and the fed we've seen a growing number of people get on board with his calls we've heard people say hey that's just crazy talk luckily author jeffrey tucker is here to break down how exactly the economy would work without a central bank very exciting let's get to today's capital account. so people are pretty optimistic about these new u.s. jobs numbers that came out showing unemployment tick down point two percentage points to eight point three percent lowest in three years but is even us president barack obama said these numbers will go up and down so i want to take a look at the bigger picture and some of the downside of this report lucky for you i got some numbers to throw up so the long term unemployed that's longer than six months was very little changed at five point five million this stunner for me that accounts for forty two point nine percent of the unemployed that's a big number now the number of people employed part time for economic reasons that was little change that's eight point two million now these are people who were working part time not because they want to take s

the law says that the fed has to appear to discuss his management of the monetary policy. it is a federal agency created by congress to mend the nation's economic policy and it is a oversight that he comes down twice a year. he will appear before the house today and the senate tomorrow and do it all over again in june. >> so finally as you take away from the hearing indicating that economists and the fed chair specifically seeing modest growth and modest growth continuing over the next couple of months, what else did you learn today, if anything? >> well, you know, i learned farce new information, not an abundance of it, but what was most striking is that we didn't see any change in the fed's outlook. and there is a lot of talk that the economy is improving and growth is accelerating and the housing market may have bottomed out, but none of the news has been sufficient to convince our pre-eminent economist, the guy who is in charge of the nation's monetary policy that the good times have really returned, and that is a cautionary message to americans, and that his opinion i

you said the fed has been too loose for too long. know bernanke said he's going to keep rates low, exceptionally low until the end of 2014. what's the issue? >> my point was, in 2003, 2005, i think many of us believed he was too loose, they were too loose for too long. the chairman doesn't acknowledge that. he does not believe that the fed really gave rise to the asset bubble that gave us the housing meltdown. so if they don't think they made a mistake then, then what's to stop them from repeating it again. now, we were at crisis rates, after the crisis, and nobody really disagrees with that. we thought there was a chance of a deflationary spiral, the fed did what it did. we're now years into the interest rate policy now they're going to do it through 2014. they put this new statement out, which i'm glad the fed is being more transparent with its policy statements, to two-page policy statement, the first page is, let's do inflation targeting, which i think there's a good case to be made for that, but the second page is much more ambi

well how is that because if you read the i mean the fed cannot we hear this all the time that the fed prints money the fed does not print money if you read the federal reserve act the only thing the fed can do is make a loan is discount something so it'll take one asset a bond or something from the public and it'll exchange that for a balance in the banking system a reserve balance ok so they're not doing three dates there they have to create debt in order to issue money but at the end of the day that's still issuing money so expanding the money is monetary supply. lauren if i if i take a million dollars worth of treasury bonds from you which is this an obligation or a liability of the united states government in the value of one trillion and i give you one trillion in cash yeah your net worth has in shea's you haven't suddenly received a million new of dollars or nine new net financial knowledge my guess is they'll hold up for just one second i'm not interrupting you i literally have to go to break we will be right back with more with you that in just a minute i was back with mike no

but in the past the fed has overestimated the pace of economic recovery. ben bernanke again today reiterating a familiar list of reasons for his cautious optimism including the depression dpresed condition of the housing market and economic turbulence in europe. the uncertainty over the future of oil prices putting a big cloud on the future of the economic recovery and expectations somewhat lower today about the long-term jobs outlook. among those posing questions, ron paul in springfield virginia last night with an eye on super tuesday, a republican presidential candidate. he's a member of the house financial services committee with questions to the fed chair who he s often a critic on issues including inflation and rising prices. >> but i do want to make a point about prices because prices go up. that, to me, is not inflation. it is one of the bad consequences of the inflation which comes from the increase in the money supply. it's one of the bad effects. but you took over the fed in 2006. i have a silver ounce here. this ounce of silver back in 2006 wou

