kayla?right, thanks, jackie. >>> saudi arabia's prince alal took to twitter to criticize his nation's energy policy. in an open letter to the oil minister mpublished on the popular social media tool, and he's a shareholder in twitter, he said a policy change was needed to address the rise in u.s. oil shale production, noting it's a threat to saudi arabia's oil-based economy. >> yeah, so are those concerns really valid? john hoffmeister is the former president of shell oil and heads citizens for affordable energy. cnbc analyst john killduff is at at again capital. mr. hoffmeister, well-founded fears? >> no, i think the global demand for energy will rise, by some 50-plus percent between now and 2040. i think a lot of that will be crude oil. i'm more worried about shortages of crude oil globally. i think demand will exceed supply into the next half decade or so. and i just got back from saudi arabia three weeks ago, and what the prince is talking about is already happening. there is discussion

kayla, what can you tell us? >> well, scott, i know a lot of people were watching to see if the charges would concern willful blindness, whether he knew about some of the issues that went on with these two portfolio managers that directly reported to him and whether he just chose to turn a blind eye. that's not the charge we're seeing here. the failure to supervise charge is a much lesser charge than the s.e.c. could have brought, even at a civil level. but still, it is the one they're using to seek to ban him from supervising outside money, to be an investment adviser. this is what they did to phil falcone, after the whole debacle whether he was using the funds money for his own purposes. the charges are very interesting, because it goes through painstakingly all of the interactions between cohen and each of these portfolio managers, matthew martoma and michael steinberg at sigma, where they were talking on the phone and immediately there was a trade that took action after the results of the phone call. there wa

all hands for kayla. one hand for kayla? >> no hands for kayla. >> okay.am hand raise. >> you just got beat. >> it's a wrap. >>> looking at this video and take some guesses of what you are looking at. >> it is a sea something. >> forest fire. >> craziest sky i have ever seen in my life. >> you are actually looking at clouds over the city of iron mountain in michigan. these are called mammatus clouds or mammatus cumulus clouds and they look like pockets or pouches hanging from the sky basically. this is all happening around sunset which gives them this orange hue, this kind of ominoustone, but once you see the trees and the power lines and you will have more perspective on what they look like. >> now that we know what it is, i still want to change my guess and say it looks like the insides of a lava lamp. >> these clouds are known as harbingers of a coming storm and violent weather heading into the area. this is posted by a guy named jason asland and he said even when he saw the sky and scary and terrifying and ominous that even a storm was coming, and it h

kayla? >> 19 fire fighters, part of an elite fire fighting team, have lost their lives trying to battle a fast moving wildfire in arizona. authorities believe a lightning strike cause that had fire in yarnell 90 miles west of phoenix. the extreme heat is also wreaking havoc on businesses and the economy. jane wells has that part of the story for us and is live in las vegas. janie. >> reporter: hey, sue, one heat-related death here, an elderly resident who didn't have air conditioning. there's a high heat warning here through friday, thursday night into friday. the temps here should reach 113, cooler than yesterday's record-tying 117 and in phoenix it was even hotter, 119. so hot u.s. airways cancelled some commuter flights. they weren't sure if the air was dense enough to provide lift for some regional jets. hot air means less density and hottest of all, death vale, 129 degrees, hottest june day on record there, but here in sin city so far it doesn't seem to matter. >> viva, viva las vegas.

kayla joins us no we more on what this means for the nation's biggest lenders. you know, kayla, people are always worried to all of the financial crisis, are the banks safe? do these new rules mean we can sit back and say the banks are not safer? >> it would appear to be so, suzy. this is one of the regulations that the policy makers have been eluding to for several years now. it limits the amount banks can borrow to fund activities, especially short-term debt. so if push comes to shove, they won't have as much debt outstanding. there won't be as many investors and also, banks will be able to fund activities from day to day. the hope is, by eliminating some of that risk in the system, they will make the banking system safer. >> this means they need basically more capital. they can't take as much risk. what in turn sdoes that mean? if i'm a stockholder, can they grow as fast as they otherwise would have been able to? >> i don't think so, tyler. utility stock, we heard that mentioned but regulators want to make sure they won't be leverering up their balance sheet,

