asking questions, is enron overvalued and is a transparent? selections when she says there may be another issue brewing we probably ought to sit up and take a listen. to my left is ben strauss, a very talented contributing writer to the "new york times." he's written extensively and in depth on college athletics but really much more important than that he is dived into the very rich and multidimensional human interest stories behind college athletes and athletes around the world. actually he's got my sons dreamb job or frankly, my dream job. so a truly great to have you here, and thank you both for coming to this years annapolis book festival.ive ti "american dream, american greed," it's a very provocative title everything today we are in for a real treat. we're going to try to have a very lively 30 minute discussion and then going to try to leave room for about 10, 15 minutes of obvious questions before we break, and we have a hard stop because of c-span2 today at 10:50. to kick us off, both of your books are so well conveyed and really so ca

anthony: yeah, top three. >> pioneer, enron, anadarko. anthony: if you had to pick a big oil, which is the best of the big oil? >> i'd probably pick chevron. anthony: chevron. >> but big oil, i don't know what they're going to do, i don't know what their future is. they now have turned their end decline on production, they have to acquire reserves, they probably aren't going to find it, and they missed the shale play. chevron is big in west texas. anthony: do you think any of the oil companies would cut their dividend near-term? >> it will be horrible if they do. i'd rather cut capex than i would -- but exxon is consistently buying their own stock. i would stop that and increase dividends. maria: what about is this a dividend play then, mark? do you agree with that? >> you know, honestly, when it comes to which individual energy stocks i would leave that to boone. i think that cutting capex is a good idea and returning more value to shareholders via, you know, buybacks and dividends is better, because why keep investing capex if the price

ththey bought enron, all the ne is goi intdeking. they are add toget p.e. ratio of net flex averagflix and amaz. it's creing pockets of overvaluation inhe index gary: the index hass beaten 90% of active managersff you quantitatitive easing since 199. >> i don't look tatistics. y put $10,000ur fund it's now woworth $60,0. gary: you hear executiveves me on air and talk about theirr result you always told me you don't't want to do that. >> long-term performrmance, the people w who tear about individl companies. the lolong-term performance of e people who m make the fewest errors. it's the mag tiewcd your error thatetermines your long-term performance. if they don't ite about the people w march over the cliffs trying to find it. if the 4years in this industry i nevehad a management ever tell me or ever saif you don't vacate my stk, you are going to get burned because have problems we can'solve. whwould i ask somebody or talk to mananent. i care about managemement but i look behind the mbmbers. we'll talk about looking b behid the numbers todayy andnd the faitgo

ththey bought enron, all the moe is goi into deking. of net flex eragflix and azozon. it's crereating pockets of overvaluation in the iexex. gary: the index hass beaten 90% of active managers iff y quantitative easing nce 1999. >> i don't lk k at statitistics. if y you put $1000ur fund it's now worth $60,0. gary: you hear exetivecome on air and talk about eir resus. you always told me you don't't want to do that. >> long-term performrmance, the people w who tear about individl companies. the lolongerm performance of the people who m mthe fewest errors. it's the mag tiewcwched yoyour r thatat determines your long-term performance. if they don't t e about the people w whoarch over the cliffs trying to find it. if the 4 48 years in this indusy i nevever had a management ever tell me or ever sasay you don't vate my ststock, you are going to get burned because e we have oblems we can't solve. whwhy would i ask somebody or tk to managagement. i care about manemement but i look behind the mbmbers. we'll ta about looking b behind the numbers day and thehe falsy going on iaccou

