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tv   Power Lunch  CNBC  February 29, 2012 1:00pm-2:00pm EST

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fxy. >> corp tes. >> sell solar. >> jb. >> look at cash. do something. >> steven weiss, we're so realtime you brought sodastream during the break. >> i did. i bought during the break. down 2%. i have one for my kid in college and one at home. >> that does it for us. more fast at 5:00. power begins right now. we sure do. scott, thanks very much. three hours to go in a very busy, very interesting trading day. and investors are talking markets, murdoch and bernanke. not necessarily in that order. the fed chairman testifying on capitol hill. mixed signals from big ben. he says the economy is stronger but the jobs market is far from normal. and he's playing his cards very close to the vest when it comes to qe-3. sue. >> and that, ty, is what rattled these markets just a bit, especially the commodities complex. those comments come as the nasdaq breaks through the 3,000 mark. highest point since december of 2000 with the major averages hitting key levels, how do you ride this bull?
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>> and ride the bull we must. plus the murdoch mess. james quits as chairman of news international. that's the newspaper division, the international one rocked by scandal. is rupert's control of news corp. in danger? >> all of that is straight ahead. i'm sue herera with tyler mathisen. "power lunch" begins right now. welcome everybody. join me at the wall here as we look at red tiles on the board. q-4 gdp better than expected. the chicago pmi, a 10-month high indicating business conditions in the middle of the country are better than expected. but bernanke is still cautious on both the economy and the need for qe-3. here's how the markets are reacting to it. and the reactions have been very interesting to watch. let's look at the pulse of the markets right now. let's look especially at gold. look at gold. lower after that big runup and a
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rise in the dollar and the reaction to bernanke. one of the biggest down days we've seen in quite some time in gold, 1725. it was a good year 1725, down 3.5%. wti crude down on a rise in inventories and the euro falling as the dollar moves up. midday movers, let's talk about herb's favorite stock. sodastream fizzling. q-4 earnings did beat, but investors are concerned about unit sales and an overall sales slump for the soda market. look at that. down almost 13.5%. ubs cutting its rating and price target on metro pcs as well. and the sun setting on first solar down $3.85. nearly 11%. down big on a q-4 loss. keep in mind its 52-week high was 163. now you see it $32.56. home builders, two of them, higher. could be reacting to bernanke's
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testimony. and the company behind payless shoe stores is up. they posted a loss, but same store sales were the best there in two years. collective brands and payless et al. we're monitoring ben bernanke as he wraps up his testimony in washington. if one man can move the markets, his testimony on the hill was certainly doing that as he exits the house side committee room there. the upshot, markets seem to be disappointed, but bernanke did not offer anymore specifics about additional easing. let's go to each of the market floors. we start with sharon epperson at the nymex on the big commodities selloff. sharon. >> tyler, big ben steering clear of stimulus talk certainly caused commodities to crumble particularly gold. where i'm standing right now, this pit has been so busy in the last hour and a half. keep in mind that we are looking at a selloff that really started with the gold market. that's what a lot of people have been paying attention to.
