pe, based on the shiller u.s.tocks look extensive, but ks that looked cheaper, russia, brazil, hungary, turkey. we could never find guests that are bullish on these countries. these are hated markets. this is where you see pop russell --this is where you see possible upside? andt: we did a book subsequent fund that looks at strategies. ratio andhe cape found that it works great in all these countries, the same as in the u.s. even bigger examples of booms and busts. japan had a value of almost 100 in the 1980's. that was all the bad news. the good news is most of the rest of the world's reasonable valuation. the foreign emerging is down around a cape of 14, the developed is near 15, 16. then there is a subsection of countries that are really cheap, emerging europe, eastern europe, russia, brazil. one of the reasons they are cheap as they have gone down a lot. also, nobody wants to own them. that is one of the reasons it works. if you have a long enough time horizon, if you do not what to rebalance more than once pe

the s&p case-shiller index due out. prices are forecasted to have risen 5.1% in july. slightly more than what we saw in the month of june. 10:00 a.m. we'll get september consumer confidence expected to pull back from the 7-month high in august and costco reporting 4th quarter results after the closing bell today. >> that's it for today's show. u.s. squawk box is coming your way next. can it make a dentist appointment when my teeth are ready? ♪ can it tell the doctor how long you have to wear this thing? ♪ can it tell the flight attendant to please not wake me this time? ♪ the answer is yes, it can. so, the question your customers are really asking is, can your business deliver? we figure you probably don't have time to wait on hold. that's why at xfinity we're hard at work, building new apps like this one that lets you choose a time for us to call you. so instead of waiting on hold, we'll call you when things are just as wonderful... [phone ringing] but a little less crazy. we're doing everything we can to give you the best experience possible. because we should fit in

we will continue with bob shiller.he press conference? mike: i would not a qs the federal reserve of phishing. -- accused the federal reserve. there is an interesting bias underway in the markets that would lead people to believe what they want to believe. you have been in big situation like that. -- and ambiguous situation like that. tom: george has handled the pressures of being married to a senior government official with such a classy way. he will not comment on the american economy. the dow -206. we will continue with bob shiller. he will comment on this exuberant american economy. ♪ tom: good morning, everyone. "bloomberg surveillance." the pope will land in washington this afternoon at 4:00 p.m. mike: en route to washington to see the pope. he will meet with president obama on the tarmac and then start a busy week. he will address congress and visit new york and philadelphia. joining us is the executive editor of american magazine. thank you for being here. let me start by asking you about the importance of this

robert shiller is the economics professor and cofounder of the case shiller home price index, and george, the husband of janet yellen, their book called "phishing for phools," the book is released today, and thank you for being here. professor shiller, i want to start with you. you are a believer in the free markets, animal spirits and everything happening there, but what you set out with the book was to show that markets not only achieve good, but they also have some inherent ways of achievining bad things as well. lay that out a little. >> well, i would say that our look a free markets for adults. we have to say reality. the realities are that we exist in an e kwquill lib yum that mas room for manipulation and deception. it becomes a -- unless there's actions taken against it, it's a necessity because businesses operating under tight profit margins have to do what others are doing. it's not intolerable. 80% of what we see in the markets is great, but there's that other 20%. >> talk about what exists. we know that free markets do not exist by themselves, but the reasons you have checks

those are the words of robert shiller.y said the confidence survey showed the stocks were back in a bubble. he would not comment on the timing of a massive correction but said a fed rate hike would not necessarily be the trigger for a selloff. let's get a view from michael guerker. he's joining us from chicago. he's the president of brewer hill partners. thanks for joining us. do you agree with mr. shiller, are we in a bubble? >> absolutely not. and i'm certain that he's a lot smarter than i am in rarts to the way the markets forecast his comments but, no, not at all. i think that if there is a bubble it's so far down the road that we'd need to see much higher inflated prices to warrant that. no, not what so ever. as we've been told the pe ratios across the curve as far as some of the broader indexes are showing they're at pretty stable rights. as i focus on the dollar i don't see it. >> michael, given that we had that big correction in late august and early september, is this a massive buying opportunity in your eyes? whi

