All the major indices took a tumble suffering the worst one and twoday drops in two months on wednesday and thursday. That led to a fall ithe price of treasuries. Investors are preparing for the feds eventual winding down of the bondbuying program. Also driving up concern on the street, a key earnings disappointment from walmart. The nations largest retailer, largest employer, citing weaker sales and cutting its outlook for the year letter bellwether cisco warned uncertain demand for technology products, that could to cut as many as 4,000 jobs, 5 of the workforce. It wasnt all bad. Fewer u. S. Workers are being laid off. The weekly count of initial claims for state Unemployment Benefits dropped to the lowest level since october of 2007. Charges have been brought up in the Jpmorgan Chase london whale investigation. Manhattan u. S. Attorney has brought conspiracy and wire fraud charges against two former traders known for outside derivatives bets that led to a 6 billion loss for jpmorgan last year. Regulators need to be more vigilant. As i have been saying for some years now companies themselves need to pay closer attention to the cultures that they create. And elsewhere an airline delay, Justice Department filed suit to block the proposed merger of u. S. Airways and American Airlines citing concern of reduced industry capacity. The proposed merger would create the Worlds Largest airline with more than 48 billion in annual revenue. Barry knapp, head of u. S. Equity at barclays. Zachary contractorabal president of River Twice Research and reuters and the atlantic, good did see you, thanks for joining us. What a week, tripledigit losses, a couple of rough days. Biggest selloff in the market since june. Do you think this is the beginning of a correction a lot of people have been calling for, or a buying tunlts . No, its part of the typical fed policy normalizationrelated corrections that have taken place, basically after every recession and then recovery rally that has occurred since world war ii. You have had a long period of stocks advancing and the fed easing then the fed finally decides as the economy gets better its time to normalize policy. Look, our broad theme is that we think the economy is getting better. And weve reaches a real reflection point. Uncertainty has boosted capital investments, labor investments, so things are generally getting better. But the market discounted that. Up 20 year to date. We are up double digits this year. Everyones talking about the Federal Reserve and when the fed is going to start lowering that stimulus, winding down, beginning to wind down the 85 billion in bond purchases, whats your take . When do you expect the tapering to begin . Two things. I think Market Participants invested, pun intended, with a lot more weight psychologically than it probably has literally, meaning we live in a world of 60 trillion, 70 trillion of securities floating around between bonds and stocks. Buying close to 900 billion of those a year then revolving them. Its still not moving needle kind of event when you look at that as a global thing. Its psychological for the markets right now because people believe that the fed and Central Banks are determining rates. Because they believe it, they then believe this will determine rates. Theres a selffulfilling reality here. I think the reality is bonds are the thing to look at, much more than equities right now, as an area of volatility. Because thats the thing thats going to be most impacted by the fed. Stocks are kind of in the world in that its corporate earnings, its whats gone on in terms of global growth. Lumping these together in terms of one conversation, theyre two different conversations. We saw some weak Economic Data this week. Given where we are in this anemic recovery, cab the fed wind things down . This is what theyre trying to figure out. How long you can maintain this before it becomes a permanent policy. Were already close to being the new normal. Theyre not increasing it that we know. The yes is when do they decrease . I know things have improved. But can we really see the fed to begin the tapering in 30 days . Oh, absolutely. Really . Absolutely. You think the fed starts next month . We do. And whats really interesting about this is that if you go back through all these cycles theres been discussion about low readings of inflation. Maybe the fed shouldnt do it because theyre missing their 2 target mandate on the downside. 1983, 1994, 2004, the last three cycles, inflation measures were falling. One factor started to improve and that was the labor market. It begins with the firing slowing, falling jobless claims. Like night follows day hiring starts. Weve of weve had a pickup in the labor market and that triggers the start of normalization you may not get any inflation period in this level system right now. High productivity based on technology, low wages based on the fact that the rest of the world is emerging. And while wages are rising and the rest of the world, theyre nowhere near what they are in europe and the United States. I think we could have a new normal of an extremely low inflation environment for many, many years. The reason i dont believe tapering can begin next month is because of the two targets. The metrics put forward. Unenemployment 6. 