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tv   Closing Bell  CNBC  October 17, 2012 3:00pm-4:00pm EDT

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that brought some buyers into the market here. we've had a mixed trade today. we're going to look at where we stand now. the industrial average, if we wait a moment here might turn positive for only the second time today. down just four points. well off the lows of the session app 13,547. the nasdaq has not been troubled by intel and ibm today. nasdaq is positive, a gain of a fraction right now at 3102. the s&p is up 5 3/4 at 1460. let's get back to the mixed messages we're getting on wall street. earnings season moves into full swing. s&p capital iq is expected to see the slowest growth in three years overall. when it comes to the help of monetary stimulus, one of our next guests, keith springer, says that's all that's driving this market right now and he feels we're starting to see a crack in the armor. >> we did expect this. we expected the slow earnings period. so what is there to depend on in
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today's market? we bring in it our panel. we have carol roth, mike the pento, and our own rick santelli. rick, what are you seeing in terms of stocks, money moving out of equities and some moving into fixed income? >> many traders think this is going to be a rough and bumpy earnings season, a rough and bumpy guidance. they believe that the stock market has a bit of immortality thanks to the fed. in terms of interest rates, they believe if the actual data continues to improve in a real way, like some of the housing data points, some of the ism points, that we will indeed see an appropriate rise in rates. that threshold seems to be about 2%. so we're about 20 basis points away. they do see some optimism though. >> is that why you think the yields have gone up as much as they have in the last week for the treasuries? especially the ten-year. >> i think it's 50% year up and 50% the better data is reflected
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by higher equities. >> all right. keith, what about the -- you know, we seem to be feeling optimism here. we have the housing start number better than expected. housing has been a bright spot. the financials have had mixed results here so far. here we sit at 4 1/2 year highs for the markets. you feel this is due to the fed though though, right? >> you've got to love the printing press. they keep printing money, putting money in. we've had such negative sentiment. it's not really hard to beat these expectations. so every time a company comes in with mediocre returns, everybody gets excited. the housing starts were nice. let's remember the banks were sitting on millions of homes they were allowing people to live in for free. this is largely stimulus driven. once we get the law of diminishing returns, eventually it's going to wear off. qe-1, we had about a year. qe-2, about eight months. maybe we can get three, four, six months out of this.
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even trees don't grow to the sky. investors need to be careful here. invest for need, not greed. >> that's why i think we are seeing a bit of a breather today in terms of equities here. michael, do you buy into the housing numbers today? do you want to look at those numbers and say, okay, things have turn the in housing, you want to p put money to work? >> 95% of all new mortgages are controlled by the government. do you know that 40% of those mortgages are now guaranteed explicitly by the fha? that's with 3.5% down. the entire economy is addicted to these fictitious interest rates. they're at 0%. interest rates are going rise because of the overwhelming amount of debt that we are issuing and because of the inflation we are creating. when that occurs, you are going to wipe out the housing market bounce back, and we're going go right back into another leg down in housing and the economy. >> you're not real happy about what's going on. >> not at all. >> carol, i know you feel a lot of the data are what you feel
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are schizophrenic. >> absolutely. i think the housing data is completely schizophrenic. who's buying these houses? people can't afford the mortgages. they can't even qualify for the mortgages. i think this is driven a lot by investors and not by the average consumer. so i am kind of with the panel here. i feel like this could be a potential additional asset bubble. i'm just not buying it. >> we got a tough crowd with us today here. >> we really do. in terms of this market here, what do you want to do in the face of all of this? do you want to put money to work or sit on the sidelines going into year end? >> you can't put money on the sidelines. what are you going to do, buy a treasury bond and get killed? you have to put money to work and put it in those things the government cannot create by fiat. that's hard assets. >> okay. keith, what are you buying here? >> you've got to buy yield here. you can buy some hard assets, but we're in a deflationary environment. we don't see inflation -- >> don't go to the grocery store.
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>> assets are being destroyed faster than the government can inflate with. you have to buy yield. you can find good yield. there's plenty of places if you don't need all the risk of the market. it's what we do for our clients. we have to remember, we're in a deflationary environment for a couple more years. that's why we're not seeing any inflation. >> look, can i say something? look -- i hate to interrupt. >> you did. >> i know, but that's kind of how i do things. i'm sorry. look at m-2. >> look, a debate broke out. >> the largest againg aggregate kept by the fed is up 8%. how can that be deflationary, sir? >> cpi, all-time high. >> what was that, rick? >> are we seeing any inflation? >> rick, what did you say? >> cpi index yesterday is at an all-time high level. just to throw it in. >> thank you, mr. santelli.