edward griffin who's been opposing the fed since the sixty's let's get to today's capital account. ok before we really get into the meat today i just want to touch on this because obama today unveiled his two thousand and thirteen budget he gave a speech at a community college in northern virginia there is to tout it to manage expectations take a listen. we can restore an economy where everybody gets a fair shot everybody does their fair share everybody plays by the same set of rules from washington to wall street to main street. great so the new budget is a solution to america's rising inequality to wall street and corporate welfare and big business is the advantage over the small entrepreneur i've let's see where the budget goes from here well as one book points out in the washington post like the two thousand and twelve budget it has no chance of being adopted by congress the big ideas in it are d. o. a in the house dead on arrival ok well obviously obama knows this let's listen more. the last thing we need is for washington to stand in the live america's combat it. here we go a

>> well, i'd rather know how the fed thinks than what the fed thinks. the problem with this is that we know what the fed thinks about some various scenarios at a point in time, and in fact it's kind of a -- we know that different people think different things. but even if you stick with the main thrust of what they're saying, sometime down the road when events begin to develop, we may find a situation that seems to be very close to this situation they've laid out now, but they do something differently because not everything is the same. in short this is a conditional outlook and the fed can't possibly know today everything that's going to happen one, two or three years out. that's why this isn't particularly useful. >> susie: all right. well, stay tuned, we're going to keep monitoring this. thanks so much, bob. >> thank you, susie. >> susie: we've been speaking with robert brusca, the chief economist at fact and opinion economics. >> tom: still ahead, apple, like many companies, is sitting on a big stash of cash, from dividends to fresh acquisitions. wha

let me commend you and the fed. 's very important for us to recognize the achievement and the progress we are making with economic recovery. and i think it's in no small measure to your monetary policy of accommodation and creating credit facilities and certainly ensuring liquidity for borrowers. i think that is the real core. unemployment now is going down, we're at 8.3%. we're averaging 200,000 new jobs each month now. we're not bleeding jobs, we're adding. and the dow jones is still cracking around 13,000. we've come a long way. but we're not out of the woods. but i do, it's important for us recognize that your contribution in helping us to wade through some very troubled waters. let me ask you about the stringent prudential standards that you are required under dodd/frank and under section 165 of dodd/frank. you were given the opportunity to differentiate among companies on an individual basis or by category, taking into consideration capital structure, riskiness and complexity. and of course congress put this pr

>> congressman, first, the fed has a lot of interest in housing. it's important for the economy. it's important for monetary policy. we are bank supervisors, swoe ear interested in mortgage and lending -- >> so let me ask you this then. congress has a lot of interest in monetary policy. i guess the comparable would be for us to do a house resolution with regard to monetary policy. is this an invitation now to congress that we should be issuing resolutions to what the monetary policy that the fed should be doing? if so, i'm sure there are a lot of members that want to engage in it. >> well, i hear lots of advice from congressmen -- >> could i say the bottom line here though is that we've done a lot of work on this. we've gotten a lot of requests from individual congressmen for our views an analysis. it was not the intent of that white paper to provide a set of recommendations. there were not -- there was not a list of recommendations at the end of the white paper. we were trying to provide pros an cons, analysis and background. i'm sorry if you think we went too far. >> i hear tha

i for one am skeptical that the fed the fed has the tools to create growth i think it's doing what it can i personally in my view what i would like to see more fiscal stimulus actual investment into things i think that would probably help i think to some extent the fed is pushing on a string and you look at a lot of the you know see if you look at the effects of q.e. sure they're buying up these assets held by banks but then that money isn't getting lent out anywhere and it's just sitting in excess reserves held by the banks so it is kind of pointless and there is no. there's only yes there's pretty marginal effects of all this stuff but it is not the reason why rates are so low it is not the reason investors all around the world are stuck in these risk free investments because throughout europe and the us right now due to the mediocre economy and basically the crisis stage in europe there's just an incredible demand for liquid risk for investments and until that demand eases there's just going to be no way that anyone can make money on a risk free and i question why people think that

