Skip to main content

tv   Street Signs  CNBC  October 24, 2012 2:00pm-3:00pm EDT

2:00 pm
announcement that comes out in about 15 minutes time on "street signs." that's it for "power lunch." thanks for watching. >> we'll see you tomorrow. have a great afternoon, everybody. "street signs" begins right now. and we begin with some good news, america. warren buffett says he knows who the big winner in the presidential election will be. it is you. the oracle says things are getting better and we have a hopium hit list to prove it. reaction from bond king bill gross. plus, is facebook back? the stock soaring. we'll dig in. put on your track shoes, herb greenberg. we are going to give you one victory lap on two battleground stocks. >> very generous to our herb, aren't we? a back-and-forth day for stocks following the biggest drop in the dow yesterday since
2:01 pm
june. the s&p managed only a modest advance after its lowest close since early september. the nasdaq also posting a very small gain following its lowest close since the beginning of august. those are the stats, brian. it certainly looked bleak for much of this week. right? yesterday 25e 40-point drop capped three days of selling and whacked about 3% off the dow. but speaking exclusively to us here at cnbc, warren buffett says it's in these bad times that he is a buyer. >> if the market is down, i'm happier buying. i like to buy. if i go to the supermarket and they reduce prices, i feel better. if i go to a men's clothing shop and they reduce prices, i feel better. if i go to the stock exchange and they reduce prices, i still feel better. i'm a buyer. >> buffett was indeed a buyer this week, putting his money where his mouth was. he told us that he added to his position in wells fargo. buffett has also been touting
2:02 pm
real estate saying that housing is picking up. today we found out new home sales surged, their highest level in nearly 2 1/2 years. facebook. when is the last time we said that? the stock is up 20% today after earnings beat expectations and mark zuckerberg talked up their progress on monetizing mobile. >> hallelujah! might not be the last person after all. we here on "street signs" are seeing signs of life, but is the fed? they're just minutes away from announcing their latest rate decision. let's bring in bill gross, pimco's co-cio and founder. always great to have you on our show. what do you think the fed is thinking and feeling about the economy right now and do you agree? >> well, i think the fed is looking at a slow economy, perhaps 1% to 2% real growth. i think at this meeting, that many members are trying to agree on a rule based approach that differs a little bit from an inflation target at 2% and
2:03 pm
differs a little bit from lowering unemployment. they want to put a number on it. don't know if we'll see that in terms of today's statement, but i think at some point going forward we're going to see a nominal gdp target of 4% to 5%, and that would be a reflationary aspect to fed policy. >> at what stage do you think they'll feel that the economy is good enough to maybe take their pedal off the gas here? at what point might they indicate to us that they're ready to make wind down buying $40 million in mortgage debt every month. >> they've indicated in the minutes that the fed wants to remain highly accommodative for a considerable period of time after -- after the recovery strengthens. i expect at this meeting for the fed to continue to discuss exactly what that means. but the fed does not want to stall any type of recovery in terms of its momentum. bernanke has sensed that that's the problem -- or was the problem in terms of japan, in terms of its lost decade, that perhaps was probably the problem
2:04 pm
in the 1930s in terms of the effort to get out of that deflationary recession or depression, so to speak. so i think they're going to let it continue for some time after the recovery starts to get going. >> before we bring in steve leisman, i got to ask you about an article in the ft today. basically said there is a ticking time bomb in long dated bonds. do you agree? >> well, we agree in terms of the long term bond market, brian. long-term bonds obviously are geared towards 10, 20 and 30 years out in terms of inflation. and i think -- we think at pimco -- that that's really what the fed is trying to do, promote at least 2% inflation and perhaps 3% inflation, and 3% inflation is not a long-term bond investor's friend. therefore, we would stick to two, three, four and five-year pieces of paper that basically are held down and held low in yield and supported in price by the fed's efforts going forward.