she joins us now. >> reporter: that's right, kayla. this merger monday, three mega deals were announced. the second and third largest ad agencies merging to combine a new ad behemoth, that's pub lickis and omnicom to combine their revenue, nearly a third of all of the major ad agencies' revenue. if it gains regulatory approval, the company is expected to use its scale and data to negotiate better terms and better compete for digital ads which are expected to go to 27% of all ad spending by 2017. there's also a big deal in the luxury retail space. canada's biggest department store chain, hudson's bay company is buying luxury retailer saks for about $2.4 billion. the deal will create a department store giant with three chains, saks, lord & taylor and hudson's bay, and 320 stores in some of the biggest cities in the u.s. and canada. now, the retailer plans to expand saks' footprint, especially up north. and, also, a mega pharmaceutical merger today. u.s.-based perrigo, which makes over-the-counter medicines, is paying $8.6 billion for iri

kayla has the very latest developments right now. kayla? >> reporter: maria, it was a short hearing that went the way many expected, a swift not guilty plea on behalf of s.a.c. capital, in the face of the criminal indictment over charges of wire and securities fraud from the u.s. attorney's office. and even though steve cohen didn't appear today, and he wasn't named personally in that indictment, the signature on that not guilty plea signed steve, from steve cohen himself. the not guilty plea pits s.a.c. against the u.s. attorney for the southern district. that's preet bharara, whose track record on pursuing these insider trading cases that go to trial, it's a 100% success rate. he's tried one other recent case against a big firm, even though it was on a smaller scale than s.a.c., but this certainly would be the most high-profile case yet given that it concerns the entirety of s.a.c. capital and all of its 950 employees. s.a.c. responded to the indictment yesterday with a statement saying, quote, the handful of men who admit they broke the

i'm kayla in for maria bartiromo. >> and i'm bill griffeths. stocks rallying after the better-than-expected jobs report this morning. not after wild swings early in the session. we had this stutter-step on the open this morning where maybe, as we show you how we're finishing on wall street, for a time maybe they thought good news was bad news. because the yields were rising in the bond market, and the dow kind of tumbled for a little while in the session. >> that's right. it seemed like as the yield spiked, the dow went down. certainly it recovered, closing at highs of the day. so recovered more than fully from some of the lows that we saw during the session. >> so a whiplash day for the stocks as we head higher, giving us a winning-shortened week on wall street. josh lipton tallying the final numbers. josh, lucky you. >> reporter: bill, a whiplash day. i like that. choppy trading. the major averages finish in the green. that's the first two-week winning streak since may 17. a few things to touch on. one would be the technicals. i heard you tal

i'm kayla, in for maria today. on today's show, the good news, but maybe bad news, for the stock market -- or wait, good news again? it would certainly seem it was bad news at the open, but we've now made up almost all of the gains. still up triple digits. huge gains in the futures, wiped away in the first hour. the jobs number coming in stronger than most anticipated. and now, jpmorgan watcher said, we may need to wake up and smell the taper. >> yes, it feels like the rotation is under way. stocks are going higher. bond prices lower. pushing yields to highs we haven't seen in two years. 2.72 on the 10-year yield. gold prices down sharply today. oil prices -- >> up sharply. >> -- two-year highs as well. >> it a seems like a schizophrenic market, because we can't figure out where to go or what to do with the data. we are up for the week as of right now. two weeks in a row. the first time that's happened in several weeks. so a good day and a good trade. >> best week of the year for the oil as well. we'll get to that.