the dollars ok but but right now during these times wouldn't we expand the money supply wouldn't the fed stimulate the economy and print money and order to devalue the dollar well it could if it didn't go get cooperation from trying to get would be an option so that who benefits from that because we're pretty sure would be more compatible will improve as wall street benefits from wall street be very unhappy wall street wants the high dollar because their money goes further in china and they fear inflation like anything so wall street be very unhappy with it which is probably why we are doing it right now but what are the high dollar mean high interest rates which why would wall street want that they're broke they're using these low interest rates to roll over the debt in the credit markets to finance their speculation road typically typically high dollars more from associate with higher interest rates so they generally don't want lower interest rates we have lower interest rates now to spur the economy and again i can't see why anyone higher interest rates but who is benefiting from thos

but on swift, i will say that the fed is one of the supervisors of swift. we work with the bank of belgium and other international supervisors. and my understanding is that it would be feasible. and it's a very important system because it's part of almost every international money transfer that occurs. so, you know, it's -- it could be a real problem for iranian financial markets or financial institutions if it were -- if they were banned from using it, yes. >> let me assure that you every institution of the federal government that is involved typically in national security policy would like to see iran as financially isolated as possible. and so while i don't have a national security staff, whether it's the foreign affairs committee in the house, full house, the senate, the state department, i think you should use your position at swift to achieve what is already the national security policy. >> we'll do whatever congress instructs us to do. >> and turning to another issue, i want to commend you for your white paper on the u.s. housing market. and i think

he was a democrat and vice chair with you at the fed. and let me quote. they talk about aggressive fiscal and monetary policy that not only avoided a great depression. when we divide the effects to the components, including the feds easement, we estimate that the latter was more powerful than the former. so it says that things in the jurisdiction of the fed were more important than the stimulus, although the stimulus was important. so this effort to den grate the role you play in that seems to be greatly mistaken. i have handed out a chart to the press and i would ask those that have the copy, look to page 17 of your report and there's a chart on the bottom, net change in private payroll employment, 2005 to 2000 and 12, what it shows is, and it measures monthly job loss. the lowest point of this, the worst monthly job loss comes in early 2000 and nine, in other words just after the change in the administration. and you then beginning, in like february or march of 2009. you get one of the steepest rises i have seen. you get a substantial, an almost vertical

it wasn't easing when the fed was. >> put up the stock market here.t of the sectors put up the sectors here. you see materials, industrials, energies, financials. there's your heavier risk side. they're the ones that dropped the most today. all of this is consistent with the idea of qe-3 off the table for now, labor market improving. >> that's right. and as you pointed out, gold, silver 7% decline today. >> huge. >> all of these commodities. there's a look at 34.63. dramatic moves stemming from the chairman. be back with more of bernanke's testimony on capitol hill. plus, the ceo of ryder systems with us live. before the break, a look at winners and losers from europe's trading day just now ending. >>> next on "the halftime report," an analyst that says microsoft is better than apple. sodastream takes a plunge. is the sell-off overdone? predicting the s&p, could it hit 1300 before 1400? hear from last year's most accurate market forecaster on "the halftime report." back to carl and "squawk on the street." >> the federal reserve in the humphrey hawkins

the fed has been quick to deny at all. you can't really deny it at this point. >> no, so i think today's speech won't get a heck of a lot newer in relative to the communications. but that is the key thing to watch for the next couple of months, if we're going to gear up in the second or third quarter. >> so second quarter or the third quarter, paul expects the dow to hit 13,000 and then a whole lot of buying. we'll have to keep notes and hold them to being accountable on some of these predictions but thank you so much for being with us. global head at nomura. thank you for being with us today on "worldwide exchange." that's it for today's show. i'm kayla tausche in the u.s. >> i'm ross westgate in europe. "squawk box" and the countdown to the markets state side. whatever happens, we hope you have a profitable day. >>> good morning. another day, another round of questions about greece. still no deal to secure the bailout. there's an agreement in washington. lawmakers announce a bipartisan deal on the payroll tax cut. i feel

