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Stocks got a boost after themselves at pending home sales came in a top forecasts that it was up about fifty points there and Arnie this is way more than that.
On what on stuff we have -- -- on the fact that a tax credit was offered and people rushed to close their deal I mean.
No I think it's this simple looking very reason Iran.
This is a make up call you know in sports they have a -- call the officials call foul.
And it really wasn't very good call on the fifth on the back -- months ago that wasn't really very calm and make it up to the other team next time down the court was on bass -- We knew would Eric Holder was gonna say last night.
And he said it judge yesterday afternoon last hour straight fish market sells off we already knew that it wasn't -- as we knew that he was gonna.
Investigate both civilly and criminally.
We knew that was gonna happen yesterday morning I talked about it at 6 o'clock tomorrow I don't so -- -- claw today with what the makeup calls investors saying I hop we sold off and probably should've sold off yesterday afternoon with the noting that was gonna happen.
The pending home sales will -- because of that even though.
We knew that was gonna be good -- because everybody has to get there they had to buy the home and maple they've got a close on the home in June to get this tax credit.
-- goes on talking about this is a former lacrosse player they're really Smart.
Our average kids there's -- -- dry grass off that you also allowed them.
You have eleven -- eight you know eleven on strike any luck going on yesterday at the end to close -- coming today.
Was this team at best this morning and then tune to -- up like this all because of pending home sales that we knew I think -- -- -- this -- the -- giving themselves a reason to take off today.
It's it's -- if there is nothing.
Cred Beckham joins us right now equity products that his -- yeah freezing company here in New York -- what do you think -- make up call right now.
Well I think -- is a little bit of a typical circumstances expected -- market that's been broadly oversold what I mean by that is we see data that's good but largely to be expected.
The market finds a way to rally in the back of it here I -- what's interesting and that data is that it's -- it inherently domestically oriented data point this is a market that for the better part of a month now.
Has really -- and -- based on broader concerns about the macro environment.
I think the plot thickened a bit last week because in addition to that.
It's a persistent worries about what's happening in the eurozone high and as well as some of that the dynamics coming out of China.
We've now got a little bit -- geopolitical risk that such seemingly.
That come rude to the top of that the investment story here.
I'm certainly influence in sentiment on on a day to day basis I think the bigger picture theme right now from from my perspective is it -- the US market get refocused on US fundamentals on the economic side.
-- so today's data on the housing sector yes -- may be old yes it may be influenced by the tax credit.
But nevertheless I had I I I don't think that it is it obscures a generally pretty positive and constructive fundamental backdrop for US equities on the back of it -- -- economic recovery that's still under way.
The could be a good point and and it is time we start heading back to fundamentals but -- -- fundamentals there.
Are we seeing top line growth like everyone's been waiting my neck like every quarter -- saying he wouldn't pick up -- -- certainly important we're not yet we're not seeing the consumer -- of course.
Housing -- another story.
Still losing jobs and I just I don't see the case to be made yet.
Lot -- they kill your thesis will get tested to some extent on Friday when we get the -- job report for the month of may we're expecting to see is a huge payroll increase but even if you take away the contribution to that job increase that's tied directly resulting from -- census job that's we'll probably see something and -- and a 175000.
Private sector job that that'll be at two months in a row now of actual job creation.
-- that's a key underpinning for the -- the recovery story in here and as it pertains to.
The revenues story which that it is very very key point here in terms of gauging that I sustainability and health of this recovery.
You know we're the third month of the of the of the quarter right now we're not too far away from the point where that the market's -- refocus on.
The single most important fundamental driver which is earnings we still think right now that the European dynamics are a bit of a wild card.
How we are seeing estimates that they don't get from the lower mostly on -- on account of currency translation effects we actually act.
I -- software analysts here make -- to eighteen companies.
To take guys reflect what the Euro is done.
But by and large the company's -- technology sector that have been willing to talk about demand trends in Europe have not noted any meaningful disruption yet so.
Hi this stay tuned and watch that space that remains probably the biggest risk right now.
-- you one of our viewers pokey oaks kindergarten is a matter of fact.
Ask the question about the energy sector specifically you know all eyes are on the gulf and BP how much of that is a psychological.
Barrier I guess in the markets moving higher and in maybe -- crude moving higher -- -- -- and how much of that is.
As real economic value of the woods once that well -- cat is there a psychological boost to the market.
It out probably at the margin but I do you think what we have -- it.
But really does take a step back and try to look at what the Gulf of Mexico represented in terms of the overall energy complex I have -- -- -- up next -- productions only.
Roughly 2% of global oil production so I that we are seeing -- moratorium on ninety quarter drilling that's a bit of a pinch on the supply side all that being said this is happening in an environment where crude -- gone from -- north of eighty dollars that have recently below seventy dollars he had had some bounce back a bit out of the broader demand concerns seem to be -- the supply issues -- -- Stemming from that that that this bill.
In the gulf here there are some economic repercussions.
And certainly on on a very clear local level but.
You know -- in the energy complex specifically.
I yesterday was nothing short of a bloodbath in the services group.
I'm probably one that anybody's got hit kind of a two year timeframe anyway I aid will move could represented pretty -- afraid.
-- we had someone on Barney this morning who brought in the literal blocks of gold.
-- -- -- And tried to convince us all that this is where we should put our money because it's real money as opposed to the paper -- -- around these days.
I act I -- yet to be convinced what's your take on gold.
