asset management company and jacob now chief economist for russia morgan stanley all right gentlemen we're going to start with our new segment here it's called cover your marker where you have a few seconds to give me a yes or no thumbs up thumbs down shake up first. double dip for russia by the end of the year no i think growth will continue strong where is all this coming from this negativity i think is coming from fears about the oil price falling ok but it hasn't happened yet you could judge they had to be oil price when we going with that oil price i don't think is going to amount to much more i think all price will stay around one hundred thirty nine hundred which i mean what's driving that i think is. limited supplies production costs are getting higher and higher. and i mean who knows what's going to happen with syria and with iraq that's a worry that continues to hang over the markets and that's an external threat china what's going on i think andy i think we're getting policy action from the government is going to support an acceleration in growth in china in the second hal

but it wasn't all good news. morgan stanley delivered an unexpectedly soft report while a jobs report and weak housing data. >>> ford is telling owners of its brand-new 2013 escape to stop driving them. the suvs are being recalled with possible fuel line leaks that could cause a fire. >>> documents show new yahoo! ceo marry sa mayer will receive up to $100 million in total compensation over the next five years. >>> a startling new government study finds students borrowed far more than they could afford from 2004 to 2008 because of relaxed standards by private lenders. much in the same way the risky lending led to 2008's subprime mortgage meltdown. >>> and finally one french realtor has found a creative way around the weak economy. the lottery. that's right. the agency sells tickets for 12 buck as piece and then draws a winner and hands over the keys. why didn't we think of this. not a bad idea. >>> the braves avoid the broom, twin blasts from one met, and golf's british open gets under way. >>> plus, 2012's dream team gets fanc

were talking about the potential for an acquisition on morgan stanley, that they would have to put themselves up for sale. can you speak to that at all, the potential for morgan stanley being bought out? >> i don't see that as a real distinct possibility. right now no big bank wants more assets. i don't see that as a possibility. what i think you're going to see, though, for m.s. is a little more aggressive restructuring which sounds like it's going to start to come on the fixed income side. >> i mean, are we looking at morgan stanley sort of revision assist, looking back for the glory days? because the environment they're facing now is extraordinarily difficult. those fixed revenues, they were a disaster. this is a company that missed by $500 million on the revenue side. so i get the stock might be cheap valuation, but i'm not even sure that that's a reasonable argument right now. >> i mean, it's a fair point. it wasn't a good quarter. look, it's an incredibly volatile business. they destroyed estimates in the first quarter and revenue stocks sold off. this was a challenging quarter. they missed by a decent amount. some of it attrib

idiots who own mutual funds of the morgan stanley of course who sold them these funds and then sold them this toxic derivative of this toxic stock facebook and now they're all losing their shirt again the morgan stanley will blame the market they won't blame them so mr market is the bad guy the fact that we took fraud publicly committed massive securities fraud and because we're basically fraudsters doesn't matter to people they passively got into the stock the networks have been destroyed and it's because of mr market. well there are loads of lawsuits being filed as we speak but you know as this oklahoma was the center of the great dust bowl of the one nine hundred thirty s. and where did all the okies head but to california so if they head out to california today however they're going to find economical wasteland which is probably worse than the dust bowl but just the financial and economic dustbowl happening in california headline reads california cities i plan to seize mortgages officials from san bernardino county in two of its cities have formed a local agency to consider the plan to condemn troubled mortgages the idea was broached by a group of west

morgan stanley on the heels of jpmorgan. >> absolutely not. exactly to the point that we're just talking about, the investment banking business, dimon said that it was weak. all capital market businesses, he also said that the third quarter started out like the second quarter. europe and asia specifically have been weak. those are the growth markets. morgan stanley has been very closely correlated to the european banks. interestingly enough today. if you look at a five year chart you can see right here, europe and morgan stanley are one to one correlated. morgan stanley is having systemic risk. >> it's obvious from the chart and that's not we use the structure a lot it's. this is a bear strategy. that's where you make the most money. that is where your profits are capped. walk us through the trade. >> so, today when morgan stanley was around $14, i bought the 13.11 put spread in august. what am i doing here? i bought one of the august 13 puts for 40 cents. i sold one for 10 cents. my maximum risk is 30 cents. i start to make money when the stock is below 1270. my maximum gain $1.75. great risk reward. my max gain i certainly wouldn't short the stock. i think

