tv Squawk on the Street CNBC July 9, 2009 9:00am-11:00am EDT
nation's retetairsrs repeptitin gegerally weak resultstsfor the momoh h ofjune.e. ththou reil giant target d d say the second quarter pfifi would meet or e eeed wall stet's pectations. stratateg alliance that gives the digital dedeo porter greatest distribution n ofhehe productsts. that's cnbc.com nene now, i'm cocoureyeyeagan. live froroththe nancial catatal the world in the heart of wewemanhattan. . >> andnd l liv from sun v vley,e ididah i'm sorry abououtthat, mark. od morning. > a r rht. let's s geitit going. i'm
markhaines. stock settoto open higher. yeah. nicelylyhigher. investors breaththin sigh of lilis a alcoaoa and thehe first the junene same-store e leles m in a tttt better t tha
expectcted >> yeah. 's going to be interesting to see if the retail l sas,s,f people a areoioingo f fusus on e optimism or the weakakne h he in sun vley.y. ththrereal concern is weakness. th i is ptty glum crowd.d. they can't seemem to find any reason to bebe titistic about the second half ofofhehe year. i hope,mark, thee mket w wl go up ne the less. the e u have it.t. >> okay. futures right t no u u 77 anthat shouldd cngng in just a a mement it'sacacally -- there we go. fair valueue, w we needed 236 t to fair value. but you're stillll lookingngat,u know, 35, 40 poinints on thedow. now we m menoned those tatails. most of f emem poststin akak, same-store
salalesororjune. job wriri and thehe weather playing majojorroles. joining us foforinsighttanalylyi ucuc gm, a anastst with jpmorgan. chk,k,ood morning.. thanks for b bei with us. thank you, mamark >> what's your t teeon whahat we'v've enen s arar? >> ihihi generarall y you know,
what we s s in june was a very tough month led bhe stimimusus from a yeaear agoond b bad weat in the northeaeastanandid atlalaicic. by and large, momostf f e reililerrecover windpp pitting bobothheheir guidance a well as the whisper nunumb. i think when you tee a step back from itit gngng forwardhih is goingngtotoe the toughest compmpar of the yr andore or less e evebobo has hitnumbers. we think the grpp gets a b bid day, particularly s somf the dertment stores who wanant t t - jp penny in arartilar, want praisingng g guince and target raisised guidance. >> it is true,oliver, isn't t, that these n nbers are n good. they're just not assad as ouough >> that's a a grt t int. i mean, weelelie going fwawa atat retailele will not go up on sg and a corol, inventory controls. retailers thatat w wl l gop wil contininueo o ive betterer to lines.s. look atkohl's, down5.6%. look at t th relative too year o date trends s th number i is a significant improvement. they are gainining hare, p posie traffic. wehihinkith a company like th, , ll continue toto do well.
>chucuc what about what ereric express said yesterday and he refleleeded t mood of prpret much everybody heree in sun alley, which is he doesn'tt see any green hohos. s saiit wouldnonot be the appropriate wordrd tuse. maybe some ability, butoo green shshoo.. this is coming from a man whoos directly b befiting as p peoe are goinintotospend moneyt retailers. dodoeshat in any way m me you concerneneababouwhether wrere goinggo o e improvement in spending o orrhe next six monthshs? >> ababsotely. byooeans aree out of t t odod that's whyhy was referercicing think the retatails s th will rkrk wl be thenes that drive e top l lin those who continin t to deliver down sininee digitcomps, w dodot t thk are the w winrsrs i this space. so we coininue to ststar belled in light ofof a t of unrtrtnty in the market. you lolo at famimily dollar, resususs yteterd, people are coinuing to trade down. laterals there would be doarar tree and walmart. you do neeeed beta i iour portfolilio. saks today down 4.4%. xm oise, that's stillll a denen
number all in. we continue to stay balancncedon the retail gup but stay fofocud on thosos companieses a sitive traffic and directctio directionally gainininmamark she.e. >> refocused meaea buying shes? >> yeah, buy those names.s. >> all ririt.t. ford, chucksasays overweighghbj, doar tree, jp pepey, ohl's, saks, target a and walmart. uck, thanks a lot. >> all right.t. anank u. and let's ge straighttoto r r maet reporters and find out how the retaiail s sal j jls claims and alcoa is playing out. evevything isovoved. berthaha iwiwiths at the newew york stock exchange.e. good morning. good morning. it's beautififul out there in idaho. reret'sooking -- furur are hier after the j jobssss claims. a l litee bit of bargain huntin of rkrkethave been down s mu over the lastst f few daysys. alcoa ceceaiainl settingng t t e positively coming g with a narrowow loss, 2626 cents. better thann exexpeeded.
whwh f fol are looking for t th eaearng season is a top line, totop nene aually is whatame in. 4.25 billion verersu expectatio of just ununr r 4. they had betteral lum nm prices. at said, enenerg costs are going to eat into theirir prpri. and ththeyee actually lowering estimates. retail round-up, more e oresess what y yust heard in the previous iscussion. saw thehe high-h-en guys r rll doing poorly. abercromombidodown%. saksks d m mage to come inn lilele better because t the ifted their designener sale. discscouererwere the winnersrs coming i i betterththanxpected on lowoweralal. and target, asmentioned, is piping its outlook. they do see s som stabililititi in their credit cardarea. goldman sachchgegettg an upgrade ovover b banofof erica. merrill lynch sees emem out rfrforng the competition. sapececeing a secondupgrade, graded by jefeffrss today. upped atb of a. merrill seeing aa t tugh in s sl there in this quter.
go on over tthe nasdaq wheree jeff witith kekeuckman tthe.. got lolotsff btech names totoy. >> yeahah, bertrtha we have, what, the nasdaq eke out j jtt a 1oint gain sterday and in the premarket itit looks like we're going to built on that, up ghght point or over half a ppcecent it'seaeall all about milli vanilli he e day as in "blame on the rain" becauausehahat' whatathehe retailers are e dogg regarding theieir june same-sto sas results. cococo, children's place,e, an wet alal, to name a ff.. yesterday, of coururse it was biotech giant amamge that led te wayslsligly higher heret the nasdaq. here t tod -- or yeerery. today y wee e go more p pitive news o of amylin far ararmauticals saying patients lost 22 pounds inseven-months timeversus f fouounds lo o on those on theheplplaco. we're goining to watch w wtt th vis s to vivus which are compas
in late-stage test right now of their own diet pills. finally overer tech lala, c cow d d coany areniniating coveragegef f broadcom with anat perform or the equivalentofof a buy rating, s saygg -- calling this a chip p pow hohoe,e, semi power house andaying thattt se 22 upside lalati to the rkrket overhehe next 122 months. and on that, blblee it the inin, lli vanilli tete i'll send it ovoverhehe sron epperson. . >> a lot of tders here, evenn ththoswhwho thought o would get dodowno $60 a barrel thissonont dididn think it would happenen a x-day stretch, wchch oil fell 1616%. kekeepn mind thatveversd cocondions a b reason why we're e eieing bounce inilil today. the are f fdamental factors ass well. jojo n nots bad as one m mhtht think and thrhrowgg a lowower cline in unemploymymen rate. that iss helpfpful retail sales s sllll noterergood though. anand 're also looking att t
fact thats we look some of the data c comg out of china, that was a little bter than expected as well.. th dollar certainly hasas hping not t on oil but metals s ll. th wker dollar onnthe backff the boe announuncentnt when yououlolook at the snap b wewe'r s sing crcros the boboddn the energygy complplex chcha'a'o sales in jujuneererthe fastest ce we havee en for the year. and the imf making comments out maybe the workk over for now. thth also hping oilprices.. wewel see if this rally hasas legs. riricksaelli, to yo in chicicag >> thank you, , araron certainly the dlar i ind needs toto bwatched. here we a a once again teststin that all impororntnt lel o 8 in t t d dolr index. twtwdaday art clearly shows the gigive back inn yesterday in the prior seseioion. as i lolook it's eier the e ye or all t rest of thth currencies. yeerday the yenwawasog doing well.. today the yen n down buthe dollar is s do p ptty much agaiait t evything else with the popod,d, a sharon inted out,t, exceptionally large.e. down 52,000, thahat' g gat for inial, right? but here's whatthe labab department is sangng.
seasonality means ththeyakake t nunuers do something b becsese they seeee a seasonalitity atat needs s s sho up. and i this casese was aututo worker layoffs.. they're expectingng71,000.. but theycycle was storted due toto a the issues regegarngng e auto indndusy y ich might have given us a b bteter an expected nunumb.. up 159,000 o o continuing clai, whwhicis a better a a maybe aa mo acaccutete readf f thjob market. nonow t't'go back mark. >> thank y,, rick.. cinin up on theublic private ininvemement prprraram, reaction from the securities industry and financial markets association. and we'll tkk to theead of one of the firms managing a portion of the ppip. >> that's right. he's right oututhere in sun valley. fifirs we've got th word from sun valleyey we've gott highlights, , mark, from, welel from important inrviews we had yesterdada a wh w wre expecting to heaea totoy. we'll tatake brief break and wel be back from sun vlele idaho, and the new y yk k stk exchange. f
real story of whaha is happenig he. wewe d catch more of abibias a resusultf f thclaim stake. that hasifted eupepean equityt mamaet. up 1.4% on e stx 600. this is a seven-daday chart. you cansee, we're still down ininhe doldldmsms. how muchch wprpre t advance, now is the storyveverydy is asng themselves. cod we actually therefore get t a positive result? glglamerican up 5.3. e m ming g ock leading the chge here in europe todada doing very,veve nicely. ase were hearingefefor the break, one of the bibig storiess what is cinin out oflondon.n. the bankk of e engndnd tay sayig that i it' not ining too extend its s qe program. there is a a real and growing bate here in london about ju how effectivivqe has beenen. has it p pduced any tangigiee results for the british ononom we wllwait and watch. maybe we're n quite done y yet with thihi storory though. ththat it from europe.e. let's get o out to ahah and rejoin erin..