2:05 pm
>> we're showing our viewers now a chart that, regardless of how well the stock market has done, people keep putting money in to bonds and fixed income is eschewing stocks. >> i want to talk about what bill had to say. listen, i do want to address what bill had to say because all of a sudden the market is starting to pay attention to the idea that romney could be the next president. he doesn't like the current fed chairman. seems most likely to appoint a chairman who is more hawkish than the current fed chairman. so a bunch of reports from guys like barclays and guys like steven stanley saying, we're probably going to get a more hawkish fed. effects of that over two different horizons -- here's what barclays said. a new fed chairman after january 2014 and a romnmmxiv and a romn sense densecy wou cc cc cc cc c
2:06 pm
more hawkish. the question becomes if you have a more hawkish chairman and he affects a gradual change to poli policy, the pain could be on the short end where bill gross suggests he would like to put his money. or the long end would stay pretty much the same to maybe up just a little bit but the worst of the pain would happen -- >> i think one fund manager called that a monetary cliff. >> very good, mandy. exactly. >> i'm worried about a fiscal cliff clavin where all we do is talk about this and not get anywhere. bill, you pointed out yesterday you thought obama would be better for stocks. how come? >> no, i tweeted romney would be better for stocks and romney would be b -- obama would be better for bonds. i agree there is potentially a hawkish fed chairman. republicans have not really been
2:07 pm
for the past 50 years, at least, a tight money party. look at nixon in terms of breaking the gold standard. look at reagan in terms of reappointing volcker in 1984. volcker was a carter appointee and only reappointed when he was lowering interest rates. of course, bush with bernanke. so it's hard to find evidence that the republican party is really the party of tight money. >> i just want to add to that, that bill is exactly right. all of the analyses i've read about the potential for what would happen to interest rates under a romney presidency, that's half of the story. other half is what happens on the fiscal side that would have also a huge impact on interest rates. if romney were to come in, be more hawkish, appoint a more hawkish fed chair but be tight weather it comes to the deficit -- >> who do you think might be the gop's potential candidate in terms of replacement for ben? i've heard a couple of names. john taylor, glen hubbard. >> glen hubbard would be in the first -- except one problem.
2:08 pm
he likes ben bernanke. he supports what ben bernanke has done and he said that ben bernanke should be considered for the job and he's made some republicans angry. then there's john taylor and john is a brilliant economist. he's invented the taylor rule. he follows a version of the taylor rule thatittle bit about a john taylor appointment. >> hey, bill, would you take the job? if you were offered? come on! >> newport beach is too wonderful in terms of its environment -- >> i would ask it differently, bill. do you hate yourself? how much do you hate yourself? would you take the job? >> and how well can you grow a beard? >> let me shift the discussion, talk about taylor a little bit. taylor has mentioned that if he were fed chairman, that he would drop the unemployment mandate. would hope to drop the unemployment mandate or at least suggest to congress that they do so and then simply focus on
2:09 pm
inflation which would be more german than u.s. >> the guys at barclays did a not job of gaming out using the different formulas that each one has come up with and basically came up with a man q chairmanship would be 100 basis points higher and a taylor chair machineship would be 150 basis points higher. >> how do they snow. >> they plug in a certain variable that's part of your religious belief as an economist into the -- >> i was mistaken. i thought there were other men and women on the board that actually might have an influence in the decision, too. >> that's an important comment, brian. or better said, it tends to be gradual but the chairman tends to go with the chairman. just don't think it is that far off. >> apparently ben bernanke's very persuasive. >> exactly.
2:10 pm
just think about this. a january 14th chairmanship will be up. the summer of '13 is when you might start to get some effect of of the market, start to game out what that would be like. ask bill when he would start trading? >> we've got to just take a break. bill is staying with us so he will have a chance to answer that question. we're taking a very quick break here on "street signs." the fed decision is coming your way next. [ male announcer ] at scottrade, we believe the more you know, the better you trade.
2:11 pm
so we have ongoing webinars and interactive learning, plus, in-branch seminars at over 500 locations, where our dedicated support teams help you know more so your money can do more. [ rodger ] at scottrade, seven dollar trades are just the start. our teams have the information you want when you need it. it's another reason more investors are saying... [ all ] i'm with scottrade. that makes tv even better. if your tv were a space captain, zeebox would be an alien, first officer. together they'd become the best star team in the fleet, able to take on anything in the universe. whew. space. space. [ male announcer ] download zeebox free, and let your tv go where it's nevfore.
