-- on a subprime basis. ...

so that as far as the market knew they had about $6.8-$6.7 million subprime loans. as a result they probably had about 18 million. regulators regulators. and wall street regulated insured banks are regulated by the government. in fact in the larger banks, there are examiners in the bank 24 hours a day, seven days a week all of the time. and they didn't recognize the risks that these institutions were taking on because the institutions themselves did not. one of the reasons as the bubble grows these mortgages become more and more valuable. there are very few defaults. when a bubble is growing, people can refinance if they cannot neat meet their finances. we thought the sub-prime mortgages were risky but we are not seeing a lot of default so we can go into the this business and invest in sub-prime mortgages which is what i think people in wall street did. they were helped by the accounting rules at the time because if your fortportfol -- portfolio. they began thooo loose many and look risky. the federal reserve probably has better regulations and a huge stack of econo

a subprime juggernaut. and if that doesn't spook you, what does? what about you, steve?make it? subprime and juggernaut in the same sentence is unnerving. >> yes, i think if anything you are being a little bit kind about the auto sales numbers. by the way, speaking of songs, blame it on the rain was a terrible song by milli vanilli. lehman on the weather is a terrible excuse for these auto members. last winter was the worst winter of my adult lifetime in chicago. so blame it on the weather is not a valid excuse. i think there's something bigger going on and there's something going to a part of this. not only do they but also extending the duration of all the growth, it is now six and seven years. seven years is an eternity when you're talking about an auto loan and your card appreciate so much over the course of seven years. i think that we do have a ripple effect. but we do have a similar kind of bubble on a smaller scale within autos. >> people are loath to lose their car and people will live in their car. and by the way, people have figured out a great deal. >> i'm go

we have the housing boom, subprime bust, and it crashed all over the floor. the market is running way ahead of the real economy. the real a car will meet -- real economy of the world is friday to a halt. there is now a huge deflationary cycle in all of the materials and in most of industry. in the oil market. that is a sign that the world economy is grinding to a halt. betty: so our answer is to raise interest rates? david: get the fed out of interest markets. i know that when you have interest rates at zero for six years, you have given a massive signal to it erroneous false signal to governments who are financing themselves for nothing, for traders sure making overnight money, two em

in 2,004 democrats passed a bill to restrict subprime lending. when i became chairman in 2,007 i did not get a bill through the community. no lending to people who cannot pay you back. the "wall street journal" attacked me. why doesn't he want minority groups to have loans. 2,007. all before the crash. here is what he said i am aware of the loosening of mortgage credit terms for subprime borrowers increases financial risk and subsidized homeownership initiatives distort market outcomes. i believe that has now you have the power to regulate. the benefits of homeownership are worth the risk. protection of property rights so critical to a market economy requires a critical mass of owners to sustain political support. in other words then and people money so they will be conservatives and don't pay you back. the "wall street journal", most of these new homeowners are low income families not qualifying for a mortgage. ensuring far fewer of these loans are issued in the future. [laughter] [applause] the loans that they get caused the crash and they were

-- on a subprime basis. ... the regulators and the federal agency a few weeks ago said you're not taking enough risks on mortgages. you have been insisting they make down payments and that is weak. we want you to accept 3% down payment that will lead to overtime for a lot of people have mortgages who thought they cannot sustain. they have the same effect on financial institutions and will have something close to a financial crisis. we should have understood from the beginning that it's the role and then we could have reformed the government rather than try to impose restrictions on the private sector. >> host: does it look any different than the last one? >> guest: there will always be some differences but if we keep going this way with the government in charge of mortgage standards we are bound to have a financial crisis again. this is not something that is irrelevant to them. if it is a loyal back if the mortgages in your neighborhood have the value of your home is to decline expected whether your neighbors ca

now, wells fargo, a bank i really like recently has tried to pull back from subprime lending.ved and see so much of auto lending. is this something that could slow down sales in 2015? >> we don't see it. in fact if you dig deep into what wells fargo really said is they're going to cap the amount of subprime lending they do. and if you look at that cap relative to the volumes they're doing right now, they're really quite in line. so it would only be if car sales grew materially beyond $17 million and subprime increased as a significant percent that we'd have any worries. but putting that in context, on the dealertrack network, there are over 1,600 lenders doing lending. so, if one lender decides to not be as aggressive in a segment, i'll tell you, it's a very competitive market now. we would expect other lenders to jump right in there. >> a lot of people write these articles and just say this is the next ticking time bomb. look, you're deeply involved in it. i personally think that the credit picture of the american consumer's so good it's another a ticking time bomb but i resp