>> thanks so much tyou, g guy johnson. i i ju wanted to h higigig for everyone what the moododss here. as we said, 250 pluss exececute and investors arare g gatrered totogeer. much more e th media. you've got juststin f fro gegeh. yoveveot the ceo o o coca-colol. you have the ceo of american n expresess. so broad rrereseation in terms of who is hehere cecehair of jpmorgagan ase.e. ananhehere are a few of the highlights that sum m uphahayou need t tokkno first, vevera, much of t the convnvertitionhat i've been a part of isis off t theececd but e e thg we canhahare is most of the ceos do seem toeeeel erere'noustification for the markett the current level. came so farrrom march andnd th really see that t itver valulued that is somethininatat lst from the ceo suite toto takenote. frfrom american expresess, we hd his firsrs television interview erer yterday. heheasas o my p pan on the s st of finanan.. what he saidid in the intervieww was he d dsnsn'tee any green shoots. hehe w p prey direct ouout a people here jokeke aututow tired ey are aboutut hearing theheere
grgrn shoots but a lot of f pele are saying mosos s som are sayan it's ass littlesmomo.. there's not aa lot of titimi. talking about the crcred c card industst, , ye there's bnn stabilization but nonomumuch mo than that. second half of 2010, when he seeses recovery. lalastthingng mark, remember t her da you w weeocusing in onon tt t ory onyndicated loans and they y we 2.7 trillion dollar loans paagaged and rered in 202007nd almost nonon last year. jimmy lee at jpmorornn chase is known as m manhohonvented the sysyndated lone. i hahad h h on "street signs" sterday. mark, he seemed coconcnenedbout ere we go from h her but he hadd one optimistic thinin on the credit mamark.. he said d 'r're t s sing any ne dedealdone but he is seeing refinanancg.g. a great grououndwewell of rerefincncg. companieies veve suessfully ben able to roll or some of the debt a andusush some of the maturities out.. atat w the one positivee tnk that i canayay r reay heard out herere was thahat particular statement. >> all rhtht.
thank yoyo erin. up nt,ouour first live guest from sun valleyey bob johnson,n, foundnder of ljlj companies andd b.e.t. we'll talk a abo his nest venture caribbbbnn gamingg d enenrtainment. hippip nvnvesent, the statatu ofis chchartttt bobcats, a and more. "sawk on the street," fifit t in business worldwiwide bbbb
let's check o out thefufutus as we told youearlier, they arar comfortatayy above fairr value. ough to geeus maybe 40 rs 50 pointsts oththeow a at ee opop.. th govevernntnt's pplic/private vestment prprogm, ppip,p, to get xixicssets offba's's books starting offff sller than excted but still holds omomee forr incrcrsesed ananarency. treasury departmenenwiwill inve up t to $ bililononn partnerships with nine d difrere fund managers. joining us nonow, tim ryan, president, ceceo of the secucurs industry andinancial markets asciciion. anandne of thoho fund magegers brucuc chchds, cofounder of marathon asset managementnt. ntlemen, thank you bototvevery much for beingng wh h us. apeciate pit. t tnks foravavin us. . >> bruce, this is alalr t tha exctcted is it stililgogoin towork? >>absolutely.y. $30 billion programamhere the governmemeor the first tee is hiring money managers s to m ma
neneand be half of u.s.. govevernntnt. this is a mililesneneevent. in addition tothat, the vestment c cmumuni has the opportununittoto contributete $ llion angngde the governmentnt $ $30 billion foro0 billion progogra we thinknk $ billion a pretty sizable amamou o o money t to c into this marketplplac in a residential l ancocommcial eleligle assets securities taking othe market. >> are you s satfied with it?? >> yeah,i i thk i is s we sisign. i agree t totlyly with brucece. i think thisisss e exalyly real whatate e ne now.w. e e mo important part of this is our h hop ishis program will rereart the sesecutitid ararke momore r ridential mortgageacked securities. th market has been all b dormant in the pvava sector since the crisisi started,d, rey nce the last monthshs. anththeconomy really n neet rrreally consumerr ffance. >>avavid faber?
>> acally, rkrk, i thouough you wewereoing to talk toim and i'i'going to talk too -- >> no one t tol me at. i i wi continue on withtim then. >> great. i i would imagine the jumbo part of the markets s e one thatat noodseeds the most t hhp >> iss all of the nococonfming sector. u know if y you look at just in '07 w had a abo $2.7 trillionn of securitized product. rst quarter off'08 it wawas abouout 0000 bibiioion. sincee that time in the private label area, everythingng tt nnnniend frededdi it's basically disappearared th p proam, part of i iisis designeded, icich not really wewe didiscsed, is really to jumpmptatarthis s secititiz prododt t sector. >> nonow, thesearar risks tt you would nott take whohout the governrnme b b yourside? >> no, i thinknk that they a ar ririskthat will becccctable to investorors. thisisis better swered by
bre,e, but my sense that the spspre herebebetwn the willilin llllernd thehe willing buyuyer should be relalatilyly nrow because principapallthth s selr herereilill banks thatrere holding these sururies innmamark to market portfolios. >> how optistic are e yoababou this o o a a scaleff one to ten? w we' been try for this fo m mths. i thinink atat ia great dedelolopmt. ournly disappointment is s ee other piecece this, the legac loan piece,ss kind of --t't's a quiet phase andndhe fdic ing to betesting reaeall rtc-likeke prococess.s. eventually we'llavave to get t the legacy loan purchase progogra too, bebelie. >>didid >> thanks,s, mark. you brought inin b bce ricichas eaieier,cofounder of marathon asset t mamagegeme. one of the f fms that will bee participating.g.
uu awered one question, but another, why a a y you papaicipating? >>e thinkis a milestone events. agn, this ishehe first t tim the e s.s. government hasonon ininto mey market inststry momoyy managers of theworld. the united states, gogoouou and put ann rfp o outo 104 managersrs tmamana money on t t u.s. treasury's behalf.. wehink it's a service complieie to the u.s. governmementtotoe a money managege o of their choho and an opppporninityo make thee vevestnt community or investors signififanant r retns beususe how cheap t asset class is, the elelibible assets vevers commercialmortgage backedececuries. >> some pepeop s s you aregogoin to b befefit and your iestors wiwi b benit but the u.s. xpxper won't. yoarare putting down 7% of the funds, t the u.s. gerernmt putting in 9.. win-n-n n foyou, n real dodowndede. you're goingngo o painflated prices insteadadff true prprice. what do y you say to thatat? >> we c cometely disagree witit thatat aaesessmt. the u.s. govoverenenisututti up50% of the equity, which h is 10 billion. an investorsrs aututti up
another $10ililon for the other r %% of theequity. the u.s. govovnmnmen will putut $20 billion in d deb financingn for upo tenears for $30 billllio $30 billion orr 0 bibillnn isis 3 of the capitata 9 not93%. number two,hehe taxpayers do bebenet becauause the retetur o the assets are increreblbly atatactive. reremeerer, resesenents of commercialal mogage backeke cucuties are i iued at pa at libor r pl 12 twspspres of libor plus 25 now there e e e spads that are t theteens, yieldlds at reretus s ra of teens and icics , , 40, 50, 6 60 p poi discount fofor par.r. st price points we cananakake highly attractivive turns. >> a and g get the assetbabaed secucutitiesarketoving again.. but to the point o the banks' willllinesess sell, you know, they have taken some m mar on th portfofoo.o. at the e e of the day why not simply lettheararkework?
