anytime anywhere. good afternoon and welcome to prime interest i'm terry i'm boring in washington d.c. let's get to today's headlines. never underestimate the raft of the shareholders investors and of fannie and freddie are suing you as the government which took control of the mortgage giants in two thousand and eight and exchange for a one hundred eighty billion bailout dollars the treasury got to keep all of quarterly profits go in as well as high dividend payment alleged by the plaintiffs to be serious so this might be the shareholders a last chance to recoup their money now that administration and visuals have talked about winding down the mortgage giants fannie and freddie already returned fifty nine billion dollars to the treasury after opposing high profits last quarter but

most of that was due to a change in tax asset classification. and said even so again that's according to a stock analysts who estimates citi group could lose as much as seven billion dollars if the u.s. dollar appreciates against other currencies despite calls for bans on proprietary trading pursuant to dodd frank and that the volcker rule which i have yet to been implemented by the way about half of the bank's profits come from such currency speculation and finally standard and poor's is bullish on the ads but no one seems to care at least not the market two years after downgrading as outlook on the u.s. to negative the upgrade to stable was not a market mover nonetheless as m.p.'s cited economic resilience and monetary credibility apparently a batch of bernanke kool-aid has and once again been served at the ratings agency.

and here is what's in your prime interest. now with all the new technology creating the crowd funding landscape it's important to recognize that crowdfunding is not a recent phenomenon even at the statue of liberty has crowdfunding origins in the late eighteenth hundreds the committee overseeing the statues completion lacked the funds to build its pedestal so it's joseph pulitzer the publisher of the new york world newspaper urged his readers to help fund the pedestal within six months he

was able to raise over one hundred thousand dollars or around the six million dollars today and most of the donations were under a dollar now flash forward one hundred twenty five years and internet companies like kickstarter rocket hub and mosaic have taken off thanks to new and invasions and fund raising but there are also many regulations limiting the use of crowdfunding and the us currently a hedge fund or venture capital firm looking to attract investors cannot advertise however under new jobs act provisions venture capital firms can now advertise to attract investors but they must verify that all purchasers of the securities are accredited investors as a stance now a potential investor only needs to check a box to claim a credit investor status in a private offering but new standards impose the burden of proof on companies and regulatory guidance on this is very murky well earlier i talked to thames sullivan he is the chief executive officer of mike. oh

a bench areas are how raising capital has changed over the last few decades. bencher capital started out as operators are entrepreneurs build businesses and have exhibits reinvesting capital into startups to grow those businesses into the next you know big businesses the future. they kept their networks very very tight in close and formed kind of an old boys' network if you will individuals who have access to early stage startups and to that community in over time because of things like the implosion and things that happen in no way securities laws and regulations that change things like the jobs act in been passed. more transparency and has been created in inside venture capital so much to the point now there are starting to become ways to better credit investors to really participate with the same level of

information the venture capital really only had access to in the past. well how has the funding process changed in terms of risk taking and other words our investor is taking on more or less aggressive in the early stage and. i'm not sure of the risk profile has changed that much yet but i think that the risk profile is changing and the reason it's changed is because of things like big data and the crowd it all use the example. guessing the coward's way to the county fair so if you went to the county fair and try to get the county gets to close way if anybody did they would likely not be the expert however the crowd statistically as a group does the expert every time and so getting the momentum and deep and wide domain experience that involved in those startups the might be the next

you know google or apple or whatever you think is a is a great company. increases getting a probability to. move is being enabled by by really you know the crowd right now and that's never been possible before i hear in our g m how does crowdfunding a fit into venture capitalism and the fund raising and general. there's two types of crowd for me right now there would be crowd funding which is a very small part of what crowdfunding is and it's not necessarily when people think of as crowd funding and there's per base public so per priest crowd funding you can find on sites like kickstarter an indie go go you can actually receive a return on your investment in those types of what you might think of as an investment so if you invest in company a they'll give you an early release of their product or they'll send you a hat or or