and in total, it's 8% of our business subprime loans.nders what the delinquency rate is on subprime it's about 5%. on the subprime. and about 3.4% on the total. the point being, people continue to pay their loans. so i think the anecdotal stories you hear about subprime in certain lenders, i think that's -- if you go to a $5,000 or $10,000 vehicle and a super subprime customer you're going to get extremely high rates. and you're going to have other stories about much higher. but as far as that being a big part of the auto industry it simply is not. >> so just to clarify, mike not just what happens at autonation, you're not concerned about the trends that you see in the auto industry at large? >> absolutely not. you know this has been a theme. and i think the ultimate litmus test as way a late 9 and 10. the first payment that american people make is their car payment, before their children's education before they pay for their house, before they pay their credit card. i'm not making a moral judgment whether that's right or wrong. >> no yo

in 2,004 democrats passed a bill to restrict subprime lending. when i became chairman in 2,007 i did not get a bill through the community. no lending to people who cannot pay you back. the "wall street journal" attacked me. why doesn't he want minority groups to have loans. 2,007. all before the crash. here is what he said i am aware of the loosening of mortgage credit terms for subprime borrowers increases financial risk and subsidized homeownership initiatives distort market outcomes. i believe that has now you have the power to regulate. the benefits of homeownership are worth the risk. protection of property rights so critical to a market economy requires a critical mass of owners to sustain political support. in other words then and people money so they will be conservatives and don't pay you back. the "wall street journal", most of these new homeowners are low income families not qualifying for a mortgage. ensuring far fewer of these loans are issued in the future. [laughter] [applause] the loans that they get caused the crash and they were

but if you fed into the model of 80 million subprimal ounces 76 million the model would spit out a much different set of risks. so people really did not understand at the time how bad the market was. which is important for everyone to a understand. wall street regulated heavily buying the government with the larger banks there our examiners seven days a week and they did not recognize the risks. because as they grow they become more and more valuable. with very few defaults. if it cannot meet their obligations. isn't this amazing? we're not seeing a lot of defaults. so to go into this business to invest with a sub-par mortgages is what the people on wall street did. by the accounting rules because it was growing at wed to the bottom line by what happened is when everything reversed in then began to lose monday and the capital declined. all the things happen that the town and. with that insufficient information about what is really going on. and people assume the lot about public policy they did not realize what fannie and freddie redd actually doing. to figure out why things are so bad

the reason for that is because interest rates were low and subprime mortgages were available. with that available, we had an increase in buyer demand. buyers didn't really have to qualify. they were programs put in place to encourage home ownership. as a result people took advantage. now, the credit correction in 2007, as quukickly as the prices went up they went down. during that period they went up 80%. >> is there enough blame to go around? blame the banks? blame the homeowners? >> what happened is lenders lended too much and borrowers borrowed too much. >> mr. brown? >> icon concur. there's enough blame to go around. we can focus on what happened in the past but what we have to do now is how do we get through it and focus on various situations where we have families. that's what we are trying to do. deal with where we find families in this particular crisis. >> how does the crisis impact what you are trying to do luring businesses here and encouraging investment in the communities where foreclosures are still a crisis. >> there's a lot of factors in the county that we have

. >> cheryl we have to point out the lending to subprime houses was mandated by the government. david: that's true. they forced, remember who it was, andrew cuomo, now governor of the bite state of new york when he was head of hud, he was mandating all of these policies, subprime policies. panel, we have to leave it at that. don't forget, catch myself, sabrina, carrie on "forbes on fox" every saturday morning 11:00 a.m. eastern on the fox news channel. thanks to all those who watch. we have a nice audience. cheryl: like "outnumbered," david asman edition. the supreme court heard arguments today in a case have e housing market. a court will decide that if a homeowner declare bankruptcy can get a second mortgage wiped out if the home is worth less than the combined two mortgages. bank of america said bankrupt homeowners should not be cleared for a second loan if in trouble with the first. a decision is expected in june. the 11th circuit court of appeals said you know what? they're with the homeowners. david: you will watch that. super mario, talking about draghi, his stimulus send

