tv Closing Bell With Maria Bartiromo CNBC July 10, 2012 4:00pm-5:00pm EDT
hung those that require global participation, the only area we're focused on is energy. outside of energy, we're under. >> that's the last word, that's the closing bell, and we continue now. >> welcome to the "closing bell." after rallying nearly 100 points very early on, the bears came roaring back with a revenue warning. plus, you've been waiting, and later on this hour you will be rewarded. we'll reveal the top state for doing business. who is number one? you have to stay tuned for the big reveal, and an interview
with the governor of that secret state. >> here is a look at how we finish the day on wall street today. we did close off the worse levels of the day, the do you was down about 125 at it's worse, and it closed at a loss of 83 points. nasdaq hit harder today because of the chip warnings from amd. >> it was a tough day from the markets and particularly for the s&p. now in the middle of the longest losing streak. so will the coming earnings season turn things around, or is it just going to make it worse? >> let's get the thoughts of the brian shactman. alcoa wasn't has bad as some people thought it would be southbound o so we're not off to a terrible start. >> absolutely, you will finally
start to see that companies will not have the benefit of cutting employment anymore. companies will have to face the fact that the top line has to increase. i don't think upside is in the cards, i think it will be a sobers earnings season. >> that's what it comes down to. you will have earnings, stimulus on one side, and i expect it will be significant. if you have massive earnings basis, it will work, otherwise i think we go to stabilization. >> you're a buyer on a day like this. >> we, we have seen this movie before, i've been on the show several times before, there's pockets of strength i would be
participating in. there are financials we like -- >> which financials do you like? >> we like the mortgage rates at jp. they're not for the faint of heart. >> you say buy telecom, but they had a good run of late. aren't they getting a little expensive. >> you do it to be defensive. if you ask yourself, you buy telecom. if it was a bonding with could you hold this ten years and break even? yes. investors need to start thinking that way. >> i want to share a couple thoughts here on earnings, no one mentioned asia. we have a string of things on the breaking news desk. for the first time in two years, business in asia is down.
cummins sighted asia as weaker, so if europe is no growth and asia is bad, we don't know it will be pockets of strength when those expectations are down. i don't want to rain on parades here, but today we learned a lot of negative head winds for earnings. >> that's true, but look at it from this perspective, what will gdp growth look like? >> i was going to say 7.5% is disastrous. >> we also don't know the number. whatever they say is probably -- it might be -- >> the other thing we don't know is how much stimulus they will throw at this problem. >> they have the cools. >> and i talked about software, we have a couple narms that we like that are domesticly
focused, and they make the process better. >> what would you avoid? >> i think it will be tough for the multinational banks to do well. they not benefit if europe continues to weaken and we're avoiding them. >> i want to say real quickly about the friday earnings. you talk about financials, wells far go is domestically focused. >> i just want to mention, apple can still rally -- >> a trillion dollars like david einhorn? >> i don't have a trillion, but
i would bet my money on it. >> so what did the fed know about the rate fixing scandal and when did it know it? congress ready to ask those questions. they asked barclays about the market in 2008 when timothy was the president. >> one of the questions here is what was geithner's roll in all of this if anything. and tim geithner is expected to be in front of the senate banking committee ready to testify. we'll see ben ber nak key up in the senate testifying. it is now clear from conversation wgs folks in the senate that bernanke will be asked about what the fed knew and when it knew it. and on the house side, house financial services compete, they're sending this letter just
yesterday now to the new york fed asking very pointed questions including please provide this sub committee with all transcripts in your position that relate to barclays and the selling of interbank off rates up until november 2009. s that a sweeping request. clearly the committees think there is smoke there. if this causes a problem for the obama administration is a whole different question. they did not come into power until 2009. that said, mr. geithner and bernanke could be in for a couple more uncomfortable weeks. >> do we need more big banks? >> dick thinks we do and he explains why next, and we have a lot more heading your way here on "closing bell." >> is former new york attorney general elliott spitzer in
trouble for bullying the former aig boss? and later, south dakota, south carolina, and virginia cracked the top five for business. today, our financial advisors lead from a new position of strength. together with bank of america, they have access to more resources than ever before. a steadfast commitment to help you achieve your financial goals in life. that's the power of the right advisor. that's merrill lynch.
