behavior across the bond space. oil, tyler, the dollar, you name it. >> you would definitely say that this is a relief rally in a very classic way. the catalyst, really the lack today, kelly, of a negative catalyst. >> now, the stanford finance professor who wants a lot more bank regulation and has the ear of president obama and the attention of the federal reserve vice chair, stanley fischer, is here. these ideas make wall street nervous and they're gaining traction. she will be here with what she says is wrong with the banking sector. our old different marcus lemonis joins us after the bell. "the profit" star here on cnbc has a few things to say about this market. plus, marcus has accepted the ice bucket challenge for als and will do so here on the "closing bell" and you won't believe who he's going to challenge to do it next, kelly. watch out. >> i know. let's take a look at markets right now. with an hour left in the trading session, the dow is turning in a strong performance, up 168 points or 1% now. it's actually the nasdaq as well that got an early start in the green, helping boost the risk complex higher. it's up 38 points to 4,503. and the s&p 500, and this will be one to watch, is at 1, 69 right now. >> and what a great year that was. joining our "closing bell exchange," rob bartenstein from washington wealth management, steven hammers from compass emp funds, anthony chan from chase, and winnie sun from sun group wealth partners. welcome one and all. rob, let me start with you. we've gone a long way up, we've gone a long way down this summer, but basically, we're roughly where we began it, aren't we? >> very true. when i was here last around june 18th, i think we were sitting right about 1,955, and when i went to bed last night, i think we were right about the same level. of course, that's a whole different story this morning as a result of some of the geopolitical risk getting moved to the back, but you know, that's the market. that's true to form for the market over the last ten years. returns through the summer months have averaged a typical slightly negative return of about 0.3%, and up until this morning we were running pretty true to form. >> you should count robert shiller among those perhaps surprised by the stock market's resilience, anthony chan. >> absolutely. last year, robert shiller was singing the same song, talking about the fact that the prices were overvalued in the stock market, but guess what, kelly? if you would have listened, with all due respect, to professor shiller, you would have missed out on the 29.9% rate of return on the s&p, the 2% dividends all with a 30% rate of return, and by the way, you would have also missed out on the 6% plus profits this year. >> by the way, he's not saying the overvaluation itself means the market will decline, just that we're seeing persistent overvaluation and should we worry about that longer term? >> yes, kelly, but if people tell you something is overvalued, you'll be reluctant to buy it. and there's another issue that cuts at heart of this, and that is that he looks at the last ten years' worth of earnings. it is no secret that we went through the most ferocious financial crisis and earnings were heavily depressed, so guess what? that ratio computed are based on earnings way below average and out of the box in terms of being too weak. so, in my judgment that pe ratio of 25 that he talks about this year is way too high, because earnings over the next several years are going to be much higher than they were in the last ten years. >> winnie sun, you know, as rob pointed out, we're basically where we were two months ago in terms of the major market averages, but we're just, i think about less than 1% from an all-time high on the s&p 500. what's your thought about where the market may head next and how can i make some money between now and the end of the year? >> that's a great question, you know. i mean, the main thing we want to do is we want to be positioned so we have the best opportunity to really make money in the market. so, it's really time in the market. stay true to your philosophy. long term we need to be patient, we need to give our portfolios time to grow. so, the main thing is don't worry about all the noise, but make sure that you're participating in the good and the bad. remember, it's the day that you sell that matters, not the days up until that point. >> and steve, let me bring it back to this discussion we're having about whether the market's overvalued or not. are you hearing the same concern by people reading robert shiller and looking at these valuations and saying, you know, is this unhealthy, is this sustainable? >> a a pe of 25 is a pretty big stretch, especially with the next 12 months, but about you look at the market today, we might be a little bit on the high side, and i do believe the market's going to be trading sideways for quite some time, but there's a lot of room to grow. we're looking good, the economy's looking good, so there is definitely a lot of room for us, and it's definitely not high. >> so, when your clients in nashville call and they say, you know, here's my money, here's my inheritance, here's my life savings, et cetera, do something with it, what is it that you're doing with it right now? >> well, we continue to invest. we really focus on volatility waiting, which means spreading the risk across the entire market. and so, the fund investors that we have that are all over the country, they're still buying at a very fast pace. so, i don't think they see a lot of concerns. but we still have to be a little bit cautious, not necessarily put everything all in at one time. but i don't think we have a lot to be concerned about right now. >> anthony chan, the end of this week is all going to be about janet in jackson, i.e., yellen in jackson hole. what do you expect to come out of that conference, and is there a way to position ahead of it, or is that kind of a fool's game? >> no, i think there is a way to position. i think she's going to continue to talk about slack in the labor market. and guess what, there is a lot of slack in the labor market. when you look at part-time workers for economic reasons, which is one of janet yellen's favorite numbers to look at, that is 4.8% of the labor force. if you look at all the economic expansions since 1958, that has averaged about 3.7%, which means we have close to 1.8 million worth of equivalent workers out there. if you take that in the connete of what hourly earnings are and what the economy has the potential to do, that can add up to up to 0.8%, almost 1% to gdp without really boosting inflation. that is what the federal reserve wants to wait, and i think that they're right in waiting for that. and the last thing i will say about the price-earnings ratios, that shiller pe of 25 that was mentioned, yes, that's his number, but most people on wall street look at forward earnings, and that number is below 16, and the historical average is closer to 16.3 over the last 15 years. that's why i'm not so worried. >> let me just mention, as you can see on your screens there, president obama is going to speak at 4:00 p.m. eastern on iraq and ferguson, missouri. we will take that when it happens. rick santelli, should these concerns, do you think, about especially what's happening in the middle east, they've done nothing today to roil markets. do you think that changes in the week ahead? >> all of the geopolitical hotspots, including the middle east and ukraine should be something we all think about. from a market vantage point, as difficult as this may be to believe for many, i really think geopolitics is more of a weekend fear dynamic, algorithmic, right words pop up dynamic, but i don't think it's going to affect the tina aspects, which is why equities keep playing on. mr. shiller's a quant guy. this isn't a quant-type market. we write off fundamentals at will. i think when you look at europe, that's something to pay attention to. when there is an alternative, see, i don't know that we'll ever have a correction. we're either going to be loving stocks or hating stocks, and when the transition occurs, it will either be a force transition for an exogenous shock that was expected. i think you'll see janet yellen will keep doing the strategy she wants. call it labor slack, call it whatever you want. there's 60 million americans out there that aren't looking for work anymore. as our one guest pointed out in terms of historic slack, i don't buy it. you know, let's look at what the historic labor force participation rate was at those points and factor that in. the dax had a nice bounce. the pressure's off for now. interest rates move back up. remember, the average between 3.30 intraday low on friday and the big close that was at -- i'm sorry, 2.30 and 2.45, the average is 2.38. i look for this to be home base for several sections. >> rick, let me go over to rick shiller's piece. here's what robert shiller is saying "nothing i've come up with a explanation for the continuing high level of valuations. i suspect the real answers lie largely in the realm of sociology and social psychology," which is exactly what you were saying, rick. in other words, does the only thing that matters now for investors come down to fund flows and sentiment week in and week out? >> yes. absolutely, unequivocally, yes. >> and i'm sorry, the guest who was going to speak, go ahead. >> sure, rick. it's rob bartenstein. i agree with everything you said. i was curious as to your opinion, though, as we look ahead into october with the fed beginning to wind up the taper and go back to 2010 and 2011 when that happened. clearly, the market loves it. it's obvious, the market loves it when the fed's buying paper. but when they stop, we get these periods, 12-month periods of very difficult, very rocky pricing in equities and also declines in the 10-year yields. do you see that happening in october, starting in october? >> you know, i think all the effects of the taper in my opinion are factored in the market. what's important is the ongoing holdings that the federal reserve will choose not to sell in the future unless they're driven to it through match sales and maybe a higher velocity of money. i think the next big game zero interest rate policy under scrutiny and monitor the flatness of the yield curve to see the market's opinion on that. >> we'll leave it there. thank you, guys. appreciate it. 50 minutes to go in the session, and as mentioned, it's been a relatively strong one, but at 169 points higher on the dow, and apparently, as the s&p 500 is right around that 1,970 resistance line, we'll see what happens, tyler, as we head into the close. and home depot and lowe's, two big retail companies. credit suisse sounding a bullish call on both home improvement retailers ahead of their earnings reports later this week. the pros will debate which one, if either, you should own, coming up. plus, it's a busy day for retail. dollar general buying family dollar as our andrew ross sorkin reported, for nearly $10 billion. target expanding hours. our courtney reagan will round up the retail action, next. and next, tensions between russia and ukraine did move the markets last week, could do so again, obviously, but wait until you hear what emerging market hedge fund specialist and russia expert bill browder says could happen next. browder is barred from russia after waging an anticorruption campaign over there. we'll be back in a moment. ♪ [ male announcer ] since we began, mercedes-benz has pioneered many breakthroughs. ♪ breakthroughs in design... breakthroughs in safety... in engineering... and technology. and now our latest creation breaks one more barrier. presenting the cla. starting at $29,900. ♪ all right, giving you a market check, industrials are up 1%, the s&p 500 i think less than 1% away from an all-time high, or at least it was just moments ago. the nasdaq at the highest levels today since the year 2000. kelly? and our