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tv   Power Lunch  CNBC  March 15, 2019 2:00pm-3:01pm EDT

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else around the world and say, can we use your capacity and can you help us with manufacturing >> anything could happen with tesla. thank you, phil. philip lebeau with a recap of the y launch shares down nearly 5%. that does it for the "the exchange." i'll join tyler and melissa for "power lunch" which begins right now. >> indeed it does. see you in a moment or two i'm tyler mathisen with melissa lee. new at 2:00, bulls are charging again. should you jump on back of the bull and ride the rally or the gains almost done? plus, facebook flounders the shares there dropping as two top executives leave are more departures coming what does it mean for the company? a thousand an hour to help your kid get into college the booming business of college entrance consultants "power lunch" starts right now welcome to "power lunch.
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i'm melissa lee. we've got a rally on the street today. dow getting a nice lift from boeing that's a nice change boeing shares higher on reports it will roll out a software fix for the 737 max in the coming weeks. in the meantime, the s&p 500 and nasdaq on track for their best weeks of 2019 and both aiming for their highest closes since early october. kelly? >> melissa, thanks let's get straight to bob pisani on the floor of the new york stock exchange look at the rally today. bob? >> and the important thing is we have broken over the 2815. fell five times in the range in the last five or six months as you heard from melissa if we close here, a technical breakout essentially only 4% from historic highs on the s&p 500. there's 2820 we hit that important level. that was this afternoon. you see the rally, right there technicals do matter at this point. what's happening this week though is tech is really happening and helping. broadcom really helping the semis moving up here
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if you get apple, microsoft, cisco, when they're all up 5% or more, look at the next screen, you get a nice rally overall here intel 4% look at that that's dragging the markets up and moving the s&p 500 this week next week guys, watch micron micron dropped 50% in the fourth quarter when everybody realized china was slowing down and the competition was tough, i think you're going to have generally more positive comments the rate of earnings decline will slow down a little bit. a lot riding on technology guidance in the next few weeks guys, back to you. >> thank you very much, robert turn to treasury yields. now at new lows. rick santelli tracks the action at the cme hi, rick. >> that's definitely the case. although the buoyancy of the equity markets with a gravitational pull pulling the
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rates up look at the two year note. this is a year-to-date chart see how close we're coming from that spike on january 3rd. if you zoom it back, should we take that out around 238 i don't think it's going to happen today but getting close the lowest closing yield since may. if you keep the same scenario in your mind, we'd have to go back to january for the tens, much more developed as a matter of fact, only a couple of basis points from the lowest close that would take you all the way back to january of last year. that's right around 255. finally, let's look at how this all winds up together. here's a two week chart at tens versus s&ps. clearly after the end of last year, just haven't gotten the correlation back so the real dilemma is should rates continue to fall through the significant levels what is it going to do to the psyche of evaluation traders back to you, ty. it's been the best week since two weeks ago. last week was a down week.
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nice average gains for the week. s&p up 3%. the nasdaq up even more and dow up 2 it would have been much higher if it wasn't for boeing's big drop this week on track for their best weeks of 2019 so far. apple one of the big gainers, up 8% since monday. should you keep riding the rally? let's bring in lisa ericson. u.s. bank wealth management and cnbc contributor ron lisa, we were having a conversation yesterday with one of the guests that said he anticipates, perhaps, perhaps the dow or s&p ends with mid double digit returns with the 14% or 15% area. that sounds impressive until you unpack that thought and realize that that means basically we've got maybe a percent or two or three more to go to get to that number are the best days of the year behind us? >> we do think there's room for u.s. stocks to move up
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if you look at the overall picture, corporate earnings, while slowing from last year's pace, still in solid absolute territory and then if you look at the economic fundamentals, it still remaining solid. about 57% of indicators are still in growth mode so we do feel like there's a case for stocks to continue to rise >> ron, let me turn to you if i am a classic sort of 60% equity, 40% fixed income investor in today's market, is that a comfortable level should i just be on my target or should i shade more into risk or less into risk >> i'm not sure more into risk but more into quality. and going in that direction. one of the big things, i think rick santelli had the chart of the week the s&p versus interest rates where rates have come down rather surprisingly. the yield curve, relationship of the ten year note to the 3 month t bill is 14 basis points the flattest we've seen in quite a while so it seems to me that maybe the market is beginning to believe that the path of least
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resistance for rates would be lower rather than higher so that could be a catalyst. >> what does quality mean? >> big brand names, strong balance sheets, stocks with high quality. i think in this environment where you've booked solid gains so far this year, you don't want to get crazy. >> lisa, what's interesting is that you and ron both say you see growth but if you look at fed funds futures pricing at a rate cut. >> i wouldn't say growth but more concerned that the economy would slow. >> but you'd have support for stocks with rating coming down >> prices in a rate cut this year are we in this weird market paradigm now, lisa, where if you're in a growth environment or if you're in an economy that's slowing down, that you still want to be in the high growth names, is that what we see play out here? >> well, i think you pointed out a couple of good trends.