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>> carol, bring some desency to this conversation. >> i don't know that i'm the right person to do that. >> break the ties. are you worried about inflation or deflation? >> i'm more worried about inflation. i think you're going to see it in food. i don't think gas prices are going anywhere. a sector i particularly hate right now is the restaurant sector. i think it's had a really good run. i think it's going to be hard for them to keep up those comps in the face of the rising food costs. i'm on the inflation bandwagon here. >> would you be buying hard assets? >> i'm actually taking a breather. we've done quite well for the year. i'm taking a bit of a breather, taking in all the information. if you're somebody who's churning your portfolio, lots of volatility to do that. i'm more of a long-term investor. i'm sitting this one out for a few days, bill. >> all right. thanks, everybody. see you soon. >> cheer up, michael. see you guys later. okay. it is one of those days, isn't
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it? >> it really is. >> okay. we got 50 minutes left in the trading session here. dow squjust below the unchange level. >> we have a hot show today. don't go away. we're just getting started on this busy edition of the "closing bell." coming up, maria means business. two big exclusive interviews with two big market movers. first, blackrock's larry fink with his thoughts on earnings, the election, and vikram pandit's sudden departure from citi. then in another exclusive, u.s. bankcorp ceo on his company's earnings. and trouble ahead? s&p's chief economist tells us about three big risks looming on the economic horizon and why there's no room for error. find out what they are ahead on the "closing bell." for [ male announcer ] it's a license to drive.
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welcome back. wall street still buzzing about yesterday's surprising resignation of citi ceo vikram pandit. mary is learning more. >> you have to look at the last six months of pandit's near five-year stint. first of all, back in march, keep in mind the federal reserve rejected citi's request to raise its dividend. then in april, shareholders rejected pandit's $15 million pay package, even after two years of a voluntary pay cut. that same dai citi n director michael o'neill chairman. o'neill is a much more hands-on chairman, a trait tra fueled the tension between him and pandit. in july, another misstep.
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citi overvalued the joint venture it has with morgan stanley. last friday, a person who saw pandit in tokyo said he didn't speak like a man about to lose his job. all of this combing to the fore on monday. that's when citi reported very strong third-quarter earnings. pandit gives no hint on an analyst call he's about to resign. sources say the bank's recent m missteps and differences between pandit and o'neill led to his resignation late monday. one top citi official telling cnbc there had been conversations about pandit and the board about his leaving for multiple weeks. the board having already identified a successor. so after pandit resigns, some of the members of the operating committee were told about the resignation monday evening. others on a call on tuesday morning. that's when long-time pandit lieutenant john havens he signed as well. the public announcement later
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tuesday morning a surprise to citi employees. citi still needs to fill havens' job as president and c.o.o. right now, the co-head of citi's investment bank is said to be the front runner. we'll be watching. back to you. >> all right. we have some breaking news. i want to get to sue on this late breaking story. >> indeed, bill. thank you very much. a suspected terrorist has been arrested for an alleged plot to attack the federal reserve building in new york city. the plot was a sting operation monitored by both the fbi and the nypd. the man is in custody, according to sources that spoke to the news earlier. apparently this gentleman lives on long island. law enforcement officials are stressing that at no time was the public in any danger. at this point, that's what we
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have. they're still working the story for us, bill. as a result of that, we will keep you posted. >> all right, sue. thank you very much. quite a story. we've actually got jonathan on the telephone right now from wnbc to give us more about this plot on the federal reserve. >> hi, maria. >> what do you know? >> we're told from the fbi and nypd officials that this was a sting operation. this lone actor, self-radicalized, was apparently trying to target the federal reserve bank. it was a target he scouted and for some time they've been monitoring him and using informants and watching him. this morning they made the arrest. they moved in as he was allegedly trying to move forward with some sort of plan to attack the federal reserve bank here in new york, right near wall street. he is now in custody. we're expecting this suspect described as a male in his 20s
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from long island to appear in federal court in brooklyn later this afternoon or this evening on the terror-related charges. u.s. attorney loretta lynch, fbi officials, perhaps mayor bloomberg and the police commissioner here in new york all expected to detail the charges and the nature of the events later today once the suspect appears in court and once the charges are officially filed. again, an arrest made in lower manhattan today of a suspected terrorist targeting the federal reserve bank of new york. we're told this was a sting operation and that he had been closely monitored by the fbi and nypd for some time and that there was no danger of any sort of explosive going off because they had him so closely monitored. >> so how was he planning on doing this, jonathan? do you know details in terms of what the plot was? >> all i know is it was some sort of bomb plot where he was trying to obtain some sort of
