would a bond investor prefer a 1% fed target as opposed to a 25-basis point fed target? of course. >> bill, sorry to interrupt, but how much is the fed repressing interest rates? if the fed backed off right here, right now, where would the market naturally set its rate? do you have a sense of that? >> you know, steve, fed studies -- anywhere from 75 to 100 basis points. i totally expect something more. it all gets caught up in the tightening of that particular policy if interest rates rise. but i think, yes, there's been a repression of at least 100 basis points -- >> bill, i want to follow up on that. why have mortgage rates crept up recently? is the fed effect wearing off already or not been seen yet? >> i don't think so. there was a little bit of an extraordinary push there before the fed announced this measure in terms of buying mortgages. pimco had bought mortgages ahead of the fed in anticipation of just that measure. and so a little bit of a back-off here. it is only perhaps a five to ten basis point back just and one-point back-off in terms of the price. i would

>> i don't think the fed is out of bullets at all, nor do they. they think every time they do something, they need to do more. and the federal reserve is certainly going to make another announcement in december to compensate for the end of what they call the twist. chubby checker's song, "the twist." they're going to continue to buy more treasury bonds and extend their balance sheet further. the problem for the fed is it is almost as if ben bernanke has dropped the money from the proverbial helicopters and it has got caught in the trees and they're trying to shake it out of the trees and have it fall to the ground so we can pick it up and spend it more. >> a lot of people are homeless, and a lot of people are going to be voting in the election, and they're trying to figure out what is going on in this economy. we seem to get two pictures. we have companies saying that the outlook is bad, and we're hearing they're laying off workers and closing plants and cutting costs, and yet the message from the report card from the feds sounded a little more en

the fed wrapped up a two day meeting and decided to leave its key interest rate unchanged. the fed noted that the economy is still growing at a "moderate pace," the housing sector is improving, household spending is "expanding," but business investment has slowed, the unemployment rate is still "elevated" as we know, and strains in the global financial markets pose "significant risk." as darren gersh reports, the fed wants to keep a low profile for the next few weeks. >> reporter: less than two weeks before the election, the federal reserve was clearly not looking to make big changes in its policy statement. so what we got were slight course corrections today. on inflation, for example, the fed said inflation picked up somewhat from september, because of higher energy prices, but that trend may already be in the rear view mirror. >> if anything, core inflation has been coming in low over the past three months. the core c.p.i. increased only 0.1% over july, august, and september, pushing it further below their 2% target, i think that might be more significant for them than t

fed decision moments away. what the fed will say about the economy, qe and more? that is coming up next. tracy: as we do every day at this time how oil is doing. oil down 93 cents at $85.74 a barrel. we better start to see that at the pump. we'll be right back hahahaha! hoooho, hahaha! this is awesome! switching to geicodreds sure are happy. i'd say happier than a slinky on an escalator. get happy. get geico. melons!!! oh yeah!! well that was uncalled for. folks who save hundreds of dollars switching to geico sure are happy. how happy, ronny? happier than gallagher at a farmers' market. get happy. get geico. if you're a man with low testosterone, you should know at axirois here. the only underarm treatment for low t. that's right, the one you apply to the underarm. axiron is not for use in women or anyone younger than 18. axiron can transfer to others through direct contact. women, especially those who are or who may become pregnant, and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or incr

things in operation before the fed the new. national banking system abraham lincoln's greenbacks were printed up literally printed up greenbacks. but yes there are many wars throughout american history where there was the again this war fatigue and where the government actually had to cut back and they couldn't go on there were some people for example of or looking at the u.s. war on spain who wanted to conquer spain and conquer all of the spanish colonies but it. there was some point the american people much of maybe they like war and they like conquering the philippines like conquering puerto rico and go on and so forth. but when they don't want to pay for it anymore so yeah they were forced to cut back and there are hundreds and hundreds of examples like this not only in american history in english history in the history of other countries were going to people get sick and tired of paying for the wars getting these massive additional tax bills presented to them and they refused to pay him any more and when that happens with

