tv Street Signs CNBC April 10, 2013 2:00pm-3:00pm EDT
>> i think it's the quick effect. i think it's because you're here today. i want to thank you for this. and the shoes. i left mine at home today. that will do it for "power lunch." street signs begins right now. stay classy. >> it is a big day for the stock markets. beautiful san diego because we have got a big show for you as we continue to find opportunity usa. & yeah go quietly becoming a technology capital of the united states. you have got all of your market coverage. just because i'm out west doesn't mean that we won't be all over the markets. we will end the east coast media bias for the stock mark. >> you're such a slouch.
you have got the worst backdrop in the world. the markets hitting new highs. get right down to business. we have bob and rick. bob, nothing but nothing, not even hawkish minutes are stopping the record market. >> i think they made a real difference. s&p gapped up six points. most of the traders adistribute it to a more market friendly interpretation. let me show it to you here. they said many emphasized that any decision to reduce the pace of purchases should reflect an improvement in their overall outlook for market conditions and their confidence in the sustainability of that
improvement. i think the jobs report creates real questions about sustainability and traders are interpreting that positively. defensive names as well as cyclical were all on the upside. everything else is down, mandy. that is a little bit on the unusual size. >> indeed it is. certainly those minutes getting bond yields on the hop here. they often say that bond traders are the smartest around. >> when you said hawkish minutes, what i hear is hawkish easy money. i think it's oxy moronic. nobody down here believes anything is hawkish when it comes to the fed. our yields are up slightly. keep in mind we have much higher yields the last time we are given a run in the s&ps.
and the biggest charts on the floor today in terms of quantity of print are the dollar yen which gets ever so close to the very significant 100 mark. >> absolutely. hello japanese money. thank you very much. you know what? we were supposed to be taking our first look at the fmc minutes but guess what? the fed sent them out real early. we have got david kelly. steve, i would like to start with you and how you are interpreting these minutes. what would you say? >> i would say are we supposed to take anything brian says seriously standing in front of the water like that? i think bhil i'm talking we should just be looking at brian. >> you stay classy.
>> it's very hard. i think the minutes were in touch. i think that the idea that the jobs port came out between now and then are really changing not everything. we did hear from him and he says look, it's not changing my forecast. the bottom line is another round of weak numbers would change the outlook. what we do know is before that number came out there were a few more guys that were thinking about a mid year tapering. so the risks are higher if the jobs report for march gets revised higher and we get a strong april report we will be talking again about a mid year tapering. >> bob was talking about the silver lining here and the glass half full scenario. is this a green light to get even more risky? >> i think people, as the equity
market goes up, people get more and more excited. we still like equities. we don't love them. there are two things going on here. yes i agree that the fed minutes don't really change the story very much but this party will come to an end. some going to the end of the year. but either way this year we will increase the assets of the federal reserve by one third. we will not do that again. whatever happens, 2014 will be less accommodating. i think that tuz mean that long term interest rates will have to go up and therefore money needs to find a better home. the one other thing that's helping is the cycle between the equity market and economy. the u.s. economy, a lot of wealth is in the equity markets. we saw a 3 trillion dollars
increase. >> david, it's brian. listen, the stock market is not complicated. stocks go up when there are more buyers than sellers. who are these buyers? where is this money coming from? >> i think it's probably coming from all over the place. we have seen the first few months of this year we have seen more interest among mutual fund buyers. i think we're still seeing that and some institutions are buying in. the one thing that all of this has done is it has made it a team market. there is no alternative. with interest rates this low it's very hard to argue that you should be putting extra money into long term bonds. i don't think it's doing that. >> it just strikes me that jim is the best answer. the question is not just the fed stop. tapering is still buying assets and holding a $4 trillion or $3.5 trillion balance sheet is still easy money.
