Also in this playlist...
This transcript is automatically generated
Hey welcome to fight this is dot com live everybody I'm probably change and is off today -- but something got on Twitter for all those who you who follow me a few moments ago -- -- -- -- wanna fill in for Jenna.
Nobody responded -- of the instruments -- Now we actually have a -- and it's a surprise guest special guest and really get to that in a moment that's -- kind of my way of keeping on the -- you see here.
On Friday a busy Friday mind you the markets are up again were up by 112 points on the Dow Jones Industrial Average to 85 point.
-- you and you know the S&P 500 is up one and a half percent were -- twenty there the NASDAQ is also -- -- this market rally continues they were.
A jobs lost in this country of course as we expected the thing was there was not as many lost maybe as many expected there to be so that was the headline of the morning coming off.
Last night stress tests we're gonna talk about all of this throughout the hour in -- and take your questions and everything else is we always do.
Kathy lien is going to be here -- he's great on currencies she'll be here just a few moments John Brown is one of our favorite guest or most colorful guess from my Euro Pacific.
-- firm is going to be -- senior market strategist there's a former madam member of the British parliament is -- very very interesting guy.
Jonathan -- -- from meridian equity on the floor of the exchange will be here as will Bert Ely is very outspoken on the stress tests and don't think is a big fan of them.
And a little later on the show something different Johnson -- is an author of the book called career renegade it was a great personal story you know he.
Didn't like his job anymore even -- making plenty of money doing it is one of these guys who went back and just change course altogether as a book out about it and I think he hasn't been twisted and that but we start off potential Smith on the top stories of the day which -- morning Sanders and for a great.
-- that's right if I and we didn't this is a morning person I get all screwed up -- that -- that after twelve now jobs.
Jobs well that's it right bottom line is that the US economy continued to shed more jobs in April job losses there there.
They continue to shed jobs at a very brisk pace the nonfarm payrolls dropped by about 539000.
In the month of April and the unemployment rate the big number that while talking about today a jumped to a 26 year high.
Of eight point 9% in many economists still saying that they're predicting that the unemployment rate will eventually top 10%.
In coming months but what's probably even more troubling number.
As economist dig through these numbers here today -- men age they record 28%.
Or thirteen point seven million people that have now been out of work for longer than six months what does that tell him.
It really paints the picture of how difficult it is to find work out their right now when you've got.
Thirteen point seven million people -- now worked for more than half of the year.
They're not getting jobs so not only -- we continue to shed jobs out there but those that are out of work are not finding new work so.
Either sort of the bad points if you well right at worst points out of these numbers -- hiring is not picking up and the -- girls are getting lost it.
It with a silver lining -- the silver lining here is that that 539000.
Job number job loss in April.
Wasn't as bad as the economists had been forecasting so certainly Wall Street likes the bite on that not as bad as expected numbers which is why -- got the -- from Lotta -- exact -- What it was Tim and Virginia's question in real time as you're speaking -- -- why this then watch the stock market on unfair those numbers are still climbing.
The fight any better than expected in the end we got President Obama would just started started speaking a few moments ago and something that he's proposing talking about the huge pool of unemployed workers that we've got out there.
That those that are collecting unemployment benefits right now.
Should be allowed to get training.
And continue to take -- -- unemployment checks out or those benefits that they receive bother out of work so right now if you do get that jobs training lose the unemployment check.
He what's he saying hey there's so many people out of work they should be able to get training -- continue to get that track.
So that they can live and pay their bills except her so he's proposing that right now that's something certainly optimistic for those that are out of work right now -- -- guess where they did continue to add jobs.
Health care and education right or education doesn't enter thanks very recession and government but it's important keep in mind that that's that's all in preparation for the upcoming census -- a lot of government to workers so.
Kind of skewed when you look at those numbers the health care and government is where they added jobs but construction manufacturing continues to really suffer as far as job losses.
It is interesting now before we let you -- the market today as we said I sit at the top of the show.
Continues on this chair right now and -- and it is the stress tests are now behind us that we are 515.
And you we've shaken off just about everything that comes our way even the stress tests you being able to be spun into a positive light one way shape or form betting on -- you talk to.
Well guess what the financial sector itself has doubled since the month of march so.
Everybody's been looking at the financials in the big deadline for those stress tests to be result to the results to come out they're now out and college we always say.
When of the mark Tatum certainly will not a stress test results are out and so some buyers feel that they can move forward with that uncertainty eliminated -- certainly that's.
Something that we can put behind us and fortunately they're gonna start to look at the fundamentals of -- balance sheets and guys have been it's still pretty bad -- well that's the thing.
No matter how you slice it things are pretty bad right it's hard to really spin this and another direct I mean it's you could do it against expectations for the doesn't mean things are -- And -- -- -- the job losses I mean these are obviously pretty ugly numbers and pretty ugly percentages when we look at it but again it was a it was a little better than that.
Economists had forecast out there and look at party price and the fact that most economists are predicting the unemployment rate will eventually top 10% so.
We're slowly seeing it get there and market hopefully if price a lot of that and -- fires.
-- -- What's priced in vs what can be.
Taken the other way -- mean that that's been questioned the whole time is is is it adds that but -- is it -- -- as -- -- it's going to be.
Inches fat you eat you know as you've been reporting this morning economy start to see a lot of these analyst at Wachovia securities UBS start chomping the bit as far as.
What financials they're gonna pick as the strong points to move forward here so.
Certainly we've been sorry to hear from the likes of various Wall Street analysts say it's kind of -- -- -- financial so -- start -- season seasons right behind the financial sector and.
Our adult maintain that the club now I told my attention that there was going to be a film and I'm -- today.
Not that I have a little fun with our viewers -- the surprise gift this year but I thought we could talk for a few moments and maybe the viewers could guess who's filling in for -- -- today this is -- So.
Here we have a lot going on distressed and it's we don't like when I'm here to do and -- worked at the global warming being against.
Just about it well and got that taken at a couple bleachers with you that gave it away like him who lives that are coming -- -- -- like this.
Lee and -- yeah.
It is yeah.
The best game -- the -- Accidents what's up -- -- you know I'm just.
Watch it doesn't need to sit through it sorry if I'm assuming it's been -- blow hard over at -- and fox you know -- -- when they're gonna you know.
Pay for a stimulus money -- -- the wind farm outside my office you know.