mary thompson covering markets here at the exchange. not a bad start to the week. >> a great start to the week. of course, easing tensions in ukraine helping drive the markets higher coming off strong performances in asia as well as the stock markets in europe as well today. as tyler mentioned as we head toward the close of today's session, the s&p is within striking distance of a record high that it set back in july. less than 1% from that area. the dow about 2% from its all-time high, and the nasdaq, while at a 14-year high, is still 5% from its best levels of all time. quick check of the movers, or i should say the sectors that are leading markets higher today. industria industrials read the transportation stocks, benefiting from lower oil prices. financials are strong along with consumer discretionary. the retailers at play there, of course, because of the deal with family dollar and dollar general as well. the ten-year note, of course, the yields on that rising today. and as a result, we've seen weakness in some of the rate-sensitive sectors today, including utilities and telecom, which among the s&p 500 have been the weakest performing groups in what otherwise has been a very strong but light volume session on this monday. i don't think we're going to change 3 billion shares here at the big board. that's below the 30-day average of about 3.3 billion. back to you. >> mary, thank you. our next guest says despite today's snapback, investors need to watch russia, because putin is not backing down from his move on eastern ukraine. >> bill browder ceo of hermitage capital management, joining us on the fun. bill, i know you fought the kremlin over corruption for years and you know how putin operates, sometimes very ruthlessly. it seems as though since last week, things have taken a calmer tact. should we believe it? >> i wouldn't believe it for a second. putin, you know, he doesn't know how this whole thing is going to play itself out, but the one thing we can say for sure is that going into ukraine and doing these invasions is what's fueling his popularity. his rating went from 50% up to 88% because of what he's doing. so, he's got to keep this thing going, and he can't look like a loser to his own people. otherwise, his approval ratings will go down inside of russia. so, if he's backing down this week, i wouldn't take any comfort from that at all. and i know this guy. i've been scuffling with him for a long time myself, and he'll just regroup and there will be some other action that he takes to try to win his war. >> right there he looks like a guy on an old spice ad. we just showed him riding, bare-chested riding a horse. >> well, he tries a lot of unconventional tools, using unconventional tools to rally russian popularity, but the tool that works the best is lifting the lid of nationalism and getting everybody in russia all excited about invading a foreign country. and people inside russia genuinely support him, because they like the idea of being on the winning team, and they don't want to be losing, which is what's happening in ukraine right now. the separatists, if you want to call them that, or i would call them the russian-sponsored terrorists, are in ukraine and at the moment are getting surrounded and they're losing, and putin is not going to lose this invasion that he's doing. that's not -- >> bill, i just want to ask about what happens when these headlines first came across friday night about the ukraine. it sounded like it was attacking a russian convoy thursday night, and then all, you know, stocks here traded off. people were focused on the russian response and what had really happened, and then we never really got one. >> yeah, right, exactly. >> we never got a sense of what happened. and i'm just wondering if you can give us an idea of what you think that, whatever it was that happened thursday night, was all about and why, then, things got so quiet over the weekend? >> well, so, what's been happening is that russia has been sending in military equipment, convoys of equipment, convoys of troops. some of them have official uniforms. some of them are these sort of what we call separatists. and they're sending these people in on a regular basis. for a while, ukraine didn't know what to do about it, but ukraine has now gotten their military command structure in place, and they attacked this group. and this has been verified by two different british newspapers and by nato that russia was sending in real military equipment that was then attacked. what's interesting is that russia has gone completely quiet on their own casualties, because this is going to be a problem eventually for russia if they ever do a real acknowledged full-scale invasion as opposed to one of these unconventional invasions of what they're doing right now. if the russian people start seeing acknowledged and public body bags coming back, then they're going to say, wait a second, what are we doing here? but at the moment, it's been kept a big secret -- >> so, you think the only reason why russia hasn't talked about or shown evidence of casualties is because if they do, it will turn public sentiment against this campaign instead of fueling it? >> well, there's two reasons. one is they can't be seen as being losers. putin has to be -- he's playing a game of poker with a pair of 2s. and he doesn't have a strong hand here. which is why he's not doing a full-scale invasion. he'd rather do what i call a plausibly deniable invasion. so, he doesn't want to be seen as being a loser. and secondly, he will lose public opinion if people start saying, wait a second, why are russians dying fighting ukrainians? for what purpose? because there is no purpose, other than putin pleading nationalism. >> i think, bill, i know your answer to this, but i'm going to ask maybe an unconventional question nonetheless. does putin, dialing back to february and march, does putin have any argument with respect to what went on in ukraine when his proxy there -- i can't remember the guy's name -- yanukovych, was ousted? does he have any argument that the west was mischievous, let's say, in the overthrow of that proxy there, that puppet? and if that had happened in the western hemisphere to someone we liked and we saw russian fingerprints on it, we certainly wouldn't stand for that. could you just give me some thoughts on that? >> well, first of all, yanukovych was a complete and utter criminal. he was a crook who was stealing an enormous amount of money from the people and the people rose up. as much as putin would like to be the paranoiac and think we have something to do with it, america and europe don't have the capacity to do this. it's complete nonsense. the ukrainian people were outraged that this guy was living in a couple hundred million dollar house on a $100,000 salary and stealing. his son was stealing. all these people were stealing. they're now on the sanctions list. they was an uprising, a genuine uprising with hundreds of thousands of ukrainians who went to the streets and didn't want a corrupt president running their country. and in the end, this guy, this crook then ran for cover in russia. i mean, this is not -- this was a genuine ukrainian uprising getting rid of a corrupt -- >> this was indigenous. totally indigenous then? >> totally indigenous. america and europe don't have the capacity to do anything that the russians were accusing us of doing, complete -- >> you think he was using that as an excuse to cover the fact that his guy lost and deservedly so. bill, thank you very much. >> and -- thank you very much. >> sorry we have to leave it there. bill browder, ceo of hermitage capital management. i have a feeling we'll hear from him again soon. about 40 minutes before the closing bell and the dow up 163, kelly. >> and the s&p 500 at 1, 969. art cashin flagged the 1,970 level as resistance to watch. so, who will win the battle of the home improvement retailers? home depot and lowe's posting earnings this week. the pros swing their hammers on which stock you should buy, next. also coming up, several biotechs hitting all-time highs today, helping to push the nasdaq to 13-year highs. we will check in with seema mody on the names moving over there. don't touch that remote. but what if you could see more of what you wanted to know? with fidelity's new active trader pro investing platform, the information that's important to you is all in one place, so finding more insight is easier. it's your idea powered by active trader pro. another way fidelity gives you a more powerful investing experience. call our specialists today to get up and running. welcome back. we're looking at the major indexes now. the s&p and the dow only a percent or two away from their all-time highs. the nasdaq, meanwhile, with today's trading session pretty much going back towards its 52-week high. tyler. all right, kelly, thank you. dominic chu is keeping track of movers for us today, and there are movers a plenty, right, dom? >> that's right. let's start with the airlines, flying high as oil prices continue to move lower. today hitting six-month lows. united, continental, delta, american the majors, and then of course, southwest, jetblue all safely in the green. so, flying high, if you'll forgive the pun here. also a good day for dreamworks animation, appointing a new cfo, and it's "how to train your dragon 2" is now the highest grossing animated film of 2014. then, tekmira pharmaceuticals swings higher with a out-perform rating and a rised price target. they're the ones with the experimental ebola treatment. and monster beverage the biggest loser in the 500 after jefferies downgraded them based on valuation. home depot and lowe's. credit suisse said investors should own both ahead of earnings this week as it expects them both to report better-than-expected results here. so, again, this week a big one for retailers, especially for credit suisse analysts and their clients, home depot and lowe's, kelly. back over to you. >> dom, thank you. so, which of these home improvement stores is the better wuy right now, home depot or lowe's? >> we've got a couple experts ready to weigh in. james romelli from keenonthemarket.com says earnings could be a boost for home depot, while jaime katz from "morningstar" thinks it could be limited for both names. welcome to you both. james, let me start with you. you like home depot but not lowe's. tell me why. >> right, so i'm a catalyst trader, so here i'm paying more attention to home depot because they are reporting earnings relatively soon. now, generally, investors like home depot on earnings day. the stock has rallied seven of the past eight quarters on earnings day with an average move to the up side of around 2%. now, this time around, market-makers are implying that the stock could move around $2 by this friday's xarsion with an upside target around $86. we had upbeat housing data today and more to come later on this week that could also give a boost to home depot's stock price. the stock is making new 52-week highs -- >> but don't they report on wednesday? >> right. lowe's reports on wednesday as well. however, they don't have the same historically strong bias that home depot does. generally, investors are sellers of lowe's on earnings, selling off six of the last eight earnings. they're making new near-term lows and trading into bearish territory, whereas home depot is making new 52-week highs today. >> fair point. so, jaime, what about you? home depot, how do you feel about these shares? >> i think both companies are positioned to report decent numbers this quarter. there was a lot of demand that was pent up from the first quarter. i think for us, it's more of a valuation concern, and we think that these shares are, both lowe's and home depot, are trading in fair value territory at this point, so we'd prefer to wait for a dip in prices before investing in shares. >> james, let me turn back to you. i take your point that home depot tends to do better