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tv   Closing Bell  CNBC  April 9, 2015 3:00pm-5:01pm EDT

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talk of the intel talks, that's really putting a boost under the sector. tonight, an analyst who's going to give us his list of potential takeout targets. that's at 5:00 tonight. >> we'll look forward to that. melissa lee, thank you very much. a busy day for melissa. thanks for watching, everybody. "closing bell" starts now. and a hello and welcome to the closing bell. i'm kelly evans down here at the new york stock exchange. >> and i'm bill griffeth. the chinese market so strong. >> the european market hitting a new intraday record in the earlier trading session. >> earnings out last night. you had both alcoa and bed, bath & beyond. look at what both of them are doing today. alcoa down 4%. they hit the number, but their revenue came in light. the guidance i guess was below expectations as well.
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>> klaus kleinfeld talked to us. we're going to look to that bill not because alcoa necessarily should be a barometer, but because it so often is. >> down 6%. the worst performer in the s&p 500. we're not exactly off to a great start in the earnings season that didn't have very high expectations anyway. >> deal-making activity for the year. talk about the fastest pace we've seen pretty much in history. $100 billion announced in just the last 24 hours coming into today's session. so we've certainly got our eyes on that one, too. >> we do. coming up here constellation brands is one of the winners, and that's after the wine beer and liquor company reported better than expected earnings and announced, get this its first dividend since going public 42 years ago. >> so what's driving constellation's growth right now, and more importantly, what took so long to pay that dividend, rob sands? that will be one of our first questions for the ceo coming up in a little bit here.
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and jamie dimon defending the bank's size and warning regulations could hurt his industry if there is another financial crisis. so what does the committee chair barney frank think about that and we'll get him to react to car lee fiorini's comments. she would do away with dodd frank. >> carly saying she would wipe the slate clean and start over again on regulation on wall street. >> can't wait to hear from him on all of that. we've got an hour to go now and here's where we stand. the dow is up about 28 points right now. the s&p broad market up almost .3 of 1%. five points 2087 is the level there. the nasdaq up a quarter percent, adding 12 points. interestingly enough, even as the russell is down about half of 1%. >> let's talk about all of that and more in our closing bell exchange. we have heather hughes ron weiner, david scranton from sound investment strategies, jim
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lowell from adviser investments, and ron mullencamp. ron, i'm going to start with you. i mean you're one of the great value investors out there. you say you are thinking now about getting into europe and japan. but, you know, europe's had a heck of a run so far. it's getting away from you, ron. >> well, it may very well be. the central banks have changed. and frankly, pickings are getting kind of slim in the u.s. so we always monitor other countries. they're looking a little better than they did six months ago. >> david give us your reaction to this start to earnings season. >> it's not a big surprise if you think about what's happened the last few years. although we've had corporate earnings keeping up with projections, we've had a lot of companies fall short on the
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revenue side. and also i think it's important to notice that a lot of what we've seen so far in the misses has come from that revenue side. and we've had a lot of volatility the last six months. five of those months where we had 500 swings or more on dow one way or the other. i think that volatility is going to continue. >> are you seeing that we might be in a secular bear market going back to 2000 despite the run-up that we've seen? should investors be cautious on equities? >> i definitely believe we are. it was only a couple weeks ago that i was watching "squawk box" in the morning, and joe asked a guest there, to what percentage he thought the market might drop. and the guest either was unable to or didn't want to answer the question. i was sitting home like on "welcome back cotter" saying oh i have an answer. the answer is historically speaking, we have to see a drop of 25% to 30% from today's
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levels. in other words, we have to drop below that glass zealceiling. >> why do we have to do that? >> because historically speaking you go back 200 years in the stock market. there's three truths. number one, we've never recovered from a secular bear market in only 13 years. it's always taken more than that. number two, we've always had three or more major drops or cyclical barriers inside of it. this time we only had two. lastly, we've never recovered from a secular bear until price to earnings ratios get down into the single digits. we haven't seen that yet. we'd be breaking three guinness book records regarding the stock market. >> jim lowell. i can't wait to hear your response to that. >> well if this is a secular bear market then call me bearish because we've been able to make gains every year the last six years. i'll take that kind of a bear market any day. i think the real concern i would
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have -- >> it's a bad connection. >> go ahead. is that investors would definitely hear that and fear that this is a marketplace that they just don't want any part of. that would be i think a profound mistake. both here in the u.s. where it is getting tougher to pick your way through to good return success. we've been relatively bullish on europe, now even more cautiously optimistic about what we're seeing going on inside the eurozone, inside japan's market place. so if this is a secular bear market count me in. >> heather hughes you want to add to that? >> i don't know. i'll be jumping up and down if we get a 20% to 30% decline in the market. i guess if you're short the market, you would be. with valuations nearing 17 times in the u.s. markets, i see where people are saying we might be getting a little frothy. profit expectations have come down. earnings guidance as we know is going down. the usual copouts, the weather,
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geopolitical risk. that strong dollar. the energy sector also affecting earnings to some extent even though we're holding about $50 a barrel today. can we rationalize those? can wall street rationalize those in q3 and q4 and say it's okay we're going to raise interest rates and have markets hold up as they did from 2004 to 2007. so we'll have to see if that bear scenario plays out. >> ron muhlenkamp says he's thinking about getting into europe and japan. you're getting into that right now. why now? >> we've been into it beginning of the year. so we got it right. we added 5% to a developed world, and 5% to emerging markets. only because it just made sense. you've got quantitative easing finally kicking in. a currency that's allowing europe to sell more of their goods cheaper, and 50% where
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we're 14%, europe's 50% exports. so the metrics are also cheaper. made perfect sense to tactically allocate more over to europe. and then we picked a couple staples and consumer goods etf to go back into the emerging markets where we've been out of that for a couple years. why? consumers right now consume about $15 trillion and kenzie is saying and others are saying that by 2025 it's going to be $30 trillion. okay, so buy toothpaste. buy beer. buy all these things at emerging markets. just makes sense to tactically allocate. because as everybody else is saying u.s. isn't cheap. not bad but isn't cheap. >> speaking of beer and changing consumer preferences, i'm going to borrow a move from bill here and ask if we can show everybody in a five box right now. a conversation we'll be having all show. raise your hand if you had to pick beer or wine how many of you would say you're a beer
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drinker? >> it is 5:00 somewhere in the world. >> does greggos count? >> just one there? and how many of you would say you're a wine drinker? >> that's me. >> ron? >> two. >> i missed the setup. i'll have a beer. >> two and two. heather, we know you have a special excuse for a couple of months. >> yes i have a little one on the way. we'll hold off for two more months. >> i'll drink a beer for you. >> i think after being grossly outnumbered, i need to have a glass of wine right now. >> where are you investing, mr. horschack? >> a lot of people right now are heavily geared toward fixed income primarily because with what we have right now over in europe, our rates simply won't be able to go up much soon. >> fixed income, by the way, is the asset class. whether it's the fed moving on rates, something happening globally, could suddenly mean
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that there's big gaps in the market. people aren't getting the kind of price or returns that we expected. just real quick before we go, do you have concerns about these fixed income instruments that people have been piling into looking for yield? >> well i look at both sides of this. i know a whole lot of retirees who would love to start getting some kind of return on their savings. if you're an investor and you're not prepared for interest rates to move up you've been asleep for a very long time. so frankly i'm looking forward to rates moving up. what we've seen with the consumer including with the savings in their gas tank is they're not spending the money. so i would be delighted to see the consumers -- you know, 15% of our consumers are retirees. >> america is not going out of business right now. and the u.s. economy may not need that cheap easy money to thrive. so we all look forward to normalization of rates. >> amen. >> savings is going to show up
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somewhere. i think the u.s. will be fine. but it just hasn't shown up. >> very good folks. thank you. appreciate your comments today. a lot of fun. >> the dow is now up about 30 points. it's continuing to gain a little bit of altitude here. the s&p adding about six on this session. the nasdaq is up 12. small cuts do helicopter tocontinue to lag. >> here's the reason for the cocktail hour survey. constellation brands paying its first dividend since going public 4 years ago. the ceo tells us what's behind that process next. also we're going to talk earnings and how he plans to spur growth as the global economy flattens. >> also ahead, jamie dimon sounding that dire warning on unattended consequences of stricter banking regulations in the next financial crisis. find out what is concerning him, and if the experts think he's got this one right. we're back in two.