allied financial and have a lot of exposure to the subprime auto lending. it's unclear what that will be treated like under these levels and you have a lot of big banks. j.p. morgan citigroup, bank of america, goldman sachs, morgan stanley that have a lot of exposure to capital markets. there was a new test that put a new strain on the capital markets that brought some of the capital levels down. it could see something where the banks wanted to give back for more money. they don't want it to be predictable. they want banks to have a safe enough balance sheet that no matter what happens, their thank you so much kayla tausche. >>> costco announces a surge in profits and that's where we begin tonight's market focus. wholesale giant's numbers related to a taxes because of lower fuel prices. the revenue was slightly below estimates but same store sales rose more than expected. the stock almost 3% higher today, finished at $151.17. kroger announced a big pop in earnings. grocery store's quarterlies. full year outlook topping views. shares up almost 7% to $74.31.

they have the same subprime situation, they don't call it subprime. they have a mortgage insurance bubble that is really interesting driven by the cmhc and gen worth up there. that has existed a couple years. in my business it's all about timing. what is the timing to pop that bubble? and we really see oil as the pin to pop the canadian housing bubble. if you look at the canadian provenÇal markets, atlantic, canada, has been soft and unemployment going up for several months, even a couple quarters now, the same is true in quebec very soft, rolled over last year in the middle of the year, but alberta and saskatchewan where the oil boom have been going on have been strong and kept the stats up until now. january like they fell out of bed. calgary home sales listings up 40% and sales down 40% in january alone. never seen such a dropoff. and so if you continue to see soft oil prices you're going to see the beginning of weakness there and because the setup is so leveraged and loss ratios are so low, provisions so low, and there is so much leverage in the s

. >> i represent an area that suffered through the subprime mortgage crisis of the mortgage-backed securities. i am concerned about how fast these new types of rental-backed securities are going to proliferate. is there anything wrong with trying to make a profit? certainly not. but i want to make sure that residents are being treated fairly. that the impact on my community is not negative. >> how powerful are these new institutional investors, companies like blackstone? >> one of the big problems we have with the functionality of our government is that the ordinary person doesn't believe they have as much say as these big financial interests. and they're right. >> we have voted numerous times to weaken financial regulations, the dodd-frank bill, the federal consumer protection bureau has been the subject of many pieces of legislation this past year. i'm not able to get one single hearing on this issue. >> if you've got lobbying powers who lobby 24 hours a day 7 days a week 365 days a year on behalf of banks on behalf of issuers and no one protecting investors or the consumer, you got a probl

citigroup has agreed to sell its subprime lending unit onemain financial.leaf and onemain are two of the largest providers of installment loans. some advice from one possible presidential candidate to another. jeb bush tweeted that hillary clinton should release her unclassified e-mails from a chua secretary of state just say he did as the governor of florida. we said obama says continues a personal e-mail account to conduct business and that may have violated federal requirements. she has since turned and thousands of pages to the government. stephanie: slain russian opposition leader boris nemtsov was laid to rest today in moscow. thousands turned out to pay their respects. he was shot four times in the back last week days before he was to lead a rally against president vladimir putin. john major had this to say at the memorial. >> he stood for a word -- liberty. he stood against aggression oppression and anyone who thinks his words will be silenced by his murder, i believe they made a very serious mistake. stephanie: he former world chess champion who no

they blocked our efforts to restrict subprime lending. it has gotten a little too much currency. it was to absorb the financial community, responsibility so that they could avoid legislation to regulate them. >> i think we have time for two questions that are related. [laughter] >> aside from hillary clinton do you have any preference for a democratic presidential candidate? any hope for another? the related question is would you consider running on the same ticket with elizabeth warren or president or vice president? >> if we did i could i could not get the votes of the commonwealth of massachusetts. one of whom shall not be from the same state. the constitution the two for one state. the president. she would have the votes. >> change your registration domain. [laughter] >> i could. tax consequences. here's the deal. in the 1st place, made the record. john mccain smudged his own record some elements of distinction by nominating a person who was clearly unqualified. presidential nominee, an absolute obligation to pick someone to be vice president who can take over. when tho pick