2:12 pm
2:13 pm
welcome back. we are just moments away from the fed decision with simco's bill gross, bill leisman and paul hickey, a lot of discussion the last couple of minutes about who might be better in the bond market and for the overall economy. what about for stocks? does it matter who wins the election? >> history shows us democrats have been better for the market than republicans. overall the average return on the market under democratic president is more than double what it is under a republican president. history shows democrats have been better for stocks. >> of course history has a habit of repeating itself. bill, do you get the feeling that the bernanke put is somewhat waning especially after that "new york times" about the comments that ben bernanke's
2:14 pm
apparently made to friends that he may not stand tore ffor a th term even if obama wins. >> when romney's surged in the polls, the market has seen some pullback on that due to the fact we'll see less government spending and maybe a more hawkish fed under a romney presidency. but we are seeing a very weak earnings season right now. that isn't helping matters by any stretch. >> bill, what do you want to hear from the fed specifically today? we could get this any time, by the way. just want to let our viewers know. >> i'd like to hear some new rules. i don't think we're going to hear that this time but they've had two days, brian. certainly there's some intention discussion we may hear more about this or see more about this in terms of the minutes a few weeks from now. but i'd like to see some rules in terms of what they're pointing towards in terms of monetary policy and interest rate policy going forward. to me that's a nominal gdp target. i think that's ahead of us but we may not hear it today.
2:15 pm
>> i think i'm looking for the bill maher bernanke new rule. but i don't think we'll get it today. i think we'll get a discussion of it three weeks from now. i think a couple keys out there right now, the fed has to tell us what happens when operation "twist" ends. >> in change in interest rates. committee decided today to key the fed fund rates at 0% to .5% and currently anticipates an exceptionally low level of the fed funds rate likely to be warranted at least through mid 2015. committee will continue purchasing additional agent mortgage-backed securities at a pace of 40 billion per month. committee will also continue through the end of the year its program to extend the average maturity of its holdings with treasury securities and is maintaining its existing policy of maintaining principal agent mortgage backed securities in agency mortgage backed securities. these actions which together will increase the committee holding of longer term
2:16 pm
securities by 85 billion each month through the end of the year should put downward pressure on longer term interest rates, support mortgage markets and help to make broader financial conditions more accommodative. on the economy, since the open market committee last met in september, economic activity has continued to expand at a moderate are pace in recent months. growth in employment has been slow and the unemployment rate remains elevated. household spending has advanced, a bit more quickly, but growth in business and fixed investment has slowed. the housing sector has shown some further signs of improvement, albeit from a depressed level. inflation recently picked up somewhat reflecting higher energy prices, longer term inflation expectations, and remains stable. the committee remains concerned that without sufficient policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions. strains in global financial markets continue to pose significant downside risk to the economic outlook.
2:17 pm
the committee also anticipates that inflation over the medium term will likely run at or below its 2% objective. if the outlook to the labor market does not improve substantially, the committee says, it will continue to purchase of agency mortgage backed securities, undertake additional asset purchases, and employ other terms as appropriate until such improvement is achieved in a context of price stability. there was still a disagreement with the diskrepgs of a time period over which a highly accommodative stance of monetary policy will remain appropriate and at exceptionally low levels for the fed funds rate. this is hampton pearson, reporting live from the treasury department. >> we talk about the fed leaving their foot on the gas pedal. they've placed a 50-pound cinder
2:18 pm
block. they are saying we're saying with this low policy, easy money, free credit essentially policy until things get better, no matter how long it takes. >> i have no quibble with that metaphor. i think it works from the beginning to the end. that's right, they'll keep going. part of that cinder block on the gas pedal was effectively a cut and paste statement. they took very, very slight twe tweaks in here. household spending was moving a little bit more quickly, but really not much to write home about in terms after chanin the statement. they cut and pasted the same policy. >> to your point, why even bother with giving, say, mid -- at least mid 2015 -- why bother? >> first, they don't like the date. >> anything can change between then. >> the concept -- i'm sure our guests have other thoughts -- the concept is to make people feel secure that going out
2:19 pm
interest rates will remain low. and that by telling people where rates are going to be in the future, you're having a greater effect on depressing interest rates if policy is uncertain and you make people big risk premium into the interest rate. >> bill gross, what's your reaction here to the statement? >> well, the same as steve's. it is cookie cutter. there was some mention of global financial conditions and global economic conditions which i don't think was in the prior statement. but other than that, it's pretty much the same. again, i think we should look forward to december to substantial change in targeting, but that remains to be seen going forward. i think the fed basically is repressing interest rates. let's be fair about that. bond investors are being repressed. would a bond investor prefer a 1% fed target as opposed to a 25-basis point fed target? of course. >> bill, sorry to interrupt, but