i wonder if the economy improves and the fed stays easy, is that a bad stock environment? or could we still have the best of both worlds in the sense that the fed is easy, maybe buying fewer but still assets? and an improving economy? >> you brought up a good point. we're in an environment where is bad news good news? and the corollary is where will have an environment where bad news is good news? and i think the answer might be yes. it likes the idea that we will continue to move higher. we will combine what we read in a minute. and we're going. so buy, buy, buy, our research looks at the relationship
between interest rates and stock prices. if interest rates rise from varying levels it's associated with a rise. if interest rates approve from 2% to 3%, we don't think that will be associated with the stock market sell-off. >> i will ask a very simple question. very simple to ask and hard to answer. when does the fed stop? when does it stop and what happens? >> the fed will stop when the markets tell the fed to stop. i don't think they will ever declare victory. we have done enough and we will go away now. they keep going until the markets say enough, please stop. >> jim, i got to ask, it's not like the ten year treasuries at 4%. we still have a lot of buyers. people are still afraid of something. >> the fed is buying treasuries. the fed is the big player.
>> yes, but they're not the only buyer. >> bill gross has treasury exposures. >> he just started. but the fact of the matter is the buyer on the margin is the fed. they're setting the price. they're buying $40 billion a month of treasuries. do we think that the treasury and the stock market would have a huge reaction? of course it would. yes there might be money coming in from europe. you're not going to get that giant rise in yields. >> we have got to leave it there. more coming out of jamie diamond's annual share to holders. >> that's right. always a dense and meaty
document. it's interesting to note that jamie diamond in his letter says that control and oversight in terms of responding to regulation and preparing for upcoming regulation from single biggest priority they are making changes in order to figure this out. he said they created a firm-wide oversight and control group. each company has asked the business lines to appoint a control chief in each of those business lines. too big to fail. interesting. interesting to see that line in the document. they need to prepare for a potentially bad outcome. he thinks the consumer is in great shape. he says the firm is preparing for a scenario of rapidly rising
rates. >> thanks a lot. that's right. and some of the most red hot of the bioteches are based right here which is why we're here. the ceos are going to tell us where they see their companies going. and jane wells hitchhiked all the way down from los angeles and she's got something that is going to make herb greenburg squirm in his seat. street signs returns right after this break. (announcer) at scottrade, our clients trade and invest
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>> it's got nice people and guess what? it's so nice. how do you manage? >> i wish i managed living right here. >> i got it in and got the plug in. >> how awesome is this? >> i know you spent time growing up here. my husband was at north island. it's a fantastic place to live. but san diego has had challenges.
>> if you have got land in san diego, hold on to a piece of california gold. >> he is buying land and building houses again. >> the region is now considered a biotech hub. >> an extraordinary place where people are betting on the future and taking risks. >> mohamed is working on parkenson's treatments. >> we're hoping to find the next
penicillin. could be discovered right in this room and that's really exciting. then there's golf. it's not just a game it's science. >> for all that's positive and there is a lot, the cost of business remains challenging. taxes are among the highest in the nation. >> i think the companies would move out of the area. >> we will hear a lot more from mark. what he is talking about with taxes, it is really a challenge. it does have an impact. some of the start-ups, occasionally they are bought by big companies and moved out of
state. >> my father was also in the navy. got out of the navy and loved it. we left. my family moved away in 1985. we moved to virginia. we left california like millions of to find economic opportunity on the east coast. >> now they're all coming back. >> my parents' story is not unique. i know it's embarrassing for my folks to hear they have gone through tough times. how do you make san diego competitive? >> we start with our weather. we can't do much about that. >> you don't get this in texas. >> we have built a synergy between universities.
and our culture who attracts people who will do that high-tech stuff. away from the sprawl and the automobile oriented culture that we are used to. it's the kbe nation and close connection. and said real close connection. >> how much of the economy is still based on the defense? >> we're still a navy town.
we're ocean based research. we lost a lot of the defense industry. sequestration will hurt us. congress is dumb but they're not stupid. they will not allow the see questions trags. we're talking a 2% drop over gdp over the whole nation. that can't happen. >> but to jane's point, california, yes the weather is fan tas tick. you know what is not fantastic? paper work, red tape and high taxes. if you want to sell a company that it's worth it? >> it's a little overplayed.