I thought about the nation's energy needs -- account so wouldn't you know what we're watching with that stress testing -- talking about it you and I just feel like.
-- -- the regulatory antenna fell off the treasury and alone time the root for the treasure long time ago and maybe these two in a bank examiners now have a clue what's on the balance -- but still.
What what boggles my mind is that you know the government is saying that these other the banks are solvent that's that's about right that there will capitalize.
We'll have two months ago you know Treasury Secretary Tim Geithner launched that public private partnership one trillion bucks to remove Kryptonite assets radioactive facets of the you know -- a giant did say they're -- capitalized and -- you know when two months ago your panic and you launched that and when that was launched the markets went down.
About 4% right after he spoke the markets are dropping the.
It out -- that that yet they passed all the nineteen banks that you know received the TARP funds that aren't going to be announcing that these are the kids out of the government right now why would they not passed their children.
Are you could these -- feel a little more skewed that we know about and.
-- yeah I hear you I'm worried about its and thank you Sandra by the way negative run -- -- clothing and food for thought make of that.
Adjustment there aren't listen it's great to have you -- out and I was played that he had -- over it.
All ability to think we have so -- to talk about I've rented to guests -- you those who do you like yourself that weren't watching.
We have Catholic lead come and really kept these great honor that's right -- job Brad as you know John from your Pacific -- one or more colorful cast he often with John.
And down -- -- as worked up about the stress tests and then Jonathan -- little bit later -- wrote a book called -- renegade which and he is only not an accurate real -- you're kind of did my -- right right now so that's lets you keep you happy right now I'm very happy about this a great lineup let's talk to -- -- first of all currency research G.
FT Forex conceding Kathy Kelly pat thanks in here so what's this job's report -- for the for currencies.
Well it's good for the economy but bad for the US dollar.
That's basically an action that we -- in currency markets today and we took that dollar essentially sold off across the board and against all high yielding currency explained to her why why that -- -- think -- -- here answer the question because you're getting confused you would think that a good job to have it would mean -- for the dollar.
-- indicates these days because.
Over the past year so.
A lot of investors have pots of money into the low yielding and safety of the US dollars.
Still thinking there is seventy elevenths and a lot of these risky asset and it talked I think diluted for the flight to quality -- -- -- outlet be it good news.
That's actually leading to people taking money out of the dollars and investing into you know high -- kind of hard to figure out -- -- New Zealand dollars from -- And I think my list right then and essentially it means is that we have risk appetite in the taking on you know additional -- -- how -- that an expectant Dobson.
We didn't have that knee -- logical reaction right dollar stent that was almost the based instantaneously.
And the dollar and that's selling off across the boy.
And here's the thing because.
What really you started hurting the dollar earlier in the year was when the Treasury Secretary Tim Geithner said look I I -- before.
If this basket of currencies where the dollar would not be the Fiat currency meeting that global trade would be enacted or -- had done in dollars and even oil.
You know could be done in euros you know that's that Iran has been threatening for some time.
But what we're talking about here is again the flight to quality story why has the dollar not -- out why has -- given all the government spending.
And when you look at that you don't seat right Kathy -- and her -- on a flight to rubles or rupees or other currencies because these central banks to.
Are launching their own stimulus plans and -- the printing presses and that's hurting their currencies out what's going.
You know in the beginning when all the central banks started -- blackened quantitative easing the -- you know being -- -- -- get everyone was worried.
That this would mean a -- US dollar and in fact you know printing money as negative for the dollar.
Think everyone else is printing money and everyone else is doing now that quantitative easing like measures.
And -- to matter at the end who did the -- who's going to pull their content out first because and it and that's kind of dollars actually.
In the beginning with strengthening.
After all this all -- news and that's why we've really you know having a flight to quality Ford and now we're having a good news -- -- called soft dollar.
-- was an interesting discussion while explained by the way Kathy I think we should bring in.
Lucky he's ready early we're gonna talk to John -- of Euro Pacific Capital about the stress tests which we will do but jobs actually ready to go now.
Kathy -- is with this talking currencies -- -- maybe you could weigh in on all of this is I know you have some thoughts on.
The other printing presses being opened up and what have you and Kathy says he known in the near term everybody else is doing the same thing so what does it mean.
Well of course the printing presses -- -- they couldn't run fast enough to print -- I don't have to follow digital.
That's how -- -- -- on bank -- computer we can produce a trillion dollars in seconds.
-- -- is -- I think it's it's quite correct correct but there are two other points I'd like to add one is that of course in the good jobs number.
Which is -- and a loss of 600000.
Was still losing 570 odd thousand jobs a month.
Which is actually bad but hidden -- that of course is 72000.
Government employees that have been increased.
I'm -- that's inflation and back with a -- of that wealth consuming jobs.
The second thing is that as the rest of the world seems to pick up the news from China are more stimulus and or -- -- the -- beginning to work.
XQ what's called -- the dollar carry trade that borrowing cheap dollars and just need one or 2% or 3%.
Exchanged as dollars in two while Moore Renee and dale or Australian dollars -- I need to get on board a higher investment.
I'm baffled by buying Ellicott City sell the dollar and drive the dollar dot.
So the -- carry trade is probably beginning to increase now because of -- relative.
Greater expansion of -- John you make an interesting point about and it's important one about the 7181000.
Government workers in the number what we're talking about here.
Again -- that issue of more government spending and we saw.
Early flashes in the warning signs and the T bond market we saw yesterday and thirty year kind of -- Like the -- out there.
And people are winning for the bond market to have a crack up -- talking about with this avalanche and government spending come and what about due to the dollar.
Well I did the Dalai you know all of this stuff that fact is that that he has.
That congress has been playing with paper money -- -- not digital money to give massive entitlement programs to buy votes.
I'm -- what he's huge debts -- debts piled up.
And we've got an economy that's not seven to 2% consuming.
And therefore we're consuming from all that we're producing so heading out of rakes progress and of course that's bad for -- -- -- It's becoming more and more apparent as other economies move into production and producing more than that consuming it's going to get less and less so long -- on the dollar is very broad.
-- in the short term.
Formed within the next few weeks one expects to see a huge bubble bust in the treasury market because people of flooded into US treasuries to say motivated nowhere -- -- -- The yields well what we're ready go for any good when you add in -- -- my -- but yet.
