repo transactions are usually with highly liquid assets as ka ka lat tral and bought the sovereign debt and financing about using the debt itself as the collateral. it was european debt. the whole world was holding their stomach about whether there would be a default of european debt. it appears that the reason that these trans transactions held out the possibility of a substantial profit, it was a bet against the market. the sovereign debt was beat down because the world was worried, the markets were worried about whether there would be default. it was 100% financing. there wasn't money to make the margin call. you knew the margin call was a possibility. what red flags and at the same time corzine and others have said, there's no problem here. there is no problem here. you said earlier that you did read -- corzine's statement was a public statement and you knew about it. to whom did you say, whoa. no. we have a lot to worry about? did you say it to the board? did you say it publicly? did you stay to a regulator? did you say it to your accountants? to your auditors? who did you say it t

ka tall markets gary ka minsky. today of all days, there's a stark contrast of the good ipo and the bad ipo. the good ipo, coors, which continues to hit new highs and then zinga, which is falling off the cliff after guidance. >> let's talk about the anatomy of what makes a good ipo. if you look at coors and you did some good reporting on this yesterday. if you look at them, up 116% since the ipo price. great quarter took up guidance. you look at zynga. it was priced at $10 a share. immediately broke the penalty bid. is trading 24% above the ipo price, the $10 ipo price. if you look back to the actual transactions, look at terms of the deals. essentially michael kors, pricing at $20 a share, raising approximately $944 million. lead managed by goldman sachs. zynga, raised about $1 billion, led by morgan stanley. both of these on paper trading above the ipo price. but what makes a very good ipo? and that's couple of elements that you have to look at. in both of these are great examples of what it was. take a look here. you've got to recognize that the companies coming out, the bankers know what -- they will not admit it, but the bankers know what the first quarter is going to look like. you've got to underpromise and overdeliver. secondly you've got to recognize that flippers will participate. every leader knows there will be a certain number of shares that will become public that will come right away back into the marketplace. in the case of kors, that was fine. third point and this is exactly what you're seeing today. the first public quarter, have to have the transition of stock from flippers, from participants at the ipo, into stronger hands. you've seen the anatomy today of a good ipo and a bad ipo. >> gary kaminsky. >> lelsa, stay right there. sorkin, give me that. melissa, who is that? up to the line, three-pointer, who is that? >> i would guess jeremy lin. except that that form was nowhere right. >> hold on one second. we'll do it again, come on, i think he's going to drive -- boom. now i have a question for you. when you were at harvard, because lin is obviously, were you hanging out with the basketball players when you were at harvard? >> no, my head was in the books. >> i would have, i'm going to beg to differ with that. we'll talk about that later. >> we will, gary, thanks a lot. >>> let's get to the cme group. rick santelli is here with the santelli exchange. >> in 1961, roger maris broke babe ruth's home run record, hitting .61. but his season was eight games longer. now let's move 20 current times, there's a lot of talk about the payroll tax cut that's the republicans signed off on without any way to really pay for it. and there should be an asterisk here. because as we've learned from some great economists like art laffer. the thing about taxes and why many fiscal conservatives like to lower them, like the republicans most of the time is because they modify long-term behavior in a positive way, that generate more growth. but tell me how eight months, ten months, a year on the payroll tax extension is going to modify behavior. would you viewers or listeners, would you refi your house if the refi rate was only for a very short period of time? or yesterday was valentine's day? how would you feel, women, wives, girlfriends out there, if your significant other said, listen, for the next year i'm going to actually shave, comb my hair and have some good personal hygiene and stop tweeting other females, but only forea year. it doesn't make sense, there's a tax asterisk there. the great interview of andrew ross sorkin, what did the ex-treasury secretary say? it's going to be a long slog. the problem with long slogs are that ultimately politicians like to make little promises along the way or do little programs along the way that really aren't going to change the length of the slog. but they change the amount of deficits. think about spending. how many times have you heard, we have to keep spending. but yet, everything that controls spending is always in the next election cycle. which is the biggest asterisk of all in politics. the goal of politics should be to serve you. but, it seems it's just to get re-elected. otherwise why wouldn't politicians deal with this? because they probably wouldn't get re-elected. back to you. >> rick santelli, thanks so much. >>> swiss drug maker roche is putting out a serious warning this morning to patients, doctors and hospitals, telling everyone to be aware of fake avastin. doctor gottlieb is now with the american enterprise institute. dr. gottlieb, great to have you with us. most people are wondering, how can this happen? what are the supply chains like