Food and energy up. 1 of 1 . David apple right out of the gate. The stock rebounding after the slide yesterday. Investors brushing aside concerns that sales of new iphones might be disappointing. Liz there are reports this afternoon that at t is seeking buyers for its cell phone towers. These towers could fetch as much as 5 billion. David despite concerns about Interest Rates, homebuilders are more optimistic than at anytime since the mid 2 thousands. National homebuilders Housing Market index remaining at 58 this month, the same level as in august. Liz the sec announced Enforcement Actions against 23 securities firms. Securities Exchange Commission saying those firms improperly participated in Public Offerings after betting against the stocks. 22 firms have settled with the sec. David a bigger version of the boeing 787 dream liner is taking off. They hope the 7879 will help increase dreamliner sales and put the aircrafts previous battery problems in the rear view mirror. After the bell starts right now. Liz lets get to todays Market Action with our market panel. We have mark travis, Intrepid Capital management who says investors shut only buy when theres a discount in the market. Scott black, Delphi Management president who warns the economy may not accelerate as fast as wall street thinks. Both of you guys are very interesting when you come to the stock picks. Lets get to the macro picture right now, scott, right off the bat, you over the past several months sounded somewhat of a negative tone yet market continues to go higher. What is going on here . Well corporate earnings have been a disointment. You look at the last quarter, liz. Truthfully revenue and earnings were up less than 4 . Of the original s p estimates were north of 112, 113. Bottom up estimates are 108 and change. From the time of the barons roundtable in january i think i have been much more realistic at 104. Which makes the market 16. 5 times estimated earnings this year. By historical standards were fully valued. On small and midcap which you alluded to before i came on, theyre roughly 20 times expected earnings. They may be going up in liquidity in etfs but not great value overall in the small and midcap arena. David mark, we heard Mario Gabelli is treasury yields is first thing he looks at. I dont get up that early. You do too. They seem to tell us the fed willing pupping back a bit. Once again we have kind of mixed signals with the yield. It is down one basis point today to 2. 5. What are the yields telling you . Well, i mean, i think, david they have gone from say, 1. 61 in the second week of may to where they are today. So you have backed up the yield to where we are. And, you know, i think that as you raise the discount rate on a present value calculation in a discounted cash flow you will get a lower terminal value. So at some point that become as headwind. David hold on a second. Put all of that in english. Talk english to us. What does that mean the fed will do tomorrow. Sorry. David what are Interest Rates telling you short term about what the fed is going to do tomorrow . I cant use sign language . David no. You knee, i think, i think bernankes out of here the start of the year. He wants to, you know, start the process. I believe they will start the process. Were in unprecedented times as far as the amount of easing weve had over the last however many years. So i think they will try to do as gradually as we can but we really dont know whats going to happen. Its a great experiment and hopefully it works out for all of us. Liz scott, what about you, what do you think, not necessarily will happen tomorrow but the reaction from it . Warren buffett said back in may, we know this the minute the fed decides on something, every trader in the market whether theyre long, short, bonds, equities is going to make some type of move or at least think about it. I think youre going to see a gradual tapering here. I look 3. 7 trillion on the fed Balance Sheet. It is actually averaged about 70 billion per month. 840 billion incrementally. You will see tapering in the treasury. Not so much in the mortgage because you dont want to kill the Housing Market. I think to a large extent a small amount of tapering is already priced into stocks. My biggest concern is debt ceiling crisis which will come to conflict by end. Month that could spook the market more so than the gradual tapering. David lets talk about traders are doing. Mark, your cash levels have gone up recently. Why do you think that is . I know why it is, david. Weve been selling more than buying. Weve had incremental inflows. Were looking at a disconnect between price and value and a conservative estimate of that value. When we get there, were a seller. This time of year we try to, you know, neutralize our Tax Liability best we can, running into our fiscal year. So that is some of the effect but, as scott alluded to earlier, small cap shares are not inexpensive. And that is a part of the Capital Markets where we focus the Intrepid Capital funds. So were having a hard