Yeah I I think.
It's it's it's -- an asset that certainly deserve some representation in those portfolios.
As a few different reasons to own gold you know -- -- the classic inflation hedge but I think -- more real time we have now is.
Gold attributes are really a reflection of concerns about currency debasement risk.
We've got central banks globally and most recently in in Euro -- Have essentially a firing -- the printing presses.
And what you see in terms of full rallying both in your terms as well as dollar terms -- a reflection of of increased concerns about.
Just how viable the -- the Fiat currency model is here.
We -- -- what do you do from here you know if it is a feels a little bit like the democratic trading everything you need to focus on you know why you wanted to get a gallon or more ahead than anything else.
Putting money you work right now correct me on this 10% plus pullback.
You look at the by some -- -- -- wait until maybe some this momentum settles down about it.
But hey that's -- and on a day to day basis that it says that to get real excited only because.
It doesn't really do you like the market is moving based on local fundamentals it feels like it's really being dictated by.
-- -- -- But you know we do think they're there and a lot of signs here of a market that's generally oversold.
And one of the things I was looking at this morning was bearish sentiment.
Certainly -- not clearly on the rise since the flash crash earlier last month.
We're seeing you know less than 50% at less than 40%.
Bullish sentiment yet coming out of most readings which has been -- a pretty decent buys -- we didn't seem that sort of negative sentiment around stocks out days since last year.
Craig thanks so much for sharing your thoughts -- us as always.
Thank you have cut back on equity product strategist at -- and -- He was acts he's actually in New York.
Yeah but he's not here that's right we should have told them that he needed to get his butt up here because we have nobody in with us today -- -- -- time -- -- that.
Mean come true for me I'm really be joined by Peter Barnes -- probably come back thought about the legal.
Aspects of what's going on in the gulf and -- -- heated up yesterday afternoon and dancing -- -- -- -- burns Chris -- you noticed something interesting today maybe than usual.
As you look at the monitor.
I'm wearing my jacket wearing my mind that today it's.
It's nice and comfortable in here so I decided to.
-- it blows it's a very summary jackets so what that with a five year doesn't like this that I'm wrapped in like thermal -- Hey look that's like Chris at a jacket -- good on the market's up 118 -- -- -- good for the bulls as well not so good if you're in the oil services industry right now particularly if you're one of the five companies public companies principally involved.
In this deep water -- on the gulf right now Peter Barnes joins us from DC Peter yesterday afternoon the whole entire criminal.
Investigation really heated up when Eric Holder made his announcement but under what law -- Are they looking at charging either BP -- Halliburton -- other companies -- violation.
While they Justice Department mentioned four specific laws out there that are on the books right now.
-- Chris the Clean Water Act the oil pollution act the migratory bird treaty act the endangered species acts are.
The four that the Justice Department listed as well as they said.
Quote traditional criminal.
Acts as well.
Criminal violations so looking at five different areas.
And what's gonna come on any of these Peter means we -- -- here can we go yeah yeah because according -- -- -- -- he -- like this crazy.
Well -- in some areas they do have very easy cases and other areas they do not for example the easy ones are the migratory bird act and the and oil spills for example.
If you find a bird that's covered with oil and it's dead.
That's a violation that the criminal violation and that's prosecutable so that was an easy one it's going to be harder to prove criminal cases in the actual oil spill itself.
And in the explosion of the rig.
You know right now those are technically accidents to in order to prove criminal criminal case there you'd have to show willful -- disregard.
Of the law and or -- negligence so those are those are tougher standards to make.
The standard is pretty -- they also have to determine it is it a percentage of who's at fault is it finally determining once and for all that.
One particular company is -- -- because I imagine that adds to the complexity here.
Yeah on the civil side that's going to be one of the big issues here is you know who principally who has the deepest pockets.
And the greatest responsibility.
You have multiple companies and a contractors.
And all and the owner BP involved in all of this for five different companies all of them could be held legally liable.
Not just in -- civil cases brought by the US government but also.
Private civil cases brought by injured parties are already are lawsuits for example filed by.
The survivors of the of the workers who were killed in the rig.
Not so we're gonna see a lot of those as well.
Yeah I guess that's I should have been specific about the ones that I think are crazy to Clean Water Act in particular -- is going to be really difficult.
I mean if I have to choose a prove somehow that.
This was purposeful -- purposefully went right out there to tried to put -- polluted the right.
Right that's right and and that could be hard because again right now it's an accident and that's not -- criminal liability.
So you'd have to prove again will willful disregard of the law in that area the laws and regulations that.
Oil spills or just negligence that that could be a little bit easier to -- too well prove because we've heard already.
From that number this ongoing testimony that's going on.
In this joint investigation committee.
By the department of homeland defense of the department of interior that's been going on in in Louisiana for the last week or so we've already heard.
Lots of stories and evidence from that about just mistakes that were made in the in the drilling itself procedures that might have been ignored or.
Our short cuts the president will actually give a speech -- -- that Carnegie Mellon in Pittsburgh shortly.
And -- he is going to specifically talk about the possibility of human error.
But also he will say that according to the excerpts this might have been caused by corporations.
Trying to take short cuts that's a shot across the -- Question and a here one last thing real quick about a month to go all the talk was about the cat.
The semi five million dollar cap.
And they tend to have you congress wanted to add that it is legislation that bump that up to ten billion dollars but I guess that's -- -- -- point it with all of this right.
