tv Closing Bell With Maria Bartiromo CNBC May 30, 2012 4:00pm-5:00pm EDT
we'll find out. plus, the white house economic council for bill clinton says we all secretly want bigger government. he'll tell us why coming up as maria bartiromo continues now with the second hour of the "closing bell." i'll see you tomorrow. >> and it is 4:00 on wall street. do you know where your money is? hi, everybody. welcome back to the "closing bell." i'm maria bartiromo on the floor of the new york stock exchange. stocks giving back all of yesterday's gains and then some. that means the dow will go to entire month without having back to back gains today. it's the first time that's happened in two years for the dow. meanwhile, the facebook flop continues. the stock falling below $28 a share several times in the past hour. the stock fell another 2% and has now fallen 26% since going public less than two weeks ago at 28. check this out in the eight days that the stock has traded, it
closed down six times, including today. here's a look at how we finish the day on wall street, meanwhile, dow jones down 161 points. it's down to 12,419. nasdaq under water as well, down 33 points, better than 1%. s&p 500 gave up 20 points, 1.5% lower at 1313 on the standard & poor's. may just goes away the sell in may strategy and the dow will be unable to achieve the gains and could this month action be an indicator for what is ahead for the month of june or does june turn it around. back with me is joshua brown for fusion analytics. wealth management and amanda
drury. thank you for joining us. let's take a look at what you're expecting in terms of the month of june. mark, let me kick this off with you. and dealing with the high earners and are they risk adverse and investors we have seen have been risk averse and they said we're pessimistic. we've actually spent a fair am of time and sell in hey, go away, you're going to miss a wild ride and and we think at the end of the day, the european fears and anxiety exceed a little bit.
corporate earnings, cash on the balance sheet. little bit of labor improvement. and we have the ammunition for reasonableness this year. >> i want to come back to you on the summertime. i'd like to know what you are in fact envisioning this summer. how do you see it? what are you expecting for stocks? >> well, we think the second half would be better. the last two days are a perfect indication where you just can't get any traction. it was one day risk on, one day risk off. when you have that level of your honor uncertainty, it's going to take us out of perg ga tore and we're going to stay in this narrow trading range and we see a little visibility. that's the bad news. i think the good news is that we probably have fleshed out a lot of downside and i think a lot of that risk certainly with solidity. we don't have a lot of downside. i think it's a situation where
people can look at individual stocks and even looking at where they are in the bond market and say, look, there are ways to make my assets productive. i can't afford to have them not be productive because this is going to be a very drawn out process. >> drawn out because we have the election in november, mandy, and a lot of people are saying there's not a lot that is going to happen. we have the june 17th elections in greece? >> we certainly do and certainly the market is going to be going from headline to headline until we get clarity of what is going to happen on june 17. the question is, how do you galvanize the portfolio for whatever outcome there is on june 17th but i also want to say that how we just seem to not be gaining any traction, i would like to point out or as bad as things seem here in other markets, if you look at the s&p 500, for example, doing a whole lot better than the emerging
markets with the u.s. index as well, and the portfolio is the way to go and what about that, the place to be was outside of the u.s. emerging markets are hot. that's where the growth is. still want to be exposed, or not? >> we have been exposed in the emerging markets. we have been overweighting mark kelts, actually. we're taking a close look at that. we're lightening up on that a little bit. the base portfolio is really domestic large cap high free cash flow kinds of equities. we've been saying this for a few months. we're determined not to lock in negative real yields in fixed income and hide there. hide in large cap domestic great names and hedge in long-short equity. don't lock in negative.
