tv After the Bell FOX Business May 20, 2014 4:00pm-5:01pm EDT
peter will ask bill dudley why. is that concern to investors quickly? [closing bell ringing] >> 2.5 on the 10-year right now. liz: bells ring on wall street. closing the books on a rough session for the bulls, a great day for the bears. stocks finishing up weakly on very thin volume. the volume became thinner and thinner throughout the session. hour by hour it got worse. one thing that turned around utilities. lows of the session, the russell getting hammered, down 1.75%. 1 1/2 actually. very close to correction territory. "after the bell" starts right now. david: thin volume but very exciting action today on a number of stocks. let's break it all down on the market moves. michael sorrentino. he is here to tell us why he is calling for an end to the year
rally. jason rotman, lido i'll advisors, managing partner with his stock picking strategy and three names to add to your portfolio and larry shover in the pits of the cme. larry, i heard from you early this morning about how things were shaping up. coming up, peter barnes will talk to the new york fed chair bill dudley about bond yields and why they're down. why do you think they're down? >> i think it is for foot trillion reasons. all because of the 10 trillion bank -- neutral reasons. see headlines coming out of europe, half-baked headlines somebody will take action. we know on june fifth the ecb will have to do something. a lot of expectations to make asset purchases. i think that's unlikely. more, i mean could do ltros. they could suspend smp. rate cuts are a foregone conclusion but, david, what this has done, it has create ad great arbitrage where our 10-year
yield looks very good compared to ireland. italy is 3%. ireland is at 2.6 etc. it is become very attractive as an arbitrage. liz: we go to what happened this morning before the fed had started speaking, and jason, you had pretty much obvious behavior when it comes to the consumer, when all kind of consumer names looking very weak. whether urban outfitters or for example, staples. >> that's right. i mean at the end of the day, and more specifically at the end of a five-year bull market, not necessarily saying this is the end the market needs proof. before the proof was hey, the fed is going to stimulate the economy, easing, easing, easing. that is ending this year. market needs to see actual data consumer are spending and jobs are being created and anytime the market is questioning that the economy is looking good we get a selloff. it is kind of like clock work. that is what should happen.
we have gone up almost 200% in the past five years. we need to see proof and staples is not too pretty. thus a broader market selloff. david: hard to call this a selloff at this point. there is clearly, mike, a rush into bonds. are you surprised folks are getting back into bond in such great numbers. >> absolutely. i willfully admit we gotten that wrong this year. never would guess we see the 10-year go from three, to what, 2.5, 2.6 in such a quick time period t caught us off barred. we're long-term investors. we're avoiding a part of the fixome market simply because w noturehen rates are going to rise. when theo it be roughout there. wee nowillg to take that risk righ now. liz:ike, what areou wlin to do at this poi obviousl treasurys are nt nninbet at 2.5%, that is a little patheti i think but there are some opportunities but you got to be careful whe y take on t much risk.
what names, which names do you feel are the best plays right now? >> you said it yourself. our theme this year has been be opportunistic, wait for the stocks to go on sale and we're looking at sectors an risk-adjust basis. one of those is telecom still, we like verizon. we have fixed income component in many of our funds, this is stock far cheaper than some other sectors in the market t has a higher yield and there may be some growth going forward. that is really not why we're owning those stocks right now. david: jason, let me talk about housing for a second. we're getting a lot of mixed signals on housing, except at the high ends. high ends are doing great. a lot of sales are for cash. a lot of those buyers and sell remembers actually international but the great middle class is not buying houses the way they used to. does that concern you? >> i mean it is obviously a factor in overall bullishness of the housing market and the stock market overall.