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we have such interesting conversations. i sound like i know what i'm talking about. the dow is up 68 points. the nasdaq up 21. let's see the ten sectors inside the s&p. all but one are positive today. i mean that really is not reflective i don't think of major averages. >> it's energy leading the way. yesterday we had one of the worst days for oil in quite some time. today the fact that it's simply holding its ground is enough to send that to the top of the leaderboard. >> and utilities are lower. we had a really bad 30-year auction today. three basis point tale. very, very wide there.
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so the demand wasn't that strong. so yields are going up. >> my opinion, always that the best conversations sometimes do happen off camera. so that's just my thought there. general electric is moving towards the highest levels of the day after multiple reports that the company is close to selling all or part of its $30 billion in real estate assets. the company is set to be in talks with blackistone or wells fargo. ge shares climbing all day. there's also shares of mgm resorts climbing as well. the company announced it was going to have a special dividend of $400 million paid from its city center joint venture. it's going to be split between itself and, again, dubai world, which is its partner on that las vegas city center complex. those shares reacting higher as well. on the earnings front, you've got spirits, constellation brands. beat estimates by nine cents with earnings of $1.03 per
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share. you can see there up by about half a percent today, guys. back over to you. >> thank you so much. we're figuring things out. >> putting the pieces together. >> oh if only we could talk about it. let's get more on what's driving constellation brands growth. >> we are joined by rob sands. welcome back. good to see you. >> thanks. >> and is this all about corona? >> i'll tell you, that's a large part of it but it's really all about corona. it's all about modello, which is the second largest imported beer brand in the united states and growing double digits. and it's about some of our spirits brands. we gained significant share in the spirits industry. we've got some terrific wine brands that are also growing fast. black box, the dreaming tree. just to name a couple. kim crawford. >> one thing that kelly and i have been talking about is this
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tremendous popularity for the hispanic brew the beers out there. the modellos and the coronas. why them? is that at the expense of the mass produced domestic beers like the anheuser-busch and others? why have we seen a drive toward those particular beers right now do you think? >> there's a general drive to what we call general beers. more premium beers. our portfolio has benefited from that. and the craft segment has benefitted from that. so it's a general trend towards premiumization. and as it relates specifically to hispanic it's all about demographics. the hispanic demographic is growing at probably the fastest rate of any demographic group in this country. >> agreed. >> so hispanic-oriented products
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are really hot right now. >> and rob, especially after integrating your last big act we acquisition, 40 years as a public company. you're now paying a dividend. there are a lot of investors whose ears will pick right up. what can you tell us about the sustainability and the growth of this dividend going forward? >> and what took so long? >> we've been a growth company historically, but we finally have reached a point where i'd say that we have the confidence to number one, both continue to invest in the company and continue to grow and to return cash flow to our shareholders. so, you know we find ourselves in that really enviable position where we believe our cash flows will be sufficient in the future to do both, and, you know our business is growing at a great -- at a fast rate. so that's why we have the confidence to do both for the
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future. growing the dividend, yeah. we will grow the dividend. you know we talk about the dividend as a percentage of our net income. we should be able to grow the dividend as our net income grows. and we also have a range from a percentage point of view of 25% to 30% of net income to be returned to shareholders, so there's some room there, too. we're optimistic about the dividend. >> you sort of answered my question, but let me get you to amplify that. i thought okay rob sands is finished with the acquisitions binge, but you seem to think growth by acquisition is still not off the table for you. >> uh yeah. we have the possibility or -- to make selective acquisitions, tuck in brands things to that effect. our cash flow is going to be strong enough to as i said both return cash to shareholders, and invest for the future. whether it's in m&a or marketing
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and otherwise. >> where in your portfolio is there room for growth then? who are you talking to? >> oh, i think that high end beers, there continues to be a lot of room for growth. i think that's going to continue to be a fast-growing segment, whether it's craft or our mexican portfolio. wine continues to be a fast-growing consumer goods category. and we have some of the best brands in the business. we grew our spirits business 8% this year. which is tremendous growth. like i said svedka in particular. so lots of things to invest in. lots of areas that are ripe for continued growth. >> before we go anheuser-busch is launching a "let's grab a beer" campaign, which they're basically saying to get the message out there to everybody across the table to grab a beer, whether it's theirs or somebody else's. is this a campaign you support? would you be part of funding it?
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do you think it's even needed given what you've just said about the growth in your own beers? >> hey, i say let's grab a beer too. but no we wouldn't be funding it but you know on the other hand, we don't have any objection, and it's probably a positive thing. they're promoteing the industry generically. so i think it's going to be a positive thing. >> it just also tells us that you know tastes have shifted. and now a big industry effort. by one company in particular to get them to shift back. >> thank you, rob. see you later. >> thank you. >> rob sands, ceo of constellation brands today. >> 40 minutes, a little less than that to go before the closing bell. the dow is up 54 points. the nasdaq up 20 points. up next another day another buyout. why is linkedin snapping up linda.com for a cool $1.5 billion, and what will this do for their stock and bottom line? we'll get you those answers when we come right back.
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we're talking social media stocks today, because linkedin is buying lynda.com, an online educational site for $1.5 billion. >> our julia boorstin has the skinny on this deal now. hi julia. >> hi kelly. this is linkedin's biggest acquisition by a factor of ten.