our kayla tausche joins us with more in manhattan. hey, kayla. >> hey, carl.w there was an arraignment for sac capital. the company's lawyers answered the lengthy indictment from the u.s. attorney of the southern district of new york with the very short plea, and that was not guilty. all four entities that were named in yesterday's indictment pleading not guilty to all five charges -- all five counts rather, four counts of securities fraud, one count of wire fraud. took about 20 minutes to start to finish where the defense lawyer said basically we don't believe that we have reason to support your indictment, and they pleaded not guilty. after that the prosecution said that the next 60 days will be a discovery period. they will be looking through e-mails, from phone records, consensual recordings as well as wiretaps and interviewing cooperating witnesses as well as former employees ats ac capital. a guest earlier in the show was talking about how anyone who has worked at sac might consider whether or not they will work with the feds on this, but the feds are go

kayla tausche on the case. >> feel like i need a gavel. luckily anthony weiner has it for this campaign if he chooses to use it, 200,000 self-destructible messages sent every day. more popular than instagram and its biggest fan base wall street, messages ranging from the embarrassing to the excessive, like hampton pool parties but should the fact that the vanishing communications are so hot with the trader set raise regulator eyebrows. jim cramer asked the wall street's top cop. >> can they get away with it because you don't have the technology to stop it? >> i don't even know what you're talking about. >> priceless look on bharara's face. said law enforcement has done well to scour new technology, e-mails against steve cohen and goldman's fabulous fab. they have been able to adapt e-mail they didn't have a decade ago but they are locking at snapchat. >> i like the phrase, unflattering or compromising selfies. going to show me how this works. >> i can't promise that's what we have on here, but my inprep i had producer took some snapshots e

kayla?have it in my hands and it is a sealed indictment and 41 pages and in it four securities fraud charges and one charge of wire fraud, and very thick document, and a grand jury charge described throughout the bulk of these pages. we haven't had a chance to dig through it, and we will do that shortly. certainly a lot of information there inand confirming all of the suspicions there would be criminal charges filed against sac capital and also listed in the charges intrinsic investors and cigna capital management, the two subsidiaries in which matt martoma and michael steinberg were reporting directly to steven cohen and they have been charged with criminal charges over insider trading. we will get more on this, but i want to comment on the state of some of sac's dealings with the banks. i have been talking to the banks and discuss iing the relationsh between sac capital and the brokerage firms. a lot of the firms have been evaluating the relationship with sac capital, but we are waiting to

kayla tausche is live outside the courthouse with those details. kayla? >> reporter: hey, scott.ac's legal team convened at 500 pearl street earlier this morning to plead not guilty to all charges of securities and wire fraud that were in that 41-page criminal indictment filed by the u.s. government yesterday. led by sac's general counsel peter nussbaum, the rest of the defense attorney team standing by, they listened intently as the prosecution detailed what would happen from here. 60 days of discovery meaning they'll come through all types of communication from e-mails to phone records to consensual witnesses recording conversations at sac capital and the like as well as interviewing former employees. now, i tried to talk to peter nussbaum as he was exiting the courtroom today. he had no comment on whether the firm would seek to settle with the government before that discovery process is over. of course, there's the potential for more damaging information about the firm to come out during that period, especially as there's the fear of more departures given the status of this in

we welcome kayla tausche, cnbc's scott cohn and bethany mclean. last friday night, it was the s.e.c. bringing a civil lawsuit against sac capital. all of a sudden within a week's time they flip. now it's a criminal lawsuit against the entire firm. why did this flip happen? >> well, these two things were not mutually exclusive, larry. we knew when the s.e.c. brought ie its administrative action on friday, there could be criminal charges for the coming. what changed is they did get that new cooperating witness. on monday, richard lee, a former sac capital employees entered into a plea agreement. he has a maximum potential prison sentence up to 25 years but he did agree to cooperate, provide documents and testify before the grand jury. >> and this is a man with a history of insider trading. >> there are some mentions when he was being interviewed for the job, some people flagged lee and said, steve cohen, this guy has a history and cohen and others overlooked it. there are a lot of stocks involved here. but he flipped this week and he has been partic

guys, becausek to you. >> thank you, kayla. guys, coming on a day when raymond james does upgrade jpmorgan. >> yes, downgrades there. and i find that there is a parallel universe in banking. washington says not enough capital, and not enough capital, and then when you are studying the banks, they have so much more capital than any other banks, and when you hear things like "the hearing is nye," and that is an overstatement. well, i have been following the banks since 1982, and they are stronger than ever. >> and that is true, but in capital, but less profitability in terms of returns. they have been adjusting to the the world that has been coming for years and now is here, and the only thing nearer term is the gyrations of june, and the quarter from jefferies which is a may-ending quarter of fixed income commodities down 36% year over year, and it duds make me wonder about the near term earnings in the likes of morgan stanley or goldman sachs or citi, and what we will see because they have increased the number cuts. >> well, we