it has to be securitization in relation to not just, if i might call it, subprime property assets.ght. where do you see this going? as you said on this side of the atlantic, we have one model. the americans are completely the other way. do we want to go as far as the americans or do we want to find a middle ground? allowing the banking channels to operate, it is good and financing certain kinds of businesses. but and praising the capital markets union to allow a more balanced approach? sir bischoff: there are advantages to using a banking channel. you have a relationship. it is quicker. capital markets, there are all kinds of documentation needed. if we have an aim, we should aim to get to 50-50 rather than 50-70. i think it would be seen as a triumph if during this european parliament we might increase from the 30% capital markets to 50% capital markets. it would be a big step toward. guy: do other things need to happen? financial services is something the u.k. has banged to the drum for. what other things need to fall into place? sir bischoff: the capital market union looks at al

now that wells fargo has pulled back from the subprime market -- you can tell it bothered people because even gm didn't go up much and they were the lone winner. if you think it is too cold out to buy a car, how about a house? it is not like homes are selling like hot cakes, especially on a day like today which happens to be national pancake day, which we'll celebrate later in the show with the ceo of dineequity dineequity.com. i think they're selling more like quinoa. there's a day for the millennials. really? i've been watching these stocks trickle down after some pretty good quarters and i think they were anticipating that february would be an awful month. the housing market seemed to be getting just ahead of steam. fourth negative remember how we fell in love with the semiconductors that go into cars and cell phones and the number one chip supplier to the auto industry? guess what we left out? the selling of computers. best buy lowered the boom on tablets, which are suffering from what they call material declines. ouch! that's plain terrible. it becomes clear something is very wrong

our calls but in 2011, and said that all cars are sold with a warranty and helping customers with subprime credit that could not purchase a car at other dealerships. >> they are seeking restitution for consumers and they believe there are other victims of these alleged scams that have not filed complaints, go to 6abc.com for the link to the a.g.'s website to file a report online. also on 6abc.com you'll find tips to keep in mind any time you buy a used car i'm nydia han channel 6 "action news." >>> a major drug smuggling operation that funneled heroin and cocaine and meth is now out of business, officers took the six men into custody yesterday following an investigation that began last july investigators say that they shipped the drugs from mexico to reading where they would be broken down and distributed. and they got a words for another transaction occurring they spotted the suspects and an outy, they found cash guns and methamphetamine, the men are held on $1 million bail each tonight. >>> from our delaware news, fell wear state police are looking for two men wanted for armed robberies

subprime mortgages. melissa: ackman really?e did "jeopardy" and whipped right back to bill ackman. >> because ackman cried once when he was talking about herbalife. melissa: i will cry myself. thanks, guys. >>> leaving money on the table, millions of americans are not getting the most out of their social security benefits. you could be getting more money. it doesn't have to be you. we'll reveal the secret earns up to tens of thousands of dollars more. you. you have got money in social security. you're not getting it. we'll tell you how to get it. plus the commander-in-chief tastes music. not even president obama can face a round of mean tweets on "jimmy kimmel" live. more "money" coming up. >> dirty -- 30 rack of coarse light is now $23 at fun stop. thanks, obama. [cheers and applause] how do you make obama's eyes light up? shine a flashlight in his ears. [laughter]. that's pretty good. there's nothing more romantic than a spontaneous moment. so why pause to take a pill? and why stop what you're doing to find a bathroom? with c

i have to tell you, just like what happened with the subprimes.f all the leverage that has been used to buy these stocks. if the stocks go down in value, suddenly everybody is stuck with this debt that they have to pay back. that could really hurt the financial system. maybe not as bad as 2008, but maybe it is. >> well, look, david, i think the thing is, the economic recovery is still fragile. we're trying to predict when is this bull market going to turn into a bear market. but i think we have to remember and step back a moment and say, these kinds of crashes don't just happen out of thin air. it's when new information reaches investors. we have to ask, what is that new information? is it going to be bad political policies down in washington. is it something else. i feel optimistic because there's a lot of gridlock right now. i don't think it will happen overnight. >> go ahead quickly, adam. >> keep in mind some of the companies who have been borrowing at cheap rates to buyback shares, apple. so, you know -- >> well, apple is in a class by itself

