there are tiny bubbles, cue don ho ♪ tiny bubbles tiny bubbles ♪ >> and giant bubbles. you think this chart screams bubble. others say not so fast. stocks are historically cheap right now. no denying money has ever been cheaper. look at the interest on your checking account. that's a bubble, too, because this guy is keeping interest rates so low, which makes us wonder in rescuing america from a crash, is he creating the next bubble to burst? stephen moore, dan grossman and zanny beddoes. you wrote a book "pop: why bubbles are great for the economy." >> this is how we create new infrastructure, telegraph, railroad, internet. we don't sit around and the government says build this line from here to here, people run around and go nuts and build four railroad lines and four telegraph lines and they all go bankrupt. but then someone picks up the pieces, takes that infrastructure and does something with it. when the infrastructure companies went bust, we built the web 2.0 on top of that. when we're not developing any new way of building housing, the benefits are much less. >>

cross-talk currency wars in the new bubble i'm joined by martin henniker in hong kong he's an associate director at the tight group in new york we have. here is the founder of chap would finance dot com and an internationally recognized expert in wealth management and in washington we cross the early he is a senior associate and director of carnegie's international economics program right gentlemen cross-talk rules and effective means you can jump in anytime you you want martin it's very late for you so let me go to you first what are you more worried about are you worried about currency wars or a bubble. board of our bet awards because i think you know the main reason why they are racing to debase the currency is may not actually be really the economy or the export side but really the fact that all of the major best and most of them anyway are really heading for nation of bankruptcy you see japan has got a debt to g.d.p. ratio of two hundred percent in the u.s. they have had warnings from the former comptroller of the united states that the u.s. is now two years away from where greece

yeah and we are probably traveling in the direction of a bubble i agree but we're not i don't see a bubble yet i am however while it does martin is particularly with the european situation i think is which but a dog simply has to do with the fact that there isn't enough of a currency war in europe in the fall in the sense that these countries can no longer. individual currencies they cannot change the exchange and that is a very important reason. that is persisting and indeed potentially deepening martin and it's are too much liquidity out there i mean i need to throw in the right and go first band and go ahead at this point. i believe the entire world is in stagflation i mean we have you know lots of printing of money we all know that the cost of goods or our you know the prices going up from dramatically in the united states they do or horrible job of measuring the cost of living increase they you have the c.p.i. number that's manipulated has been since the early one nine hundred eighty s. and we have very high unemployment around the world as you just said we have it in europe and it's

cross-talk currency wars in the new bubble i'm joined by martin henniker in hong kong he is an associate director at the tight group in new york we have. he is the founder of chap would finance dot com and an internationally recognized expert in wealth management and in washington we cross the early he is a senior associate and director of carnegie's international economics program right gentlemen cross-talk rules in effect that means you can jump in anytime you you want martin it's very late for you someone to go to you first what are you more worried about are you worried about currency wars or a bubble. board of our bet awards because i think you know the main reason why of racing to debase the currency is may not actually be really the economy of the export side but really the fact that all of the major of us and most of them anyway are really heading for nation of bankruptcy you see japan they've got a debt to g.d.p. ratio of two hundred percent in the u.s. they have had warnings from the former comptroller of the united states that the u.s. is now two years away from that greece wa

discussing currencies and bubbles. martin how worried are the chinese about this printing press ok and their future. well there are quite warry it which is you know one of the reasons probably why they're buying a lot of gold actually there's an interesting cable that you can find on the internet which was released by vicki leaks that's a cable from the u.s. embassy in beijing to the headquarters in washington from the twenty eighth of april two thousand and nine and just want to briefly read that. one quote here read this quote from the chinese boat news john saying the u.s. and europe have all their suppress the rising price of gold that intends to rekindle its function as an international reserve currency and don't want to see other countries turning to gold instead of the dollar and the euro therefore suppressing the price of oil is very beneficial for the u.s. in maintaining the dollars rolling as the international reserve currency but in china and once to increase gold reserves and then also the ones that will su

