Transcripts For CNBC Closing Bell 20150115

Starting with the Swiss National bank. Not just the Swiss National bank well get to it with the huge shocking moves, in currencies, also the fact that india cut Interest Rates, even the bank of korea. What were seeing now is going to continue as europe then has to decide just what moves it will take next week folks. We are living in crazy times. A race to the bottom. Or as our friend in currency terms. The bond fire of the currencies. Exactly. Now people are starting to look at gold again. You have to wonder once this volatility settles down we will be able to get back to quote unquote basics or we are embarking on another experiment of historical proportions. Were he going to talk about all that and have a special show lined up to do that. Joining us jim grant by the way who called this on the swiss from the grant rate observer former Time Magazine chief Walter Isaacson and henry mcvie will give us his outlook for 2015. Looking forward to all those interviews. Dow giant intel is due out with earnings after the bell. Those numbers, the best instant analysis and the market response usually thats, you know, thats a big deal and it will be but after a day like today, its just another big moment were looking forward to here. I love the fact that at least were getting, again, a lack of correlation across the market here. You hate to see a situation where all of a sudden all equities are being lumped together and thats not happening today. The dow is off about 26 points. Its trying to turn positive bulgtsbut take a look meanwhile at the nasdaq, thats been far the underperformer down almost 1 . The s p giving up 7 points traders watching the intraday lows weve previously had below 1990. For now the s p holding in above the 2,000 mark. It was a volatile day for the oil market as well. Well talk about that coming up and gold very strong in part because of this story. Sara eisen joins us now with this explainer on why what happens at the Swiss National bank doesnt stay at the Swiss National bank. Crazy, crazy day in the currency market sara. Correct. This is one for the history books, bill no question about it. It starts with the Swiss National bank trying to protect itself becoming awfully expensive and difficult to defend this policy they had in place. A peg for the euro versus the swiss franc at 120. They did a complete policy about face and got rid of it. Certainly there was a huge reaction. Why now . The speculation is the European Central banks is gearing up for quantitative easing or stimulus as soon as next week. Mario draghi expected to pull the trigger which will weaken the euro lead to more money pouring into the swiss franc. That and its also been surging lately because of the mass exodus from the russian ruble. All of that would have made it more expensive and difficult for the Swiss National bank to keep this peg policy in play. So it said thats it enough without any warning, and that sent the currency up an unprecedented move 30 . Its called down here a little bit, down about 16 . That in itself is absolutely crazy and the mere shock of this announcement massive volatility not just for the swiss franc but spillover effects the swiss equity market, for instance, plunging. It could cause damage for the economy there. Exporters are a big chunk of that economy. Not to mention the effects its having here like a stronger u. S. Dollar and, guys more market volatility. Its already the name of the game for 2015 but now if we have Central Banks all of a sudden surprise us in ways they never before the questions is what is that going to do to the currency market and the ripple effects everywhere else . All right. Good setup there. Lets talk about this. Try to make sense of it all. Sara stay there as we break it down in todays closing bell exchange. With us contributor Heather Hughes from sun america funds. Hi. There he is. Jim lowell from advisers invistments and jason pride from glenmeade and another great looking tie, jim lowell. Rick san it tele by the way, lowell, you wore that on purpose, i can tell after the last time you were with us. Rick santelli start with you. You have spent a whole career on a trading floor. Youve seen your share of days of incredible volatility of surprises, of panic moves. Today was another one of those. Wouldnt you have liked to have been on that currency floor in switzerland . Absolutely. I would like to be in some of the households in switzerland that are close to retirement age and 10 of their stock portfolio just vanished. Im sure theyre really happy campers, probably going to vote to add more central bankers to the fray. It shows, were all talking about volatility in markets and nobody can argue against that. But i think its worth mentioning that we went years where, you know, our equity markets and many equity markets climbed up a little bit every day, seemed to ignore the fund mentals wasnt truly based on price discovery and now when we see things like oil and stocks acting like markets with a little extra steroid horsepower this is getting back in a rough sort of way to the real markets, it seems like nobody is prepared for it, nobodies like it and theyve gotten used to kind of getting the early word on where markets are going to go. The other assumption the swiss got a wink note or phone call from the ecb, im not saying i know because i dont, but i think theres a high probability that they could look like they have major egg on their face on the 22nd. If mario draghi stammers on this one theres a good chance the euro will sky rocket boy, the swiss franc will get a onetwo punch then. Thats exactly it. Thats why im wondering does people look to the u. S. And the equity markets here and say butter put my money there and ride out the storm or make it less attractive, do you think . I think right now you are seeing people flock to our treasure markets and, rick i do think you might know something. If the ecb does ease we know that makes our dollar even stronger. It may hurt the u. S. Multinationals but in the long run, people would flock to the u. S. As we did outperform International Markets by 10 last year and until you see a reversion, the world globally is still slowing down and europe looking at a potential recession again, the u. S. Is still the best place, maybe the best place for investors. Were the rock of gill brawl tore and all the investors of the world all trying to balance on it at the same time. Im sure thats going to end extremely well as well. U. S. Market as crowded trade. By the way, folks, those numbers were correct. You saw correctly the 10year at 1. 77 today and the 30year at 2. 40. Think about this people with a 3. 9 mortgage may think about refinancing. Not to mention people buying treasuries like they used to buy houses for the capital appreciation. Crazy. Jim lowell with this race to the bottom the continued race to the bottom are you going to buy gold . Thats one of the conclusions and gold has been strong . I would say this our Tactical Income model does have a position in gold but purchased it about four weeks ago. We will let that position ride in our tactical stake. Overall i wouldnt be chasing gold or currency. You know i havent been banging a big drum more like playing a tambourine when it comes to europe. Today we saw the European Forces get a windfall thanks to what the swiss bank did up about 2 on average. It points out again, the incredible benefits of being well diversified. We expect volatility to continue here, there, everywhere as we go through 2015. You like this move . I do. I think it tips the hand that switzerland thinks that stimulus measures are about to be not just per vare cated but delivered into the eurozone and on scale and if that does transpire, that will be a net benefit to those markets. Obviously its based on bad news and weakening economy, but weve seen how stimulus measures can at least help prop up a market in the interim time period. I ask because lately people have just been throwing up their hands in exasperations at Central Banks and saying theyre the ones exporting alls this deflation deflation. The other part of what the swiss did was cut deposit rates to minus 0. 75 . Were talking about this becoming more common the negative rates across all types of major countries if you will. So what does that mean for you as an investor . How do you put money to work in this environment . Well, you know weve been kind of saying that this waiting around for international and the International Economy was kind of like the good old play waiting for gooddo. Never coming around. Now you have the scenario where the Central Banks are starting to look and see the u. S. The federal reserve, got it right through this period, now were going to replicate what theyre doing ins these other markets and putting in place those plans. If we do that maybe well end up with a more healthy and balanced Global Economic environment. Perhaps thats a rosy outlook for this. Were inching in that direction. The swiss bank move is just another step in that direction. Theyre taking away things that shouldnt have been in place in the first place. That peg they had in place, that wasnt sustainable. 12. 5 trillion globally, 5 trillion here in the u. S. No doubt i recognize in 2008 the stimulus helped the Housing Market recovery and maintaining low rates here in the u. S. At what point, though, will the 12. 5 trillion come into question . Were not creating inflation. We keep throwing money at the problem and it hasnt worked and were seeing deflation or maybe a fiscal problem and not a monetary problem . Sara thats what were in. Were in a balancing between deleveraging on one side and carrying low Interest Rates so the excess balances can be worked down very, very slowly over time. Sara clearly this inflicts pain as rick was pointing out on swiss citizens who are savers and investors in that country. Who does it help . Why are they doing that . Im going to ask that simple question. Why are the swiss doing it. I asked you first. Theyre doing it to perhaps for selfpreservation, to protect themselves because what they see ahead its going to be harder and harder for them to defend this level, this euro swiss 1. 