yoare in t thi marketas it is.. i i asmeme you have seenen attractive thingng are there unwillingngns s fo banks toto sell? and if ,, is thepipi going too resolve th?? >> this is a spongeaeabl market. is market trades all thehetime. is is notloans. loans are nonot rkrkedn the books. > tse are securities, undersrsodod. >> mark mamark.. banks wiwi s sel because they have m mar t market price. it's notot oyy buying f fm m th bank -- >> althoughththe market pcece t fair,t't's not nessssily thatat ansparent. ththe can be snificant differences,correct?? >> trere c be significant differences but ththe markets trade all the time. 2.2 trlion of rididtial assets andnd uerer a llllio dollars of mortgage bked. >> trillion. 2.2 trililli.. for aa total eligible asset poo of 2 1/2 toto 3 trillili.. thesetrtradin the marketplace l the time. h hows $30 billion going to make a difference inaa $3 trlilion market?t? >> good question. slslhtly less than 2%f f th
rkrketace. 85% or originally rateaaa, which is about 1.88 trillion. and of that p pul we thinink au half of that pooools put away, willot come out. so that l lves you about peapss a trillllio tradadaee securities that t tre e inhe marketplace. wehihi $40 b bilon doesake a ntnt in that. 4%fhahat elelie is al o or eligible flow. set new price discovovy,y, a sense. >>absolutely. >> how long? yoyou' g gng to be inn i in for long time,aising your money, i i assume now, correct? >aiaing the money now. itit's three-year investment period with a five-yearr rvesting period for anan eieit-year fund. we belelveve t average lifife o erage cash flow result inn a a five-year avavere e fe. ourr holding period might be a short asas t thr or four y yrs five orixix years with an avage life of fiviv years. bruce, thank you for r begg with us thth morning. apprpriaiatet. cofounder r of marathon aetet management. > the final countdown to t the opening bell i is t the o oth side of f thbreak. this is cnbc "squawkwkn n th
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you're watatchgg cnbc'ss "sawawk the street" live fromom the financial capital of the worldheherehe openingell is riringg g ght now. do you want to doo t t hors? keepep ing. thnaacp celebratiti t the 100th anniversary anannu convention being held in new york ci.. atathehe nasdaq, standard crosystem, coreicicr smsc. our market reporteters are raratecally p pced aroundththe glglob let's statart with bertha coombb here on the floloor rtrtha >> go aunun the globe, why not go jusust downstairs.. watching the p,p,regaining here ght now at 882. the s&pevels have been t the trigiggefofor selling. yesterday wewe fl l we below. and jujustarary bounced off of a key s suprt lel. ththat something that b brs watch. wewe d get higighe volumeas we move to the upupsi yeererda
the bulls fdidi a little b bit ofenencoagement there. alcocoa isis morningetting the totoneith better than expected eaings and also beerer than expected top lili.. that is goingg to be the scene this earnining season. not just cost control bringigi the numbers in onn theottom line but seeing a a bi of growt or ait of h hel in sales.s. that's what the mket wants se to continue to bid these stocks up. 're seeing commodities onhehe babacknd of alcoa's betterhan expected eaeaings. moveve u ghgher particularly the tals. also witith dollar weakness. goldman sachchs isis morning getting an upgradede o ove at bk of america. memerrl l lyh helping the fincials which swoon ed yesterday y afrnrnoo eueuge mcquaid will j joi citi. and quenenn leavining citi. tata, meantitimeththe rorounup continuing t to w wea consumers c connunuinto be price
sensitive. ks, one of the standououts because they shifted theieir designer sales att60% off high-end desesigrsrs into june. that helelpeheir salales the scscnters are the biggest winners. tj max beating eestatates owing anncncase of 4%. raising guidancnce along wh targrgetalal r raingng guguidcee very p pri ssitive these days. let'soo over to o eeasdaq now and mike huckman. >> thanks, bertha.. an investorsrs hee alslso ememo be shruguggi o off thehe pretty smsm june same-store sales results out ofof t retail sesect.. right now wewe'v g the nasdaq uporor than half a percent orr 11 point gaiain o yesterday.y. let's take a look atathe retailers. cococo said t tha its june sa-store sales were downwn6%. chchilen's place saidid thathey were d dow 12%. wet seal said they were d dnn 11%. bubut ctco and chchilen's placac as you can see, are e hiererhis morninin moving o ovetototecech, we haha covevera initiatiti at cowan and company of brbrdcom with anan o perform or buy rating.
ose shares are up 2% right now. ththe mpmpy saying that this i a powerouou of a chip maker. eses 20% upside lalave to the market over in the next 1212 months. th's'soving philadelphphia miconductor index h higr 2% finallll i in bio pphaa,a, t compmpanss reporting potive d-stage test results. amin up 1 1/2%. and a rheumumoioid arthritis dr that stock is up 14%. leles goveverto shahann the nymex. sharon? >> mikike,hihi rally is losing steam herere in the oioil mark. wewe a looking at bntnt crude prices and wti prices coming off of their higher levels o of e e seioion. again, the continuininjojobls claims are w whaaa lot of fos are payiyi attention to with thahat record and hililits the fact thahat t thi economic recocove is going to be ve slow at coming. epepn mind we'relooking at ththe 00 mark here innti. when you lookkt the --whwhe the prpric a are here a a if ne compared tobrent, the fact ttt
brt t at a a dlar premiumum, that is a bearish factor. when youooook at the crude rve anand e fact that augusto janunuarspspads have blown outu over a doar in the past ek. ththatss a bearish si. merrrrillylyh among thoseirirms raising their pricee targetsts. theyeyeeee the third quauart pricicestt $66 a barrelel. rick sanantei,i, tyou in chchagago. >> thank yo sharon.. well if you look at the i intest rarateurve, rates are higher.. anthey're especially higher in the longer maturititie of which we're going to have t t lalast optiti of f th weweek 11 billio 30s. we're adding a a issue that already exisis what i is key here is to keep in rsrspeive, even though ratetes ee upersus yeststdaday' close, theydrdropd rather drataticly yesterdada the levevel eyeypent a lotot o titi ararnd, 33 and theen i 3.38, i itepresents the exact d point where wended the rst quteter, 266 and th highs of the recenent ararr at 4%. nono l let go to sunvalley, up,,
you knowow whahat,etet go back rkrk itead. thank you. >> but, rick, i is s alys sunny when i'm herere a at the bibioa >> alwayays,snsn it? >> yeses. the markets oning higherrss investors s t t reassurancnce om cocoa' earnings and a drop in first time jobless clmsms. as we g into thee tckck rnrnin season, how shouldd investors beosositning themselves. joining usus from the cnbcc ed chairman o of cio taz investmen and fanniee mae, ief investment strategigisttt standard & poor'. i'm going to s sta with chrhr because we're iningo need sa to bringng u us back u u aftere stst b us ou > ionon'tnow if i will bum yoouou compmplelyly, but wewe a co s sing right now a and the mamark is going move dramatically one way or t t ototr over the nextight to nine weeks. we think it's pbably going to be on the downside.e. we've gone toooo f far too fast. n nee to consosolitete the gais and people areoioing to be sasaointedvever the next couple of weekek
>> it's only one mpany. > o d dayone dan company. >> but,,yoyou know, coco big instst, firm, sensitiveto enengygy, etty good t thathey didn't disappointnt. >> you look athehe actual dr, itit dramamat if you look a at onone-arar decline of sasass of th magngnite.e. but t opopleave priced in a ttttleit more of a worse case scenario. where we n'n't think peopleere ing to price enoughss if this economy doessotot recover and the stimumulupapackes prove nototo work ateaeast in the rrrrt form and wee d up having to say, now, what are we going to when ll theowowde ha b bn fed. > s,,here do you stand? >> i thihi'm going to be adding to theloloudon your sunun valley. > o brother. >>y expectatitis we're goioing through a a corrective phphee rt now, a a digestion o oththe % advance thatat wsasa off the march 9 low. wewean see the s&p&p dp to about 00toto 825 beforore we get a bebeerer feeling as to w wheere this is simply a dififcucultust
shun of ththe inin orwewe coulde fufurtrr deinines i think general, th there are concernrn aut the ececomy.y. we'r're ilill looking for thee cession to end by thee beginnnnin o othe fourth quart. but i think that thehe recoveryi going to b b very, verery slugg anununployment will likely stay ababov10% t thrgh the f fst half of 2011. >> llll, i jt feel a whole lot beer. do you buyuyinin this heaead a shldlds, is that part of your rereoning, or look at t the fufuamentals? >> c canook at anyththgg that wiwillelp me get an edge. do look at tenicals. i d dolook awhwh our chief chchnian says is ahehead and shouldlderpapattn if yoyo do t e the hyhypeetetwe thehohoulr and ththe head, that i it could bring us down at lett the 830 0 level, but t the also l lg at othther correctivee patterer. the thought ishaha werorobay willlloo dnn to about810 oroo on the s&p&p. >> c chr, , u're in the school that says the stimululu h has rkrkedwill it work, dyoyo think? >> d d't think it wll over
time b be viewed as beingng rtrticarly successful. think that you willll get a covery, and some ofhaha recovery credit w wil goo to th stimulus ckage. t t 's probably somethingg t tha would have happened aanyy.y. i agree c cometely that thee pullback could be as much as 10%. think unemployment iss goingoo be a lot higher an people expect. the key isevevybody expects 1 t the unemployment. e key is when wewe g it. if we get it chch sooner, the numbers lastst wk k we hoible. i ininthis mmart,t,hat could behehe calyst to cause us t to sellll o. . >> but yououanage ney. >> rit.t. >> spite this vvie you've g toto fd d sowhere t to vest it fofopepeop. what do y you recommend?d? we expect that over theeexext coupup o of years that you're ing to have lot of stagnant t economic sececrsrs b you are going toto he e so areas ininflioion. we do think k ee cycyical, the coodity based n namnto a pullback. 'r'rtalking about this aononth o, theyeeded to pupull b bac sharply.y. they h hav done that. pulleded bkk 20%0% t 30 in many ses. we would b be bubur in n th d d with a a lgeger-rmhorizon.