>> joshua brown, and then there's facebook. now, 2011 revenue, i have a $3.76 billion. how do you value facebook? do i want to look at revenue or advertising metrics? we recognize that the stock was priced way too high. how would you look at it in terms of valuing the company? >> i want to come back to the points that the other gentlemen make because there's an important story here. on facebook it's very simple. if you believe they can earn a dollar in 2013 or 2014, take it on a pure price to earnings multiple and understand the fact that you take a wild guess. other than that, it's really tough. momentum stocks, once the spell is broken and the momentum is going, there's no true way to value it. i don't think that will happen to facebook. just getting back to stocks or not, i don't want to come off like i'm really gloomy. there are some things that are
working. i'll tell your viewers very quickly. look at the biotech sector. no one ever talks about it. if you look at the etfs that own all of the bioteches, they are all making not only 52-week highs but highs in all cases, it's an interesting way to look at it. say, hey, these companies are not cyclical. it's a secular company. they are going to spend as much money as they can trying to do that. one other, walmart, massive breakout. look at a daily, a weekly, monthly chart. this is a decade breakout. >> can you imagine, here is a company that literally tripled earnings over the last decade and price trended within a ten-point range. look at what the stock is doing right now. what does it signal for the economy? not anything good, of course, because that's really a story of people going back to the discounters. this is a huge break out. the stock is working. it's a 2% yield.
>> stock is up 11% in a three-month period is what i'm looking at over a three-month period. >> take that chart back ten years and you'll be amazed. >> can i jump in, you're pluj plucking out some of the good individual stories and it's very hard to get the retail sectors, the moms and pops interested in the market again. a lot of people were hinging their hopes on facebook, they didn't invest in google. i thought maybe, just maybe i'll look at the jackpot with facebook and it didn't happen. what are we going to do to get the mojo back? >> the boomers have a lot of baggage. they've been burned very twice in the last eight years. as they come into their own peak spending cycle, that will erase the negativity. it will happen but it's not going to happen because of the volatility. >> we appreciate your time. let's get you back to jackie
deangelo. over to you, jackie. >> we're taking a look at shares of tivo. they reported just after the close, first quarter loss was 15 cents. 17 cents was the consensus estimate. also, second quarter guidance. net loss in the range of 28 to 30 million. looking like the street is not liking these numbers. tivo is down 2.5% at 8.72. where should investors go for the biggest yield? santelli dukes it out next. and then empire state number one for residents fleeing the state. that's because of high tax rates. are lawmakers paying attention? plus -- >> somebody has his hand in your pocket. it's the hand of big government. it's taking four months away, $1 out of every $3 in his paycheck. >> 50 years after that barry goldwater commercial and the big
debate over government is increasing. going toe to toe against mitt romney, that's coming up. do you think it's realistic to expect big cuts with social security in tord shrink the big government? we'll get your responses on the air coming up. back in a moment. the teacher that comes to mind for me is my high school math teacher, dr. gilmore. i mean he could teach. he was there for us, even if we needed him in college. you could call him, you had his phone number. he was just focused on making sure we were gonna be successful. he would never give up on any of us.
welcome back. searching for ways to make money in this market with the ten-year bond dropping to a record low, where else can you hope to get a return for your money except stocks? bob pisani and rick santelli join me to weigh in. increasingly we're seeing money going into things like money markets, savings accounts. very, very low yields. you're seeing huge volume into treasury funds? >> on the one hand people are going for safety. on the other hand, people are still going for yields. i noted all day today that the tlt, the biggest bond fund out there has got huge amounts going in. it's been trading for ten years and the important thing is
people are showing no signs of taking money out. on the other hand, people are also stretching for yields, the jnk have been holding up very well. there were sellers last week apparently but this week it's been holding up. that's yielding 6%. >> rick, another area has corporate bonds. you are getting some competitive yields with some of the corporates. you have a record low with the ten-year. where are you finding this market? >> there are three areas that we should pay attention to. you look at the barclays intext, index, not bad. if you look at 680 over but you need to be careful. munis, everybody is nervous about munis. there's only been 11 defaulted issuers and you're going to get
a 260 do 250 yield and there's tax benefits. if you're in california, over 10% sales tax. if you're in a 35% federal tax bracket. these really make up the difference and of course some of those tax issues going into year end for whom the bells toll may change. so these are things to pay attention to. >> right during our report the bells are tolling now. >> the s&p and dow futures closed. they closed a quarter past the hour and where the stock exchange closed at the top of the hour. that's one of the reasons that you have to go through the exercise to figure out fair value in the morning. >> thank you for that, rick. in terms of yields for stock, it's really the dividend payers barring any performance. >> it's below 2% on the yield. when you've got the s&p actually yielding more than the ten year, you've got a problem. you've got a real mismatch there
and that's why there is no place else, most of those big funds are 7%. there's no place else. money has no place to go, maria. people who can't stand getting 1.3% in treasury yields don't want to go in the stock market. they don't want to deal with the treasury yield. they can't stay in cash because there's 2% in inflation. they are being forced into the higher yield funds. >> yields are going down, taxes are going up. go ahead, rick. you've got the final word here. >> one final thing, ironic as it may sound, don't estimate price appreciation. you have 161.10 that doesn't sound interesting but if something happens to spain, that could push it down 30 basis points. that's price appreciation as well. >> good point there, guys. see you later. i appreciate it. yields going down and taxes, they are going up and people are moving out. new yorkers leaving in droves due to high tax rates. it's happening everywhere. lower tax, will that mean lower tax revenue for states?