obviously -- david: hold on a second. this is more than just an indicator of the stock market. this is really an indicator and has a direct effect on the economy. >> right. almost one in the same, i completely agree. obviously yes, you are correct but i'm going to make a call i haven't really heard people talk about. i could easily see a housing market staging another leg of the recovery as we get into the summer and fall, because if you think about it, if the market is really starting to anticipate higher interest rates in the future, people will want to lock in good mortgage rates and i think that could be a bullish factor for the economy overall at the end of this year. david: very interesting. liz: larry, talk about the behavior you saw with the investor sentiment today. again it was a great day for the bears. we love our bulls, we love our bears and there is always a way to make the money here but what were the flows like that grabbed your attention in the pits? >> right now really small caps. everybody keeps looking at the
russell. it seems to be the whole interesting ticker and the whole thing isn't happening since the end of march with severe underperformance between the russell and s&p 500. yesterday was a change of pace. the russell did outperform the s&p 500. treasury yields actually went up. everybody thought everything was great. then today everything went back to the old normal which really depressed a lot of people. people are just waiting to see what is going to happen, when is this correction going to stop with the russell 2000. david: i want to stick with you for a second, larry and ask the same question before i asked about housing. what do you think about housing? what are the indicators telling you? >> i continue to think we've fallen down, like, seven-year flight of steps. last year was the first step up. it is going to take a while but i do believe the story is very good. that's why securitieswise i still like financials and materials. i do not think that the housing market is going to turn around in the next six to nine months. i think it's a three to five-year story as our economy
builds up. liz: jason, i always like the way you pick stocks. you like right now new york commune bancorp, h&q life sciences, spectra energy. is there a theme in these names investors can really learn from. >> that's a great question, liz. look for companies with great dividends as always, you have to love the dividends but exhibit actual evidence of growing their income and growing their bottom line over the past five-year period. you don't want startups that say, hey, we'll pay 5% a year. you want companies making money and made more money year-over-year and have increased their dividend payments. new york bank, i mean new york community bancorp is almost giving you almost a 7% annual yield to be a shareholder of their company. it is incredible. liz: why not? >> that is one of my top three. david: you have to worry about your principle. that is what is worrying a lot of people why they're going to bonds right now. larry shover, mike sorrentino.
thank you very much. >> thank you very much. liz: speculation swirled as to when the fed would start to raise rates, coming up, peter barnes goes straight to the source asking new york fed president william dudley when he believes rates should rise and when they will rise. it's a fox business exclusive. david: the latest filings, meanwhile, showing leading hedge funds getting a bit riskier. guess where they are betting? they're betting big on russia, you heard me right. should you ignore the political headlines and follow the big money? one strattist says yes. he will tell us exactly how to play it. liz: biking legend erik buell launching a brand new line of street motorcycles. david: i want one. liz: the growing popularity of sport bikes. we'll show you how the new hot rides are look and we'll talk to him in. david: austin, you want one of those? let's buy one. back to the fed talk. we want to hear from you. how are stocks going to hold up as the fed unwind its four plus
trillion dollar portfolio? will they do well or will they tank? tweet us @fbnatb. ♪. ♪ [ bell ringing, applause ] five tech stocks with more than a 10%... change in after-market trading. ♪ all the tech stocks with a market cap... of at least 50 billion... are up on the day. 12 low-volume stocks... breaking into 52-week highs. six upcoming earnings plays... that recently gapped up. [ male announcer ] now the world is your trading floor.
liz: intuit releasing its third quarter earnings report just moments ago. shares are following in after-hours trade. david: let's go back to nicole petallides on the floor of the nyse. how are they doing? not too well, huh. >> not too well, dave and liz, you're right. down three bucks for intuit. 3.53 versus the estimates of 3.50. taking a look at revenue, 2.4 billion, beat estimates of 2.38 billion. doesn't that all sound great? however it is guidance going forward for both revenue and earnings per share that are disappointing here. the view, for example, for adjusted earnings per share is six to eight cents, when you're talking about that, that is much lower than the estimates by the analysts. so revenue as well. the good news here they are adding subscribers. quarterly quick books online subscribers accelerated to 38% growth, so that's good. 36% growth. turbotax online units increased 14%. they do business solutions for accounting, taxes and the like t