. >> [inaudible] >> sorry, because it's television.ink of as a it even enron which most people think of as a giant fraud was mostly what i like to refer to as a legal fraud which is they have found ways to to rip out the sentence and take advantage of loopholes in the system while beating the letter of the law d such when prosecutors try to go after it was actually very difficult to do it he cuts it turned out accountants andue lawyers and all the people in our system to protect our executives from the consequences of their decisions even when they benefit and prophet directly from those decisions make it really difficult to prosecute but difficult the loan isn't the reason there weren't convictions in the wake of a financial crisis.se part of it was because nobody wanted to wreak more havoc on these institutions that we just bailed out and there was a very real fear that if there were prosecutions that we would crater the fragile confidence of these institutions that we just spent all this taxpayer moneych bailing out. the regulator signed off on aba lot of what was happening so it

he started doing this with energy to stop then enron blew up because of this.e banks got this and they started doing it with mortgages. mortgages is cool, because you cannot drive down the street and see mortgages. you cannot say that a house is underwater or has a loan. you couldn't see that. they push together these clumps of commodities, mortgages. they called commodities. then they went to aig and said, we want to buy insurance. we do not want this to go bad. lse, and it is literally a bunch of guys in say, you, they would have $1 million worth of mortgages and a $10 million insurance policy. we will buy $100 million. $100 million in the fact that the policy may go bad stop someone else goes along and that's. someone else comes along. they say that that $10 billion policy will not go bad. each one of these, because they have this underlying value, from which they derive their distance, these are called derivatives. here are the numbers. the gross domestic product in , it is roughlyes $15 trillion. the gross domestic product of the entire plan is roughly 65

i don't think -- >> you think this is enron? >> i don't think -- i don't -- it may not be as deliberate. but certainly the cms certainly thinks there is a lot of questions here that are enronesque. >> you said something i wanted to hear it. bill, bill. >> i agree with les. i agree with les. we got to see the data. medtronnic would never submit a product without data, with mu i multiple medical centers. they need to talk to les, talk to les, not to people with -- that looking at false business models. you have to show us the data. >> she said she could do -- >> we have to wrap it up. i will say this, when elizabeth holmes in that sound bite said i sent the journal a thousand pieces of information, that, to me, the flag goes up because nobody should need a thousand pages of data. that's -- you go through this -- >> the government said the exhibits are missing. it is not there. and furthermore, the pinprick she said she could do, it doesn't work. 250 tests, didn't work. >> guys, got to leave it there. ivy league panel -- thank you.

the way the law has been moving, has beenhat enron moving, it's very much a fiduciary model a lot gotost in the rhetoric. came oute rule yesterday, i'm sure you are working your way through it, shall take on is that this is a weaker rule than expected. if you look at stocks yesterday, a lot of brokerages were up. is that a victory for you? this,ry word matters in the lawyers have to look at every single word. i don't know if those are the right adjectives to use here. is it effective, how will it affect investor choice, price? those are the things we need to look for. david: you mentioned compliance. i wonder how this will change how brokerages do businesses. as you see it, what will demand it be like? >> the vast majority of brokerages already put their client's best interest first. two reasons. many are dual registered, so they are running fiduciary accounts for clients that want of service. and it's an incredibly competitive marketplace. those that do not put their customers first will tend to see their customers leave. have the deepest, most cap the liquid markets, the most democr

. >> that was a case called enron yamashita. the japanese had treated the philippines terribly. there was no question about that. but macarthur wanted the general in charge of the philippines tried for war crimes. the problem was there was absolutely nothing connecting him to any of the horrible things that japanese troops had done during the last months of the war. there was evidence to show that unlike the german generals led weekly reports from their underlings communication was practically nonexistent. but macarthur wanted him executed. in some ways i think just to placate the filipinos were furious. and what rutledge said is, this is not the process. it does not even follow the rules of military justice. his was a minor voice. the only minor dissent was frank murphy. when the next time the code of military justice was revised they ignored. john wayne wherever leading historians confirmed it was the rutledge view and not the majority view is currently informs the uniform code of military justice and during the cuban case that came up andwas their view that informed the major

