studies treasury one and treasury two, we all knew how it worked. we all knew that you could lower the rates if you could get rid of deductions. it's pure mathematics. the house had public hearings for a year in 1985, and they had a lot of individual votes on things as they went along. and they picked up enemies. they picked up barnacles because some of those interests lost their votes and there's lots of single issue groups. and i don't mean the nra or right to life but you touch mortgage interest and you've got -- you touch charitable contributions and you've got every organization in the country opposed. and the problem with the -- the house bill is that they had enough of these barnacles attached to the bill when they finally came out of committee, that there were votes on the floor to pass it. it would have failed but for the fact that ronald reagan literally came up on the hill. met with the republicans and said, please vote for this bill i will veto it if it passes in this form, but send it to the senate and see what they can do. with that en

treasury denies americans -- there is still a treasury sanctions in place. ♪ >> welcome back.ime for today's latin america report. the ceo of mexico stock exchange says he's open to proposals from groups interested in buying a stake in the board. gappers reader -- the operator of brazil's -- like a 50% stake -- 15% stake. this fight to the easing of rules, most sanctions between the u.s. and cuba remain prohibited. the deputy director of the treasury's office of foreign assets control said americans traveling to cuba or engaging in transactions with the country are still required to keep records for five years. his office will continue to enforce the cuba sanctions program and will take actions against violators. that is you are report for this wednesday. coming up, frozen stays hot. disney's planned to have outside and and a joint cinderella's party -- elsa and anna joint cinderella's party. ♪ >> it is 45 minutes past the hour. let's check bloomberg world news. president obama's pick to run the pentagon says he is inclined to back increased u.s. insistence to ukraine includin

treasury rates will be held down because of their greater demand. those four factors alone would've argued for a lower revision act. on the other side, for --4 other factors that will push up interest rates. one of those is greater federal debt. another one is slightly smaller capital inflow from overseas. a third is fewer people in their prime seating years. -- saving years. another way of saying baby boomers are getting older. people in their prime saving years. and also the higher capital share argues for higher returning cap that compete with capital for investors. as best we can judge, the factors pushing down rates relatives -- relative to this, will be more powerful than the pushing up rates. that is why we made this revision relative to history. nonetheless we think rates will move up from where they are now. that is consistent with expectations of participants in financial markets and consistent with our own modeling of demand for a fund as the economy strengthens. again, these are changes we mostly made last summer in the long-term budget

studies treasury one and treasury two, we all knew how it worked. we all knew that you could lower the rates, if you could get rid of deductions. it's pure mathematics. the house had public hearings for a year in 1985, and they had a lot of individual votes on things as they went along. and they picked up enemies. they picked up barnacles because some of those interests lost their votes and there's lots of single issue groups. and i don't mean the nra or right to life but you touch mortgage interest, and you've got -- you touch charitable contributions and you've got every organization in the country opposed. and the problem with the -- the house bill is that they had enough of these barnacles attached to the bill when they finally came out of committee, that there were votes on the floor to pass it. it would have failed but for the fact that ronald reagan literally came up on the hill. met with the republicans and said, please vote for this bill, i will veto it if it passes in this form, but send it to the senate and see what they can do. with that

studies treasury one and treasury two, we all knew how it worked. we all knew that you could lower the rates, if you could get rid of deductions. it's pure mathematics. the house had public hearings for a year in 1985, and they had a lot of individual votes on things as they went along. and they picked up enemies. they picked up barnacles because some of those interests lost their votes and there's lots of single issue groups. and i don't mean the nra or right to life but you touch mortgage interest, and you've got -- you touch charitable contributions and you've got every organization in the country opposed. and the problem with the -- the house bill is that they had enough of these barnacles attached to the bill when they finally came out of committee, that there were votes on the floor to pass it. it would have failed but for the fact that ronald reagan literally came up on the hill. met with the republicans and said, please vote for this bill, i will veto it if it passes in this form, but send it to the senate and see what they can do. with that

