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-- on the foxbusiness.com.
Live Chris -- and Sanders Smith.
Good afternoon everybody nice to be here I also want flyer on the is it that we would do you know at the beginning of the show is who is like five full word for it looked happy to do -- -- We have to.
How do you but I looking -- I had a valued your downright giddy and happy Buick everybody used -- we are we are down fourteen points on the day.
I'm staring at 111000.
Right in the face that.
You know with sort of -- and doing well a lot of people thought we might do he'll bouncing up against that not quite reaching it not quite able to kind of hold it in -- -- -- it is a psychological.
Number it's not really technical -- -- by any stretch of the imagination but.
Every time I guess you take off these 1000 round numbers it's pretty cool we could -- -- if you can hold it that you look to the next one.
But you know lot of the bulls are looking at -- little.
Great that we're having in -- rally today and they're saying this is only natural we've had so many consecutive weeks of gains for the Dow for the broader stock market.
That's so much positive economic data plans jobs in manufacturing.
Concern to take a little bit of a break some might argue is actually pretty healthy -- -- Almost nothing this week it really seems that way to -- a little bit and not on night -- the service sector yesterday pending homes yesterday I get a little fed talk as well but in general you don't really have much to move the market.
You get a little retail talk -- -- my talk about a little bit later on the show but.
My guess is all digesting.
The jobs report all Friday for the most part.
There's also the -- right we -- the market have to react to that on Monday because it was closed on Friday but the other thing.
That the market has today just right now -- we continue to see commodities prices go higher you know lot higher -- so oil prices are now rate hovering around 85 dollars a barrel mark and that causes some concern.
For the consumer if that's gonna push gas prices heading into the Summers driving season so.
That's playing apart as wild that you know in a lot about the current.
You know its interest into the beginning of the week you always say you look at the -- you look at the -- -- you simply don't really know what's gonna drive the market generally have a handle -- -- not a whole lot of corporate data coming -- not a whole lot of economic data.
But there always is.
Something whether it's natural disasters -- geopolitical.
Things whether it's.
A company like AT&T coming out and -- we're gonna spend a billion dollars on four G network.
You know it's stuff like that that just seems that happened here in there and it moves the market.
Let's go to Jack -- right -- chief investment officer at Harris private bank joining us once again front Chicago hey Jack how are you.
We've got done that Sandra Smith here also from Chicago so that's who you kindred spirits.
If you will thanks for address that what do you make of blood -- -- this sort of ho -- a little bit right now isn't it.
Yeah I mean you know Chris you're talking about looking for themes this week you're right there is a dearth of data so there isn't a heck of a lot to latch -- to but I think.
Some of the things that perhaps investors are trying to get their arms around would be a potential revaluation of the Chinese -- -- That and that.
What if it were to be re valued higher.
Spell higher commodity prices whether we like it or not whether gasoline goes.
Above three dollars a gallon or not.
If you know higher Chinese currency yield means all of a sudden.
The world's commodities -- that much cheaper to huge.
Population so that's something that to keep in mind as well.
You know to that point Jack that might be mentioned in the Fed's minutes which will be released this afternoon from its latest policy meeting.
Anything language wise that we should be looking for from there as far is completion commodities prices.
And of course the economy.
Well -- don't expect a huge surprise from the Fed minutes I was really interest in reading some of the stuff in the Wall Street Journal over the last couple days where.
You know there is they -- a concern still.
Among fed policy makers that we.
We could actually flirt with a deflationary.
Or it certainly is substantial -- inflationary environment and -- still is on now fed governor radar screen so that's not -- To maybe look for in in some of the language.
So that I ever gonna turn -- you for the story so what is the big story right now is -- Dow 111000.
I think the big story out the big story this week's probably dollar -- thousand.
You know we've got you know a lot of things going on in the sport sports world that may be acting as a distraction.
But all in all I think it's steady as she goes we've got a reasonably valued market we've got.
Favorable economic tail wind although arguably a lot of -- artificial.
But based on spending.
We've got enormous cash stockpiles on the sidelines which was -- key ingredient for the market last year and -- proving to be an ingredient for the market this year.
And you got some favorable momentum so -- of putting it altogether.
We still have a justification.
For staying exposed to equities.
I think I Bloomberg report.
From about a week ago.
And mentioned that you know a lot of -- investors really never participated.
In the rally over the last twelve months so -- you know these people may be situated on the sidelines with cash.
Looking for an entry point could -- could help fuel this market a little bit higher.
What do you -- -- about rates right now Jack Louis had the thirty -- go up about five point three now on a national average.
You got treasuries now and the yield is having to go look on these.
That's true and and you know that is -- certainly the all arrows point to higher interest rates.
If you look at secular trends in interest it would appear.
Based on some of the guys I talk to that that follow the technicals internally.
As a kind of look at key point where we're not far from there and then 430 -- really a key support level or interest if we were to breach through that.
We could see us.
You know substantially higher rates or at least -- sexual secular reversal.
In treasuries now keep in mind all that historically higher interest rates haven't really done much to.
Tend to have pound stock so.
You know while most stock investors are worried that higher interest rates could rain on their parade.
Historically we find -- in years where interest rates are going up by 1% or more the average return on stocks is about 9%.
Now one of the things we're gonna deal and we haven't done yet is really separate -- the cause of the rate rise is it.
And inflation or growth rate rise or is -- a real rate rise in other words the calling into question.