2:20 pm
how much is the fed repressing interest rates? if the fed backed off right here, right now, where would the market naturally set its rate? do you have a sense of that? >> you know, steve, fed studies -- anywhere from 75 to 100 basis points. i totally expect something more. it all gets caught up in the tightening of that particular policy if interest rates rise. but i think, yes, there's been a repression of at least 100 basis points -- >> bill, i want to follow up on that. why have mortgage rates crept up recently? is the fed effect wearing off already or not been seen yet? >> i don't think so. there was a little bit of an extraordinary push there before the fed announced this measure in terms of buying mortgages. pimco had bought mortgages ahead of the fed in anticipation of just that measure. and so a little bit of a back-off here. it is only perhaps a five to ten basis point back just and one-point back-off in terms of
2:21 pm
the price. i would expect mortgages to be pretty stable here in terms of price and yield going forward if the fed continues to do what it's doing. that's what they just announced. >> on the mortgage question here -- i think rick santelli's somewhere out there. i know you were lookingality the housing market this morning when we got some new data. the both applications for re-fis and purchases are below the level of mid-september which of course we all know was when the fed decided to further help the housing market with qe3. do you think it's working? rick. >> well, you know, absolutely not! i mean i think that you can make -- my world, if the fed didn't try to help housing, if the government didn't try programs to help housing, my guess is housing would be at least where it is right now, if not better. if people couldn't get mortgages because freddie and fannie were actually being taken care of, somehow life would sprout up in
2:22 pm
lending somehow because people need houses and banks have money to lend. but the gorilla is in every room, whether health care, mortgages, housing -- they're everywhere. i like the statement today, it didn't change much. it doesn't really mean anything to me. it didn't mean much to the market. we're within a basis point of exactly where we were prior to the statement in 2s, 5s, 10s, 30s, even in the stock market. so it wasn't really a surprise in any way. there was a bit of a rumble on the floor when they were following along on the techs, 20, 15s, keeping rates low. 2015 he might want to hold rates down but it is about which job he's holding down at that time. >> well said. bill, i just question whether we're at to throw the whole history book out here. the fed's going to have a problem with housing real soon. the only way they can argue that there's not real inflation --
2:23 pm
okay? because everything everyone of our viewers buys all the time is up in front. is owner equivalent rent. that's down so it skews everything. as housing gets better, it will be hard for the fed to say, no inflation, we can keep rates where they are. >> the fed has been trying for a long time now to elevate asset prices. they pumped the stock market until 2000. then they pumped the housing market until 2007 and now they've pumped the stock market again, doubled it over the past three or four years and now they're working on housing. it is a fair question as to whether this is an appropriate policy. i don't think it is either but it is a fact that the fed has basically elevated asset prices and that's their policy going forward. >> just a real quick question on the equity market. i'm seeing not a huge amount of movement here, paul. all three indices are kind of sitting flat which is kind of where they were before. the equity market is saying "meh" to this? >> i don't think anyone is
2:24 pm
expecting anything, as bill and steve were saying. the fed made their big moves in the september meeting. they're not going to go and change course again a month later or radically change course two weeks ahead of the election. market was expecting little. it is one of the narrowest ranges on a fed day since 0% rate fed policy in '08. >> don't sell this policy short just yet. the fed has bought $22 billion worth of mortgages according to its last release. it hasn't had a full month of mortgage purchases. the feds believe that it has the effect by the amount of mortgages or assets that it owns. not by the continuous purchase. it's the stock effect rather than the flow effect. there could be more to come when it comes to -- >> bill said it. they doubled it. right? they doubled the stock market. right? inflation is going to be a problem with housing, i believe. steve, thank you. bill, paul hickey, thank you very much. see you guys soon. if anybody else is out there not
2:25 pm
in the boxes. thank you as well. >> rick. >> rick. bob pisani. whoever else is out there. facebook stock fans rejoice. shares are soaring today but is it all short covering or something more real? and we're going to go to the mattresses with herb -- not like this. he's been warning but this stuff for a year now. he's going to do a victory lap as well. anyone watching, it is bulletproof stock. [ male announcer ] you are a business pro.
2:26 pm
2:27 pm
monarch of marketing analysis. with the ability to improve roi through seo all by cob. and from national. because only national lets you choose any car in the aisle... and go. you can even take a full-size or above, and still pay the mid-size price. i'm going b-i-g. [ male announcer ] good choice business pro. good choice. go national. go like a pro.
2:28 pm
welcome back, everybody. we have herb greenberg here. monster lost 22% in two days over the course of monday and tuesday. today it does about 14%. we were scratching our heads and trying to work out why. what materially changed here, if anything? >> i don't think anything really. i think we have an issue with some upgrades. there's talk about what goes on with lawsuits, things like that. i think here's what you got to look at on monster. i think it is very clear. will other states follow new york with an investigation. but more than that, critics say is this a company -- remember, much of the consumption for these drinks is under 25.
