tv Street Signs CNBC September 25, 2012 2:00pm-3:00pm EDT
announcement on its budget thursday, some talk in europe that that might be a point confidence is affected. >> indeed, simon. thank you so much. >> pleasure. >> good to see you again. matt, thanks again. appreciate it. >> that's it for "power lunch." thank you very much for watching, everybody. >> see you tomorrow. have a great afternoon. "street signs" begins right now. we are grateful you are with us, we need your help y do so many people say the economy is getting worse but think the president is still the man to fix it? a street fight to answer that question. china looking more like a broke down palace lately, steve, but don't cheer. why we may need china a lot more than you think. plus, college tuition looking more like a shake down street than the road to riches. the sad stats on just how unprepared american students really are. and are there any deals in the
scrap heap of the worst s & p 500 stocks. >> the morning rally is a distant memory on wall street, the dow giving up a 61-point gain and then some to drop into negative territory. the s & p 500 also losing early gains and it is in danger now of a fourth straight losing session, something that has not happened, by the way, in nearly two months. the nasdaq is down for a fifth time in seven sessions, though it still has a nearly 3% gain for the month and 7 1/2% rise for the third quarter that is on its way to a hit. >> all right, mandy, thank you. well, cnbcs aall-america survey was filled with more than just a touch of gray. it was down right confounding. example, the majority of those polled believe president obama will be better for the economy down the road, even though they think it is worse now than it was four years ago. steve liesman, please, explain
this discrepancy to us. >> yeah exit is really a paradox or a poll with a paradox in it, cnbc all-america sur acres have 800 americans all across country. get right to the charts, see what i can do to help explain this on the economy, 55%, no questions here about what people think. say things were worse than four years ago, just 27% better. 17 the same. but who do they think would be better for the economy in the next four years? 43 to 34, romney. i will tell you in our last survey that we did in june, pretty much the same sample. we asked a slight variation on the e con question, romney beat obama by six points on the economy. let look at all the different issues we asked. went more in depth than almost anybody else. on jobs, 23-59% saying worse than four years ago. over here, health care, obama's signature issue, many people don't think it is better than it was. in fact, 2-1 it is worse. who would be better?
by about 13 points, obama beats romney. rotate it one more time. on the deficit you can the one issue, by the way, romney is going to win, 73-6, worse, that is unbelievable, way off the charts. romney eeks out a gain here or a win within the poll's margin of error of 3 1/2%. one more thing i want to show you this is foreign policy in the news, the u.n. meeting in the news this week, america's standing on the world, 16% of americans worse off than four years ago, 44% think obama would be better for that issue in the next four years. why is this? let's take a quick look here. slightly better economic numbers? no our economic numbers show people think thing are about as lousy as they have been s it perhaps, next item, somewhat better stock market? not really. people don't think the stock market is that great. three reasons come up from our pollsters why this may be true. changes in racial support, personal appeal and tax issues. let me go through these real quickly. look at what happened in support from different racial groups here from our june survey to our
september survey. latinos, bumped up by 15 points right there. african-americans bumped up by 23. 93% to 1 they support owe bam man at economy. a bit of a gain for obama on white bus are the story here is romney only 42%. two other key issues here, taxes and personal appeal hospital. will increase your taxes effectively? obama has managed to really neutralize that typical republican advantage. and then the likability factor, who would you want to hang out with? call it 5-2 in favor of obama. who would you want to coach your favorite sports team in a championship game? looking for a piece of -- people's sense of leadership there, again, about 5-2 in favor of obama. so it seems to me like there's good ferment here for romney to sell something but he is not able to close the deal with the american public. i think there's something that, again, our survey, guys is all adults because it is a financial economic sur strain, is not voters but maybe this gives you an idea where the electorate is