will be a tough day tomorrow. we'll see if anything changes. conference call that might change it, liz and dave. they have a conference call at 4:30. we'll listen to that as well. liz: thank you very much. david: so as the federal reserve wind down qe and tries to get rid of the portfolio questions continue to linger as when the fed will raise interest rates and how it will unwind its balance sheet. liz: is there seen a answer to that question if there is is our own peter barnes got it. he sat down exclusively with new york fed president bill dudley in a rare interview. you asked him exactly that, peter. >> that's right. he gave a very meaty speech today, guys. nine-pages single of spaced that proves it is meaty. he talks about all the tools the fed has at its disposal to make sure as it unwinds all of this it keeps interest rates as low as it can for as long as it can but does not stoke inflation. i told him sounds like he may have a major communications problem on his hands he will
have to try to explain this to investor and consumers. here's what he said. >> i believe the economy will be strong enough so we can start to do that perhaps in 2015 but the first goal obviously is to get the economy strong enough to reduce the slack in the labor markets, to get inflation closer to our 2% objective. assuming that all goes as plan, then, yes it will be time to start to contemplate how the fed actually begins to raise interest rates. it is more complicated than it has been historically. not just level of short-term interest rates. we also have a very large balance sheet. the question how we will behave and conduct monetary policy with a very large balance sheet. >> the fed has never been here before and that is part of the issue. so you are proposing a couple of new tools that the fed has been testing to try to help unwind the balance sheet and, one of the principle concerns as you unwind the balance sheet is
whether or not as you flood the economy with more money, to put it simply, that inflation gets out of control. how do you make sure that inflation does not get out of control? >> we, that is not going to happen. it is not going to happen for the simple reason we really have good tools. the first tool we got in 2008 as part of the tarp legislation the ability to pay interest on excess reserves. so as we raise the rate we pay on the bank for reserves, that induces them to hold the reserves rather than lend reserves out. if we start to become concerned that credit is growing too rapidly and that is likely to lead to inflation we raise interest rates excess reserves. we think that is sufficient by itself. in addition to make sure we have a belt and suspenders we're testing some other tools. one tool is what is called overnight reverse rp facility. >> reverse repo facility. it is complicated. >> what it really basically means that we are basically
going to, this facility testing works as we think it will, this will be open to a wide range of people, money market fund, you know, other investors and this basically would be a facility that people could basically make cash deposits with the fed. we would lend them security. they would give us cash. that would drain reserves from the banking system. to the extent we have this facility open for business and money is flowing into it, that would drain a large amount of excess reserves that are in the banking system. >> you're talking about this is something that consumers would use? >> no. >> big financial companies, wall street firms, fannie and freddie, big financial companies. >> yes. the value of it, peter, it basically would put a floor we think under money market rates. interest rate on excess reserves right here and rate on the rrp facility here. this would put a floor underneath money market rates. >> that's been a concern of the fed, of the fed's why? what has been happening with traditional fed funds rate, the
short-term interest ra that you are able to change? >> i think right now everything is working fine but it's a question of control. the better control we have, the more confident people will be in our ability to control inflation. people are more confident in our ability to control inflation, inflation expectations will stay anchored that will also keep inflation in check itself. so i think it is very important that people in the marketplace and households and businesses understand that we not only do we have necessary tools, we have more than sufficient tools to do the job to keep inflation in check over the longer term. >> but as you know in the not too recent past the fed has had some communication slip-ups, perhaps to be blunt. so then how, how are you going to get the word out? and how are you going to translate all of this to the average investor, to the average consumer and what will it mean for them? >> well i think the most important thing, we can communicate to the average business and household is that we have two objectives, maximum
sustainable employment and price stability. price stability we define 2% inflation measured by what is the personal consumption deflator. we'll conduct monetary policy to achieve those objectives. the only thing people need to be worried that we sufficient tools to accomplish that mission and i assure you we do. >> you said in today's speech and i think what main street and investors are concerned about, is the future course of interest rates and you made it pretty clear or seemed to indicate that, that even when the fed starts to raise short-term rates with whatever tools that it uses, they are still likely going to remain very low for a long time. historically the short-term interest rate, fed fund rate has been about 4%. you're saying no, it could be much lower than that for longer. why? >> i think there are two reasons why. the federal fund rate which is typically the fed's target for
monetary policy, will be low for a while, well below that 4% is first. short-term, there are definitely still headwind leftover from the financial crisis. we see that in the housing sector, people with lower fico scores still have trouble getting mortgages. we see it in terms of, you know, people's ability to, you know, people holding more savings because they're worried about the risk of a financial calamity. so there is more precautionary savings. there is less investment. we still have a lot of households whose houses are underwater in terms of mortgages being, mortgage value being higher than the value of the house. that is going to take several years for that to dissipate. even after those headwind are gone, which eventually we hope those headwind will dissipate, there is number of other reasons to suspect that the federal fund rate will be lower in the long term. for one thing looks like the economy will not grow as fast as it did in the 1990s or 2,000s. the growth rate of the labor