morgan so they run the financial system and that's what you were asking the feds. now your critic here you're critical of the government and at least being in charge so does he have a point about the fact that there's only the j.p. morgans of the world in charge who does he think is running it now j.p. morgan it's goldman sachs it's wells fargo it's it's all the big banks i mean that and they are they are the ones who ran to the big banks set up the fed when they had a meeting in jekyll island georgia. senator nelson aldrich who was the son of john d. rockefeller and j.p. morgan himself and all the other big bankers they wrote the federal reserve act they promoted the federal reserve act the federal reserve exist to benefit the big bankers so they so dr baker is is is not just i mean it's a very it's a very silly point this is who runs it and who and so it's the fed is run for the benefit of the big banks of the government big government contractors like the military industrial complex and so forth and whether we saw you know what's going on in two thousand and eigh

the fed is so far behind the curve, what are they thinking?> well, i don't think you would have had the strong jobs number without the low interest rate policy that the fed's had for a while. and also, we've had a couple of false starts. about a year ago we started to see job growth more than 200,000 per month and then it faded away. >> you know, randy, my friend and your friend john taylor from stanford hoover institute, the taylor rule, which i am told is used by some in the fed, says that now with the economy expanding, and it's been expanding for a couple years, albeit slowly, the taylor rule says the fed funds rate should be 2%, returning gradually toward normalcy. what's wrong with that? it would be a vote of confidence if the fed started raising rates. >> well, certainly if we really see a good foundation for growth. i'm not quite sure that the taylor rule would have us there quite yet given that the unemployment rate is still quite elevated. it's over 8%. i mean, it looks like it's getting better, but we still have to see whether this

which sort of evoked a response on the part of the fed. oncerned as some of my colleagues. i think over the cause of the fall and into the first part of the year, we've actually seen a substantial firming of growth. i think we're entering growth here in the first part of the year, on a much firmer stance than we did last year. and certainly the unemployment rate, which has fallen over a percentage point since last december of 2010 is kind of remarkable. not many people predicted we would get that much of a response. i'm actually cautiously optimistic. i'm not expecting a booming economy anytime soon, because i think what we suffered is a very serious shock that's going to take a while for the economy to repair itself. but i do believe i'm encouraged over what we've seen over the last few months. >> what are the metrics that are most important that you're looking at. in other words, what would it take to actually move the hand of the fed to start actually a tightening process? >> i tend to look at a few things. one is inflation, obviously, a

usually we get reassurance from the fed on that. but i believe there's a logical reason for this because the federal reserve has given a responsibility to protect the value of the dollar. that is what stable prices are about. we do not have a definition of the. we ask about the definition of the dollar and it's whatever it will buy. ev every day it buys less than the next day. it's like having a planning, like a builder with a yardstick that changes every day. it was a suspect designed to pyramid debt. we have a debt-based system. the more debt we have and the more debt the federal reserve buys the more currency they can print and they monatize this debt, it's worldwide, no wonder we are in a debt crisis. it's something we have never experienced before and i think the conclusion will be a vindication for sound money. or if you say, you can do it. in a few years we will know -- of course i'm betting that the market is smarter and commodity money is smarter, nobody is smart enough to have central economic planning, so, i'm anxiously wa