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explosives to target the bank down there. that was one of several locations in new york city that he allegedly had scouted or perhaps discussed targeting. so unclear if it was the fbi informant who was providing, you know, the materials. we've seen this in other fbi-related stings. so therefore they were inert and never any danger. it seems obvious that the fbi and nypd were able to get inside, work alongside this suspect, and keep him close at hand to make sure that no attack went off. i guess when he went and chose this day and this site to go attempt something, that's when they moved in and made the arrest. apparently it took place in lower manhattan today. >> unbelievable. thank you very much. i know you'll keep us updated. we are also watching blackrock today. the company reported earnings, stocks slightly lower today. net income was up 8% in the past quarter off a surge in the etf
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business. if you do the math, investors poured $25 billion into blackrock's etfs. the most since 2009. blackrock also saying it will cut fees for six etfs and create four new ones to better compete. let's get right to it with with blackrock's ceo. larry, great to have you on the program. >> hi, maria. how are you? >> great. good to see you again. can you characterize the cart r characterize the quarter for us? >> we had a very good quarter. we had revenue growth. we had asset growth. as z you said earlier, our i-shares grew by $25 billion, a very large engine. what was particularly important for the quarter, in the last few quarters we saw most of the money going into fixed income. in the third quarter, we saw over $20 billion going into equities, which is a good indicator clients are looking to add more risk.
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that's evident by the indexes. >> okay. so we are actually seeing a bit less of a risk aversety. we've spoke nnt past. you've been on this campaign trying to educate and explain to people when you have your money in fixed income, you're losing money when you consider inflation. you're seeing money back in equities. >> no question about it. for those still fearful of the fiscal cliff and the outlook of the election or what is happening in europe, fixed income is still a great area to keep your money, but you have to understand that represents a cost if you're in treasuries earning 1.5, 2% after inflation and after -- you know, when you think about your need for the future, fixed income is not going to provide you with what you need for the future. this is why over the year now i've been suggesting to investors they should be in equities. we're beginning to see that movement. >> larry, let me get your take on what's going on in your own business. seems like vanguard is undercutting everybody. is there a price war going on right now in the etf world?
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>> absolutely not. you know, vanguard is a very capable, very good organization, great brands. they're actually a client of blackrock's. our changes in our etf platform was unrelated to what vanguard is doing. many of our clients are buy and hold investors. the buy and hold investors are not as -- they're not looking for liquid etfs as much. so we created a new class. over the course of the quarter, blackrock i-shares was the number one etf platform in flows. we are the number one etf platform worldwide hin flows. so this was not about a price war. i think it sounds sexy. i think it's a great thing for the media to use those words. what we did was to -- was listening to our clients.
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those clients were looking for a buy and hold strategy. we created a new core fund with much lower fees. >> so this is different categ y categories then. how do you differentiate? is one more for the retail group and one for the institutional group? >> i wouldn't say retail or institutional. for those who are looking for liquidity, and some have three times more than any of our competitors, they're looking for etfs as a means to move around and asset allocate. they may only be in the product for two, three, four months. so it's something so important. our products have the most liquid markets of any etf. in addition, on some of the products, especially institutional, they'll look at tracking error. many of our products have substantially better tracking than some of our peers. so when you look at etfs, and this is true for anybody who is an investor in etfs, please look at the bid spread you're paying on the exchange. please understand that some of
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these instruments have very large tracking error to your index. you need to track that. then you need to look at the total fees. you add those three elements up, we have very competitive products in both our product. for those investors who are saying, i want to own this and own it for years, that's when tracking errors are less important. that's when bid spread is less important. i'm looking for something with the lowest fees. that's what we were providing. >> i know you think this is an area that's going to continue to grow in terms of investors looking for ways to get exposure to equities, which is what you recommend. >> and ways to look at fixed income. in fact, we said in our earnings call, fixed income etf right now is about $300 billion. we expect over the next few years fixed income etfs could be $2 trillion. we believe as etfs have transformed the market, we believe they're going to transform the fixed income market.