heading as well. >> you really can't underestimate the likability aspect, would you like to have a beer with this guy? i want to ask you, steve, you are a guy that puts rhyme into reason and you have your economic cap on here, when you look at some of these seemingly conflicting results from the survey, steve, how do you explain it? >> i think -- sitting down here. >> yes, please join us here at the table. >> by the way if that is your economic cap, you need a new hatmaker, my friend. >> looking a little shiny these days. >> we will have to -- >> [ overlapping speakers ] >> but listen, i think this racial support issue is huge. i think what's really interesting, i'm actually doing some work on the numbers inside it is the economics play is less to do with it. we may be in a situation here where people are so polarized and maybe bipolarized about the -- about politics, politics comes and completely colors their view of the economy. >> let's bring in some guys to debate this. bring in american enterprise's
two columnist and -- >> i didn't know jimmy was going to be here h. >> yes. >> and keith. >> b.e.t. columnist. >> old times here. >> enjoy coming from the leaseman camp here. good to have you here. >> keith has his thinking cap on as well. jimmy didn't wear his. >> his thinking cap is shinier. jimmy, let me ask you first of all, would you explain part of these results by just saying that americans are addicted to hope? they are hoping things will get better, flying in the face of some of the seemingly depressing statistics? >> i'm sure they hope things will get better. in dad toying steve's great analysis, i would add this i was kind of perplexed by these numbers. looking around this bomb, other polls it became clear to me that people really don't know what the romney coming plan is. i looked a another poll, showed big gap between the number of people who felt need good, solid view of the obama plan versus the romney plant and as tim geithner once says, plan beats no plan.
romney has a plan, i don't think he has done a particularly good job of getting out there the second point is, among people who dough know about the romney plan, i'm not sure if the average voter know what is would be the difference between a romney administration and a bush administration. since a lot of people probably blame bush or bush's poll city for the great recession, that doesn't help mitt romney. >> jimmy that is a place where it is ral failure of the republican party to change its message. between bill clint unand obama at the convention, they said romney's plan is the same as bush's plan. people may toer may not like what obama is doing but pretty sure they have questions the prior four years. >> one thing the romney campaign has not differentiated, need to throw bush under the bus and say this is what he did wrong and sabe maybe some of the things did he wrong, obama is doing wrong as far as that i would be different. two, that convention was a very soft convention by the republicans. >> i agree. >> focussed a lot on personality
rather than saying this shut plan, here is how it works. >> keith, greater than 8% unemployment, record deficits here. we have got anemic economic growth. how is the president selling his gold to be in office another four years so successfully? economically, he would be toast. >> i think jimmy p is actually right about this. you know, the romney campaign has failed to do is explain to the american public why mitt romney should be elected. they focused on making this campaign a referendum from president obama, clearly that hasn't worked. you have to offer an alternative. >> whether or not has obama done to say why you should re-elect him? >> exactly the point. the president can point to the fact that things were worse than they were four years ago. we have had now 30 consecutive months of private sector job growth, 4.6 million new jobs, you can talk about the fact the stock market has doubled. talk about the fact he saved the auto industry. he can talk about the fact that
osama bin laden is dead and al qaeda has been taken out, much of al qaeda has been taken out. so he has a record to run on, not to even mention health care, which is debatable. >> people aren't too thrilled with the record, because they don't think they are any better. so, there is -- i think maybe, the default mode, where they -- they don't know exactly what romney's gonna bring so they are going to go with the devil they know versus the devil they don't. >> let me make two quick points, one, if you look at the "wall street journal"/nbc news poll, obama hasn't move $, romney whose support dropped out for him that is very important. the second one is that he doesn't have to make that case as long as romney keeps making the case against himself. >> let's get the science and the psychology behind why we might be addicted to hope. joining us is dr. jeff guard day, assistant professor of behavior medicine at tour row college of osteopathic medicine and also an nbc news contributor. you are the doctor. you are giving the sign science. you have heard the economic. what say you? >> i think two things going on. first of all, your guests are absolutely correct this whole
idea that familiarity may breed contempt but it also breeds comfort. people don't want to change horses in midstream and what's adding to the hope is what they have already seen, a record by obama, whereas governor romney has not given specific ises of his economic recovery. secondly, i think we have to look at the fact that president obama is known for having good people skills he connects with people, rolls up those sleeves. he connects. even his foes may say he didn't do a great job on the economy but he is honest. >> what advice would you give mitt romney? >> can't duck the 47%. go out there take responsibility for t secondly, what he has done is releasing more of his tax, he should have done that before