force is lower because of demographics of the population are aging so that baby boomers are retiring. productivity growth in the economy looks to be a little bit lower. we think that the growth rate of the economy over the long term is very, has an important factor in terms of what level of interest rates ultimately apply. another factor is the fact that we're forcing banks to hold a lot mover capital. that's a good thing to do because it makes financial system stronger and more resilient. but one thing it does do, it drives up the spread between deposit rates and loan rates. that is probably ultimately going to push down the level of short-term rates we see over longer term. david: so the message here if everything goes according to plan and forecast that people can count on pretty low rates for auto loans, for home equity lines of credit, for business loans, for mortgages for years to come? that sound like what you're saying. >> assuming we do our job
correctly and i'm determined to do that. >> and we have part two of this interview coming up in just a few more minutes here which i asked him why, with the with the fed tapering the quantitative easing bonn purchases which would have interest rates going up why interest rates have been going down. david: we have to talk about this first segment first because this is the most dovish statement i heard from a federal reserve president ever, ever, in my lifetime. been following the federal reserve for about 35 years now. alan blinder, a democrat, known to be dovish, wrote in the "wall street journal" saying they will have to raise rates. this is so much more dovish than alan blinder was in "the wall street journal." inflation is never going to happen. ier in heard a fed official say that. >> well modest inflation is going to happen. they want to get up to 2% on inflation and looks like they're headed that way but, you know, this is uncharted territory. >> sure is. >> that's why i press on him for
these questions because this is high-wire act for fed. part two coming up in couple more minutes. stay tuned. david: incredible. peter, thank you very much. also coming up don't let the political headlines out of china and russia scare you off. a lot of smart money is flowing in as panicky investors are getting out. we'll tell you exactly where to put your money. liz: founder of crumbs bake shop, those incredible cupcakes, cooking up a new venture, for people's appetites with something different. we talk with jason bauer and how he expects to disrupt the entire new york real estate industry. ♪. [ female announcer ] who are we?
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david: for investors looking for the high returns that come from risk, no risk would probably be greater right now than a bet on russia or china. both of these countries are leading the headlines with allegations of every kind of thing: government sponsoredded sigher crime and imperialism beyond its borders. is now the time to buy after the fear is its greatest? >> we have charles sizemore. sizemore investment capital chief investment officer. charles, i was a informal meeting with some big hedge fund guys here in new york. they're saying we're not in the stock market. we're in these ventures and russia and china. i would say, are you mad? look at the headlines. they would say, that's the point. is that your point as well? >> exactly. the key point on russia that
it's cheap. when imr i'm talking about cheap, six times earnings. david: charles, forgive me for interrupting before you talk about rush shea want to talk about china. i want to mention these walls of worry and investors folks like us are concerned about. we have china slowdown. the cyber headlines front page headlines in the "wall street journal" among others. possible moves, military moves against japan. imperial moves against vietnam. these are pretty significant events, are they not? >> well, if you recall we had a little spy scandal of our own, what was that six months to a year ago here and that really didn't amount to much. the big story with china is the fear that their property market is about to implode. we have a little experience with that ourselves here. if you recall, wasn't that long ago, 2008, 2009. david: crippled us for about six years. would say that would be a reason not to invest? >> well, sure, that is the fear with china right now they could have that happening.
that their property market could slide, continue to slide and that will pull down their financial sector. so the question is, is that already priced in? when you look at chinese equities they're trading near multiyear lows. they have single-digit p-e ratios. they have been beaten and battered. at this point is it worth the risk to buy this, see what happens? if the world doesn't end you've bought some of the world's up-and-coming companies here at a great price. david: we're looking now, this is the etf for china. we do see a very, very depressing look for this past six months. so you say this has gone down about as far as it's going to go? >> well, pending the end of the world as we know it, i should put it out there, the end of the world we know it can happen in china, if property prices really do slide off a cliff as some people fear, then you want to get out of china. until i see that i would buy the dips. david: all right. by the way, it could also invade some island that japan claims that it owns.