dollars for a top trader that would not be very much no you worked at morgan stanley merrill lynch which was it across the board all banks and every bank has its own culture but it's all about money at the end of the day and so there is one thing i think that they all do have in common that there is this tremendous amount of competition it is ruthless you're never quite sure who's on your side and who isn't so even though every place is slightly different i do think that they have that in common you know from the get go you were going to wall street in the hopes of making. a lot of money what surprised you that you weren't expecting because you knew you had to have known it was going to be cutthroat sure i guess maybe what surprised me is that you're never satisfied you're always sort of looking to go up the food chain you're always kind of looking for the next step up and and there's always someone to compete with now i was sort of if you compare me to sort of a top trainer who was nowhere close to that but that doesn't mean that you don't still have this same sense of need more more more and at least for me that

morgan stanley. bank of america. all of them are big banks. >> right. and this is not surprising in a way.ecause mitt romney is from that world. he knows these people. he is of their mindset. and the other thing is that they don't like obama so much anymore because they have been blamed in part for the financial crisis, in some cases perhaps with good reason. and in are the cases, there have been various misdeeds that people have looked askance at, and it has led to more regulation, aka the dodd frank bill that has been very, very unpopular in the financial community. >> so, you know, we hear this a lot. mitt romney is getting these huge do nations from people with a lot of money, and we can see that he is. so does that necessarily mean that these big banks and big corporations will decide our election? >> well, you know, it's very hard to draw a straight line there because there's a lot more going on. i mean, they may be helping our election, but of course money is not everything. you have to have, you know, the basics in place. you have to be a, you know, intelligent individual who is ab

morgan stanley five weeks ago was at $12. so it's certainly had a significant rally to this point. your entry is not bad at all. >> a lot of ground was covered on that jpmorgan two-hour call this morning, everything expect stocks versus options. want to short the other house of morgan, they can go up forever and this is put spread risk. $30 can be worth as a buck 70. that's more than five times your money. not bad. let's move on here. $700. $700. that's where they say going sl going in the next three months. the options prices are implying a 6% move on this event. let's find out why. a call with the charge to the one and only carter of braxton oppenheimer. what do you see? >> it's all the same time frame just with different lines and arrows. so this is a five-year chart. google tops the chart. bottoms of the market 250. and you have this nice steady early up trend, '09 to 2012. in principle what's important about this trend, take a look at the next drawing, same five-year chart. you have a flattened top which means there's tension building here at the 600 plus/minus level. and the presumption is each time you

all time. that's into the a good -- >> it hasn't helped citigroup or morgan stanley. >> the book value affects yield curve. but on a mental stand point, that could be a level of support for the stock. >> let's wrap this up by hitting the stocks versus options button. shorting stocks carries unlimited risks and his call spreads sales nets him .65. interesting risk/reward there. here's what's coming up next. >> too hot. the heat has wreaked havoc on crops across the globe and sent the price of food soaring. when we come back, we're heading down to the farm for a trade to put some of that money back in your pocket. that's when options action returns. time for "pump up the volume." this retailer is best known with its hush-hush apparel brand. speaking of intimate, these guys are in your bathroom, too, with the indulgent bath and body brands. who is it? the answer when "options action" returns. and you don't want to miss it with thinkorswim by td ameritrade. you get knock-your-socks-off tools, simple one-click orders, real-time paper trading to hone your skills, plus anytime you need it support. ♪

