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Well good might be the only canceled today -- -- -- not good is that we just heard President Obama speak flanked by his team Paul Volcker.
Bill Donaldson former SEC head talking about what they called the Volcker Rule.
Basically come down on the banks banks no longer be allowed to have their own hedge funds private equity funds while running a bank.
He's going to prevent further consolidation basically limit future growth capping their size.
Saying no single bank could hold more than 10% of the nation's deposits.
Is pretty much limiting risk we're seeing them market -- sell off on this -- I.
Don't necessarily know that's all that bad news honestly I don't think that that I think this is the least intrusive.
In the least dumb.
Offensive move by the Obama administration in terms of the banks that I've seen -- year.
Honestly that are so what's happened and JPMorgan get to spin off chase and the Bank of America and has of pretty much has -- almost close to 10% of the nation's deposits what happens to them.
I -- well I mean you looked at you look at Doug Goldman Sachs for example Robert raised here I wanna get into this with a 90% of their revenue was derived from trading activity even know they are bank holding company.
So -- bank holding company by name because they took deposits but not really a bank holding company that's what this does holds -- vocal rules intended to protect.
Bank holding companies that are using FDIC insured deposits for.
But we're so on that news though we are seeing the big banks -- -- JPMorgan city Bank of America Goldman Sachs all down on the flip side though you have the regional banks.
Up -- benefiting I guess from the fact that what you're saying they're not gonna have to do anything.
It just gonna go on to -- banks and their fine against the big got these big investment houses that are gonna have to potentially.
Com -- up -- figured out there -- Rollins and Robert -- is here he's got the scoop on Goldman Sachs assets bottom line.
You know if there was ever I guess fuel for the bank bashing among the populists.
This was it being -- billion dollars -- profit in the quarter.
And and what flywheel just over five dollars a share expected in Italian in over eight dollars right here.
And that's you know but that's what we we got used to a couple of years ago you -- -- it's really difficult to pinpoint because you'd like you said most of their revenue was coming and off of trading so it's really hard to you asked me exactly how much that's going to be.
The fixed income currency commodities about four billion dollars actually lower than they made the third quarter.
You look at their investment banking Dow was up 80% though and we've talked about on the show a number of times -- the record amounts of secondary stock offerings companies particularly the banks themselves.
Selling stock so they could pay back to our other companies doing it so they can raise cash themselves IPOs were back.
I'm the third quarter fourth quarter did pretty well as well and there today they're making -- that trading principal investments in disputed -- was up pretty good as well.
Interesting in here and that they were trumpeting the fact that they were not setting aside any money for compensation and they were troubling you know it's the lowest ever.
Compton that ratios amount of compensation and benefits or any of their employees as -- to the revenues since they've been a public company only ten years by the ways -- not like a huge did deal.
But in talking to people in in looking at the stock reaction in and now Barron's houses the story up on this as well that's.
Is that if they had set aside money for compensation they'll have actually missed estimates O'Donnell and you know not only are they mr.
nice -- now we're not gonna.
Put anymore money aside for an assessment there was actually a it was an all through -- reason they did that necessarily him.
By some estimates it would only have four bucks a share they would have missed by a dollar.
So he yen.
Yeah you can look at that one of both ways and -- -- -- anymore it's a historic low level still sixteen dollars by the way.
A sixteen billion should say six primarily funds and that's about it you know they did talk about -- -- they've paid a high tax rate 32% pretty high for corporations.
Six billion dollars but nonetheless he had that the company you've got a -- with a grain of salt again had a much more on by the way the president's.
Attack on banks if you will come up a little bit later on the show we'll get all of the the details on.
Well the president says Tracy said just a little while ago on the new Volcker rules.
They did make a point of saying the government may 24% on its investments right in front -- bought their dividends and all that stuff one batter that's a lot of money yeah.
I think it came back faster than even Paulson -- -- mean he's happy being a Goldman may have bet it would would probably have a pretty good idea on the return.
Yeah on capitol there for a for the government when he made that original trade as treasury secretary of course -- And -- -- that it actually is a good one because it's high most come corporations -- -- pay in the twenties they're effective tax rate is in the twenties.
32 point 5% as -- as high -- And again these guys can be upset if I had.
You know five billion in the bank now is only paying 32 -- -- -- -- -- -- -- -- they can hit like 40% right I thought if you got five billion -- in in just you know twelve weeks of work.
You -- paying a little bit more of that area there in Jersey it's better.
Thanks taxes now that 70%.
Soon enough all island -- we're gonna talk to George -- about this and a little bit but I wanna get your thoughts on -- And I -- -- I think I wanna stay with the the Volcker -- -- -- Newton it's the big thing of the day it was coming out I mean in my house on the phone this guy who's talking on the compensation.
He told me before.
President Obama's recent that he's just -- is out there bashing we're going to be okay but he gets specific.
The stocks are gonna start get hammered again and and he got specific and they went down immediately as soon as good.
But it's -- a former Goldman guys in Washington protecting Goldman Sachs and protecting the big banks and here you have Paul Volcker.
Who would eat his name is on the on the bill on the episode the proposal if you will welcome on the Volcker Rule and it to me this makes sense I mean.
Somebody this morning on -- companies that -- to bang up quarter Goldman has there there in great shape.
They're doing everything right look at three years ago I -- assure you the bang up quarter that Lehman Brothers and Bear Stearns.
So my point is they -- do it they had all the chance in the world to manage their own risk.
And we heard from the seals a couple of weeks ago on capitol building in -- they did a poor job of managing risk we need the government to help them manage their.
-- I think it's -- Jamie -- admitted this week yeah do -- ought to get a -- I'm doing again on the wrong but missing the point out what went wrong about this is not so her what needs and then -- it right now.
All the doing is making money off what do in the same exact thing -- -- -- in two years ago.
