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tv   Closing Bell  CNBC  August 26, 2016 3:00pm-5:01pm EDT

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counter and have to pay the $600. we never got a clear answer from him and didn't sound like that many ever. the poor get subsidized by medicaid. if you have insurance you don't pay that much and then the uninsured. >> thanks so much for watching. >> "closing bell" starts right now. hi and welcome to the "closing bell." i'm kelly evans at the new york stock exchange. >> i'm mike santoli on a day when the markets woke up a little bit. janet yellen's speech arriving today. right around here. at 10:00 a.m. and then a little bit later, after the markets were rallying a little bit, seems like status quo message, our steve liesman interviewed vice chairman stanley fischer right there and the market went down from there. we'll hear more from steve in just a minute. we'll take you to jackson hole for that. >> we'll come back to that pattern. also coming up, every heart
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patient's worst nightmare. a pacemaker being hacked. a firm said the devices are particularly vulnerable and carson block is betting against st. jude. joined live by block and the head of the security fim in a few minutes. amazon goes old-school. the giant is opening more brick and mortar stores. will the move pay off for the internet giant? >> we'll find out. mylan shares are taking a bounce. the real outrage should be aimed at the u.s. patent one says. he'll explain coming up. let's begin with fed chief janet yellen's comments in jackson hole. steves liesman joins us from wyoming with the highlights. steve? >> reporter: yeah, hi, kelly. fed chair janet yellen pretty clear at the fed's annual jackson hole retreat that rates likely rise soon. she wasn't entirely clear about when. she said, quote, in light of the continued solid performance of the labor market and our outlook for economic activity and
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inflation, i believe the case for an increase in the federal funds rate has strengthened in recent months. the market kind of rallied on that. today's gdp report showed sluggish growth just above 1% and stan fischer said he dismissed it as a back-looking measure. >> we want to be looking ahead making this decision. not back. we're reasonably close to what is thought of as full employment. and inflation right this year is higher than last year's. it's still not up to 2%. it's been growing so you ask what are the big numbers we look at that? they're better than they have been for sometime. >> reporter: and so maybe the one that got the market's attention when asked if investors should prefair for a september hike and maybe two this year. fischer said yes if the data cooperate and turned around the market and sent stocks negative and then august jobs report is
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critical for the fed. just be clear. among the gathered fed officials, there seems to be good agreement rate hikes were near and would be gradual, kelly. >> it's interesting to absorb all of this. mike, you pointed out that basically we went positive after yellen's purportedly hawki isis comments until stanley fischer. why did people take his comments at face value and sell the market? >> i think because steve pinned him down saying, you know, he talked about the possibility of two rate hikes for the rest of the year and in fact one starting in september. and it seemed to give stanley fischer the option of sort of not really addressing them that directly and instead he said be braced for both of them. steve, didn't he also say, you know, should we be on the edge of our seats? he said it depends on your stomach dealing with turmoil. >> reporter: he definitely said
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it that way. it's dependent on the data and also true that stan is probably a big more hawkish than janet and the question is how much real space is in between them? it's worthwhile to think about the speech that yellen delivered today. it said right at the very top, i want to make some comments on the current economy and the policy outlook. a lot of times that stuff is buried inside the speech. this was up high where she said the case is strengthened for near high and i think stan reinforced that, maybe more specific than the chair would have done but i don't think we see daylight there and we have to think seriously about september. i can't think of another way to approach this. >> steve, just real quick, any thoughts on the kind of number to look for next friday on jobs to kind of seal the deal one way or the other? >> so being out here, i'll ask my ace producer betsy but i haven't seen an estimate. she is looking it up right now and angry at me for pinning her
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down on air and she is great. in any event, i think between 175,000 and 200,000. in general. that 193-month average is what they look for. i'll mail it in. oh. 4:00. we'll be back at 4:00 for you. >> see you then, steve. thank you both so much. >> reporter: wait, wait, wait. i got it. 180. >> 180. >> reporter: that's the number. >> just like you said. >> something around the consens consensus, thank you. joining our "closing bell" exchange, we have heather hughes, holly liss, greg itt and ben wallace. thanks everybody. holly, maybe let's start with you here. just in terms of the bond market reaction, to the back and forth between janet yellen, stanley fischer, what is your take of what finally jogged the bond market, 10-year treasury that
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went up for one thing? >> considering how much we anticipated the speech by chair yellen it was a delayed reaction and interest rates didn't move all that much following her comments following the release of the statement. as we digested it, the markets didn't move all that much and i think fischer put the nail in the kochb commenting september could be in play and two rate hikes this year. keep in mind there are only three more meetings and probably leaves september and then after the election in december again so i think it was his comments that really sealed that deal. and anybody who was looking for volatility or some level of activity finally got it today and not only saw 10-year yields get through the month-long range, but it's staying above there and that gives you potential for a quick 25-basis points to 190 now. especially if next week data confirms what the fed members have been saying. >> all right. hold that thought, everybody. we have a market flash on saibt jude medical.
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let's get to the news desk with more. >> kelly, we have a st. jude medical halted from trade making pacemakers and defibrillators and in the headlines as of late with the research firm taken a short position and he says questioning the security of its cardiac devices in an effort he says that could derail the company's purchase by abbott laboratories and st. jude medical down before this trading halt before the top of the hour. we don't have anymore information at this point. if we do, we'll get it right to you. back to you. >> susan, thank you. shares there you can see under pressure earlier in the session today. now, we do have a news release from st. jude medical reinforcing the security of their devices and commitment to patient safety. we'll see if this news release just crossing is the reason why shares haltered. remember, also, been continued
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speculation or concern about when's happening with their merger, as well, with abbott labs and st. jude. there's a lot of different pieces here that could be affecting the shares. carson block and justine bone, the ceo of medsec holdings will join us in a couple of minutes. we'll bring you much more as soon as we get it. let's get back to the "closing bell" exchange, especially, holly made a great point of interest rates. greg, what's the prospect for a turn in the rate environment which we haven't seen with rates moving higher? >> better today than 24 hours ago. i mean, i think the key is that for janet yellen to put a rate increase on the table in her speech and as high up as said steve is significant. i read her as wanting to get the possibility of a september rate hike on the table. it is difficult to bring themselves to increase rates if the market has that probability
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well below 50% on the day of. we'll still only at 30%. she is trying to get the numbers up to 50%. i read stan fischer as steve was saying, on the hawkish side of things and i recall him doing this exactly a year ago at this time of year when he put a hawkish spin on some dovish talk out of fed officials. so what i think he's trying to do is he's raising the prospect of two rate increases as a wi to guarantee that we get at least one. >> that's interesting, although stan fischer's comments in the context of saying, i believe that janet yellen's words earlier were consistent with the possibility for two rate increases. we have a lot of really subtle shadings of what people mean here and we'll get to that in a moment. heather hughes, i was wondering what you think it means, whether it's a wake-up all for investors in the yield plays. we saw a lot of pressure on the
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dividen dividen dividen dividend-sent rick communities. >> they have it wrong today if we're raising rates that's a positive sign. the financial advisers want it to happen and waiting on the sidelines for the fed to raise rates and in terms of rich valuations, i think it's more specifically where it's the utilities, reits, maybe mlps. not necessarily the dividend-paying category at a whole and still a reach for safe haven asset classes and there's uncertainty as the fed increases rates and we can head higher in the market. first rate hike in nine years. a quarter of a basis point and the markets are up on the year. just a down day so far. >> ben, how do you read things here? heading into the close, the dow down 72. >> i would like to be steve liesman's agent right now.