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i do agree what we're seeing between what bonds are telling us and stocks is really different. i think stocks are on and have been more risk on of late simply because there's relief over the trajectory of where economic growth is going. but the bond market to your point is really thinking more recession narrow a recessionary and rates on the margin could come down that's a paradox that has to be reconciled going forward i think where we would advise our clients to stay right now, really, is to remain at their typical long-term al lo kaigloc for the two big asset classes balances and within stocks, technology to your point is still an interesting place to be but we wouldn't be looking at those with longer term as well as shorter term growth trends. >> the tech the sort of magical sector to withstand any scenario you put at it? >> not ever.
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i mean, just cyclical. bears and bulls and tech is the best performing. >> you lean into and typically don't name those names but lean into the stocks doing extraordinarily well in an environment irrespective of the economic climate i think global growth is slowing pe meaningfully there's a bit of a put underneath the market. not to say there aren't risks out there. seems to have been propping up oil prices, later on in the hour again, i think gravitate towards quality but the bond market is telling us a lot that the fed's next move might be the lower rates rather than raise them and to a certain extent under the equity markets given what we experienced last year. >> thanks, ron appreciate it. have a great weekend appreciate it. >> thank you >> all righty. to seema mody with an alert on marriott
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>> tyler, marriott says it is evaluating activist investor jonathan's nomination to the board and the founder of hedge fund lands and building investments with less than 1% state in marriott and said data security privacy is a top priority and that it's evaluating the nomination to the corporate governance committee process. it does come after marriott unveiled one of the biggest data breaches in history ahead of its investor day which takes place in monday in new york city we're looking at shares where they're up as much as 4% at the highs of the day currently up 2%. back to you. >> thanks. it's not just stocks this week but commodities too. both pushing higher with incredible gains this year up 25% and goldman now seeing brent at $70 at the same time, the international energy agency warning is venezuela's power crisis could disrupt the global oil market
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a partner at again capital and cnbc contributor first of all, how much impact does venezuela have right now and how much oil are they producing? >> the numbers range between 700 and almost a million barrels a day but with the power outage affecting the country so widespread, you have to believe it's darn near zero. >> it would perhaps put more pressure on to solve the power outages but i just don't see that happening >> they don't have the equipment. they don't have the personnel. these people, the workers can't feed their families. down the street. it's a complete and utter disaster down there. i think it's just going to end up, now that we've closed the u.s. embassy there they now have unconstrained policy levers to pull according to the secretary of state and i believe some intervention at some point in the near term by the united states. >> maybe that's one reason why crude has been pushed a little
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bit higher but what are the the more important factors here especially as we talk about brent back at 70 >> a couple of things. a lot of the charts are looking here and you're having this inflationary effect arguably from the active central banks with monetary easing gold going up, stocks going up, crude going up yield going down with the inverse relationship dollars next for crude oil that's a bit of a push right now. but the main thing beyond all of that, kelly, is the saudis said rab ya has doubled down on taking oil off the market. doing double what they promised last year to stem supply they have really taken it to the united states. exports to the u.s. lowest in years. >> when you say they've taken it to the united states, you mean they're using higher oil prices as a leverage tool because aren't they just ceding market share if they produce
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less >> 10:30 in the morning, we have a seminole weekly oil report by withholding barrels, the numbers have been juiced net imports down the over inventory number. drawdown, not guilrises. partly because of the saudi impact. >> we've heard from the major integrated chevron, increasing cap x this year. chevron first time after four years of declines in cap x are we really just seeing sort of the push/pull on the markets in terms of more supply coming on to the u.s. producers versus opec's best efforts to reduce? >> the big news this week was chevron and exxon getting it to shale. almost like the adults have come to the region. it was concerning from a consumer's perspective because up until now, we've had these hell bent wildcatters down there just trying to keep one step ahead of the creditors and