on its earnings day than lowe's does on its earnings day, but if i want to -- if i don't want to trade the number but i want to invest in one of these companies, which one do you like better? >> i still like home depot better as a long-term investment, because like i said, we're seeing more bullish activity in the name. it's in a much stronger bull trend here. and although the stock is off of its highs to date, we tend to see this type of price action in home depot ahead of earnings. the stock pot of 2% last quarter on earnings day and it's up 7.5% since then. we tend to see the stock consolidate ahead of earnings and often gaps to make new 52-week highs. it's done this multiple times over the past year. >> we're looking at shares today which are going in different directions now. lowe's higher while home depot just slightly lower. but again, home depot's been the one near all-time highs. jaime, are you surprised we're not seeing a more positive response to that home-builder number today? it was 55. >> no. i think, you know, i think people are concerned about the cadence of home price improvement, and that has ticked off a little bit in recent months. and it seems like just the improvement in the wealth effect may make investors a little bit more concerned about how consumers are willing to spend at home depot and lowe's going forward. >> jaime, are there just too many of these stores for your taste? >> i think it's very hard to grow the store footprint, and that drags a little bit on top-line growth going forward. so, i don't know that there are too many, but i think improving the footprint or growing the footprint going forward is going to be very difficult for both of them. >> all right, folks. james romelli from keen on the market and jaime katz from "morningstar "morningstar." 50 30 minutes to the close. the nasdaq just touched a new 13-year high today. up, up and away, that fresh 13-year high is on our radar. our seema mody will tell us what's helping to push it back towards the 5,000 mark. still not seen since the dotcom bubble. plus, is the american love affair with gambling over? two gaming pros weigh in on why this isn't just a new jersey problem. ♪ ♪ drivers want to go further with their electrical vehicles. but you can't take a trip from lisbon to stockholm if you can't re-charge along the way. the green emotion project, funded by the european commission is using the ibm cloud to make this possible by creating a single charging and billing network across 28 countries. so drivers can travel as far as they want to go. take your business further with the ibm cloud. the ibm cloud is the cloud for business. all right, there you've got the industrials up 157 points, and it has roughly hovered at that level for much of the afternoon. the nasdaq composite up 36 points at 4,501, and the s&p 500 celebrating the 45th anniversary in 1969 of woodstock this past weekend. >> there you go. >> there you've got it. >> tyler, were you there? >> i was not there. i wanted to go, but my parents wouldn't let me. i think i was just a tenth grader at the time, so i was a little young to go there. >> yeah, but what an opportunity. >> yeah. >> oh, well. seema mody's over at the nasdaq market site. speaking of that 1969, seema, what a day, huh? >> definitely a big day for the nasdaq, kelly and tyler. we're looking at the nasdaq trading at its highest levels since march of 2000. when it comes to tech, experts that i spoke to today are thinking of a couple different catalysts that are helping tech out-perform, the first being an improving spending environment from brian marshall at isi, attractive valuations and earnings. although i've got to say, some of the market participants i spoke to caution that a rise in geopolitical tensions and you could potentially see stocks reverse gains, so that's something to keep in mind. in terms of which stocks are having the most positive impact on the nasdaq 100, apple, rbc today says it remains bullish on the stock going into the iphone's sixth cycle. google and facebook are two other tech giants playing a role in today's rally. facebook continued to surprise to the up side as it monetizes mobile. biotech is moving higher. regeneron, gilead sciences and cellgene at all-time highs. citi says the out-performance at biotech has to do with investors focusing in on drug innovation, positive drug trial data as well as better-than-expected earnings in general from the biotech sector helping provide a lift to the index. kelly and tyler? >> all right, seema, thank you. many casinos across the country from atlantic city to las vegas have been dealt a bad hand or are being forced to fold their operations due to declining revenues. >> latest bs the $2.4 billion revel casino hotel announced they'll be one of three atlantic city destinations to cash out and close their doors in september, leaving just eight casinos in that resort town. joining us now to talk about the current state of the gaming industry is frank fan teenie from fantini research and christopher jones from telsey advisory group. mr. fantini, is gambling overall as sick as it appears, based on what we see going on in atlantic city? >> no, i don't think gambling is sick at all. i think that atlantic city is an exceptional case because it's been surrounded by casinos in philadelphia, pennsylvania, new york state, that have taken away what you might call the convenience gambler. the person who before was a day-tripper. however, it is true that gaming revenues have been sluggish in the regional casinos throughout the country. they're about flat so far this year, but they're actually down about 3% on a same-store basis. >> hmm, all right. so, chris, how sick is the gambling industry and should new jersey have known better than to build these massive new ones, these massive, new casinos? >> i think in retrospect, probably. i think the deal is they actually started construction well before we saw the slowdown, but we've also seen a lot of the new supply come online since the concept of revel was actually conceived as well. so, i think that from that perspective, it's both the situations. both a challenging environment but also incremental supply. >> mr. fantini, why does the borgata seem to be doing right what so many others in atlantic city can't seem to get right? i mean, i gather their revenues are down a little bit, but much less than some of the others. and they seem to be the one property, maybe not the one, but one of the few properties that is doing well there. >> well, you know, you've got two issues. one is the borgata got a chance to start from scratch on a clean slate. it did not have to build, adapt old buildings along the boardwalk, be constrained by being in sort of an inner city environment, which is what the boardwalk is to a great extent. they could build a single-level casino. they could have all their amenities on one floor, just like you do in las vegas. >> mm-hmm. >> the second advantage they have is the microgeography. the fact is, the people in the marina district, as it's called, are doing very well. harrah's, which is borgata's next door neighbor's probably the most successful property that caesars owns in atlantic city, doing much better than its two casinos on the boardwalk. >> wow. what does this mean, then, chris, for the future in atlantic city? >> i think it's challenging. i think i would actually go back and i would add one more thing to the borgata comment in that borgata also brings in more of a destination customer. you have a higher-end gambler who's coming in for a lot of the entertainment venues there as well. i think that if atlantic city was able to appeal to that broader segment, atlantic city would be doing a lot better. but the reality is that the atlantic city is very much sort of a convenience gambler there as well. so, i think atlantic city needs to right-size. and i think seeing a couple of those properties downsize or disappear is actually going to be good for the survival of atlantic city, because the reality is, is they're not going to get a lot of its customers back. >> mr. fantini, what's your favorite gaming stock? >> well, you know, right now i like, in terms of casino operators, my favorites are those that are based -- not based in macau, but have macau operations, mainly las vegas sands. >> las vegas sands, all right. >> chris, do you want to add your two cents there on top picks? >> yes, mg m&m pal. >> short and sweet. thank you both. >> thanks, guys. >> thank you. >> we've got 20 minutes left before the closing bell. the dow is up 158, the s&p by 14, and the nasdaq is at 4,501, up 36 points. and it's been a summer storm of news in the retail space. our courtney reagan is up next on who's buying what and who's extending store hours. all right, and president obama is going to speak about the situations in iraq and ferguson, missouri. we expect that around the top of the hour at 4:00 p.m. eastern time. he's been running a little late lately. we'll bring you his comments when they do happen. financial noise financial noise financial noise i make a lot of purchases foand i get ass. lot in return with ink plus from chase. like 50,000 bonus points when i spent $5,000 in the first 3 months after i opened my account. and i earn 5 times the rewards on internet, phone services and at office supply stores. with ink plus i can choose how to redeem my points. travel, gift cards, even cash back. and my rewards points won't expire. so you can make owning a business even more rewarding. ink from chase. so you can. frothere's no reasonn average 17 we can't manufacture in shuthe united states. here at timbuk2, we make more than 70,000 custom bags a year, right here in san francisco. we knew we needed to grow internationally, we also knew that it was much more complicated to deal with. i can't imagine having executed what we've executed without having citi side by side with us. their global expertise was critical to our international expansion into asia, into europe and into canada. so today, a customer can walk into our store in singapore, will design a custom bag and that customer will have that american made bag within a few days in singapore. citi has helped us expand our manufacturing facility; the company has doubled in size since 2007. if it can be done here in san francisco, it can be done anywhere in america. welcome back. 15 minutes to go and not much movement from the last time we checked. the dow up almost 1% today. so, 16,823, tyler. >> all righty. a couple major shifts on the retail front could change where and when you shop. courtney reagan, what's going on? >> hi, tyler. so, another takeover proposal for family dollar, this time, though, the proposed buyer is dollar general, a buyer that wall street seems to think actually makes a little bit more sense. dollar general ceo rick dreiling says they've expressed interest in merging multiple times over the last several years and was surprised by the dollar tree announcement, saying he wouldn't have announced his retirement if he knew that was coming and if the deal goes through, he won't retire until 2016. first reported by our own andrew ross sorkin, offering $7.58 a share in cash for family dollar, trumping dollar general's offer. dollar general estimates up to $600 million in cost synergies with family dollar. that's double what dollar tree estimated for its synergies. a dollar tree/family dollar combination would have 20,000 stores in 46 states with sales of $28 billion. a dollar tree/family dollar combination revealed 13,000 stores in 48 states and canada with sales of $18 billion. we are just getting news that carl icahn has made comments and said suffice it so aye, for someone who is supposedly involved in a process, we were very surprised by family dollar's announcement with dollar tree. so, carl icahn putting his two cents in, since he had been active in family dollar. moving on to a separate story, target staying open later. over 900 u.s. stores