20 floor whether from russia, from anticipation of ecb action, they want to preserve their own credibility because its costing them an awful lot. 500 billion on their Balance Sheet could wreak havoc. It was always a controversial policy. That could be a risk. Its like 60 of their entire economy that theyre doing to defend this. Theyre trying to help their own policy credibility going forward. But yes, in the short term its going to cause pain for the swiss exporters. Think nestle, Novartis Michele was taurg about earlier, you saw the stocks plunge. To for exporters its going to be a problem. The euros stay weak its going to be helpful. Its going to help the european economies and exporters. Right. Desperately in search of economic growth. Rick thats why well give you the last work word here. People trying to wrap their heads around this the swiss, their currency was going up too much. Theyre trying to keep that from happening. As people piled into there as a safe haven, the Japanese Fighting this trying to stop people from piling in theirs. What if people start to additionally pile in here as a safe haven . I think that the dollar has to be going up depending on what happens on january 22nd and the dollar going up is an issue. An issue for multinationals. The count er dleractual if it makes the negative spiral of europe a little less that has to be factored in. Its very difficult to do so and for our one guest who said the u. S. Fed had it right i contend, you know me if if we switch and put ben bernanke and janet yellen in europe and mario draghi in the u. S. Given our economy versus theirs the outcomes would be the same. Our economy is different than europe its different than japan, different than china. Its a wonderful resilient economy. Yeah. I foe we got to go but again the swiss reacting at the time to how strong the euro was because the European Central bank wouldnt be as accommodative as the u. S. Thats the point some have made. The peg was a mistake in the first place. Yeah. Once again, central bankers think they put a Little Spring out of a transmission that has 10,000 parts and know what the outcome is going to be. The bottom line theyre all going in opposite directions and doing Different Things for the first time really since after the financial crisis because of these new challenges. Its going to be a mess in the making. It will be. Thanks guys. Monetary policy by economy. Global economy. God forbid. Thank you. Appreciate your thoughts. Sara good job. 45 minutes to go to the close keeping an eye on the dow drifting lower again. Off almost half a percent, decline of 77 points. Again, its the nasdaq thats the weakest, off 1. 2 here and the s p back below the 2,000 level. Do we have a jam packed show coming up to help your our alltime lineup wisdom chief investment strategist, james grant, influential news letter bearing his name i cant wait to talk with him about this Walter Isaacson with us today the bestselling author and ceo of the aspen insti today and henry mcvey telling clients to, quote, get closer to home. Dont touch that dial. Well be right back. You show up. You stay up. You listen. You laugh. You worry. You do whatever it takes to take care of your family. And when its time to plan for your familys future were here for you. Were legalzoom, and for over 10 years weve helped families just like yours with wills, Living Trusts and more. Visit us today for legal help you can count on. Legalzoom. Legal help is here. You just got a big bump in miles. So this is a great opportunity for an upgrade. Sound good . Great. Because youre not you youre a whole airline. And its not a ticket youre upgrading its your entire operations, from domestic to international. Which means you need help from a whole team of advisors. From workforce strategies to Tech Solutions and a thousand other things. So you call pwc. The right people to get the extraordinary done. Female announcer get beautyrest, posturepedic even tempurpedic mattress sets at low clearance prices. And through monday, get 3 years interestfree financing on selected models. Dont miss sleep trains year end Clearance Sale. Your ticket to a better nights sleep. Welcome back. Crazy day. These three major averages dont tell the whole story by any stretch of the imagination but here we are with the dow down 77 points, was down 130 at the low, s p is down 14 there is the dow, heating up all 30 components of the industrial average, twothirds of them are negative today the other third are higher. See a lot of that green is in the Health Care Pharmacy sector. Intel just turned positive and intel reports earnings after the bell. That should be very interesting as well. Looking forward to that. Investors meanwhile loving etfs these days or maybe just shunning active fund managers. 2014, money going into passive options Like Exchange traded it funds exceeded active flows in all morning star category groups. Bring in wisdom chief strategist is luciano. Tell me you have a swiss franc etf. Dont have a swiss franc but we have europe and hedge out the euro. Can get to that in a second. We saw last year weve been seeing that for six years over the last six years we saw 800 billion come into equity etfs while 300 billion came out of equity mutual funds. Just a continuation of a trend. Not to discount what you do but i maintain that as long as the market trend is up youre going to see that continue because people see that they can make greater gain there with fewer fees than you would have to pay for an actively managed fund than in etf or an index fund of some kind. The moment it reverses well see that trend reverse dont you think. It depends on how they do in a down market. You would think they could outperform the indexes because they could hold cash and be selective. What happened in 2008 didnt prove that out. So i think there are enough ufs out it there and Financial Advisors who know how to allocate. You can use etfs to help cushion a down draft. It remains to be seen what happens in the down market. Interesting to focus on the fact that the type of product people are investing in as opposed to the asset class. A difference trying to get out of a swiss trade or the stock market or a fixed income trade when swru to be in the mutual fund getting whatever the quote is on the funds versus the etf where you can trade in and out. That liquidity, the appeal to investors . Its hard to argue a Financial Product that liquidity is not important. You can trade intraday, keep fees low, taxes low, and see what you own, thats important. The market was up 200 points the other day and then down. You can buy and sells the etf in that window. The mutual fund you put in your order dont get filled until after the close. For all these reasons we think people realize its the 21st century, new technology and time to put away the black and white televisions. Talk to us about what you are, you know, trying to make sense of this rubiks cube as it continues to switch colors with Interest Rates going lower, currencies going lower for the most part stocks volatile where whats going on here do you think . The market is trading off oil. Typically look at an instrument take its cue, to some extent trading off the ruble in the sense of instability but what now its trading off is the january 22nd. The ecb will meet mario draghi romancing the market for seven months with words, now the market wants action. They want to see if they can seal the deal announce bond buying, announce qe how large its going to be and how you will implement it. The court in europe ruled yesterday that he has Legal Authority do it. The swiss are getting away from their peg. The writing is on the wall its coming. Deflation is taking hold in europe. We know when the u. S. Has done this whats happened. Interest rates have risen and in europe weve seen a massive compression of their Interest Rates ahead of this move. The second mario draghi does this is it possible Interest Rates around the world will move sharply higher some. It could because the news will be out. There is a big buyer coming into the market. Its understandable why people want to buy ahead of that. Thats why you see yields coming down. Not just below a percent, but below half a percent in four or five countries. Switzerland buy the tenyear and get paid four basis points. Tremendous amount of buying in advance advance. Once they sell and take in the new euros he will conjure up where do those go . Where does that liquidity go . We think its going back into european equities back into global equities, and hopefully liquefies the system and gives people a sense of, you know that theres way to combat deflation. The problem in europe not enough private sector or Public Sector investment in the economy. Hundreds of billions of dollars of deficit in terms of what should be invested thats not happening and cant get the kind of growth they need and the kind of job growth they need until that occurs. Theyre between a rock and hard place and mario the last one out. A guy who can have a solution or at least a bridge to the private economy gets stronger. At least one asset that went up is gold. With currencies doing what theyre doing, make it more attractive, have we hit a bottom finally on gold . Yeah. I realize if the dollar continues stronger thats a whole different story, but our friend Dennis Gartman owns gold in yen terms. Depends on what currency you have it against. May not be against the dollar you want to buy it but get it against the yen or euro might be an opportunity there. We think this is the beginning of the reign of king dollar. We think you had a multiyear bull market in the 80s and 90s, think were in the beginning of that now. A multiyear bull market in the dollar relative to foreign currencies. Where are you seeing most of the inflows . Dollar etfs people are buying . Gold . Going somewhere else . Money coming into a dollar bullish product and also seeing it going into europe and japan if you can hedge out the currency. Currency hedging will make a difference in the year ahead for u. S. Investor. I know someone who offers those kind of products. Luciano, thank you. Thank you. Luciano siracusano from wisdom tree which offers a variety of them. We have 35 37 minutes left in the trading session. The dow down 76 points. But again, Interest Rates are a big story today. Gold is a big story. The currency markets, huge story today. Our dominic chu will run through some of todays movers for us when we come back. Also coming up jim grant, founder and editor of grants Interest Rate observers giving us his take on swisss surprise to most. How it could affect wall street and your money. Stay tuned. Theres a difference when you trade with fidelity. One you wont find anywhere else. Onesecond trade execution. Guaranteed. Did you see it . In one second, he made a trade we looked for the best price and the trade went through. Do the other guys guarantee that . Didnt think so. Open an account and find more of the expertise you need to be a better investor. Why do i take metamucil everyday . Because it helps me skip the bad stuff. Im good. Thats what i like to call the meta effect. 