The government being Big Brother this is 1984.
George -- does the government committee does not yeah.
Does the government make rules on how fast you can drive does the government make rules about how safe the food has to be because the government make rules about how -- the building has to be -- it is -- yes because those things have to be done and apparently this has to be -- also this is this is capitalism -- this should not.
Robert up here but let's -- but no I wrong about that capitalism -- would protect because you revealed that she was a building that was built properly instead of the building that wasn't built probably and there are for the buildup -- the properly.
Would win out and capitalism but that's not the case -- but if I did.
You Robert my money.
And -- under sound mind body and mind and I say glad it's down make -- -- you're me I don't care should he be allowed to make those risky -- absolutely.
And the question is should -- your grandmother who just put your money and you know questioned her money be at risk as well and that's where the question really -- -- you talk about Goldman they -- we keep in mind they were not.
A commercial Baghdad to apply for that they can access our -- discount window because the Fed does not regulate Wall Street firms are -- there -- any Wall Street firms really left.
The big guys mortgage and Goldman both became bank holding companies because -- that they have that little -- out and you taught it gives them that right.
Now the Volcker rules state that yeah.
This is for bank holding companies need this is for people that -- look at FDIC insured deposits at risk so what's gonna happen is Goldman and we're gonna have to go back and be that.
Dick they actually with a note out yesterday.
Yeah we talk about him a lot -- analysts -- rocked a securities.
Saying that it was time for JPMorgan Chase to get rid of their commercial bank and he's got a a note out today as well talking about.
You know he sees them as sort of a drag it like these guys will be much better off to get out of any commercial -- JPMorgan and obviously Goldman and Morgan a very small.
-- to get rid of a comedian talks about the -- Then they're not coming due to mortgages not a lot of growth area he's -- -- -- -- -- -- GM gets back up and and running they're gonna take the loans backed themselves so that's not a lot of growth in that business.
The growth opportunities.
At least if you look at the market for -- are as you mentioned the region makes look at suntrust based in Atlanta 52 week high for sun -- as TI today BB NT -- North Carolina these guys.
If they are shedding deposit could be a growth opportunity for them to go in where chase is and you don't -- BB NT around here suntrust maybe you would maybe they can get -- be a bigger markets if Jamie -- decides you know what I've had it with chase that's the point of on -- that.
-- Erica thanks.
Mean -- and then by the stuff guys he's just so he has still beaten down because Carolina roots is so down this he's he's he's like he's out -- me when -- -- Stock market was at the end of 2008.
Right he goes from national championship to.
To lose in the Wake Forest and Georgia Tech in the same week wow Georgia Tech wow I'll let you know when -- Robert.
They've and this is some reason being down -- how many hours of him -- to say that is that I.
-- -- Stunning.
And it's -- is gonna -- -- it's a little bit he's a senior U obviously love this week and that the -- we will do he's got a break down.
A lot about what's going on in China right now that you've got situation a situation there where.
All these materials companies are just getting beat down dollar's going up most -- -- Tim point 7% up.
-- -- -- -- I -- -- I don't believe that I think -- and then another question is is that a bubble will that become a bubble will -- and -- simple real estate.
You know any number of things going through the roof right now and uncontrollable growth and that's sort of what the bank of China said yesterday we were worried a little bit of -- -- thought -- raining every.
Reigning things in advance -- is here to cover all -- I just wanted to act like it's just give you might.
In that you go let me let you tell everybody what is going on there because we're down a 187 points average is down over 200 points and his team is in a row.
Exactly and we've had a major downdraft in a lot of interest in commodities.
And I mostly the big downdraft has been caused by self stops.
China lending more non lending.
-- the break down of the moving averages and gold and silver for example.
But interestingly enough some of these commodities have not broken down.
Silver's down but not proper.
And for the first time copper has more of an open interest and silver line each and I I think if China if we're worried about China's growth.
The majority of the world's copper is going to China to build it has been going to -- now.
Is they're going to be infrastructure need for Haiti will there be infrastructure needs elsewhere as the housing market going to turn around in the US in May be in Western Europe.
You need proper full of -- yes there hedging of copper has become a much bigger business than it ever has been.
Because all the copper -- live we've -- bottle of palms thanks for their bed now.
All of us need and -- -- of course all of this downdraft in gold -- -- last couple days shows you how important.
The need for futures market is so that the mining companies can hedge -- let's.
-- time here in the United States right now -- because we -- market that's and a 183 points.
Tried radio senior editor makes a great point that Obama's proposal to reign in the banks and limit their proprietary trading is gonna affect now the exchanges as well so we -- CME group.
Getting -- we see the big banks getting hit we have a lot of different sectors -- this market and getting clobbered because of this.
And and you have something interesting for example in -- a lot of fuel orders that are in New England the majors.
Users who have jewelry.
They don't buy gold -- -- gold and all of a sudden the banks will not be in that leasing business and lease rates have been coming down and collapsing.
And for example.
When sometime there it took over sovereign bank which had.
The -- large leasing business up in that area they just finished it -- off.
-- there's less leasing there's probably.
Less of the commercial demand for gold because of that.
And of course -- is -- coming down and it's becoming.
Directly again correlated to the -- of some powers would moving off.
All the -- stops in both have been going off.
What you make of China yesterday do you think -- and -- saying that it will we're gonna limit our lending and we're we're not gonna tell other banks in China to do the same.
But they may -- -- -- is -- going to happen is that gonna have a profound effect on the global economy or thinks so I think authority has had an.
And and you know markets -- forecasters.
So the market is saying today with the downdraft that yes this is definitely.
Of probability -- some volatility up yesterday the highest it's been pretty much all year grant only 21 days in but nevertheless it was up high yesterday what does that mean going forward then.
Between that the -- -- coming down on the banks the uncertainty in China this doesn't it doesn't paint a pretty picture of the next couple months and twenty.