all right. >> caller: so now that morgan stanley reported earnings what's your play?sider it to be a good one or stay away? >> you know, i've got to tell you. it would be easier to say about morgan stanley's spanish brokerage. there's nothing there for me. i'm sorry. you know, i like wells fargo and i like jpmorgan. jpmorgan had a losing season. okay? this is a new season and i like jpmorgan. that, ladies and gentlemen, is the conclusion of the lightning round. [ buzzer ] >> announcer: the lightning round is sponsored by td ameritrade. polar shifts will reverse the earth's gravitational pull and hure us all into space. which would render retirement planning unnecessary. but say the sun rises on december 22nd, and you still need to retire. td ameritrade's investment consultants can help you build a plan that fits your life. we'll even throw in up to $600 when you open a new account or roll over an old 401(k). so who's in control now mayans? >>> have the sem constructor stocks finally bottomed? yesterday we got a tradeable bottom after intel reported a shortfall and wen

all right. >> caller: so now that morgan stanley reported earnings, what's your play? would you consider it to be a good one or stay away? >> you know, i've got to tell you. it would be easier to say about morgan stanley's spanish brokerage. there's nothing there for me. i'm sorry. you know, i like wells fargo and i like jpmorgan. jpmorgan had a losing season. okay? this is a new season and i like jpmorgan. that, ladies and gentlemen, is the conclusion of the lightning round. [ buzzer ] >> announcer: the lightning round is sponsored by td ameritrade. take the privileged investing tools of wall street and make them simple, intuitive, and available to all. distill all that data. make information instinctual, visual. introducing trade architect, td ameritrade's empowering web-based trading platform. take control of your portfolio today. trade commission-free for 60 days, and we'll throw in up to $600 when you open an account. ♪ ♪ ♪ [ male announcer ] what's the point of an epa estimated 42 miles per gallon if the miles aren't interesting? the lexus ct hybrid. this is the

all. morgan stanley's adam parker explains why the s&p is headed for a 15% drop and how you should preparek? our traders will weigh in on that. top ways to play the comeback in coal. guys, see you in about 15 minutes. >> looking forward to it. dow caterpillar down more than 20% in the second quarter thanks to a lackluster u.s. economy and, of course, worries about china. the stock taken off wells fargo's priority list on friday. can cat bounce back. a senior research analyst has a buy rating. he believes caterpillar will bounce back. i see the price target here is $132. you think there's more than 50%, almost 60% upside from here. >> that's our long-term price target, caterpillar had a terrific three to five-year outlook, just have to navigate through difficult waters. >> talk me through that. what are people missing when they sell it down like this. >> it's a proxy for global growth. with problems in every region of the world, you become suspect what kind of numbers caterpillar can put up. in this environment things will begin to flatten out a bit. the long-term is terrific. it hasn't cha

all right. >> caller: so now that morgan stanley reported earnings, what's your play?ould you consider it to be a good one or stay away? >> you know, i've got to tell you. it would be easier to say about morgan stanley's spanish brokerage. there's nothing there for me. i'm sorry. you know, i like wells fargo and i like jpmorgan. jpmorgan had a losing season. okay? this is a new season and i like jpmorgan. that, ladies and gentlemen, is the conclusion of the lightning round. [ buzzer ] >> announcer: the lightning round is sponsored by td ameritrade. s gotta be just righ. perfect golden color. rich in fiber. my dad taught me, and i taught my son out there. morning, pa. wait... who's driving the...? ♪ 99 bushels of wheat on the farm, 99 bushels of wheat ♪ [ male announcer ] yep, there's 8 filling layers of whole grain fiber in those fun little biscuits... so they stick with you, all morning long. kellogg's® mini-wheats cereal. [ mini ] yee haw! a big breakfast in a little biscuit. [ female announcer ] 100% natural lipton iced tea. it's delicious goodness, just the way nat