time. Not to say we dont own anything, but there is not a plethora of opportunities from our point of view. Liz perfect segue to what you guys do own. Between the two of you you have a lot of brains and good coin a lot of money. I will with scott. We can put up the names. You like swift energy and Rogers Communications which is a canadian company. Anybody who lands an an canadian airport immediately you can tell in your blackberries and your smartphones it switches over to rogers. They do really, im sorry, sanchez energy. You really do have a lock on that market with rogers, right . Well, its a slow grower. The top line is only about 3 . The bottom lines about 5 but an enterprise value to ebitda is one of the cheapest media stocks in the world. It is six 1 2 times ebitda. It is selling at 11 times next years earningsings. They have remarkable return on equity over 45 . They do have dominant share in wireless. Bigger in terms of earnings in wireless than they are in cable tv they have a triple play in telefon any. They have bell canada and telus. The stock is trading low of the year because there was threat verizon would enter the market and they decided not to. The stock sells 41 a share. They in 3. 70. Liz there is the fallout when that news came out. You see the falloff on the chart. Sure. First six months they did 870 million in net income, generated 310 million in free cash. Veritable money machine. Cheap statistically. David rogers is clearly cheap. Mark, you say big lots is a big stock youre looking at but that stock is up 20 since its low in august. It is not exactly cheap short term. No but we think theres still a disconnect, david. We think your valuations in the mid 40s much like scott was alluding to, enterprise value to ebitda. That name to us is six times ebitda to enterprise value. So its a cheap security in a maybe a not cheap equity market at least from our point of view. So it, at 1600 stores. They bought stores in canada. Maybe not as good as business as rogers wireless. I get great ideas listening to scott in my ear. I think that, they have brought out coolers to serve food in the store at 75 stores. Hopefully david were running out of time. I got to get this one in. You like wrestling. You like World Wrestling entertainment. Why . You know, im starting to wonder myself. All kidding aside. No, its actually, its a very good business. Actually a very old business. Vince mack mans father started it in the mid 50s. Theyre trying to develop, you know, their own cable channel. And the tv rights are good. And, you know, you got a beautiful Balance Sheet. 700 million equity market cap. 120 in cash. Youre paid to wait at 4 dividend. Liz, i got to go. Liz scott, might not be glitery, sanchez energy. Mark liked swift. Great to both of you. Are you guys going to be in a bomb shelter when the fed news come out . Scott . No, in the middle of the fray. Im not worried. Im a longterm investor. Liz longterm investment is the smart way to go. David thanks, mark, thanks, scott. Gold and oil are the in the crosshairs of the investors today. In a moment we head to the cme group to find out what is hyped the big moves for the closewatched commodities. How you can play the market. When they say their fall says about the entire stock market. Liz also the clock is ticking down on the big budget showdown in washington today. The Congressional Budget Office added new fuel to the fire. Were taking you to capitol hill for the very latest. David facebook question is on the reports that jpmorgan could pay 800 million in fines to settle the secs civil action on london whale trading. Sound like a lot of money but some say it is not enough. We want to know from you, are Financial Firms getting off too easy by paying these fines . Well bring you answers later in the show. [ male announcer] surprise youre having triplets. [ babies crying ] surprise your house was built on an ancient burial ground. [ ghosts moaning ] surprise your car needs a new transmission. [ coyote howls ] how about no more surprises . Now you can get all the online Trading Tools you need without any surprise fees. Its not rocket science. Its just common sense. From td ameritrade. See who does good work and compare costs. It doesnt usually work that way with health care. But with unitedhealthcare, i get information on quality rated doctors, Treatment Options and estimates for w much ill pay. That helps me, and my guys, make better decisions. I dont like guesses with my business, and definitely not with our health. Innovations that work for you. Thats health in numbers. Unitedhealthcare. 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. David adobe just reporting their Third Quarter results. Lets head back to Nicole Petallides on floor of the new york stock exchange. What do they say, nicole . Heres why were seeing the stock moving. So the Current Quarter was weakerthanexpected. However the outlook better than expected. So lets break down the exact numbers that weve gotten in from adobe. Of the 32 cents versus analyst estimates of 34 cents. That obviously two cents miss. We come in with the numbers for revenue. Also a miss there. 