The credit worthiness.
The US government so if -- -- were to separate the inflation component and see if real rates go up.
Does that impact that could be a completely different story and we're gonna find out over the next couple days.
I checked that being said what are some of your individual stock picks right now I know that.
You know retail is an area that you're looking at some some consumers having a little bit more -- discretionary spending.
-- dollars on hand there are reducing the retailers.
Strong from here.
Well -- I'm not individual stock picker but I will tell you you're right I do like cut discretionary shares we do look at.
The sectors of the S&P.
And so our preference has been pro -- -- have been that way for awhile.
We like consumer discretionary we still like finance we like.
Industrials we like basic materials and then technology I'm gonna put.
As kind of a you know sort of us a second rate category right now but still slightly favorable so.
All in all I think we like you know we do like prozac -- that tends to be value oriented particularly.
Small cap value is something we're gonna start start taking a closer look at.
Jack I know it's really tough to do what are -- thoughts longer term I know it's really tough to predict that particularly in this environment but.
Beginning of 2011 just how do you see the economic environment moving forward and how -- poised for a a double -- -- thing.
Well I can you know Chris I can't speak about a double -- -- I still think it's up unlikely but I will say.
-- longer term I'm I'm still looking for this secular roller coaster market now where we go up and down a lot and and not going very far.
Until we see some major breakthroughs in policy I mean it's either.
That if we can either look to see.
You know -- rethinking of how our public employees.
Are compensated and reward it if we're looking at may be just a whole -- visitation.
Of of you regulatory policy not -- trade.
But you know short of that I I -- -- -- you know mired in the secular sideways.
Situation so unfortunately.
-- -- -- way to best way to play it is really a momentum based.
Value plus momentum -- strategy and that's what we've been doing.
And what's your best guess as far as job growth when are we going to be written returned to pre recession levels do you think.
Why that's going to be a tough one because we know we've lost nearly eight million jobs so that's -- and I think we're we're looking years a way to get those jobs back on the payrolls but I will say Sandra.
Our belief is twofold one I think companies got rid of too many workers.
And that's why we're seeing productivity rates nearly 6% -- certainly an unsustainable level so what that means is at least over the near term maybe 23 months.
Consistently we're gonna see some pretty strong.
Job growth and that's going to be good news for stocks near term but my concern is that at some point.
Investors and policy makers are -- -- start drying trend lines.
And assuming we're gonna be continue to get that job growth and that's gonna lead to disappointment probably in the back half of the year maybe third or fourth quarter.
Jack thank you so much as always good -- -- -- Arafat all right thank you Jack gamble and from Harris bank Harris private bank rather in Chicago.
Chief investment officer it was pretty adamant that this.
Very optimistic you know what we're -- actually speak to somebody coming up was also very optimistic.
About jobs about the economy about Dow 121000.
Forget about 111000.
Lot of fuel I don't know cautionary tales about China guess who it is -- -- him coming up.
I welcome back everybody is we want to talk to mr.
Peter -- each -- about.
Whip and everything what the outlook is for -- economy right now we're -- Pacific with him gonna try to get them all riled up to look -- -- -- -- There are still pretty apparent that you go take from that all -- what do you do when we're talking about Dow 111000 right now you don't seem to think that's going to be stopped -- -- seem to think we're going to 121000.
Professors -- to look back it drains 121000 end of the year -- -- not that much how we have much.
Well the economy continues to grow at 3% a year.
That's goldilocks it's not too hot to drive up inflation that'll give the Fed latitude to keep interest rates -- we won't raise them too much this year.
And -- got fire growth in China.
I mean I was -- -- -- -- -- here but the reality is general body GE and all the rest they're making money over there and it shows up in their profitability and it will show up in this.
Not -- -- we are more of a bold call from you know I mean out of 121000 really because if your ball.
That's that's maybe pinned it mildly good days -- the stock market you know to get well I.
I'm a professor and I have to maintain and the moderation associated with my station in life but I mean -- still -- -- -- -- saying we're gonna go sideways.
For the next you know six months my feeling -- the potential for a good.
Steady increase in the market with some ups and downs is -- the trend line is up because the economy growing at 3% should be able to deliver that.
Coupled with strong growth in Asia.
This is 3% gonna create jobs and I think that that's obviously the biggest worry right there is that even if we're creating a 120000.
Jobs every month.
It's not gonna be -- it's just -- to keep up with population growth and we really got to do some creation here.
A 120000 is not enough to keep up with populist anger I wouldn't I wouldn't be surprised that if we end the -- -- Dow 121000 and unemployment at nine.
One of the hard realities of the stock market is what's good for main street is not necessarily good ball Wall Street and vice -- Versa.
You know because the economy isn't going to generate a lot of jobs productivity growth is such strong and it's good economy -- only 3% a year.
That interest and the interest rate environment where rain quite favorable it's quote the goldilocks economy -- that it is good the stock market but it's not a target for the job market.
-- Peter you -- strong growth.
-- -- -- particularly mention China and nations over there.
What does that do for commodities right now oil is certainly -- and hired do you think that's gonna continue.
Yeah the only place we're really gonna see inflation is commodities oil steel -- -- the new up pricing scheme with regard to.
Wired or and so forth but I think commodities continue to move up.
And we're gonna see American manufactures absorb some of that with productivity growth.
And the CPI will go up accordingly with regard to oil but not much of anything else.
I think inflation remains came.
