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tv   Closing Bell  CNBC  August 15, 2012 3:00pm-4:00pm EDT

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bob barker. barker's beauty is still what we'll call them, and it's about time. >> put your name forward. >> thanks for watching "street signs." >> time now for "closing bell." hi, everybody. into the final stretch, this is "closing bell." the market continuing to tread water today despite a flurry of economic news today. >> a big improvement in production. the home builder sentiment was good. some say an improving economy would hurt the odds of a fed bailout, that may be why we're not seeing a big rally. tind kind of a sideways move. if you're basing your assumpt n
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assumptions on today's market on that, you're wrong. the nasdaq is up 13 points. the s&p still above 1400 with a gain of 2.66 points. one thing that stands out today has to do with the empire fed report. over 50% of firms say uncertainty is provoking them to rethink adding to their payrolls and creating jobs. is this a real concern especially with the department of labors report just days away? >> we keep hearing about this. we're going to talk with the ceo of cisco in terms of that comment about adding heads to the payroll. let's get to nathan backrack, and rick santelli.
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michael, are you buying this uncertainty argument? >> i certainly do think that uncertainty does play a role when you're looking at with the empire number. it does give us some pause here. when i travel in, you know, sometimes talk to clients that own small or medium size business, they're telling me that they're business is just fine, and they want to hire somebody, but they're uncertain whether or not they should given the upcoming election, given the potential for the fiscal cliff and the ramifications for that and what it may or may not be. so i do believe there is uncertainty that's affecting this market, it's not the only factor, but there are clearly issues there. >> nathan, yesterday, we talked about if i'm a ceo right now, and there is a fiscal cliff and
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global slow down, you would continue to sit on a pile of cash and not create more jobs. is that what you think? >> yes, and of course. take yesterday's numbers on retail sales. typically when we have a seasonal adjustment we subtract those numbers. this time we added them and all of a sudden we didn't have what would have scared the market to death which is four months in a row of bad retail numbers. she knows nobody is buying printers. she's waiting around and she doesn't get paid to lose money. and yet we have a slow by steady melt up in this market. what are you hearing from insiders, do you want to be in our out? >> and guests have been talking about uncertainty and all of these issues. if you look at insider selling, executive companies, they may not be certain on what to do,
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but what they're very certain to do is to be selling their old stock. look at the numbers that came out for the weekend. 2.7 billion insider selling, insider buying 170 million. you'll always have more selling than buying, but we're seeing the inside selling by company executives that would be more characteristic in the fall, later in the year. insiders are selling aggressively into this melt down. >> and paul singer was telling his clients that if you own government debt, now is the time to get out. it's clear with yields rising that people are getting out, especially international investors. >> yes, the conservative steepened dramatically. i don't disagree, but in 16 trading days we went from 138 to a current test of above 180 in a tentuure
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tenure. i think a good chunk of the selling is dell. i would be careful. between 180 and 2%, this is a range that can hold when you look at jackson and europe coming back from vacation. >> it's not just the uncertainty though, right? it's actual lousy revenue growth. that's not an uncertainty, that's a fact. we didn't have revenue grougt and market impact in the second quarter. >> listen, we had this high -- we've got 2.2, and 2.3. we have done this eight times. nothing will move past 2.5 or where we are now. we'll see rates go down again, even to everybody's amazement, because there's not a lot of order books out there. >> who is laughing? >> i am, i totally agree. >> i was trying to get the
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actual language, if you read the letter that came out today, it's more or less a "you better sell today because if you own government debt in the u.k., japan, or anywhere in europe, this is your last chance to get out of a twenty year trade." i this a lot of people said the same thing a year ago. >> there is another way to frame the risk. i think it's a time risk, okay? i thi you have three weeks, here, where the stint in this market finding sellers overnight. they assume it's chinese and they can't prove it. the next two weeks you're much more vulnerable to selling than buying. >> we'll see this every day for the next two weeks, bill. >> the money will go around once just like in twine. there will be stimulus, it will be spent, and they'll have 3
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trillion instead of 2 trillion, and you won't have inflation or growth. >> michael, where would you be putting money to work here? >> i'm a long only portfolio manager, i have about 30 stocks, so we're constantly putting money into equities. i think they generally look inexpensive here, still, i think if you get a whiff of good news coming out of europe or washington dc or elsewhere, then the market is acting as it has recently, as a coiled spring here. maybe that's because there is low volume in hedge funds and it's still short, but i think it's kind of difficult to be out of the equity markets at this point given that it's very hard to time these sorts of things. >> particularly where rates are right now. thanks, everybody.
