e're a nation of builders. our vision is one of a country where everyone has the opportunity to build something from nothing. a business, a charity, a church, a gadget, the website, a ome. it is because we are a nation of builders that we created more prosperity than anyone, anywhere in the world. it is because we are a nation of builders we've been able to pass on to our children a brighter future and a better life. under the obama ministration, it is been harder than ever to uild in this nation. red tape, and outdated tax code, shortsighted policies are driving the cost of everything, stifling innovation, and sending jobs and opportunities to our competitors like china. politicians and bureaucrats will bet taxpayer money on pet projects. meanwhile, the hoover dam, the golden gate bridge, even our highway system would be impossible to build in today's regulatory environment. this administration would have us believe that we can build a great nation on a rain of red tape while operating the service economy by t

we know the home builders ran up. what about derivative plays? picks to rally even after this news is already out. later, what'' the trend in home building? you know, nine shower heads in one shower? a great room? how many half baths? jeff flock about what's hot in home building. he's got all the trends live from chicago. stay with us. ♪ it's monday. brand new start. ur chance to rise and shine. with centurylink as your trusted technology partner you can do just that. with our visionary cloud infrastructure, global broadband network and custom communications solutions, your business is more reliable - secure - agile. and with responsiv dedicated support, we help you shine every y of the week. how old is thehe oldest person you've known? we gave people sticker and had them show us. we learned a lot of us have known someone who's lived well into their 90s and that's a great thing. but evethough we're living longer, on thing that hasn't cnged much the official retirement age. ♪ the question is how do you ma sure you have the money you need to enjoy

t -- builders right now.today, two-year high for interest rates. you worried? >> you know, obviously, i'd love for them to stay as low as they are -- cheryl: we all would. [laughter] >> in 1983, the first year after the '81-'82 recession, mortgage rates were over 13%, and we had more than double the housing starts that we do right now. so people lose perspective. in the end, you've got to have shelter. the population's growing, you need more houses in the country. cheryl: but is that a lower income individual, medium income, high income? we are hearing that lower income individual is still not in the housing market which would signal there's an upside to be found here. >> i think you're exactly right. interestingly, the lower income or traditional first-time home buyer has not been able to come in as much because more no gang qualification -- mortgage qualification standards have gotten so strict, stricter than we've seen in decades and decades, that it's difficult for them to enter. it will return to normal

when we look at the home builders, let's go right to the bottom, home builders, what do you do now givencause of rising rates? is there still money to be made or is this story over for a while? >> look, it's a tremendous buy. the good news for the home builders is they start planning profitability five years ago. so the big value of the home builders has been deferred taxes rolling forward plus the discounted value of the finished lots they have on their books. the problem is they have now built on all the finished lots. the land development business is catching up. home builders have traded at 1.4, 1.5 times book. affordability at the entry level may get hit a bit but traditional rates on 30-year fixed mortgages which has been the best investment for americans has always been in the 6s for the last 10 or 15 years. so all of this hoi polloi over trf interest rates raising will hit affordability. but the supply is so dismal in every category, in every category of home building and every category of rental. we bought 13,000 houses, we're renting them in 21 days. from the time they're rent

home builders rallying on news that home builder sentiment hit a seven-year high in june, jumped eight points on the national association index. the first time it's been in positive territory, that is, above 50 on the index, since april of 2006. the eight-point jump is also the biggest one-month gain since 2002. we just showed you the stocks of the big builders like lennar, d.r. horton and pulti to the upside. no mention in this report of rising mortgage rates. we'll watch for that going forward. all three components of the index saw gains. current sales conditions up eight points and sales expectations up nine points and buyer traffic up seven point. only the last one, buyer traffic, is still in negative territory or under 50 on the index. now, confidence rose in much of the country, particularly strongly in the south. it did, however, slip in the west. supplies of existing homes are rising in some western markets, and prices are particularly strong in california. now, confidence is gaining, but will construction match? the two normally do correlate and we get may housing starts tomor