. >> bernie sanders one enron rhode island.>> if the democratic party is to look at which kennedy is the one to defeat donald trump or we see on national polls is us 15/20 points ahead of donald trump far more than secretary clinton. >> ted cruz held a gathering in indiana. he tried to frame the night in the most positive terms possible. >> the media has told us candidates in this race the republican and democrats are both going to be in your group liberals. i have good news for you. this campaign, tonight, moves back to more favorable terrain . >> the favorable terrain he is mentioning is indiana. he hopes to stop the truck train. let's talk targets. clinton has 90% of the delegates that she needs. trump is 77% of the way there. that means he needs more than half of the remaining delegates left to lock up convention. thank you, robert. 5:10 am. one week after they plagued the primary, the board of elections says he is sorry. during the weekly meeting , michael ryan says he wanted to apologize in public for any actions that might have been taken by the staff that caused any amount of

well, the indexes were the ones who bought enron, they bought worldcom. robot investing, that's the du jour of the day. liz: bob is going to be on "wall street week" friday. but in the meantime, a guy who disagrees, tom lydon, ceo of etf trading. you say better to go with etfs, baskets of stocks that win for themselves. >> liz, if i own a mutual fund company i'd put the hate on etfs as well. scared to death. 200 billion dollars came out of mutual funds last year. 125 billion went into etfs. people want diversification, transparency, they want low cost. and that's what etfs are giving investors, they don't want to pay the high fees. lack of transparency and the underperformance. liz: buffett is on your side, he'll always win if you go into the s&p inde get to your favorites right now. you like guggenheim. power shares, footsie, u.s. 1,000. looking at those two, tell us what the threat is that is common here. that would help our investors. >> bob's point, if you buy s&p 500 and happens to be a beg weight with equal weight, 500 stocks having equal weight wit

after my previous book, the real lincoln came out, my editor at the time and i were talking about the enron accounting scandal, right in the middle of this and we agreed that what was going to happen was that everything the academic world, looks around a written and articles making the argument that since some business people are crooked, all businesspeople are crooked and its inherent in the system of capitalism that thievery is inherent and this is of course ridiculous, sort of like saying some people are left-handed, therefore all people are left-handed, there are sinners in all walks of life, including business, church and government. sure enough, there have been a state of books like that and i were in the academic world and i know a lot of my fellow academics and then working diligently the past couple of years and enthusiastically and these arguments that all business is like this and this supports its things as laws which punish every corporation in america for the sins of one or two companies -- not even dust of companies, just a small handful of people -- not even two companies, j

remember enron? the real estate appraisers basically every occupation concerned, look what is happening to investment banking and just one after another you attract the corruption by inequality, by the money out there in front of them and this is happening at the same time and yet it doesn't seem to affect the way the people on top in washington understand professional rectitude or anything like that. by the way that the professionalization. i got out of academia and got into journalism. what an awesome move and then it's like no, no. okay. books. they got that in the crosshairs, too so i should turn it back over to you after that. [inaudible] >> they call them liars loans. >> one of them is from the inflation but here is another question. why don't you call them [inaudible] >> a listened. the liberal hypocrite? it doesn't have the rhythm but that's good. it's a story of hypocrisy or betrayal or if it is a story of -- i love the sort of perverse explanations if it is a story of idealism like really s

, she actually foretold it a few years earlier when she started asking questions, is enron overvalued x is it transparent. actually, when she says there may be another issue brewing, we probably ought to sit up and listen. to my left, ben strauss, he's written in depth on college athletics, but he's really dived into the very rich and multidimensional human interest stories behind college athletes and athletes around the world. actually, he's got my son's dream job. frankly, my dream job. so it's really great to have you here, and thank you pote for coming -- both for coming to this year's annapolis book festival. american dream, american greed, you know, it's a very provocative title. and i think today we're in for a real treat. we're going to try to have a very lively 30-minute discussion, and i'm going to try to leave room for about 10, 15 minutes of audience questions before we break, and we have a hard stop because of c-span2 today at 10:50. to kick us off, you know, both of your books are so well conveyed and really so captivating, i'd like to ask each of you to kind of kick us

