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-- And happy Tuesday what the (%expletive) is that -- hi Tracy burns and Robert Craig look -- right -- -- still sick still sick.
If I hadn't heard my theory -- McChrystal daughters.
Went out at night.
You know to come back as a group rate since.
The get all of it takes isn't really long time -- I hit a -- this evening.
Well I still it takes -- kids teens I have one drink I'm like I'm posts till next August just on the -- -- -- Now that big Clinton was last year he's coming on -- -- line -- -- -- on a sudden I know what happened to me that amount about maybe is playing golf is beautiful.
Well maybe it's that.
That -- But I feared Chris is prevalent in bed with like some awful flu and I said that watching you rock gonna send an email -- perfectly.
It's -- market's up 33 points.
It's not it's it's not spectacular but I think considering all that's -- -- I think and that's pretty good since.
Shrug off a lot of headline risk as Italy says our upcoming guests and I were just chatting about it briefly before we started yeah I'd definitely we've.
You can count you -- and the other little -- Dracula.
At least five headline out of the -- to the the old -- your financial reform going on Bernanke Geithner and Dick Fuld the former Italy and Brothers and -- -- that -- for you down there.
God Goldman in the SEC who's next that soccer continues to play in the background -- Goldman speaking of earnings this morning along with.
A lot of other corporate America agrees the bond markets -- -- think -- why not be good enough there and then of course there's the Icelandic volcano always throw that into the.
And that I don't think is getting enough play you know we -- Matt McCall whose frequent guests on the show Sweden.
Denmark Denmark father and sister Barney show he's been gone for he's stuck for a week.
He's looking at another week before you can get out I mean there's you know there's the financial side to this volcano most definitely but troubled personal side.
People are dipping into their own pockets they get paid for the -- I mean you know -- lucky he's got business Agassi can take it out of business expenses -- -- -- you're on vacation.
Had -- -- with few other people -- Being in airports -- their kids right now on this run out of money when he why would he -- he has all of our -- college Everett Scott this morning and and they were interviewing people who were stuck in China trying to get home.
Second right and then of course you people -- -- airports -- in JFK we're trying to get there a trend yet.
Our friends in Europe and -- the FedEx UPS of their businesses in -- -- hurting too because people can't ship overnight.
To Europe can't get -- gonna have to go on the ship into the Slobodan.
I'm thinking I can even imagine -- my heart bleeds for these people I would just be swimming if I had to cross the ocean just to get home.
Peter Kenny here think from -- I -- Peter Kenny now we have so many different at six degrees of Peter Kenny managing director at Knight equity markets.
First I'm gonna tell you that Peter and I are.
Members of this fabulous organization -- and Tomiichi he's our took an irishman -- what you ray -- yes.
But that's because if you're -- -- come -- odd -- I don't love it -- It is a lousy schools and we -- wonderful charitable organization and they give scholarships to kids and it's just -- unfortunately they had this great dinner last night breaking out is and I missed it.
You know -- and I you know couple of seasons -- -- Yet Peter Kenny also funded not one of the first people I interviewed for another network on -- York stock exchange -- -- -- for many millions and yeah I just listed off what five things that are headline events for the market -- and I yet I was sort of shrugged off the bombshell of Goldman on Friday which many -- it was a much he agreed -- -- to know what was gonna bring in about an hour it's seeing this slow steady march hiring in the past two days.
-- we we continued to inch higher the goldmans headline could have been significantly more dramatic than it was in terms of impact to the market.
But after a short period of time in the fact that it was on -- Friday.
Gave the market participants time to digest the impact potential impact of what it meant the suit.
The fact that it was a split vote on the suit was one thing and then it was political.
Secondarily that it looks as though.
-- -- -- -- And what happened that there may be other banks and other institutions not just the United States that followed same practice so that further homogenized is the risk.
And as a direct result you've seen the ETF that represents the financials.
Really -- its head up over the -- -- -- a -- -- -- -- -- -- -- -- yesterday.
Market close to the upside substantially to the -- much to many people's.
I mean it was down below 111000 for a little while the Dow was and then closing up 73 points but many will say that everything sort of shifted to your point when we heard that the SEC vote was split exactly.
Three to two yes you have to dissenters out there who didn't -- want to do this and that's I think when the market started to tell us exactly right.
So -- -- that leave us does that leave us with the case is not that strong after all maybe there were a lot of people involved but they don't have a lot of backing.
Well the take away from this is it's very very clear.
And the timing is somewhat ironic in that you know Obama's coming to Wall Street Nick Swisher did and you know that the hot button issue right now is financial reform.
And frankly regardless of what's on the -- -- on.
We need financial reform and it's it's it's how it's gonna be done it really is the question.
The fact that he's coming to want to Wall Street next week the -- he's coming from Washington this was headline news on funny.
It's been it's almost not coincidental it's almost it feeds together towards the driving towards of the that this reform initiative which I think.
All Wall Street wants frankly.
Even those who are being -- right now in the cross hairs transparency is absolutely essential.
Especially as we get more.
Derivatives you have the more open more opaque -- -- an agreement -- -- an exchange student contracted exactly it's it's for quite some us required going forward.
Because -- not talk to analysts said this a collateralized debt obligation market -- CDS which.
If you're not familiar with the not a household.
Acronym I guess for want people but you have basements they're -- synthetic -- because they're based on.
Mortgage backed securities strips of mortgages.
Based that your couples give your couple steps away from the actual person but -- pay their mortgage or not it's nothing and it wasn't unusual practice for 53 years ago.
For the class but people who are trying to shorted in this new kind of that -- to all have input.
Into which strips of mortgages went into this and a third party came in signed off on it.