if you're looking at the coal brothers, a luxury builder, those customers can afford a rate rise and still be able to close their home or buy a home. so it's going to be very dependent on the significaegmen housing market. >> reporter: analysts for the big public builders say they are watching it closely and some do expect cancellations to climb. the jump in rate since the beginning of may pushed the average barrowers payment up 15%. that's make. >> reporter: break for some buyers. for "nightly business report," i'm diana olick. >> for more, read her piece on our website, nbr.com. >>> overhauling the nation's policies on immigration, one that offers citizen ship to those here illegally and suring up the borders in mexico. 32 opposed and 68 in favor but heads to the are you pub can controlled house where it faces tough opposition. >>> the trillion dollar issue, is congress any closer to preventing student loan rates from doubling on monday? first, here is how the international bond closed on monday. >>> wall street regulators filed a self lawsuit against john corzine for his role in t

i agree with you with the home builders.look at xhb, not necessarily home builders atf but housing atf. you have to go down to 15th largest position to find a true home builder. you have stocks in there like home depot and whirl pool. these are very, very good charts. if you look at home builder chart individually, like when lenards, you have home charts holding you higher. you have a nice back and forth here. which is why i can't sell. i have to hold on -- >> steve, you -- >> you think interest rate are going much higher from here, do you? >> i don't necessarily. but the fact we didn't see in terms of housing demand out there, housing demand primarily from cash buyers. in other word, interest rate weren't that important to the housing recovery that we have already seen. i'm saying higher rates certainly aren't going to help but i don't think rate will skyrocket from here. i don't think there is that kind of inflation. i think for home builders, which you mentioned toll brothers, which is one of the weakest names, they are d

everybody talked about waiting for a bullback in the builders to get in.lback, great time to get in. pulte is the leader and no offense here, the leader in elderly living home areas. their dell web segment is up 40%, and those buyers are cash buyers. so what happens with mortgage rates here doesn't impact that whatsoever. pulte is a buy. >> are you done? >> done. >> okay. i'm really going to finish you off now. here is the deal, okay? pulte home is selling at 3.5 times book value. you don't need to know anything else. if i were to play the home builders and i agree the housing cycle is not over despite the fact that affordability increased by 10% virtually overnight which will prejudice some of the backlog, it's not going to disappear as fasted a your hair has over the last week, but it's going to take a hit. i would buy lennar, i would buy toll brothers. pulte has had issues. >> if you take a chart of the three and overlay them. if lennar and toll are going higher, pulte is going higher with them. >> kbh and pulte have had the biggest move over the last y

a rough week for the home builders. they are a little bit frothy, and a lot of that froth has come out of them this week and all the concerns about higher rates, a little overblown. very unlikely we'll see 6% mortgage rates. >> all right. bob pisani, see you a little bit later. ty, up to you? >> from frothy to frosty for some of the home builders. let's go to the nasdaq where seema modi is tracking, at least for a few more days, the big moves in oracle? >> that's right. oracle is now responsible for the nasdaq 100's entire loss today, and it's not just oracle's lackluster earnings that are disappointing the street. an analyst says oracle's tans fer from the nasdaq to the new york stock exchange could pressure shares between now and july 5th which is the date that oracle makes the switch. oracle has a 4.7% waiting on the index. leading the qqq would result in 15 million shares going up for sale and in terms of which company will take the spot of oracle and the nasdaq 100, alta vista research says it probably won't be a t

south east side of detroit william polk by the way head of polt housing holmes the largest house builder in america so he's going around with his potemkin policies saying that the only way to recover the housing market which he himself would benefit from he's saying we have to wipe out these houses use government funds just like at the opening they use government funds there are funds from the detroit blight authority so he's going to knock down these buildings and then rebuild them. if people are building tunnels under the trying to get into canada to avoid this guy reminds me of the vietnam war you know the u.s. lost a war for because of this kind of more onyx thinking where there subsidized housing baron is using money from the government to destroy villages and towns to rebuild again with the u.s. government subsidies how about this guy get a real job for a living put him to work doing something useful instead of just milking the government and bilking the government for his plutocratic lifestyle get a bill helicopters start bombing villages in vietnam you know give me a nice flashba

not the builders. it is the consumer. if i came to you and send you by this house and you paid this interest rate. if you bought this one, you pay this is as ray. in -- if not the same you bought this one, you pay this interest rates. why is it not the same in insurance? one of thesling, things you mentioned is that the winds of a tornado are much than gusts of vertical winds. there are categories of events. f5. to have the we do not technology to protect a home from an f5 storm. ofwe go to the mitigation life over property, to say that the house does not make, there are things they you have worked affordable fairly inside the home. could you cover a little bit of what are some practical things the could be done in the homes in retrofitting and new construction? >> thank you. early on, we adopted the toroach that it is expensive take a home of the type we build today and to sign it to resist the worst case tornado. certainly improve the performance and protect against severe damage from the vast and the of tornadoes damag