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but look at the downdraft in silver. an $80 range in gold is huge, but a $4 range in silver in one day is also very big. and we're looking at silver that's been a very volatile commodity up about 33% year-to-date before today's selloff. again, we're looking at the accommodative policy. well, now stepping away from that, that has caused the selloff not only in the precious metals but in other commodities as well. but silver and gold definitely the standouts. we are looking at the worst day for both in about two and a half months. turn it over now to bob pisani at the new york stock exchange. bob. >> sharon, we were all parsing mr. bernanke's written testimony at 10:00 a.m. eastern time for hints of what would have cause thd very strange reaction in the 10-year treasury. maybe rick can comment on that. look at that. we spiked over 2%. that is a very sharp move up. almost like a machine trade was done. a lot of people speculating what was going on there. the important thing here is a lot of people assumed the fed
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was going to be very accommodative. maybe mr. bernanke did not come off quite as dovish as some people anticipated. move on here, show you some of the effects on other markets. we saw in currencies the euro just completely collapsed here. the dollar rallied dramatically and that was a factor in sharon's move to the downside in many of the commodities. how about stocks? well, the s&p did react. but wait a minute, it took a little bit of a while. this reaction took a bit longer than the reaction in the currency markets and commodity markets as well as treasuries. i would say yes, stocks dropped but took a little longer. one thing you can clearly see happening reflective on sharon's on commodities, we saw the commodity names move down the most. they were the big leaders on the day. now as most of the market has come back, some of these names here still down 2%, 2.5%. b bertha, even apple dropped. >> it did. and that after the nasdaq hit an
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11-year high. big milestone topping 3,000 for the first time since december of 2000. take a look at the nasdaq 3000. a real interesting milestone level for the index. it first crossed there, we can take a look at the big wall back at cnbc. i'm going to try to match bob's big technology guns here. the first time we crossed was back in november of 1999. back then it was the big y2k buildup in telecom and microsoft close at a $600 billion market cap. and we saw an explosive 60% runup in just four months where the nasdaq as we all know peaked in march of 2000 just above 5,000. it would be a big ride back down to the last time we closed at 3,000 in december of that year. among the biggest stocks that moved things this year sears up
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112%, seagate up 64%. but it's really all about apple in terms of apple's move. it's accounted for a third of the big caps move this year to the big milestone. rick santelli over to you in chicago. >> well, thank you very much, bertha. you know what, mer vin king set us early on the track. look at the gilt, 10-year and uk. started rising up a baker's dozen 13 basis points. then the post ltro hiccup. up a mere 70 basis points. who wants to be subordinated to the ecb with respect to something like a haircut? then look at the bund. even though it's only up a couple bay si points, you can see the pattern. then there's our 10-year. look at the fact that gold's down $61, equities move lower. there's one conclusion to draw, that is somebody might be taking out a mop quantitative easing might be in a halt for now mode and i'm surprised to answer
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bob's question that you didn't see a much bigger move in 10-years. rates moving up, the risk trade debting modified and i think a lot of bankers working in central unison, this was a fat finger, covered multisectors and probably belonged to the statue of liberty. one big finger. back to you. >> rick santelli, thank you. let's switch on the power surge. keeping an eye on oil today after its huge runup it's trading lower today. deutsche analyst paul sanky making a bolder call. he's bearish on u.s. light prices and bullish on selected refiners and says $80 a barrel for u.s. crude is in his sight lines. first on cnbc paul sanky. always interesting joining us from nasdaq today. welcome back to "power lunch." >> thanks, guys. >> make your argument for oil prices falling. you look like a generius today.
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this is their worst in two and a half months. >> you always worry the call works on the day we make it. it's the long-term call. >> explain your reasoning for it. i read your note, i'm not sure i understand it. >> fair enough. it's a built complicated. the issue here really is the big idea is u.s. exploration and production companies are going to do the same thing to oil that they did to natural gas. and the reason for that is basically that they drill very aggressively. it's mostly light oil. we're limited on how much of that stuff we can use. and, secondly, once we've maxed out our reutilization, we're not allowed to export it. so the two things together over time we think, as i said, make the market look very much the way u.s. natural gas does right now. >> what about iran? do you care about it? is it figure in your call here? >> it absolutely does because we think brent will stay above $100 a barrel.