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we look at etfs as tools for investing. we believe we have more opportunities through the i-share products. >> larry, let me switch geears and ask you about the stories of the i did. citi one of them. what's your reaction to vikram pandit's sudden resignation yesterday? quite abrupt, isn't it? >> very abrupt. vikram is a friend. i'm sad to see he's gone. you know, under vikram's leadership, the organization has stabilized. under his leadership, the organization is moving forward. yes, i'm not blind to the missteps. obviously, the board of directors was looking for a different leader. obviously, i'm not aware of what information they were looking at, but i am very bullish on u.s. banks. i think they're in a good position. not only that, i think citibank is in particularly good shape.
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most of their balance sheet problems are way behind them. they're one of the leading international banking platforms. their brand worldwide is one of the best. so hopefully the leadership -- the new leadership focuses on its brand and it focuses on its leading market position worldwide. >> i know the fiscal cliff has been something you've worried about. it certainly is front and center here in the u.s., particularly in new york and washington. you had an institutional client conference going on today. $5 trillion in assets under management. you're hosting some big clients there. are they as worried as you about the fiscal cliff? are they reluctant in terms of putting money into the u.s. because of the dysfunction in washington right now? >> i don't think it's just investors. i think the problem we're facing now, investors, consumers, leaders of businesses are all deferring decisions here. so we may be seeing a little risk on in equities, however,
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many investors are actually derisking, setting more money aside because they're very frightened of the outlook of the u.s. as we try to resolve this fiscal cliff. so ceos are deferring investments in cap x. they're deferring hiring. i expect to see if we don't solve the fiscal cliff in a sensible bipartisan way, i expect to see us drift into a zero growth economy and possibly a recession in the first quarter. i think as you know i'm very bullish long term, but i just believe we have this real uncertain period at the moment. what i'm really kind of upset at, we've had two very important presidential debates. i did not hear anything about the fiscal cliff. whoever is president, this is going to be the first item the new president or president obama
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is going to have to face when he's president. this is going to be the first thing that the whole congress is going to have to start facing on november 7th. there's not a dialogue about how are we going to address this tremendous issue. importantly, we have a government debt ceiling in february. if we don't address the fiscal cliff, we have the debt ceiling. ly tell you, i was at the imf last week for five days. obviously there's a little more comfort on what's going on in europe. obviously there's still many issues. all the side conversations we had was, what's the u.s. going to do? this is not just a worry for the u.s. this is a global worry and we need to address it. >> real quick, would you buy into europe right now, or is that still dysfunctional? >> i have been constructive on europe. i actually believe europe is on a path for stability. unfortunately, europe's fix is a seven-year fix. we're going to have a lot of
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volatility. for those who can handle the volatility, i would say when we have dips in europe, you buy because i think the outcome will be a better europe. the trends you're seeing in italy, the trends you're seeing in spain, their competitiveness is improving. however, they have much more to do. they have big hurdles to go through, but the trends are positive. >> we'll leave it there. good to talk with you. >> thanks, maria. >> about 30 minutes left. stocks struggling to remain positive right now. the dow is back in positive territory, up a point. >> how about those home builders? >> exactly. >> going through the roof. which home builders stock is the one to build now? names are next. >> also, the looming fiscal cliff strikes again. the head of one of the nation's biggest lenders says people are not tapping credit lines because of uncertainties about the click. richard davis joins us in a few minutes after this. when you ta. the best schools in the world...
