Skip to main content

tv   Fast Money  CNBC  May 15, 2017 5:00pm-6:01pm EDT

5:00 pm
the designer stuff show up on the shelves at tjx as opposed to online. there's a structural reason why kind of the other retailers and the designers like it. >> i like nordstrom rack. the trend is still intact there. michael, thank you. see you tomorrow. "fast money" begins right now. "fast money" starts right now. live from the nasdaq market site overlooking new york city's times square. i'm melissa lee. tonight on fast, steve eisman is here for an exclusive interview. the man who called the mortgage crisis and he's back to tell us what's keeping him up at night now. why one uber bull is getting cautious on the carmaker's big run. shares of the cyber stock soaring. the one name that could keep your portfolio safe.
5:01 pm
the dow up nearly 100 points. the s&p closing at a record high above 2400 for the first time ever. the nasdaq hitting a record and the russell 2000 soaring. amazon, 20 years after its initi initial -- market cap taking off a whopping $450 billion leaving traditional retailers in the dust as they struggle to stay afloat. the two names have been somewhat immune to amazon's demolition. the two best performing dow stocks this year. they are getting ready to report this week. what do they tell us about the story of the consumer, guy. >> i think home depot absolutely is. lowe's is cheaper. we can make an argument it should be, shouldn't be. home depot absolutely stands on its own. reports tomorrow before the
5:02 pm
bell. 14% eps growth. i think it is immune. walmart, different story. but i think the beauty of walmart is the downfall of target. 2015 was an awful year for walmart. 90 to 45. i think it got its footing back because target lost theirs. >> i think they got the footing back because they got back to what they can only do and that is compete on price. meanwhile, you get back to the store, we talk about amazon, and home depot, does shopping in a store make you happy? >> every time i'm in a store it makes me happy. >> why? >> because i like people. i like tactile. >> the question is, home depot versus the department store, people go to home depot. that place makes me happy e. when i ask for birthday presents, i get home depot gift cards. my mother-in-law gave me one, thank you for that. we have a reason to go to the home improvement store. you have less store space per
5:03 pm
capita in home improvement. >> i think the same thing. total experience. you look at it and say the housing is showing us that the millennials have shifted to a spending perspective. they have to fix the new homes. walmart made right strides. but let's be clear about that, that was $100 million business they acquired. let's look at it and call a spade a spade. they're making right investments. but they're not there yet. >> why can't we interpret the walmart store as an inverse amazon -- >> they are. >> doesn't walmart in essence have its own logistics with the big box stores? >> what's really actually starting to propel walmart to the next level, you talked about target as well, they were beating target, in groceries, and that's rolled on to everything else. that's been target's biggest problem. when you go back to home depot for a minute, it's not just the
5:04 pm
housing market. if you go back to 2016, how about when you looked at those earnings, record earnings. they come into this year, they're expecting to get $7 a share. buying back $15 billion worth of stock. everything is going right. the big box, very difficult for amazon to attack. when i go to buy my mulch at home depot, and i go over there every saturday, and i get about three or four pallets of mulch -- >> there's other kinds of mulch. are there different kinds? >> there sure are. >> all right. i was just asking. i'm asking for a friend. >> but you also buy a rake, and a shovel, and everything else. >> that's right. you walk in the store, you're not buying just what you walked in for. that's why home depot will continue to work out. walmart, very different. walmart's doing the right things. the investors love walmart because they're paking the right investments. >> let me ask another question.
5:05 pm
walmart's gains are made on the back of target's losses? >> they've been faltering maybe the last two years. for quite some time. it doesn't mean the stock is not trading well. if you go back and look, target held 54, which was a pretty critical level. >> five-year level. it's held it well. >> it hasn't bounced in a meaningful way. at 13 times forward earnings, if you believe they can turn it around, i'm on the fence about it -- >> you used to love target. >> i love it. >> they're all moving in the right direction. here's the problem. when they started to falter with the grocery side of things, that took all their attention. they need to possibly think about what they did with the pharmaceutical spin-off. they are not able to run that properly. maybe they've got to do some form of spin. >> would you rather? >> look, you think guy is the only one who likes to play would you rather? >> home depot or target. >> i tell you what, over the next 12 months, target.