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key parts of the call is that u.s. price at $80, brent price international oil price at $100. it's that disconnect between not being allowed to export and the amount of growth we have here keeping in mind that u.s. demand is falling that causes us to make this call. >> how soon do you think we get to this $80 price? >> well, first we have to substitute all the light crude imports, which is not that much. we only think there's about 750,000 barrels imported from the gulf coast and growing about 350,000 barrels a day per year. so within two years we should have oversupply in u.s. markets. >> a two-year call? >> that's right. >> thank you very much. we'll have you back soon. >> thank you. >> it's not just the u.s. markets keeping an eye on the testimony by ben bernanke. we saw markets all the way across the globe react to the prospect qe-3 might not be coming. >> it's a very important observation. first i would like to make, sue. and all the markets from the french banks to the 10-year here
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in the united states, equity markets, gold and silver all moved at one point today. my first question are welding investors looking for an excuse to sell the risk rally taken the s&p up 5% in advance of the big cash dump from the ecb this morning. i wrote an article on the website yesterday, cnbc.com, that suggested, yes, people were looking for a reason to sell. and they would look for disappointment in what the ecb said. ultimately they couldn't have found it. but four hours later they found it they thought in what bernanke said and risk assets move together and money floating to the bond market. the second question to pick up on what rick was saying earlier that i think we have to ask is are central banks, major central banks around the world, about to end qe? today the bank of england suggested that they may not embark on further qe. and they have been prolific. today there is a view from the european central bank that there will not be a third cash dump from them. possibly. and then we come back to the
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analysis of what ben bernanke was saying today with the further easing coming from the fed. if that liquidity 15 trillion from those central bank ss going to come to an end, no more. what does that mean for the markets? back to you, tyler. >> thank you very much. the other big story social media giant facebook making news this hour hosting its first ever marketing event. it's all in advance of its much-anticipated ipo. julia boorstin is at the meeting in new york city. she is covering that story for us. julia. >> well, tyler, despite this rain, facebook has gathered over 1,000 people for its first ever marketing event here behind me at the natural history museum. i've seen representatives from all the major ad agencies plus the likes of nissan a. all here to see how she's going to offer new tools. the theory is the better they connect with consumers through facebook, the more money they'll spend on advertising which should boost facebook's revenue
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and diversify its revenue streams ahead of its upcoming ipo. chief operating officer sheryl sandberg is taking the stage right now to present to some of madison avenue's biggest spenders. she's announcing a new page design more personalized with a time line. like people's profiles pages, enabling brands to post bigger pictures and longer stories. these new pages are also designed to feature your friends' interactions with that brand. valuable that also makes ads more effective. in part of today's announcement is facebook is going to make it easier for brands to track the performance of their pages and respond to private messages with a new admin panel. now, in the next hour or so, facebook's chief officer will take the stage. we'll also hear from facebook's vp of advertising, david fisher. and then later on this afternoon there's also going to be a
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panel -- excuse me here, a panel with chief marketing officer from walmart and the president of 1-800-flowers talking about how they're using facebook to effectively market to their users. a chat with a ceo of american express. they'll be talking about their marketing in the social age. back to you. >> julia, thank you very much. >> get out of the bad weather, julia. >> yeah. >> straight ahead as we continue on "power lunch," the dow and s&p at their best levels since spring of 2008. the nasdaq, it's best level in more than a decade. how do you play the bull right now? stick around for some picks. >> and let's take a look at where some of the other averages we track stand right now. new york stock exchange composite down about .3%. utilities higher by about .1%. and the russell down about .5%.
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apple a bright spot in the markets today. shares, new all-time highs yet again. what a run the stock has had over the past five years. up 540%. up another 1.5% today. the tech giant now part of an exclusive club, that is companies whose market values have hit or topped $500 billion, half a trillion. courtney reagan, courtney half a trillion reagan. >> quite a number. unbelievable stuff. within the last 20 hours apple
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tops the $500 billion mark for market value. only five other companies have ever hit $500 billion, microsoft, intel, cisco, ge and exxon mobil. all five have lost value since then. cisco's market cap now $107 billion, intel $134 billion. right now apple's worth more than microsoft and google combined. stack up apple against autos. it takes market caps of toyota, volkswagen, diamler, honda, ford, nissan and tesla all added together to reach apple's present $500 billion market cap. measure apple against media. look at these 11 names. you have to add all of them up and they're still less than apple at $350 billion in combined market cap. so exactly how big is $500 billion? well, if apple were a country with a $500 billion gdp, it would be the world's 20th largest economy between switzerland and poland. now, apple has been publicly