While there there's some.
Provisions in the law to provide for higher penalties but.
Provision in the -- that 75 million dollar cap.
Which covers certain areas of the law here is is going to be changed by congress no question about it the debate is.
By how much there is that that there's bill that would.
Increase it to ten billion dollars from 75 million.
But some critics of that particular from oil producing states say wait a minute that's that's way too much ten billion dollars -- company.
Let's do it as a percentage of company profits.
So for example -- congressman -- from Louisiana.
As supporting that so but one way or another that capped by that cap is going to be -- significantly no question.
Peter -- everybody wants someone needs to take the perp walked just like every other it's big event that we had and it's not gonna happen I agree with you end I don't think the years superb block -- I cannot.
What you -- it is stuff.
You know all these awful.
Did Byrd's public oil and it's gonna get to the heart of America unfortunately bureau that up you know oil Peter Barnes and talking -- -- down in DC we're gonna keep talking about all -- and all the people that are getting her.
-- -- down to New Orleans now.
Mike Woodson is in with a is owner of whom.
It's a commercial based you could hear commercial fisherman -- is that correct.
I quick commercial farming operation in the Gulf of Mexico Louisiana specifically boosters -- seafood processing plant and distribution.
And found in Louisiana seafood promotion and marketing board.
What so how I'm how hasn't been for you how badly have you been affected by -- this.
Well no seafood community in south Louisiana produces about 2.4 billion dollar annual economic impact -- -- Louisiana.
-- numerous closures -- areas.
It's been confusing to a lot of the communities you agree cultured it on himself always eat the food.
He you know we don't live to eat we eat to live.
As most people are coming into the south Louisiana -- you know we've.
Great shops in -- restaurants in New Orleans.
The product is still available.
Only about 50% of the harvesters are close it was kind of mixed messages out there in the marketplace.
But it's been very challenging -- -- of small business operation -- -- operations.
And small businesses under thirty employees.
-- had to shut down basically as a result of not being -- get.
-- Like you mentioned product what types of product will be hurt the most.
In your mind.
On this bill both short term and long term and people -- -- of noise here for example out west.
-- what will they see shortages up here soon.
Well we're number one producer of oysters were number one producer blue crabs and number one producer crawfish calendar here.
And number tune and a few other items we are in the lower 48 we produce about 30% of the seafood it's domestically produced.
Oysters I think is one thing -- probably first be noted because there's been substantial.
Closures and these are all precautionary closures that are being done.
Only as the oil kind of moves northward.
-- precaution narrowly.
In case there's problems at this point there's only been -- smaller -- world or will this impact -- -- issues involved but the precautionary closures and made it unable to be -- will be harvested.
So we'll see shortages and oysters I think blue crabs is another one you see shortages.
Shrimp and Louisiana -- produce a 110 dollar and twenty million pounds of raw shrimp being here.
But there's lots -- -- -- elsewhere but they'll be sure shortages -- domestic trumpet this one's well.
It's -- and you tell people whether or not it's actually safe to come down and eat in your restaurants right now.
Perhaps saloon -- director grant park and snow we're going into our summer season.
There's availability of product instead -- locally.
The environment -- grace and festivals we've got a major oyster festival this weekend in New Orleans we've had -- -- the last few weekends.
-- in -- for the local festival's local restaurants.
Didn't have spotted shortages but overall.
There's availability of product and product in market -- You've been tested borrow federal agencies and state agencies.
Again closures -- precautionary.
In case the person she -- break optimal blue -- break off.
So far none to my knowledge or can you do agencies the -- has gotten into your experience.
Michael you already seeing whether it's.
Fishing vessels or -- businesses related to fishing in your area.
Struggling whether -- to make mortgage payments -- make payments on both already because of what's going on.
Well creepy setup the claims process and you know working with the commercial fishing community you going to -- center and pretty quickly within 48 hour.
Period didn't turn around -- -- dollars and help you to be able bridges challenge.
The amount of money and putting it's not enough to completely.
-- -- challenge faced by fishermen but it's enough to help them bridge that challenge at this point.
I've been there have been challenges there are people -- so produce a lot of relief agencies and Paramount are helping those individuals.
Well a lot of commercial fishing innocent citizens weren't people were.
I'm not making a significant amount of money but they're able to feed your families they work week to week a lot of the -- in some -- so.
This is a real challenge to them.
-- wish all the best down there.
Thank you whom he prepared foods you absolutely.
Did send people down -- -- -- visit.
Might poison is a commercial fisherman and owner of I don't you know it's motif that then I asked them say motif a team that.
I'm struggling today I don't know if it's Wednesday it's short it's -- but I didn't really as it was Wednesday I'm -- -- call no this is my problem I'm off I think it's Tuesday.
And as you usually get most miserable on Tuesday and today so yeah clearly we all -- barely one miserable and Wednesday.
One honestly Tuesdays and user access but what book contract all total caught my -- You know we'll talk about a lot of experts down in the -- I mean everybody the oil industry's the industry whatnot.
Well the Environmental Protection Agency.
Is meeting went twenty.
Experts scientists and other experts including.
Titanic director James Cameron is among the experts.
That he made a movie.
About the ship that sunk in the north Atlantic and also about avatar and some other -- All my feeling is I compiled.
That next group.
Of experts at they're gonna send down there in what's gonna come next for the environmental protection act.