5 , inflation 2 , were nowhere near either of those. Unemployment 6. 5 is a target for raising interest rates. And theyve gone to great pains to separate the taper from the actual rate policy. Whats fascinating about this is go back to last september. And things in the labor market were getting better. Capital investment was weak and stalled Public Policy, related to elections. But essentially what the fed did was they were risk managing against the risk of the u. S. Taxing their way into recession like spain, italy, france did last year. We know that didnt happen. Consumers responded better than we thought they would to the tax hikes. And the economy didnt weaken all that much. Let me switch gears and ask you about the other big story. That was the activist investor is back. And we saw so much drama around jcpenney this week. Activest investor bik ac man who holds a sizable amount of jcpenney, 18 . Karl icon tweeting about his large position in apple. This trend of shareholder activism, positive for markets or negative . My perspective, ill be a historian even though hes sitting next to me, when you think about how Creative Destruction works, the austrian economist who talked a lot about this, in the 80s when i was first coming into the business, there was a whole round of corporate raiders. And they were viewed negatively. But they were all the focus of the media. What they essentially did was they forced Corporate America to restructure. If you think about it in the current environment, weve had massive events of cash buildup on corporate Balance Sheets very bossive. Because of Public Policy uncertainty. And these activist investors are forcing the issue. They are a positive force for change. Im going to take the other side of that. Icon connects the raiders of the 80s and he was part of that to the activist investor today. I think a lot of the activist investors in this category really dont know and understand the operating businesses that theyre going after. They think they do. They think they understand the Balance Sheet part of it. They dont understand the operating part of it. A lot of businesses they go at does not take brain surgery level iq to figure out those businesses are hurting. It didnt take, oh my god, jcpenney is having trouble for someone to come along and let the board know that, nor does it take karl icon to let us know they have neither returned to shareholders much or been able to use productively. So i think theres a lot of ego involved in activist investors, a lot of hubris it believes it knows how to operate operating businesses. I dont think thats true. That certainly is the criticism. It feels like theyre back. Well see the impact on investors. Thank you very much, appreciate your time today. Well see you soon. Up next, are the suburbs dead . What the Great Recession did to the American Dream. And it doesnt include a white picket fence. And its that time of the year, back to School Shopping season in full swing. Which retailers are getting top grades from consumers and their parents. Take a look at the stock market and how it ended the week. As the Housing Market regained its bergds many question is the American Dream with the nice how many and white picket fence will survive the aftermath of the Great Recession. Here on more of the suburbs demise, leigh gallagher, author of the end of the suburbs. Great to have you on the program. Great to be here. What makes you say we are seeing the end of the suburbs . Its funny. Theres a number of indicators that really pretty convincingly show that our love affair with suburbia, suburban america as we know it, coming to an end. Theres a number of reasons behind that, some of them are due to the financial crisis and the housing boom and bust, many of them are not. Things like the rising prices of energy. When we built our housing landscape in the suburban pattern way back in the 50s, it worked well at the time. But we kind of grew and grew and grew and the model sort of grew outsized. People spending a lot of money to get to work, 3. 