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traded since december of 1980. hard to imagine, but the company hasn't always made money handover fist. apple lost money '96, '97 and 2001. steve jobs wasn't always at the helm either. he was ousted in 1985 and didn't return to the company he founded until 1997. fast forward to 2007. apple hits $100 billion in market cap. multifullying four fold in five years to $400 billion and just last month apple's grown $100 billion to more than $500 billion right now in trading at yet another all-time high. shares up $542.99. sue. >> courtney, well, apple's up, but the stock market's been slipping a little bit after the fed chief, mr. bernanke, hinted there would be no more monetary easing perhaps. nonetheless the nasdaq did stop the 3,000 mark earlier. first time that's happened in a decade and comes day after dow
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climbing above 13,000. and joining us, guys, nice to have you here. dan, i'm going to start with you if i could. as simon hobbs, i don't know if you were able to hear his report earlier, pointed out that there was a lot of selling just around the 10:00, 11:00 hour and the question is whether or not people are really moving away from the risk trade. whether they've seen too much of a move in stocks. or do we go higher from here? what do you think? >> well, i think, sue, what we have is that we just have a situation where the extremely strong earnings motor that's been driving this market is probably back in neutral temporarily. i mean, we had earnings growth that was 15% in the fourth quarter. significant move in the market in the fourth quarter. and now we're up 9% this year so far. and we've had a full p/e multiple expansion from 12 to 13. so we're asking a lot from this market going at this sprint, you know, to not just take a
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breather for a period of time. so i think what we're going to see is that the earnings momentum in the flow from now to the end of the year is good. we're on about a 10% run rate. i think we still have further to go. probably another 3% to 4% from where we are now to year end. >> okay. >> but we probably take a breather here and just watch what the events are, see what the earnings momentum continues to be. if the gdp numbers continue to be good, we might start to pick up sooner rather than later. >> michael, i believe you like the commodities complex longer term. given what we're seeing in terms of a selloff in commodities, what do you do? do you add to positions in that particular space or not? >> yes, the short answer. i mean, i haven't heard anything fundamentally different. your word, perhaps sue, was the keyword in the opening line. i mean, realistically inflation doesn't appear to be a problem. there's a lot of political pressure to bear this year, an election year. if the economy does stagnate, there will be a lot of pressure on monetary stimulus if congress can't get anything done on the fiscal side. >> uh-huh. >> i still foresee easing and
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accommodative monetary policy around the world for at least a couple more years. so that environment coupled in with the worldwide growth story and emerging markets and, yes, here in the states even though it's anemic growth accommodates for supply demand. you have a recipe for continued higher commodity prices and energy prices. >> michael, you'd be buying more gold on today's selloff? more silver, more oil? >> yes. >> dan, let me turn to you. i don't know whether you follow apple. i don't know whether you care about apple. but when i saw courtney's report of apple crossing $500 billion in market value and i looked at some of the other stocks that have done that and where they are trading today, does that give you pause about apple? >> well, it doesn't give me significant pause about apple just because i think the valuations are still reasonable. and the fact of the matter is they've just put together a tremendous growth story. and they've executed on it.
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so i think people have to be probably a little worried on the near-term, bidding it up, because certainly there's a lot of momentum that's in it. but i think that the space is going to continue to be good. and the technology space is somewhere that, you know, you want to have position. that's where the earnings are going to be. we're going to continue substitution of technology for labor as the market turns around. and clearly, you know, i probably want to be not only in that sector, overweighted that sector, but maybe look at something like an oracle that really hasn't had that much of a run at a little more reasonable valuation versus just running totally with the herd at this point. >> gentlemen, thank you very much. appreciate it. >> thank you. >> thank you again. and up next, a bomb shell at news corp. james murdoch quitting as executive chairman at news international. that's the scandal-plagued newspaper arm of his father's media empire. >> what's the fallout for news corp.? is rupert losing the grip on the company he found snd we'll dive into the murdoch mess on the other side of a quick break. it's kind of hard to make decisions by yourself
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time to check in with scott wapner, see what stock's on his radar this hour. hi, scott. >> hi, sue. i'm watching shares of hewlett packard. the company going to cut about 275 jobs in the web os division. earnings weren't good of late. this turnaround orr ke straited by meg whitman. the stock is off about 2% today.
