jim paulson with wells fargo capital management. >> and now to the federal reserve.oday atlanta fed president dennis lockhart said there may not be enough data on inflation to support a second rate hike in january or march. the central bank's 2% inflation goal will be a big part of the debate when the fed next meets and when they should next raise rates. especially as oil prices continue to decline. >>> and all of the anxiety in the stock market is trickling into the bond market, and that may be good for homeowners because of the pressure it is placing on mortgage rates. that means the refinancing wave may have crested, but even now for some homeowners refinancing could still make sense. diana olick runs the numbers. >> reporter: more than 5 million u.s. homeowners could be leaving cash on the table. that according to a new report from reese, inc. with rising home equity, more borrowers are now eligible to refinance. nearly 2.4 million could save $200 or more per month. and almost 2 million more could save between $100 and $200 a month. add it up and that's $1.2 bill

the relative yields are attractive right now, and jim paulson recently did an analysis in periods of full employment, so i hope larry fink is wrong, oil outperforms by about 6.5%. and, in fact, exxon is up this year -- well, it was through yesterday versus a down market. i'm glad you mentioned jim because he's going to be coming on in the second hour. "power." tim, let me get to you. where are you seeing attractiveness? where are you seeing opportunity appear? >> thanks for having me back. we've been looking for a reset in asset prices. we were looking at all time highs in a number of market indices and now stocks are attractive. we're seeing the s&p on a forward earnings basis looking at 14 times earnings. the euro stock index at essentially 13 times earnings so it's becoming quite attractive. we're seeing stocks even though they're down quite substantially today, the financials look interesting. the rise in the interest rates will help net interest margins for them. as interest rates rise and nor yammize -- >> but how much will they rise? already expectations is being scaled back.

joining us is jim paulson. he is capital management chief investment strategist.ng about concerns about global growth. watching the markets down by hundreds of points each morning. you say the real reason is not global growth. what do you think it is? >> well, i think it continues to be what we've been dealing with for almost 18 months now, becky. that's moving to full employment in the united states. a lot of things that happen with that. an aging earnings cycle, certainly, this long into the recovery. a fed that's pulling away from support. worries about how fast and how often interest rates will rise. some challenge to profit margins as wages pick up. i think that's really at the root of this market that's finding a new valuation level to deal with full employment. the catalyst for the recent selloff has been the slowdown in global growth. and probably the market won't do well on a sustained basis until we see evidence of global growth picking up. but i -- i am feeling better about this, becky. i don't know if we have to go down and break through 1800 yet and h

we'll continue to try to figure out what to make of this, get reactions of the jobs number, and jim paulsongood morning to you, sir. >> good morning. >> good news is good news, call it it that for a day? >> well, you know, andrew, i really think today's report highlights where we are at here. we crossed into full employment last year, and the market's been struggling ever since, and i think the day's report reflects this struggle. if growth remains too weak, if china's story is for real, the target has a problem because earnings will not hold up in the weak economic global environment we got. you can't pay 19 times earnings for weak earnings growth. on the other hand, if we pick up, this is a fantastically strong number today with big job gains and still no rise in unemployment rate because the participation rate went up. wonderful across the board, and no wage, but the problem with that is that being at full employment, i bet you anything that fed expectations for rate hikes just went up. >> right. >> so if we get too good a growth, that's also bad. the -- >> why? >> the stock market's in

jim paulson. >> that's all right. >> these '08 comparisons are getting scary. >> i'm going to say -- i feel pretty good now, michelle. that pocketbook. no i would be buying but we'll probably break 1800 and scare everyone that we're in a recession and convince everyone that we're in a bear market but i don't think that we are. i think that's the critical question. if you don't believe we're going to have recession we're getting close to a buy down here. we'll be at 16 times earnings if we trade down to 1800. that's a very sustainable, moldable, even if core inflation and wages go up to 10%. even if the treasury has to go up to 10%. that's a very good value buy again so i would be starting to think about it adding a little bit and i'd be more aggressive if we broke toward the 1800 level. >> it's interesting because you have been correctly negative on this program for at least the last several months. i recall you coming on repeatedly. >> at least on stocks, scott. i missed on other markets. >> so it's come to the point now we pulled back far enough that i'm sensing you're sort of chan

jim morrison, can't miss that. >> we're looking live at the ferry building right now. san francisco, rainy, windy, we're riding on the storm. that rain is going to pick up more later. steve paulsoncast. it's going to be an interesting day and windy. grab an umbrella. welcome back to mornings on 2, friday, january 22nd. i'm dave clark. >> and i'm pam cook. let's check in with steve. speaking of steve. windy. >> it's rainy at boot canyon and it's windy and warm. and tahoe is 40 degrees. wind maybe a bigger factor. >> okay. snow on a friday. >> and the snow level will come down on tonight and tomorrow. we have wind advisories. northeast bay hills and the santa cruz mountains and some areas not getting much of a breeze and others it's roaring. and it's pretty warm. and not only here but also up there. and pretty good rain in lake county. cobb picked up an inch of rain. and other locations, a couple hundredths. things are picking up a little bit's bay and out to fremont and hayward. and nothing in the yellow or red. that just tells me it's pretty light. the wind is with us. and that's the main core of the system and there's a lot of cold air with that. gusts from 15 to 40 in some of