big banks have been a target since the financial crisis. the next guest says they're critical to growing the economy. >> he saying the big banks serve to protect the dollar as the world reserve currency. he joins us now to make his case. you say big banks are critical to the u.s. economy and that we cannot grow if we have more regulation, right? >> absolutely. if you look at the history of the united states financial system going back to alexander hamilton, you will not find one period where bing banks are
sli shrinking or being reduced, but multiple periods where they're growing and increasing in number and the economy is moving ahead. >> we can't grow if we saddle them with too much regulation, you sound like a bank ceo. >> have you seen the u.s. economy grow when banks were shrinking? never, you can play jamie dimon games, but if you can show me an economic period of growth with banks shrinking -- >> it seems to me what's hurting the banks most is regulate, rates, and ridiculousness. the london whale thing did not help, but they keep shooting themselves in the foot every week. >> i agree, but you still need the banking system.
if you want to the see the debt rolled over, you can't dot it with a savings and loan, you need a huge bank. in 14 foreign banks to even domestic banks. you will not support them as being the globe currency and big banks all over the world supporting american business, it just can't happen. >> there's a lot of new regulation out there and more efforts to have more regulation, is there anything in that regulation that you feel will help another financial crisis? >> nothing at all. >> nothing at all? >> nothing at all, ever. there's no period in time where banks create financial crisis, they help facilitate. they develop because you grow
debt at a faster rate than income, and debt faster than income when you increase money supply at rapid rates. it's all the same. it goes back 600 or 700 years. so there is is nothing in this legislation that will do anything to stop another financial crisis for occurring. >> are we cheering or cringing? >> what's a safe way to play the banking sector? >> it's to go for big regional banks like u.s. bank, you know, pnc financial, a risk way, and the way i prefer to do it, is
jpmorgan, citi group and we'lls far go. >> if the loss is $6 billion, can we manage that, if it comes with a blooted number like a $9 billion, is that when we really need to be concerned? >> if they lose $9 billion pretax. it will still have 12 companies in the united states that makes more money. jpmorgan makes so much money, we're talking in the $20 to $22 billion after tax, that it can afford to take a hit of this nature. we don't want it to, it's extraordinarily bad what they did, but the fact of the matter is the bank makes more money than any other bank in the world, and there's only five companies that make more money than jpmorgan. so what you're looking at is if they lose 63 cents a share,
which is what they would lose, what you're looking at is basically whether they curtail it. is it controlled? >> just real quick, i want to take you right back to the beginning of this interview when you said big banks are critical to the u.s. economy, do you think the economy lost their trust in those big banks? >> no. the investors lost their trust, the equity people don't want to buy them, but people are pouring their money into big banks. you know who else has tremendous degree of trust in them? that's bondholders, preferred stockholders. if you take a look, you will see a shortage right now of tixed income papers, and the market doesn't have enough paper. the only people that lost trust in them is equity buyers. >> treat to have you on the
show. >> thank you. >> guys it is pay back time, et yac -- spitzer's case, and he is going to bring the heat and you don't want to miss it. >> and we're minutes away from revealing what the best state of the union is to do business. scott cohn is coming up with the big reveal, stick around for that.
