he's charlie reinhard, deputy chief investment strategist at morgan stanley smith barney. hi, charlie so, are you saying that investors should take the cash out of their mattresses and put it into the stock market? >> well, that's one of the places where it should be. we're recommending that they have balanced portfolios, that for moderate risk investors consist of global equities, global bonds. a little bit of cash and other investments as well. >> you know, a number of market strategists were saying that with these drastic moves that the fed is making it gives the sense that the economy is not in such great shape. so maybe this is a time to get out of stocks, what are your thoughts on that? >> well, there is an old saying on wall street which is don't fight the fed. and the fed is clearly trying to lay out accomodative conditions so that people will take on a little bit more risk. remember, the sequence of events is first you get the policy response and then you get the reaction in markets. and if it's pronounced and strong enough then ultimately you see a revival in eco

. >>> citigroup and morgan stanley agreed to value their joint brokerage venture morgan stanley smith barney at $13.5 billion as morgan stanley begins to buy out citi's stake in the firm. >>> facebook's ceo mark zuckerberg admitted yesterday he's disappointed with his company's crumbling share price, but his comments about company's morale and mobile growth prospects pushed facebook's share higher in late trade. >>> meanwhile, the ceo of zynga, the struggling social gaming company behind popular facebook games like farmville, resigned this week. >>> luxury retailer burberry issued a profit warning tuesday citing slowing sales to china. brands ralph lauren and tiffany and company. >>> u.s. regulators issued a rare warning to lancome parent loreal over claims its anti-aging skin care products alter the way the human body works. the fda says that language requires classification as a new drug and, in turn, fda approval. >>> finally, move over, jared. a 66-year-old virginia woman says she lost 85 pounds in two years eating every single meal at starbucks. she credits the nutrition info on the pac

meantime, morgan stanley and citigroup have a deal putting a value on their joint venture brokerage, morgan stanley smith barney. the value of the business has been a sticking point between the two banks as morgan stanley moves to become the sole owner. today's deal values the brokerage at $13.5 billion. after the deal, citi's stake will be reduced to 35%. shares of both banks were gher on the deal. morgan stanley gained 3.9%; citi rose 2.6%. under today's deal, morgan will own all of the brokerage by the middle of 2015. it was a management change at asset manager legg mason that got its shares moving. the stock jumped 5.4% after announcing c.e.o mark fetting will step down october 1. the fund company has suffered from investor withdrawals from its funds while facing activist shareholders. higher insurance premiums may not be good news for customers, but they are for shareholders, at least today for travelers. shares were up 2.5% to a new high after the company said it continues to enjoy pricing power with business and individual insurance premiums. at an investor conference, the traveler's c.e.o said business

. >> derek fowler is with morgan stanley smith barney and is fairly new to twitter. give us your twitter handle so we can grow you from 14. >> dfowler@mspwm. you have at least three more followers today. >> and you're looking at kim's vacation pictures. sth a mai tai conference. >> it's just a group of sill von valley investor that's share the passion for kiteboarding. they shared the passion to expand it. we decided this time to go to the george, which soefr in portland, so we could expand beyond kiteboarding, do some cliff jumping. >> you'll post this and mccall, you've been writing about nokia. windows 8, got a chain? >> this is not as exciting as your job. windows 8, there was a lot of anticipation. i think there was actually a lot of disappointment after nokia announced these new lumia devices. but, you know, they're knot nice looking devices. it's just i think people wanted them to leap frog apple and android and it's not going to happen. >> that's our show for this week. i'm scott mcgrew. thank you for making us part of your sunday morning.

