tv Closing Bell With Maria Bartiromo CNBC June 12, 2012 4:00pm-5:00pm EDT
>> we certainly don't want that to happen, do we. that is it for the first hour of the closing bell, stick around, michael dell joining maria next hour. coming up on the second hour of "the closing bell" right now. it is 4:00on wall street, do you know where your money is? a rally into the close, the stock price is shruging off concerns about europe. coming up, we will hear from a stop strut guest that sees potential for a upswing. we'll see a rally from an eight month low. where will oil head next? two very different takes. take a look at how we are finishing the day with the markets at highs at 6:00 p.m.
160 points. volume on the light side once again. nasdaq picking 3u7 3 points, technology, financial, and materials doing well today. they're at 2843 and the s&p up 20 points. forget europe, greece, spain and all the rest, charles schwabs says it's the cliff making folks nervous, should we pay attention to what's in our own backyard. thank you for joining us. >> liz, i'm so happy you focus on this, we have focused on this a lot on this program, and the fiscal cliff we refer to is the expiration of the tax cuts and spending programs at year end. if nothing is done about this all of it goes away and it will squeeze americans. >> yes, what i was most
heartened by with bernanke's testimony last week. i'm not a real bear for the ultimate impact on this, you have numbers as high as 4.5% gdp, i think the chance of us going over the full cliff is very low. not only with the presidential election but the senate and the house that brings that number down. it takes a big chunk out of gdp, but the hope is of course that the folks in washington can jump in the sand box and play nice for a change. >> larry, what do you think about that, will we see an agreement? if we don't, we'll talk about dividend taxes going up from 15% to 43%. >> the first thing i will say is i don't think that is the major effect on the markets right now. i think it's europe and greek elections and so forth, i think
this will become ab issue as the year goes on. it's very unlikely the whole thing will expire. everybody on the hill knows about this. it will go down to the wire like these things do. i would say the most likely share owe is that most gets expended, but there will be some that doesn't. that's not the worst thing in the world. we all know we have to get started on deficit reduction. so if 1% doesn't get through that will be a hit to the first quarter, but i think the markets will look through it. another strong possibility is they punt and do a temporary extension of everything for six months while a new congress gets settled. >> so liz ann, in terms of this fiscal cliff, what would you like to see happen to feel good about where the market is going and vice versa. >> i happen to be a fan of the
simpson bowles report. it is very hard to come up with a bold set of recommendations given the spread typically on these commissions from left to right. i was pretty impressed with how bold their recommendations are. they have not been adopted but the understanding is they are meeting right now with 45 or 50 bipartisan folks in congress, and my hope social securis is t gets done before the election. we probably won't know anything into the lame duck session. >> if they don't do anything until after the election, you have one month to fix this and that's probably not going to happen. >> yeah, i think we really have all of the frame work there. it takes some political courage on both sides to jump in with
both feet, but that was an impressive start. >> let's talk about investing in this triermt. larry, the last time we spoke you were skeptical about things in the near term, but longer term you were bullish. >> i feel the same way now, with the greek elections coming up you want to hold your fire. it depends on your investing horizon. if you ask me if stocks are better bets than bonds, absolutely. if you're saying for the next month or two, not so sure. so this is the first time in i don't know how many years you have a higher yield. i think you have five basis points for that, and 27 basis points in the u.s. you're not getting paid to stay on the sidelines. >> great to see you, good to see you, we'll see you soon. thanks so much. on the floor of the nyse,
yesterday they hated the bailout, today a change of heart? what gives? >> we erased all of yesterday's losses. a couple things matter today. charles evans at the fed, not a voting member but important over there said the fed wok back moves. then all day european officials talking about a banking union, and german officials saying no we're not going to get one for checks unless they get more control. a real food fight in europe in the political disagreement in europe. i think that was a major factor as well pm look at some of the big sector movers today. all of the global growth sectors beaten up did better today. the materials, energy, and emerging etf had a very nice day today. a lot of people remain skeptical