It doesn't and the markets hate uncertainty it and and and when there's uncertainty people just -- to sell and go to fixed income.
And fixed income has been the beneficiary.
Of this selling in the last few days.
This last few days though is this a a short term correction.
In the eventually we're gonna find this you know that that leveling off area for another run out because that most analysts that we speak to that coming here.
Say that they still like -- so bullish in the first half of 2010.
So is this at 10% correction seven of 10% that we need -- get some money off the sidelines backing him.
We've got on the commodity watcher I'm not a stock analysts but I have to tell you from what I see the trends for the moment are negative.
And and and all of this is because I think there's.
Dark cloud hanging over.
The financial system.
And there's dark cloud I don't know how they're gonna dissipated.
But will eventually.
Become -- beneficiary.
For the precious -- again but not now.
So where's the safe haven then I mean where where aside from copper wishing -- -- -- -- palladium isn't things like well now palladium and platinum are interesting because the UETFs.
Just recently started trading in -- platinum and palladium.
Interestingly enough are gathering a lot of assets -- because they're gathering assets.
Platinum group metals are off and of course people again ought to remind them as much as catalytic -- murders doctors jewelry.
But it also cracking crude oil at the heating oil and gasoline that you need the catalyst for.
So there's a good use with the catalyst.
It's a good place to be and it will probably.
As we go forward.
Wanna get real quick only a few seconds but oil and gas inventories today what do they look like it was very interest think exactly pretty -- a lot of for.
Fox who traded on the floor might have thought would happen because it's cold.
They're using heating oil and they're not using gasoline usually have more gasoline weak demand.
The economy still hasn't turned.
And of course.
Probably everything his right priced into the market now.
The only difference has been natural gas human -- facility that we demand and you think now the sort of the dollar crude relationship is sort of balanced.
A -- looking at.
Even though -- December and January is a trough for crude and gasoline.
Alina gonna see this big rise in springtime in early summer driving peak at the pump is that going to be that will depend on whether the economy's turning around or not I'm -- we're going to need.
More gasoline by next Labor Day.
George thank you so much -- -- senior vice president RBC wealth management.
Thank you should ask.
I wouldn't -- a quick break and we're gonna come back we -- talk more about this hold.
Big proposal that come down on the banks we'll be right back.
Welcome back foxbusiness.com Tracy Byrnes Chris -- Same show in temporary digs don't get confused all's well will say this though the market is down 195 points.
A lot of it had to do with President Obama proposing what he called the vocal rule basically come down on the banks' talk about potentially.
You know disallowing them to get any bigger.
Can hold more than 10% of the deposits out there.
-- have a Glass-Steagall and I mean you know pretty much its Glass-Steagall all over again without a fan of but it's the proprietary trading part that makes.
Me nervous that if they're coming down a proprietary trading which is basically the banks.
Trading your own money.
Then that I get concerned.
And again that but I still think that in like I said before the CEOs would admit to it that they did not manage risk properly.
And when you -- that integral to the economy.
The government has to step that they've they've got to help you manage your risk properly.
But just doesn't example let's -- airlines if the government comes in and says you can't take -- risky bets with derivatives -- most of the airlines when they try to hedge against oil.
Well but again I think it's it's.
A matter of the airlines haven't -- to the point where they would of whom would majority of them would have gone under had they had at it not been done properly you see -- I'm sandy if you have a Delta Airlines it doesn't -- very much dollar southwest -- hedges a lot.
-- they have not they have not -- enough to where they would get into trouble -- that would cause a systemic failure of our transportation system I guess that's what I'm saying.
The stakes are higher with the banks and when the -- of that -- the government has involved when the banks so they can't do it Jeff Flock.
Is standing by this is something else Jeff where the governor.
-- got involved in the Louisiana but by the way dealership and there's all this talk now about these dealers.
Coming back on line that was scheduled to close by -- -- 2010.
And Jeff up before we get -- gonna say one thing we're talking so much about government involvement today this simulated situation of the government got involved at first.
-- Picking and choosing which dealerships and stay open which should stay stay close they say they were completely out of that decision making but just last month the government got back involved.
And put -- in place.
A process the way it is good -- could stay open so that's a positive involvement with the government getting involved.
You know that's the hazard of government involvement you begin to get these -- they they get involved and they say okay we're gonna let the companies do what they want they want eliminate dealers they eliminate them.
And then they get back involved and pass a law that says you have to have arbitration -- -- -- whether people like Greg morrow got a fair shaker not a some people could say.
Well that is good government recognize the problem got involved and passed a law that said you have to get arbitration.
And you filed for arbitration -- today today we filed a deadline is Monday here's Greg -- and IE you probably Telemar tequila and I didn't look around this dealership does it -- knew it all does this look like a new show room deal well it should because -- -- six million dollars on it.
He's been a crisis are actually dodge dealer for 26 years they -- -- -- open a brand new show room and then.
Eight months later you get -- termination.
I got termination notice him him.
It's on constitutional criminal but thank god for.
The senators and the congressmen and women that they realize that this was wrong in that.
They are giving us an opportunity to get back which was rightfully.
Arts and here's the other piece of this it's a fascinating I mean you're the arbitration and severe independent arbitrators gonna come in which you've got to pay actually.
For the -- -- the arbitration -- you and Chrysler.
Are competing on this -- room you know at loggerheads on -- hopefully -- -- understand same team but I mean you you have to share the cost of the arbitration which could be how much.
It could be tens of thousand dollars I mean first thought just the filing fees are -- couple grand plus.
Attorney fees and -- arbitrator could cost as much as 3500 dollars an hour to take several days to actually hear our -- Meantime they've already given your dealership where this is -- -- -- on the wall here Chrysler G this was a Chrysler Jeep dealership.
They've given it to the dodge dealer down the street yet ahead.