in the early 2000s you had a believe you could create subprime mortgages and developing an ownership sheut and target those trying to refinance their home. you cannot create a democracy built soley on accumulation of private property for one. it has to be much more robust in term of defending the rights of the poor to have political voice and that is part of what is important about jim crow. you have a moment where there is a possibility of creating democracy as you tear down the color line and you redescribe to the property owners. the book has a number of characters that make sure segregation remains profitable. tony tommy is one of my favorite who is keeping the population confined to villages where people can come observe them. luther brooks a white property manager, helped manage segregation and kept it moving forward and helped people making money. you had black landlords who were managing the color line as well. so i want to get people to think about the figures and what extent are the present politics being run by those making sure segregation remains profitable and keeps law

to sell one main financial unit for 4.25 billion in cash making spring leaf the nation's biggest subprime jpmorgan upgrading citi from overweight to neutral, citing the credit card deal with costco expect capital returns to be approved in 2015 jim, and hit operating efficiency targets. >> making a lot of moves. i think these are moves that are long overdone they had to do a lot of things. i think corbat's done a very good job. a lot of people are recognizing that the guy's become very don't you look askance at me. >> i feel like you saying he wasn't doing a great job. maybe i'm mismembering. >> no. he's been gaining -- as he got in, what i realized was the situation was not in hand. as he's gotten control of the bank, he's recognized where the fat is he's cut a lot of the overseas divisions, the mexican problem wasn't he he inherited that and he's being very forward looking. also been up front with the government and tried to put that behind him. spring leaf deal people will say leaf got the best of it but any more capital, citi will do fine in c car. i was hesitant this bank is in troubl

and you also reassert the worries about the loans to the small oil companies and the subprime market. oil going down while it is a long-term benefit is spooking the financial markets. the credit market. charles: i want to let the audience know, whiting petroleum closed up a dollar, in the after-market up $2. rumors they're going to be acquired. perhaps exxonmobil. lot of action on that. we're going to see this right now. and i think matt is going to take a couple of major deals and somehow on a chart, oil hang above 43. if it doesn't, i got to say in the 30s is not unreasonable. >> i agree. i called the bottom a few weeks ago. if we break through the bottom that is obviously from a technical perspective. i don't care what i think or anybody else thinks that's a major breakdown. 30s is doable. today's action, the deflation work, that was thrown around a lot. i'm sitting here thinking, if we had deflation and consumer confidence number is not good, should the market be up? things are too good, the fed is not raising rates if we have deflation. shouldn't the market be up today? we're man

most people say citigroup denounced business mix, subprime lending business here in the u.s., they'ree world. so slimming down, derisking the business. we think that's going to play to citigroup's favor and they'll get the dividend from the fed and be able to buy back. liz: go from one penny to six pennies? >> i've got them going a nickel. we'll see. i think most of the money is dumped into the buyback. citigroup is trading below tangible book. when you have the ability to buy back stock that creates equity and value. liz: mike, we heard brennan, i'm hearing him say through that answer citi is going to pass and will raise dividend. do you like citigroup as an investment. it's up 2.25% that the second? >> the answer is yes, and yes, i think it would be a huge shot because people who really know the company are completely convinced that michael corbat told the people around him, we are going to pass the test. by the way, if we don't pass the test, we'll all lose our jobs, mine would go first is what he would say. with bank of america and goldman sachs are interest in the market as well.

auto loans are up, yeah, because of the subprime and seven-year loans. >> definitely.ou know, whether you liked bernanke, greenspan, you have to say they did not wear their politics on their sleeve. janet yellen from day one has been, obviously, a wing of the obama administration, and everybody sees it. yes, just recently she met with 21 conservative financial leaders, but that was only after she was passed during a house subcommittee meeting for meeting with the democratic financial riders. -- leaders. charles: here's the thing though, do you think she can draw the line? i don't remember a fed person talking about income inequality. i wonder, what can she do with respect to fed policy to even change that? a lot of people say, hey, janet, you're making it worse. >> if she's going to bring in that,. >> she also needs to talk about all the other ip equality, and should the fed be getting involved in that? she also brought in college loans with that and talked about inequality in the distribution of loans. these are not things -- >> she's not trying to be political, it's

let's not forget about the fact that to an increasing degree, subprime auto loans are helping fund therowth of auto sales. so there are developments on this front. gerri: you are so hooked on debt. our entire society. talk about people 18. talk about people 25 35, 45. >> no savings. gerri: all across the spectrum, rich. it is not just, and it is just not americans. it is government too. >> it is a culture of borrowing that is driven and encouraged by at almost every level. government itself wouldn't exist if it couldn't borrow and didn't have massive red ink. gerri: i want to talk a little bit about hillary clinton. i can't get away from it today. she finally made comments what is quickly becoming email-gate. rich he had who hands been listening to all of this. rich? >> former secretary of state hillary clinton said she met all disclosure responsibility and gave private emails to the state department and says all the email she failed to turn over is private. she installed a server in her home from former president bill clinton and decided to maintain the address at the state department