4in1 multihealth metamucil now clinically proven to help you feel less hungry between meals. Experience the meta effect with our new multihealth wellness line. I love my Meta Health Bars. Because when nutritious tastes this delicious i dont miss the other stuff. New Meta Health Bars help promote heart health. Experience the meta effect with our new multihealth wellness line. Pricing pressure and sluggish demand will lead to a sales slump. Those shares down 13 . Leonard after the home builder reported first fall in quarterly margin and a further drop in 2015 as costs escalate. The stock down by 6 . That helped other Home Builders to the downside. Dr hortons, the big ones kb pulte to the downside. Gold miners soaring on higher prices. They are all safely in the green. Well end with ocwen financial all over the headlines rebounding today after Hedge Fund Manager Robert Chapman in the Mortgage Service company said the stock could double. Ocwen to the downside in terms of momentum but today buying in the sector. Back to you. I cant help but think we did a segment on whats wrong with the mining stocks. Today the answer is nothing. Yes. Just make gold prices rise. Thats all you need. Exactly. Thank you. Good to see you. 30 minutes to the close. Keeping an eye on those stocks and others with the dow off 55. When we come back International Monetary fund head Christine Lagarde tells our Steve Liesman she did not get a heads up. This was a bit of a surprise. I would hope that it was communicated with all the colleagues from Central Banks. Im not sure it was. Oh, boy. Jim grant behind grant Interest Rate ob ser ver will tells us if he was shocked. Hell tell us why when we come back. Have you heard of the new dialing procedure for for the 415 and 628 area codes . No what is it . Starting february 21, 2015 if you have a 415 or 628 number youll need to dial. 1 plus the area code plus the phone number for all calls. Okay, but what if i have a 415 number, and im calling a 415 number . Youll still need to dial. 1 plus the area code plus the phone number. So when in doubt, dial it out . Welcome back. Dow down 41 points was down 130, hasnt moved a whole lot here. The s p is down 10 points at 2,000 and the nasdaq is down 50 points. Other markets have been all over the map today. Heres price of gold up 23 or almost 2 right now with this race to the bottom of some of the worlds major currencies. Shock waves in trading rooms around the world. Steve liesman then speaking with Christine Lagarde the head of the International Monetary fund a couple hours ago. Great get, steve. She wasnt shy about expressing her displeasure with the swiss, was she . She wasnt. Im really interested you say at 4 00 you have jim grant coming up and he was not surprised by what the swiss did. Let me tell you who was surprised, stock investors were surprised around the world, currency traders were surprised, i was surprised, and Christine Lagarde, the managing director of the International Monetary fund, which is supposed to oversee Exchange Rates stability around the world, she was surprised too. This was a bit of a surprise. I would hope that it was communicated with other colleagues from Central Banks. Im not sure it was. And im going to reserve judgment on the perty nence of that move because we have not discussed it with governor jordan. Governor jordan did not contact me, which does not mean he didnt contact someone else in the organization. Its important to get the backdrop on this. Lagarde at every possible opportunity, trying to smooth what are certainly going to be divergent monetary policies around the world, has called on central bankers to be transparent and communicate with markets about whats going to happen and, indeed, weve been living in a time period here since the financial crisis where central bankers have been telling us what theyre going to do and doing it. This was probably the first Major Central Bank surprise that i can remember in the postfinancial crisis period. Guys . Thank you very much. Steve liesman speaking with Christine Lagarde this morning. Let me quote the september grants Interest Rate observers. September. We ventures Swiss National bank will be forced to permit the franc to appreciate and threeyear cooption on the swiss Euro Exchange rate somebody who made this call. You dont have to wait until 4 00 to see jim grant. Heres here now, grants Interest Rate observer that joins us. We look smart having you on today. I look really smart heeding one of the advice of one of my readers. You give credit where credit is due. What do you think . Well it is a day to take the measure of our infatuation with the central bank. Steve said there were surprises. Steve liesman said we have been free of surprises, but what we have not been free of is the constant intervention meddling and hand holding and levitating influence of Central Banks in our markets. I think what todays underscores is they the monetary manner and the powers that be can attempt to suppress volatility they can attempt to raise up certain asset values but they cant do these things forever and when they stop doing them when forced to stop doing them something noisy and sudden happens. The market will prevail. Yeah. The swiss is kind of an older case of simply trying to assert a certain level in the market and traders knowing that knowing they cant really hold it forever although maybe technically they could, just keep hitting it for it and making them pay. People believe the swiss. As recently as i think the 5th of january, president jordan the president of the Swiss National bank said that this peg is essential. And one reads this morning that nobody none of the corporate treasurers in switzerland was hedged. A lot of hedge funds hurt today were borrowing swiss francs at negligible Interest Rates and using the proceeds to speculate elsewhere. Why do you think he did it this way . If, in fact its he told no one ahead of time. Its a bit of a mystery. I had thought, i still think that the artificial suppression of these Interest Rates and Exchange Rates brings about contradictions and distortions within the affected economies that will ultimately force the hand of the economies to step back and allow nature to take its course. One of the distortions you saw, we see in switzerland was, for example, a fly away Residential Real Estate values great big up draft in the speculative values but now Interest Rates, of course, are going to be lower in switzerland before today you could borrow a 10year fixed Rate Mortgage in switzerland at 1. 8 . Wow. So if the swiss theyre borrowing property bubble as a result of this. Will get perhaps get bigger although the swiss have take an hit today. What about in the u. S. . Is it possible we see if its the stock market or our own excellent question. The fed has been quite explicit about seeking to raise up asset values in order to stimulate us all to spend more and, therefore, to be parties to the anticipated liftoff in economic activity. Well what if the earning power of the assets that the fed has lifted fail to keep up with the prices posted on the new york stock exchange. Thats a form of trouble we may look forward to. But the biggest to me the biggest distortion worldwide is extraordinary light show in Interest Rates. The british, the chancellor in britain, George Osbourne recently announced he was prepared to refinance all british perpetual, undated, debt going back to that issued in 1751 consolidated debt to the south sea bubble. These are unique times in Interest Rates. Whats an investor to do . Youre dramatic about this. Let us take a specific case. Bmw. Solid, you know, single a rated German Company makes automobiles, i think. Yes, they do. The stock is yielding 3 plus i think the 9. 5 times earnings reasonable equity value. Bmws just issued 10year notes at 1 . You could be a noteholder at 1 or a holder in equity with a chance of adepreciation if, indeed, this is the end of the world and the beginning of a deflationary collapse. Would you homds a hold a ford at 2. 5 . Im an expert on bmw. Put you on the spot. If we can generalize about stocks and bonds, the fta reported a new class of investpment class is the negative haven. It has this appeal. You receive less than nothing for your investment but, bill you get your money back at the end of the three, five or ten years, money that is conjured out of thin air by our ph. D. S running the Central Banks. Such a deal. Speaking of which, before we let you go the stage seems to be set for mario draghi finally, after much lip service these past several years, to finally enacting some form of quantitative easing like what weve been through for the last five or six years. Do you think thats going to happen next week finally . Yes. For what its worth. Much to your dismay i know. Not dismay. Its what is. I think this is the i think central bankers the world over are enthralled to the idea that by creating at zero costs the things they call money, these clouds of digital womanpen they can with those, those units of currency buy stocks bonds, real estate and make us all richer. Interestingly though we would be much richer if they had started that about 300 years ago. Doesnt work though. Right. Does that still, though, make this we havent seen the correlations or in the last couple trading sessions that came about bouts of panic the last couple years. You can still win by stock picking this year . I think so. Im a keen advocate of security analysis. Read the footnotes we say. It helps. Thats a great place to leave it. Great stuff. Always good to see you. Thank you bill kelly. Thank you for being here. Grants Interest Rate observer. Dont forget the forgotten depression. Thank you, bill. You bet. Toward the close, 20 minutes left. The dow down 59 points the s p down 12 back below 2,000 and the nasdaq down 56. Our great lineup continues, Walter Isaacson on deck, barney frank and kkrs henry mcvey plenty to discuss with all of them. The markets that call to break up jpmorgan apples future a lot to get to. How are we all going to fit this in . Stay tuned. [container door opening] what makes it an suv is what you can get into it. [container door closing] what makes it an nx is what you can get out of it. Introducing the firstever lexus nx turbo and hybrid. Once you go beyond utility theres no going back. Ameriprise asked people a simple question can you keep your lifestyle in retirement . I dont want to think about the alternative. I dont even know how to answer that. I mean, no one knows how long their money is going to last. I try not to worry but you worry. What happens when your paychecks stop . 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Stores and merchandise and inventory levels that werent right. Target is exiting its operations if canada. In the press release, he was unable to find a realistic scenario to get target canada to profitability until at least 2021. November 19th heres his answer when i asked what it would take to exit canada. The next six weeks are critically important to see how the guest connects with our brand during this important Holiday Season. Im going to analyze and assess every store in canada but every store has to improve. Were seeing Performance Improvement but were way behind where we should be. This is a critical Holiday Season for target in canada. Clearly he was serious about that. Target confirmed losses from the 133 Canadian Stores totalling 2. 5 billion Canadian Dollars on top of the 4. 5 billion of Capital Investment it took to get there. The retailer estimates it will cost between 500 and 6 600 million to discontinue canadian operations most will occur in 2015 or later. It will increase earnings in 2015 and cash flow in 2016. Investors are applauding the move today by pushing up those share prices. It wasnt a good thing to have done but seems like theyre doing the right thing with getting out. Back to you. Thats for sure. Courtney reagan this afternoon. Thats a stock thats told in a lot of board rooms and mba rooms how to get it right. The dow is down 53 points but just joining us its been a wild day in the currency markets, the treasury markets, yield on the 10year 1. 