in terms of u.s. drugs so fake drugs can make it into the system and get distributed to doctors? >> the supply chain is very closed. someone deliberately went into irp, purchased product that they thought was destined for the european market to sell it here at a higher price. trying to capture the arbitrage. this going to invariably involve criminal activity, someone was very deliberate here. >> what kind of person can go to another market and resell it here in the united states? who is buying that? are they selling it to doctors or hospitals? >> genentech sells to distributors and those sell it to physicians offices. someone in the doctor's office had to know as well, because the packaging was not u.s. packaging. it's easy to tell what avastin is destined for the u.s. market. so someone was very deliberate here and probably more than one person. >> the fda is still investigating. i would imagine that this is a tremendous problem for roche, from the standpoint of a doctor, do you then question the distribution and validity of all of roche's drugs? >> it should be easy for doctors to look at the product in their offices to make sure it was sourced appropriately. roche is involved in three dozen vials, roche ships around 100,000 vials of this product a week if you look at their report this was a small amount. the fact that they caught this shows how closed the system is. >> despite how closed the system is, there have been cases in the past of fake other drugs, generic tamiflu in 2010 and a belgian man pleaded guilty to selling potentially phony viagra and lipitor. and there's fake versions of the weight loss drug alli. consumers must be feeling a little bit concerned, should they be? >> well there's no question this is a growing problem. more people trying to penetrate the market with counterfeit drugs. i think the system for the pill drugs is more vulnerable than the system for the injected drugs. because the injected drugs are distributed more tightly controlled system. certainly when you go on the internet, you're taking a real risk. a lot of those drugs are counterfeit and this is a growing problem. >> in your view, is the fda being vigilant when it comes to internet sales? you can go onto the internet and almost, it's seems like you can buy any drug out there on the internet. you don't know where it's coming from and you don't know if it's real. >> i think the fda has been very vigilant. i think they're cracking down hard to protect consumers. >> do we see the instances of fake and the desire to make more money or bring costs down in an environment where the economy is not doing so well? hospitals are faced with rises costs? >> this is just complete counterfeiting. these are people trying to make money by selling fake product. >> all right, dr. gottlieb, thanks a lot for joining us. scott gottlieb. >>> coming up next, research in motion getting a much-needed boost from david einhorn, will it be a lasting effect? ♪ ♪ [ male announcer ] offering four distinct driving modes and lexus dynamic handling, the next generation of lexus will not be contained. the all-new 2013 lexus gs. there's no going back. see your lexus dealer. we believe the more you know, the better you trade. so we have ongoing webinars and interactive learning, plus, in-branch seminars at over 500 locations, where our dedicated support teams help you know more so your money can do more. 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[ all ] i'm with scottrade. ♪ ♪ >>> david einhorn of green light capital, a buyer of r.i.m., the software moving higher on the disclosure of the filing last night. can the momentum continue? senior communications technologist tavis mccourt is with us for more. i'm wondering now with david einhorn, having a stake in the company theoretically, we of course don't know if he's sold since then or what but assuming he still has a stake in the company, does that make your more optimistic that perhaps change will in fact come to the company? >> i think it makes me more optimistic that perhaps after this year, if their current strategy doesn't work out, that they may be open to other things in the future. you know, my sense is that their plan for this year is not going to change. >> do you like that plan for this year? do you think that it will actually change the company? turn it around? >> yes, so in terms of you know the plan to continue to invest into blackberry 10, their next platform and to really go back hard at the u.s. market when the launch is, i think it's a worthwhile bet. i think the chances of success of that in the u.s. is relatively low. but i think a lot of the future profitability of r.i.m. is likely to come internationally. i think there's still kind of a wide-open race internationally. where if they can put out better product and continue to build on the success they've had in some of these markets, they can be, you know, a good niche provider of smartphones, longer-term. >> in terms of market share, f tavis, i'm curious what you think about the gardner research. apple as it sits at yet another record high in today's session, is also making gains. is this all at the expense of r.i.m.? does it make it that much tougher for r.i.m. to get ahold of new customers? >> yeah. i mean i think what it says is there's a window of opportunity that is closing. and my personal opinion is i think the window of opportunity in the u.s. is probably closed. i think the u.s. for nokia and r.i.m. is going to be very difficult at this point. i think it's probably an apple and samsung world for a long time. internationally, there's a window of opportunity and i think that window is a little bit more wide open. largely because apple, with the price points where they are, doesn't compete