> s,,ame question here, ererdo you pututmoney? >> i think k yo go for ality. i look for mpmpans thatavave s&pquality rank o a minus or tter, pay divididen eld of 3%3% ormore.. bu ranking or betttterby s&p analysts who companies like the telecom spspac semiconductor d technonolo o o johnson & johnso in health care. >hahankou both very much for aring yourthoughts, i think. erin? > a right, mama.. upup next, adventutus s in vent catal from sun valley, aho. fit up, bob johnson is t the founder of rljcompanies and e.e.t. he is going g join usndnd tal about whwhate'e' hearing here ad alsoso tt t ip, he is onef the managers there. and lalate rei v venreres head jamesrobinson. he's's gngngo talk about tetechlogy right now. obviously herere you'vegogot bi gates,riricschmidt fromgoogle. they're all h her in sun valle. we'll find out what ththeye e talking about.t. introducing g ona a da women's 2o.
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hi. welcome baback iererin buetett. this isssquawk on the street." i'm obviously le e in sun llll, idaho, at the sun vavall nference. medidia d d hohole lot m mee no fafairoo really clsify this as a media confefencnce. youavav business leaders from cocompies around the world.. bob johnson is with us now,r dd b.b.e. founder andnd contributor fofor hher >> i it' a bebeaufuful place. >> it sure is. yore one of the people who gets it right on e casuaual esess. some people e t t it more right than o othss out here. o o of the things i h hav tatann ay from the state of fincepenalty yesterday mornininanand om t talngng to pele is there isn't whole lot of optimism a and has ken chenault said, tre isn't any green shoots.. what is your takeke-ayy so far from talalki to peoplple he ababt t whe we are? i think the f feeng is wait d see. erere e a number ofofigig that yoyou ght argue sort of s sayg wewe'r beginning to see the
bottomom and there are othther signs t t say there e e e a t of thingsgs over thehohorin that could relyly b damaging. commercial real eststat i is a g one.e. unemployment i ia a bi one.e. consumeronfidence is still an n iss issue.e. and availability of cdidi you'u'veotot a lot off tngs that sasay,etet'sontinue toort of hold out andndope for the beses but not enghgho say,ou knowow, we've turneded ts s thg around. >> it's interesesti, , too, som ofofhehe pple i was speaking wi, , th they allkikind of shrug and lolook s sad andsay, i don't know whyhy t market ththishihigh i i inink see where wee g g fr there. that pot,t, you're one of t t mamanarsrs f theubub blilk prprive investor rtrtnehip, ththso-called pipi wherere eses this go f fmm here? you have a fewmonths, ght? three months to r rai half a billion ololla, that's where e you are? >> we're in a ptntnship with western assets, and, yeah, we veve t raise ininitilylybout $500 biion, 12 weeks to do that. and d ou gl is treasasur is
arartilalad in their atatemt, atat w want to look at g gting morerecredit, liquidity back ino the banks by t ting o off some thesee legacacy mortgage securis in a a y that wi allow more lendndintotoet into thth mamarkplplac and we thihi t tha the combination of westete assetsnn rlrl we're goingo o be very y effective in doing t ttt it's intererestg.g. wilbur ross wawa saying earlier not "squawk box" crew thatat th wathis wastrtrucred the managers m mig b be le to pay % to 10% moreoror some of thehes asaststs tn they o oerwise would veve, anks to the treaeasu's's involvlvemt.t. do you thinknk tt't's out right? ththe condary thing,,is 5% or 10% more enougug to mamakehehe banks actually be willing to sell? > tt's the issue. the treasuryry want a price discovery in theheassets.s. thonon way to dott is to g get a numberer o ofeople out thehe oking at them, d doi the risk sessment and analysis and making thehe b.. and you dohave access to treaeasu capital, b bot fm the
equity sidee and thehe d deb se. so y youhould be at a a adntnte. i'm surere othehe private pplpl ouththatould bid aswell. buththe pointss i do think t te way it's structured, it's's g g toto ge e us an opportututyty t take on sosome o o these securities. d at the same time, providide upside both toto onvestors and the tpapaye. >> investors, i guess this is a ququeson a lot o o pepeop atomoe ha. acnyms sometimes are nfnfing, let's be host, for alof us. en you goututand raiai money are you going to rse money om any individuals? is this somethingng t tha regul americicanararnot going to be able to says a taxpayay, , or an investor, i can gettnn on thihi >> pension f funto union corporate pensisionunun, certainlnly ghgh t w wthth dividuals could investst i in thth.. so, yeah, i ththinatat the e of the e y,y, a we're getting vernment monene s taxpayers already asinvestors, regular americans are partrt his opportrtuny.y. >> sorere thehe opportunities - yo know,, yesterday on t tha
state ofoffifinae panel which, s talked about, people e we ttle bit more negative than think people h hededfor. ey did talkbobout opportunity. and you now, american express was saying i ind is a main place he sees oopptunity. you obvbviolyly have investmemet in gaming, i indealerershs,s, ririgh everywywhe.. where do youou s th b bgegest opportunity ririghnonoand are you actually psisilly pututti cacashn right now? >> iututti cash in, but i i think the biggestst opportunitye see now in termrmsofof our asse is in our bank, urbantrusust. wehihink we've g banank atat is enepepneurial, it's s inlved in prorovingng credit and lending to theunbank and the unundeanked in aayay that's transparent, that'ssreasonable. and our goal is to continue grow t thababa. we got areat partner ipipith wawaarart. we're in about 26 w walrt s sres in cenentr f floda,primarily.y. so we see that as a critical part of b bnging creredi to the rkrketace. reresting consumerconfididcece. that's w whe i think o biggest growth potentialal i right nono. >> what wowod d be if you had
stst y, i don't'tknknow onef f theososinteresting nvnvertions you, you don't have to say who i iwas with i i you dodott want, but a name take-away. >> t tught you were talking abouout n n ers stealiningmy ca. >> no, i i stole s somneneelse's caca i won't sasay whose. >> no, i ihink theigigge take-away ishat people e he are, you know, fococeded o you ow, trying to see at the gogovemement programs reallll going to o.o. ani think the more certain theyey g f frothe government, like the t tasury prprogm,m,hich is now saying ilile think moneneyis going i intbanks, catatais going b bac into banknks,hehe's still this legacy hangover of these assets, these mortgage-backeked securities. ununtiyou sort o o help thebanks rt of rid themseselv f fm that an deploy the capital back into ee mmketplace, that'ss what treasury is trying to o do >> bob hnson, it's alwayay great to see e u.u. i know you've got t a t t the hopper. 'll talk to you about that. i guess it's gd we fnd out ron meyer iss a thieie >> he always wass a a thiefef.
>> all right. thanks to you, b johnson. and ourunalleypecial programming continues today on "seee "street zisigns." dad barr, he is thehe c o of thirdvevenu mmager. hehe'salalk about what h hss seg on the investmenen side herere. coryry boboer, new yorkayayorwil be with usalalng about the ststululus and nassef sawiris,s, presentatn this mniningy thereresint of combmbia and we'll l hearing from the kingng ojordan and neral petraeae.. a lot of talkk ouou iran an we wiwillalalk to the richest man fromegypt. meanwhile, up p nene, stksks o ththmove. weweavave rk on the list day, chevron makess the cc. yoyou' w wating "squawk on thth street." werere right here onon cnbclive omomhe new york stock exchchan and sun valley, , ahaho.hesese m s i'm glad i turnrnedo o delity for an annuity with guararanedd income for life. that's r rhtht, guaranteed income for r li.. my annuity from m fililityeans my retiremenenininco is safe.
worsterformer in the dowow industrials. it's cut to hd from buy it in e taxes. thstock is comimi off of a four-monthhigh, which isis yeyeererdathe health care trade appears to be reversing. the same c c be said f forhehe enener t tra. i talkeded a lot about t tsese bobott fishsher out there at at some point are goioing to step. anybodyyaififin ccheonon/taco with a a bubuy. exxon initiated att a hhol also, in m m jimimmy buffett tribute of n nblblin on sngng ca,ibbling onstock, they initiate six with a a bu today. three of them listed here. eog, south westernrnnd xto also on their n buy list. wantnt tbubu a ililde credit isisse says,yeye,, take itithome, man. 5% igigr, upgrade from o o perfrforonon the waytoto 11 it's's made big j jpp there reread let's get t erero david faber
for the veryry lesesrenditionff the "fererrerepo." >> thanks.. there we e.e. usually we're overnn that dede. things arereversed. i've been having iueueshis momorng.g. we've g got importantnt c chaes citi group. onef the nioiosargest babank hobbled, to say y ee asas soonon tbebe owd,d,34% b by youd me, , thu.u.s. toks taxpayer. some signinicacant management anans they want to go over f yothth morning.g. what can i iell youfirst? gary, rerember, long-time cfo,o had been c chamaman the citi holdings. he aving. he's out. he's had enough, i gus. he's going to utut,,t least that's what it says hehere he's's relocating tootatah to devote more time to o hi f famy anand other businines iintests. yes. we're gogoin getto eugugen mququaid. why dodot t we do that rightnow? th is one of f e e bi additions at citi groro..
eueuge m mquades going to join as ceo,o, t bank. look at thiss gguy workk industst.. i dodon'knkn jean mcquadede, bu he was at merrill lynch fromm february of '0808 until feuaua of '0'09. wenono what happened then. by, the seeds ofmerrill's demise ss planted lonongefore mr. . mcquade wasas therere. but he was atrered dee mackor a long time bebefo t that. he wast ededdimac, smart enghgh tsay, i'm out of herere yeyearefefor the wholele t thi collapsed. anand didn'twawant richard ren's job. he alsoso bththwa rved as president of bank ofof erica. mae some people give h h hh marks. i don't know the man. i think it's intereresngng. of cououe,e, freddie mama i n n geget red of reading someef f th ldld mos from mike t t di ren who ran it 00h who
saidid weieith got t to get l lr inoo income no, asasse,, or out of the assets. wh d didr. mcqcqdede decide to do? what sid mr. senen decide to d? let's get bigger. asor citi, it looks l le ned kelly, who i i -- or hadadeeeeno is going too t tak on responsisibititiesor stratatyy and m anda. hehe'soing to coco a vice chaiaianan o citi ouou it says heheren n thmemo, we'll worklosely with thecompany's ceo in order to d dri the exececutn n ci's s sategic d d opational prioritities so there you h hav mostt of it. bibillhodes taking alesser le. he's beennththe rever. crittenden o out kellyetetti re, and mcquade joining iticizediciti grououp. well see iff ts has a impacac whsoever on what continunu t be a greaeatdeal of management tuturml.l. mark, babacko o you. t tha you, david. > > brking economicc news..
whololese e tre numbers forayay coming out in just moments. you willgege thehemirirst rht here o o cnbnbc'"s"sawk on the rereet don't go a ay.y. u have questions. who o cagigi you the financial adadvi y youeed? where e wi y youind the stability ananreresoces toeeeep u ahead of this rapipiy y evving world?