75 . The lowest since at least i want to say it was may of 2013. Yes, i think it was. Thats correct. Lowest level since may 2013 before the taper tantrum. Much more to come here on closing bell. As we work to the other side of that Walter Isaacson with his take on whats happening in the economy. Barney frank responding to jamie dimons saying banks are under assault and henry mcvey. You wont want to miss a minute when we come right back. Your dogs definitely got your back. But whos got your back when you need legal help . We do. Were legalzoom, and over the last 10 years weve helped millions of people protect their families and run their businesses. We have the right people onhand to answer your questions, backed by a trusted network of attorneys. So visit us today for legal help you can count on. Legalzoom. Legal help is here. Sunday dinners at my house. Its a full day for me, and i love it. But when i started having back pain my sister had to come help. I dont like asking for help. Dimon, jamie dimon,. Ten minutes left almost exactly the dow down 62 points the s p down 14 nasdaq down 62 points. 1. 3 . As we get ready for intels earnings by the way coming up at the top of the hour. Keith bliss from katonah company and bob pisani. Every day its yet another new major wrinkle and today, of course its the Swiss National bank cutting free their currency. The Indian Central Bank cut Interest Rates there as well. Whats going on . What do you do with this here . You must be loving the volatility. Waiting for it for four years now. Its a cascading effect of some troubling news. I mean theres no other way to put it. Its pretty clear to me that somebody whispered in the ear of the Swiss National bank about what the ecb is doing next thursday and they decoupled away from the euro and trying do some manipulation inside the currency markets. Its extraordinary they took their deposit rate minus. 75 to stave off the rally. We have a ways to go in the little downdraft. This is not the 10 or 20 correction we think but we could get into the 1965 level quickly. Im more concerned about whats going on in the u. S. Mortgage rates at 3. 75 . 3. 9 mortgage could refinance right now. Homeowners are down 5 . Lennar will make a 24 instead of 25 . Thats why Home Builders are down. Kb homes, something similar the other day. Yes. 5 with 3. 25 mortgage. Thats troubling. The other thing troubling is the banks. Bank index down 10 this month. Thats not normal. Normally in earnings season, banks down 2 . This is like orders of magnitude difference. Theres two problems with the story. Number one, Home Building is a Major Economic component inside the u. S. And of course you need the banks to rally as well. The Home Builders this is where the Lower Oil Prices are starting to impact. Lennar said that theyre worried about layoffs in the houston area because of low price of oil. The banks if youve been paying attention the yield curve flattening some time. I doubt it will get inverted which is a harbinger for a recession, not always but it is a harbinger. Tough to get inverted because short term Interest Rates are at zero. Those are the warning shots were starting to see. Look at wells fargo the problem here theyve got these great deposits sitting there, and they dont have a lot of loan growth. Net interest margin will be on the tough side. I neglected to mention art cashin was telling me although its not that gargantuan 200 million in stock to sell going into the close here. So you want to stay net short here . What are you going to do . Are you expecting the downdraft . Were down about 4 from alltime highs right now on the major averages. Typically we go down 5 and then see that bounce. I am absolutely expecting the markets to sell off further. Some will say thats an easy call given whats happened the last few weeks. Weve not seen any bounces like we have over the last three years. Real fundamental issues you need to Pay Attention to. One of the biggest ones ive cited is the decoupling of oil away from the s p. They were correlated until 2011. The fed went on a qe binge. Qe taken away. Something has to give there. If oil comes in 60 will the s p examine in 60 , i doubt it but some. Maybe it will change everybodys conversation. Funny you should mention. Were going to come back with these two guys with our closing countdown on another White Knuckle day for the street and after the bell, yes intel and oil services giantschlumberger. The number they hit the tape. Instant analysis and important market reaction. You are watching cnbc first in business worldwide. [cheering] everything okay . Were here because youre about to have a heart attack. Petes heart attack didnt come with a warning. Today his doctor has him on a bayer aspirin regimen to help reduce the risk of another one. If youve had a heart attack be sure to talk to your doctor before you begin an aspirin regimen. You just got a big bump in miles. So this is a great opportunity for an upgrade. Sound good . Great. Because youre not you youre a whole airline. And its not a ticket youre upgrading its your entire operations, from domestic to international. Which means you need help from a whole team of advisors. From workforce strategies to Tech Solutions and a thousand other things. So you call pwc. The right people to get the extraordinary done. I take prilosec otc each morning for my frequent heartburn. Because it gives me. Zero heartburn prilosec otc. The number 1 doctorrecommended frequent heartburn medicine for 9 straight years. One pill each morning. 24 hours. Zero heartburn. Being a keen observer of the world has gotten you far but what if you could see more of what you wanted to know . With fidelitys new active trader pro investing platform, the information thats important to you is all in one place, so finding more insight is easier. Its your idea powered by active trader pro. Another way fidelity gives you a more powerful investing experience. Call our specialists today to get up and running. About 3 30 left to the charts to show you what happened today. A quick recap. Stutter step open this morning. A lot of volatilities dealing with the surprise announcement of the Swiss National bank to let their currency float adrift south midday with the dow down 130 points at the low of the day and heading back down down 109 on the close at 17 317. The tenyear the yield now 1. 74 on the tenyear. Go back a couple years to see anything lower than that. The 30 year is at 2. 39 right now. Yes. Oil wti, another volatile day there as well. Down 2 and change or almost 5 . Back to 46 and change on wti oil and one last one, what benefit from all of this . How about gold. Up 24. Some who feel and im going to ask you about this gold up 2 to 1258 some say maybe this is a buy signal for gold. Even though the dollar is expected to strengthen other currencies are having a race to the bottom. They are. You have to put your money some some place. Gold has turned bullish here. Bearish for some time but the play is, i spoke to a lot of people today, the play is where to put the money, put the money in gold. Primarily because theres so much uncertainty in other Asset Classes as were working through this. Isnt it interesting. Switzerland buying in gold with the weak dollar. Gold whether its a risk asset or a hedge right now. You know in a deflationary environment which you could argue we are in isnt it ironic gold becomes the asset of choice. Yes. Up is down and down is up our world is twisted around right now which makes the analysis inside the markets with whats happening with the equity markets different. Everything interconnected, interrelated. You have to Pay Attention. The big day a week from today, listen to Mario Draghis comments very carefully. What im worried about were rotating through a succession of weak sector. First part of the year Energy Stocks and material stocks drag this down. Now the bank stocks are doing it. I wanted to put up the kbe. This is the bank index, swing over and take a look on the kbe, its down here this is today, but its down 11 so far this month and its been a major problem now because those are really big sectors of the s p 500. We cant lift off without that. Hopefully intel will Say Something about the pc business. Thats one of the reasons they did so well. Pc business stronger than people expected. Intel one of the best performers next year. We will get earnings in a few weeks. Intel has been a stellar performer lately. Technology. Well youve seen that in the trade today. Its been very defensive day. Youve seen the areas that have rallied, because copper was way overdone. People have been pouring into that. Technology utilities, those are the sectors up today. People are nervous. All right. Thank you. See you guys later. Keith, thanks. See you, bob. Down just under 100 points on the industrial. Intels earnings a lot coming up. Walter isaacson here for the full hour. Barney frank answers jamie dimons comment that banks are under siege by regulators in this country. All coming up on the second hour of the closing bell with kelly evans. See you tomorrow, kelly. No thank you. Welcome to closing bell. Im kelly evans. As we hit 4 00 what day it has been not just on wall street but in Financial Markets around the world. Lets begin with where were finishing, looks like the dow going out with another triple digit move and decline. Going out with a minus of 102, or about 0. 6 . That makes it the outperformer of the big three today. The s p gave up almost 1 . Look at that. Closing at 1992 going towards those lows from a couple sessions ago. The nasdaq meanwhile off 1. 5 and as you heard, we are waiting for earnings from intel in just a couple minutes. In the meantime bring in todays panel, joining me now, Walter Isaacson from the Aspen Institute and author of the innovators how a group of hackers geniuses and geeks created the digital revolution and with us jon fortt, and cnbc contributor John Najarian. Welcome to you both. For more on todays Market Action tim seymour joining the conversation as well. Welcome, welcome. Jon fortt, whats going on with the nasdaq today . You know maybe its the best buy fumes, right, because best buy saying they dont expect consumer demand to really be there heading into the rest of this year. You take a look gopro down 7 . Kind of accelerated into the close. But twitter also down 7 there at the end. Not that these are all nasdaq stocks. Alibaba, which, of course, trades here at the nyse. Maybe reaction to that i dont know. The important thing is the intel numbers we expect to get any minute will give a sense of the health of the core pc market. Corporate buying because intel has highlighted data center as an area they expect to grow at 15 compound an fuel growth rate for at least the next couple years. Is data center keeping up if the consumer isnt. We will get to those results in a second. Walter, when you think about some of the moves weve seen whether its from this the swiss, the indian central a lot of stuff happening, these wheels are plunging. I was wondering what your perspective is on how serious an event these historic yields are. Starting to get black swan it territory. More than two years since youve had five Straight Days of the nasdaq declining like this. The swiss move is uncertain because youre supposed to be able to count on the swiss and they didnt give much warning on this. Next time around when they say were going to protect, you know, the swiss franc not going to believe them as much. Thats a great point. We will get back ifto this in a second. Josh lipton has the details now. Hi, josh. Kelly, so intel just reported, get you the numbers, intel reporting 74 cents on 14. 