Transcripts For FBC Varney Company 20140507

Janet yellen still speaking. Do not worry. We will interpret. Varney and company is about to begin. Stuart lets briefly recap what janet yellen has been saying on capitol hill. She says, the fed will continue printing money because of the weak jobs market. Do not know how much. The economy will grow at a faster pace this year. Interest rates will stay the same for a considerable period of time. The bad Winter Weather is partly, mostly to blame. Check the Market Reaction to all of this. The dow is trading at a very narrow range. Interest rates, though, that is a key barometer as to where the market thanks the economy is going. Take a look at this. Down again today. A huge drop yesterday. The stock talk below that whatever it is. Right at 30 a share right now. Same with yelp. It dropped 12 yesterday. Now another 2 . It is being investigated by a shareholder rights firm. Whole foods. It has cut its forecast. Look at that. As you can see, there are some huge moves in individual stocks. Sue lily. A darling stock. The good news, the bad news. Nicole the amazon for some moms. Down about 28 at the moment. It is hitting new lows here. You have the analysts jumping on board and cutting their numbers. It is a laker this year. Zulily, you have to be, obviously, pro act. You need to know what you want. They basically do it in both. That is not necessarily for everybody. It certainly is not for me. I am an overnight girl. Stuart i want to bring you up to date on what janet yellen has been saying. She said there may be a faster pace for the Economic Growth rate later on this year. The market not really going with that opinion from janet yellen. Listen in briefly to what she has to say right now. Definitely relevant to the strength of investments. Thank you very much. We have been very generous to make sure the chairman has plenty of times to answer questions. Thank you very much. Thank you for being here. I want to follow up on something that chairman brady talked about briefly. Milton friedman once said that inflation is everywhere. Today we see that the United States department of agriculture estimates that food costs may go up as much as present. In this mornings wall street journal, a distinguished Federal Reserve historian said the feds focus are not having too much attention on the structuring monthly quarterly data. He says the side affects have ugly consequences. One of the worst is the ultralow Interest Rates for retired persons. It forces them to take substantially greater risks in bank cds. We see people with plans for retirement. Maintaining an extraordinarily low Interest Rate or a decade grading market with distortions, you know, it is nice to talk about being able to control inflation going forward. Last year, it was a percent and a half. Can the Federal Reserve identify , accurately, a change in Economic Conditions and execute and exit strategy before inflation occurs . Never any time in history of this country. Well, i do believe that we have the tools and the will and determination to remove monetary accommodation at an appropriate time to avoid overshooting our inflation object to. The committee, everybody on the committee forms and experience for them. 1970s, we saw very high inflation and a huge effort by chairman volker to tighten Monetary Policy to bring it down. We went through a period in which fed policy was not sufficiently tight. High inflation led to a rise in Inflation Expectations. We saw Inflation Expectations could become a persistent source of high inflation and it could be very costly to lowering inflation. The lessons from that period are very real for all of us. None of us want to make that mistake ever again. I do believe we have the tools and determination to avoid that. We indicate inflationary developments. We watch what the likely evolution of inflation is and i cannot say that let you know, we will get it perfect, but i can tell you that the committee has adopted a 2 inflation object if in order to make clear our commitment to achieving that objective and to be held accountable for it. We are determined to make that happen. Howard that payments, our Interest Payments will exceed our National Defense budget within seven or eight years. I think 2021 is the estimate. All of that working together, we really need to grow our economy to be able to manage that. We want to be able to. Longterm Interest Rates are likely to be rising over time. This is something i think we should certainly be taking into account as you look at what fiscal burdens will be down the road. Thank you. Thank you, mr. Chairman. Thank you, janet yellen for being here. You touched on something a few minutes ago about some deeper structural trends going on in the employment market. You tied those very appropriately to the trends, to the macro trends of globalization and macro type allergy. We have benefited people with access to capital. They have been very disruptive to the average american. This is the root cause of some of the concerns. We are creating high school jobs is it possible . Put us in a position where the fed would have accommodating Monetary Policy for a sustained period of time. Particularly, congress doing things like rough form. It is impossible that that is the new norm and the size of the Federal Reserve talent sheet stays quite large for a reasonable period of time. You know, i think these longerterm trends have to do with relative wages of different groups in the labor force. It has been going on for a long time for the reasons you stated. I do not think that those trends are ones that the Federal Reserve can really address. In that sense, when the labor market has returned to normal, in the sense that most people who are looking for work are able to find work for which they are suited and skilled in a reasonable period of time, there really will not be much more, as in our domain that we can do. We would not keep our balance she large or refrain from restraining Interest Rates for that reason. There are some people who have suggested that the distribution of income and rising inequality are pulling down spending and holding down spending growth. It is hard to get clear evidence on that. To the extent that that is true, it would be a way in which inequality would be slowing the pace of recovering back to full employment. That would affect how long we would hold our Interest Rates where they are. My second question is around financial educators. Asset bubbles in particular. We have seen a delinking that has gone on between leverage spreads and leverage. We have seen the delay just as we have seen the delinking of equity market values. I think of it more as froth as opposed to formation of asset bubbles. How do you think about these things or what kind of benchmarks do you use to indicate we may in fact be creating asset bubbles in different market . A variety of ways of measuring those. We can look to see evaluations and that sense move out of historically normal ranges. I would say for the equity market as a whole, the answer is that valuations are in historically normal ranges. Interest rates, longterm Interest Rates are low. That is one of the factors that feeds into equity market valuations. There is that linkage. There are pockets where we could see this. Those Broad Networks do not suggest. Thank you very much. Thank you, chair for your presentations here today. I wanted to ask you if you wanted to step faith aside for a moment in terms of representing the fed. Give us some of your personal thoughts if you think it is appropriate . So many of the ceos and owners of those businesses, almost to a person, to indicate that they are underperforming. They are underperforming because of the uncertainty of the case. Relative to prospects of uncertainty of what it will be. Essentially, they say it is an incentive to the private sector there business investment, which, as we know, is the foundation of job creation. Your predecessor, i asked your predecessor the question of whether or not, of what his opinion was relative to the opinion. His answer was, we pretty much exhausted the major tools that