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i think you have witnessed the change of mantle to liesman when they need the markets to understand what they're trying to say. he has had a major impact on the market with the conversations out of jackson hole. that's what we have been listening is he's making the world understand exactly when's going on in the fed speak. to heather's point, a quarter of a point naturalizing in rates. >> isn't that a good thing? >> absolutely perfectly fine. rising rates are a sign of a strong economy and the equity markets go higher from where we are right now. you are seeing the effects of a summer doldrums in the marketplace. very few trading desks to react. the liquidity in the market is thin. so don't read a lot into it. wait until after labor day and people start to trade against that. you're going to see buying opportunities in those stocks that have benefited from the idea of safe haven looking for yield. those will have a natural selloff as the yields start to
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rise and some of the -- because they don't have the humans of point of sale -- >> a knee-jerk selloff in the loved sectors with a yield? >> take them. >> you would buy those? >> absolutely. >> go ahead. >> specifically utilities and that's mainly due to the fact as rates increase, regulations prevent utility sector usually from adjusting or increasing the dividend yield as easily as other sectors and mainly why i think the utilities are struggling here on the backs of increased -- the regulation restrictions they have, as well. >> all right. guys, thank you all this hour. trying to make sense of the markets. as we have a little more than 45 minutes to go into the bell. the dow down 82. pressure across the board after first two-day selloff since brexit happened. >> bank stocks are higher so that's the rate hike trade,
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right? st. jude medical halted and you futing claims that the devices are vulnerable. we'll speak with the head of the short seller making the claims and the ceo of the company that found the alleged fundamentals. why is amazon planning to open more stores? you are watching cnbc. gilman: g it,arcu ate get
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welcome back. >> minutes ago trade halted on st. jude medical as carson block is betting against the stock of a recent report of medsec said the devices are a ticking time
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bomb, vulnerable to attack of cyber and it's a lifesaver for hundreds of thousands of people and the potential for a fatal hack could derail the pending acquisition of abbott lab. st. jude said, quote, we have examined the allegations of muddy waters capital and medsec and we conclude that the report is false and misleading. >> joining is carson block and justine bone. joins us here at post 9. welcome to you both. justine, you know, just to look at what st. jude is saying, they claim -- they say your claims of remote battery depletion for misleading, for starters. once implanted, these devices have approximate range of seven feet, your report said a 50-foot range and brings into question the entire testing methodology as the basis of the report. >> well, first of all, i would like to point out this is what
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we were hoping would happen. st. jude responded and paying attention to these security vulnerabilities that are present across the ecosystem that we looked at. we didn't just look at implants, the at-home unit. we looked at the network protocol connecting the devices as you probably understand, all of these are connected not only to one another and back into the st. jude infrastructure. we look at the ecosystem and found problems across the board. we plugged those vulnerabilities together and we created repeatable attacks and we dmoen straited to the advisers, muddy water. these are repeatable attacks. one of them is what we're calling a battery drain attack. and, yes, we believe that over time and we have reproduced it several times, a battery could be depleted. we can cause them remotely to cease to function. be that -- being bricked, an industry term for just a device
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completely unusable or a rapid pace. that's a couple of findings we came away with. at the bottom layer of this is this network protocol that the devices use to communicate. we found there was no encryption in the protocol. no authentication built in. it's what allows one to talk to another device. >> right. >> we were able to reproduce the attacks and this is actually great that st. jude are sitting up and taking notice and responding. >> are the protocols, vulnerabilities specific to st. jude? >> we spent 18 months, looked at medical devices by the leading manufacturers and sure, we found found a few across them all and st. jude medical stood out as falling far behind with the attention and security of the product range. >> carson, the shares of st.
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jude which you're shorting halted. unclear why they have put out a press release we were quoting from and there's some questions i guess about the -- what happens with their merger, proposed merger with abbott now. what do you think happens? >> well, i can't speak to what abbott might do or should do. i'm looking at st. jude as an investor and so st. jude's business faces some significant risk of recall for an extended period of time. so, abbott as any other investor in st. jude or potential investor in st. jude presumably would want to take that into account. >> but isn't it implicitly a bet on whether abbott goes through the merger? you can be short and abbott buys it, the stock does not go down. >> right. i mean, there's a lot that could happen. and that's true.
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i mean, abbott and st. jude, you know, the deal might close when expected per the agreed upon terms. deal price could -- this is general situation with m and a where something comes up in due diligence where the deal price is negotiated lower. the deal might break. the deal might ultimately close but at a much later date. there's variables and we don't insight as to what abbott is going to do but certainly as an investor if i were looking at st. jude from the long perspective, i would not be paying these prices to go long a company facing the real risks of losing close to half its revenue for two-plus years potentially. >> juice teen, another one of the claims from the research they have rerheed in on the claim that the system is impaired similar to a computer system crashes and said the report has very little detail on
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the simulations and there's a device that's functioning normally. the red items on the screen are showing no leads connected to the device. it's pacing properly. it shows expected behavior. so they're getting pretty specific trying to rebut the issues that you have raised and in this particular one. >> their focus -- what they have missed here is that that was a section of the report talking about the programmer. and the case of the crash, we're talking about the implant. in other areas, the underlying protocol and issues with the protocol and separately of issues of the at-home device and vulnerabilities across the spectrum. >> just to be clear, would they be an attack on a single individual with a device or a systemic attack in your view? >> we have produced scenarios where both a singular patient could be targeted or larger collections of patients, unfortunately. thanks to this at-home monitoring system and the way it
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works. we did not recreate this particular attack but we do believe that there's a way to take advantage of certain weaknesses in systems to impact larger sets of devices. >> why go to carson and muddy waters with this information and not st. jude themselves? >> we recognize that this is not the typical behavior in the cyber security space and looked at the findings significantly disturbing and we looked at the track history of st. jude coming to security, researchers have sat down with st. jude as far back as 2012, 2013. we have no significant security improvements since that time despite the researchers approaching st. jude. perhaps the same problems we have identified again in 2015. the dhs investigating with other manufacturers with regard to the cyber security situation there. 2015 the fda issued guidelines requiring the manufacturers to prioritize cyber security and throughout the entire time we
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have not seen st. jude raise the bar unlike some competitors that put basic protections in place. >> have you had any evidence either for st. jude or other companies that an attack is attempted? is this just a hypothetical? >> neither. it is not hypothetical. we have reproduced the attacks in the lab environments and not aware of researchers focused on this. we are not aware of adversaries targeting this system for a threat purpose. but it's certainly possible that there are other folks out there conducting a similar exercise to what we have been undertaking for last 18 months. >> carson, did it occur to you in doing, seeing this research taking a position on the stock to also then approach the company and tell them what was happening just because as you guys i'm sure aware is this topic betting against it, shorting it, potentially profiting huge from it, even if
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you're trying to just bring to light the severe issues to be a problem for yourselves? >> well, we see this as a company that for a number of years in -- with these devices has been putting profits before patients. this isn't an oversight or, you know, small, little hole that you have to look very hard to find. these are gaping holes. and to illustrate that, to be honest, if this were something where it were so technical and so obscure we would never have shorted it because when i first sat down with medsec and i heard that there was this -- that st. jude had this cyber security vulnerability, my initial thought was, we don't have the capability in-house to diligence this. but it turns out that we do because these holes are so big and security flaws so basic,
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this is a company i think will ultimately be held to be grossly negligent. so that company, especially given the history of warnings already given to that company about cyber security vulnerabilities in this e ecosyst ecosystem, that company does not deserve a third, fourth chance to try to sweep this under the rug. it's important that patients understand the risks of these devices and this company be held publicly accountable so we felt that we were -- that this is the right approach to accomplish both. >> if i could just add one point in there. to carson's point, a research process that security experts go through when they're examining a piece of technology and there were not even any protection mechanisms built into the ecosystem to make the process slightly more difficult. it was almost like st. jude were inviting folks like us to come in and open the systems up and examine them. there was nothing making the process difficult enough that we
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would sort of give up and walk away and focus on the next piece of technology. >> carson, just to get a little more specific about what you expect, you said about half of the revenue of the company at risk. so what you essentially believe might happen, if all this is looked into in the proper way from your perspective, a recall, eventually a process to replace them? >> well, so, devices that are already in patients, those would probably not be x-planted. probably does not merit that risk because x-plants, of course, carry their own risks with them. but if st. jude were to disable the rf cape frblt a security perspective, device users would be safe from these attacks. so that would be step one. and then in terms of current products, i mean, st. jude should stop selling those until it makes the communication
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protocol more secure and our best estimate is that's probably at least a two-year endeavor for st. jude. as we discussed in the report and something justine could get into more herself but there could be a lot of problems in the code base outside of the communication protocol. there's a lot of sloppiness there. a lot of shoddiness. >> that's right. >> in our opinion and that's something that really might take them longer than two years to remediate. >> carson, all of that said, the analyst this morning maintained the $85 price target on the shares and said even if what you guys are describing is the case, there's no precedent for the fda to mandate a recall on devices and earlier stages and something that the company could perhaps fix and address and others perhaps come into the spotlight, as well, the pressure will in a way possibly come off them. so what is your point of view, both on the idea that the
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company might be able to brush it aside and where are you betting the shares will ultimately fall to? >> so, that's a funny comment from that analyst. i mean, if he'd read to page 26 or 27 he would have seen precedent for an fda issued recall due to cyber security concerns. that be the hospera insulin pumps. fda mandated recalls of devices that are unsafe. so the fda with the guidance to which juistine alluded, the fda said a category of safety is cyber security or lack of security and so if devices don't meet minimum cyber security thresholds then they need to be fixed. if they can't be patched within 30 days then the fda has to be notified and there might need to be a recall.