we saw it in the case-shiller index. not the gains as big as some people expected.at markets that are consumer related. oil and gas prices. oil price is up today, by almost 3%. and gas prices we should point out are down 20 cents from where they were a month ago. that is your kind of the state of the consumer report. neil back in a moment. neil: we heard young and rest letters now to bitter and angry. gerri willis to college grads that a college degree wasn't worth it. is it that bad? >> experts say it will be worth a million dollars over the lifetime. recent grads saddled with the debt say i don't think so. among those with debt they have average of $30,000 in college debt. 33% say it is worth it. the remainder say it is not. this is turn of events. tell you really who is threatened by this. all colleges and universities competing heavily for the next college class to come in and take their seats, right? more you get the word of bought i don't know, should i have done it maybe i shouldn't have. the worse it is for incoming college classes. neil: getting increasingl

on tuesday, the case shiller home price index comes out. thursday, we get auto sales for the month of september and on friday, the big number of the week, we'll find out how many jobs created when the jobs report for september is released, at least assuming there's no government shutdown. there are signs of the sharing economy everywhere and now you can find it in your backyard. if you have a hankering for farm fresh eggs, you don't have to own a chicken. now you can rent one. morgue morgan brennan explains. >> reporter: farm fresh eggs in your backyard from chickens that are rented. several start-ups have been hatched that lease out hens, all of the necessary supplies in what's perhaps the quirkiest addition to the shared economy. >> we are an affiliate farm, raise chickens for our customers to rent for four to six month rental over the spring and summer. and then we'll come pick them up so you don't have to keep them over the fall and winter. >> reporter: kay owns a farm and rentthechicken.com. >> usually we make more than one delivery in

a read on the state of housing with the s&p case shiller home price index. also on the data front a report on consumer confidence. and the senate is scheduled to vote on a spending bill which, if passed, will give fresh funds to federal agencies avoiding a government shutdown. and that is what to watch for on tuesday. >>> an update now on the volkswagen investigation. audi, mostly owned by volkswagen, has confirmed that more than 2 million of its cars have the software that is able to skirt emissions testing. the majority of those cars were sold in europe. about 13,000 were sold in the u.s. and in canada. >>> well, you may have received a new credit card or debit card in the mail with a microchip. as we've been reporting, it's part of a nationwide shift by major credit card issuers to offer added security and try and combat credit card fraud, which has skyrocketed to more than $5 billion a year. and it all goes into effect later this week on october 1st. but what is this new technology, and how does it all work? sharon epperson explains. >> reporter: the com

the latest report from s&p case shiller reported a nearly 5% increase nationally in july from a year ago. the index has risen at a 4% or higher annual rate since september of 2012, and that's a rate of growth that's much higher than inflation. >>> and it is those rising prices that are keeping many millennials from buying a home especially in urban areas where they want to live. now that millennials are aging out of college and into marriage and parenthood, developers are coming up with new ways to get them back into buying. very small ways. diana olick reports. >> reporter: into. >> this is really simple. pull this and the whole thing comes down. >> yes. >> this is a picture frame that converts into a dining table. >> reporter: welcome home to your 372 square foot home that is. >> these are magnets. >> the eating space is small but the whole idea is that the condo doesn't eat up your home buying budget. this unit sells for $275,000. about half the neighborhood's meed yab price. that is how developers are targeting millennials who until now have been the renter nation generation. >>

squawk laureate robert shiller economics professor at yale university and co-founder of the case-shillerthe all the over the best selling book "irrational exuberance." professor shiller, thank you so much for being here. i know you have been looking at this for a long time. it's the cape readings that you look at, the cyclicly adjusted price earnings ratio that has you concerned about valuations, even at these levels. why don't lay that out where we are on an historic business. >> the cape ratio, monthly cape ratio reached a peak of 44 in the year 2000. and that was followed by an important drop. went to 27 in 2007, followed by another drop. and then we were recently back up to 27 again. it does seem to forecast some what it's not reliable, but warning signal and we have been -- we are still, the cape ratio right now is around 25. it's high. >> walk me through exactly what the cape ratio measures again. i know it's cyclicly adjusted. it takes a look at earnings over how long, ten years? >> ten years. yeah. that's much longer than most business cycles. it averaging out of the business cyc

cory: right behind me through those doors, we have phil shiller on the stage right now. talking about the new apple tv. it was last upgraded in 2012. big upgrade as expected. the ability to use it syrian with your remote control to tell the tv what to do. siri.use you could say what funny tv shows are available and it would show up there. that is what they are trend to offer with apple tv device. the ability to use things like netflix. we've heard about apple negotiating with hollywood studios, talking mother own custom offerings. -- talking about their own custom offerings. pimm: thank you very much, cory johnson. yahoo!, the chief executive got slammed this morning. her company was called an accidental hedge fund. it happened right here on bloomberg tv. tom keene was discussing yahoo! and marissa mayer with scott galloway. >> in my view, if she had not announced she was pregnant with twins, she would be out of the job in six months. i don't think any board in -- she wants to be seen got a reprieve from death row because she is pregnant with twins. i realize how awful t