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the banks and the investors. drilling and drilling and drilling, no matter what the price was. i think exxonmobil and chevron have a more disciplined approach to that. exxon in particular is working on the cost aspect there was a claim from the exxon ceo this week getting barrel costs down 15 14 i was shocked at that and still trying to see how they're getting there but earlier in the investor day said double digits. so the math works out on that basis but there's a concern to me and the eia or the u.s. agency did lower the rate of shale growth this year by a couple hundred thousand barrels and sent a shout throughout the course of the market because it made you think that the unbridled shale growth may not be in our future. >> unless they can get the $15 price down all right. john, thank you very much. >> let's get to josh with the market flash on alphabet josh >> melissa, we've got a big
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headline flash in the "washington post" which is saying now that some of the country's most influential state attorneys general are apparently signaling that they are willing to take action against facebook and google for being too big and powerful, specifically states like arizona and mississippi now taking aim at google for what the article says it's collecting and monetizing the data and district of columbia i challenging facebook's business practices in court we know that has become a big issue, even on the campaign trail with senator elizabeth warner, of course calling for the break-up of big tech and making this argument, they've become too big back to you. >> thank you very much, josh lipton in san francisco. and we'll have much more on the book coming up including mounting president barack obamas n what does mark zuckerberg need to fix it and more states
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attorney generals. and tesla shares lower as new car unveiled disappointed musk magic. "power lunch" will be right back you should be mad at airports. excuse me, where is gate 87? you should be mad at non-seasoned travelers. and they took my toothpaste away. and you should be mad at people who take unnecessary risks. how dare you, he's my emotional support snake. but you're not mad, because you have e*trade, whose tech helps you understand the risk and reward potential on an options trade it's a paste. it's not liquid or a gel. and even explore what-if scenarios. where's gate 87? don't get mad. get e*trade and start trading today.
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taking action against facebook and google, tech giants. warning they have grown too big and powerful and that washington has been too slow to respond joining us now is ed lee of "the new york times" and then silicon valley editor with the verge great to have you with us. casey, i'll start off with you is there anything legally these state's attorney general will make a case on i thought the reason so many analysts in wall street are dismissive about some of these anti-trust concerns is that there are no grounds to bring a case against these companies to break them up. >> that's right. if there's going to be legal action against these companies, anti-trust grounds, it's not going to come from state's attorney general i think the impact may come from data privacy frankly, there aren't a lot of states either and i think that's where you're seeing the skepticism it's hard to determine how these are and if you mentioned google
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and this kind of context, a lot of big headlines they have a lot of to prove if they're serious. >> if that's the case, and maybe these state's attorney generals are looking for state by state, kind of privacy regulations. these tech companies are better off wanting and requesting federal legislation instead of having to deal with state by state. >> and that's actually what part of the aim might be and there's a lot of bipartisan support in washington already for some kind of regulation with the big tech guys i think the state's attorney generals say we need to give them a nudge one way of doing it. set a floor for these guys and what kind of data collection they're allowed to do and not allowed to do. that would create the floor but you're right i think more likely, you're going to get some federal rate with federal legislation and i think this is sort of part of the chess game right? i think the states look at it saying if you don't do something, we'll do this now >> casey, i want to turn the