and usa kind of talking about some of the legal questions in terms of the builder burge what they're involved with the principles at the u.k. politicians who are involved and how they're have some conflicts of interest and this is where the you focused your piece you didn't really touch on this global theme or this new world order theme so much is that because you don't believe in that new world order theme or because the readers perhaps recognize that is a code for conspiracy theory well i mean i think that it's just in the current climate easier to talk about lobbying and transparency you know what with what's going on currently in the kind of post patrick muscle world well there's a lobbying conspiracy going on right now going to exactly so that's just literally . often days before days before the mess of conference with senior politicians spending three days in private with all these you know heads of h.s.b.c. goldman sachs nestle novartis eccentric cetera so i think it's i tried to focus my piece on on. trying to put these two things together the the lobbying scandal and the mas

so, home builders as a group were up 7% of the year.le that, 1415, something is going wrong and we know what it is. the change in rates. >> mike, do you agree with carter? >> i definitely do. not just an issue of rates, but material and labor costs, as well. the home builders were leveraging the fact that those had rose. as they feel the building boom, they have so start hiring and labor rates are going to go up, as well. this is a company that was doing $6 billion in sales and had an enterprise value of 6 billion bucks before the credit crisis. it's doing $2 billion and it is worth $7 billion. had $4.80 in eps now, it's 74 cents. i ask you, what exactly are people thinking is going to happen? it looks expensive and they are nowhere close to what they used to do. it's really hard to make a bullish case, i think, for a stock at this -- >> so, walk us through the trade. >> here again, something very similar to the other trade i was doing, now i'm doing a bearish bet. i'm going to sell the july 34 for $1.80 and buy the 36 for -- against it

that's a great way to play it rather than own the home builders. >> i like the home builders. i can't help but think you're going to get a better shot at them. >> i think you have to own lpx. i wouldn't do the home builders just yet. >>> coming up on "the half" stocks selling off for the second straight day. we have one stock in the green by double dim jits. one of morningstar's top bond fund managers gives his picks. revealing his game plan for making money and we'll be right back. ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all on thinkorswim from td ameritrade. ♪ >>> welcome back. the bond sell-off is deepening. you look at what the ten-year yield is doing at its highest level in well over a year. to help us figure out the best way to profit from this spike of rates, let's bring in mark kiesel from pimco. he was also named morningstar's fixed income manager of the year. mark, nobody better to talk to

has ben bernanke killed the rally in home builders?ice appreciation. definitely slowed the rally in the builders. >> right. so what should investors do from here faced with those sorts of losses? >> i think at the end of the day you pick your spots, wait for the taper or the red to slow down, and there will be an inflection point as we get to second quarter earnings when we hear about strong price in margins and demand. >> i want to get into why exactly the builders are selling off. even as we have seen the ten-year pretrace by about ten basis points, we're not seeing a response. ask that because builders here are more concerned and more selling off on worries about fundamentals? >> i would tend to think that's a couple things going on. the first thing higher rates ultimately mean the discount rates you put on the builders have to go up, therefore, multiples have to go down. right now the builders are trading at ten times. a week ago they were trading at 13. the second is forward price appreciation. although homes are quite affordable,

home builder shares benefited from that rise in sentiment today. pulte homes, toll brothers each gained more than 2%. >>> a new wrinkle in the deal to buy smithfield foods. the world's largest pork producer, for nearly $5 billion. regulatory authorities work on whether to okay the deal. one of smithfield's largest shareholders says the company would be worth a lot more if it was sold off piece by piece. or maybe slice by slice. an investor estimates the company could be worth nearly 11 billion if it was split up and divided into divisions like hog production, international pork sales and others. shares of smithfield were up nearly a percent higher today. >>> lots of stocks hitting new 52 week highs, thanks to that broad based market rally we told you about. cisco led the dow stocks a day ahead of its analyst conference call with deutche bank tomorrow. the company will talk about new trends in router software as mobil video use explodes. cisco shares hit their highest level in nearly three years. $24.70. gaining more than 2.5%. >>> lockheed martin a