kayla tausche has the latest on the case against steven cohen. we've got a quick roundup of the other morning stories. the big one being that the federal reserve is now considering whether to allow banks to continue owning trading assets like oil storage tanks or metal warehouses. the regulator also reviewing a 2003 decision that first allowed banks to trade in physical commodity markets. financial firms' activities in physical markets helped generate billions in profits, and a senate committee will be holding a hearing on that topic this week. if you didn't see the front-page article in "the new york times" this weekend about aluminum and this idea of aluminum warehouses and moving all the stuff back and forth, check it out. also, the cftc wants in on the action. the commodities market regulator has put banks and other big traders on notice for a possible investigation of their metals warehousing businesses. >>> in other washington-related news, president obama has a series of economic speeches planned for the week ahead of key budget deadlines

i'm melissa lee along with herb greenberg and kayla tausche. with a scorecard. 7% of the s&p 500 companies have reported so far. the earnings season ramps this up week with banks, tech, health care all taking center stage. meantime, let's start off with bank of america. kayla has been watching the banks here. solid reports so far so what are we expecting from bit. a.c.? >> expected to earn 25 cents a share which is less than its peers but still pretty solid for a company that has seen its earnings completely wiped away the last quarters by settlements in one-time items that seem to be recurring. two things that we're watching for bank of america. the first is mortgages. cfo bruce thompson has said over and over again that bank of america was late to the mortgage game, that they are ramping up their loan officers and putting their loan opsers and branches trying to ramp up their original nation but original nation right now starting to come down. are they too late to the game? are they spending too much money trying to get into that game and how

maria, back to you. >> all right, kayla, thank you so much. what is the motivation behind the government's efforts to effectively wipe out steve cohen and s.a.c. capital? steve is with me, former assistant u.s. attorney for the southern district of new york. he is now a partner at harrick feinstein, and also with us is robert frank, cnbc's wealth editor and john carney is cnbc editor, and good to see everybody. thank you for joining us. this is pretty extraordinary. steve, have you ever seen anything like that? >> well, look, there's often the case that corporations get caught up in criminal activity, and they bring charges. they often settle those with different prosecution agreement, new put monitors in place, come up with alternative ways that don't destroy the company. what's extraordinary about this is we have a company that they haven't reached that resolution yet, and it looks like they're going on a road that could end in the death penalty for the company. >> you think that's what's going to happen here? they're saying, look, we can go

kayla tauschy is live in washington and has been monitoring that meeting.>> hi, sue, certainly seems to be moving in that direction when chairman ben bernanke gets asked about ending the too big to fail. the first box got checked today, the federal reserve's board of governors in an open meeting approved and voted in support rather new capital requirements on the banks that are slightly stricter than they were before, raising tier one capital required to be held at 6% from 4% and also called for another capital buffer and a limit on how much banks can borrow based on their assets. the rules also outline the relative risk of certain asset classes, private equity and volatile commercial rhee real estate and delinquent loans weigh heavier on the balance sheet and government debt if it's defaulted and bank debt, relatively riskless and mortgages to some surprise were treated more leniently this time around than in previous drafts of this proposal. that because of concerns raised by some small bank advocates saying the strict rules on capital and mortgages would

kayla, thanks very much.e years after dodd-frank was signed into law, details, as you saw, are still being worked out. critics continue to question whether it will prevent the kind of risky behavior that caused the financial crisis of several years ago. >> and one-half of the duo that wrote that law joins us with his take on the law and its critics, former massachusetts congressman barney frank. congressman, thank you for joining us. >> welcome back. >> thank you. >> we want to start out with the news that kayla mentioned there. is it the spirit of this law -- do you think it should be the case that this particular example of s.a.c. should be included when they extend the statute of limit achesations of years instead of five? >> you're asking me a technical-legal question, and i don't know enough of the facts to answer. obviously, i am for extending the statute of limitations, we put it in the bill. these things take time to uncover. but as to its application in a particular case in a particular set of fact,