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one other point there with respect to that comment from the analyst, most device recalls are actually not mandated by the fda. the fda has the authority to do so. but the device manufacturers voluntarily end up recalling these devices in almost every case because the fda said, well, either do it or if you don't we'll do it for you and from a public relations perspective, obviously, you look better off recalling the devices yourself. >> got it. before we let you go, carson, where are you betting the shares fall to here? >> well, if the deal were to break and i don't know that it does, but if the deal were to break, i think that we could be $55 or lower. >> carson block, justine bone. thank you guys both for joining us here at post 9.
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we want to get down to bob pisani over there where the shares are halted, bob. >> that's right. you can see the crowd with orders the buy or sell and waiting to reopen. there's a formal procedure to happen here. remember, the company itself halted trading in its stock saying there was news pending. in order for trading to resume, the company must say that all of the news that we wanted to disseminate is out. so the procedure could be the company must call upstairs, nyse regulatory office, and say we have disseminated all the information. you may open the stock. the regulatory people call there to the dmm, the designated market maker saying you may open the stock. they will say bids, offers, put them in. let's get an auction going and then we'll reopen the stock. when will that happen? we don't know. we're all standing here waiting for upstairs to call and say you
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can reopen and we don't know when the company calls and say do that. i think the hope here is certainly this will open, they'll generally do not want to allow this to go into the weekend, keep stock closed over the week. generally not a good idea. i would anticipate it will reopen. >> are they allowed to keep it halted? >> oh yeah. oh absolutely. i have seen this go on for days. i think that's highly undiscussed. the company already had a response to this. i anticipate that this thing should -- we should see an open beforehand. the question is where it will open. could be a big strange move and hit a limit up and down and hit a circuit breaker depending on the action. we don't have an indications. i have nothing to go on. the company didn't allow them to start making a market in the stock. as soon as i get an indication, i'll let you know. >> thank you. stock down 2.6% before the halt. we have a market comeback broadly. the s&p 500 almost back to flat.
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nasdaq actually with slight gains and closing those post-stanley fischer losses. >> the dow down 25. a weird day. up next, a new twist in the battle of two billionaire investors over a supplement company and latest developments and the love/hate relationship over herbalife. stay with us.
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shares of herbalife lower after a report that the
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supplement x supplement company's largest stakeholder is looking maybe to sell to bill aikman. what's going on, kate? >> yet another ironic chapter in a bizarre multi-year saga that's herbalife and investors. "the journal" reporting this morning that jeffries looking to offload the big block of herbalife stocks, specifically on bill aikman and raised questions of aikman short this name looking to cover. but in a phone call this morning, ackman said it was worth paying money for a block of stock he intended to sell the next day as long as it meant getting carl icahn out. >> he's a, you know, obviously seller now. which i think is terrific. this is a confidence game and carl i would say is the leader of -- what creates the confidence in the company. and if carl sells, you know, i think, you know, can accelerate
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the demise of the company. >> ackman said that only big holders also bailing out. naturally, this created a stir in the stock, been down consistently in the day today. fidelity declined to comment. and told holding herbalife without saying how much and icahn actually declined to comment on this one which could be interpreted as a confirmation of the story since you wouldn't want to talk down a name trying to sell, mike and kelly. not trying to start conspiracy theories but we have confirmation of the story from the ackman side and carl's response is interesting. >> that's for sure. a big name speaking carl icahn speaking at an alpha conference next month. separately i'm going to be interviewing singer there and jack lew among others.
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all right. should be lively. time now for a cnbc news update with sue herera. >> here's what's happening this friday afternoon. former democratic presidential candidate bernie sanders hitting the trail so lo for hillary clinton for the first time. he'll do that on labor day. a spokesman for sanders confirming to nbc news he'll stump for clinton in new hampshire. a california supreme court judge rejected a request to immediately suspend that state's new law that allows terminally ill people to end their lives. the request was submitted by several physicians and groups claiming that the law lacks safeguards to protect abuse. border control agents arrested two men for smuggling more than $3 million across the u.s.-mexico border. the homeland security department says the cash was being transported in separate vehicles. one of the suspects is a u.s. citizen. the other a mexican national. swimmer ryan lochte has a new sponsor. all four of the sponsors dropped him following the controversy he
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caused in brazil by fabricating an armed robbery. he signed a new deal with pine brothers throat drops and the theme of the campaign -- forgiving your throat. that's the news update this hour. back to you, kelly. you are vindicated. remember? >> i don't know if this counts. i mean -- i love the lozenge company but it's small to lay toes. >> cough a little bit hearing that news. >> now in the national discussion. right? >> that's true. >> they took a brand that really had not been talked about, actively for quite a while, and there you go. >> that's how it works. we seal see you next hour, sue. >> you got it. let's get to bob pisani here. bob? >> i think something's going to happen right now. the company given the okay. basically they have said all the news to say has been disseminated and given the nyse the okay a moment ago and called down on the floor from upstairs, gave the okay. the crowd locking around here. you can see them.
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they're looking at the book right now. and what they're doing is they have looked -- okay. they're going into the crowd sayinging wi want bids and offers. put in your orders to buy and sell. they're building a book. and i would say probably going to open about four minutes or so. again, i don't have any indications on it and definitely starting to move on this right now. let's come back to you when i have more information and we should have an open in about four minutes would be my guess. >> thank you, bob. >> all right. meanwhile market still staging a comeback. down 31. it was down more than 100 at the lows. coming up, live to the great american trucking show in dallas for a look at amazon transforming the entire transportation landscape. e an theyade mistake. the check ey sisn't enough to repceour tod w r. you ma the mie ay youhould have chenull-car replent. excue? ayyou pickedheroinsurance . me be frk, hsays.lent.