I think the Fed has a lot of latitude to wait if necessary even till after the election to begin raising rates.
Did -- surprise you about this jobs report on Friday we got construction jobs added in manufacturing jobs added.
Well I should manufacturing if you were calling my note and I said a 150000.
When everybody was saying 300 plus so -- 160 to 150.
You know that's within one horse show the -- as far as I'm concerned so I was surprised at all.
Peter what do you think it's going to be the biggest surprise of 2010.
The biggest surprise in 2010 -- how much the markets like Barack Obama when it comes to economic growth.
Barack Obama truly worships at the temple of the mediocre he's very satisfied with this he says he's not but he's very satisfied with this.
That's really good for the market because the market likes a moderate interest rate environment steady growth in United States and no confrontation with China.
To get this economy fired up.
What finally gonna have to do business with China and he's not about to do what he just -- -- we just -- gotten -- punted into the summer and then all of get a bounce all the way to the fall and next spraying these guys got to procrastinate as long as they can't.
Because when it comes to big interest whether it's China or drug companies.
This guy doesn't like a fight.
-- I was gonna ask you about that putting off field report on the you -- until April 15.
I know there are a couple of meetings this is summit with the president Jintao in Washington between now and then.
We -- -- accomplish between now and you know the next nine days it's gonna change their mind OK now we can put the report out there and feel safe that he could tell everybody.
How -- is gonna change their currency policy.
The best we can hope war which is virtually nothing is is that they will you know re valued by 5% like it did the last time and then.
Have a gradual revaluation.
You know we have 50% revaluation to get trade straightened out and can't happen overnight we can happen over a couple of years.
You know the price supposed to be ninety dollars and and that's artificially kept down it.
Forty so that's too much demand in a raving about five bucks isn't gonna help not -- president -- and laziness some conversations.
The all time I see this president talked tough.
It's what he did a town meeting shocked fellow Democrats in Ohio but you're right -- the insurance company job.
Look CBS affiliate here in -- -- challenge -- treasury to debate me on -- week after week they won't come out and play.
Well we hope they do quickly thank you Peter as always -- gently -- another network.
Thanks after Peter thank -- prepare -- and -- -- -- obviously economics professor at University of Maryland.
College Park thing it's funny MR all that it is Indio is here China will do it tell you he's like very sensible very -- -- almost done.
There was like an inner peace with Peter until we mentioned the wind in China and then you can of course went off which we love -- do -- -- -- -- this morning.
Wall Street -- this is fascinating story right now as we all know big Wall Street executives have been taking pay cuts.
There's been a lot of public scrutiny an outrage over the fact that they were getting millions and millions of dollars while these banks for getting TARP money -- being bailed out by the taxpayer.
Well what's happening looking back now at 2009.
And proxy statements reveal what exactly these executives make.
Total compensation and benefits despite CEOs taking -- -- -- total compensation and benefits has never been higher in fact that that record look of the highs.
A -- out -- the top Wall Street firms that's up from a 133 billion dollars in 08 and a 137.
Billion dollars in 2007.
Meanwhile the a far different picture is being painted when you look at the top ten highest paid CEOs their pay coming down.
Double digits of the top paid CEOs in 2009.
They're total compensation which is down 30% so what's happening is.
While the CEOs are -- taking a hit because yes it is made public what exactly they make.
Meanwhile their teens are there troops there are pulling in more money than ever before so executive pay still under the microscope but.
Some examples of some of the big CEO's who said -- I won't take a bonus for 2009.
Former Morgan Stanley CEO now the chairman John Mac no bonus yeah.
-- for a third straight year.
But also Barkley CEO John Farley RB SC EO Stephen Hester C Citigroup said Vikram -- no pay.
For 2009 so what's happening -- and arguably this is the better way.
The producers are getting paid the top traders at these firms -- -- -- John Mack recently said at a conference.
Said one of our -- that made eleven million dollars last year just left the firm for a bigger pay package at a hedge fund.
So these guys have to remain competitive the CEOs of these companies.
While they have to take a taking a look good for the public image they have to continue to pay their biggest producers because it's still a competitive.
-- -- focus on risk to write about focused on -- and I but I know that that's also with the traitors to.
Because that was always a big thing you could.
If the payoff is eleven million dollars well -- take as many races I can't because that's the downside is I get fired.
But does that take on the big -- but those that are allowed to take on the bigger risk.
Are those that are allowed or have the potential to make the most money that's exactly right now -- an environment where they are profiting.
They're performing very well as we come out of recession and.
That was -- before that's what happened before we went into the recession that's -- worries me there's no there's no downside the other downside risk there's no there's no penalty for it.
I've yet to break when we come back.
We tell -- let's move in this market right now down eleven points or roughly flat we'll be right back.
I -- -- -- -- -- -- dot com live Chris -- Sandra Smith we're down ten points on the Dow right now for the day by there's some individual market members -- -- welders on the upside and some of the downside and that we'll tell you some of those right now -- market -- AT&T.
It's been a billion dollars or global network expansion for business customers.
Accusing -- upgrade our upgrading rather high speed networks.
Not only many countries but also in many states we talk about that a lot you know when will we talk about the stimulus -- -- got to put some high speed networks and a lot Israel there is.
Well a lot of the private companies are doing this already in the eighteen -- one of them.
And spending a billion dollars so eighteen -- Was up slightly on the day -- looking at Massey Energy Co.
this is the company that owns the coal mine.