will extend their closing by one to two hours. that means they'll keep their doors open until 11:00 p.m. or midnight, depending on the location. the retailer says there may be opportunity to better serve shoppers. that's why they're doing it. keep in mind, many walmart stores, by comparison, a key competitor, are open 24 hours a day, 7 days a week. kelly? >> and court, just real quick, what do people think about this move for target? is a few extra hours really going to make a difference? >> it may not. you do often see this surge of shoppers right at the end of closing or right at the end of store openings every day because folks are in there and might all of a sudden run out of time, but that may just push that hurry up and get to the register an hour or two. does it add traffic ? maybe not, but anything to get a sale may be worth it as brick-and-mortar are trying to compete at every angle with the 24/7 that online offers. >> courtney reagan with the latest on retail with 15 minutes to go until the close here and the s&p 500 sitting right at 1,970. there is much more ahead on monday's market madness. and lateer sprint gearing up to slash prices. will it be a difference-maker for them or not? some pros weigh in. [ woman ] the cadillac summer collection is here. ♪ ♪ [ male announcer ] during the cadillac summer's best event, lease this all-new 2014 cts for around $459 a month or purchase with 0% apr. hurry in -- this exceptional offer ends soon. the dow is up 1% almost on the button, as you see there. the nasdaq composite at a multiyear high, going back 13, 14 years at 4,503. and the s&p 500 sitting right where it's been almost all hour long, at 1,970. quite a nice gain there for those averages today. tim rudderow is with mt. lucas management and michael peppy is with jsk capital advisors and they're going to bring us across the finish line this afternoon. tim, you have a pretty optimistic view on equities in the next couple months? >> absolutely, tyler. this is goldilocks for the equity market. you have a really decent growth rate in the economy. you have quite low interest rates, as we see for the foreseeable future. it's just the perfect situation for the stock market in our view. and i think that's -- and i think people are underinvested as well. so, i think you have buying power. this is a good environment. >> and it'd be amazing if this were 2009, but it's 2014. we've already had five years of this run. michael, how much longer can we go? >> i think we're seeing a continued rally in the bond market from the action that's happening in the ukraine, and i think, if anything, that's an opportunity to shorten up duration in bonds. i'm a bond guy, and i love the equity market. you know, i probably have never said that before in my career, but i really do think that the equity market is set up for a continued rally. and like i said, i really do think that this bond opportunity, the rally that we've seen over the last couple weeks, is an opportunity to shorten down. i do think we have a lot more economic growth in the second half of this year than what most economists are calling for, and we've got things like the carry trade that are going to have to wind down. when that does happen, we're going to see a lot of selling in the long end of the treasury market, which is going to create a big drop in price. >> michael, let me just follow up there with your thought about bonds versus stocks. one of the earlier guests this hour said that the last couple of times that quantitative easing or bond-buying was withdrawn by the federal reserve, stocks had some rough sledding for a while, and then, you know, the retort was, yeah, but this time it's a little bit different and it has all been signaled into the market. where do you come down on that? >> what i think happened the last time around, i think the equity market pulled back because it started to compete with the bond market. as rates go up in the bond market, investors are going to want to move money out of equities back into bonds again. so, if anything, i really think that the equity market is the place to be. >> what about, you know, outside the u.s., tim? do you see after the pounding europe took, do you think it looks attractive at all? do you think there's still risk ahead? >> i think it's a bargain. i think it's a great place to move money right now. >> really? >> in fact, we're looking at that right now. >> why? >> absolutely. because everyone hates it. sentiment is so piled against europe right now, it's ridiculous. >> yeah, but you've got italy in a triple-dip recession. the rest of the block may join. >> yeah, but i mean, is it really true that economic data fillet yeaters through to stock? that's not altogether clear to me. i think what we're seeing here is that a real bargain opportunity, a real opportunity in europe. >> i'm chuckling because this brings us back to the discussion we were having about robert shiller and whether there's a connection between equity prices and the u.s. and the fundamentals. >> i think there's a connection between bond prices in europe and u.s. stocks. there's no question. i think that the bond prices are putting a bid -- bond prices in europe are putting a bid into u.s. bonds. as michael pointed out. and that's good for stock market. just as long as rates stay low, the equity-risk premium looks really good. >> so, michael, what should i keep my eye on by way of risk. if i basically subscribe to europe, your optimistic view about equities, what would cause you to change it? what would be the risk that you would be on guard against? >> i would want to listen to the minutes that come out on wednesday from the federal reserve, and also jackson hole, towards the end of the week. if janet yellen sounds a little more hawkish, that can create some volatility. >> all right, interesting. >> i think longer term, too, it's economic growth that's the risk. faster-than-expected economic growth is the real risk. >> faster economic growth? >> something people are looking forward to. >> absolutely. higher rates, faster economic growth and higher rates, no question. >> that's all good. we want that. >> interesting. >> okay, guys. >> we've been waiting for it. >> you guys are going to come back with us and carry us to the closing countdown. we'll take a quick break and have the closing countdown. >> that's right. and right after the bell, it's a very big market day. very big market day. after we see if we go s to treat symptoms of bph, like needing to go frequently. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long term injury, get medical help right away ion lasting delamore than four hours.e ache. if you have any sudden decrease or loss in hearing or vision, or any allergic reactions like rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. ask your doctor about cialis for daily use and a free 30-tablet trial. ask your doctor about cialis for daily use having a perfectly nice day, when out of nowhere a pick-up truck slams into your brand new car. one second it wasn't there and the next second... boom! you've had your first accident. now you have to make your first claim. so you talk to your insurance company and... boom! you're blindsided for a second time. they won't give you enough money to replace your brand new car. don't those people know you're already shaken up? 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[ male announcer ] stick it to the market before you get stuck. get the most extensive charting wherever you are with the mobile trader app from td ameritrade. all right, the dow hanging on to very nice gains, up more than 1% or 170 points, 16,833. 1,970 is the quote on the s&p 500, up about 0.8%. and the nasdaq at 4,506, about 41 points higher. we've got now about three minutes before the closing bell and time to segue to our closing countdown and rejoining us from the floor, tim rudderow of mt. lucas management and michael pepe from jhs capital advisors. michael, you talked a little bit about the risk that you might watch, and that is the fed minutes, and anything coming out of jackson hole this friday. i assume you don't expect any surprises there, though. >> you know, i don't really expect that much in the way of a surprise, but what does concern me is everybody's bought in that it's policy that we're going to have low interest rates forever. the federal reserve president from minneapolis over the weekend said we're going to have low inflation to 2018. when i started in this business, i was always told that you can't predict interest rates or inflation rates any longer than six months down the road. and now we're moving that out to four and five years down the road. and to me, it creates what could be a problem for everybody. we have a lot of new bond investors that have never seen inflation before, have never seen a spike in interest rates, and they can really get hurt by it. >> you know, tim, you said -- i believe it was you who said just before our break that the biggest risk, or one of them, was fast growth, too fast growth. given the fact that we've got nice growth, low inflation, and the implication of prolonged low interest rates, what kinds of stocks would you be buying here? >> look, we like stocks that fit a particular value profile. you know, i think this is the time to be dispassionate in the market. buy things that offer good value and that give you the opportunity to buy them cheap when the volatility presents itself. i mean, some good examples are delta air lines, gamestop, best buy, ford. all these companies have had troubles. they've been sold off by the market. and they've offered good opportunities from a value perspective because they're fundamentally strong companies. >> michael, let's talk a little bit about bonds. i believe it was you who said earlier that you look at this as an opportunity to shorten your durations. what point on the yield curve do you think is the sweet spot? >> i think right now anything three to five years is where i would want to be buying. you know, the muni market's a different story because we've seen so much healing in municipal governments. they've balanced their budgets, they've got budget surpluses now that they didn't have for quite some time. and the credit quality in the municipal world has gotten better real quick. we've gotten through detroit, we've gotten through some of the other problems that were out there over the last couple years and i think it's a very healthy place to be. >> all right, guys. thank you very much. we appreciate your being with us today. >> our pleasure. thank you. >> tim rudderow from mt. lucas management and michael pepe from jhs capital advisers. well, it looks like this second-to-last week of august is off on a good foot here, as the dow industrials look to close about 1% higher. the s&p about 0.8% higher. and the nasdaq composite is up 42 points, a little less than 1%. that will do it for me. i'm tyler mathisen in for bill griffeth. the second hour of the "closing bell" continues now with kelly. and welcome to the "closing bell." i'm kelly evans. and president obama will speak on the situations in iraq and ferguson, missouri, any moment now. there's a live shot. we will bring that to you as soon as it begins, and we are going to ask tyler to stick around for that as well. first, here's how we're finishing the day on wall street. and let's see if we can sneak in some analysis here before the president begins. with the dow closing up better than 1%, art cashin noted there were some buy orders on the close, helping to add about 10, 15 points in the final seconds of trade. the nasdaq getting 43 to 4,508. the s&p 500 jumping to 1,971. joining me on the panel, cnbc contributor michael yoesh cami from destination wealth management. welcome. also, marcus lemonis is here. we've got questions, marcus. also, our own jon fortt. and joining us from the nasdaq to break down the money action is "fast money" trader guy adami. welcome, everybody. >> yo, yo! >> as mentioned, the president could begin speaking any moment now, so let's whip around quickly if we can to get a sense where people stand. michael, what do you make of the markets today? >> there's a lot of buying because people are desperate to get into the market. you have a lot of people in cash. look where hedge funds are, horrendous performance, where hedging hasn't really paid off. i think at this point, there's a lot of resistance on the dow side as markets sell off, i think people start jumping into the market with the cash they have on the sidelines. >> and we saw it in the nasdaq today, jon fortt. >> absolutely true. >> your names were doing well. >> absolutely. zynga up almost 6%, gopro up about 5%. opower, which is also a relatively young ipo, up a little bit more than 3%. then you've got jive and viva, so some of these smaller, more speculative names that have been iffy lately, it seems like with the strong buying today, those are up. not a lot that's down very much. look at sprint, zulily down a bit, pandora a little bit, but not much. down more than 1%, kelly. >> what do you think accounts for that, guy? >> i think, i mean, people have been rewarded for quite some time now, for years, every time the market's had any hint of a sell-off they've been rewarded for buying this sell-off. and that's worked. and it continues to work. the technicals have mattered. 