are you sure kayla? everything okay?s the timing good for you now for you to do your hit that is supposed to be done at the top of the hour? >> joe, my makeup does take a long time. but that wasn't the issue we were waiting to fix our microphone, now we're good. we have a lot of trucks coming by, you want to make sure you can hear the high value. behind me, 500 pearl street, this is where sac capital's lawyers are expected to show today for a 10:00 a.m. arraignment hearing where traditionally the party is expected to address the indictment and also enter into some sort of plea, whether that's a guilty plea or a not guilty plea, we don't know at this point. up until yesterday's lengthy indictment, sac capital and its lawyers and cohen had all staunchly defended the firm's actions as right and just if saying that they didn't do anything wrong, especially at the very top of the firm. all changed, of course, yesterday, with a sweeping 41-page indictment from the u.s. attorney for the southern district of new york who has bec

i'm kayla towshi at the breaking news decsk.g a statement from sarks c capital, a target of an indictment from the u.s. attorney's office this morning. the statement reads, sac has never tolerated or encouraged insider trading and takes its tolerance obligations seriously. the handful of men who admit they broke the law does not reflect. honesty, character and integrity of the thousands of men and women who have worked at sac over the past 20 years. we will continue to operate as we work through these matters. of course, the handful of men referred to in that statement the six defendants in the indictment this morning who have already pleaded guilty to charges of insider trading. certainly interesting to see this statement from sac in the wake of those charges, and we'll continue to report on whatever we have as we get it. you're looking at right now that statement in full saying that the firm never encouraged, promoted or tolerated insider trading and that it takes its compliance issues seriously. guys, back to you. >> coming b

thank you for being a great example to your fellow classmates and to our city's youth and i hope that kayla your senior class president and david your student body president as well as the entire lowell graduating class of 2013 become the great community and civic leaders of san francisco future. because of being your mayor, i think that the people of the city every day for the opportunity to serve san francisco. it is a privilege to wake up each morning and to work for you, a people the our city and to do everything that i can to help all of us be successful. and as your graduation day is a day when you set off on a path to success you will use what you learned at lowell to tackle the great challenges next in your life, to make the differences in your world and the impact in the lives of your peers, family, your friends, and your community. looking back at my graduation day in high school, i remember feeling excited, scared, nervous, and inspired to make a difference in the world and just like you my journey started on this very important day, graduation day. and you know, each of our live

kayla?a, new york's notorious ban was defeated, this time by a state supreme court of appeals, and today, the court's opinion determined that the board of health overstepped the boundaries of its lawfully delegated authority and deemed the use of that authority was unconstitutional. the ban sought to outlaw city businesses from selling sugary drinks larger than 16 ounces. that limit becoming a year-long battle between bloomberg and the state's judiciary. the limit was introduced last september and was set to be in effect this march until a state supreme court in march declared the law invalid. in today's decision, the response to the bloomberg administration's first appeal on that decision two months ago. it was a unanimous decision, four judges saying the board of health was acting too much like a legislature. mayor bloomberg responded, today's decision is a temporary setback and we plan to appeal this decision as we continue to fight against the obesity epidemic. the longer this goes, thou

back to you. >> thanks, kayla. >>> more often than not, the investigations usually end with fines and because on wall street, this type of criminal charge is akin to a death sentence, as few clients are unwilling to invest. how has it come to this? i'm joined by harvey pitt, and it's always nice to have you on the program. >> well, i think this is the first question one has to ask is why are we hearing about an indictment that hasn't yet been filed? i think it's very troublesome that there's any preindictment publicity. but once you get past that, i think this is a death nail for s.a.c. as it currently exists. even if they win a criminal case, and if steve cohen wins the s.e.c. proceeding, the damage has been done to the firm, and i think money will start flowing in droves out of the firm. >> but you make a really good point, harvey. usually, this kind of -- this kind of -- an indictment -- is not speculated beforehand. so how come it hasn't been filed yet? it just feels like the government has been circling the wagons for a long time, and has been unable to come up with anything real

