is goldman sachs the first of many battles brewing between the securities and exchange commission and big banks on wall street? plus...european air travel remains uncertain...as ash from an icelandic volcano eruption grounds millions of travelers. and...female c-e-o's still a rarity....even in this day and age...reasons why..coming up on this edition of first business. good morning everyone, thanks for joining us. it's tuesday, april 20th, 2010. and lawmakers on capitol hill are calling on the sec to force goldman sachs to give back some of the taxpayer money that it received just from being an aig counterpart. let's take a look. now remember goldman got almost $13 billion in taxpayer money when aig used that money to pay its counterparties. among them

goldman and many other banks. and any fraudulent gains should be called back according to some lawmakers. angie, this will still be in the news. and we'll find out if there were some fraudulent gains going on at goldman sachs. as the sec has also approved pressing forward with the investigation into goldman's activities. and the vote came down by three to two. now that actually lifted the stock. some people are thinking that maybe there's something that's unclear. maybe goldman wasn't so bad after all. but keep in mind, its really hard for the sec to get the goods on these guys. they had to go as far as wiretapping to find out what was going on at that company. yeah, good point there angie. now remember goldman sachs earnings coming up before the opening bell on tuesday. flight restrictions over scotland, northern italy and potentially other areas of europe are expected to be lifted today. that could bring some relief to the airline industry and to weary travelers trapped in europe because of the volcano eruption in iceland last week. vesna arsic and her son niko were good to go for a trip to paris to visit friends. they planned to fly out of chicago

sunday night... but then the volcano in iceland errupted. "well i've basically been on a rollercoaster since thursday." "i was pretty disappointed because we couldn't go to europe" since the eruption-- vesna arsic begain getting updates through facebook, twitter and email. "i was getting messages from my friends all over europe about people being stuck everywhere. i felt like my own little news service here. and then, i got addicted and i was up until 3:00 one morning reading information as to what was going on where. " what became clear, is the cloud of volcanic ash was leaving no chance of a european vacation. "i actually started looking at prices of other trips to morroco and things but you could see how prices were sky rocketing as the volcano was spewing the prices were sky rocketing." she eventually booked a caribean cruise and counted her blessings. "at least i'm here not on a cot, some people are running out of medicine at airports some people are read are in transit and can't get out of airports

because they don't have the visas for that country." an update monday from the state department is giving comfort to americans waiting for loved ones to come home. "as far as we can tell, americans who are stuck in europe are weathering this as well as you can expect" the international air transport association predicts air carriers are losing more than $200 million dollars a day....and that 6.8 million people are affected. ..at windy city travel, travel agent gary trick says business at this agency has not been hurt-- yet, but it could if the problem persists. "travel restrictions during 911 3 days this has been almost a week." "people are questioning when am i going to be able to go, can i get out." on the flip side-- there are reports scandinavian ferries and even taxi drivers are profiting on the volcano erruption as people scramble to get to airport where planes are taking off. and now we have george tkaczuk / rmb group joined us from the cme group.

george, looks like the markets are shaking off the jitters from the goldman sachs news. hi beejal. yes, markets are. looks like there was a little bit of pressure on the market. especially after goldman sachs news last friday. and it looked like, oh boy, this may be the start of a correction. then, however monday if you noticed at the end of the day, the markets started trading higher towards the end. so it looks like the market's gonna look past the goldman sachs news and focusing more on the earnings coming out this week. yeah, you think earnings could actually provide a boost for the market. so, do you think is gonna continue to do that? yes, we really do. what we continue to still have is a formula for risk appetite. meaning good earnings, good growth in a very easy fed. and the fed, is not gonna tighten anytime soon. they made that very clear. so, people are gonna be searching for returns.

they're gonna be coming into equities. ok, so you're still bullish then, bottom line? yes, we did trim some positions. we had a little scare after goldman sachs announcement, but we still are bullish. thank you very much. after charging goldman sachs with fraud last week, has the securities and exchange commission finally opened up the pandora's box - on walstreet? brian battle / performance trust capital partners is here to help us answer those questions. brian, you say it's not just one deal, and it's not just goldman sachs. so other banks could face the same charges? good morning, you're right beejal. this is a very typical activity for a lot of the investment banks. it's gonna be everybody you've heard of. goldman, merrill, citi, b of a, j.p. morgan. most of the major desks on wall street have had c d o and synthetic trading desks. so, this is just the tip of the iceberg and as soon as this case its momentum, it will be applied. the same setup will be applied to the other banks and the prosecution will continue way through the summer. we're just getting started. what are are the synthetic cd o's that banks are cooking up? i mean, how you make one and then lie about what you put in it?