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conversation to facebook also, to youtube which is owned by alphabet. and speak in light of the posting earlier today, truly shocking video of that massacre in new zealand i wonder whether the concerns and i'll tie it back to the topic we were just talking about. whether the concerns of attorney's general or lawmakers has to do with in part the size and ubiquity of the platforms but also the idea that the people who invented these platforms have now found themselves with machines they don't know how to control. >> yeah. you know, here's why thisinfur . if we tried today, we would get a notice that was a copy right violation and youtube wouldn't allow it to go through whereas if we wanted to up load a video of a mass shooting, there's a very good chance that it would people are continuing to find these videos which very clearly
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violate youtube's own terms of service. and so i think that really puts pressure on youtube to come up with a better answer unfortunately, we live in a time where there's a calamity like this seemingly on a weekly basis and the platforms need to catch up to the fact that people are going to find ways around the filters. >> is that because music videos can be scanned by machines that can identify whether i'm up loading copy righted content and then identifying the kind of tragedies you're talking about is harder but then i would think that they'll get there >> it definitely takes a little bit more time to do this, but the platforms are already doing it in other contexts for example f y, if you try to p load a video from isis that's known to the platforms, they actually work together and identify these videos, so you can't re-up-load them to any of the major platforms. what we need to do in this case is find a way for them to do that faster at scale so within hours of something like this happening, there's just no way to upload to a site to be shared
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with millions. >> even hours, isn't that too long by that time, others have downloaded it and can replicate it and circulate it. >> we're never going to be able to get this stuff off the internet as soon as it gets up loaded i do think that's impossible if you want a free and open internet, this is one of the trade-offs but i absolutely think that the platforms can get that down to a very short amount of time and prevent something we saw yesterday is people opening up twitter to check what was going on in the news and twitter auto playing in their feeds the video of a mass shooting and traumatizing who knows how many people >> to that point, your colleague, kevin, wrote this piece and summarizes an issue really well when it comes the these platforms here with the design of internet platforms create and reinforce extremist beliefs and that's simply because the algorithms they steer the users to more and more extreme content so it sort of is this
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reinforcement loop >> feedback loop. >> it gets worse and worse that goes back to the algorithm issue that congress took issue with before. these companies control an algorithm and we don't know what they spit out. >> part of kevin's point, how much that's done is theshape o this really terrible act is the way in which he went about it. the way he recorded. the way he sort of talked about it ahead of time and these platforms. he was very, it was shaped by understanding how the internet works and i think that is sort of what was really sort of kind of pernicious and really difficult. we're talking about the video being taken down, i actually saw it on my twitter feed just minutes ago, even though i know twitter has been working hard to take it down as well as facebook and youtube. it's just been really hard and it seems like this act was designed to take advantage of the algorithm and just being really savvy, as terrible as that is, with how these things
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work and clearly, tyler, you pointed out earlier, is this like a mantra they haven't been able to contain. this is an example of that, and, you know, they're caused in washington for some type of legislation or action. this is an example of that >> melissa just used the phrase, the companies control the algorithm. i wonder whether the algorithm coms the companies beginning to feel that way. >> we're going to leave it there. gentlemen, thank you so much underwhelming. to surprises that's been the reaction to tesla's new suv y. what could the model y mean for the stock and former nba star trying to give players, young ones, an alternative to college basketball will pay pln s west in the studio to exaihinew league "power lunch" will take it to the hoop after this. ason. [ sneeze ] you know at cdw we get that sometimes it's smart to work outside the office. that's why we would suggest the powerful, portable lenovo thinkpad t480. to let your people stay productive from anywhere.
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whai tell clients, etfs can follow an index, but which ones target your goals? it's not about quantity. it's about quality. no trendy stuff. i want etfs backed by research. is it built for the long-term? my reputation depends on it. flexshares etfs are designed and managed around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully. ♪ ♪ dear tech... let's talk. we have a pretty good relationship. you've done a lot of good for the world. but i feel like you have the potential to do so much more. can we build ai without bias?