i'm kayla, in for maria today.ews, for the stock market -- or wait, good news again? it would certainly seem it was bad news at the

kayla with a bigger look. >> tyler, what is driving facebook's popularity this quarter is once the biggest worry. a year ago when facebook went public it warned it didn't know how much money it could make in advertising. this quarter is affirmation whatever they are doing is working w. revenue of 0 this time last year now it's 41% of the $8.1 million in revenue. for and mo more and more people are using phones to facebook and 119 million people were on the site. zuckerberg said soon we'll have more revenues on mobile than desktop. whatever the platform, advertisers like it and more than one 1 million companies have advertisements. >> 1 million companiecompanies? >> 1 million companies are advertising on the network. you would never think. >> stunning. >>> our next guest says this is a break out quarter for facebook so david, how do you feel about facebook tonight? is this a stock you would buy, sell, or hold? >> if the stock says up 20% as it is as we go into mart ket tomorrow, target price at 12 months is about 35 dlarpz$35 d$. certainly continue to be attractive but there are other names

for nightly business report, kayla toushi. >>> are you at risk of hidden charges on your credit card? they're unwanted but not illegal. they may be costing you hundreds of dollars a year. >>> let's get a check on how commodities, treasuries and currencies performed today. >>> the merger between usairways and american airlines could sooning cleared for takeoff. european regulators are set to give the okay to the $11 billion deal creating the world's largest airline. approval hinges on the combined carriers agreeing to surrender several aircraft slots at airports in london and philadelphia to rival airlines. >> from the skies to the roads. ford is recalling 33,000 late model hybrid cars to repair a component in the roof that did not meet federal requirements for protecting against head injuries. thankfully no accidents or injuries have been reported because of the problem. >> another big auto maker unveiled a brand new line of all electric and hybrid cars today. hoping they'll become the industry standards. bmw introduced its new i-3 sedans. made of lightweight carbon fiber and getting

kayla, do you want to weigh in on this? obviously, as press, and you've been covering this story very closely, i'm sure you have a view. >> you know, mandy, it is interesting to get a statement like that from the lawyer for s.a.c. but what's more interesting is to look at the actual charges from the s.e.c. and see the exact dialogues that they're pointing to as indication that steve cohen directly supervised and directly engaged in some of these trades or failed to supervise some of the trades alongside many of these employees. and yet still chose to go with administrative charges and go with charges of failure to supervise, which is very interesting that they chose those lesser charges, even though they had some of the communication instances at their finger tips. you know, there is another situation where preet bharara was talking about compliance. if you ask a lot of people on the street, they say, no, if they're supporters of s.a.c., they have a very, very extensive compliance department, the thickest in the environment

kayla breaks down the results for us. >> reporter: the banks are always bellwethers for the economy,rs saw a quarter of progress. there were far fewer loans going bad and fewer reserves needed for those, but cautious borrowers have kept the loan value down. wells fargo, rising 19%. revenues beat though flat. and the firm's lesser-known on investment banks, the surprise, the upside in mortgages. wells was expected to suffer as fewer people took out mortgages in the quarter. not so. origination rose slightly. that drop-off fear is still to come. diamond, as you said earlier, admitting that wells fargo out-mortgaged his bank, down 17% to $49 billion. total loans also fell. on top of that, the bank shifted more cash toward carrying higher capital levels. that drove margins to record lows of 2 baunt 2%. next week is busy for banks. we have citigroup out monday. goldman sachs tuesday. and bank of america, which analysts have begun favoring, out wednesday. morgan stanley reports on thursday. one message we could hear, don't worry about rising rates. it means the economy is only getting bett

