tv Street Signs CNBC April 12, 2013 2:00pm-3:00pm EDT
could you imagine today in new york city? free cigarettes all around? not so much any more. >> street signs begins right now. >> has the consumer really been crushed? retail may be week overall but two companies might just run right past it. and much more on the incredible drama around bitcoin and no, it
is not a currency. >> karn age in the metals world. precious metal's cousin, silver, has fallen 46%. let's find out what exactly is going on with precious metals. >> boy, if you followed that advice on wednesday you would be pretty happy today. it looks like the bank of cyprus may be willing to sell gold in order to pay some of its debts. gold having its worst decline in several years.
closing down bear territory for the first time in a very long time. a number of traders are looking at this technical break down. on a monthly basis for the first time since the 12 year bull run in gold. the karnage worse in silver. this risk aversion in terms of metals certainly hitting silver and also in terms of demand on the industrial level. not seeing that with concerns about his economy. and oil also faltering. one point below its 200 point moving average. a really rough day in the commodities patch. >> you said it. thank you very much for giving some of the reasons behind the
losses. what i really want to know is when is it all going to end. how much more downside do you see in gold? >> one of the largest problems that i have in gold is this. that was great when gold was going up. the trend was going up. there is going to be a story about this. what it is is this. gold is a very small market. as the gld, okay, goes lower, let's say that the future contract goes lower. they have to sell gold. at the end of the day when they're selling that gold. picture this today. physical gold is going to get sold. it accelerates it on the way
down. that's a huge problem. right now as of last night the gld was the lowest amount of gold they owned since 2010 and still are the sixth largest owner of gold in the world. that's the gld. the dollar itself might take on the dollars that want to go to 89. >> he still owns 21 million shares of the gld and that's a problem. >> can gold and the dollar both go up? >> hi, brian. how you doing? what did happen during the cyprus deal is that gold and the dollar did go up. like okay, hold it.
that can happen. i think we will see that but i don't think we will see that for a couple of years. >> we have got a big problem. >> what does happen in yen terms, yes, gold is going higher. it really is about the dollar. what has happened across the world is this. it's going to get better and the reason is that go to south america and they want dollars.
you go to asia. what are they doing? bottom line here? transferring their currencies whether into europe or the united states. the euro is done. >> before we let you go, we need to ask. i don't get paid in yen. in u.s. dollar terms should we buy gold at this price or sell it or do nothing? >> don't buy it. not even close. when i say don't buy it, i don't hold anything. gold is going lower. this is going to be one of the classic flush outs. >> thank you very much. always appreciate your time. >> have a great one. have a safe one. >> thanks. you, too. is the consumer on the brink of
collapse? so, what exactly is going on with the consumer? join us now. just how bad was the retail sales report really? >> it was pretty clousy. was not just the fact that march was less than expected. it looked crumby. it's still not as bad as what i thought it might have been when we were dealing with the fiscal cliff. it was bad. but the consumer was holding up well. >> maybe this is just one of the cases where the chickens have come home to roost. the payroll tax hike and more. and a couple of paychecks in, they are starting to freak out, peter, maybe. >> certainly some head winds forming. if you look back at the latest
jobs number with the gain of roughly 80,000 shares there is clearly some weakness in the real near term it's a concern. but having said that, the market is not trading at ast nom call valuations. even if we get a pull back it's not as though we see solid earnings and cyclical rotation are not there to support market valuation valuations. >> they are lower. let's not forget that gas prices have come down. payroll taxes have come up. and gas prices have come down. wholesale price have come down. energy prices are down. that consumer is getting made whole. >> every penny on gas saves u.s. households about a billion
dollars. so the gas story is important. one thing i will tell you and we're not throwing dirt on the consumer. a 15 million, so that's very good. >> i'm sorry to interrupt you because i love the point you just made. you're making it for us. wouldn't all other sales go down. i just dropped a few ground on a down payment. when car sales hurt other stuff. they tend to lead other things. when people buy vehicles it's typically because they have a job and they're transacting and doing things of economic -- of niceness or fortitude.