And then they came -- tried to take your -- where these are some folks spine it used car you're selling used cars your memory we're selling used cars and servicing cars and -- I still have a Hyundai dealership and Highland Park -- -- operating with you think that aren't at all do you think -- -- -- and we gotta you -- Hyundai dealership you should be loyal only Chrysler now there's does a lot of dealers that have -- -- but we were exclusive here with Chrysler.
-- -- So H one -- -- nothing -- -- that.
You know there's really no reason to -- anybody especially myself I think.
And guys that's about to be I think that's the bottom line -- come back to it is.
Manufacturers Chrysler GM made the point that you know we need to reduce the -- number of dealers the dealers made the point.
We're not cost anything new you're selling your product -- customer of the orders.
And -- -- -- you would you subscribe to that wouldn't have been a cursor -- nearly thirty years.
We'll see how it turns out the arbitration deadline is Monday for people to file could be as many as 3000 dealerships filing could get their dealerships back.
But they lost.
The deadline for decisions is the summer.
Jeff can I ask you had asked Greg one quick question well what would the specifics of his deal.
Chrysler I mean.
That it wasn't -- number of years about how much was it a shot for him to realize that it -- that the deal would not be renewed or cancel.
-- And Chris would like to know how much shock it was to you because you were of what they call five star dealer right yes -- -- dealer mean.
-- by -- it means you have to certify your technicians certify your your -- people have a facility.
That meets that -- star review did all of that.
Absolutely we've -- if I start dealer for all almost the inception of the program and they gave your dealership away your franchise is a way to -- dealer who's not.
That was never never -- start and so it was shop.
Well I think like I said I didn't want his franchise it in line and take I didn't want to take his and I didn't think he shouldn't -- take mine but they wanted to consolidate these franchises to right.
Right -- today they take and they took franchise away that had all three and then reopened with somebody else.
So this makes no no sense and hopefully we'll have our day with an arbitrator and ever -- understand that you know we're independent business owners serving the community.
And revenue and tax dollars for her for for.
Supporting RR local businesses I mean and and -- this'll be an opportunity for us to get back what was roughly taken from us.
-- ego voice for Greg -- and thousands literally of other dealers around the country -- Jeff thanks so much thanks to be in the voice out there for us come -- enters -- -- it.
-- -- -- -- -- -- -- -- Its arms around it it's a very tough the -- hands from around the because.
He -- -- -- -- Obama just real quick.
Like we were talking about the very beginning of the government involvement early on seeing you know they said there -- -- off.
GM was making the decision as what the -- for staying with with -- go -- and government comes in last month in says -- If you were arbitrary capricious in those decisions now you've got to go back and they have to be based on solid evidence well.
If the free market society the government doesn't come back in and say that it is that the general that motors and a lot of these -- -- and Chrysler and a lot of these dealerships are closing at probably shouldn't be.
So across -- -- so it was so the government stepped in and did what they had to do.
I don't I don't wanna get hammered that was still well it made that they break we'll be right back that a lot more a lot more -- -- hammered by everybody and that the Communist.
-- -- -- Yeah well I think different.
Gotta we gotta talk more about this whole big bank issue Obama's basically.
New attack on banks Peter Barnes and DC covering more of the details for us.
Peter you seem like a really long list this stuff in particular it's -- proprietary trading.
On what you know.
Well you're right the administration the president particular stepping up this populist attack on the nation's financial firms and today proposing two additional new.
That congress will consider would have -- -- It's still have to go through congress the first one as you mentioned Tracy.
Forbid a a financial firm that has a bank that has deposits from customers from engaging in.
Our proprietary trading for its own accounts for its own profits do.
Alone or sponsor hedge fund or private equity firm the administration saying basically -- wants to segregate.
Put up a wall between.
The riskier types of activities with the bread and butter banking activities so it's kind of a return -- -- some.
Restrictions on commercial banks as you know Glass-Steagall past after the Great Depression.
To split up financial institutions and the second proposal is actually would be a limit on the future growth of these companies AA restriction on their size the administration is worried.
About too big to fail and so it wants to impose new limits on how big these institutions can get can get.
Going forward so for example.
A Bank of America or Citigroup.
Could not really grow much more by acquisition right now there's limits by the federal government -- no single institution can control more than.
Of the nation's banking deposits for example -- now they want to expand that two two -- -- impose a cap of some kind.
To be determining consultation with congress and regulators to limit the overall size of firms.
What about timing on this -- because.
We've had people in -- talk about -- we do have a return a Glass-Steagall.
These bank holding companies now that -- heavy investment bank in the banks themselves a commercial banker so intertwined.
They couldn't just tomorrow say OK now separate -- and let's move forward until how long until this would have to take place or do you know.
Well it well obviously that have to be a transition period and and the other thing that's going on here is on a separate track.
Bank regulators are are imposing.
Looking at higher.
But bank regulators around the world.
Are looking at coordinated.
Higher capital requirements for banks and for financial firms.
And that's part of what's going on here this legislation in -- would actually.
Incorporate some of that legislatively which is why I think.
You're seeing some of the reactions in these financial stocks.
But before today.
A lot of that would be left up to the discretion of regulators -- already have a lot of power in this area but now the administration apparently wants to codify it -- -- would be under under the international standards that are being put together they're there are -- periods for example for these new capital requirements so I anticipate that these new proposals that -- president announced today would also have some -- -- periods.
-- some of -- in typical.
To me issued now act lately you know ask questions later -- -- what's gonna happen well.
It is seat -- we're gonna go to -- button so we got heads funds that have been well all of a sudden too big to fail.
They throw a little better go to private equity market added -- -- Well that's not necessarily gonna dry up the private equity market you're just gonna segregate these activities.
For example you know.
Bank of America and Citigroup had.
You know some of these off balance sheet investment that type vehicles and and so they want to -- to -- separate.