we have to address some of these problems. An awful lot of unused capital. He is right. My question is, you made reference to the fact that it will be a gradual return over the next two or three years of Economic Conditions. Given that, would you be willing to give us some direction. Either accelerating that movement to where we really want to get, beyond the two or three year. What recommendations would you give to us in terms of dealing with this uncertainty. I hear exactly the same things that you are siding. Concern about regulations. I guess, one recommendation that i would give you is that longterm budget deficits, we can see. They remain. There is more work to do to put fiscal policy on a sustainable course. Progress has been made over the last several years in bringing down deficits in shortterm. We can see that over the long term deficits will rise to unsustainable levels. I know that these are very controversial matters. It will probably help confidence. We also can see very clearly, for example, the kinds of regulations that we are putting in place during the process of doing that. It creates uncertainty and burdens. Here i would say, to some extent, we are doing this for a very good reason. We had a financial crisis. It is important to make the Financial System safer and sounder. We will try to make sure that we try to worry about regulatory burden. We try to design regulations that are different and appropriate for different sect tours of the economy. I think it is important for us to be sensitive to burden in order to minimize its impact on the economy. Thank you for that answer. I noticed that my time is up. You joined a long list of very responsible americans that have the expertise to give us some warnings about what may happen in the future and the consequences of our inability to act over the last several years now in addressing these major problems that will have significant consequences in the economy of this country. I do not know what it will take. You have a responsibility up here and you are not fulfilling that responsibility. Thank you very much. Good to be with you this morning. I wanted to ask you a couple questions about jobs and the new fracturing. We have a lot to be positive about. When i think about it from a national perspective, good job numbers in the last couple of months and even the recent report, a lot less in the terms of good news. I am told the Participation Rate is at a 45 year low. You said during the economic recovery so far, Payroll Employment has increased. Can you speak in terms of what you would hope to see . Secular will continue. The amount that they work. It declined notably in spite of the fact that retirees are working more in participating more in the labor force than earlier. Nevertheless, if we had a strong economy, it would not surprise me at all if we did not see more participation in the labor force by retirees. In addition, we are seeing for all age groups, a reduction in Labor Force Participation. Especially in those nonretiree demographic groups. To me, it is clear that the weak state of the labor market partly explains why we are seeing a decline in Labor Force Participation. The Unemployment Rate comes down, we need to figure out what portion of the Labor Force Participation decline is secular and what portion is cyclical. That is what we will be looking at very closely. I guess i would expect, as the economy recovers, we may see labor force Participation Rate strength in rather than continue to decline. One thing that we talk about a lot is the skills gap in the disconnect there between the jobs that we need to fill or that need to be created in the future. The skill level of folks that are seeking levels of these jobs. I guess, one of the questions that i have for you is you look at transit all the time, you look at the Economic Impact of policies that we have put in place here. You see those trends in the kind of skills that these folks would need. My youngest daughter is a junior in high school. What would you hope that she would get to be placed in one of those high skill jobs that we hope we are creating. We hope we have policies to get us to the point where we no longer have that kind of skill set. What would you hope that either i or society at large could provide in terms of that . I hope that you and society at large will make sure that she has access to a good college education. The gap in earnings between those with a College Degree and those with less education has increased enormously. Good opportunities to get advanced skills will clearly suggest it will make a difference to her lifelong earnings. Thank you very much. Thank you. Knowing senator casey, she will get a good education. I have no dow. Chairman brady got to a point where he said he was hopeful he would enlighten the committee on six specific points. There is no time for you to answer those. I would like to submit those as my questions for the record. Will you do that . I would be glad to. The last one is about transparency. I understand your reluctance to be tied down to specific predictions of when this or that will happen. I do think we got a yes from you on one thing. That is when the Asset Purchase Program will end. As i understand it, you have a set of expectations for the rest of the year. If those expectations are met, you expect the asset purchase problem to and this fall. Is that a yes . That is correct if the labor market continues to recover and we continue to see to the evidence pointing to inflation moving up over time. The committee is likely to continue taking further steps within the program next fall. In the fall of this year . Correct. Said she saw no sign of rising inflation, you do not agree with that. Ideally, inflation should increase to 2 and that would be a better result, as far as you are can turned. 2 is the committees longerterm objective. It will not be at that level at every moment, but we expect it to move up gradually over time. Great. You mentioned during your testimony today, maximum employment and full employment. Would you define those for the committee the wording shoes in the Federal Reserve act, that congress designed for us and the percentage rate, what is a maximum employment . I interpret maximum employment as meaning the level of employment in the Labour Market where people are able in a reasonable amount to find to gain work. For todays purposes you not put a percentage point. In terms of income inequality. Lets get back to the meltzer article in todays wall street journal. The policies and the Federal Reserve are responsible for fee income inequality, and he says ironically it is often repeated, demands for increased redistribution, and policies pursued by the Obama Administration supported by the Federal Reserve have accomplished the opposite. He goes on to say voters recognize boosting the stock market through a very low Interest Rates not to mention subsidies and handouts contributed to that result, for another discussion. Dont you acknowledge the Interest Rates which you have achieved, the stock market, therefore boosting stock market, contributing to this distribution of income . I would not deny that the level of Interest Rates fixed the stock market, would hardly endorse the term boosting the stock market. We have no target for stock prices. The policies we have undertaken are meant to ease financial conditions and a whole variety of ways that will be conducive to generating greater spending and greater spending means we create jobs throughout the economy. I would take issue with a stronger economy. The variety of households throughout the economy including lower income households who are gaining jobs. We have an impact on the stock market and impact on housing prices. Housing prices come back up again. Middle income households, the most important asset. The return of house prices to normal levels, i think, has been a major benefit to Many American households. They have seen themselves move from situations when theyre under water on their mortgages to being back in the black and helps give them access to credit if they want to send a kid to school or have an emergency or start a Small Business. There have been benefits in this policy and the policies we have pursued for main street as well as those who hold equities in their portfolios. Thank you. Senator sanders. Thank you, mr. Chairman, will command good luck on your new endeavor. Mr. Chairman, with your permission i will put into the record a recent bbc article entitled u. S. Is an oligarchy, not a democracy. Chairman, is that right . Chairman . Can i placed it into the record . Without objection. Madam chair, in the u. S. Today the top 1 own 38 of the financial wealth of america, the bottom 60 own 2. 