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on a day everybody talking about apple hitting half a trillion dollars in market cap, microsoft rolls out mobile operating system, it seems the conversation is centered around those two technology companies. when you talk about old tech, it's around microsoft, ibm. it certainly isn't around hewlett packard these days. that's why i'm watching it chl share down almost 2%. >> thank you very much. shares of news corp. ticking higher and touching a fresh new 52-week high today. headlines out this morning that james murdoch is stepping down as executive chairman of the scandal-plagued news international. is there any fallout for the parent company? does it change the calculus there? what's the play on the stock right now? >> joining us u.s. media and marketing correspondent with "the financial times." has the sun set on the son in.
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>> he was the heir apparent to his father's company. after a year of scandals at news corp. in the uk and perhaps even here in the u.s., those succession plans look very much in doubt. >> barton, it would seem they are at the very least postponed, but the family and mr. james murdoch will control a lot of the voting shares nevertheless. >> right. this announcement i don't think actually is anything very new. we've known from rupert for several months now that if he were to get hit by a bus as he put it, chase carey would take over. james has been planning to move back to new york. i think it was expected he would step down from this position in publishing. he's still the number three executive after chase. look ahead ten years given the family control, i think there's a very good argument james will be in contention, but not today. i mean, it's clearly delayed. >> barton, near-term, does it damage the brand at all? it's the story that doesn't seem to go away. and if you're a shareholder of
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news corp., should you be worried about that? >> well, the publishing business i don't think materially effects negatively effects the value of news corp. publishing is so small, less than 2% of earnings from the uk, this is a $40 billion market cap company driven by tremendous success in television. the financial implications of settlements, potential penalties are just immaterial. what you haven't said a company growing earnings per share 25% over the next couple of years among the fastest growers in the tv business with the best share purchase profile. i think it's a very good stock to own right now. it's one i very much recommend. >> and you've got a $25 price target on it? >> right. >> dave, let me turn back to you. does this resignation take the investigatory heat off news corp. international? in other words is it the scalp the investigators might have wanted? >> i don't think james' stepping down as executive chairman of news international insulates him from any of the regulatory scrutiny that that unit is still
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under. >> nor does it insulate the unit itself, not just him. >> certainly not. and there are even some thoughts that with him stepping down, the uk newspapers could potentially be positioned to ultimately be spunoff from news corp. itself. even if that were to happen, the regulatory issues would still dog the parent company. >> david, do you agree with barton that ten years from now james may indeed be back in good graces and in control? >> as he said, this is still very much the murdoch's company. the way the voting shares are structured, that's not going to change any time soon. yet james' credibility has been significantly damaged over the last year. he was overseen news international at a time when these hacking revelations became public. he wrote the checks to payoff some of the early accusers. and frankly the handling of this whole saga has not been up to par with what one would expect from the ceo of a multinational corporation. >> barton, very quickly, should
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i care that this company's stock is so heavily controlled by one family? i'm always suspicious of those dual share companies like that. >> clearly you should care, but clearly stocks like that can work, viacom, a family controlled company got more shareholder friendly. news corp. is taking a page from that. so, yeah, i think you can still look at it. but be aware of that. >> barton, john, thank you very much. >> thank you. >> all right. when we come back on "power lunch," statten, cholesterol drugs, $30 billion a year. now a safety warning on them from the fda. how the stocks are reacting to that. and big news from gm. they're taking a stake in france. some people are wondering after a few years of a huge taxpayer bailout they're pumping money into a french company. response on the other side of the break. oh!