995. 1 million versus 1. 01 billion. So the numbers come in shy for the Current Quarter, however, they do see their revenue for the Fourth Quarter looking to surpass the analyst estimates. Or be right in line at least. In addition to the fact the company, the creative cloud, the adobe creative cloud, that surpassed one million subscriptions in the Third Quarter. That is sort of a milestone. Dont forget, they have the whole kind of data management. This is where they have analytics, social advertising, targeting, everything they put it all into their cloud. And in addition to that, you know, i was reading in barons not long ago, they did a profile on the ceo of the company, talking about him being a turn around artist. It really has been good news for the san jose, california company. Yeartodate its a great performer as well. Up nearly 30 . Big moves here for adobe. Certainly one to watch tomorrow. A winner now as i noted on this outlook as well. Key of one million subscriptions. Back to you. Liz we said last week when we were with the ceo of adobe, we said if there were survivor show for Silicon Valley companies he would be the winner. Right. Liz steve jobs, david, tried, in a way to kill that company by refusing to put adobe flash on the ipads and i fixed his Company Another way. David shows you market share is important even in the ether space. We were wondering in Cloud Computing would mean that much. It does. If you get customers, even on hardline even if you miss estimates which they did. Liz both top and bottom. Oil pell to its lowest level in more than three weeks. Gold dropping for the fifth time in six days. Here to break down the action david is larry shover, sfg alternatives chief investment officer. Yes, thats a familiar face on the right, sandy smith joining from us the cme as well. Sandy, oils lowest close since august 202nd. Im beginning to wonder whether this is more than just relief over not going to war in syria . Whether this has to do with fed action as well . What do you think . I think really tale of two markets right now. You have the u. S. Dollar down today against a basket of cure currencies, which indicate the market is pricing in exactly what will happen, tapering of 10 billion by the fed or no tapering at all. When you look at the price of oil it is telling as you different story. That would indicate aside from the syria story, that would indicate actually well see the fed taper more than expected. That we would see a stronger dollar and weaker commodities. The market might be setting itself up for a big surprise tomorrow. Liz larry, i know you guys are watching this very closely and tomorrow will be a big day. What is the chatter in the pits how the reaction will take hold . We pretty much figured biel see some type of tapering but what are you expecting for reaction . Where will we see the biggest spasms and gyrations . Stocks, bonds . I think it will be the stock market right behind me. We had a relief rally. People are getting used to the fact hey, well see 10 to 15 billion of tapering. It is much larger that than. The press conference and what will happen with guide dense in 2013. Zero rate Interest Rate policy. Is it going to be 2 1 2 or less . That is on minds of traders. Anything on that comes out of bernankes mouth will be sliced and diced. Well see a big move one way or the other. David what is futures now, larry. People are squaring up. People just dont want much exposure. Were seeing that really across all sectors, whether ags, metals, energies or behind me. People want to stay as flat as possible. Liz so, then, sandra, what exactly happens with ags and commodities . Are you hearing any discussion about that . Youve got the stock market that obviously has been rallying into this announcement. Today was no different. We got another 35point gain in the dow. Then youve got gold prices. Were watching gold down 8. It is hovering around crucial level of 1300 an ounce. Gold is the at 100 level. All the commodities are sitting a at these key, big, round numbers, psychological numbers where a lot of difficult trading programs will be set to be triggered on this announcement. Why i think a lot of people like larry youre hearing from are calling for a big move one way or the other, not just in the stock market but commodities market as well. This will all be about the u. S. Dollar and currency movement, liz. All the commodities are priced in u. S. Dollars. If we get a big reaction in the currency market that trades at the cme i will get a big move across commodities as well. David larry doesnt seem to be any concern about inflation when you look at commodities but is there concern . I know a lot of cme traders there are worried all the money printing will eventually cause some inflation or some kind of bubble but you dont see it in the price of commodities. No, you dont see it in the price of commodities. You dont see it in the price of the longterm euro dollars or fed funds rate, or whatever you want to look at. Seems like the market is not pricing in inflation whatsoever. Keep in mind traders behind me we realize were in a policy sperm weve never seen before and nobody knows how this is going to turn out. Whether inflation, deflation or something in between. Inverse stagflation, who knows. When you look at forward curves and Interest Rate products specifically theyre not pricing in inflation now. David inverse stagflation. That is new phrase to me. Go ahead, sandy. Dave, i was just going to point out, everybody should take note where the yield on the 10year is right now. It is at 2. 