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ceo jeff weiner says it expands the company's potential market opportunity by $30 billion. online education company linda offer -- lynda the opportunity to improve creative skills offering 3,000 online courses, adding an average of 60 more per month. the company grew its revenue about 20% last year to $150 million. about 2/3 of that is from individual consumers. the other third is from businesses paying monthly or annual fees from limited access to lynda's course library. shares on the rise today for the potential for the two companies to grow together. linkedin could identify skills its members need to recommend particular lynda class. linkedin has nearly 350 million members, so the potential, if even a small percentage of them pay the starting fee of $25 a month could be huge. bill? >> all right julia, thank you very much. so what will this deal do for
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linkedin's stock in the future? >> let's roll it out. james joins us saying the stock is going higher. he's got a $300 price target. max wolf thinks it won't surpass its present valuation for the next three years. so let's start, james, with your $300 price target. does this deal fit in to that thesis or add to it? >> when you look at the mission that linkedin has, this fits exactly into their wheelhouse. so many opportunities to bolster near-term engagement. could be a person looking to boost their skill sets. in longer term it's a broader education plan. but the value that lynda.com really brings is a 20-year track record. entrusted relationships with consumers, governments, higher education institutions corporate enterprise and the ability to do so across multiple languages. so you can value the valuation today, but at the end of the day, this is one of the most
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trusted brands in the space. >> max, what about you? you're just concerned about the expenses going up too much for linkedin right now right? >> i wouldn't disagree that broadening the revenue is a good idea. i think lynnda makes a certain sense. they just bought an aggressively growing private company at a multiple less than 25% below theirs. so lots of things might be acreedive to them. but they're at a multiple here which is really pretty far up into the nosebleed seats. like the company, like their future. don't know if i have to pay for it to be perfect. next year and the year after today. that's my issue here. >> and james the shares are trading at about $255 today. how do they get to 300 from here? >> sure. when you look at the valuation, i think it is near-sighted to focus on what the near-term valuation is. what you've got to do with linkedin is take a step back and
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focus on what are they really doing. they're tackling highly inefficient industries. not trying to take share in a niche market but tens of billions of dollars in each vertical they're going after. sales generation. and they're doing that in the very early doors, $3 billion revenue. we like it and we think the focus on valuation near-term is a little short-sighted. >> max, in a very polite way, james just said you're being short-sighted. >> when he focused on valuation, we are always near-term sighted. based on what the numbers could be not what the world might look like. because those are guesstimates with the heavy emphasis on guess, and we have to make an estimate. this could be all kinds of things. this could be a soft serve ice cream company serving people on mars in 15 years. the problem is if i get you a valuation today about soft serve economies on mars in 2029
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there's a possibility it isn't back up with "closing bell", but it's from the outside. >> james? >> in fairness, it's not an ice cream company. >> it's very near-sighted, though? >> this is a company that's trying to change the way recruitment is done central repository of jobs online. they're trying to emulate facebook and moving off a platform. and really, it's about -- is it going to be the cold call of today, tomorrow? no it's going to be about social selling. >> we have to go max, but if you don't like linkedin is there anybody else who you do like? >> we think there's a lot of great plays on the app. let's be clear here, i agree with a lot of what he's saying. i think linkedin is a great company with a bright future i just don't want to pay for the best case scenario tomorrow and the day after today. that being said, there's a lot of app-based sales and sales interaction programs that we like a lot. and we think things like relationship science are doing
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really well here, helping you map out who you know, how you know them and who you want to talk to in a proactive manner. >> so first it was networking and now it's relationship science. >> that's how it works. >> thanks, guys. >> as the world turns. now here's a cnbc news update with courtney reagan. >> here's what's happening at this hour. the california public utilities commission voted to penalize pacific gas and electric $1.6 billion for a 2010 gas pipeline explosion that killed eight people and destroyed more than three dozen homes in suburban san francisco. it's the largest fine against a utility in california history. standard and poors says it will likely downgrade chicago's a-plus rating if the city lacks a plan to sustainably fund its pensions by the end of next year. the warning was released in the wake of rahm emanuel's re-election on tuesday for a second term as chicago mayor. a british energy company announced a major oil find in southeast england. uk oil and gas says there may be
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as much as 158 million barrels of oil per square mile in a five-county region near london's gatwick airport. today marks the 150th anniversary of the end of the civil war. general robert e. lee surrendered his confederate troops to ulysses grant in virginia in 1865. to commemorate the event, a battle was reenacted at the site. that's the cnbc news update for this hour. >> robert e. lee then went on to become president of washington lee university, the alma mater. started the honor code started the journalism program, started the tradition of students in their junior and senior year off campus to mix the community. you can all look it up. >> but she digresss. >> thanks courtney. 30 minutes to go to the close. the dow is up 62 points at the moment. there's the nasdaq. up about 19 bill. and when we come back china is stoking controversy right now on whether the u.s. should
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support its plans to launch a rival to the world bank and the asian development bank. we're going to discuss why this matters to u.s. businesses and what the smartest move for the obama administration would be, coming up. also ahead, did you miss the rally? as the u.s. stock market trades near record highs, a new survey shows you're not alone. more than half of americans are currently sitting on the sidelines. we're going to pick the brain of a top financial planner about strategies to get your feet wet, when we continue. legal solution that's right for you. with easy step-by-step guidance, we're here to help you turn your dream into a reality. start your business today with legalzoom.
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welcome back. britain, germany, france and italy have all signed on to join asia's infrastructure finance bank. it will provide openings for roads, rails and construction projects across the continent. >> so why is the u.s. standing firm in its opposition to joining this particular new bank? jeff cox is here. what's the deal? >> thanks bill. well the asia infrastructure investment bank poses the latest challenge and the u.s. certainly has had no shortage of challenges from china over the years. it's set up to fund infrastructure projects and develop the developing markets in the asian region. sounds innocuous enough, right? well, there's an interesting sub text here, and the sub text is that it provides a direct
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challenge to the international monetary fund and the world bank. now, the u.s. exercises a tremendous amount of influence in the imf and the world bank through its funding and it helps not only fund projects, but it also helps influence how those projects are developed. now, this started off as a fledgling project last year. now it's got 35 members, as kelly alluded to some very close american allies. so it's no longer just some shot in the dark. it's something that's quickly gathering steam in the world financial community. >> and we bring in here ravine joining us the ceo. we were just talking about your business off air a second ago, which is fascinating. what we really are interested in is your perspective that by not joining with the aib, the u.s. is basically setting businesses back from their dillings in the international markets for years to come.ealings in the
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international markets for years to come. >> generally, yes. i would say generally i'm all for infrastructure. it keeps prices low at wal-mart which is great for everybody. if it's for infrastructure, i'm for it. >> but is this a zero sum game? should u.s. businesses be worried about the fact that some of our allies are going with this aaib? >> i definitely am not going to opine on the entire geopolitical political system. what i can say as an entrepreneur who owns businesses in asia, where we are, it's very capitalistic. it's a very good market. it's growing for us. it looks quite good. i believe the u.s. in the long run gets things right. >> i will opine on geopolitics. this is what happens when you have a leadership void. there's going to be somebody who steps in. now, china has been pushing the world bank and the imf to loosen up some of its regulations, to give china greater influence. they didn't do that. basically at the behest of the u.s. so you have this leadership vacuum. you have china stepping in and
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saying look we can do this, too. and we can maybe do it even better than you guys can. larry summers had a blog post about this that got a lot of attention around wall street and in washington, just saying look it's not a democratic problem. it's not a problem problem. it's an american problem, that there's a development atmosphere happening out there and we're going to miss the boat on this. >> which goes to the question do you feel like we'll be at a disadvantage longer term if the u.s. somehow loses a foot to -- let's put it this way. china has said the washington consensus, the way the imf runs things and tries to impose its ideology on countries interferes what it thinks will be a better approach. if china takes a different approach with investment, with partnerships, with development, would that affect your business somehow? would you feel crowded out? >> i mean ultimately, again, the point i made earlier is i think the u.s. is actually going to get this right. i think that the u.s. is all about business. we are the most democratic the most capitalistic, the most open, the most free the largest
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economy. the most important. we're a super power. i think it's going to stay that way. and i think that for people like me, i'm an american i have sales force in the states i have a factory in china, i have a factory in india. i'm a global entrepreneur. i think that china is being good enough to us. are there issues? of course. >> what about jeff's point the perceived dysfunction in washington. the squabbling between the democrats and republicans. there is some confusion then on the part of our foreign counterparts as to exactly what the economic policy is in the united states, right? >> i would answer this question most as a citizen. i read jeff's article. without a doubt, i don't think you're going to find anyone who says there isn't a high amount of political dysfunction in this country right now. >> i think there is a blip. in the long run, america typically gets things right. squabble on the left, squabble on the right. >> what do you mean by that? does getting it right mean ultimately signing on along with a lot of these other western european countries or does getting it right mean trying to assert the imf and the world
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bank and some of these institutions traditionally seen as more american in their leadership? >> i mean if you look at who's on the aib, it's a laundry list of our allies. there's a tremendous amount of momentum for people that the thing is actually going to happen. i think that in the end america one way or the other -- i don't know if we're going to be a part of it or we're going to be on the leadership committee. we're concerned about the governance, the social aspect of it. those are the things that america has complained about and i think that america will obviously negotiate very hard to make sure that they don't do anything to hurt guys. i don't think america's going to do anything to hurt business. >> wouldn't you like to see the u.s. take a leadership role in this? don't you think they need to step up? >> i absolutely would love the u.s. to take leadership on this. >> the administration has been deafening in their silence about this. the only thing we really have on the record is one of the undersecretaries of state was on cnbc europe a couple weeks ago. and said hey, we're okay with this. but we're concerned about governance and concerned about environmental regulations.