These are from.
The protected the federally insured in federally backed activities.
Such as just plain -- Vanilla commercial lending -- In a small business lending our our home -- of that kind of thing but let's at.
Let's go back from that this is a proposal.
But it's got to go not now go through congress in this environment what we've seen of course is this populist wave sweep over the country anger over the bank bailouts anger over the big bonuses that -- game getting being paid.
Including the ones announced today.
By Goldman Sachs that the administration which has gotten.
I've gotten and got a lot of criticism.
Over the extended 800 billion stimulus package.
That that hasn't taken off the obviously Health Care Reform is now in big trouble so.
The administration clearly is now targeting.
The financial services industry the big banks for political purposes I mean that maybe some good policy reasons here to do some of this but clearly particularly after.
Then the vote Massachusetts.
Electing a conservative Republican to Ted Kennedy seat.
Has triggered some missed triggered some of this activity the administration the banking banking lobbyists that talked to today say this is all politically motivated one of them said.
Why what when Richardson asked one of them why -- is happening.
And then he got a response back.
That is out but it's not there's still a lot there's still a lot -- has to be done to get from a proposal that's over here yeah to actual legislation if -- I mean this is a negotiation.
Administration starting over here were some very tough proposals it could end up.
That they simply just require.
Some segregation and some some in separate capital.
For certain activities higher capital level levels.
-- for certain activities that so it's not clear yet if this will actually be enacted and force you know JPMorgan to sell chase bank for example.
You point is a good one is could this could end up being nothing or very watered down at the end of the day but he said it.
He made his point very clear -- where he stands on the -- well he.
He's engaged in and he's very focused on and I think what the street is nervous about it he's clearly going to make -- a top priority between now and November and in in this environment I gotta tie it in this environment you can't rule anything out in this looks just like that populist wave that hit the country a century ago.
When that rockefellers and they get -- is in the others.
-- those huge trusts.
There were there were criticisms of market failures and market injustices and it led to that huge wave of populism that put.
President McKinley and then president Roosevelt Teddy Roosevelt -- office and then led to the creation you know the Sherman antitrust act and all these other.
A proposal so populism is a very powerful force do not underestimated I think you could see some of these provisions passed enacted into law.
Peter thank you sir hey guys appear vines from Washington giving us the latest on the you know full -- rules are right we are.
Would say what we've gotten hammered here over the last two days we -- down 221.
Points right now on top of 122 and lucky to be only down a 122 yesterday.
Let's move in this market -- -- well I'm gonna tell you what's movement.
Up because there's always -- bright side we know it's moving market down right the banks the financial sector right now is getting clobbered and I got to point out the W KM.
Wrote on the boards he said is this Obama's attempt to reassure our banker China.
So the Fed is able to sell our next round of debt is he pandering will find out our next -- need to talk about that.
-- -- is down.
Got a point that out 25%.
It adjusted its 2009 earnings they said that the holiday season was well below expectations.
This ad that's Melissa stocks that are getting what do they expect.
I don't know who who know no real.
No but why I wanted to point out some that are out because some things are people are making money still in this market.
Panera Bread is up today they reported a nine point 6% jump in same store sales.
Believe or not it was the -- -- lines diligently on them and they lifted their fourth quarter earnings target.
Stocks moving was up about six and half percent earlier ITT educational services.
This is education company that you can.
Take classes online totally benefiting from the fact that people -- unemployed and the dogs and have gone back to re educate themselves fourth quarter profit jumped.
Bigger than expected.
It's this educational -- very volatile but they're moving.
Seagate Technology was that tells me and I were talking about this one earlier double digit growth in sales and volume revenues be.
Technology company on the move yet again and of course -- -- with your fox fifty leader and -- S&P 500 leader.
Came in last night with fourth quarter profit that nearly quadrupled.
In PayPal believe it or not an -- -- -- marketplace business was up as well.
And they had -- one point four billion dollar -- since the sale of Skype itself there are there are still places to make money and then mark.
PayPal is very -- thing.
I opened the PayPal counseling to do business on -- and a few years back before we had this crash.
You were making it's a really good money market account -- to park money in there you can -- a nice little interest returned I'm okay.
Yeah and then you could send money back and forth right from there are no limits on the pond number of the positively and the limits on number withdrawals really good.
And then of course you know interest rates went to zero and they went really to zero -- basically -- nothing but I'm sure I guarantee they solve a lot of those deposits in there because people use it.
As a parking place to do business on -- that I am telling me.
Only person left in the world has not done one single transaction on you yet you do it's really easy and you should do it especially because you're moving -- -- got a lot of stuff.
To move out to do what went to sell -- -- here with -- yet to sell you got the old stuff he got to sell it.
What is gonna tell us about with the other big story of the last couple days and that's what's going on in China in Dallas going on -- with the banks in -- at their bank the bank which I understand.
We're gonna limit lending and that's freak everybody around the rest of the world.
There's -- reason for that.
-- kind of scared the way you refer to our our banker China because what happened today is Secretary Clinton basically read -- -- the riot act.
Yes she's a diplomat says she did very nicely she gave a very important speech of the Internet freedom of speech.
And she said.
This is what's important.
To us and China you're on the wrong side of history.
I'm drastically every characterizing what you said this is of course caused by the flap of Google where Google has made allegations that somebody.
Acton their systems.
And as result of that they may consider not doing business.
And also their -- consider no longer censoring to Google search results so Lotta people worry what does this mean.
And Secretary Clinton gave him.
Previously scheduled address that said as -- -- America with very nice to listen to she read out -- she sided FDR's four freedoms and she added a fifth freedom the freedom of connectivity.
And she made a very.
A pro business very elegant.
Listing of what's important to us.
And the Internet and free information.
Is utterly important to.
Our way of life and how we do business and -- were able to set some.