3 . One family is worth over 140 billion, more wealth than the bottom 40 of the American People in recent years, we have seen a huge increase in the number of millionaires and billionaires while we continue to have the highest rate of childhood poverty in the industrialized world. Despite as many of my republican friends talk about the oppressive obama economic policies in the last year charles and david koch struggled under these policies and will increase by 12 billion in one year despite the oppressive obama economic policies. In terms of income, 95 of new income generated in this country in the last year went to the top 1 . A study which i have just introduced into the record by two professors from princeton university, professor Martin Dillons and Northwestern University professor benjamin page basically suggest that while historically we have considered our society to be a capitalist democracy we may now have entered into a phase where we are an oligarchic form of society. In your judgment given the enormous power held by the billionaire class and their political representatives are we still a capitalist democracy or have we gone over into an oligarchic form of society in which incredible economic and political power now rests with the billionaire class . All of the statistics on inequality that you cited and those that greatly concerns me, and concerns about them they can shape or determine the ability of different groups to participate equally in a democracy and have grave effects on social stability over time. I dont know, i prefer not to give labels, and if trend toward growing inequality and i personally find it very worrisome, deserves the attention of policymakers. I get the point professors are making and others have made that there comes a point where the billionaire class has so much political power, the Koch Brothers are able to buy and sell politicians thanks to citizens united, and what point does that reverse . That is the great concern. And to another point. My colleagues in the house believe we can improve lives for the middle class and create jobs by completely repealing the estate tax which applies now to perhaps less than 0. 1 of the wealthiest families in this country. Would it make sense to you to give enormous tax breaks to the families of the top 1 of people in this country . I have indicated that i share your concern with inequality but i guess i am going to say on this that it is up to the congress to decide what is appropriate. There are a number of different ways to address it that are on the list. Let me explain another question. One way to stimulate the economy is to give more tax breaks to the wealthiest people in the country and the largest corporations despite the massive wealth and income inequality. If we give tax breaks to the Koch Brothers who are worth a billion dollars that will create a lot of jobs in this country . Most of the evidence that we have suggests transfers to lower income people tend to be spent, larger fraction of the dollar is spent than when theres a transfer to a wealthy individual but changes in tax policy so that is from the demand side tax policy also has supply side effects that one should take into account. Thank you. Representative paul. Thank you for being here and offering your testimony. You mentioned several times the Unemployment Rate is still too high and clearly we as elected officials representing our constituency would agree with that. In april you made some remarks to the Economic Club of new york. At that time you said the central tendency of the federal open Market Committee participant projections for the Unemployment Rate at the end of 2016 so this is still yearandahalf would be 5. 2 and for inflation the central tendency is 1. 702 , you mentioned 2 presented day. If this forecast was to become a reality the economy would be approaching what my colleagues and 5 u. S. Maximum employment and price stability for the first time in nearly a decade. I am wondering, you didnt want to put a number on maximum reform but referenced this in april. In light of the Unemployment Rate being around 4 in the middle of the last decade, youre indicating full employment or maximum employment is significantly higher, 5. 2 to 5. 6, is that the new normal. Is that when you are targeting for full implement . This is numbers that are purely based on empirical evidence. Each member of the committee is asked to make every three months. What they are trying to deal with is the level of unemployment that would be consistent with stable inflation rather than gradually rising inflation over time and based on the evidence, the current read, these are just estimates, something that changes from time to time but their best assessment, most of them in a range of 5. 2 to 5. 6 . When unemployment was as low as 4 previously to some extent, that may involve shooting it. Nothing says 52 to 56, a floor on how low unemployment can go. In the late 1990s unemployment fell below those numbers. An increase in productivity growth and strong dollar appreciation of the dollar that was holding inflation down and made that happy coincidence, very low unemployment and stable inflation possible so at the moment this is their best guess, and it is where they envision the economy in 2016. In general, it is good to see that between 6. 4 . What you said you wanted to look getting details of the labor force Participation Rate, it felt to tying the low, that is one of the most concerning numbers, and labour force has declined by 800,000. That is a significant number. What do you envision the labor force Participation Rate might be evaded the 5. And to present to 5. 6 Unemployment Rate. Hard for me to give you an estimate of that. We had a huge move, very unusual to see at 0. 4 decline in the Unemployment Rate in a single month with a comparable move in Labor Force Participation. We always tell ourselves one should not make too much of any single months numbers. My preference would be to look at those labour force and Labour Market statistics over three or six months to get a read on things. If we do that, what we see is the Unemployment Rates come down. For the last six months, job growth has been, employment has been gaining 200,000 jobs a month and somewhat higher over the last three month. Labor force Participation Rate has bounced around but it has been roughly it came down, it had gone up previously. Over the last six months it has been roughly stable which is, i think there is the declining labor force Participation Rate as the trend so stable labor force Participation Rate could signify some cyclical slack in the labour force, in the labor market is gradually diminishing over time. So looking over three to six months i would say the patterns we are seeing are consistent with improvement in the Labour Market. Thank you. Representative cummings. In february senator Elizabeth Warren and i wrote to you urgings that a formal vote of the board of governors be required before the fed enters into consent orders over 1 million. Staff reviewed all Enforcement Actions between 1997, and 2013 and found only 2 resulted in these over 1 million. During a hearing before the Senate Banking committee on feb. 27th senator warren asked if you agree with our proposal. Un tukwila mack i do think it is appropriate for us to make changes and i expect that we will. Yesterday senator warren and i received a response, in which i wrote i agree it is appropriate for the board of governors to be fully involved in important decisions to the supervisory