Where they had the explosion last night we already know that 25 miners.
Had passed away Massey Energy was down as much as 11%.
It down 9% right now certainly that's something to keep an eye on the more importantly by the families of those 25 miners who have passed away on overnight and they're still missing four are still searching for those four miners.
All donation they raised the first quarter guidance they'll report on the 22 of this month.
All donations ticker symbol A and used cars.
And that's I think it makes sense but maybe it's been sort of a little bit of a lag here now all of a sudden.
People -- decided in a -- cars and maybe they're dropping -- -- more used causes oppose to a new cars even though the new card numbers have been fairly decent.
Over the last couple months speaking of cars -- -- an analyst's upgrade the -- today.
Commercial Reynolds -- -- faster than leisure equipment rentals are stabilizing as well -- the 9%.
And then my favorite as you know -- -- that's ticker symbol of the car.
And hanging your replacements there industries in the S&P midcap 400.
This -- it was -- seven dollars.
To 27 dollars in fifteen months.
-- -- iron for me again it's a marketing thing I can't understand why you would call a dress retail location of.
You go to Barnes and China's overall have let's leave them alone that I look.
Now it's not a not a knock on you to shop there obviously a lot of people do the -- gone through the -- -- in the last fifteen months but to me -- -- -- marketing -- place.
I would say.
The points of how they're doing better in their stock is what you just mentioned tripled from where it was during a recession -- remembered.
You know -- for the retailers moms women are more likely to cut back on themselves staring I got in the boats and now they're going back finished they're -- I would rather -- address the -- and address bar to look watch the old rules dirt floors in Haiti and cows and whatnot.
You know a lot about women's clothing.
Let's go to Craig Boswell now we have got a reporter on the scene.
The West Virginia mine explosion thank you very much for joining us -- I can you fill us in -- -- very latest that you're seeing out there.
Absolutely and good afternoon -- you -- -- Chris what's going on right now.
Is that -- rescue crews are trying to move heavy machinery up the side to these mountains.
Where they can place drills huge drills are gonna they're trying to drill eventually four holes three of them for ventilation.
So that they can start to ventilate some of this methane gas that is a deadly levels down in this mine which is the reason why they can't send crews in there to look for the four.
Missing miners that they're hoping against hope.
Might still be alive and as the hours Wear on.
Tension and frustration and desperation grows -- worried this happened at 3 o'clock yesterday afternoon where we're coming up on 24 hours.
It's a serious situation but now they're saying it's not going to be tonight but tomorrow night before they can actually get one of those holes drilled.
Because they have to go 11100 feet down into the ground actually -- emulating some of this nothing gets -- -- -- very very serious.
Situation and look at outside of these mountains.
They've got their work cut out for -- here.
Hey Craig I didn't egg theory sound this morning about watching a monitor.
I think you have a font on a monitor I I I heard one of the spokespeople at a -- are talking about.
They've they've they'll remove the 25 bodies and then the other four bodies -- -- -- -- that was a slip of the tongue I don't know whether he is the -- that is the assumption is that.
-- it's been nearly impossible for them to remain alive as you -- into tomorrow is that the thinking right now.
Right that's that was a huge assumption I think at that point the governor told us just maybe an hour or two ago.
That have the 25 fatalities.
Eleven have been idea and have fun.
So we still had fourteen that is -- -- not identified at that point.
-- not I don't believe at that point they had been now all of them removed so that's something -- still -- and certainly they haven't been inside this -- for hours because that that was.
Well before daybreak this morning we've been here since midnight last night.
-- can you get a -- any sense of the community around there have you been able to talk with people.
Obviously this is affecting every one there whether you had somebody directly involved.
-- -- -- -- Everyone has someone directly involved here whether it's a family member or friend of the family member that's the tight knit community this this is -- mining community.
People have been doing this for generations and generations -- yeah I talked to a lot of family members.
I've talked to a woman whose brother.
Was just five weeks away.
From retirement -- who was killed in this explosion here also there was a family of three.
Three generations that -- The parents in this -- everyone has a story that's actually that just seems to get more and more tragic as we go along and even -- driving and miles and miles before we got here there was signs up saying pray for our miners pray for -- miners certainly for those who lost family members but also.
Pray that there is hope that they might be survivors -- sports coincide.
Tough situation Craig thanks for your time today and then thanks cracked.
I think Basel and Fox News quip on seeing thirty miles south of Charleston, South Carolina -- never been in that area that is very rural.
Difficult to get -- and obviously as he said considers you alluded to very tight knit community there so it's a very sad situation.
While continuing back on -- markets chief investment officer.
Mets' front asset manager named a Walter Garrett some seat now I said before -- went to break and I -- it perfectly tonight.
-- there are some of its perfect you see how.
I -- and I used to call play by play for hockey games in the NHL right -- every single game.
You get a new a couple of guys from Russia and they have fourteen Constance in their name he had no idea how to pronounce it while -- got it right Brian Lara.
Right the first time a commercial I have -- gets it right with the market here you've got a few stocks that you really like right now but -- gets those assisting you real quick general.
The heartbeat of the market what do you see right now.
Well what I CU's that were in a sustained recovery of the moment however it's not.
Nearly as robust in my opinion.
Other economists may believe I think GDP will grow -- -- -- -- real GDP -- three to 4% this year.
We still have heavy unemployment if you look at Colin trade for unemployment the kids who run Kuwait with flash here.
