robert schiller is the co-creator of the schiller cape ratio.ces in relation to the amount per share that a company earns. it's run through a filter that smooths some of the volatility out. don't study the chart too hard. just look at it and understand that when the peaks are high, the market is over-valued. this is not about the quality of the underlying companies. it's about whether stocks like anything else you buy, are trading at a discount or at a premium. joining me now is robert schiller, nobel prize winning professor of economics at yale university and co-founder of the index we just showed you. bob, great to see you. thank you for being here. you wrote a note to my colleagues at cnbc saying low volatility could be the quiet before the storm. you are saying that's a phenomenon which you say has you lying awake worrying explaining this to people. why are you worried? >> well, volatility is measured by the vix, for example. is at near historic lows. that means that other people are not worried, but i am worried. i think it's kind of simila

in a blog almost incessantly about taking down the trump administration and the thing about john schiller is when you when you hear these issues of an identified intelligence former intelligence officials almost certainly that these are the ramblings of john schiller who has a vendetta against the russian intelligence services for forcing him out of his job at the naval war college and so this is this is you know a deep state that is very antagonistic towards this president ok well ok we only have a few a few seconds of you know what i think is very very interesting is that trump really needs to step back and see what's most important a for his agenda to get past i like his style sometimes but sometimes i get the impression that it really is in spite of his behavior to move his agenda an agenda forward or a german would run out of time many things and i guess in washington williamsburg and in london and thanks to our viewers for watching us here are to see a next time and remember the last time. well you could you i'm sure you know melissa i know but marianne one million people died and d

in a blog almost incessantly about taking down the trump administration and the thing about john schiller is when you when you hear these issues of an identified intelligence former intelligence officials almost certainly that these are the ramblings of john schiller who has a vendetta against the russian intelligence services for forcing him out of his job at the naval war college and so this is this is you know a deep state that is very antagonistic towards this president ok well ok we only have a few a few seconds left what i think is very very interesting is that trump really needs to step back and see what's most important a for his agenda to get past i like his style sometimes but sometimes i get the impression that it really is in spite of his behavior to move his agenda agenda forward or examine would run out of time many things and i guess in washington williamsburg and in london and thanks to our viewers for watching us here are to see you next time and remember the last time. but also. to the ship. it was suggested that. a fairly strong. study it's a very extensive study done b

the schiller price earnings ratio and the ten-year ratio all of those are extended. i would say they are simmering they are not on the boil the long-term average of the schiller pe is 16.8. >> yeah. >> the lowest ever was 4 right after world war 1 and the highest ever was the dotcom era 44, so it's now 30, okay the r-e-a, "a" is analyze and assess and that's david darst's six-point check list from a bear market one, is the fed tightening no is the recession looming no is investor euphoria present in the large-cap tech stocks, yes. otherwise no are valuations stretched yes, they are simmering, okay. i would give that one a yellow light. not a red light. finally, are the bank small caps and transportation stocks underperforming the market and yes, they are. that's a flashing red light. going to see it text tend in order to make you bearish. lastly our credit spreads between regular bonds and treasury bonds narrowing or widening widening is no good but they are staying narrow so basically five out of six, still okay, all right. r-e-a-d, "d" is the debt drama in washingt

schiller home prices are consumer prices a market mover. to keep an eye on on. we will see how the jobs numbers take off and impact the market. earnings season the slowing down now but there are few names. abercrombie and fitch best buy and campbell's soup reporting quarterly numbers. tune in next friday at 8:00 p.m. eastern for another edition of "wall street week" with we will see you then and i will see you on the "fox news" channel are for sunday morning teachers. catch the show at 10:00 a.m. on "fox news." that will do it for us now on "wall street week". thanks for being with us. >> i'm bob massi. for 35 years, i've been practicing law and living in las vegas, ground zero for the american real-estate crisis. but it wasn't just vegas that was hit hard. lives were destroyed from coast to coast as the economy tanked. now it's a different story. the american dream is back. and nowhere is that more clear than the grand canyon state of arizona. so we headed from the strip to the desert to show you how to explore the new landscape and live t

guggenheim has equal weighting in every sector as well so power schiller -- powershares is big.l be covering the smart data areas and i think for active shops, guggenheim would becausemart acquisition .hey have a smart aspect for companies like to euro and franklin that are behind the curve, i think this takes a huge the table for them. >> when he traveled around, do people ask you about this next etf? shares -- it is boring, but really popular. it allows what is called lettering. it basically has a basket of bonds that mature in certain years. you go out and buy the next year, that way you are buying the lower rate. all right come i got to leave it there. thank you, so much . vonnie: live from bloomberg world headquarters, in new york, and london i am vonnie quinn. mark: and i mark barton. let's check in on the bloomberg "first word news." emma: president trump says nations must be tough on north korea. he to did after many years of failure, countries are coming together to address the dangers posed by kim jong-un's regime. nikki haley told nbc that new sanctions will force kim