because the action was in hitly, not in spain, italian banks today. the australian finance minister came out and said italy will knead the next bailout of sorts. they caused all of those in europe to say shut up. they said italy does not need a bailout today or in the future. this is merging as a kind of food fight at this point. finally, i would be more impressed with this whole rally if i saw movement in commodities, but i didn't. you see copper did nothing. brent is down 22% in the last 2.5 months. copper another indication of global growth. it made me skeptical. >> thank you, don't go anywhere, it gets bigger on this hour of closing bell from here. >> apple generates all of the
buzz in the computer industry, what does dell need to do to steal back some of the spotlight? >> is president obama out of touch when it comes to the economy? and will those comments hurt him in november? coming up, national economic council director gene sperling joins us live from the white house. tdd#: 1-800-345-2550 like a lot of things, the market has changed, tdd#: 1-800-345-2550 and your plans probably have too. tdd#: 1-800-345-2550 so those old investments might not sound so hot today. tdd#: 1-800-345-2550 at charles schwab, we'll give you personalized recommendations tdd#: 1-800-345-2550 on how to reinvest that old 401(k) tdd#: 1-800-345-2550 and help you handle all of the rollover details. tdd#: 1-800-345-2550 so talk to chuck tdd#: 1-800-345-2550 and bring your old 401(k) into the 21st century. tdd#: 1-800-345-2550
welcome back, shares of dell have been hit hard. better than 18% on the year, but shareholders getting good news today, they announced an eight cent quarterly dividend, that's 32 cents a year on a yardly basis. michael dell kicked off the financial analyst meeting in austin texas today, good to have you back on the program,
welcome. what are the messages you're trying to get across? >> we're going to be talking about our strategy and the shift that we made over the last five years to an end to end solutions provider. we built $20 billion business, almost $20 billion in enterprise solutions and services, and we believe that business can continue to grow. certainly with the cash flows we have been generating, up 5% last year, we're very happy to initiate this dividend and return more capital to shareholders. >> first dividend is 32 sents a year, eight cents on a quarterly basis, why now? what triggered it? >> it's something our board has been considering for some time, and with the consistency of our
cash flows, and the shift that we made to this enterprise solutions business, we feel confident that this is a great time to return this to the shareholders now. >> what can you tell us about it spending at this point? the last earnings report of course analyst and investors were disappointed. you talked about weaker it spending aefr tougher competition, where are we in that cycle here? >> i think certainly there are macro pressures you have been talking about on your show as i tuned in over the last 30 minutes or so. it is still the area where companies get productivity. what we're seeing in the public sector is that those organizations, you know, are pretty pressured with their spending. we talked about that at the end of the first quarter. you know we think the areas
where we can grow are really in the enterprise. we think our server storage and networking community services can be a real area of growth. we invested a lot with acquisitions and we're fuelling our future growth and investment. >> it's interesting because you did say you were working on expanding the enterprise part of the business. 80% of the business now commercial. that's a long way from the dell days targeting the young retail computer user, i guess the world has changed given apple and google success. >> it's right, and the vast majority of our revenues and profits come from institutions and businesses and governments and this new segment i'm talking about, the data center and service networking, that represents about 50% of dells growth margin now, and we think that will go further. and we will describe that focus
we have over the next day or so. >> so are the margins better on the commercial side verses the retail side? is it basely this is the new focus for the company, and i say new loosely because i know it's been that way for several years now. do you just forget about the retail part of the business and not try to compete with the apples of the world? >> we are serving a broad range of customers, less than 20% of our business is consumer, but it's actually fairly similar to the split of the overall industry. the overall industry is about $3 trillion, and $250 billion of that is consumer, and about $2.75 trillion is institution and government business. so it's really not the big growth engine that the commercial and enterprise space is. >> and ofg when you look at the numbers like 5 billion cell
phones on the plannest, only one billion are smart phones, there is huge potential for growth there. do you need to come up with new products to compete or are you focused only -- i know it's 20% of the business, but do you need to do something new in this new world of mobility? >> we're constantly introducing new products and our customers are using mobility as an engine to drive their business and produce enormous amounts of data. we're helping our customers something this onslaught of all of these devices. how do you deliver the corporate data securely on to the personal devices. these are the areas that we're working on, we think desk top virtualization is at the beginning of a rapid s curve adoption now.