And both people who bought it for those who -- also signed off on and they read through -- they approved it.
So to me and in talking to analysts it doesn't necessarily tonight there's a lot of there there meals -- very murky and shady market to begin -- and that's why you -- everyone understood that when they took a seat at the table.
Yup yup and that's why going forward the reform it's going to be a blanket reform it's gonna be comprehensive -- cover everyone.
Initially people -- the Goldman Sachs would be singled out and called from the herd that's not gonna happen.
This is just the -- -- it's just too many connect your connectors into this and it's.
-- -- frankly the reform needs to be for everyone not just one firm so that and that's why when that pressure was taken off of Coleman the whole financial space lifted.
Let me see today now we're 4344.
Points up on the Dow.
Tonight at city -- cities doing okay -- numbers came in much better than I think anybody thought.
We know JPMorgan did OK I'm.
We're getting decent numbers from IBM even though it's down their service contracts are down that -- also near record high it's absolutely run so.
Intel degree -- -- some.
Really good numbers -- -- earning season you would this market would just be blown away by this and it seems not nothing seems to blow this market away and yet.
Isn't very good sign.
Because the markets actually reacting.
To incremental increases in earnings sequential increases in guidance.
That has been raise consistently across the board when they talk about large cap.
Technology financials consumers consumer durables apple retail -- that we -- go run retail center with a list for months.
Guidance and earnings continue to be raised and they're being raised in a very orderly fashion.
And what one -- stock that has not done well though and it's a little troublesome mails a day yesterday as -- -- they kicked off earnings season and -- -- down almost every day since -- it's not great showing us it's not a good harbinger of a lot of -- now.
-- -- -- -- -- In industrial prosperity to calm you know what's what's going on Alcoa that that is such a great point actually I was looking at this morning when I look at it was down year to date thirteen point 76%.
Now Alcoa is the Bellwether of global health in terms of the -- global economy -- the fact that it's in negative territory in spite of the fact that the markets.
Behave the way it has over the last three and half four months should tell us that there is caution now there is global demand real.
Is this the pre fabricated in another words is it is it's something that the the world economy's going to be able to grow -- I thought -- what I think with Alcoa.
I think the demand is there.
But part of what you're seeing in that specific sector.
Is concern over China.
If you look at China over the last three or four months China's performance he's actually lags many of the other major indexes in the world why.
Because of the -- -- so this morning restrictions on credit right restrictions on third and second homes restrictions on outside investors making bets -- the real estate market.
You have to give it to the Chinese Central Bank there are definitely minding the store that but it's having a dampening effect on the perception.
Of demand for.
The Alcoa aluminum so the world down and as a result you're seeing -- negative territory for the year today we'll -- we'll have you back and we'll we'll talk about that the cheap money debate here.
Come -- minding the store or an.
Time but thanks so much for your insight market up down or sideways for the next six months six months -- good but.
But somewhere in between we're gonna get a little gut check.
He can thank you so much that I am so glad thanks very much or haven't -- -- -- and then.
-- for some longtime first time a long time it in person.
We communicate via him.
Email phone and it can't see it managing director at Knight equity markets thanks for being an experiment I got up and down to.
I'm rich when we didn't get out of this.
-- panel number one is up right now we're talking to the regulators Treasury Secretary Tim Geithner SEC chairman Mary Schapiro and fed chair Ben Bernanke now of course Geithner and Bernanke were at the Fed at the time.
That Lehman declared bankruptcy Shapiro.
Was not working with the government at the time and we do have a statement from the SEC chair of the time Chris Cox.
He says look the SEC really didn't have the authority to go and we told Lehman had to raise more capital but we -- we were supposed to do.
Under what the law says Ben Bernanke says it was the job of the SEC to regulate.
And look at the subsidiaries and in one of the panels later today the guy who's looking into this for the bankruptcy process the bankruptcy examiner -- -- the SEC.
Acquiesced here they knew there was a problem and they chose not to do anything we'll all sleep.
Hear from Lehman but Lehman Brothers.
Former CEO Dick Fuld will say.
Look you know we did everything we were supposed to are counting was on the up and up.
And this idea of repo 105 that's the accounting trick that the banking exit out of bankruptcy examiner says.
That -- used to hide so many of these risky assets he says -- even heard of that.
Accounting trick repo 105 until about a year after the bankruptcy so.
Deflecting blame much like we saw with the Financial Crisis Inquiry Commission were no one says yeah you know was my fault.
I really brought down Lehman Brothers and will be doing this for the next couple of hours.
Does anybody believe this though you know I read that Dick Fuld said he knew nothing about -- 105 and this is.
This is major accounting staff how could you not know what's in your financials when you're the CEO of the company.
-- he says luck I signed off we had done business officers take a look and make sure we -- our county folks take a look -- -- everything was on the up and up and we were OK meanwhile.
We -- is headfirst that a number of these risky mortgage assets.
And have before you know it there if they're not being saved by the government and forced into bankruptcy so.
You know this is this kind of look back -- it has been somewhat of a problem here because you've now had two.
-- you get the Financial Crisis Inquiry Commission in the second commissions really just a handful of congressional panels that have been looking into what exactly happened.
During a mortgage crisis how did this confluence of events happen how did so few people see this coming and so far nobody's really stood up and raise their hands and say you know what really guys.
I messed up big time on this one.
Haven't had that yet you know I don't hold your breath threat that they're not gonna affect -- -- after -- Rates they -- I think it's -- on this thanks guys.
Identity -- DC covering a Lehman Brothers hearings -- and I -- -- hole fireworks sketchy though yeah expansion I don't know I don't know I guess you do you put reliance -- your your counting people you presume they know what they're doing but at the same time.