the treasury resisted a big tax cut.anted a down payment in '62 to make sure we didn't fall into a recession and go ahead in '63. he didn't buy that. in '62, he bought the idea of an across-the-boards tax cut. every dollar released from taxation that is spent or invested will help create new jobs and new salaries. these can create other jobs and salaries and more customers and more growth for an expanding american economy. although kennedy agreed with him, heller had galbraith to contend with. every now and then his shadow would fall across the white house when he'd come home to report from india. the president would say, "galbraith's been lobbying against your tax cut." i had access to the president and expressed myself with some vigor that if we passed tax cuts they would become too popular with conservatives and they would be taken up by conservatives at the cost to the expenditures that were needed on behalf of needy people. despite ambassador galbraith's arguments, the president remained committed to his tax cut. th

those decisions are made at the treasury and hud. our decision related only to whether to fund them or not and to apply the statutory criteria to determine whether they should be funded or should not be funded. we did not look at the use of these funds. we did not look at the history. i am not even sure i knew -- >> thank you for clarifying. i would like to ask you about the risk retention rule. the final rule inadvertently failed to exempt freddie mac multifamily securities. even though it did exempt fannie mae's multifamily securities. can you give us enter update on these efforts -- can you give us an update on these efforts? >> the original was not done by fhfa, that was a joint rulemaking process. i am not sure that we are looking at anything -- >> the fact that it inadvertently failed to exempt fanny -- freddie mac's multifamily securities even though it did exempt fannie mae those should be treated the same. >> i would hope that whatever rules come out would treat them both the same, that is what we are trying to work our way

but did you seek approval from treasury to do that? >> no. >> and don't you think that since they are the opener of that preferred -- the owner of that preferred stock on behalf of all the taxpayers you should have checked with them first before taking money into the housing trust fund before sweeping all the profits into treasury? >> no. >> and tell me again i know you've covered some of this ground before, tell me again why you believe that's the case -- >> why i shouldn't -- >> yeah, why you believe -- >> why i shouldn't get treasury's approval? >> correct. >> because there's nothing in the preferred stock agreement under which we operate that addresses the housing trust fund, and so we're not violating the terms of the preferred stock purchase agreement in doing this. we're just simply complying with the law. and that's, you know, so there's no reason for me to get treasury's approval for that. >> it just seems like when we own the shares of that company as the taxpayers that we should want to have all the proceeds until there's a

how do you look at the treasury market and the u.s. treasury bond risk?had treasuries at 217. where did they and the year? it is somewhere between 2.5% to 3%. you have to get modest losses on treasuries but we never 2014 some pretty decent gains therefore fixed assets. as the final year to on treasuries is probably wage inflation, but remember, also this year, there is a big journey with treasuries. part of that journey will be inflation. headline inflation this week in the u.s. is likely to be negative. >> a rate increase in june, he gets june is starting to look very busy. that space in june. >> september, december. think of the context. how can the federal reserve ways interest rates when you have got negative headline inflation to mark that is a stretch -- when you have got negative headline inflation? that is a stretch. >> there was a more dovish federal reserve. does she prepare us to get rid of the word patience and even when we get rid of it, it does not mean that rate hikes are imminent. >> i think that is right. i think the fed has got to get aw

and for a point of reference, this is treasury two and this is treasury one and during the years you guys found the will to make this happen and this is six years of the president's proposals. my first question for both of you all is how do we find common ground when finding a serious partner towards real tax reform appears to be missing in the seriousness of the presentations and the proposals number one, and the second part of that is when we've heard from both our chairman senator hatch and senator thune just talked about revenue neutral position when you start the conversation as well talking about achieving several hundred billion dollars more of revenue versus a position of neutrality, how do you bridge that chasm? >> i don't think bill and i can tell you how to bridge that gap. if the bridges areir ref equable, that bridge cannot gapped. >> i agree. >> senator if you can bridge that, then spend time doing something else. i think however that the question is can you put together a small group of people on this committee that have sufficient clout within the committee, as bob sa