5:06 pm
these guys have managed to either reestablish or maybe never entirely lost the indoor experience. i think they're competing on price. but target is target. they're getting their mojo back. i think in the next couple of months, relative value. >> it would have been too obvious to say home depot or amazon. i wanted to get the notion do you go for a turn-around or go for what's working? >> i think the turn-around. >> i would say home depot. can i make one point? when you go get a part for your tractor -- >> i didn't -- >> hold on, hold on. >> i follow tim seymour who sent out a meaningful tweet about his tractor. >> it was tractor season at my house. i pulled out the john deere.
5:07 pm
and shame on you, guy. >> that tractor is not really a tractor, that's a toy. >> i think we've got a lumberjack contest on this. >> some things you cannot believe. >> back to the would you rather, target over home depot? i think it's hard in the age of technology to catch up. i think target will struggle in catching up. i wouldn't touch it. i would much prefer to own walmart or home depot here. >> that's really what's been holding them in play -- >> if people are nesting, their homes are their homes -- >> that's the growth quarter after quarter is the home goods side of that trade. tjx, and don't forget about burlington. that burlington, they are killing it as well. let's not forget about them. >> i think that right now, burlington's gotten so priced. they're so expensive.
5:08 pm
they're doing great, but right now tj maxx, probably your best bet. >> the home improvement trades, sherwin williams. i still think there's more left in that name. >> amazon hitting all-time highs as it celebrates the 20th anniversary. what could be the next blockbuster stock for the next 20 years? hey, chris. >> nice to be here. >> what are you looking at? >> i think when we talk about amazon here, we have to appreciate how amazing the last 20 years has been. $1 invested in this stock 20 years ago is worth almost $500 today. $1 in apple 20 years ago is only word $250. $1 in the s&p is only worth $3. and $1 in macy's is still worth $1. so i think when we look at how extraordinary this picture has been, and when we go to the next chart here, looking at amazon versus what was the other bellwether in this group,
5:09 pm
walmart for a very long period of time, these are their market caps. amazon crossed in 2015, it hasn't looked back since. this is clearly the secular play in the group. when we look at the stock right now upon our next chart, so long as the higher lows are in place, the trend here is up. you have good support in this 950 neighborhood. i think as long as you're above that, you play this on the long side. and looking for what could be the next name here, i would point you to expedia. expedia's coming out of a two-year base. it's really been a lag guard over the last 24 months. broke out today. you have support near 135, 140. look to 175 as a longer term target. i think tactically, this is the spot for a catch-up trade. >> bold pick. >> wow. >> come on over, chris. >> bring him in. >> yeah, come on. sidney's going to bring the chair in. thank you, sidney. we're talking about the
5:10 pm
destruction that amazon has done to the retail sector, as it has risen to all-time highs. when you take a look at the charts for the likes of a walmart, let's say, how does that chart look? >> well, the one spot i would take objection to here, and we had a discussion about tj maxx, i've never seen a bear market hit a group without the best getting hit. that's tjx and ross stores over the last couple of years. they act pretty fatigued here. tj maxx against the s&p today, as well as ross stores, i'd be a little bit careful there ahead of earnings. they hit all the bad ones. ultimately they get to the good ones as well. >> chris, how about thinking about the moving amazon and some of the peers leading the market, like facebook. what about the ownership here? just passive index pushing these things up? or do you think dedicated players own this and maybe don't want to own a lot more?
5:11 pm
>> i think certainly we have to identify who the dominant investor is. as long as we identify the rules of the game and we're okay with it, we have to acknowledge it's probably been pretty much etf driven. amazon is like in 300 etfs. that's the dominant investor in this kind of environment. those are the rule of the game. we have to follow the trend. you've been rewarded for oeng this stock own in corrections over the last 20 years. until that changes, it's hard to walk away from it. >> expedia, all-time high today. it looks extraordinarily like priceline. does ex speed yeah set up into the next earnings release the same way priceline did? >> we've seen the bid for the experienced stocks. the restaurants go up, we've seen the cruise lines go up. expedia is a way to capture that. placeline has been your leadership stock in this group and it certainly was for the last several years. i think you play expedia for a
5:12 pm
catch-up trade here. but i would point out carnival cruise, even some of the airlines, the fact that united is knocked down, given everything that company's been through, extraordinary. we like oeng things that don't go down on bad news. a lot of those experienced stocks satisfy that here. >> chris, i know we asked you to pick a stock for the next 20 years. when you're analyzing a chart, how long can you extrapolate -- >> until it stops working. we are not people who think about targets in term of time or price, we think about target in terms of relative value. how long am i going to be compensated owning this stock. until the relative proposition of the amazons and apples and facebooks changes, it's tough to walk away. what's the objective of the game? buy things that stay high. >> thank you, chris. >> thank you. >> pete, you like expedia? >> i do, absolutely. i think priceline as well.