i don't believe the vehicle sales are taking spending out of the economy elsewhere. the irony is probably going and getting more consumer spending in q1 than we actually had in the fourth quarter. on the housing side, home prices are much more important. >> okay. so pros and cons? i would really like to know what one would do with retail stocks at this point in the game. just a couple of stocks. 102% to the upside. on the other end of the spectrum, gap up 22%. there is really good performing retail stocks out there. what do you do now? >> this is clearly a sector that has not only outperformed the market but done so by many
multiples. i tend to be on the cautious side it's predicated. >> you take profits. >> i think that's a sell. >> it is. >> joe and peter, great stuff. do us all a favor as americans. good americans. spend a lot of money this weekend. buy everything in sight. that's the american way. >> done. >> one good us a see here will do some retail therapy. >> you have enough shoes. >> we have started to get some decisions in the j.c. penney battle over martha stewart. what do we know now. >> we're far from the final decision. what just happened within the
last hour is the judge denied macy's request to expand the injunction that is already in place. this means that j.c. penney is allow allowed to sell the design. these are products that are labeled jcp every day. at some point this decision could actually change. but for right now those jcp everyday products are allowed to be for sale. the judge basically says he thinks if he went the other way there would be measurable collateral damage. he said exactly his conduct may have been less than admirable
with the direction to go ahead and manufacture these products knowing that they could have been taken off the shelves. he did not violate. for the time being. the court's ruling. we believe that jcp everyday product will compliment some of our other brands. court is adjourned until tuesday at 10:00 a.m.? >> we have the analyst who downgraded herbalife earlier
this week only to upgrade it. >> and foul play, dozens of players burned in an alleged investment scam. we will bring you the full story on that one. coming up. don't go away. we asked total strangers to watch it for us. thank you so much. i appreciate it. i'll be right back. they didn't take a dime. how much in fees does your bank take to watch your money? if your bank takes more money than a stranger, you need an ally. ally bank. your money needs an ally. ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ]
>> why did you go back to a buy? >> i think we had the questions that we had earlier this week answered to our satisfaction. when the facts change we changed our mind. >> we certainly had concerns. you often times can't report earnings. you often times can't repurchase shares. we have gotten comfortable with the fact that none of those issues are likely to apply to herbalife given the spatial nature of these circumstances.
>> so in your mind, nothing to do with the balance sheet, with the audits. it's just this guy they are clean in this deal? >> of course. and i think in some ways the fact that we're going to have another audit firm in, that's going to be another deal in the coffin. >> where do you see the stock going? >> we have re-established our price target at 78. even at 78 dollars the stock would only be 16 times earnings. >> they have pretty much recovered. not every dime but most of it.
>> j.c. penney, herbalife. the 350 page report that he published had tons of inaccuracies. i'm surprised that he gets the credibility he continues to get from your network after j.c. penney. >> j.c. penney has been tough. he has been right on many names. just asking you to counter why the market has pretty much brushed off akman. >> when you really understand what a pyramid scheme is, herbalife has nothing to do with a scheme. it's a legitimate product company as is avon, tupperware.
none of them are pyramid schemes. >> only time will tell. the jury is still out. thank you very much for joining us. coming up, the bitcoin controversy. proof this new so-called currency could be the worst idea ever. >> and honey, i shrunk the bank. the nation's largest bank branch operator says bigger is not better. we're going to take you inside wells fargo's radical redesign when we return. welcnew york state,
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advisers, tellers, the back offi office. >> honey, i shrunk the bank. that was launched by the brains behind the 6,000 plus branchs. the concept would be full service for the 70% of wells customers that still visit a branch twice a year but modern for the others. >> what i'm going to show you is what we call our playground. >> they went underground. literally.