and say hey boys print us up another trillion dollars and the fed is happy to do that in cahoots with the banking system of course the banks are here as in europe the key and most important private sector chua's are private sector special interest along with the military industrial complex so they all benefit from this vast creation of money companies that get to make more bombs and planes and cruise missiles and bunker busters and all the rest of the things that kill people blow up whole cities destroyed whole countries so yes absolutely the central bank enable government to take warfare to a whole new level world wars and the use of atomic weapons and so forth now of course they're threatening the use of atomic weapons against iran that's what that's what both bush and obama for that matter are romney mean when they say nothing is off the table when it comes to dealing with iran they're threatening the use of atomic weapons and again i wouldn't be able to do this without the central bank and let's back up for a moment a couple things you said mary do you are you suggesting that actu

tricky thing as to how the fed would maintain its independence. >>> a reminder, the fed is expected to release its latest decision on interest rates and its view of the economy at about 2:15 eastern time. >> you can read all this about this discussion we just had on cnbc.com. >> we'll do that, thank you. >>> street signs is also going to be all over the potentially market moving news with the reaction and analysis, including pimco's number one guy. >>> break news from the bond market. $35 billion in 5-year notes up for auction. rick santelli track being the action at the cme. earlier this week we had an a-plus-plus auction. what's this one look like? >> today it is nothing but average. it gets above the sea today for 35 billion five-year notes. we priced within the range. .774 is the yield. 2.91 10-option average on bid to cover. indirects at 43%. 10-auction average. this auction right there, whisker under 43. it was pretty solid in the auction camp this was a little over 15%. yeah, it's pretty much average. what we gave away on bid to cover we gained a bit on direct. pricing was solid

may make headlines we'll talk about one aspect of the federal reserve that does not will as if the fed may arguably be making war easier and more prevalent we'll hear from lou rockwell of the ludwig von mises institute and we keep hearing about the middle class from the two main contenders for u.s. president. that's how we built the world's greatest middle class this is about bringing good jobs back for the middle class of america. in these candidates these candidates talk about supporting the middle class in terms of tax cuts loopholes regulation but they leave out the money in the middle classes pockets pockets that are being picked every second of every day what happens to the middle class if you don't address this aspect will discuss and it is the twenty five year anniversary of black monday it is also the one year anniversary of this show's launch. thank you fake applause would respond to your birthday wishes and more and your feedback let's get to today's capital account. this coming monday barack obama and mitt romney are scheduled to face off in a foreign policy debate and we p

but because this fed is so much in the political crosshairs, because things the fed has done have been so unique, so unconventional, the fed chairman has to go out there and really talk in simple terms to the common man about the policies and try to explain it. there's been a lot of criticism about savers, about the effects of inflation, about the fed monetizing the debt, about the fed going out there and really helping the fiscal authority be reckless with its fiscal policy. so he's out there saying we're not doing any of those things. i thought most interesting was his attempt to say we're not really hurting savers because you can't really save if you don't have a job. you can't save for retirement if you don't have a job. so he's really getting at that public debate that's out there about the effects of fed policy. >> the phrase being the financial repression. steve, thank you very much. we're running a little short on time. we're going to take a quick break right now and we'll be back with you a little bit later. >>> we'll be right back. >>> let's look in once again at chairman ber

the fed has pumped all this liquidity into the economy and then the fed will have to start tighteningsooner than expected. interest rates will shoot higher, much higher than i think the fed imagines. the stock market could crash. liz: we don't want to hear that. mark, yes or no, we've got to go? >> i think it is a very real concern. yes, that is something we need to be an eye out for. liz: date jones, mark calabria, cato institute, director of financial studies. something tells me we need you back. thank you very much. >> thank you. ashley: which candidate is better for your wallet, president obama or governor romney? coming up next bob dietrich of polaris financial tells us what his research reveals. the answer, well, it may surprise you. liz: were taxpayers duped by bank of america? the federal government filing suit to the tune of more than a billion dollars. liz macdonald is telling us what the serious allegations are. have a little queen to take us into the commercial break. ♪ >> i'm adam shapiro with your fox business brief. wall street closed lower for the second straight day o

