tv Wall Street Journal Rpt. NBC April 8, 2012 2:30am-3:00am EDT
time. for more information about today's show log onto our website inwinecountry.com. hi, everybody. welcome to "the wall street journal" report. i'm maria bartiromo. has the market's rise ended? is it now time to take some or is it the beginning of a new bull run? >> a lot of people are looking at this and wondering, oh, my god, is a computer going to take over for my doctor? >> how computers are getting to be more like people with one of the smartest guys in the room. microsoft, craig mundie. and lessons learned about life, money, and patience. letters from a grandfather to his grandchildren. why nobody ever told us. "the wall street journal report" begins right now.
>> here's a look at what is making news as we head into a knew week on wall street. it's the big number wall street has been waiting for, a sign of the strength or weakness of the economy. and on friday the labor department released the jobs number. in spite of the fact that the market was closed for the holiday. it was a disappointing number. the economy created just 120,000 jobs for the month of march. well below economists' forecast of 400,000. the unemployment rate was down to a three-year low of 8.2%. the lowest since january 2009. that's down from last month's 8.3% but the rate declined only because more americans stopped looking for work. the markets kicked off the holiday's shortened week on a high note but then sold midweek when the minutes from the federal reserve showed additional easing by the fed is now less likely. u.s. auto sales is speeding up
for the month of march. gm saw sales rise 12% from a year ago but it was below analysts expectations. ford was up 5%. chrysler's sales are up 34% on the strength of fiat. and volkswagen climbed 35%. the company's best march numbers since 1973. meanwhile, former internet high-flyer yahoo! announced 200,000 job cuts by the end of the year. new ceo scott thompson says the cuts will save the company $375 million as 14% of yahoo!'s labor force is cut. have we seen the best of the markets and the economy in the first quarter of the year or is there room left for the bull to run? joining me now is matthew bishop business editor and author of the new e-book, "in gold we trust." matthew, thanks for joining us. >> great to be here. >> i want to talk about gold because that's front and center but let's talk about the week that was. the market fell midweek after the fed walked away from the possibility of any more stimulus, the so-called qe 3.
what do you think about that? the current stimulus is in place. operation twist expires in june. >> yeah. i think the fed has no upside in saying anything earlier than june as to what it is going to do next. the economy is clearly picking up. but we don't know how strongly it is bic picking up. so i think it makes sense for the fed to wait and to dampen expectations. so much money has been printed. interest rates are low and they are going to stay low for at least a couple of years. so really i don't know what all of the fuss in the market is about really, because i think it's about watching the economy, seeing whether there is real depth to it and then watching for the fed to do whatever they need to do. what we know is it doesn't hesitate when it comes to it, if it thinks that the economy is going to slip back into a recession. >> and of course those rock
bottom rates is one of the reasons that the stock market had the best quarter in the first quarter since 1998. >> right. >> because people are looking for yield because you're not getting any yield if you're in fixed income or anything. do you think there is opportunity in the market? how do you see what goes on in the first quarter? i feel like the retail investors on the sidelines shows who is buying. >> well, i think what happened in the first quarter is a lot of investors stopped worrying so much about europe. the european bank in december changed policy, decided to do qe 3 like the fed has been doing. that took off the table the catastrophic scenario. i think a lot of companies in the seconds half of last year were sitting on discretionary spending, they were holding back and they were very nervous. now no one is worried about the european banking system collapsing because that's confidence coming back in. if you look at the underlying health of corporate america and the company has their balance sheets in order, increasing productivity, profits are up. it's a strong story.
the economy does continue to recover, then the profits are going to be great. >> let's talk about commodities, oil prices, gas prices over the last year. do you think this is a road block for the economy? when would we actually see demand destruction as a result in spike in prices? >> for a long time it's been demand and strong economic growth. so i think that by and large it's a positive sign for the world economy. it means it's going very strongly and i guess we'll continue to see commodity prices rise. >> yeah. the demand is there. >> uh-huh. >> so oil prices -- and we're going into the summer driving season. >> so the big worry is obviously iran. if we see something happen in iran with israel attacking, that could throw the whole thing into a mess. and that's our biggest disaster scenario for this year. so far people are talking that down in the last couple of weeks. >> so in your book you're talking about the big economic questions of the day.