. welcome back to the show, the dow try y-- industrials dow by 83 points. >> fiscal first quarter earnings after the close. shares are tumbling after the company cut their forecast. they're down 13% at this point. >> the fall without from elliott spitzer's campaign on wall street continues. all but two charges have been dismissed. aig boss is defending himself against some of the -- >> the man that proceeded spitzer says he was in the courtroom when spitzer went on a
curse filled tirade. we're now joining on the phone by him, elliott spitzer's office would not comment. what happened and when. >> thanks for having me on. this meeting occurred before any charges were filed against aig or mr. green berg or before there was any public announcement of the probe against greeneberg and aig. i know the date and remember it clearly because i was in the attorney general's office that day to meet with spitzer and his staff concerning the march probe. i was representing a client with connection to his investigation and i there was to speak to him about that. >> did you say anything to him
about his comments at this meet something. >> frankly i was taken aback because i was not there to talk about them, i was there to talk about their role in the investigation, and i was really surprised after referencing some comments that hank greeneburg ma made recently. they were prosecuting him for murder for essentially jay walking. but what followed was a wrath ir startling personal attack that was i was surprised by. i really was just quite surprised at the nature of his comments. >> a couple things, just to be clear, are you saying the only reason that elliott spitzer went off hank greenberg was because
of a personal vendetta? >> i wasn't there to talk about this, but it wasn't that he was hammering his fist on the desk or the table siting allegations of wrong doing or corruption, his tirade was much more personal in nature, and it left me with an uneasy feeling there was a personal reasons driving him at the time. i lost track of the case until just recently when i read about the issue of the offline e-mails that the greenberg camp has been attempting to obtain. some would say that there is nothing really new. dick grasso, they were certainly targets of spitzer as well. did you hear him talk about them
specifically? >> i didn't hear him speak about grasso or white head. i did not think that the missile had yet been launched this conversation was exclusively about the greenberg's and their companies. for a guy that was self proclaimed -- >> we reached out to eric schniderman, and he would not comment. his office is fighting a judge's order. what do you know about the e-mails. >> most of what i know is what i read in the press and that there is a treasure-trove of personal e-mails that the greenberg camp is aware of. the court ordered they be turned over and they do it's own investigation to secure those
e-mails, and that's what brought me forward. i read about that and this conversation that i reference is almost eight years ago, a and i heard about these e-mails and that they were conducting business offline, it's just unbecoming and i called to give them my thoughting on it. >> why would all of this be coming out now. there will be those that think you have your own arguments with spitzer. >> i'm surprised you remember that, it's such ancient history. if i was motivated by any of that i would have come forward a long time ago, but i'm now motivated about my concern over these e-mails and i don't think we should have government officials who are prosecutors and law officials being able to
conduct business in a shadowy fashion. >> hank greenberg's attorney sent us this statement. these are disturbing charges. almost all of the claims have been dismissed. if they were brought with knowledge that they were without merit, this was a even greater miscarriage of abuse and the legal system. >> i'm saying the same thing, i believe if the charging were unfounded and politically motivated and shadowy e-mail accounts that helped advance the investigation during the investigation, i think that is inappropriate. >> thank you so much for joining us today. >> thank you. >> okay, drum roll, please. >> the moment is finally here, it is time to reveal which state in the country is the very best
welcome back, the moment we have all been waiting for. our countdown to the best state in the country for business. so who is number one in 2012. tell us where you are. >> the competition is intense every year. remember we rank all 50 states on 50 metrics in ten categories of competitiveness. it is a big deal. so in a state where they do everything big, we decided to ask for a little bit of help. you got it, it's texas, america's top state for business in 2012. it's the third time to the loan star state has taken top honors, you're looking live at texas
memorial stadium. let's take a look at why texas is number one. for six years in a row, we kris crossed the country to look for the states that were best for business. and in 2012, nobody does it better than texas. america's top state for business scores 1600 out of 2500 points. the best infrastructure, the third cheapest cost of living. quality of life is 35th, education 26th, and cost of doing business at 28. that may seem surprising in a state with no individual income tax and no corporate tax, but the six and a quarter state sales tax and relatively high profit taxes hurt.