72 billp. Analysts were looking for 66 cents on 14. 7 billion. The divisions, the Pc Client Group revenue, 8. 9 billion lighter than what the street was looking for, data center, 4. 1 billion better than what analysts were looking for. The closely watched gross margin 64 . And mobile and communications that group, operating loss at about 1. 1 billion, about last quarter. Keep going through this release for new details as we get them. Back to you. Thank you very much. Be sure to tune in tomorrow by the way on squawk box, intels Ceo Brian Krzanich will react. Reaction from our panel. Dr. J, what do you make of it . Overall looks pretty good. Guidance also pretty good. Pretty strong. Looks like the q1 gross margin was i believe 60s plus or minus. Thats a good guide out of intel i believe. So bottom line number pretty significant beat. These are companies that normally beat by a penny or two and here intel is beating by, you know, some accounts as much as 10 cents. Jon fortt why do you think shares are weaker . I think the guide that a lot of people were looking for was closer to 13. 8 billion at the mid point and got it to 13. 7 plus or minus. Maybe a little conservatism there. Also the gross margin being at 60 . Maybe some people are reacting to that, though intel did indicate Gross Margins would be lower in the beginning part of the year expected to rise toward the back end of the year as the new manufacturing process starts cranking. Got to hear on the call what it is thats causing this. Does some of it have to do with foreign Exchange Rates, things like that. This is going to be a key call because Everything Else weve got going on. Walter . When you look at the longer it term for intel the important thing is they are getting into the very small chip market. The core. With the core. The discover of the cork would be very proud he is now also a micro means hes in a wearable talks to your dog or something. Thats the point as we covered the wearables. I will be there with the onlines or apple watch as soon as you have the internet of everything, and you have chips embedded in everything from your ice maker to eye glass, its important that intel, which sometimes missed out to amd on small chips is now doing well there. Isnt it amd chip in the fit bit . Correct. And thats been a huge product category to date. We have to wait for the watch. By the way, if they miss some of the mobile when everything went to mobile i remember steve jobs having the tug of wars with his friends at intel, thinking they were too much of a battleship to turn around. He goes with his own arm type architecture. I think now youre seeing intel make sure that its not going to keep losing out on wearables and the internet of everything. Right. Arm based chips in a lot of these devices is wearable. Im sorry not amd. Amd made a small chip. Both of them there. But, you know, intel continues to lose money on mobile. You know consistent with expectations in this report, they say revenue in mobile negative 6 Million Dollars. The Pc Client Group the revenue down 3 sequentially not exactly a blowout type Holiday Quarter for pcs, if people were expecting maybe a little bit more hope for more than the guidance. Intel pretty much nailed their guidance. Things are going as they said but not that much better. Do you think that there will be a pc market going strong or just saved by windows 10 upgrades . You know, that is the question. I do not do people want windows 10 . People want windows 10 because they dont want windows 8. We have to see if windows 10 fixes some of the interface issues with the original windows 8 started to fix with 8. 1, 8. 2. If windows 10 is ready for the enterprise which what is you expect to see from Satya Nadella nadella, but i think here in intels numbers theyre doing what they guided to but given we heard all this caution from best buy about tvs, the pc ecosystem, now were seeing these numbers from intel that kind of line up with the retail numbers we had yesterday, yeah you know, its pretty good but not that great and by the way, the guidance is pretty conservative as well. Was that you, sorry, please share your thoughts as well. Jon, given what the stock has done. The stock is up 40 year over year, now trading at a 17. 3 multiple. Its fine. But its, you know a place and people are talking about how intels, you know, the delta between intel and the overall growth with the pc business is very good but overall, pcs are not growing. You get to place where the bar is very high. The company doing a lot of things right. They are now effectively the number twos guys in mobile processing. Theyre going to be one of the last man standing. Thats great news. The stock needs a lot to push it higher. Thats a good point. One of the best performers in the dow. What about the flip side the apple trade, for example, we saw pressure on apple but to share anecdotal evidence i walked into best buy to get a chrome book and nothing like that quite worked and none of the higher end laptops with windows 8 quite worked and i walked out with an apple, dr. J. I dont know at least you walked out with something. A lot are doings just that. The apple retail experience, whether its online through the app store, through itunes or whether its walking into a brick and mortar with that gorgeous glass that steven helped design that walter wrote about hows he set it up with the florentine the gray slate lines. Yeah. Unbelievable. The florence. And the experience is just superior than the experience you get in the other retailers in the electronics space. But kelly, 2 decline out of intel, in the afterhours i dont i dont have a position in it right now. But they were pricing in basically 1. 50 or thereabouts with the options the calls and the puts so its only moved half of what that priced in through tomorrow so if it stabilizes here they come in and buy it tomorrow. Well leave it there. Thank you. Tim appreciate your time this afternoon. Tim seymour coming up at 5 00 and theyre going to be talking to a top analyst who says were in the golden age of biotech and theyre going to it tell you what you need to know to get in now. Dont miss that. We have a news alert on the antiterror raid in belgium in the meantime. Dominic chu joins us now with the details. We want to bring you up to speed on a developing story out of belgium. Belgium police connectducted a vooers of raids targeting an Islamic Group that they believed were prepping to launch terror attack ossen a grand scale. Youre watching a video taken during one of the raids. The distij sound of gunfire being exchanged. Heard it again. It happened throughout this video. Two men who opened fire on police have been killed. Another suspect has been detained. All three were belgium citizens. The raids happened around the capital city of brussels. As you can see there verviers outside again in belgium east of brussels. There is no clear link to the attacks in paris believe officials. Now there is more of a focus however on whether these islamists had possible links to fighting thats going on in syria right now. Details are still being gathered by officials and more when they become available. Right now thats what we know and again, what we dont know about whats happening in belgium. Back over to you. Dominic chu at headquarters thank you. The Swiss Central Bank making moves. Will gold be the winner in this bond fire of the currencies . Thats next. Also ahead if the regulators at the end of the day want jpmorgan to be split up thats what will have to happen. We cant fight the federal government. Former congressman barney frank coauthor of the dodd frank legislation responds to jamie dimon later on the closing bell. Stay tuned. Your dad just kissed my mom. Turning two worlds into one takes love. Helping protect that world takes state farm. And so theyre looking at a shocker from the swiss today after the nations central bank dropped its currency peg to the euro helping the franc sky rocket. This could help gold rally. For more cnbcs jeff cox joins me now with Larry Mcdonald from new edge usa. Welcome to you both. Why is gold suddenly regaining its lets look at the move by the Swiss National bernanke as a segway into National Bank as a segway. This is a sign theres a belief that mario draghi is basically going to carpet bomb the markets with committeequantitative easing. Its going to help the gold trade. Couple other things gold is going to be a basic safety play here. I think it wins in an inflation theirry or deflationary environment. Its going to be looked at as basically a port of call. Finally, Central Banks, russia buying a ton of gold india lowered very important trade import barriers to gold a lot of things working in its favor. Do you buy gold because you think europe will be the latest central bank to effectively lower Interest Rates . That this is a global currency race to the bottom . Well the first thing you do with gold is buy it when everybody hates it in november i mean we were bullish on gold on the show and i mean just the tweet stream you can tell by the attacks when youre right. The vitriol. But here you have a central bank in switzerland that whose Balance Sheet is 85 of gdp of the country. 