extraordinarily well in a lot of emerging markets. and samsung, even though they do, their low-end product, their high-end product is relatively expensive as well. >> in terms of the window of opportunity, overlay that with the one-year plan here. i mean if we wait a year, if r.i.m. and r.i.m. shareholders wait that one year for einhorn to put this in place, will the window have effectively been closed? >> it could. i think part of why a lot of value investors find this interesting is this is kind of a graham and dodd special. it's trading close to liquidation value, if not below it. these guys have about $8 of working capital per share. they purchased about $2 billion or $3 billion of patents over the last few years. if not trading that far over a complete liquidation value. and for all the negative trends, there's still likely to make money for at least the next four to six quarters. regardless of the strategic success in the turn-around. so i think, i don't think greenlight's bet is a massive bet. to put it in perspective, their massive holdings are about ten times with what their r.i.m. holdings are. it's intriguing from valuation basis and it makes me comfortable that the management team is making the bet they're making this year. but perhaps they're a little more open to various other strategic alternatives. >> tavis, thanks for your analysis of the situation. tavis mccourt of morgan keegan who has a $17 price target on r.i.m. market rating suitability speculative. we're counting you down to the close in europe. we'll bring you details on the effect of the markets here in the united states. >>> but first, rick santelli is keeping track of the trades at the cme. he'll tell you which ones matter most for your morningny, after this. in absolute perfect iphysical conditioner, and i had a heart attack right out of the clear blue... he was just... 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[ male announcer ] try the new 360 investing dashboard at e-trade. >>> seconds away until the european close. let's bring in simon hobbs. what are you watching? >> what's remarkable around europe is the way in which we were set up for a great day, from asia, from emerging markets, with the aftermath of the bank of japan, to have a great day in europe. but ultimately the party has been spoiled, partly by the opening we've had here, more importantly the news coming out from brussels. just wrapping up wednesday's session. the european markets are closing now. >> there is still green on the screens as you can see for much of europe. something like spain dipping into negative territory. as i said earlier, we were set up better than that at the beginning of the session. let's look at the three major indices you'll see how london, frankfurt and paris were doing great guns and at that stage it was quite a broad-based rally. what happened was, we just took the edge off that. and weren't very dramatic moves, some of the banks notably that had done well, cut their gains. the governing of the bank of china was suggesting overnight that perhaps china could help directly in the crisis. you had the bank of japan quantitative easing and emerging markets rallied strongly. asia rallied strongly overnight. but we've sold into that and the major reason for that is this conference call that started 30 minutes ago. from the members of the euro group where they're clearly suggesting they might cut or axe the greek bailout for want of a better expression. melissa, let's look at the euro while we're there. that's the glass han hf full bit. as we heard from gina sanchez a few moments ago. paying the bills for greece on march 20, albeit with a bridging loan. >> let's bring in bob pasani here. it sounds like now the market is in for death by 1,000 paper cuts, but sort of this slow -- yes, slow cuts. >> yet look, we still have no idea what ultimately is happening. we just don't know. and i think everyone has got to acknowledge that look at the markets, put up the sectors, we're on either side of positive or negative. some of the bigger sectors we follow every day, like the tech sector, continuing to lead. >> is that -- but apple is masking the performance of technology. >> that is correct. but before we say x apple the rest of the world here. the rest of the market is holding up pretty well. i'm rather surprised, actually. industrials is the only major one that have been to the down side. remember the market leadership had been materials, financials and technology. and they're holding up today even though they're showing signs of being topee, they're holding up here. let me make some comments about the rest of the stock market. we found some remarkably optimistic comments on housing in the last few days. did you see the nhaid home survey that came out? it's a five-year high, that's remarkable. >> then i think to owings-corning and massco. >> owens corning says they've had a lousy report but they anticipate improved housing starts in 2012. they're optimistic. massco had a crummy report yesterday and they expressed cautious optimism. there's an awful lot of people betting on housing recovery. if you look at the housing market index, the itb is the one to use, that's the best one with all the home builders in it. it's at a new high today. what's happening is everyone is betting that the spring home-buying season is going to be terrific. john burns, a respected analyst thinks it's going to be up 20%. we've got new highs in ryeland. we've got new highs in pulte. new highs in lennar. i'm the son of a home builders, i grew up in the spring home-buying season. i carried the wood for my father's projects, i was a laborer, i was a carpenter's assist bt throughout the 1970s. >> melissa, i want to jump in. bob, you mentioned