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how can we bake security into everything we do? we need tech that helps people understand each other. that understands my business. we've got some work to do... and we need your help. we need your support. let's expect more from technology. let's put smart to work. ♪ ♪ welcome back to "power lunch. i'm michael santoli at the new york stock exchange. tesla stock under pressure today. failure to kbrimpress the street 20% shares down this year. michael from fios advisers
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i'll start with you, craig with how the chart looks for tesla, for so long, the stock has toggled and a good deal below that now how's the set-up >> so mike, i look at the set-up like this and the fundamental story, confusing you've been stuck in a trading range for 2.5 years. 245 on the lower end and 390 on the upper end. backing and to me, it looks like we'll have to come back down and retest the price channel confirm it to do any sort of tactical trading opportunity with these shares so i'm waiting for it to pull back and retest that level >> and michael, i mean, could you get comfortable owning this company? it's really the same set of issues can they produce enough, is there enough demand for the existing models and can they become self-financing over the long-term? >> i can get comfortable owning it right now with the model y being unveiled last night being a yawner, and they're
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really struggling with the brand definition they don't know who they are they don't know what's the difference between them, ford, gm and with production and delivery issues. the competition is heating up. there's a ton of companies coming out that are making the car. and i'll leave you with one final stat they're trading at per units sold market cap of $120,000. bmw trade a $30,000. so it's four times any other market cap per unit sold out there. >> well, that's for sure i mean, obviously, tesla's stock and market value contains a big chunk of the possible future right? not about the production today we'll see if it ends up playing out right for them or not. michael, craig, thanks a lot for more "trading nation," head to our web site or follow us on twitter @tradingnation thank you, kelly >> thanks, mike. big business of college admissions plus a new league to rival college basketball former nba player david west joins us next.
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top u.s. general accusing google of helping the chinese military. all this when "power lunch" returns. >> and now, the latest from tradingnation.cnbc.com and a word from our sponsor. >> many traders like to watch technical patterns and one of the most popular ones is called the golden cross the golden cross is where the 50 day moving average moves up through the 200 day moving average. and while this pattern is not intended to get you in at the very bottom, it can be an effective entry point in an uptrend. i'm randy frederick and schwab is the better place for traders. measure up?
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i'm contessa brewer. here's your cnbc news update this hour. students around the world protesting their government's lack of action on global warming. marches occurring here, in the united states, and switzerland and germany, italy, india, sweden, england. rent for single family homes and multifamily on the rise as home prices are falling. the median monthly rent in february rose nearly 2.5% compared to february of 2018 according to the bureau of
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labor statistics, job vacancies jumped to a fresh high of $7.6 million in january the jolt report is watched closely inside the halls of government it measures the level of employment vacancies as well as how many workers left their jobs and their reasons for separation and a good day in space. a russian american crew arrives successfully at the international space station today. that's five months after a botched launch led to an emergency landing for two of the three astronauts that's cnbc news update at this hour send it to you, melissa. >> thank you 90 minutes until the closing bell rings higher markets across the board here dow higher by half a percent good for 145 point gain. s&p up by 16 and the nasdaq is up by almost 1 full percent. clearly technology is the leader this today's session and within tech watching shares of qualcomm rallying on the back of headlines moments ago. a trial verdict, finding apple infringed on patents
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suk at t you can see the pop in that stock. >> thank you, melissa. the college cheating scandal exposed an industry we didn't know existed college admissions consultants. >> this is one of the fastest growing industries in all of education. there are now about 8,000 private educational consultants in the u.s that is quadruple the number of five years ago revenue at $400 million a year and if you add in test prep and tumors, the numbers estimated to be in the billions consultants say william rick singer was a bad actor in an otherwise important industry that helps guide students through their college process. demand is soaring for kids starting young as 8 or 9 years old. the fees for advisers run spectrum high as $15,000 a year and others charge by the hour. some over $1,000 per hour. most expensive programs can run to the hundreds of thousands of dollars if you're talking about many years now, by some counts, college consultants are used by one