You presume government bailouts coming to I guess I guess -- -- We had to break.
And a friend how -- -- -- And welcome back to foxbusiness.com live Robert -- and for an ailing Cris Carter along with Tracy Byrnes.
Ailing we used the word lightly well -- In the AL pattern in jail if they got I can't get away at our football.
We get out of eggs in the -- -- that's like you're gonna.
Yeah -- -- it's like under the table somewhere aren't there some under the weather garbage -- Seattle.
-- -- -- Now he's crying.
Yeah I -- -- -- Charlie well.
Around here all right we're up -- that it doubts I had about 45 point seven gonna title mergers and acquisition activity now.
Mike Hogan managing director for Harris Williams joining us now from Richmond Virginia and might think too much for joining us here this afternoon.
Thank you -- -- -- And basically -- let's kick it off I talked imminent now we haven't had a lot of splashy headlines lately we've had a lot of deals actually lifted up.
One FactSet before we came in actually were a little bit ahead of last year's pace.
A lot of people I talked to -- at the end of last journalists here sort of the predictions were we have -- much further along -- we were at this point in 2010.
Are you surprised we haven't seen more than did they approximately 200 billion not involving US companies -- far.
Robert -- I think you're seeing is a dramatic build up in the pipeline so a lot of the activity that people expected should be playing out in terms actually deals getting announced -- close.
Probably in the second half of attending Q3 and Q4 as opposed to the next quarter or.
Year to date but activity.
Remains very very strong our pipeline is up -- over a 100% relative to last year and I think it's a a good indication of a broader recovery in Yemen and markets.
We've since coming back in on -- you know to the whole merger Monday again -- -- definitely seeing a lot in the Biotech health care sector.
-- we gonna continue to see that sector kind of come together as they figure out how Health Care Reform affects them.
Tracy I think you're gonna see a lot of activity and health care across a couple sectors Biotech is one -- where you'll see continued consolidation.
As the pharma companies have to do something.
But also what we're seeing is very broad activity and health care information technology and health care services.
Sectors where companies are helping drive cost Al -- health care system.
And that's really where people are looking to invest right now as they know the pressures that we're facing.
And health care system -- not gonna let up on the cost side companies that can help take cost doubt whether it's improving the efficacy of treatment.
Making doctors and nurses and other practitioners more efficient we're just taking cost out of the red tape.
-- the back office or areas where you -- see increased investment.
Mike insurance leading the way that most of that really AIG divestitures.
Are we gonna see.
More vulture investing -- maybe people see assets didn't fall as much as they had hoped if you -- sitting on cash.
During the the credit crunch are you gonna see more vulture investors coming in and trying to buyouts and distressed assets.
In sort of a feeding frenzy here.
The rest of this year.
I think you're gonna see Robert Moore bolts are on the financial side in the banking sector and the challenge there is just the difficulties.
In making investments -- financial buyer.
In the banking sector there's been more activity the Fed is encouraging more of that.
I think you'll continue to see people set up banks and go out and consolidate some of the more troubled assets.
But we are seeing a lot more activity outside of financials in areas like health care technology energy efficiency.
Food and beverage those sectors all remain probably much stronger than the financial services sector.
Mike Weaver seeking emergency we're seeing are basically cash steals and -- that would that has this non cash for so long now.
-- you start to see debt financing come back to the picture or is it strictly going to be.
Those that have socked in a way can be in the market to play.
Tracy if they are seeing a dramatic increase in the debt markets but the high yield market in the bank market if you look at high yield it's up about threefold.
Ever the same time of last year banks have a much stronger balance sheets now.
Are getting back in the business of lending we're seeing a big pick up from private equity groups.
You're sitting on a lot of capital and we anticipate that that will continue through the course of -- ten.
And expect they'll be very strong leveraged activity.
-- what about as far as the financing guys how easy is it to get access to that now line and on top of that -- it seems that a lot of BP.
A lot of the firms that bought up a leveraged just 23 years ago I'm just wondering yeah how much.
Activity there's going to be going forward here and -- easy to get the financing.
-- -- You know there's a couple drivers I think what we think there's going to be a tremendous amount of activity.
For one private equity groups are sitting on about 650.
Billion of on invested capital.
And that's capital that needs to be put to work sometime over the next college.
Two you'd 245 years.
A lot of capital to fuel deal -- buying power that would be measured in the trillions.
If you look at the bank leverage markets certainly were not back to the height of the bubble in in call it -- seven.
But we're now at leverage levels that relative to where historic levels and -- 45 times debt for good quality businesses.
With stable cash flows that allow private equity groups to get the kind of financing they need to be very active in dealing transactions.
-- we have about thirty seconds left where you see -- worlds for the rest of the year is -- gonna pick up steam are we gonna see this slow and steady crawl on merger Monday.
Tracy I think you're going to see had a very dramatic pick up in the second half of this year particularly in Q3 and Q4.
There's a lot of activity building in the pipeline now continued improvements in the lending and high yield markets.
You -- the pick up in the stock market companies have good stock prices behind them good balance sheets.
And so we expect a very strong and to the year in -- and -- and continued momentum going forward in the 2011.
Can be good for the bankers and a -- don't like it might go -- thank you so much for being with us.
Mike Hogan managing director for Harris Williams and.
Mean -- interesting his number one of course this year.
Goldman Sachs there and anyone else safari underwriting these deals an MM and a activity as well right advising so.
Italy filling the coffers and we hear that from Citibank and JPMorgan saw these debates continue to help themselves a little bit in a good way here.
Miami -- in an amazing good is good he can argue with -- in.