Is -- suggest volume Will Smith they're gonna need him to go down -- because remember they got all the recalcitrant robots down their flighty gently C three PO and and Hal and all the rolls are down -- -- didn't get it done so little bit hollow man in black all -- iRobot Cairo I was kind of -- Chuck -- like I said he's -- swim down there 5000 feet is the case at Bailey junior shows up and -- the muck around down that we subsidize.
Of George Lucas.
Because that's all it doesn't get fined by the way what don't we have enough lubricant down there to keep that's all -- mean it was that the -- the saw got stuck.
MI at only one that I'm Marty this morning Thornton said store if I don't there's a puff game was like that -- predicted Ford as -- largest.
So all we need George Lucas in case that sought to stay stuck with the forces the last as the last hope -- -- -- yet CI and that that doesn't work I said we'll get Bill -- is he drove the submersible in the movie Titanic and you can drive down that apple might fall was the Paxson he's gonna show up as the carry to shed.
In weird science not his very easily confused.
You know that can be mess.
You're clearly making fun of this.
Yes I'd gladly hand but are we didn't meet meet may have something to this -- something to the notion of bringing in creative mind to think outside the box.
Yeah I can just see him right now itemize on scene that's what he's trying to set.
To any scientists that this is not this is science fiction right here.
I think we can now where -- this time dare to dream there to draft pick they got that would be could be like this week it can look like this once again in the Gulf of Mexico.
James Cameron -- -- break we'll be right.
3-D glasses and that's it.
Talk about husbands that -- live trees -- -- kind of we got -- Dow that is up 100 more points.
I'm -- -- try to explain it.
Because I don't get it but Adam Shapiro seems to get what's going on downtown these days he's at Manhattan's new school.
Adam -- and the oracle of -- not getting questions what's gone on.
Well this is the Financial Crisis Inquiry Commission could issue their report by the way December 15 then it'll be.
No one of those big things that you know maybe the aides to the members of congress -- read it.
Will be big gonna have a lot of stuff right now the talking about that the credit rating agencies and particularly Moody's bring about the end of the world as we knew it -- -- financial crisis sent.
Essentially what mr.
-- -- is saying he's actually coming into the offensive Moody's and -- CEO by the way mr.
Buffett does have a large stake in movies he's one of the top five shareholders.
But they've basically saying the whole world missed -- everyone missed in fact one of the quotes that I pulled from him -- he was testifying was that.
You know he he says that when a bank.
Blows it then goes to the taxpayer to get bailed out the CEO should be thrown out on the street broke along with his wife they should be -- -- should be.
Incentives for good behavior and punishments for bad behavior.
But he says in this case with the credit rating agencies which clearly missed it blew it he says everyone blew it it's not the same thing.
Therefore he's not coming down hard on -- How much of them of what we hope to hear today is more about not whether they missed it -- as to whether there were negligent in terms of for lack of a better phrase getting in bed with these -- sank down.
Then that's really important ally he's testifying right now but earlier this morning we heard from man -- used to be.
In a role as a kind of managing director of movies he's no longer there.
And you might even call him I don't know whistle -- would be appropriate more like the insider I wrote down some things he -- on my Blackberry Caracol kinki.
And here's some quotes from him because it's very important that the issue at hand is did the credit rating agencies essentially you know -- only a few of them so it's not like you can go and shop.
-- credit rating -- compete with them but did the credit rating agencies.
Sacrifice the quality of what they do.
To get -- quantity.
This business to -- these are structured investment vehicles and these mortgage backed securities and here's what.
Physical -- he said quote many analysts under pressure from bankers and their high deal loads.
Began to do the bare minimum of work required we did not have the time to do any meaningful research.
It all the emerging credit issues and he went on to say he pointed a finger directly at Moody's management said.
Management also went out of its way to placate bankers and issuers.
Contrary to testimony of a moody senior managing director bank of requests to keep certain analysts off of their deals.
Granted the weather that rise to levels something criminal.
I'm not a criminal lawyers -- -- now.
I gulping down a little confusing because on -- -- he's saying it's not the perfect model but yet I don't have I don't know what the alternatives are.
He sent a symbol of -- -- I -- but that that.
That's a -- is saying he he said it won't point ticket there's this issue look if your bank you pay the credit rating agency to give UN and the conspiracy theories that you pay the credit ratings give you what you want a good -- right so then look at the flip it if you don't go to an -- -- -- you go to the user page that I as the investor.
-- perhaps rely on this rating for some kind of data input.
And I should take that information right now it's free and what mr.
-- -- -- it is very difficult to think of an alternative.
Where the user pays because it would become just too voluminous are too expensive to do that.
But I wanna I wanna read some quotes from ray McDaniel who's the chairman and CEO.
Moody's he's testifying as well right now he said this and that people the credit rating agency -- all the time but if you're an investor pay attention because they've been basically saying some things that.
May make you want -- lap for May make you want to rethink what you're doing.
Credit ratings are not investment advice that's a direct quote many says.
Investors should not rely on ratings to buy sell or hold securities which begs the question and we're hoping someone from -- -- lasted.
If investors should not rely on ratings to buy sell or hold securities.
Why have rating agencies.
The government requires that you know I know it's a great point I mean that's.
That's how it's priced Odyssey -- pricing in risk still think that that did not help you determine risk what motivated.
The other issue to bed and essentially he's the chairman of the commission came you know he talked about this nobody from Moody's which made billions I love the calls -- -- -- that billions upon billions upon billions of dollars.