restoring our currency or competing currencies auditing the fed these banks that have been bailed out the money vanishing if you take m.f. global for example you know money is vaporizing and i think that they're setting. stage for something like that to happen here and nobody else is even talking about it ron paul is the only one who is willing to shine a light into the dark corners of our political parties and these big corporations who are running the show and people are awakening to it and deciding that they can take part and make a difference so. and lastly mary just want to ask you. paul that we see he is gaining some momentum how can he continue to attract more voters we are seeing that he's winning some people over from the mainstream and he does have his loyal base how can he continue to take advantage of this leverage. well everyone who does some researching and gets involved and understands the policies usually gets profoundly moved by them and wants to be active in this and wants to make a difference so i encourage everyone who does come along and decided to support them pa

while i have no problem with the of fed audit i mean we saw the fed basically handed out twenty nine trillion in low interest stories zero interest loans to the financial sector was that necessary we see the fed doing these massive multi hundred billion forex swaps with. other foreign central banks i got no problem with that the elimination of the fed i think ron paul stands for that a little bit i don't think that's necessary i think it's good to have it is to to should which you know let's say he sets the interest rate on us of money but basically the fed and the treasury should switch roles i mean the treasury should be the one who credits bank accounts like the fed does now and the fed should be the one that is shoes to control the interest rate will set the interest rate where it wants i mean if we if the treasury in the bed or if they consolidated both under the treasury i think we'd have a much better system that's a really interesting idea i might have to bring you want to get if you'll come to talk about that more i also love to talk about zero percent money now you can rest

fighting inflation and protecting the dollar's value mood what exactly would that mean then for the fed's unofficial mandate of trashing the dollar will take a look at that question and turkey the fastest growing economy after china is being penalized in the credit markets reportedly for failing to promote consumer savings that's according to bloomberg see there you have it more evidence that savings matter so does this mean the federal reserve needs to end its work process and zero percent interest rates i'll talk about it finally with central bank policies of the fed and the e.c.b. with trash to cash programs are we seeing transfers create exponential wealth extraction turning into compound inequality and ultimately serfdom it's what we at capital account like to call the kleptocrats carry trade we'll break it all down let's get to today's capital account. so we have seen central bank and government policies responsible for wealth extraction literally siphoning off wealth with what we call the kleptocrats carry trade now in the us you have zero percent interest rates forecast for years

none of those people were challenging the the right of the fed to set interest rates or anything like that their only disagree event is that they're not doing it right the implication there is if they were doing it it would be better i recognize from the very beginning that the federal reserve system shouldn't i don't even think it should exist because you see it's not a government agency it's a private banking cartel and people don't realize that it's a cartel no different than a bank i mean than an oil cartel or a peanut cartel or sugar cartel it happens to be a banking cartel and when a cartel exists it has only one function and that is to promote the best interests of the members of the cartel so when the federal reserve system says it's going to push interest rates towards zero the idea is that they're trying to stimulate the economy for you folks for me but that's nonsense because everything the fed does has only one purpose and that's to help the banks and once people understand that basic principle then they get off of this trick about well the interest rate should be a li

morgans of the world who set up the fed wrote the fed act got is adopted and have run it ever since so if we if you don't want these special interest plutocrats running the economy then you don't want a federal reserve you want to money that the government can't print up money like gold and that can't be manipulated that can't be inflated so that the federal reserve uses its horrendous power to inflate to cause the business cycle to bring on recessions and depressions but the benefit the government itself and the special interest connected with the government especially the bankers so the spirit of j.p. morgan. and still hovers over the federal reserve and that's an exact example of why there was a fed because j.p. morgan wanted a fed ok interesting point as you say that that public private partnership is a cartel for the schizm right that's fascism that's the for that's the definition of fascism or government of big business get together to stick it to the rest of us and so no i don't think fascism in money or in any other aspect of society is a good thing you know let me ask you this