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>> memecan m well nl back to " "sqwkwk othe street." ririck santelli here. may inventories down0.8. th's close to expectation. wee looking at a anyerererorom wn 8 to doinwn 1.2. st month, downn4.4. slightly revisesed,nly down 1.3. inntories, it's allbobo cycles.. you know, wewewe down ventories. you u ha t tmake them. th's a pposivive. does a abobodyuy thehem? atat'she next chapter in n th story. bebeususe deed, that will be the consumumererernal income sryry down thehead. buatateast a this point, ininveories being wnwn cld be viewed a as plus because y you havevehehe rereplisis if l loo at the response in the mamarkplplac equitiesroropp a bi it isnsn a anying huge but ey've given a lotf early
gas in interest ratesrere closose to the low price, high yield of the day at 3.38. by the waway, welcome 1 11 billn new 30years added into an existiting i iss at 1:00eastern. ofofourse, i wille there for thth auctionon excitement. >> thank you veryuch, rick saelli. bertrt c coos joins me here on ththflfloo we gotffff to a n nic start ana now it's flat. >> yeah. i wawas lklkg with one of the tradads s an he saidthth is a shshowe market right nono certainly as we e gogg into earnings i it a aut show me.. we've alreadadysese the grereen shoots. somemeeoeoe call t the green shortsts, w wt helped usove t theupside. >le calal them m soththg els entitilyly. but go on. >> whatever. yes. probably in the brownn departmtn in your-- in urur area. but now wewantrfrfornce, top lili growth. not justmamanang the costif u u cabeat thatumber on the bottomom inine. coa is aixed ppicre. they b bt t on the bototto line. their top linin was a ltltl
better. ththeyot a little better pricing onnal l al luuminumaluminunum. aluminin s stos are reaeay y th inventory the e ha not worked out. nomuch demand.d. even though they talked a abo a lilitt bit ofmpmpvement in the auto sector withh what's nowow americic automakers coming out of bananupuptcveryquickly.y. none e less, it't's stillotot great.t. though china, sales were u up 36% in june forr tos. china is part ofhe story everybody is looking t. probobab materials today. >eeeel ee to argue with me n is or disagreeee with me. my s ssese thatt a lnerable, is not the r rig word, toeriodic boununce of optimismsm, tt overall, therere still l th natatity. >> i d don k knoif it's gagavity. >> p pesmimism >> there's's little pessimisis it'susus peopleanant to be optitimiicicut at there point they don'tave enough toove e themem forward. i think wveveototte past that phphia that, oh, mymy gosh, we're not in a deaeath spspir.
>> ririt. >> but that cann carry youou fo only so lo. >> y yea s.s. the world isot gogg tond o on thursday will onlyly cry y you- >> ectct. p, in particular, thatathehe u u se where we are. you've gogohehe right price,e, you do well. gap overall was ddow old navyvy wasown only 7%. nanana republic, theirir higher end, downbobout20%, 30%, i i ink, c comred to the expectation. sohahas -- we're all looking r bargains. some of usooook forbargains all the time. bertha, thaha y you very much. let's switchch gears and h overer tththe sdaq andheheck in th mike huhumaman. >> mark, rere too,o, we're definitelylyeeeeg someweakness. ririghnow thee n nasq is only .2 of a percrcen i iwas up half aercent a fewminutes ago. hehelpg g e market stay just above w wat here arare the chip stococ.. we've got thehiladelphia semiconductor index up 2% right now. thatat d duen part to a bullish
call on broad come. e analystst ininitiining covere with a equiuivantnt of a b buy rating. it's u up . alththe attentiti i iseing paid to retail, which is inflalami it on the alcohol butut on the r ri in termsms o of its weakk june same-store sales sults. ho topic justst t turd positivea few m mineses ago. costco tradinglowower but zmies is zooming upup 2 1/2%. even though that snowboardrdin equipmenen retailer said ththats juneales wereowown almost 20%. ananthen filly, we've got bio pharma hitting a ububle rhmamaid arthritis rerelts, fifinay, seeing a bit o of prof taking innmgen after a huge run-upin that stock ststery. erin, over to you beautiful sun valleyey ere i used to live in ise, actually. oh, i did n not know ttha atat'sn intetereinin little piece of trtriaia. thank k yo m me huckman.. it is reallyetting beautiful here now. the sun is oout the tetempataturhas gone upp wh aa solid 10 or 1 deees, which rather icic joining us now, james robinsns
rr venturesananagg directctor rre venturessinvest in a lot of chnology cocompieies,t's venture cacapil,l,and we appreciate you taking thehe tee to comee ov,, jim. >> glad to be herere >> i wanted tosksk yoyou, well, first, to start off, since wre here i in nn vavall a everyone meeting right now, m meengng throrohohouthe day. wh h haseen your main take awayay,alalki totothther iesesrs anand e e ceos here? >> well, think thatouou stillll have a tremendous ount of ncncn about theheeconomy. and what the consumemewiwilldo, the fe, theererceion as opposed to the realityofof t economom issues.. we really don't knkn what shoe is going roro nenext so there is a a teououess in te tivity. and yet t t theame time there's opmimism it's in t tsese nds of cycles whe you see t trendous portunities emerge. it's a little bit of a a mid,, you knowowaa mixed msasa right now. and on your dedes an instst and especially in
veure capital you're loooongng for opportunitieies. the most fundamental q qststiois this one. do you have enenghghertainty t be putting g an n moneyoo wo? it's onenehihing to sasay'm optimistic o or r thlong term, we're going to c com out of thi. itit another to bepuputtg monon in right n.. e e wrdoing thth?? >> we ar indeed.. 'r're actively investingng touoh this ccyc.. tuturnouout that a awe look b b onon o 15 yeyessff isisto, we've haddhe most success whene we'vee invested i i down cyclcl. so we'rere optimisticfrfrom tha pepepecte. having s sd d th, the baris higher for us t make anenew investmeme.. in fact, justhihis week we closed a new investmeneninin revolution momone >> with steveve case from aol. > a golden saks a and hers. soso vy interested inthat. excited about it. w wt is atat? since it's's adede you'reoioing ririt t noand obvbviolylyere at sunvalley, i it' cdit card transactions? >> it's a so-calleled intnteran rarate it's a system thth allowsor a much cheaper c cos structure fmm
thtitime you u your credit card at, say, a point o o s se n a store e memewhe to the bill that you geget. nenefr, rather than paying or 3% what if it was only 50 basis points. >>half of a percent. >> yeah. you knknow three years ago, retailers carerea a lile bit abt that. buwhat they reallyly red about is houmt inventory turns theyy could get o outof a year. toy y this econonomy -- they cee about ererytng. >> they c car a t,t, that's correct. > wn n u say you're innthis, golden s saks in this and we'e'e trtrngng t read in w wheerer ppe ee putting alalto rkrk, how would youhahacterize the size ofof it, t commmmitntnt at opoplere making? >> this is aa coany that adads in excxcesofof $1000 millili.. our investmenent theatates rodd in that.. anher 15 or0 that's gone .. d d think thisshshou take them throuough cash flow eaeak eveven >> when you sasay e e r is higherern n neral, to put money wo, what do you meanan? what have e uu changed inouou
pararatetershat say this is someththinii would invest in? >ou know,t t is m mor diffffict t toy, i ththin to do the --hyhy would term t the two guys andnd the dog start-up. inin oererords, nceptual stuff ere somebody may havee a killer idea but thehey' d don no deveveloenen have no beta pruct, nothing t tyyan demonstrtrat doesn't mean those a arett getting g do, , th aare it's morore ffffult to do that. what you're reallyloloing for now is somee sort of traction.. and thee companies that we see a the earliest stages have, e ev wiououventure fufuining,nd papartff this is bauause it's cheaper now to srtrt cocompying, atat least inn many categories, demonstrated traraioion. we haveompanies like, if you follow twititte there's a groro called stocktwiwi. . >> stock twitits. >> i know, interestingng. foundedd byby an eererepreur, inrereing feow. whwhathoward did, insteaddff doing major funding he wewe o ot and built a c comnity of 100,00 people.. now h h can get venturere funde
because he is proving h his coept. i'm nonoanan invevest,, i proba should h havbeen. >> w whaababt witter? everyoyoneasaseen talalki a abo twitteter. and so t to takak awaw h hasee a lot of p peoe e e perplexed by it.. they don't denyththatt's gototnn traction. t thereoesn't seem to be from the b bigededia ccpapani, y the way, they'reeotot always right, but they don't t me necessarily sese t to t it or to ink twitter haha legs. > i a fan twtwitr, but, you know if you look back three years atat t the o ogiginaquest thth twitter posed, theueuestn wawas,haha are youdoing? >> yeye. >> icallhat the hamam s sdwich discussion. you know, what are you dodog? i haha a h sandwich or'm'm going g denner here orr lunch re. lilienen, at's interesting f for any numbmberofof people t ttt n toto kp p on that.t. but the ininteed coconsueuee t twier is two-folold. on the brbrkikingews vavalu we've seen atat, of cose, acssss my storieies,heheer it's india, p plas landingg i i the hudson, etetcera. > right. but there's another si of , too, which i ihink is ofof