case-shiller is home prices are up.ahead individual is is out, filled with words of warning. >> glenwore rebounding a

home prices continue to rise in july up 5% according to the s&p case shiller home price index. it has grown since september 2012. >> our next guest has raised some $45 million in venture capital funding for her real estate invest ment company and was named in the 4th annual 30 under 30 list which recognizes the brightest minds across a range of different fields. joining us is the founder and ceo of realty mogul.com. first of all, congratulations. we were just talking about the housing market in the u.s. telling us that we have seen a steady advance for home pricing continuing this year. you tell me, how do you see things right now in u.s. real estate? >> we have continued to see appreciation in u.s. real estate and i think that we'll continue to see it for sometime. real estate continues to go up in today's market. >> you oversee what, half a billion dollars in real estate across the top 25 u.s. housing markets are there good deals out there still? >>> revolutionary idea. crowd funding. that's very new in the real estate space. how did you come up with that idea specifically an

barry: bob shiller. he has been talking about kate and how they are overvalued. a really nice look at 16 different valuation metrics. for the most part, they find ,tocks are fairly valued well valued. a couple of things said they were slightly undervalued. i will spare the details of it. valuations, you cannot say stocks are cheap. the nicest things you can say are your thoughts are reasonably priced. reasonably priced stocks can go up or down. betty: they are cheaper down. clearly cheaper now. barry: 12% compared to a week ago. betty: we have not hit bottom possibly, so how long are we going to stay around these levels of the lower? barry: we have done some damage by breaking the trendline. you have done some damage by having a 10% correction, which we have not had for a really long time. typically you see a 10% correction if you take the past century and average it out it is every 18 months. that is not how they roll. we have gone and extensively long period of time. just from june at all-time record highs. the fact that we have had a reasonable correction does

the s&p case-shiller home price index climbed 5%, home prices rose in all 20 cities, thanks to diminishedply of housing. when we come back, we'll have advice whether you should be betting on currencies. >>> plus are gun rights under fire? second amendment expert jan morgan joins us. new york is not allowing any prosecutor to apply for or have guns even in their personal life. an interesting story. we'll talk about it, that's all next. we live in a world of mobile technology, but it is not the device that is mobile, it is you. . trish: one of the biggest threats to us right now is a global slowdown, and a recession in emerging market countries, the threat of a recession is a real dmrn all of these places. you get commodity prices from oil to copper to nickel all plummeting in these countries are struggling to get by. it matters to us. the contribution of growth from emerging markets to the u.s. economy, it basically equates to 65% of our overall economy. so with all these economies around the world tanking, what does it mean for us? adam shapiro live from the nyse with answers. when you lo

for robert shiller, he's probably looking longer term and saying this is a little overextended. if you look at the s&p 500 overall, that 1950 mark, it seems kind of fresh in our memories, right? the 666 intraday low we saw during the financial crisis on the s&p 500. we pretty much tripled the stakt sin stock market since then. if you take a look at historical price to earnings ratio and we've done so ever since the year 2000. that's going to be the key since around the peak of the overall internet of the dotcom double -- >> this is the pe ratio -- >> the blue line -- >> forgive me for tell straighting. >> by all means. you can see it was closer to 30 back in 2000 before things fell off. we've seen it drift lower and you can see here near the financial crisis, we traded -- >> this is trailing earnings forward. >> trailing earns. not proprojections. this is actually the earnings and the price on top of that. today we're 16.5. that's where the s&p trades. we were cheap compared to where we were back in 1999, 2000. more expensive than during the financial crisis. on average, that's

i'm in the camp that believes that the shiller p/e and the 50-year highs of the median s&p stock, stockarket valuations as a percent of gdp, i'm in the camp that all that matters and that valuations got too high. and we've had an incredible six-year bull run maybe through -- i guess the s&p recent high was back in may. i think we need a good correction. i think we're in the midst of one. but there are a lot of stocks that have corrected more than the major indices. so we're starting to get a little giddy at wedgwood picking up some bargains. >> now you're getting to the real question. 42% of the nas 100 already in bear market, 20% off the highs. how cheap does it need to get before you truly get interested? do you need to see 50% drops in some of these names? we've already got that in some areas of tech. >> right. we only own about 20 stocks. our top three holdings are berkshire, apple and our third largest holding is probably the most hated tech stock out there and that's qualcomm. and those shares have been just decimated. so you're right. there are some bargains out there. thank good