, interimmediate treasurys down more than 2% so far this month. and we've got high yield corporates, up more than 1% on the month. would say at this juncture i would rather take the economic risk rather than rate risk you have with treasurys. david: todd, talk about how the strong dollar is affecting things, in particular the financial sector. what is happening in u.s. banks as a result of the strong dollar? >> the real problem we have here now, david, is when you see the dollar continue to bain strength, it takes away the advantage of u.s. banks because of the dodd-frank and amount of leverage they can put on the street, that strong dollar takes away. it allows foreign banks to woman underneath and loan money to people we normally end to. it is underleveraged situation to 2008. we were overleveraged. now we're becoming underleveraged which create as dramatic effect on their balance sheet when they report earnings. david: short u.s. banks and long for return banks? >> that is probably a pretty good spread. i see no reason the u.s. dollar will not

treasuries today, but no. >> yeah. you would have thought that. again, i don't want to be that bearish in treasuries because i think we're still globally in a growth-challenged environment, but we are starting to see some better data points. not necessarily the u.s. but away from the u.s., particularly in europe. that's something we haven't seen in a while. so maybe, just maybe, the bond markets are kind of focusing on the improving business cycle in europe and if that's the case then you're going to see yields move up a little bit higher. >> so where and how can i make money in bonds this year? >> well that's the ultimate question because it's not just about trying to forecast where yields are going to go. do you make money in fixed income and your viewers have a lot of exposure to fixed income. so the way that we are anticipating making money for our clients in outperforming is not invested in german bonds and japanese bonds and u.s. market treasuries but there's still some bonds that have too much inflation expectation price in them. it's the m

this treasury have a dynamic model? >> you know, both the treasury and the other take and keep track of this -- >> you have one? >> yes. >> okay, i yield back that was easy. >> mr. lewis is recognized. >> thank you, mr. chairman. >> thank you mr. secretary for being here today and for your great work over the years. mr. secretary, i want to make it clear, make it crystal clear. but the republicans today you will repeal this, the president said that he is going to veto it, maybe he has changed his mind and he will not veto it. maybe just that. >> okay. >> what would happen? what happened to the hundreds and thousands and millions of people. >> we have 10 million people with health insurance coverage that didn't have it before. and the challenge of providing the kind of security that family only knows what has health insurance has taken decades to accomplish and i think it could be a bad situation. it's why the president would veto a measure that would repeal the affordable care act. >> thank you very much mr. secretary.

does treasury had a dynamic model?count of economic factors practice treasury have a dynamic model? >> yes. >> good. that was easy. i yield back. >> thank you. mr. secretary they queue for being here today. i want you to make it plain and crystal clear that republicans today repeal the affordable care act and later this and a repeal the act may be he changes his mind and will not veto. >> he has not changed his mind. [laughter] >> what would happen to hundreds or thousands or millions of people who have affordable care act now? >> congressman who is because of the affordable care act we have millions of people who have health insurance coverage that did not have it. the challenge of providing the kind of security of family only knows with health insurance has taken as decades to accomplish we would take us step back to assess security that flows from it. it would be a very bad situation why the president would veto a measure that would repeal the affordable care act. >> what does the president's budget do to help more

>> there was a decision that all enforcement was leaving treasury. so the question really was, at least in my involvement, was justice department, homeland security, where does the -- where is the natural fit. when you look at the department of homeland security you have coast guard who regularly on a routine basis supports the secret service quite a bit with aerial support motorcades, other things like that. you have tsa who has been supporting the secret service with magnetometers, especially during political campaigns when they are stretched very very thin. there's a lot of support from sister agencies within dhs. and that was looked at. >> but you also the secret service does get support from the fbi and from other agencies who are outside of homeland security, correct? >> not to the extent, i think that you see with coast guard and tsa. >> do you think that the change, to move the secret service into dhs -- the tsa is a new creation of that but there was obviously a coast guard before that. so the secret service's interactions with the coast gua

we sweep the money to treasury. it gets applied to the deficit. it gets applied to government operations. you know i gets argument is, should it be doing that or building up a reserve or capital reserve of some kind? that's just -- that's not a decision i can make. >> i think the concern is we've got such a big deficit and it's going in the hands of the federal government, where is it going? also just to help me understand a little bit, like i say, we've covered a lot of ground today. what's the average credit score to a 3% customer? >> i don't know if i can tell you that off the top of my head representative williams. >> okay. we may have covered -- i heard a figure earlier of 2% but what's the foreclosure rate in your portfolio? percent to the total. i heard a figure, i thought, of 2%. would that be right? >> i can tell you that if you'll let me get to -- >> while you're looking at, that when do you decide to foreclose? i mean, how far behind payment? how far past due are homeowners before you say we need to foreclose on this piece of property?