kayla is covering the story for us. how different is it today than where it was? is it in better shape financially? >> better than a year ago just in this most recent quart e. bank of america got 200,000 bad loans off of it's books. it also shifted a billion dollars in legal reserves that it had to cover some of those loans from those reserves into it's normal balance sheet. they had a lot of legal costs but looks like their returning capital to shareholders and investing in the business again and meeting the regulatory capital ratios. this is a far healthier company. >> let's talk about legal costs because they are still not all resolved and have a big chunk, $8.5 billion, something like that. what could go wrong in that area? >> they already reserved or put aside $8.5 billion to kovcover t settlement. it in court now. there is expected to be a ruling whether that $8.5 billion is enough. it could go higher that could be kopsly. we expect a decision in a couple months. remember, this is a bank that spent nearly $50 billion to get out of the woods with a lot of iss

>>> the fdic is pushing for stricter requirements today, and kayla just spoke exclusively to one of theulators key members. >> the top eight u.s. banks must now meet leverage requirements nearly doubling the strictness of the global counterparts. they want u.s. banks to borrow less against their assets, so there's ultimately less risk in our financial system. the criticism? u.s. banks will lose their competitive position. but fdic vice chairman thomas honig spoke out to cnbc against those critics. >> when you compete from a position of strength, you are doing -- you compete much more successfully. you can handle unexpected surprises in the market. you can handle losses that you might not have overwise otherwise be prepared for. if you find by not having a strong capital position, when you have a downturn, as we did here in 2007 and '08, you have an implosion of loans. so you really actually do your economy and your borrowers a great deal of harm. >> reporter: what will banks do with all of the capital? he says they can still invest it, but they can't lever it up to produce artificial hi

bill and maria, back to you. >> kayla, thanks very much. let's zero in on citi.oes the good outweigh the bad that she just highlighted on the banking giant? joining us, a couple of bulls on this stock, anton and fred. anton, why do you like citi? are they back? can we just say citi is back? >> well, citi was a tremendous value, and they've, you know, obviously delivered on some of the operational issues, getting the bad bank holdings down, getting eck pences in line. those were important metrics. and capital has been built off the lows. back to where they're almost compliant with 2018 regulations. so the real, you know, juice is yet to come. and showing us earnings power that citi can earn over $6 a share in the future in 2015 or beyond really makes the stock very cheap. and it still trades at or below tangible book value. >> fred, what about you? i mean, for a long time we were talking about how the ceo was separating good bank from bad bank. where are they in terms of their strategy and what do you think needs to be done at this point to keep this momentum aliv

kayla tausche has more on b of a's big day. kayla, over to you. >> still corporate news happening for you and we have it all for you. bank of america, it cut more costs and released more loan loss reserves than expect the and also posted its first post-crisis quarter that didn't see the bank's bottom line erased by pesky legal costs and managed to best its peers in some cases like mortgages and jpmorgan and citigroup, the ceo this morning said the pipeline is down only slightly and won't see the impact that its peers will. trading another boost to earnings. the best quarter for equities trading in more than two years. big hires paid off in cash equities and thompson attributed weakness to the end of june volatility as the market tried to interpret the fed. he later made comments saying it could take up to three years to make up some losses in the industry suffered in the recent bond route. there were some thorns in the quarter. the bank made less off interest than it did last quarter and revenue every quarter was down. those is

. >> reporter: when tony miller proposed to kayla shank he dreamed of them being married on a piratehip. >> i told him he was crazy. definitely did not think it was happen. >> reporter: what is crazy tony wanted to build a ship and a pond. >> a pond. a a ship? who build a shippen their front yard. >> reporter: he quickly got to work on his labor of love. >> i didn't know much about ships. it was fun to do. a hobby in the wenter i took different types of ships and collaborated my favorite parts of each ship into one. so a cross from, a, gallion, to a frigette. >> it sits on a man made pond and boulders made by hand. and soon it will host family and friend for tony and kayla's wedding. >> august 3 is d-day for the wedding. that's -- i believe, if we didn't have a dead loon noline gets done. >> reporter: with more work to be done. tony's plans hatch hit a snag. the county put a stop work order on the project. >> hope it is no big deal. we can work something out. >> reporter: tony never got the required permit to build the ship. the county officials say they're willing to work with tony