500 billion versus 700 billion, essentially a hedge fund and they cut rates to defend they cut rates. Didnt want the currency to strengthen as much and the currency still strengthened. People are saying these guys not only out of bullets but losing a little control. But if they cut rates but the currency still strengthens wouldnt that suggest that maybe you dont want gold. Dont you only want gold when the currencies are diving to the bottom. But its the fact that the stock market lost 15 in a couple hours. Think about during the financial crisis, i think the worst day we had was like 7 or 8 on percentage bases. Stocks like nestle and some of these other ones novartis off 15s . Sends something to the market. Makes people want to buy gold because of the uncertainty. Part of that economy thats not the hedge fund that small part things like novartis and nestle, under pressure if youre going to try to artificially do things and back off. But you said something really interesting running out of bullets. Do you think that the era of Central Bank Interventions is starting to wane now . I think, you know, i owe this to mohammed owe hairen stuck with me on october 15th and he i would say that whats happening the longer you do the qes from all the different banks, youve had 9 trillion total of stimulus the longer that goes on when they when they do a little tinkering you get these outsized moves. Were starting to lose control but more importantly walter the fact that the small anything they do because theyve been done so much upsets the market. Huge effect. Bigger and bigger effects. What about the idea that actually were starting to see new activism all over again from Central Banks and the swiss today or europe next week indias surprise rate cut last night, could this be the beginning of a new round of Central Banks trying to do even more to combat deflation . Its a great question kelly. Almost look at it, though more of like almost a blow off top if the era of Central Bank Intervention. I think this is sort of like the hail mary pass now coming from global Central Banks that were in this environment of extreme world maybe not extreme deflation, but at least disinflation amid all of the incredible amounts of Central Bank Intervention weve already had. I think that, you know yes, you are going to see another round of it. Ultimately you will see you are pushing on a string and whats beyond that is what the market has to think about. I think hence the popularity of the gold trade. Dr. J, are you buying gold . Do you like gold here . Not particularly. I mean i do listen to the smart guy sitting next to you when he pounds the table for it because hes been right a lot. Not in general i havent been after why . Not a trade you think works or just a trade you dont philosophically like sp. I like any i would trade any asset class i could. If there are two flies buzzing around something maybe i would bet on which one it would land on, but what i see here is when the s p is making 80 handle move overnight because thats what happened here i think you cause that kind of volatileity causes people to run for the hills. Do you think thats going away . I think theres gold in those hills, doc. I think for longer. Further gold in those hills, doc. Yep. There might be. There might be, indeed but the people that see this and are fearful of it that dont want to buy a bond thats yielding 1. 81 where our, you know, treasury was today or whatever i think those people chased into what larry was talking about and went for gold. Thank you both for being here. Jeff larry, appreciate it. We would hop over to schlumberger earnings. Quarterly results after they raised their dividend earlier, what can you tell us . Hey, kelly. Schlumberger coming out with earnings and looking at x items 1. 50 per share for the Fourth Quarter. That beat the street estimates by about 5 cents. Also looking at revenue, 12. 64 billion for Fourth Quarter. Just about in line ever so slightly below the 12. 67 billion that analysts were expecting. Now im still digging through all of this report but a lot of comments here, a lot of comments about the Global Economic environment and about falling oil prices. Schlumberger saying that their performance for the quarter was driven by north america where revenue grew 16 and International Area growth 4 was led by 10 increase in middle east and asia revenue. Taking a look at some of the other comments in this report saying that in this uncertain environment we continue to focus on what we can control. We have already taken a number of actions to restructure and resize our organization that has led us to record a number of charges in the Fourth Quarter if youll recall we got note that they were cutting back on their ships. They are cutting back on jobs. Im going to continue to comb through these numbers and see what else it has to say about this falling oil environment. Meanwhile looking at shares they are up about half a percent in the afterhours trade. Back to you. Thank you very much. Reminder to viewers as well the call wont be until tomorrow morning. Schlumberger up a little bit after hours on that report. And meanwhile, Jpmorgan Ceo Jamie Dimon suggesting the big banks are under assault from theshe federal government. Does he have a point . Former congressman barney frank coauthor of the dodd frank banking bill joins us with his response. Is the u. S. Still the best house on the block when it comes to investing. Kkrs henry mcvey thinks it is and time to start putting more of your money here where you live. Ameriprise asked people a simple question in retirement, will you have enough money to live life on your terms . I sure hope so. With healthcare costs, who knows. Umm. Everyone has retirement questions. So ameriprise created the exclusive confident retirement approach. Now you and your ameripise advisor. Can get the real answers you need. Start building your confident retirement today. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Banks are mostly reporting disappointing earnings this week. Hello. Regulation continues to be an issue and a call with reporters yesterday Jpmorgans Jamie Dimon lamented the position banks are in. If the regulators at the end of the day want jpmorgan to be split up thats what has to happen. We cant fight the federal government if thats their intent and we think we can earn a superior return still versus other banks and carry the higher capital and modify our Business Model over time without taking drastic action. Joinings us with his take is barney frank, former chairman of the House Financial Services committee and coauthor of the dodd frank banking bill. Great to have you back. Thank you. Thank you. First of all what would you say to jamie dimon in response here . Ive had good relations with him. I guess hes under stress. For him to say that this is is this america . I hope he understandably regrets that. Theres a philosophical difference here. His major complaint that i have heard and read is that hes facing too many regulators. Thats an inevitable consequence of his decision to be in a lot of businesses. Look theres a Current Issue about the bill that just passed that undoes the requirement that a banks thats involved in complex derivative transactions take those outside of the bank. The banks got a bill through with the republicans help to leave them in the bank. How did he expect to have one regulator. Hes a bank engaging in complex security transactions which involve the commodity futures trading and the s. E. C. Who is the one regulator he thinks can do it . You dont think there should be one regulator . For everybody . For no. Listen, should there be a more centralized regulator overseeing these banks which are so important . No. Not if they want to multiply activities. What jamie dimon is in effect suggesting is that we should go back to glass steagall and split them up. If you are a bank and also doing commodities and you are doing sophisticated other securities transactions, who would the one regulator be . Should we not have a Security Exchange commission or regulate the derivative activity of some people and not others. This is a direct consequence of the decision to diverseifydiversify. Here is a summary. I read jamie saying in the old days, you dealt with one regulator when you had an issue. Thats it. I dont want go back to the old days. The old days not so old is a series of unregulated irresponsible actions with derivatives that caused a great crisis. Congressman frank, its Walter Isaacson. Good to see you again. Hi. I have a simple question out of what you said about jamie dimon. Do you think that the era of the big bank is coming to an end and that maybe we shouldnt stay in this period of history in which there were these big banks that did everything . Walter i appreciate that but im more of a market guy than some realize and one of the big objections many of the banks had to what we were doing we were forcing them to go more into the market. For example, saying that derivatives shouldnt be done over the counter in the dark. They should go on exchanges where possible. I dont want to make that decision. I think thats one that should be made by the market. I will say this when we had the problem with the london whale, jamie dimon is as good a Bank Administrator as we had and when the derivative abuses or mistakes came up, what struck me was first they said it was maybe 2 billion and then 6 billion and then 8 billion. Jamie dimon had to acknowledge he had no idea what was happening there. And there is a legitimate question as to whether the scope of activity has gotten too big for even the best and smartest like mr. Dimon. Thats a decision the market should make, not the government. Were starting to see the market assert that because some of the analysts that cover banks like jpmorgan are saying perhaps they make more ceps separate than together which raises arch interesting point back to the crisis and one youve looked at before. If there isnt a bank with a big enough Balance Sheet to rescue another one thats failing, not somebody there to step in in if something goes wrong, that only leaves the u. S. Government or i guess some of the newer resolution authorities that are out there, doesnt it . Are you worried thats a very good question. They might be left hanging the next time around. Heres the answer. Thats one of the things we did. One of the major advocates of the system we adopted was hank paulson, george bushs secretary of the treasury supported by sheila bush and ben bernanke. Youre right, there wont be any one big bank but what we do in the legislation is frankly draft all of the others. Heres the way it works. If an institution cannot pay its debts, unlike five years ago, we dont have to choose between paying none of the debts and all of the debts. The federal government steps in through the fdic which knows how to resolve failing institutions pay off only as much of the debt whatever percentage is defined in a fair way to keep it from causing further contagion and then the secretary of the treasury is mandated by that law to recover every penny that the federal government had to advance from Financial Institutions that have 50 billion or more in assets. In other words youre right that no one big institution can do it so you then levy on all of them which have benefited. By the way, i know some of the republicans have argued oh, the system you have when you designate it as too big and covered, tell that to the people at metropolitan life who were suing because they are so upset about being designated. Met life is suing it doesnt want to be designated as too big to fail its a big insurer and your response is . It shows that being designated means not that youre getting any great special treatment, but that you are subject to higher Capital Requirements and stricter regulation. By the way, its not just Insurance Companies who represent that. There are a couple regional banks approaching the 50 billion asset mark