>> you're making it easier? >> we're trying to make it easier to do business and welcome people. all that requires some investment. we have had the governor perry in from texas. if you want to go there where there is no regulation to keep your air pure and ocean clean? you have got to have regulations. >> i saw a dolphin smoking. >> you have got to have smart regulations. you can't have dumb and duplication. we have got to make sure our
environment continues to attract people. >> we're going to bring you more on san diego's biotech boom. we're going to hear from two ceos on what is really moving them forward. and of course we're all over this rally. and it's not just sunshine in san diego but out here in the markets, as well. let me tell you if you have not caught up on what is happening.
that's what's happening in the markets. i want to know what's happening in san diego. let's get straight over to brian. >> we have been saying that this has become a biotech capital of the united states and we're not just going to tell you that. it's television. we can actually show you that. this is not radio.
>> it's only an hour long show so we picked you guys. thank you very much for coming on the program. >> i want to begin with you. we could talk about san diego but you need scientists and smart people. you have got pay them money and bring them here. >> it's all about innovation in life sciences. we have the opportunity to introduce the first truly new weight management pharmaceutical for based on our studies. patients were able to be two to for times more successful. >> we have talked about the cost of obesity to this country.
however, kissemia is out. i know the market opportunity is big but how do you make sure it is arena pharmaceuticals? >> no single drug is sufficient for orlanal indication. >> talk to an analyst this morning. we talked about marketing a drug. we have got to partner. what is going to justify the huge investment? research and development? >> it is the same company that introduced the first alzheimer's drug that is still used today.
they have ten drugs that have been successful with. being quite successful with as well. >> he has gotten out. >> you're trying to diversify the risk. and the way we have diversified risk is we're a neurorow science company and we partnered one of our late stage products. they have a phase three clinical trials. then our second compound that we have moving along, we're keeping all to ourself. it's in movement disorders. we're tarking it to children
next year. >> a medical insider said that you have got an easier time than jack did. the fda has become better and faster and when you were fighting through it. do you agree with that? >> and i think investors should be confident. we're a company that has gone through and not come out the other side years ago through the fda. the name of the game is adapt. it's always a changing environment. you just have to adapt. >> wish we had more time. a lot more to discuss. but thank you so much. >> my pleasure. >> we can all understand the good opportunities here, not just the weather.
>> your road trip is not called opportunity usa for nothing. the president unveiling his new budget plan. gene sperling will join us next. ♪ [ female announcer ] you're the boss of your life. in charge of long weekends and longer retirements. ♪ ask your financial professional how lincoln financial can help you take charge of your future. ♪
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>> welcome back to street signs. i'm john harwood at the white house. president obama has laid out his budget today and we're now joined by top economic advisor to talk about it. gene, two elements of your plan. you're trying to get conversation with republicans over a deal to replace the sequester. what is your read at this moment given response that you have heard from republicans. >> obviously, we can't control your reactions. keeps his offer to speaker boehner on the table. that was an offer that speaker boehner was very close to during negotiations and the president has been willing to stay with it
even though that means he is willing to adjust to things. so the president has made clear that that offer is still on the table. that's $1.8 trillion in additional deficit reduction. so far we have seen that people are impressed by the seriousness. could not lead to something better than what we have right now. that doesn't deal with any of our questions. >> you talk about the
negotiation with speaker boeh r boehner. you did have a negotiation and came to what was described as a permanent change in the estate tax. why shouldn't republicans look at that and say the president is going back on what we agreed to. that's something where there is a significant amount of cost to relatively few people. remember that going to 2009, it means that any couple that leaves $7 million in a state would pay zero on that. the president does stay with the agreement for these next five years but the president believes at some point as part of a larger deficit reduction plan, we need to take a serious look at that.
>> you know what? what the president has done here is he has put forward a compromise offer. he has put our proposals. what he has not done is say that some of his other visions like having universal pre-school, these are things he believes strongly in. >> we will have more from street signs san diego right after this break. we've completely integrated every step of the process, making it easier to try filters and strategies... to get a list of equity options...