85 . Remember just a couple weeks ago we were above 3 . So that is likely going to be the thing to watch tomorrow. Liz i think sandras right but not necessarily for commodities purpose. Much watch the u. S. Dollar. Any kind of lessening of fed involvement is dollar positive. It is bullish for the dollar. Got to watch that more. We will for all our viewers. Larry shover, sandra smith. Great to have you. David House Speaker john boehner struggle to win the budget battle may have gotten a whole lot more difficult after a blunt new warning from the Congressional Budget Office. Well bring you the latest live from capitol hill. Liz the house that jamie dimon built, jpmorgan chase, could be slapped with a whale of a fine to finally settle the traying mess that cost the firm more than 6 billion in losses. But will that really be the end of the scandal for the ceo . If you slam the door do a few more Windows Start to open . Well game it up for you next. [ male announcer ] now, taking care of things at home is just a tap away. Introducing at t digital life. Personalized Home Security and automation. [ lock clicks ]. That lets you loser to home. Thats so cool. [ male announcer ] get 100 in instant savings when you order digital life smart security. Limited availability in select markets. Liz time for a quick speed read. Five stories one minute. Rhapsody restructuring the business. They announced plans to cut 15 of its staff as president john irvin steps down. China set to replace canada as starbucks second largest market. The coffee giant plans to open a total of one thousand stores in china best end of the year. So much for drinking tea. The face value for the most expensive tickets at Metlife Stadium in new jersey, david, expected to be twice the going rate for last years game in new orleans. A report by the wall street journal, it says premium seats will cost 2600 each. Im in, kidding. Consumer reports ranks the Chevy Silverado 1500 as the toprated pickup truck, beating out the dodge ram 1500 and the ford f150. The magazine says the silverado delivered best in class fuel economy of 16 miles per gallon. Is that barely anything . Grand theft auto 5 is available. The latest release in the bestselling series is expected generate 1. 5 billion doll in revenue. [buzzer] david who here has the recent one . Marco . Not. A lot of people are buying. Liz candy crush. David marco will you take that lying down, standing up. Blunt new are you l flue warning the congressional un Budget Office says the outlook is not good. Liz rich edson this is not getting on toward very well on capitol hill. It is not, liz. Debttogdp ratio of 190 by 2038 . That is what the Congressional Budget Office says that is where were heading if congress does what it typically does. As we get to the outyears, entitlement programs, medicare, medicaid, Social Security start to eat a larger portion of our budget, start adding trillions of dollars to our debt. When it comes to solving entitlement programs, well, congress put it off. We has a society have a fundamental choice of whether to cut back on those programs, or to raise taxes to pay for them. And so far, weve chosen, to do very little of either. And, as long as thats the case, i think seeing those projections will keep looking like this. Quite a timely report for the Congressional Budget Office. It is budget season in washington. Lawmakers try to figure out their next budget to avoid a Government Shutdown october 1st. In the middle of october lawmakers have to figure out a way to raise the debt ceiling. Republicans want cuts or reforms for any increase in the debt ceiling. Treasury secretary jack lew says that should not be part of the debt ceiling discussion. Theres a kind of notion in part of the House Republican caucus it can be used as a lever to force major policy change lying the delay of the Affordable Care act. That is just not reality. They will have to start dealing in reality. The Administration Says it refuses to negotiate over the debt ceiling. House republicans are still trying to work out with what their opening offer is going to be. David and liz, back to you. David a lot of people on wall street worried about a repeat what happened couple years ago. Rich edson, thank you very much. Liz coming up the sec plans to play hard ball with banks when it comes to admitting wrongdoing, not just paying a fine and keeping your lips sealed. Do the