and those cuts will go into the other room next door, where they'll be broken down into subprimals.hey'll be packaged or shipped out as orders. >> so how much revenue will you do a year? >> uh, we should do about 50. >> 50 million? >> 50 million. >> that's a big business. how big is that electric bill? >> uh, about 30 a month. >> wow. a big business like this comes with big overhead. how much is your rent? >> about 32,000 a month. >> wow. there's rent and cooling cost averaging over 60,000 a month. there's union labor costs. there's seven delivery trucks. that's a lot of money being spent. but there's $50 million of revenue coming in, so i'm a bit baffled by the annual losses. this is almost a $50 million business, how much do you think you'll lose this year? >> about 400,000. >> how much is inventory at one given time? >> probably between 800,000 and 900,000. >> how much leaves here a day? >> 150,000 to 200,000. >> you're turning your inventory pretty quick. >> right. >> and so do you guys have any debt? >> right now our bank is lending us about $3 1/2 million. the fabricating room

subprime lenders selling one main financial for more than $4 billion in cash. we will to you what is behind that sale up next. ♪ betty: here's a look at our top stories. greece is getting so much needed investment money. funding will be provided through 2020. greece asked for help last year but the request was put on hold during the country's elections and bailout. the world's largest electronics chain is cutting cost efforts. best buy will offer a special dividend of $.51 a share. it will increase by 21%. it be estimates but fell short this quarter. one main financial was bought for four and a quarter billion dollars in cash -- $4.25 billion in cash. blackberry is taking another stab at winning back the smart phone market. the introduced its five inch leap device in barcelona today. the touchscreen device will set you back two hundred $75 and will be sold by european carriers in april. the canadian company plans another device with a sliding keyboard later this year. lots of people still like that blackboard keyboard -- but very keyboard -- blackberry keyboard

we have the housing boom, subprime bust, and it crashed all over the floor.t is running way ahead of the real economy. the real a car will meet -- real economy of the world is friday to a halt. there is now a huge deflationary cycle in all of the materials and in most of industry. in the oil market. that is a sign that the world economy is grinding to a halt. betty: so our answer is to raise interest rates? david: get the fed out of interest markets. i know that when you have interest rates at zero for six years, you have given a massive signal to it erroneous false signal to governments who are financing themselves for nothing, for traders sure making overnight money, two em countries, they are scrambling to couple or third dollar exposure -- cover their dollar exposure. everyone has been extorted by this -- distorted by this monetary madness. his wife is a ticking time bomb. we are in a more dangerous financial environment than we have ever been in history. betty: i do not know if i am convinced by that. i am not sure if americans are as exposed as they onc

together to talk about the consumer protection agency what they are doing on payday lending and subprime sure that people who are taking out the high interest rate type of credit cards and stuff understand what they are doing and that they are being treated the right away. away from that, the president has had the same message on the economy. it is doing well but needs to do much better. i think if you would ask he would probably say the glass is half full. it used to be half empty but nowhere where he wants it to be. >> whether it's clinton or elizabeth warren what message do you tell them? what message will resonate the next 12 to 18 months. >> well i think the most important thing right now for us is infrastructure. >> you're not going to win an election on this juncture. >> i didn't say win an election. i stay in my lane. >> what's the central message. >> well the message is a little two things. it's economics and foreign policy. the economic message is going to be getting the middleclass going better. that's just a general message. how that is so generic. it is how you do that. and

others that you should keep your eye on auto lenders under scrutiny for subprime loans on the books. foreign banks, many undergoing the test for the first time. the "wall street journal" reported that deutsche bank slated to not pass the test this year. results out at 4:30 eastern time. this is part i of ii. this i just the capital levels. next week we will get how much of that capital banks will be returning in the form of buybacks and dividends. back to you. >> kayla tausche. >>> shares of apple up 70% in the last year but will today's news, reports i should say of ipad delay hurt that stock? it's having a rough morning down more than a percent. we'll tackle that question on "squawk alley." ameriprise asked people a simple question: can you keep your lifestyle in retirement? i don't want to think about the alternative. i don't even know how to answer that. i mean, no one knows how long their money is going to last. i try not to worry but you worry. what happens when your paychecks stop? because everyone has retirement questions. ameriprise created the exclusive confident retirement