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welcome back to "power lunch." i'm seema mody. let's resetd the markets for you. where'd the rally go? if you take a look at our major indices, we're trading in negative territory. u.s. stocks, commodities selling off after bernanke dented hopes of a fresh round of monetary
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stimulus for the economy. another story i want to bring your attention to, the big story in the pharma world. the fda warning that patients taking cholesterol lowering stattens may face a slight increase in risk for diabetes and memory problems. now, stat ents the best selling class of drugs in history brought in an accumulative $130 billion in sales for pfizer alone in the last quarter. in q-4 they brought in $2 billion in sales. the big question is, will these pharma players be financially impacted? analysts i spoke to said they're not changing their ratings or estimates in response to this news. many of them already expect a deceleration in sales given the availability of generic options. it's still considered a headwind being monitored very closely. patients will naturally question if the benefits of being on a statten outweigh the risks. tyler. >> now, seema, i at least know where my memory went. gold having worst day in two montds. ben bernanke doing little to boost the hopes of qe during his
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testimony on ch. that would be capitol hill. prices ready to close right now. sharon epperson tracking the action at the nymex. >> tyler, we're closing at the lows of the session. we've seen gold now dip to $1705 an ounce for the intraday low. and we're down about $80 in the price here of course bernanke's comments the lack of any really stimulus talk that's certainly what has precipitated this decline but what exacerbated the decline is the fact that gold prices tried time and again to retest those november highs near $1800 an ounce and were unable to do so. we saw a lot of sell stops that were triggered as gold was unable to do that. and that exacerbates the decline technically. speaking of technicals, look at silver. silver posted the biggest percentage decline giving up all of tuesday's gains. still the best performing commodity so far this year. back to you. >> thanks, sharon. general motors announcing it's buying a stake in struggling
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french automaker oui oui. with europe's economy in trouble, what's behind gm's move? philip lebeau joins us with gm's vice chairman first on cnbc. >> thank you, sue. i'm joined by the vice chair of general motors joining me from new york where you just got off a conference call outlining this alliance, steve. we're going to show the terms of this alliance to our audience. in a nutshell this is really all about cost savings, isn't it? at the end of the day? >> i think it's cost savings and revenue opportunities, phil. really we're setting up a broad long-term strategic alliance around two pillars. products, modules, components and technology. and a purchasing jb. on the product side we'll be able to lower our cost of putting products on the road and also combine putting product on the road economically challenged if we did on our own. >> a lot of people look at this alliance saying it makes sense in terms of two companies spending trying to save money in terms of cost side. but did gm need to spend the
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money, which i think is $360 million to take that 7% stake? couldn't you have done this without taking that stake? >> it was important to them that they raise capital to support the alliance and to support their investment in the program's going forward. we wanted to show reliance. we wanted to be supportive of their capital raise. >> i want to show our audience of the wallet. this shows how much money you've lost in europe, gm europe over the last dozen years, essentially you've lost about $12 billion there. and all this brings up the question, how much does this alliance help get europe back in the black? or at the end of the day is this a nice move but not enough? >> well, we made very clear on the call that we both need to work on our internal improvement plans on our own. that would mean working with our
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constituents to improve the revenue side as well as improve the cost side and improve the profitability and lower the break even targets of europe. we view this as adding tools to the tool kit, so to speak. materials are a big part of the cost structure of a company to the extent we can reduce material costs, that will be very favorable. logistics is another area that's a big cost item to the extent we can lower our logistics costs, that will help. and putting anchor on a product on the road at a lower cost is very important as well. >> on wall street, we're all analysts. there's a lot of skepticism. i want to read one note from credit suisse putting out a note saying this is not the type of solution we need to see in the european mass market where capacity has to leave. will you shut down some plants in europe within the next year or two? >> we are working with our constituents to improve the profitability of the organization and looking at all aspects of the revenue and cost side. we're going to work together to lower the break even costs of
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our operation there. >> steve girsky joining us from new york city, guys, on a day gm announcing an alliance with peugeot. not initially will they save money, but over five years they hope to save $2 billion. >> nice try on that last question. i'm not sure whether he gave you a yes, no or maybe. >> he didn't give us an answer and he's not going to give us an answer until they get things worked out with the unions. >> that's right. coming up next. >> microsoft unveiling new software. windows 8 for the tough titan.