while we've closed out january, we've closed the worst month for the dow for treasuries, brian. it was the strongest month in over six years with a total return of 2.88%. 30-year bond here, remember, hitting put reply record lows during last month. take a look at the ten-year right now. currently yielding 1.657%. >>> meanwhile, gasoline prices may have hit bottom. but not because of the price of oil. unionized workers at nine of america's refinery walking off the job. they want a new contract. morgan brennan here with us with more on those strikes. morgan. negotiations are not coming to fruition right now. we have seen the strike start to take place. >> in temz of what it means for you and me as we pull up to the pump for our cars, to what sdee degree is this supportive for gasoline prices? some of the refineries are saying, look, we've got the capability to be able to bring in replacement workers and do business as usual. >> are you already seeing statements come out. tesoro put one out. marathon said they have contingency plans in place and they continue to have nonunion worke

treasury secretary william mcadoo shrugged off the recession as "a propaganda of pessimism."ublicans had no doubt why the economy faltered. it was that dangerous democrat woodrow wilson. while many were quick to blame wilson, few thought the government should intervene to correct the situation. the prevailing point of view seemed to be that the business cycle was correcting an imbalance, and that by intervening, you might only make things worse. by the government coming in and purchasing more goods and services to take up for the lack of business investment they might adversely affect the little business investment that there was. it's doubtful that this attitude provided much comfort to the unemployed workers who lined new york streets demanding assistance workers who had barely recovered from the panic of 1907. but when relief came it changed the world. when europe hurled itself into battle in august 1914 neutral americans began supplying food and weapons for the belligerents on both sides. the recession soon vanished as america cranked up to meet the new demand. looking ba

but did you seek approval from treasury to do that? >> no. >> and don't you think that sense they are the owner of that preferred stock on behalf of all of the taxpayers you should have checked with them first before taking money to the housing trust fund as opposed to sweeping all of the profit to the treasury? >> no. >> tell me again -- i know you've covered some of this ground before. tell me again why you believe that's the case. >> why i shouldn't? >> why you believe you don't have to -- >> why i shouldn't get treasury's approval in. >> correct. >> there's nothing in the preferred stock purchase agreement under which we operate that addresses the housing trust fund. we're not violating the terms of the preferred stock purchase agreement in doing this. we're simply complying with the law. and that's, you know -- so there's no reason for me to get treasury's approval for that. >> seems like when we own the shares of that company as the taxpayers that we should want to have all of the proceeds, until there's a change, a truck churl c

it seems treasury made this change in the first place. it could also undo this policy, and eliminate a barrier to private infrastructure investment. i'm pleased to see that once again, the president agrees with me on the need for reform as illustrated in his budget. so since we all agree this is a bad policy, and treasury clearly has the authority to reverse this ruling, i hope that you would look at taking some sort of action on this. so my question is one, does it make any sense to create obstacles for foreign investment in the u.s., particularly considering our dire need for infrastructure investments and will you commit to working with me, and there's a bipartisan group of members of this committee and beyond who support this effort. >> senator, we've discussed this before, and as you acknowledge, we agree this should be fixed. we believe it needs to be fixed through legislation. i actually hope that in the discussions we're having about business tax reform, it provides an opportunity for us to do this in a bipartisan way. and we've o

this is a big move that we're seeing in the treasury space right now. three points away from 2% once again on the ten-year notes, and also moves in the 30-year and the shorted end of the curve as well. let's get back to the equity side because it looks like some of the money might be rotating into stock markets. we have two bulls joining us now. we have phil chief equity strategist and jeff chief investment strategist at raymond james. both of you have some pretty lofty targets there for the s&p. >> by our measurements, there are oodles of internal energy here for a sustainable move. very fast up through 2200 on the s&p. >> you are looking at 2350. how are we going to get there? what's going to drive markets higher to 2350? >> we just hit 2,100 earlier today. that was our target for the end of last year. >> something in the neighborhood of $130 by the end of this year. we think that treasury yields still 2%. very low. core inflation 1.3% still very benign. the ability for multiples to expand up to about 17.5 18 times earnings by the end of the year we t