when higher mortgage rates kickstart the mortgage market. you're watching the "closing bell" on cnbc, first in business worldwide. worldwide.and had your shoes shined. well, i made you a reservation at the sushi place around the corner. well, in that case, i better get back to these invoices... which i'll do right after making your favorite pancakes. you know what? i'm going to tidy up your side of the office. i can't hear you because i'm also making you a smoothie. [ male announcer ] marriott hotels & resorts knows it's better for xerox to automate their global invoice process so they can focus on serving their customers. with xerox, you're ready for real business. so they can focus on serving their customers. recently, students from 31 countries took part in a science test. the top academic performers surprised some people. so did the country that came in 17th place. let's raise the bar and elevate our academic standards. let's do what's best for our students-by investing in our teachers.
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revenues, up on "the hunger games" release but then we saw a loss of 17 cents a share. that impacted by $38 million charge in costs associated with the acquisition of summit entertainment. we're seeing this stock getting hit in the after hour sessions as well. it's down nearly 3% at this point. 12.47. maria, back to you. millions of americans are voting with their feet these days and fleeing states with excessive tax rates. take a look at this. 3.4 million people are leaving new york lost nearly $20 billion in revenue because of those tax rates. in many cases, high taxes are needed. thank you both. thank you for joining us.
>> thank you. >> why are higher taxes a big mistake for states? >> because they can fly across the border as thousands of people move to zero income states like nevada and people moving to florida and massachusetts people moving to new hampshire. it's not just new york but basically any state or for that matter, where it's too greedy and they penalize too harshly, they are going to lose out and it's not only the taxpayers that move away but the taxpayer income. >> if you tax people to death, they are going to leave and then you lose all of the taxpayer revenue? >> if you tax people to death, what states are finding is that
they can't cut it too low. the effects exist only in the heads of accurately measurable anywhere. if you cut taxes, what a lot of states are finding, oklahoma was going to cut taxes. the business community came in and said, we need infrastructure. we need schools and roads. >> i don't think anyone is arguing for zero tax rates. >> i don't know. in fact, no tax states is exactly what they are looking -- what the republicans were asking for in kansas and coke r oklahoma. >> well, i'm completely in favor of states getting their income taxes because if you look at states like texas, wyoming, south da coat tarks tennessee, florida that don't have state income taxes, they grow more
jobs and have the infrastructure. >> where do you get the revenue? >> you have taxes that are less destructive. sales taxes, i don't like them. >> bottom line, we saw an exodus in new york. look at the numbers. new york is seeing an exodus. down 22%. isn't this just clear, people are saying enough is enough? not necessarily zero but you can't tax the rich to death. they will leave but you can't tax them zero because you're going to undercut the infrastructure. i disagree because they are looking at unemployment or median income and, by the way, the population trend that you're highlighting, that's a lot of
people, a long-term trend of a lot of people moving to the sun belt. that has little to do with taxes. >> but taxes are lower there. >> wait a second. are you saying, jared, that people do not leave when they are -- when they don't like the tax situation? >> no. >> are you disputing the fact that we are seeing exodus? >> i do agree with you that people who feel overtaxed will leave. what i'm disputing is the notion that all of these exits that you are seeing from new york, from california, are exits that are generated by taxes. in fact, in some of these states you have the exodus when the taxes are going down. you can't isolate the taxi fekt. >> where do you have an exodus when taxes are going down? >> massachusetts, new jersey, new hampshire, some of those states are shedding -- >> a tax cut through right now, he's trying to cut taxes. >> agreed.