would that be another reason to get out? i would suspect so. >> well, okay, we've had this little spat for a while now. china gets really aggressive. japan gets really aggressive in turn. i don't really see it escalating. i see it a war of words. we worried about it escalating for years now. it never happened. i'm not seeing it happening now. i don't think china would be brazen enough to risk u.s. retaliation. that is the their bet that the u.s. is not going to rush to japan's aid but i don't think that is a bet they're willing to take. david: we have about a minute to talk about russia and it was russia that was the center of the conversation last night. obviously ukraine is first and foremost in people's mind. these hedge funders were saying, putin is no dummy. he wants to get more money coming into russia. he feels the pullback not only internally but extern tern alley as well. do you think that russia is the a big bet now? >> the bet on russia purely is
because it is cheap. russian stocks trade six times earnings. russian stocks are cheap as always should be because russia is political risk, it is primarily a oil and gas state. russian stocks are usually cheap. but they're trading 1/3 of a discount to their usual cheap levels. that is what it amounts to. unless you think russia will slide into war with the west which i put the probability of that as zero, russia stocks are a good short to medium trade here. david: you could buy into the etf, rsx, which had very similar trajectory downwards as the etf for china has, the fxi, but you could buy a specific stock, yandex, this is kind of the google of russia, is it not? >> you bet. yandex has been absolutely beaten lately. and part of that is the same macro risk affected all russian stocks. part of it too was the fear that the russian government was to start censoring the internet more aggressively.
that caused investors to dump the stock and ask questions later. now you can pick up shares of a great world class company at a decent price. another stock worth considering is gazprom. gazprom is russian gas. gazprom single-handedly supplies 30%, about a third of europe's gas imports. unless you think that europe's about to turn off the tap, which they're not going to do. david: right. >> that would cripple their economies if they did that's an interesting play. now vladmir putin is also in china right now trying to ink a deal with his counterparts there on supplying gas to china. now we were expecting a deal to be cut today. that didn't happen. i expect that in the next couple days. david: all right. charles sizemore. a lot of smart money is going in your direction. we'll see if you're right. sizemore capital chief investment officer reporting from dallas, texas. appreciate it. liz, over to you. liz: coming up more of peter barnes exclusive conversation
with new york fed president bill dudley. he will tell us whether he sees any bubble. is this is an important question. does he see bubbles in the market and if so, how to fix them. seems like a broken record. general motors recalling another two million cars in the u.s. we've got all the details on which vehicles are impacted this time. stay tuned. we're moving our company to new york state.
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david: time for a look at today's market drivers. stocks closed lower today with blue-chips wiping out gains during the last two sessions the telecom and industrials were the worst-performing sectors. retail sector sank into the red following number of disappointing quarterly reports. staples and dix's sporting goods, urban outfitters among hardest hit retailers. natural gas climbing 1.8%. natural gas is up four of the past five days. liz? liz: despite the fed's tapering interest rates remain a little low puzzling some investors. david: is this a sign of trouble ahead or some type after bubble? fox business's peter barnes sat down with new york fed president bill dudley and asked him that. peteer? >> there are concerns that maybe the bond market might be in a bubble but regardless interest rates have come down rather than gone up against market expectations at beginning of the year.
i asked bill dudley, why haven't interest rates come down so much on longer term securities? take a listen. >> it's a little bit of a puzzle. i think factors i point to, one we had a big rise in equity market and large institutional investors are taking equity gains and reallocating in the bond market. that is having depressing effect on bond yields. people are v. evaluating wha intere rates apply over long run. they're bringing down eimates what intert rates will be five 10 years from now as they revise dow exps of rates tt is havg depressive effect 10-year >> is af th reflecting economy?abouowth in that the onommigh be growing slower expected?>> thera of economyecause the first quarter was so weak but i think, lly i think the forecasts that i have, people i've talked
to haven't really changed very much. most people think the first quarter was aberration. unseasonally harsh winter weather. looks like we're bouncing in the second quarter. the. people forecast that we'll be on 3% growth path. that will have slack in the labor market, put americans back to work. as that happens we'll get closer to the point where it is appropriate to raise short-term rates. >> last question for this segment, bill, what about bubbles out there? do you see any publics in financial markets in particular, equity markets. some of your colleagues spoken to this issue recently. >> we look at financial issues all the time to assess current level of interest rates is, generating excesses in the financial market and excesses in
terms of that stability. leverage loan markets for example, are quite frothy. that is not a very big market. the thing that we don't see that we saw in the run-up to the last financial crisis, we don't see a lot of increases in leverage. we don't see a lot of credit growth. absence of credit growth and leverage, the fact that markets are frothy rather than large, we're not taking a lot of financial stability risk at the current time. >> we have part three of this interview we did exclusively for our website, foxbusiness.com. i asked bill dudley about two of the biggest drivers of the economic recovery: the housing market he said stalled and capital spending. interesting commentary on both of those subjects. get to foxbusiness.com where we post that in a few minutes. david: thank you very much. peter. >> you can't launch a successful business without the right
recipe. just ask the cofounder of crumbs cupcakes. you know this one, right? he turned one tiny shop into a nationwide chain. now he is cooking up a whole new career in the world of real estate. we'll talk to jason bauer about his brand new venture and how different it is. >> david: motorcycle bikes are riding higher as foreign buyers hop on american bikes throughout the world. we'll talk to biking legend erik buell on his hot new motorcycles and the future of the industry. ♪.