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so it's sort of a non-committal committal kind of a thing. >> i have a couple hundred employees, a city that has barely a million people. so you wouldn't have even heard about it. you go there, there's americans all over the place. there's mexican restaurants. irish pubs. it is a boom town. my point is that we entrepreneurs, are working together on the ground already. and i don't think at the macro level that's going to be screwed up by the high level. i think that in the end, bottom's up, top down. >> appreciate your on-the-ground perspective on this one. much more on jeff's piece on cnbc.com. >> we had a symposium on nonstick coatings. >> dishwasher safe technology. dow is up 51 as we head toward the close with 18 minutes left here.
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the s&p is up eight, the nasdaq up 18. coming up, not a pretty picture. why jamie dimon says the unintended consequences of new bank regulations could be ugly for everybody in the next financial cry sismsisis. >> our professional along with barney frank. we'll debate if he's right, coming up.
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crude oil is clawing back. >> jackie standing by at the nymex. why the turnaround? >> we did see coming off of the session highs at the close today. we were only up 37 cents. they said what definitely added some support today was the fact that they were keeping an eye on the situation in yemen. iran dispatching a naval flotilla to a very key waterway. the concern there is that it could aggravate the situation with saudi arabia. at the same time, you have people looking at that inventory number yesterday and saying could this be a peak for inventories?
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finally, i think it's important to note that we tested key levels as one trader put it we got up to 52, and we failed very hard there. it could be a little bit more of this seesaw action in the next few days. back to you. >> as mentioned, a lot enjoying it for the time being. thank you so much. 13 minutes to go. the dow's up 60. >> there's slight sale side bias right now. right now the dow is up close to the high for the session. the s&p up eight. bumpy ride obviously. so we'll find out how he can close the session coming up in a moment. stay tuned. lped one million business owners get started. visit legalzoom today for the legal help you need to start and run your business. legalzoom. legal help is here.
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welcome back. the markets are holding steady. we want to look at what's been happening overseas, overnight. joining us is bruno delama from global x funds. bob pisani is joining us as well. we've had this move higher in the chinese markets. >> the price depreciation of domestic stocks in china has been phenomenal. that really is happening with stocks trading on shore.
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if you look at the shares that are trading in downtown it's really coming back the last couple of days. you see those stocks that are trading in hong kong are really close in the gap. >> why now? what's going on? >> some of it is driven by the hong kong shanghai exchange. this is a direct connection where people in shanghai can trade hong kong stocks or the other way around. you're seeing all the flow. there's about a 30% discrepancy in prices. >> bob, excitement about asia. excitement about europe. what about the u.s.? >> well, we've got a little bit of problems here. we're in an earnings recession, in a period where there's some economic uncertainty, and the fed seems determined to try to raise rates, at least one time this year. you put those three things together, you've got uncertainty, and you've got people who aren't interested in buying the market. we've had this problem for two weeks now. i called at the desk. you guys doing anything? no, we're dead here bob. anybody want to sell something? get somebody interested in the
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market. but give us a list of reasons we should be buying and that doesn't add up. what's amazing about china to me is the chinese investors are getting more sophisticated. they see it doing great this year. they see hong kong lagging. all of a sudden in the last few days they're starting to buy hong kong. where did they start getting so sophisticated? >> it's interesting, because china is an interesting market. it's dominated really by retail investors. so you're seeing some of the more sophisticated institutional players. about $2 billion, the maximum amount of flow you can see in one day from shanghai to hong kong. so you see the more sophisticated institutional investors. plus the new connectivity is really starting to take place. >> you noticed the connectivity. once that started and we start talking about it in november the volume shares -- the shanghai took off. is there a relationship?
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>> and also what about u.s. investors who might be looking at some of these developments and thinking to themselves should i gain synthetic exposure to this asia-china story or not? >> it's definitely made it easier to invest on the part of americans. and there's a spade of new a share etfs where you can invest in the mainland today. but we're seeing real activity that wasn't there before. i have been asking a lot of people, why is it blowing up? chinese investors aren't happy with real estate apparently. they're taking money out of that putting it into stocks. they're not happy with gold. that's not going anywhere. i think the point is what other choices do the chinese investors have? the governments told them they want to do something to support the stock market. >> let me ask in another way. when i see the kind of move you've had in that market this week straight up for a few days here, you start to use that word bubble. aren't we putting in a top here? >> to see such a move in such a small timeframe.
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but if you look at the move in the domestic stocks the last six months it's about a 70% upswing. if you look at relative valuations, it's still going to look expensive. for a market that's still growing earnings slightly faster. if you look at the hong kong move it's only moved up a fraction of that. it's really just catching up and there's probably still a 30% discount in hong kong relative to on shore. >> stay right there. we'll get to the closing countdown. see how we do as we go out with the market up 52. >> and then after the bell take a look at this chart. it will tell you the story. a new survey shows more than half of americans sitting on the sidelines even as stocks trade near record highs. a top financial planner explains why that's not the best strategy to grow your retirement funds. stay right here. you're watching cnbc, first in business worldwide. it took tennis legend serena williams,
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and reach, toes blossoming... not that great at yoga. yeah, but when i slipped a disk he paid my claim in just one day. ahh! so he had your back? yep. in just one day, we approve and pay. one day pay, only from aflac. [duck snoring] here's what we're talking about, the explosion in these chinese equities here. this is just the last couple of months here. now they're playing catch-up. talk about that in just a second. let me show you the dow today. kind of a quiet narrow day, trading on either side of the unchange level, a rally selloff. here we are finishing with a gain of about 59 60 points. one other thing.
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the 30-year treasury auction didn't go very well today. and the yield went up quite a bit. does this thing have legs do you think? >> i think it's beginning to continue. if you look at just the fundamentals, absolute valuations on shore, about 15 times earnings for the shares about 11 12 times earnings. fundamentally, there's upside. technically, it's starting to break out. again, we see about a 30% discount 25% to 30% discount between hong kong and shanghai. >> and we use this word tina in the united states. there is no alternative. actually, there's tina in china. there's widespread reports of a real estate bubble going on. chinese investors are really worried about that, they're pulling out. gold is going nowhere.
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the government has actively said they're going to be supporting measures to help the stock market outs. so put those things together. bubble, real estate nothing going on in gold. government supporting stock market. chinese investors are sitting there saying tina there is no alternative and i think that's a large part of what's going on here. >> what about debt securities over there? >> fixed income is one of the alternatives that they have, interest rates in china are reasonably high. so you've got to get fixed income, government exposure at about 6% 6.5%. that is traditionally where all the money has been in china. so really the move into other asset classes is relatively new. it tends to be called real estate. >> i think we need to get away from it. mainland investors are driving these particular moves now and i think we have to recognize that they're really starting to wake up as a really active global market. >> very good. bruno, good to see you. thank you. stop by any time.