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see you soon. let's get to kayla tausche. >> a source close to the libor case says that eric schniderman issued subpoenas to a number of banks. other banks could be involved in this state examination. they have fined barclays for this issue abroad. we'll have more on this as we get more confer rations, but the state ag's office -- >> in the final stretch of trading for the day with a market holding on to gains. cisco is a name we're watching closely. don't go away, we're just getting started on this special edition, jam packed of "closing bell."
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coming up, a bevy of market movers, first richard fisher talks stimulus and what he thinks about fed basher paul ryan. then cisco ceo john chambers weighs in on earnings. plus, network wide coverage of this year's historic and devastating drought. and, look who is back. can captain kirk help priceline stock get back to the stars? [ male announcer ] how do you trade? with scottrader streaming quotes, any way you want. fully customize it for your trading process -- from thought to trade, on every screen.
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okay, we have about 50 minutes left in the trading session if you're just joining us, we'll get you caught up here.
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the do you drifting in and out of positive territory today. up now three points. but about a 50 point range just like yesterday. lets look at maria's favorite indicator. volume. talk about the dog days of summer, we're in august, it looks like it. right now we have had the cumulative 1. billion shares changing happeneds here where average daily volume so far this year has been 3.7 billion. we're well below that number right now. and doubts are growing that the federal reserve may ease next month. retailers blowing out the numbers for the month of july and the trade deficit narrowing in the month of jug. not everybody is buying it. i think it needs to be substantial enough that it off sets some of the shocks that
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we're getting from abroad and some of the concerns that people have with how weak the world economy has been. so we're in a global slow down. that would argue for a quantitative easing program and one of a sufficient magnitude that it has an impact. >> is he right? we bring in another member of the federal reserve. richard fisher joining me now exclusively. thank you for the time. i know you argued against stimulus, did the boston fed president change your mind there? >> well, eric and i have different views, but that's part of the process. you just talked in your last panel about uncertainty and what index indicates and the release of the national federation of independent businesses and what ceos and others were talking about. i don't think any amount of stimulus will deal with this uncertainty and inabout of companies to budget and plan.
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if you can't budget you can't spend and if you can't spend you can't hire. we put a lot out there. it has not been used. we have a huge build up in reserves, and my question with my colleague social security what good would it do to put more out there because what we have out there does not have much effect in term was of employment. >> it feels like the fed keeping bails out the white house and the white house is giving a free pass to not deal with the fiscal cliff, the same with congress, do you think the federal reserve, if you do opt to do more stimulus, that it looks political? >> i worry about that, but we are studiously nonpolitical. i checked my policy at the door seven years ago. nobody talks about a particular candidate or party. we want democrats and republicans to get their act
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together. you know businesses plan on a three-year budget cycle. they're not going to help businesses plan. if you can't plan you will not plan cap x. if you can't plan cap x you cot plan your payrolls. it's a theoretical basis for this, a little bit of a wealth effect, you see it changing the discount factors of the market, but it has not taken, so i question it's efficacy and if it's eric, me, or who ever, we're having a discussion, this isn't like congress where we beat each other to a pulp, we're trying to come up with a solution. >> you came into this role as a businessman, so coming from your business background, would these be the kind of issues that would stop you from adding heads to the payroll? not knowing your tax rate and the regulatory environment? >> absolutely and i argued this over and over again. i would have plenty of access to
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capital if i'm publicly traded, private, big, small, medium. look at the national federation of independent businesses, 93% didn't want to borrow or didn't have a problem with accessing capital at cheap rates. it's not on their list of concerns. we made that possible, i think the fed made that all possible, it's other issues that are inhibiting action. a dual mandate, enhance full employment. our actions have not assisted the process and you can't in my opinion unless you have fiscal clarity, the ability to budget the plan, and we cannot affect that change. the only thing we can do to further uncertainty is if people feel we're going to far. i don't know what the line is but i think people are
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approaching it. >> let me get your take on something we just learned moments ago. we reported that the new york state attorney general eric schniderman subpoenaed several banks in their investigation. what's your reaction to this. are you expecting this to get bigger? >> i don't think it's appropriate for me to comment on this at all. it's a legal action, and i just won't comment on it, forgive me. >> where do you believe we're in the economy here? companies are saying that uncertainly is provoking them not to add to the payrolls, what will it take to get out of this? >> fiscal clarity? no one knows what taxes and federal spending will be. no one really knows if it is a giant company with a million employees or a company with 20, what it cost to hire somebody in terms of the social overhead. we got a little clarity on health care, people expect that
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to be overturned if there is a change, and then the finish that you mentioned which is weak demand. weak global demand, uncertainty about the top line, and you go into a defensive crouch. there is plenty of cheap, high octaine fuel, how are you going to grow the business? what will your margins look like? we cannot change that dynamic in my personal opinion. >> what's your take on the romney-ryan budget. ryan puts fiscal issues at the top and has been critical of the fed's growth action. >> i'm not going to comment on any politics. i'm indifferent to who the president of the united states is. whoever is in the executive