In the last decade -- this stuff.
Known for what he's ever went.
To a community saying California -- Nevada Florida.
Take a look at the mortgages or -- the properties that were being underwritten by these mortgages.
They haven't bothered to do that they were relying on the input from the banks and from the mortgage issuers.
And that that was a problem nobody was doing quote due diligence -- almost -- mister Madoff nobody was doing due diligence.
Money not an argument during the -- crisis right Moody's and all these rating agencies.
Great on the information that's given them so it wasn't really their job to go out and figure out if what was given to them was accurate -- -- -- -- -- -- the auditors of companies and got the idea -- support spotted off they give me out of somebody out.
And then there are also protected by the way by saying look -- -- music and investigation and use these credit ratings.
As you know -- reasoned by holders sell.
Right which makes it absolutely logical rationale for having these things in the first place and -- You can't find work down there keep us posted -- Speculator.
We got a market right now it's up on seven points not so bad that the you know -- a rebound everybody would win this thing getting beat up even on days like yesterday when we were.
Flat all day into the final hour dropping a 113 points is just that I think it's just to -- -- -- will hold -- -- we get another day.
Let me yes they were little tiny little sliver of bad news -- not and not even news.
-- that announcement by somebody sends the market -- may be but summons move in this market higher and I have a feeling units on new evidence.
But it's -- Dave I think your point it's day by day market to date -- -- deep market.
I don't get it's an hour by -- at the and you come into my -- you just forget what avenues -- -- answer machine and -- Collective Brands is actually down down a lot of fair amount actually fiscal first quarter profit -- 40%.
Higher -- But sales well below Wall Street's expectations of footwear company so called my -- US Airways -- up all the airline's stock actually up across the board US Airways is the ticket LCC.
Was the biggest Gainer today but it was really -- -- from continental continental came out and said.
That they had strong traffic in May strong revenue traffic -- bar.
-- -- and number four airline so LC seen.
-- much higher than them but people out there traveling again -- -- trying to get him for the summer ticket prices go up I don't know.
-- -- -- and then they and a little bit completely.
Capacity down and -- -- -- of flights every single seat on every plane is taken it's pretty amazing right now.
And that -- even with higher than expected fares so they still be so that's what that is about 85%.
That was some cases -- Lotta Lotta things.
-- -- -- -- of substance and all the time and Els -- like rocks the Jones socialists green it.
Couple years ago and I thought it disappear -- still -- it's slowly -- his way back up but it is now going to be in Wal-Mart.
Come on -- the bridges and why can't I just show.
And make a big mistake the role that I'm Sarah I think he's making you know because he wants to have a higher brand.
The crew flagrant.
I Oden and Brian he's he's a stage manager by the way it never been used yet and things than -- -- -- -- it.
Did X is a going to be acquired by Sonic Solutions now I heard this this morning I thought it was the burger joint I had to go back and look at -- Sonic Solutions.
Online video offerings all digital media products no burgers and -- Sonic acquire DV ActiveX sorry for 41% leniency -- this close.
Big win again and guard -- amnesty at all now they.
Gave the guard -- -- are still 54 point 6%.
Approval to buy 13 of state in a it's in -- -- steel producer.
So expanding a little.
-- make it bigger.
Stocks -- of that little -- not there that would appease socks off the Red Sox have a lot 75%.
John Harris fire -- is not -- they're getting bigger they're.
Expanding into parts is still.
In and materials.
And it's chicken and haven't had expanding like the sound of that that's bullish Tuesday in my while -- at NASA -- -- -- David Stephenson joins us Peterson joins us right now vice president portfolio manager -- -- the capital management.
In Baltimore where they did have -- lacrosse national championship this past weekend Volvo across these days David welcome to the show -- -- I did what what do you make of that last stopping his talking about a small steel company acquiring another -- This is like bat without a bomb materials names asked -- -- to investors out there right.
That it's very bullish.
And what you're saying it just in the steel market as you're seeing.
Capacity utilization increase saying I -- prices going up again and that generally happens when there's demands.
That there's a lot of -- is out there not much of it being reported that things are recovering nicely.
And that's a good -- But why is it being -- but is it because.
There's so much negative news to cast over it isn't enough I mean -- -- you just -- in -- blade of grass out and running with it or is it enough to say.
There's a ton of good news to -- market around.
I wouldn't say there's a ton of good news attend a market out what I would say though is that there are some large overwhelming negative stories out there.
That are really driving things -- -- the European financial crisis is overwhelming to many people.
Even though it's not a huge trader.
Trading partner with the United States that -- the he's trading partner.
With countries like China and then the Chinese growth story becomes an issue.
So I think the what you have there is some large.
Stories that are negative.
But lots and lots smaller stories that are very positive jobs in the United States.
We're gonna get a report on Friday that I think is very positive just like it was last month.
And and that may or may not.
-- well reported on because you never know if another country in Europe -- sides then you know they've got issues -- they can overwhelm it but.
You gotta watch the individual stories and they're relatively ged heard of the US economic recovery seems like for a.
-- a year here David we got nothing but at least a little bit better economic data whether it's from manufacturing or housing or jobs.
And that's a much jobs but this -- and housing in and over the last couple months a lot of -- status seems to be wish you watching you getting that feeling right now and they were hitting.
A little bit of a plateau in this recovery.
I think of course that nothing will go straight up or down but look at the ISM number yesterday it was it was huge.