unconventional monetary policy requires the fed to buy treasury bonds and that can look like the fed is trying to support the federal debt. >> in an unconventional policy world, the lines have been blurred and i think what the fed is trying to do is communicate clearly to some of its skeptics what it is trying to do and why. >> reporter: as bernanke ramps up his efforts to counter his critics, some economists worry the attacks may be working. >> i think the real question is, if the economy remains weak, is he prepared to take further steps later this year or early next year and we'll have to see. >> reporter: but as long as the fed is running an unconventional monetary policy, its critics will be turning up the heat. darren gersh, "n.b.r.," washington. >> susie: joining us now to talk more about the fed and the outlook for the markets. jeffrey kleintop, chief market strategist at l.p.l. financial services. hi, jeff, you know, this first day of the fourth quarter often gives a signal of how the rest of the year is going to go. what was your take away on the performance of the first da

sane chris martin said meanwhile consumer credit rose more than forecast in august according to the fed that eighteen point one two billion dollar rise was driven by borrowing for education and automobiles it's up the most in three months so is this a sign the bubble is being replated or are we past the deflationary point of no return we'll talk about it and the unemployment rate dipped to seven point eight percent as the job gains used to calculate it clocked at eight hundred seventy three thousand or the most in almost a decade wow that's amazing driven by what well those who are part time for economic reasons look at that bar on the far right at the very end ok it's not the largest increase since february of two thousand and nine and those folks who can't get full time work their part time for economic reasons they are counted as employed too so we'll talk about that also how the factor of exponential population growth compounds the problem let's get to today's capital account. such a policy in the u.s. has gone from traditional monetary policy of setting interest rates to then buyin

they may say that the fed has or that it may proport to be on the fed's website wait for folks to go and check out what exactly the federal reserve is now naysayers might say dr martin said hey look at the unemployment report today unemployment came down seven point eight percent the economy is getting a little better it's getting a boost maybe this is a cyclical issue and the fed is helping out i would say that that's bogus because the household survey we saw eight hundred seventy three thousand dollars for the season a thousand jobs rise and this is driven by part time workers and it was a huge difference from the non-farm payrolls which is one hundred fourteen thousand so that's a very confusing thing but is there are a totally different aspect here that policymakers and people that watch this number every month and are planning for the economy aren't thinking about and something that you talk a lot about which is population growth exponential population growth is this a factor or a headwind if you will that people are really planning for. well look let me get to that in just a se

fed is saying it is experimenting with a new way of showing consensus forecast for the outlook of fed policy. there has been confusion between individual forecasts and the policy statement. they need to fix that. that's in the works. second, the fed is also saying calendar date guidance in the state has problems. any change could be seen as a downgrade to the economy. that works against the positive impact the fed is trying to have when it says it will remain easy into late into 2015. and third, the fed gave us little guidance on what happens in january. that's what it expires. some time soon, maybe this next meeting in october, the fed is going to have to more explicitly tell markets how to engage the amount of asset purchases relative to incoming data. right now markets are in the dark. >> you have five seconds left! that was amazing, sir. thank you. >> you owned it, our friend. you owned it. >>> stay with us, steve, because we want to know more about the voting members of the fed, the women and men who could just be the most powerful unelected officials in the world. they certainly

that is what the fed should do. if it does that, then the fed will be leaning against a market where the market slows down and commodity prices fall. the rate of change in commodity prices, year over year, very important, and right now, it is about the same. commodity prices about the same as they were 52 weeks ago. it won't be that way as we get into 2013. liz: let's get to the housing market. we have the new home sales today and they look pretty good up 5.7% and single-family homes muscling up a bit at least sales of them. we also got from the mortgage brokers association indications that mortgage applications have slowed down. tell me in a way showing all of that money, $40 billion a month from q e 3 that the fed said it would do to prop up the housing market is petering out? >> it just doesn't register in regard to commercial bank lending. that is a reluctance to go in and do mortgage once and that reluctance comes because we had a very strong shift in regard to regulation. that is regulatory power ought to stay