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branch needs to work with the congress of the united states and we finally get a grip on things. we have not had a budget in the congress in this country for over four years. i blame republicans and democrats, so we need to change and reboot this process, and i hope that whoever wins the election will get the congress to finally act. and the worst thing that can happen is to become totally dependent on the central bank. when he said you're the only game in town you start getting into trouble and that bothers me. they have to do something, democrats and republicans working with the executive. >> so what's the likely today, richard, of a recession in 2013 given the fiscal cliff issues, a lot of people are predicting we'll see a recession, or does the romney-ryan ticket put
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economic growth back on the table. >> i don't see a high likelihood of a recession. we're not growing very robustly. we have positive momentum going forward. a lot will be determined if people have confidence and the clarity of the businesses. >> richard, good to have you on the program, so appreciate your time tonight. >> thank you, maria. >> richard fisher joining us have dallas. 40 minutes left, the do you up five points right now. is cisco starting to feel the pinch of the fiscal cliff? meantime, cisco has been a hot stock recently up nearly 12% in the last few weeks, is it time to get on board once again? of 10 inch hose clamp pliers. you know what's complicated? shipping. shipping's complicated. not really. with priority mail flat rate boxes from
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welcome back, the nasdaq getting a calf boost from starbucks and cisco. >> yes, we're calling did a caffeine high, taking mcdonald's out of the u.s. focus list is helping shares of starbucks outperform today. there is a $24 price target on starbucks and it offers one of the highest long-term growth stories. the big loser today is staples, office supply cane posted a 32%
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slump. weakness seating here in the united states and abroad. shares are hitting a nine-year low and other office supply chain retailers also under pressure as you see right there on your screen, bill. >> all right, thank you. maria is going to talk to john chambers tonight after the bell. this is a stock that fell 10% after the last earnings report, so some thing is could be better. we have mark newton on the technical side. joan joan in a what are you countied tonight? >> we think cisco is making very positive strides. >> mark, the chart, i took a peak, it's about the mid-point
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of it's range so far for the year, which way do you think it breaks? >> i'm not too font of cisco. it's been down since 2001. the shot going back to 2001, you see this longer term range bount p -- bound pattern. you see a pattern of deracing low lower highs. you need some structural improvement. the daily chart has a different picture too. it started to show a few signs of stabilization. we saw a big deline here. so the minor stabilization is somewhat positive. so technically they have been laggards, but you want to see them get over 20, really, if you
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think the stock could be bottoming out, now we're just not there. >> the market always looks very carefully at the guidance that johnson chambenn he provides. >> cisco is guiding flat, we're very comfortable. there the big question is october, and do they have a big hype line in visibility. expectations are very low at flat sequential lev knew growth. we think that they're there. >> still a seasonal industry. is there a price point you would get in? >> yes, if it's near $16, that would be an interesting level. the prior areas were better i think. the stock has rallied in the last few weeks and that is important. >> thank you for joining us, maria? >> who bitter to break down
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cisco's earnings than john chambers. is there a dividend on the who ri zone? we'll find out first at 4:00 p.m. eastern. the tablet market getting a little more crowded today. the device that will start around $500 is a built in pressure sensitive stylist. this was called a game changer for media creation. this market is holding on to fractional gains. the nasdaq is up about 12 points. rudy giuliani not mincing any words last night on the kudlow report. >> he is not bright, never been
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welcome back, emergency prices advancing. bertha coombs has the details. >> yeah, the api last night said they had seen a build in terms of stocks that draw down 3.7 million sents brent and crude to three month highing and they closed on the highs of the session and gasoline moving higher as well here to three
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month highs with that gasoline draw down bigger than expected with a number of refinery glitches and that fire in california. ethanol also saw a draw down of about 1% last week with ethanol production having risen for the third straight week, producers, even though they're being squeezed with corn pricing so high, they're getting an off set because the feed byprukt they're getting back on that. >> time now for our network wide special look for the drought of 2012. it may be raising pricing on everything from bred to meat and hurting consumers, but it's also creating opportunity in other parts right now. jane wells has a look from iowa and formers how they're betting on the drought tolerant seeds
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that will help. >> good afternoon, here in owen county kentucky, we're at american water facilities where the brought has been an opportunity for this company because they used forward planning to move into the future. this if i felt was built two years ago in response to drought like conditions. it was a $164 million investment, but without it they would have been hard pressed to meet today's consumer demand. the question now is how to continue their momentum into the future. >> only 1% of all water is actually consumed. that you actually drink. the rest is used for laundry, showers, and outside irrigation. do you really need to have treated water to irrigate your lawn with? >> great question.