and we can call it a bubble is in a storage bubble and that and when that finally does burst like all bubbles do we'll see that inflation but it will come all the sudden. and that the very very end but in the meantime i. wouldn't like to confuse them on the beach and the bond speculated upon the vigilantes and like you know it's a popular movement. but the one spoke of this special with the experts the very very sharp i understand your point between a vigilante in a speculator the speculators this breed of the past ten or fifteen years with zero percent interest rates that has has created this enormous bond bubble price. that discoveries been destroyed and the tsunami of disinflationary cash will come into the into the market at some point but it will happen quite quite quickly it's all as a matter of fact i believe it's this is all been foretold in something called the austrian school of economics yes right ok so let's talk about the austrian school but i want to be very specific about the austrian school of economics question because this is kind of the fundamental difference betwee

and we can call it a bubble is in a storage bubble and that and when that finally does burst like all bubbles do we'll see that inflation but it will come all the sun. and the very very end but in the mean time i. wouldn't like to confuse the bond with. the bond speculated among the vigilantes alike you know it's a popular movement. but the one spoke of the us special with the experts they have very very sharp i understand your point between a vigilante and a speculator the speculators this breed of the past ten or fifteen years with zero percent interest rates that has has created this enormous bond bubble price. discoveries been destroyed and the tsunami of disinflationary cash will come into the into the market at some point but it will happen quite quite quickly it's all as a matter of fact i believe it's this is all been foretold in something called the austrian school of economics yes right so let's talk about the austrian school but i want to be very specific about the austrian school of economics question because this is kind of the fundamental difference between karl mangere

>> it's just starting, but the fed is a serial bubble machine, and i think we're entering housing bubbleis a flood of fast money coming into the housing sector from wall street, and we have absurdly low mortgage rates on main street, and you put those together, and they are lifting the market rapidly right now, but it's not sustainable. when interest rates reverse and begin to normalize, the fast money will scatter as fast as it came in, and then i think the bubble will splatter because there won't be natural buyers left in the market as interest rates go up. >> but, isn't it -- i mean, isn't the point to stabilize the market so that it's on a more stable footing before we actually see rates rise all that much? that's why the fed has said they are going to keep rates in place until 2015. >> well, i don't know what the timing of this is. i just know it's absurd to take the mortgage rate on 30 years from 5.5 where it was in late 2008 to 3.3 where it was just recently. what that does is increase the buying power of someone who has a mortgage or who can spend $1,000 a month on a mortgage by

bubble, we think gold is a natural bubble and we don't use that pejorative lee, not all bubbles pop,u are seeing a decline in liquidity premium, the fact that the ranch to price ratio, you will see that fall over time. that will drive up housing prices. that is what i mean. charles: initially we will all feel good until those little bubbles start to barista. we appreciate it. you educated us and we will see you again soon. jeff flock continues coverage on real-estate on fox news, in chicago. sell me the house you are in right now. >> i am steps away from the heart those studios. if you look out the window of this unit perhaps you see downtown chicago. it is all about location. a man who tells me it is all about location today, it is also about a lot of valuing real estate. >> used to be the 3 els were location, location, location but in today's location there's a lot of value. >> for anyone who doesn't know who i'm talking to, he is a legendary chicago developer. you survive, don't know how you have done it. prices in chicago are coming back. >> definitely coming back. the situation

that is no bubble. you will get your money back unlike say pets.com in the year 2000. >> right. >> that was a true bubble. finally the federal reserve is still active. the unemployment rate at 7.9% is a great distance from the 6.5% it said it would begin to have to consider a rise in interest rates. that force alone is very powerful in keeping interest rates low. >> but tony, that is exactly the reason, the risk that we've seen to equities that is going to happen into the bond market. people will lose money and run. >> you could say that that risk -- >> i'm going to wrap it up. >> the fed is pushing investors to take more and more risk and without more improvement in the economy being more difficult is the same as those gains. >> appreciate you coming from the west coast to send time with us here. >> thank you. >> not all stocks are celebrating the dow run to 14,000 most notably apple, down 1% today and one of the biggest losers in 2013. down 15% on the year. so, joey t., miserable trade in apple. what