It creates opportunity and job and -- our market going again I speaking of getting going I have to tell you look my -- So there's this whole notion of the legal limit of alcohol.
Which my theory -- Cris -- exceeded its.
That's right here on -- sort.
Apparently the FDA is getting ready to put out some sort of legal limits on salt intake -- I feel that -- I am not a big fast food -- kind of person but I can't imagine going in to get like McDonald's Fries not -- Because clearly those Fries like exceed the legal limit of what -- I'm gonna have to be exactly whatever the FDA's gonna instill whatever the limits going to be.
I'm Ben my kids' college fund that does rise exceed one thing in congress -- to have something else of this tequila -- because.
Except that at -- but it's not Muster up is that I mean you know of the notion being of course it.
We do too much is bad and now heart disease it'll reduce hypertension and a lot of help.
The load the next day pinky rings and I think when -- too much salt but I'm not sure I've got to decide that it's too -- -- -- -- something else.
-- that that's so it was sort of thing although I guess McDonald's would need to.
Offer up maybe -- lower.
Salty Fries -- they're gonna give -- true choice for you discuss some where else.
-- -- -- -- -- The FDA is gonna put this limit out of you get -- back everyone it's gonna affect all industries it's certainly -- -- -- -- and take -- I mean.
Let's face it anything in Canas got only good.
Because -- -- had to be new leases will be this.
And anyone that each team that he can come and you cannot eat them without saw.
So I'm just I don't feel a little Big Brother I'm not sure how to that little Big Brother that's a little but on the and you don't have to put so much in that you're.
But dedicated every patient in my -- isn't if I decide to blow guys disclosed that put it on there and -- ten is labeled so we shape shine causes bloating.
They take a break it -- I -- and tell me I feel we're back.
-- the back -- -- this outcome I've Tracy -- Robert Gray.
We're talking about -- on the -- and -- -- The government knows better than I do apparently how much -- I -- taken that was one of the comments.
The -- police are coming I love that I think the British are coming to Britain softly from thinking the guys on the pretzels outside will be in trouble.
The thing that's all -- but the way they did slick paper.
That's a mix of New York pretzel right does wet and it's -- salt stuck to it.
They get all of your car yesterday those horrible.
But yet -- the salt makes it.
Incidents -- what it's doing tots that -- wet I like Paxson also did have a -- in this never mind.
Right right up and up 51 points and -- we'll say that's the karma that we bring because it's higher than when we started.
-- -- and increases that's.
But things including a -- went down first IBM believe it or not this is your Dow loser today now its first quarter profit jumps 13%.
Higher software sales.
Technology services revenue but their service contracts are down and people kind of saw this as -- maybe not and will need to corporations aren't ready to dive in.
And spend and that's tech money so profitable for them and hot and it's 50% of their revenue -- right and those are down.
So they don't make anything that you're you're servicing your your helping them right.
So it's using your employees of us could really tell me I don't know what IBM is to service can be much point -- it's a consulting service so the computer making the -- a few years back right.
So what else -- they do.
-- -- -- -- Anyway American International Group AIG this is your S&P 500 leader today.
They're considering potential claims against Goldman Sachs and other Wall Street banks.
Now you got to believe that it's he's gonna take the opportunity try to come out of this looking shining bright.
Absolutely they're gonna take every effort they can could you know taxpayers -- -- kill this company because we have done nothing but -- -- out and gotten -- on a couple of return them.
-- he's gonna do what they can come out shining Rosie stocks of 2%.
Holiday missions of today.
That's the burglars.
And -- and that's -- -- profit fell 782%.
Declining sales higher restructuring costs but.
Do you think it.
-- they -- on our earnings from continuing operations and revenue and therefore well the -- up.
There it is Harry you know -- you collect yourself and you went and got a show.
Two weeks two weekends ago I guess with my son just stand there looking at those beautiful beautiful bites and then it occurred to nano at the door.
I should bypass the bikes kids should not get any bright ideas about owning motorcycles and that.
-- -- number -- up 31%.
Reaching agreement with Novartis believe it or not to develop cancer treatment.
A re getting 45 million upfront payments up to 422.
Dollars in additional payments in -- Create this cancer treatment and number one is -- now -- soda small little soda company it's with 44% today.
-- this match also at nonalcoholic drinks nothing Chris -- -- drinks reported a 21% increase in fourth quarter sales.
And forecasts -- -- 20% jump into 2010 sales now Jones soda is up as well today.
But now -- -- obviously to -- -- Tackle these like realistic since it is so when you have a spot they're anticipating that we're going to be all holistic -- -- -- we cancel all.
But I -- just Ottawa -- at this point.
All gone way I am glad to make the -- of McGinley well men have -- in Hillary can.
How are you might.
Good traits -- nice to be.
Make -- -- -- -- -- -- about the salt thing OK tell us first about the market and we'll get back to the solved.
Where where he's I mean -- stock pickers market are we not.
We have seen tremendous amount of momentum in the last sixty days.
In addition to that the earnings over the last week have house -- that exceeded expectations.
We do expect this to be the theme for the next several quarters.
-- would have to agree that this is a good time to be looking for stocks.
So well -- but without further adieu I would jump into a -- -- here I Aeropostale and I that was what elements the teen retailer.
It's been on -- mean it's been here it's been a record high recently here.
How do you convince side investors and then I guess the skeptics that we are in that that it's a by still -- what what sort of expansion to they have left to continue growing here.
Robert -- RO hands.
As you say an excellent.
They are in what I would consider a second wind.
There -- year over year earnings and revenue growth has been substantial their three year it has also been substantial.
We believe even though they are trading up into new highs that they are a very good -- In addition to that they have opened.
Forty new stores domestically last year.