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quarter of the students at private colleges the advisers say their focus is to help figure out what they want in a school and steering them to the best fit and in a road map to get there. the bull market for consultants expected to continue as competition for those few spots that the elite school heats up the acceptance rate for stanford, for example, was 20% in 1994 and now it's under 5%. that's what you're up against. >> wow all right. stay with us with us now to discuss the college consulting business is sarah, and christopher, thank you both and for going an hour because you each charge an arm and leg for tutoring up to $600 an hour and christopher here charges $950 an hour >> that's the lowest charge. >> what do you get for that? i mean, i know that's a very basic question but if i had a child and i said, christopher,
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help me, i'm willing to pay you almost a thousand dollars an hour what do you tell me to get for that money >> what we'll do is create a yearlong road map for the students every month, one of the objectives to fulfill to stay on track. some testing, like for the s.a.t., a.c.t., you have to sign up months in advance to secure the right location in your neighborhood the last thing you want to do is fly or drive overnight to a different state to take the test because a test center within your neighborhood is sold out in full. >> these are just some examples but i am assuming that for children whose parents are able to pay this much money, most likely, they're going to very good schools perhaps some of the best private schools in the country and these have guidance counselors who should be able to do muff of what christopher just said and much of what you may do in fact, as well. >> the independent college consulting business expanded not just for the rich and privileged
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although i do take on private clients. most of the work i do is free or a low monthly cost i have a private facebook group called application nation. we have families of all income levels and 40 out of 50 states being remitted just in the past year since we launched it but what families get with an independent college consultant if they do their homework, for me, i've been in the business for 20 years i was an associate dean of admissions at penn and ivy league institution and dean of admissions worked at high school, literally read hundreds of thousands of applications so when families are asking, is it worth it? is it worth the money? i would say you want to find out what the independent college consultant's background is and get references as well. >> is there anything and you, christopher, that you provide that i couldn't know or find on my own in other words, the heart of the question is, what the hell is so complicated about this process that i have to have a sherpa guide me through it?
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it doesn't seem that complicated. i need grades, i need test scores i need some extracurriculars, probably some community service. and i need to be able to write an essay >> you know, so much has changed in the process, just in the last couple of years. so for me, i know what i needed to do to read an application i signed off on admissions decisions. i know what it takes to get admitted but, you know, when an admit rate at stanford is about 4% or 5% a year, students don't know how to navigate that. they're doing it for the first time i've done it hundreds of thousands of times so when you hire an independent college consultant, they're not just telling you this is what you need to sign up for the s.a.t.s, but they, if they do it right, they understand kids. they understand teenagers and really, what is the very best essence of who that student is most students in high school, they do what everybody else does my whole mantra is do what is right and distinctive about who you are. >> i want to hear from you on that same question
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what is so bloody hard about this number one, and number two, if you were to draw a pie chart of your customer clientele, how many of them are u.s. families, how many of them are non-u.s. families from asia, europe, wherever >> sure. i think with this process, because admission rates are so low, you can't just have grades. you can't just have straight a's or near perfect s.a.t. scores but something to make you stand out. what's that hook colleges want to see students with a singular focus and not a well rounded student, believe it or not they want to build a well rounded class, which means the student good at one or two things and that's it not the president of six clubs and plays three different varsity sports they want students who know what they want to do, know what passions or interests they pursued. >> my issue with this is what you guys are all saying sounds to me somewhat undemocratic because if you don't have access to experts and insiders and
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you're able to pay up for that, your chances of getting into college on your own merits using your own best instincts don't sound that good. >> but it's the same thing with tutoring obviously, we're both on the higher end of the, in terms of price point but tutors that charge 20, 30, 40 an hour and for some peep, that's okay for some people, that's above their budget i'm not sure in terms of equalizing the playing field i'm not sure where to draw the line. >> are you arguing that this could help people get a leg up that somehow it's about leveling the playing field. i take your point, you have a facebook group that people can pick up a few tips but the kinds of things we're talking about a thousand an hour are way out of reach for anybody who wants to get into a school on their own merit and doesn't have those means. >> most of the families i work with pay a low monthly fee and they get access to me 24 hours a day, seven days a week i teach them how to think like admissions officers.