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bob, thank you as always. we're going out with some modest gains for the dow industrial of about 61 points. the s&p up nine. much more to come now on the second hour of "the closing bell." i'll see you tomorrow. welcome to "the closing bell," everybody. i'm kelly evans. here's where we're finishing up the session today on wall street. stocks got a little bit of a lift there into the close. the dow going out with a gain of about 55. we were only up a point about an hour ago. the s&p and the nasdaq both having almost half percent gains today, up nine and 24 points about respectively. and it's all the more interesting because that russell, the small caps sometimes looked to as a leadership were struggling today. a lot of things to get to. let's get right to it with today's panel.
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joining me is jim la camp. and also with us is steve grasso. steve, with a welcome to you as well. jim, let's begin with your views on this market here. we're beginning to talk about how a lot of people haven't been participating. there's something we heard yesterday that stuck with me. he said sure we've moved sideways for a couple of months but that's as good as a correction. would you view it that way? >> i would. i think there's things going on below the surface. the nasdaq had a pretty good week this week if you compare it to the other averages. then you start to look around the world and see markets moving in china, hong kong, europe japan. the emerging markets broke out this week. i feel pretty good about things. the market has been closing a little weekly.
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it's become more of a stock picker's market. >> and the retailers today are a bit of a mixed bag with some disappointments. >> wall street analysts actually expecting a decrease of 0.6%. the company did note that the timing of the easter holiday, with it being a little earlier this year than last year helped march, warning a bit that we could see a hurt in april. the strength from old navy with global march same store sales up 14%, down 7% for the gap. namesake brand, up 2% better than expected. >> thank you courtney. any word on disruptions, things of that nature? >> not in this release. this release is pretty tight. just basically the same store
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sales numbers. we know that gap is one of the retailers that does operate internationally, so we know it's gone on with the strength of the dollar versus other currencies. so i'm sure it will be a bit of a headwind there as well as that issue, because they're importing a lot into those main ports on the west coast. that conjection is still pretty heavy. >> you shop at old navy? at 14% year on year? >> well, not really. i don't shop that often. >> nobody does. apparently guys wear the same thing to workday after day after day. >> the brooks brothers or ka cabella's. >> don't bring the hunting gear to work. >> you don't walk down the streets of new york with a gun case. >> it's the nasdaq you have to keep an eye on here. it's become the real stock picker's market. at the same time are people as
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concerned about valuations in some parts of it. so maybe it's been too strong. where do you think there's still opportunity across these markets? >> i think the millennials and others are playing ingpointing the way. they're looking at unconventional markets. small banks, private equity. the execution we're seeing on the sub debt issues that we've been rating for large community banks is amazing. four or five times oversubscribed. i think that to me is the story. the people look at wall street they see an institutional market, and they also see big banks, kelly. they don't like big banks. anything affiliated with big banks has no -- absolutely no pull for the average american right now. >> and we're going to get into more of this later as well. how strong is this economy ultimately? there's a real back and forth argument still. where do you see these tea
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leaves? what did we learn at this point in this year? >> big banks aren't lending. it's only the smaller institutions, unconventional lending platforms like peer to peer. that's the only place we can get credit today. what you've got to remember is there's no velocity in the banking system. it's a big static pile of assets. >> i know cap rates for real estate are going around 4% in a lot of places. >> lower in some markets. >> this is where they peaked. >> an awful lot of refinancing coming at us in the commercial real estate state. it's going to get done. >> i'm so glad we're all talking about this. for months it's been a discussion about is real estate -- and i try not to use terms like commercial real estate. we're talking about offices hotels, apartment buildings, shopping centers. we've seen investors pouring money into this space. yields are coming down.
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>> it's amazing. it really is. >> mary? >> just why don't you continue your thought? you were saying -- >> all of these assets classes other than stocks and bonds. i think are attracting enormous attention because of the returns. we just put out a piece today talking about residential. both lending and servicing. there's no money there. these are single digit trades now because of the fed. the fed has driven down returns on these asset classes to the point where investors don't want to put money in it anymore. >> aren't you worried that the shadow banking system and all these other deals -- you look at where pinterest gets valued. >> hey, i like pinterest. >> i do, too, but $11 billion? i don't think so. the parts of it that aren't resolved, that have issues fine. but i think the fed and the other regulators have to get a consistent message. they beat on the big banks. they chase them out of mortgage lending.
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and then they complain about the fact that non-banks are increasingly part of that market. what do they want? >> and they smashed the yield curve to the point where the big banks can't make any money anyway. >> the only reason that banks have been active in this space, because a gain on sale has been so attractive. they're selling everything. they're selling servicing. they're selling loans. >> let me bring steve and mary into this combo. just keeping an eye on market levels. what have we learned into this year? the deal flow started right away. >> right. you know what we've seen it's a very healthy environment for m&a. and that's probably going to be reflected in bank earnings which come out next week. that's a positive for this sector. as far as selling things it's a regulatory issue as well, right? >> the rates have been rallying. so if you own a loan you sell it to one of the agencies, you take the game. >> so looking ahead to the earnings season coming up at least for banks, which i'm touching on earlier, the results are expected to be good.
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that's the area of strength. financials should benefit to some extent especially the big banks. >> part of the bank you're talking about has nothing to do with lending. >> but they're still under the banks. we could get specific and we'd all go crazy here. steve grasso save us from getting too crazy. >> it was just this 2088 level on the s&p has been resistance for maybe about half a month or so. once we broke through that, i think guys started getting a little active on the buy side. the 50-day is 2075. we could be there tomorrow. >> you've seen this every earnings season. we've seen the market sell off,
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either the previous month or during the month of earnings and then as earnings come out, and they haven't necessarily as bad as feared, the markets have rallied back. >> exactly. so the market has done one thing and it's been bought every dip. obviously if you expand it out to '09, it's been an extreme buying opportunity. so this market knows nothing but to buy the dips and then you can't even say sell the rips at this point, because people have stayed invested, have been rewarded with profits. >> and let me just go back to show what's happening with gap after hours. i just want to talk about retailers. gap's global comps were expected to be down about 3.5%. came in down about 7%. jim, listen the consumer -- this is what we've been talking about this hour. it's changing. the preferences are changing. they were buying different kinds of things. what do you do with the retailers here? >> you know everybody thought, with lower oil prices year over
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year, they've come up a bit recently, but lower energy prices, and lower overall prices from the strong dollar that the consumer was really going to ramp it up. what we saw is the consumer actually saved a little bit more money. the savings rate went up. and the spending really didn't materialize to the point that everybody thought. >> even costco results were a little bit soft. >> so we can blame it all on a strong dollar for our exporting retailers, but there's more to the story under the surface. >> the other thing they're talking about, only 52% of americans avoid the stock market. let's look historically where they are. they've been saving money.
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>> that's correlated to consumer spending. they need to feel good about their jobs. they need to feel that they're going to get a raise. it usually takes about six months for it to trickle down to the consumer. the consumer feels i'm going to save $50. it's not going to cause you to buy a new home. >> nobody thinks about the fed's taking a couple trillion dollars a year out of the pocket of consumers because of low rates. so waiting for inflation i think is unreasonable. >> that debate will continue. thank you, sir. stick around with the rest of the "fast money" crew. one biotech company, we've been talking about this headed to court next week for pulling a
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hard switch on its alzheimer's drug. what's at stake for activist? find out at 5:00 p.m. a new survey finds more than half of americans do not invest in the stock market and that includes their retirement accounts. why are they sitting on the sidelines? is it mistrust, wage stagnation or something much different? that's next. also jamie dimon defending jp morgan's size. coming up barney frank weighing in on whether jp morgan is too big. you may be surprised by what he has to say. you're watching cnbc, first in business worldwide. so why pause to take a pill? and why stop what you're doing to find a bathroom? with cialis for daily use, you don't have to plan around either. it's the only daily tablet approved to treat erectile dysfunction so you can be ready anytime the moment is right. plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions
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joiping us richard copa, member of the cnbc digital financial council. what does this number say to you? >> i was surprised when i read the article myself. i think what it's telling me is that people just don't have a plan.