1,915 on the s&p, as we've discussed. the sector that i've talked about with you for quite some time, look at biotech. look at some of the names today. cellgene, gilead. we talked about gilead in the low 80s, said it's headed to $100 and reached that today. so, there are sectors that have worked. the market's holding technical levels, and here we are testing potentially new highs in the s&p. >> and speaking of deep value, marcus, what is the fate of the crumbs chain? >> i can't tell you right now, but i know we'll talk about sprint later. what i'm focused on is the homebuilders number, continues to tell me that the market is strong. the supply of inventory in markets like chicago, miami, new york, l.a., the supply is so low right now that there's obviously a confidence out there from the consumer. we're seeing it show up in the market. >> it's interesting you say that. i was just talking to someone in northern california where the market's been incredibly strong, and the supply is actually building. you're starting to see more houses come on the market, and they're starting to be some hesitance with all of the uncertainty we have around the market right now in terms of buyers going into escrow. probably some of it is people are frightened with the multiple bid situation, but there is some uncertainty, at least in california. maybe you're seeing strength around the country in that market, but in california, i think inventories are building right now. >> but building up a tiny base, right, mike? i mean, we're talking about less than 30 days of inventory out there. >> yeah, yeah. we're talking about very, very slow inventory. >> coming off all-time lows in terms of supply. >> that is true. >> let me briefly mention as we get into the housing discussion, urban outfitters, one of the names we're waiting to report after the bell, as you can see there, looks like a match on the bottom line, a small top-line beat and we'll keep an eye on those shares moving around. there has been retail news and we'll get more of it. speaking of the housing sector, we will get home depot and lowe's, guy. how much is priced into these names already? and what do people in the market think is the trajectory for housing in the back half of the year? because fannie mae's chief economist just came out with some much more cautious remarks about housing demand. >> yeah, i'm not nearly as the housing bull as a lot of the folks on the panel are today. i think there's a lot of shadow inventory that's just waiting to come out on board, but i will say that home depot is in their sweet spot and they've been in the sweet spot for quite some time. you know, here's the stock that maybe is a little rich on valuation, but frank blake has done everything right. they have an incredible balance sheet. and their business model is in the sweet spot where housing is right now. so, i'll be surprised to hear home depot say anything disappointing, and if they did, i would take the opportunity if there is a sell-off down to the high to mid-70s to buy the stock. >> marcus? >> guy, why aren't you feeling good about the housing market? obviously, you're referring to me being excited about it. what is it that you deaon't lik? >> people talked about the bounce in the housing market, and it has bounced off what was a ridiculous low, but if you overlaid whatever housing chart you want to and overlaid it with let's say a bank of america chart, yeah, we've bounced, but we're nowhere near levels that we peaked at in 2006-2007. >> but are we talking about price or demand? >> although we bounced off a tremendous low, i don't think we're anywhere near where we should be given where interest rates are and given what the equity market has done over the last four or five years. >> fair point. marcus, doug duncan, chief economist of fannie mae said today "the outlook for the housing market has deteriorated as housing appeared to have lost momentum at the end of this second quarter. only minor improvement in the second half of the year. in the first six months of the year, total sales ran below last year's pace." interestingly enough, and this you could certainly quibble with, he says "on the demand side there appears to be a conservatistm among consumers and their willingness to take on big-ticket purchases." >> i think that's exactly what we were talking about. >> they want to steal something. they feel like prices have driven up in the last 12 to 15 months, so the consumer's sitting back and maybe putting in a low-ball offer. i don't think the housing market is as soft as people think it is, because if you go look for a home today, the supply isn't nearly what it was five years ago. >> i don't think you can look at the supply and really say that the housing market is strong just because there's a low supply. you could very well have people that are still under water on their houses. and if you look at -- >> in california, yes. >> yes, in california, absolutely. >> in new york, no. >> well, if you -- well, perhaps so, but if you look at what's happening in terms of housing right now, this is all with the backdrop of historic all-time low interest rates. what happens when housing -- what happens to housing purchases when rates go up 1%, when they go up 1.5%? like, theoretically, they're going to after quantitative easing -- >> well, they already have, by the way. if you look from the lows on the 10-year last summer to even more recently, while at historical lows, that has nipped off a little bit of the excessive refi demand in the market. >> look, while that's important, on a $200,000 home price or mortgage, a half a point, while important, isn't going to make somebody's buying decision, let's not buy our first home. >> i don't know. i think for a person looking to buy a $200,000 house, i think it will. i think we're kind of spoiled in california and new york, $200,000 doesn't sound like a big number, but you know, i think for some people, it is a big number. in the real-world economy, if you're making $15, $20 an hour, that -- >> but it's $185 a month in interest. it's $185. i don't want to dismiss it -- >> well, you are dismissing it. >> let's not say the market's going to slow down. people are going to buy their first home. it's still the american dream. they'd rather buy than rent. >> we have to go only because the president's coming up. i want to give guy the last word on this. part of the reason why i thought it was interesting what doug duncan said about the willingness to take on big-ticket purchases is that they're certainly willing to do so with autos and is financing making all the difference here? >> the auto story is you have a fleet that's 10 to 12 years old and people need new cars. the reality is, people need new cars. i don't think you can equate the auto market with the housing market. i mean, you have students coming out with record debt. i just don't think you're seeing the household creation that you need in order for this market, the home-building market, to be as robust as we'd like to think that it is. that's just my personal opinion. >> diana olick saying fannie maid said there are not enough workers or land to meet the demand. that could go back on the immigration topic. guy adami, thank you. much more coming up with guy adami on "fast money" at 5:00 p.m. they'll be asking dennis gartman which beaten-down sector he's buying today. don't miss it. stocks kicking off the week here with a bang. the market has now gained back most of what it lost in that pullback that began late july. so, should you forget fears of a correction and go full steam ahead for stocks? that's next. also, she's one of the banking industry's biggest critics, and now she's got the ear of president obama and fed vice chair stanley fischer. coming up, stanford professor anat amadi tells us how they should be fixing risks in the financial sector. also, sprint expected to announce new prices. is this a marketing campaign or should verizon and at&t be worried? we will also hear from president obama in a few minutes. keep it here. you're watching cnbc, first in business worldwide. being a keen observer of the world has gotten you far, but what if you could see more of what you wanted to know? with fidelity's new active trader pro investing platform, the information that's important to you is all in one place, so finding more insight is easier. it's your idea powered by active trader pro. another way fidelity gives you a more powerful investing experience. call our specialists today to get up and running. developers are all about speeds and feeds. it's all about latency. it's all about how fast does it run. i often sit with enterprises who ask me about how mission critical and how's the performance of the cloud. and i tell them, if you can make gamers happy, you can make anybody happy. speed is made with the ibm cloud. the ibm cloud is the cloud for business. welcome back. you're looking there at a live shot of the white house, where president obama is expected to speak any moment now. the topic is iraq and ferguson, missouri, where there has been a spate of violence. we'll bring that to you as soon as it begins. in the meantime, after how we ended last week, no one knew quite what to expect from the markets today. we had a snapback, and mary thompson is tracking all the action at the stock exchange. >> as you said, a significant snapback for the markets. of course, the dow, s&p and nasdaq all finishing higher. the nasdaq closing above 4,500 for the first time since march of 2000 and since geopolitical tensions eased, the s&p 500 coming within striking distance of its all-time record high, 1% from those levels, led by a strength in industrials, financials and i.t. or tech stocks leading the way in today's session. we do note it was a light volume session, could be one of the lightest sessions of the year as this kind of summer trading gets under way. you don't see the significant volume. the market leaders today, dollar general making that bid for family dollar. both of those higher on the news. of course, that hurt dollar tree, which was one of the weaker performing stocks within the s&p 500. southwest airlines, like a lot of the other airlines, benefiting today from the weakness we saw in oil as kind of the risk-on trailed came, or the risk-off trade came off. along with oil, we canness in gold and the vix, of course, dropping for the sixth time in seven sessions. where we saw money going in of course were the junk bond etfs, both hitting one-month highs. junk bond etfs up eight out of the nine last sessions. of course, one of