understands that the that the stock market increases are directly tied to quantitative easing to fed federal reserve policy not to any kind of economic recovery and certainly not to any kind of naturally occurring free market principles this is this already. discredited by researchers ok austin. in washington you know i want to talk i want to say that we agree here eric because i think the issue here is you're talking about the federal reserve's policies and one of the things that has declined since the one nine hundred seventy s. is the value of the dollar with the federal reserve quantitative easing policies they are destroying the purchasing value of people who do need to go out there and buy goods and services and the people who are harmed the most are the poor and the middle class by the inflationary policies of the federal reserve because what is happening is people who are on fixed incomes are losing value and their ability to purchase things like gasoline and food so the real problem in this country is not the devaluation of real wages that is the devaluation of the currency at the currency

understands that the that the stock market increases are directly tied to quantitative easing to fed federal reserve policy not to any kind of economic recovery and certainly not to any kind of naturally occurring free market principles this is. about iran reserves ok in washington you know i want to talk i want to say that we agree here eric because i think the issue here is you're talking about the federal reserve policies and one of the things that has declined since the one nine hundred seventy s. is the value of the dollar with the federal reserve quantitative easing policies they are destroying the purchasing value of people who do need to go out there and buy goods and services and the people who are harmed the most are the poor and the middle class. by the inflationary policies of the federal reserve because what is happening is people who are on fixed incomes are losing value and their ability to purchase things like gasoline and food so the real problem in this country is not the devaluation of real wages that is the devaluation of the currency at the currency that they are using to buy th

germany it's stored in american vaults but after burley in the us the federal reserve to return its bullion instant has fears the fed no longer possesses the gold it's been holding for germany and other countries what is going to church of cannibals. behind these walls is one of the most secretive organizations in the world u.s. federal reserve websites to audit them it's a wall this place is impenetrable for we years the u.s. federal reserve has been the place where many countries of the word a big chunk of their nations well as the countries weathered different waves of economic crises economic instability the federal reserve seems to them like a more or less secure place to keep their funds but are the funds really secure or are they being there has been speculation for a long time that the fed doesn't actually have much good that he has either sold it all lent out or used it as collateral for borrowing either way there are many claims that the gold that is being stored on behalf of many nations doesn't actually exist germany has recently decided to bring home all these gold but the federal reserve says that it's

fed head reunion. members of the federal reserve meet today in jacksonhole wyoming.the two topics that might come up: who will be the next fed chair when ben bernanke leaves.when to end the bond buying program and yesterday, the stock market sold off heavily at the end of the session after the fed minutes offered few clues on when the stimulus program would end.gold and oil also fell. hewlett packard had a bumpy night. the stock fell around 4% after meeting earnings expectations.but revenue fell shy and there's a management shake up. and wells fargo reportedly is cutting 23-hundred mortgage production jobs. as federal reserve presidents gather in jackson hole wyoming today, standing by for us is todd horwitz of average joe options. tell me what's going on with the latest fed fretting in the market. > >good morning angie. you know the fed is involved and i think that they're overinvolved. i think yesterday's minutes showed us that they really don't know what they're gonna do yet either and i think the real problem is they're in a position where they have no way out. so taper or no taper---the market is be

we need the fed's role changed @nd federal reserve to step back and government needs to move forward to get america's economy going again and build our infrastructure and get millions of people back to work. there are things we can do, but we can't do it putting it back in the hands of the fed and think wall street will prrme the econom with more innovation. it is not happening. adam: senator brown, i imagine you would agree you can't rely on the federal reserve to save this economy but i would bet you disagree a little with congressman cues cues? >> if you listen to the congressman, i have a lot of respect for him. we have to have the federal government to do a, b, c. and hey, mr. president, tell the federal government to get out of individual businesses and do their jobs. they're overregulated. we have highest corporate tax rate in the world. you have obamacare, 18 new medical device taxes crushing businesses in massachusetts and throughout the count. there's a lot we can do, but first thing they need to is get out of the way so businesses and individuals can start to use the thing