>> the trouble is the changing electorate. looks to me, i say that advisedly, looks to me like the republican party has not taken note of the growing number of latinos in this country. >> at one point, many african-americans were very much disappointed with what president obama was doing. they felt wasn't connecting to them as perhaps he should as a person of color and now, that's kind of turned around and he has got that extra boost from the african-americans and on immigration policies from latinos. so all of that is helping with this whole idea of being addicted to hope. >> and talking about connecting with the electorate and having essential lay comfort zone with a certain, you know, would-be president, is there something you can do in terms of changing your likability or is that almost an impossibility? >> well, i think what you are talking about is changing your
person eighality but you have t soul searching what your message is and what you can bring to the leak torah. if you cannot warm up to them, perhaps you are not the person who should be running for president. you should you can the kingmaker around not the king. >> jimmy, wrap it up here with this, what can mitt romney do better to win those undecided votes over the next couple of weeks? >> i think he needs to connect the dots, talk, you know, don't worry about boring people with detail. bill clinton used to give those state of the unions, a ton of detail, boring speeches, people liked them. give people details exactly this is how i'm going to create jobs. remember ross perot used to do those commercials back in '92, in front of a blackboard? update them do them from a white board. if you are kind of a wonk, be that, show people how you are going to get it done. >> thief there, guys. that's the bottom line. thank you to all of you for weighing in on this. hope is the keyword here. and we will hope the forecast on election day. new poll by the weather channel shows the weather could play a huge role in november.
among those that vote, 35% of undecided voters say the bad weather conditions would have a "moderate to significant impact on whether or not they make to the polls." bad weather conditions would affect their decision versus 20% of republicans. >> coin star close to trading below its 200-day moving average. >> thank you very much. on deck, should we be fearing the great china slow down? why we might not need them as much as you think. later on, debt-free college. with student debt now topping $1 trillion, we found one school that is refusing to add to that number. stick around. [ male announcer ] what if you had thermal night-vision goggles,
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all right. we have got some breaking news involving spain. there is word that there are riots going on in spain over austerity. we have got to get more on these now. look at that. look at those scenes, by the way, folks, protests, maybe riots, whatever you want to call them a lot of people angry that the government wants to cut its spending, cut their benefits, cut their pay, and make them
work longer. we have got full team coverage of this we have got michelle caruso-cabrera on the phone. michelle, are you there? >> i'm here on the breaking news desk, tell you what is going on here in the video. this was a planned protest it has turned out to be bigger than they expected, more violent than expected, trying to surround the parliament in order to protest a new bunnell that's is expected on thursday, which is going to include you have seen the movie before, more tax hikes, more budget cuts, trying to deal with a bigger deficit than they expected because of lower tax revenues than what we have been bringing in. we know there have been arrests, clashes with police as well t is prohibited to surround the parliament as, as it is in most european countries for fear of coups, et cetera, et cetera, we do know they have until 9:30 local time in madrid permission to protest and demonstrate and then they are supposed to leave. so, right now you it's about 8:20 there so we are going to
find out in a little bit more than an hour whether or not they are going to actually leave this is a different place than they normally protest. normally, they are in the place desol, porta dell sol in the center, today, they are froegs the new budget announced on thursday. they don't know the exact details but know there's a lot more tough stuff coming when it comes to austerity measures, guys. >> moment he is ago of the pictures in spain. we think it is on the floor of the bond pits in chicago. rick santelli, what are they telling but the protests? >> most of my source and many traders are telling me put this on, so i'm glad we did. this is riffeting many traders in chicago, not for the least of, which of course, trying to handicap not on the budget and the stress test issues of this week but the separatist issues of cat loan ya and this is big.