the reasons, very attractive yields on these etfs, about 5% compared to roughly 2% or so for the s&p. again, strong day for the markets, although on very light volume. back to you, kelly. >> mary, i'm so glad you mentioned what was happening with junk bonds there. that has been such a tell. retail piled out, created a huge opportunity. thank you. for all of the talk of corrections, does today's market moves put that to have end? is it time to go back into stocks? joining success warren myers, and peter costa from empire execution. the view from the floor, for sure here. peter, first to you. was that it? >> no. you know, this is -- you're talking about 175-point move without, you know, without any volume at all. mary mentioned it before, this might have been one of the lightest trading days of the year. you know, the market was ripe for a little bit of an upside move. do i think we'll not see a downside move this week or next week? no, i think we'll see the market move in very, very substantial -- there's going to be substantial moves in both directions for the rest of the summer because there's absolutely no liquidity in the market. and any time there's good or bad news, the market reacts accordingly. >> and so, warren, is it look out ahead or look out below? >> i think you could probably say, according to peter, at least, you could say both ways. but i think what today shows you on light volume is that there's still an underlying current of an upward momentum when all else is missing from the marketplace. and i think today was a prime example of that. until the fed actually officially raises rates, i think that zero interest rate policy is in place, and equities are not a bad place to be. the problem is, in the absence of any other data, your risk is a little bit greater with the geopolitical issues going on and things like that. so, i think that's what's keeping some of the volume away. but again, in the absence of any other news, this market tends to go up. >> well, even if there's no volume, the volume that is there is biased to the upside whenever there's a sell-off. it seems to me that when the market goes down -- for example, we get e-mails from clients all the time. market goes down, they say, oh, my god, is the world collapsing? we say, no, we don't think so. the fed is still in place -- >> do people ever e-mail you when stocks go up and say what's wrong? >> no, everybody's a bull when the market's rising. no one is a bull when the market goes down. but when the market actually starts to have stability, when you have more cash flooding into the market -- last time i was on, i know there's a dispute that there's still a lot of cash on the sidelines. i just have to believe there's a lot of cash on the sidelines right now. >> you mentioned geopolitical risks. we had a few geopolitical shocks, right? >> absolutely. >> is it going to take a full-on crisis to get the market to really react to the downside considerably? because i mean, these have been some serious potential issues that have reared their heads lately. >> absolutely, but again, i think that points out the strength in the underlying upward momentum in this marketplace. you can withstand -- >> i agree. >> -- a lot of those geopolitical issues, and still on the absence of everything else, the market goes up. >> there's different geopolitical issues, right? if you have the ukraine situation horrible, the syria situation horrible, we have israel, horrible situation with what's happening with that conflict, we have all kinds of geopolitical problems, but what really matters are the geopolitical issues that make an economic difference. if a geopolitical issue is bank of america declares bankruptcy or banco santander declares bankruptcy, that's a much different geopolitical issue than some horrendous other sort of news. >> but you probably are surprised by this, a lot of people who don't care -- >> they don't care about it. >> but i mean that there are some who don't care altogether, but others look at these such tragic situations -- >> it's horrible. >> and it feels almost wrong to just -- in other words, help us contextualize them and understand that there can be horrible situations that shouldn't necessarily keep you from making a poor investment decision. >> well, that's exactly what it is. just because a situation is awful, and the human tragedy, our heart goes out to every one of these human tragedies that we're seeing. i mean, we have planes being shot down. it's just unbelievable -- >> michael, we know there's a lot of cash on the market. >> good, i'm glad you agree. >> rich, rich, rich with cash. obviously, we're coming up to a holiday and everybody's going to take a break, but right after september 3rd, the market's going to be ripe with a lot of new issues. >> and the credit market, too. that's going to be something that provides, i would think, peter, some help to stocks longer term. >> yes. you know, i want to take issue with something about all this cash on the sidelines. the market has gone up and gone through several records over the last nine months. where is that cash coming from? if all the money's on the sideline, how is this market going up? so, i think that there's a lot less money on the sidelines than people like to think there is. >> i think if you look at retail investors, retail investors -- >> go and hit the market. >> -- they're flooded with cash. >> they might be, but if they start moving into the market, that's when you want to get out. i think they have been putting money into the market more than you think they have. i think the market has gone up because a lot of money is flowing into it. it makes sense. >> peter costa, warren myers, we have to leave it there for the time being. thank you, gentlemen. we are awaiting president obama to begin speaking on the situation in iraq and ferguson, missouri, any minute now. we'll bring you those comments as soon as it happens. also, she may not be a household name, but when banks hear anna amaddie speak, they get nervous. and up next, a stanford professor will explain why. the best way to end too big to fail is to change how banks get their money. welcome back. u.s. banks raking in near-record profits, the likes of which haven't been seen since 2006, before the financial crisis. despite their profitability in increased lending, my next guest says the banking system is still super fragile and needs fixing. joining us in an cnbc exclusive is anna amattie, professor at the stanford business school and co-author of "the banker's new clothes: what's wrong with banking and what to do about it." thanks for being here again, professor. if you waved your "harry potter" magic wand and fixed the banking system overnight, it would look like what exactly tomorrow? >> oh, it would be a long night to fix everything with a magic wand, but i have a few immediate things to do. first and foremost, i will immediately stop any leakage of good old equity money that they have, just to kind of be prudent about something that we seem to kind of forget, that that's perfectly good money -- >> you mean dividends? >> payouts like dividends. i'm not talking about -- we could do more than that. we could pay some of the executives with shares instead of cash. so, there are other ways to keep cash in the bank so it can do something with it and so it can back up all the borrowed money that it uses. so, that would be one thing. and i would certainly want to do something about those derivative markets and about the disclosures, see if any of that can be done overnight. so, there's plenty to do. >> let's talk about the lending. in an ideal world, how much cash would you have banks hold for every dollar they lent out? >> this is not about holding cash. i'm not actually asking them to hold any cash. i'm just asking them to fund some of their loans with unborrowed money, like most companies, you know, use equity funding to invest and to do things, to take risk with. i'm not asking them, i'm not talking about reserve requirements. i'm not talking about any kind of liquidity requirements. i'm not touching what they do. i'm only talking about whether they use borrowed money, like depositors in other short-term funding, versus good old equity shareholder money -- >> yeah, got it. >> -- that is plentiful. >> in that case, so, to be clear, how much, for every dollar that was lent out, how much equity, stuff that wasn't borrowed or cash aside, how much equity would you have banks hold for every dollar? >> it's not cash aside. i want the lending and all the other stuff that they do, which, by the way, a lot of it is not lending. i want it to be funded with something like 30% equity that's a reasonable number. it depends on the measurements and how you value the assets and how you do calibrations, but you know, that ballpark of a number. >> do you think we'll ever get there? and when you talk to the president, do you sense as though he's sympathetic with your arguments? >> well, i mean, for once, they have to understand precisely what's being said and what i'm recommending to do to get there from where we are right now, and that's just the no-brainer part of it. i mean, it's not like a magic, you know, silver bullet or anything, but it's really an obvious thing to do. i don't know if people get it. i think they're beginning to kind of wonder what's going on here. but look at all the living wills and all of the too big to fail, you know, right now, and you'll see how we're not really any better off, and in some respects, we're worse off than where we were, so -- >> can you give us a sense of in what ways we're worse off? for people seeing headlines about banks making record profits, they've cleaned up the balance sheets since the crisis. so, you know, how much more work is there to be done? how bad a shape are banks in, according to your analysis? >> well, i mean, you just have to look at just a few numbers. tom honig in his statement about the living wills of the banks, these are their plans about how they're going to go through bankruptcy under numerous assumptions that were deemed, you know, foolish to unreasonable to too optimistic. they would have to, you know, have to happen for them to not harm and not take the economy down. the statement was the top i think eight banks have assets about 65% of gdp. and that dpebepends on how you the accounting. again, if you did different accounting for the derivative, it'd be even more. and the three largest banks that do derivatives have 60, on average, $60 trillion of exposure in notion to drirvetives, which is 30% more than before the crisis. so, if you talk about size, interconnect interconnectedness, funding mix, all of that, we are facing a more dangerous system than even before the crisis. so, all of this fixings all very relative. >> and what, before we let you go, is your -- or in what way are we most vulnerable? so, what is the worst thing that could happen to the banking system tonight in your view? >> well, something can start from any number of things -- >> let me jump in, because president obama is about to begin speaking. >> okay. >> on iraq and ferguson, missouri. thank you. we'll listen in. >> -- ongoing operation in iraq and the situation in ferguson, missouri. with respect to iraq, we continue to see important progress across different parts of our strategy to support the iraqi government and combat the threat from the terrorist group isil. first, our military operations are effectively protecting our personnel and facilities in iraq. over the last 11 days, american air strikes have stopped the isil advance around the city of erbil and pushed back the terrorists. meanwhile, we have urgently provided additional arms and assistance to iraqi forces, including kurdish and iraqi security forces who are fighting on the front lines. today, with our support, iraqi and kurdish forces took a major step forward by recapturing the largest dam in iraq near the city of mosul. the mosul dam