The entire hour tonight. Aig ceo Bob Benmosche is with me. Well say hello to bob. Thank you very much for joining us, bob. Nice to be with you. We want to jump into todays Market Action and talk to you and our other guests, before we get specific with bob on the aig, the regulatory environment, and lots to talk about with bob. Tom is with us, todd from land capital and our own rick santelli. Thank you very much for joining us. Bob, let me kick this off with you. Does it surprise you to see this market move higher even in the face of so many uncertainties out there . How do you characterize things right now . Well, we see everything and ive said this for quite a while a very core strength to this economy. Businesses are doing well, and i think the problem is growth, and people investing, putting a little bit of money at risk to create new ideas, new busines s businesses, new technologies, and, therefore, new jobs. So what youre seeing here is that theres a lot of strength here in our economy in particular, around the world. And so, this is just a sign that market also continue to improve, because they believe profits will be there. Yeah. And, of course, the growth part of what you just said is critical. Todd, let me ask you. Would you put new money to work in this market right here . Absolutely not. Look, we are definitely the feeling on wall street is something is going to happen with syria. And right now, that is the headline driver. We could talk about fed tapering. We could talk about the upcoming jobs report. Right now, what moved this market today was syria. And if you really want to see the quick reversal, look at gold in the final hour. Gold shot up right after the senate panel voted we can go in and strike. Yeah. You know, its such an uncertainty, though. You have to ask yourself if thats the headline of the day, how come the market was up 100 points today . Go even further than that, though. You had the president speaking this morning and here he gave some clues, okay, lets talk about the red line and pushing accountability and everything else. And then that leads traders here to believe that, yes, congress will not end up doing something, but still the senate panel voted it forward. Heres the thing that traders want to know, those. Whats the ancillary risk . Even though we might attack syria, whats going to be the outcome for that region and, therefore, you have to look at oil prices. And, also, fed tapering. Will they be able to taper if we go to war . Well see about that, the next meeting of the fed, september 17 and 18. Todd, where are you on that . Would you put new money to work here . Yes, maria, the way were viewing things is this is a sentiment backdrop that continues to be very supportive of higher stock prices. Weve seen pullbacks like this before, most recently the may june period. This pullback really isnt any different other than whats driving the pullback. Today, its syria. Earlier in the year, when we had the pullback into the beginning of 2013, it was the fiscal cliff. Lately, its been tapering. But all in all, weve got this, as your guest host just explained, weve got this underlying strength in the economy, and better yet, weve got a lot of nonbelievers out there. Whether youre looking at sentiment pools, whether youre looking at Short Interest i just checked right before i came on the show, its amazing. Short interest on s p 500 component stocks, now up 14 since last years lows, yet the s p is up 21 over that period. So we still have a lot a lot of skepticism, hedge funds underweight, a lot of todd sideline moaning. I love the optimism. Here we go, though, last earnings season, what, s p 1. 7 in earnings, First Quarter at 3 . Historical average at 7 . Were just not seeing the Earnings Growth right now. You have to wonder where its going to come from in the second half of this year. Thats not and thats true. And i hear you. And that is one of the anchors of this pessimism that were seeing. How many quarters in a row have we come in absolutely scared about how what Earnings Growth would be, scared to death of what that would do with the market. Yes, earnings havent been great. The key is they have beaten expectations quarter after quarter. Yeah. Rick santelli, jump in here. We had the yield on the 10year moving up again today. Whats your take on where rates are going, and whether or not that equates to sort of the economic landscape out there . Well, i think it equates the economic landscape with the managed aspect of rates where they are. How that will filter through as the fed has less effect on rates is anybodys guess. The auto sales were good, and many auto sales, especially the loan side, isnt going to the highest scores, that get the great incentives, which really are playing games with the price. Theres a lot of auto loans that are in the subprime. So its baked in the cake. I dont know that higher Interest Rates on government benchmarks is going to affect that. But 5s to s10s, look at this, five years are up more than any other maturity. At 1. 