5:13 pm
but it's an interesting thing when you're talking about 20 years. that's a difficult thing to put him in that position. i think the experienced stocks, you talk about these other things, go to the airlines, all the bad news. it is amazing, right? it's absolutely amazing. and i heard a little bit of what's going on with buffett and some of the changes in his filing. sounds like he's adding to the airlines as well. i'm still willing to stay there as well. >> i like the experienced stocks. a great call, 20 years. in general, i like the experienced play. i would be a buyer of expedia here. >> we have a crack staff back in d.c. a cracker jack staff. >> there it is. >> is that the actual -- >> by the way -- >> when my son has his own tractor, i would be tweeting out my son's tractor.
5:14 pm
>> i don't know how big that is. >> that tractor looks beat up and used. it looks like i've taken it through a war and back. >> he came right at me for crying out loud. >> coming up, dave einhorn's report just released. what he's buying, right after the break. the global hack attack sending cyber names surging. the traders tell you which ones will keep your portfolio protected from big losses. that's next. and there he is, getting ready. legendary investor steve eisman is here. he called the housing crash. does he see something similar brewing in the market right now? we'll hear from him right after this break. the show's about to start! how do i look?
5:15 pm
5:16 pm
5:17 pm
like a bald penguin. [ laughing ] show me the billboard music awards. show me top artist. show me the top hot 100 artist. they give awards for being hot and 100 years old? we'll take 2! [ laughing ] xfinity x1 gives you exclusive access to the best of the billboard music awards just by using your voice. the billboard music awards. sunday, may 21st eight seven central only on abc. welcome back to "fast money." we've got a news alert with the littest on filings. hi, leslie. >> digging into activist plays here. green light increased stake in gm by 42 million shares, to 54.7 million shares. a little bit under $2 billion based on the price at today's close.
5:18 pm
decreasing the stake in apple. joining a slew of others that did that as well. we also received the 13 f filing from pershing square. bill ackman told us in january he took two new long positions. i made calls, tried to figure out what was going on here. it could be one of two things. number one, these could be securities that aren't required to be disclosed through 13-f filings. there are a select group of securities that don't need that disclosure. number two, potentially the more likely scenario, that he drew these positions through derivatives. that's what we know at this point, melissa. >> leslie, thank you very much. so this is just the latest in the stake in gm, ackman, we still don't know what his new positions are. maybe through derivatives -- >> he does a lot of derivative trading. >> think about gm. think about where the peak was
5:19 pm
around the stock, as a trump trade. in the start of the first quarter. you really had an opportunity to come out of the gates and buy that stock. obviously first quarter gets you into a place where that stock really hit its peak. down almost 12% since that point. i'm long gm. i think of all the autos, i think it's the one that makes the most sense. >> we have no idea whether or not these positions still stand. >> no question. >> nef chase a 13-f. look at gm and say we have a massive glut of used cars in the market. avis is getting crushed because of that. there's no reason i would step in and buy these names here. gm in particular. i think there's more down side risk to these stories. >> unless he gets more of what he wants in two classes of stocks. >> gm based on valuation, advocate for change, ford on the other hand is in a four-year down trend since 2014. it just continues to make lower lows. i think you've got to wait on
5:20 pm
letter f here. >> breaking news on president trump coming out of d.c. let's get to john harwood for the details. >> reporter: melissa, the "washington post" just posted a story in which current and former intelligence officials are saying that president trump in his meeting with the russian foreign minister sergei lavrov last week revealed highly classified information that has the potential to damage u.s. national security in cooperation with allies. this information, according to the "washington post," report, and by the way, we've reached out to the white house, have not gotten a response from them to this report, although within the report there is a statement from the national security adviser, hr mcmaster, saying sources and methods were not compromised by the president's discussion. how far, the intelligence officials quoted in the piece said that by revealing the city in which this plot was discovered, gives the russians
5:21 pm
information about where the intelligence came from, and did not have the permission according to the post report of the ally whose intelligence agency produced this report. so i think if you step back for a minute, this is part of the intelligence community responding to the criticism that donald trump has leveled against them, and is giving the president a very clear indication that they are not going to let pass what they see as misbehavior by the president. this comes, of course, at a time when there's tremendous catastrophe about the russia investigation, and the trump firing of james comey, the fbi director, melissa. >> so, john, the characterization of this information is highly classified information? i would imagine it depends on what kind of -- lots of information is classified. but if this is highly classified, that denotes a more serious tone to the disclosure. >> reporter: that is the way the intelligence officials in the piece described it. they talked about it as -- among