Of 1% yield on the Treasury's short term bond is actually not seven point 1% that you added to six point 1% of deportation.
As opposed to subtracting it for information so seven point 1% -- -- treasury shall attempt is not a bad it actually.
And of course in the longer time -- inflation beginning to show.
People and also came and the government.
Had a bad experience yesterday not as bad as some other ones like in England -- they had a real shambles.
Because Damon's -- -- follow -- state and America right.
Two of the auction -- so -- -- number of interest and pointed John brings up there Kathy -- here.
Expertise on currency's -- you know the dollar our currency being flawed long term as he put it.
-- -- -- -- Well I think that there's a number of reasons why -- an accident to the belief that -- selloff in the coming weeks.
And -- next week we've got about the green lights US counter aside from retail sales.
And we've got a lot of indications tens of wal -- beating.
Expectations that that's stronger retail sales reports from Walgreens as well citing consumer spending NASA not -- that that.
And that's why wouldn't have a little bit more of this app attend the markets.
Also we've gotten very very good employment numbers from Australia and Canada -- Canada and blew everyone away went I think 35000.
-- all that -- story about how you know and terms of relative growth wouldn't have you know better opportunities elsewhere and he left.
And that you know it gets that was made us is in the city that pointed that was made by -- about treasuries -- For quite frankly hadn't thought of it that way before that the yields weren't as bad because it -- deflationary effect but -- -- yeah.
Right and you know John what I want to return -- like I had not yet John I just aren't sure.
I just -- are not criticize what's just -- -- I agree that it.
It's just that when one talks about Wal-Mart has good experience of course it's at the expense of Macy's says and others.
Not a what people are trading -- that bank for cheaper cheaper goods because that actually cutting back.
So Wal-Mart should not be read as a great increase in consumer spending you want to look -- from across the border -- stores and you'll find a rather more depressing picture.
No John stay on this point -- stock market is some say has become the -- real time.
Economic report card but really the dollar is the economic report card for fiscal spending.
So what -- I hear what really spook the markets I want you to speak to this is that China threatening to rotate out.
That the dollar they've got a massive amount of dollar reserves but they really can't do that -- hurting their reserves right.
I'll accident -- not anyhow I think -- -- much more important of course -- hating their own exports.
Of which that very very conscious that's why.
What they've done is -- -- -- you into the United States and on X dollars they keep those dollars in New York.
And -- place them in treasuries because they do not want to sell was dollars and by the Rubin did their own currency and drive that currency up against the dollar up because that.
That's their exports -- they've always patiently held US -- but now they're beginning to need.
Dollars and that money to stimulate their own economy -- -- extremely worried about the security of the dollar.
And that is why the G-20 in London a few weeks ago they push for a new.
International currency link to go and sure enough.
I've got to China which is not the world's largest go produce a -- larger now -- roster and and South Africa and Canada.
This is sort of very clever -- Took half of its -- production and put it into its goad resides and that we're not driving the price of -- -- up by buying any of the market just probably -- That is Bob go above into their own treasury.
I'd say they're looking increasingly towards -- and increasing their way from the US dollar.
He insisted that proposal is of it is the easy that proposal -- of linking.
The link to gold and all the world's currency so to speak you take something like that seriously are now.
I think that we're not going to see anything like that within the next decade.
You know it is possible that we'll have and now want to say dominant currently we had a dollar.
But that'll take some time but it just you know -- -- they.
It's really easy and -- home.
-- -- I think it's and how Sally got it done.
I'd have -- one dollar to one dollar.
-- -- it sadly within XP has that -- a decade.
Already at the G-20 they were moving the IMF is -- authorized to issue currency effectively.
Again make -- -- -- for the first time is the beginning days of the beginning to the door.
The currencies particularly that of issued have existed on -- borrowing and Fiat paper the United States and I kingdom.
And both those kinds is a long time John -- -- long time I mean it is like horrified yet not gone.
I had -- done in my reading too much into the minds that you may be reminding us that turned back to the gold standard.
-- any any individual investors should be having -- -- government a government -- I think the government should be affixed and I value -- gold bug you want to go to dinner back.
-- I wanted but the British and American government today.
Everything -- that to discourage goat they sell 500 tonne is metric tons of go to every year into the market to drive the price down and manipulate the price -- They're doing everything to discourage -- try to make it volatile so that it doesn't seem a good investment.
They don't want go to the countries that are -- money and creating separate isn't that long -- Like China and then progressively other countries like you know I think you're pretty that you did you ever bringing -- for bringing back the gold standard here in the United States.
Interest and -- -- the -- out of but it -- linked.
The ghost out of with boxers to death would drivers -- and I think it presents its plot to several different fueling your -- that showed up.
You don't want to ship a patient you want to operate on the patient how -- it up.
I'm so we we need something not says that they had a ghost out of the -- -- -- it okay that some semblance of on -- in the currency.
-- rationality everything I that we cut -- off with a isn't fair halfway through her answer on the other things so nobody wanted parents are Kathy multi.
And finish that before because we wanna talk to John and -- -- anybody talk about the stress test so but the finish this point on -- is important.
About this whole idea of the world currency link to gold why you don't think it's gonna happen.
Well as I don't think it can happen and times in because in terms of what weld of the new real world's reserve currency there's a lot of complications involved and it really -- -- -- blunt instruments being on politics exactly right and it's nothing that's going to talk had a couple -- Going discussion back and -- -- a great -- just give me second wouldn't get back to open a -- switch that and Kathy thanks for joining us happier today that you're you're great as we always appreciate it.
I want to switch the conversation to stress tests.
We have to get Peter Barnes up here quickly -- he's gonna go talk to the -- this is -- I had these.
If you're -- -- and the strength of this effort.
Now why you know number and that's breaking stories.
Vacation I can't -- up.
You are you seriously -- terrorism.
I got up this morning guys we got.
Ovals but you know.
And I have -- well operation is this after all.
I think the Pentagon but -- -- -- think we're just doing a show on the Internet or some.
Wait -- -- and it's -- I only got.
What we got it's actually we got a night we got guys that leak we -- -- here and help us to break news and die anyway they turned out last night that after the stress tests were.
Released the Treasury Department issued to the banks a set of guidelines -- thing now that these are draft guidelines.
Among other things spelling out for the first time.