-- has this fed has more of an influence on our markets and the economy than the fed's mission wouldswer. you know, because the fed's mission is to promote maximum employment and stable prices. as you just said, the price level -- the inflation rate has been very stable over the bernanke era as it was in the later part of the greenspan era. the fed has been working overtime so to speak, both figuratively and literally, on its employment mandate and it still is. it's been -- what's clear is very active by historical standards, absolutely. >> when you say activist, you know, some people call it mission creep, others say it's doing that because it has the effectiveness, able to do it where congress doesn't do it. what's your sense on -- should congress be doing more of the work that the fed is trying to achieve? >> congress should be doing more of the work the fed is trying to achieve. look, the reason the fed has been pulling so many different levers over the last several years, is that it's normal weapon, the short-term interest rates, the federal funds rate, hit virtually zero all th

>>> plus fed chief ben bernanke getting ready to take questions.ake you there live when he does. ♪ chances are, you're not made of money, so don't overpay for motorcycle insurance. geico, see how much you could save. zagat just gave hertz its top rating in 15 categories, including best overall car rental. so elevate your next car rental experience with the best. >>> welcome back on "halftime." so much for that gain in the nasdaq. we've given it almost all back now. you can look at one stock primarily for the reason why. that being microsoft today, downgraded over at rbc. that stock down .66%. back in a moment. a crash management system and the world's only tridion safety cell which can withstand over three and a half tons. small in size. big on safety. try this... bayer? this isn't just a headache. trust me, this is new bayer migraine. [ male announcer ] it's the power of aspirin plus more in a triple action formula to relieve your tough migraines. new bayer migraine formula. [ male announcer ] the exceedingly nimble, ridiculously agile, tight turn

i think there's a lot of sympathy for that in the fed. a lot of people don't like this idea we're going to keep rates at zero come what may. i think those are two things to keep an eye on to see whether anything develops on that front at the december 11th and 12th meeting. >> i want to ask greg a quick question. isn't the fed running out of short-term securities and any extension of operation twist would just be another $45 billion in addition to the $40 billion in msb and treasury purchases? >> so they are indeed running out of short-term securities. i think there's a case to be made that they might actually start to sell some of their three and four, five-year maturity securities as well. the real juice will not come from swapping one type of bond for another. it will come from pure quantitative easing. >> $85 billion per month in addition to the fed's balance sheet, correct? >> and brian, you said -- >> that is right. >> brian, you say the key question here is whether they can continue with the low inflation expectations out there. >>

don't fight the fed. stay along the market. >> kenny pull carry, joins us with the conversation, make the argument that stocks haven't net net gone too much further. closing 1460 and the we have been stuck in that range, now coming back to test it as we moved through earnings' san and see the weaker earnings and the revenues. these companies, too, are shedding jobs. keep hearing job layoffs, also not good for the economy. certainly someone who is going to be out of a job pretty soon, right? so it's frustrating to a lot of people. >> fourth quarter i know i'm arguing a bullish position, i don't normally do that. they did this with the third quarter, took it down and they are beating it again here, even if the revenues are on the weak side. i certainly agree with that. doing it with the fourth quarter, likely to beat on the fourth quarter as well. some kind of trough and likely that we are. >> right. that's the frustration. bringing it down, bringing it down. they beat, tried to sell the story, as if they b

and the fed kicks off a two-day meeting. former fed chief alan greenspan joins us live to talk about the economy, qe3, and the markets. now back to simon on the fast money halftime report. >> that is a huge show today, tyler. thank you very much. power lunch ahead in just 15 minutes. let's have a look at where we are on the market. only two members of the dow 30 are actually showing green, intel and microsoft, and then only just materials. energy appear to be extending their losses. meantime, what's getting the most buzz today on twitter? seema mody has more on your tweets. >> hi there, simon. the twittersphere is reacting to the selloff that we're seeing. let's get you the responses from our cnbc "fast money" fans. tony is tweeting, it's still on october, and i'm staying on the sidelines until veterans day, with i is november 11th. guy adami, given the macro-uncertainty in the markets, do you agree with this strategy? >> 11th hour of the 11th day of the 11th month. the end of world war i, simon, in case you need a history l