5:22 pm
the most secret information you can have in the government. now, it has to be said, the president of the united states at any time can declassify information on his own authority. so it's not so much a legal question, as it could be a question of discretion, judgment, was he careless with classified information. this is what -- there was a quote in the post story from someone saying he may not have recognized what he was revealing. in any event, this is something that is about the last thing the white house needs at this moment. >> yeah. john harwood, thank you. interesting story this evening from the "washington post," again, citing their own sources about president trump revealing information, highly classified information to the russian foreign minister lavrov when they met a couple of weeks ago. it's funny, not funny, but there are so many things the white house is dealing with in terms of black eyes, even if it's optically. and the markets sit at record
5:23 pm
highs. >> it may distract them and taking their eye off the ball of tax reform. execution is obviously the most important thing right now and we're just not seeing it. points on the board, need to get in quickly for investors to stay reminded. >> a strategy that the white house is using before they were the white house. this has been going on for nine months. if you think about what's going on in the market, look around the world. it's underperforming the rest of the world. you're getting ppi and inflation out of japan and china, things that you want to see, see the rest of the world rallying, u.s. should be rallies. not just about valuation. i think the u.s. is underperforming for a reason. >> is some of it political blowback? >> absolutely. you can't tell me that the republican party, we know how democrats are going to react to this news, right? the onus is on the republican
5:24 pm
party to put america first and decide what they're going to do intraparty. that puts a lot more presh ir on any agenda that this market has. >> a lot of people hear blah, blah, blah, blah, and the vix is at 10. >> the movement in the market has been extremely tight. there's a reason for it. actually, john and i were talking about spot vix is lower than where we're seeing it trading at right now. but the reality is, there are parts of the market that have really outperformed. the overall s&p, yes, it's lagged some of the foreign competitors. >> i'm not going to say it's done poorly. >> but it's lagged. the way you were saying it. if you still look at individual names in this market, those are killing it. for all the passive investors out there, you still want to keep an eye on the apple, the amazon, the facebooks and even go to the financials. coming up, one of wall street's biggest tesla bulls suddenly waving the white flag. what has him so nervous, later this hour. here's what else is coming up on
5:25 pm
fast. >> no one is paying attention. they got greedy and they can profit off of their stupidity. >> steve eisman, the man who called the housing collapse is back. with what he thinks could be the next big short. and he'll tell us what's keeping him up at night. plus, that's what oil looks like, soaring to $50 a barrel. but traders are betting it could all come crashing down. we'll explain. the power of innovative thinking. the power of 100 of the world's top companies. the power of an etf. the power of qqq. the thinking we put in, clients get out. power your client's portfolio at powershares.com/qqq. before investing, consider the fund's investment objectives, risks, charges and expenses.
5:26 pm
call 800-983-0903 for the prospectus containing this information. read it carefully. distributed by invesco distributors inc. containing this information. read it carefully. it's what busch is known for. what are you known for? i'm indecisive. scratch that. no, that's right. although... [sfx: buschhhhh] when this bell rings... ...it starts a chain reaction... ...that's heard throughout the connected business world. at&t network security helps protect business, from the largest financial markets to the smallest transactions, by sensing cyber-attacks in near real time and automatically deploying countermeasures. keeping the world of business connected and protected. that's the power of and.
5:27 pm
dearthere's no other way to say this. it's over. i've found a permanent escape from monotony. together, we are perfectly balanced, our senses awake, our hearts racing as one. i know this is sudden, but they say: if you love something... set it free. see you around, giulia ♪
5:28 pm
time's up, insufficient we're on prenatal care.es. and administrative paperwork... your days of drowning people are numbered. same goes for you, budget overruns. and rising costs, wipe that smile off your face. we're coming for you, too. for those who won't rest until the world is healthier, neither will we. optum. how well gets done. we cut the price of trades to give investors even more value. and at $4.95, you can trade with a clear advantage. fidelity, where smarter investors will always be.