2:29 pm
the under 25 set. will there be restrictions ultimately on marketing to teenagers? >> according to monster, 70% of their drinkers are over 25. >> let me put this a different way, brian. that 30% are you talking about? that's on the margin. >> apparently soda drinks in general are declining in terms of sales. energy drinks are on the rise. maybe this is something that needs a closer look in terms of labeling. i want to also give you a victory lap, herb, because there are two stocks that you warned us about here on this show. the first is netflix and the second is tempurpeedic. >> starting with netflix, last night i twitter i said, they've won the excuse battle. they've won my award for the craziest excuses, because on u.s. subscreaming subs, they
2:30 pm
came in below expectations, blaming it on forecast fears. but in the company's letter to shareholders at the very bottom they had an interesting discloer sure this time i don't know other people have come in on. that is they talk about the $5 billion cost of content obligation. and then they say, this does not include obligations that we cannot quantify but could be significant. look, they got less than $1 billion in the bank. you got to take this into consideration. they're telling you here 5 billion could go way up. then we get to tempurpeedic. >> every single person that i know, you know, they know, uses netflix. why aren't they making more money? >> they keep they've got to keep promoting. margins have been coming down. they can't raise prices. well, it is a question of there are other options out there like amazon. and others in the space.
2:31 pm
including cable. including pay on demand. people love netflix. you're right, they can't raise price. >> at least three brokerages are cut their price target on that. competition has been eating into tempu rechrpedic's busines. the company is coming out and now effectively warning saying competition is really hitting them. they're saying they've lost visibility, they are uncertain about the future right now. they thing thinks will turn around but margins keep going down. i mentioned this this morning on "squawk on the street." you have a three or 20 basis point drop in margins from a year ago. that's a huge decline. they're trying to buy sealy. there's so much going on. >> competition is also moving lower today in sympathy. >> electricity comfort select c
2:32 pm
competitor. there is discounting in the air bed space. it is expected to continue. >> nice work, good job. have an energy drink. lay in bed all night and watch movies on netflix. it is all related. street talk lovers, we're got two names for you that are up triple digits so far this year. >> here's a dire debt warning, because you need another one. if congress fails to act on the fiscal cliff, it will send america into instant recession. we're going to speak to the woman behind the campaign making that claim. stick around. americans are always ready to work hard for a better future.
2:33 pm
since ameriprise financial was founded back in 1894, they've been committed to putting clients first. helping generations through tough times. good times. never taking a bailout. there when you need them. helping millions of americans over the centuries. the strength of a global financial leader. the heart of a one-to-one relationship. together for your future. ♪
2:34 pm
welcome to the world leader in derivatives. welcome to superderivatives.
2:35 pm
it is street talk time. panera bread shares are on the rise. >> funny comment from our producer andrea in our year. i can not repeat it. strongs earnings, a forecast increase. earning $1.24 a share for the first quarter beating estimates by a nickel. revenue also ahead of most analysts forecasts. and they increased their full-year forecast on improving same-store sales. barclays raising their target to $175. we were just talking about, with any company that produces a product where you can eat the bowl itself --
2:36 pm
>> it's a winner in your book. lumber liquidators. been a heck of a stock this year. >> shame on us for missing these name as we talk about all these housing halo stocks. the stock is up more than 200% year to date. up 12% date. beating estimates, raising full year estimates. sales rose nearly 19%. what's interesting, lumber liquidators noting more people are moving away from diy to difm. >> do it for me. >> this is one of the reasons why home depot has not been particularly successful. it is not a diy society. it is a difm society. sears another one we're watching, on the rise as well. we picked some winners today. >> this is an apple halo stock. because of strength of iphone 5 sales. also as we talked about yesterday, the ipad mini launch. raised their target on cirrus
2:37 pm
from this name doesn't get a lot of attention but in that apple halo. by the way, that stock is up 156%! >> that hey low has served it well. all right. facebook. remember them? their shares are on track for their largest percentage gain ever. up about 20%. is the stock finally at a turnaround point? or is this all short-term short covering? collin sebastian, senior research analyst at robert w. baird joins us. collin, a real turn or the shorts having to buy back the stocks? >> i think it is a little bit of both. there's certainly some short covering today but i think from a fundamental level we're seeing a turnaround in facebook. six months ago they were generating any revenues from mobile platforms. in the last quarter it was $150 million. in q4 it could double that amount. ad formats appear to be working on facebook and that's a nice change. >> right.