dell is the leader in that. these are the things we are talk about at the lan analyst meeting. we will not compete in every area of the business, but we feel confident in our ability to grow this whole enterprise nz of our business. >> i'm glad you mention that because nothing is growing as fast as data and it needs to be protected and organized and when we look at the cloud, that's really one of the sweet spots for dell. so let me ask you about that, you mentioned the deal with the -- will the growth of dell come through further deals in the coming years or is it organic? >> it's really both. we're iing organiclally. storage is an area we have been quick active. our own property for storage
grew 24% year over year. the amount of data being stored is roughly doubling every 18 months and is expected to for the next five years and beyond. so we think there are huge markets here influenced by consumerization and tablets and thing being developed. that's driving a real change in how it is taking form inside enterprises. >> can you take us through the world and tell us where the strength and weakness is. in other words, are the managers in europe exhibiting what we're seeing on the ground right now? how tough is europe right now? >> you see a general kind of pause and caution with the news that's out there, and that's really to be expected. you know, as i talk with our customers, i was just on the phone before this call with a ceo of a large global company that just gave us a significant piece of business, companies are
looking at their costs, trying to see how do we stay productive, make sure our balance sheet is strong and make sure we're focused. that's exactly what we're doing at dell and what we're talking about. >> good to have you on the program as always, we'll see you soon. >> thank you. >> michael dell, founder, ceo, of dell. gas and oil prices going lower today, but boone pickens says don't get used to it. >> i think it's more likely to go up and down. >> is he right? the debate coming next, and the gaffe heard around the world, the private sector is doing fine. the administration will continue to try to get back on message. ♪
their men in saudi arabia unemployed. they don't want the price of oil down. they like it around $100 a barrel, and i think it's more like i to go up than down. >> not everybody agrees. we have both sides with us. we have katherine who sees the prices rebounding, and john who sees prices falling into the low 70s. >> i think we're clearly in a state of oversupply right now. i just saw the uae minister say he think it's upwards of 1.5 to 1.6. so the slow down in china and fears of europe will push this oversupply into the market traders psyche and help us break $81 a barrel and cascade down to
$75. >> why do you think it's going to go the other way. >> i agree that we're seeing inventories build in the short term, but i think in the second half of the year things will tighten up. sanctions on iran will lower supply rather than increase it. so they will have to keep it up to keep increases from falling later on. >> so you're looking in terms of supply on the market? >> yeah, i think that's a big part of the story, and certainly over the last several years, we learned when you treat commodities like any other asset class they start to behave like any other asset class. when we look at our fundamental balance, we think things will tighten up in the second half of the year. >> john, you don't see that supply as an issue? >> i don't think i'm as constructive, necessarily, maybe on the sector as katherine is. i agree that certainly demand will pick up in the later half
of the year and the saudis will have to increase. they are going to do -- i disagree with boone pickens in this. this is remembclose to what tha before. they want to stick it to iran here and squeeze them. they don't apt nuclear iran as much as the israelis don't. >> thank you so much, the president of oil today snapping that losing streak. up next, president obama planning another framing speech. she still doing demand control from saying the private sector is doing just fine. verizon wireless unveiling new data plans that may save customers money. slip-on's the way to go. more people do that, security would be like -- there's no charge for the bag. thanks. i know a quiet little place where we can get some work done. there's a three-prong plug.