74, extending the historic run to 24 months. Whereas, the long end, the 30year bond, normally associated with wild moves, is a dozen basis points below its august comp, which was a twoyear high going back to august. So i would continue to keep an eye on the 5 year and the debates on syria and the taper, it keeps chugging along, making new passes at 24month highs every session. And, Bob Benmosche, youre an investor of fixed income. Tell us how you approach investing, and what corner of the market, given that weve seen a tick up in Interest Rates. Were focused on clearly the most important thing we start with, so we have an advantage, not just trading for yield. Were trading for our liability. So were looking at a threeyear, fiveyear guarantee well make to a client, and out in the marketplace to look for that kind of paper to do that. So thats the large part of our fixed annuity business. On the life business, were looking around the globe, as well as in the u. S. , for an opportunity to get extra yield over whats in the general market. So its hard to find good yield right now. Are you yes, i was going to say. Are you able to find the higher yield . Where is yield in the bond market . I think its were looking at corporates, were looking at mortgages and so on, were looking at some core you know, the cnbss, for example, some of those activities. But were being very selective, very careful on our research to find the right names to be able to get the credit. You have to be careful. You dont just grab something without real careful thought for research. Is that the alternative for you, given youre not optimistic about equities, you dont youre not optimistic about the economy. Where do you allocate capital . Heres the thing, now. Weve been expecting the fed to continue with 85 billion. Clearly, theres diminishing returns there. So theyll have to start tapering. Then you have to look at where the Earnings Growth if were going to have any earnings power. Were just not seeing that right now. So, therefore, this going into equities right now, is probably not the most prudent thing to do for the second half of this year. But look at alternative investments or even look at things like gold. Clearly, we do strike in syria, gold will go through the roof. It might be the optimal place to be. You want to buy gold here . I would definitely buy gold here. Buy gold at 1,392 . Gold is the best trading sequence right now, because you can trade it off of the headline news, maria. Look, here we go. We start thinking well be shooting off missiles, gold goes through the roof. Yeah. Next thing you know, you subside, it goes down. A great trading story. I believe you. Gentlemen, thank you very much. We have a lot with Bob Benmosche, our guest on the market. A lot of todays rally fuelled by redhot auto sales. Phil lebeau has the story. Reporter you look at august auto sales, the best pace since november 2007. Officially the sales pace last month coming in at 16. 09 million vehicles. Thats not total sales. Thats the pace of sales. And again, thats the strongest since the november of 07. Who led the way . The japanese big way honda, toyota, nissan, all posting sales gains of greater than 22 . You see mercedes with 20. 5 , gm 14. 7. Everybody much better than expected. On the luxury side. Look at the Sales Numbers from bmw. Sales last month jumped 45 , overall luxury auto sales up 31. 5 . Thats practically double what the Industry Sales growth was last month. The ford fseries, this is one stat that caught my attention today. Ford sold an fseries pickup every 42 seconds in the month of august. Its raising production in the Fourth Quarter not just for the fseries but all vehicles by 7 . Take a look at shares of ford and gm. They had a huge day today. Maria, its not often you see ford and gm up 3 or 4 in a single day, but both of those stocks are up today on the backs of the best auto sales since late 2007. Maria . Yeah, and pretty good returns to both yeartodate, as well. Phil, thank you very much. Great reporting as always. Market flash on blackberry now. Dominic chu. Reporter the lateday surge for the smartphone maker blackberry. Its on the heels of a dow jones report, according to their sources, blackberry is looking to conduct a rapid sales process and find a buyer by november. The report goes on to say that the company has held talks with possible bidders, and that it s is and its advisors, rather, are planning to begin the option process soon. So if youre looking for a little bit of a reason why those blackberry shares popped at the end of the session, it could come from the dow jones report. Well bring you more details later. So its definitely taking a populate. All right. Dom, thank you very much. Much more with my special cohost of the hour, Bob Benmosche. Plus, Standard Poors crying foul, calling the 5 billion lawsuit against it retaliation for its decision to downgrade the u. S. Credit rating back in 2011. Stripped the usa of its triplea rating. Well debate it coming up. Very interested to get bobs take on that. Also ahead, the Senate ForeignRelations Committee taking a vote on syria today. A house vote may not be far behind. Congressman Gregory Meeks tells us whats next. Stay with us. Amelia. Neil and buzz for teaching us that you cant create the future. By clinging to the past. And with that youre history. Instead of looking behind. Delta is looking beyond. 