business flaws and social media is exposing them. so there's nothing to learn from because all they're figuring out is what can we say different and fast faster. >> and it's hard to predict when one of these things will go by. so this issue with progressive could have quietly -- if this guy had not written this blog post or if it had not gotten picked up in the twittersphere, they could have taken care of it in a quiet way. and that's part of the complicating factor. you don't know when you need to be more proactive or when you you can do the quiet subtle dismantling that nobody knows. >> there has to be a formal preach, some type of viral

barometer. it's not easy to predict, but you can get a sense of what could go rival. let's look at united. i guess now there's another song. >> and in the allegations, it was a serious credible blogger. bob sutton sat in that seat. it's easy to say, well, bloggers, you know how they are. but not realize this guy is a big deal. and he's being critical. >> if you look at the idea of a viral barometer, that would have scored incredibly high that we need to take this seriously and start to mobilize our response. but again, united and progressive, these are fundamental breakdowns oig in how the business is run.

accountability, both issues. no one wanted to take ownership of this child. nobody wanted to officially acknowledge that this was a problem or even apologize, which all the best business strategists, apologize and make amends. >> united did issue a statement saying they had apologized and here it is. we reached out directly to the family and we're reviewing this family what they describe as not the service we aim to deliver to our kucustomers. they were able to make a statement and get out in front of it. and in the end, the ceo would say what are you talking about, it was hours later. but in the speed of social media, and we talked about not responding, it seemed like a delay. >> part of the issue is that it's so hard to report the customer service problems. in the case of united, they were sent to a call center in india.

or unless they had platinum status, then they got someone in the u.s. and people feel like all they can do is go on social media and express that because that's the only outlet maybe that other people may be able to help them and propel the story a little bit more. so it seems like there's a huge fundamental problem that isn't just about social media, but how they operate their customer service in general. >> absolutely. >> there's another role for companies to play which is to use those situations you're describing, where someone has taken to twitter and complaining about the experience they had and you need to have people who are monitoring those situations, just monitoring slash tag your company name and looking for

those situations, figuring out where they need to respond. maybe it's a larger trend. so you need to have an early alert system. >> you talked about the voice of the customer. social media certainly a platform for the voice of the customer. it's very powerful. i'm pretty sure that we've all had our share of negative experiences with whatever airline you want to insert into the statement. but you have to first want to become customer centric and that's a cultural move from the top down. social media won't solve that problem. somebody has to say we need to be on social media to solve these types of problems. in the case of united, when i have great service, i'll tweet at united to say this person was exceptional. thank you for this great service. never get a response. you always get a response when things are negative. but i actually believe customer

se send -- virgin america or southwest very much known for how they're using social immediate use to improve customer service.very much know using social immediate use to improve customer service. that is the culture of coathe company. you're looking at united. they have other priorities. systems that aren't talking it to one another. you have a lot of other issues in place. but losing a child, whether that is -- however we want to say how united faired on that -- >> and they misplaced a child. losing can be interpreted a number of different ways. >> the part that hit it for me, in the battle of empathy versus apathy, it wasn't up someone said, look, are you a mother. and she said yesterday and tried to go the extra mile to help. but it took that moment of

empathy and that's the missing ingredient for businesses. and social media is not just the voice of a customer. it's a human network. empathly is the secret ingredient to all especially gaugemen engagement. >> "press: here" will be back here in just a moment

. lena is joining our panel. thanks for being here. lena is joining our panel. thanks for being here. how is tech crunch -- it's been bought by aol. that's the latest. >> you're really putting me in the hot seat. it's great.

obviously lots has happened over the past year. but i think we're better than ever and we've got new leadership, new talent, and i think it's a different tech crunch now, but i think that we're on it a new chapter. we survived. michael is our founder and he'll always be tied to our brand and we're lucky to have him. >> the latest thing you wrote was about square. mobile payments have become an enormous and understandably, i can understand the desire to be able to do all this with your smart phone. target and walmart announced that they would team up to try to create their own mobile payment system. are we thinking square will ben?

>> square announced a partnership with starbucks, so they'll be processing all the payments in about 7,000 stores. and their loyalty app will best. it's a huge deal for square and it should just sort of expand their user base significantly. and you're seeing all these other retailers like walmart and target jump into the game as well. my perspective is really about data. i think all these retailers want to take control of their data and that is through payments. >> i think people think a lot about the issue of mobile payments, they think i can pay with my phone or i can do transactions on my phone. but at the end of the day, it's about collecting all the information about transactions. >> and all these tech companies that are trying to do it and soon apple will also be trying

to do it. and so i think that we're going to see a pretty competitive space. as it is, every week there's like a new mobile payment startup. >> you're right. i think that's the problem. >> and so it's hard to know who is going to be that player. but i do think there is the company that is able to get that data, get a large user base. >> i also think of all of the companies of the world, starbucks is brilliant. everybody goes to starbucks. and there's that friendly nonpressure approach of have you tried this mobile team thing. does it work particularly well at help depot. home depot, you pay -- whereas somebody tried to explain while

at home depot how pay pal works, whereas the local barista. >> but then they take that informati information, you bought the same cup of coffee, so we will send you a coupo in a ochlcoupon and your receipt. or maybe they promote somebody else. but it's using that data to reinforce the behavior. >> when all the places started the frequent buyer card, i'm waiting for it that day when the data gets out. >> you mentionedt that day when data gets out. >> you mentioned that day when data gets out. >> you mentionedthat day when t data gets out. >> you mentioned sort of version 2.0 where basically your deals are not the same as my deals.

>> isn't it extraordinary that i pay a different price for eggs than you do but you get hairspray as a different price, as well. >> and that's really what all these retailers have to do. it's getting so competitive that they have to add personalization to their offerings to the consumer so that the consumer can choose that particular retailer. >> lena, thank you for joining us. we hope you're return. eric, we know you'll return. appreciate you always being here. we'll be back in just a moment.

we're back to our normal schedule now that the olympics are over, so we will see you back here next week and the week after that and so on. i'm scott mcgrew. thank you for making us part of your sunday more than. morning.