. >> there you have it and should the stock market thank the fed for the really. the stock really continued today inching closer to 13,000 but not just the fed, hint, students, what is the mother's milk of stocks? we will get to all of that in a few minutes. >>> first up the top sizzle, santorum sweep puts rick back in the race and yet another sign that republicans are not ready to let romney role. here is what giuliani told me last night on the show. >> frankly people are still looking for an alternative to mitt. i would like to see how santorum develops. i have not understood why he has not done better in many of the polls and some of the early primaries. >> all right, that was rudy before the voting returns were in. so he was right. now, let's get the latest to republican race rescrambled, cnbc contributor, robert acosta, what is the team romney saying and thinking today, their knees knocking? what is up? >> team romney is very nervous, larry, they are going hard at santorum, they are picking out two things. they are going after his congressional earmarks and p

long-term goals of the fed higher inflation, get to those in a second. first i want to give you the monetary and deficit headlines. he issued a stern warning on the deficit saying increased possibility of a sudden fiscal crisis from the deficit, he warned interest rates can soar quickly if investors were to lose confidence in the american government. he did say on the economy that it's gradually recovering from a recent deep recession, but the pace of recovery has been frustratingly slow. the outlook is uncertain. on the jobs marveket, bernanke says the situation is improving but appears to have improved modestly over the past year but still talked about the long-term unemployed. on the back of ryan and bernanke was the issue is the fed willing to tolerate higher inflation in return for bringing down the unemployment rate as perhaps some cold from the recent long-term policy statement from the fed. here's what the fed chairman said. >> mr. roseman, let me ask you about leverage ratios if i could. >> it looks like we don't have that, but fundamentally he s

recently the dallas fed president richard fisher made me aware of a harvard business study showing the greatest impediments to job creation would be taxation, red tape, uncertainly. recent gallop poll of small businesses show that roughly half believe that health care and government relations is what is causing them not to marry more workers. you have job creator after job creator like bernie marcus and home depot, saying i can tell you today that the i'm pet mus that the government imposes today is hard to deal with. i would add the voices of just about every small businessperson i've talked to in the 5th congressional district of texas, that i represent. and so, again, it begs two questions. number one, the limits of efficacy of monetary policy and, frankly, the risk as whelp it was. it was brought up early that we have retirees being squeezed, pension fund savers. you know that community banks are feeling squeezed. many of them are lending out on the risk curve. and i'm very grateful that you've shown your concern and anxiety over the structural debt, but to some extent, you're one

is it fair to say the fed did not see the severity of the housing crisis? >> i think the mistake was a little different. house prices were already falling in 2006. what we did not know was what is the impact going to be? we did not have a sufficient understanding of how the fall of house prices would affect the financial system. that was the linkage we did not see. yes, we did not see the prices come in. we were aware that the housing market was pulling. i talked about it in testimony. we have learned a lot of lessons. we have changed the way we do our supervision and will now focus on the interaction between different parts of the system, looking at it from a systemic point of view. >> looking at the economic projections from last january, you projected growth at 3.4% to 3.9%. why were you so far off? will you be that far off for the coming year? >> i would like to look at those numbers. there would two glasses of things. there were developments that were impossible to anticipate, like a tsunami in japan. the affects of the arab spring. i think, more gener

other foreign central banks i got no problem with that the elimination of the fed i think ron paul stands for that a little bit i don't think that's necessary i think it's good to have it is to to should which you know let's say he sets the interest rate on us of money but basically the fed and the treasury should switch roles i mean the treasury should be the one who credits bank accounts like the fed does now and the fed should be the one that is shoes to control the interest rate was set the interest rate where it was i mean if we if the treasury in the bed or if they consolidated both under the treasury i think we'd have a much better system that's a really interesting idea i'm mad to bring you want to get if you'll come to talk about that more i also love to talk about zero percent money now you can resist the excited we're out of time for now though thanks so much for being on the show that was mike norman chief economist at john thomas financial. ok before we go dmitri is six so wish him well we can banter back and forth today with shannon and the team but this gives me the opportu

and we join steve liesman, a comment on the fed. i hear what you're saying about the hard core members, right. there is some policy disagreement. looks like it's still bernanke show. i want to ask you a broader question. i'm looking into minutes now, the fed website is finally back up after everybody tried to access them at the same time, they're very different than how they use today look. this is a different fed in terms of transparency. do you like it? do you like this new fed and the way they are communicating information and data projections? >> i don't know, brian. there's been so much new information so quickly. in fact, i'm so glad you asked me this question because i didn't get to tell you all the new stuff in there. there's new stuff that tells you what their risks are to gdp, do they think they're to the upside or downside. new stuff there on the risks to inflation and risks to unemployment forecast. that's all new. whole new discussion for the balance sheet and outlook for the balance sheet and also new information that s