fell under terrorist control earlier this month and is directly tied to our objective of protecting americans in iraq. if that dam was breached, it could have proven catastrophic with floods that would have threatened the lives of thousands of civilians and endanger our embassy compound in baghdad. iraqi and kurdish forces took the lead on the ground and performed with courage and determination. so, this operation demonstrates that iraqi and kurdish forces are capable of working together and taking the fight to isil. if they continue to do so, they will have the strong support of the united states of america. second, we're building an international coalition to address the humanitarian crisis in northern iraq. even as we've worked to help many thousands of yazidis escape the siege of mt. sinjar, hundreds of thousands of iraqis have been displaced by isil's violence, and many more are still at risk. going forward, the united states will work with the iraqi government as well as part naerdz lipartners like the united kingdom, france, italy and australia to get food and water to people in need and to bring long-term relief to people who have been driven from their homes. third, we will continue to pursue a long-term strategy to turn the tide against isil by supporting the new iraqi government and working with key partners in the region and beyond. over the last week, we saw historic progress as iraqis named a new prime minister designate, hider al abadi, and iraq's outgoing prime minister maliki agreed to step down. this peaceful transition of power will mark a major milestone in iraq's political development, but as i think we're all aware, the work is not yet done. over the next few weeks, dr. abadi needs to complete the work of forming a new, broad-based, inclusive iraqi government, one that develops a national program to address the interests of all iraqis. without that progress, extremists like isil can continue to prey upon iraq's divisions. with that new government in place, iraqis will be able to unite the country against the threat from isil. and they will be able to look forward to increased support not just from the united states but from other countries in the region and around the world. let's remember, isil poses a threat to all iraqis and to the entire region. they claim to represent sunni grievances, but they slaughter sunni men, women and children. they claim to oppose foreign forces, but they actively recruit foreign fighters to advance their hateful ideology. so, the iraqi people need to reject them and unite to begin to push them out of the lands that they've occupied, as we're seeing atmos y mosul dam, and ts going to take time. there are going to be manual challenges ahead, but meanwhile, there should be no doubt that the united states military will continue to carry out the limited missions that i've authorized -- protecting our personnel and facilities in iraq, in both erbil and baghdad, and providing humanitarian support as we did on mt. sinjar. my administration has consulted closely with congress about our strategy in iraq, and we are going to continue to do so in the weeks to come, because when it comes to the security of our people and our efforts against a terrorist group like isil, we need to be united in our resolve. i also want to address the situation in ferguson, missouri. earlier this afternoon, i spoke with governor nixon as well as senators blunt and mccaskill. i also met with attorney general eric holder. the justice department has opened an independent, federal civil rights investigation into the death of michael brown. they are on the ground, and along with the fbi, they are devoting substantial resources to that investigation. the attorney general himself will be traveling to ferguson on wednesday to meet with the fbi agents and doj personnel conducting the federal criminal investigation, and he will receive an update from them on their progress. he will also be meeting with other leaders in the community whose support is so critical to bringing about peace and calm in ferguson. ronald davis, the director of the doj's office of community order nate policing services or c.o.p.s., is also traveling to ferguson tomorrow to work with police officials on the ground. we've also had experts from the doj's community relations service working in ferguson since the days after the shooting to foster conversations among local stakeholders and reduce tensions among the community. so, let me close just saying a few words about the tensions there. we have all seen images of protesters and law enforcement in the streets. it's clear that the vast majority of people are peacefully protesting. what's also clear is that a small minority of individuals are not. while i understand the passions and the anger that arise over the death of michael brown, giving into that anger by looting or carrying guns and even attacking the police only serves to raise tensions and stir chaos. it undermines rather than advancing justice. let me also be clear that our constitutional rights to speak freely, to assemble and to report in the press must be vigilantly safe-guarded, especially in moments like these. there is no excuse for excessive force by police or any action that denies people the right to protest peacefully. ours is a nation of laws. for the citizens who live under them and for the citizens who enforce them. so, to a community in ferguson that is rightly hurting and looking for answers, let me call once again for us to seek some understanding rather than simply holler at each other. let's seek to heal rather than to wound each other. as americans, we've got to use this moment to seek out our shared humanity that's been laid bare by this moment. the potential of a young man and the sorrows of parents, the frustrations of a community, the ideals that we hold as one united american family. i've said this before. in too many communities across the country, a gulf of mistrust exists between local residents and law enforcement. in too many communities, too many young men of color are left behind and seen only as objects of fear. through initiatives like my brother's keeper, i'm personally committed to changing both perception and reality, and already we're making some significant progress as people of goodwill of all races are ready to chip in. now, that requires that we build and not tear down, and that requires we listen and not just shout. that's how we're going to move forward together. by trying to unite each other and understand each other and not simply divide ourselves from one another. we're going to have to hold tight to those values in the days ahead. that's how we bring about justice and that's how we bring about peace. so, with that, i've got a few questions i'm going to take. i'm going to start with jim kuhn of the "ap." >> right here, mr. president. the incident in ferguson has led to a discussion about whether it's proper to militarize the nation's city police forces, and i'm wondering whether you think that you see that as a factor regarding the police response in ferguson? and also, do you agree with the decision by the governor to send in the national guard? >> well, i think one of the great things about the united states has been our ability to maintain a distinction between our military and domestic law enforcement. that helps preserve our civil liberties. that helps ensure that the military is accountable to civilian direction. and that has to be preserved. after 9/11, i think understandably, a lot of folks saw local communities that were ill equipped for a potential catastrophic terrorist attack. and i think people in congress, people of goodwill decided we've got to make sure that they get proper equipment to deal with threats that historic ally wouldn't arise in local communities. and some of that's been useful. i mean, some law enforcement didn't have radios that they could operate effectively in the midst of a disaster. some communities needed to be prepared if, in fact, there was a chemical attack, and they didn't have hazmat suits. having said that, i think it's probably useful for us to review how the funding has gone, how local law enforcement has used grant dollars to make sure that what they're purchasing is stuff that they actually need. because you know, there is a big difference between our military and our local law enforcement and we don't want those lines blurred. that would be contrary to our traditions. and i think that there will be some bipartisan interest in re-examining some of those programs. with respect to the national guard, i think it's important just to remember, this was a state-activated national guard, so it's under the charge of the governor. this is not something that we initiated at the federal level. i spoke to jay nixon about this, expressed an interest in making sure that if, in fact, the national guard is used, it is used in a limited and appropriate way. he described the support role that they're going to be providing to local law enforcement, and i'll be watching over the next several days to assess whether, in fact, it's helping rather than hindering progress in ferguson. steve, reuters. >> thank you. how do you avoid mission creep in iraq? and how long do you think it will take to contain isil? >> well, i have been firm from the start that we are not reintroducing thousands of u.s. troops back on the ground to engage in combat. we're not the iraqi military. we're not even the iraqi air force. i am the commander in chief of the united states armed forces. and iraq is going to have to ultimately provide for its own security. on the other hand, we've got a national security interest in making sure our people are protected and in making sure that a savage group that seems willing to slaughter people for no rhyme or reason, other than they have not copped out to them, that a group like that is contained. because ultimately, it can pose a threat to us. so, my goal is, number one, to make sure we've got a viable part. and that's why we have so consistently emphasized the need for a government formation process that is inclusive, that is credible, that is legitimate, and that can appeal to sunnis as well as shias and kurds. we've made significant progress on that front, but we're not there yet. and i told my national security team today, and i will say publicly that we want to continue to communicate to politicians of all stripes in iraq, don't think that because we have engaged in air strikes to protect our people that now's the time to let the foot off the gas and return to the same kind of dysfunction that has so weakened the country generally. dr. abadi has said the right things. i was impressed in my conversation with him about his vision of an inclusive government. but they've got to get this done, because the wolf's at the door. and in order for them to be credible with the iraqi people, they're going to have to put behind some of the old practices and actually create a credible united government. when we see a credible iraqi government, we are then in a position to engage with planning not just with the iraqi government but also with regional actors and folks beyond the middle east so that we can craft the kind of joint strategy, joint counterterrorism strategy that i discussed at west point and i discussed several years ago at the national defense college. our goal is to have effective partners on the ground. and if we have effective partners on the ground, mission creep is much less likely. typically what happens with mission creep is when we start deciding that we're the ones who have to do it all ourselves, and you know, that, because of the excellence of our military, that can work for a time. we've learned that in iraq. but it's not sustainable. it's not lasting. and so, you know, i've been very firm about this precisely because our goal here has to be to be able to build up a structure, not just in iraq, but regionally that can be maintained and