areas doing better don't necessarily want to the perception is being dragged down. catalonia couldn't get funding because of the issues of spain in general, not allowed to separate, based on the spanish constitution, but military force? come on? would that be used? because the eu has various rules with their organization that would make it illegal to use the military against the people. i know that's side issue but traders are really riveted to this because economic issues, many times, lead to social issues. >> absolutely. in fact, that was proved in a book "this time is different" banking crises always become financial crises which always become plight sal crises and that's where we are right now.o that's where we are right now. if spain is a baseball game where are we in the spanish
story? >> well, i tell you, according to some of my buddies upstairs and some of them have relatives in the area, so inside track, they think it is about the seventh inning. >> i would say fourth or fifth, a long way to go before they fix anything. a long way to government seventh inning in terms of the anxieties. they think the anxieties are in seventh. the solutions are way behind, but the people are -- their anxiety is ahead of the solutions to come. >> feels like this european game has some way to played an could be talking about it this time next year. thank you very much, rick. thank you very much, michelle, for working the phones as well. all right. moving on, caterpillar raising a red flag on china today and sellers taking a chunk out of that stock. the company is cutting its 2015 earnings forecast because of slower-than-expected economic recovery. cat tracker says equipment sales in australia and china were among areas of concern and many
people seem to be cheering a china slow down, perhaps in the hopes it will help the american recould have environment that a dangerous way to think? another way, a simpler way, do we need china more than we know? let's ask the author of "what the u.s. can learn from china" and peter navarre row, economist and director of the film "death by china" and cnbc contributor. a spirit deed bait the other day. continue this now. and americans sort of have a view of china as being, you know, bad for the united states because mostly the job issue s that an unfair and dangerous way to look at it? >> it is a very dangerous way because the world so so interconnected. we depend on china, it china depends on us. how can we cooperate and make the pie grow for every? of course we need china t would be ridiculous for americans to turn away from the second largest economy in the world. they import more american goods
than any other nation in this region. they have a growing middle class, so, corporations would be ridiculous to turn their backs on such a growing marketplace for goods. >> ann, here is the problem, the basic problem by just mathematics. sure, we get jobs by exporting to china but we are importing a faster rate. on net, we are losing jobs and lose about over one percentage point of gdp growth alone to the trade deficit with china which is 1 million jobs a year that we don't create. i think this thing with caterpillar -- >> depends on how you -- >> doesn't depend at all. >> the san francisco fed had actually done a study showing -- >> no. no. no [ overlapping speakers ] >> respond to that point that you made. ann? >> yes. because the san francisco fed, in fact, had done this separate study showing that for every dollar generated out of china, we create more jobs here and more gdp than creating it even
in the u.s. and so i think that you need to look at the full picture of how this is creating lots of jobs in the u.s. and created lots of service jobs for lawyers, for marketing. >> ann, come on this is total -- >> no, no, no, no. it is fan it is a cism let me have a minute here, ann, you have made your point. >> no i haven't even finished my point and you keep interrupting me, unfortunately. >> deficits and that's 1% or more drag on the gdp at a loss of 1 million jobs it is absurd to claim that our export trade with china is a net job generator. that just does not parse. it's like saying that the chinese currency is not -- >> peter, i beg -- i agree with you on some point bus if you're an american farmer with an excess crop of wheat or corn, you need china. >> no question. no question. and i was in ohio, i'm doing this film tour, down in ohio, and i was looking a this the devastated manufacturing base, but i'm talking to farmers and
they are worried, stranged relations with china what will happen to the corn and soybeans we sell them. at the end of the day, we need to be concerned about growing our industrial base here. one point i need to make for corporate executives, this should be a wakeup call. i would say if you don't sell into the china market, you should no longer be making it there. corporate executives are putting all their eggs in a china basket when there's both internal risk and external geopolitical risk. >> let me just say that -- [ overlapping speakers ] >> -- shut down by this conflict. it is n . >> this is not an either/or thing. >> i would like to ask you a question on that point. a lot of american cans lot of foreign companies said i need to be in china this is a great growth opportunity for me. and how many companies have we seen go into china and actually realize it is a lot harder than people think and started to see a lot of american companies pull out or scale back.