matters, steps are already underway to develop new practices for review and approval of significant Enforcement Actions. Can you tell me what specific steps are under way where the board procedures are changed to require formal votes Enforcement Actions, what they would that occur and if this is not a procedural change you anticipate making, not new processes and improvement actions will be introduced . We have met and it is in the Public Record we have had, a number of meetings at this point over the last couple of months to discuss Enforcement Actions. Our participation in those discussions with our staff early so that we can guide handling these matters. Is fully appropriate and i pledge that we will continue to do so. We have taken a vote, one very important enforcement matter. I want more time working with staff to decide exactly what the guidelines will be for when we should delegate and when board action is required. You suggested a particular cut off and want to think more carefully about how to define precisely which actions should require board votes when it is appropriate for us to vote. I want to pledge that the board will be involved in discussing major Enforcement Actions and we have done so. You were vice chair of the board of governors when the fed terminated the independent foreclosure review and agreed to a settlement with Mortgage Servicing companies in january of 2013. Did the board formally approve the amendments to the consent decrees that terminated that . The board did not vote on that agreement. Under the procedures in place this was a matter that was delegated to the staff but the staff consulted closely with members of the board before they took those actions so the board did have been put in an informal way when those decisions were made but there was no formal vote. On march 4th i joined with oversight chairman darrell issa in a letter requesting both the fed and the occ produced documents relating to this decision and the sec produces document several weeks ago, we received the feds documents yesterday and were still were viewing them. Documents reduced by the occ show there was no reliable data or error rates at the time, preliminary data showing doubledigit error rates in some categories and some services. Deep dives were planned to identify the full extent of harm that they could not be completed because the imf are was terminated. Did you know this when they were terminated . The i f r was terminated because it was decided that the process was too slow in terms of its time frame and its ability to get money into the pockets of homeowners who had been harmed. It was a decision that the occ took the lead in and the Federal Reserve went along with after consulting closely with Community Groups and looking at the process that was taking place with the independent consultants reviewing these files. It was not a happy outcome. It was all horrible outcome. Horrible. I dont know whether you have looked into it but it is a very sad commentary on what happened. I know i am out of time but i will send you some followup questions along with senator warren. Be happy to answer them. Thank you, thank you for being here today and your testimony and answering questions. You have a difficult job, which you well and look forward to future hearings to come. The hearing is adjourned. Stuart the hearing is adjourned. We heard that. Do you remember approximately 35, 40 minutes ago, senator wicker, republican mississippi, asked a question of janet yellen. When he asked the question the dow was up 22 points. The question was madam chair, are you going to end Federal Reserve current policy, that is printing money . This fall . She replied yes. We will end it this fall depending upon Labour Market conditions. In other words, here is my interpretation of all of this, she was basically saying low Interest Rates from here on out into the fall, then we will stop printing money depending upon Labour Market conditions. Was at that moment with the dow up 22 it started to rally. Now we are up triple digits, we had been up 105, now we are provided 5. Charles payne is with the. I think he disagrees with my interpretation of Janet Yellens commentary. Charles i disagree on timing. We have a market clashed going on, with the stocks. Put it on one side. The broad market was starting a crater so we were actually in the red when she began speaking. People were asking political questions to get a gauge on what is going to happen because you have two things going on. That capering which is the printing you referred to in the low Interest Rates, she has endeavored throughout this period particularly today to make sure wall street knows and make it very clear we are going to taper, put less and less in the system but there will be a huge paws between finishing capering and eventually raising interest. Stuart lets compromise, janet yellen said the printing of money stops this fall depending on labor market conditions. The market goes up. You are saying she also made clear there is a long pause before they start pulling money out of the market. The market goes up some more. Are you with me on that . Charles that was her mandate going into this. So far she was successful. Stuart those are dow stocks, chevron, visa, travelers. Say that again. Those five stocks account for half of the dows balance. Were 100 points, those account for 50 of those points. Hold on a second. You started your commentary by saying there is a crash in a certain section of the market but you are right when talking the twitters of this world. Charles amazon, fire hydrant, the list goes on and on. The momentum stock. Stuart amazon especially 400300 etc. That is your point. Within the overall market theres a crash and was previously known as momentum. Charles it has gone bad in the last 48 hours. The crash of 2,000 one text box crumbled everything crumbled. I find it interesting the broad market is resisted falling stocks. Stuart those stocks you are talking about were weighed down but the rest of the market did not fall. Charles they are hanging in so far which is interesting. Stuart can we at some point again onscreen, amazon, twitter, lets get up there those stocks. Charles i meant fire i so please get it up there. Yelp, put yelp up there. Most of these are going to be extreme bias. They were overbought, oversold but this is classic capitulation. We are seeing people toss in the towel because everyone else is tossing in the towel. Class a capitulation. Stuart looking at twitter in particular, went from over 60 to 30, cut in half. Charles if people can be locked up date for pvotf adnup t00vt91 30 . Facebook is down 1 and the selling has nothing to do with what janet yellen said. Charles this has already gone on. This is an entirely separate phenomenon. Stuart fire i down 24 . Charles it really is amazing. If you look at what these companies are doing or saying the bottom line right now is they are not going to earn money. Stuart can you tell me what you have got for us on the floor of the exchange . The dow is up 110 . Nicole zoo lily hit a new low. We are seeing that down in a 20 range, 26 to the downside. Also keeping a close eye on groupon saying they had First Quarter loss, you can see this down a big way. The big losers, dont shoot the messenger, down 19 , high of 45 and analysts jumping on board and downgrading this. Week Second Quarter but full year number is trying to boost them. Stuart what you are bringing us are those stocks which had great momentum over the last four or five weeks and fell out of bed and still falling out of bed today. Percentage losses are enormous but nothing to do with what janet yellen just said. I agree with that and these momentum stocks when you talk to analysts and market coming back the momentum stocks move in big ways and the come back of the market overall, the momentum stocks lagged the come back, they can come back but come back in lower fashion. Stuart look at the dow right now. Were 110 points. Going back, 35, 40 minutes ago asked a question, when are you going to stop printing money, she said in the fall depending upon Labour Market conditions. The dow is