How banks can repay the TARP and the American Bankers Association is not happy about the terms here for example.
They -- guidelines say that.
Where that regulators will weigh the impact of repayment.
-- TARP funds on a -- quote overall soundness capital adequacy and ability to land.
Which is now basically very vague language open to interpretation of the ABA thinks that regulators could use this these particular.
Terms to turn away to deny an application to repay the TARP funds that the treasury guidelines also saying that they want to make sure that.
That a couple of firms that want to repay the Goldman Sachs the JPMorgan Chase's and the others do not pay so much that it actually reduces their.
The normal levels under these new under the stress tests and so attorneys saying.
If you repay and it hurts that extra little -- amount of capital you have over and above the minimum you can't repay -- the banks are upset about this language this morning.
At Peter I want it can't even working so hard I want to talk to about you know sort of broad -- policy issue here.
You know David -- -- though he was -- treasury official under Henry Paulson he had the front row of seats on the bailout he left in January.
He and there's an interesting paper he wrote that's making the rounds or he says what's this -- you saw some Wall Street to.
The risk models that the Federal Reserve and the treasury using -- you know the bank of problems I've run on the bank or bank going insolvent.
They use not eleven -- 87 crash long term capital management the hedge fund that blew up the Asian debt prices energy price shocks.
But Phillips waigel says in his paper that check this out.
They did not use any any risk modeling for sub prime defaults for loans that subprime loans -- originated.
And all fall 506 and 07 you saw the same thing on Wall Street nobody.
We talked about a housing crack up in their risk models so you know we know that the regulatory antenna fell off the roof of the treasury and the Federal Reserve -- while ago.
Is this really after the fact refereeing going on with this -- -- Yeah as he is the paper talking specifically about the assumptions used in the -- -- -- know what I'm talking about as big a risk modeling and batons to check bank reserves and they -- at capital adequacy of bank right and then the.
As -- as long -- we're talking about the period 050607.
They did not account -- of sub prime loan crack up in other words subprime defaults and the risk modeling which is why don't to me that's crazy to me.
Well I know they included.
Mortgage losses in their modeling I don't know if they broke it down by type of -- you know they don't have an ego in check that.
But you're right I mean listen obviously the sub prime mortgages are the ones that are.
Are going south fast that that might favor phases from me back faster it it's going south faster -- decent winter -- -- -- -- And yeah and then you're Heidi there are going to help you -- unflattering.
-- but they did also throw and there are you know -- and in the stress scenario the hypothetical.
What if worst case scenario to another 22%.
And -- -- -- -- which obviously did you know what -- which obviously would trigger out potentially more mortgage defaults but if you actually that's -- not to get too into the -- with our viewers are watching on the -- but we -- sent me the paper yeah.
Absolutely nothing -- -- lake adamantly mentally but this is sure I think a lot and thought I've been I've been going through.
This the stress -- paper since last night.
-- and -- of our board you know some Peter Barnes at 1 o'clock in the morning do you get those he'd never get.
Enough -- you vacation Peter I have an indication that seriously all right are you OK guys.
You know me well.
But that stuff that's what I'm taking with a -- vacation already taking.
Stress -- Yeah.
There orbits of the public good with -- awful at the -- -- -- from London.
Important -- the -- Prosecutors get about.
Fox Business that -- let me might have everything in a few minutes so you can see in there anyway to.
That's what John -- with the theory huh.
An old folk song probably about -- you can write that won't -- -- and it says June but we're at the bar where it's it's so John.
I'm here again -- -- -- -- -- -- -- as he must atop we we have got to get went to talk about the stress Cincinnati for Peter.
With his analysis and is reporting on it what did you make of all this we've had a you've had him play time to think about it since last night.
Well I agree with me a lot of what he -- we had some gambling -- -- got back because.
Pay themselves huge bonuses vomit back out and brought the US economy to its needs it back to a few -- from catastrophe it.
And nothing much has changed except that the -- has been brought in to give a huge amount of capital injection to guarantee deposits and old so.
To change the accounting rules and says the government has got us tots is to re create confidence even -- -- -- to cook the books right out of college it has put the book to detect unemployment -- -- a 10% we're already at nine.
And if you take.
If you calculate on employment on the pre Clinton basis that more real basis it's actually -- 20% already.
They've assumed all sorts of growth rates which are -- very very.
Some -- win.
They've ignored -- -- of these Baxter.
Derivatives you didn't see any mention of derivatives which in most of these banks like three poll and in the case of government -- over a thousand times this cap.
Okay you know yeah.
I -- that I.
The reality they may have broke in other admits that's in that until line and -- -- what you guys that we talk about derivatives and maybe in another at the class in college riveted you know the 40% of the bank's.
Balance sheets argue that Salmonella tests that are are.
Native of derivatives and they think -- -- -- -- here and wasn't automotive sector that brought the US economy to its -- -- with the banking sector.
And now the US treasury basically -- the world's biggest bond and investor because they provided these insurance wraps around Citigroup and Bank of America's elegy.
The Federal Reserve has often balancing the -- the world's biggest jump investor now.
How can the US government get out of the economy at the rate it's going how caddie what's the exit strategy here and how Long Will it take you could -- -- war.
Or is taking forty -- degette has that got to take a decade amorphous sort of get out and that's if you had really serious policies but.
You know we're having creeping socialism where -- -- today president is talking about.
Great entitlements for everybody today in -- best education.
The wrong but jobs with the university graduates and these are -- consuming job that very good jobs and it teaches -- what to think but then not creating wealth from America.
You know with keeping General Motors and Chrysler failed models alive.
And subsidizing them with taxpayers' money to fight against American.
Cop cop is that it is in the -- -- -- -- creating real -- And that being subsidized against that's about it compete against the government and so the -- and is dedicated in.
In the in my opinion but the government is thought to be very capital it's got to create confidence -- I think it's great the odd job.
Was was good and it it satisfied some people and markets a roaring and things like that but it set -- not solve a problem.
But what is not -- the list is original question about exit strategy from the government's point of view our gets the Federal Reserve's point of -- and -- -- what is that strategy -- you at some point you have to start raising right right but you yeah you could do it way too early and right off the recover anyway how do you view that.
That's a good question.
I wish I didn't think I have a strategy except they want to get they want to get out the data that got to start -- wanted to win a war we didn't have a strategy of how to win the war.