. >> my name is larry schiller, and the smithsonian american art museum allows me to the guest curator of this exhibit on jfk. i photographed a lot of politicians. i started with richard nixon, governor brown in california and john f. kennedy and many of the events he was present at. why this exhibit here in the american art museum at this time? it is the centennial of his birth 100 years ago on may 29. how do you put an exhibit like this together? first you start with a few researchers. we collected 34,000 photographs of jfk and his family. it took about six months and became the basis of a very important book that we published. from those 400 odd pictures in the book we were able to select 77 photographs that we felt told the story of jf k and his life and times. john f. kennedy was a president who saw america's place in the world. he was a man who understood history, who served in world war ii. he understood the issues of civil rights. he understood many of the conflicts around the world. this exhibit addresses the issue of jfk's vision for america. it's the story of the life and hi

two pieces to watch this tuesday is the case schiller house price index.ew ceo meanwhile continues, after the resignation of the ceo last week. there are a few in the running. joining us is jane foley, senior currency strategist, at rabobank. good morning, jane. we picked this story up in bloomberg. it's an interesting problem to have. warren buffett has too much money. why is that news, we knew that already? ! but what is he going to do with it. this is a problem. this is a company that doesn't pay dividends. he is a pilot of cash. cash doesn't earn much in terms of return. his problem is where to invest. there is a small pool of companies he'd be willing to consider. he's made the point that it would be much more fun if the phone were to ring and business propositions were to fall his way, but as it stands, there is some difficulty trying to know where to put all of that money. lovely to have that problem. this graph shows how he's managed to rack up the money. 99.7 billion dollars at the end of the second quarter. he's got all these great businesses mak

he had a top security aide, keith schiller, informed gigicos that he'd never manage a trump rally againfor more than two decades, benjamin wit tis has written about national security. an editorial reporter at the waus post and a cofounder of the law fair blog which has become a must read. he made a name for himself defending the war or terror and its policies against its many critics. but this may he went from covering the story to being the story after donald trump fired james comey in may were he revealed that comey had been trying to keep distance from the president during the query in the 2016 election. writing that comey told him of at least two incidents which comey regarded as efforts on the part of the president to compromise him or implicate him. and that's not the only story wit tis is famous for. he's tweet out tick tick tick in the break of a russia investigation story. and his blog is read by everyone today for its analysis of the current administration. now he's gone further than ever before calling on congress to seriously consider impeaching the president. he says it's t

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. >>> "the wall street journal" agenda full of economic data tomorrow, look for case-schiller home price index, wednesday, adp report and q 2 gdp and topped off friday with august jobs report ism manufacturing index, consumer sentiment and auto sales. the list includes best buy, h and r block, and lululemon >>> harvey, the first major hurricane to make landfall in the u.s. in more than a decade early estimates suggest damages could total tens of billions of dollars. focus on the economic impact to the insurance industry next. stay tuned, you're watching "worldwide exchange" on cnbc hey, how's it going? um... who are you? i'm val. the orange money retirement squirrel from voya. i represent the money you save for the future. see? we're putting away acorns to show the importance of being organized. that's smart. who's he? he's the green money you can spend now. what's up? oh you know, gonna pay some bills, maybe buy a new tennis racket. tennis racket for a squirrel? he's got a killer backhand. when it's time to get organized for retirement, it's time to get voya. >>> welcome back to "worldw

schiller home prices are consumer prices a market mover.uto sales and jobs report always a market mover the major indicators to keep an eye on on. we will see how the jobs numbers take off and impact the market. earnings season the slowing down now but there are few names. abercrombie and fitch best buy and campbell's soup reporting quarterly numbers. tune in next friday at 8:00 p.m. eastern for another edition of "wall street week" with we will see you then and i will see you on the "fox news" channel are for sunday morning teachers. catch the show at 10:00 a.m. on "fox news." that will do it for us now on "wall street week". thanks for being with us. >> i'm bob massi. for 35 years, i've been practicing law and living in las vegas, ground zero for the american real-estate crisis. but it wasn't just vegas that was hit hard. lives were destroyed from coast to coast as the economy tanked. now it's a different story. the american dream is back. and nowhere is that more clear than the grand canyon state of arizona. so we headed from the strip t