. >> hauntingly familiar to enron and chesapeake and the donation to duke, aubrey mcclendon a huge donationimilarities. >> and the work that nathan has done is really fascinating except a lot of things we're criticizing are things that investors loved on this company and the reason he's aggressive and cutting costs. it was an acquisition model >> right. >> and who cares if the company is cranking up drug prize, so, i mean, let's -- as investors, you know, are you about investing with nobility or about investing to make money? >> right. >> and i think that's really the question. >> and don't tell me that major investors like a bill ackman did not know about the compensation plan. >> he tout it had. >> he tout it had, exactly. >> still ahead, small-cap stocks surging, but could it actually be a bad sign for the markets? what has traders so worried right after this break. you're watching "fast money," first in business worldwide. ma that's like my grandma the kcooked, my mom cooked. i make a lot of banana bread because the baby likes bananas. (laughs) whatever home means to you, we'll help you

was it appropriate to jail the guys from enron?teresting. ♪ (ee-e-e-oh-mum-oh-weh) (hush my darling...) (don't fear my darling...) (the lion sleeps tonight.) (hush my darling...) man snoring (don't fear my darling...) (the lion sleeps tonight.) woman snoring take the roar out of snore. yet another innovation only at a sleep number store. you premium like clockwork. month after month. year after year. then one night, you hydroplane into a ditch. yeah... surprise... your insurance company tells you to pay up again. why pay for insurance if you have to pay even more for using it? if you have liberty mutual deductible fund™, you could pay no deductible at all. sign up to immediately lower your deductible by $100. and keep lowering it $100 annually, until it's gone. then continue to earn that $100 every year. there's no limit to how much you can earn and this savings applies to every vehicle on your policy. call to learn more. switch to liberty mutual and you could save up to $509. call liberty mutual for a free quote today at see car i

there's not a corporation in america, maybe enron, who does their accounting that way. the way the government accounting works is, the payments the seniors are going to get, they don't exist, and if they did exist and you put it on the balance sheet and took the present value of that cap, according to an economist from university of massachusetts, the present value of that gap would make our current debt, $18 trillion by most accounts, would make it $205 trillion. i don't know whether this is science. all i know is 205 is a lot more than 18. you see the problem. let me just wrap this up in a nutshell for you. if you look at what we've promised current seniors and you look at the size of the fiscal gap, there's not going to be any money left over for future seniors. that is the young people in the audience. people might think i'm against medicare and social security. actually i love social security and medicare. the problem is, i love them so much i think the younger people in this room should be able to get them to do. -- in 40 or 50 years, too. this is not young versus

are crossed in different ways in which the way enron is coming into the fold.iran is coming into the fold. the interesting thing about the middle east is it's become a place where everything is up for grabs. the prince did not say this. if you talk to people in the saudi court, they push across may not behat obama a strong as they would like. tom: one final question if i could -- let's bring it back to the price of oil. representative of citigroup of a about the demand strong economy. john: they want a strong world economy. what comes through quite strongly about saudi arabia, there are tensions. you can imagine their main priority would be a high oil price. i don't think it is as clear as that. i think they have different priorities. $50,have oil prices at they feel relatively comfortable in that because they think that is enough for people to keep on buying oil. but from the point of view of the reformers within saudi arabia, it is a prompt to get more people inside the kingdom to move away from oil. it is a very complicated economic problem. john, thank you

every time there's an enron in the market, investors -- something wrong in the market, investors get are three risk assets which are important, what is the yen, the other is the dollar, third is gold. the yen is dominating in terms of the printable risk asset, the turning point was jenny worried 29 with the back of japan moved to even more negative interest -- january 29. the dollar depreciated. it has been the other way ever since. why is that happening? i think the japanese are bringing money back into the country. and that's because of the changes in the fluctuations of increased volatility in the overall markets. haven reason is as a safe , foreigners are now buying yen, even though the deposit interest rate they get is negative. tom: what does it do to japan? sri: they kill japan exports. tom: even more so than 20 years ago. sri: that's right. it's interesting you mention the past, tom. it's interesting to the plaza accord of 1985, which was intended to strengthen the yen substantially. by early 1990, we had a surplus in the uris -- in the u.s. account. the treasury supposed be

