squeeze. there's wall street lore about rosh hashanah and sell yom kippur. >> not coming right now. >> exactly. an exclusive with the chief investment officer at calpers. one of the biggest funds in the world. and if you remember last week huge news by announcing to stop investing with hedge funds. today, we're going to find out why from the person responsible for those zixs. >> largest public pension fund. >> great point. because, look -- >> we made sure to know they're the largest pension fund last week. how's this for a company vacation policy? no policy. at all. as in, take as much time as you like. whenever you like. no limits. we're not talking hypotheticals here. richard branson whom you see there vacationing as much as he likes at virgin telling the flows today, that's how it's going to be from now on. will it work? a lot of opinions on that. we have the full story coming up. as soon as we finish our vacation. >> i might give that a try. >> yeah right. exactly. show you how the markets are trading right now, huh? now up 159 right now. just continues higher. talk about it in the "closing bell" exchange. and our own rick santelli. oil moved sharply higher here in the last few minutes on word of bombing over benghazi on a non-oil port in that region of the world. we're keeping eye on that right now, as well. oil moved sharply higher here up 1.5%. jack, when's going on? what's with the bounce today do you think? >> this is all end of the quarter type buying, bill. we have had one good run this quarter and with the holiday tomorrow with the jewish holiday tomorrow, remember, you have a couple of days to buy if you want stocks to settle in the quarter, beginning of next week. a lot of that is going on but, you know, that's not to say we haven't picked up on a pattern. remember, we have been watching the markets make new all-time highs on the expiration fridays followed by a 3% to 5% dip. don't read too much into the rally. i think the next week or two is more important. >> let's break. breaking news out of western new york with tony stewart. dom chu has the story right now. when's the grand jury saying, dom? >> all right. so bill, kelly, last few moments here a grand jury, they're announcing what they have come up with and after listening to dozens of witnesses and other experts decided not to charge nascar driver tony stewart with anything with regard to the crash that actually led to a fatality. so again, tony stewart and nascar perhaps a little bit sighing some relief here. a grand jury finds there's no basis for charges against nascar's tony stewart in that tragic death associated with the crash. as you can see right there so again an interesting development here. grand jury again finds no basis for charges against nascar's tony stewart. back over to you guys, bill, kelly. >> dom, thank you for now. appreciate it. we'll get back to the markets. it's a strong day across wall street. the dow up 164. david kelly, question to you about all this speaking speeches talk we have heard from the federal reserve in the last couple of days, what stands out to you from what you have heard so far? >> well, i think markets underreacted to the fed's statement from last week. i mean, what the fed is essentially saying is they'll do rate hikes next year and six in 2016 so that makes interest rates too low here and part of the story here. given how low rates are, the riskiness in the market and there's no other good alternative other than putting money in equities. i think that's what's driving this rally. >> and yet, rick santelli, treasury market's not acting that way. i see the yield on the 10-year going up there. >> no. i mean, we have come off two-week low yields as we settled yesterday. below 254. i think it is to be xrekted that rates pop up as the equities right themselves. to some extent it's kind of an end of the quarter every day for stocks for a thousand days. i know the nikkei's hovering at seven-year high and highly warranted by the wonderful fundamentals and tomorrow there's a good chance that august durable goods tomorrow will release the worst month over month change in the history of that data point and i'm kind of bag little cute here because the last month up 22.6 happened to be the biggest up month month over month. the current record down 13.9 and a good point, you know, some of the data's going to do a mean reversion here and i think the last point that many treasury traders continue to embark on is just what you led off with. how many tightenings are coming up and i remember reading today what charles evans said. be careful because the housing market isn't going to like it. i would like a comeback question. how much does it like historically low rates? seems there's an affordability issue beyond and above the credit issue. >> i was going to ask you about the comments and the fact this he again is one of the guys saying we might need to overshoot the inflation target and been discussing for days we can barely get to 2% of late. he is seen as pretty influential on the front in terms of setting policy and you know and more and more people understanding that it is the evans, moderates and doves the hold more sway next year. >> well, i don't think there's any doubt that the fed is going to go kicking and screaming on removing some of the subsidies it's imparted on the marketplace and the word of caution a lot being written on this even though the fed might start to -- finished with qe for now and may end zero interest rate policy and the effect on the market even removing this is permanent so things like reverse repos and end of the quarter financing dramatically affected short term funding. issues to contend with moving forward. >> there's a reason that's happening. there's a reason that's happening. look. we have talked about this week after week. the bottom line is that they are not getting any help from the government. all right? we are not seeing policy out there that's creating anything that is considered to be pro-growth. here we are creating laws to stop companies from inverting. instead of doing corporate tax reform. all of that is really creating this atmosphere that is really putting the fed into a corner where they have no choice to do -- but exactly what they're doing. >> there's always a choice, jack. >> jack, jack, to your point, the fed -- >> two wrongs don't make a right. >> go ahead, keith. >> respectively, the fed's been in a corner for a listening time. to say we have trouble getting to 2% completely discounts what the average american is experienced which is inflation between 9%, 10%, 12%, 20%. the statistics are more cooked than a christmas cook and what comes down to is confidence and if the fed is dovish and accommodative to the end of the time, it doesn't matter stimulus, qe, the revenge ofqe. that drives liquidity for a long time in this marketplace. >> son of stimulus? >> sorry. i don't think -- all this fed action doesn't actually inspire confidence. what real confidence is is when the doctor says you don't need the medicine anymore. and to rick's point, i say that the government isn't helping but the economy is recovering by itself despite that. i think we are at 3% for the third quarter. so the economy is recovering