regulators have the muscle to go up against the big boys, firms like jpmorgan . David also tomorrow of course we are all expecting the fed to begin modest tapering. I shouldnt say all. Some people think they may stiff us in that. What our next guest says what we really need is a fullthrottle move. The chief economist from socgen with a shocking plan how the central bank should end qes. As we head to break, look at youngest billionaires in the world. They made the forbes richest 400 list under the age of 40. Biggest number of under 40 billionaire ever. At od, whatever business youre in, thats the business were in with Premium Service like one of the best ontime delivery records and a low claims ratio, we do whatever it takes to make your business our business. Od. Helping the world keep promises. Nice car. Sure is. Make a deal with me, kid, and you can have the car and everything that goes along with it. [ thunder crashes, tires squeal ] so, what do you say . Thanks. But i think i got this. [ male announcer ] the allnew cla. Starting at 29,900. David it is time for a look at todays market drivers. Stocks pushing higher with the s p ending above 1100 for the first time in six weeks. The dow posted gains for third week in a row. You. Oil fell to the lowest level in four weeks. Crude day 1. 1 to settle at 105. 42 a barrel. The Consumer Price index rose slightly last month. The latest sign that slow Economic Growth is taming inflation. The Labor Department reporting index climbed. 1 of a percentage point in august following a. 2 increase in july. Liz . Liz jpmorgan is expected to pay 800 million in fines in a deal with regulate over last years wrong way trade known as the london whale trading mess but the sec may be after something more valuable than perhaps money. Chairwoman Mary Jo White may flex some muscle an push the bank to admit wrongdoing. This is something you dont typically see in these types of case. They pay a fine and move on. Hire to give a legal perspective, fred tecce a former federal prosecutor. Joining us for financial perspective, marti most bi, guggenheim partners. Thank you for having me. Liz fred, is this splitting hairs or does it really matter . When america saw financial crisis. They saw fines being paid and nobody led away in handcuffs and didnt see anybody admitting wrongdoing . At the end the day the purpose for taxpayers whether or not the check bounces. Im sure jpmorgans check will not bounce. I read what i think admission of wrongdoing. Not an admission we somehow engaged liz in fraudulent behavior. Fraudulent activity. That we were lax and allowed these guys to do this not sure at the end of the day where it gets you. Liz its a game of inches at this point and marti, does it hurt the bank to admit we didnt watch the children closely enough . I think they already admitted that. They put a whole document out where they improved their controls and way they will oversee and really what the regulators are doing, seting a real tone at the top which will then flow through management and down into the employees where they know they have to make sure that they do watch the risk positions much closer than we saw in this instance. Liz marty, does that 800 number hurt the company to pay that kind of fine . It is not something you like to do on regular basis. Liz of course not. When you look at unusual charge of one quarter, jpmorgan has about a 6 billion per quarter earnings. So they can more than afford this fine for this quarter. When you start looking at it is really again, something that theyre building capital and being able to continue to grow through this. Liz fred, do you see this as a shift at the sec, where they will now definitely push not only to get the money but get an admission from banks, we did mess up . The head of the sec says this is something she wants to do. Im not so sure where it gets you at the end of the day. Your job at the sec is to correct wrongs, pay money. If you force people to stipulations where they admit wrongdoing, ultimately you do will buy more cases you have to take all the way to trial. When i was young prosecutor, put in sentencing guidelines, they told us trials would go through the roof. It is kind of analogous to that. Im not sure how long this will continue. Liz does this hurt jamie dimon to break the check or have a black mark on the legacy . What theyre trying to do is resolve the issues. The headline risk and overhang that continues to be out in the press is what they need to resolve. As we saw bank of america go through over the last yearandahalf. As they clear the decks and get this behind them it is better for anybody involved. Liz 25 buys of all the analysts that five holds, one underperform, zero sells. That is not hurting it. Fred, if this door closes does it go behind jpmorgan or do we get drafty windows where we have civil lawsuits . If this kind of thing the little guy said you admitted it, i need money because i lost owning your stock and market cap was shrunk. I call it lawyers fair employment act with all the