let's look at the three bubble teams.isagree and you know how much i hate to disagree with you, doug. i don't think they have road victories in the top 22nd. st. mary's i think had a golden opportunity which they blew this week by not beating gonzaga. if they don't beat creighton, i don't think st. mary's is getting in. i think villanova for the time being put themselves on the inside looking out. a road win at uconn. for a bubble team, that's huge. >> doug: let's start with iowa state. yes, a paucity of road wins but you told me close road losses are just like wins, should have beaten kansas, should have beaten oklahoma state. i think they'll get one if not two of those. st. mary's, second best team in the wcc, st. mary's will get in, and i think nova is more likely to be the team that lost five of seven inside that syracuse-louisville two wins than they are the win over uconn going back to yesterday. give me one team america should watch out for that's not currently on the bubble that will climb into the bubble. >> seth

yeah and we are probably travelling in the direction of a bubble i agree but we're not i don't see a bubble yet i am however while he does martin is particularly with the european situation i think do you see is which but a dog simply has to do with the fact that there isn't enough of a currency war in europe in the fall in the sense that these countries can no longer. individual currencies they cannot change the exchange and that is a very important gleeson d.-u. a crisis that is persisting and indeed potentially deepening martin and it's are too much liquidity out there i mean i need to throw in the right you go first. at this point go ahead ed. i believe the entire world is in stagflation i mean we have lots of printing of money we all know that the cost of goods or our you know the prices going up from dramatically in the united states they do all horrible job of measuring the cost of living increase they have the c.p.i. number that's manipulated has been since the early one nine hundred eighty s. and we have very high unemployment around the world as you just said we have it in

let's look at the three bubble teams. this is where you and i disagree

but nevertheless it's a bubble because our economy is run by a bubble machine, a serial bubble machined. on schedule, it has now turned loose fast money from wall street, hedge funds, lbo funds, short-term traders. they're flooding into these former subprime markets are now totally busted with billions of dollars a month buying up distressed or foreclosed properties, trying to induce a bubble so that they can, attract the dentists, the doctors and chinese to come in and buy for a quick profit. david: what you're essentially saying what they're doing is very similar to last time. they're going in and looking for subprime tracks, buying up hundreds or thousands of properties at a time with a big giant vacuum cleaner just sucking these assets up? >> that's right. they're not riding into scottsdale. david: arizona, on the back of a jon deer lawnmower fixing to become lands lords for the next seven years. i say they're riding in on a hoover vacuum cleaner sucking up inventory in selected precincts, selected zip codes, in order to induce a bubble and attract buyers. remember this fast money

know what is cool, you can see the bubble react to the air that the stick is pushing towards the bubbleat's crazy. >> and of course when the stick hits it, it breaks but you see the trajectory. it goes. it moves up. >> isn't it crazy? >> like a jelly fish or something. >> i like when you see the end of the top. you actually see all the little specks of water and the particles of water. this is cool. they blew a bubble and then tossed a bullet through it to see if gravity was faster than the speed at which the bubble pops. >> it popped before it ever got to the bottom. >> if i own a weird night club, i would have a bunch of videos playing of their stuff in slow motion in the background because people would -- >> that would be cool. mesmerized. >> it is a video of the baby whale that is putting a big smile on the web. >> look at that. these people are putting their hand in this giant mammal's mouth. >> oh, they're rubbing like his teeth. >> on the next "right this minute." still to come, amazing video of the best female rock climber in the world. >> how do you become the world's best clim

and housing and bond bubbles and equity bubbles and tech bubbles and green bubbles eat and consume transact and print but the cargo well the cargo that never actually gets there. yes max now everybody knows we've dnd us for allies so we're post-industrial and just look at detroit and we seem to forgotten how it is that we built these bigger economies how we made these airplanes and sent men to the moon how we were able to create these and like we saw in the pacific islands there was a lot of cargo cult activity there because during the world war two all these japanese and u.s. military bases were established there and the. tribes there saw all these planes coming in and the planes brought with them all sorts of material wealth cargo and in an attempt to attract further deliveries of goods once the war ended followers of the cults in these pacific islands engaged in ritualistic practices such as building crude imitation landing strips aircraft and radio equipment and mimicking the behavior that they had observed of the military personnel operating them so the islanders began concocting like