the economy in texas improves to the fifth best in the nation which is what rick perry was talking about in his brief run for government. >> there's a reason that caterpillar moved their manufacturing to the state of texas. >> up employment in texas is down to 6.9%. they weathered last year's budget crisis and kept their solid aaa bond rating. the biggest industries are health care and energy. america's top state for business in 2012, texas. >> our thanks to the university of texas cheerleaders for helping us ring in style. yesterday we were at the winely. the wine industry is up and coming and more than doubles
since 2001. that was grape expectations. the second was legendary lights which has a couple different meanings, were were looking at the light houses that were on the gulf coast, only a few of them are left. you've got the power, texas is the only state with a power grid. the pechan thing is the and what the hey, governor rick perry, it's good to see you again, we have done this before. >> yes have, welcome back to texas. >> always good to be here. we talked about your formula, and if you let me paraphrase it, business friendly regulations and don't spend all the money. >> that's the economic side. i disagree with the quality of life attributes they talk about.
there is an incredibility quality of life. the cultural arts are growing. i think dallas now has three performing arts facilities here in austin, texas. and a knew museum of modern art, and tonight in houston, texas, there are more theaters tickets for sale rather than any other city but not new york city. >> it's not just things like that, it refers to health care, and you know, this is been in the news this week, that texas has a problem with uninsured people. people not getting health insurance. you have, as we know, have decided to not accept the medicaid expansion. anyone that followed you for awhile knows you would not do
it, but it's a business issue as well. >> anybody that has followed texas would now that texas chose to how deliver health care and make it accessible. and the issue is that's what texans want to do. texas decided a long time ago that we were not going to burden people and force them to buy insurance if there rr care catastrophic events they would have health care. you don't have people from around the world travel to texas if we didn't have great health care here. we have ut medical center, or somewhere else, it's some of the finest in the world. it's allowing states to make their decisions. we told the obama administration
no thank you to expanding medicaid because it is a failed system that is brumting systemed today, and socializing it will not make it better or more successful. ly finish with the thought or the idea that you expand a program like the medicare program today is not unlike adding 100,000 people to the die tannic. you're on your way to failure here. >> but getting past that, as i said. not a great surprise that was the decision you made, but one out of four residents don't have health insurance. >> that's what decision of the people of the state of texas made. we appreciate you coming and people are coming in record numbers. if this place was going to hell in a hand basket, people would move to another state. but they're not they're still coming here. >> so you don't feel as though that is, as our numbers
reflected, an economic problem. there are people that don't have the access -- >> we have access to health care. it's a semantic issue. we have number of people without health insurance, and a number that do. >> this whole record here, celebrating america's top state for business, is what you ran for president on. is there any i told you so here as you look at governor romney and some of the issues he has been dealing with that you were talking about in the debating, squaring romney care and obama care and what you called vulture capitalism. is there any part of you that says this is what we were talking about? >> the choice between barack obama and mitt romney is about as stark as you can get. and that's the choice americans have to make.
if you want something that wants to force your state to go into government run washington centric exchanges, expand the cost of government, then vote for barack obama. if you want someone with a business background that says he will repeal obama care, he will need to vote for perform. ly support him in every way they can because he will get the country back on track. what we do here in the state of texas, has worked loyally with me, we both understand there is a clear resolve of having low taxation, a fair and predictable regulation, and a legal system that does not allow for oversuing. another level, if you will, of protection for the businessmen and women in the state that want to risks their capital. they know they can do that and that's the reason they continue
to move here in record numbers. >> governor, go ahead. >> this is the other scott, it's good to talk to you, congratulations on -- i know it's a great honor. you have been highly critical as we all know of the federal reserve in the past. you called the actions of ben bernanke treasonous. >> i think i said almost treasonous. >> i'm wondering if you're willing to concede that in part it's because of the fed policies in some sense that you're able to invest. >> i'm not taking that bait at all. here is the facts -- >> let me finish, with all do respect if you would. >> you're spending money we don't have. you can print money until hell freezes over, but if you stop spending money, the economy will strength faster than what we have seen. don't try to get me to buy into the fact that printing money and