great t lulue, and tt't's the dissemination ofnonot necessariy realtime breaking newsws information but t ju the dissssematatn of information i general. the e arso many bgs today, there's s soucuch coming at yo that thebibity toort of usus twtwter, as i do, w whi is a a lter, i follow something likike 00 sources, over halalf of whic easily are either news or soururceththatare, youknow, of ininrest tome, whher ventutu capital,l,technology, nano technology, healthth care, wherevererhehe aa is. that comomeso o and i'm ablble filter out toorere why want. pepeop use it fora lot of differentt asason eseson, i'm not an expert nor am i aninvestor, butut i don't thk k th're going to have a problem withth tt t and when thtime comes to do i it. >> quick and final queststn n t u.u. in terms offututti money to workrk. you can get the funding thatt yu need? wod yoyou say thatat y're still seeing the iinnatatio aree m mor companies c comgg tou or f few companies coming to you than a aewew years aago
probably slilighyy fewer cocompies but compmpans s th do come a areofof muchhihigh quity. the cpapani that come, you know, ffralyly have lot more gogoinon. we have a company atat, you knowow, enene first invested, i ththin t t years ago, thehey ha single product, , th h havyet to reallylyhihip in market. totodathth have 400,000 p pdudt ouout erer it's anphone forouourhome, if yoyou will. soso i looksike that, aapp sp, very eful. theyey'ldodo probably a mlilion units next yeye. >>hank you so mumu.. we preciate you takinghe titi. >> happypy tbebe here. >> certainlyly caurure some ofe real cautitionndndoncern abt the econonomyhehere but also th timism for the future. wewe dwawantompmphaze we ha spspecl show comingg up for you on "street signs."" jeff sooker iss g goi to be wit us, our bossanand chaiaianannd ceo of nbnbc uninivealal t talk out the mea buzz.
david barsee hereitit us,s, t e ththir avenuee nagement, c cyy boer, democratic risinin star. ere are a lot o pololicical people herere talking about whas ppppeng and we willl talk about at's going on with the obama rating. cory will be with s.s. and d nassefsaririri fmorascom, richest man in egyptpt. he will talk aboboutthe mile east and i ira itegins a a 2:00 p.p.m. e etern toy on "strere sisign"" in the m meaime here on " "sqwk on the streeee" " a p lodging analyst who o isucking the trtrd andururng positive onn few trtrel names. 'r're ing to check out his pick foror t s secd half. and ththenurur cnbc investor network l lat on t target,,toto statate retiremenent ndnds d itit britain's momostenenio policeman launching g iuiry into how rupert mumuococh' newspaper is ususin private investigigats s hack into pnes of celebrities,s, legislators?s? is this the future ofof joururnasmsm?
skskulotel and lodging analyst atatfbrcapitalmarkets. patrick, g gddmorning. >>oooo morning. w why this burstst enthusias for the motetels >> there's's aouple of reasons. itit rllll boils downnoo looking at our expectatition f f rwrwa dendndrends aselell as splply trends. and ceainly thendndusy has be devastatate by decreasing mamand however, w we have s snn some ey signs thatspspeclly in the leisururttnsient segment that things are on t t rebound. i lookatat those ass s som of t fifirssigns of therecovery. now, on the s supyy side, rtainly with the lackk of finanancg g ailability for new hotels, supply -- new supplier competition reaeallshshld not be headwind to theindustry stararngng le next year. when iook a a i incasasg levevel ofofememan or e elyly signs of demamand thout the ad winds of competition, myhoughts werer the rerece pubaba of 25% in
stst nes and valuationons becoming moror aararacte, time to become more aggressivive on e sector.. >> when you look down n thllis isese you h hav picked as y you bebesthohoicof choice hotels and teterctinent teterctinental, why them? that's right. a a coe of reasons. fit off, it's on comparativeve valuation.n. these companinies allll trade at several ltiples b bel their historical mean. typically as uuet f farerer inintohehepzcycye e th valuatio of the trade s seral multiplple turnsbove their anan rst off. second off,f,heheseomomnies have veryry sonon free chh flow characteristics. primarily magers and franchchiss s the hotels. they cater aitittl bit moree to the leisure and trsisit segment, which i sasaid werere earlier signgn o cocory. ititiay, they h he minimal c c x reququirenent, certainly ifif
ee a tetelwnwner you hee had d day cap x spending. the companiesonon'twn ththe hol so they don't have cap x spending. > y l le intnterll leisure group. isisn'that t time share coordinanati - -- >> yeah,t't'sefinitely a veryy teresting, sort of niche namee playayernn its seseenent. i don't thinkk it's a veryryele undersrsto c cpany. it's not vy y ll -- trere's nott lot of analysts who folollo it on ththe street. again,n, lee choice a inrcontinental, has very hi caca f flo characteristic. what's interesting is t tt pepeop who own t tim shares i i this c comnyny primarily caterso the exchchgeges of p pple who time shaha.. they don'tuiui it,, they don't deloloit. 's basicalal le a club. it's veve hhh retentioionrrat what's ve interesting i iifif you're an o oer of aa t tim shsr you're c connunug to use itit a yoyorereontinuing to ke those exexanange and this compapany really hasn' enenny slowdown ithth
propensity of ththeiembers to ntntue to renew their membererip membmberipip. initially, t ts s coany has very locaca x requirememen and fr cash f flo c chacteristics. > ty're really kind of a a boining ent more than anhing. >> that't's sosotely right, -h-huh >> all rigig.. patrick,k, tnknk y very much. prpriate your sharing yourur knowledge witit us. >ou're welcome.e. thank you. > up xtxt, om our cc adviser network, how not to get shotot using tget date retirereme funds. plus, the fababerreport. david has rere onhe end of thehe data domaiai bidding war,r, whi i'm sure you'u' b beepaying close e atntntn to. welcome to progrereivive.m. yomumu be looking
for momorcrcyc insurance. thanks. so is r r bi insurance.ou're good. alththe verage you need atat g gre price. hold on, cowboboy. cool. i'm not done - - r less than a dollar a a mthth you also get 24/77roroside as. rit on. yeahah,vrvroovroom! sounds like you rann 500. more like a 9090v-v-tw. exexcu me. we, , u're excused. the right insurancee for. now, that's prrereive. call or clclictotoda
twtwor wre we findd financial planner and co-authorrofof "on n two fe." ananks very m muc for beingith us. >> hi, arar >> g goototo see y again. what is i it about these target te rerement funds? under a lolot o o criticism in washingtgton is it juififd? >> target date retirement funds are like t gogoenen child that just got p put into time-out. there areththre m maj barbsbs tt people areimimin at them. and i think only o oness valid. the first one t tha p peoe are talkining ououis thathehey' not safe. while, you kn,,safe instmentnt is ann oxymoron, soo t tt i didiouount the second onene ihat they're t selectable nough. to me that'ss code for wantingnt market time.e. that's n n w wha arget-date ndnds e about. ththird one and theeone i uld like to addressododay is at targeget-tete fds aren't alallhe same. two fufuss cled taetet-de
2010 may look different. that's a v val criticism. washington is workrkg g on it. yocan do it at home d doi from didilolosu homework of y you ow. three ids.s. >> all ririgh lelet'tatalkbout three pointnt here. the first o one is onene o of e diicicties ielieve with thee t thiss is pking the so-calledvintage year. c corct. >> espspiaiallin light what'ss happened to a lot of people's 40401( you knknowfive y yea oo ty might h hav thought i'm retiring i in 201010. today theyey ma feel lilike i can't retire i 2010. are you stuck wnn you pickck a year?? >> no, you're nono yoyou nn sft ars. you cacan ifift and outut of these fundnds ststike y yan move in andutut any otherer fun. e key thingisis to cocorrtltl ididenfy your vintnte e year.. enenhe funds cee out opople ididick the fund closest to when you turn 65. not everyone iss goingng to be e rereti at 6565 anymore. it's you may n ndd topupu th f fun-- swap oututof t tha
fufundndnd pk one with aonger titime horizizon >> a asome use active funds, some use pasassi nds. isne necessarily b betrr than the other? >> ll, it's verer important to understand what you'reregegettg. you wantnt t l lk u und t the cocove that's the b bigstst issue right now, i tnk, withfunds. rsonally i like index ndnd i ve the vanguard family o of funds. but if y youeeltrongly at you likeke active managementnt many pplpl do,o,heherere a mbmb of fund amamils. fidelity o oerers t tget d dat funds, schwab hasas a an active component in them. but you want t t know whahayoyo' getting. >> let's say it is nowow 2009. lelet'say you are sayiying t t yoyourlf, come hell origig water, i'm etiring probably five years f froow b becsese i just can't work anymore. so regardless of the economy o regardless of a aththinelse, five morore years iss it. whwhatort of mix of stocksnd
bonds s wod d soone i iththat situation n bein? if you'ree in that situation the biggesestthing you mayisis thatat y g got lot off upside, but if you h hav to retire,ouou y thing you need to protect yoself against is makeure you don't have unanticipated downsidede. my favorite russellff fund is thee ted andhrhrgh 1 minus your age is t maximum amount y youportfolio that you should have in stotock yoyou want to look for aararge tete fd family thatt followsws that rule.e. e three that iike t best agagaiare vavangrdrd fidelity ad schwab. thth're all 10% plus or miminu following that good solid guguidinine. >> thank y y v vermuch. >> good d toeehere. and now,w, we rn to who we can now calll a " "neyoyorkimes best-selelli author, nunumb ttn but number onenn our hearts. david? thank youou mark. i appreciate that. thank k you, mark.