and their stock is being hurt because the market understands, being designated as systemically important is not a good thing for you, it means more restrictions, higher capital which means you owe the leverage on what you control. This is the outcome you wanted . Oh, yes. That people try very hard a, not to be designated but if they are, to understand this is no ticket to a free ride. Congressman barney frank here to weigh in thank you so much. Good to see you this afternoon. Thank you. The stock market on a rough ride this year. My next guest saying dont bet against the u. S. Here to explain why straight ahead. And zuho downgraded apple in sales of the iphone. The stock rallied more than 40 last year but under pressure lately. Walter isaacson chiming in on all things apple coming up on the closing bell. Rade. Sound good . Great. Because youre not you youre a whole airline. And its not a ticket youre upgrading its your entire operations, from domestic to international. Which means you need help from a whole team of advisors. From workforce strategies to Tech Solutions and a thousand other things. So you call pwc. The right people to get the extraordinary done. Female announcer during sleep trains huge year end Clearance Sale, get beautyrest, posturepedic even tempurpedic mattress sets at low clearance prices. Plus, free sameday delivery, setup and removal of your old set. And through monday, get 3 years interestfree financing on selected models. But hurry this special financing offer ends Martin Luther king jr. Day. Dont miss the year end Clearance Sale at sleep train. Your ticket to a better nights sleep. Welcome back. U. S. Markets have certainly had a bumpy start to the new year. Next guest says the u. S. Is the best place to invest and advising investors to put money closer to home. Kkrs henry mcvey joins me now. Welcome. Thank you. So glad to be here. Im concerned about everybody around the world loving the u. S. Loving it more given some of the moves overnight and piling in. Are we talking about almost a too good to be true story for u. S. Equities . Look i think overall, our title kind of getting closer to home is pred cated on a couple things. One were seeing a flattening of the yield curve. Two, were almost 70 months into an economic expansion. I would say three is were trying to transfer 2 trillion from commodity producing countries to consumer countries probably not going to happen without a few bumps in the road and when you take a step back also six years of positive equity returns, so do i think the u. S. Is a good place to be yes, but i think our message is the volatility will go up you have to pick your spots, also when you look right now, i think in the near term you see energy and financials struggle against that backdrop. Long term probably going to be okay. What sectors are you picking if youre picking them some. I think what we try to do is more of a themebased approach. I think the things that were most focused on as a global firm right now, i would say, one, is some of the energy dislocation but thats a walk not a run type of opportunity. Two is were still seeing a lot of opportunity in europe. And then the third thing is i was recently in china right before the new year and, you know, that is structurally slowing and theyre shifting to be more of a Service Based economy than a manufacturing economy. Theres a lot of things that are going to have to take place for that to work without some bumps in the road. Look, so what i think the message from our standpoint is were trying to harness the volatility. Most of our capital is locked up from somewhere between 5 to 7 years. Were not trading on a one month, you know, idea. So were digging in and finding things to do but weve been up six years in a row and you have to be respectful of that. I wonder what happens because theres this theme about deflation, collapse in oil prices and other commodities and agriculture the softs whether its that or just final prices in electronics and all these other parts of the u. S. And in fact the global economy, add it all up and what is an investor supposed to do . These are kind of extraordinary times. Yeah. First thing i would say i think that the Consensus Forecast for inflation is way off. Its too high. Too high. Our base view in this country. Is about 1. 5. We think its about 70 basis points and in europe we think its about 40 basis points. The consensus about 0. 6. Things in our Vantage Point people are too optimistic given the outlook. Look at most of the wall street analysis what does it mean . Our base view would be is you should focus on the german boonds not the treasury. Treasuries have not traded 00 basis points above that. The long end is pretty pinned down against that backdrop what i would say is there is a lot of opportunity both in the liquid market and particularly in the ill liquid market to lend where if youre a pinch in or individual investor lets say youre trying to get 7 to 8 in a world where the ill lick quitty premium is 3 to 400 basis points thats a big deal. If you can underright credit well, theres a tremendous opportunity and also providing segment credit to a segment of the market d. Thats it. This is a nice outcome, right. All the pensioners of this country funding Small Businesses who need access to credit. How do they know theyre doing that in a sound way . Incumbent as we my background covering financials a long time weve moved to a world where the dealers inventories are down 70 to 80 and not the same liquidity in the market. Complex, originations tend to move off market and i think its incumbent that the funds that do that, dont employ a lot of leverage. What got us in trouble in 2007 was leverage in arrogance. Thats a toxic combination. As we go forward what we need to do as an industry is make sure we are providing that access to credit but not cog it in a dramatically levered format. Everybody has piled out of the commodities trade supposed to help them get to 7 and 8 . What will they pile into . Can you give us a sense now so we can figure this one out . Look i think right now, the basic message, people are still going to search for yield and i think our premise whether you look across public equities credit or commercial real estate. More real assets infrastructure parts of reals estate but they want yield growth yield and growth but theres got to be a component where its just not a high dividend yield but some underlying growth to that and i think when we think about what were trying to do with the companies were partnering with or the securities were buying thats what were trying to deliver and i think theres still a pretty big market there. Think about europe i think 70 of european stocks have a dividend yield above their credit or bond yield. Corporate bond yield. Thats pretty extraordinary. Even when you go to asia there are a lot of good cash flowing companies that have sound capital management. Its more of a hunt and peck than where we were in a beta trade, but still a pretty interesting environment out there. Well keep hunting and pecking around. Thank you for being here really appreciate it. Henry mcvey this afternoon. Up next Walter Isaacsons book on apple and steve jobs. It was a best seller. Jon fortt covered the company for years and John Najarian is invested in it. What better group as apple faces new product launches and investor concerns. Oil having an impact on the high seas. The drop in price is putting oil tankers in dry dock but that is not the case. We will talk to the ceo of a shipping firm just ahead on the tanker trade when we come back. Welcome back. Lets start with our Courtney Reagan and a market flash. Check out shares of priceline, the stock closing below 1,000 a share for the First Time Since october 2013. You can see there that stock is trading down a little bit there at 998. 25 hitting an intraday high of 1378 and march 6th down 380 or about 28 . Thats a tough year for priceline. Kelly . Certainly is. Thank you. Meanwhile were going to talk a little apple because downgraded today about from buy to neutral from mizuho. That firm was pointing to disappointing sales expectation for the apple watch expected to come out before the end of march and probably never had a panel on the show more suited to talk about apple than this one, Walter Isaacson who wrote the book about steve jobs. Dr. J understanding the apple shares in and out. Are you surprised by the weakness that weve seen here in the concern today from mizuho . Not at all. First of all i want to say you have to separate apple the company from apple the stock. Apple is at its lows in mid2012 i believe. Right when they were coming out with 2013 right when they were coming up with the great ideas that are fueling the stock right now. What the stock does really doesnt reflect on what company is doing at all. That being said theyre heading into a tough cycle. Iphone 6 has done incredibly well. The he have increased the weeks of inventory they hold which means that when you get the comparison one year to the next its going to be tougher for them because theyre actually pushing more phones out into retail out into the channel, than they have otherwise. Current success. And everybody expects everything apple makes to be a big hit from the second it hits shelves and thats not historically how apple operates. They tend to start slower put the watch out there, maybe at higher prices to begin with. There will be shortages, wont sell necessarily tens of millions right off the bat so investors might be disappointed by all of those things if they happen though might be good for the company. Walter are you buying an apple watch . Im going to get an apple watch and i think people who have the iphone 6 selling like crazy they will want the apple watch. People want the apple watch are going to get the iphone 6. I want the apple watch because i like wearables, things that intimate with me. I like to flick and do things and use apple pay just by flicking my wrist. I think that the whole history of computing over the past 70 years is make it more intimate more personal more fashionable, make it more beautiful, and where do you get there . You get apple. When you Start Talking about that. Making the flag stone floors, you know, out of the siena marble from florence everything about it is beautiful. Were entering an age coming out of the recession and all where youre going to want really beautifully made things and, of course, ill want that watch. So do you. And then dr. J, are you buying and investing in apple here . I am not for the reasons that jon mentioned. Not because i dont think that apples a tremendous company. I do. If i have to buy one of these Tech Companies right here apple would be on my short list. The reason that im a little have a little trepidation is that i think the street will be unimpressed by the sales of the iwatch. Are you going to buy one . Do you want one . No. I wear this kind of watch. Im not into that. I dont need one more piece of hardware. Walters got two different phones over there. Blackberry and an