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they don't have something to follow and stick to to go forward. that's what's caused people to be stymied and not invest at all. >> mary thompson is shaking her head here but i think it's for a different reason. >> i'm just thinking what this survey tells me is that people just don't have money. it's not that they don't have a plan, it's that they don't have money. my first question is, okay, 52% of americans aren't invested in the stock market. in 1981 it was about 31%. it peaked at 32%. this according to the census bureau. 2001 at 52%. so really it hasn't changed all that much. but the number that concerns me is the average family which has an average income of just over $50,000, they only have savings of $3,800 and we all know that investing in the stock market is risky. so i'm surprised that 48% of them have. most of this is due to 401ks,
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which have replaced defined pension plans. >> i have never seen an environment like this. people don't believe it. >> they don't believe the stock market? >> no. they know that the federal reserve board has pumped in $4 trillion into the economy. and that a lot of companies are just buying back stock. and a lot of financial engineering. but they don't believe it no matter what you tell them. >> but here's the thing -- >> you could say that but the reality is over the last six years, you would have averaged, just looking at the s&p, over 17.5% annualized. so you could doubt what's going on, you could give various reasons for what causes the market to go up whether the fed is forcing people to take risks and invest but the reality is if you're not part of the stock market you're losing in your portfolio. and this report is about 401ks. it's about iras. these are the tools, and people have to realize it. look pensions are pretty much no longer part of the retirement plan. and social security is suspect. so it's incumbent on investors
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to really have a plan whether it's the 401k the i.r.a. and to invest over time. savings is up but it's small dollars. savings from gasoline. every bit helps. so you have to. >> the other thing that you really need -- i'm sorry for interrupting -- is you need financial education. i'm listening to jim make some very good points. do you really think the average american knows what that means? i don't think so. >> i don't think so at all. >> if we're going to have people -- if we're going to encourage them to save in the stock market which is a risky endeavor in the first place, we need to educate people. and that is first and foremost what we need. >> there is a survey out about ten years ago that said more people would rather clean their toilet than look at their financial plan. there's a lot of people that just won't do it because it's too daunting of a task. and to your point, they don't understand it. >> no they don't. >> they've seen the crashes of 2002 and 2008 and they're afraid of it. >> it's cynicism, too. to your point, mary the same number that's very close to the
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52% is how many households have no savings. >> people choose what they're going to put their focus and attention to. i mean i know more people in the millennial generation that spend more time worried about fantasy football and figuring out who's going to be on their team each week. they know how many fumble recoveries, how many sacks, but they don't have the attention to put into their 401k and it goes into some default, which is in all cash. >> jim just give us a word before we go. what is the difference between investing in the stock market and betting on fantasy sports? >> you don't own anything if you bet on fantasy sports. there's so many great companies. and these people know these companies. i'm not recommending any of these, per se. but they know these companies and they know they're great companies but they're still afraid of the stock market in general. >> rich, thank you for being here. >> thank you, kelly. >> will regulations make it harder to respond? jamie dimon thinks so. up next barney frank, the co-author of the dow frank
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jamie dimon complained about overzealous and unreasoned new regulations, but also spoke optimistically about the safety of the system at large and of course, his own bank jp morgan. highlighting not just the past fiscal year but the last five since the financial crisis. dimon touted jp morgan's returns on capital as well as its margins, among other metrics, to indicate how it has adapted successfully. even as the share price has improved only modestly. he also defended jpm's size and scope, noting that its unique capabilities as a lender corporate adviser and consumer banker allow it to move trillions each day on behalf of a wide swath of different customers. at the same time dimon railed against the consequences of new regulations. like the dodd frank volcker rule. even in key markets like treasuries subjecting them to wild bouts of volatility on days like october 15th of last year, where you had a real lack of
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bank inventory in the market. and that created an unprecedented move. >> thank you so much, kate kelly with an update on that. joining us with his take on whether jp morgan is getting too big, the co-author of the wall street reform and consumer protection act, former representative from massachusetts, barney frank. representative, welcome back. what did you make here of this argument by jamie dimon? >> first, whether or not it's too big, that's not something on which i expressed an opinion. we did implicitly express that opinion, because in legislation we differed with those who said we had to reduce the size of the institutions. one of the problems i've had with people who tell me that we should reduce these is i don't know to what size they want us to get down. if the argument is that no institution should be big enough so that its failure has reverberating consequences, then nobody could be as big as lehman
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was, because it was lehman that touched it off. >> but i don't quite follow congressman. are you saying that you were never against jp morgan being too big? >> correct. you sound surprised, but i would be -- >> i am i confess, i am. >> well what makes you -- other than stereotyping on your part i don't know why you would think that. >> no, i apologize, because too big to fail has been kind of the moniker, perhaps wrongly applied to the financial crisis. so you're saying the real focus here should be what? is dimon right, that liquidity is a risk? >> no i'll explain. what we had were banks that were too big to fail without somebody doing anything. and this came from the bush administration people. if a large institution can't pay its debts, we to either pay all the debts as they did with aig, or none as they did with lehman. so what we did was to change it so that if a large institution
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fails, at that point, it fails. the federal government steps in. and takes it over and dissolves it, for some semantic silliness we always call dissolving a bank resolving. and then the federal government is empowered to pay as much of the debt as is needed to prevent a downward spiral but that is recovered from other institutions. so yeah, there are institutions there always will be institutions that are too big to fail without taking some action. but what we did was empower the regulators to step in put the institution out of its -- out of our misery and then control some of the debts. so as i said the institution whose failure triggered this was lehman brothers. so if you're going to say no institution should be big enough so that we would have to react if it failed then the biggest one you could have would be smaller than lehman and i've never seen anybody define that. i don't think the markets can take care of that. and there is an argument that people can be too complex.
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that's one that mr. dimon has to deal with. we had, for example, the question -- and here's the regulation where i believe he was wrong. we did empower the regulators and they acted to put regulations on the derivative trading of the foreign subsidiaries of american institutions. mr. dimon was very angry about that. but frankly, his takes against it weakened when the london wail not only lost billions and billions of dollars, but he didn't know for a while how much was at risk. so some effort to have some better information. >> chris whalen pointing to october 15th in recent trading events that these markets have become dangerously liquid. >> well i think the volcker rule and some of the other regulations have taken an awful lot of liquidity out of the sell side of the market. there really isn't a bid out there, even for on the run securities treasuries. you hear this complaint. i'd like to ask the congressman,
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though. you know, we had a 50% loss rate among large institutions during the crisis. jamie dimon actually took a shot at small banks. but they did much better. what did we solve, though, in terms of securities fraud? we never really got into that. we talk about capital. we talk about too big to fail. but we never punished the people who created trillions of dollars worth of bad assets. >> no, i agree with that. remember, i'm a legislator, i'm not a prosecutor. i have no mandate whatsoever. i have no mandate to sit here and talk to you guys. we were not in charge of prosecution. that's the separation of powers. there was one problem, i will say. there were things that were legal before the legislation. that were wrong and are since illegal. on the other hand, i said throughout this i was disappointed there weren't more criminal prosecutions. for one thing, i don't understand how you can find a bank criminal but no human being. i know the supreme court said that corporations are people but it still needs real people
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to work with them. so i share that perplexity that people were being prosecuted. as to securities fraud, i do have this problem. and here i want to put a little blame on my republican colleagues. the bank regulators are financed by their own operations. the securities and exchange commission, the secures and derivatives regulators are dependent on annual appropriations. they didn't have the votes in 2011 to undo the substantive regulation. but they substantially underfunded the s.e.c. in fact, i think that's one of the reasons why the s.e.c. felt pressure. and never find anybody guilty. >> just because we're running out of time here, i'd like you to quickly address two points. the first just being to jamie dimon's point that we began the segment with. dangerous iliquidity. is it a regrettable one in your view? >> i don't see that yet.