It's as high as 35%.
Which very few were talking about now on the positive side though.
If we take a look at all of the money that's been dropped -- -- -- What I'll call -- metaphorical helicopter.
Of them a lot of it though is still hung up in the trees.
The velocity of -- Has not reach the main street and that's a real problem is still hung -- in the bureaucracy.
And that has yet to and through the economy so that we have a multiplier effect here.
But Walter you know you mentioned that the do you believe that the U recoveries not as robust as some economists are saying right now.
But yet we've got to stock market we're staring up at 111000 in the Dow.
-- you might not necessarily be with the economists are saying but the stock market is telling us hey there's big growth out there.
Absolutely and if you take a look at how the stock market is -- that we could go back historically and look at what happens after.
Crash during the Great Depression it recovered over 80%.
At that time.
And we may we may be happening some of that moment from now I mean I'm not fighting the tape I don't think anyone should fight the -- yeah matter of fact there are some.
Very very good opportunities out there in many areas ranging for what him.
The commodities sector -- now which was a bit -- Through the early part of this year -- but you -- technology stocks.
There are always areas -- pockets where you can benefit with respect to the stock market.
Additionally what's driving this market is the fact that.
All of the stimulus only about a third to 40% of it -- actually do you believe it.
That is so that the -- yes Floyd.
I do believe that yes there's more to come and -- -- there'll be another stimulus before this mid term.
-- election I really do believe battle -- in the area that I worry about.
The not treasury market we've been working actually in the morning your area and done very well by -- in short there if you look at the ten year.
It's hit 4% yesterday or three -- 95 today.
Back in December of oh wait it was at 242.
And record lows.
I it's -- -- -- so where we are today.
What are some good -- can you give us some names some good stocks look at Oakland.
The factors in the medical instrumentation area.
Were very very bullish form Varian medical -- There is a company where troops will be largest.
Radiation oncology company.
In the world these stories and if you take a look past.
Launch of it is.
Deploy it all over the world her earnings are growing at over 20% -- -- over a 100000.
Are treated on their instrumentation.
Additionally the bearer of the gold standard and what all called proton beam therapy -- And you own the stock that we -- the stock -- and then London last -- -- know we went on and on time.
Vistaprint what does this VP RT.
You know this is of interest and company located in Bermuda.
It's an e-commerce site company and you would think -- You know what's the big deal because -- are.
Electronic sites that allow you to produce brochures business cards calendars you name written.
Well -- in over a 120 home -- The very -- over 600 million dollars a year in revenue their earnings are growing.
At over 40%.
At the same time they're replacing the print shops that are replacing in house printing.
And on a daily basis they receive something like 59000.
Orders today and it's growing.
And all over it already million customers a 120 different countries that surprise you -- that -- like discovery communications.
Everybody likes it seems like a medical supply company and everybody likes cable television right now as well not the network television the cable -- Well discoveries.
And for spring because they count themselves as -- world's number one nonfiction media company.
And when you take a look at it the very the Discovery Channel the Learning Channel all the military trial Animal Planet so long.
Their earnings have been growing dramatically.
And half of their earnings come from affiliate -- From the Time Warner some other than others -- in one point seven billion author of three and a half billion and earnings.
There are expanding into -- Latin America Brazil and Mexico.
And something that is very uninteresting to me.
They are now about too -- -- joint venture believe it or not with Oprah Winfrey -- And this company just continues to show remarkable growth.
And remarkable evolution in terms of its electronic media products -- so long.
So discovery communications.
Vista friends and Varian medical assistance welcome -- to -- it.
-- -- in my -- Paris -- know it you were practicing that I.
Thanks very author -- thanks very much with -- -- -- you know it's a quick break -- we come back.
-- -- -- -- -- I'll hello everybody really just a second on yet -- on -- minutes up this afternoon we wanted to -- -- -- tell -- -- got a 2 o'clock.
And we've got some and we can talk you on this -- -- -- -- here we are Peter Lawrence you -- Barnes joining us right now Peter.
Apple -- minutes later today what are we looking for a good afternoon.
Hi guys guy on the FOMC minutes we'll get those at 2 o'clock as you mentioned this is for the last meeting at which the Federal Reserve.
FOMC policy that policy making body decided to once again.
Leave interest rates low for an extended period -- continued that language but we know that there is debate within the Fed.
On how to move forward with -- on winding.
All of these gigantic rescue programs that launch during the financial crisis and it has been slowly putting these things out of business and and shutting them down.
Basically customers have gone away a lot of a lot of financial firms no longer need these liquidity facilities these lending facilities -- backstop facilities but -- some other ones.
That our still out there are the Fed just finished up for example.
By buying one point 25 trillion dollars more in the mortgage backed securities.
To help keep interest rates and mortgage rates low it just finished that program at the end of march and now there's a lot of speculation about whether or not.
-- -- when she should sell that stuff and if it sells that -- that cause interest rates to reverse single back up and so we're looking to these minutes -- trying give us some more clues as to the thinking of the FOMC.
On how to move forward with -- and then ultimately of course how to raise -- -- -- to raise short term interest rates as the economy recovers to make sure that we don't get -- inflation again.
All right so we're all we're worried right now -- you look at the economy obviously jobs at a combat were worried about you know inflation.
We're in interest rates going up and worry about being overly taxed so but this is something that we've seen.
A lot even to this point states.