80 thousand of us investing billions. In everything from the best experiences below. To the finest comforts above. Were not simply saluting history. Were making it. announcer at scottrade, our clto make their money do more. Re ann to help me plan my next move, i take scottrades free, inbranch seminars. Plus, their live webinars. I use daily market commentary to improve my strategy. And my local scottrade Office Guides my learning every step of the way. Because they know i dont trade like everybody. I trade like me. Im with scottrade. announcer scottrade. Ranked highest in Customer Loyalty for brokerage and investment companies. Welcome back. Call it a big withdrawal. Aig closing all Bank Accounts on september 30th, following new regulatory limits on doddfrank. Aig is the the only insurer to make the exit. Aigs Bob Benmosche, my cohost for the hour, weighing in here. Bob, the government is stepping up the scrutiny. First off, whats your take on that . And what do you see as the biggest regulatory hurdle you face . I know what youre going to say, because we talked about this a lot. You always ask me about hurdles. Lets talk about the positives of this story. Right . Thats what i usually talk about, the positives. If you want to whats clear is look, when i became ceo of metlife, it was 1998. And one of the greatest concerns was what was going to happen with deregulation of the financial system. And glass steagall failed, and we had a new law, and everyone wondered what would happen with the insurance companies, investment houses and banks. Of course, you remember sandy had actually started the ball rolling with the citibanktravelers. Yeah, basically did it before the law was law. Absolutely. He was the forerunner of that. And so, whats happened over the period of time until now is weve really not figured out how to regulate those kinds of companies. You have the crisis in 08. And so, what i believe is happening is were regulating ourselves back to some form of glass steagall. We dont you know, if you want to take insured deposits, deposits insured by a government, and then you want to trade your own account and you want to be an investment, or you want to be an Insurance Company, then what volcker is saying is you have to have more restrictions on those activities, because the governments standing behind the deposits. And so, what i think is the hurdle were dealing with is how we begin to work our way back, to be competitive, but get out of some of the things that are necessary to protect bank depositors. Thats what we do. Can you do that, though, when you still have this whole too big to fail . You know, requecan you protect consumer deposits . I think banks can. They have to limit the amount of risk on their books. They have to reduce the amount of leverage. They have to be careful what theyre sources for liquidity, which is what happened before. You have deposits as a source of liquidity. But when a crisis comes, because of the government guarantee, you hold onto the deposits. But the commercial paper went away and other sourcing of funding, because thats how they operate. Insurance Companies Operate totally different. Our job is to go out and talk about protecting you from some longterm event, life expectancy, retirement, you know, a disaster down the road, in terms of flood, what have you, and then we have the liability. And then we match assets. We buy investments to match off to that liability. But if something goes wrong, you dont tend to take your money out as quickly as you would from a bank, because if you have life insurance, youre not just going to cancel the life insurance. Youll hope the Insurance Company approves. If you have a longterm annuity, you wont take that out. If you have Car Insurance with us, you wont say, well, im cancelling my policy and bringing it to some place else. You dont have that mobility of your money. So for us, we want to make sure, as we think about this new era of regulation with the fed, is weve got to maintain sufficient liquidity, but recognize our liabilities are different than the banks. Yeah, a very important point. When it relates to the banks, everything you said has occurred, right . I mean, they are in a much healthier position today. Capital has been raised. Risk has been taken down. Yeah, but listen i have been listening to you. I know this is the part of the story thats important to you, and the story thats not out there. And yet the scrutiny continues. The scrutiny on jpmorgan, for example. Theyre looking at the hiring practices of jpmorgan. 200 hires in china. Were they related to, you know, just trying to get business deals in china . Even with the improvement that weve seen, has the scrutiny also ratcheted up and stays there . Until we can improve this economy to the point were creating jobs and people have more confidence in the economy and in their ability to retire thats a huge issue. Everybodys retiring at certain ages now, in the 50s late 50s and 60s by five to ten years, because they know they cant live on the money they put away. And so, until confidence comes back, until people can say, gee whiz, i can retire and do it safely and not run out of money before i die, if all of that confidence comes back and jobs come back, i think the pressure will come off the regulators. The public is angry. Right. And the public says you didnt arrest anybody. Well, you cant arrest people for making mistakes that werent intentional. You can say you were stupid. Well, theres no law against stupidity either. Yeah. Thank god, because wed have a lot of people in jail. Yeah. I would say that right now, once the public sentiment calms down, the economy gets better, the regulators will not be under the enormous pressure to do something. Let me ask you about aig in particular. We had Bruce Berkowitz of fair home capital on cnbc this morning. The top holding is aig. Yes. I want to get you to react to what he had to say about your company. I think youre going to like what he had to say. Listen to this. And when you look at todays stock price with aig, its still selling significantly below a liquidation value. So at some point, the stock market price of aig will meet the book value of aig, which i take as a proxy for the liquidation value. So how do you continue this move that youve obviously been leading, bob, since you took over . Youve got consistent dividends. You announced the 1 billion Share Repurchase plan, a ton of cash on hand. How does this continue . You have to constantly reinvent your business. And were in the process of doing that at aig. And technology, not only plays a big role in cell phones and ipads, it does in our business, as well. How so . Data management. Mining, big data, data mining. The more you can do to analyze in terms of whats going on with risk, risk selection, pricing of risk and so on, the more you could be more scientific about it as well as intuitive from an underwriting point of view about what risks and how to deal with it. When you put that all together, it will give us an ability to grow our business, but do it in a way that we dont take on what i would call black box risks, so that we have a better sense of how much to charge and what are the probabilities of something going wrong so we can make at least our cost to capital, which is our goal. So were going to continue to grow our business. Use technology to come up with better information about the business we take on and put on our books. And i think over time youll see we continue to grow. So whatever is todays liquidation value is for bruce, my hope is he keeps chasing that carrot, because the liquidation value keeps going up, book values keep going up, and thats good for the company and its share 40e8ders. Hes clearly a happy shareholder. Youve been raising cash and not done raising cash, because the Aircraft Leasing business is still out there. Where does that stand in terms of an ipo, in terms of a sale to the chinese . We are continuing we are continuing to proceed with an ipo. The chinese are working hard to resolve some of the issues that they have. They feel confident theyre going to be able to close in a short period of time. I dont know what short is. Short was several months ago, and still were still here. Right. So theyre working through some complexities. Theyre doing it in good faith, and so, therefore, we wish them success. If that works, thats wonderful. Well be able to deal with the transaction. However, if that does not work, well proceed with an ipo and begin a deconsolidating trade so, in effect, we can sell more than 51 , that takes the 24 billion off of our books, and so that gives us relief from the rating agencies. Is that a 2013 ipo or 2014 . My guess is the markets if you look right now, were a little up and down. And so, were going to have to find a period of very calm, strong, steady markets. When that period arrives, thats when well be able to launch an ipo. I cant tell you what 13 looks like. You know, look at today alone. You know, the volatility today. Volatility yesterday. You cant enter this until youve seen some good consistency. Id like to see some of the syria issues and others behind us, some clear sailing here in terms of an economy thats moving along, and thats when well probably be able to do the ipo. All right. More with my special cohost for the hour, Bob Benmosche, coming up next. Thanks for that, bob. Well get his stake on Standard Poors is being targeted in retaliation of its downgrading of the United States. Let, time for the smartwatch, or is it. The anticipated smartwatch, but folks are not using the word smart to describe it. Well have a live report. Welcome back. Standard poors calling the United Statess government 5 billion lawsuit against s p nothing but retaliation for its 2011 downgrade of the u. S. Debt. Kayla now has the story. Over to you, kayla. Reporter in a vitriolic 72page defense filing, s p said the fact that it was sued is is no coincidence. Its lawyers wrote, quote, only s p ratings downgraded the United States and only s p has been sued by the United States, even though the s p ratings challenged were no different than by those at least one other rating agency. The governments lawsuit according to s p is just vengeance against the firms decision to strip the u. S. Of its aaa Credit Rating an opinion that says is protected by free speech but sent washington Approval Ratings down and markets into a tailspin. The downgrade was a year and a half before the Justice Department cease lawsuit in february which said s p gave fraudulent ratings to residential mortgagebacked securities in order to win business. S p says its ratings were consistent by general market views on housing, including those held by ben bernanke and hank paulson. A spokesman for s p referred us to the filings and a spokesman for the doj was not available for comment. The firm over the next two and half months will be requesting documents to discern how exactly the doj has reached this conclusion, as well as the round 5 billion its seeking in damages. Talks over 1 billion settlement fell apart before the lawsuit was filed. While settlement is not out of the question for now, it seems that its off the table. All right, kayla, thank you very much. So is this retaliation . Joining me now securities lawyer jake and jeff cox, along with Bob Benmosche, and also joining the conversation fraud. They were rating these mortgagebacked securities. The emails show the analysts rating these deals believed they were false and misleading. When you look at the emails, they said that they would rate a deal if it was, quote, structured by cows. They also said we hope we make a lot of money before the whole house of cards falls down. So i think when you look wow. The email, you see what their intent is, s ps going to have a big problem here. Jeff, what do you think . Why do you think its retall you think its retaliation. Absolutely. Maria, let me just say this. Im not here to pin a ribbon on the chest of s p. Im also not here im not even so sure that its a good legal defense. However, the optics of this thing are just