hundred savings-and-loan executives prosecuted, convicted, and sent to jail 20 years ago, and some enron executives were. but they have so gamed the system, the corporate lawyers, it's extremely difficult to put them in jail. and by the way, if f ty went to jail, they would improve the prospects for prison reform. [laughter] and the food would be better. [laughter] the governments buy almost everything we buy. you know, it's called government procurement. they buy food, they buy clothing, they buy motor vehicles, they buy energy. they buy construction materials. and they can do specifications where they can stimulate innovation, and we got airbags that way. the auto companies controlled department of transportation under reagan, and we couldn't get airbags. so i went over to the general services administration, and i said to the administrator, who, luckily, happened to be a rigid republican from new hampshire and he was an auto supply dealer. now, listen, if you know anything about auto supply dealers, auto parts dealers, they have no awe of the auto companies in detroit. so i said to hi

world com, enron. revenue isn't the be all to end all as far as looking for pure guidance.oves in the stocks we have been seeing haven't necessarily been a result of meeting or beating current quarter expectations. it's more about the narrative for the long-term growth prospects of the company. it seems to me that's what company stock prices are reacting to. what is the narrative, the growth outlook going forward? >> brian, we have established most companies aren't honest golfers. let's get to investment ideas. are there companies or sectors you have seen numbers come out that you believe that you like enough to put new money to work in? >> i guess on a sector basis, earnings revisions have been positive in software and negative in hardware because of the cloud that's been happening. a couple of names we mentioned on the show are benefitting from the trends. >> we have three brians and a jack in the conversation. how about that? i will ask the jack of hearts over there. >> sounds like a full house. >> maybe the jack of diamonds. i don't know. jack, you're a holder of citi.

>> what i find amazing about the enron deal is how much division an deal is how must division there is. everyone has a strong opinion one way or the other. i don't understand the underlying technical issues. is thethe common things are giving them the license that 10 years from now, they will have an industrial nuclear weapons capability. that is one concern. the second concern i have is, i wish we had more people talking about north korea instead of the iran deal because that is the real problem. they have lots of nukes, and they have been building them up regardless of what the rest of the world is doing. it is the failure of the international community and we are just sitting by. it was mentioned earlier of this thing called strategic patience. it is neither strategic, or patients. it is just a very bad move. [laughter] i have had a chance to interact with the iranian technical people and what they are iranians. what has happened is over the they30 years essentially, made the decision that they would go ahead and reconstitute a path toward -- a nuclear cap in the mid-1980's. if you

there's not a corporation in america, maybe enron, who does their accounting that way. the way the government accounting works is, the payments the seniors are going to get, they don't exist, and if they did exist and you put it on the balance sheet and took the present value of that cap, according to an economist from university of massachusetts, the present value of that gap would make our current debt, $18 trillion by most accounts, would make it $205 trillion. i don't know whether this is science. all i know is 205 is a lot more than 18. you see the problem. let me just wrap this up in a nutshell for you. if you look at what we've promised current seniors and you look at the size of the fiscal gap, there's not going to be any money left over for future seniors. that is the young people in the audience. people might think i'm against medicare and social security. actually i love social security and medicare. the problem is, i love them so much i think the younger people in this room should be able to get them to do. this is not young versus old. this is smoothing out

actually foretold it a few years earlier when she started asking questions, is enron overvalued and is a transparent? selections when she says there may be another issue brewing we probably ought to sit up and take a listen. to my left is ben strauss, a very talented contributing writer to the "new york times." he's written extensively and in depth on college athletics but really much more important than that he is dived into the very rich and multidimensional human interest stories behind college athletes and athletes around the world. actually he's got my sons dreamb job or frankly, my dream job. so a truly great to have you here, and thank you both for coming to this years annapolis book festival.