all right. let's move on to morgan stanley this morning because those shares there are moving in a different direction than many of the others we were just speaking about. the investment bank says it earned 29 cents a share in the second quarter. that was below wall street estimates. they had been about 23 cents a share. revenues were down in the quarter compared with one year ago. it does appear that, well, it was a little bit higher expenses but across the board, guys, it was more or less just not performance that was anticipated. we know it wasn't a great quarter but it seems to have been a perhaps worse than expected quarter when it comes to fixed income, currency, commodities. when it comes to debt, in particular. underwriting, core equities underwriting and really sales and trading is where they seem to just fall down on the job so to speak. >> the moody's downgrade which we all talked about, everyone knew. that does hurt. >> it did hurt. it was, again, i've underlined certain things here. like i want to take things out of my pocket but i have to go through my -- what do you have in there by the

that, although it does seem to be getting encapsulated in the valuations which are all below book value. >> morgan stanley downgrading general electric to an equal weight from overweight, it's moving to the sidelines in light of ge's recent outperformance and equipment orders and tough comps in energy as well as aif invitation. risk/reward seems to be balanced right now. but there is weakness. we've heard from cummins. >> i think people misinterpret. there was a tremendous truck surge. "mad money" went to the bakken last year. that was an amazing imbalance between how much oil that was and how to get to oil to the market. people are now using trucks. natural gas, they had to use trucks to bring fracking sand and fracking water. the ge downgrade on the energy exposure they have doesn't cite wind as being something that's going down. but a lot of the energy business that is ge has could be weaker. the real battleground here is aircraft. is aircraft really peaking? we have a lot of people who listen to airbus who said, there's a problem. i don't think it's peaking myself. >> we just came off the farmborough

morgan stanley is resolved. the disagreement -- adam works for morgan stanley. i see you reach us nervously for your cup, i ask you allthings, downgrades. andy you're a stock guy, what you're going to stick with. good idea. disagreement on the smith barney morgan stanley venture. planning to buy an additional 14. from citigroup, and kayak and palo alto network debut today, k and palo alto specializes in computer network security. >> timing is everything and i just blew that. >> it's called sleeping. >> it's the only little thing i had this morning given i've not had that much sleep. the banking sector bailout, anti-austerity protesters in the country turning violent. cnbc's chief international correspondent only international correspondent -- >> shh! a lot of dramatic events in the last 24 hours when it comes to spain, you just saw the video there. the key thing we'll focus on is the eurozone finance ministers in the last hour approving the terms which spain will receive failout money for the banks. there's a lot called the mou later on. the one key element i want to focus on right now, spain has said they are willing

well morgan stanley came out with an interesting estimate a couple of days ago. as saying that the total regulatory fines for allg implicated could amount to $22 billion. that would be quite a massive cost. also for u.s. banks it could reduce 2012 eps by between 4% and 13%. back over to you. >> carolyn, thanks so much. appreciate it. >>> still ahead on "way too early" -- just months after linsanity swept the big apple, it appears the new york knicks may be ready to yet their young point guard walk. the latest on jeremy lin's future and an update on another star knick who found himself in handcuffs over the weekend. oh my god, the new york media market, what will they do. and the quiet police strike in london where the plug is pulled on a concert featuring none over than the boss and paul mccartney. we'll tell you why that epic music duo was, get this, pushed off of the stage before they wanted to finish. >>> plus get a check on the weather, when "way too early" comes right back. it's hot out there on the acela corridor. >>> it does now seem certain that they went down in the crash of a single-engine plane that k

morgan stanley fell short. in tech land intel beat estimates, ibm as well, and raised expectations. ebay, google and microsoft all beat expectations and microsoft did post the first ever loss, revenue a bit light as well. mixed housing news. housing starts hit a four year high in june driven by a jump in is single-family homes and rising by nearly 7% but existing home sales fell more than 5% although prices were higher. analysts say prices rose because there were fewer distressed sales. the markets aren't quite so glum these days looking past europe and the fiscal cliff in the united states to earnings season which is in full gear right now. which is more important and how do you invest in this environment? joining me is j.p. morgan's chief u.s. equity strategist. what's your take on the earnings season so far? tell me how your clients with being here and what people are doing with their money these days? >> clients are really nervous about earnings because they were hearing europe slowing, china, big profile announcements and it turned out to be a lot better than expected. if you look at bottom line numbers, abo