horrible. I mean, when you look at i think they make a very good case. How many other people, how many other agencies were asleep at the switch while all of this was going on . I think you know when you look at they mentioned hank paulson. What about ben bernanke, the Federal Reserve chairman sat in front of congress and called the subprime problem contained. I believe that this administration has shown over and over and over again what it will do when it gets mad at somebody, the lengths it will go to to target its enemies. Wow, bob, where do you stand on this . What do you think . Could it be possible that well, i think, first of all, frauds a very specific word. And hard to prove. And im not a lawyer. I think for s p, what has to systemically say, look, guys, were all here to make money, find ways to cheat, come up with the aaa. So on and down the line. People were not thinking about the consequences of the products they were putting together. They were way too complex. Way too dependent. And what you ultimately had was changes in the way some of the accounting had to be performed on the securities. So it was a whole bunch of things. But i think the point was everyone was making a big mistake by what they were doing. And clearly, to put the aig Balance Sheet behind some of these things, they werent committing fraud. They were making judgment errors. Right. And people were saying, wow, if aig stands behind it, but then realize aig was standing behind the huge market all over the u. S. You know, so maybe our aa sachlt wasnt so aaa after all. I think one of the unfortunate things here, maria, this could be excellent teachable moment. It could be a learnable moment for regulators. You know, we still have the same horrible system in place, about rating agencies being paid to give ratings, but by companies. Its a terrible system. Its not been changed. Yeah. All of the abuse that came about through the financial crisis, the potential for all of that is still there, still right in front of us. Right. And theres a lot of blame to go around for the financial crisis. How come moodys is not being investigated . Well specifically i think the Business Model is broken. Paying paying to rate an investment product, i think is wrong. The model has to be changed like it was with the analysts. If we remember, ten years ago. Right. Here youve got evidence that they knew the ratings were false. Institutional and individual investors depend on the aaa ratings to buy those products. If they believe that those are false ratings, they should take them off, and i think they should be held accountable here. Its sending a message to the industry that you cant do this. And whos accountable for the overseers of the ratings agencies . Whos accountable for the regulators . Wheres that accountability . Thats a good question. The s. E. C. Actually regulates these agencies. Right. So how come they were asleep at the wheel and nobody can sue them . Well, there should be standards here that have to be followed. They know the law. If you issue a false statement that you know investors are relying on, thats securities fraud. So i think they will be held responsible. Several judges have looked at this and said that their they can be held responsible based on this evidence. This case evidence at moodys. Moodys didnt have the stupidity to write the emails. Have the same dumb emails, but i think they probably engaged in the same conduct and there may be cases against moodys. This case is tantamount to writing out speeding tickets at the indy 500. I mean, really. It just its silly. It really is. All right. Gentlemen, thank you very much for all of your insights. We appreciate it. An unexpected rally on wall street today. Lets get to dominic. Reporter Dollar General up over 4 . Sales profits beat estimates. Again, what really got investors excited came by the samestore Sales Numbers. That really got people a little bit more excited. Also, moving on to another big name thats in the news so far to the upside today, take a look at whats happening with shares of micron. That company was up after competitor sk said there was a fire at unof its china manufacturing facilities. Its been extinguished. They did say later there wasnt any material damage to its equipment and that it would resume operations in a short time period. On the downside, check out shares of professional networking site linkedin. Yesterday, it filed a document to sell 1 billion in offering, and well cap it off with a decliner. The skies arent so friendly for ryan air. It said it might not be able to meet forecasts. It cited increased competition from other budget carriers. Shares down big in todays trading session. Back over to you. Dom, thank you. Well keep watching. The Senate ForeignRelations Committee voting in favor of military action against syria just a short while ago. Members of the house of Representatives Foreign Affairs committee may soon hold their own vote. Congressman greg meeks speaks with us after the break about the latest developments and how this could all play out. Well also talk to Bob Benmosche about how the conflict could impact the economy. Were back in a moment. Before their gift helped preserve the point. Before a credit solution was used to expand their business. Before trusts were created for their grandkids educations. They chose a partner to help manage their wealth. One whose insights, solutions, and approach have been relied on for over 200 years. Thats the value of trusted connections. Thats u. S. Trust. As we reported, the Senate ForeignRelations Committee has approved a resolution on syria. The vote now moves to the