5 Million People spending more than an hour and a half each way to get to their jobs, its just not sustainable. Which is why people are moving to the cities. Yes, many people are moving to the cities. Thats all over the world. But your prediction is not for all suburbs. Thats right. Some communities will be fine and people are still gravitating there particularly close to those cities with public transport. Exactly, the future is urbanization everywhere. People want to be closer to the thins they need to do every day. That can mean an urbanized surbush, villagy models, the way they were before world war ii when we massproduced everything. Every home developer is falling all over themselves to build more of these places. People want to be where they can live closer to the things they want to do. How does the Housing Market comeback play into this . We know there are signs housing is coming back. If the suburbs are dieing that could trap millions of homeowners. Yes, millions of homeowners are trapped. Because of the housing crisis. Many baby boomers are not moving, theyre staying in place for a number of reasons. One, theyre trapped in their homes. But the interesting thing about the housing recovery is that if you look at it over the last year or so, Housing Starts, Housing Starts for multifamily construction have done a lot better over time. Over the past year. Than singlefamily homes. The percentage increases, theyre really you can see that shift in the Housing Starts. So, you know, when we rebuild, when we come back, the big question is how are we going to do it . It may not be in the exact same way. What about municipal dids . We know theres stress on so many local municipalities and exodus from the suburbs may mean a drindling tax base. It may. I have a chapter in the book about the tax revenue. Its different when you have low density, youre not pulling in as much property taxes per square mail as you are in a denser environment. So the suburbs, i have one source who thinks the suburban model is a ponzi scheme. Because to fund, the only way the revenue can sustain maintenance for infrastructure of the suburbs, lots of sewage, wiring, is to keep growing. Because the density levels dont sustain themselves from a tax revenue basis. How are the cities accommodating this influx of people . Rents are going up. Prices are going up. In cities like new york city. Lots of other cities are more affordable. I think new york is an outlier where thats concerned. Cities are booming. They have more sidewalk cafes and restaurants and multiplexes than the suburbs used to in many ways. All right. Leigh, great to have you on the program. The end of the suburbs. Thank you for being with us. Up next, schooling major retailers as summer winds down, shopping for answers about consumer sentiments. And a notebook made to last, surprising students, saved from the trash heap. Welcome back. The dog days of august, primetime for retailers with a look at the allimportant back to School Season im joined by jason weighing. Hyme. Good to see you again. Thanks for joining us. Lots to talk about. Last years back to School Season was particularly successful for retailers. What are you seeing right now broadly in terms of back to school . Were coming off this 84 billion season last year. Were off to a sluggish start. Earnings reports indicated sales in july werent what everybody hoped for. In august were optimistic. 8 of 10 readers told us this week they intend to spend the same or more as they did last year, which is encouraging. Break it down for the generations for us. Tell me about the ways young shoppers shop. The millennials. Are they different from jen x or boomers . Wildly different. This generation has more influence than any generation prior. First the technology aspect. They are tweeting and posting more than any generation ever could prior. Theyve grown up with technology. The second think that is the brand loyalty landscape has changed for them. Theyre considering as many as 48 brands every time they walk into a store before they make a purchase. Its tough to capture that loyalty longterm and retailers are trying more and more to do that. Youve done a lot of research into the millennials, that brand loyalty. Is it an emotional connection that they form with retailers . How does it happen . What makes them come back and back and back . Theres four important things. The story theyre allowed to tell with brands that they purchase and love keeps them coming back. Theyre looking for deals and insider information. Theyre looking for the cause, community is important. Theyre looking for the showcase. Diy, things that show their own expression of their own fashion and beauty style. And do you know some retailers that are very much loyalty for the teens . I think h m is great for fashion right now. They spend time and money marketing their conscious collection which focuses on social and environmentally responsible materials and products that they use to produce fashions. When we talk about major retailers in the news, like walmart for example, they had a stumble. You had jcpenney struggling with leadership, their board activist investors. Is there a trickledown to the 16yearold . They may not care about activist investors but how does it trickle down . The average 15yearold doesnt know who bill ac man is. What they things do, cause a distraction for retailers. Focusing on multichanneling markets, web, social, bricks and mortar to connect with the consumer and capture brand loyalty. As we look for years and years beyond, retailers that dont capture that experience now are not going to be as successful as others. Lets talk about pricing. It was a cold