all three indices are in positive territory. weekly jobless claims actually increased. 386,000 filed. existing home sales and also morgan stanley earnings lower than wall street expectations. and those of j.p. morgan will expect to release their report. verizon showing an increase and also microsoft. honda impacts 166,000 and 6200 of the driver's side the inner door latch could not work if the locks are used and shot, simultaneously. these recalls will begin next month. >> ford is telling some buyers of the 2013 to not to drive it because the engine could catch on fire. and i they could crack and leak the fuel line. this just before it cylinder engine. just impacting--the four- cylinder engines. with reports of fires and thankfully, no injuries. many will get repaired even before they are sold off the car lot. >> this crash sent people to the hospital from dismantled wreck. this plain clothes officer noticed a driver driving erratically. when a patrol car attempted to pull over this cart there was a short chase. and the car continued and id and it collided with another car. the suspect got out of the car and ran but he was deta

chairman and ceo of bankunited and steve crawford at center view partners and former morgan stanley president, our guest host allre to start on this one. >> first thoughts on some of these jpmorgan both numbers, how they're explaining it and this idea that potentially, i don't want to suggest it was criminal but this idea there might have been some malfeasance involved, john? >> i think a lot more information needs to come out as joe said. restatement is not very good news. i think that that's probably going to get a lot more attention in the next couple of days than some of these personal details. >> a restatement on an honest mistake and restatement on something that was not in good faith, but then off camera then you said, since they were the market, they were the market, they were so big that they were the market, so it's like the libor rate, you don't know where to set it. there is no rate. >> to me the most troubling aspect of this if you're jamie or if you're the board is you find out about this problem internally from an outside source. you ask your people to go back and do the work. they go do their hom

not all companies are in the same position. >> as of today, morgan stanley -- yes, i understand it's ironic banks making estimates about banks and what they're doing or not doing. anyway, analysts there estimate the so-called libor rate manipulation scandal could cost banks $14 billion. that's fines and fees on the banks. you say great, they should pay it, those jerks. here's what it means, $14 million less for those banks to lend, which will hurt the rest of us. banks are crucial for our economy. we need them to thrive. they have become so big that they seem to control our fate. just yesterday on this show, dan gross, the economics editor at yahoo! finance, suggested the u.s. economy is sort of like the titanic. take a look at this little image. our economy is the titanic. it feels invincible and huge. the most amaze thing in the history of the earth. even after the financial crisis. pretty much just like the titanic was, right? we were sailing along till we hit that jpmorgan trading loss. and it jolted everybody. it jolted our ship. we said, wow, is our economy still at risk from b

ready to dish the dirt and other banks all to escape punishment and for the details wash the kaiser report later today on r.t. . goldman sachs and morgan stanley are among financial firms that may bring lawsuits against their biggest rivals as regulators on three continents examined whether other banks manipulated the london interbank offered rate known as libel or said bradley hints an analyst with sanford c. bernstein and company now the only reason why they would do this according to hints is that goldman sachs and morgan stanley manage money market funds so they by law would be obliged to you. well if the law ever stop these guys from doing whatever it is they want to do but now they're hiding behind the skirt of the law suddenly wanted suits them just like remember back during the crisis. they were not a bank they wanted to go about offense of not being a bank and then when the crisis or they decided oh no we are a bank and you know that they treat the law as a plastic movable feast you know as whatever they write the laws themselves when we're talking about. some other stories making news around the world a series of u.s. drone strikes o