treasury. spend a lot of time with sarah dahlgren, who was also handling it for the new york fed. they told me about the financials. i questioned them about the financials. and my assumption was that they did their due diligence. >> when they briefed you on what was going on at aig and what they knew, were they better or worse than you thought? >> in line. the world thought they were worse than they really were. >> you did not? >> i didn't think it was that bad. but it is a question of, if the outside world thinks it is that bad, i have to get you to stop talking about how bad it is. >> and bad it was. aig was expected to be broken up and it's best parts sold off. in 2009, then treasury secretary tim geithner told meet the press that he wanted aig just successful enough so the taxpayer can get out. benmosche had different plans. he was going to revive the company and pay the taxpayer back. did you ever think you might not? >> no, i did not think i could not get it done. when i looked at everyth

treasury market in almost five years. where will the treasury market end up? asset managers say about 3% by the end of the year. we had another conversation. it really is a question of whether the treasury market is pricing in what janet yellin will say tomorrow. +++ in the face of zero, nonexistent, even negative inflation. >> thank you very much. i'm going to take you to the last trading day, 1999 where the ftse 100 closed at 6120. we trade at 69 39 -- an all-time high. 6950 is the record high. a record high on a closing basis for the ftse 100. some are marketable moves in the market. on wall street the s&p 500 at a record high. that's the ftse now, of the third of 1%. interest rates to seal the deal. in athens the greek government is walking a tightrope between obligations between creditors and voters as it rushes to do reforms. prime minister sipper us -- tsipris has to come up with a deal. joining us for more live from athens. eric, i am going to start with you. tell me what is the mood like in athens. is the government spinning this as a win? >> yes the

treasuries are trading like internet growth stocks and oil is flying around. oil services names have extreme volatility. certainly is 20 still 20? i don't know. my target is about 22. that's when i step in. if you want to step in now, you have to keep a tight stock. the market can easily reverse on itself when it's on these trend lines and collapse. i'm willing to dip night toe in. i've got to take a -- >> brian has done that very well for a long time. you at home should not be charting the vix. carter spends time doing it and vix is not an asset. focus on what's going on in bond and rally on gold and other things that affect the stocks you own. that's the message i would have. when you put it all together, it doesn't make for a pretty picture right now. >> brian, i'm going to go back to you. in terms of spikes and volatility, are there certain sectors that look more attractive than the overall markets? >> i think there is, when you look at the dividend paid by the s&p 500, that yield is basically trading tax adjusted at the 30 year treasury. if you think ther

treasuries just widening out to a level that you have not seen since 1989.that investors want to hold u.s. treasuries versus their peers in germany is the widest since 1989, something that we will pick up later on. manufacturing and services data. bnp paribas still shortly euro. -- short the euro. >> talks in brussels today over greece's proposal to extend its european loan program. yesterday, alexis tsipras said on twitter he has had a positive phone conversation with angela just hours after her finance minister rejected out of hand greece's loan extension request. lenovo said it messed up badly by reinstalling software on its computers that potentially exposes you to hacking attacks and unauthorized activity. they are coming under fire from computer owners. they promise to have a fix ready today. santa fe -- sanofi is hiring a new chief executive. the 59-year-old will start his new job on april 2. the move comes after sanofi's board fired the previous chief executive back in october because they were not happy about his handling of the business, including

ten year treasury bouncing back of a little bit treasury yield extremely low, 1.7%.f this is breaking in the last hour, the justice department reaching and your $1 billion settlement, standard and poor's of the mortgage rate in this mess. number one former treasury secretary timothy geithner nehr said about the s&p downgrading u.s. death, voting the former treasury secretary, he said the snb's conduct will be looked at very carefully. such behavior will not occur without a response from the government. there is an response. judge andrew napolitano is here. at the time everybody thought this sounds like a shakedown, like a threat. judge napolitano: it resulted in the $1.3 billion payment by standard and poor's to the federal government and state governments but is still what lawsuit involving calpers, the california pension fund which is the largest in the nation. there are equities on both sides. there are serious issues about what standard and poor's new and what it revealed in the mortgage bundling crisis the bubble of which burst in 2008 but there's a strong argum

look at that. 1.764810 year treasury.tocks reacting to another negative read on the economy. >> aims are certainly better tom. the market is react into what is going on in europe. it is reacting to what i am calling the quantitative easing. unless we get some type of fiscal reform in the united states i think the market languishes here over the next several months. >> europe is firing up their quantitative easing. they have all kinds of problems. they have protesters in spain over the weekend. they want anti-austerity. >> i think that is something that is worrying our market. the strengthening dollar is also worrying our market. two and a half, two and a quarter% growth. that is weighing on the markets. the quantitative easing was working for a very long period of time. you need political reform. you need corporate tax reform. tom: you say it was working but it was artificial. we do not have a pure market. >> we will not have one for a very long time. we are in the age of governmental intervention. the united states will