liz: we told you earlier about key comments from the fed president who is a voting member of the federal reservee fed was looking for. they need to see more economic data before deciding to scale back its bond buying program. the market kind of started to move higher, didn't do much. now it is simply unchanged. feeling the real gdp forecast were way too high. he is not happy with the gdp numbers. he does not think 2% is worth anything. david: i disagree. we could be so much stronger than we are right now. homebuilders got a little bit of a break because the rates were basically flat today so if you're looking for some good news, there is some good news. the volatility index as a reflection of the market still under 13, historically very low. lauren simonetti at the new york stock exchange, apple is way up again. under 500 now, but it was up most of the day thanks to one man, carl icahn. liz: you got that right. $498.30. if it closes above $500, that would be the first time since january 23. not bad. liz: we are watching cisco. finally picked up, said report numbers in just a few minutes, the sto

central bank demanded the federal reserve return three hundred tons of gold lynn says it needs bonk she's ganna chicana explains now the assets of foreign nations and the fed may not be secure or even that a chill. behind these walls is one of the most secretive organizations in the world u.s. federal reserve websites to audit them hits the wall but wait to be impenetrable for three years the u.s. federal reserve has been the place where many countries of the word a big chunk of their nation's wealth as the country's weathered different waves of economic crises is not a disability the federal reserve seems to them like a more or less secure place to keep their funds but are the funds really secure or are they going to be there has been speculation for a long time that the fed doesn't actually have much good that he has either sold it all lent out or used it as collateral for borrowing either way there are many claims that the gold that is being stored on behalf of many nations doesn't actually exist germany has recently decided to bring home all these gold with the federal reserve said that it's not possible that it would need until two thousand and twenty

they contain spelling and other mistakes so on and so forth and the fed still has all that gold the power of the u.s. federal reserve has grown dramatically especially since the one nine hundred seventy when the u.s. cut the link between dollars and and gold that allowed the u.s. dollar to be bought and sold freely on the market and with the u.s. dollar being the main reserve currency the u.s. has basically been able to tax the whole world in just the value of the country holdings by printing more money now we see many countries trying to maneuver away from the u.s. dollar is the main reserve currency and we see many central banks increasing their own gold reserves and he seems after all these years the world decided they put too much power in this one building. the germans were infuriated when the u.s. federal reserve didn't even let them examine their own ass to speed or boeing or the founder and chairman of german precious metal association says that is a bad sign. we have pressured business bank a lot we have sent a lot of questions there and other people parties have as well we have to know why they are not doi

fed. so, really it's non-farm, it's federal reserve. we're in a market basically where things are starting to correlate unless you're microsoft. liz: jobs still matter. jobs still matter, non-farm payrolls, right. >> yep. that is exactly right. >> i would add to the perspective on the taper. i think the taper is very significant and spot-on point but people have been speculating about the taper. it will be nice to actually get there because i think the federal reserve is still waiting for data. it is still if, not necessarily when in september but when they do do something in september if that is when it happens i think it will be a very light tapping of the brakes. i don't think they go from 85 billion a month to 40 or 42. adam: sandy? >> yes? adam: talk about making money microsoft. i know you have a small position there. mark said if things correlate with microsoft. names being thrown out about potential successors to ballmer. one i haven't heard yet, year ago, scott, former executive from apple who had to leave ungraciously after th

i think the real issue here with the fed -- and greuel pro we talk about this. this is not the same federal reservegreenspan ran. there are differences nowadays that think the fed is up against that probably change the morale. melissa: there were looking at federal employees. the work force showed that there were demoralized. there -- teamwork was nonexistent. innovation and creativity were actively discouraged. that see pretty creative to me . in one of the surveys they did, the talks to a thousand people at a public relations firm and fund 26 percent of respondents had quit their jobs. this is a big number. an uncivilized. >> the study is not remarkable in the sense that it makes complete common sense. if you walk into your work environment and people a smiling, even if they don't really care, but they at least ask for say your name more knowledge you. the ten ft. 5-foot rule. just the knowledge and my name. that makes such a difference. this kind of grunting and you, are mean to you, of course of the of said. it makes complete sense. smile. won't crack your face. melissa: what is the ten ft. fiv

structure of the fed the f o m c which is the federal open market committee they vote and they they for monetary policy but the structure of the fed itself is that there are twelve reserve banks and only five of these get to vote on this panel of twelve people how does this affect the ability of the fed or the fed to game the system with the big point here is that the federal reserve banks those twelve banks you talked about basically those are controlled by the banks in the district so on the one hand you have the private banks having input directly into monetary policy you also have the seven governors those are appointed by the president approved by congress or fourteen year terms so those are representative of the public but then you have twelve people sitting there five of whom voted a one time right who represent basically the bank so you just go where where does this get off that the banks have a direct say on government monetary policy it doesn't seem that way let's talk about some of the new candidates for the fed chairmanship it looks like bernanke is definitely out so we've got summers i know you're not a fan of summers and we have yellen on the other side wh