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simple is good right now. (anncr vo) innovations that work for you. that's health in numbers. unitedhealthcare. david: shares of general motors closing lower by more than 3% as the company announces yet another recall. the company is recalling this time 2.4 million vehicles. the recall impacts the 2009, 2014 buick enclave, 2009-2014 chevy traverse and gmc acadia. the 2004 and 2008 model years of the chevy malibu. pontiac g6 from 2005 to 2008. and cadillac escalades from the 2015 model year. the company announced 29 separate recalls since the start of the year, for a total of 15 million vehicles worldwide. liz? liz: david, we're going to shift gears here and talk about one of my passions, cupcakes. actually going from cupcakes to real estate. that's a huge jump, right?
that is the exact move that jason bauer, crumbs bake shop, cofounder is making as he launches a new firm focused on new york city properties, condos, apartments. right now, folks, forget what is happening in rest of the country, manhattan real estate prices are soaring. look at the average condo price in the first quarter, $2.4 million average? how will these staggering numbers impact jason bauer's new firm and he has a twist to it and is with us now. huge jump. you founded crump bs bake shop, the best cupcakeses ever. which your wife created, all of them. >> yes. liz: 80 stores, more like 70 at the moment. >> correct. liz: you sold out. you're very much a part involved because you own a segment of it, but looking now to real estate that's a pretty interesting jump. >> you know when you think about it, crumbs was very much a retail real estate play. not only did we have an incredible product but a good
product, location, location, location. it was important to find the right locations in each market and with real estate, cupcakes are subjective. you might like vanilla. i might like chocolate. you might like one apartment. i might not like it. we provide the customer the product, whether cupcakes or apartments that appeals to them. liz: you're doing in such a different way now. talk about the revenue sharing concept you have for voda bauer real estate, different. >> our model is different. our model is all about collaboration, sharing best practices. very much of a sharing and receiving type of company. liz: that is very touchy-feely for a vicious industry. >> yes. liz: i mean when realtors, they're showing different properties this one wants the sale. this one wants to represent, how are you going to get them to do this and break human nature. >> it is interesting. we started having our weekly meetings and one of the things we focus on is collaboration.
when agents join our company to realize we're not doing things traditional way for the companies do for the most part. we don't expect you to share your listings or you're an expert in social media, share great stories and in turn we'll share top line revenue with you irregardless -- liz: with employees? >> with the agents. the portion the house makes we're giving a portion of that back to every agent each month based on productivity. liz: how many listing do you have right now? >> we have es close to 20. liz: how long do they languish on the market. >> one week, close to 20. they languish on the market because it is so hot in manhattan and brooklyn. >> eight out of 10 apartments sell for all cash. is it 50%, is it 80%? right now with market conditions the inventory that apartments don't stay on market for week to 10 days if they're priced right. liz: your first crumbs bake shop was 75th and amsterdam.