senate floor where it is expected to pass. The bigger question, of course, what happens in the house. Lets get reaction now from representative Gregory Meeks from new york. Congressman, thanks very much for joining us. Good being with you. Where are you, congressman . If the vote were to happen today in the house, does it pass . Well, where im i dont know where im at yet. I have a lot of questions still to ask and to get answered. Id like to know where the International Committee is. I think the house is in flux today. So i think that the Administration Still has work to do. What are your questions . Why dont you know where you are right now . What are the open questions from your standpoint . Well, you know, im really concerned about us doing something unilaterally. I hear individuals saying that it is the United States credibility thats thats in play here. I dont see it that way. I think its the International Communitys thats at stake here. The United States has clearly stated that theyre willing willing and able to do what it takes to make sure that the utilization of chemical weapons doesnt happen. But wheres the International Community . I dont think we should do it unilaterally. Can you say wheres the International Community, but Bob Benmosche and i have been having a conversations, of ceo of aig, and weve been saying the world looks to the United States with leadership. And when it comes to the United States, we have to say what we mean and mean what we say. There was concern about chemical weapons being used before. Theres concern and dialogue around iran. Theres dialogue and concern about north korea. And so, when you look at the world, not only this one situation, we have said some things are not acceptable. And, therefore, we have to say that, and, therefore, well lead a coalition or were going to go to the united nations, or were going to take action in the country. And i think the Lesson Learned here is going forward, we better be very clear what we say as a country and what we say is our willingness to work with other countries. But i will tell you for the free world, people look to the americans for the good ideas and the right way to live and do things in a government. And so, were role models, and we have to live up to the role model. What about that, congressman . If we have evidence that this chemicals was used on syrias own people, do we have a moral moshlly, do we have to perform the strike . Theres 189 countries that are part or signed on the treaty against chemical weaponens, where theres certain rules and regulations put in place. Everyone has said its a violation of international rules. So, therefore, its the International Community that has to come up. And the United States is willing to take the lead and stand as, i think the president has been doing. But what happens oftentimes is the United States becomes isolated, because when something if something goes wrong or something doesnt happen, oh, that was the United States, it wasnt us. And then we are the ones that are isolated. I think right. Were all interconnected. You know, we talk a lot here about how we are all financially. Well, what happens in the United States affects london, affects other parts of the world. And what happens there affects us. Same thing with military, with chemical weapons. What happens there affects us, definitely. And its in our own National Interests to make sure something happen, but it affects other international country, they need to step up, also, and the leadership we should provide is telling them theyve got to step up. I totally understand what youre saying. But let me ask you this. How much of the reputation of the United States how damaged has it been in the last two weeks . The president comes out, tells the world about the chemical weapons used in syria, says we have we are not going to tolerate this. No way, no way. The next day he comes out, well, wait a second. Instead, were going to wait ten days and get congress approval. I mean, how much has the u. S. s reputation been damaged at this point around the world . I couldnt think the u. S. s reputation has been damaged. What i think is the u. S. Has the president has said that as he said today, there was a red line crossed. Thought just on america but on the entire International Community so. No one can you know, the secretary secretary kerry said today the world is standing back and watching. We dont need the world standing back and watching. We need the world with us. We dont need them sitting on the sidelines. They need to be on the front line. We will lead the charge. But they need to be standing with us in the same way. The same theyre interesting let me ask you this. Lets say the rest of the world pushes back. We heard from the u. K. Theyre not going anywhere near this conflict. Weve heard from some other countries. If the world does not stand with the usa, should we do nothing . If the world if the world doesnt stand with the usa, then its sending a bad message to north korea. Its sending a bad message to iran, which says to them they can utilize chemical weapons and the world will not come and stand with the United States, and then everyone will be pointing to the United States as a unilateral nation doing what it wants, its will on everyone else. That would be a bad thing for the world to do, because it would isolate the United States and give north koreans, iranians and others, they can do whatever they want to do without repercussions from the world. Right. I understand what youre saying. And i agree with that. But that wasnt the question. The question is, if the world does not stand with the