They're just hoping for the best and that hoping that not confidence will come back these banks will create some profits which as I needed to be much more profitable.
With that substances in a -- that's a stop on that and it's a very steep -- cut -- -- not -- problem -- out and -- By the way out.
And that the derivatives by guaranteeing -- his commercial real estate loans and no that's going to rip the actual credit credit reports -- would not be triggered.
So that just hoping for the best hope this is not a -- about it just right.
We should be my back but look I'm hoping for the best what you think it was like what Obama called -- -- like -- -- apparently showed I think Unita was hoping for the best.
-- -- -- They'll look at me -- actually affect pat cash.
And -- Dickens novel I popped up dad had an epic you know -- to Google that who's not black and we're right -- down that didn't.
-- -- -- -- -- -- -- -- -- -- -- Hey John just I don't want to really get got to finish that point real quick can we wanna take these markets -- John.
The real problem was the abuse -- -- money by congress.
And that's the real problem not -- the politicians don't accept an event that trying to ban on the backs but of course it was congress that you opened the field to gambling.
-- -- -- -- -- -- -- -- -- single state -- create these great.
Too too big to -- help some people think too big to save.
Mammoth banks it was all done by congress right penalties and those and all this other stuff and the back as -- got involved again.
Let -- -- -- dancing behind and let them leverage so final point the tier one capital he had a lot of paper stuff I don't know.
You know it's ridiculous that they padded those numbers to.
The per capita I could -- and it acts yeah that's right.
John thank you so much even ready resonates congrats and at Tennessee congress -- -- -- -- -- -- got to get a senator now look at a case for term limits he defeated John thank you so much serving really appreciate it you've been brilliant thank you congressman -- -- is great over the.
-- appreciated from Europe Pacific capital senior market strategist there this guy understands capitalism -- no one's aren't.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- Who's on the floor of the exchange for -- How about this rally in -- keeps on -- -- 118 points up on the Dow today.
What are we gonna give this up.
You know this market I think you're trading up on on head linesman and the psychological lot.
Expressions in the market.
Everyone was half.
Happy to see that the government is doing something and is intervening with -- -- passenger trying to put -- the right steps forward to like get our economy -- on on the right track.
At this point right now we just remember that we're not clearly out of the woods yet and it is gonna take some time to get -- where we really need to go some way to get back to where we came from.
But psychologically I think investors are are like the fact that we're getting transparent Seattle Washington and our weekly.
I think we are the -- and I think you know you start reading the headlines saying that and digging deep into the investors -- the information whether it's.
Whether it's good news or bad news the fact that we're getting some solid news.
He's is it's got to help dictate this market investors are gonna stop putting their money back into it very slowly.
It seems like doubled and the retail investor really hasn't done that yet so we're kind of waiting on that to happen.
The institutional investor judge driving things for the time being right what brings that what's that catalysts then to -- is this enough to -- convicted more more people we talked to and -- no idea if they're right or wrong.
Are now believers in this rally wears a week or two or three weeks ago there are much more doubters out there is that a shift you're seeing also done.
I do you know what we've seen over the last sixteen months -- you -- the investors and -- the traders so we went from all the investors.
Quickly became short term traders little by little we are seeing investors coming back -- They're putting their money back -- this seeing some -- positive returns on the table and they're not taking them off as fast.
If we continue to see that we're gonna continue to see this market continue the bottom that we can form.
Interesting comment -- from -- in Virginia since the market bound and determined to go up regardless.
Of the news that's coming out -- just don't like that some day it -- in Italy there's a thing about blind panic and also the blind optimism I'm worried about that right now John.
I'm always word let people come back into the market and then lose their shirts.
You know would instead be based on some positive news the company at the CEO says that passing a stress tests are doing at capital raise.
I is are you Izzy you're standing do you think that we're stuck in a trading range for a year or so there were -- market's gonna crab walk up and then come back then.
This swinging back and forth in the trading range will.
And just just to comment as far as Tim's comments there have been the comment that came in before.
Tom clearly what we've seen the last two weeks is that we haven't had all good news and the market has continue to -- a lot.
So that is not solidified with ten -- and to answer your question the market came down so fans -- big volatility swings -- on the market.
And what we like to see -- little steps back up again.
As investors start seeing psychological levels in the market.
-- change that we we got -- the 8000 level for trading -- 8500.
Over 900 in the S&P psychologically these are these are milestone numbers that we have to get through.
And short term.
Resistance levels are now becoming support line.
You know John -- Chicago board of volatility index the options index.
That's they're ready it's called the -- and you know I want -- to second to explain to the viewer what this is.
Those levels shot to eighty unheard of hold accountable -- ninety and now I think they're at free Lehman Brothers crack up levels right in my -- So in what we -- what we beat the gauge that we used as a base and the big shows as the volatility in the market.
And as you've explained that we we went from record high levels and now it looks like we're coming down we're coming back down to some levels that are that's showing some stability in the market.
Investors can look at this and engaged this as far as their aggressiveness of their passengers how to get into the market and once again in the market.
-- so hey it that it's the -- and this is interest -- him because.
Earlier that morning when it hit agrees and is now ninety visited eighty here on the and a -- standpoint I think this whole thing.
What is going -- and it was a different world then but what it in terms of -- early on March right we're -- February -- that was in the fall within -- a little nine president Jonathan do you have what it wanted -- -- I doubt -- I think was -- closer to -- attack you have different -- leaving him shake -- than some of those -- kind of run together.
Anyway do so how is your business changed from.
You know coming to work now vs then I mean Packers Ted and I -- talk about this last week of that was.
There's not stand for a few -- those few months and now being on the floor and and it did today.
Business of trading stocks mean what's it like now well.
The volatility and market does dictate how we doing what we do.
I'm so throughout the day now we're looking at him -- longer term windows even though it's if it's within one day when trading period we're looking at longer windows of opportunity.
In the period I was thinking of winning on the quality index was much higher.
We had customers -- trying to move in and out very quickly.
And now we've got and customers that are looking at longer term periods whether it's within the day -- they carry positions over.
But I think we see across across the floor and how the client has not increased over time -- but the but the volatility has decreased.
And I think that's one of the things that we see in building a box.
-- -- -- -- I would argue that their bottom started forming in October when filling 93 of the New York Stock Exchange composite index.