well, right, there's two points to your question there. you make up a cd o by saying these assets will behave in a certain way. and that's what you get. a bet on a derivative transaction. this bond will survive, or won't survive. the question lies, and here's where the case is in the civil suit is. whether it was a material omission, they forgot to mention about how bad this bond was. or they intended to not pervade the information to their customers. and that's where the legalities lie. do they know it, or they but it know it, or were they lying about it. so, goldman's contention is, everybody who bought it was a big boy it and everything was disclosed, that was material. the sec says everything was not disclosed that was material. and that's where we're going to end up in court. so for the first time, it sounds like other global banks were the victim of this alleged fraud. who'd wanna do business with wall street after learning about this? that is the long-term implication for wall street is that they survive and their reputation and trust. they're helping you achieve goals and financial goals. and if you can't trust your counterparties, that completely

eliminates their ability to access the market. nobody will trade with you if they can't trust you. and that is a big problem for goldman. they're probably working furiously to try and settle this case before it goes to court, or before they end up in congress and have to testify and it gets on the 6:00 news. i'm sure it will be very hard to make it go away. ok, yes or no. did european regulators go after goldman too? yes, gordon brown announced today that he's gonna be pursuing action there and they're going to try to get the money back. and that's what the goal is going to be in all this action. thank you. why there's still plenty of room for women in top corporate positions. plus...now that the s-e-c is going after goldman sachs for it's alleged role in the subprime meltdown....a look at the impact it could have on the rest of the financial

sector...that's next. talking about the headlines now

with john person / national futures. and, where again talked about the goldman take down. the company said the fraud allegations are false. but john, if the sec does prove them, will goldman be slapped on the wrist, or will it actually face a severe punishment? you know, i'm not a legal consultant, but i can tell you this. i think that from enough

experience in the industry, there's been all types of fines that have been levied. i think with the intent of the regulators to clean up wall street and the image of wall street. the fine could be quite substantial, if goldman is in fact found guilty. so that's the key, what's really gonna come out. it's gonna be big news, there's no doubt. but goldman sachs, truthfully i think that if they can defend this case and if they are able to from a civil standpoint. because this is not an sec sanction against them in regards to criminal activity. but, if they can buy their way out of this with a reasonable fine, goldman sachs is still king of the hill. ok, still though, two years after the crisis started. regulators act like they're trying to be tough right now. i think its

pretty pathetic that it took them so long to figure it out with goldman sachs. what do you think? well you used the keyword. pathetic. and if you wanna talk about pathetic, here you have goldman sachs, you have bearstearns, lehman brothers. it was a common practice amongst most wall street firms. they survived. if you want to talk about the sec's ability to regulate their industry. how did they let an individual like bernie madoff slip under their finger? so, i think that the word pathetic could really be triggered at the sec for coming up with something like this. but i think right now, between what's happened on wall street to main street. what's happened in the housing sector. the sec has to do something and go after somebody. and goldman sachs is your first primary target. and for the record, do you own goldman shares yourself? no, i do not own goldman shares. but i will tell you this, that if goldman got into the 135, 140, i would certainly be looking at maybe six months, nine month out options. call options. i would be looking for it buy down in there. ok, well let's talk about overall financial sector. since the sec may be looking at other banks. do you short financials now, or do you still buy them? no, i like financials. i think

like bank america, i still like bankamerica. but, bankamerica up at 19 and the whole financial. if you look at the xl f, just as an index or an exchange traded fund. you see the percentage gain that we've seen this year alone. i think we got way to far ahead of ourselves. the market is going to struggle, banks will struggle throughout 2010 and probably for the first half of 2011. but i don't think you do not want to not have exposure. i think you want to have exposure. looking at citi for example, we hit $5, we tapped off of that. we lost 10%, we've rallied back, on good news on earnings from citi. i think a lot of financial's, if this economic recovery is to be sustainable. there's three sectors you want to pay attention to. it's obviously the banks, transportation, and technology. those are the three leaders come out of the recession. so far, we are seeing the strength in all three of those sectors. i think you still

want exposure to the financials. ok, let's move on to the overall market here. stocks, popping up in the last hour of trading yesterday. but do you ever see stocks turning negative anytime soon? or are you sticking with the rally? well here's the thing. last week at the peak in prices, the s&p 500 was pressing close. believe it or not, this may not seem like a magic number. but we were at almost to 8 and half, little over eight and a half percent gain on the year in the s&p 500. for where we are in the year, i think it was a little too much. and i think there's a lotsectors that were really fueled. ones we just mentioned, number one with technology, number two transportation. you take a look at some of the top holdings in transportation, like fedex and ups. we've just seen some of these stocks on fire. i think we need to cool down. ok, bottom-line john, bullish or bearish? i'm looking for consolidation and i'm still bullish throughout 2010. i think that this equity market in our economy has some underlying strength going forward. thank you very much.

bar-b-que grilling this summer could get a lot more expensive...thanks to rising meat prices...on our website...firstbusinessnews.com. ... a look at what's behind the spike in meat. plus...a former s-e-c attorney talks about what's next for goldman sachs. and...companies dish out millions of dollars on social networking...is it really worth it....these stories and more on our website...firstbusinessnews.com. and straight ahead on the show.... women in the c-suite....what they've done right and wrong at the top and what we can learn from them...that's next.