u. S. , does the u. S. Go forward . I cannot vote for something if its the United States unilaterally. So then youre not so then youre not standing behind the president putting the red line then, in other words, its not that important no. What im saying is this. That the United States needs, as we said, its an International Line thats been crossed. Now, if, in fact, and ive got to have some more were going to have some classified hearings, if i thought there wasswas an imminent threat to anyone in our allies, if i hear that kind of information, if any of our allies in the region or others were in danger, then that changes the whole scenario. And i have not had that conversation yet or ive not heard that that was the case yet. So if i hear that that was the case, then that changes the that changes the conversation. We have here is a civil war wait, wait you mean if others were damaged beyond just the syrians . No, im saying that if there was a threat not that they have to be damaged. If there was an immediate threat that other people would be damaged other than the syrians . Thats correct. If any of our allies, because what is happening here, if we you know, this is a nowin its a tough situation, a nowin situation really, because were really talking about focused on is a civil war thats taken place inside of syria. And we are divided. The russians clearly, theyre going the chinese, apparently, theyre standing by their ally, syria. Right. And were going to stand by our allies. And what we need to do, if were going to get this issue resolved, is it has to be done diplomatically to alternately stop the killing and the death thats taken place in syria. And its going to take a diplomatic solution to do that. And that needs to that probably means that theres going to be conversation among a number of nations still, because everyone admits that the action thats going to be that is talked about being taken now is not going to resolve the situation in syria, its not going to stop many innocent people from dying, as they have been dying, and for me, i want a resolution to the problem in syria, and thats only going to be obtained by everybody admission diplomatically. You make a lot of good points. We appreciate your time. The worry is, while all of the conversations take place, is assad moving the weapons to the civilian areas, and then were sort of behind the eight ball. And if assad does, we have intelligence, theres something we would do there. But im also more concerned i know 400 kids have been killed. Right. Over a thousand with these chemical weapon, but over 100,000 killed with other weapons. I want that to stop, too. You have refugees thats going across on jordan and turkey, and people are being displaced. Weve got to stop this whole situation, because all of it is bad. Yeah. Congressman, good to have you on the program. Thank you for your time tonight. My pleasure. Well see you soon. Up next on the program, digital delight or fashion folly. Samsung out today with the worlds first new smartwatch. But timing is everything. Even for hip cool products. Well debate if this is a flop or a fixture next. Stay with us. [ indistinct shouting ] [ male announcer ] time and sales data. Splitsecond stats. [ indistinct shouting ] its so close to the options floor. [ indistinct shouting, bell dinging ]. Youll bust your brain box. All on thinkorswim from td ameritrade. From td ameritrade. In a we believe outshining the competition tomorrow requires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. [ male announcer ] some things are designed to draw crowds. Others are designed to leave them behind. The allnew 2014 lexus is. Its your move. Amelia. Neil and buzz for teaching us that you cant create the future. By clinging to the past. And with that youre history. Instead of looking behind. Delta is looking beyond. 80 thousand of us investing billions. In everything from the best experiences below. To the finest comforts above. Were not simply saluting history. Were making it. Welcome back. Sam ununveiling its hotly anticipated smartwatch, but early reaction is not so hot. Lets get to seema. She has the latest. Hi, seema. Reporter hey, maria, expectations seem to be pretty high coming into this event. Thats why were seeing somewhat of a mixed response to Samsungs Galaxy gear smartwatch unveil. I was one of the first journalists to play with the device. Its a stainless steel device with a touch screen similar to the one on your smartphone where you can navigate by swiping through applications. Some of the other features include voice capability, builtin speakers that allow you to make and receive calls by speaking into the smartwatch. Analysts at catalyst say the smartwa smartwatch is the most important product category since the ipad. Theyre estimating 5 million to 10 million watches to be shipped this year if samsung and others get it right. Now, one of the others is qualcomm. The chipmaker surprising this week with its own version of a smartwatch. Now, all eyes turn to apple. Apple expected to unveil its own smartwatch device in the near future. So, maria, the wearable device space seems to be the hot, emerging space to watch in tech. Back to you. Seema, thank you very much. So not a great, smart start for the smartwatch era. Compass intelligence james brim is with me. He says these devices have a place, but need to be fashionable, or consumers wont buy it. Joe thompson, editor in chief of watch time m magazine doesn think theres a market for them. James, what do you make of the smartwatch . Its a first step. Its the first product out. Well see other Companies Come with it. I think