You know hit B 52 week lows and I think we're gonna stay.
You know at this sort of the loans swinging bottom I think through the end of the year because you know we're in the -- we're going to be heading into tough months ahead.
In September of oh -- we were thinking third quarter of 09 I think obviously that's been pushed back.
A little further towards the end of 09 in the first quarter 2010.
-- when we're really gonna start seeing.
Some some positive earnings coming out of companies that are going to be the support -- markets we're gonna see the flow of money that's been on the sidelines start to come back little by little.
Like I said before you know -- active investors in Pasadena.
It is very passive investors have been watching the market they're -- they're up to date with everything and they're just waiting for the right opportunities -- come back game.
Big dip their toe in the -- that my little they wait and see sometimes the stock goes up or down if it goes down we'll -- -- average couple average down a little bit.
So over time they start building positions those with type passive investors that we see coming to the market.
And wants that cash comes in from off the sidelines.
The confidence back into the market.
The bottom the foundation comes back and all right.
Jonathan thanks a lot.
Thank you good to see thank thank you so much thank you Jonathan Clarke -- at meridian equity partners or his senior managing director of the same firm that brings us our good buddy Mike according.
Marshall in the morning's life and the great thing about Mike is he also watches the show and comments on the comment board to become a -- -- he says Brittany but anyway we're gonna talk to.
We're gonna talk stress tests now for the next administrative birdie Eliza was I think he says he's got us the inconvenient right -- -- -- -- him on -- that's yes that's nothing wrong with being upset.
But first to -- -- was always come and Luis has the story and LA of the Wells Fargo customers and how they're reacting to the fact.
That well most needs what thirteen or fourteen billion dollars in capital what -- the -- out there in the streets of Los Angeles today.
You know it's been insisting to told two Wells Fargo customers because up general that the once it -- the bank seeking.
Interestingly enough the two banks that fit the west Connolly is in this stressed -- this other ones with the live just California prisons which will give you an idea of how the housing -- it is.
Considerable light impact on these recession.
But I'm joined by bud bud dry -- -- Beno Wells Fargo -- -- for more than fifty years so you've seen many ups and downs.
Read this not minding this bank and other banks you have personal and business accounts here but.
I you confidence.
In Wells Fargo.
And then with the both -- -- -- for many many years.
And I've had my mortgage -- I got my business -- my personal account savings and they've done a wonderful job as far as I'm concerned.
I don't know was -- so much adverse.
Publicity about the banks especially the new Wells Fargo.
I just don't understand was going Washington.
Does it -- and you signs that well Wells Fargo.
-- has to cough up we've.
That same point seven 1000000000 dollars and this morning night they -- up seven point five billion dollars in in common stock but.
Does it -- saying -- -- that they really have to raise this this much money in the next five months -- -- -- -- Very some -- the rules that are being close I think are unfair.
Well as far as always done a good job I don't know why they should be.
Ultimately for us to do something like this then they protected their customers and I for one of them of them all these years.
And I'm very satisfied with their service.
And and listen -- I should just say this is what we're hearing from a lot of custom is very loyal happy they had -- in the FDIC.
And despite what's going on on the east -- the -- custom is anyway seemed to be very happy remembering that Wells Fargo is at 157.
Year old banks here in California.
-- -- -- be -- or they should trust because that you know with the 250000 dollar limit -- was yeah it on that -- -- always good I.
Hit the -- -- -- that the expiration of their -- they didn't aren't Louise thank you very much humiliations he was -- his DNA and we Fidel.
Bowed in Los Angeles and how very early -- at least from.
The only company out of DC to talk about the stress tests and this was on earlier this McDonald's with me Connell -- here and in New York -- for coming out that yeah the incoming -- years considers -- in -- -- that.
This -- you're passionate I guess they felt that I used to -- up.
Yeah I'm sorry.
I -- -- -- -- -- what what your reaction to the results of the stress tests yesterday seemed like -- pretty passionate about a lot of strong opinions about the stress tests.
Well I prefer to I'm glad it's over and hopefully we won't have this exercise again because it did create a lot of -- market uncertainty.
While we have.
To -- and fight to the how the government is viewing the credit losses.
The nineteen companies are facing there's a lot that we don't feel there's a black box element to the stress test result.
And particularly in terms of exactly how the government calculated.
How much income they expect.
These bank -- going forward and how much additional capital they will need.
Right -- -- I find that kind of a troubling aspect that there are important.
Aspects of the stress test and results of produced that we don't really have a clear insight into on a company by company basis.
Great -- even with the -- assets and the -- probably spent on this better than I -- but some of the assets on banks' balance sheets right that we.
For months have been saying hey what do these things worth and nobody seems to know -- there -- -- Achilles assumptions for the stress test.
Mean how do we know what anything's worth and would the if your assumptions are wrong I mean we're all big trouble again -- -- -- -- Well this is always the problem assumption.
But when you're trying to forecast what's going to happen in the future you have no choice.
But to rely on -- I think the the hope is the expectation is.
The assumptions are.
Generally prevent a -- paid a a a more bleak.
Outlook for the economy over the next couple years that in fact will transpire but again there are no guarantees never -- -- -- Any guarantees about this it is clear that there was a lot of tailoring.
Of the assumptions to the companies into their specific loan portfolios and that is so positive.
To these stressed that.
Albert there's been a lot of debate about whether that government really wants to run the banks and you know we've got hurt a lot of opinions about that here.
At Fox Business -- is curious.
-- about your opinion about that because we I know that the government came up with a new blitz got -- mandatory convertible preferred.
On that they can -- now instead of a comment which does in other words when they when the government converts.
Their preferred -- into common shares and to these stress tested banks to boost their.
-- capital cushions.
On that fear was that those shares -- -- voting rights and you know they could start jamming down that throw to these bankers says he did with -- you know mortgage cram down legislation which could hurt.
Their balance sheets even more -- now there seems like they're backing off of that with this new mandatory convertible for that doesn't have a voting rights with that.
Well now you're you're you're correct that the mandatory convertible preferred doesn't but -- it -- in the common.
In the they they -- I've I think there has been a backing off by the government.
The notion of the government continuing to have.
Significant ownership interest in the banks and having her hooked into the bank that -- happen very well received publicly so now we're seeing.
A greater willingness to get the government.
Out of these banks but also.
-- the having any kind of government stock position.