and you know the term fight the fed i feel like jamie diamond thinks that the fed has nothing on him he fights a bet every time that he talks to its talking about q.e. i was like oh the fed that's three you know minutes how many hours is we have do you really have dollar the fed does nothing but the really hilarious thing about that is that one of those assets those are the best with your securitized debt and what you're talking about your buying off of your books but also the point is that there is that's capable of the leveraging that's like a vacuum all right so in talking to. the lives of the those assets or worth what they're worth. in their nominal value because the fed is there backstopping them all right this is this is absurd that's like the hall of mirrors the grand talks about it's the fact that you don't actually know what are the things worth because you've got a central bank and a banking system that's being propped up in the plating asset prices so no one knows anything so inserting a trillion dollars that's just like hocus pocus is like i would be here you go yeah her

don't fight the fed. they want to prop it up. those earnings and cash flow. >> i'll get your comment on that coming up. guys, thank you for joining us. preesh appreciate it very much. we are heading toward the close here. 15 minutes left. we seemed to find a plateau, mar marie ya w the dow up. the nasdaq is led lower by apple today. >>> next up, sheryl sandberg speaking to cnbc's julia boorstin for the first time since the company's ipo mess. >> we said it a bunch of times. as mark said, we're disappointed in the stock price but we have to focus on moving forward of how we build a business. >> is she helping to win over skeptical investors? we'll check it out. >>> also speaking of facebook, is mark zuckerberg as we've never seen him before, in a suit? what is the world coming to? what was the occasion? we'll find out, coming up. he didn't even wear a suit for his wedding. smart comes with 8 airbags, a crash management system and the world's only tridion safety cell which can withstand over three and a half tons. small in size. bi

is a gates and a currency war now you tweeted that quote bernanke speech is fed holding a gun to its own ad and saying nobody dollar gets it right operate sure thing this is actually it's news in a start is it two different ways the cars who has been going on since two thousand and nine this was really concocted at the g twenty summit in pittsburgh in september of two thousand and nine announced by the present the united states in january two thousand and ten and the state of the union address but until two days ago neither the fed or the treasury has ever admitted it publicly now finally we have the chairman of the fed reserve ben bernanke he come in and say yes we are out to lower the exchange value of the dollar and he said all you other countries brazil korea taiwan china as the case may be got to add pressure to your currencies if you don't you're going to get inflation we're going to keep printing he saying my printing press is bigger than your printing press and we're going to keep printing and if you want to maintain a peg to the dollar if you want to prevent your currency fr

when it comes to the fed, all the moves were in anticipation. if you go back and look at the august meeting and how the s&p acted, the dow acted, the weakness in the dollar index, and maybe most of all the rally in mortgages, which could have been the most telegraphed easy trade for the big dogs in the fixed income fund market of all time. but today's adp might have been better, sequentially lower. it doesn't make a different to employment. i have yet to see any research that says qe anything does. >> all right. thank you, all. good to see you. thanks for your thoughts today. appreciate it. >> thank you. >> all right. we're in the final stretch. we have a mixed market for the most part. >> i don't care what you got planned for the afternoon. stick around. we are just getting started on this very busy wednesday edition of the "closing bell." watch. >>> coming up, downloading a dividend? what will apple do with its huge war chest and potentially devastating tax hikes? we'll drill to the core straight ahead. >>> and you heard it here first. >> look

then the fed chairman started speaking, ben bernanke offering his best defense for pouring more fed dollars in economy, and the markets pulled back. rich edson will have more on mr. bernanke's speech coming up. and the dow is still up, 161 points, that is the biggest intraday point gain, by the way, since september the 13th financial stocks leading the dow right now including, yes, the bank of america, america express, jpmorgan all having banner days. microsoft remaining the biggest laggard after two price targets cuts from jeffrey's and rbc. we've got traders at the new york stock exchange, the cme group and the nymex. let's take a look at the cme, charlie needles, the cme. charlie, what a day? is it all on the back of the ism numbers? >> it is. you know, chi pmi came out overnight, and that showed things have stabilized there, in china. european pmi was in line, not lighting the world on fire. a little concern over the employment situation there. but if you look at the breakdown of the u.s. pmi, you kind of hit on all cylinders. the prices paid was actually a little higher, but if you're