there is a market for them. It is not a smart device, though. It is actually connecting to your smartphone. So it doesnt have all of the intelligence in the watch. Thats why some of the people are disappointed. It looks heavy to me. But i dont know. I wasnt wearing it. So, joe, youve been an expert in the highend watch world. What does history tell you about anticipated success of smartwatches . Maria, i see it and i cant help but think about 30 years ago when seiko introduced what was really the great smartwatch, which was a tv watch. It got 82 tv channels delivered to your wrist. There was enormous buzz. It was covered on the front page of the financial times. But it was a big buzz but a big bust. Two reasons. One was the design. It was clunky, chunky, and did not look good on the wrist. And the other was it was impracticable. People love tv, but they dont want to watch the yankees game, or in those days, an episode of m. A. S. H. On a tv with a 1. 2inch screen. Here we are 30 years later, and those two great issues are still there. Theyre two hurdles no one has gotten over yet. One is the design. And then the question of all of the functions that are on the new Samsung Watch and whatever other watch comes now. The question is, do people really want that on the wrist . Would you wouldnow. The question is do people really want that on the wrist . Would you wear this, Bob Benmosche . I kind of like my watch. Its interesting because i know that one day when somebody says to me, where did the word clockwise and counter clockwise say you see these hands on my watch and theyll know. Most kids have no idea where those words come from. Jump in. Maria, the pebble launched last year and on kirk starter. 85,000 of them were shipped from a company nobody knows anything about with no marketing budget. I think there is going to be a place for this thing but its just like the high end watches. My other guest is talking about high end watches. Thats a niche market. So i believe that this is going to be a niche market as well. Its not going to be a mass market device, yet, niche could be fairly broad. That makes a lot of sense. Gentlemen, thanks very much. Well see you soon. Coming up what is the one thing ben mow shea is worried about. Well ask him. For six months with qualifying net deposits. 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Tdd 18003452550 welcome back. Finally thoughts now from our special guest host for the hour, Bob Benmosche. Bob, what does worry you right now . Right now its the rhetoric is what worries me. People are looking for some direction. Theyre looking for stability. Theyre looking to begin to grow and work out of this situations were in. So all this talk, whether its the unsettling of syria, the issues of u. S. And russia, the issues of china in that mix and so on, Interest Rates going up, Interest Rates going down, the fed in, the fed out. The new fed chairman. Unsirnts. Uncertainty. Id like to see it resolved so we can begin to show with steady hard work we can build our businesses, add jobs and see growth again and ultimately allow people who are in their 60s and 70s to begin to believe they can retire and actually enjoy the retirement theyves worked their whole life for. Its got to be tough. Is it 80 percent of assets trying to fix government. How do you prepare . Youve got to have a bet in terms of when the fed begins the tapering. We actually dont make that bet. Other people do. We dont. Our job is to make sure we look at the liabilities, the promises weve made and make sure that the assets we buy against those promises will match so that we make a spread. So were really working being a spread business. We dont make big Interest Rate bets. We do actually have one, its not a bet but it turns out difficulty in finding good assets right now. Were a little more liquid than we want to be. Therefore as rates rise well be able to get better rates over time. If they fall well get less. That sense of uncertainty is what worries us the most. In the end i think were doing well. I think the core of our economy and many others is strong. I feel pretty good about the next couple of years. Is it Strong Enough that the fed could actually begin rolling that back this month . Im not an economist and im not looking at the data theyre looking at. I just think things look pretty strong from my point of view. I do think theyre going to have to start unwinding here. Remember our financial crises which turned into an Economic Crises started out as a liquidity crises. I think the fundamentals for business is still pretty good. Well leave it there. Good to have you on the program. Great to have l to be with you. More on the markets next. Back in a moment on closing bell. [ female announcer ] youre 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. Welcome back. Before we say good night lets look at the day on wall street. It was a winner of a day. The market adding onto yesterdays gains erasing much of the losses related to syria. T the dow up 96 points. 14930. Volume impressive despite the fact that its going into a jewish holiday tonight and tomorrow. Technology once again adding onto yesterdays momentum up better than one percent. The s p picks up 13 and a third points. 1653 is where the index closes out. Thanks for watching. Stay with cnbc. Here is fast money now. Live from the Nasdaq Market site in new york citys times square im melissa lee. Our traders are dan nathan, Karen Finerman and mike khouw. Over the great wall. We all know about the apple event next week. Could the bigger deal actually with the day after, september 11. Could this be the long awaited mo