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>> you ear telling our viewers. >> i look for a value of the company. it's fixable. >> how do you know it's fixable? >> they are working on it right now. july we will see something else. they have a back-up plan. we know what the problems are. the stock is like $10 a share. this company is a very strong business. they have about $400 million in cash. no debt in the balance sheet. when i look at it, i think the stock will be -- the assumption is they will get past the accreditation issue and if they don't, pain to investors might be more justified.
>> howard, it's tough. you can put the sunglasses on. this is san diego. you have got 300,000 plus registered users. you're not bringing us a san diego name. >> this is a fitness town. we live in an age of data. we live in an age where everybody is connected. >> look where all of the start-up companies trying to digitize our life.
and nike and underarmor are right here in the fitness world. >> you like nike and underarmor shares. sounds like you're calling these guys technology companies. >> i'm not talking from the world of fda approval. small investors. >> it's displayed on my watch and glasses. this is what's coming. it's not a value play. it's something that everybody can understand. >> all right. we're going to wrap it there. before we let you go, long time san diego resident, sitting back
in the dark, squirrelled up in his desk, give him a shout out. >> herb? >> big. big mistake. >> boy. there you go. thank you guys. appreciate it. guess what? we've got a ceo coming up. another company that has been doing well and the guy is australian. i will practice my accent. everyone's retirement dream is different; how we get there is not. we're americans. we work. we plan. ameriprise advisors can help you like they've helped millions of others. to help you retire your way, with confidence. ♪ that's what ameriprise financial does. that's what they can do with you. let's get to work. ameriprise financial. more within reach.
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consumer? payroll taxes? are you seeing a the challenge is uncertainty within the air why of business and start helping us get a's and start marking our papers and allowing us to go forward. we touch everybody. and i think that's what's important. let's get confidence back in business. >> the ceo says right now no negative impact from sequester or the payroll tax reset. >> i don't know if i'm that smart to say none but end users are not stopping to buy our product because of it. >> follow up on what you said about making it easier to do business, right? have the politicians run amuck
with red tape? >> well, if leadership was a about taking away barriers, why would we continue to put barriers in our way. >> let's have one aussie talk to another. >> absolutely. i'm going to give you a good'day as well. i want to ask you a question. sort of aussie to aussie here. i know the 50 plus-year-old formulation of wd-40 remains a secret. you can tell me. i'm not going to tell anyone. what's in it? >> you know, mandy, as an aussie, i know i can trust you, but i just can't. but it's 60 years old today. so it's our birthday. >> well, happy birthday. that's all i wanted to ask you. always good to see an aussie on the show. >> she's never going to stop asking you, by the way, what's in that stuff? what's in that stuff? you've got a big product line
and you've got this foaming wash, which is good for my hair, later on. what other segments of the market do you want to get into. when you look out at the next 60 years for wd-40, how big is it going to be, what's it going to look like? tell your investors. >> there's still a lot of squeaks in china and a lot of rust in russia. 70% of our business is outside of the united states now. we tripled in size in the last 12 years. so our first job is to take that blue and yellow can to more places around the world. and then the second exciting thing is we're unleashing the power of the shield. and we will launch this year a new range of bike product, a new range of wd-40 specialist product. so we see that as our two growth engines. >> are you going to grow internally or do you hunt for acquisitions? >> i think it's mostly internal. >> and quickly, does a stronger dollar hurt you? >> not really, unless it gets really out of control. >> and right now, it's not out of control. >> it's not out of control. >> gary, it's a real pressure. >> great to see you. >> thank you very much. >> go, melbourne mag pies.