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since this moment on friday. >> the private sector is seeing fine. where we're seeing weakness in our economy has to do with state and local government. often times, cuts initiated by, you know, governors or mayors who are not getting the kind of help that they have in the past from the federal government. and who don't have the same kind of flexibility as the federal government in dealing with fewer revenues coming in. >> and joining me now is gene sperling, wonderful to see you again. good to see you. president obama's comments there that the private sector is doing fine, how much damage did that do in terms of getting off message. >> i don't think it hurts at all and here is why. i think the american company now this is a president, as we know, who is not suggesting the
economy is fine, does not believe the private sector is growing fast enough or creating enough jobs, and he is the one who has been consistently out there fighting for jobs. i'm not just saying that in terms of what he is saying in his speeches, i'm talking about september 8th of last year. he said we need an american jobs act, a major plan with tax cuts for investment. cutting payroll tax in half, doing more for payroll and for teachers, that if we had passed in completion would mean a million more jobs. i think the public knows who is fighting for jobs everyday, and who has been opposing that effort, and i think that this is just put us back on the issue this president wants to talk about, which is who actually has a plan that independent economist would project as creating actual jobs in the any
objection six, 12, or 18 months. the only person proposing that now is the president of the united states. >> i'm glad you said that. people know there is a plan, i think that's what most people want, they want to hear the plan. there is all of this uncertainty out there. business executive after business executive that comes on this program and all they're talking about is the uncertainty and vacuum of information. take goldman sachs who talked earlier on msnbc. they say they don't nowhere their tax rates are going. maybe they have a lot of money, but they're not doing anything with it. listen to this, i want to get your reaction. >> we're in a tough position for the next thee, four, five months. we have been in a tougher position. the economy is not horrible, it's just not growing the way it should. there's a lot of uncertainty and people are looking at the collection and saying i don't know what i will have, what my net will be after taxes, i don't
know what regulation will be or what the result is, but it will be very consequential, so i will wait. >> how can the government keep everybody waiting for answers? >> i think there are four things the united states government could do right now to work together. number one, we could all agree that we're not going to allow the debt limit or the threat of default to hurt the united states credit standing again. secondly we can agree that we're growing to extend the tax cuts for the middle class and take away uncertainly there for 98% of the american people. number three we can agree on a bipartisan effort to do something for jobs and demand more momentum right now. and the president talked about putting teachers and construction workers back to work, and proposals that republicans long supported like
cutting payroll taxes for small bids, these are all things we can do, and even if we could not work out every detail, everybody can agree to the basic frame work that we need significant revenues and entitlement savings and we need to do it in a way that protects the most vulnerable and asks the most from those who can contribute the most. that would create certainty that we're going to work this through as a country and we will take steps to provide more momentum now. >> should the white house be taking a leadership role? what about this risk of the fiscal cliff in is the decision on the push era tax cuts being pushed off or do you think you will have a decision before the election? >> maria, what i reject is the view that the only way to deal
with the fiscal cliff or uncertain city to give up the enforcement mechanisms we all agreed to make us come together and work on a compromise of balanced revenues and entitlement savings or that we have to send a terrible signal that we will extend tax cuts for the most well off -- >> but is that signal in the middle of a slow economy, gene? i understand you talk a lot about shared fairness and you feel that that's the topic of of the conversation, making sure it's fair, but we're in a very slow economy. we all know we should be further along with jobs creation and growth in this economy than we are now, so should we put the shared fairness aside for the moment and create jobs? >> that's why it's the president of the united states out right now saying dloets a plan where we agree we'll do 100% expensing this year like last year. that sounds pretty bipartisan,
let's agree to cut payroll taxes in half for small businesses or give them a tax incentive for new hiring. those are very bipartisan measures. infrastructure, putting teachers back to work, those are bipartisan things we could do right now that would help job growth and uncertainly over the next 12 months. >> why aren't you doing it? >> we're doing it. you'll hear the president talk about this. >> no, i said why aren't you doing it, if you could do it now, why aren't you doing it? >> unfortunately, i don't imply motives, but there are too many on the hill, republican colleagues that come on your show and talk about being worried about job growth not being strong enough, will take any step that any independent forecaster would say has impact on job growth.