moment depot said it can scale back. >> i don't disagree american companies should invest more in america but you can do it simultaneously, it doesn't mean an either/or choice. i think that's false choice. you can grow both markets. in fact, it makes sense to leave some manufacture energy china because american corporations sell not just to the chinese but to many countries around china. and even -- >> if you don't sell -- ann -- sell in the chainal in market -- >> can i just finish -- >> -- here in the united states. >> no, because let me just tell you. >> we have got to bottom line this. let finish my point, okay? because the corporations will look at their total cost and even though chinese labor is going up, the total cost to manufacture a lot of things is still lower there because china has a very developed infrastructure and so in order to get those goods to places like indonesia or india or any other places, it would be much cheaper to do it from china than
to be shipping it all the way from the u.s. or mexico. >> right. >> two words, geopolitical risk. >> ann and peter -- >> geopolitical risk. >> we are going to get you two back on because we always love a good fight here on "street signs." thank you so much. >> sullivan family thanksgiving there, guys. thank you very much. l on deck, we are on the hunt for diamonds in the rough. we are gonna mine through the five worst s & p 500 stocks this quarter. look at those ugly returns, man kim. find out if there are any gems hidden in the coal. >> ugly. and you thought odd rough commute? we have the most amazing video of the day, seriously, you're gonna need to see it twice to believe it. maybe even thrice. street signs is back after this break. i love you, james. don't you love me? i'm a robot. i know. i know you're a robot! but there's more in you than just circuits and wires! uhhh.
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move on. yesterday, we talked about toyota scaling back its electric vehicle plans and the new questions around the chevy volt. well now today, high-end electric carmaker, tesla is warning revenue will fall short of expectations. bring back in phil lebeau p i know tesla is over here. expensive, a small company, still though, not looking good for electric cars the last couple of days. >> brian this is part of the learning curve. you have an industry just developing. if you look at what happened with shares of tesla today, whacked, in part, the company has come out and said you listen, we need to raise cash as we build up production facilities. as a result, that along with another reason is why the stock is down 10% today. what is the other factor? tesla has come out and cut its revenue forecast due to slower model s rollouts. in other words, the production is going to be slower on the uptake. it expect he is the 2012 revenue to be at least $120 million lower. remember, tesla originally forecast it was going to sell
5,000 of these vehicles this year. they haven't changed that forecast. but people are saying i'm skeptical that is going to happen. last night in revealed the super charger for recharging the cars, provide owners with a free quick charge. according to the ceo, this will clear one of the hurdles that a lot of people have when it comes to believing in electric cars. >> people have this idea if you believe in electric cars, there's no freedom, you are stuck. they have this idea you can't go anywhere. what we are showing here today, you have more freedom than with anything, able to go anywhere. >> they expepect to have the sur chargers across the country in two yoos. thought it would be interesting to throw this up here. look at tesla versus toyota, yes, outperformed toyota a year ago, since then, toyota staged a nice rebound while tesla has been, generally speaking, range-bound, although starting
to trade lower and down in that 28, $27 range. guys, these are the learning curves that go along with being a mitch manufacturerer to a mass manufacturer. >> what are the funding -- what is the funding -- excuse me, what he is their funding situation like at the moment, phil? >> they are fine. >> obviously, having to raise more cash here by selling more stock. >> the idea they are running out of cash that is not the issue. they have got enough to get the model s up and going, once they meet the production forecasts, if they can meet them, the expectation is they are going to be ramping up the profitability rather quickly. the issue is how quickly can you ramp up production? they said 5,000 would not be a problem this year, now people are saying that's probably not going to happen. 20,000 next year? that's the target they have set. are they going to be able to meet 20,000? a lot of people are going looking at that and saying, i'm not so sure. >> phil lebeau, always great to have you on the show. we will bring you on for the next installment of the electric car situation tomorrow. maybe i will even be able to speak properly tomorrow. >> i will see about that
considering you are off. we won't know. coming up, beaten down bargains, some of the worst performers this quarter be diamonds in the rough? plus, the case for the blackberry, yeah we have got one. why this scrappy little phone still has some juice left in it. "street signs" is back in just a couple minutes' time. [ male announcer ] introducing a reason to look twice. the entirely new lexus es and the first-ever es hybrid. this is the pursuit of perfection. the entirely new lexus es and the first-ever es hybrid. i've been a superintendent for 30 some years at many different park service units across the united states. the only time i've ever had a break is when i was on maternity leave. i have retired from doing this one thing that i loved. now, i'm going to be able to have the time to explore something different. it's like another chapter.