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that's what parents want they want to get the inside scoop and when you've been on the inside, but here's the problem. unless states will infuse and overhaul their college counselling programs at high schools, parents are going to want this, but they're going to need it. all income levels. and i think we're beginning to see the college counselling industry turn on its head because now it's not just about getting a private counselor to work with your child really, it's about getting a ground swell of support from parents who say, this is ridiculous i shouldn't have to pay 500, 600, $950 an hour with a private counselor. there is incredible information out there for free and there's also these private groups that have popped up and what's happening is so much of this process has been private and secretive and what i'm doing with application nation is saying let's put it out there and be completely honest what's really going on and that helps
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parents and students navigate this process. >> let me come back to my earlier question about the profile of your classic customer, where are they from? >> new york city quite a few in dc, palm beach, and of course, l.a. and san francisco. >> but you're opening in hong ko kong, right? >> yes, we are. >> how has the scandal affected your business? >> so we're working with students and the core of our business ishelping students figure out what they're interested in. because we try to help students figure out what their hook is going to be. what's going to stand out. >> are you getting more calls after the scandal? >> yes our phones have been ringing off the hook >> what are they asking? can you help my child write the essay, for instance? how far does it go >> clients who are calling us earlier. today, i think i had a fifth and seventh grader call us we usually work with eighth, ninth, tenth graders before, we worked with second and third graders.
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i mean, they called and asked for writing tutoring but i'll see students after this entire scandal starting to work with us earlier because -- >> because the scandal highlighted the fact or the -- >> the existence. >> you need a tutor to navigate this process. >> that's one point and then also because they don't know how competitive this process was just because you have perfect scores does not mean you're going to get in. with the scandal >> one more second, chris, you write essays for students? >> absolutely not. >> give them tips what to write about? >> we help them think about what types of moments in their life they should write about. >> it's unethical for people to write the essays of other people. >> definitely. >> i don't know anymore. all right, we're going to leave it there fascinating discussion thank you. >> thank you so much >> it's not just colleges. college athletics facing heat of their own and now facing competition too.
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david west, a two-time nba champ with the golden state warriors is launching a new basketball plerue he says will pay ays while in college he joins us next this is your invitation to be our guest. this is the invitation to lexus sales event. lease the 2019 rx 350 for $399 a month for 36 months. now thru march 31st. experience amazing at your lexus dealer.
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march madness is just around the corner looks like college basketball is
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about to face now a newcomb pet or the a new league being created called the historical basketball league 12 teams in key markets guaranteeing a 5-year college scholarship to players also pay those college players and would allow those players and would allow them to sign with agents. joining us to tell us about the league is david west, chief operating officer of the hbl and a two-time nba champion. let me understand this the players would be what? good high school players who have chosen not or were not selected to get a college scholarship? or, people who decided i'd rather get paid and get a scholarship? >> there you go. the latter the players we're looking for, aiming to be, the top college destination for elite college athletes, guys to make the decision at 18 to go into the professional world. >> they say i want to play basketball i want do get paid for it. >> compensated, right.
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>> take a college scholarship at a college of my choice to get into >> absolutely. in their area. we start 12 cities where we have reversed the model is athletes play in the summer so they won't have the pressure of performance in the classroom and performance on the court play in the summer september-ish will finish and then become students they'll engage in regular academic activities. those that don't want to go to a traditional route is other educational opportunities to meet their needs. >> have you heard from the ncaa at all i'm sure this must be the last thing they want to hear is to take players from high school and pay them and do the things they refuse to do. >> we are another option you know they have a model, a traditional model in place we don't feel that that model is equitable and fair and we are going to create an opportunity for kids to make a choice. they will have a few different options. we want to be one of them.