up 22 at that point. Stuart a year ago she said we would stop printing stuart down 400. Got to watch that fit. Now that we are done with janet yellen, on to a new hour on varney and company. Here is what we have got, one company that is going to spend, wait for it, half a billion dollars on one videogame. Game of already exists. They will develop it more with halfMillion Dollars. Why would you put that kind of money into a video game . The story behind the astounding number will be new and noon. More businesses divan start up in the years after the great recession, the obama years. Where is the growth . Carthy joins us in two minutes on that. When folks think about what they get from alaska, they think salmon and energy. But the energy bp produces up here creates Something Else as well jobs all over america. Engineering and innovation jobs. Advanced Safety Systems technology. Shipping and manufacturing. Across the United States, bp supports more than a quarter million jobs. When we set up operation in one part of the country, people in other parts go to work. Thats not a coincidence. Its one more part of our commitment to america. agent ill walk you guys through every step. There are a lot of buyers for a house like yours. husband thats good to know. Stuart the second hour we have this for you. Obama sinks americas engine of growth, private enterprise. More businesses lost and gained every single year. Carly response to that. Activevision spent half a billion dollars to develop one video game, 500 million for a video game. We are on that one or try it this. Would you pay extra for Sustainable Clothing . Meet the Business Owner who thinks you will. Use a super model and College Grads with death not happy as those who are debt free. No surprise there. Maybe we can get doctor keith abbott to put them on the couch and cheer them up. Last one. Since this is incredible, since 1965 Life Expectancy for men in rich countries of gone up by nine full years. That is a shock. The market popped, half an hour ago after janet yellen said the fed would be done printing money by the fall. She said depending on labor market conditions. At that point the dow started to move up, had been up 110. The stocks leading the dow higher, chevron, visa, travelers, goldman, all down stocks. Those percentage movers account for 55 points on the dow. Got some more individual names you know. Oh look at disney. It is not much but its profits were, it made that movie frozen, that is a blockbuster, up goes the stock, 81 on disney. Did you hear ali baba is going public . Yahoo s stake is worth 26 billion. Not much good to investors. It is down 6 . Forecast weak profits, the dow is down 19 . It cut its forecast in the Third Quarter this year, dont do that. It is down 20 , that is a huge drop off on this particular share and you can see a new low 3731. Like safeway and kroger over the last 52, not doing good for the Company Overall lander earnings forecast, the third time here they are cutting it. Everyone getting into the organic game including walmart. Theyre down 20 . Stuart did you just say the organic game. Supply and demand, we study economics here. I dont know why i am smiling because were talking about the decline of private enterprise in america. A new study from brookings, a leftist organization it, they reveal, u. S. Businesses are being destroyed faster reason they are being created. The rate of new business formation, cut in half in the last 36 years. Business formation has taken a tumble since 2008, the obama year. We are joined by carly fiorina. Cammed being overly harsh, blaming president obama for what i call the setback of private enterprise in america . It is true there have been trends, increasingly complex regulation, tax codes, increasingly complex permitting processes to get through but it is really accelerated the trends under the obama years snow we knew before the we had some more Small Businesses failing and your starting than any time in 40 years. Now we know business are being construed more than created. That is a huge problem and why the economy isnt going. And is being hollowed out and taxing the wealthy wont fix this problem. The only thing that will fix this is to get at the root of the which is a regulation and taxation. Can you get stuart i agree with you, cut taxes, cut regulation. We can return to a reagan like recovery. How long will that take. Any prospect in the future that they can recover . Dont think theres much prospect when president obama is in the white house. Democrats controlled the senate. Is president obama coming out, another round of regulation, under the guise of Global Warming but i do think what we need is a fundamentally new mindset in washington d. C. Washington to quote reagan is the problem. If we want private enterprise to flourish we have to support Small Business creation and entrepreneurship. The only way to do that is to get decisions out of washington, and eliminating regulation, why simplifying the tax code is so vital, no one can deal with a 27 page tax code, and lots of lobbyists and accounts. Stuart back to Climate Change for a second because as you know the president pivoted, he wants Climate Change legislation and lets suppose you look at it from the the point of view, we have a Climate Change problem, and want to do something about it does it mean automatically you got to cut jobs . If you look all the science around Climate Change, all the scientists that believe it is real also believe that a single nation acting alone can have absolutely zero in pact. If the u. S. Undertakes even more regulation in the name of Global Warming all were doing is costing our cells jobs because china isnt helping, india isnt helping. Unless there is a concerted global effort over many decades we wont make an impact. Secondly if you look at the keystone pipeline, the truth is what we are doing today is worse in terms of Carbon Emissions transporting natural gas. Frankly i think this is about ideology, not science, rallying the liberal base. Of course this is going to cost jobs and it need not cost jobs. The best answer is innovation, innovation and innovation comes from the private sector. Stuart i have ten second. Would you consider getting back into politics . Maybe. Stuart thank you for being with us. Busy day and glad you found time to be with us. Want to get back to this two fes market. The dow is up 100 points, some stocks falling out of bed. They went straight up over the past few weeks and straight down. Zoo lily is one of them. We call this the amazon for moms posted a surprise loss and it is down 29 . Come on in. What is going on . 3252 is a three month low, it was 73 in february. Same day delivery is so popular, this happened to zoo lily, the worst loss than expected. Revenue grew up 80 , a number of users almost doubled, the number of orders almost doubled, the problem, the back orders, it is getting longer and longer. Stuart it is not expectation they failed to meet. Keeping customers waiting. The key Holiday Quarter was 11. 5 days, the average time you waited to get your item. They dont expect to be same day. In the quarter that was just up, 13. 2 days, they cant book the revenue for the order is made, until they fulfil them. It is moving a lot of sales and to the Current Quarter and actually looking ahead they raise their full year revenue a little bit for the Current Quarter as well so we dont want to wait. They are down 30 . Stuart you got to do it now. I want it now. Thanks. Same day is not often that i talk about profit estimates but i have to tell you about electronic arts. The estimate was that they would earn 0. 11 pershare. They came in with 0. 