i kind of believe with david faber, it is an ongoing issue for the next couple of years, but what willemain is ongoing positive economic momentum, and i think that it is going to bring funds flowing back into the stocks again. >> what happens, jeff, when one other thing that david faber was referencing happening that this is the first, but there are others and people stop caring or does this become a big problem like the all of the issues with wall street research or solomon brothers with the case against them in the early '90s or arthur anderson? >> well, there are lingering concerns and you can liken it to the european debt crisis and first dubai and then ireland and then greece and maybe portugal next. they don't go away and get wrapped up in a bow and set aside, because they linger in the background, so we believe it is too early to get back into the market. late last week we went 10% underweight to the markets after being bullish for a long timings because we believe we will see a pullback here of 5% to 10% and not just goldman sachs, but the last two earning seasonings we have se

we have my co-host for the hour, bob pisani, and sharon epperson and david faber joining us from new orleans and also in the conversation is steven wood with rus selling investments and todd shownberger managing director with a coleman trading. so full group indeed. let me start with you steven. what is the fallout, and are investors overreacting? >> well, the markets are roll till for a while and the volatility has pared down for the last couple of months, but long term, investors want to look at the strategic view and what it means to the portfolio. so asset allocation that is properly diversified takes into account shocks like these, and the market will be volatile around this news, but longer term, i won't change my view on how the markets will perform, and the portfolios that we have got. i think they strategic asset allocation is the best way to deal with the short-term volatility. >> would you include financial services in that strategic allocation if it were you? >> i would look at strategic financials and stay away from some of to banks. when you look at bank of america, and

david faber. and former ceo chuck prince and citi director bob rubin on the hot seat in washington before the financial crisis inquiry commission. both men apologized for saying that they didn't know that citi had the risk on the citi's book and gave their thoughts on who is to blame for the financial crisis. >> i am sorry that our management team, starting with me, like so many others could not see the unprecedented market collapse that lay before us. >> we all bear responsibility for not recognizing this, and i deeply regret that. >> i think that what happened here is that the regulators also mistook the ultimate safety of the cdo positions. >> in an institution with hundreds of thousands of transactions a day and something over $1 trillion a day running through it, that you will know what is in the position books and i didn't know it when i was running goldman sachs and you would not know it on the board of citi either, you were depending upon the people there to bring you problems when they ex

cnbc's david faber has been brave enough to join us tonight to try to figure all of this out, especially in light of this lawsuit. we were talking earlier. it seems to me, obviously there are troubles for goldman, in an industry that depends on confidence. they've got two problems. a, how this looks, and b, by the way, fighting fraud charges. they are making $1 billion a month in a financial crisis. >> they are an extraordinarily successful firm. they have been for a long time. they pay their people extraordinarily well, sums most people would never be able to imagine. that's the way wall street worked. goldman has benefited from surviving the crisis from the fact that many taxpayers came to aid the financial system and it survived. they also benefited from the fact that lehman brothers is gone, bear stearns is gone, merrill lynch was bought. so there is more market for them to take. that has resulted in very strong numbers for the firm. yes, they are fighting fraud charges from the s.e.c. they continue to fight a larger public relations battle because of the optics of making so much mon

to talk about that is tony dwyer with collin stewart and dan greenhouse, with miller taback, and david faber and sue herera. tony, would you put new money to work right now ahead of the first quarter earnings season? >> no. you could walk in tomorrow and have a two to three percent correction. you have to look at the market dislocation of what we went through in the last ten years and these returns are historically rare. we expect the concurrent estimate is up to $81 for earnings this year. and $98 for next year. we think it is over $100, so you put the worst case multiple of 15 times in a non-recession environment with core inflation below 3% and i get 1500 at mid-point next year and i'm being conservative, so if it pull bask from alcoa's earnings it is not relevant to the investors. >> what about you, david faber, what are you focus odd en? >> well, as the earnings season goes along, maria, investors are looking for the top line and signs of significant revenue growth, and we know there are great productivity increases in the last six months and another question is what they say if anythin

news of a possible blockbuster merger combining two big brand names in the air, cnbc's david faber is with us to talk about it. what are the names and what is the likelihood here? >> the names are ual and usair. most likely it will probably happen, although it is weeks away and there are plenty of things to come in terms of hurdles they have to overcome. the airlines are still facing a prospect of not make anything money. you can charge as many people as you want for their bags, ultimately one of the best ways they perceive to actually be in a position to profit is by merging. consolidation is something the airline industry has embraced for a long time. unfortunately regulators in washington and their own unions proved a gaping issue. that's happened. ual and usair talked in the past in 2000. the government said we don't think so. and in 2008 when their own unions probably said we don't think it's something we want to happen. >> as a consumer, i'm thinking of the two brand names, united is one of those so-called legacy carriers, been around forever. would they control in a company for