2:38 pm
now it gets about 14% of its ad revenue i believe from mobile ads. is this news encouraging enough, colin, to make it a buy at $23? >> we believe so. certainly that's more. geared towards longer term investors. there's still a large lock-up, expiration coming up in the short term as well as early next year. let's face it, facebook is still on a long road towards legitimizing itself as a large-scale ad platform. we happen to believe they will succeed. they said last night they sell the equivalent of three super bowls a day, which is quite a large scale already. >> is that enough to justify a stock whose trading i think above 40 times? >> we think it is. facebook is in the early stages of a huge opportunity. i think a lot of focus on the current estimates is ad soeldz on facebook. if we imagine when facebook begins selling advertisements targeted at consumers off of facebook, that roughly doubles their market opportunity. i think that deserves a higher
2:39 pm
multiple. >> i have one word though -- zynga. right? and the weaker payments that facebook has experienced as a result. it's not getting as many payments from social gaming transactions. is this something which is a problem for you? >> it is certainly a near-term headwind. makes the advertising chart of their business look even better since they even beat their estimates despite the issues at zynga. i would say the opportunity for facebook and payments is not only in games. think ultimately they'll extend payments as a platform to other products and services and should mitigate the risk from games over time. >> i've argued the greatest risk to facebook is just boredom. there's only so many updates you can have your mother like. right? am i wrong? >> user growth is plateauing so they need to find ways to keep users engaged. exactly to your point. i don't see anything competitively out there right now which might lead to a defection from facebook. there's a significant amount of
2:40 pm
content and engagement, and in fact that level of engagement has increased even with the shift to mobile. at this point in time, the fundamentals there look better than they did six months ago. >> you've got a rating of outperform price target, $32. which, by the way, is $6 still below the ipo price of $38. colin sebastian, thank you. let's move on now, because it's microsoft's turn. yesterday it was all about apple. we got a big windows 8 and surface. that's the name of microsoft's tablet debut tomorrow. jon fortt who somehow beat me back from california. he's here in the studio today. he's got a first on cnbc interview with mike ballmer, microsoft's ceo, tomorrow morning on "squawk box." on street signs, another great show, we're talking about the housing hopium. we've been right. herb, how can you capitalize is our question here. also ahead, brooklyn is getting yet another professional sports team. we're about to talk about that big news with the woman who
2:41 pm
helped make the new barclays center in brooklyn a reality. [ male announcer ] this is steve. he loves risk. but whether he's climbing everest, scuba diving the great barrier reef with sharks, or jumping into the market, he goes with people he trusts, which is why he trades with a company that doesn't nickel and dime him with hidden fees. so he can worry about other things, like what the market is doing and being ready, no matter what happens, which isn't rocket science. it's just common sense, from td ameritrade.
2:42 pm
2:43 pm
oh, hey alex. just picking up some, brochures, posters copies of my acceptance speech. great! it's always good to have a backup plan, in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs. can't let 'em see what you're drinking. you know, i'm glad we're both running a nice, clean race. no need to get nasty. here's your "honk if you had an affair with taylor" yard sign. looks good. [ male announcer ] fedex office. now save 50% on banners. coming up on "closing bell," three big interviews you won't want to miss.
2:44 pm
he co-authored the dodd-frank financial reform law. why is barney frank now defending one of wall street's biggest banks. we'll ask him coming up. warren buffett told "squawk box" this morning he's buying shares of wells fargo. does meredith whitney agree with that call? we'll ask her. then noted tech investor dan niles has made an absolute killing shorting facebook. now he's buying the stock. we will ask him why coming up. we'll see you at the top of the hour for the always unpredictable last hour of the trading day. see you guys then. >> indeed we will. thank you, bill. big news for brooklyn. new york islanders are moving to the new barclays center. our gary kaminsky joins us now with more on that special story with a special guest. he's wearing a kangaroo tie for the event as well and he is live from the goldman sachs asset management conference. gary? >> mandy, thank you so much. i am wearing that tie and we are very fortunate to be at this great event and be sitting with
2:45 pm
maryann who's made some big news today in terms of bringing the new york islanders to brooklyn. >> about 45 minutes ago i crossed the bridge from brooklyn where we announced a 25-year deal with the islanders to play in our house at the barclays arena. this conversation has been ongoing since we announced the move for the nets to brooklyn. obviously having two hometown teams in our arena is an extraordinary thing. but today we created a reunion of sorts by bringing the nets back to the islanders in brooklyn. >> it means something more for brooklyn, not just the sports teams. talk about the revitalization of brooklyn. brooklyn the new manhattan? is this where economic growth is happening in new york? >> i like to say that brooklyn is no longer apologizing for not being in manhattan. brooklyn is a place unto itself. i think it is the center of gravity for all things cultural, arts and sports related today. brooklyn has been our front yard, our backyard and side yard. the brooklyn moment, the modern brooklyn moment has been an extraordinary thing to watch unfold.