40 a share, that is why it is up 17 . Big game. From one gamemaker to another check the share price of activevision. It made a ton of money in the First Quarter, all very good, stocks of 6 . Now this. Activevision is spending 500 million to create, update and promote their new online video game destiny making it the most expensive game ever made. Digital trends editor jerry kaplan is here for more. Than not spending and half billion on creating this game. It is already out there. They have been teasing it for a long time. It takes ages to develop these. They showed it to a lot of people last year. We have a beta in july, silly technical terms, just means we will have a pre release version some people will play around with and the final version will be in september. Stuart i cant wrap my arms around a half billion dollars, 500 million for a game, video game. Tell me about this. For one thing lets keep in mind this is the franchise game for this company for the next couple of years. There will be other editions of it that have spun off from it. Part of the Development Goes into the creation of an engine which is the Software Code they can use to create other games, a platform stuart expanded to other games later ron. One other big factor. It is not just we develop the game, press it into disks and we are through. It is a vast amount beyond that. They have infrastructure that supports the game. You have to have servers that are going to host things and keep people on line and keep from developing beyond that. The game you buy in the stores will be different from the game that exists a year from then or two years from then. Keep on developing and keep on promoting. The first game in what would be a franchise. Everyone loved it because they played a previous edition, they dont have it this year so it is free apps or cheap apps, of going to spend money on something we never heard of before. Tying fault was a big game, we didnt have one of those before and theyre on track to sell 6 million copies of that. That is a fair number. Of fair bit of revenue at the flagship game. Stuart how many did you have to sell . How many Destiny Games . You put half a billion dollars into this. How much revenue will you come downstream . You have got to be looking at 5 or 6 billion to justify a half billion dollars put in . The game is that big . It is a huge market, massive industry. Stuart i cant get my arms around. We talk about movies and how much money goes to marketing films any studio puts out a couple of the man theyre spending tens or hundreds of millions of dollars on them. Games are the same way these days, video games are often advertised on television, each of those spots costs 1 million or 10 million. Just in advertising alone. Stuart isnt destiny free . This game . There are a lot of questions. Havent even heard what platforms theyre going to be on. 60 a pop i can see it being free. Stuart i cant see that thing coming to me on an apps on this. That wont happen. It is a counsel. It will likely be on the pc because we dont have a lot of details yet, that will come out at the gaming conference. Stuart do you play games . I do, not as much as i used to but i do. Stuart do you . No. Stuart have you ever bought one . Not as a present for someone else but for yourself . No. Let me make a point. Maybe you havent played these games but you know of them so theres a lot of marketing money that will sell the stuff. If it is part of the pop culture is the zeitgeist. I know about them over the holidays and you see the long lines. Stuart when you still got rolling that way. Crazy amount of money. Thank you very much, see us again. Here is a staff for doctor keith keith ablow, 56 , the majority of parents think videogames are a positive force in their childrens lives. The doctor will put those parents on the couch and he is next. Stuart the maker of candy crush, a game, came out with good profits but the stock is going down. 11 . A big drop. Twitter moving lower still, 30 a share, down 4 , it had hit 29 earlier. Progressives, lets just say they will tax anything especially in california. What is happening . What are they taxing now . Basically do what oregon is doing, moving to tax miles driven. Imagine this will get a lot of people in california in an uproar. You drive a lot of miles as people doing california, there would be taxed on the number of per miles driven. Stuart not per gallon of gasoline used because we are using a lot less gasoline and revenue is down. They are driving. How do they check . A lot of money to have new devices to track your miles driven so that could wipe out the dollar amount of the revenue from the tax but what is right about this story is watch local californians reaction, liberal progressive saying wait a second, we bought electric cars, we are trying to be the good guys and you are going to tax us . Tax subsidies of those electric cars, now you tax as . We go on vacation, drive hundreds of miles, youll tax us for going on vacation . Stuart finally the liberals i am being nasty here but liberals are upset about a tax. That i just love. Tax them, boys. New statistics from the Electronic Software Association Show that only 44 of parents think video games are bad for their kids. Only 44 . Dr. Keith ablow joins us now. You realize the other side of the colon is 56 of parents think they are ok, they are positive. I am sure you are not in a 56 . I am not in the 56 , big surprise. The headline reads like an optimistic statement about these games. I would venture that if you found something, 44 of parents said could she dangerous for their kids, what if it was something they were eating . This would be an uproar. It is only because we have been lulled into a false sense of security to believe technology is not a drug which is that leads this to be a reassuring headline. Nearly half of parents in america think that games are destructive to their kids. That is the headline. Stuart you sound like my mom and dad 50 years ago objecting to the rolling stones. Dont you realize every single generation says look at those kids, look what theyre up to now. Society has gone to ruin. It is terrible. You sound like my mom and dad. This is different. Never before in the history of the world had we had the end drug as potent as cocaine or more potent that was disseminated willynilly to millions upon millions of American Children without a warning label, without so much as a warning label. And i will tell you is not reactionary, i met data driven guy. Facebook is associated with depression, less powerful interpersonal relationships, increased narcissism. This surge in general should be putting a warning level on facebook but he doesnt have the wherewithal to do it. Stuart i got you. You now want the government to get right in the middle of peoples electronic lives but i must move onto another subject. That is not what i want but they might have to. Stuart a new gallup Study Says College graduates with no dad, seven times more likely to be happy than those with death. I kind of things that is obvious but if you have one of these College Grads with a lot of debt around his or her neck on your couch what would you say . Life is a labyrinth and 20 years down the labyrinth toward the center of your life this that isnt going to look like a noose around your neck, work hard, appreciate the education you got, it was meant to be, you are a consumer, you chose to buy this and look forward, dont look behind, it is painful now but when i was in that school stating that most nights nobody said to me are you perfectly happy right now . Are you sure you are ok . The answer would be i am sweating every day to get this work done. It is a lot of money but down the road, it will be worth it. Why cant people say i am little less happy i have a lot of debt but that is okay as long as you perform. Stuart these surveys are crazy but i will make time for this one last one. Kevin durant named the nbas mvp last night, gave an emotional but great speech, take a listen for a second. You made a deal. The cameras off the street, put clothes on our backs, food on the table, went to sleep hungry, you sacrificed for us. You are the mvp. Stuart his mom in the audience. You know financing wrong with that. Stunningly beautiful moment, something that can certainly inspire lots of feeble. Notice he didnt say a thing about you got us every videogame you wanted and we are tweeting this right now. That is how much we care about you, we are tweeting it. These technology plays are the antithesis of the real emotion you just shared with people. You cant have both. We got to choose. Cant