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welcome back. what a day for the home builders as maria mentioned. kb home shares up 10%. multiyear high there. there's the whole home building space gets this boost out of the bullish housing starts we got. cankb build on this strength, or are you better off buying the sector as a whole? let's find out in "talking numbers" today. richard ross here with the numbers. this is a group that has done
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well anyway. what about the home builders themselves? >> well, clearly housing stocks and housing starts are surging faster than mitt romney. let's look at this chart. i'll tell you if that run is going to continue. this is the benchmark philadelphia stock exchange housing sector index. we've drawn this line to show you a long-term view. we captured the high and low. if you sold this index on that break below the 200 week, you saved yourself 57%. you get back in here earlier this year, we're now up 63% from that buy signal. investors are wondering where do we go from here? boom. >> you think it's higher? >> well, i don't. in the short-term, we're into resistance. you have this 50% retracement of the entire decline. you see the overhead resistance from the trends line. you want to pump the brakes on the overall housing sector index. >> what about kb? >> let's look at kbh, one of the components of that index. there's no free lunch on wall
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street, which means high risk, high reward when you go for the individual stock. bo boom. sell it, buy it. we've only gone up 37% from that 200 week. we still have almost 175% to go to get you back to that same level that we're already at in the benchmark indegindex. look at that potential up side. higher risk but higher reward. >> so the group, cautious. kb, all systems go. >> if you want to play the sector, highly leveraged, a pure play, kb is a great way to go. >> very good, rich. thank you for joining us today. appreciate it very much. maria. >> all right, bill. thank you so much. we have the dow strims down about three points. still to go, breaking up is apparently not hard to do. nike and anheuser-busch breaking their tiefs with lance armstrong. we'll talk about what the future holds for livestrong, which has done so much for cancer victims.
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welcome back. shares of u.s. bancorp have been a strong performer today after earnings beat analyst's expectations. the company report iing earning where most have exceeded expectations. can it continue? >> that's the question to be asked. joining us in a cnbc exclusive, richard davis is back with us, chairman and ceo of u.s. bancorp. i was reading a statistic today. his bank, since he took over, has not posted a quarterly loss since 2006, which says a lot, richard, when you consider the financial crisis we went through that whole time. so props to you on that whole thing. this quarter, though -- >> thank you, bill. >> good numbers, and we attribute a lot of that to the mortgage industry, don't we? >> it certainly helped. first of all, thank you for
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having me. hi, maria. bill, i think for us this quarter was another consistent repeat of a quarter. we've been doing this 12 quarters in a row now with double-digit increases year over year. mortgage certainly helped a lot because the market with low interest rates is very interested in continuing to refi. over the course of time, rates will eventually go up, refis will come down, and we'll find other ways to be successful. >> where are you seeing the mortgage activity? we saw the housing numbers today. a lot of people are excited thinking the housing market has peaked. is this activity largely refinancing and not purchases? >> it is. two-thirds is refinance. one-third is purchase money, which is a little better than it's been in the last four quarters. so people are starting to buy new homes which is probably why your home builders are starting to sew that kind of sustainable increase and inflection. for a while, you will not believe how many people will keep refinancing their loan as the rates continue to get to record low numbers. for us, that continues to be a very positive pipeline.
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i expect that to go well into 2013 and probably just until the rates start to move up. >> those refis, i mean, last week wells fargo acknowledged they were a big part of their business. it lowered their margins, their net interest margins went down. are you seeing the same phenomenon right now? >> bill, we're not. actually, mortgages in most cases don't effect your margin because we sell it off to freddie or fannie. in most cases it doesn't hit the balance sheet. sometimes it does for the jumbo loans and more complicated loans. for the most part, it's more a function of your securities portfolio. >> so how is the fed's $40 billion of mortgage securities buying a month impacting your business? >> it does a couple things. one, it keeps interest rates low. in the near term, that gives you reason to have people refinance their loans and stay optimistic about the cost of lending being low. it also hurts the yield curve.
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banks make a lot of money on the yield curve, both on the middle and long term. it's been coming down over the course of the last couple of years and the last couple of weeks, in fact, given the continued buying by the fed. so long-term interest rates being low are actually not positive for banks, but they're positive for our customers. eventually rates will go up. some of our customers will take quick action. we'll have more purchase money loans than mortgages and more customers taking action before rates go too high under the fear they'll get out of control. we need rates to move eventually for banks to be more profitable. in the meantime, our customers are benefitting. >> we mentioned before the break that you feel that many of your customers are not tapping their credit lines because of the fiscal cliff. they're uncertain. i'm torn about that. aren't we still in a period where people are deleveraging? good for them. it's not good for credit card companies. not good for banks that hold the credit lines.