Amongst their competition having to close many stores they -- also excellent success overseas.
And they are investigating some international growth opportunities at this time so while for a lot of those reasons -- we do like them.
Interesting I you're your your kids a little bit closer to that then where in my young but this is like if you know your fickle teenager you're relying on -- -- for -- -- it was all about -- yes yes and then the bottom really fell out of Abercrombie right here in the recession in particular because they failed.
To discount they really stuck by that premise that really hurt them I guess -- assaulted one of the winners coming out of that.
-- hands and no one of the things they've been able to deliver is fashion in value.
Which has served them reasonably well in the last year.
Yeah is it seems like they're also they are -- a -- that they're giving a big flagship right in Times Square pretty soon.
Which -- and covered as part of real estate to retirement earlier and and that they were one of the people who are sitting on cash and they're able to negotiate better terms.
To get into some some pretty good spots like that so big we want to watch some.
-- also -- -- a health care play Community Health Systems so we touched on the Health Care Reform with previous guest but you say these guys.
Could be a winner thanks to that want they want you -- tell us in just a bit more about that.
Sure well that the health care facilities sector is in a well established trend right now.
Which is good for all all health care facilities in fact.
Company in particular.
A lot of -- really like the additional playing as you reference Robert.
To the fact that a lot of they're uncompensated.
Claims soar uncompensated expenditures.
May have a lot of additional help.
By way of the new health care legislation.
And in addition to that don't have a greater population in which to be able afford.
And then also too we have and I I holdings -- and I HD.
This is a little bit of a Latin America play isn't it.
It is and to -- -- Latin America has been extremely.
In terms of their growth.
In addition to that and I I holdings is poised very well against a lot of their competition over there.
They have drilled down really into the small business sector.
And -- Allen -- -- account.
Revenue is nearly four times that of their competition.
In addition and I and I holdings his hand exceptional.
Year over year growth in terms of their revenue year over year.
Earnings growth in addition to that we we do believe they're still priced reasonably well.
They're trading in the low forties right now and they hear from far off their highs in the ninety dollar range that they saw back in 2007.
I think I'm sorry I have to -- -- People know it's under Nextel right so this is wireless play they are under -- Nextel brand in Latin America.
Yes and this is the communication services sector.
And in addition to that we're seeing that communication services sector is also emerging.
At this time sorted itself -- a lot of those reasons it's a very good play.
Let's start about the engineering pleasure like -- and Jacob -- -- -- play.
Here on infrastructure we haven't really seen the infrastructure build out that we had anticipated.
Coming from stimulus and just.
Looking at time Watson walked on the streets of Manhattan and you can look at bridges that have fallen the past couple years is that sort of what you're looking at the the rebuilding of America as -- -- It for -- to some extent Robert yes we're also seeing some strength -- capital goods.
We do see that construction services is beginning to emerge.
We believe floor and Jacobs engineering were headed that.
They are very well diversified in terms of their clientele and in addition to the sectors that they service.
So we believe that a lot of these factors should be good for them and in fact they do have very good three year.
Our revenue growth in three year earnings grow.
-- Totally differently from come right struggling.
Yet these guys are still doing well and win and if we ever see a nuclear power plants built -- -- women absolutely.
Might think so much for share your pics with us.
Tracy thanks for having me -- -- -- -- wealth management in north can.
I like icons link to the meeting gets talked about but couldn't he encourages his whole notion of you know for profit schools are doing -- right to use he's got some great picks.
-- -- a break we're gonna come back we're gonna talk about.
All things advertising.
Jordan Zimmermann and right back that he.
But back to foxbusiness.com.
Live Robert Gray in -- -- Chris -- Tracy Byrnes is always.
-- Go to Florida going to Florida your your I know we I got back.
Going to -- chaplain Dick -- with rockets securities and to dictate so much for joining us what else would we wanna start with.
With -- except Goldman Sachs.
Don't know what -- you're right yeah all valid earnings they beat expectations.
Not beating the street here obviously there on in the cross hairs of the SEC right now and so what are we start we'll start with the earnings first the earnings a little bit of a surprise to you whether they were strong as they ended up Bob reporting.
Well yeah absolutely but you know if you took a look at the whole company the earnings were not as good as the bottom line number which show in other words.
In the fixed income currency -- and -- in commodity trading area they had you know just blow out numbers and as a result of that the weaknesses that showed up.
In all other parts of the business what kind of obscured because they're underwriting activity was weaker the -- their investment management.
Division didn't do quite as well there hedge fund business so that what they call -- prime brokerage business was we.
So was just it was just a blowout in trading -- created those numbers.
But yet no one's talking about that -- -- a -- -- the fact that well they made a lot of money they took -- money and there the root of the cause of the entire subprime mess.
But I know I think that the problem the Goldman Sachs has is that it's done very poor job in in explaining.
What it is that this company -- why it has a purpose beyond simply making a lot of money for greedy bankers and they haven't taken any time to do that.
For example the United States government has to raise one point three.
Trillion dollars this year and that -- monies in addition to which they've got to roll over about three trillion dollars in existing debt.
Who's gonna do that -- mean we're gonna have a bunch community banks put tables in front of the Arab branches and -- savings bonds -- 25 bucks a clip.
Or do we need a large company to go out around the world and pick up funds into the global market in order to fund -- that.
So I think I think that if this Goldman started to explain.
Things like that you know it would change its image somewhat he -- wouldn't be the poster child of you know the kinds -- financial crisis.
Our tech guy you put out a note on Friday guilty or not the stock is a -- you still think so and so why.
-- I think so because I mean essentially if we take a look again at the trading operation over the last few years let's -- the last.