in its ongoing efforts to improve so-called "stress tests" on big banks, the federal reserve isn't yet satisfied.the fed said yesterday that some banks still aren't taking into account the possibility of declining home prices when setting the amount of capital on hand. the fed is demanding that banks take into account unique weaknesses and vulnerabilities that apply to a bank's particular operations. emerging markets are emerging as a concern for investors.india is sending worrisome signs to traders , as the rupee loses ground, and stocks falter. the nation's government contends that it is not on the brink of financial crisis. traders like joe cusick say they are tuning into red flags, including runups in commodities like gold, steel, iron and copper. " if you start to see those metals start to come under further stress, that is giving a signal that we could have some pullbacks here. now india is leading the way right now. we haven't seen it in the other bric countries, that is brazil, russia or china at this point, they've still had solid upside moves. but, this could be a signal and we want to keep an

everyone's talking about the federal reserve and when the fed is going to start lowering that stimulus, winding down, beginning to wind down the $85 billion in bond purchases, what's your take? when do you expect the tapering to begin? >> two things. i think market participants invested, pun intended, with a lot more weight psychologically than it probably has literally, meaning we live in a world of $60 trillion, $70 trillion of securities floating around between bonds and stocks. buying close to $900 billion of those a year then revolving them. it's still not moving needle kind of event when you look at that as a global thing. it's psychological for the markets right now because people believe that the fed and central banks are determining rates. because they believe it, they then believe this will determine rates. there's a self-fulfilling reality here. i think the reality is bonds are the thing to look at, much more than equities right now, as an area of volatility. because that's the thing that's going to be most impacted by the fed. stocks are kind of in the world in that it's co

that they contain spelling another mistakes so on and so forth and the fed still has all that gold the power of the u.s. federal reserve has grown dramatically especially since the one nine hundred seventy when the u.s. cut the link between dollar and and gold that allowed the u.s. dollar to be bought and sold freely on the market and with the u.s. dollar being the main reserve currency the u.s. has basically been able to tax the whole world in just the value of the country's holdings by printing more money now we see many countries trying to maneuver away from the u.s. dollar is the main reserve currency and we see many central banks increasing their own gold reserves and he seems after all these years the world decided they put too much power in this one building. china's gold consumption have skyrocketed by more than hald this year and they've been buying up gold and not fueling full cost is preparing a revolution in the world's financial system the one of the speculation such as they drink could be holding up to ten thousand tons of yellow metal and the parity i would tend to the gold standard and that's the life t

speaking of the fed, the cleveland federal reserve president sandra pianalto joined the chorus of fed policymakers who say the bond buying program could be tapered soon. while she didn't indicate a time frame for a scaling back the bond buying, her comments follow on from charles evans and lockhart who point to september as a potential start date. pianalto's views are seen as being particularly significant because she typically tends to reflect the emerging consensus on the fed's policy committee. what do you think? could we see tapering beginning for the fed as early as september? next meeting is, what, 17th and 18th of september. >> i wouldn't expect there to be any great moves before the end of this year. i think the fiscal consolidation hasn't really filtered through to the economy yet in the way we would expect. so having said that, kind of going into 2014, we are expecting a much stronger pickup from the u.s. and the repercussions for asia for that, before you think about normalizing interest rates or kind of even before you think about qe tapering, dollars are naturally going t

without saying anything. >> let's look at the markets meanwhile, the federal reserve of course, releasing the minutes from the last fed meeting. everyone was looking forward to it for any clarity on when the fed would start the tapering, start slowing down the bond buying program and they really didn't get any. >> yeah. >> did that surprise you? it did not surprise me so much, i think there's a lot of uncertainty both in the world and in the economy as wells and we are seeing it on the fomc too, and we saw it in the minutes. the report seemed to be more dire than i thought. i know there's talk about the boards wanting to go with a september action and pulling back on the bond purchases. there are mixed numbers just this week when you look at the housing data. mixed numbers on the new home sales and it's evident of what is going on in the market. >> the next two day-meeting is september 17th. the most important point to make is that the fed has moved private sector in that direction. the fed has an insider survey so to speak and right now the insiders that are surveyed think that the fed will reduce purchases by 15 mil