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he expected more water reuse in in the future. something more companies are working to develop. it's a priority here in american water, they plan to spend to help expand and main tear their network. >> yesterday, jane wells showed us drought tolerant seeds, and now she has a upclose look. >> maria, some farmers say the new seeds are saving them, others aren't sure they're work the higher price. the corn you're seeing right now was not treated with drought tolerant traits. compared to what is. the difference is black and white. >> you want the best players on the field, seed to me is not where you cut corners.
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>> the first thing they want to know is how did it do last year and how did it handle the drought? >> he runs a seed operation in florida, but conventional seeds are the fastest growing as customers are shying away from genetically engineered seeds. >> i think think the cost justifies the difference of what we're getting for yield, the limited markets or the easeability of using them. >> when you take a look at this maria, the growth of the hybrid seeds is growing substantially around the world. it's now about 30% of all seeds sold. >> thank you, jane. get ready for more stick p shock, how it could drive up your grocery bill, and the entire nbc family has coverage of the drought today. we have just about 20 minutes
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before the closing bell sounds. the dow is down about nine points, nasdaq with a gain of about 12. >> the yield is hitting a three-month high right now. is the bond bubble starting to burst? and what would rising interest rates do to our economy right now. and remember this heating interview, maria? >> greenberg and aig committed fraud. >> there's no evidence of that, you keep saying fraud, but there's no charge of fraud. >> here is the 29-page federal court opinion. >> do you remember that? >> yes. ly talk to ken langone who was also a target of spitzer years ago. we'll talk about that, plus a few weeks ago, he ripped into paul ryan and now ryan is romney's running mate. first, before we go to
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just before the break, we asked which company's stock has advanced the most this year. dollar tree, ross stores, or sears holdings? now the payoff, sears holdings. not much action for stocks otherwise, though, but there's a lot going on in the bond market. interest rates continue to move higher. maybe partly because overseas investors are scaling back their purchases including government debt and bonds. >> so how will all of that impact interest rates down the road. joining us right now is kcathy
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jones. we know rates will stay low until 2014, do you expect thing to change that up? >> i don't it. i think what the fed is saying, unemployment is still over 8%. it's not enough to change the dynamic of the economy. we have a lot of downside risk, and i think that's a big factor for the fed going forward as well. >> rates going up, does that change how you preserve equities if. >> i think rates will go up in the near term. >> they are right now at a very slow increment. it might stir more interest in equities. when they're yielding above the ten year treasury, we have not seen that in a long time. >> ever since the u.s. was downgraded, so much money went into fixed income, and we see
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that risk of adversity. >> remember august of last year, we were claiming about the volume and how crummy it is. i think the market is changing. there is little volume today, but there is huge volume in the one that bets against the long term treasuries. big volume today. people seem to be bet that's right interest rates will be going up in the long term, and some of the other ones like the csj, if you look at that, it continued to sit right near it's high for many years. high yield funds as well, guys, so i see changes coming through here. >> kathy? >> we have seen bouts of this in the past, they get nervous, they think the 32-year-old bull
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market is over, and something happens in-year-old, and they go down again. >> is there a pain level for the fed, they're trying to get loan rates low with operation twist, but if rates rise -- >> i don't know if there is an explicit level. i would say 180 on the ten year is barely a high rate. so if the long end starts to climb, that's a signal to them that their policy is not working. >> so we know what we're dealing with, these rock bottom levels, and europe really an unknown. how do you want to invest with these head wiwinds in place. in equities. >> you'll want to go to cyclicals that were beaten down.