a sticker or something like that if you want equity you have to be at this point in time do securities laws that accredited investor. by definition it's an i.c.c. term that says you have to make a certain amount of money or have a certain amount of network what it really means is that you can afford to lose body or take risk in the eyes of the s.e.c. . those in those types of situations are those platforms the exist that allowed him to do when you can actually it's invested in a company and own back what he either directly or indirectly in their company and the conduit for that type of investing it's never really existed until very recently there are ways to become involved through baby broker in a private placement but getting to permission and getting really deals that open source more by the crowd has has not happened in the past and we're all

very new and what is your business micro ventures do in the crowdfunding space. so we're in the smaller category of crowdfunding platforms we were fairly early in the space for the only player in the space with with a broker dealer which is quite important well everybody else is trying to get a broker dealer approved but they are having a hard time because it's it it takes more than filling out paperwork with with c.d.o. to become a broker dealer it takes experience in the securities industry with transactions on your bell and a good record you know with clients and that sort of thing. that a lot of people who are trying to get in this space are very new you know there are tumors they think it's a neat opportunity they think this is going to be great but they don't really know what they're doing or know how to do it so the process is being held up for almost all them. that coupled with the fact that there is an inherent conflict if you're

not appropriate you are doing these transactions in the sense that there is no. diligence or providing real information. two to the people on your platform so if you're a good investor on our platform go back to detail financials and so the company to receive questions answers you know we we that the battle with the individuals on the companies but but the actual information that they produce we do criminal background checks as well other platforms don't do that they let the companies sulfur or whatever their numbers and information are i personally feel that that's a disaster waiting to happen so they've got to be a broker dealer is a huge differentiator for us and those people that are on the path to becoming a broker dealer on the right track what are some of the pet possibly the companies that raise money without their oath and the ability to terminations being made and know your customer rules being followed can this hurt their ability to raise money

and they can share. sure there's a few ways that can hurt you the one that a lot of people think about is having an investor is invested in a competitor's offering so they may actually not be investing in order to look forward to the success that company but they may be just trying to invest to get information so that they can have their other bigger investment you know compete with that investment so knowing who the customer is what their or their investments are what their background is what their education is and things like that is extremely important i think that falls into another category of automation in this space where platforms are you know what the side of companies listing or the putting of their own information if you automate the process about bringing clapp customers on your platform and actually don't speak with them and build a relationship with them a you're not going to be able to understand what the needs of your customers on

a platform or and b you're not going to be able to read the right clients or investors to a company that's looking to raise money or. if you do things that are by the book and following securities regulations there is potential also to have a deal on while so you as a company could go and raise money on a. maybe they cut corners or some stuff in the group or c. looks back on two years from now says you know the offering was was not legal we're going to have to we're going to have to wind it essentially so somebody has to give the money to the investors get their money money money go on you know who knows but but the outcomes are sensually quite bad. i will go back to automation is this something that you're possibly looking at in the future as a strategy for vetting potential investor. we are it is kind of a balance. we're playing because we want to automate the process to to on war

investors if we want to lower the cost for our company so that we can actually maintain. profitable status. but we don't want to lose that interaction with the people on the platform we don't want to be driving the company aggression that is in line with the people in our platforms desire it's incredibly important to base our direction from the people who are for i want to get into the politics of all this for just a minute what about the status of the crowd i think might displace sand and other parts of the jobs act where is it in the in the room making process. so jobs act obviously was was passed there were a number of things that were going to be enacted by the f.c.c. rules that were going to be made that were going to be made and approved. the only rule that is really material the has been approved was changed in a cat table from five hundred best years to two thousand investors. three months

went by and. there are a couple of things coming down hopefully the what is left of the piano journal solicitation allowance i'm not accredited or unaccredited investors to participate in these types of transactions neither are the latter that are approved and i think yes you see maybe but the general suspicion sooner than later it's hard for me to wrap my head around how they're going to allow her investors into this space not that they should be allowed to because i believe they should but making sure that there are enough safety measures that are that are taken so that they're wrong people don't enter the space and create an issue for individuals who are current who might. be doing more of a link and then making sound investment decisions you know with these types of

things because it is a very high risk i risk asset class even if you increase the probability of. successful deals through crowdsourcing it's still a risky asset class early stage investing is and always will be. and that was ten sullivan the c.e.o. of micro adventure marketplace and stay tuned because up next prime interest producer and justin underhill flushes out the fear index for viewers the vix that is and tells us what might be in store for our writing and told future then that bob inglis and i have do over three d. printed in the new apple i phone app.