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welcome back. monitoring shares of st. jude halted earlier in the hour. >> we are opened at $77. just a few second ago. just to recap, $75.81 the last and now $77. opened. up fractionally from where it was before. the whole auction process, again, company halted for news pe
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pending. to open, they had to call down and say the news was disseminated. the call on the floor took about 20 minutes or so and opened again at $77 right now. big volume here by the way. we're heading towards 9 million shares. normally only trading about 3 million. this event today cause add lot of movement in this stock. guys back to you. >> thank you, bob. i'm a little surprised. the company put out a press releasefuting the claims. no pressure in the investor base. if anything, the opposite. >> seems relief that st. jude had a relatively specific response to each of these charges and bits of research put out there opposed to a general, you know, we stand by the product kind of a comment. i don't know if that's going to carry the day but seems like a relief down. >> shares down about half a percent. 15 minutes left to go in the
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session. mylan ceo heather bresch feeling the heat. in the wake of yesterday trying to defend the price increases for epipen. >> while the stock saw a mild uptick after a tough week, columnists and consumers are raging against the drugmaker and joined by meg tirrell. when's the news today on this one? >> the attempt to shift the conversation to the rest of the health care industry and this idea that it's the middlemen who are incentivizing rising drug prices and mylan with a tough week and a little bit in the green down. down almost 12% on the week amid the scrutiny. heather bresch, the ceo of mylan, continuing to be a focus of coverage. looking at "the new york times" there's a profile of ms. bresch, the lead saying america has a new pharmaceutical villain. her name is heather bresch and looking at the background and the involvement in the industry. analysts are starting to focus on how it came about and looking at previous drug pricing blow-ups i guess the previous
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two you could say is turing and valaent and pointing out that those two companies put in the spotlight after they dramatically priced the price of older drugs overnight and mylan over about a decade and the point is that they're not unique doing that and people starting to worry who else could be on the docket. he says investors asking him to put together a list of the biggest drugs a ten price increases they have taken. here's the top-selling pharma products of 2015. more than $10 billion and the point that is analysts make is that potentially there could be a lot more scrutiny of everybody now. >> absolutely. a lot of revenue at stake. thank you very much. appreciate it. up next, we're hitting the road or at least cnbc's morgan brennan is in dallas finding out what the biggest trucking companies think about amazon's move on their turf. that's next.
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mapping the ere we expre. otecti biodirsy. evimprovg energy efficie develongclnatuga tug algae intoiofuell? recingrgy verty in deving world. fueling e gl ecorwith l reciand you thght we jtnde the . fueling e gl♪ecorwith l energy lives he. welcome back. amazon no stranger to disrupting american business. first books and then music, now it is trucking. >> what do some of the country's biggest trucking companies think about the move into their lane?
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morgan brennan is getting the answers in dallas. what did you find out, morgan? >> reporter: oh, i found out a lot. so take a look at this chart. amazon and e-commerce is the biggest opportunity in transportation. this is over the past 15 years. this is the combined ground volumes of u.p.s. and fed-ex, thanks to the partners and other players benefiting, as well. trucks. so take transforce. a top publicly traded company in canada. it's growing the stateside business, especially in last mile delivery and unlike traditional carriers outsources to independent contractors. ceo bedard expects sales in the package delivery segment to grow from 30% right now to 50% over the next 12 to 18 months. >> we have one customer that just 18 months ago, i mean, we were basically doing nothing with those guys. today, if we look at the statistic of what we have been
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doing today from this same customer, we will probably do more than 35,000 deliveries today for this customer. so it's been growing very fast. >> reporter: 35,000 deliveries today from zero. you can probably guess who that e-tailer customer is. other thing to note is more last-mile deliveries and amazon alone shipped over a billion packages last year alone. more last-mile deliveries means a shift of truck driver responsibili responsibilities, as well. you have truckers hauling freight and now deliveries to doorsteps and interact with consumers directly. in some cases, they're even having to take products into people's homes. and set them up. in terms of amazon, building out its own transportation network, which is obviously talk on wall street, a lot of talk here, as well. a lot of trucking companies welcoming that because the volumes are surging so quickly.
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they can't necessarily handle it all and more truck trailers and what amazon's purchasing, mean more business for them, as well. because it means less equipment they have to provide. the fact that amazon has those trailers means they can bring the trucks to haul more of those goods so it's actually considered a good thing. not a threat. >> that is a gleaming, big rig, morgan. you can sleep in that cab. >> reporter: pretty. some rolling eye candy. i think it's bigger than my first apartment in manhattan. >> exactly. everybody's kitchen. the next guest says he rates etfs so what does he like? he'll tell us after the break. a, d fi heathe sebelt click tt say're buckd infoe dri
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giving thethe it havespeed & prs
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welcome back. joining us on the floor is mark travis, president and portfolio manager of intrepid funds. looked like the market was jolted to attention, the interest rate complex with a move higher. >> shocker, rates go up from where they are? i don't know how people are surprised by that. from my perspective. so, you know, i think we have high prices in stocks and bonds and raise a discount rate and get a lower price.
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>> what do you like here? >> well, i think cash is very attractive. just because i anticipate higher volatility and volatility i think is where the disconnect of price and value appear. that allow us to kind of arbitrage that. it's difficult in a low volatility environment to find this pricing. you get one offs. st. jude medical maybe. i don't know. i don't have any opinion on that. so there's been very little volatility. >> speaking of st. jude, we'll monitor that post. thank you so much for joining us. >> certainly. we'll have the closing countdown up next.
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welcome back. we have the dow down about 50 right now. actually less than half its earlier losses. the market, bob pisani, yo-yo'd all day. and we went down more. >> we've talked about this acy metric risk in the market. to the downside. i don't know if you can put up the chart. but yellen's comments most people thought not a big change and maybe not as much of a -- didn't change the prospects of a september rate hike. market up a little bit. fischer comes out and definitive. like, oh yes, this is very, very live and a strong way. market went down. more than twice as much. that indicated that risk is to the downside right now. >> perhaps -- >> market fully valued, tough to
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move it forward but easier down. >> so the interest rate market certainly got its attention. thank yous very much, bob. we have the reits across america and at the nasdaq, national dog day. hello, kelly. thank you, mike. welcome to the "closing bell," everybody. i'm kelly evans finishing out with a loss on day three on wall street. dow dropping 53 on the bell. s&p down 3. the nasdaq managing to hang on to about a 6-point gain. the dow below 18,400 retreating from the highs of mid-month. as we digest the comments of the fed today. the outrage of epipen didn't die down. coming up, why it is not just mylan that needs to be held accountable. it could also be the u.s. patent office. now joining our panel again,
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mr. santoli back for the hour, commentator and evan newmark, as well. mark travis rejoining us, president of intrepid capital funds and for more today, trader steve grasso will be with us in a moment. mike, it was a peculiar reaction to the fed today. yellen sounded hawkish and then markets dovish and then fischer spoke and convinced everybody differently. >> i guess the repetition among several fed officials that, yeah, we think we're close to the goals and close to an opportunity to raise interest rates and just stanley fischer just sort of didn't take the opportunity to back away a little bit. and i do think that it shows you there was some pent-up energy in this market for a move one way or the other. i think that the bond market is more interesting than the stock market in terms of reaction because initially treasury bonds rallied, yields came back. we have been in this period of very, very low volatility and
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kind of uncorked some of that it seems today. >> we spoke with holly in the pits in chicago saying another move in the 10-year and putting rates at 1.9%. >> yeah. i mean, look. the market, the bond market and the equity market have been pretty range-bound all summer and not broken out of the range despite whatever happened today in the bond market. you really -- i still continue to believe you have to see a move of the 10-year up to 2% or over in order to get the stock market to move higher because you need the financials basically. i still believe that. >> the financials are finally starting to show some life and utilities on a five-week losing streak. out to wyoming to steve liesman and janet yelling highlighting day two of the symposium. steve, we'll hear from the japanese central bank chief today and the comments of jackson hole aren't done yet. >> reporter: yeah. we'll hear from a negative interest rater from a person who may be positive.