the president tried to put out bipartisan ideas, he is certainly willing to hear other ideas that could have a strong bang for the buck creating jobs and we're willing to do that and we want to do that, but we have to have a willing dance partner at some point when you have divided government. >> i will not bring in a republican here, i don't want to play politics, i want to bring up president clinton. this is from my interview last week with president clinton, take a listen. >> what i think we need to do is to find some way to avoid the fiscal cliff, to avoid doing anything that would contract the economy now one and then deal with what's necessary in the long term debt reduction plan as soon as they can, which presumably would be after the election. >> does that mean extending the tax cuts? >> i think what it means is they will have to extend -- they will
probably have to put everything off until early next year. that's probably the best thing to do right now. >> so gene, do you agree with what former president had to say? put everything off and don't let it expire. >> we know that president clinton made clear that he supports president obama on not extending the high income tax cuts. he was talking about the need that most people agree that after an election we have to come together on a grand compromise. >> that's not what he is saying. >> we both know that he clarified very clearly that night his comments and then repeated often afterwards that he spotted president obama completely about not extending tax cuts for the well off. he said he was confused about
the fiscal cliff hit at the beginning of the fiscal year or the calendar year, which he now understands is the calendar year, so i think driving a wedge between them will not work. >> i'm not trying to drive a wedge. >> well, when you know -- >> what he said was against the talking points, so they asked him to put out a statement. >> maria, that's just not true. that is not true at all. >> wait, this is good. so you're saying to me that no one from the white house said to president clinton put out a statement because what you said is against obama's talking points, are you saying that's not true? >> i'm saying what's true is president clinton felt he was misquoted and interpreted and he put out a clarifying statement? >> why would he do that? >> the president right before that said, and you didn't play
this part of your quote. >> i'll play the whole interview. >> what he said was they're going to try to force the president have to have extend tax cuts for the well off, and he said he shouldn't do it. so the president made very clear he did not believe hb should let the republicans force him to extend tax cuts for the well off. >> what are you doing to do about all of these defense contractors. when these spending programs go away, we know there will be tens of thousands of job losses from the people that will lose those programs. so what about these companies, what are you going to do about it? >> do i get to answer? >> of course, i adore you, gene, but this is a smart viewership. they just want answers here. >> and i want to give them a very important answer, which is many of the people in your
viewership understand that we, as a nation, have to deal with our long term debt and deficit crisis, and we put on sequesters so it would bin tolerable for them to go off. but the answer that both speaker boehner and president obama agree to when they put the sequester on, is that it would force us to come together as a people and have an honorable compromise so the sequesters would go off not because we just didn't have the nerve or the will, but because we had to come together to avoid them and engage in an honorable grand compromise, and we know that will take the shape of the bo bowles simpson report. and that it has a sense of shared sacrifice to it. so when you hear the defense contractor say we're going to
lay off people, i'm sure that's probably true, but the answer to that is to avoid it by us copping together and having a balanced deficit reduction plan that takes those sequesters off. not just to kick the can down the road one more time. >> absolutely and that is what everybody would like to see. we'll be watching, gene, and i think most of us are wishing you luck to come together and get things back on track. we appreciate your time today, gene, thank you so much. >> thank you. >> gene sperling live from the white house. verizon wireless has a new plan that says -- later, the rally today, follow through tomorrow, our stock jocks make the calls. and we love hearing from you, answer our twitter question of the day. send us a twee
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attorney, and our technology correspondent, good to see you both, thank you for joining us. why are these verizon data share plans bad? >> it is designed with the consumer of the past in mind, so the the consumer of the future. they give you a great deal on unlimited voice and text and people are using those less, and making data more expep suv which people are using more. >> they say it's to save dopplers money because they're not spinning more than they actually use. >> yeah, if you unlimited voice right now and text messaging, you might see savings, but if you use some voice and some text messages, and that's what they're doing more, the data will cost you more. >> the industry trying to find
ways to monetize the data usage and the explosion of data, will sprint to the same? >> absolutely they have to. executives told me they're looking at shared data plans and figuring out how to implement them. one of the things i want to point out here, you have a big bucket of minutes from multiple devices, but they're not all the same. a smart phone cost you $40% a month on top of the bucket, but a tablet is only $10 a month. so this will increase the likelihood that people will bring an apple ipad into their plan because they have this bucket of minutes and they can use it for less than adding another phone. this increasing the efficiency use of data among the devices, you get free mobile hot spots,