rising far faster than inflation up 4.7% in july from a year ago according to the latest s&p case shiller and that's a bigger annual gain than we saw in june. so how do urban condo developers get cash-strapped young millennials back into buying? for one thing, they don't go big. they go tiny. super tiny. this is one of 30 teeny, tiny about 300-square-foot condo units on ontario 17 which is in d.c.'s very trendy adam morgan neighborhood and the area very pricey and the condo not so much, $27 5,000 for this studio unit and the developer behind it, the peterson group had to pay very close attention to detail because they had to use every teeny, tiny square inch and of course, you have your murphy bed in the wall and that's a given, and also underneath the sofa you have your storage for your bedding, but if you're saying to yourself, i have my dining room in the middle of my bedroom,/living room. all you do is pick it up, and latch it in and voila, you have art work. i promise, it's up there. come with me to the kitchen which i have to say by new york standards is really quite spacious. you h

according to the case shiller index in july, bay area prices were up .6%.hat was a stronger gain than in june and they were up 10.4% from to a year earlier. that was the biggest year over year gain out of the top 20 markets. followed closely by denver. and we also saw strong growth across the country with home prices up by 5%. year over year. >>> tesla launches its model x crossover delivering the first car tonight at its factory in free font at 7:00. we don't know much in the way of details about pricing for the models yet and we will get that later tonight. but we do know that the fully loaded signature series that's delivered later today will come at a price tag of $132,000. >>> market looking to rebound after a heavy selling yesterday. the dow lost 300 points and nasdaq down 3%. and pretty flat so far this morning. let's look at the big board and see how we're doing. and starting to move a little bit lower now and dow dropping over 40 points and s&p is down 4 points. >> michelle is going tesla shopping today aren't you? >> if you're buying. >>> okay. th

. >> what did you think of shiller over the weekend saying some of his favorite indicators say we're potentially in bubble territory, that we're at levels not seen since the dotcom bubble of 2000? >> i think that's something that we've heard multiple times over the last six years by many, many people and i think the impact has to be on your particular portfolio or what it is exactly that you want to do. looking forward if the federal reserve does raise rates, it's important to understand that this time is different. last time they raised rates, you were talking about an economy that was growing. you were talking about earnings that were growing, profit margins expanding. you were talking about pricing power that was expanding and you were talking about a falling dollar and rising commodity prices. every one of those things are different this time so this time around it is different, and i kind of agree with josh. i think the mindset of the market has changed over the next six months to where as david tepper accurately said last week it's a sell the rally mentality versus what it used

home prices rose 5% in july according to latest case-shiller home price index. home prices risen the most in san francisco and denver, up more than 10% there since last year. >>> hilton hotels announcing today it is looking into a possible security breach of credit card transactions at gift shops, other stores on hilton properties. that is kind of scary of the breach does not appear to affected cards used for reservations. >>> amazon is getting in on offering superfast delivery service in its hometown of seattle. called amazon flex. it lets drivers sign up for delivery shifts picking up packages from amazon warehouses delivering them to customers in as little as an hour. melissa: so take a look at apple ending the day down 3%. losses accelerating in final hours of trading and weighing on the broader market. it marks the tech giant's biggest drop in a month. look at that chart, wow. >>> taxing the rich more won't make it go away. results of an eye-opening new study on income inequality. david: there is a tropical storm we're tracking, joaquin, that is taking shap

it has been a topic robert shiller four years.times and he has a new book out, a redux of his terrific work with george eight perloff, who happens to be married to janet yellen. tomorrow in with us the 9:30 hour here. it is a celebration of work by the laureates. would you explain why carol massar gets an air purifier fan deluxe? because she is carol massar and she is great. tom: i have a 442 page contract. stay with us. bloomberg television and bloomberg radio. it is monday and there is more. ♪ >> welcome to the bloomberg market day. the world passes largest automaker faces a full sized scandal. full swag and admitted cheated on the u.s. it visions test which could be daunting to clean up. alexis tsipras should remain in power but economists say the government has a whole new set of challenges. we will sort through mixed messages. and hbo cleaned up at the emmys last night. did victories strike a blow with cable? ♪ brandon: good morning. we have julie hyman, our senior markets correspondent, who will break it down for us. julie:

rising becausep of limited supply and increasing demand according to the case-shiller index.from the thanbefore, slightly less the median estimate. home prices were of the most in san francisco and denver where they were up more than 10%. yahoo! says it is on track to fill -- then opt the $22 billion stake in ipo. investors have been concerned about the tax hit yahoo! could take from the transaction. they plan on going ahead with thedeal even though internal revenue service has refused to give the company and advanced ruling to ok the split. traditional power companies are scrambling to get on the roof. they say that utility companies are jumping into small-scale solar energy. the competition is heating up as utilities and smaller solar installers fight over the future of the u.s. energy system though the residential solar market is remainrowing and panels price leak -- remains pricey, they grew by 50% and on track for another record year. top stories at the moment. stocks are not getting much of a boost, even though strong economic data was released, particularly on the cons

case-shiller is home prices are up. carl eye sawn's danger ahead individual is is out, filled with words of warning. >> glenwore rebounding a bit. citi for one part sell if the sell-off goes any further, maybe the company should consider going private. >> yahoo planning to forge ahead despite a ruling from the irs, but first of futures are on the rise as stocks look to rebound. meantime goldman lowering the s&p start from 2100 to 2 0uz, cutting the earnings forecast as well. carl icahn releasing his full "danger ahead" video expressing worries about the economy and markets, take a listen. >> low rates by almost definition building bubbles, building real estate bubbles, building bubbles even in the art market, because the fed balance sheet has mush roomed from less than a trillion to over 4.5 trillion, which is a huge almost unbelievable move. and all that money crowds out the little guy, the middle class investor has nowhere to go with their money but into the market or even more concerning high-yield bonds that are ver

right now, phil shiller is on stage announcing something called live photos. you a little bit of a recap of what's available on this iphone 6s and 6s plus that apple hopes will continue to help it gain share over android rivals. 3d touch is the main feature they began talking about. and it sounds like it's going to be especially useful for multitasking. instead of having to use the home button to switch between applications, you'll be able to be in an e-mail and touch a part of it. other examples like that they gave, as well, instagram taking advantage for being able to navigate within a personal instagram feed. they will have an a-9 chip which apple says is between 78% and 90% faster depending on graphics, or not. other things like voice recognition always on. it's built into that chip. you don't lose image quality if you pack 50% more pix ls in compared to that camera they used to have. now up to 63 megapix ls, this will shoot 4k video, which rivals phones, already do. a five megapixel for the selfies. also the screen as mark garmin reported will act as a fl

fisher, professor shiller and forward. treat dwroe, tthe trio. these guys would be fabulous if they took a vacation to machu picchu. we flew over denali. my doubt s >> tesla ceo tweeting a message being well-received on wall street. we'll find out why. we will keep our eye on the ecpb, which continues as we speak. my name is mark amann. i'm a gas service rep for pg&e in san jose. as a gas service rep we are basically the ambassador of the company. we make the most contact with the customers on a daily basis. i work hand-in-hand with crews to make sure our gas pipes are safe. my wife and i are both from san jose. my kids and their friends live in this community. every time i go to a customer's house, their children could be friends with my children so it's important to me. one of the most rewarding parts of this job is after you help a customer, seeing a smile on their face. together, we're building a better california. >>> shares of tesla rising in the premarket. the electric carmaker announcing plans to deliver the first model x crossover vehicl

sure if you've seen what we got today in the financial times whether it's a suggestion from robert shillerwe may be in bubble territory. he's a behavioral economist. he's looking at surveys to the point that you're make being what people are thinking more than anything else. >> yes. if you buy into the notion that we are transitioning to a higher volatility regime, then by definition a few things happen. one is that peoples asset allocation becomes too aggressive. why? because we have to change the underlying assumptions about the volatility of markets. secondly, multiples start looking high. so, yes, there is a transition. the good thing for investors is when these transitions happen, markets typically overshoot, typically there's too much contagion, too much correlation, you get value that pays you over time. michelle was right earlier today saying emerging markets, it's happening in front of our own eyes. the question becomes at what point, you go in. we're getting some real overshooting. >> but as far as we're concerned in this market, have we seen that yet? have we seen the correction

bob shiller says the federal reserve needs to raise interest rates right now because things have gotten bubbley, i'm paraphrasing there, bob. but your view by your valuation says that this market isn't only toppy, it's like feeling like 2000 toppy, right? >> well, i'm trying decide between 2000 and 1998, because in 1998, the russian debt crisis, the market dropped a lot as it did in august this year. but then went zooming back up, so yeah, that's the problem, you can find historical data that proves either way. neil: bob, we should point out seven other countries over the course of this, you know, post financial free fall, have tried to raise interest rates. every single one of them reversed that. >> right. neil: and i'm wondering if we were to do that here, whether we might follow suit or how we would be different, what do you think? >> that's an issue. yeah, we seem to be -- i call this the new normal boom in my book. because that's the mood, the spirit, it's somehow everything maybe not so much in the u.s. but there's a lot of weakness, interest rates are just rock bottom. it's just