yeah, , nuerer teten. that's nice. one week wonder, pprobly. but, y,y, ty'll never be able take it away fmm me. we don't have a lo of m a a out there or c conststed sisiatatio to begin thth thismorning, two of t the just we ay.y. 'l'llstart with a smallll deal, but in t thi market, i it' one i'i'veeentataing about, broadcom's's hostile bididoror amamksks. it was an a a cash d,d, over and done wh.h. they rejected broadcom. also mayay raised the guidance.. and yououknow what broadcomdi sa, fine, 're dodone see youlater. 're dropping our efforts to acququiryou. yowouldn't even talk to s, u u wodn't evenhave a conversasati?? i mean, y know, we w wer't't asng for a t.t. butemulex'ss brd rejecting the offer sayiyi,,hey, shareholders dot tenderer itit'sllllver w.w. you see brdcdcom didwewe owow you emulex?
it is theeatured stock rere, to be certain. down aosos14 there had been some exexpeatati atat emulex w wldld at least enenteainment as cocoerersaon. not thecase. people have been telelngng me, dodot know. mamayotot ppppen broadcom sort of rks they didn't quite say t thi was drop dead but they hadad indicated i s best and final.. anthey're done. eyey'vwalked. nonothe caseeinin another dede. emc, if you remememb y yterday, raed the bid rr dataomain from 30 to $33.50.. nono surprpree today that theyya domain agrees tbebecquired by em ultimatatel breakakinaa alal it had witith tatapp wchchimply couldn't compete hhe. netapp g geta a brk-up fee. u u know, if youou'r napapps yo come in with caps a and stock. emc is so mucuch rgrg than you
are. they got aititst proval. it was a cashdeal. hard to imagineou alal couldld find a w wayooompete there, given n th t the could c csese o weeks. at was the one advantatagehehe had h hop they mightht have, certainty y ofclose. whwhenhat went awayy a a em raised, it w wasllllut ov.. antoday, iisis over. emc willacquire, as i said,d, data domain. whwhe t the talk in t ter of synergies, neneutl. beginning inin fiscall year 201. doesn't leavee us much the cocontteted ont, does it? couple of bebermaa insurers. thateal may also be endingng soon. and then you've got the fertilizers andnrnrg a xe lexel. am i forgettttinathing? emc gain, allll cash. $2 billion. in this market,t, a aually mean something.g. all right. wee e t breaking news eia
inveventy y data. let's get to arar eppersoso f the nunumbs.s. >> david, wre waitingng f t the da to come out o natural s. weweee looking for a range somewhereeroroun 70 to 100 bcf in terms of increase there. but what we're really wchching is oil, , icich is thelolo $60 barrel. we also just got t t eia data. it is an increreas of 75 bcf. itit'sigightround what the expectatioion s.s. it's lowewer th thenjnjecon we saw this timeast ear. natural gas is rising a little bit ofoff o this nnber. john woods from integ gririty ey is here.e. >>e haven't moveded much. we were trading 40 anan here we a are trading 44. pretty much j jus little pushsh on the upsididfofor us. we're due for a l ltltle bounce. a week oro a we're tradiding ababov$4$4. now w weee test th low $3 leleve >> the storyry down h he e thgh hahas enenil and the factt that oil just broke below $60 a barrel, thatatasas a important st there. lowest levelelince we've seen
ncncthe middle of may. mand, of course, not there that muchch. do you think t ts s is where prices s shod d be after r l,l, last week t thewew atat $ abarrel. >>wewe, i think t the should be a little b bitlower. you look at t economy, people just aren't'ttataki trs.. we kn why we rose above $7070. ththatasas basedupupon a rogue trader out tre. we are at levels we s shod be. right around 5 5 ses to be a bottom likike the $ $3 levels l $3.25 is etetty much ourur bott re in nanatul. >> anotherer b storethink weekk has been abobout speculationon tighter restrictions o on this market and on o utures. and on naturalal gg,, the ung corara, coming uer a lototff fire for what has happeneneditit that c conact and t a asss have beeeeswswelng as preses have b beesoso low. what do you think ababt t th on ththe tural gas market?? >> no one is bigger thanththe rkrk. obviously y eyey'rtrying to push eieiposition on th.. theyeyee trying to have fu disclosure a a you shldldave it. the shouldn't be any gray
eas.s. and d ththinthat's really w wha we're goiningtoto tryoo get. >>llllight.. ththanyoyou ry mumuch john w woo frorom integrity energy. . coming up, aew report that finds an increaseded rkk of lowr homeprices---- man, i intthe benning of 2011, aear and a half frorom now. bubut thehere a tstst chchieececonist and s stregist atat pmi will join u us rsrsher on c cnb
let's look at the e rkrket d theinfernals. right now the dow is wnwn 9 1. but the s&p i i up a a point. ththe sdsdaq compoposi issup abt four, dodog g be of all as u cacan e,e, a quartete off1% an even though wewe'r down a bit on the dow,e have more winners than losers. 16-11 ratio. nasdaq, evenbetter. -9. all ririgh some not s s good newews - - thi dadavis page. okay. i thououghthth was a mistake. david? >hanks, mark. yeah, , y yousasaid not so gog news for the u u.s housing rket. new repoportrorothe mortgagage insurer pmiroup, saysthere's an inincrsese risk t tha most metropolitan areas across t th untry could see lowow h hom
prices in n 2011. joining us with m me on what behind that risk k fitt on nbnb, pmi gup chief ecomist david berson, before joining, hwawa chieief ononomt at fannie maee fo2020 years. thanks for being w wits. >> goodd mning. >> g gd d morning. explain to me whatt increase rik actually means and t methodology behehin y you servi. sure. atat wlooktt is t the probobililitthat the level of icicesill be l low in twowo years. sosohat the report is saying i because ofisisin uneneloloymt rates and ring foreclosure ratetes,hehe probability thatt pres will be lower at t the benning of20 has g gon up for many c citss across thehe country. th doesn't mean thatrices are goining b b falling in 221 itust means that thehehance e thth t theevel of preses cldld be lowewe in two years s gone up.. >> why has thathappened? >> well,l, is hapapnened in lar rtrt bause we have huge numbmb o of meme for se,e,ust a
t trememenusus orhang. evenens s theconomy is recovering nonow, unemploymymt stl l ing up andnd our forecast and i think if you l loo at the consensus forecastst, even if the economy startsts owing in thsecond halfof thissyear, unemploymementates probabably won'teaeak for another yr r so that that risis i unplplment is going t put some additionallowoward pressure on home pces. >> you sayayhat the enomy may be recovererinaabit,t, but ememplments risisi, , it going pressurehousing. would think housingtiti reins a key to economic rerecory. >> well, y youee absolututel right. ani i n't think we can get much of recovereryntil we get housusg g on board. i think that's's of the key factors that picicymers are lookining now. u know, weanan have an economomrecovery, butut til we get ththe b b maet coming ck, ununtiweweet the hsisingarket coming back, we're nototgoing t have much of a recoveryry. we're cecertnlnly ing to havav growth beloww trendand unemployment cononnunuinto go up eveven if gdp growthhs mostly popotive. >> w whaababouregions in terms of the countrtry? you m mtition meopopitan areas. i'i'm curious, obviously w all
knknowcifornia, arizona, nevevaa have beeeen hararde hit,florida are they continuing inin yrr survey to see declines or pectation or risk of further declines or are thinings improvg at all in ththat p pt of the country? >> wl,l, e news issixed there. certainly because prices arare llllinso much in t tsese areas you're seeing investors coming in, , first-time buyerscocomi , and sasas s ha gone up, particularly incalifornia.a. sales have justt soared. there are e soanany homes forale ththathehere still a tt more in e market. ee markets are s sllll bng prprsured. thosose e e thmarkets where the dsdsf adddditnanal ice declines are there. >>hat do the housing markett reports say r the future? yorerealking asarar outs 11 at t ts s pot. when given t theurur vai are w e expecting to s availablization? well, i i tnk o on a national averagebasis,wewe'l probably see home pririss flat next ye.. u know, t thell probably d dpp
significantly again this y yea halfway throrougththyear alreread that's an easy c cll to make. next year ourododel are telling us that hoho pricesshould be about flat.t. that's rllll the first t tim i fo arars at we'll have had hohoririceas good as roro. and d think in 2011 we'e'll stat toeeee some vevery sll i irereas on national basis. it h har to t tkk aututit nanatial market. there are marketsowow where prices a a g goi up a eveven i 2010, as ththe national market fl,, prices inomome parts of the country willononnue to declcle.e. >> david, you spspen 20 yearsrs fannie maeae. did any ofofouour forecasas e e call f a significantnt decrease homeprices? > dliline yes. significant? yoyou ow, i don't think -- >> did you err imagine -- > not 20% or3030%. >> you n nev i igined we wouould see somemeining ke we've sese, i guess. >elell,ot with prices.. we ctatain talked abobo the risk of ctatain mortgaga oducts. papartulular layered ris.s. anand the probabilities and t t ssssibities of significant
inincrseses dauaus. but, y know, we wereeasas surprisesed a abody that weawaw 3030% dd 40% decline in prpric.. now, 5% and 110% deines, we rere cling for that. the were still wayututon the edge. >>ight. david berson, thanksoror joining us this mmorngng. appreciate it. good to be he. >> allll right. t's send it back to erin in sun lley. >> w warare getting r rea for upuplef great seenen comingg your way. daryn rovelelisis gng to take us indede scscar "days of thununr"r" in the rearview mirror.r. whatss america's fafavotete sporort? we've got that cocongng on the otr r si of the brbrea mr. haeses >> us,he british newspapepe the araran, allegehaha r rupt murdoch'h's wswsf the world tabloioi i is paying private investstigororto hack into the phones off ceceleities, legigisloro gigiators, and other famouous types. a popoli vevestation under way. ou insidider ready to react. you're watching "squawawonon t
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in sun lley, tig bi topicc of conveversioiois advertrtisg.. drop in a aererting for media mpanies. ththe e da in neral, big cocompieieare m monororin where they spendmoney, whererehehey vertise, is it worth i many sports spspsosorsps have cocomendnd firire. thososininvoed with nascar are gegeining return on their m mey that t thecacat getelsewhere. scar is really going tbebe the nnnner here. night's sportss business reportererdaryn rovell loren ro this. >> dalele enhnhdt jr. has onlyl beenenin vicicto lane o onc in e st year and a half, anddet ss s spoorors still thrilled.