we just stand up for mom and say this is a great speech . I have to talk about my points. Stuart when you have to bring in the Anti Technology branch even when presented with a wonderful example that is stuart that is pathetic. Good moms, 44 of america says gaming is bad for you. Those are the 40 of moms that are just like his mom. Stuart okay. I am sure we will see you next week. Absolutely. Stuart see you soon. In rich countries we are living longer. A lot longer. That has profound implications. My take on it is next. Stick with innovation. Stick with power. Stick with technology. Get the flexcare platinum from Philips Sonicare and save now. Philips sonicare [ bell ringing, applause ] five tech stocks with more than a 10 . Change in aftermarket trading. All the tech stocks with a market cap. Of at least 50 billion. Are up on the day. 12 lowvolume stocks. Breaking into 52week highs. Six upcoming earnings plays. That recently gapped up. [ male announcer ] now the world is your trading floor. Get realtime market scanning wherever you are with the mobile trader app. From td ameritrade. Its called truecar. And truecar users. Save time and money. So when youre. Ready to buy a car, make sure you. Never overpay. Visit truecar. Com today. Stuart flyer i is an Internet Security company gave a disappointing forecast, spending a lot on new products, down it goes, 23 . The income inequality fight going global this week, worldwide protests for a higher minimum wage planned and we will cover that story. More obamacare fallout. New numbers on job losses all because of one tax. Even though this is about longevity, i will keep it short. Since 1965, Life Expectancy for men in rich countries has gone up by nine years. Here is my take. I got to say i find that astonishing. An extra nine years since i was a teenager. There has never been that kind of like extension ever before. It is having a profound impact. In america in 200013 of 65 years old still worked, now is 20 . Seniors are clearly working way into their oldstyle retirement years. Why not . If you expect to live a whole lot longer than your dad why not workable lot longer . If the economy isnt great and your children are saddled with student that you are going to keep 90 making money and work longer and you are likely to feel a lot better than your dad at this age so you work. Doesnt this raise the issue of the Social Security retirement age . We dont change it how do we pay for all those extra years . Are we going to show the bill under the next generation . They are not doing too well right now. Social security is hemorrhaging money precisely because we are living a whole lot longer. President obama has ruled out raising the Social Security retirement age. Some groups to not live as long as the general population so he argues it would be unfair, discriminatory to make some work longer. Okay, the retirement age is the third rail of politics and neither side of the aisle is keen on touching it because older people vote. Last statistic, the number of over 65s will almost double over the next generation. That is an awful lot of extra voters. Lets sum it up. We are living a lot longer. Some of us will work a lot longer but dont hold your breath when it comes to later official retirement. That is it. Weve never sold a house before. agent ill walk you guys through every step. There are a lot of buyers for a house like yours. husband thats good to know. My dad has aor afib. Brillation, he has the most common kind. Its not caused by a heart valve problem. Dad, it says your afib puts you at 5 times greater risk of a stroke. Thats why i take my warfarin every day. But it looks like maybe we should ask your doctor about pradaxa. In a clinical trial, pradaxa® Dabigatran Etexilate mesylate . Was proven superior to warfarin at reducing the risk of stroke. And unlike warfarin, with no regular blood tests or dietary restrictions. Hey thanks for calling my doctor. Sure. Pradaxa is not for people with artificial heart valves. Dont stop taking pradaxa without talking to your doctor. Stopping increases your risk of stroke. Ask your doctor if you need to stop pradaxa before surgery or a medical or dental procedure. Pradaxa can cause serious, sometimes fatal, bleeding. Dont take pradaxa if you have abnormal bleeding or have had a heart valve replaced. Seek immediate medical care for unexpected signs of bleeding, like unusual bruising. Pradaxa may increase your bleeding risk if youre 75 or older, have a bleeding condition or stomach ulcer, take aspirin, nsaids, or blood thinners. Or if you have kidney problems, especially if you take certain medicines. Tell your doctors about all medicines you take. Pradaxa side effects include indigestion, stomach pain, upset, or burning. If you or someone you love has afib not caused by a heart valve problem. Ask your doctor about reducing the risk of stroke with pradaxa. 800,000 hours of supercomputing time, 3 million lines of code, 40,000 sets of eyes, or a million sleepless nights. Whether its building the worlds most advanced satellite, the space station, or the next leap in unmanned systems. At boeing, one thing never changes. Our passion to make it real. How much money do you think youll need when you retire . Then we gave each person a ribbon to show how many years that amount might last. I was trying to, like, pull it a little further. [ woman ] got me to 70 years old. Im going have to rethink this thing. Its hard to imagin how much well need for a retirement that could last 3years or mor so maybe we need to approach things dferently, if we want to be ready for a longer retirement. Stuart as many as 280,000 jobs will be lost because of one obamacare tap. Liz, what is the tax . It is like a sales tax on insurance companies. The thinking was everyone who is benefiting has to pay for it. It is a sales tax on the total premiums collect it. This is a big deal. The Small Business lobbies are saying, hey, wait a second. It will be passed along to the little guy. Every Health Insurer has to total of what is coming into that Health Insurer in terms of premium. They will pay a tax. That is right. Guess which states will get slammed the hardest. California, texas, illinois. They are saying Small Businesses, they will have to foot the bill for this tax. 100 billion over 10 years. Stuart this is organized labor. That is right. We have seen this become an annual rite of spring and summer. We see panera bread. We see mick donalds. That is a danger if you push this down the road. Stuart i will say that kind of activity worldwide next week. Liz that is right. Stuart google maps teaming up with google earth. That is a private car service. Nicole they are invested in uber. You can take public transit. You can walk, what have you. Isnt that unbelievable. Just uber right now. Stuart who pays who . Do you know . Nicole no. Somebody has to be paying for this. Nothing is free. Nicole do you care where your clothes come from or the conditions under which they are made . Social responsibility is a trend among consumers. They want to be responsible purchases. Welcome to the program. You are really making us look good this morning. Thank you. We appreciate that. I do not care about sustainability or workers rights or anything else. I want you to show me an article clothing that you are selling which covers all of the bases of sustainability. Sure. I will show you an accessory. It is a handbag. It is made with recyclable materials by people who have been paid fairly. Stuart i see some metal here. I see what looks like leather. All of it is either recycled. Or they found, this leather is probably up cycled or it could be new leather, but it is touchable guide. Stuart i satisfy all bases. I am not offending anyone. That is right. I am covered. If i am socially conscious, i am covered by that tag. This is vivian westwood. Probably about 250. Is there a premium price for these sustainability . There is a premium to some extent. I just did a collaborative with agent m. Not all of the items are that expensive. Anywhere from 40 to 750. Another human being being forced to work under humane conditions. When you are saying a difference between 0. 