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cyclicals lagged behind and i think you have great opportunities and good quality cyclical stocks selling for great prices. >> you mean companies closely tied to the u.s. economy, but they have not shown any momentum that's sustainable, right? >> right, we won't have real robust growth, but with microsoft and chevron, they're a great choice. >> where are you finding opportunity? >> it's getting harder and harder. we still like corporates, although again, they moved up a lot relative to treasuries, but we still think investment corporates is a good place to weigh it out. >> what is a yield you like right now? >> what we like is something above the rate of inflation. the fed is targeting 2% inflation. >> etfs that are yielding 4%, or
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6% as well. >> if you're getting 6%, you're taking some risks, you need to be careful. >> that's where the high-yield corporate funds are right now. are you worried that more people are in treasury funds or that a lot of people are in high yield because they're in both right now. yeah, i don't think it's a either or thing, people have been chasing yield for several years now. know what risk you're taking when you get that yield. >> kathy, i'll see you in the count down. >> we have a market that is mixed her, the nasdaq is up. >> you may remember this if you're a student of television commercials, william shatner for
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priceline met an untimely demise a few months ago. he went off the cliff, and guess what, so did priceline's stock. so could resurrecting him help the company's shares. we'll show you the new commercial, guess who is back? and if you think congress's approval rating is bad, wait until you hear this. ut there, how do you know which ones to follow? the equity summary score consolidates the ratings of up to 10 independent research providers into a single score that's weighted based on how accurate they've been in the past. i'm howard spielberg of fidelity investments. the equity summary score is one more innovative reason serious investors are choosing fidelity. get 200 free trades today
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welcome back, priceline shares have fallen off ach cliff from disappointing numbers a month ago, or is it because of them killing off their spokesman. now they have a plan to resurrect their price. they are resurrecting the
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negotiator in a brand new commercial, watch -- >> you've been busy for a dead man. after you jumped ship in bangkok, i thought i'd lost you. >> suffering is my life now. >> who is going to tell that pricing is the easiest way to save on hotels and flights. >> so is this it? >> we'll see where the waves take me. >> great commercial, investors like it, the stock getting a boost after announcing that they're bringing shatner back. >> think about this, years ago, when he first started doing years for priceline, nobody knew them, and he took shares, not even any money. so it's been a great relationship through the years.
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i don't know why they skilled off the character, but it's good to have him back. >> we'll see if it correlates to earnings growth. >> all right, we're going to take a break and we'll come back with the closing count down. and after the bell, john chambers will weigh in with me moments after his company reports earnings. [ male announcer ] when a major hospital wanted to provide better employee benefits while balancing the company's bottom line, their very first word was...
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almost exactly five minutes left here, i'm seeing this cold as well. these are the better performing sectors today. financials, consumer discretionary. you know, a risk on day, but it's all relative. we don't have a lot of volume going. >> volume stinks, it usually stinks anyway in the summer time, but just because the retail investor has left the room. >> and ups -- look, it's august. last year we had a very different august. they had the debt ceiling crisis, unprecedented volatility.
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yeah, you have a cupping things going on for you. there's a lot of important things about to happen. things in europe about to come about. you have resolutions, you have to find out whether the presidential election will spin out one way or another. there's a lot of reasons to leave the wallet on the hip. seco secondarily, the etfs a starting to eat into the stock. you have people that trade only etfs now. >> right. >> and so they're so liquid they don't have the natural filler. now it doesn't do anything. >> it's more convenient for the investor. >> within the etf you would think they're stet gilling volume and action. >> only if the etf becomes very
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liquid like the spider. they had to make an adjustment on all 500 stocks. now they're so liquid, they don't necessarily have to do the layoff. >> and yes let me look at the interest rates. this is one of the most interest things going on with the yield and the ten year continuing higher, we're above 180, and with that gain today, and on the 30 year, that continues higher as well. that's the highest level we have seen on the 30 since may, right? and yet, nothing else is changes right now. the stoke is still there, the vix is going down, so what's the message from the treasury market? >> i think there is a lot of expectation that mario draghi will do whatever it takes. that he will follow up and the european central banks will bring liquidity, and that will make things safer. >> say we don't get mario
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draghi's action, we don't hear from the fed, what happens to this market? >> yes, expectations are very, very high, and even though it's only only august, the theme here is santa clause is coming to down, and they're assuming one or two of these will show up with a sleigh full of goodies and the surprise will be devastating. >> good to see you. what are your expectations from ben bernanke? is he going to make comments that help is coming? >> i think the fed is in the mode that they will provide more stimulus. i'm not assure about the central bank. >> they're a more patient group, ant they? they have taken their time. >> yes, and they have more issues to deal with. >> yes, there are too many people to vote on this. it is not just the fed, it's all
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of the governments. >> but the economic data has been pretty good, home builders, inflation data, it suggest demand in this market. is it possible the fed will be off the table for a little while because we don't need the help? >> it might well be, but this market in fact may be holding the fed back. the market is ahead of the economy right here. this is not a 1.5% gdp move. so the fed will stand back and say what message am i sending in an election year very close to the election. >> there was some changing hands. china has been selling and japan has been buying. >> kathy, good to see you, always good to have you here, as we head towards the close, it's another one of those days, it feels like august, low lu


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