Decade they put a couple of billion dollars it's a building that business they have more IT people on this staff and have traders.
So the net effect is they've put systems in place electronic delivery they've created trading opportunities they have depth in the market and they do it.
All over the world.
In virtually every major commodity currency financial product.
So the net effect these can't get away from Goldman Sachs no matter how mad you may get at the company and as a result of that I think that.
The company will come through this its earnings will continue to rise.
And that the stock is -- Predicted I investment banks are really only as good as -- -- one thereof people and to the reputation and in danger of losing both here.
No I don't think that will -- reputations gun is pretty hard just to assume how they're gonna give him a little reputation.
-- they haven't the president I still maintain with a -- stuff.
Yeah the reputation with clients and able to maintain get.
Yeah what what the point is that you know in the trading business what they have to do is provide service and that's what they do.
And -- -- -- client gets so upset with Goldman Sachs and they decided they don't do business with them anymore -- they're gonna go.
-- was there is no other firm in the world it provides the services Goldman Sachs does on the trading desk.
Now if you talk about the investment banking business well in the investment management business that I hedge fund business clients can get very upset there and walk away.
And we'll have to see whether that's going to happen and I think.
The reason why the stock was so weak today at least when -- Left the office was because of that fear that in these other businesses they would lose clients and we'll have to see.
But it still Goldman Sachs at the end of the day.
Dick do you think that the timing of this whole thing is just a little sketchy with financial regulation on the table we're talking about a bank tax yet again.
We have Dick Fuld of Lehman you know formerly of Lehman Brothers sitting before congress today -- just so seems to me that there's a lot going on same time.
There is and I think that this was no coincidence I think that.
This was orchestrated -- in the SEC in my view has always been a highly politicized operation.
And basically I think that the if you will.
Publication of this soon.
You know two days before the president goes on the road to explain to the American public -- derivatives.
No good is is you know not not a coincidence.
I think it's it's a political act I also think that this suit has virtually no merit whatsoever.
Because you have -- sophisticated seller.
Selling products to two sophisticated buyers in it's pretty hard to assume that these -- didn't know what they were getting.
I did last thing you know you rest reason that you're talking about the prices of confidence we've been there.
Been through it confidence has gotten better now in your concern really -- government shakes the tree too much here.
We may see yet another crisis of confidence there.
How they walk this fine line here too gifted to gain some kind of financial -- were to prevent a repeat while not shaking the confidence too much.
Well I think they're gonna back up from hundreds doing right now let's assume for example that there -- two weeks from now they attacked JPMorgan in two weeks after that.
The attack -- -- sent -- two weeks after that they go after Bank of America.
They will effectively have convinced the American public.
And the world community that the financial system in the United States is no good and it doesn't operate except through high levels of corruption.
They did that -- in September of 2008.
When you have these two senators get up and say.
You know the system has to be nationalize these zombie banks to fail.
You know what when you -- you shake up people's confidence.
In the American financial system you're not helping the American people in any way shape or form and that's what they're doing right now.
Dick thanks so much for taking the time any -- share your insights with us.
Dick say in Florida we're gonna say in Florida this but Dick is senior vice president equity research -- -- -- securities.
And we're gonna steady in Florida only Florida came to us during bitterness here chairman encountered him in advertising based out of course down and west -- before we get into why you're really here can we talk about this whole woman thank him.
You got evidence the rest -- that's why we're gonna use them for everything right now only end.
-- many will argue will get through this will they get to this untainted -- Lloyd Blankfein have to step down the CEO.
I really think it's how they reposition their brand around -- consumer confidence I think captain but the two fronts they have to look at their.
And how they gonna -- put a spin on this that's positive and that's real for the public to the public can understand what they did is a legitimate trade on the other side.
They've got its start to do traditional marketing -- advertising to start to rebuild the brand in the confidence of the American people Goldman Sachs is an outstanding bank.
They have done an outstanding job what happened is we have to dig between this and see what has happened is it real or is it not real and of Goldman says they're gonna.
Defend their position didn't have to defend their position not just in court but with the American people do marketing advertising and through public relations.
The court of public opinion.
Yeah but you know Charles -- a point this morning on -- -- -- that if Coleman went out and said look.
We under wrote you know the bonds that.
And we -- talons build themselves like let's appealed to the softer side.
That might help.
I think I think they have to show the diversity.
They've done a lot of other things that have done great things for our country and I think you know the -- so we just made.
About you know strengthening our banking system and the trust of the American people in the trust to the world.
It's not gonna come by taking down -- trying to take down a Goldman Sachs and ruin the credibility -- they have in the marketplace.
It's -- live on from Goldman to -- -- blackberries learners and fake photographers and camera phones and is is really ingenious but.
You know no one likes to me made a full love and I guess that's that the problem with this so called stealth marketing that's really -- have been in.
Sponsoring this about this moving -- not familiar with the -- I I guess with a little when I don't get out the movies as much as I used to but did this is an upcoming film my ticket.
Yes Robert it's an upcoming film.
We caught buzz agents you know -- -- buzz agents for years and it's how you use your buzz agents and how you position.
You know an example of Tracy's in the grocery store.
And she's looking at the breads the -- he's a buzz agent there a woman that looks like a mom as well yeah it's over there -- this talk and insists Tracy now.
You see this you know Wonder Bread let me tell you the new Wonder Bread is unbelievable they're nine grain is wonderful.
Think she is a plant.
She is not a helpful mom hey fellow.
Says sitting in your community she is a plant there that is there to sell one to -- This is -- the next step from when you're out of the bar and you know and then some I unites attractive young lady comes liver in port you'd drink her strapping -- brings you a trial of -- -- -- -- -- But.