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>> so the target would be really good high school players who want to play ball for pay. what if you had a college student who wanted to do it or a graduate student or a 24-year-old who got out of the service and says i want to come play you would let them in? >> mainly our age demographic is 18 to 23 and will have exceptions kids come out of school, goes into the military two or three years and has five years of eligibility. probably kids like that in the league kids in college, may not be satisfied or happy in the current situation and transfer into our league without penalty. so we again create another option for these kids in the market. >> and obviously i would assume you'll try to get television contracts in local markets or nationally. >> yeah. we'll work more in the digital space. >> interesting. >> our demographic is younger. if you think about the time when our games will be played, the summer and dealing with kids out
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of school, young -- environment to drop kids off feel safe. >> i think of -- kelly follows basketball more closely than i do and knows more about it but in some ways the value for a college player is the television exposure that they get zion williamsson would not be zion williamsson if not on tv with duke three times a week. >> interesting about that. so zion had more social media hits than the entire duke men's basketball team, his senior year in high school. >> in high school? >> in high school. so he's generating -- these players generating quite - >> a brand for. >> why they would come to you? is it going to be about how much -- how much can you pay them how can you convince them that giving up -- it's big risk to give up what tyler's talking about in the early days. how can you get zion >> right so our pitch, right, or our position to offer greater value.
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sign with a marketing agent immediately to monetize the likeness, take advantage of the fandom in his instance he's not the lone wolff in this. >> to me an injustice is inability of college athletes to monetize their likeness. >> absolutely. >> that's really not a good thing. let me ask you about one thing in your life that fascinates me. >> okay. >> you had an option year at $11 million or something like that. >> uh-huh. >> you chose to go and work for the nba minimum? >> the veteran minimum. >> veteran minimum $1.5 million for a shot at a title. >> uh-huh. >> why huh? you walked away from $10 million, man was it worth it? >> it was. absolutely because i got great experience i got to be in an environment that i learned valuable, valuable lessons that i'll be able to carry me for the rest of
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my life and the area that i was in, so i was able to go into the bay area, make connections, learn a bit about business. >> start your own basketball league. >> learn - >> you played for pop, kerr, who was your favorite coach? >> oh. >> putting him on the spot. >> it's -- >> i would say i like them all equally and probably learned the most about basketball in my brief moment with coach popovich because every day he's like a teacher. he just teaches every single day and finds a way to spin life and basketball in one. >> kelly turned down $11 million to sit here on "power lunch. >> no, no. to play in the wnba. never happened. >> she was a good college athlete in lacrosse. sfrigt. >> division 3. how much would you pay these guys >> we're going to pay them in range to $1500,000 to $150,000 and pay guys more if it comes
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down to it. >> david west, thank you congratulations. good luck with it. check please is next we think. you should be mad at airports. excuse me, where is gate 87? you should be mad at non-seasoned travelers. and they took my toothpaste away. and you should be mad at people who take unnecessary risks. how dare you, he's my emotional support snake. but you're not mad, because you have e*trade, whose tech helps you understand the risk and reward potential on an options trade it's a paste. it's not liquid or a gel. and even explore what-if scenarios. where's gate 87? don't get mad. get e*trade and start trading today.
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does your wealth manager a cfa charterholder does. you've worked hard to grow your wealth. make sure you're working with a wealth manager who can grow with you. cfa charterholders have the investment expertise to unlock opportunities other advisors might not see. learn what a cfa charterholdr can do for you at therightquestion.org check please. >> fascinating conversation we had this hour on college admissions i think we are skeptical there's anything anyone could do worth $950 an hour. >> contraire
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pay someone to figure it out for you. >> who knows the ins and the outs. >> be like melissa lee one day. >> whoo! thank you for watching. >> have a great weekend, everybody. "closing bell" starts right now. ♪ happy friday, everybody. welcome to "closing bell." i'm sara eisen. >> i'm wilfred frost it's a rough week for facebook the stock falling some 2% so far this week and today on a slew of negative news. we have executive editor cara swisher to break it down. tesla also falling today the company unveiled the new model y suv last night is the tesla hype waning an analyst took it already for a test drive. on the markets, set to cap off a pretty strong week with
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