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coming up, top of the hour
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on "street signs," whether there are any real signs of life. and an exclusive interview with the ceo of e than allen. and what's the one stock that's worth half its current value? get the scoop from a big mutual fund manager. and, no, he's not shorting it. just minutes away on "street signs." now it's back to sue and tyler on "power lunch." >> thank you, mandy. see you at 2:00. we want to let you know the cme is out with a statement. you recall earlier this morning there was some talk in the market about a potential fat finger trade in treasuries that spiked the yield above the 2% mark. the cme is now saying there are no reports of error trades after that talk this morning. so apparently they're officially saying that was not the case. ty. >> new report out today showing which companies are ruling the mobile world right now. the answer may surprise you. jon fortt in silicon valley with the exclusive. jon. >> well, tyler, happening this week in barcelona and kom score giving me data on what companies
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are winning in the u.s. who is apps have the highest penetration. the top two won't surprise you. google on top with presence on 96%, number two is facebook with 76% penetration. but get this, number three beating out amazon, apple, wikipedia is yahoo! >> they're pretty well-positioned to do well in mobile. i think that comes in in yahoo!'s history where they've been able to really monetize their content well on the web, which has been a challenge for some of the other players. >> considering yahoo! stock lost half of its value since the launch of the original iphone, it's a bit of a head scratcher. this shows yahoo! has a better beachhead in the mobile area than given credit for. the problem is yahoo! has no clear strategy for protecting its position and monetizing it. the risk is outside forces amazon's kindle fire strategy could hurt yahoo!'s chances. yahoo! is not alone in this challenge. facebook is also trying to figure out how to monetize mobile so its finances don't continue to suffer as users use mobile devices more often than pcs. but facebook has an advantage
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yahoo! doesn't. com score says people in the u.s. spend 75% of their time on mobile devices on facebook. so if i were yahoo! ceo, i would be thinking a lot about mobile engagement right about now. >> jon, what is actually being measured here? when you say penetration, does that mean people are actually using yahoo! that frequently on their mobile devices? or that it's available to them on their mobile? or what? >> it doesn't have to do with frequency, just means how many people does yahoo! reach either through mobile sites or through apps. so in google's case people use youtube a lot. it's pre-installed on android devices and iphones, ios devices. its penetration is big. yahoo! is number three. time spent is going to facebook. people spending much more time with facebook than others. >> let's bring in chairman of media morph in new york. weigh in on this. i mean, i see from my notes you
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think yahoo! has a bit of an identity crisis and has a ways to go to try and make a big foothold in mobile. what more do they have to do? >> i think they're heading the right direction for a number of years they've had an identity crisis where they've been going back and forth between being a content company versus being a product company. scott thompson at the helm, they're clearly going to focus on their product. they embarked upon an approach called mobile first chr, which similar to what eric smid. there are a number gate keepers to biopypass. the device manufacturer, the carrier, and you have to go and find mind share with the consumer. a very tough road ahead. >> we posed the question can mobile save yahoo!. it sounds like you're saying no. >> i'm saying mobile will give them an opportunity, but i'm not sure if it's actually going to
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be the savior. i think they have to go back and do some fundamental shift in approaching the market base for actual core value proposition to the consumers. >> jon, microsoft over in barcelona apparently lifting the comona on windows 8. how important a product is this? i have heard good things about it. >> yeah. it is the most important product for microsoft. this is the next pc operating system. it's also their play for tablets. what's complicated about it is that they're mixing sort of desktop that we're used to with pcs with more of a touch interface that we're use today wi ed to with tablets. this looks very different from any windows operating system we've seen before. the challenge is going to be trying to please everybody with their massive windows market share and yet also be cutting edge competing with apple and the ipad. >> sha heed, i believe you sat down or met with mr. ball mer with microsoft. i'm sure he was positive on it
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certainly. give us your thoughts? >> my view is that this is the first time in a number of years that microsoft actually has a formidable opportunity in the mobile space. i was very impressed with what they have done with windows 7. and i've seen the road map of what's coming down the pike for windows 8 mobile integration, better ui. i think there's a very, very good opportunity. but going back to my earlier point, it is very important that one controls the ecosystem across mobile which is why google acquired motorola and apple controls everything from the operating system to the device to the retail channel as well. i believe microsoft has an opportunity to actually succeed. but if they really want to win the game, they should seriously consider acquiring either nokia or rim. the two companies provide different advantages. nokia gives them a strong presence internationally whereas rim gives them a strong presence in the enterprise mobility space which i believe is an area left
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completely open. there is no clear winner right now. microsoft has all the right ingredients and strong balance sheet. >> i was just going to say, they have a lot of cash. they could easily pick up one or both of those companies. thank you, gentlemen. the question is whether or not that's already in microsoft's stock. >> yeah. up next, only on wall street, a $200 million payday. we'll tell you all about who's laughing all the way to the bank. and in honor of leap year, the four smartest investment plays for the next four years. that's all still ahead when ty and i come back. [ male announcer ] what if you had thermal night-vision goggles, like in a special ops mission? you'd spot movement, gather intelligence with minimal collateral damage. but rather than neutralizing enemies in their sleep, you'd be targeting stocks to trade. well, that's what trade architect's heat maps do.