But it is -- the next step because you -- you.
Yeah they're holding whatever that they are product.
Promoters or whatever right but this is this is really the next step -- your -- comment.
Women using a Blackberry and trying to get some of the use it to put their phone number ran an -- play with them in the guys like -- this is really cool it.
There are promising to call them.
Yeah I think if you put your phone number I won't give you call right so of course the guy's gonna put his phone number -- what they're really trying to do was get them the use the -- -- -- how we see the phone is and then they can actually start communicating with him.
-- -- this -- that this entire families bunch playing terrifically bright rare actors.
And then it's it's -- anymore and there she is wearing all the things that you would want so I guess basically marketers pay heard aware.
-- -- whatever -- -- she's wearing so that I say I have to keep up with I want what she's wearing him banned it just worked.
We didn't see more of this I mean not so much to this extreme.
Let me tell you what's happening.
Now that it's out there that you're aware of it it'll start to fade because there's -- lacks credibility.
And when the consumer understands.
Lacks credibility and like sustainability.
As well because you're gonna start to question when somebody gives you you know we use -- for -- client Lane Bryant.
We have beautiful women walking to the mall there plus size woman carrying their -- the Lane Bryant back and they are dress did -- help.
Another -- we look and say oh my gosh have been no Lane Bryant carried that.
But they are buzz agents now we're doing it no more authentic way and a more believable way when -- trying to trick you this movie.
They've planted this Stanley in a community.
It's David -- And also a Demi Moore and two teenage children and they everybody has a job in that family and everybody has to sell things and that spelled it out of the kids -- have the iPad -- the -- iPhone the Droid phone and every wannabe trying to keep up.
But with the jones' letter -- is you're waiting back there and I.
Didn't know I don't know she's a plane.
Why you know there there -- on -- solely on that walk and analysts say that we're trying to be deceptive we're just trying to.
Extradite our brand outside of the store and live within the mall itself cynic could say that some of sake of our life fashion show that there and we want our bags to become more acceptable you know for years -- -- was known as just.
A place to go get clothing not to get -- they brought in the former chairman.
-- Shea and he's revamping that Brian and plus size women being that it's 55% of the American public today.
Is a great opportunity to show them how beautiful they really can be and as a reaction to -- I taken and we're gonna see more this -- -- on the web.
Yeah I we've already seen it on the web and you know and -- and -- exactly Wal-Mart.
Went out there on the web and actually got busted for -- big time.
And there's a whole story about that because they said you know this is an authentic.
-- deceiving the public this is not real and I think cattlemen get it and you know adamant -- formally apologize for what he get out on the web so.
You know the consumers have the responsibility.
To be able to -- Say no this is not real I want to be part of this and -- the authentic.
-- -- and I know we have to go but had a line that.
Well I think I think you -- to start I think need to be aware of it now for the first time when somebody mentioned something to you because of this movie and because of the heightened awareness of buzz agents.
You know start to say.
This is real or how might being persuaded by a buzz agent that's getting paid to persuade me.
Have to wonder about the risk reward for ticking off consumers want to find out about it what you've been had what's the long term viability feel -- You think about it like I think about the Kardashian incidentally you know claim they lost all this weight on this product in the how many people went out what would ever that the product was because of it so.
Some of it still works consider the source yeah I guess.
OK is it at least -- -- you knew who the source wasn't pregnancy.
Diet well got a break or they're gonna break.
So thank you could not very regular chairman -- found gives him an advertising based in Florida pleasure to have announced that I wanted to take a break.
The look of -- had asked -- to be right back.
Hi welcome back to foxbusiness.com live Tracy Byrnes.
-- great in for the ailing Chris -- market is up about twenty points and now we pull back a little -- -- still on the greens it will take it.
This will take is that apparently these days we have a little more leverage -- their banks when it comes to our credit cards at who have been chairman co-founder of credit dot com is here with us.
I don't by the -- -- by the way did you ever get any kind of leg with our banks and was killed that poor person but at the TD bank the other day really.
-- -- That's the spotter for another show but I just -- the -- merger with Commerce Bank went very well -- -- -- -- Jordan Jordan -- -- on the battle to get some -- agents we -- back.
He advises I mean it is strapping lad here -- -- All right.
I don't what kind of legs a little leeway do I have now with both -- what we're -- email by.
There's actually begin to fill up with those preapproved credit card offers again a lot of the mileage related.
-- also seen instances where people actually call credit card companies are getting rates reduced -- -- but that's -- to tell us yeah well what's happened really is that because the community.
That the banks have been operating with has shrunk.
Because they've cast aside many credit challenged consumers and as a result if -- had decent credit.
And a good history.
-- relationship with them.
They not only want you for the credit card that they want you for other relationships to whether it's bank and banking relationship right investment relationships -- they're trying to.
Expand their footprint.
While the same time focusing on the better credit system stealth marketing we'll give you the 0% credit card for -- two years.
But we really want to become man and take got a mortgage and -- something.
-- -- they they do refile with us because that is the truth is the world changed the Internet this is made things extremely competitive -- the financial disaster has.
Trim down -- the pool of people that they that they deal with.
That the the regulatory environment has changed things and plus the fact that they just have to fight more because it's -- more competitive relationship.
Adam and that this is the reason I came to blows the other day it was that this all these dumb -- Overdraft fees.
You know late fees extraordinaire.
There's still days.
But I live there and they're they're definitely -- -- not good anyway.
They're not gonna go anywhere but you can appreciate them a little bit but you have to really kind of plot I thought I mean I fought and I got -- wiped out but does that -- and that means every time this happens I have to go.
-- but it's a struggle that I can't play and killing people is never.
But it's it's a thing where it.