the goal is to design a smaller branch and costs a fraction to open and run. the back office gone. bank atms give way to advise or hubs during the day. this branch is paperless. >> the operating exepenses will be 60% of a traditional store. i can effectively have two of our neighborhood banks for the price of a traditional store. >> two for the price of one. that's how america's biggest branch network plans to adapt and keep growing. consumers are going to the branchs less and less only to
open the accounts or get a mortgage. some say this is the inflection point that might kill the branch. >> talking of getting smaller, i want to ask you about the comments that have been made by three wall street firms this week, by the plausibility of the biggest banks looking at breaking themselves up to boost profitability. >> the debate took on full steam. you saw the draft bill that we're expected to see in the senate from brown about what these cap call levels could look like. jp morgan would need 200 billion dollars. it's just not feasible. >> does it make the
attractive? >> it might. it's interesting to so it they're unworkable for shareholders. the investment bank of all places might be the place to invest. >> that's incredible. >> of course today was the news. thank you very much for kicking it off. coming up next the home repair edition. >> and blackberry is fuming after an analyst says there are more returns than new sales. we're going to separate the fact from the fiction coming up.
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>> street talk time. >> yes, these are harp extension plays. remember the push now to extend some of the housing help for another two years. that extension will give these services more time to look through their portfolios. they're in the process of what they call boarding. large servicing portfolios. i call an upgrade. >> that is an upgrade. they get five reasons to buy a stock. posting better than expected first quarter comp sales.
>> personally, i think bad weather equals go to the shop. who didn't work that one out? >> you got to plant seed. >> a thousand people are going to lose their jobs. about 30% of the sales force. preparing to lose patent protection. company is expanding its diabetes sales force. i don't like it when the stock men fits. >> this is an indian company. >> this is a disaster due joer. they are forecasting revenue growth of 6 to 10%.
that is 24% drop. >> transformed itself into a high profile. what was your energy. take a lock at this one. this was a $45 stock a couple years ago. and also you see a little bit of a rebound during the coal. for steal making. and the prices have gone like this. they see a little bit of reprieve from that. look at that down now.
>> he likes two big names in the space so we have invited him to come in and talk to him about them. they are and why. >> they are foot locker and underarmor. >> because. >> we think there is a lot of margin story left. a lot of growth story left in internationally and we think the operating margins could continue to grow as they remodel their stores and improve their allocation systems. >> what does foot locker have that makes it special? >> it has become the place to go for more fashion driven product like the air jordans. they get a lot of -- allocated product. >> they get a lot of limited edition product. they see better allocations of it. >> what's hot and what's not and
why. i remember back in the 80s we all wanted reebox. they were half the price in united states. what makes a stock and a particular brand hot. >> they would do a good job of managing that image. as well as very strict control of their distribution. you put those together with the athletes they have. stuff is doing great in the united states. we think there is issues overseas. >> they are both up 17% this year. under armor at a near double valuation as nike.
i know it's growing faster but does it deserve that prem yum? >> they have guided their growth. they said this year is at the low end of that. they only have about 6% of their business in international markets. that's going to be a big opportunity. and big growth continuing in womens and kids apparel as well as footwear which is a very small part of their business and they're finally making good head way there. >> good to leave it there. >> up next on street signs. blackberry making an unusual move today. they are taking direct aim at an analyst and calling for an investigation over a comment he made about the smart phone sales. >> we are heading to augusta to talk about big money at the masters. >> coming up on the closing
bell, maria and i are going to dig into wells fargo's earnings. and we will find out what they have to say about the housing market. and then we will be joined by sheila who says we may be through with too big to fail. and we will go live to augusta, georgia, and find out how big of an impact tiger woods is making. . with fidelity's guaranteed one-second trade execution, we route your order to up to 75 market centers to look for the best possible price -- maybe even better than you expected. it's all part of our goal to execute your trade in one second. i'm derrick chan of fidelity investments. our one-second trade execution is one more innovative reason serious investors are choosing fidelity. now get 200 free trades whou open an account.