and housing and bond bubbles and equity bubbles and tech bubbles and green bubbles eat and consume transact and print but the cargo well the cargo that never actually gets here. yes max now everybody knows we've dnd us for allies so we're post-industrial and just look at detroit and we seem to forgotten how it is that we built these big economies how we made these airplanes and sent to men to the moon how we were able to create these and like we saw in the pacific islands there was a lot of cargo cult activity there because during the world war two all these japanese and u.s. military bases were established there and the. tribes there saw all these planes coming in and the planes brought with them all sorts of material wealth cargo and in an attempt to attract further deliveries of goods once the war ended followers of the cults in these pacific islands and gays in ritualistic practices such as building crude imitation landing strips aircraft and radio equipment and mimicking the behavior that they had observed of the military personnel operating them so the islanders began concocting like

so here we are at the top of the dotcom bubble. here's the top of the housing bubble.nteresting it's blown through where it was when housing was l-tihigh. interesting, the stock makes the same amount of money. when you turn to well defined past top, memory kicks in. there are people who own it from here, now having been made whole look to get out. and people who bought well look to get out. we're sellers here. >> what's your take, ennis? what's shocking about that chart it's higher than during the height of the housing bubble. and back to the tech bubble levels. >> the price to earnings ratio, you can see the point that i've been making about value not being there. this is the ten-year chart of the p.e. of hd. it's at ten-year high. so people are paying more for earnings now than at any point during the housing bubble. and it's a much larger company, so it's harder to grow earnings going forward. >> always good to crack open the playbook and see how this works. it's a bear strategy. buy one put and sell lower to cut your cost. you want the stock to fall to the strike o

and housing and bond bubbles and equity bubbles and tech bubbles and green bubbles eat and consume transact and print but the cargo well the cargo that never actually gets there they say yes max now everybody knows we've d.m.d.'s realize that we're post-industrial and just look at detroit and we seem to forgotten how it is that we built these big economies how we made these airplanes and sent men to the moon how we were able to. like we saw in the pacific islands there was a lot of cargo cult activity there because during the world war two all these japanese and u.s. military bases were established there and the. tribes there saw all these planes coming in and the planes brought with them all sorts of material wealth cargo and in an attempt to attract further deliveries of goods once the war ended followers of the cults in these pacific islands and gays in ritualistic practices such as building crude imitation landing strips aircraft and radio equipment and mimicking the behavior that they had observed of the military personnel operating them so the islanders began concocting like headphone

government helped build during two thousand and one we build so many houses we had a real estate bubble that you see in florida that's the government we have and i would like to point out you know reason be intelligent guy watch i can make one hundred fifty seven thousand disappear to one hundred sixty six thousand of them are immigrants roughly eighty eight thousand of them are new graduates the arrival of these new jobs merely leads to aid. level employment it doesn't actually juice unemployment by one scrap so we can get one hundred fifty thousand jobs per month for ever and we will never reduce the rate something is wrong then where how do we do that how do we reduce the import of the conservative say do with a free market it seems to work wherever it's tried but i'm starting to understand whether this is an r.v. logic all human or affects your argument because for you to say the government is to get out of the way you actually categorically state that the government cannot create jobs well the government can create government jobs the government can do things that help to create jo

and housing and bond bubbles and equity bubbles and tech bubbles and green bubbles eat and consume transact and print but the cargo while the cargo that never actually gets there. yes max now everybody knows we've dnd us realize that we're post-industrial and just look at detroit and we seem to have forgotten how it is that we built these big economies how we made these airplanes and sent men to the moon how we were able to create these and like we saw in the pacific islands there was a lot of cargo cult activity there because during the world war two all these japanese and u.s. military bases were established there and the. tribes there saw all these planes coming in and the planes brought with them all sorts of material wealth cargo and in an attempt to attract further deliveries of goods once the war ended followers of a cult in these pacific islands and gays in ritualistic practices such as building crude imitation landing strips aircraft and radio equipment and mimicking the behavior that they had observed of the military personnel operating them so the islanders began concocting like