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take a look at this. shortly before the keynote speech in jackson hole, janet yellen took a nice stroll with two of her closest confidants taking in the vista of the mountains. and then, she took to the podium to really rock -- begin the rocking of the markets to say the case is strengthened in recent months for the fed to raise rates. yellen, though, unclear about when the fed might hike. later in an exclusive interview i asked fed chief stan fischer if a rate hike is likely this year and maybe more than one. >> i think that the chair said today was consistent with answering yes to both of your questions. but these are not things we know until we see the data. people get upset about us saying we're data driven. i see criticisms of data driven. i don't know what the alternative is. toss a coin?
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>> reporter: so, fischer based his comments on his outlook for the economy to improve in the second half of the year and several fed officials think 1% growth could yield to 3% growth in the second half of the year. fischer said that that's something that the fed is always going to be concerned about. so, guys, i guess the debate becomes, is there much space between janet yellen and stan fischer? i'm not sure there is. one made a comment about coming rate hikes and another asked a question and more definitive. >> great stuff. thank you very much. steve liesman out in jackson hole. >> reporter: sure. >> steve grasso just off the floor here. steve, you know, maybe it just comes down to gdp number this morning wasn't that great and next quarter, the current quarter looks better. >> right. >> does it depend on the jobs number next friday? >> i don't know. they say they're data driven. i think flipping a coin might be a better way to do it. right? they have a 50-50 chance.
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right now the market thinks they're 100% wrong. they have at least a 50% chance of being right. today rallies what you expect to ralliment financials doing better. i thought they would do a lot better. i guess the market is struggling saying what will higher rates mean to the overall equity market? >> the larger point everybody could make is that this is a strange recovery and gdp growth very weak and very choppy. >> the problem that i have with what's going on out in wyoming is there still seems to be both in the market and amongst the fed governors kind of permanent crisis mind-set. there's still this mind-set that exists at the ecb, the bank of japan and at the fed which is here we are nine years after, eight years after and still an idea of, like, we don't want to upset the apple cart with 25-basis points. it's absolutely ridiculous argument to be having. >> speaking of that, a note by bernstein this week makes kind of an interesting point about
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dislocations in the market and called the silent road to serf dom and says passive investing is actually even worse. making the case that the move to passive etfs is worst thing to happen for people who have to make decisions to allocate capital in society. mark travis, one reason to keep you around, sir. you are not a fan of passive etfs either r. the reasons overlapping? >> i think the reality is most people buy low and sell high and i think passive looks really good in a period of low voluntari volatility like we have had for four or five years and looking at the average investors earn in funds, the business i'm in, they earn 2.5% over last 15, 20 years. so i think we're forcing people in at the top because passive investment, we're going to buy more of what's higher. and when volatility reappears through higher rates or whatever, they're going to wake up with significantly less
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capital. so -- >> bad -- your argument is it's bad for the investors. >> yes. >> which making the case, the argument also laid out here is that it's bad for everybody. it's bad for the companies, bad for the participants in the system and all of us employed that just distorts the incentives. >> will have the law of unintended consequences. the government looks at it with a ruling and says, hey, they're paying 120 basis points and better off at 20. holding everything stagnant. that's not the way capital should be allocated. so i don't think most people call 1-800-vanguard and send in money and leave it there for 50 years and get out when they retire. they wait until the sky is clear, breeze is light and 72 degrees and send in the money and then as soon as a class-4 hurricane shows up, they say let me out. >> there's no evidence that's been the case. i understand -- there's almost no evidence that vanguard when the market sold off that all the investors panicked.
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in fact, quite the opposite. the investors in vanguard tend to believe in the stay the course mentality of the index fund industry. >> the smart folks like yourself. >> i have invested in vanguard for 25 years. >> you are unusual. >> may be. but the reality is that the note and the whole idea that active fund management is endangered and a terrible thing is -- i mean, that note was a classic case of the emperor has no clothes. that's bad for us because we're active fund managers so let's try to put clothes back on the emperor. that was -- >> making a social case. >> for it. >> i think vanguard customers are self selecting. in general. investors do rush in toward the top. they get more comfortable and they vastly underperform the funds they're in. that being the case, as you say, kelly, this is a very much a fantastical exercise, this piece, about if we all only indexed, that was the premise.
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>> there is a -- >> 20% indexed right now. you can get to 60% indexed and still have smart, high-powered people trying to beat the index and the system would be efficient. >> better, steve, 60% of people passive and the rest are trying to -- actually are smart about it -- >> depends. depends on which side of the fence you are on. obviously, if you want to see that churn in the marketplace, you want to keep that to a lower number. but the truth is there are a lot of people who think that it's a better idea to index and it's always at the wrong time where they begin to mike's point. >> there's another level of that argument which is not only what this is saying effectively not just making a potentially bad market timing move but bad for society. >> basically saying capital allocated in an inefficient way. >> by the way, the note is an interesting note. >> really is. >> i'll say it's methodical. there's a lot of data in it. not just some three-page headline thing although i think the thing of communism was a
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headline-generating thing. but the argument underneath it which is that this is important to society. >> yes. >> and i don't see how in the world keeping active fund managers getting 120 basis points a year from people who are investing, how that's possibly bad for society. >> i can make the case that -- >> no way. >> a world and nobody's allowed to justify active management to just look at -- >> i'll tell you -- >> if they do that and everybody piles in to the s&p 500 index fund. black rock's writing letters to corporate america saying we'll try to talk more about making sure your returns are -- >> here's what the note did not have, which is the far and away distorting influence of capital markets over last few years is central bank policy. >> here here. >> not the equity markets. whatever is going on, you should be looking at the central banks and not at the active versus passive thing. >> kelly, you gate darwinistic approach with active managers and we have seen the redemption
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numbers. we kill off the ones that shouldn't survive or don't. >> which is good. >> that's what i'm saying. you get a natural revolution on that -- >> pressure on fees among everybody else. >> yes. point is in the way the system works and not good enough on the active side, you go out of business. >> pendulum swings too far one or the other. >> if everybody has -- listen. running a company s&p 500 and told me for 25 years everybody's just going to park their money with me, i have no incentive to compete for that capital against anybody else. >> that's not at the base, that's not the way the markets work at all and not how the passive versus the -- people, lots of different asset dlaszs. indexes in every asset class and the argument against indexing is really a fallacious argument and not -- you can slice and dice indexes in all different ways. >> largely talking about the s&p 500. people coming down to it to make the case broadly about the direction we're going, it's a
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direction of everybody's retirement money or pension money or whatever is basically just sitting in the s&p. >> i'm often looking at the shareholder list of bigger companies, vanguard, black rock,en creasingly top two. >> you don't point out, you being a -- >> evan. >> that's okay. you can call me charlie. >> i was close. you know, most people are coming through a registered investment adviser, a brokered dealer and not calling 1- 800-fund. very few come through an 800-number. >> right but the problem you touched on which is investors kind of buying high and selling slow, that is true in active fund management. >> sure, sure. no, no. >> nothing to do with the -- >> i completely understand. people making a rational choice looking at considered active when it's really as an australian said aping the index. why not say 20 basis points for manager that looks like the
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index at 20? but are people getting active management? that's the other question. >> i think -- >> for a firm like ours with a high active share, to be the index, go with evan in the s&p 500. if you don't, if you want to try to succeed unconventionally -- >> go with charlie. >> go with the other guy. >> come to intrepid capital. >> i think what you'll see and what -- why you get letters, articles like this and active fund managers on cnbc to defend active fund investing, not to besmerch that industry is that profits historically gone to fund managers being pulled out of the system. there's something going on and get korea si letters of this. >> it's possible to include this outcome. >> not in your lifetime. you don't have to worry about it. >> appreciate you sticking around, mark. >> thank you. >> steve, you can go, as well.