spring. As a result, some stores have excess summer inventory. Does that mean prices will come down . Were seeing an unfortunate trend with longer discount periods. We created back to School Saturday last weekend which was successful. These shortterm advance day programs are great. Longterm discounting is a struggle. You said you think we are going to see a better next couple of weeks going into the School Season. What are you expecting . Were expecting it to be consumers are cautious right now, trying to they will spend more but making their dollars go further. Theyre continuing to want to create 24 7 relationships with retailers across all the platforms that matter. The more Multichannel Marketing we see, the more success well see. Thank you very much, great to have you on the program. Jason wagenheim. Its trash for teachable moments. And a look at the news that will impact your money. Look at em. Living on cloud nine with that uverse wireless receiver. You see in my day, when my mom was repainting the house, you couldnt just set up a tv in the basement. I mean, come on nope. We could only watch tv in the rooms that had a tv outlet. Yeah if we wanted to watch tv someplace else, wed have to go to my aunt sallys. Have you ever sat on a plastic covered couch . [ kids cheering ] youre missing a good game over here. Those kids wouldnt have lasted one day in our shoes. [ male announcer ] switch and add a wireless receiver. Get uverse tv for 19 a month for 2 years with qualifying bundles rethink possible. One company is curbing the 250 million tons of waste americans produce every year through our children. 75 of schools in the United States participate in a recycling program through telecycle. Tell us first how does terracycle work. You recycle products from partnering Consumer Brands like frito lay and make them into new things . Thats right. We go to major Consumer ProductCompanies Like kraft, mars, frito lay, and they Fund National collection programs where anyone can go to terracycle. Com and send us their waste for free. Shoes, juice pouches, cigarettes. We pay the shipping and we give a small donation for waste collected. Over 7 million has been paid out for people sending us garbage. Unbelievable. Sending you garbage and youre creating products with the garbage. Tell me about the School Supplies you brought with you. We brought five examples to show you what we can do with things that would otherwise end up in landfills. First some examples of what we call upcycling. Sewing together juice pouches and today we collect 4 of all juice pouches in the United States. Amazing. Another example is a lunch bag. This is made from old tents. You can see the effect, upcycling. How do you produce them . We team of designers that looks at what can be reused and what can be upcycled. Those are two examples. A team of scientists at terra cycle who look at how we can recycle the material into a new plastic or textile. Where can these are purchased . Online as well as all the worlds major retailers like walmart, target, home depot. Thats terrific. This is right in step with the Green Economy. How big is the Green Economy . Do you see this part of the economy growing . I think absolutely. Terracycle, for example, 20 million company, weve been growing for 10 years straight, were in 24 countries. And i see a lot of Green Companies in the Green Economy, its something thats grown very fast, but i dont think its as big as people think it is. Theres a lot of opportunities to get involved. This is a cooler, the inside of the cooler, bestseller at wool mart, is made from postconsumer, used chip bags. Amazing, i love it. Good to have you on the program. Thanks for having me. Good to meet you, appreciate what youre doing. Tom szaky. Take a look at the week ahead and the things that may move your money this coming week. Continuing our look at the retail landscape, home depot, jcpenney, lowes, target report their Quarterly Earnings this week. Saks fifth avenue, best buy, barnes noble and sears among others. Wednesday the existing home sales report for the month of july. Also wednesday, well get the minutes from the july fomc meeting. That could be a market mover. Thursday, president obama will hit the road for a bus tour about the economy. Hes traveling to new york and pennsylvania. Also, friday well get the new home sales report also for the month of july. That will do it for us. Thanks for joining me. Each week keep it here where we are on the money. Have the great rest of the weekend, see you again next weekend. Oprah on the record. Did have a sales clerk refuse to show her an expensive handbag. Touching words and how else she remembers her late love cory and zole survivor of different strokes tough journey of todd brings. This is weekend edition. Im shaun. We get to all that in just a moment. But we begin with the apparent suicide of former bachelorette star gia. To missing a side of you i didnt know was there and to you knowing exactly what you want. Describe sweet without a