on the uptick of loans, what are you seeing in terms of the quality of the consumer credit, subprimee've been hearing are on the rise. consumer loans, higher consumer loans with lower credit scores. >> you're definitely seeing a little bit of that but i think the pendulum swung so far to the conservative side that now we're coming back towards what i would call just a more normal environment. and ultimately i believe it's always been my vision for 17 years that the consumer credit market should be very similar to the corporate credit market. that everybody can get a loan. it's just very different based on your actual risk profile. and i think that's where we're heading over time. where banks are doing automated underwriting, risk based pricing, and a highly automated consumer friendly well and lending tree is well positioned to be the search engine in that new world order. >> are you saying we're going to go back to the days ever the financial precise? credit quality is one thing but quantity of loans -- we're in a period where we have been deleveraging. >> consumer credit is still t

prevent the kind of practices that kind of metastasized in the prefinancial crisis days through the subprime lending problem. i think if you look at the kind of back end, when institutions hit a difficult time, we've put in place resolution practices through both procedures like orderly liquidation authority and orderly liquidation fund to make sure that insured -- insurers like the fdic can manage without having to turn to taxpayers for a -- the kind of support that was required in 2008-2009. i think internationally we worked to try and bring global standards up to where u.s. standards now are. i know this committee asks a lot of questions about the f.s.b. well, the f.s.b. fundamental lisa way for us to drive the conversation internationally so it won't just be the united states that has high standards but there will be high global standards which is so important. i think we still have a lot more work to do. i think that the idea that you ever finish is probably not attainable because the financial system doesn't stop moving. it doesn't stop evolving. the next problem won't be exactly what

look at in 2007 ben bernanke was telling us that all was well and we didn't have to worry about subprime and all of that. and that's the same time when i told all of our clients and people that have listened to my radio show to get out of the market and stay out for all of 2008. and then,, you know -- so you have to look at when things are at their very best that is the time you have to start getting worried. and when everybody thinks everything is going great and life is good that's the time when you start preparing for the worst, in my opinion. >> all right. well, provocative thoughts and got everybody talking about it. thank you all for join us today with your thoughts. appreciate it very much. omar, safe travels back to san francisco. >>> we're heading to the close with about 50 minutes left in the trading session here. while we were talking, kelly, the nasdaq did briefly touch 5,000. it's flirting with it here. we'll see if we can close above it for only the second time in 15 years. but meantime the dow and the s&p are about half a percent lower right now. >> all right. much more ah

morgan stanley in talks with the new york attorney general to settle legacy subprime mortgage allegationsat's according to reuters. the settlement would be separate from the $2.6 billion deal announced last week. u.s. travelers visiting cuba can buy items using a mastercard credit card. the company lifting its restrictions on sunday. the move comes as the obama administration eases trade restrictions with cuba. new york city's 1.1 million public school students are being allowed to take their cell phones to school for the first time since 2006. mayor bill de blasio lifting that ban which was imposed by michael bloomberg. and from shark tank to sharknado. nba owner and tv most mark cuban is set to play the president of the nights in "snarkharknado 3." anne coulter will play the vice president. and one question is whether "sharknado 4, 5, and 6" will be far behind? hey, girl. is it crazy that your soccer trophy is talking to you right now? it kinda is. it's as crazy as you not rolling over your old 401k. cue the horns... just harness the confidence it took you to win me and call td ameritra

now, the others to watch, auto lenders, under scrutiny for subprime loans.d a lot of cdos. and foreign banks, many which are undergoing the test for the first time. "the wall street journal" reporting that deutsche bank are slated to fail. we'll be getting the results out after the bell at 4:30 eastern. back over to you. >> all right. thanks for now, morgan. 13 minutes to go into the close. we're looking at the dow up 35. >> and art cashin just stopped by. $700 million to the buy side going into the close. so a little buying pressure coming in here with the dow up 35 points as we head toward the closing, about 12 minutes left. >> and mark cuban will be joining us next on the news line responding to this whole discussion he has started about this bubble in tech being worse than it was in 2000. we're back in two. you can call me shallow... but, i have a wandering eye. i mean, come on. national gives me the control to choose any car in the aisle i want. i could choose you... or i could choose her if i like her more. and i do. oh, the silent treatment. real matu