A great number.
So there are some good news items then there are some items.
Data points that are are not as strong as we -- and today.
But no recovery that that that I've learned about her experience.
Has been a straight shot in any one direction.
Say -- you're gonna get these fits and starts and air pockets of weakness pockets of strength.
But I think by and large this recovery.
Is a little weaker than everyone would like it to be but with three to 5%.
GDP growth forecast.
And and and the same number eleven I think that that's pretty good considering where we've then.
Lot and based on the history of Hewlett-Packard I'm impressed that it's on your list that you have Hewlett packer on your list as a very -- stock.
What are your favorites how come.
Well it's almost entirely -- valuation story with some sick -- -- the associated with it.
This stock is trading at a 2000.
Eleven earnings estimate and and that is incredibly cheap and they're growing their earnings.
In double digits so that PE to growth rate is is less than one which is typically a nice.
Dynamic for that stock anyway.
The other very important factor is there is a corporate buying spree if you well.
In technology and he'll that is a direct recipient of that and and they're claiming that we're still early in the cycle as is Intel has is Dell.
So it's really setting up nicely.
For that company.
To be very well for the next couple years and it's not reflected in stock price.
Over the last three months David probably two biggest news items we've talked about Health Care Reform on Capitol Hill and the oil spill in the gulf you're next to names.
Involve Google both of those let's start with the oil spill in the -- you like an Ultra Petroleum neighbor that's little -- -- Natural gas play -- him.
Well that's right but what's happened with all of the names regardless of whether they're natural gas oil gulf non golf -- it doesn't matter they've all been taken out in case.
To the -- and what we like to do as sort of value investors as we like to try to find opportunity in the rubble.
And then there is no reason why you.
All of petroleum is -- much higher than it is you got to thirteen times next year's earnings they've -- a lot of their natural gas prices.
-- the best operator in the in the industry and what's more important probably.
Is that a lot of companies like shell and Exxon have been making natural gas purchases buying companies.
And these are the best operators have.
It would not surprise me at all not only -- they perform very well and high gas prices but that there will be some interest from an outside party.
Yeah we had have Rasmussen Paul the other day about health care and -- that 60%.
The people that responded were in favor of repealing health care at this point.
We -- -- -- is more government money now into the process of this whole thing but.
So -- in -- tri -- gonna wind through all this.
They -- of their medical device company and what they did as soon as this started to sort of percolate.
Is they set out on a billion dollar cost cutting initiative.
And that was their estimate that roughly of what they thought the health care initiative would cost them in the form lower profits.
Says they're way ahead of the curve.
So we think that their earnings stream is going to be relatively unaffected.
And more to the point they have new products in the pipeline.
And all of this seeking get for roughly twelve times next year's earnings.
And they're growing faster than that once again you've got this PE to growth rate that's above one.
Or below once art -- a very attractive entry point has been passed for Medtronic and we think it will be in the future as well.
HPQ and DT NUPL.
With David likes David thanks a lot for joining us today.
Thank here and say hi David that's -- first for David Steelers invite VP of portfolio management.
Manager -- the capital management have them back on to.
-- -- -- And noticeably Melissa well I think he was standing right in front of the TY so -- lucky you look -- -- at -- sad outlook cannot look at actually.
They can argue that I'm burger.
I got a comeback they.
I'm hungry if -- -- Thanks a lawyer it thank you so much -- take a break out the army person that -- -- my -- that was Sonic -- I don't see sonic yeah.
Birds and now parties -- -- food and read me.
My iron on all I'm glad yeah united that's very -- it -- that mean it was a joke.
Welcome back foxbusiness.com.
Live Cotter and burns on Wednesday or not it's -- issue -- we hope you'll enjoy it out there.
Are we -- a 110 points right now on the Dow Jones Industrial Average as you can see.
By the charred near days.
Session highs I should say -- a little over.
1% all right we do a lot of business online and we we do is -- it you know what.
It does even it -- -- scare me -- people of our generation who've grown up for the most part I mean I started yield shopping online.
When I was maybe 2930 years old solely a little bit later on in some but you really got used to it in a hurry we kind of take it for granted think that it's safe it might not -- That's -- John Y -- joins us right -- this is CEO of seven sticking to -- or not -- California to talk about cyber attacks welcome John.
Thank you -- are we as safe as we think we are when we go online to shop will start on the consumer side.
Well it is it really depends I mean that the -- is that we're up against is that there's over a hundred million web sites on the Internet today.
And if you look at all the -- that exist out there there's about 5000 new attacks that can be done on these applications that are sitting on the Internet every single year.
So a lot of these companies are either doing no testing or very little testing.
Or not continually testing their applications so the answer is that there's a lot of risks associated with that.
-- -- I -- two big -- -- IC one risk is I've put my information out there as Chris said because I don't know how to shop anymore if not in front of the computer.
So you're gonna get some information my bank information it summons gonna get that go to town and realizes that the only checking out the other side of this is.
The cyber attack from you know another country somebody coming in shutting down need to -- -- our entire country.
Can we talk about that how much of -- risk is that.
Yes so if you look at we know what who gets -- there's a couple of different vertical that are really driven for attacks of the financial community.
No question about it the e-commerce companies there's lots of attacks -- get down on on that information.
But government is -- the number one were in that group that gets hacked and and that people come after.
I was talking to -- official and in Washington DC were having lunch and actually made a statement which is in one year.