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are they being overly cautious? is that the point you're trying to make? >> i think they are being overly cautious. i also think, by the way, that's a good thing, like you do. i will say the fiscal cliff is an interesting paradox, if you think about it, bill. it's already here. the uncertainly is present. people don't have any confidence that it will be solved. on one hand, if the fiscal cliff is solved in the next couple months, it will be very positive. likewise, if it's not solved and isn't taken care of by the lame duck, then i think we have a new problem. i think we have a zero growth rate environment, and i think we start to have the recessionary activities that bring things back to a crawl. that will hurt all of us as people lose confidence that anything important like that simply cannot get solved. >> richard davis, good to see you again. thank you for joining us today. >> thank you, bill. >> we'll see you soon. >> heading toward the close. 20 minutes left here. dow holding on to a fractional gain right now of two points. >> up next, he's warning there's no room for error on the
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economy. find out why s&p's chief global economist is having trouble sleeping at night. and key earnings are out after the bell. this time ebay and american express. also ahead, sticker shock in the grocery aisle. i'll be talking with the head of the largest grocery store chain about higher prices. we're back in a moment. in america today we're running out of a vital resource we need
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our next guest says we are right now navigating historic times with no room for error. he says there are three key near-term risks investors should watch out for. you have the fiscal cliff, the china slowdown, which we're hearing more and more about, and of course the euro zone sovereign debt crisis. >> what will happen if we can't get these economic risks in order? joining us in the chief global economist from standard and poor's. glad taf yo have you on the pro. what's the biggest worry? >> the eurozone crisis is at the top of the list. it's such a systemic conflict.
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>> are there indications we may finally see progress on the spanish debt situation? >> they have mapped out a road map for solving this problem. the problem is, it's a ten-year game plan. of course, markets are looking for action on a much shorter horizon. >> it's very much a bifurcated situation. next week, spain is going to be asking for more bailout money. do you think that spain gets that money? at the same time, france is moving lower on the dial in terms of competitiveness with these sky-high tax rates and anti-competitive practices. talk to us about france versus spain versus italy. >> i think everyone at the moment is looking at spain. all eyes on spain. whether they put their hand up for a program. of course, that is really the first train to leave the station in terms of the scheme of the ecb. a lot of progress was made
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midyear around those issues. markets are still waiting for action. >> but if you go by the u.s. equity market right now, we're near five-year highs on all the major averages. yet, we're so concerned about the fiscal cliff, europe, the slowdown in china. why are we as high as we are? >> i think fed action is certainly helping. the quantitative easing from the fed has been very aggressive and has played a role here. the u.s. economy is recovering. it's one of the better performers among the developed world. one of the few economies that's got its head above the gdp level. you mentioned the fiscal cliff, bill. that is the big risk moving in the u.s. it doesn't make any sense for policy makers to deliberately push the economy into recession. >> do you worry that these outside issues, the europe issue, china slowing down, is that going to impact the u.s. economy? >> well, certainly if europe were to experience a much more
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serious recession. it is already in a recession. china is slowing as well. both of those external factors have certainly crimped growth. but the u.s. is a big economy. it's really driven by domestic demand. that stands to be influenced by domestic policy. everything hinges on not going over that fiscal cliff. >> we had the ceo of international paper here last week. he said publicly he felt china was only seeing 2% growth right now. >> 2%. wow. >> well, the official number was 7.6%. there's always a lot of discussion about how much you can believe the china figures. taking them at face value, which i think more or less you can, there's been a sharp deceleration in growth. growth was at 1.11% year over year in china. we think it will bottom in terms of the growth rate around this level as policymakers now tack back towards trying to support the economy a little bit. we see signs of that already. >> what's your take on the u.s. economy right now based on the earnings we've seen, based on
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year-end anticipation? >> it seems to be gliding along at around about 2% or so. a little less than the second quarter. i think the fed easing at this point is giving a renewed tail wind. we're seeing that nurn the housing market, which is so important. had good numbers today on that, as you know. i think the u.s. economy could grow a little bit faster from here as long as policymakers make the right moves, which means not making the wrong moves. >> paul, good to see you. >> thank you. >> thanks so much, paul. >> very interesting. >> we have about ten niminutes before the closing bell sounds for the day. >> life after lance. what is next for armstrong's cancer foundation now that he's stepping down as chairman of livestrong? we're going to have a discussion about that coming up. later -- >> when the president took office, the price of gasoline here was about $1.86. now it's $4 a gallon. >> mitt romney and the president battling it out over whether the
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well, the lance armstrong doping allegations have take an turn to wall street.