it is street talk time, walking you through few stock stories you need to know b staples really falling today aft air numbers onning new cost-put cutting plans, quite often the market cheers cost-cutting plans, not the case today. >> not the case. down 4 1/2%. staples accelerated the closing of 15 stores here, 45 in europe. going to take a big charge, about $230 million. staples posted sales drops the past two quarters. here is the reality. people are simply using fewer traditional supply, right? folders, actual staplers, right? who took my stapler? well, if you're going to -- that was terrible. anyway, staples shares are down. you get the point. >> another job-related story today it is paychecks. >> yes. falling after the ubs and citi downgraded the company despite a first quarter company, they did top estimates fractionally.
here is the problem, only a slight for pay checks of greater revenue per check going forward, checks per ray roll rose 2% for the quarter. what does that mean? the reason we brought up paychecks a great indicator of job growth, more people hiring paychecks or adding workers, might be able to assume the job market is getting better, pay chechs numbers, doesn't look like it is. >> buffalo wild wings upgrade rbc. >> raising their price target to 95 bucks. chicken wing inflation. >> how many times can you possibly say chicken wing inflation? maybe never said it before in your life. >> i have said frog leg deflation one time in belgium, it was unfortunate, after a number of beers. chicken wing inflation, a literal quote from the rbc note, folks, saying it may not be as bad next year as some people thought it is a commodity-priced
story, which means if their costs don't rise as much, that's higher profit margin, rbc noting they are not leaving a lot to the upside but say the stock could hit $100 a share. mentioned that in the note, kind of rare. >> i want to hear bernanke say chicken wing inflation is under control. anyway, let move on to our guest p. >> overall, a darn good year for stocks n facts rant numbers today, only 47 of the s & p 500 are down double digits this year. but there has been some rain amid that sunshine, america. so without further ado here are the five worst-performing s & p 5600 stocks so far this quarter around grocery store chain, supervalu, leads all the dogs, down 53%. amd down 41%. in fact, touching its loews level today in years in. >> you have got devery.
are you finding bargains amongst that bin? >> i see value in amd. all this movement toward mobility with smartphones and tablets and cloud computing, some reasons, people seem to think pcs and hard disk drives will disappear over night. a good case in point would be seagate, one of our favorite picks out there the hard disk drive universe and seen 200% appreciation year-over-year and still undervalues. >> in theory, i agree with you, if those users choose amd chips, intel has massive market share, plus you have got a company in amd that's mess managerially,
right? executive departures, comings, goings, et cetera. >> as you are mentioning it one of the finer details nobody is mentioning is the fact that they have actually recently poached some higher level executives from apple. so you know, if you really want to move forward as the economy is starting to move toward this mobility, who better to poach than two of the big guys from apple in the one guy in particular, jim keller, he has really been instrumental in the development of the pros sthaers are being used in the iphone, the ipad, am tv. so i think they have really made some good, strategic moves in going out and looking to replace maybe some of the stale management team that they have this had in place with fresher ideas, more innovative solutions. >> maybe wanted to be a bigger player in smartphones and various other tablets. mark, i want to ask you in that bargain bin, are there any particular stocks that you see that are cheap but you still would not touch, they are going to get cheaper? >> yeah. i would definitely stay away from both big lots and
supervalu. i think they are already discount stores that have very, very minimal mar joins begin w and devry, i see serious issues with def rib, in the macroeconomic environment we are looking at now the high unemployment rate and feel we will be looking at the high unemployment rate the next five, ten years. i think it will be tough to find students following take on $20,000, $50,000 of debt only to graduate and not be able to find a job. so the business models of those three in particular i would avoid them. >> and quickly, you know, you don't have to comment on this, mark, but a lot of people forget that just a few years ago, big lots was the single best performing stock in the s & p, i can't remember what year it was, not that long ago, single best performer, how the mighty have fallen. >> the hire you soar, the hire you fall. >> thank you coon fusion. >> i won't do it in the chinese accent that would be offensive. a market flash from seema mood kim. what are you watching? >> one of the early staged me
minutes? development for hepatitis c. will be discontinued due to a lack of efficacy, seeing shares in the space like gilliard and idenix move hire, vertex did say it is continuing development of another potential new medicine for the disease als 2200 after showing promise in an early stage trials. ver deck down about 2.8% in today's trade. >> thank you for that. a quick break and then -- >> get ready to shake your head in shame. we have one of the saddest stats on the state of american students. plus, more alit racial. -- mor and this device is not dead yet. ans believe they should be in charge of their own future. how they'll live tomorrow. for more than 116 years, ameriprise financial has worked for their clients' futures. helping millions of americans retire on their terms. when they want. where they want. doing what they want.