the home builders. not one of you has a home builder on your list of things to look at. >> love them. i think there's plenty of upside. when you look at what they've forecast and when you look at some of the sentiment from the builders, i think there's upside there. i like the builders. >> mike? >> i think the stocks have already kind of told you that business is great. so i don't think there's any value there. i don't think they're very good businesses. that's the thing. all they do is ride the cycle. you had an 18-month massive move. >> one up, one down. what do you think? >> i'm not touching the home builders. i look at valuation, pull at te. the biggest issue is they have to get long land. >> a lot of these guys have land. >> i just spoke to a guy who is selling a big chunk of land because they've been supply constra constrained. either they don't earn like they used to in the peak cycles because they don't have the land or they buy too much land in cycle. either way i'd rather play names like home

home builders making shares fall more than 3%. becoming one of the biggest losers in the s&p 500 along the way. some other big home builders followed suit, including kb, toll brothers and dr horton. >>> coming up, we'll take you inside the lab of a blue chip company that's inknow vating like mad, and it's not headquartered in silicon valley. a look at how treasuries did today. >>> an embattled hedge fun saw investors pull money out of the firm, in the wake of federal insider trading charges a standard quarterly period showed that nearly $3 billion in investor money was taken out of sac, which was in-line with expectations, as the justice department investigates the fund and its founder. >>> no one seems to be pulling out of mcdonalds these days. the world's biggest hamburger chain reported same store sales rose in may. it's late night breakfast offerings. including a new and healthier egg white sandwich. shares of dow component mcdonald's up more than 1% today. >>> another member of the dow is 3m, which you may know for its post-i

home builders also in focus. ryl, hov, dhi and len. we are watching bond etfs.

qb to take it. >> the home builders are happy. and you just love that?r spouse. you just never know what you're going to wake up with. when you look at consumer sentiment it makes more sense because there is peace in that. people spend their money, but the home builder sentiment, they're feeling better about things. the fact of the matter is, it doesn't matter if they're happy or sad. they're going to build houses and people are going to bynum. right now people buying. liz: are you a believer? it is the industry, and they're trying to present the picture of positivity. >> well, of course. i don't know if we necessarily need sentiment involved. we have housing starts, other economic data that comes out to say that. we just kind of laugh at the fact that we have built a sentimental about their feelings about things. >> i want to consider this. the rating came in a 52%. to give you an idea, anything over 50 means that over half of those polled say the housing market is good. if you look at where they were just a few years aao when there were selling off the

we need to unleash the nation of builders. to become a nation of builders again, we have to stop picking winners and losers, and focus on expanding opportunities for veryone. we start the foundation for giving more of her kids a chance at a good education. let's empower parents with choices and opportunities to improve access to higher education, job training, so students are emitter -- ready for tomorrow. we must simply fix our tax code. if we clear out all of these loopholes that make the tax code fair, it is going to be asier to understand. we will keep ideas and resources here in america. we need -- we need to expand markets for american made goods. it will help lower prices for onsumers, create better jobs for workers, and attract new investments to our shores. to become a nation of builders again, we need to reform our broken immigration system. securing our borders and enforcing our laws, and making the process of becoming a legal immigrant fair or will help america remain a magnet for the brightest minds in the world.

home builder confidence has hit a seven-year high. this is according to the national association of home builders. we've got low mortgage rates, rising home prices and a short supply of homes for sale. that's all fueled this recovery in real estate so far this year. >>> we have seen some pretty wicked and expensive natural disasters this year, but it turns out that 2012 was one for the record books. from superstorm sandy to the numerous wildfires, to the devastating drought, weather and climate disasters caused more than $110 billion in damages last year. the national climatic data center says the two most expensive disasters were sandy, that cost about $65 billion in losses and the yearlong drought which had a hefty toll of about $30 billion. of course we've seen a pretty disruptive year so far, tornado in moore, we were supposed to have a horrible hurricane season. >> nine named storms maybe. >> and then the wildfires going on in colorado. >> exactly. >> it's so early this year. >> hopefully they won't pan out. maybe they'll just ha

years in fact that we were both there covering it last year in chantilly virginia as we know the builder committee has taken a different approach the media this year providing a media contact intent what do you attribute this change in attitude to. well i believe the only reason. that they've changed their attitude slightly is because of the light that we have shined through the alternative media and programs like yours to make people aware that this group not only exists but it does wield great power once again when you have the heads of state the heads of banking industry is the dutch royal shell facebook google in attendance with prime ministers like carl cameron obviously they are shaping the world around us and you know i fear though jason that this is just the guise of transparency i mean it like we saw this here the protesters had this fenced off area far away from the conference hall it looked like for the first time let's talk about the most interesting attendees that we know where they're side from multiple banking c.e.o.'s at the world bank i.m.f. they were also members of bri