civil actions come behind it on the class action lawsuits. They will all come. Trying to put this behind you like choreographed demolition derby. You have pieces going every different direction. You have sec. Different regulations, you have the justice department. I take my hat off to jpmorgan, tell my clients, tell my witnesses when you need to eat it you dont nibble. They have not. They have moved forward. That will help them in a lot of regards but it will be a while before it is all over and done with. Liz in the end, marty, does it change your opinion of a company like jpmorgan and do you expect to start seeing this and it becomes par for the course . No, i think what it does if anything its a wakeup call and as they go through that process now you can expect to see more tighter controls going forward. Theres a course correction that takes the volatility out of earnings as they emerge out from under this the true value of the trap choice will be recognized again and thats the upside potential we see this point. Liz marty mosby, we love the gang at goo again him. Fred, great to have you here in no new york city. Thanks both of you. Great perspective. Thank you. David were expecting tomorrow the opening act of the feds tapering pulling back a little bit on the bond buying spree. But our next guest goes a little further. The socgen chief economist has a fourstep program for complete exiting of qe. She throw as rise in Interest Rates to boost. You dont want to miss this. Liz call it the war of social media giants. Facebook turning up the heat on twitter in the battle for the Second Screen in your living room. Could it impact twitters upcoming ipo . Well have impact and what it means for investors next. You really love, what would you do . [ woman ] id be a writer. [ man ] id be a baker. [ woman ] i wanna be a pie maker. [ man ] i wanna be a pilot. [ woman ] id be an architect. What if i told you someone could pay you and what if that person were you . When you think about it, isnt that what retirement should be, paying ourselves to do what we love . Paying ourselves always go the extra mile. To treat my low testosterone, i did my research. My doctor and i went with axiron, the only underarm low t treatment. Axiron can restore t levels to normal in about 2 weeks in most men. Axiron is not for use in women or anyone younger than 18 or men with prostate or breast cancer. Women, especially those who are or who may become pregnant and children should avoid contact where axiron is applied as uneected signs of puberty in children or changes in body hair or increased acne in women may occur. Report these symptoms to your doctor. Tell your doctor about all medical conditions and meditions. Serious side effects could include increased risk of prostate cancer; worsening prostate symptoms; decreased sperm count; ankle, feet or body swelling; enlarg or painful breasts; problems breathing while sleeping; and blood clots in the legs. Common side effects include skin redness or irritation where applied, increased red blood cell count, headache, diarrhea, vomiting, and increase in psa. Ask your doctor about e on underarm low t treatment, axiron. This man is about to be the millionth customer. Would you mind if i go ahead of you . Instead we had someone go ahead of him and win fiy thousand dollars. Congratulations you are our one millionth customer. Nobody likes to miss out. Thats why ally treats all their customers the same. Whether youre the first or the millionth. If your bank doesnt think youre special anymore, you need an ally. Ally bank. Your money needs an ally. David if ben bernanke listens carefully to our next guest and he should, he could save the himself and rest of fed from a lot of headaches next couple years because our guest came up with the perfect formula for phasing out the Bond Purchasing Program that carries with it the threat, the overhanging threat of inflation and speculative bubbles. Joining us is annette macost sewtae generals chief economist. Socgen i say because i dont speak french too well. First step, taper away. A lot of people say well have a token taper. You say forget that taper away . I do expect a token taper tomorrow. I think the tapering pace will accelerate. Bernanke tied the end of assets purchases to 7 Unemployment Rate. Looks like we can get there by early next years a opposed to june 2014. As the Unemployment Rate trajectory diverges from fed expectation there is will be pressure on them to david wouldnt more aggressive tapering really stop the stock market cold . Bernanke we know, even though he wont admit this publicly we know he is concerned how the market reacts to what he does. Into the if driven by better data. I expect the data to be better and not push down on the Unemployment Rate further. Typically the very first move is the most disruptive one. Once we get initial tapering step out of the way i think further steps will be a little more easily digestible to the market. David okay, err on the said of more aggressive, not less aggressive . Eventually. Less