>> if jared thinks that massachusetts and new jersey are an example of low tax states, let me give you an international example which i think is great. the sixth biggest french city is london. because so many french have moved from the high taxes in france and they are going to get worst with this crazy milan and they've moved to london. i think they are at least better than france. >> 83% for france, right, for the highest earnings? >> 75%. >> but there's an 8% tax on top of the 75 called the social conscious tax and takes that tax rate up to 83%. to discourage people on that point, it's too low that leads you to undermine your education and infrastructure. out this oklahoma, they very conspicuously decided not to go
to a zero tax rate because they were worried about the impact on the infrastructure and education. i think they've made the right choice. >> really quick, if we see all of the bush tax cuts expire, what do you think happens to the economy, jared? >> that would be quite damaging to what is already a fragile recovery. >> what do you think, dan? >> i guess we're all going to get along and have a group hug. i agree it's not good for the short run or long run for the economy. we don't want to be france. >> big hug. thank you, guys. we'll see you soon. >> thank you, maria. >> appreciate it. see you soon. maybe it's counterintuitive but maybe it's true? our panel will chime in. do people like big government without realizing it. send us your feedback. do you think it's realistic to
expect medicare? send us a tweet. coming up, you're watching the "closing bell" on cnbc, first in business worldwide. countries took part in adwi1 science test. the top academic performers surprised some people. so did the country that came in 17th place. let's raise the bar and elevate our academic standards. let's do what's best for our students-by investing in our teachers. let's solve this. ♪ i hear you... ♪ rocky mountain high ♪ rocky, rocky mountain high ♪ ♪ all my exes live in texas ♪ ♪ born on the bayou
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>> okay. welcome back. it wasn't just europe, the pending home sales set the tone coming in. they were weaker than expected in the face of pretty good gains year to date. the data led some investors to post sharp losses between 3.5 and 8%. ouch. but europe had a big hand in what happened today. eu finance minister reportedly said, quote, euro zone governments have been discussing euro bond variations. the headlines to watch for on
june 17th, when the european stability mechanism will be up and running and whether greece can can convince the esm to have a bank charter, that will be vital. that bank charter can be used by the esm to pledge collateral with the european central bank for funds. that has been the underlying issue for this market. pending home sales have fallen to a four-month low as potential home buyers are hoping to snag an all-time mortgage rate from the treasury market. falling below the september low, 1.61%. that's got a 30-year fixed mortgage for those with the best credit, sitting about 3.75%. is this preventing potential buyers to fall further? our next guest says if rates rose, they would get buyers into the market and boost sales. joining me now is dan, washington columnist from
reuterss and on the other side of this point is fred glick. good to see you, gentlemen. thank you for joining uses. >> thank you, maria. >> dan, most people would think that raising mortgage rates would be really ridiculous. why would it be a hard thing? >> it's the counterintuitive take. and we have banks that are funded by the government but those on the bubble, they are the questionable ones and banks are very worried about mortgages that are not perfect because of put back risks. so in those cases, a little bit more yield and interest rate, you are seeing close to 4% rate that has encouraged them to buy and they are going to have to
get rates that they are not going to be around forever. >> what do you think about that. >> would higher rates get them off the fence? >> they don't care. once you get a job, once you are comfortable with a job, i remember back years and years ago rates were at 7, 9, 11, it didn't matter. the fact that hu a job was all that matters and you can comfortably afford it. and if you loosen up the credit guidelines, it depends on the market itself but us all about people being comfortable. >> anecdotally speaking, i know quite a few people are sitting on the sidelines.