. >> it's david faber's hands because haynes is off this week. last week i was in the middle east and haynes was going to be off and they wouldn't let him off. they said in exchange, you get a few extra days and take this week. haynes was a good sport and did it. so haynes and mike, as you know, only haynes would get this. he gets the sunny 90-degree week in the middle of april, three days off. he made off like a bandit as only haynes can. >> the sunny week would go with his disposition, incredibly sunny every day. >> he doesn't want to be there with the dow flirting with 11,000. >> because he was out, the dow couldn't go anywhere. so we wait for his return. >> all right. >> david faber when he came in, we got him the ketchup, the cheatos, the peanut butter, mayonnaise, bacon, tater tots and david faber actually ate it. >> nice. we'll have to tune in and see if the weight gain was instantaneo instantaneous. >> that's why he doesn't fit now in the chair. >> tell him we say hi. have a great weekend. >> all right. well, a few minutes ago we played y

joining us now from washington is our david faber, who is covering today's headlin, it says.way, got to get used to that. how are you doing, david? >> reporter: i'm okay. good show. i've been watching it all morning. you guys do a great job. >> wow. >> that is -- coming from you, that is high praise, indeed. so, you know, we had chanos on. short selling is getting -- and ackman is is here. short selling is going to get a bad name again just from the discussion today, i think, david. >> reporter: yeah, no doubt. listen, it's interesting when you look even at the witness list and what the hearing is called, wall street and the financial crisis, the role of investment banks, and yet of course every single witness is related to goldman sachs. nobody here from merrill lynch which lost $41 billion structuring and holding onto it cdos. to be from citigroup which lost even more, or morgan stanley, some of the investment banks that lost a great deal of money in these various products in the mortgage market. nonetheless, certainly as you say, there will be focus on the short side of th

. >>> all right, now back to cnbc global hq, where david faber throne is -- >> throne?> -- is located. yeah he has a throne, as well he should. >> yes, of course. >> what's up? >> thank you, mark. the s.e.c.'s complaint against goldman sachs has put the spotlight on a now defunct product, the synthetic cdo. a market, though, that boomed in 2006 and 2007. james frischling knows the cdo market intimately, now runs nuo capital, it helps people understand the complex securities like synthetic cdos and others that wall street created. it is nice to have you here. the synthetic cdo market, you started in structured products in early 2000 and watched this market grow. was there a place for this product to begin with? some would say including me it is somewhat reflective of wall street's ability to create things that in some ways don't even seem necessary. >> there are investors in the world that need aaa securities or need exposures to various underlying asset classes. and i think the genesis of this product had a lot to do with rather than building out all their own complete

. >> thank you, david faber. here to go inside the numbers on citi, get a check on the latest with goldman sachs, marcia orenbach is managing director the credit suisse north america and anton schutz, president of mendon capital. we'll start with you. first, the citigroup numbers, pretty impressive? >> yes, they are, mark. particularly the $2 billion lower losses than they had relative to our expectations in the fourth quarter. >> all right. so, it's not just a case of easy come. >> no, no. you had better trading, as all the others did. but in addition, you also had significantly lower losses. we'll wait to hear on the conference call how much of that is sustainable. >> and how do you see it kn. >> strong numbers. international is strong, expenses down. shareholders have to be pleased. i guess we as taxpayers that own citi shares have to be pleased. and look forward to making some profit on this investment. >> anton, vikram pandit's comment in the press release -- i'll read from it -- "we are proud of our first q

. >> thank you very much, david faber. >>> just ahead, still a lot more to come.ort-mcmoran's stock more than doubling over the past year. now a fund manager with $3 billion to invest tells us if he is doubling down or dumping out. the ceo's on "street signs" today at 2:00 p.m. >>> and do jobless benefits encourage unemployment? we're debating it this hour. we want to know what you think. vote at squawkonthestreet.cnbc.com. and as we head to our commercial, a check on the greenback as we're getting ready, by the way, for a very special event in washington about the dollar. we've got a new benjamin and we'll be back. >>> gold prices are higher today, just slightly, up about $4, but we're still north of $11.40 per ounce. today's earnings trade, american airlines is down. obviously, all the airlines taking a bit of a hit. it was interesting, delta, by the way, only canceled 400 flights and lost $20 million during the snowstorm. they canceled something like 7,000 flights and only lost $60 million. shows you how lucrative that atlantic route is. let's get to phil lebea

david faber did a wonderful documentary where people admitted to him over and over, they knew these products have no value, but they were trading at such a high level and they were making so much money off of them -- one guy who made some of the most money shortage these products. -- shorted these products. host: that special "house of cards" is it something that they can find online? guest: it aired last fall. they might be able to. host: next phone call. caller: i am one of those responsible home owners that have become ensnared in this. my husband lost his job but was picked up by another company, so now we have to relocate to california. we have always had good equity in our home, but we are going to lose that because it is not worth what it was a few years ago. the good news is, we may have a buyer through the home owner's credit. i thought we were going to be able to go to california and get an f h fha loan . you say that they are getting in trouble, so it almost is crushing my hopes. guest: when i say that, it means that we are going to have to pay for it in the end. nothing is actual

david faber did a wonderful documentary where people admitted to him over and over, they knew these products have no value, but they were trading at such a high level and they were making so much money off of them -- one guy who made some of the most money shortage these products. -- shorted these products. host: that special "house of cards" is it something that they can find online? guest: it aired last fall. they might be able to. host: next phone call. caller: i am one of those responsible home owners that have become ensnared in this. my husband lost his job but was picked up by another company, so now we have to relocate to california. we have always had good equity in our home, but we are going to lose that because it is not worth what it was a few years ago. the good news is, we may have a buyer through the home owner's credit. i thought we were going to be able to go to california and get an f h fha loan . you say that they are getting in trouble, so it almost is crushing my hopes. guest: when i say that, it means that we are going to have to pay for it in the end. nothing is actual