>> today mostt cars inin nascar top ries, the sprintcu are covered in spsponrsrshi. >> dalee . r rorter: pepsi's energy drink k amspspt thespsponrship of dalele enhnhar jr.'s 88 k ka ththhe nationalguard. they pay $20 million a a yr for e rits. storory a aamazining success. >> it was hestly anexplosion. we had 5 5 million consumers trithe productcthoho h never tried it before. wewerove awarenesssspp to %. some of it had been n inhehe0s. it was just honestly a a perfec storm.m. >> reporter: aamp is n n in fourth plalace in the engy drik cagogory up two spopo om when itt a aeed toto apap its logo on t the hoof dale earnharardtr.r.'sar in 2008. > a you can watch "inside e trtrk,efeflling the business of nascarar tonight at 9:00 p.m eaeaern time and rerun i it at 10:00 and 00 a.m. erin, back to y. . >> we will llbe oking
forwrwartoto that. next, privatate investigigo. a lot of bust bubuzzutut here i sun alley. ththe allegationss thatrivate vestigators are hackininininto phones to gett foformion on celelebrieieand legislatorors. it h has t mamangngs of areat movie crcrip allelegey y though, thihi is pa of how one nspaper in ldodo geing i itsews. we havavththe details onn t ts deloping story andnd what i may mean for quouo,, unquote, journalismsmomominup. rkrk? >> all rightht but irirst ,, trish. >> hey, ma, good tosese you. we have a lot cing up p t the top of the houour. we're going to t tal about t the weeklyretail saleles mbmber atat a they suggesting aboutut the fall, thth back to schooool ason? and d atat ds this mean f what you need to be investing in rit t now? wel hash it out. also, as we speak, barnrneyrara is holdldinaa hearinin on whet a.r.p. money shld go to distressed homeowners. we're going to d debee that one for you.u. anwewe will haveththe latest market action up justt barely ririt now.
a ttttleit on the f fla line. we've got it all covered for y u here on n "the llll" coming u a e top of the hour.. but first,arark and erinin a back right a aft t thibreak. thee companies in t theororld know that connnntitivi is about reaching f furerer faster thann anne else. totother, we're helping toto she the exchanging worldld
ok.. we arebackck ththe dow dowown12 pots, bythth way. e guardian newspaperer out w wi seous allegatatio a agast the news of the world. it i is alleging t ttt tabloid perhaps others used pririva instigators to hack into phones of celebritieies, a other pupubl f fik ours. british h auororits investigigatg g e claim.m. if true, what does thiss yy ababtt the future o journalilism it raisesots ofissues, to let's get into it. bruce winesteinoins us anththe man who owns thee news,a cncnbc contributor.r. miaeael,o you believe it?
>> of f cosese i b belveve it.t. yoyou ow, i think that's t the interestining ininabout this styy is i itomomes as surprise to nonody. it's hardo even say everyryon hocked atthis. i meanhehealalletions and rumors have beenaround for a a ngng time.e. butt bononthat,nd ihihink isis is the mo important thing. e e ne of the world, which the-- his second biggest paper. his firstst b bgegestpaper in te uk is "the unun". everybody will shrug and say th's's murdock. >> evene i is i innent untill proven uiuiy. >> that m not be thecacase withh murdock. > n no it is. here ishe thinin thealall reet journal buried this story onagag seven.n.
one of the fears when murdock ququed the walll street joururll isilil heover hisis own stories. >anany y copy of the " "ne york timesesitit w not on the front pagege > i is mentioned bebelo the foldld on the front page. >> nn we s sto arguing about where it was i inthe " "neyoyo times"?? chchae let me goo yo iininhed youour book. why anyonone wod ever talk yoyou beyond me but it was a grt book. history w whh ts?s? an a aegegatns in the past that haha been provenrurue by reporters? >> yeahah there wa --inin twec i bieievethere was a case thatt inlved exactly thihis where ty said, ""nef the world"d" said this w a freelancer, didn't
kn about it a a we apapogogiz >>but, having said t tha -- let me starart with the questiti h her part o ofhe reasosonhehe "new yk mes" could have done ts is they hate the ll streett jojourl.l. maybe itss competitive. thth want to pickk on thehem. > well,l, wait a minute. wawait minute. >> y couldlay thisisnn both sides. >> the real qststnss what is wrong wiwith i it ethically. >> i is a kwkwaran sryry itit is not a "new york times" story. e story comesutut of london. this iss a london ise. and i it wass broronn by ee guardian. and even the gudiantoto is pretty scant onsources. >> these kinds of wars betweene newspapers are nothingng new as well.. >> let's ta about what i really a at stakeethically. enen if thiss were gal. ananif the allegations s rere true, they would b b glgloelyly
violation ofof t t lalaw. what is ong with doinghis. we have a a moral obligation to treat other people w wit respe. an important wayee show that is by honoringng pepeop's's right pracy. t ts weretrue, it w wou b be a gross eicicalppblblem >>haha has noining doitith it. >>t has everything to doo with it. > t issuess this isgagain ee law. >> w we m notavav e ethalal issueses. >> why i is it againsthe law? > why is itagagnst the law? ethics and the law a are not t sasamehihing >> the law follows hihic' lele.. >> things are against the law because in the uk, parliament papass l leglalati this i isn juju against the la u don't't have to a whyhy it's againsttththe law or why it's wrwrg.g. >> no, no. michael, i i dottare why it's wrong. if itt i i against t the law it
agnst the la >> abablulute. >> w w would youu bototrr talki about t th from an ethical point of view.. itit is worth asaski w whamakes somethining gogo law. >> is nottororth asking at. you violate the lawaw, you are wrong anan y go jail. >> you d d bringupup a point eaeaieier at i wowoul like to throw out ththee for the n nex3 sesecoss and let t yogugu scam abt which istheidid of th holding newsws wchch is a abo yr own cpapa or od ns about a cocompititor that is n nhihing new that murh would dothat?? > h protectshihimsf. it has to beood for him.. if youre a ws rson, you canreely report onn murdoch. will not hahaen. wi n notappen from the lowest tabloids to the wall strtree
journal. >>oes it happen anywhere?? thatats s no specific tothis pap erer. >> it is momo - >okayay > must mee this enen because time is s go.. thank you ry much. >> thanknk y f for the shot. up next, , fifinacheck on the markets. you are wawatcngng sakak on tht street here on cnbnb could d soononetoss me herere y g g eleven s sixenens... (announcer) frfromesigning some of the e wod'd'cleanest to building more ndndurbines than anyone in thcocotry... creatingng iovovatn today for amerera'a's morrow. ananks no problblem yoyohahaveuestions.
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> final check on ththe markets. we are downwn now we arere up .68. rereal really quite.e. >> mama,, a a littltle trivia. blaging is what y y c cal when you pretend to be s somnene else >> th iscnbc.comewews now. > urgingg banks to ke loanso credit worththyborrowers. isis has not y yet r retned to precrisisis levels. dd repeporngng positive results omom a