expensive,cks are one of the simplest measures is something called the schiller pe ratio or cyclically adjusted p/e ratio which is price relative to 10 year smooth to earnings. it takes out the effects of economic peaks and troughs. at an economic peak, the price-earnings ratio will be -- will seem lower than it really is. in a traffic will seem higher than it really is. the highest p/e ratio in the last 50 years was that p/e ratio in mid-2009. what a terrible time to sell. the schillerk at p/e ratio today, it is 31 times earnings. it has been higher than that twice in history. techand the peak of the bubble plus or minus one year. that is scary company to keep. i look at this and i think -- i do not think that means an imminent bear market. it mints that means really lousy forward looking returns. a person and a half above inflation. the restr band between of the world and valuation is stretched tight. in emerging markets it is 14 times. better still, the spread between growth and value is stretched awfully tight. the value stocks in the u.s. are priced at about 24 times, that is a ni

simple as the 10-year treasury yield on pe, whether it is forward trailing or something that the schillerip, you see more reasonable violation picture. -- valuation picture. background conditions are supportive of the valuations where they are right now. joe: speaking of earnings, one thing that has cut people's attention is that copies of not being rewarded as much for their beats. they are not seeing much of a pop positive reaction. ins this imply richness investor expectations that are a bit ahead of themselves? liz ann: part of the reason come as i mentioned when we started the interview, that we could be in for choppiness, leaving aside the year ending in 7 phenomenon, is investors are more deserving now. we will continue to experience some of the rotational pullbacks, where it does not take the overall market down to a significant degree, but you see some weakness specific to certain sectors, as money rotates out and moves into other sectors. you have seen correlations come way down. the playing field has not been leveled for quite some time. but i also think it helps to define why

schiller, a hotel and duty-free business unit.ives within samsung running huge parts of samsung electronics and that are influential as well. >> this adds to what the president has been pushing for, less influence from these conglomerates on the overall economy. seeinginess in general some soul-searching under this administration. how has this case affected all of that now? rosalind: opinions are divided. some say the ruling helps give leverage to moon to reform, to loosen the grip of the conglomerates in regulation. he has pledged something like increasing taxes on the biggest companies to 25%, but other say it will not make a lot of impact because change is slow. one investor saying this sends a strong message to conglomerates that nobody is above the law come a but saying some suncorp its governance is ahead of other places like japan. one asset management firm saying this will not have an impact on corporate governance of conglomerates. movesg has been making for more effective and friendly policies, so the impact of this one

jump n.rick, i was also going to mention that we had had the home price index this morning, case schiller, 77% of the pre-crisis peek and back then we thought things were completely insane. granted, it's been over a decade rick, i guess my point is if we have the ten-year under 2.1% briefly today with that consumer confidence and house price activity are things getting seriously out of whack >> to some extent you're correct because there's a huge correlation because what a mortgage goes for and ten-year note yields and when you look at things as a hold we see great price appreciation over the last handful of years in housing, but in are pockets doing well and pockets that aren't doing well one thing i have a hard time applying is that low interest rate don't seem to be the secret sauce that makes housing drive or not thrive. there's many other issues, a lot of them are economic and a lot have to do with jobs and location, which part of the country, i don't see that change offing any time soon, but it's always a positive to have downward pressure on rates no matter where you are in the cou

if you're looking at schiller's cape, the market looks quite expensive.s and applying an inflation filter to traditional pe metrics, the market looks fairly reasonably valued. atould call it medium level today's level of both inflation and interest rates. unless we see a significant ship quickly and that piece of this, i think valuation is not a deterrent for equities eventually moving higher after we get out of this consolidation phase. alix: in order to be consistently constructive, you have to have a view on gdp and this is where we tight back to politics. if you have a 2% long-term view, how much more can multiple rerate higher? if you see three or 4%, that's a different story. liz ann: keep in mind that we have had a subpar, new normal secular stagnation, post that super cycle 2% kind of growth for this entire bull market. that has not prevented this from being what i think is an ongoing secular bull market. it is may be as simple as the goldilocks phenomenon of decent economic growth low enough though that you do not end up with an inflation problem

if you look at people like iliad conway and the communications director and keith schiller and all thesite for a long time, they came to washington with a different goal, different objective to not be business as usual. most importantly, the president came here and said the way washington has worked for the last years has been a disservice to the american people and he will change that. sometimes it's very difficult. you have to build a wall and make sure tax reform gets done. these are the hallmarks of the campaign. >> corey, he does need the help of the republican party. i just question with steve benin now on the outside, you're going to shake things up. he's going back to bright garden is indicated he is no fan of the traditional republican establishment. the quote we gave here we can share with you. if the republican party gets behind the president, it will all be sweetness and light, one big happy family. i think the implication of that is if they don't, they will run into a bit of trouble. his art he made that very clear. steve benin on the outside. does it help or hurt this pre