aggressive on the first step but eventually step up the speed of tapering. David taper away. Listening, ben . Number two, the fed built up huge reserves. You say drain them as soon as possible, or at least beginning in fourth four, right . More likely to be the second half of 2014 but the fed clearly has been working on this, last fomc minutes they floated this idea of firsted rate full allotment overnight reverse repos. This is a facility that would allow the fed to effectively set the rate on overnight repos presumably at higher levels than theyre trading today. That would allow them to basically take a lot of money that is slushing around in the overnight market out and bring effective overnight fed fund rate much closer to the target which is very important. This is a prerequisite for eventual tightening process because the fed really has to get control of the overnight rates first. David although you beg a question here which is whether the fed is trying to do too much to direct details of this economy . This fed has gone further than any fed in my lifetime to try to pull all the bells and whistles they can to affect every little piece of this economy. Isnt it doing too much of that . In this case were talking about overnight rates which is not that different from what the fed is trying up until now. David true. I think this is a way to solidify the framework of paying interest on reserves and making that floor really stick. In this particular case i think it is totally acceptable. David rate hikes is the next step. You say catch me if you can. Were not talking until 2015 for this, right . I actually think they start late. Im with consensus in terms of timing of the first hike but i think the eventual tightening cycle will be potentially much steeper than the market is pricing right now. With 6. 5 Unemployment Rate and up nation approaching 2 , presumably, you know thats where were going to be at the time of the lift up in rates. The prescribed overnight rates will be around 2 . So the fed is telling us effectively well undershoot by over two Percentage Points and possibly more. And theyre going to have a lot of catching up to do. David look at 10year rate and its rise. It has been coming down over past week or some still has risen at an alarming rate. The rate of the rise has been scaring people particularly inside the fed. Look at oneyear chart. Arent rates getting away from the fed . I think were still at levels that are probably not going to be too disruptive to this recovery. Remember, that we started from levels that were significantly below fundamental fair value. David of course. And really when you think about the things that have been holding back this recovery, rates have certainly not been that factor. David right. It has been deflationary dynamic in housing and those expectations and what they imply for the rest of the economy and i think thats what is pulling rates up. David we have to go to the fourth one. This is last question. We run out of time. To sell or not to sell. Whether you hold those bond or roll them over. What do you think theyre going to do . Well thats obviously a question are to the distant future. I think that is really 2016 and beyond. I think asset sales will be very difficult for a number of reasons. I think they david they will roll them over . They will hold on to them . I think they will let them expire at maturity. David so they wont roll them over . Right. If they start doing that in early 2016 my estimates suggest they will be able to norm mallize the size of the Balance Sheet in five 1 2 years. David put you on the spot. What is your guess the amount they begin to taper tomorrow, five, 10, 15 billion . I think it is 10, 10 billion. Im looking for other hawkish surprises in the conference. David a netta, thanks for being here. Thanks for having me. Liz twitter gears up for its hotly anticipated ipo it is a clash of social media titans being closely watched by investors as well as the entire media industry. Who will win . Well have the details next. Nasa seeking some very special recruits for more than twomonth long mission which will boldly go where no one has gone before. Not quite the final frontier. Well tell you about it. Stay tuned. In todays markets, a lot can happen in a second. With fidelitys guaranteed onesecond trade execution, we route your order to up to 75 Market Centers to look for the best possible price maybe even better than you expected. Its all part of our goal to execute your trade in one second. Im derrick chan of fidelity investments. Our onesecond trade execution is one more innovative reason serious investors are choosing fidelity. Now get 200 free trades when you open an account. But it doesnt usually work that way with health care. With unitedhealthcare, i get information on quality rated doctors, Treatment Options and cost estimates, so we can ke Better Health decisions. Thats health in numbers. Unitedhealthcare. [ male announcer ] 1. 