an issue because blackberry is walking a tight rope. it's all because of this analyst report apparently short interest has been around 30%. we're going to need another quarter or two before we know what the calls really say. by getting regulators involved, blackberry is making it less likely that carriers will talk. >> do you buy this story? >> it's very difficult for analysts to get that information. you can check it locally by surveying stores in your area
but it's not an indication of an endemocratic situation. he is probably saying that in spots, if blackberry is going after the sec, their data is much easier. >> is it possible in it's always possible. but probably not. normally you're trying to get a little bit of an edge on what has happened in the short term. very unlikely that it's a manipulation of stock. of course that would come out in an investigation. >> you know, when you look at the phone, it is very different. is it possible that people are confused by the operating system because it is so different? >> we have seen that with a few other ones.
but absent a problem like really poor battery life or hangs up and resets, you usually don't see return rates much above 2 to 3%. the other aspect that you had to look is how hard is a carrier pushing it. >> is the z10 a make or break? it has risen about 14%. a lot of has been hinging. >> i'm not of the opinion that this one product -- they are cash flow positive. they're going to survive to keep fighting. it has never been the case when a phone company turned itself. >> thank you very much for joining us. have a great weekend.
>> coming up next, bitcoins. you never heard of them a few weeks ago but now everybody is talking about it. is it a currency? >> or is a stock? >> or is it stupid. >> all coming up next. >> time now for today's return on retirement. when it comes to socking away money, most people trust the planning for themselves. nearly two-thirds of those surveyed do not use a financial advisor when it comes to saving for retirement. why? find out in just a second. oh, he's a fighter alright.
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most trust friends and family when it comes to deciding what to do with their nest eggs. >> that was brought to you by deloit, otherwise known as dulu duluth. >> i still can't get over your voice in that. if you didn't bite at the bitcoin craze you may have saved yourself some money. what was that with the flash crash? >> bitcoin's value plummeting to a low -- she said 54.25 each overnight, a stunning 77% decline. bitcoin still making money for investors who get its recent rise fuelled by demand and the
commodity is what a lot of people liken it to. with only $11 million in circulation, value determined by peer to peer transactions with no intervention from a government or central bank. that is a great part of bit koint's appeal. there are no damming receipts they might want to coop from a spouse or significant other. >> i think it's refreshing for a lot of consumers to be able to spend money without everyone else being in on their business. >> that attracted a certain user to bitcoin.
online porn and gambling have been fertile ground for bitcoin transactions. >> it is interesting that angle. it gives the suggestion that maybe it's a little shady? >> if i had i had a bitcoin and paying you in bitcoins, they could basically look at our account numbers, but it has nothing to do with our identity. so you can buy things, again, with no one knowing. >> we don't even know who invented this, right? >> no, we don't. >> there are some rumors that it's this japanese name. you're literally putting on to real money on to a system that we don't even know who created it. >> it's kind of an amazing story. >> and it's one that's going to merit another segment. let's bring in the atlantic's derek thompson. all right, derek, you say this is not a currency, it's more like a dot-com stock. and i agree with you, but a lot of people believe -- i saw a guy just bought a car, $38,000 used porsche, using bitcoins. people are taking this for real,
my friend. >> right, it certainly calls itself a currency and some people consider it a currency, but it's not a very good currency. so what does make a good currency? a good currency is something you can use and exchange for goods and services, whose value you can trust. because it doesn't change that much over the time. if i buy a sandwich today for $5 and i get on the plane and i fly and six hours later and i'm in los angeles, i should more or less expect that $5 should buy the same sandwich. it shouldn't buy an incredibly extensive steak or only a tenth of a sandwich. i should have a certain expectation that it should buy the same amount hour to hour. and bitcoin certainly doesn't. the stock quadrupled in a matter of days and then again a week later, and now it's fallen 75% in just a few days as well. there's no trust nor terms of the value. it's behaving much more like a shock that we enjoy watching the gyrations of, but not really a currency we can trust on its value hour to hour. >> it kind of feels like a dp
gamble and a speculative stock. so why are people, and not just everyday people, but big investors, why are they starting to get on board with this? >> i think there are two reasons. i think there's a good reason and a bad reason. when you have a stable supply of currency and there are more things that that currency can buy, the value should go up. so the mainstreaming of bitcoins on the internet, i think, has helped its value and maybe brought it from $1 to $10 or $10 to $30. but when you see it exploding to 250, $260 and then falling again to $75, you realize this is really a speculative exercise. this is a situation where people see like a stock price rising and they want to get in the game so they can, you know, feel that valuation. >> derek, it's almost like if you put money in paypal and the next money you had half again as much as you put in. i find that to be very difficult to understand, why people would want to do that. >> exactly.