>> we would argue that treasuries are mispriced.we think the fed is going to go in june or september. if you look at the u.s. economy, income proxy is up 4.5%. ours worked up 0.5%, wages up 2%, economy is doing well. you can own bank loans which have lower, almost no interest rate risk and earn 4% to 5% in a senior position in the capital structure. treasuries are mispriced here, whereas credit, in our opinion is the safer bet. >> where should yields be, mark? >> we think rates will head higher in the u.s., probably 25, 50 basis points over the next six months. as the fundamentals come through. interestingly enough, though, we actually think yields can come down somewhere in mexico and brazil. emerging markets with commodity deflation will think eventually will ease. the rate risk is in emerging market, take credit risk here in the united states. >> do you think greece will default again, mark? >> we don't think greece will default. it's in the best interest of greece and the best interest of europe for greece to stay within the eur

treasuries or european, the pricing is lofty right now. treasuries and look for higher yields elsewhere like -- high-yieldple in the debt in the u.s. or emerging markets, we are seeing emerging-market debt. i think the attractive yields, for example 3% or 4% or above that, that is were the opportunity will be. >> what about opportunity as it pertains to oil? do you think it will go down or up? >> i think we have drawn a line in the sand around 40 dollars or $45. in terms of supply it will take a while before the response comes through so we may not see a sharp church in oil pricing -- sharp surge in oil pricing taking place. but we are seeing china by more moreor the reserves -- buy oil for the reserves. they are gradually restoring the equilibrium which will be $60 or $70 but in the short term there may be more volatility. >> it is the new normal. thank you so much for joining us, j.p. morgan asset management strategist. coming up, we will point out how news of the greek a lot extension is playing out in the currency -- they allow extensi

how many times she went to the white house, met with treasury officials, compared with how many times she met with congress how many times she may have met with so-called liberal economists. did you see or do you know of any bias in her meetings? do you see any problems there? >> i didn't see any bias. i think it's very important for the fed chair to be talking to members of congress talking to the secretary of treasury. that's been a standard thing done as far as i know for the whole history of the fed to have a good back and forth with other key decision makers but it's very important to have that discussion. the fed shouldn't be independent in the sense that they never talk to anyone. they shouldn't have political interference in the decisions, but they should be talking to key political actors on both sides of the aisle. >> what do you make of her testimony on the state of the economy and what she still worried about, the income inequality issues the labor issues out there, the lack of wage growth. do you generally agree with her stance on where the economy stands right now? >> th

i especially like the $38 billion in extra funds that you gave our nation's treasury. i have another question. late last year fannie mae and freddie mac announced new lending outlines designed to help more low income and first time buyers afford homes as well as minimize the reduction of the down payment of a home from 5% to 3%. what other proposals is fhfa looking at to encourage first-time home buyers and how is the agency making people aware of these initiatives that i have mentioned? >> well, we have a number of things already on the books. i don't know that we're looking at any new proposals that i would indicate to you, but we have homeowner modification programs, we have the program for people who are under water but have been regularly paying their mortgage. and the 97% loan product i think what we've asked fannie and freddie to do is, in this space, evaluate how we can make credit available to creditworthy people and that part of the 2015 scorecard, it was part of the 2014 scorecard. they operate in this area regularly. we evaluate what they propose. it is all

david: you used to work for the treasury department. you're familiar with looking at accounts who has what, what kind

the appearance before the treasury so kemeny -- treasury so community -- committee will be on tv. our bankers held to too high a standard? what do you think? should they be given an easier ride? are they being appropriately remunerated? they're all kinds of ways of looking at it. let us know what you think. >> we have had great responses that we will round up for you at the end of the hour. it looks like janet yellen has come to her limits. if you look at the markets and what she is saying and the market expectations of a rate hike they are different. >> i listened yesterday and read her of the transcript. here is my take away, went pretty much every single bank cannot find consensus, she did a good job saying nothing and that was the takeaway. someone who does not want to commit to what they are going to do and was conditioned by what happened with the taper tantrum and worried about what happens in the market if they signal the rates changing. there is concern on her part to not say too much. she is good at saying nothing. >> she said enough to keep everybody happy and, at the s