you can send out a wifi signal for other devices, not really a bad deal. >> michael, what do you think about that? >> one of the thing about the per unit costs is that it's really hard to explain. in this plan you have to pay, in addition to the data, $40 a month for a smart phone or $30 for a feature phone. with laptops and tablets, you have to pay $20 or $10 every single month just for the pleasure of using that data bucket you're paying for. why do you have to pay for the r reoccurring fee. we want to get to the breaking news disk. jpmorgan, right to the disk at head quarters. >> i'm going to take it, maria
will be followed the testimony for us tomorrow at capitol hill, but the prepared remarks have been released for mr. dimon. he says we believe this to be an isolated event. the trading losses were basically a result of offsetting existing positions. he feels terrible and the firm feels terrible that this cost sharehold eres money and that is what we have so far in terms of his prepared testimony tomorrow which you can see live here tomorrow on cnbc. he is expected to start at about 1:00 a.m. eastern time. you see a number of financials finished higher. we'll probably get more on this maria and we'll bring it to you. >> it occurs to me that jamie dimon put this prepared speech out there, but it is what was
expecting that this was a trading loss risk gone wild. anything more in terms of that trading loss? >> not that we see yet. i think some of that will come out in what is expected to be a very interesting question and answer session in capitol hill tomorrow. so far he has not discussed in these or released in these prepared remarks what those positions were. how much of it was unwound which we will be interested in seeing where they are in the process of unwinding the big trade that has lost them this amount of money. so far we don't think they have been able to unwind all of it, and the street is working against them unwinding this, so this is what i think will have to come out in the q and a session tomorrow. he speaks at 10:00 a.m., right? >> yes, we're trying to gauge how long they will go. i can't gauge how long the
prepared marks are, but i think it will be several hours of question and answer. everybody will want to get least one question in and they want the option of going forquestion >> we'll have more on closing bell live from wash wab and you will cover it on power lunch. thanks. >> thank you. >> my observation ahead of jamie dimon's publish thrashing tomorrow is coming up next on "closing bell." stay with us. [ male announcer ] when this hotel added aflac
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finally today my observation on what will no doubt be pure theater in washington tomorrow. jamie dimon testifying on the big trading loss jpmorgan announced three weeks ago. the hearing is entitled a breakdown in risk management. what went wrong at jpmorgan. it's reignited the debate if the big banks need to be broken up and if they are too big to manage. those would be worthy
discussions. if this goes like virtually every other hearing in the past where a so-called fat cat a ceo is hauled in front of congress dimon will serve as a wealthy pinata. >> mr. lay, i have concluded that you're perhaps the most accomplished confidence man since charles ponzi. i'd say you were a carnival barker except that wouldn't be fair to carnival barkers. >> a schoolteacher, a plumber or policeman makes on average $40,000 to $50,000 a year. yet they had to pay 25% tax. you make a billion dollars. yet your rate can be as low as 15%. is that fair? >> i'm going to ask the three executives here to raise their hand if they flew here commercial. let the record show no hands went up.
second going to ask you to raise your hand if you are planning to sell your jet in place now and fly back commercial. let the record show no hands went up. >> let me tell you the context is clear. june 22 is the date of this e-mail. boy, that timber wolf was one [ bleep ] deal. how much of that [ bleep ] deal did you sell to your clients after june 22, 2007? >> what hotel are you at in the city? >> at the ritz carlton? did i hear you correctly? >> yes. i will never forget what alan greenspan told me when i asked how he put up with all the hearings with shrill lawmakers. he said, i try not to speak so much. i know at the end of the day this is just for them to hear themselves talk and look smart. only john corzine escaped the harshest treatment despite the
ritz carlton moment. he was handled with kid gloves as a former senator. membership has its privileges. we'll be live from washington for the circus. among my bests senator bob corker, david vitter and kay hagan. also senator bernie sanders who called on jamie dimon to step down from the board of the federal reserve. that's live tomorrow from d.c. what will questioning jamie dimon accomplish? we asked you and you tweeted. tony friend says nothing. john wells says, the testimony will establish if you are a private company it is against the low to lose money. but if the government loses money, it's not a problem. david tweets dimon testimony, nothing more than a chance for political sound bites from clueless politicians. thanks for tuning. in. send us your comments. with e eel get them on the air. that does it for us.
see you tomorrow from d.c. i hope you will follow me on google plus and twitter. send us questions you want answered from the senators we have with us from washington. tweet the questions and we'll get them on the air. "fast money" begins after the break. stay with cnbc. see you tomorrow. have a great night. [ male announcer ] citi turns 200 this year. in that time there've been some good days.
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