ben bernanke's policies are the reason -- >> you have folks buying heavy machinery for the oil systems they're running, you do get where i'm going whether you agree with it or will take the bait or not, sir. >> the price of interest i will suggest to you is not the reason people are coming to the state of texas. they can go to any state and get the same interest rate. the reason they come here and expand here is because we don't overtax, overregulate, overlitigate, or spend all of the money. people know there is stability in this economy. if america is looking for a blueprint to have economic freedom and prosperity, they could look at the state of
texas. for washington to not take some of the policies we have. >> we just one piece of advice for some of the other states, what would it be, governor? >> i would ask them to stand up with us and of course other governors standing up and saying we're not going into these exchanges or going to expand med, you're continuing to put america's future in danger economically by spinning money we don't have. >> do you hear from the romney campaign? what do you hear, what are they talking about? is there is place for rick perry in a romney administration? >> i think there is a place for the governor to be talking to governors like myself. a host of governors who are having very successful economys in their state, we all have good relationships with hitt, so i suspect he will have that really
good back and forth with people with practical knowledge of how you keep the american economy going and you allow states to compete against each other. i suggest to you on the medicaid issue. if they want to have all across this country, people with better access and more affordable health care, block grants of the states back, not one size fits all like we're seeing out of washington dc. >> rick perry, congratulations once again. we want to remind you you can now go to cnbc.com, go to top states, and you can let us know what you think on twitter. we'll be back here from austin, texas tomorrow to look at some of the individual categories and get reaction again. texas, america's top state for business. >> thank you for that, a quick shout out to my very clever
jonathan, you say it's widespread. not just wall street. >> i can't say how widespread, it is certainly more widespread. in the ethics and actions survey in december, we polled 1,000, and 34% were aware of wrong doings in the workplace. and another survey found that 45% of people within the business community were aware of wrong doing in the workplace. >> because they can get away with it? >> you know, i don't know why that is, but i do know that it's -- these surveys are significant, and from my type, i can tell you that misconduct and corporate ethics problems exist in corporations that have no ties to the financial service
sector. >> nicholas, i find it hard to believe that you would find one quarter of people believing that in corporate america, you need to engage in illegal or unethical behavior as they do in the same numbers as in wall street. >> the idea that wall street is like any other industry is inscene. the complexity, size, salespeople, and scale present norm activity. so i think the ease of which people can do things wrong on wall street, and just greedy things that create winners and losers and -- >> don't you think though that the events of say the last four years have changed somewhat the brazen attitudes if you will of people on wall street? i mean -- >> the attitudes changed?
i don't think so. what other industry do you get a single person losing $200 billion in a trade. >> how much of it is tied to the compensation system? >> absolutely, you're paid, you know the thing to look at, i don't know if you have seen the story, but how the barclay's libor went down, it was just a little help, a little favor, it's common. >> jordan, i know one of the issues you have heard given the time you have worked at the sec, if there was a cop on the beat, so to speak, perhaps some of the people would not feel like they have to cheat or be able to get away with it. >> there's no question that the sec and other financial regulators could have been better in the past. but in the last few years, it's
a new s.e.c., and they're recording results. people that don't take the financial regulators seriously are not paying attention >> yes, the only place more dishonest is congress. >> out of the nasdaq market with a preview for us. >> top of the hour on "fast money," we're talking about earnings revisions lower. what's the chip trade? we have a top ranked chip an ris list to give you the trade. what is the next shoe to drop?
the chair woman has got her trade. and we're also talking children of the corn with corn prices so high, which stocks are getting fairly and unfairly punished because of that. see you at the top of the hour. >> we will look forward to that in a few minutes. >> a hemorrhaging stock at the company's annual meeting.
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>> with held a significant number of votes. 23% with held. that's not coming for at least six months, guys. >> all right, john. >> i believe cnbc actually came up on the conference call, right? someone referencing saying this is what a shareholder asks. let's have a listen. >> i was watching on cnbc, it must have been -- probably was last night. a man was talking about hacking of the nortel computer base
>> the fact that you don't manufacture in china. of course, that man he was talking about on tv last night was our own david faber and that is what he was talking about. >> about. i love that because it was on canada it was all very civil and didn't t get out of hand. some shareholders would be pretty irate. before we go, let's recap the day. the quick markets. stocks fell on worries that the global economy slow down is putting a drag on u.s. profits. first four ta losing streak in other a month.
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