50, we are not talking about 20, 0. 50 to a dollar more on premiums. You are talking about high fashion. It is very curated. I am selling fashion. Something that you would buy at the mens or varneys. Stuart do you think that maybe 10 are prepared to be socially Conscious Consumers . I think, actually, i think it is probably around 20 . I think that it is growing. Everybody wants things to be done efficiently. If we do not, we pay the price in the longrun. I juggle all of them at the same time. Do you have shoes in the lineup . You did not ask about shoes, stuart. I think that this is smart business. It is about being efficient and cutting costs by really doing things the right way in the beginning instead of later. For the first time in decades, more businesses were lost, closed down then opened up shop. Stay right there. The real Halftime Report will discuss it in a moment. mother vo when i was pregnant. I got more advice than i knew what to do with. What i needed was information i could trust on how to take care of me and my baby. Luckily, unitedhealthcare has a Simple Program that helps moms stay on track with their doctors and get the right care and guidancebefore and after the baby is born. Simple is good right now. anncr vo innovations that work for you. Thats health in numbers. Unitedhealthcare. When folks think about wthey think salmon and energy. But the energy bp produces up here creates Something Else as well jobs all over america. Engineering and innovation jobs. Advanced Safety Systems technology. Shipping and manufacturing. Across the United States, bp supports more than a quarter million jobs. When we set up operation in one part of the country, people in other parts go to work. Thats not a coincidence. Its one more part of our commitment to america. Nicole more store closings could be underway at sears. Expected to announce the move as part of its plan. Eddie lampert speaking at the meeting yesterday. They do not need to thousand stores to be a competitor here in the United States. Shares now up one third of 1 . Whole foods has cut its outlook for the third time. Ceo john mackey says they have the market to themselves for a long time. The reality is that we just do not anymore. A profit of 0. 38 a share. Stay right there everybody, the real Halftime Report is coming up next. Stick with innovation. Stick with power. Stick with technology. Get the flexcare platinum from Philips Sonicare and save now. Philips sonicare stuart this is it. The real Halftime Report. Joining us from chicago, trait and if the. A new study from brookings. A leftist operation. In more recent years, the obama years, more businesses are closing up shop then being opened. That cannot be a good sign for private enterprise. No. Not at all. If i had increased cost, as it cost me more and more to higher, what is my likelihood of expansion . Probably pretty little. This is the cost of hiring new people. As simple as that. Obviously, she is what we always expected her to be. She is proving to be the wind underneath the market. She has basically said low Interest Rates for as long as we can possibly foresee them. It is probably well beyond her tenure. Please look at twitter. The lockup ended. What are they saying on the floor about twitter . Down five and a quarter percent. Hit a new low. The problem is, they have user growth that has disappointed two quarters in a row. Guess what, they sold. Twitter is coming back down to where it ipo would at 26. It lost the equivalent of an entire whole foods. Stuart that is a drop. Did we have allie baba. Yahoo owns about 24 of allie baba. Wall street is already ball parking. They are talking about the fair value. 40 of its value comes from allie baba. It surpasses its ad business. It could be more than half of its current market value. National climate assessment. Climate change is hurting the economy. Is there any way of fixing it without costing jobs . If we Start Talking about making changes, at least policy changes here, do we expect the same from the rest of the world . The answer is no. For me, you know, quite frankly, i do not see any sort of ground swell in washington. This issue does not have enough tailwind. Stuart all right. We called zulily the amazon for bombs. It ran up to 70. Look at it now. Thirtyone. Are you buying at this level . No. I do not like the business model. It does not make a lot of sense to me. Four fifths of the north american sales come from repeat buyers. Stuart we hear you. That is the real Halftime Report. Thank you one and all for being on the show today. We will compare san diego and las vegas. What does a Million Dollars by you in both those locations . Back after this. [ girl ] my mom, she makes underwater fans that are powered by the moon. She can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. My mom works at ge. [ chainsaw buzzing ] humans. Sometimes, life trips us up. Sometimes, we trip ourselves up. And although the mistakes may seem to just keep coming at you, so do the solutions. Like multipolicy discounts from Liberty Mutual insurance. Save up to 10 just for combining your auto and home insurance. Call Liberty Mutual insurance at. To speak with an Insurance Expert and ask about all the personalized savings available for when you get married, move into a new house, or add a car to your policy. Personalized coverage and savings all the things humans need to make our world a little less imperfect. Call. And ask about all the ways you could save. Liberty Mutual Insurance responsibility. Whats your policy . Stuart with it to our properties segment. What does a Million Dollars get you . Cheryl casone tells us. You get a four bedroom three and a half bath in a gated community. 3300 square feet. A barbecue island. Marble floors. The master bathroom has a jacuzzi. You are 20 minutes from downtown las vegas. Everything in this home is custom, and i mean everything. A barbecue island. I dont know what that is, but it sounds great to me. Stuart what am i getting an san diego . A condo same price. 1600 square feet. This is a condo, but it is just overlooking coronado island. Literally a few minutes from the airfield. It is a 14th floor unit. You are in a high rise building. Again, it is hardwood floors. It is also a custom apartment. Stuart you just do not get anything like what you get in vegas. No comparison. This is such a location story. If you are a big golfer, that las vegas home, go for it. I always wanted to be a weather forecaster there. You can never be wrong. Oh, look it is sunny. Back to you. Stuart if you have a Million Dollars, would you buy vegas or san diego . San diego. I grew up in arizona. I have had enough of vegas. Stuart thank you very much. Your take on cupcakes is next. Up. A short word thats a tall order. Up your game. Up the ante. And if you stumble, you get back up. Up isnt easy, and we ought to know. Were in the business of up. Everyday delta flies a quarter of Million People while investing billions improving everything from booking to baggage claim. Were raising the bar on flying and tomorrow we will up it yet again. Stuart you have to check out these stocks with double digit percentage moves today. Electronic arts, zulily, groupon. This, you know, we have a wide range of opinions on this program. Richard says, when will the expensive cupcakes that you have to buy in a dedicated store fad be over . I can make a whole batch of cupcakes just as good as theirs for the price of one of theirs. I hope you choke to death on them, varney. Well, sorry to hear that. Thank you. Work our list. Thank you for watching the show. Here is deirdre bolton. It was very popular, indeed, stuart. As far as being able to make a whole batch were one of those little ones, you have to put a taste test in there somewhere. I saw those cupcakes. I went to the green room. Thank you very much. We are giving you alternative ways to invest your money over the next hour. Allie baba filing for one of the biggest tech ipos ever. It will raise between 15 and 20 billion. We will tell you why it is so significant. Deirdre other headlines we are following, the Hong Kong Market is coo