but he sat for 13 years and the treasury and he never did anything about it. now, if he wants to make sure that the acts on tax avoidance and evasion, why doesn't he start with the labour's biggest donor mr. john mills? yes. we all remember this. you gave his donation in shares in order to cut his tax bill. has he paid back the taxes yet? >> i'm really pleased -- i'm really pleased him i'm really pleased he wants to talk about donors. let's talk about his donors. 7 million -- >> order. the question will be heard. very simple point. i've had to make a second time. i will make it has been times as necessary. the right honorable gentleman will be heard. the right honorable member. >> 7 million pounds living in monaco 3 million pounds for michael hintze, company based in new jersey. and michael spencer who gave him a 4 million pounds and called in the libor scandal. same old tories. now, now let's give them this chance, this chance. i know he doesn't do his homework. i know he doesn't do his homework. this chance. [shouting] the hedge funds are avoiding tax to the

to go into treasurys or perhaps even cds with banks is financial suicide. there simply is no return. i'm a bit different than warren. we don't have the purchasing power he does. we're really focused in the united states. going into 2015 i just felt that it was probably wise to pick up our marbles and go home, given everything that has bonn on in europe and japan and russia. why not focus right here where we know we have some growth, we know we have some momentum. so we're really interested in u.s. domiciled companies that have growth, perhaps consumer driven growth, given lower gasoline. we're really excited about that. but absolutely we want to be fully invested in equities. you need to really coach your clients along with this and help them understand why. because everyone is fearful. when you're fearful, you're hesitant. hesitation you will make bad decisions. so we're really been engaged with our clients saying hey, look, here is why we need to be here. so hang in there. it will be okay. david: but, matt, you have a big interest in the united states. i

that compares to about 3% for real treasury tenure rate from 1990 to 2007 period. so we've made a substantial downward adjustment and that adjustment is the next effect of a number of factors. we list four going in different directions. the four we list pushing down interest rates relative to the history are number one slower froet of the labor force. two, slower growth of productivity. and both of those factors we think lower interest rates because they basically effect larger product of capital in the production process. we think that the greater income quality is pushing you have saving, which tendses to lower interest rates and we think there will be a greater risk premium on private securities, which is to say they'll be held down because of a greater demand for safe assets. those four factors alone would have argued for a larger reduction. on the other side, four other factors we think will push up interest rates one of those is greater federal debt. another one is slightly smaller capital inflows from overseas. third is fewer people in their prime saving yea

who is it that wants to buy treasuries at 1.7%?> start with the folks who want to buy the long bond. long bond is up 41% the 30 year, since january 1 of last year. >> why doesn't anyone talk about that? is it was up 11% last month. it was the best performing asset in the world. last year, the best major asset in the world. who wants to buy the yield? i do not know. it has been serving people well. the trend has been your friend and it has done very well. the question is, what comes next? >> exactly. so the fed, any quantitative easing in october, and ecb just announced $1.1 trillion in quantitative easing that starts next month and a year and a half. our fed did quantitative easing for four years. how long do think the ecb will do quantitative easing for? years and years to come because of high employment, low inflation, and the economy. it will be a very interesting dynamic to see 11 central bank is doing quantitative easing while another central bank presumably later this summer, is starting to increase rates. the 64 dollar quest

you have to take a look at what is going on in the treasury market as well. we saw a reaction a little bit more of a dramatic reaction where we saw a pop in treasury prices and they dropped in year the yield, definitely seeing a reaction there. finally, i want to take a look at the dollar. there we are not seeing much of a reaction. if you look at the dollar index it still where it was before these minutes came out. in the equity market, we are seeing a little bit of movement. now we are heading lower once again. >> as we were going over the fed minutes, we do get some breaking news out of greece. >> the latest is that we are hearing that the ecb is going to be increasing funding for the banks in greece emergency liquidity assistance. that figure has stood at 65 billion euros. apparently, they will increase that to 68.3 billion euros. basically that is that greece lenders had asked for additional is an -- ascendance -- assistant because her had been the punter withdrawals. -- there had been deposit withdraws. they are not feeling confident in the business and