The US loses the equivalent of one library a congress of information to hackers the command and steal information.
So it's not only -- -- credit card you have to worry about but it's also stealing secrets -- stealing the latest designs the latest chips.
That this espionage it takes place could even be from company to company it's our country to country which is a big problem.
Why our web applications web sites -- applications.
So easily hackable I mean you would think that you know the at the smartest people in the world -- hopefully.
Working for whether it's from Microsoft whether it's for apple whether it's force Cisco system whatever the case -- -- you'd think they would be able to prevent this that's not the case.
Now what you see when you look at an application that the challenge Iran into -- -- create the applications are very creative.
So they create applications that look -- that interact really easy they're easy for people to use -- these various technologies.
The problem is is that when you compile all these different moving pieces together into an application that people can -- is.
Unfortunately there are susceptibility is it it's almost the equivalent of when people write software at a rate an application is there any bugs and it doesn't work the first time you get at the answer is no you have to test it.
If the fix those vulnerabilities are those bugs that are part of that code in order to get an application that works form fit and function.
-- application security is no different those applications when they're developed need to be tested.
Need to be looked at how people will misuse.
An application because remember hacker does uses an application machines that you an idea which is become -- browser.
And instead of putting nice -- hey here's my name here's my credit card information here's my Social Security number.
They put attach strings they put other active script into those fields.
And submit them to the website if the website doesn't understand how to handle that code a lot of times they go into an unstable state and when an application -- on -- in an unstable state.
Then they're able to extract and steal information from those sites.
Crazy but explain to me though why our government doesn't have -- -- so I worry about cyber attacks more than I worry about other things.
You know this money aside -- they said three activity -- million dollars in the stimulus plan.
-- cyber security.
And that's not -- enough I got a czar.
-- we have -- that's how we got out of it but so why not focusing on the -- -- -- to many this is a huge issue.
Yeah -- when you look at what's what's currently happening there there are things like if you look at GO BA or hippo or Sox.
It has broad -- statements that say you need to protect the person's information you protect consumer information.
And if you don't do that down and we've all got -- you get the letter from your your financial institution that says.
Hey what we lost your information and and by the way here's a year of some monitoring service it's gonna make sure that if you -- on this user information it's okay.
-- -- I think you know to be -- -- that the government hasn't done enough but I think the consumers have to do more.
I think the things that consumers can do like you and I is that if we are doing business doing commerce with a company that gets half that -- -- information that's not doing a good job of protecting information.
We as consumers should stop using that merchant we should stop using the services and ultimately send the message.
-- the average cost of -- hot so so if you go back you know eight years ago when when -- just started coming out on the Internet.
It would cost about a million dollars to go fix a hack in and to -- give goodwill to the customers that hacked now it's over six and a half million dollars well that's not enough damage that's not enough pain today to these companies.
To take a stronger security posture so as consumers if we can hurt them more through that process they will they will become more aware of this and say.
Hey I don't wanna lose this hurts my business -- -- my stock price of them enough they'll pay more attention to it but right now the finds a relatively low and it's not it's not a great enough pain point for people to do more.
John I would imagine companies like Amazon eBay have.
Entire wings of buildings -- Preventing cyber attack at sends it -- you focused mainly on the small smaller business because you know.
Being a shopping online is it you know everybody's got to do it now.
Yeah and interestingly enough -- I'm almost there are companies are the fortune 1000 and so we have the very large corporations that.
Have the large security teams and -- you know they'll have twenty people thirty people that -- just purely on their application posture.
They'll test their applications they'll do it on a continuous basis and and they'll do it free -- in and out and and really think about security it's it's.
We go through leader ABC is an application security and the eighty she's an application security is that you assess your application.
And you find your vulnerabilities need to do that on a continuous basis just like you would with antivirus for your desktop.
And then when you -- vulnerabilities it it unfortunately it's it's an application that -- it's being used on the Internet today.
And -- that he is blocking technologies and there's good blocking technologies out there from companies like.
Cisco and barricaded and and citrix and and they have blocking technologies when you find the vulnerabilities of our solutions that you can start blocking.
And in the last part of the correction part.
Where over time either -- your consultants or your internal developers to go fix the code.
And this is just an ongoing life cycle it has to happen -- application security.
That the companies have taken the advantage of lower -- they don't need to hire people because people we're all doing stuff on line which is cheaper for them for them right but now what they have to start doing is taking some of the savings.
Putting it back in to secure our information to make sure it -- secure.
I -- we got.
-- my second -- but quickly as a consumer what -- I do or look for when I go shopping online.
Well I mean I mean some of the larger companies obviously spent more money on security and and that's an important part to make -- information safe.
I think you need to to make sure that you know what the privacy policies are you need to go look at what kind of security what -- application testing have they done.
And what do they displaying -- what feels -- what has -- been done to feel comfortable that your information is going to be protected by the sights.
You can also look at the company is on the Better Business Bureau to see -- it -- they've got complaints against them if they've lost other people's information that will also help.
John thanks so much to be with -- -- -- good points.
All right thank you very much John -- checked out and it mounted cowboys CEO of send sick -- -- security cyber security.
You're having a rough Wednesday's last Tuesday yeah -- it but one of our -- is is also having a rough Wednesday apparently -- an acting hang a few of them on national TV -- this is actually you know what Larry you're right I agree with you the haven't such a rough weapons they have heard off your right online right -- you -- -- -- We'll be right -- do -- think.