Is now the increase from the -- right.
Scarlet letter on these banks and made the banks and their management -- their boards one -- -- The government having any voting stock so other than with city which is already agreed to it.
And possibly -- in America.
Let me just -- -- Burton why is it considered bright scarlet letter because these banks stocks are going out.
The bank -- here are going up because I think -- -- -- We're through the stress test.
Process and result throughout there there's maybe a little less uncertainty in the market also.
Or frankly you know there's kind of a growing optimism that we may be through the worst of the recession -- we can see the bottom.
So I think that that be a factor but I think the management these companies.
Don't want to have.
The government with voting shares.
And it daddy is seen as a negative.
It's part of being you know weaker company for the government to have an ownership position.
Common ownership position in the bank so we feel -- -- very strong desire the banks to minimize the government role at the same time.
I think the government under growing political pressure.
Hang in there with the ownership.
Interest in control even though there's some -- the government does that would like that.
Well you know -- -- the other -- -- the way that the banks wanna get out from underneath the government control courses to pay back this talk money right heard a lot about it from the likes of Jamie -- and -- flood like five Goldman Sachs and what have you from your point of -- Burton puterbaugh incidents reporting on this earlier.
Is big government.
For what it's going to take to be to allow a bank to pay back -- Are those standards too tough or just about right what do you think.
Well I think in principle there right that is they want.
The the banking company.
To still be well capitalized and and and functioning very well in the market providing credit.
After -- back -- -- -- they don't want the banks to wound themselves to it you know if you will and inflict a wound on themselves.
In their rush to pay back the the -- money but it's also important realize -- with a lot of judgment that goes into this in terms what the future hold.
How well the company is reserved for -- future losses so there's an element of negotiation and bargaining.
Over the terms and the timing is to win these TARP investments will be we paid for the government and.
Bursting interest and will be following paper thanks a lot for -- -- was terrific -- -- good insights in this.
-- -- -- -- -- -- -- -- -- -- -- The stamina and a -- -- -- -- -- -- -- in our -- and -- -- today.
Okay that you better be here you know it's anticipated yeah right you know it's -- its interest in this talk about all the in the banks to mean because now and we tuchman in our our network all the time is this big government and we wanna get the government out of our business and what have you -- -- -- -- and not to be a politically captive company like -- and it may have Freddie Mac.
It is the fear and somehow getting lost and all this is that these banks for better work many of them at least.
Did have the government got involved because if it wasn't for the government the banks going under leveraged -- hearted -- yes that's all of a sudden now it's and we forgot that they -- many of the banks were in the businesses in the program about it -- -- -- let me -- two sides to this point to accept -- appointment with a with a I have attended a ticket -- that -- -- It's great to have you join with the fuse McDonald's you -- is with us today feeling again.
Your seemed like you so far but we'll get -- -- minutes left can't help that was right.
Our Jonathan fields -- -- -- return -- we've been pumping up Jonathan career renegade author.
Who's joining us now and that all the great thing Jeff thanks for coming in -- -- and it talk about the book and about this great odd jobs this kind of appropriate.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- 600 -- so giant and Anthony did you do at Jonathan.
Makes -- locals that we don't fault the guy and as I just started following him today so it is and at 121000.
Talk and 230.
Now has now been the job.
And you know started yesterday you know -- -- reflect.
You know what what about its quality got caught about it I'm glad I am very very loyal Twitter followers that the audience that she gets angry and start talking to Twitter will get a comment.
What every minute hi again.
I can't career against the book me in your story means you get better of telling it -- -- would that.
That this is simple terms get a job you didn't like he stopped doing it you want to front him again -- passion.
Yeah and that's Madison was you can get -- you know as what has -- -- from lawyer in New York City.
It ended up in the hospital from the stress that -- -- surgery and I -- been an orchestra tennis.
So now -- -- problem it was just literally working for days and is on both very little my immune system shut down and that I had infection in my life just.
So you have one of those political -- elements are one of those at -- -- I mean wake up call your body physically rejects your career you can have to step back.
Couldn't tell us through second early hours a day we were here.
I was probably working somewhere around 92 and it was a week so how did and it didn't happen yeah -- -- -- humiliated again.
Not at all -- -- and I don't knock the pass a lie either -- there wasn't what was calling me it's now.
Reza you're in that position.
You pardoning pretty good money right now as a lawyer and initially you said yourself -- I'm gonna do something different than what.
Take a step back.
And and -- Lewis sat there at my desk and took a legal pad it and -- -- the biggest moment that you have received because when I was reading lists are the top ten list of cool things -- can do to earn a living.
And this -- I think that actually had.
Luckily I immediately had nothing to do with the way how much money you -- making them or nothing but the reality is I'm not a person who buys into the do we shall have no money -- follow me I live in New York to have family to support so I -- to make certain amount of money so for me it was a matter of a case.
What does that make me come alive and whether somebody's you know and make money at them or not -- -- -- -- top -- on -- list all revolved -- health and fitness and lifestyle so the first -- -- -- -- -- I went from six figures.
212 bucks an hours and personal trainer.
And that -- I had to make our.
You know before the way I look at it was this.
I think everything -- 36 months to -- the industry to really figure out what was being done what right and wrong and forget how to make it work.
And I knew once I served you know how that fundamental information to turn around and then build a better mousetrap so for me I was not it was only twelve dollars now.
But I was getting paid to essentially learning new industry.
And I did exactly that six months later I went out charming and practice six months after that -- -- so.
And so the idea of the book career renegade I mean you're trying to help people do certainly does similar types of things and it is possible in all cases.
It what's that is there who I don't know that there's one there's never want answered any of these questions but what's the best path for some of the -- if they want to.
They're looking at this is a you know a lot I agree with him might -- can't -- my job right now I gonna start over.
-- what you know I think one because you have to ask -- just take a step back and just that's really broad question which is hard for the last which is what makes me come alive.
And you know -- run and a lot of people say well I don't know I don't know an impassioned Iowa and I don't know my interest saw him I don't believe that you know because we're -- -- -- 1213 1415 years old we only what we left to do that we got this thing on the end which says what do I love to do that I can make a boatload of money act.
Analysts and we shut down -- we won't answer the question honestly.
To answer the first part separately.
Then what I found is you can very often come about it and totally different ways and forgot how to make money doing things.
Where most of the people just donate that money.