for a third term at the fed.is position is dependent on election results. mitt romney has said he will not re- nominate bernanke if elected. the times says if bernanke does not accept a re-nomination, obama's top picks for the job are former treasury secretary lawrence summers and the fed's vice chairwoman, janet yellen. bernanke's term is up at the end of january 2014. the federal reserve delivers its decision on interest rates this afternoon. traders highly anticipate the fomc will leave rates at historic lows. however, there's always a possibility the statement from the fed could be a market mover. bill baruch of iitrader.com says if the fed talks about gdp as a measure of when or if to stimulate the economy, it could be a bullish sign for the market. "if you've been a bear because you think the gdp is going to be poor and the economy is poor and now if they use that as a target, then that means they are going to have ease for a longer period of time, because the gdp is poor. so now the reason you've been sell

signaling to investors that they want to pile on to these assets things like stocks and that if the fed was to pull out of the treasury market this would actually create a private sector deal leveraging that then could drive people to treasuries to a greater extent that they are now in dr reef even lower than we've seen now. well that assumes that treasuries will be forever seen as a safe haven. while i personally think that we're having a tremendous bubble and safe havens such as treasuries and the dollar for example but the rate of return on treasuries. negative in real terms and so this trick if you will can only go on so for so long as the holders of treasuries are willing to continue cooperating and as you see in the case of japan there comes a time when the market comes to the government and says we are getting uncomfortable what are you going to do about this and this is what's happening there and this is after many many years of course and there are reasons why european could drag it out for so long i don't think these reasons exist in the rest of the world the economy is slowin

was and they were doing it earlier the fed sort of catching up so they're both doing the same thing the main difference i see between the u.s. and the and the bank of england is that if the u.s. gets into some kind of difficulty if there's sort of a run on the dollar was a confidence the u.s. has eight thousand tons of gold that they can bring out the back of the dollar if it's really in distress the u.k. of course has no significant amount to go wrote it and size the economy europe on the other hand the european central bank the european monetary system has even more gold than the united states and europe in the u.s. are well stocked with gold the u.k. is not so i see if there's going to be a currency crisis sooner than later i expect it to happen in and pound sterling partly because of quantitative easing not backed up by any gold all right i mentioned c.p.i. and here in the u.k. they call the r.p.i. and the numbers exclude energy and food you responded that well there's not much of a conspiracy here but what about this idea that governments cooked their numbers what we do know is

we're going to ask the distinguished former fed governor kevin worsh. later in the show, something straight out of a james bond movie. boeing completes tests for new technology that literally fries enemy electronics with no collateral damage. and as always, folks, don't forget, free market capitalism, it is the best path to prosperity. we will talk more about that later in the show. i'm larry kudlow. hmm, it says here that cheerios helps lower cholesterol as part of a heart healthy diet. that's true. ...but you still have to go to the gym. ♪ the one and only, cheerios bp has paid overthe people of bp twenty-threeitment to the gulf. billion dollars ...but you still have to go to the gym. to help those affected and to cover cleanup costs. today, the beaches and gulf are open, and many areas are reporting their best tourism seasons in years. and bp's also committed to america. we support nearly 250,000 jobs and invest more here than anywhere else. we're working to fuel america for generations to come. our commitment has never been stronger. >>> no surprise

let's talk about ben bernanke's fed.ave more of an influence on this economy -- on our markets and the economy than the fed's mission would dictate that it has? >> well, that's a hard question to answer because the fed's mission is to promote maximum employment and stable prices. as you just said, the inflation rate's been very stable over the bernanke era, as it was in the later part of the greenspan era. the fed has been working overtime, so to speak, both figuratively and literally on its employment mandate and it still is. what's clear, it's been very activist by historical standards, absolutely. >> reporter: should congress be doing more of the work that the fed is trying to achieve? >> congress should be doing more of the work the fed's trying to achieve. look, the reason the fed has been pulling so many different levers over the last several years is that its normal weapon, the short-term interest rate, the federal funds rate, hit virtually zero all the way back in december 2008. at that point, the bernanke fed co