-- -- -- -- lives -- how to act I am very excited about this next segment because I had young receiver again that's because I had all things down on -- that -- on how I am.
That Yamaha stuff you know now I I didn't yeah alcohol is too high and for me.
No I'm well up.
Tom Sumner and Rick Young out in LA are with us now senior vice president that got -- I'm telling you -- part of -- and then my formulating years when I was totally into it concerts in rock and roll and he's gonna last but I the last -- -- -- -- CEO I'm my speakers I just thought it was the coolest thing ever.
So you brought although absolutely perfect will -- -- I've brought about this stuff.
How hard was that.
Well it was it was a challenge.
You know -- back in 1960.
When we we came over here as a subsidiary.
It was a challenge.
But one of that the most important things that that what we did as a company.
Was making absolutely sure.
That we consistently.
Looked to make the product better and better.
And that's really what made the difference in those early years as.
We didn't have dealers that -- there.
The best for the biggest and in particular market we didn't even have secondary a lot of times we have more of a tertiary dealer but they were interest in helping us and we made sure that we went out and talked to educators and pro musicians and everybody that we possibly could ought to be able to get information to to bring it back to the parent company in Japan.
And make our instruments better so it was.
Sort of -- I think in the mixing of Japanese and business culture from the US now Tyson.
It's a word that that I think a lot of people know about and that's making it a little bit better every day and that's basically.
What helped us get over some of the less expensive sort of connotations that the Japanese products yet.
It is time you can go to specific places to get the -- at least back -- you couldn't just walk you know -- best -- -- what the best I was around back then that you couldn't do that.
You have to yet you knew you wanted -- basically -- -- -- Is that what kept -- -- mean -- is celebrating your fiftieth anniversary is that what kept the clientele because it was like almost.
I don't I don't use the word elitist but it was the cool thing -- have actually.
Well actually when.
The beginning fifty years ago a lot of people had no idea what eight Yamaha was it took awhile to get it to be a cool -- so.
You know when you remember -- Yamaha receivers -- house speaker's.
You know that's.
That came much later where it was popular early you know in from 1960 in the early sixties.
You know we were just trying to establish our brands and just how people know what a Yamaha was.
-- had people tell us you can't market -- under that name because nobody will be able to pronounce the name.
You know Rick Tracy is mentioning right -- deal before -- really.
You guys have to thank flock of seagulls you rednecks Depeche Mode all of these new wave bands in the early eighties because.
It was just you know synthesizers.
That really hold you guys explode here in the states wasn't.
Well you know we we were into it before that.
For those that might be approaching middle age -- we had country Joseph McDonald playing our acoustic -- Woodstock.
And then and then Santana after that so -- but you're right we have a lot of people to think but FMR synthesizer technology.
Really took off in in in 1983.
When we came out with a DX seven product.
And god that just gave everybody what you like the bands you mentioned so much more color and tapestry to be able to work with -- -- sounds -- -- doubt that just all it did really was made but those musicians more and more creative.
It even though they already are they had much more to work -- But it's changed so much time might like.
And here I am I -- and a subject today.
My stereo system right in my group had all these components in these games speakers and now my -- -- my -- So how have you guys made the transition you know to bring in this new clientele.
Well the you know leveled playing music and listening to music actually doesn't change if you just look at the way music is gone.
It hasn't changed as far as people enjoying it you know I'm sure you've all seen you.
Somebody with the iPod headphone you know 11 in one ear and and one of the other kids here I mean so it's just a matter how you enjoy it and both from a musical -- standpoint.
And a home audio standpoint we've really.
Grown with the market and we followed.
Follow the trend and actually made some trends you know that lots of new technologies.
That we brought out you know you -- -- got the receiver side of things the home -- side of things.
You know lots of new technologies with surround sound and actually making those iPod sound better when you -- -- hook them up your home.
Rick here in the states are kids still interested in playing musical instruments and maybe -- good goal lane area are your young teenagers.
Because the BBC that's -- cut in schools all the time and things like that doesn't like musical programs aren't there is that affecting what you do from musical instruments standpoint.
Chris you're you're absolutely right and -- its it's a real challenge right now with budget deficits the way they are.
But to keep school music going and really.
For a lot of that the kids that get older and wanna play music whether there and bands or even the kids that it that are lucky enough to get -- in real professional bands.
When they're when they're older a lot of times the Genesis of of -- the capabilities what the lord is really school music programs -- that is that is a real challenge and yes -- over the years we have made.
A number of products from the little a little recorders the little hand recorders for elementary.
To something called music and education.
-- which is a an elementary music program that is really.
It's it's working with modules and it's progressive over the use a keyboard to be able to teach and -- so -- -- we have.
Designed instruments specifically now when it comes to.
-- and trombone -- and things like that we have a student grade and intermediate grade and more of a professional grade.
But but where were more concerned right now you know that it's we need to keep children and music there's been so many proven benefits.
That that this is that this is a challenging time for -- -- music education right now.
Well I think you guys are great and I was safe and your mother's worst men and women son brings on the trombone.
But common Rickey brought back fond memories and a congratulations on the fiftieth anniversary thanks so much for being on us and you -- -- thanks for having us and refused.
Tom summer Rick Young senior vice presidency.
How cool is that.
Honestly about my kid brings so much Ramon.
-- -- willed and believes that an eleven play unit you'll -- it out back.
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