2:46 pm
it is happening on all fronts -- culture, arts, entertainment, sports and housing. >> maryanne, brian sullivan, brooklyn law school graduate. one of my teachers, a brooklyn guy. if you were invest money anywhere in the new york metro area in real estate, what would you do? would it be brooklyn? >> i would bet on brooklyn. >> where? >> i think -- >> it is a big place. >> well, downtown brooklyn is hotter than hot right now. i think the biggest challenge is that it's hard to find inventory and hard to find sites because in many ways, lots of people have been in and around the borough and looking at the opportunities over the last two years. i think it is probably difficult to find a real value play in brooklyn because of the boom. so having said that, brooklyn is the place to be and it has had extraordinary growth in terms of live, work and play. so the environment offers a lot, not only to people who live and
2:47 pm
work there but to investors. >> that sounds extremely bullish for multi-family housing. right? isn't the rental vacancy rate 1.5% only in new york residential area? >> yeah. so vacancy as defined by new york state, anything under 5% is a housing emergency. can you imagine, at under 1.5% vacancy, you understand that in our city, 65% of new yorkers choose to rent versus buy. notwithstanding historically low interest rates. i believe that there's a new kind of new yorker that prefers being nimble and having this untethered existence where year to year they can choose where to live, they can live in high-rise buildings in brooklyn. five years ago to find a luxury rental building in brooklyn was near impossible. it was brownstones or bust. i think what's changed is that brooklyn is now a place where you can live in a high-rise luxury rental building with amenities that are akin to manhattan. >> that's the residential side of the equation.
2:48 pm
what about commercial real estate in new york? what are your thoughts on that? >> so commercial real estate is heavily dependent upon job growth and sustained job growth. i think over time, as we watch the unemployment rate move and we see companies hire, we can appreciate the fact that eventually there will be a drive to create new office space. but right now i think that vacancy rates are starting to migrate down and rents are starting to edge up. i think other than a signature building where a company like coach will build for itself, i think it is not in the short term -- we're not going to see a lot of new construction for skyscrapers and office buildings. i think that will take a real economic recovery with a lot of confidence from the corporate sector of the economy that jobs will continue to grow and a companies can expand. >> maryanne gilmartin, making a very strong case for brooklyn. gary kaminsky, thank you very
2:49 pm
much. maybe the hockey team should change their name to the empty nets. with the nation's debt bomb continuing to tick, we'll look at how ceos are starting to push washington to act. that's coming up next. you have to dig a little. fidelity's etf market tracker shows you the big picture on how different asset classes are performing, and it lets you go in for a closer look at areas within a class or sector that may be bucking a larger trend. i'm stephen hett of fidelity investments. the etf market tracker is one more innovative reason serious investors are choosing fidelity. get 200 free trades today and explore your next investing idea. wooohooo....hahaahahaha! oh...there you go.
2:50 pm
wooohooo....hahaahahaha! i'm gonna stand up to her! no you're not. i know. you know ronny folks who save hundreds of dollars switching to geico sure are happy. how happy are they jimmy? happier than a witch in a broom factory. get happy. get geico. fifteen minutes could save you fifteen percent or more.