world. technology innovation all the developments around russia we've done in the future are covered. michigan is. a good indication. for chargers. arrangement three. three. three. golds reborn rolla video for your media project a free media oh god r t dot com. a little more you are going to take a long flight out of the radio guy. they want. to give you never seen anything like this i'm told.

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the stock market keeps climbing higher and higher with the dow and s. and p. five hundred index reaching record levels in the past month on the other hand the volatility index also known as the vix have climate it to worry market. over the past year for more on volunteer volatility we turn to prime interest producer testing underhill who has an in depth analysis of the vix to see what do we see going on with. all the volatility index or the vix is the market's expectation of thirty day volatility or price range and it's calculated on the options on stocks of the s. and p. five hundred and as a reminder the options are the right to buy or sell at a pre-determined price and a lot of people buy these options as insurance protection which is why the vix is also known as the fear index as investors become more concerned about market losses

the cost of insurance or options goes up and in this graph we have a graph of the vix index which is in green and we have a graph of the s. and p. five hundred index which is tracks s. and p. five hundred stocks now you can see that almost they almost mirror each other so when the vix is up the s. and p. is down and implied volatility one place volatility remains fairly low is during during bull markets during two thousand and seven lead up to two thousand and seven and more recently we saw one of the bull markets were going on we had low volatility and that means that investors aren't as worried about an immediate crisis the client in the market on the other hand when volatility spikes the market plummets and we have three major spikes on the scruff the first one came right after after lehman brothers and that was right there and we'll get to that in a minute we also have this one right here and this was during the flash crash when

the dow dropped more than a thousand points in a matter of minutes and this was exacerbated by high frequency trading now the third one was right here and this one was during the debt ceiling debate of two thousand and eleven now in all of these events there is a lot of uncertainty in. there's a lot of fear and that drove implied or expected volatility as well as realized volatility up while the market drops now let's take a closer look at what happened during a volatility during the lehman bankruptcy and we can see in the in the next graph of the vix futures in this graph is from current time to eight months out and let me get this cleared. from current months out we can see this yellow line which started in september of two thousand and eight right after the lehman brothers collapse and initial volatility was fairly high but it was expected by

eight months in the future to decrease over time and investors thought that the market would eventually become less dangerous whereas if we look at august of two thousand and twelve which is marked by the green line right here we can see that the lowest it was the lowest vix in five years by the way and even though it starts out low. comes it climbs higher and higher and higher over the eight month period and this means that buying long dated insurance when the market was doing well was very expensive and that's more expensive than the long dated volatility of insurance after the lehman brothers collapse and a low vix index does not necessarily mean cheap volatility well with the victim being at a five year low is there any way to predict when the next occur. a lot of that depends if history is any guide a lot of that depends on what the federal reserve does so if the federal reserve decides to raise interest rates that will affect volatility the vix index and also

if there's liquidity sucked out of the market at any point that will also have a big impact on volatility but it really depends on how fast the fed decides to take away the punchbowl and talking about the federal reserve how has their bond buying program to whine you. two three how has that affected the vegs well when the fed engages and q.e. purchases a large scale asset purchases they're taking. they're taking securities out of the market so they're putting them on their balance sheet and so the banks and primary dealers that own the securities no longer have to hedge against them and hedging is a form of insurance protection and when they unwind these hedges the cost of insurance across all asset classes drops and so in that way that effects the vix as well and so with that you can look at the fed and what they're doing because the fed doesn't hedge against any of the assets that they take on the fed in some ways