going to circle around to the fed and kind of explain rather perverse scenario in which banks right now are receiving what's called interest on excess reserves basically the federal reserve is printing money but then they're paying banks to hold it with the fed at zero point two five percent but when interest rates rise the income from the fed which comes from treasury securities and whatnot m.b.'s may not be able to cover the balance in other words the interest on excess reserves so the bottom line is there's a perverse scenario which the fed could go cash flow negative in other words they have to print money in a tightening cycle can you comment on this. yes you're pointing out the problem they're facing but they're between a rock and a hard place of their own creation since two thousand and eight and two thousand and nine the federal reserve has increased the monetary base this is really cash in people's hands and the reserves available in the banking system for lending purposes they've increased that monetary base by about two and a half trillion dollars yes by the end of this calendar year they will living. crees did by about three trillion dollars now many

there is a debate of course within the fed about whether to begin the tapering in september or not. richard fisher, the head of the dallas federal reserveit doesn't matter we haven't hit those targets. there is too much manipulation and the fed needs to step away. >> if things go as the committee expected i would expect us to dial back. we'll have to see what the data and the feeling is between now and the time we next meet in september. >> so what do we have? one employment report before the next meeting? if fisher is right the markets could react negative. there are a few catalysts on the horizon come fall that could result in decline for stocks due to the incertainty of these events. here's a list of events, telling clients to be aware of the german elections, the fomc announcing the beginning of tapering, obama appointing the successor to bernanke. the continuing resolution expires and the consumption tax hike decision in japan. so if we believe, if as we do believe that we don't see a tapering in september after nearly 20 percent rally in stocks this year, perhaps it might be prudent to start pulling back ahead of what no doubt wil

look, i think when the fed started this, the federal reserve deficit was a whole lot bigger, meaning net issuance by the treasury was a lot bigger than it is today. so technically, to have the same impact, they need to reduce that amount. and unless we have really bad economic number, i think we'll go there. we got 1.7 for real gdp recently, the economic activity since then suggests that number's probably going to be revised up. so you're right. we're not singing on all eight cylinders, but things are okay, enough for them to do that. you're right, it has nothing to do with raising rates. >> so what do we need to see from the economy to have that hold true in the next 30 days? >> you know, so i think if we just get kind of two out of three economic statistics being okay, they'll go forward and begin that tapering process. and reinforce lots of different ways that rates are still essentially zero, and will be for the foreseeable future. the line i've tried to use is say the fed has been a 100-mile-an-hour tailwind for s us, and they're going to shrink that at some point to an 80-mile-

fed head's looming departure is keeping bookies busy. that's after the break. ♪ ♪ ♪ ♪ ♪ there's been a surge in betting action on the federal reserve. britain report most gamblers are betting fed tapering will begin in september or december. both months have 3-to-1 odds. fewer bets are being placed on august, which has 12-to-1 odds. when it comes to the next head of the fed, treasury secretary lawrence summers is favored with 4-to-6 odds. he has surpassed janet yellen as most likely to replace ben bernanke. despite the recent record highs in the stock market, there are plenty of sectors that have failed to keep up. michael gayed of pension partners is skyping with us this morning to tell us if some of those may be good places to park money. good morning, michael. - hello. - let's start with the bond market - good time or bad to go long on bonds? - i think bonds in general have probably overreacted to this fear about the fed tapering and pulling back on quantitative easing, given that inflation expectations are still relatively muted, and given really a lack of demand pull and cost to push inflation. jobs are not picking up in a very

to germany had stored in american vaults so after berlin asked the federal reserve to return its billion instances stoke fear is the fed new longer possesses the gold that's been holding for germany and other countries what is going to teach a kind of force. behind these walls is one of the most secretive organizations in the world u.s. federal reserve whether it's nice to audit them it's a wall this place is impenetrable for we years the u.s. federal reserve has been the place where many countries of the word the big chunk of their nations well as the countries whether it's different waves of economic crises around the instability the federal reserve seems to them like a more or less secure place to keep their funds but are the funds really secure or are the reason being that there has been speculation for a long time that the fed doesn't actually have much good that it has either sold it all lent it out or used it as collateral for borrowing either way there are many claims that the gold that is being stored on behalf of many nations doesn't actually exist germany has recently decided to bring home all this gold with