we had a writer, matt o'brien, who wrote a piece basically saying, this isn't a currency, it's a tech stock. but is it pets.com or paypal? and in addition to being clever because it was ill lwrittive. when you transfer money from paypal, the friend has the expectation the transfer will be $100. but a pets.com kind of stock, where you invest one day and look at your portfolio one month later and you realize you've either lost 50% or gained 200%, this isn't a currency. this isn't something that people, in the real world will want to buy, will want to use as a means of exchange. >> you know, it's very easy to be cynical, but if you take the winklevoss twins, who have one of the largest bitcoin portfolios out there, they say this is just teething pains. this is what happens when you've got like the nascents of a currency or anything else, it's going to go through a bit of a bumpy patch.
is there any cred to that? >> sure, there might be cred to that. i can't predict the future, and it's certainly possible this could turn out to be a currency whose value stabilizes and people really use. one thing we've seen around the world is that alternative currencies can exist and can thrive. there's the ithaca dollars that exist in new york, where if i mow somebody's lawn, i can use that hour to buy somebody else's hour. there's things where they wanted an tariff currency to help create incentives to help people care for their elderly ones. that's been another alternative successful currency. it remains the to be seen whether bitcoins can join the ranks of these alternative currencies that have thrived over the last few years. but right now, it's behaving like a tech stock. >> indeed, did nothing all year, absolutely nothing if you look at the chatter, and now, whoof, up it goes like tulips in the 1600s. >> i'm fully invested in old
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how's that for an encore? with xerox, you're ready for real business. ♪ there'll be the usual presentations on research. and development. some new members of the team will be introduced. the chairman emeritus will distribute his usual wisdom. and you? well, you're the chief life officer. you just need the right professional to help you take charge. ♪ check out shares of callaway, down big today, a downgrade from raymond james, which is timely, but callaway's a golf company, and there's a little thing called the masters
in augusta, georgia, that is now underway. it is day two. it's also a huge week for private jet travel. how shocking. but how huge is it? brian shactman, i've never asked you this before, but how huge is it? >> reporter: it's -- sorry, i was just practicing here. it's ginormous, brian, by the way. here at the double eagle club, a lot of people that come here to relax across the street from augusta national take private jets, and the truth is, the masters is usually the second biggest american sporting event when it comes to private jet travel after the super bowl. but according to net jets, this year it's actually number one. and it makes sense. despite today, the market has been absolutely ripping. tiger woods is number one, and perhaps more importantly, cash-rich companies are once again spending money here. >> major corporations are more comfortable about entertaining their most important clients and working and building those relationships. >> now, that had a huge impact on the private jet business. flight options is the country's second biggest reporterer behind net jets says it will use half
of its hundred-plane fleet down here. and as for net jets, they will do at least 300 flights to this area, which is up significantly from last year. okay, round trip, about 20 grand for five people from teterboro, right outside of new york. and you can even consider that cheap when you look at how much can be done in one week. >> you can bring somebody in on tuesday or wednesday and enjoy the practice round in the par three tournament. they could come in on tuesday, leave on wednesday night. that's one group. you can have another group come in wednesday night and stay until friday. that's a second group, and a third group comes in on friday and stays until thursday evening. >> reporter: flight options says their business is double at the masters from 2009, but still a little shy from the peaks of the pre-recession levels. i do want to point out, guys, people are buying four-day badges for ten grand. if they can pay for that