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armstrong today resigning as chairman of the lance armstrong foundation livestrong. today, nike and anheuser-busch announced they are dropping their relationships with him. also, honey stinger and giro announce they are dropping armstrong. >> investors don't seem too worried yet. nike and anheuser-busch have spent the day flat. >> here are companies who have not said anything yet. oakley, trek, johnson health, and 24-hour fitness. they have not yet returned our request for comment. johnson health did say they are sticking by livestrong. many of the companies are saying that. they're staying with the foundation, even though they're dropping lance himself. >> he has a lot of sponsorship companies. >> he had a very healthy
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endorsement life outside of bicycling. livestrong, i think, was a big draw for a lot of companies as well. the cancer fighting foundation he founded after he won the tour de france in 1999. so they're stuck now. do you stay with that because it's been so closely identified with? i think that's why he resigned today. if he stays, they would have to reduce their support for the foundation. >> well, it must be in the contract if he does anything to, you know, impact ethical standards or, you know, expectations in terms of negative behavior, they can fire him. >> absolutely. it's tough. a lot of companies. it's great when he's a hero. when he's not, you got to change course. >> that's what we're seeing today. >> all right. we'll take a break here. in case you're wondering, no, we did not plan the color scheme today. just worked out. but we are coming back with the closing countdown. >> after the bell, matching the matchers. target jumps on to the price
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matching bandwagon. we'll get to the bolt some of that. you're watching the "closing bell" on cnbc, first in business worldwide. ♪ [ male announcer ] how do you turn an entrepreneur's dream... ♪ into a scooter that talks to the cloud? ♪ or turn 30-million artifacts... ♪ into a high-tech masterpiece?
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three and a half minutes left on the trading session before the closing bell. here's how the day unfolded. we start in europe where moo did not, as had been anticipated, downgrade spanish debt into junk territory. so demand peopled into spanish ten-years today and brought the yield down. what did that do to the euro? pushed it higher. up to a one-month high against the dollar. what happens when the euro goes higher? the u.s. stock market goes higher. almost. the dow today should have been higher. we'll show you why in a moment. here we are down. call it unchanged right now. why isn't it higher with the housing starts numbers and all that? two stocks. i'll show you here. the best performer among the dow components today was alcoa with a 2.6% gain. ibm all by itself accounted for an 85-point takeaway from the
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gains in the dow today. if there was no ibm, the dow right now would be up 84 points. when you add in intel, call it around 100 points. so right there. those two stocks took 100 points out of the dow today. we would have been up 100 points without those two companies is what i'm trying to say. our own ten-year continues higher. the safe haven play is going away right now as the buy more equities. the yield up to 1.80%. just last week we were about 15 basis points below that. sectors, a little cautious today. utilities were the leading sector with a gain of 1.25%. then energy, financial, telecom, and materials. matt, what do you make of it? still a risk-on mark here, even as earnings come out. >> the earnings have been a little better than anticipated. we've been able to weather the storm. obviously, ibm was a huge drag on the dow today. that's been a great performer throughout the year. we'll just give it a little back right now. we're finding a new sector to buy. we're buying the banks, home
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builders aggressively. as earnings come out in individual sectors, we're going to buy other ones up. >> energy also strong. even though oil was down today because stockpiles were higher. demand is going down and stockpiles are going up. the saudis are overproducing. >> i'd like to see gas prices come down. >> wouldn't we all? >> pain at the pump. it's good to see the oil service sector rally too. this is an unloved sector for a little bit. as we go into the end of the year, it may be a laggard. >> in just a moment, we'll hear from american express and ebay. that could set the tone for tomorrow. expectations? >> well, american express used to issue middle of the day. that was a great market mover. they've gone on to do it after the close. i don't know what to expect anymore. they have been forecasting good for financials. i would expect that trend to continue, at least through tonight. >> credit card companies have suffered, though, as people deleverage their balance sheets. that's for sure. matt, thank you very much for joining us. we're going go out unchanged
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right now on the dow industrial average. the s&p, though, up about six points. and the nasdaq up about two points. stay tuned. a lot more. some big earnings reports that could set the tone for tomorrow as the "closing bell" continues now with maria bartiromo. see you tomorrow. and it is 4:00 on wall street. do you know where your money is? hi, everybody. welcome back to the "closing bell." i'm maria bartiromo on the floor of the new york stock exchange as we're following out the close this wednesday night. stocks wrapping up the day close to where they started. good housing report today offsetting weak earnings reports from ibm and intel. take a look at how we finished the day on wall street. the dow jones industrial average up four points today. had it not been for ibm, it would be closing near highs. the nasdaq also higher, although just


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