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much more next hour on "fast money," talking amazon after a nice day of gains because morgan stanley says they know the next opportunity for the e-commerce giant is. how do you trade it? that's tonight at 5:00 zwrirks the outrage of mylan's massive epipen price hike is showing no no sign of slowing down. someone says parents should be demanding accountability of mylan. plus, amazon announcing plans for three more bookstores. we'll discuss why amazon is getting physical and so many traditional retailers are struggling. s been crazy with scl being back- so we're constantly going over our data limit. oh, well, now - all of our new plans come with no data overages. wow, no more overages? so that means... gon...say it... we'll finally be in ctrol... and we're back... introducing new at&t plans with no data overage charges.
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♪ i do love that song. i'll admit it. when you think about silicon valley, you think of microchips, smartphones and social media but the area is hotbed for agriculture start-ups. aditi? we'll get back to her. looks like a lovely field she's standing in.
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>> last time they were in the field jane wells told us about the frankenstein pumpkins. remember that? still -- some of my viewers' favorite segment of all time. >> excellent recall. interesting thing of ag tech is huge area of computer surveillance. they do the counts every year of the grains and crops in the fields and increasingly they're trying to get good enough to take a snapshot every day. >> retailers. same thing, retailers, the drones, coming in, a full parking lot. >> big ag kind of an early adopter with a lot of technologies. gps and drones and all the rest. >> i think aditi is live with us from california. additi? >>. >> reporter: hi there, kelly. yes, i can hear you now and an hour south of silicon valley in the heart of salinas valley. i want to show and tell for you here. showcasing the technology out here. if i were in these strawberry fields and picking them, i have a boxful of strawberries and
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heavy to cart back to the trucks out of the fields and they have a cool machine to load this box, you can see the boxes of strawberries there and use a ro mote control to advance this machine in the field and moves with you and you can see the workers helped by using this piece of technology to increase productivity. just down the road there's taylor farms and produce let luis and veggies and spearheading innovation in this area. they use a water jet slicer and what it cuts the lettuce heads with water and they have robots in their plant that go ahead and help package things and they also have lasers that remove impurities and cool stuff going on. and investing in technology. the ceo bruce taylor said that's important to him and they have 15 start-ups that they have
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housed in incubator in their own headquarters run by the western grower's association and he talked about helping the entire region. >> if we can collaborate, we can move the needle faster, come up with innovations, get it implemented and get the benefit sooner and the benefits, of course, using less water and fewer pesticides, fewer herbicides and labor for higher yield. >> reporter: and i know that they cut their workers by half and increased the productivity here. george, you are here every day and see it in motion here. why is technology so important? how's it helping the workers here? >> easier workload and helping with the region. his help and his innovations helped us cut time and help with issue of labor. people want to work and makes their work lighter. >> reporter: great.
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thank you so much. kelly, we can tell you that the farmers polled say 75% of them were actually planning on investing in agriculture in the next three years so not only are they using the technology but investing in it because they see it playing out right in the fields. >> stay with us, aditi. thinking of the fields of produce rotten in california not getting the visas and how much does it feed into the demand? >> yeah. as i was saying, i think big farmers are always the ones looking to -- because, of course, they don't operate with a big cushion. right in they have to be pretty open to these new technologies and wondered about the precutlet us the. looks pretty seamless. >> anything you learned about the stuff you see in the grocery store? >> reporter: yeah. you know, one of the really cool things that we learned about, you mentioned just like the economics and the cost of things, one of the things that's really important is that there's
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a real fierce competition for talent, the people working out in the fields and bruce taylor told us that that lettuce machine, like before there would be workers hunched over like eight to 12 hours a day picking the lettuce up manually and now they have this machine where they're actually personal perchh and operating the machine and far easier and more comfortable for them and a good draw for his company to get good capital there. >> so much goes into the package of hearts of ro main. thank you. >> productivity growth in the united states negative. >> in agriculture, phenomenal. >> i'm sure. i'm shower. >> prices go up. >> 2% of people employment and making the same amount of output of so 0 years ago. totally striking. >> yeah. the mylan epipen price hike controversy raging on. we'll hear from someone saying that heather bresch has a huge personal incentive to keep prices high.
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wherwe explore.s protecng biodiversity. evhere we work. defeating maria. veloping naral gas.uingy. my job? job aexxonmobil tuininalgae in biofuels. duci energy porty in theelopinrl mangargo furtherth less. ing the global economy and you thought we jusss. the gas. ♪ energy l here. welcome back. shares of st. medical closed higher today after the company refuted muddy waters' claims that the devices are vulnerable based on a report of security firm medsec. we had the interview last hour. the stock halted ahead of it and minutes before the company disputed the hacking findings and did manage to close in the green. mylan under fire for hiking
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the price of the life saving epipen drug. the next guest said parents should be demanding for. he's calling for the u.s. patent office to be held accountable for an unjustified monopoly. he's the founder of a firm of evaluation of intangible product and a data provider. david martin joins us now on the news line. welcome. >> thank you. >> explain where you think the federal government dropped the billion. >> listen. the epipen technology was invented back in the 1970s and it was invented largely for military applications to make sure that emergency kind of m.a.s.h.-level readiness ready for soldiers and battlefield environments so the technology is around since the 1970s and patent law gives you a 20-year monopo monopoly. so what has happened is essentially the patent office and then ultimately the patent office and the fda gotten
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together and extended something which by law really should have been public domain and available for anybody to use probably somewhere in the 1990s. >> you know, the big question amid this controversy has been why are there no -- why is there no competition, david. so, are you saying that there is no competition because the government gave mylan the monopoly on this product? >> actually, they didn't give mylan the monopoly. they gave meridian medical companies of king pharmaceuticals and acquired by pfizer. they gave meridian medical technologies a patent on the sheath that covers the needle. you heard me correctly. not on the drug or the pen, not on the injection. but on the sheath that covers the needle. like a sharp's container kind of protection. and that patent is only thing standing between the united states consumer and being able to get epipens at the current rate that the u.s. government gets charged by meridian medical
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technologies which is under $15 a pen. >> david, it's evan newmark. let me ask you a question. is this not a case where everybody involved, whether it's the company, the licensing of it, everybody's acting what you would call rationally but you're getting an irrational result? i mean, what can we do right now about this situation other than put whatever kind of social pressure's being put on via social media and television news reports? isn't this a case of everybody's doing what you're supposed to do and a situation of doing that you're getting the ever-escalating prices? >> listen. that's a great point, evan. what i would point out is that if we weren't in an environment where literally there's a sign on meridian medical technology's website saying the technology is available for the defense department and not consumer use. good enough for the veterans and