all day for you on wednesday. on thursday, earnings from microsoft, morgan stanley, google and the existing home sales numbers and closing out the week, we'll get earnings of xerox and ge. ge a minority owner of this fine network. >> will we deliver on the conf >> it is being gathered and backed in to a truck and delivered on wednesday. i can assure you. >> that's what we do with a bow on top. thank you, brian. if we get a wave of good news next week, is that enough to keep the rally going? joining sus barbara rhine hart, managing director and chief investment strategist at credit swis and president of kin sale trading. thank you both for joining us today. barbara, first of all, do you feel that perhaps -- i don't know -- we've hit a short-term bottom, are things materially better? is today a bounce off oversold positions? >> of course, it's oversold conditions but we think things are materially better or at the margin better since the beginning of june. we think that the expectations for the eu summit that had been baked in were very, very low and earningse estimates of the u.s. marked down significantly and pro

constant headlines out of barclays and then jpmorgan and morgan stanley and facebook and feels if the retail investor is thinking, you know what? all rigged anyway. why would i bother? >> listen. quickly, china huge question mark. don't know europe. jobs in the united states. >> hands off for that. manufacture lamore later on. >>> something else for investors to watch, of course, is earnings season. it starts after the bell today. alcoa will report. shares down 10% over 3 months. ceo will be on "the closing bell" after they report later today. now, for the bigger picture on this upcoming earnings season, courtney regan is right here right now. >> thanks, tyler. there were worries of a global slowdown due in part to the european debt crisis and the currency translation. drops in corporate and consumer confidence. second quarter earnings expected to grow and excludeing bank of america drops to 0.7%. revenue to 2%. 95 of the s&p 500 companies issued negative preannouncements and 29 positive. the weakest ratio since the fourth quarter of 2008. now, because of of bank of america financials are expected to grow almost 54%. but remember.

morgan stanley. what is the loss? that's all we care about. give me a number, what do you think it is?number we have in our models is $6.5 billion. >> ooh! wow, if we were scared at two, but based on the size of jpmorgan, that is manageable, and that probably doesn't put the uninight an overall loss, does it? even the unit, much less the bank. >> they have gains they can harvest to offset part of that, if not all of the loss, i think the important thing going forward for investors on friday morning is going to be how much have they actually closed out of the trade and what's the forward look, because that will really set the tone for what you think your earnings are going to be good forward. stocks reflecting that, expectation as well as how much they can start to reengage the buy-back and when they can start to reengage the buy-back. >> in your view as an analyst there are probably a lot of other things that are going to be actually more important to consider, right? what are those things rather than this, the whale. >> you know, so i would say the whale's important just to put behind

bank of america and morgan stanley these are the five institutions that hold ninety eight percent of three hundred two trillion dollars worth of notional derivatives that are held by all american bank holding companies all right premiere at time thanks so much for being on the kaiser report love being with you max all right that's going to do it for this edition of the kaiser report with me max kaiser and stacy herbert i thank my guests rob kirby of kirby analytics if i mean e-mail please do so at kaiser report r t t v dot are you till next on my status and buy off.

all. that is one of the reasons that the numbers have been coming down like this. >> thanks so much. morgan stanley is number of about 15% is what i'm told. a 15% stake in morgan stanley commodities. don't know exactly what the price terms would be, but if you figure it being somewhere in the neighborhood of $5 billion, that's looking at the revenue. other issues swirling around as you guys just alluded. the rule would make the trading business a lot more cumbersome. another question out there on the regulatory front is can they continue to hold physical assets that they have? a big oil terminal business that morgan stanley owns. but, moving on, talent retention, another factor. apparently a lot of traders are getting rested when they think of new regulations and the landscape that they are looking at in the future. these are some issues i am told a deal could be close. it has not been finalized yet. i am still tracking down the details and see how things play out. >> is this now a pattern? should we look for morgan stanley to sell off more of their assets? potentially breaking themselves up? >> i