5:29 pm
5:30 pm
welcome back to "fast money." we're live at the nasdaq market
5:31 pm
site. a record day for the markets. closing at all-time highs. the dow rallied. we're just moments away from our exclusive interview with steve eisman from the big short fame. first, is the u.s. auto market signaling the potential breakdown for the u.s. economy? phil lebeau joins us with the latest. >> what a lot of people are worried about the auto market is what's on the lower end of the market. subprime and deep subprime part of the market. it's natural for it to slow down this late into an auto cycle. we've had seven years of growing sales. people like to focus on 30-day and 60-day delinquency rates. in the fourth quarter, experience that both of those increased fractionalfractionala. when you look at the overall
5:32 pm
market and say how many loans are written right now in dealerships are those who have good credit versus okay credit or weak credit? more than half of the loans written in the fourth quarter were for those with very good credit. prime and super prime. nonprime, which is your okay credit rating. about 20%. and then subprime and deep subprime make up just under a fourth of all auto loans written in the fourth quarter. by the way, that's down fractionally compared to the fourth quarter of 2015. and as i mentioned at the top, melissa, it's all about the overall sales that are out there for the industry. it is unlikely we're going to hit a record sales pace for this year. we're at 7.1 million vehicles. last year was the record at just under 17.6 million. the industry would really have to turn it on going into the second half of this year for us to hit 17.6 or greater for this year. most believe that's not going to happen. and that's why everyone's focusing on the subprime and deep subprime markets and what
5:33 pm
kind of losses that we see there, how that might impact some of the lenders there, and some of those holding those securitized assets that hold some of those loans. >> all right. phil lebeau, thank you very much. a wall street legend bet against the u.s. housing market. before the crisis hit. now, steve eisman joins us in the "fast money" exclusive. steve, a pleasure to have you on "fast money." >> thank you. >> phil lebeau was just talking about auto loans and subprimes. we've seen the data trickling out of the crumbling of the used car prices, about lenders vying for fewer and fewer loans out there. how do you view this area of the market? >> look, subprime auto has gone very, very rapidly post-crisis, for some type of correction. i expect a tightening in the market. therefore, lower volumes.
5:34 pm
fewer used cars sold. used car prices continue to go down. not a calamity. but it's going to be a problem for the industry. >> when you take a look at the various data points, what tells you this is something that is tradeable now, or is this an event that will even worsen in the near future? do you have data points like 3.6 vehicle leases to expire this year, which indicates so many more cars -- >> i'm looking at the data showing higher delinquencies, higher losses, longer terms. the traditional things people like myself look at. >> how big of a problem could this be? >> people like to put words in my mouth to say what's the next big short. let me just make it clear, i've lived through the big short, i'm in no rush to do it again. there aren't any, in my view, systemic issues. example, citigroup used to be leveraged 35-1, now it's 10-1.
5:35 pm
it's like measuring the distance from mercury to pluto. there's not enough leverage in the system. >> how do you express the short, though, in this? would you short lenders? is it the actual loan backed securities? >> i'm not involved in the fixed income world these days. it's hard to get swaps done on individual pieces of paper which is what i used to to. if you want to do something, you would be short some of the lenders and maybe short some of the used car companies. >> do you take a look at the automakers and say they have big financing arms? there was a question about ford because they have one of the biggest financing arms among the oem. >> but they're not doing used cars much. this is not a new car phenomenon. maybe rolling over in the used car market could impact the new car market. but it doesn't necessarily have to be that way. >> i want to go back to an
5:36 pm
interesting point that banks are not as levered -- >> not even close. >> very far from it. >> there's no one alive today who was around when citigroup was levered 10-1. that's how much it came down. governor truelo, the biggest bank lender in the united states, did a magnificent job of deregulating the system. he did that with the banks kicking and screaming, but he did it. >> the system is safer, does that mean that a big short could never exist again? as a big short that made you -- >> it can't exist now. there's not just enough leverage in the system. >> when you take a look at some of the other parts of the economy, there's more than just used cars. people take a look at student loan debt, for instance. perhaps the housing market. where else do you see some opportunities? >> people like to talk about
5:37 pm
student loans a lot. it's certainly a problem. but it's not an investor problem. it's taxpayer problem. because most of the ones are guaranteed by the united states government. so it's our problem. it's not wall street's problem. housing is pretty strong. probably opportunities in housing as well. but it's not on the short side. >> on the long side? >> it's on the long side. >> there's just nothing concerning in the housing market -- >> well, no, i think there's shall in mall reits and apartment reits. but not a systemic problem. there's a difference between a short and systemic short. >> in this kind of market do you see more locngs than shorts? >> i do. >> why is it harder to find this location? >> on the short side? >> yeah. >> because there's just not enough leverage in the system.