Pretty gee -- statistics have for example.
10% increase in penetration of mobile phones and some country will lead to 1%.
And GB -- That's pretty good and contain -- China listen.
You can't have these fire walls of -- information.
We will have less trust in your businesses if we think that they're not getting.
Everything OK let me see here this big patriotic speech to sign actually listen -- did they just give us.
And then what -- I -- to characterize it as as if she were my lawyer and -- -- mind and thinking that this is a very elegant demand letter was she saying that China.
This is what's important to us you are.
Reaching something that's important to us we are going to go to court.
But reports -- this is what's important China to that this is its own government -- preservation don't they have hand.
-- -- -- -- -- -- -- When you're telling me what to do -- -- telling you what to do well by going to negotiation -- -- the other guy has hand but I'm already sunk.
I understand what you're saying that she may -- what's the reality that she may be interdependent argument and when you say that China you know has -- the -- this money.
But -- gonna -- -- if they do not want us to go bankrupt right so this into dependence not quite sure that as a strategic approach we have to -- Who has hand and do they really have -- from a trade perspective as well we are so interdependent but -- Unity deal they are protectionist and in many ways what do we have to hold over them what do we have as leverage to say.
You know you really needed -- -- doing this you really need to do so I'm laughing because one of our allegations is that we're accusing them of stealing.
Our advantage which is the high tech capability.
So that if that's part of that the present dispute that we're gonna -- she called for an investigation.
Into the hacking incidents.
He says she wants the results to be transparent.
We're headed to court.
But do we win.
Only time will tell.
Note -- that the government they they believe that their government's survival is at stake she'd make points at look at east Germany.
Look at Iran this is teetering as -- -- the people of information.
Ultimately your government will fall.
Unless you take some sort of action because suppression is never ever.
Going to workers and the walls are still relatively young country.
They're still kind of coming up with rules for the -- this country from but young economically get very young economically as far as where you know as far as our conversation here.
They're they're making kind of creating rules as we go we have risks and inflation there now.
-- -- get and a lot of people believe that it is the place to invest that the economy still booming there but can understand why.
-- -- a lot of people very nervous about and sketchy about going over there.
Forty run of the mill or typical business if you -- -- like a twenty -- perspective is a lot easier to do business in China.
Then in twenty years ago.
I mean I can get rich Chinese trademark application -- -- desktop at this point I have some security that I'll be able to -- my rights in a Chinese legal system.
But it -- -- perspective things are going in the right direction but we have this thing looming on the horizon protectionist or dictatorial authoritarian government.
The problem mourn for our partner in Moses is seasonal actual property thank you so much -- to Syria has -- -- information currently at daybreak when we come back a lot more to get to.
On the airlines in the news.
Some earnings and all so.
And baggage the increases are gonna talk with travelocity that all that stuff because she's moving money around.
Choice not hang out -- -- don't try to -- I think we'll -- all of my ticket price then why -- I meaning.
-- possible thing.
I welcome back to foxbusiness.com.
Live Cotter and burns.
With you on a Thursday afternoon and don't forget to catch is by the -- and Barney company that that's on the that this is -- 920.
Mean in the following Don Imus -- go until 11 o'clock and we a lot of fun in the evening Riyadh and streaming here.
All whittled -- while on that show we will be yelling and screaming a sentence and didn't really throw anything yet but we always sort of the show this week so there's still plenty of time if if I thought about airlines right here Genevieve Shaw brown from travelocity joins -- Bag fee increases we see it again it just seems like it's each airline is ticking up twenty dollars and 2525 to 352 bag.
Is this gonna continuing to keep going up and up.
Yeah I think it's possible because these baggage -- started.
Last year went to only for the second chance I -- you know the first and second checked bag and went from fifteen to twenty.
Turning to me I can just keep going.
All -- -- in general is the way to airlines are moving whether they can teed up the charge for baggage fees or figure out other things they can charge for to make money.
That really is the direction where this is going and the airlines need 700 million dollars in check if he's alone in the third quarter -- around the nation can't ignore.
So it's going to day and I -- your point this whole notion of ala carte pricing.
From a guy that gets on the plane with -- carry on I shouldn't have to pay a higher plane ticket because I'm not carrying a suitcase full of flat from three kids hit -- that's -- and you know and that and that's the airlines argument in favor ala cart pricing they say that they can keep.
Base -- is lower by only charging customers for the services that they use like checked -- -- You know it's it's tough to say at at a lot of -- are outraged by the -- -- but when asked if they'd rather.
Ticket prices go up you know they don't want that either sell them.
Doesn't think people like now many have my high horse but it's little like many who -- -- because I have to actions who get hurt.
Because I have to check a bag.
I have -- Pay for food on the plane because you know my kid can't make -- an hour without eating right so I'm paying a seven dollar cookie thing.
Dixie dominant to pay to use the bat I look at that -- into words the am track all right if you don't wanna -- like don't I don't know about my.
Well look media would take a boat.
You take and take a rowboat or something one of those paddle boats listen.
It's southwest getting any traction by saying we're not doing it seedings and I see commercials for him all the time and helping them was it -- -- -- hit that there.
Do you -- while.
Well you know they reported and recorded their passenger traffic is -- -- pass in traffic at their rivals is falling so you know it.
It does seem to be helping them to some extent the fact of the matter is -- southwest does not fly everywhere.
That the legacy carriers do you go out so sometimes you don't have a choice and it's important to point out -- JetBlue also last one free checked back so that's an option to consider as well so -- -- I -- money.
On baggage fees are just inject inject -- In general at the hotel.
On my airline travel my baggage fees -- pat well the first thing I do is to get a low base staring into that by being as flexible as possible and flying on off peak days Tuesdays and Wednesdays.
At least travel days of the week and off for the past fairs taking the first lead at the table CD money it's generally the least expensive -- also the most likely flight.