importantly, they also have a time line under which morgan stanley will still use that value to acquire what it doesn't already own. a morgan stanley/smith barney5. along with all of those brokers and full control, of course, is the firm that will come by 2015, including the 14% it will very shortly buy $13.5 billion value. morgan stanley does get $15 billion in deposits, that's something. and complete a deal under which it paid $2.7 billion and combined the brokerage unit with that of smith barney, again, creating the largest brokerage unit in the country. one, perhaps, some say morgan stanley doesn't get enough credit for, but doesn't include global wealth management. we should point out that stocks of both companies are up rather sharply. this was not a controlled premium being paid here. it was a determination of the fully distributed trading price that this firm would've had as of june 1st, 2012. 1st, 2012. apparently the two sides believe that was $13.5 billion. >> so almost 10% over last week. >> yes. there will be a significant writedown associated with this. take 49%, $23.3 billion, that's where it was marked and say well it's only $13

maria, all the best of the 9/11 victims yesterday and, maria, happy birthday to you from morgan stanley smith barneyg heart. it's a paperweight. that's all it is. it's a paperweight. >> you always surprise me and you always say you're not going to. >> what is the feeling on the floor? is this going to be one of those sell on the news tomorrow? >> once you get the fomc, a lot of news, the europe news is temporarily out, the fomc is gone. so far, the only thing that's right is buy on the rumor. the draghi put is huge and enormous. maybe a little bit of a pullback seems likely here, but 10%, 20% correction. i think people are kidding themselves at this point. did you see the news earlier, bill gross announcing that he's cutting holdings? he's concerned about inflation. there's a little bit of effect. and i liked him comment on high yaeldz because i've been talking about these high yields etfs. people believe the fed is going to extend its low interest rate guidance. >> high yield funds will be the beneficiary. >> on bob draghi, he's one of my large investors in the marketplace comment just that. he sai

still to come, we'll talk to a morgan executive about the smith barney name change. >>> morgan stanleymith barney and being renamed morgan stanley wealth management. mary thompson sat down for an exclusive interview with greg fleming on the company's launch of its new ad campaign. >> this is the largest ever integration of two brokerages and it's been ripe with complaints. in an exclusive interview, fleming acknowledges the problems, but remains confident he can keep key brokers in the fold. i've spoken to a number of people and there were a lot of complaints about this integration in large part because of the problems associated with the new technology that was introduced. are those problems behind you right now? >> so takes new car. it doesn't have a lot of the bells and whistles that it needs. there are things like the longer statement, things that haven't worked as quickly as they need to for clients and for financial advisers. we're very aware of that and we're very focused now on making sure that we add all of those features back to this new car and not all of it will happen in t

. >>> morgan stanley purchased another 14% take in morgan stanley smith barney for $1.9 billion. s according to "the wall street journal" which says the bank has now boosted its stake in the venture 65%. morgan stanley is expected to buy the remaining stake from citigroup in the coming years. >> whole foods selling two businesses for 1.7 businesses -- dole foods. unloading worldwide package foods and aged and fresh produce units to japanese firms in an effort to reduce its debt and pay for an upcoming restructuring. that is the latest from the fox business network. dow down 4 points and change. we're of course giving you the power to prosper lori: mitt romney under attack after a video surfaced of him describing 47% of americans as dependent and entitled at a private fund-raiser this year. he is not backing down. lou dobbs is here with his take. we're 49 days away from the election. what do you think of the statement and how it will impact the outcome? >> what he said is absolutely true. what he said is absolutely reasonable and logical. and the fact that it be somebody had a tele

expected to hear, i believe today, on the valuation dispute between citigroup and morgan stanley about morgan stanley smith barneytanley is going to buy another 14% of it. but the two sides point to perella's firm, perella weinberg, to determine the value of what it actually is worth. >> is it what they have to pay? >> citi had it marked at a much different value. if it gets marked at that far lower value, will it be $11 billion or $13 billion, may force a writedown for city to some extent. and it's only 14% that morgan stanley is buying of whatever that valuation is. then they have to go through this potentially all over again when they want to exercise their next option. they hope they can get it all over with -- >> when we talk about morgan stanley, we think global investment bank. but people forget that wealth management, such an important part of that company. >> and a stable business. >> right. >> aig is down by 1.8%, perhaps less than what one might think on hearing of the announcement of a massive share sell by the u.s. treasury. $18 billion worth of stock potentially. >> i had some expectations it might