the deficit, getting our arms around the deficit, the gridlock in washington which has been so frustrating for so many people. the two sides came to a remarkable deal to reduce the deficit last year. do you think there is a possibility of the two sides getting together? i don't think it's been this toxic in washington. >> i think the two sides are extremely toxic. basically, you look at the fundamentalist, see the gridlock in washington, huge deficit both here and in europe and you say, well, who is going to fix this? and i really don't believe the hype that they were very close to a deal last year. i think that that was a lot of people saying we're trying but not really having much intention of trying and i think ultimately the problems are so extreme that they are only going to be sold by printing money in the long run because no one wants to take the political cost of raising taxes and cutting entitlements on the level that is needed to actually really make a difference. >> let's talk international for a moment. you talk about china's changing attitude towards the united states. what do you mean by that? >> i think china, you know, up until, again, the financial
crisis, china looked to america as a role model in many ways. it wanted to have american-style capitalism. it's been really -- it was putting a lot of its money, it's spare money into american assets. and now china is doubting whether that's such a good model anymore. and so seeing a lot of effort by china to diversify into other assets, including buying a lot of property and land and also switching into things like gold rather than holding u.s. treasuries, and so i think that kind of gravy chain america has enjoyed the last few years is no longer going to be there and creates reasons to worry that there may be at some point a financing crisis in terms of selling treasuries abroad that may again kind of cause problems in washington. >> because china is the leading holder and buyer of our bonds? >> exactly. >> you're just back from india. >> uh-huh. >> what can you tell us about the global story right now? a lot of people are worried that the chinese economy is slowing down. that has been the engine growth
for the world. what did you find in india and what's your thought about the chinese slow down? >> well, the chinese slow down, i think -- i still expect china to grow more strongly than the 7.5% that people are talking about. we have got leadership in transition going on in china that at the moment is making slightly nervous but they understand that is the number that they need to get to the political pressures there under control. in india, the government is really in all sorts of trouble. it's not really an effective government but i think the underlying economy is incredibly strong. so i'm again quite optimistic about both india and china although the mood is certainly more downbeat on them. >> certainly from the highs. matthew, great to talk to you. >> thank you. >> matthew bishop from the economist. from your remote control to your doctor's office, the chief research officer of microsoft is
welcome back. technology is enabling so much in health care. in fact, when it comes to your computer and what your computer knows, i spoke with microsoft's chief it may be learning faster than you are. strategizing officer craig mundie about the rise of the machine. >> computers are getting smart enough and powerful enough to have them interact with people in a much more natural way. i think that's going to be a big trend. in the last year we've used that to let people talk to their televisions. and so, say, hey, i don't need
this remote control anymore. i can tell it what i want. >> i want to talk about applications because we know what's capable in the consumer market. we've seen a bit of that already. but we haven't really seen enough in terms of the health care industry, education, but there are a lot of applications in health care, right? >> yeah. i think health care we've spent quite a bit of time on. we started building two products a few years ago. one was an infrastructure data system to absorb all of the data and the other was a consumer record-keeping business on the internet so people can have their own records. now there are devices looking up to the computer part. so i think it's going to be a big play for people, whether you get it from your phone or these little things that track your steps. the scales, i got a new scale for christmas and it sends your hydration and weight to your health account. it's going to be a great acceleration in what we can learn about people in their daily lives.
>> you mentioned to me something about someone getting sick in the hospital. that's pretty amazing. >> you hear a lot big data and one of the real questions is, it's easy to get the big data. what do you learn from it? so we're using new technology called machine learning to sift through the huge amounts of data. so we studied a question that has eluded people in hospitals. which is, why do people get readmitted so frequently after their stay? >> so they are in >> they go to get treated for something, discharged -- >> and then they leave and -- >> and it never seems to be one the hospital -- reason. the question is why. so we took ten years worth of data, put it into the big machine and said, tell us the reasons why people come back. and it found a lot of normal things. it found interactions between drugs that people didn't know about, found a case, for example, where there was a cardiac event and then you had a
gastrointestinal event. those two doctors would give you different drugs and they would interact. one of the more stunning ones was in one hospital where you happen to stay in room 209, you have a high probability of coming back. turned out there was a cleaning problem with a bug that stayed behind the vent. if you stayed there long enough it didn't happen until you were discharged. so machines are happy to sit around every day and humans would never be able to find. >> a lot of people look at this and they are wondering, oh, my god, is a computer going to take over for my doctor. >> well, i'll give you my personal opinion. i don't think doctors 10 years -- certainly 20 years from now will be able to practice medicine without a computer. part of the reason is you're going to see the arrival of metabolomics and they are all data. no doctor is going to be able to tell you your drug catabolisms but a computer can do that all day long.