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here's the deal. first of all he's arguing two things. one, that he's doing great and the bank's making more money. and the economy is doing very well. stock market has tripled, etc. so it's hard for me to see what the negative consequences are. secondly, there are always going to be problems as you go into a system. and i think there may have been. i'm not an expert. i believe the market is flexible enough to work that out even with the rules. >> okay last question. carly fiorina remarking today in an interview that if she were president, she would repeal the dodd frank law. she thinks it's bad policy. would like your response on that before we let you go. >> first, let's remember that she is a poster woman for atrocious corporate governance with that fiasco they had with wiretapping each other over at hewlett-packard. secondly -- but i appreciate her intellectual honesty. i do think one of the issues at
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stake in 2016 is whether we abolish all financial regulation, not improve it not changing it around. but get rid of it. i think that's what all the republicans will be forced to. and the dynamic is now. now that carly fiorina has said that, given the conservatism, all the other candidates are going to be there. so i'm ready to debate that in 2016. >> all right. we all look forward to it congressman. hp was a tough company to run for a while. thank you for being here. congressman barney frank with us this afternoon. time now for a cnbc news update. courtney reagan joins us. >> here's what's happening at this hour. president obama meeting with the heads of governments from various caribbean nations. this is a part of the president's goal of fostering better economic and diplomatic operations within the region. a wisconsin man accused of attempting to join isis is in custody. he was arrested at chicago o'hare airport yesterday after returning from turkey where prosecutors say he had traveled to join isis.
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real estate heir and murder suspect robert durst appeared in a new orleans court today for his arraignment. he pleaded not guilty to charges of possessing a firearm and drug possession. donald trump was in iowa where he spoke with simpson college students about his education and career path in business. trump announced he was hiring a presidential shlial shlial exploratory committee. he received mixed results. back to you. now, financial abuse, get this. it's the number one reason financial abuse that women stay in or return to abusive relationships. so what steps can someone take to gain financial and personal freedom? this important story when "closing bell" comes right back. help join a continent with nearly 3 million rugged square miles with a single broadband connection. when emerson takes up the challenge
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welcome back. every year tens of thousands of women are affected by economic abuse. we're talking about stuck in a relationship where they're denied access to financial resources. research showing many of these women often lack financial knowledge to leave their abuser and as a rule keep returning to these harmful relationships. let's bring in john rugel, senior vice president of life customer fulfillment. welcome. most people don't understand
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what financial abuse is or that it even exists. could you begin by explaining what you see? >> yeah. thank you. financial abuse is directly tied with domestic violence. in domestic violence 98% of those cases directly relate to financial abuse, and financial abuse is control of the finances checking handing over their paycheck. my mother was a victim of domestic violence as well as financial abuse. and typically, it also means destroying credit harassment at a job, so they can't get free. if you think about it your finances are your life blood, so you need that to live. if you don't have access to finances or understanding your finances, then you can't live or break free from those relationships. >> that's right, john. in one of the pieces on this it points out that financial education to domestic abuse sufferers was once seen as a kind of icing on the cake service. now it's being recognized as a core one. but obviously this is going to take a lot of funding.
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a lot of people who can be involved in the education process here. explain your role in this and what more is needed. >> yeah. you know, this has been a vexing problem for many years and it's only now coming to the national discourse. we at all state have been involved in this for the past ten years, before anyone was talking about it and we made the link early on that the financial abuse, if you can teach people how to break free then that would sustain them to helping them get out of it. as a matter of fact, we developed a financial curriculum that's free to women everywhere that is clicktoempower.org that helps teach them to break free. we've spent over $40 million on this issue, but i'm proud to say that we've helped over 580,000 survivors. in a recent rutgers study, it's shown the efficacy of all that financial literacy has to do with teaching women to break
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free. >> i'm bringing in jim from the panel here. >> isn't there an adjunct to this, that people don't talk about it enough that is financial infidelity where one spouse will hide moneys or accounts from another, and then you go through a divorce, you don't even know that money exists. isn't it another big abuse that women are suffering from? >> that's absolutely correct. and that's why it's important to help more women understand their finances particularly since it is a weapon and they do have hidden accounts. but there are probably three things that we can educate our viewers and women, because domestic violence and financial abuse go across many socioeconomic lines regardless of race or gender. know and understand your finances as you can. two, women need to you know put away money as they can. and by that also whether it's saving change or creating an emergency fund or opening up a bank account. but it's important, i can't stress this enough.
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they actually have to keep that secret from their abusers. but most importantly, getting the help they need. and there's many resources available today. >> mary, this connects back to a theme that has been one of this show, and it's financial education. where does the process start so it doesn't get to this phase? >> well, i think that's a question that we could pose to john actually if you're still with us. i mean how early should we start educating young girls about the importance of finance? my thought is maybe fifth or sixth grade. not just young girls, but young men as well. >> it's a great, great question because it actually -- you hear about this a lot. the earlier we can teach your kids and start talking about their finances, and as a matter of fact i know my wife and i have started talking about our finances with our children. the earlier we can educate both boys and girls about finances and how they work the better. the problem is it ties back to domestic violence and financial abuse, financial illiteracy. and that's part of the problem. so the longer that an abuser
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holds on to the finances the more illiterate they become the more they forget or they don't have access to the information. and that's where they go back to those relationships. it goes back to the premise of i need my finances to get out. if i don't have my finances i can't break free. >> and raising awareness hopefully goes back as well to some of the financial institutions involved to develop processes to deal with this so that people don't become trapped. a lot of points to think about. thanks for sharing your story, for the work you've done and for being here this afternoon. >> thank you. >> that's john rugel with allstate. uncle sam wants you, meanwhile, to wash your car. after a five-year investigation, that's the government's investigation on how to avoid brake problems. the hot list has the details next. plus there are few more iconic images in advertising than you know them well budweiser's clydesdales. they are now launching a new marketing campaign. not only doesn't it feature the famed horses it doesn't feature
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any anheuser branded beer either. we'll look into this coming up. why do we do it? why do we spend every waking moment, thinking about people? why are we so committed to keeping you connected? why combine performance with a conscience? why innovate for a future without accidents? why do any of it? why do all of it? because if it matters to you it's everything to us. the xc60 crossover. from volvo. lease the well equiped volvo xc60 today. visit your local volvo showroom for details.
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alan joins us now with more on "the hot list." >> in droves they come, kelly, to the word mortgage. they put up this wonderful feature that's been kicking it all day.