2:51 pm
2:52 pm
whoever wins the election, i think there will have to be a compromise. i think the other side is not going to go into a funk. >> people say business leaders should be more vocal. look, we're vocal. you know, this is a complete distraction, an important distraction, at a time when the country doesn't need it. let's get it done. >> it's going to get done. the american people won't stand for it not getting done. >> all right. there you see it, folks. national debt topping $16 trillion last month. really no end in sight. fiscal cliff, of course, is
2:53 pm
rushing toward us. or we are rushing toward it. joining us live from the buttonwood conference in new york is mya mcginnis. she's president for the committee for a responsible federal budget. sounds like ceos are starting to get a little more vocal in their calls to fix the debt. >> you know, i'm really pleased to say that they are. so what we've been seeing in this whole effort we're putting together, the fix the debt campaign, which is bringing together bipartisan groups of supporters and in particular ceos to help push for a big debt deal in washington and lend support for when there is. business leaders from all different industries are getting involved because no surprise they can't function in this environment. we all know that some big changes are going to have to happen to the budget and until we make those decisions, the economy is really at risk. there's capital sitting on the sidelines basically paralyzed until we know what the path forward is. business leaders from all industries are stepping out and saying we need to get this debt
2:54 pm
deal in washington. washington has to work together on this. we're going to lend our names and support to help make it happen. i think we're going to hear a lot more from business leaders in the coming months. >> indeed. buffett was saying the american people will not stand for something not getting done. at the same time, maybe they might have to stand for it. what's the chance that there is no grand bargain, there is no deal, do you think? realistically. >> well, listen, this is no matter what incredibly hard to do. we're talking about the need to put a debt deal in place that would save about $4 trillion or $5 trillion over ten years. basically, anybody who's looked that the this problem knows that needs to happen and frankly knows the kinds of policies that are going to have to be involved from reforming medicare and medicaid, fixes social security, raising revenue by fixing the tax code in a way that's good for the economy. so i think there's broad understanding of what has to happen. politically, it's incredibly difficult. now, one thing that's going to focus the mind is the fiscal cliff. come november 7th, we're going to be focused on the fiscal
2:55 pm
cliff completely. that's going to be the call to action. if we go off the cliff and actually put this country into recession because republicans and democrats can't come together, it would just be a terrible outcome. at the same time, if politicians punt like they have before, just extending policies, adding to the debt, it becomes a dangerous probability that credit markets start to lose faith in us. so the hope here is that they use the lame duck, start the process, to start that important process of p putting in place a big debt deal. perhaps they have some kind of a down payment in the lame duck and put in place kind of a plan over the next six months where they'd finish the $4 trillion, $5 trillion deal. that's what should happen. i think it's possible getting more and more likely that that could happen. >> ceos make millions. their companies are worth billions, right? why are they so beholden to d.c.? we've said ceos have to toughen up, put d.c. in the rearview mirror.
2:56 pm
why are they whining about d.c.? drives me nuts. >> what i'm hearing from a lot of conversations is they are frustrated. when you see a problem, you're supposed to go fix it. it's sort of the businessmenalty. there's a huge debt problem facing this country. we know it. there's a fiscal cliff problem facing us in the immediate future. we know it. and there's no excuse for not taking action it make changes. ceos are frustrated because it obviously affects business, and not just their bottom line, but their employees. but it also -- ting frustrated them like it frustrates all of us. how come people in washington can't come together and work on this issue? what they want to do is support those who are and urge more of them to do so. i think a lot of business leaders are starting to say, listen, this is the i think l most important issue there is facing the country. it's more important than a certain tax break and a certain regulation. getting this debt deal in place is the best thing we could do for the economy. >> let's see it we can do it. thank you very much for joining us, mya. okay, pumpkin lovers. you out there rejoice. we sure have a story for you.
2:57 pm
"street signs" returns in two minutes. the legal protection y? at legalzoom, we've created a better place to turn for your legal matters. maybe you want to incorporate a business you'd like to start. or protect your family with a will or living trust. legalzoom makes it easy with step-by-step help when completing your personalized document -- or you can even access an attorney to guide you along. with an "a" rating from the better business bureau legalzoom helps you get personalized and affordable legal protection. in most states, a legal plan attorney is available with every personalized document to answer any questions. get started at today. and now you're protected. are we there yet?
2:58 pm
are we there yet? are we there yet? [ male announcer ] it's the question we ask ourselves every day. is it the safest, the most efficient? the kind of vehicle to move not just people... but an industry forward? are we there yet? are we really? [ male announcer ] are we there yet? we are, for now. introducing the all-new seven passenger gl. motor trend's 2013 sport utility of the year. mercedes-benz. the best or nothing.
2:59 pm
well, by now you know pump skin the new bacon. feast your eyes on this. burger king in japan is offering up a new pumpkin burger. it doesn't contain pumpkin as we know it here in the united states. it's a japanese winter squash like a sweet mini pumpkin. burger king is officially calling this burger


info Stream Only

Uploaded by TV Archive on