Your book due to heavy because there's been so -- people laid off as a terrible time for people in the economy who've been laid off.
In your book do you explain what you think -- the easiest points of entry in ways and you know yeah you definitely cash -- paying job at some level I I don't go to Johns -- the -- is probably more oriented towards -- -- it but -- so you have.
Do they identify those things.
That have a really good likelihood of actually you know certain patent passion and -- -- for president of Catholic.
Jason Campbell some really funky things are people so you can never make money doing so there's a guy interviewed -- -- dad.
And that he is job loved video games and enlisted can make money playing video games and account.
-- -- make six figures now.
Selling pamphlets that are essentially cheat sheets for video games -- -- don't yet well not actually cuts a shortcut because what people do it.
They're really communities around these things that most people think well you know unfunded -- -- and evidently -- for the -- so.
You give up on basketball -- people don't look at the bigger communities and what -- the infinera.
You don't there's another way for example stop iPhone applications on it last night -- -- you know had a beam your contact information up -- -- vote.
Into an you know so they have got.
A good friend of mine just launched last week he's an avid surfer absolutely love -- -- trying to -- tech technology.
To make some money serve he came out with an iPhone and the web -- that now surface of certainly -- -- yeah.
We are certain people still do that.
He came out with an iPhone app that taps into live cams around the country and you can literally stringing the surf breaks and I -- to see -- -- -- -- -- so that's pretty cheap.
I mean it's amazing you can monetize passions in ways that people just don't think adventurous yet again.
Insert key and is there is again no magic answer because they're -- -- -- -- what is what's the thought process of because oftentimes we always ask with a touch with the Internet that's how you gonna monetize this great idea great idea what am I gonna make money -- -- you don't mean that time.
Absolutely I think I think the thing to do is really step back first identify what you really care about and then take a step back and and look at the bigger picture look at look at look for the gaps I mean it's -- -- -- -- but just apply to -- -- a look back that we came from and there's Johnson had -- -- -- -- start somewhere I mean.
I actually started as a tolerant -- bank was -- working since I was fifteen.
You mention that -- have a lot of family in attendance -- Japan.
And that -- -- and never.
The public doesn't happen I used to caddie that was I think that he and others are.
-- -- I -- actually carried big money make big money gonna have a scholarship and yet I never got into the -- but what happened.
Yeah it's easy by the way that we yeah I got fired and whatever.
Washed dishes for a while what did you ever I think you're all your great great story quickly about.
It of this Wall Street Journal reporter.
He will not quit and indicated a wreath at Starbucks and he's happy if he's ever been in the marina physically stored every talks.
-- benefits and I think especially.
He was really happy making golfing.
And if you talk to people -- -- a little bit about how to actually tapped me on my role is this too.
I mean people can figure out how to make money doing things with its new with very little -- spending very little money and you can really research a concept in a matter of hours -- and you know.
You know what kind of job I love it's -- elderly people I've read this other story -- in Florida.
-- -- been -- -- basically catchings.
You know minor petty scofflaws like people who who -- walk or -- double partner phoning it in.
You know to the police department there weren't Michael and I it is great that if that now -- them.
And there is no yeah.
Existing -- before we stop this discussion that was like logic would tell you hate the economy's terrible now.
And you may want the safe job you want the job that has the job there benefits and and -- -- see concedes people that -- and adherence Jonathan along saint.
Now quit your job and start something new on the Internet yeah.
This I love it enough income to me and they say well you know like why should actually do something when you -- -- -- the -- job you know and I think to myself okay.
Kind of what it called anywhere you know in -- -- -- -- -- short they're looking to cut money anyway they can in the interest of the company for -- you know the management second and you with a variant that's the safe option for -- right to -- safe options when it gives -- much control.
It's very interesting stuff your book career renegade code your renegade -- -- -- -- outcome I think.
They come up with that 121000 Twitter followers talk about -- it's necessarily.
Run outside tweet -- at some people you.
I don't think they have found that that really that is fascinating stuff thank you nervous and -- kind also.
We always -- on a Friday take a moment to remind everybody about our Saturday college on the network on Fox Business Network he -- -- -- I'll show.
Justice is in within this weekend Shapiro -- -- -- adamant -- should be -- great -- units -- rhetoric that you -- -- and you get free advice financial advice starting their own business advice it's free and it's terrific it's Smart.
Not to read -- Diggins brilliant and disappearance terrific and it's a great panel of guests coming up you won't want in this we'll -- You budget for -- is Jonathan was just talking that there was just something on the show over with about entrepreneurs and starting your own business or an interest in time to do it right Saudi email and the phone number.
To do you gotten any other hedge fund mentioned also in terms of -- promotions is the war was.
Was claim and not the other list is she better than the other -- -- otherwise she -- -- Warren Buffett specials that you guys missed that huge interview the -- the billionaires.
By 300 if you have a Charlie -- -- and Bill Gates.
And the -- minds within an -- -- On the Fox Business Network MR -- it'll air on Saturday night on TV at -- -- really interesting questions and it's something else had been Saturday -- nine and Sunday -- pattern that you -- ADRs for that he -- it doesn't -- those interviews it's -- all of -- and there was news that came out of this one but the -- is -- interest to really -- -- three people.
To sit down with -- in one place just happens I'm -- -- it was revealed they.
And insightful and my what my favorite parts of the interview was when she asked -- books would you recommend right right and and war and recommend a -- Charlie's almanac which was Charlie -- book oldest Charlie isn't as well as calls it.
And also I'm Catherine and I.
Her -- -- he said it's very educational and to -- to read so you get some interesting you know tips there.
OK so those are two promotional -- the third one is that we have our podcast available on iTunes was you have to download this -- iPods available every day so he missed.
And signaling in the 21 century he didn't show for an hour on the Internet with computers and listen I don't like -- -- to turn your laptop.
So you guys are writing questions he would not only -- collections in argued she's even done it in the computer that's it shoots it terrific tournament -- So check out the podcast is always available on iTunes.
So we encourage you to do that thanks dominate markets up 134 point Connecticut can't read and write this song for mrs.
Barnes about Peter -- -- -- this is -- said -- that's that's that's.
That's a theater's spring and the strength from.
To read night and day -- -- this is Barnes had a great weekend everybody so we'll see you back here on Monday Kandahar.
Filter by section