a lot of people are making sure that they are at the bottom. until that happens, rates are low and they are waiting to find that deal. if rates start rising, they would say i don't think. >> how much getter can it get at this point? >> yeah. >> well, and -- >> but how much urgency is there? if they think rates are going to be low for a year or two, they don't have to wait for that bargain. >> yes, there are the neurotic spreadsheet doing engineer ohs who are waiting for the absolute bottom. and it's just not going to happen. they are not going to get perfect. it doesn't matter. it's all about comfort. i've talked with somebody at orange county that is trying to buy a house and they are cash deals. they are killing each other. it depends on the market. >> so are they not comfortable right now? >> they are still comfortable i don't have a lot of friends and family in south florida who prices are quite low compared to
a few years ago. they don't want to see another 5% go down and basically tourism and there's ton of supply, yeah, it could go down. if you're in new york city, philadelphia, i go through it with people today. it's insane that it's a seller's market in some particular areas. it's all about the area. >> i think a good analogy is the home buyer's credit from a couple years ago. you saw a huge boom and the situation was changing. again, you'd see it, as rates start climbing 4.5%, 5%, people are going to say -- >> maybe they feel like i don't want to miss it. maybe the cycle is about to
turn? you wonder that. gentlemen, thank you. we appreciate that. has the market hit bottom? there is an answer and you may need to look at stockton, california. jane, over to you. >> this home was once valued at $2675,000 and now on the market for a one-month supply of homes here. >> i think we have. i've said that before. >> paul jacobson listed this house for $165,000 si sells to families, not investors. it's been easy. the problem is prying the shadow inventory bank and.
>> the market was going up because of the ridiculous loans and now the banks are starting to control the inventory. >> this is what a house looks like with every piece of copper stolen. >> a more conservative investor will offer 25,000 cash. >> that's exactly what the home sold for four years later. >> reporter: but just as prices are stabilizing, stockton faces bankruptcy. residents gathered for a town hall and moran worries that it can hurt prices again. >> we went down under, short sailed and this is where we are at now. >> reporter: bottom line, times are still tough but even new renters feel that if this isn't the bottom, it's close. >> it can only get better. it will get better.
another couple years hopefully we'll be able to buy another house. >> reporter: prices are still falling but for a first time in a long time demand is outstripping supply. back to you. >> that's a good point. jane wells, thank you. up next, the heat is on. it's not exactly rocky but we've got the former top economic adviser to president clinton in one corner and mitt romney's top in the other. and the latest on greece. speaking of recoveries, i'll have an exclusive with morgan stanley's ceo tomorrow. that's james gorman tomorrow at 4:00 p.m. eastern right here on the "closing bell." you're watching cnbc, first in business worldwide. >> announcer: time now for going global europe. >> hi, everybody. these are the stories that we're
watching in europe tomorrow. so far can germany's jobless rate continue to slide? we'll have the latest labor stats from the country. ireland surpassing their votes on europe's fiscal treaty. live coverage on that. and can thomas cook get back on track amid the downturn in europe? tune in to cnbc world to catch all of the action overseas at the european headquarters. going global for your money. sometimes investing opportunities are hard to spot. you have to dig a little. fidelity's etf market tracker shows you the big picture on how different asset classes are performing, and it lets you go in for a closer look at areas within a class or sector that may be bucking a larger trend. i'm stephen hett of fidelity investments. the etf market tracker is one more innovative reason serious investors are choosing fidelity. get 200 free trades today
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[ male announcer ] sustainable solutions. fedex. solutions that matter. zumiz in the after hour session jump in may in same-store sales. we're going to get more retailers reporting tomorrow but zumiez down 4%. >> time and time again we've heard the calls to shrink big government. we ask and you tweeted us, here are your comments. i'm sorry. brad watson writes, it's
realistic but washington does not deal in reality. apple acolyte tweets, the alternative is disastrous. and steven tells us, any cuts in medicare or increase in taxes will not be used to pay down so why use it at all? let's get both sides of the debate. former economic clinton adviser with me now, high school of business, americans love big government even if they don't realize it. on the opposing side, mitt romney and kevin with aei. thank you both for joining us. >> thank you, maria. >> many americans who criticize big government would support it if they understand the meaning of big government. please explain. >> i think it's simple. you know what the statistics are. you have 20% of medicare and medicaid, 20% in defense, about 5% or so, a little bit more in