that is not involving us effectively trying to govern or impose our military will on a country that is hostile to us. all right? >> how long will it take to contain isil? >> i don't think, steve, at this point i'm prepared to provide a blanket answer to that. a lot of it depends on how effectively the iraqi government comes together. i think that you will see if, in fact, that government formation process moves rapidly and credibly, that there will be a lot of actors in the region and around the world that are prepared to help and to step up assistance, many of whom may have been reticent over the last several years because the perception was, at least, that baghdad was not being inclusive and that it was going to be self-defeating to put more resources into it. i think you'll see a lot of folks step up. suddenly now, iraq will have a variety of partners. and with more folks unified around the effort, i think it's something that can be accomplished. it also means that there is the prospect of sunni tribes who are the primary residents of areas that isil now controls, saying we've got a viable option. and we would rather work with a central government that appears to understand our grievances and is prepared to meet them, rather than to deal with, you know, individuals who don't seem to have any values beyond death and destruction. i am going to take the last question from somebody who after 41 years i understand has decided to retire. ann compton, everybody here knows, is not only the consummate professional, but is also just a pleasure to get to know. i was proud to be able to hug her grandbaby recently, and i suspect that may have something to do with her decision. but i just want to say publicly, ann, we're going to miss you, and we're very, very proud of the extraordinary career and work that you've done. and we hope you're not a stranger around here. so -- [ applause ] ann compton. >> thank you. >> i suspect you may get some cake at some point. >> let me ask you. this is an interesting time in your presidency. and one of the things that you have so emphasized in the last few months and last year or so is this reach-out to my brother's keeper and to a generation that doesn't feel that it has much talent. sending the attorney general to ferguson is a step. has anyone there asked or have you considered going yourself? is there more that you personally can do, not just for ferguson, but for communities that might also feel that kind of tension and see it erupt in the way it has in ferguson? >> well, ann, obviously, we've seen events in which there is a big gulf between community perceptions and law enforcement's perceptions around the country. this is not something new. it's always tragic when it involves the death of someone so young. i have to be very careful about not prejudging these events before investigations are completed, because although these are issues of local jurisdiction, you know, the doj works for me, and when they're conducting an investigation, i've got to make sure that i don't look like i'm putting my thumb on the scales one way or the other. so, it's hard for me to address a specific case beyond making sure that it's conducted in a way that isn't transparent, where there's accountability, where people can trust the process, hoping that as a consequence of a fair and just process you end up with a fair and just outcome. but as i think i've said in some past occasions, part of the ongoing challenge of perfecting our union has involved dealing with communities that feel left behind. who as a consequence of tragic histories often find themselves isolated, often find themselves without hope, without economic prospects. you have young men of color in many communities who are more likely to end up in jail or in the criminal justice system than they are in a good job or in college. and part of my job that i can do i think without any potential conflicts is to get at those root causes. now, that's a big project. it's one that we've been trying to carry out now for a couple century es and we have meat extraordinary progress, but not enough. so, the idea behind something like my brother's keeper is can we work with cities and communities and clergy and parents and young people themselves all across the country, school superintendents, businesses, corporations, and can we find models that work that move these young men on a better track? now, part of that process is also looking at our criminal justice system to make sure that it is upholding the basic principle of everybody's equal before the law. and one of the things that we've looked at during the course of where we can make -- during the course of investigating where we can make a difference is that there are patterns that start early. young african american and hispanic boys tend to get suspended from school at much higher rates than other kids, even when they're in elementary school. they tend to have much more frequent interactions with the criminal justice system at an earlier age. sentencing may be different. how trials are conducted may be different. and so, one of the things we've done is to include department of justice in this conversation under the banner of my brother's keeper to see where can we start working with local communities to insert more trust, more confidence in the criminal justice system. and i want to be want to be cle because sometimes i think there's confusion around these issues and this dates back for decades. there are young black men that commit crime, and we can argue about why that happened, because of the poverty they were born into, the lack of opportunity, the school systems that failed them, or what have you, but if they commit a crime, then they need to be prosecuted because every community has an interest in public safety. if you go into an african-american community, latino community, some of the folks that are most intent on making sure that criminals are dealt with are people who have been preyed upon by them. so this is not an argument that there isn't real crime out there and that law enforcement doesn't have a difficult job and, you know, that they are have to be honored and respected for the danger and difficulty of law enforcement but what is also true is that given the history of this country, where we can make progress in building up more confidence, more trust, making sure that our criminal justice system is acutely aware of the possibilities of disparities in treatment, there are safeguards in place to avoid those disparities, where, you know, training and assistance is provided to local law enforcement who may just need more information in order to avoid potential disparity. all of those things can make a difference. one of the things i was most proud of when i was in the state legislature way back when i had no gray hair and none of you could pronounce my name was, you know, i passed legislation requiring videotaping of interrogations and confessions, and i passed legislation dealing with racial profiling in illinois. and in both cases we worked with local law enforcement and the argument was you can do a better job as a law enforcement official if you have built up credibility and trust, and there's some basic things that can be done to promote that kind of trust. in some cases it's just a lack of information, and we wanted to make sure that we get that information to law enforcement. so there are things that can be done to improve the swags situa but short term we have to make sure that the cause of justice and fair administration of the law is being brought to bear in ferguson. in order to do that we've got to make sure that we are able to distinguish between peaceful protesters who may have some legitimate grievances and long standing grievances and those who are using this tragic death as an excuse to engage in criminal behavior and tossing molotov cocktails or looting stores. and that is a small minority of folks and may not even be residents of ferguson, but they are damaging the cause, they're not advancing it. all right? thank you very much, everybody. that's president obama delivering remarks on iraq and the situation in ferguson, missouri, as you've just heard him speaking about. let's send it over to tyler mathisen to wrap up the remarks. >> president obama taking a brief vacation from the vacation to wrap up a few things. first on iraq, isis's moves in irbil have been halted by military action and that of the iraqi and kurds, and that he's confirmed that the mosul dam has been retaken in actions supported by u.s. air power but largely prosecuted by the kurds and iraqi forces. on ferguson, i take away three headlines here. one, that attorney general eric holder will be traveling to ferguson on wednesday to be updated on the status of the investigation and to meet with community leaders. he drew a strong, strong call to keep the distinction between military force and domestic policing in place, and he said he will be monitoring the use of the national guard in ferguson. kelly? >> all right, tyler. thank you very much. we're going to take a quick break right here. we'll be right back. a new chevr, buick, gmc or cadillac - with no limits. so every time you use it, you're not just shopping for goods. you're shopping for something great. learn more at buypowercard.com and welcome back. all day long cnbc is looking at how different transportation will look 25 years from now. phil lebeau is telling us how we'll be taking to the skies for more than transportation. >> let's take a look at niche airlines. a good example is surf air out of california. flies to half a dozen cities. pay a monthly fee. you can fly as much as you want. it's for people who want to avoid the hassles. when you look at somebody like surf air, they're adding 65 planes to meet the growing demand. their ceo believes this is just the beginning of future demand. >> i think as people gravitate to it, understand it more, understand that the monthly fee, you have the benefits of community, of a club and you can fly all you want during a particular month is something that, again, as people understand it, i think we'll see the competition rise to that level. >> meanwhile, private jet operators are expecting private jets over the next 25 years. jet suite is picking up customers in markets like southwest but no longer are in those markets. jet suite will pick that up. it's charging half what its competitors charge. we talked to the ceo. i can tell you, kelly, he's optimistic about the future. they're interested in the people in the smaller markets. i want be to get there and i'm willing to go if i can pay less than another private jet operator. >> raising a host of new challenges. phil lebeau, thank you very much with that terrifying look at the next 25 years or am i exaggerating. taxis by private planes? >> hey, kind of exciting. >> just as long as it's safe. >> with the panel before we go? >> hp sales, another important look at the enterprise. >> marcus? >> we'll tell you what happens with crumbs by thursday afternoon. >> you had your chance right here. michael? >> stay in dividends. don't sell yet. >> you have ten seconds. >> okay, fine. thank you very much to everybody for being here. that does it for us on closing bell. "fast money" begins right now. "fast money" starts right now. live from the nasdaq market site in "new york times" square. i'm sarah eisen in for melissa lee. our traders are peat and guy adami. apple closing in on $100 a share. we've got the details on a new study just released ahead of apple's new iphone 6 launch. today's top story, the running of the bull. stock rallying on news out of russia and ukraine. oil falling to a near seven-month low. are there any red flags that could derail this rally? pete? >> well, i think the only red flags out there obviously are news based because when you look at the way the markets are trading without ukraine, without some oe

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