we used to go there all the time with the kids. you had to strike a deal to get that piece of real estate. what is the number one thing you take with you fro your first experience running crumbs to what you're doing right now? >> i think the key to make sure our agents, our employees are part of the process. any business is not just about the product but also about the people. and not coming from the real estate background gives me a little bit after different sense how to run this is about and how to operate this business and i believe that is what agents are looking for most these days. liz: how many pound did you lose when you stopped eating your own product? >> it has been 18 months. no cupcakes, 20, 25 pounds. liz: but they're so good. congratulations. >> thank you so much. liz: jason bauer. the company is called voda bauer real estate. david, back to you. david: one little treat i could not do without. who would have thought two wheels are better than four? that is exactly what the motorcycle industry is proving with returns blowing away the auto industry right now. jeff flock has an exclusive
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liz: we've been telling but general motors of course today as the auto industry getting plagued by recalls the hotter investment perhaps is coming on two wheels. polaris, the maker of victory and indian motorcycles up 41% over just the last year. david: wow. liz: pieto up 34% last year, harley-davidson, hog, has surged rising 21% over the past year. david: two wheels better than four. just what makes motorcycles so popular with investors right now? jeff flock joining us with an exclusive look with industry with cycle legend erik buell. what a great assignment, jeff. >> i have, boy, what a day we have had with erik buell. i was expecting kind of a guy with a hard edge and would be a mean motorcycle rider. he is actually a really nice guy and he also knows how to make motorcycles. take a look at these. what am i looking at? >> ebr.
>> ebr, erik buell racing. famously, harley bought the company. went through the recession, oh, no, we'll shut it down. you said, well, i'm not done yet, baby. i'm coming back in a big way and you are back. >> absolutely. there is a big sports bike market around the world and we felt there was a place for an american bike company. >> i i want to see latest one getting tested off the line. harley makes hogs, big touring bikes. these are sports bikes. what is they're meant to go fast. what is this guy doing. >> he is shifting through the gears, running through everything and validate that bike is ready to be in the crate and shifted. >> we heard another recall for gm today. i have mean, motorcycles, if you look at investment if you're invested in either ford or gm a year ago, compared to harley, if you can invested in harley you were a lot smarter. >> well the motorcycle business is really a valid business. we all feel sorry about the
things happening with gm. it could happen to anybody. all of us who are in the manufacturing business, have to watch out for something going wrong. but truly the motorcycle business is global and big. >> here's the thing. you now have partnered with an indian motorcycle manufacturer, the biggest one in the world called hero. they make what is it, 6 million bike as year? >> yes, over six million motorcycles last year. >> you're bringing high-end and american-made racing bikes, you have one about 20 grand, right. >> actually 18 nine. >> 18 nine, could you own this, david. i tell you, i rode on them. spent most of the day riding with eric and company. what a great day. these machines, american-made, american-loved around the world. pretty cool stuff. david: jeff, i love you dearly but why the hell weren't you driving that? liz: be careful. >> that is you driving it. i thought that was you waving. that is actually you driving?
>> i do a lot of stupid things but i took it easy today. these things go 180 miles-an-hour. not for me, sorry. david: so that is jeff on the back seat. jeff flock, good to see you, my friend. thank you. liz: thank you, jeff. david: new mcdonald's happy meal mascot is aimed at getting kids to eat healthy but is the fast-food chain's newest friend too scary? it is sparking outrage on social media. we have details coming up. liz: a ruling for the record books, a russian oligarch, that guy, ordered to pay the biggest divorce settlement of all time. we'll tell you how much he is dishing out next. ♪.
the happy meal encouraging kid to enjoy fruit, but the trusty mcdonald's mascot bought a mixed bag of news. a hailstorm calling it creepy. one tweeter said the mascot would scare children into eating right. liz: not that bad. everybody has an opinion. annoying. also "off the desk," talk about troubling paradise, a swiss court awarded the ex-wife of a russian billionaire about $4.5 billion in the divorce settlement which appears to be the most expensive divorce ever. the settlement awarded to his ex-wife makes up nearly half his fortune even though she thought a bigger paycheck of nine billion bucks. david: oh. liz: won half property deeds to former home in geneva. david: can you imagine only having to say, 4 1/2 billion. that is all i got, four 1/2 billion. tomorrow we stay on the fed beat after that terrific interview
peter barnes had with mr. dudley. tomorrow is release of fed minutes. the plans to continue with its tapering and along with hints how the housing market is doing. liz: it could move the markets. "the willis report" is next. david: good night. gerri: hello, everybody, i'm gerri willis. right now on "the willis report," gm recall scandal grows. millions more cars and some of gm's newest models. consumers win a major privacy battle. sprint hit with the largest ever do not call fine. "willis report cash challenge, a familiar face takes up the challenge. we're watching out for you on "the willis report." gerri: our top story tonight, the housing recovery that wasn't. buyers and sellers are both struggling tonight. so is real estate a real investment? we're looking at state of your housing market with rick