Have no money they have no revenue coming in to offset all of the unemployment insurance for example that they're paying out.
And now -- there might be in new revenue stream or at least one that they're looking to really exact here in the next few weeks isn't there.
That funny you should bring out -- up I have.
-- -- That do another story today which is on Internet sales taxes and this is another hot area right now for the states they're looking.
Again at the and of that Internet rainbow for that big sales tax pot of gold.
-- they all think is out there we've seen four states.
-- implement some new legislation to try and beef up collection of sales taxes for purchases on the Internet six other states are also now considering legislation according to the Wall Street Journal.
And look this is in the face of those states you know looking at tens of billions of dollars of budget shortfalls.
Having to cut budgets having to cut services.
And by a -- according to one study.
There's about nine billion dollars.
Of sales taxes out there that go on collected that just for twenties and that -- expected to rise to about eleven billion.
In the next two years here and so we are seeing states step up their efforts now to try to collect -- -- taxes but you know.
-- -- -- Got legal problems there was -- 1992 Supreme Court case that said.
That that states cannot -- force companies to collect sales taxes unless they have a physical presence and employees in a state.
And so that basically shut down.
A lot of these attempts by the states to collect sales taxes and however Colorado.
As -- got a new unique.
My school -- law that that just implemented in which it's requiring.
Amazon and other companies to send.
Transaction records over to state taxing authorities among other things so that they can actually if necessary chased down the customers and force them to pay the sales I think it.
Are you watching that closely yet you can't -- from the states that that are seeing major budget shortfalls from wanting to do something like this but on the other hand.
Do you start to -- -- some of the online shoppers that shop online because they don't get taxed.
Gather that there is some research out there that shows for example that online commerce in the State of New York which is passed a very aggressive law back in 2008.
That online shopping there.
-- has has slowed not in part because of the collection of -- income taxes Amazon by the way.
Has challenged the constitutionality.
Of the New York State law in court and we can expect that frankly see a lot of this just end up -- in court -- states.
Try to -- figure out how they can go after this money.
Which they need desperately and and at the end of the day really congress has to provide a fix here the Supreme Court said it is Congress's authority.
To allow the states to impose these -- taxes on on on interstate on and on companies that sell their products interstate.
And so the states are not only trying it on their own and testing.
The law here but they're also looking to congress for some -- And -- -- Peter Amazon and it wrote what's really interesting is very that there are questioning the constitutionality.
Of -- when Bob were being changed in the state to state basis.
But I've been covering this story as well and Amazon even altogether opposed to it.
They did want to play nationwide.
If this sort of was implemented otherwise they feel it makes it very you know non competitive.
Absolutely and here -- the other part of -- something called the streamlined tax project that -- our number of Internet retailers and a number of states.
The issue here is not to.
To try to circumvent the law I mean is the law right in a lot of states that people have to pay sales taxes and so Amazon's not as it -- not tried to conduct criminal activity here.
But it is pushing for uniformity streamlining of this project and 8000 different.
Local tax jurisdictions here and it says what what we know what are you.
What do you guys asking us to do -- to to Levy 8000 different types of sales taxes come on.
So that they are part of this effort to try to get a uniform streamline.
Framework if you well model state.
State by state nationwide to try to fix this problem.
Pierre the rest of congress are all congress may need two week long Easter vacation.
We're glad you -- -- -- even though you may need one as well thanks man.
How bad guys Peter Barnes pad that in DC the more we ask that you double duty like he had today than when you may need of -- case.
-- like one of our viewers says regulation of the Internet coming out.
A bit of fear out there it is it's I think -- do all of their shopping online tough more we talk about cloud computing the more difficult it's got to be to regulate that you don't even know what Alan how unusual it is.
Scott -- here in the Wall Street Journal also the author of -- wants but the first time I heard the phrase it was spoken by Gordon -- when he told.
But fox has not bad for a quad it's a dog with a different set of -- And ever since that day into what their nose at quads that -- -- talking about what that's the -- your book and I heard a lot about that book Tommie Liddell about it.
Well what I've found.
Reporting on Wall Street over the last several years is that.
Much to my surprise.
There are a lot of Ph.D.s and doctors working on Wall Street and I remember when I first.
-- -- hearing about this I wondered why are Ph.D.s and chemistry and physics and all of the best places that you that you don't really associate with finance the working in banks -- hedge funds.
And as I started researching this more and more I realized that these people these quonset dramatically.
Transform the way Wall Street works.
-- waited I think most people out there have been have no conception of how how big this has become.
You know is that this is so funny that we're having on to talk about this right now and obviously you've been doing a lot of research are reporting on it.
But I was just talking a -- grew up in the commodities markets and my whole family's traders in generations of them in fact I'm just saying the other day you know.
The typical trader.
It's not like that anymore the big risk taker who goes out to that bar that night in hits it you know parties that big -- -- -- these two -- -- today.
It's a completely different set of people now it is the quiet if the big Napa guys the nerds now.
Are the traders getting in there because it's not just on our money anymore.
It's highly sophisticated math equations -- even the year trader -- is especially in the commodities markets.
But it's PTA uses are known to dominate other commodities mark deaths and these are math guys -- -- coming up in the eighties.
Actually one of the the most successful.
Hedge funds of all time Renaissance technologies.
Started off as a CTA a commodity.
Trading advisory -- -- and the is Renaissance is a fascinating.
Firm we wrote about it in the in the Wall Street Journal few weeks ago.