. >> the builders were not as much as they thought they would be today given a strong earnings out of these are stocks that tend to move big in a single day and there are only up in the very low single digits. after being down 20% on the fears of the mortgage rates i think investors are still going to be quite nervous about homebuilders through the summer until we get more clarity on whether or not the higher rates are having significant impact on demand. right now it is just a little too early to tell. david: a big jump today. besides the yield on interest rates thing a drag on the market, there is the question of income, pretty much has remained stagnant in america. that is a real bad sign for housing as well, is it not? >> you hit the nail on the head. we talk about affordability when we talk about housing. there is a price of the house, the mortgage rate and the income. house prices going up like we saw today, mortgage rates going up and income statement. while houses are still affordable from a historical perspective we need the incomes to start going up if an in-house recovery t

until you remove the fed -- >> disconnect wind the xhb, home builder, etf, some of the largest home buildersin this country down or flat on the year and you still have these latest housing recovery names, home depot and lowe's, just starting to get hit -- >> to hymn's point, he's saying that's not taking anything away. right now we don't have the data to support or believe they're taking anything over any time soon. you don't want to slip out of the punch bowl when it's yaupged away from you. >> i don't think they can wait until they do that.ç that said, i don't feel like the market is completely cracking here. i think if we step back from just this two-day mini-correction, and correction is way overstating the case. we're back to where we were early may, people talking about how fantastic the market was. still, you know, i sort of take it with a little bit of a grain of salt, this two-day move. it's painful to me because i have long bias so i don't love days like this. but i feel like selling a little volatility was the right thing to do. >> here on this, take a look at -- mentioning trans

. >> there's fallout among the home builders. hold on a second.ow the home builders with nicole, please, and the mortgage rates go straight up. what does that do. >> goes straight down. >> lennar down 3, 4%, pulte homes down, and you're seeing the home builders coming under pressure. >> and i've still got 28 of the 30 dow stocks moving lower, 28 red tiles, i guess you could call them. only two in green. the two winners on the dow, hewlett-packard and wal-mart. an interesting story that's just breaking as we speak. and it's about china. china's central bank puts out a statement today. or late yesterday, i think, denying rumors that its big banks are in deep, deep trouble. now, that really gets the anxiety level. the central banks, say, hey, no trouble with the banks, everything is just fine. that gets me worried, keith. >> gets me worried, too, the chinese invented money, people forget that, i think they understand it better than we do in some regards. the aspect, hey, we may have things out of control or losing control, that's a wrinkle that's con

our team, of course webcor builders who made sure things happened and lineey oaks and lou, thanks, guys. and last but not least everyone at the san francisco fire department. we've government -- gone through a whole variety and great to assist a deputy chief who was an awesome partner during the early phase of this project and talking to the neighbors and trying to make sure the way it was paved for this project to really happen and of course deputy chief, kim lombardy to make sure we had all the details. i would like to point out to you that haven't noticed yet, there is a plaque to the right of the building that honors the fire fighters that have sacrificed their lives to the city for years. i would like to say with sincere hope today that they will serve for at least another hundred years. thanks very much. [ applause ] >> thank you. mr. letty. next i would like to introduce from webcor builders it's project director who spent a lot of time working with us on this project and that is mr. spencer reiner. thank you, chief. i would first like to congratulate and welcome the fire departm

ponzi scheme well there are some people who believe it's a great scheme and these are the house builders for example there's actually been a boom and the stock market here for homebuilders because they're benefiting from that so what what it is is the basically prices are too expensive for first time buyers here and they can't afford the. so the taxpayer through george osborne are going to subsidize the twenty percent deposit for these new build apartments and the home builders who are going to build these new build are going to benefit as the stock market has reflected now of course as albert edward says in this report is that home prices are too expensive the problem isn't with that we need more debt that these first time buyers need more debt they're too expensive prices need to decline so that they can afford it just as has happened in places where home prices got too high including america which are cheap in many areas now he says i believe it is truly a moronic policy that stands head and shoulders above most of the stupid economic policies i have seen implemented during my thirty