iphone. And hes to have an iwatch as well. I dont need all that. I need one and it is an iphone for all the apple people out there. Dont want to hold up your wrist and zap at the starbucks line. So much tougher to take this and zap it with this right. One of the things apple is good at and it came from steve jobs a perfectionism and almost desire to control is making an ecosystem like a nice world garden. If youre in apple pay easier to have apple watch the iphone. Yeah. Use the app store. After a while, its comforting to be in an ecosystem its it grated and works. Are you going to buy an apple watch . Chances are, chances are i will. Just because, you know, i got to have the stuff. But you also got to think, regardless, on a fundamental basis, i mean the apple watch is not going to move the needle that much for apple out of the gate. 5 billion max if it meets some of these projections. The iphone they have created is one of the most amazing and monumental Consumer Products of our time. That product alone is close to 150 billion in revenue er year. Not talking the market cap of a company, just talking the revenue that comes from the iphone. So moving the needle has to be somewhat with that and maybe its a year of sentiment where people see iphone sales flattening out and get spooked. People see the watch not selling as fast as they hoped, people get spooked. Dont worry about that if youre a fan of the Company Versus the stock. Final word, dr. J. If the stock broke 100 i would be a lot more interested. Thats 6 or 7 from where it is right now. Here i think its got a little squishiness because of that what i think will be a soft introduction with the iwatch. Fair point. Oil prices at a multiyear low along with gasoline. How is the oil shock impacting the tanker industry. The ceo of ardmore shipping joins us when we come right back. Out of nowhere a pickup truck slams into your brand new car. One second it wasnt there and the next second. Boom youve had your first accident. Now you have to make your first claim. So you talk to your Insurance Company and. Boom youre blindsided for a second time. They wont give you enough money to replace your brand new car. Dont those people know youre already shaken up . Liberty mutuals new car replacement will pay for the entire value of your car plus depreciation. Call and for drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. Switch to Liberty Mutual insurance and you could save up to 423 dollars. Call Liberty Mutual for a free quote today at see Car Insurance in a whole new light. Liberty mutual insurance. So, how do you feel about cash back . I would not say im into it. But lets see where this goes. [ buzzer ] do you like to travel . Im all about free travel, babe. Thats what i do. [ buzzer ] balance transfers you up for that . Well unh. Too soon . [ female announcer ] fortunately, theres an easier way, with creditcards. Com. Compare hundreds of cards from every major bank and find the one thats right for you. Creditcards. Com. Its simple. Search, compare, and apply. [ ice rattles ] welcome back. From lost profits to lost jobs crudes dropping has been causing ripple effects in the oil business but not everybody in the sector feeling the effects of negative prices. My guest next says the drop has been a boon to his business and joining me is the ceo of ardmore shipping, a Global Petroleum tanker business, only a 200 million market cap. Love this because of the story and if youre going to invest in a company this size you must be careful. Tony, welcome, first of all. Thanks very much. Great to have you here. Thank you. Everybody getting into the tanker business tankers everywhere. More popular than a few months ago. Basically so people can store oil, is that the deal . Two sides to the tanker business the crude Oil Tanker Business and the refined product tanker business. We operate in the refined product side and the big story there is volatility, so what our business is dominated by oil traders and then our ships are basically their vehicle of choice to distribute oil around the world. The volatility not just on the exchangetrade numbers but also in local numbers creates price arbitrage opportunity so the average voyage distance lengthsens. Theres more oil moving at sea, port congestion and this has really fed into extra demand on what was already a strengthening market for our sector. I wonder if you function a little bit like the quick build classrooms when a school runs out of capacity trailer parks in the background, dont mean to call you a trailer. We havent cbs a drop in what were producing Storage Capacity filling up and a lot of people think storing it on tanks is where it will happen. Correct. Weve all heard bomb storage in curbing, oklahoma filling up and thats result in a shift in wti price shifting. In our business theres a lot of floating storage with cargo moving to a destination but without it actually being sold yet, so we think theres a significant amount of unsold Refined Products on the water waiting to find a buyer . As far as the regulated side of the business which youre under the scrutiny there. Yeah. Refined product you can export out of the United States which is where you are versus crude oil which i cant. Correct. Export outside of our borders yet. Thats right. And thats a very important point. If that changes, will you change some of your mod snell. No. We think that the u. S. Gulf refineries have such a Competitive Edge that they will continue to refine as much as they can and export. Maybe the margins wont be as good as they would have been but the other important thing is the administration is relaxing the rules on the exported cleaned condensate. So all the people storing oil on these tankers are doing it because the price is going higher and they will benefit or they are doing it because they literally need a place to put it and thats almost the more important factor. I think its the opportunity rather than the need to put it on the ships. Youve got the katango trade where you can lock in futures and in our business we think they are buying cheaper oil in various places of the world and then finding a buyer and thats definitely increasing demand for our ships and rates are the highest they have opinion in eight years. Thats where the inflation is. Dennis gartman told us his largest position at this point hes had in many years is in tankers. Great. Tony, thank you very much for being here. Youre very welcome. Appreciate it. One more day left in a week of very volatile markets. On tomorrows show well speak to david bian co on what he thinks the opportunities are in stocks. Why do i take metamucil everyday . Because it helps me skip the bad stuff. Im good. Thats what i like to call the meta effect. 4in1 multihealth metamucil now clinically proven to help you feel less hungry between meals. Experience the meta effect with our new multihealth wellness line. I love my Meta Health Bars. Because when nutritious tastes this delicious i dont miss the other stuff. New Meta Health Bars help promote heart health. Experience the meta effect with our new multihealth wellness line. You just got a big bump in miles. So this is a great opportunity for an upgrade. Sound good . Great. Because youre not you youre a whole airline. And its not a ticket youre upgrading its your entire operations, from domestic to international. Which means you need help from a whole team of advisors. From workforce strategies to Tech Solutions and a thousand other things. So you call pwc. The right people to get the extraordinary done. Welcome back. Heres a look at the dow this week. Pretty big moves every day. Were taking a look at what happens form. Time now for some final thoughts with the panel. Walter, its funny, we were just talking about apple. Thats an important one for anything that happens from here and whether you buy the apple watch and its prospects and maybe apple pay which youre underappreciated, but it sounds like google glass is not going to be the future of wearables. I just got my email saying hey, were shutting down the Explorers Program for it and i kind of like google glass but it was obviously a bit intrusive and i think were feeling our way to what wearables were comfortable with. The divergence between the iphone that has had such Great Success and incorporation of apple pay at a time that were hearing about all these banks pulling back. You know i have an interesting thought that ive been wrestling with which is about innovation, and its really happening in the Information Technology sector. Why, because its so unregulated . We were talking with barney frank and others you have very little innovation and disruption in Financial Services even with apple pay. You have to read the article today saying bank of america will now do it. Go through your bank through your credit card instead of having some easy cyber currency something that disrupts having to go through the credit card and banking market and i think were not going to get as much innovation in the Financial Sector because of its overregulation that we have in things like watches and apps. And apple could maybe drive that or overcome it . Apple did not overcome it. If steve jobs had pushed he would have said let me try to get out of being under the credit card system but apple pay still makes you go through a credit card or a bank and to sign up banks. Its the one thing they dont control end to end is the financial transaction part because they would have had to buy a bank in a way to do it. John is that likely, jon fortt . I dont think its likely. Bank of america said 100,000 of their customers have signed up for apple pay already so its early innings. The watch is likely to accelerate that but ill be watching the reaction to intel tomorrow based on what they see on the call. Lots of highflying tech stocks, microsoft, cisco, big caps. They might react. Have to hop toior our show if you talk about the way energy has come down you have to hope that tech hangs in there. Looks like it l. S p down 3 yeartodate. Last year at this time it was unchanged and fell 6 from that point to the end of the month. Not so bad. Dont just think that the world is ending. Thanks for all being here. Look at wall street journal, every story is about a Global Crisis al qaeda, syria thats whats driving the uncertainty. Stay close to home, as we heart. Thank you all so much. Great you have to on program. Fast money with melissa lee begins right now. Thanks so much kelly. Live from the Nasdaq Market site overlooking new york citys times square, this is fast money. Im melissa least. Our traders are tim seymour, Steve Grasso Brian Kelly and guy adami, the s p, dow and nasdaq closed at a onemonth low today. Stocks under pressure after a surprise move from the Swiss Central Bank spooked investors. Take a look at the move in the swiss franc. Cme just raised margin requirement so were seeing move in the after hours. Much more on this move and all the action today coming up. Oil on a volatile ride today, its biggest reversal in six years. Up 5 at one point before