integrate across the separate little ecosystems that have emerged. we have the pc ecosystem, enterprise data ecosystem, now we've seen cars, the phones, televisions, game consoles, every one of them were separate. now people have multiple in their lives and it's driving them crazy. they want these things to work together. >> talk to each other. >> talk to each other. so the cloud, you know, has this really nice property that you can use it as a point of synchronization for all of the things that are in these devices and you can start to use them -- things that i love that we just did with the kinect on the xbox is we hooked it up to bing and gave bing the ability to take voice commands through your and lets it search for your tv content. so suddenly you've taken an internet search technology and applied it to the films of video and streamed it through the web and presented it on a console
interface and you talk to it. i think that is what will happen in the next five years. there will be an ecosystems of ecosystems and they will all be brought together in a compatible way. >> my thanks to craig mundie. up next, a report, lessons on life on investing and even what kind of person you should marry, from a financial adviser looking out for his
do you ever wish somebody took you aside when you were young to tell you the facts of living and living well? my guest is the author of "no one ever told us that, money and life letters to my grandchildren." john spooner has some $1 billion of other people's money under imagine management as well as four grandchildren. thank you for joining us. >> thank you. >> your book is a series of weekly letters written to your grandchildren advising them about life and money. what made you start this project? >> i gave a speech to graduate students about four years ago and they were business students and they were all foreign students. and it was supposed to be practical advice about what they would see when they got out into so-called real life. when i was done, a young woman from france said, no one ever told us that. so i thought about the idea,
boy, there's so much practical advice with young people or all people can use, let's figure out how to translate this and use my oldest grandchildren as sort of foils for it. and it's a series of 58 letters and over a space of a little over a year and each letter teaches practical lessons, including if you marry, what kind of person should you look for and my dad told me years ago growing up, marry funny. and i said, did you marry money? and he said, no, funny. most sustaining concept. and to lead to long-term relationship. >> i love that. so what are the biggest fears of young people starting out right now? we know that student loan debt is nearly a trillion dollars. we have a tough job market. what are you hearing from young people? >> scared. am i ever going to get a job? i've whistled through my teen years and now i can't believe it's crunch time. i see dozens of young people who want to come into the money business or want to write and
here's the first thing i tell them. let's see your resume. and most resumes are just plain manilla and boring. i say, here's what you need to do. what are you interested in? what are your hobbies? forget about academia. your interests are what is going to get you a job. i ran into a young man in japan, had a job in america and can speak japanese. got married, had a young child and desperately wanted to get back to the states to work. nobody would hire him because they would say, your expertise is in japanese. why would we bring you back here? so let's see your resume. it was so manilla. i said, any interests? he said, well, i'm a black belt in karate but i didn't think this was relevant. i said, i want to see something that jumps off the page from me if i'm hiring. and karate to become a black belt takes a lot of discipline
and intensity. he changed his resume and in a month and a half got job offers and came back to new york. >> good advice. >> so it's the unusual thing that is going to get you a job. >> you have some 2,000 clients. what are the questions that they should be asking of any potential money manager? >> if i were on my own looking for somebody to watch over my money, i would ask three questions. and the questions that no one ever asks me. in all of the years that i've been in business. one is, what's your philosophy of investing mr. or miss money manager? and if you can't give me your philosophy of investing in a couple of paragraphs in english that are commonsense, then you're not the person for me. second question is -- and no one ever asked this -- what have been your successes in investing and what have been your biggest mistakes and what did you learn from the bumps in the road? we all learn more from the bumps in the road, the tough times we all have, than from the good
times. so the third question is -- and no one ever asks this -- where do you put your own personal money? where do you invest in? no one ever asks that? >> and that's a good one. >> and i bet in most cases with most advisers around america, they are going to choke on that question because it's a little iffy what they own for themselves. >> john, great ideas. so appreciate your time for today. thank you for being here. >> thank you. >> john spooner. "no one ever told us that" is the book. up next, a look at the upcoming week that will have an impact on your money. and then silicon valley sets up shopop. twitter tweeting from a new address.
for more on our show and the guests, check out the website wsjr.cnbc.com. follow me on google and twitter @mariabartiromo is the handle. now for a look at the stories ahead, earning season kicks off for the first quarter. we'll get reports on the first quarter business of 2012 from alcoa, google, jpmorgan chase and wells fargo this week. wednesday, the federal reserve's beige book is out. that follows the health of the regional economies around the united states. thursday, key inflation indicators out, the producer price index will be out. on friday, the consumer price index will tell us about inflation at the consumer level. and finally today, can tweet's drive detroit to better times ahead? social media giant twitter is opening an office in the city. founded by dan gilbert.
nearly 40 new firms have been recruited to help boost the local economy in the past year and a half. the san francisco-based company says a handful of twitter employees will staff the office to start working primarily with the automotive brands. new cop companies coming to town, music to mow ton's ears. that will do it for today. next week, where are the jobs? help wanted in the technology sector for jobs that may surprise you. keep it right here where wall street meets main street. have a great week, everybody. happy easter, happy holiday, and i'll see you next weekend.