interest payments on the debt. so i assume people on survey after survey don't want to cut social security, medicare and medicaid, they are worried about cutting big cuts in defense or might say everything else. and then you have to say, well what is everything else? science, infrastructure, education, food stamps, aid to children who are very, very poor, ppoo poor, pell grants. i want people to understand what the government spent its money on and then make the hard is choices. >> that's a good point. i don't think people really know what the government is spending money on and how they are spending it. is there a breakdown? i've been looking for it for a couple of years. >> you know, basically as we know, a number of people who have complained about medicare don't recognize the fact that it's a public program. so for starters there's a huge gap between one of our biggest
programs, a publicly funded program, and people's understanding of that. i think we have a lot more work to do. i suggested that we have an app on our mobile devices which let's people sit down and say, okay, you want to cut a trillion dollars in spending, here are the options, you choose. i don't think people like the o options. they like more of the government programs from which they benefit. >> kevin, what about it? is it realistic to cut medicare and medicaid in order to cut big government? >> if you look at the long-run outlook, debt help by the public is going to triple between now and 2035 because these programs are really out of whack that they are offering benefits that are much higher than the tax revenues coming in. i think laura is correct. what we need to do is look at how we spend our money and make
the hard choices about how to do it better. i think the president's own commission, the bowles/simpson commission made cuts to medicare, medicaid, and social security. if they made those cuts because they were trying to restore balance really to protect these popular programs and i think that's really what politicians, or at least the reasonable politicians of both parties are proposing. let's make them sustainable so people know in 2035, they will be there for them. >> the whole simpson/bowles recommendation, a lot of people really bought into that and then i feel like there was just -- we didn't hear about it at all and the whole idea was blown off. >> i think the people -- >> go ahead. it's okay. >> i was going to say -- >> president obama dropped it, is what happened? i have a short thing to say. president obama dropped it. he thought perhaps it wasn't politically feasible for him to do t if adopted the commission's proposal, it might be law right now. >> what i say about this is number one, certainly there are a lot of people that like simpson/bowles. basically what they liked about
it is it came from a bipartisan group. however, however it didn't get the super majority it needed to move to congress because the republicans on the committee didn't vote for it. and then there was a vote against a simpson/bowles-like budget by the congress. so basically people need to understand that there isn't agreement on simpson/bowles. in fact, there's not a lot of damage about simpson/bowles and then the other thing i would say, we were talking about big government. another way to measure size of government is revenues as a share of gdp. they are near 15%. they were below 15%. they are at an historic low for the post world war ii. people need to talk about, are they willing to pay for the social security medicare student loans, et cetera, that they want. >> i think people get it recognize that we can't afford the programs that we have right now but people don't come out and say, hey, we can't afford
this. this is what we need to do even though it's not going to impact people 55 and old ohher today but future generations are not going to have it there. how do you get the buy in, kevin, from the people, to make the hard choices that need to be made? >> well, i think it takes leadership and it takes a much different path than the one we are on. if you go back and look at president clinton's term, there was a time when we thought that the era of big government was over. if you look at u.s. history, only in world war ii and in the first three years of the obama administration, if we had government to gdp bigger than 23%. the era of big government is back and it's back big time. we've gone in the wrong direction and i fear what is going to happen if we continue on this path we're going to see a crisis like we see in greece, where a lot of commitments made in the past have to be broken because you didn't get ahead of the curve and we definitely see the failure of leadership. they had the supermajority in