fundamentally a bearish sign for demand or are we just coming off as brian reynolds would put it the subprime adjusting to a new normal that could be good for demand? >> listen yes, there is some of that. we've had a boom in the oil business. we've had a boom in supply. but let's look at it this way. as stephen said we've had a 50% decline in the largest, most used commodity, most traded in the world. now, there's two reasons for that. either oil supply doubled or demand got cut in half. we know oil supply didn't double. it's gone up a little bit but it certainly hasn't doubled in the last six months only. so now you have the other 50% cut in global demand. let's even just say 25% of that cut is just because people are afraid and it's market forces. you're still looking at a 25% cut in global demand. that is telling you something about the global economy, and it's not a very good sign. >> my only point is this and we'll bring dennis gartman into the conversation as well. welcome to you. we want to hear from you on this move on the strategic petroleum reserve. brian is making a point about fun

i worry a little more than phil "four on the floor" lebeau about the subprime percentages. i think tomorrow's adp and friday's employment report i think thursday's ecb is more important. there's a lot of talk after the activists regarding corporates but you have to weigh that against the scarcity of good securities in general. to me you have to go counterintuitive here. all the deep pocketed kind of old primary dealer players and marketmakers whether in corporates or treasuries have decided that's not a profitable business, so all the flippers are now in control of the markets. the day traders. and i think their attention will turn towards mining some of the fairy dust of the ecb quantitative easing thursday, and as i look at what could be the second highest yield close of the year in 10s that's what i read into the way treasuries are moving right now. >> let's bring everybody up to speed on that rick. the anticipation thursday as we get more clarity, more transparency about what the ecb has in mind about its quantitative easing program, what are you guys expecting to hear

they talked about how wells fargo is putting a ceiling on the subprime autoloans.go's not participating anymore and that's putting a freeze on the rest of the industry and raising concerns. what do you think? >> i think they put a lid on the percentage they want to have. i just saw the figures on a sub-prime lender the other day where 50% of the loans they made defaulted in the first year. there's something wrong with an operation like that. you don't need the degree of misery that occurs with hundreds of thousands of borrowers if 50% of them default within a year. your lending standards are wrong in that respect. i don't say anybody that's kind of marginal doesn't have a right to get a shot at owning a home maybe with a low down payment or a car. but have it become the norm bigtime. i think it's a mistake. >> you said earlier though that car sales have rebounded more quickly than you expected. do you think it's in part of these loans being handed out? and do you think the auto sales will be hampered by this? >> i think that just from what i've seen on one or two o

the subprime mortgages believe it or not.and there are banks and others who don't want them or can't keep them because of regulatory pressures. you want to harvest the gains or ensure you have added liquidity, of course. but have self-liquidating assets. >> is it possible that the covenant lights are three times the level of 2007? >> yeah. so covenant lights are two and a half times by most recent data we have. two and a half time this level they were back then. and the rate of change that is the investor's willingness to take on these loans has never been higher. janet gave a speech on friday and said her gradualist approach is not without risks. this is the central bank upside statement that we've come to expect. and i would say that we should feel better about these risks if our understanding of supervision had increased. these new ways of regulation, they're important but they're very -- i just tell you i wish the first two resorts look better than they do. >> so do you think there's been any transformation where the fed

focused on rental housing than owner-occupied housing, and we will see owner-occupied housing in subprime cities, second here -- second-tier cities where affordability factors offer more positive for potential homebuyers. mark: the rental vacancy rate at the end of last year was at 7%. how much pressure is is putting on rents and woody be enough to make renters consider buying a home? david: the challenges, at the end of the day, if you cannot get access to credit, or you have concerns about your future stability or job situation, you will delay making the buying decision. see that today. to your point, the vacancy rate is at 7%. it was 11% year ago. that is creating stress unaffordable renting housing. and that has the impact of pushing long-term renters, who like are not going to be home buyers, into a much less affordable lifestyle as landlords raise rent because of the demand cycle that we are facing. all of this is problematic. it is a taping of the pendulum a little too far toward the rental side, and when that and balance gets out of whack, we get an imbalance in homeownership. mar