>> the average gallon of gas at $4 ties the hands of the fed. i don't want to pick within commodity and price level and say that's the case, but that is the biggest high profile one. you take that away from the fed, you take the ltros away from the ecb, the bank possibly stepping away and i think people would be in denial to think that's not going to have an impact on global equity markets since test the qe in fact that's lifted them so much over the past couple months. >> that's absolutely right. as for commodities, of course today we're seeing quite a selloff in gold, silver, oil and many other commodities, john, how excited should we be about this pullback? is this presenting some kind of entry point for people that perhaps have missed out? >> well, you know, we've only had a very modest pullback today. so i wouldn't get too excited about that. but if you look at the commodities that have taken a beating today, i do like a couple names in that space. freeport machina ran. i do agree with peter, we do have to have some concern about having come

jim record says in a recent op ed to paraphrase hey wait a minute higher inflation is exactly what the fed wants inflation to limp dollar an asset bubbles are all in a day's work just think of ben bernanke he is the modern day lawrence welk. when the boys get the show on the way with some of them some but no one i do. see that conducting the orchestra with a little help from the bubble machine now if winter is prepare for inflation what does that mean does that mean by oil and gold well we'll talk about it and speaking of oil this of course brings us to iran a conflict between the west and iran according to some analysts could mean one hundred fifty dollar a barrel oil even two hundred fifty dollars a barrel oil and with the win of rick santorum and three u.s. republican presidential nomination contest last night we're reminded of that possibility. obligation scientists working on the nuclear program in iran turned up dead. i think that's a wonderful thing ok but i think we should send a very clear message he goes on part of his plan would be if iran doesn't meet u.s. demands there would b

you indicated that the fed is prepared to use all the different liefers that you have. so that is the general questionment but specifically, i'd also like you to speak to the money market mutual fund market. right after lehman, there was a bailout of the money market mutual funds because over panic over breaking the buck. that is the investment income wouldn't cover all operating expenses. it wouldn't cover all the investment losses. and so there was an intervention by the united states into that market. could that also be something that people begin demanding right here in washington? we bail out the money markets as a result of a disorderly default in europe? >> so in terms of preparations, other than beyond the swaps which we just discussed, the federal reserve has been operating as in a supervisory capacity, work working with other supervisors to understand the exposures of banks to european nations, to european banks, european economies. >>> trying to help reduce the risks wherever as possible. we've been doing that. the other set of tools that we have in the event

i think the fed gives you a floor, too, if things were to go the other way. i think it's a bit of a sweet spot. >> low rates, low yields. only place to get a return or possible return with a risk. >> the danger, scott, if inflation were to be b hotted than expected. in the feds' hand were forced, right here right now its hand is not forced. you start printing big wage growth gains, the feds' hand is going to be forced. >> enjoy the super bowl. we'll catch you next week. steve liesman. >>> the ten-year notarizing the most in six weeks. treasuries are up across the board. so is now the time to short them? cnbc contributor has been bullish on bonds. he's at the cme. he joins us now. killer, i'm wondering what you're watching today and what this data has to possibly do with you're out look and whether it changes it. >> well, hey, we are seeing huge disparity with the jobs number. last week ben bernanke stands. but right now i'm bullish on treasuries. and just like 2011 and recently, every time you see that ten-year, it's a buying opportunity. until the fed moves,