5:38 pm
you know, call me ten years from now, maybe there will be a lot more leverage in the system and we could have a conversation. it took from 1997 to 2007, leverage in the financial system went up four times. but it took ten years to do it. we're just at the end of the de-leveraging process. maybe this administration, i do believe this administration will allow more leveraging to come back into the system. but we have so far to go. >> the game has completely changed at least for the time being for short sellers? way tougher to be a short seller in this market? >> it is harder. but it's not impossible. there's no big short in my view. there are sector shorts, there are stock shorts. this is back to a stock picker's market. there are plenty of shorts in the market, just not systemic. >> the markets seem to grind higher to record high after record high. what's your take on where we are in valuations right now and do
5:39 pm
you see individual stocks, and i can throw out some that probably come up in your mind, too, tesla, amazon, what have you, a lot of the tech names, do you see them as being overvalued? >> that's not something i particularly focus on. i think that there is a sector that is undervalued and has the biggest opportunity happens to be the financial sector. >> we'll talk about that in just a moment. that is your big long right now. we'll have much more of this exclusive interview with steve eisman right after this when "fast money" continues. [vo] when it comes to investing, looking from a fresh perspective can make all the difference. it can provide what we call an unlock: a realization that often reveals a better path forward. at wells fargo, it's our expertise in finding this kind of insight that has lead us to become one of the largest investment and wealth management firms in the country. discover how we can help find your unlock.
5:40 pm
♪ ♪ i'm dr. kelsey mcneely and some day you might be calling me an energy farmer. ♪ energy lives here. i am benedict arnold, the infamous traitor. and i know a thing or two about trading. so i trade with e*trade, where true traders trade on a trademarked trade platform that has all the... get off the computer traitor! i won't. (cannon sound) mobility is very important to me. that's why i use e*trade mobile. it's on all my mobile devices, so it suits my mobile lifestyle and it keeps my investments fully mobile... even when i'm on the move.
5:41 pm
sign up at etrade.com and get up to six hundred dollars. itbut one i think with quesa simple answer. we have this need to peek over our neighbor's fence. and once we do, we see wonder waiting. every step you take, narrows the influence of narrow minds. bridges continents and brings this world one step closer. so, the question you asked me. what is the key? it's you.
5:42 pm
everything in one place, so you can travel the world better. welcome back to "fast money." still with us is steve eisman, betting against the banks before the crisis. steve, just as we were getting to break, you were saying financials were the one sector in the market that looked interesting to you right now. what about the trump administration makes this an investable sector? >> let me tell you what not to focus on. what everybody seems to focus on is the president wants to get rid of dodd/frank and glass siegel, et cetera, et cetera. i think that happening is close to zero. you need 60 votes in the united
5:43 pm
states senate to do anything. i don't think there are 40 to add a comma to dodd/frank. i think that's ought rhetoric. this will be done behind the scenes through regulation. governor turollo last day is may 27th. you need 51 votes for that person to take the seat. the fed regulates the banks through the annual stress test. and i think in the june 2018 stress test, let's just say i think it will be graded on a different curve. and so you're going to get banks asking for and getting bigger stock buyback programs. and so you're going to have the following happen of the you'll get more leverage. not anywhere close to where we were, just move in that direction. you're going to get the volk rule reinterpreted. you'll have higher rates.