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service members, it is a situation where the fda and the patent office have done something, which is genuinely inappropriate and irrational. remember, the decision made to grant the patent comes from one person at a patent office who actually on five occasions told the applicants, meridian medical technologies, that they were actually filing a patent that they should not receive because it was obvious and it was already patented and the fact of the matter is most of the actors as you quite correctly point out acting rationally but in this particular instance, two ir relational actors and those two happen to be the federal government. >> so, just briefly, is this actually a one-time instance when this was the -- the ball dropped here and they actually, you know, led to a bad outcome or systemic with the way patents are granted and protected? >> very much of a systemic issue. i testified in congress over a decade ago about 33% of all patents that are granted in the
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united states are, in fact, redundant patents, only thing that makes that patent grant happen is influence of a lawyer or influence of somebody who uses language to kind of do an end run. remember, we are talking about epinephrine through a pen. something that's been around for nearly 40 years. and we're talking about a patent that was issued in 2008 while the company was selling the product that they had, in fact, been selling for years and decades before. so this is a situation where the public sector failure is not an isolated incident. we have identified over 30% of the united states patents subject to this type of issue and it happens to be that mylan is currently in the spotlight and this is not unique to them and it is a systemic problem where the consequence of patent granting is actually irrationally done and it's decoupled from market reality. >> david, thank you for joining us. >> a delight. >> david martin, founder of
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m-cam. we have a news alert on viacom now with susan li. >> thank you. daum dauman, he has now sold around 25% of his viacom stake. that comes to just around over $10.5 million. in current pricing. and this doesn't appear to be a planned sale. dauman stepping down from viacom on september 13th and he'll take with him a $72 million severance package. back to you. >> okay. thank you, susan. $72 million severance. >> yeah. it's -- >> numbers growing. >> outrageous. it is outrageous and in our system, just the way the patent works, you create a set of rules and weird things happen and in the case of dauman and his severance package, the shareholders of viacom are the ones paying the price for this. >> they're passive shareholders? >> i knew you were going tlo. >> of course i am. >> we don't have time to get --
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>> all shareholders to be passive because they have no say in how the company's run. >> fair point. >> has to do with the share holding -- >> the structure. yeah. all right. all right. time now for a news update with sue herera. >> here's what's happening at this hour, everybody. democratic presidential nominee hillary clinton continuing to feel the heat over donations by foreign entities to the clinton foundation which occurred while she was secretary of state. and when asked about it today on "morning joe," clinton said she wouldn't criticize a republican candidate in similar circumstances. >> people can say whatever they want. i understand that. but if there were no evidence that there was any conflict, i would say, look. i appreciate the work that they did to help 11.5 million people around the world get more affordable medicine. the white house says iranian vessels encounters with u.s.
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warships in the gulf cause for concern. at a news conference, josh earnest saying that the vessels' intentions are unclear but the behavior is unacceptable. and it increases the risks of miscalculations. the u.s. department of transportation proposing a new rule that would require trucks and buses equipped with devices to limit the speed. the d.o.t. says the action could save both lives and fuel. and prosecutors in the uk say three men charged with fraud for allegedly selling horse meat as beef in britain in 2012. the uk food industry rocked by that scandal when investigators found horse meat sold in some imported beef products. that is the news update this hour. thanks, kelly v. a great weekend. >> sue, and same to you. i was going to say, when we were in iceland, they claimed that it was better than beef and that we should have it in the burgers and i was too chicken to try. no pun intended. >> some countries who do feel --
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it's lean apparently. >> yeah. i know. i'm almost feel like i wish i had tried it. i might have to. it's not that crazy. >> no. >> properly labeled. >> yes, exactly. that was the key. people thought it was beef an apparently no. >> not so much. see you later. traditional brick and mor torre tailers have been struggling. why is amazon announcing plans to open three more physical bookstores? find out next if this is all a play to show off products like kindle and echo. canine lovers throughout the nation celebrating national dog day. will that persuade the panel to bring man's best friend into the family? that's later on "closing bell." hild speg instinly]
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welcome back. five years after borders shut down the last year and three years after barnes and nobel closed, amazon is planning to build more bookstores. the e-tail giant looking to open three more shops in chicago, san diego and portland. to go with the original seattle store. can amazon win where others failed? let's ask al stair mcforeman and
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dani daniel kurnos. if you like the company, do you like the move into the bookstore space? >> well, first off, kelly, let's throw fuel on the fire here saying all investors should be long-term passive investors in amazon. it's certainly makes some sense from a branding perspective. right? everybody likes to overreact and, you know, the e-commerce giant is getting back into the physical realm but look. they're building their brand, something they have always done and as you mentioned this is about showrooming and highlight the product lineup battling for living room share. >> hang on. we have news crossing on herbalife we have to get to. what's happening? >> this is a story we have been covering all day long and carl icahn bought 2.3 million shares in herbalife and reaction to "the wall street journal" report
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that carl icahn thought of selling the stake to a group included bill ackman. jeffries is shopping this block trade of shares. ackman on the air saying he has not bought into this. so here's a statement of carl icahn saying completely contrary to what bill ackman stated on television today, i have never given jeffries an order to sell any of the herbalife shares. last month we disclosed that herbalife granted us to go to 35% and ackman said i'm not interested in increasing the position and another misstatement of the facts of ackman and i bought 2.3 million shares and i continue to believe in herbalife. >> thank you. ackman saying he is amazed the guy, referring to ackman told the world what he is thinking. here's what he said to cnbc this morning. >> i was contacted by jeffries.
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i think late -- the week of the 4th, ending the week of the 4th or 5. >> of august? >> of august. they were trying to put together a block trade to take carl out. i viewed that, obviously, very favorab favorably. he is obviously a seller now. >> again, bill ackman in morning. carl icahn said that he doesn't know what icahn doing with the shares and reiterating his belief in the company buying 2.3 million more shares today. >> you know, it's obviously very personal. this is -- i mean, spending tens of millions of dollars or even, you know, more than that for 2.3 million shares? almost as a measure of spite. it would seem almost that's what's going on. >> he's arguing that's bill ackman is doing and obsessed with the stock. his own obsessive comments cost investors a great deal of money referring to ackman's investors.
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>> it's amazing. the rational of bill ackman of earlier is perhaps he would have been interested in buying a small amount of that block and as a way to basically unlocking that supply of a big chunk of the stock and presumably caused the shares to fall. >> which they did earlier. >> a clever move of carl icahn. bill ackman is buried in this thing. it's funny unless you're an ackman investor. i find it kind of funny. >> we know this is the latest chapter of a long back and forth. shares of herbalife popping on this news of icahn buying more shares up 6% after hours after selling off earlier in the session today. let's get back to our discussion on amazon, gentlemen. thank you for waiting patiently by there, daniel. we asked you about the company's move into the bookstore space. alastair, is this a good idea?
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>> thank you, kelly. this is about amazon prime user acquisition and big data. we get a tremendous amount of amazon third party retailer data and make up 50% of amazon.com's retail transactions. so we get a tremendous look and we see an amazing view of how much more amazon prime customers spend. so when you think about what amazon's doing here with brick and mor or the locations with the bookstores, this is an opportunity to acquire many more prime subscribers and showrooms for echo, kindle, fire. more and more of the stickiest, most profitable consumers coming into the amazon ecosystem. i think it's an amazing move. >> what do you think here? >> i do think it makes sense as branding, showrooming. even talk down the road of having use in terms of local delivery. kind of a micro warehouse.