new details on morgan stanley's purchase of smith barney. >> this was at the height of the financialsis where margan bought the group in increments. they finished the 14% increment owning 65%. the pan was to buy the remaining 30%. sources close to smith barney, to morgan stanley tell the fox business nearing, the ceo of morgan looking to expee -- expedite that. that's what sources tell us. why? he's fresh off a victory. guess what, independent auditor valued the thing at $13.5 billion, less than what they thought it was. that means buying the res is cheaper than not. you get that? >> i figured that out. >> he's expediting the schedule. the head of the brokerage are at the fed now plotting the federal rereceiver, the primary regular layer, to give them the go ahead to buy the rest of it. the fed is worried about capital. there's basil three, and forcing firms to hold capital. does it have enough capital on hand to buy the rest of the smith barney? they are saying they do. it's an incremental costs saying it costs in terms of capital, $500 million more, and they have plenty of that. th

morgan stanley is wlaufrnling a n launching a new ad campaign. smith barney name now part of wall street history. used to work for them at one point. as morgan stanley -- smith barney becomes morgan stanley wealth management. in an exclusive interview with mary thompson -- oh, no, you had an exclusive interview with greg fleming. talked about the new campaign. welcome. nice to see you this morning. >> thank you. >> we had you on earlier talking about sports. >> we did. so now i'm back to talk about business. >> you can do it all. >> you can me, i'll go cover a hurricane, too. politics is still -- i wouldn't -- >> i don't really understand that. you're at a business channel for god sakes. >> let's talk business. after a three year effort, greg fleming who runs morgan stanley's wealth management group says the campaign, ad campaign, is to show clients and brokerses that they are all part of the same team. it's a team fleming wants playing on the same field as soon as poblg. morgan stanley has until june of 2015 to buy the 35% of the brokerage it doesn't already

many of you know we talked about it before, you will get the valuation in terms of what is morgan stanley smith barney joint venture is worth $22.5 billion. morgan stanley says 9.5 billion. will you get the numbers and the results on monday. i think this is a case as i have said before, i will reiterate is now, where you will get the low number, the value that this joint venture is worth being low, will be very good long-term and in terms of what morgan stanley will be able to pay for the remaining 17% and the subsequent followeding and the rest of it an why is it important? it is important because of the sheep mentality of the sell side of wall street. don't be surprised next week after the data am kos out, you will see a number of upgrades and positive comments out on morgan stanley as a result of this being put out of the way. in fact, for those that follow tactically they just crossed the 200 moving day average for the first time in quite some time. look for a better turn for morgan stanley starting next week. i am sure a lot of people will say it is about time. take a look at this one point. reut

. >>> morning stanley dropping smith barney tomorrow. head of morgannley wealth management spoke to mary anne thompson about his vision to the new plan. >> fleming says the new ad campaign is part of the effort to get everyone behind the brand. getting there hasn't been easy. the largest ever brokerage integration. fleming acknowledges more work needs to be done while remaining confident he can keep the key players on the team. >> i have spoken to a number of people and there were a lot of complaints about this integration in large part about the problems associated with the new technologies that was introduced. are those problems behind you right now? >> it is a new car. it doesn't have a lot of the bells and whistles that it needs. there are things like the longer statement. things haven't worked as quickly as they need to for clients. we are very aware of that and focused on making sure we add the features back to the new car and not all of it will happen in the first month or three months but over time we'll add more and more of the features so it

it's official, morgan stanley dropping the smith barney name from its retail brokerage.full page spread of the "wall street journal." our mary thompson sat down with greg flemming who runs retail and high-end, all wealth management. mary, you had a lot on the agenda, didn't you? >> that's right. we also took the time to speak to him about facebook. of course, it was a high-profile ipo and his troops were on the front lines during that public offering with morgan stanley as the lead underwriter with 17,000 brokers flemming manages dealing directly with the disappointed investors. fleming dealing with the frustrated brokers. he said the consistent ipo was far from a high point for the firm. talking about execution, you know, the facebook debacle for lack of a better term, i guess -- >> we would give you a different term. >> how much did that hurt you? how much did your clients say, whoa, this was not handled well, we are not sure that we want to, you know, give you more money at this point until we're sure that everything is handled correctly? >> well, again, the relations