>> the sydney swans! >> got a little rivalry. how level is the plague field for superfast traders? one new effort is trying to shave an all-important 4 milliseconds, off the transmission time of market information from new york to chicago. and that could give some traders an advantage over others. eamon javers is in edison, new jersey, with all the details. eamon, i don't know all this talk of giving someone advantage over the other, i thought it was supposed to be a level playing field. >> reporter: let me give you a perspective on that 4 milliseconds. that's faster than the human eye can blink. it takes about 300 milliseconds to blink your eye. it's faster than the human thought. but this consortium put up behind us and transmitting new signals to the nasdaq in new jersey say they can shave 4 milliseconds off the transmission time and that's faster than the speed of light
as it travels over a fiber optic cable. why is that? a fiber optic cable is disadvantaged because it's got to travel with the contours of the earth, which is a curve. this technology goes in a much straighter line, so it comes much closer to the approximate speed of light itself, which albert einstein said is the fastest speed that anything can go. critics say all of this is too fast. it's playing into the hands of high-frequency traders that are trading faster with algorithmic computers. but i asked the guys behind it what they think about it. >> i personally believe that technology helps any kind of sector or field. i believe that what you're doing with that information, it's each firm, individual, kind of practice. i do believe that what we're doing in this case benefit everybody, definitely not just hft firms, but the wide public.
>> now, this is a partnership between nasdaq and cfe. it's strike technologies, the name of the company that's building out the series of towers. none of them would tell us what it costs. one published report says that subscribers will be able to get this information for about $20,000 a month, but we don't have any information about what this will ultimately cost when it rolls into service in a couple of months' time. >> we'll be watching and i'm also wondering what kind of impact negative weather would have on this as well. but eamon javers, thank you very much for the report. art is the new sport of kings and the new york met is about to be crowned king of kings with one of its biggest donations ever. let's get to a very artistic and very cultured man himself, robert frank. what are the details? >> thanks, mandy. you know this skit reminds us just how valuable these great works of art have become, not just to collectors, but also to museums, like the met. giving 78 works of art to the met, valued at more than $1 billion. there was no official bidding
war for these pieces, but you can bet a lot of museums were stalking these works. that's because there simply aren't. great works of art up for grabs. most are already in museums or private collections that are pledged to museums. robert black, financier, playing $120 million for the screen and the met, the momah. and this supply/demand issue is one reason we're bound to see record surpriprices in the spri auctions in manhattan this spring. >> it's just amazing. what does it say about the art market? >> well, i think the art market is bit like stocks right now. there's just money, a lot of money. they're printing more dollars, not making more picassos or la jeres and that must be needs a place to go. >> thank you very much for joining us, robert frank. still ahead, san diego's bottom line. [ female announcer ] it's time for the annual shareholders meeting.
♪ there'll be the usual presentations on research. and development. some new members of the team will be introduced. the chairman emeritus will distribute his usual wisdom. and you? well, you're the chief life officer. you just need the right professional to help you take charge. ♪ the battle of bataan, 1942. [ all ] fort benning, georgia, in 1999. [ male announcer ] usaa auto insurance is often handed down from generation to generation
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visit thenewny.com a record-breaking market is what we're having today. we've got the s&p and the dow at record highs. and what is really interesting here, folks, is that the rally is actually quite broad. you've got defensive names advancing at almost the same pace at cyclical names. that's what we're seeing right now in the markets.
i'm going to hand it straight over the brian, though, in san diego. >> i think it's fair to say, a lot of green on that screen. good day for the market. and we sort of feel it here in san diego, right? beautiful day. no humidity. and we really want to appreciate and thank sea level and island crime, the fabulous restaurant here that's hosted us today. debora scott, the chef here, she's the partner in a number of restaurant groups. 17 different restaurants here and hawaii and all these exotic locations. debora, thanks for having us at your fine restaurant. really do appreciate it. you and i were just chatting. you guys are opening up new places. how is businesses for your restaurant group? >> i think san diego is doing great. our economy, i think, is booming at this time. the restaurant business in san diego is really shining and i think as a whole, we've really come a long way in san diego. and i think we've got a comparable market now to some of the larger cities like l.a. and san francisco. we're really happy to be here. >> deborah, it's been a real pleasure for us to be here. thank you so much.