rising far faster than inflation, up 4.7% in july from a year ago according to the latest s & p case-shiller. and that is a bigger annual gain than we saw in june. so how do urban condo developors get cash strapped young millennials back into buying? well, for one thing, they don't go big. they go tiny. super tiny. this is one of 30 tiny, about 300 square foot condo units at ontario 17 which is in d.c.'s very trendy adam's morgan neighborhood. the area, very pricey. the condo, not so much. $275,000 for this studio unit. the developer behind it, the peterson group had to pay very close attention to detail because they have to use every tiny square inch. so, of course, you have your murphy bed in the wall. that is a given. but also underneath the sofa, you have all the storage for the bedding. but if you're saying to yourself, i have my dining room in the middle of my bedroom, all you do, pick the dining room table up. put it back up into the wall, lash it in and you have art work. i promise, it's up there. come with me to the kitchen. which i have to say by new york standards, this is really

prominent economist ben bernanke and robert shiller are also on the list.s for gates, the wealthiest person in the u.s., this is not the first time he's been on an al qaeda hit list. maria: blake burman form on the al qaeda threat. former fbi agent jonathan, good to have you on the program. what are your observations? >> as we were talking about, this is their leap back into the whole thing svc, what is intriguing to me is in 14 years a leadership has gone through changes and a lot of them still not alive anymore, but they still continue to focus on the big hits, so they can inspire fear through threat and big people like we see here are trying to carry out larger attacks. isis will kill some random person in another part of the world and put it all over the internet and that seems to be a fact. trained to do wonder if this is an attempt to al qaeda to be tougher and stronger and bigger than you are now. it is exerting its power once again. dagen: isis has been so effective at using social media and marketing its atrocities. disgusting to say that, but how

we talked to robert shiller. he looked back at the past 16 bear markets for equities and 14 of them real estate went the other way. imported medicine caveats. >> he thinks real estate is actually pricey. real estate bonds and stocks are pricey at this point. >> he thinks real estate is expensive. >> my point is that acts as a hedge against the stock market. when stocks fall, real estate goes up. you're actually buying real estate stocks and they are pricey plus they also move alongside stocks. it is tough to invest to save tough to investors say the least you can can see better about your primary residence. spinnaker would argue also in terms of the price event in the real estate is expensive in your major mature areas and this price moves to the upside mask weakness in a lot of regions and this is how you get good deals in many areas of the nation with mortgage rates as low as they are. if you think inflation is on the horizon, no better trade than to borrow money and buy an asset that will appreciate. >> you ar

. >> the nobel prize winners we bring on are shiller.ing on friedman, unfortunately, to offset it. the economics dr. >> you got enough smart people saying we have to have a quarter point. it's not going to change the world. let's put it that way. >> jack, to your appointment, though, about how managers are better and better, there's a story out today walmart is pushing back on the suppliers very heavily in terms of what's happening with the chinese devaluation. they want some of the savings from the guides. is that what you're talking about? walmart, home depot, toys "r" us. >> if it was smarter, people with more information, they know, for example, today, you got a global supply chain manager. he or she has a data base that's enormous. knowing when somebody is buying in china in this, selling at this price. they are different. used to be a guy in a bull pen waiting for tickets for the yankee' game, and they buy the product from you if you gave the the tickets. it's a different world. supply chain leadership is smart first class people.

michael: yesterday we had bob shiller on. he adjusts price earnings over a 10 year period.l overvalued. what do you see? jeff: valuation is tricky because the us valuation is a function of liquidity. from that standpoint, liquidity conditions are tightening, not loosening. you see that in the styles that are working so growth is outperforming value. are very things tt consistent with a contraction in the liquidity environment and when you have a contraction, you generally have a suppression in multiples. the vicks is up 16% for the year and yet you say low vol is better. jeff: low volatility stocks that have less beta. quality is another measure we look at. in this business it is great to think i'm going to buy high quality assets. one of the best things you can do when the liquidity is expanding in the marketplace is to find the lowest quality assets and own them. i know that might seem counterintuitive against the grain. we have shown time and time again that is where you need to be. michael: jeff has been named institutional investors number one technical analyst for the