morgan stanley. >> i haven't stayed involved at all with morgan stanley. i've enjoyed my freedom in retirement. >> i say that in regard with being back with smith barney andwards having a big retail presence which is what dean witter was to some. >> yes, it was. while i'm not involved, i think that the actions that have been taken at morgan stanley recently are very positive for the shareholders. it hasn't been reflected in the price yet. >> you still own morgan stanley stock? >> i own some, not nearly as much as i used to. as morgan stanley leveraged up after i left and started to taking more risk, i decided i would take less risk and sell most of my shares which i did. but the direction the firm is going today in my opinion is the right direction. it's a difficult market. it's hard for everybody, not just morgan stanley. you guys follow all the investment banks. you know it's not easy today. less deals. europe is very hard at the same time i think what they did with the smith barney acquisition, it should be a rye turn rent. i applaud what they're doing. >> sound like you like james foreman. how would you ultimately judge john mack who took over the rol

one that is more about dispensing advice to small investors, morgan stanley has the biggest british firms as they did that deal with smith barney the smith barney brokerage from during the height of the financial crisis. 17,000 brokers. the biggest brokerage firm and the country. you can't sign up new customers, you have a real problem. this is just another headache that james gorman faces commanded is a pretty big one because you can't sign people up. this is basic stuff. you have real problems. as i said, they have not lost brokers said. they have not lost assets yet, at least that is what they're telling me, and they said this will be borne out in quarterly results. melissa: if you are morgan stanley brokerage, where we you go if she left? >> reporter: we should point out, that's a good question because a lot of times morgan stanley says, you want to give a merrill. actually, merrill would consider themselves the care of the crop. would you want to get to ubs? nothing is draw on wall street. people pay retention packages, up-front fees, bonuses to lure brokers from one job to another. there are other places to go. yes, morga

smith barney is retiring from wall street. the venable brokerage firm name is being dropped by new owner morgan stanley.ng its own morgan stanley wealth management. that's the latest from the fox business network, giving you the power to prosper. we will return in just a second. liz: breaking news. it involves a stock you may own in your portfolio. ibm, the ceo, virginia rometti has been named by ibm board of directors to chairman of the board. her appointment would be effective october 1st of 2012. the current chairman, sam palmisano who ran the company for many years very successfully. he will be a senior advisor to the company until he official officially retires on 2012. palmisano retiring january 1st of the year. rometty becoming chairman of the board. she has been at ibm since 1991. she joined after being a general motors institute engineering student. northwestern, first woman ever to run ibm. so, a real trailblazer there for virginia rometty. >>> typically, let's get to this story, investors look to price to earnings, p-e ratio or price to book value when picking things like stocks but we have o

talked a little earlier about morgan stanley, where was morgan stanley who is in the process of evolving to a client driven business model with the acquisition of smith barneydidn't someone stand up and say wait a minute, $38 makes no sense based on what our internal analysis is now teg us. >> ken, if you're the ceo of the company and your bankers come to you to you and say we can support $38, which they were able to support for a day, do you not take that bid? >> getting the highest price you can get speaks for itself. let me say one thing that nobody's talked about, there's a clear rule in underwriting about so-called preconditioning the market. we've got all of these laws, sarbanes-oxley and all these things to react to what wall street did to abuse people, in corporate america. where the hell was the sec? this was the most egregious example of preconditioning the market i have ever seen. >> how so? >> the way it was promoted. >> you mean the company doing it or from other people? >> everybody. here is where the sec didn't have the guts to do it, should have stepped in and saying we're canceling. we're not going to let you do this now, we want the market