To be on time which is a great thing -- When you're traveling with companions.
He wanna spread out that the the clothing the things are going to be checking between -- so you can -- -- Fewer bags.
And save money.
You want out patronize airlines that -- -- last trick and AirTran filling charges fifteen dollars for the first checked back jetBlue is in charge off for the first checked bag.
He can use those airlines to save -- -- And -- -- I have yet to pay checked bag fee and -- let's do it I only carry out.
You know what I do this at a golf clubs you're in the you're in Atlanta so -- -- they're -- -- plan the plan to check my club things.
Of them that -- I could have a set of children here.
-- It would -- yeah.
Now a lot of data from the IATA.
Yesterday was yesterday and said that travels up and it's up at a level that we haven't seen a couple of years so this is gonna -- pricing power of the airlines and.
It is and looking ahead to us spring air -- on Africa have a lasting data that's concerns of Horry -- -- -- -- Airfare is up slightly from where it was last year but still down dramatically from where was tears -- -- the same time period hotel rates -- down about 3%.
I think that's -- gonna have to focus on finding value on the -- days now they still doing -- around winter holidays certain days had that surcharge on top of them are they doing that again around the spring break Easter holiday breaks gas one the -- -- coming up at the day following the super -- -- few days around -- spring.
I you know those -- it's kind of hurt pinpoint when they -- -- a little -- of moving target but you'll you'll notice that on heavily traveled -- is.
-- or just generally higher so I can as much as you can be flexible.
That's gonna -- -- millionaire friends and and don't get so fixing at a -- your flight that you neglect to count how much you can take on your hotel stay hotels.
Are a great value particularly in cities like Las Vegas San -- South Florida and even very popular exotic vacation destinations like why me.
This is still the same places.
We'll make you mentioned Las Vegas in Southern California.
Florida -- admit they are those have I think the best deals -- unseen but hotel rates in general.
All around our -- down particularly in places that are heavily reliant on air travelers places like the -- in places like Hawaii they have to.
Really give that incentive for people get on the plane and content destinations you can find great -- -- -- could you can't take a boat.
You can -- your arms you get there.
There is still buy time he got in your laps in the word tonight thanks to its iron -- -- -- -- travelocity visa the day.
On all that's going on you know you you you -- -- -- it.
I haven't haven't worked out in the afternoons now it's hard -- -- get motivated.
They go to -- road to get grainy look at -- -- -- -- got to relevant it's the career.
But welcome back to foxbusiness.com.
They dated a stock market down.
215 points we are right at 260 were right -- session lows right now and you need to combine that with a 122 point loss yesterday.
This is that.
This might be at 710%.
Pull back the beginning of -- that we've been talking about so we will see of course bad news -- -- in -- bad news today.
At a Washington in terms of government involving the banks nobody seems to like it.
And that's why we are where we are.
-- -- -- joins us right he's a partner in capital markets practice DO Seidman joins us from Chicago.
-- a lot of talk about the IPO market and how well it's been a -- couple years there as it has been in many markets but.
2010 might be a different story might it.
Well it might be.
You know you intro to this -- with the down market and today it was down a hundred and something points yesterday.
I wish we'd be on last week if that could be much more upbeat enough market though the doesn't to -- two days this guy.
I Gaza City two days like this really put a dent in somebody's mind when they say boy you know what.
We've started to build up steam I thought maybe the market was going to be right.
For love for my IPO and now I wanna hold off that -- two days really make that big of a difference.
Well given the length of time it takes to do an IPO.
No I don't yet does.
The question is will be investor be there when you're ready to finish the IP -- gonna raise the money and and from that standpoint it's the investor.
So that is the key variable here.
That is most influenced by the up -- down in the market.
That's why people get -- -- I remember the IPO market here in late ninety's I at one point had you know.
Family and friends shares for -- and how are I thought I could buy a Ferrari in the end I well give it up.
My shares went tumbling it was it was a it was a good moment for me but what what's different now this time around I mean clearly we're not gonna see that.
We're not gonna see the IPOs in the late nineties but.
You know we -- we will see at.
Pick up you're seeing in 2010 Y.
Well I think what's happening as we're gonna see companies that are more stable that have earnings that have cash flow.
They have a real business at the end of the ninety's we we were investing in dot com that's.
And thinking we're going to be rich overnight because the dot com was gonna go through the roof.
Those are the kind of companies were talking about here we're talking about innovators new products.
Things that we can use every day and from that standpoint.
Things that people will be willing to by -- and I think that that's a major difference from where we -- then.
And I think kinds of of preparation that have gone into these companies is different than it was in there in the ninety's from the standpoint that.
It's been a long.
Dry spell and IPOs.
In the the last significant IPOs were really done in the nineties is in the ninety's it's been way down -- for the last two years.
It's been and basically in the -- so from that standpoint.
If we could improve and bring out real companies.
And add value to the economy more jobs more products things along those lines I think we're talking about a different paradigm and we were then the very few that we've had Lee and they didn't well subscribed for the most part.
I think so far I haven't seen any.
Secondary offerings off of those companies and I think in the -- marketplace.
We could we could start to expect that if the companies continue to grow continued -- by the investor needs.
And continue to return a profit to their investors.
Then I think we'll see some secondary offerings in the edit the price continues to grow up people are gonna wanna do secondary offerings so.
I think yes I would expect that the question is win.
Our survey was saying that we can expect the IPOs to heat up in the second quarter.
And to be going very strong in the third quarter.
-- we'll just have to wait and see me.
It's a question of facts and circumstances.
So what sectors do you expect to boom you know and noticing your notes that.
Technology Canada Britain sixteen IPOs in 2009 more than any in the industry if I'm not mistaken it was like close to 400.
Back in that that ninety's were attacked in nineteen in or even 1999 or 2000.