5:44 pm
and so citigroup today, which has an 8% r.o.e. i think will have a 13% or 14% r.o.e. three to four years from now. >> sounds like you're long? >> yes. >> across the sector? >> i'm long a whole bunch of banks, and investment banks. >> basically just a lighter touch of regulation that's going to do it. why do you think this is unappreciated in the market and why the market is focused on specific rollbacks? >> because the regulation is very technical. i mean, i could literally talk for the next hour about all the various regulations that will be moved in one way or another, why that would be positive. by the time i was done, all of you would be asleep. literally. >> quickly, just on regulation. the impact on other investment like vehicles, if you will. regulation in municipal bond market. let's make the assumption that you look at liquidity con stranlt and concerns in that market. we created long liquid assets in
5:45 pm
the mutual fund assets. investment in corporate bonds have been significant. bank inventories, however, have dropped 85%. >> that's the volcker rule. >> there's nothing that shifts there, in your opinion, if it doesn't get revised, do you worry about liquidity -- >> listen to what i'm saying. there will be no changes to dodd/frank. how dodd/frank is interpreted, the fed has given a lot of leeway. and, you know, dodd/frank was interpreted extremely strictly. there's really nothing that would stop the fed from interpreting it somewhat more liberally. for better or worse. i just think that's what's going to happen. >> mr. eisman, you talked about the leverage, probably the highest in '08. at that point some of these brampgs traded two and a half, three times priced oat- >> i was short them all. >> what was the right price in the environment that you're talking about now? >> the basic formula is, let's say you have a 15% r.o.e. you'll be valued at something
5:46 pm
like 1.5 plus ten times tangible book value. just get back to citigroup again, 8% r.o.e., 90% of tangible book. if it goes where i think, it could be -- give me a different bank, i'll give you different math. but directionally it's all the same. >> in terms of the operational leverage, the institutions, they're lean, mean. but who in that group is the most attractive to you when you're weighing risk/reward and operational efficiency right now? >> choose your poison. there are different stories. goldman will benefit probably the most in income trading. comerica will benefit the most from higher short-term rates. name the bank, i'll give you a different story. >> one of those factors, do you have a view on rates? >> i think rates -- i think the fed's going to continue to raise
5:47 pm
rates through 2018. i think two more times this year. probably at least three more times next year. it's all positive for almost all the regional banks. >> this is the one sector that you like? >> i didn't say that -- there are other sectors i like, too. >> which sectors do you like? >> the difference between financials versus other sectors is the correlations in financials are extremely high, around 70%. you have to make a decision whether you think you should be long, and how much you should be long. so i'm very long. but my second favorite sector is info tech. what i like about info tech is the correlations are extremely low. you have visa, google, motorola solutions. they have nothing to do with one another. that's more of a stock picking group than a sector call. >> which sectors do you like the least? >> which of the sectors do i like the least? i like -- >> not a big one --
5:48 pm
>> i like the reits sector the least. >> are you short any of those names? >> i'm short a few. one retail premise, one apartment building premise. i think rents are rolling over in new york and san francisco. and my research on mall reits, i do research on mall reits literally every day. i come home, and i count how many boxes are in my house. that's what i really need to know. >> they're all from amazon. >> they're all from amazon. >> and all gifts for you. >> no gifts for me. not a one. >> can you tell us which mall reits are in most danger? >> i think they're all -- look, people think that you could hide, let's say in the "a" malls. i don't think you can hide in any mall. they're all going to be impast in one way or another. we're short simon. >> short simon? because the talk from a ceo of simon or any of these higher end
5:49 pm
general growth mall reits would be -- it doesn't matter, because if this big box store leaves, we'll just rent it out. we have very high rent. >> i know that's what they say. i just don't think that's right. i think the trends in retail are just so overwhelmingly powerfully negative, that -- i mean, simon will do better than the b & c mall reits. but i don't think anyone's immune. >> is the corollary to this trade being long amazon? >> it's for long amazon. >> you are long amazon? >> yeah. >> is it mainly -- >> i count the boxes. i mean, i'll give you an example what's happening in retail which gets less attention other than the traffic. you still have to buy stuff in a store. like the soup. i'm still going to go buy a suit in the store. but in the old days i would buy a suit, a shirt, i'd buy a tie, remember my wife yelling at me because i have holes in my socks and underwear, so i buy my
5:50 pm
underwear and socks. and right now i just buy the suit. >> and you don't have a tie. >> i don't wear a tie anymore. but most of the stuff i would buy in the store that was extra, i don't buy anymore. that obviously hurts retail. but i think it also hurts malls. >> how long term of a short do you think the simon property short is? >> i think potentially this is just a long-term structural problem. you know, i think we're overmalled and overstored in the united states. you can't understore and undermall overnight. it doesn't work that way. it will take a long time. >> i know you said that you're less on the fixed income side these days. but when you think about this sort of premise, do you think there will be pain when it comes to the credit, or the debt of the retailers? do you think there's going to be more -- >> people are making that argument. i think it's a little early. you're not seeing yet any real negative credit statistics. i know people are short the
5:51 pm
cmbx. you know, the problem is, given the volcker rule, there's not -- there's some volatility -- liquidity, but not anywhere close to what it was. so if you take my view that the mall reits have a problem, short simon or some of the other mall reits. i like to be able to get out of my errors if i make a mistake. >> that's a good -- can you stick around for a little bit longer? >> sure. >> more steve eisman right after this, when "fast money" returns. that's why i have the spark cash card from capital one. with it, i earn unlimited 2% cash back on all of my purchasing. and that unlimited 2% cash back from spark means thousands of dollars each year going back into my business... which adds fuel to my bottom line.