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basically asking questions, should you really be working all that hard to pay off your mortgage before you retire? latest figures are, the average person hitting retirement age has about $118,000 worth of mortgage debt. that gets people i've got to retire mortgage-free. not really. you might want to think about the high-interest credit card debt saving up for your retirement. people have been eating that one up. also another piece by robert frank. how the rich make their money. short answer capital gains. if you're making 10 million or more, less than 15% is coming from salary. and finally, i love our government. after a five-year investigation into rusting brake lines, the government has concluded, not a manufacturing defect. people need to wash their cars. get the salt from winter off. it won't rust so much and you're okay. so there you go kelly. >> wash your car, invest in stocks. >> maybe they should go hand in
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hand somehow. >> exactly. >> i think we've been told that. they don't live up north. we've known that for a long time. wash your car and get the salt off. >> i learned something. good to see you. anheuser-busch wants you to grab a beer. not grab a budweiser. grab any beer. why is the company behind an ad campaign touting beer in general and not just its own brands? that head-scratcher in just a moment. and tomorrow we'll get a sense on where money is flowing in this volatile environment when luciano siracusano returns to join us exclusively on "the closing bell." stay tuned.
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let's grab a beer. that's what anheuser-busch is saying to alcohol consumerers across to globe to try to get people back into the beer market. the company just launched a new digital campaign. it's just called "let's grab a beer." they decided not to brand it with their own name. joining us for more is patrick hanlan. are you a beer drinker? >> yes, i am. sometimes i drink a beer and wine. >> do you drink craft beer? budweiser? the regular stuff? >> i think i've been drinking ipas like everyone else.
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i also like belgian beer. >> you bring up a good point, because as we discussed, patrick, the need to even embark on this marketing campaign one of the central questions is has the consumer preference totally changed and shifted away from beer? has the industry made mistakes by not recognizing the craft beer movement? do you think generally speaking this ad campaign by anheuser-busch is a good idea? >> i think that yes, the taste profile has changed i think. i think what's happening in beer is the same thing that's happened in coffee and lots of other categories where people have a different taste profile. and i think that the craft beer movement obviously is -- i mean we have pizza and hamburger joints that have their own beer. >> you mentioned the belgians. >> sorry, patrick, go ahead. >> and people aren't -- are making it. their tastes have shifted. millennials have different tastes. when we're getting our water from fiji and places like that.
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in every category people are looking for more designed things. >> don't you think it's a sign of desperation? i mean i thought their super bowl ad -- and i'm not an advertising guy. i thought their super bowl ad was a sign of desperation. making fun of people that are drinking craft beers. fun of people drinking craft beers. that ad would never make somebody who drink craft beers stop drinking craft beers. so i didn't get the entire point. and so it looks like to me that that ad and this where they're just, okay we'll just promote beer in general is a sign of defeat. well we're not able to sell more bud because people don't like it so we're going to try other ways to advertise your brand. >> i think you're right. i think that by discounting people drinking craft beers is not going to attract people -- that segment to budweiser. however, there is a rule of thumb in marketing that says if you own the category which bud does, obviously, that the largest brewer in the world. if you own the category and you just talk about the category, all ships rise including your
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own. i think the thing is -- oh go ahead. sorry. >> i'm sorry. i'm just going to jump in here. i have a thought on this. i see hash tags all over this. i assume they aren't even marketing it to people who drink beer right now. but people who may be drinking in the next couple of years and maybe the only brand they know very well because it is the biggest brand is budweiser. so are they going after a different market at all with this? an even younger market? again, i see #let's grab a beer. >> i think they're trying to become a part of the conversation for sure. which means millennials and a younger market. i don't know if you guys have seen this but just in the -- since 2005 i think they went from just over 14% market share to about 8% a couple years ago. and i didn't really look at the map, haven't done the math but i think five share points or that many share points in the beer industry is probably about a gazillion dollars.
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>> when you look at anheuser-busch and the way they have spawned all these subbrands, is this a sign of defeat? why is it they're not marketing their core brand which has recognition instead of coming out with different flavors of beer every other week? >> well i don't think -- let's remember that they're the king of beers. i don't think it's desperation on their part. but when was the last time you ordered a bud, for example? >> when i go fishing. that's what goes in the cooler. >> i order it every time there's no other beers on the menu. >> we also just heard from constellation brands earlier this hour who reported earnings bolstered by the performance of their corona and modelo beers. the more we talk about this the more it's reflecting on anheuser-busch than the beer category at large. >> they're helping everyone i think. but i think also to remain the king of beers, it would be interesting if they went back to
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their great grandfather's beer recipe and see what that tastes like. >> that or go to belgium? learn a couple of tricks maybe? >> or czechoslovakia. they do use the finest hops in the world. >> thank you so much patrick hanlon, for being here this hour. >> thanks. >> breaking news on deutsche bank to get to now. dominic chu, what can you tell us? >> deutsche bank looks like it's near a settlement over its libor allegations. that according to the sources citing familiar. it says authorities around the world are pushing deutsche bank to pay a record penalty of what could be around $1.5 billion. that would eclipse all prior settlements with banks accused of interest rate manipulation for this london rate or a global benchmark for interest rates. it's in talks to resolve this case as possibly as this month. that according to people briefed on the matter. and this would span regulators
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from u.s. federal regulators like the cftc also with new york state's regulators and regulators in london as well. the justice department also conditioned this deal to be finding at least one of the units at deutsche bank to plead guilty to fraud in what would be the most significant bank needed to have a criminal plea. according to "the new york times" deal book citing sources, deutsche bank may be close to a $1.5 billion settlement that could include a guilty plea in this case. it's a story we'll stay on top of in case of other developments. but right now, big headlines involving a banking giant. over to you guys. >> thank you very much. as we await earnings season to begin for these major banks, it's been a quiet week. next week we'll bring the retail sales numbers and reads on inflation and housing. we will get results. more on what to watch for when we come right back.
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welcome back. we've had one big name among a few other smaller ones reported. alcoa. big because the shares. take a look here. we're down today closing down more than 3%. looking to the panel here, how much of a barometer is this going to be for the earnings season? >> i don't think alcoa has been that good for earnings season. their business is so much more unique than other businesses. yes, the multi-national revenue and the strong dollar that's a big player in this earnings season as is whether the global economy is really as strong as we wanted to believe. historically alcoa hasn't really meant muchl much in terms of forecasting. i think health care is what you want to watch. >> i was just going to ask. it's where the leadership has been. is that still going to tell us as much about the market's direction from here? >> i think so. the reason it's been a leader is because that's where you have earnings leadership.
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you have a lot of strong and fast growing companies in that sector. yet the sector could feel good. >> financials are one of the few areas we're still expecting to see earnings growth. that will get into gear next week. >> we'll see how the big banks come out. on the opposite end, it'll be interesting to see how badly the energy companies have been hurt. yes, we'll be watching banks next week. you also want to see how the energy companies have righted the ship if they've been able to at all. >> have they adjusted. how hedged are they. how long do those last? we don't know all those situations yet. >> their ability to raise funds in capital markets keeping them alive right now. >> well it's -- good point. a lot of energy companies had funded themselves. they dug holes. now they're running what may or may not be profitable. they're going to continue to run them. but back to the banks, i'm in disagreement with you guys.
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i think you may see some signs of hope on the investment banking side but the core earnings for banks, net interest margin, the large institutions are still going to be down. >> got to leave it right there. thank you very much everybody, for being here this afternoon. that wraps it up for us on "closing bell." time now for "fast money" with melissa lee and the gang. over to you. >> thank you, kelly. "fast money" starts right now. live from the nasdaq market site overlooking new york city's times square. steve grasso john najarian, brian, guy adami. google has a way to make money on youtube traffic and how it could impact the bottom line coming up. and a plan for one alzheimer's drug that has an attorney general up in arms. we'll have the details on today's stock therapy. and the mighty greenback. the dollar and oil showing some strength today. we'll debate what that means for the markets. we start off with merger talks in the chips

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