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i'm bill griffin. on closing bell at the top of the hour are central banks around the world holding back the economic recovery? pimco's mohammad al arian thinks so he will join us. . and terry guff city with us, he weighs in on restoring investors confidence and how the looming fiscal cliff in his view is affecting the economy. how about last night's
monday game? the nfl is backing that controversial game-ending call in the seahawks/packers game. is that proof that the league is unfollowing bunnell at all on the labor issues involving the locked out referees? we will look at that coming up at the top of the hour. a rare day, maria and i both here in-house at global headquarters. we look forward to seeing you on "the closing bell." >> the crowds are building up outside, bill. >> they are. >> we have got security on it. i just want you to know that. great show. thank you very much. we have to laugh, otherwise we would cry this is a sad stat on the state of american students. reading scores on the s.a.t. college admissions test for the high school charges of 2012 have hit a 40-year low. even more sobering, 57% of test takers did not score high enough to indicate likelihood of success in college. as i drop conjunctions, all to the benefit of dropping 100 grand or even more that stat adds more fuel to the debate
over whether college is really worth it for some kids. consider this, student debt now tops $1 trillion, but there is one place where debt is essentially zero. senior correspondent scott cone is reporting from washington today as part of our education pales in nation coverage. scott? >> brian, a college education still is worth it in terms of earning hour for college graduate bus the equation changed by the lousy job market and the exploding cost of college which has students and their families borough more -- borrowing mohr but there is a school in north carolina trying to buck the trend. this is a college life, a picturesque campus in the north carolina foothills. everything a college kid could want, including free laundry. >> they do our laundry for us. some people think we are spoiled. i really enjoy t.
>> reporter: there's also a nationally ranked world-class education. >> a very particular mission to educate talented students for leadership and service. >> reporter: this doesn't come cheap. more than $52,000 a year for tuition, room and board, but these students won't be drowning in debt because davidson college doesn't do student loans. >> i think this school has made a commitment to the its students and future students. >> reporter: davidson claims to be the first liberal arts college in the country to do away with loans under a 5-year-old program financed with private contributions. roughly half the 2,000 students here get financial aid, but it's made up entirely of grants and jobs, no loans. >> that wealth of your parents should not dictate your opportunities in life. >> reporter: college makes that a selling point to prospective students. >> we will never package a student loan and do we push it hard? you bet. >> reporter: for theater major, rodney saunders, it worked.