This hedge fund has put up annualized returns of 45%.
Since the late eighties and which you know it's like Bernie Madoff.
-- -- I don't say that there they're so successful that it people do wonder.
But I've you know I've I've done a lot of research and and I actually do believe -- you know this these guys are for real million they have ninety Ph.D.s working in an office -- a very small office.
In Long Island.
And they do nothing but sit around and crunch numbers -- all their options under their optimizing.
And and I think they've -- for people out there that you know consider investing in the markets they have to realize that.
They -- going up against some very powerful.
This this domination of -- on Wall Street has created some some risks.
That we've only recently begun to realize and.
-- less inefficiencies in the marketplace now and so you have to be a clock -- He -- numbers -- to even come in and take advantage of the very few inefficiencies that are that.
That's why these guys are the money -- exactly.
And who what -- you run into a problem is that as those inefficiencies.
Dwindle and it's smaller -- -- they act they hedge funds to.
And keep making the same amount of money that they've making -- use more leverage even and that's something that we saw in 2006 and 2007.
As more and more money got piled into these Quant strategies.
The inefficiencies got smaller to leverage one up.
And you know I I believe that all of Wall Street was sort of quantify -- more leverage is going in and then.
You you've basically got to a point where there were no more inefficiencies and just kind of exploded like -- spring there have been compressed night we re compressing that spring right now on Wall Street thing.
I I think they're trying.
But the leverage is still not there at the banks.
You know right.
-- -- I do you hear from time to time that there are areas where the banks are trying to get more leverage other because that's one way -- make money.
The Fed still has racing you know as low as they possibly can ago.
So it is coming back and you know a new big trend that we've been writing a lot about as high frequency trading which is you know that's want to the -- and these guys use.
Computers to traded hyper speeds on markets around the world.
They're trades are measured in my -- seconds which is a billion for the second and I still don't know why people needed.
Measure their trades and billions of the second.
But you know this is really hot new place on Wall Street for a lot of people made money -- the crash.
Do government regulators understand this well enough because over the last -- wants obviously it's been at the forefront but I I I'm worried.
That they don't understand what's going on on Wall Street enough to really regulated to fairly regularly and it may not regulated too much right.
The FCC in January.
Launched one of its most comprehensive reviews of market structure.
Ever possibly and they're focusing on high frequency trading something else called dark pools via an area where.
People trade off of exchanges that the name is kind of ominous and there are reports that some you know tricky things are going on -- dark pools gaining.
Is a concern.
So I think the SEC's is trying -- you know as we all know.
They've got a pretty spotty track record them and the industry is concerned that they're gonna come out with some regulations.
That may may hurt them in -- an unintended side effects as.
I know it we've got to go but just one last point I was looking through your notes here it.
One that caught my eye Wall Street -- collectively congratulating itself that due to the great innovations of the Quant the entire system with more -- My problem with that is that efficient doesn't mean.
Correct -- doesn't mean correct it doesn't mean money making it doesn't mean profitable.
Efficiency is a completely different or not doesn't mean safe either -- efficiency is the efficiency of the markets into markets are performing.
The best that they possibly can and -- prices are true to form as they possibly can.
There not to be blamed because they were brought they were wrong in markets where are more efficient than they ever have been.
So how is -- that -- people are blaming the these traders for the follow.
I think that it's added it's.
It can be complicated because I've -- -- I don't that you don't that does something to Vegas.
If they -- agency is actually.
It can be risky if you get too efficient.
There's no place for the market to go.
And I mean these guys actually need inefficiencies to make money they need the mark to become bouncing around.
Volatility -- they need volatility so when.
The marquis gets so efficient and they're still trying to make the same money off of the volatility you you end up with a situation.
And all those compressed inefficiencies kind of blow up an.
-- I just sometimes think that main street confuses some of that like they efficiency verses and him being practiced two completely different anyway.
You came -- mandating -- A conversation thank you Scott Paterson for joining us author of the quonset reporter for the Wall Street Journal thanks yeah.
Aren't we come back and talk about apple lawyer this a success I tried not to get -- -- let's.
Welcome back to the show foxbusiness.com.
Live Chris -- Along with Anderson expressed -- -- minds that if things were good.
It could -- -- these balance bars and protein shakes up into his head it's not real food you know it's not -- -- something that grows from the earth in the organic.
It's -- it's organic I eat processed through literally all day long.
Whether it's some type of -- protein shake or some type of a smoothie or protein bar -- -- like coming NASA as -- in this at the species station.
You know I should have one of those packages attain and another -- that says spaghetti.
Tag that says meat -- you know it is liquid food.
-- -- anyway and I.
I thought what Qaeda.
Quite a retail location that sells real food that's it and defined -- apparently others are because retails hot right now.
On the RLX -- the S&P retail and it's coming -- 52 week high on Monday -- IC SC and Goldman Sachs and that there chain store sales.
A survey that they put out there for the week ending April 3 was a four point 7% year over year up for the week as well.
You've got to -- sales for the month of march outstanding as well and a lot of people say well that's because Easter was sooner.
And a lot of people then spend money at last week of march preparing for Easter it's always important.
So what is your what's your bottom line that -- even on a seasonally adjusted basis not an -- like really tell he's not Stewart Varney.