the senate and i think we're suffering for that now. >> can i say a couple things here? >> sure. >> number one, the reason the government shares gdp is so high, it's only 2% percentage higher than president reagan. he had 22.4%. obama has 24.4%. >> right. >> the next thing is, that was largely temporary spending because the economy was in the hole. the economy was in a great recession. a lot of that spending is over. it's temporary. it doesn't added a to the long-term debt. the third thing i would say is president obama has issued a budget plan. people should read it. the cbo has scored it as bringing discretionary spending down. >> laura, we haven't had a budget in that entire administration. >> i'm sorry. i'm sorry. we have had plans to -- we've had an economic crisis where the appropriate thing to do was to provide temporary support for the economy. and that's what was done with the agreement of the congress and that was the right thing to
do. >> all right. we will leave it there. laura, kevin, talk to you soon about this developing story. tomorrow's readings on the labor marked bring new into the market. we will take a look at that and next, three top strategists give us help on what will move your money tomorrow. then paying over $5 million in back taxes. no wonder grease is in trouble. stay with us. teachers get the training...o ...and support they need? schools flourish and students blossom. that's why programs like... ...the mickelson exxonmobil teachers academy... ...and astronaut sally ride's science academy are helping our educators improve student success in math and science. let's shoot for the stars. let's invest in our teachers and inspire our students. let's solve this.
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>> 30 seconds on the clock and my next guests are joining me right now. jeremy lawson and the groups are telling zachary and brook stone. the clock is on. 30 seconds. what do you watch? >> tomorrow is about the adp report. a weak report could feed into that sentiment and make people feel much more nervous about the global outlook. >> you are up. what are you looking for? >> we look at cyclerships of the market. we are not day traders. the usual suspects will be the headline news like jobs and gdp
and europe. we look at the market like a big onion with multiple layers. if you peel across, i will give you two examples. the spread between the two and 10-year bond is yield flattening. that's a recession potentially. the vix forward curve is projecting higher volatility. not good signs. >> we have to go. what do you watch? >> i agree. people should set their alarms for the 8:30 gdp members. we work and think there is potential for the number to be stronger than expected. chemicals is a bell weather of the economy and early indicator of what's going on in the manufacturer sector. we are see a lot of investment and people being put back to work and we are bullish about the economy in general. >> thank you. thank you for giving us your thoughts in 30 seconds as well. we will watch all the stories
tomorrow. why greece may be putting itself in the fix it's in. my observation is next. a living breathing intelligence bringing people together to bring new ideas to life. look. it's so simple. [ male announcer ] in here, the right minds from inside and outside the company come together to work on an idea. adding to it from the road, improving it in the cloud all in real time. good idea. ♪ it's the at&t network -- providing new ways to work together, so business works better. ♪ so business works better. if you made a list of countries from around the world... ...with the best math scores. ...the united states would be on that list. in 25th place. let's raise academic standards across the nation. let's get back to the head of the class. let's solve this.
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observation on just how broken greece has become. at a time they are supposed to be cracking down, do not pay the state. clear evidence it could be a lost cause. a singer named tolis who is married to a former greek politician is convicted of owing 5 million euros and 500,000 more in fines. he said it was too much and he didn't have the money to pay it. instead of sending him to prison, a judge gave him a three-year sentence with parole and was told he had to repay the euros by just paying five euros a day. we did the math for you. it would take just 274 years to pay the 500,000 euros in fines since this celebrity is 70 years old. evading taxes is an epidemic in greece. they oh, 15.8 billion in total.
that's an average of 3.58 million per deadbeat. this is the lack of will on collecting taxes. they are going to take decades to miss and it forces the changes through much more quickly and painfully. the june 17th elections, one wonders if the will is there. that would work to fix these corrupt practices and usher in economic reform that will finally get the debt under control in greece. the greeks control their destiny. what is frightening is they may control much of the world's fiscal future as well. before we go, take a look at the day on wall street. the market stat, check the decline of 161 points. 1.3%. the dow closed higher only five time this is month. posting the worst decline in two weeks. all ten falling today led by energy, financials and