>> it basically came down to davidson winning out based on financial aid. >> reporter: others, like senior eileen, had already settled on davidson when she and her family got an extra piece of good news. >> i was stunned. i was speechless when they told me. my mom started crying in the admissions office. >> some of us cry when we write the tuition checks every month. this is not easy, even for davidson. they have got about 2,000 students, as you heard. and a small endowment by college standards, only about $500 million. so, they are relying on private contribution and trying to keep up with their rising costs. nonetheless, hoping to give everybody a little something to talk about in this whole debate over student loans and rising college costs. guys? >> very interesting. we hope that that kind of model can be replicated elsewhere as well. thank you very much, scott cohn. coming up next, the media
mogul who says face book screaming buy. and blackberry maybe not dead yet. we have got an analyst who's got a buy rating on r.i.m. we will find out why. and get the five reasons why companies are still addicted to the crackberry. >> and yes, we still are callin it that. e announcer ] when a major hospital wanted to provide better employee benefits while balancing the company's bottom line, their very first word was... [ to the tune of "lullaby and good night" ] ♪ af-lac ♪ aflac [ male announcer ] find out more at... [ duck ] aflac! [ male announcer ] ...forbusiness.com. [ yawning sound ]
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media mogul barry diller was on "squawk box" this morning saying that facebook's ipo was not a failure and saying if he was a buyer of stocks, he would buy facebook at current levels. it's currently sitting at 20.62. meantime, the blackberry jam is under way. this is not a collection of canners. it is actually research in motion's big conference. we didn't know that either. but at the jam, the ceo saying something good, that r.i.m. subscriber base actually grew by 2 million users, which got us thinking. has the street underestimated old r.i.m.? joining us now is an analyst at hudson square research. we're also joined by todd
hazelton. dan, first to you. why the buy rating? >> it was more of a speculative call. we put it out about a month ago when the enterprise fell to about 1.5 billion. the book value of their network is over $2 billion. they do around $4 billion a year in service revenues, which has an ebi north of $2 billion. there's a lot of intrinsic value. i think that they're losing a lot of their base. >> should they ditch it if they're too late, dan? >> i think absolutely they should. i don't think they can do it. i really think they need to sell to a much bigger partner that can take that network and secure messaging service and keep those loyal enterprise customers
inside the network in a secure business that has the capital and long-term vision and can support a next generation operating system that r.i.m. over a two-year period has not been able to launch yet. >> okay, todd. i'm going to double barrel this for you. what are you excited about with regards to blackberry, and what still worries you? >> first i'd say we saw some new features we haven't seen before. blackberry frames is one of them. it takes a lot of elements on the home screen and makes them live. you have applications existing live on the home screen. tap one, it pops up. that's a cool feature. there's also blackberry hub, which allows you to switch through the operating system and see all your e-mails. sort of like a unified inbox. that's cool stuff. i'm worried because palm had awesome things too with web-os. what happened? hp bought them and shut it down. now hp is doubling back saying they need to have a mobile operating system. i don't know that r.i.m. is on the right way here. it's terrible for them to be
pushing it to 2013. that's after the holiday season. everyone is focused on the iphone 5. it's a dangerous move. >> you know what, dan? we talk about some of these features that we're showing on our screen right now, why companies still love it. is that enough to save r.i.m.? those six things. >> i don't think it is. what companies like about it is the instant on, is the security of the system, is they have a lot of their enterprise around the globe built on that blackberry network. they're starting to come off. where they're having the growth, you know, in the east, where it's not really enterprise customers, but it's their low users, they're losing their base. they started to lose their base when we had the tribeca moms going to the apple. now they lost those folks. we moved to connecticut. on my train ride every day, they're losing guys in pinstripe
suits and lawyers and bankers. that base could have been saved had they launched blackberry 10 two years ago. i think it's too late. what happens when r.i.m. shuts down? >> sure. and they have to sort out their web browsing. thank you very much for joining us today. coming up next, the great woz of oz. stick around. longest lasting, full-size pickups on the road. so, what do you think? [ engine revs ] i'll take it. [ male announcer ] it's chevy truck month. now during chevy truck month, get 0% apr financing for 60 months or trade up to get the 2012 chevy silverado all-star edition with a total value of $8,000. hurry in before they're all gone! with the fidelity stock screener, you can try strategies from independent experts
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oh, hey alex. just picking up some, brochures, posters copies of my acceptance speech. great! it's always good to have a backup plan, in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs. can't let 'em see what you're drinking. you know, i'm glad we're both running a nice, clean race. no need to get nasty. here's your "honk if you had an affair with taylor" yard sign. looks good. [ male announcer ] fedex office. now save 50% on banners.