It's obvious they had the least -- thinking -- -- well I'll save retail stocks in general it's following this trend of all recovery summer not doing so well again you still have the -- is my sincere and deep with what you're saying attack you that he's there in the -- there and I'm saying what winner Regan actually hear that knowledge they're just performing while they're selling the right -- that's what I'm saying right now they act of Pasadena it was I was up big in March a lot of.
-- might be skeptical and -- well that's because Easter was a lot closer to march than it was last year.
But that even taking that into account if you take seasonally adjusted you see sometimes Barney cuts you -- too soon -- seasonally adjusted it.
That's -- behind -- effect out of it and it makes you say hey mark was a good month.
All the same.
But you're right though it's all about followed through its -- on the jobs report next month -- follow through on retail as well.
One month particularly march because we're talking about the snapped back after a bad February -- everybody pat down.
But that's if you -- yet you come back if you look at Macy's if you look at some of these retailers.
They've been flying I -- he's the department store chains as it it's what if that retailers are really turning around.
The department store chains were some of the hardest hit during a recession I mean nobody was shopping at the department stores.
I'm looking at stock of Macy's right now.
It's up a 125%.
Over the last years and maybe he's got a point.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- Apple had -- Johnson CEO of well -- 368.
And he's out of Chicago has dropped a great city of -- -- today and thank you for joining us -- so I understand we're talking about apple all set.
To correct what's so what are what what's the latest on that what it's a thing.
You just talked about you know we're seeing kind -- -- rebound and customer loyalty channel loyalty.
Voice of the customers very very important -- look at some of the the organizations you mention in the rebounds in the stop these these companies have a commitment to customer loyalty.
-- really engaging their customers listen into the customers and a true voice of the customer fashion.
And I think apple does that extremely well with their line extensions so when you look at some the product that apple launches -- propensity of people who have won product.
To have ten may be.
They've been very small so.
People who engage in this brand are very very loyal so that leads to a higher share of wallet.
Four and the purchases of in the product lines.
Why some people -- to do and I -- his -- why is apple able to do it better than anybody -- -- I can't think of anybody else that does it better than apple to be honest with you.
And why are they able to do it and others try and aren't as successful.
Look at the complex idea I mean did -- behavior be behavioral science he had stitches that he had created I think the most important facet of customer loyalty and customer engagement.
That apple does very well is -- listen to their customers they have panels they -- the market they try to be creative but -- -- all their products with the market to create that customer and look at -- that customer engagement.
So it almost feels like the individuals who are buying the product had a say in the development and development of them that you look at their laptops you look at some of the products mean they're two and a half acts -- competitive products but.
They worked together there it is a seamless you know transition between the -- -- iPod iPhone most of your iPad -- through the iMac.
And when you buy one product an entry level you go upstream to buy hire more expensive more profitable products and they are again getting that higher share of wallet that higher share -- mind.
And that that increased.
Are -- are you know are alive for the stock market that now with that but that's all great said and done but -- play devil's advocate here and say -- bit that this hot right now in me and you know.
These kind of companies can come -- go I'm not saying that apple will.
But you know no Q how we just there's just -- a report today that Nokia is gonna have a tablet ready sometime -- and sometime in 2010 so.
Is there any chance that apple will lose its -- You know I don't think so not for a while they're there their products are seen nothing even as a tablet this may not be the best reader for the doesn't have the drying technology.
But at the gaming system in our operates you know that dead the that the scores from customers who have bought and used it are very very high.
And they -- -- apple continues to assimilate all these data.
Behavioral -- that comprises effective loyalty engagement marketing programs is is that -- the Paramount key for success an apple does that.
You know and as good as anyone in the market so listening tried to be in the cutting edge but not too far on the cutting edge.
Always listening to your customers and making sure your products are customer centric is very very important.
The site while Toyota in this situation how can Toyota look at apple learn from their mistakes.
And really rebound here are ten -- are they beyond that you know -- is -- all about quality with them right now.
You know I think that's one of the things what is -- had a challenge within say talked about you know a product they talked about in being better than the most.
But the that the fact is they may not have been upfront and honest about some issues they had they knew about it you look some things that Ford has done.
-- consistent product.
High rankings in and Ford has very -- -- become very customer centric over the last few years as well.
Truly missing in the customers focus groups looking at the behavioral touch points.
And those are making that the -- -- much stronger than anyone would have anticipated.
In a two or three years ago.
But the the fact is you have to be honest with your constituents you have to do me a call and said we messed up we're gonna try to be -- more effective going forward because at the end of -- customer loyalty brand loyalty channel loyalty.
Is the most important -- I believe in any CMOs lexicon.
Yeah I guess somebody -- listening to this who might have a small business that that they're starting them -- have had for some time but are working on customer loyalty.
How do you create.
And -- from a very small company's standpoint how do you -- customer loyalty.
The -- great tips on our website -- 360 dot -- but there again the key way back in the early days in the twenties and the 1910s when the storefronts were small run my mom and -- They had a personal relationship with each individual that came into that store and that's what we try to do.
To help people develop effective all of the programs.
Is that make sure you understand each individual and not market to them a mass product so.
What we're seeing right now a lot of loyalty programs that have been in the market for a long period of time are being revamped they're not working just launching -- loyalty program and and getting in a market doesn't necessarily mean that's going to be successful program.
You have to continually monitor and listen look at that data and look what's in there and make sure the offers are relevant timely engaging.
They're in a Foreman factor that the customer wants to receive them.
That is in that it did true you know test and effective loyalty program and.
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