in housing and bond bubbles in equity bubbles in tech bubbles and green bubbles eat and consume transact and print but the cargo well the cargo that never actually gets there. yes max now everybody knows we've d.n. duster allies so we're post-industrial and just look at detroit's and we seem to forgotten how it is that we built these big economies how we made these airplanes and sent to men to the moon how we were able to create these and like we saw in the pacific islands there was a lot of cargo cult activity there because during the world war two all these japanese and u.s. military bases were established there and the. tribes there saw all these planes coming in and the planes brought with them all sorts of material wealth cargo and in an attempt to attract further deliveries of goods once the war ended followers of a cult in these pacific islands and gays in ritualistic practices such as building crude imitation landing strips aircraft and radio equipment and mimicking the behavior that they had observed of the military personnel operating them so the islanders began concocting like

you cannot get through that bubble.you cannot get through the brennans and the clappers and the hillary clintons and the bob gates and leon panettas and penetrate the bubble inside, do you understand what you're doing both to american civil liberties and the rest of the world's appreciation of america with these increased drone strikes that seem to have an endless vista for future? this is incredible. and yet i know how these things happen. i know how these bubbles create themselves from the president and cease and stop any kind of information getting through that would alleviate or change the situation, make the discussion more fundamental about what we're doing in the world. >> colonel lawrence wilkerson, your against the confirmation of john brennan as director of central intelligence? >> i think we ought to have a really, really hard discussion about what he represents and what -- because he represented, will probably take to the directorship of the cia. >> we will leave it there. >> i would like to invite colonel w

the security bubble. even in kabul, we find we cannot always get the protection we need to conduct our work. although kabul is clearly within the bubble, the regional security officer has informed us that because of limited resources, it is becoming increasingly difficult to support all the requests for movement by u.s. personnel in the kabul area. two of my agents went into the field to inspect a potentially dangerous stretch of road as part of a criminal investigation into a contractor's failure to build systems designed to prevent insurgents from placing explosives in culverts along the road. my agents were surrounded by heavily-armed u.s. military units, who protected them as the agents literally ran down the road from culvert to kohlberg inspecting and autographing to see if there was a coal verge protection device there and whether it was adequate. i am happy to announce that while i was in afghanistan, those agents were able to arrest with afghan participation, and the afghan government is charging

government helped build through in two thousand when we build so many houses we have a real estate bubble that you see in the employment that's the government we have and i would like to point out you know recently intelligent guy watch i can make one hundred fifty seven thousand disappear to one hundred sixty six thousand of them are immigrants roughly eighty eight thousand of them are new graduates to rival of these new new jobs. leads to a level employment it doesn't actually juice unemployment by one scrap so we can get one hundred fifty thousand jobs per month for ever and we will never reduce the rate something's wrong so then what how do we do that how do we reduce the import of what i'm going to service a do with the free market it seems to work wherever it's tried. serving to understand whether this is an r.v. logic who all human or a factual human is for us a government is to get out of the way us she categorically states that the government cannot create jobs where the government can create government jobs the government can do things that help to create jobs in the private sec

no asset bubbles we should be concerned about? >> i think there are asset bubbles out there. not sure at a point we should be concerned about them. i don't think the stock market is too high. >> are his policies to blame. >> let's be careful when we talk about an asset bubble. we talk about a quantity of capital being in an asset, the unwinding of which can create systemic risk. markets can be overpriced. is there one where it's too much and unwinding would create systemic risks. i agree with the chairman, there isn't one now. >> steve liesman, thank you so much. ben bernanke weighing in on political deadlock in italy following elections. let's get to michelle caruso-cabrera in rome. what's the very latest on what's happening on the political scene. michelle. >> reporter: well, it's still incredibly confusing, mandy. we don't have any conclusions yet on whether or not there's going to be a government formed. the situation is so problematic, led to a deep selloff in italian markets and debt. ben bernanke was asked about it because the situation was so problematic. he made clea