you can consider them as taking or sucking volatility out of the market thank you so much is this just in underhill. welcome to the daily deal with bob english. you know where they were made probably overseas somewhere vides shoe technology has taken a step forward several companies including nike adidas and new balance they've all reported that they are prototyping customized shoes using a three d. printing and i have your picture of that new balance released showing a plate on the sole of the shoe the so-called additive manufacturing it adds super

dynamic and evasions to everyday products that were once only driven through the aerospace industry these shoes are not ready for consumers they take two hours just to print one shoe but it kind of opens up the idea as to where the future of shopping could possibly go or the future of counterfeiting because you could theoretically to. one of these designs. downloaded over the internet what are the copyright laws going to say about this it's really interesting because it's an emerging field and the courts have yet to weigh the patent system the way they have on the copyright system which has already been tested through napster and file downloading through that and such why i still think that it's important to move on with technology of course we want to innovate here i mean this could improve our standard of living having customized they prototype them on several athletes and even imagine having a superbly made for your foot the way you run the way you do what that could do to

the sports industry maybe this forest industry could make it legal i use that as a. horse to have class in my show i don't tell that to lance armstrong you might have some problems with you know it is a legal to have the compressed socks if your answer and. i did not know that these three d. printed. there are not yet now you have read the probably will see them eventually ok. but also this week is apple's annual worldwide developers conference as one of their biggest events of the year they announced products they have speakers work it's supposed to be an exciting event and there's nothing better than what the market think of this well let's take a look at how the market has responded we have a graph of apple's stock price over the past two days now at about one o'clock yesterday it started to think and what did they do at one o'clock am twitter account. they announced their new products so they're going to have the new

macbook pro according to apple it will be available later this year it has the latest and greatest of x. on processors fire pro g.p.s. ok let's lots of great stuff in there but i think people were a little bit disappointed that. didn't have anything really groundbreaking to share and he's filling some really big three d. printed shoes here now that steve jobs is gone and people expected a little bit more apparently what does this bode for the long term future of apple stock we'll have to see and i'm sure these these innovations are going to help people who are already in these apple products who want the new ones but you know it's not the next i phone it's not the next i pod what do you have to offer well he hired lisa jackson who was the old head of the e.p.a. and she did a lot to influence the environmental agency i would even say she was chief of staff

under john corps and of course of the most global thing just to throw that in there a lot of a lot of ties but if you're not happy with your i phone product apple announced that they are going to introduce this app which phone trade in program supposed to start later this month and i said to entice user is rumored to. have started later this month and it will entice users to upgrade their i phones just to be sure they're going to be selling they're not going to be dumping these refurbished phones on the u.s. market they're going to be bringing them to emerging markets because because apple wants to sell i phone five here of course and what's interesting is a lot of these companies like you already have buyback programs i think two hundred dollars or so for a i phone four. you can basically get an i phone five with no money down just like a car and in this no interest rate or low interest rate environment and it's interesting that they change the chargers as well because you can't use or buy five

so all sorts of new reasons to get the i phone five move forward with innovation there you go as you're saying with this so thank you for weighing in on today show if you want to leave your comments please follow us on facebook at facebook dot com slash prime interest and you can follow bob on twitter at english p.r.i. and you can follow. to me at the very end r t bob thanks for joining us i do. and have been a day of opinions on prime interests fannie and freddie shareholders think they're due some draws after the government crowded them out in the two thousand and eight bailout and mr peabody went on a limb and to claim investors should dump city shares thanks to some stacked

a one way bets on the greenback s. and p. revealed its two thousand and eleven call on all salmon citing monetary credibility which we find and credible and it's emma sullivan of micro ventures and didn't hesitate to speculate on the future of crowdsourcing we just have to get the f.c.c. in tono and dusty in here behind the cloak of fear engulfing the begs to reach a startling conclusion thank you so much for launching today show i'm perry and boring and this is our interest to have a great night. wealthy

british style. markets why not come to. find out what's really happening to the global economy with mike's concert for a no holds barred look at the global financial headlines tune into kinds a report on our.

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