about the s&p tech sector. i know you were probably one of the first, if not the first to coin this apple being its own asset class. take a look at the nasdaq today. apple is actually representing 90%, 9-0% of the nasdaq's gain today. talk about being its own asset class? that's all you need to say. >> i think we have to talk about tech x apple routinely now and. >> or the markets x apple. should we be talking about the s&p 500 x apple? >> melissa, correct me if i'm wrong, but did you not first, and i think you really did, make that point a long time ago, that apple was really its own asset class, as far as portfolio managers looking at their portfolio, it was apple and everything else? >> when you got a $500 billion company, what are you going to do? one other comment about a hot sector right now. you want to know what's on fire? the hmos, medicare companies, we had an incredible report from wellcare today. not only are people using doctors less, we knew that trend. but what they call the dual payers, the dual people out using medicare and medicaid, there's a lot of anticipation that business is going to go upth and companies that have medicare exposure, hmos, all of these companies have been doing very well. >> bob, thank you very much. gary, back to you and maybe continuing on this notion of the markets x apple. x am, do you like the earnings growth that the s&p 500 is showing? do you like the fundamental look of the s&p 500 x apple? >> well, listen, i think there's a lot of things we could say about the s&p in terms of the earnings performance of q1, we could talk about the technicals. i think you can come away with a mixed message, depending how you want to spin it. but i do want to talk about something. i know you've read this book, you give it great recommendation and i want to talk about one thing, i want to talk about comcast. obviously the parent company of nbc universal and i'm actually a comcast customer in utah. i want to talk something that the book talks about, which is free cash flow and how you look at those companies, those companies that can really separate themselves. if you generate free cash flow, basically five things that you can do with it. the first being organic growth. you look at comcast today, organic growth. dividends and distributions, fantastic, significant increase in the dividend. obviously you track the incoming growth investors. but show the disciplined capital allocation. buy-back shares. what i loved about the comcast news today, not only was it a significant buy-back, but it was well articulated, how the buy-back was going it take place, as opposed to throwing it out there. m&a, i always say one out of ten deals over the long-term add value. in terms of the comcast/nbc universal deal, given the price paid, the timing, one of those seems to be shaping up with the free cash flow generated there. and obviously, what don't you want to do? you want to do nothing, you don't want to sit there with the cash as you know, a good point in terms of getting back to apple. comcast, have to say today in terms of capital allocation, they're in the sweet spot right now. they've done everything that an investor wants them to do. >> right. and yet, interestingly you brought up apple once again, because it's doing nothing with its $100 billion in cash. >> correct. >> and that is the stock that everybody wants to own. >> exactly, thaus bas the obvious reasons of relative performance. just think, just think, because apple you've got the organic growth. just think about what could be if in fact they did something, right? >> gary kaantelli in chick, next. >> you know i know that the news is fluid, you never know what's on and what's off with regard to the bailout in greece. but obviously these special bridge loan notes that are making their way around the trading floors, do paint a picture, whether it's true or not, that it's very difficult for literally hundreds of euro kratze crats and techno carats to try to get the deal worked out. look at interday chart of the german stock interday, the dax. it drifted south. look at a two-week chart of ten-year boon yields, now close to 186, close to two-week lows. this isn't it's going to ufrl continue to dominate the marketplace. >>> should the farmers of america be getting ready for what some are calling a government takeover? our own jane wells has a preview of that story. jane? >> melissa, what came first, the chickle fight or the egg? we've got a breakfast burrito battle between the ham and egg industries. but first, take a look at what's the euro pops with euro trash

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ka stanza. >> i want to restore america's promise, and i'm going to do that -- [ laughter ] as george ka stanzad that. this isn't the first time he's used the same quote, so now jerry seinfeld said, in an episode once, we did some digging, and i'm quoting him. when you hit the high note, you say good night and walk off. that's the quote from jerry seinfeld, but that's the closest romney got. still jason alexander, he's the one who played george, he tweeted this, quote, thrilled governor romney enjoys my old character. i enjoyed the old character he used to be. if he embraced that again, he'd be a great candidate. ouch. >>> another rogue nation already has weapons. today something big is going down. this is the first round of talks since kim jong-un took over. john park is next. ( whirring and crackling sounds ) man: assembly lines that fix themselves. the most innovative companies are doing things they never could before, by building on the cisco intelligent network. what makes us number one in motorcycle insurance? we love bikes. we love riders. and most of all, we love to ride. perfect hair e