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does not mean any kind of rethinking of the original premise of amazon, of course. >> i'm a huge amazon customer. >> me, too. >> and i'm a huge book amazon customer and can't imagine going into any amazon bookstore for any reason. in fact -- >> because you wouldn't go into any bookstore? >> the strategy of alastair touched on, kindle, echo, i have no interest in amazon for that stuff and kind of -- i can't imagine that a lot of prime customers who are not already prime customers will jump into a bookstore and become a prime customer. doesn't sound right. as a branding and marketing extension, i totally get it. >> and we'll see. people visit the bookstores, maybe they buy a few more products. thank you again. that's alastair and daniel talking amazon today. >> thank you. >> thank you. trolls and fairytales usually harass people who cross.
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jane? >> kelly, this one involves a patent, a podcast, a movie and adam corolla. he talks to us when "closing bell" comes back. card from capitaone.t's i havtha it,arn unlimite caac from capitaone.t's i havtha of mpuhasing. anat unlimed 2% shk whicaddsuel to my bottom .y busess...acyear what's wallet?
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♪ ythis is my w alerole, whing ppens inhe mket. kis a naral. ythis is my w alerole, thinkowim ready ts ycrea calerts kis a naral. ythl e thmy w alerole, atre importanto yo shhh n anytng at not only that, yocaact on that opportunyth jta righom the ale. wow, gss we don't nene theidny. cuomomlerts on tnkorsw. righom the ale. ly at td ameritrad welcome back. want to take a look at shares of herbalife after hours, popping on significant news of carl icahn saying he bought 2.3 million more today. this comes after earlier reports in "the wall street journal" suggested he was potentially
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going to share his shares, even to a group including bill ackman who is his nemesis on this position and shorting herbalife claiming it is not a business and going to zero in terms of value. this happened after hours and carl buying the shares today and a 4% move higher as a result. >> helps explain perhaps why carl icahn refused to comment in the trading day. because he has otherwise been accessible to us. and basically, you know, it's interesting. you think back on the original story, it's not necessarily routine for a broker who's shopping a block trade to say, by the way, we have the stock happened to be owned by carl icahn. usually more subtle than that. >> not only that, though, a lot of times, investment banks are in the business of buying the block themselves and distributing it. >> used to be more on that. >> used to be. but the idea that for two weeks they're shopping this thing, i mean, just -- it's possible and
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-- >> this is potentially interesting wrinkle if they can no longer inventory the share themselves maybe the risk is higher to call everybody, whether it's this stock or another one, it is just you get the stories and -- >> everything's got a price, though. enough spread on the block and they'll -- >> i'm saying if they can't hold it themselves anymore. >> i understand. >> is that part of the issue? you have more people aware of what's going on if you -- >> if the discount is move enough, they move the block. >> you're always feeling out the market to try to get some type of rough survey of demand anyway. >> we'll continue to follow the story. carl icahn buying more herbalife. patent trolls notorious in the industry. rather than manufacturing products, associated with them, the trolls are the subject of an independent film. jane wells has more. jane? >> reporter: kelly, yeah. suing you for something you thought you made. sounds hilarious. right? >> congratulation.
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>> oh, thank you. >> you have been served. >> well, that is the basis of a comedy out of austin called "the trolls" and the creator inspired by adam corolla fighting the way the podcast goes online violates a patent. >> thanks to this nice man's suffering for -- over a year? with a patent troll? >> felt like a lifetime, yeah. >> that was daily entertainment for me. as a podcast listener. so i have -- >> i had my pain. can bring you such -- well, the collie yative freedom. >> yeah. >> really. like i'm the wind beneath your wings. yeah. >> yeah. not the right kind of wind in a lot of ways but -- sorry. bad joke. >> yeah. the first $75,000 we wasted was just trying to get a change of venue. just trying to get it to california. our business isn't in texas. why should we go to texas?
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they have made a little cottage industry and it's literally a cottage industry. it is not just the courts but the diners and the hotels and all because -- okay. so they're not going to have a venue change so guess who's got to get going to have a ve venue change, so guess who's got to get on an airplane. guess who needs to stay at a hotel, neat ooet at a diner. occasional prostitute. whatever it is. there's money, if you're going to travel, you're going to travel right. >> eventually, the patent firm dropped the lawsuit. more on that and what he has to say about the presidential election on cnbc.com. east texas seems to be ground zero for these lawsuits. >> crazy. raises a lot more questions than it answers. thank you. jane wells. talking to the trolls. talking about the trolls. customers and politicians are calling an mylan to lower the cost of the epipen. a ceo says she's working on
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finding a solution to the broken health care system. those details when we come right back.
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that the $600 o is a list price. that 6-08 is a list price. $137 per pen and against that, manufacturing the product, distributing the product, enhancing the product, investing. >> that was mylan ceo talking about how much the company nets from sales of epipen. the outrage and scrutiny continues over the price increase, yet she hasn't said whether she'll lower the price. it could be because she stands
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to make a lot of money if she sells a lot of epipens. welcome, guys. >> what is it specifically that she's invised to do here. >> at the end of the day, what she really needs is for e p ps to hit $6 by 2018. if that happen, she gets a nice. at that point, the stock price could be around $70. that would be a really nice payday for her, but all she has to do is get eps to $6. when she does that, it's a lovely day for everybody in the executive committee. now, the question is how do you do that? so far, the answer has been sell a lot of epipen. like a lot. the other products in their portfolio are just so so.
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don't sell so well. they're for obscure decides. i don't know. i don't know how else they would go. >> to get a specific target, is that pretty unusual? >> it's not standard. you see it sometimes where the ceo package is pegged to a specific number in the outyears. maybe over five years. >> they use different variables. five or six parameters. there's a whole other thung wen of these industries around the executive composition and they draw up a list. it has to do with relative performance. >> it's over and over in their compensation package and if you look at at "the new york times" today, there's a great picture of her sitting at her desk. there are a bunch of books on the table and one is the compensation package. like how is that possible that went down? >> it was kind of an amazing picture. this is something the drug industry is starting to talk
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about more and more. we've seen this with valiant where the ceo's pay package is related to how much they can trooif the stock up. at valiant, we saw all this language about how this incentivises bad behavior. i'm talking the drug company ceos talking we need to change this. >> thank you guys. have to go. thank you for joining us. >> no problem. >> and this was all response to the fact it wasn't incentivised the right way. the latest details when we come back. ? wdon't lveour debt pblem n could do to our economy. moy foogramslikeducaon wl nk. just 8 ye wi be r third largesferal program. bad wsor small bess.
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this is not an honest guy. not a guy who keeps his word. this is a guy who takes advantage of little people. >> he's the quintessential example on wall street, if you want a friend, get a dog. >> that was three years ago. a new chapter started moments ago. this goes back to a "wall street journal" story that said carl icahn was looking to sell some stock in herbalife, potentially to a group including bill
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ackman. bill ackman supported this story this morning. completely contrary to what ackman said today, i have never given jerry's an order to sell. he bought 2.3 million more. the share's up 4% afterhours. mike and evan, thanks for joining us. we'll hand it over to "fast money" right now. >> "fast money" starts right now. live from the nasdaq market site overlooking times square, your traders on the desk -- tonight, shots fired. billionaire investor carl icahn shooting down ackman's quhents saying not only is he not selling stock, he bought more today. we'll have details. plus, morgan stanley betting the farm on amazon, one business that could senn the giant soaring down to road to its next trillion dollars and later, health care stockset

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