female ceos are still a rare breed... even though women's role in the workplace has progressed significantly. today, women hold only 3% of ceo positions... douglas branson / author, "the last male bastion" is here with some answers. welcome to the show douglas. thank you. so why are few women leading companies today. well, some say it's the glass ceiling but, women have made inroads in industry where no women have gone before. so, there is a glass ceiling but there are lot of cracks in it. i think that women need to get more financial grounding earlier. i think that women who get education. get an mba or go to law school or specialty and quality schools have a better chance of success little on in their career. and in your book, you profile 21 women who have beaten the odds and have led fortune 500 companies at some point. what did they do right? there are 22 now. ursula burns, who is african-american, became the ceo of xerox last summer. succeeding another woman anne

mulcahy. what did they do right? they have reputations as problem solvers and their company. allan coleman, for example at dupont, created a whole safety division. andrea young solve the problem that befuddle her predecessors at avon. she finally got it internet enabled. a lot of the independent representatives that sell avon cosmetics. they also have the financial grounding and the presence as a move up through the ranks. that they represent their company anywhere and the company will send them as the representative. for even the most difficult negotiations. now, some women have also made mistakes on their jobs, just like the rest of us. so, what happened there off the mark welcome i think that a couple of the women didn't have the financial grounding. they made rosy projections, quarter after

quarter and year after year. and they didn't make those projections, or the companies didn't. * *joe will read at mattel toys. coffee reno is now running for senate in california. she was ceo of a hewlett-packard for six years. and wall street really punish a company stocks. so, a sensitivity to the stock markets and earnings and financial matters. that proof could be their undoing. i think women can be undone by, being too aggressive to assertive. that's 40 years ago, 30 years ago. women don't need to be that way anymore. but men are also aggressive and assertive. but, is that ok? it's a different paradigm for women than it is for men. its a much more subtle route to the top. men can go pretty long way by being

assertive and aggressive. the quarterback, the 42 long. a woman has to be more diplomatic, more strategic as she progresses upward in the workplace. so, still different standards that exist today. but what do you think people should take away from your experience as a whole? i think one, the value of education. two, the value of some financial grounding. three, a contrary finding is go ahead and have children. a lot of the women who have made it to the top. 20 of these 21 women have children, they have 43 children. so those are a few of the things. there are a lot of the counterintuitive our findings in my book. because, many of the advice books out there are not grounded in any research. and i am the first person who really took a look at women who got to the top. well, thank you for your interesting findings, we appreciate it. thank you. andrew keene of katl group talks highs and lows of goldman sachs.

in our chart talk this morning, trader andrew keene, katl group joins us to talk about goldman sachs. good morning to you andrew. good morning to you. it's been a wild ride for the stock andrew. what do you think at the current levels? do you think we're gonna continue to see this stock climb higher after that big fall on friday? yeah, i don't really see it going down that much more. i mean it had a huge move on friday. it was down $25. you know the sec coming after goldman sachs. but, i feel

like this is gonna be one of those greece situations. where, you know you initially have this like frenzy at all. the market sells off and any time the market goes down, you have to be a buyer. i inflect goldman sachs. i am short a little bit of volatility. the volatility on friday in may went up about 13 points. and in the back months it spiked about five points. volatility yesterday got crushed. the front month was down about 15 points, and then the back months was down about 2 1/2 points. for people might not understand the volatility game, basically it sounds like you're saying some of the risk is starting to come out of the stock. is that accurate? exactly. i mean goldman is gonna have earnings i think it's this week. and the volatility is going to go even lower after that. for example, the may 160 straddle on friday, i think it closed around $18. and today it's trading around $15. even though the stocks moved a couple of dollars, the straddles inconsiderably. and after earnings, i think its gonna come in even more. what kind of range are you looking for on the stocks? just for people who might not understand it andrew. and what kind of floor do you put on the stock? and how high do you think its likely to go within the next few trading days, let's say? well i

mean, i don't know about the next few trading days but the numbers i'm looking at are 150 on the low end and 180 on the high end. you know, 180 is where it got to before this news came out. 150, it held up very, very well, back about a month ago. it drifted down, sat around 150, 152. hung out there about two weeks. it didn't get really under 150. got in there, maybe 50¢ under, maybe 149 and half, but it didn't close under 150 formore than one day. and it was off to the races from there. so, if people want to get long, i would put my stop at 150. i don't think it's gonna go lower than that. but you know, there could be more news that we don't know about. thank you very much. giving us the options look and the regular look at stock. an estimated 2.4 million graduates will enter the job market this spring... outplacement firm challenger gray and christmas says there's continued weakness in entry level jobs - that could force new graduates into lower paying service sector positions... or

unpaid internships. most people said graduates with degrees in health care will have the best chance of finding jobs... followed by business administration and computer science. that's all the time we have today... thanks for joining us everyone - have a great day! and we'll see you tomorrow.