So are we expecting -- to lead the way again.
Well I think that the majority of the bankers that we talked to expect tech to lead the way.
And I think that there's a real sound basis for that from the standpoint that.
Technology surrounds us if if we talk about the things that microchips are and you know -- used far these days if we're talking about software.
And -- the proverbial social networking buzz that's going on right now.
Those are all things that we use we see we access we hear about every day.
And the uses for those kinds of things.
Are gonna drive demands so.
I think that technology is clear winner it's it's been a clear winners you point out for a long time what about Lee green -- Green IPOs I I think green yeah green is right behind that from the standpoint that if we can come up with green alternatives for.
Energy green alternatives for automobiles.
Think of the things that we could do with that kind of a product offering if we were out there in the market.
But -- wind power is out there I I haven't heard anybody talking about wind power yet -- are very expensive propositions.
We're hearing a lot of ballots.
More ethanol that comes and goes depending upon which day it is then and how people think that they can use it.
But green is definitely a demand that the consumer today and from that standpoint that you -- to -- and for these companies.
Maybe get a -- -- just real quick we're certainly not gonna see those first -- pops anymore are we.
And then we haven't seen in awhile but with the resurgence of the IPO market you think that's gonna come back to you.
Well that the first thing kotsay thing from the standpoint we're not gonna see Google and race I guess there was an article in the paper today predicting that FaceBook could be -- the next Google.
But in the circumstances.
I think that you're gonna expect to see probably a nice twelve.
Or so percent return.
On the first day and then maybe -- percent over the first six months or so.
Those aren't bad return.
-- -- -- -- Thank you don't -- league all joining us from BO.
Aside and let's just.
And here's -- now in history -- joins us right now managing editor career cast dot com.
Let's have a little odd jobs very interesting survey you guys put -- -- here it's I guess is -- -- raiding of the best jobs.
And the worst jobs in the states in 2010.
And first -- how did you come up with the criteria committees.
Basically we've been doing this for a number of years and what we do you take 200 jobs and we analyze them based on factors -- stress or.
-- physical demands hiring outlook and com.
And those usually can create scores that we do but it cranking -- best and worst jobs.
By the best out now one thing I noticed just didn't call my -- -- the top ten jobs.
Actuary computer systems analyst mathematician statistician -- accountants.
Bought it on top ten -- seem to be old solitary jobs.
Where people are really good at numbers.
-- they are very social minded so I think that doesn't make a whole lot of sense it would seem -- that would be.
Brain left -- -- deep in the room by himself for twelve hours crunching numbers.
Well it depends on the situation you're in a lot of things like systems analysts and software engineers actually working genes to lose a lot of collaboration and those jobs -- the -- you know you're working at a large corporation usually where you -- I mean obviously there are independent accountants as well.
But one of these we looked acts.
Was we are trying to find work environments that -- generally.
Not a lot of danger.
I'm not a lot of high stress environments -- not a lot of high stress situations and all of these jobs often.
Those lead pencils come yeah -- last year I had.
Pocket protectors all and I don't I don't even understand your worst jobs -- ten worst jobs some of them very dangerous.
I union worker Wheldon and as if the odds on the skyscrapers and you know there.
On -- meter reader in there and I guess and certain neighborhoods -- prize for hitting his -- what in the wide world of sports is a Rouse the ballot that's your first job would.
Don't we we get -- a lot roster out is someone who works on oil race.
And it is the entry level position for oil drilling -- -- so basically you're the muscle.
At an oil rig and it can be onshore offshore.
And it's it's a tough job I mean pays low you're you're working environment and from the middle of -- winners of the desert -- the ocean you can have to be away from home for weeks at a time -- offshore and it's very hard -- industrial.
Accidents but not why carrier and -- we can't and that's it was a pretty solid job to get you got new Nina got the united all the hanging pretty dot -- -- -- Right but -- -- love the dogs cup match you when you deliver.
I was walking a lots.
The post offices you know not.
Exactly treating its workers that well sometimes so that you know people are maintaining vehicles and it's a lot of hard.
Work you people use your report on for about a salary negotiation things like that -- measure follows a lumberjack -- and say look.
According to career -- dot com -- the second worst job in America.
Have you thought about it out.
You certainly didn't try.
Hurt most of those worst jobs also don't pay very well that's if you look -- we have all -- scores and was he's on the on the side and you see -- you're not gonna make a lot of money act -- -- right.
I think it says something though I have to -- -- have -- my talent actuary friends out there -- always -- But this is a -- that a lot of people that would have been -- -- you know what it's dry media on some level but you have always employed.
This economy the what you're not very good for these hooks in him.
I completely understand and keep in mind not only did -- go to school with a lot of these people I was very good friends with a lot of math petition doesn't -- it's -- and by the way in the history of Georgetown in the history.
Seriously biologist who with a lot of these people and yet you know what I mean it there -- different breed but it's.
-- did yesterday I can't tell -- a question for you about we I've jobless claims are going up in the numbers have -- the wrong way as far as jobs go.
Right do you see people re educating themselves becoming an actuary becoming an account and saying you know what -- my dad my job is gone what do I get.
You know I think it's going to be a necessity in the coming years I -- you know you know some jobs.
We -- this year a lot of jobs hiring is very you know going down very quickly but a lot of jobs in our top ones anyway hiring is pretty stable.
Some cases you can improving so.
No doubt me EU need to change careers of your job -- -- -- -- can't -- -- elements.
You know I think and I get to him when he's production.
Thank you for shout out to be counting how they're managing editor of -- -- -- -- say thank you very much so that -- -- -- an account.
But if I could be -- -- outdoors all day that it does -- that I would rather be a lumberjack one of the worst jobs because you're outside all day long I love that.
Maybe you know life -- cost cutting back I'm going to be a little snack.
You do long division.
-- -- --
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