21 gigawatts. Today, thats easy. Ge is revolutioning power. Supercharging turbines with advanced hardware and innovative software. Using data predictively to help power entire cities. So the turbines of today. Will power us all. Into the future. David apple is making big headlines with iphone lineup, right . But ipad business is also a huge driver of growth and we were pretty stunned to see that one of those tablets was apparently being used in a war zone. Syria, to be precise. Look at this picture. Now a reuters photographer squat Syrian Rebels using an ipad to help line up a mortar as they prepared to bombard government positions, likes like a surveyor tool he is using there. Not enclearly clear how the rebels were using the ipad. You can see the apple symbol there. Twitter users are speculating that the tablet was helping rebels determine mortar angle of fire. That is raiseing a question, is there an app for war . Liz is there an app for that . That is a big question. Twitter is darling of apps and television. Certainly facebook is invading twitters turf made the prime time debut. David dennis kneale, joining us. David, liz, watch out twitter, facebook is aiming for you. Last night marked facebooks first ever appearance in prime time as abcs dancing with the stars, carried live onscreen comment from facebook viewers. Hooray for snooki. That is a right smack in twitters tweet spot as they plan to go public. Twitter has starring role on nbcs the voice. It is mainstay on news programs and this is a nice match because dancing with the stars has 4. 2 until likes on its Facebook Page and millions upon millions of viewers watch tv useing a Second Screen for interactions. Disneys abc network just out with numbers from last night. Dancing with the stars was the most watched show on television. More than 16 million viewers. On facebook, 650,000 users engaged in like 768,000 interactions. Facebook this month again releaseing a new set of programing tools making it easy for tv networks to tap into the live facebook feed. These socalled apis, for application programing interface will let ever more network news shows and now entertainment shows add Facebook Comments to their programs. Now better yet, the networks will be able to manipulate data to do things that twitter cant. Let viewers know what fans are thinking about the different dance acts by age, sex, region. Even hot topics such as snookis snug new dress. The big we how much value advertisers will place on this. Does chatting about a show have anything to do really with purchaseing a product . Nielsen recently studied Second Screen viewing. Found that less than half the audience ever bothered to make use of those on screen extras the Networks Work so hard on this is twitters sole purview till now. Facebook seems determined to make sure it doesnt stay that way. Guys . Not hurting the stock today, dennis. Thank you very much. Thanks, dennis. Fashion designer versaces mansion was fit for a king but how about for a real estate mogul . We have the auction battle for versaces estate that may surprise you. David it is the most important Federal Reserve decision in years. I know you hear that every couple months this is the real thing. Well tell you specifically what it look out for in the fed policymaker announcement. How it plans to launch the taper tomorrow as soon as we come back. 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Liz off the desk, the mansion that belonged to the late Fashion DesignerGiani Versace was auctioned off for 40. 5 million. The 23,000 square foot estate located in miami beach was bought by, vm south beach, llc this includes the nakash family that owns american clothing company, jordan jeans. The second place bidder is man not used to being number two and getting beaten on real estate. Mogul donald trump. He offered 41 million for the property. Remember he was murdered at the front steps. David kind of gaudy and geirish. You can get away with it if youre one of those guys. We asked you on twitter and facebook if you think Financial Firms are gets off too easy by paying fines. Jim wrote on facebook this, is very smart. Government fines dont punish the banks but punish the banking customer who ends up paying these fines in the form of fees and surcharges. Liz amen. Number two thing to watch, august housing numbers. Number one thing to watch the Federal Reserve policy statement. 12 30 p. M. Eastern. Fed chairman Ben BernankesNews Conference at 2 15 p. M. Investors will listen closely. Well have it live not only the decision but what he says after on tapering, how much and when. David 5, 15, 20 billion, who knows. Well be watching melissa im melissa francis. Here is what is money tonight. Health insurance exchanges open in two weeks. But will they sell anything on them . Ecigarettes are a god send to smokers, just not the person sitting next to them. Well tell you how restaurants are becomeing a battleground for the e sig boom. Who made money today. If there is any doubt before he is proving he is absolutely nuts and he is making bank off it. Even when they say its not it is always about money