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you may recall yesterday on "power lunch" we told you about the founders of private equity titan kkr each getting a $94 million payday. that's peanuts compare today this one. backstone ceo took home $213 million last year. that's up more than 30% from the previous year. most of it came in the form of dividends because he has a 21% stake in blackstone. his actual salary was only $350,000. and we'll give you any guess on which tax bracket he will fall into, ty. >> i would love if my salary didn't matter the way it doesn't matter for him. this next segment is a real leap. we've asked our guests to give us four picks to buy today, leap
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day, and hold until the next leap year. alan reid, the ceo of the 36 fund -- or 39 fund forward group with $6 billion under management. commodity long short strategy fund up 10% last year. outgained its category average by nearly 17% points. let's talk about that long-short fund. on a day like this when commodities are going down in part because of bernanke, i assume your fund can make some money. >> it's about a point and a half today, tyler. >> why is it important to go both ways? >> the thing with commodities it's big. inflationary and deflationary commodities work in both if you can go long and short. >> talking about leap day and looking ahead for the next four years, your overall thesis is for the next four years where you're going to make money is by investing in the development, the growth of the emerging world. china, brazil, et cetera. >> that's right. think about it. developed markets maybe 1% to 2%
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growth rates. emerging markets, china, 8% to 10% growth rates. when you think about where the pop is, it's driven off of those. cf industries, brazil foods, those are all going to be drivers. we think about middle class, it's not about tiffanys, it's about them eating. >> let's look at a couple of those commodity plays. one is bra sil foods and cf industries, a fertilizer company, corn needs nitrogen, cf gets nigh kro general out of the ground. >> it's u.s. being a low-cost producer. nat gas is here, you need it to produce fertilizer, nitrogen, as a result we can produce it. the chinese think they're going to be about 80% of consumption going forward with 80% corn consumption, that means a lot more corn. >> this is how investors think. they're going to eat corn, what do you need to eat corn?
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let's look at that industrial play which makes building gear equipment claims. >> japanese version of caterpillar. they have easy delivery into china comparison. from that standpoint big growth opportunity. better valuation. >> and your final pick is a real estate play based in hong kong. tell me about it. >> yeah. soundwill, you can tell i'm not the portfolio manager, right? this is great because our international portfolio manager just picked a name that basically was up 80% in a day. and really -- he's real big on valuations. this company basically manages and develops real estate in hong kong and also mainland china. they are valued, they're nav is about 40% of what it's trading at. it's huge. >> a huge discount to underlying value. >> alan reid, thank you very much. good to see you. >> thank you. >> sue. >> ty, just about two hours left in the trading day.
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charts of the day up next.
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we are now up above the 13,000 level. that's what they're looking for, a close above yesterday's close would technically be very positive for the dow. the nasdaq, slightly lower on the trading session by 2.23 and the s&p above the 1370 mark as well. >> the nasdaq did nip above that 3,000 number for the first time in many years earlier today. chart of the day, let's look at gold, which is selling off rather sharply today, rather sharply? $75 an ounce or more than 4%. there's a three-month on gold. and you can see that after peaking here just a couple days ago, it is now down principally on the dollar's move and bernanke's comments about potentially no more qe. >> yesterday he takes the money off the table. transports have turned positive. it's important because yesterday we were highlighting the fact that the transports were sitting in negative signal on the market. the question is whether or not a positive close mitigates some of the technical damage people were

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