Instead of the -- environment that we've lived through it's kind of like give me a level now.
And you know that the public is strengthening its hand again because banks -- can't just go out and and add to your earnings by buying another bank.
Those days are gone so.
So what I am yeah I'm a consumer what do you how I get some -- because I feel why do -- select bank takes my money.
But at what you do as you look around -- -- -- -- a lot of deals are being offered at the credit union level and the smaller bank level.
Then some of the big backs so look around and then.
Started little argument that some of the finish -- doesn't take pleasure is that as leverage with your own institutions you don't actually have to go -- the yeah -- Of moving.
Sometimes it works sometimes it doesn't have the one thing that's that that's come clear is that marketing is the game anymore it's really consumer experience consumers have a lot of bad experiences.
Financial services into -- understand they have to.
Deal in that environment and they're gonna have to extend themselves a little bit more than they have in the past they're gonna have to offer more and be more flexible so you would save.
How long to be seeing this turn how long has it been more.
Consumer friendly vs survivability which we saw through the end of oh wait -- and much of last year literally just the past few months.
Very very few months that -- turn has happened and it's it's starting to blossom perhaps nobody else in the spring and summer can ask what what what's next what do you see on the horizon what sort of perks make you -- coming back or or in enticements.
To keep you there because clearly they -- to keep deposits -- just in case.
We had another rough -- so to speak I think they'll be all sorts of mobile banking applications -- -- -- so they're they're trying to make it as convenient as possible that are certainly now as a result of the regulatory environment forced to.
More plain language.
More easily explainable.
Bigger bolder brighter so that people feel they haven't had more control you see some of the credit card companies coming out of you do it yourself credit cards.
We you can isolate those portions of your -- you want to pay right away.
Vs ones you may want to pay overtime and then you can develop a plan as to how you want to pay them overtime so.
They're trying to compromise a little bit with us I'm not saying that -- it's perfect I'm not saying that we're living in -- utopian environment.
But I do think at least it's something where we have a little bit of leverage and while we have that leverage let's use it.
That's a good point cement on the on our chat wrote let's give mortgages to people who put big bounces on their credit cards.
Or better yet just help us out in the mortgage process -- I had been through recently -- it was terrible.
Is that gonna get better as well we can see these banks need to become a little bit more.
-- know consumer friendly when it comes to the mortgage process as well.
They may become consumer friendly but they're still going to be asking in light of what we've all gone through they're going to be asking for greater documentation to make absolutely sure that they're they're dealing in in a good situation and there's pressure on the banks to make sure -- the consumers can really afford it if they take it unfortunately during.
The past few years what's happened is that consumers had their eye on the payment at the moment it was apps like field it.
Where you can get a ten dollar week television set you never realize that that ten dollar a week we go on forever.
So it's a situation where they're they're forced -- to be more realistic in the way that they -- people but also to make people more realistic in the way they seek.
Financial service products that's -- Well.
Continuing credit trouble I know we'll see you again soon it's yes it was a huge -- -- lives and.
Never more so -- -- than in the past two years I think that's Adam thanks so much thank you visited tips get out there and haggle with your bank -- Hagel as leverage well you've got it did today.
Can be strapping and -- -- You know -- live that down have a great.
Added eleven shooting co vendor credit dot com thanks for being with us just -- O'Connor gets on it -- -- -- -- -- -- -- -- -- that -- -- -- -- for the last two two days.
I tell us really economists are what I -- Well what -- my I think -- Party you caught yours as well earlier this morning but I -- have a little footage may be.
It is lunchtime at least here on the East Coast and now what what what's better than.
Thirty pounds of pepperoni except thirty pounds of pepperoni.
That are molded yes I'll -- a bust of in -- can sue he has a defensive tackle for Nebraska.
He is likely to be one of the top three if not.
Sports Illustrated is -- could be number one as of today the draft is on Thursday he was a visitor is on parting company -- this morning Tracy was on -- and subway he is now a spokesman with them.
They did the honors there of course and we had to bust live on settled again over a snacking on the pepperoni -- anything there's a gentleman there actually pretty decent -- you -- olives.
For the hair olives and there he actually was.
Very very nice guy -- very nice guy not -- seem to have a good head on his shoulders about his finances knock us.
Yeah there right now.
His mom's a teacher and he said that she's you know been trying to teach him to be practical but you -- he's got to come into about ten million dollars.
I want to say though that on the street it doesn't look nearly as big or closing.
It looked a little frightening in person it look like -- peeled your skin off and you were just like it was like his bloody mask but that is all the pep rally.
Pepperoni when a slice.
Thirty -- of them -- Italians enjoy.
It's probably eat it but you know what was really impressive this -- -- Three to four foot long subway's sandwich is.
And when sitting if you need evidence that the segment was like it's Stuart Varney.
Multi millionaires said that he loves subway because he gets a foot long for five bucks couldn't seem to start -- -- of course I become well that's about the price to pay for -- for -- I didn't think it.
It's really -- about it -- -- very -- -- -- -- you know an Italian billionaire and not seemed it to have a good idea about him saving some rainy day because those careers are getting shorter and shorter it.
I -- my two cents -- he had a posse bigger than my time family that is arrested for disaster right -- could you pay those people -- but he now.
But he didn't invoke NC members say at least you have an idea about what what could happen -- -- -- -- -- your -- new cars can lead to your financial demise.
Of the enemy never -- -- -- -- -- It -- -- Thanks very much for having me today is any and hopefully mr.
Cotter gets the most and some -- -- -- sort of just yeah has very impressed.
About 32 points we'll be back tomorrow.
Mean -- rather Chris will be here maybe runner who knows -- today.
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