5:52 pm
what's in your wallet? it's your glass of willpower that helps keep cravings... ...far, far away. feel less hungry with the natural fiber in clinically... ...proven meta appetite control. from metamucil.
5:53 pm
but we've got the get tdigital tools to help. now with xfinity's my account, you can figure things out easily, so you won't even have to call us. change your wifi password to something
5:54 pm
you can actually remember, instantly. add that premium channel, and watch the show everyone's talking about, tonight. and the bill you need to pay? do it in seconds. because we should fit into your life, not the other way around. go to xfinity.com/myaccount welcome back to "fast money." take a look at snap shares today. soros invested 1.6 share stake in snap. one of several prominent hedge fund managers to do so. others include appaloosa and jonah. as of the end of last quarter, march 31st. also in tech news, we're looking at a filing from tbg disclosing a 4.3% stake in etsy.
5:55 pm
that stock is up on very, very light volume after hours. tpg and dragoneer both took a stake in the company. they're working with management to push for some changes there. that's according to a person i spoke with on the background. back over to you, melissa. >> thank you, leslie, with some latest hedge fund holdings. snap seeing a nice bounceback. we're here with steve eisman of big short fame. what do you think of the companies that seem to be augmented -- >> let me make clear, i don't personally engage in social media of any kind. it scares me personally. my children obviously do. but we own facebook. >> why facebook as opposed to the others? and does it concern you that they've had these problems, that they've had troubles in terms of
5:56 pm
metrics, how many times a video has been seen on their site? >> let me look at the young industry. you're going to have growing problems of how things are measured. i think it's one of the most powerful long-term stories in the market. >> let me review some of the big cap tech holdings you have. you have facebook and amazon. do you hold alphabet and netflix? a lot of people say the passive money has really been what has been driving some of the largest holdings higher together. >> i think there's truth to that. the etfs reinforce the larger companies in the sub sectors. it's very, very hard to fight that. for example, if anyone wants to own industrials, buy the etf. take the top ten names and they'll go up regardless of fundamentals. very hard to fight that. so i don't think that's going to change anytime soon. >> is there any name in your
5:57 pm
portfolio that is sort of a swing for the fences kind of name? >> there's one. but it's small. >> okay. >> pause it's like owning liquid nitrog nitrogen. >> wow. please tell. >> a small position in fannie mae preferred. >> what's the thesis behind that? >> i think there's a growing recognition in washington that fannie mae and freddie mac can't be part of the united states government for the rest of our lives, for better or worse. so i think there will be a recapitalization at some point. by the way, when that point will be, at this point i have no idea. >> sure. >> i think the catalyst potentially is if there is tax reform. and the reason is that a lower tax code will mean that they have to write off the dta and the government will not want to write them a check. >> hope you come back soon. pleasure having you. >> thank you. up next, "final trade."
5:58 pm
hey gary, what'd you got here? this bad boy is a mobile trading desk so that i can take my trading platform wherever i go. you know that thinkorswim seamlessly syncs across all your devices, right? oh, so my custom studies will go with me? anywhere you want to go! the market's hot! sync your platform on any device with thinkorswim. only at td ameritrade a 10-speed direct-shift 5.0transmission.ine. a meticulously crafted interior. all of these are feats of engineering. combining them with near-perfect weight distribution... ...is a feat of amazing. experience the first-ever 471-horsepower lexus lc 500 or the multistage hybrid lc 500h.
5:59 pm
experience amazing. the power of the nasdaq market. the power of 100 of the world's top companies. the power of an etf. the power of qqq. the thinking we put in, clients get out. power your client's portfolio at powershares.com/qqq. before investing, consider the fund's investment objectives, risks, charges and expenses. call 800-983-0903 for the prospectus
6:00 pm
containing this information. read it carefully. distributed by invesco distributors inc. out of time. thanks so much for watching. "mad money" with jim cramer starts right now. #. my mission the simple. i'm here to level playing field for all investors. there's always a bull market somewhere. and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cramerica. my job is not just to entertain but to educate and teach you. so call me or tweet me @jimcramer. on a day where the dow gained 84

51 Views

info Stream Only

Uploaded by TV Archive on