despite the somewhat strange policies out of the federal reserve and federal gft. >> numbers don't lie. >> respectfully i would disagree with that. >> let's bring morgie in here at this point. you are a champion of high yielding bonds through this period. are you still or where do you go for income these days? >> i think high yield bonds are still a great place to be. we have a big backup in high yield. the average bond yields 6% now which is pretty good considering the economy's growing very slow and the equity market's shopping around here and i think bonds likely to be competitive with equities over the next few months and i don't think the fed is going anywhere with rates so that makes it even more attractive. >> that's why i ask. if you expect the fed to raise rates sooner than later, do you stick with the high yielders attractive to this point? the answer i guess is yes. >> yes, i am. yes. i think the fed will have a very difficult time raising rates because a lot of the economic conditions are pretty slack, so many regulations. you press economic activity. i think it's very difficult for them to reach the higher interest rate targets thad like to, frankly. >> david kelly, you are upbeat of the headwinds discussed. i would like your point of view with the energy story, commodity story. today notwithstanding we have seen substantial declines there and that's an important -- >> that's right. that's going to be a huge story, too. the u.s. is reducing the reliance on imports and that's a net positive. you look at consumption, i think housing continues to recover. net exports will recover over next two years and i can see the key point here there's not that much supply growth and use up capacity and that's why the fed has to move back to normal. >> keith, which market was wrig right? we have an update 100 points and volatility is coming back here. which market's got it right right now? >> well, the market's got it right is the market we're moving with today and path of least resistance remains up as long as liquidity is there and accommodative and we have money on the move. i think the capital creative force, strong earnings, all kinds of da the and cooked more than the christmas goose and data suggests to be in stocks. best looking horse in the glue factory. >> you can't cite it as a reason for being in the market. >> sure you can. the fed has been making up stuff all along. they don't know when or if they'll raise rates. they have pulled this out of a hat the entire journey. they were wrong about the crisis and formation. they missed it when they happened and the recovery. but that has created a monster rally and if you're not in it, you are getting left far behind. >> how can you say they missed? you just said they have created a monster rally. you got corporate america stronger than ever before. how -- >> they have inflated everything, jack. they've inflated housing -- >> they have no choice. >> they near a box. >> what's the alternative? a depression. look. >> no. that's a loaded question, jack. you know it. >> well, yeah. the reality is that -- >> they have a choice. >> the federal reserve is doing what was an experiment ten years ago. all right? it was literally an idea that ben bernake had in a notebook. this is a strong recovery. this is the beginning of it. >> i don't disagree with that, jack. what i take issue with is you have $4 trillion of debt. you have got $1.5 quadrillion of derivatives. i don't take issue with the fact they have inflated everything. that's wonderful because as an investor i love that. as a trader i love that. as somebody that's a champion of the middle class, i love that. but you know what? there's heck to pay one of these days and that's what both earls me so in the meantime we have to grab the rally, the profits. we need to be in there. you know what -- >> trading home runs but -- went out of the park and he was juiced. okay? so yes. stocks are up. you're long. you get a check. if you're outside wrigley field, you still got to hold sammy's ball and he was juiced. >> come on. there's a difference between trading 25 times over earnings. >> we have to go, jack. i'm behind by two metaphors i think at this point in our conversation. thank you for joining us. >> sammy sosa and christmas goose. i don't know where we're going from here. we have 45 minutes left to go in the session today and the dow up 162 points. 15 higher on the s&p heading back to the 2,000 mark and the nasdaq up 42 and green arrows here. look at this. what do i have here? >> that is the passport. >> this would be the new blackberry passport. unveiling it just today. we'll get a product review of a top tech pro. find out if he's hip to its square screen and the touch sensitive keyboard when apple by the way having to pull back on the latest update on the update to the ios software. we'll talk about this and the passport coming up. also, financials in focus. they have been outperforming the broader market. will it last? later, chief investment officer speaks with us exclusively about the largest u.s. public pension fund getting out of hedge fund holdings altogether. a seismic move and we'll talk about the ramifications of all of that coming up. don't touch that remote. ♪ (train horn) vo: wherever our trains go, the economy comes to life. norfolk southern. one line, infinite possibilities. opinions. there's no shortage in this world. who do you trust? whose analysis is accurate? how do you make sense of it all? a simple, unbiased stock score consolidated from the opinions of independent analysts... is that too much to ask? nope. equity summary score, powered by starmine, will help you execute your ideas with speed and conviction. and it's only on fidelity.com. open an account and find more of the expertise you need to be a better investor. rally day on wall street. we are affectionately calling it the post-russell 2000 death cross rally. dow industrials -- i said josh brown said it was going to be like this. dow up 160 right now. nasdaq, the strongest of the major averages. s&p up and the russell 2000 participating today bouncing to the tune of almost 10 points. >> we'll see if it has legs. another day, another product launch. this time, blackberry is out with its latest passport phone. joining us now with the review of the phone, roger chang here, executive editor of "c-net" magazine and jon fortt. >> we want to know what the viewers think. do you like the new passport? it's that square phone that's just been out. go to the website cnbc.com/vote. let us know. we'll be watching the reviews as they're coming out. what is your review? >> once i got over the really weird shape and let's be truthful, it is odd. it actually was pretty useful. i found it to be great typing experience. and for managing the e-mails, a quick story, i was able to do that. effective. i was surprised by how much i liked it. >> that's what phone is supposed to be, jon. productivity. the question, though, becomes, you know, is the size, use, enterprise customer willing to go back? >> you're taking odds, probably not. i mean, this is not a mass market phone. these days, phones have become so much a matter of fashion and how people feel about themselves and takes somebody who doesn't mind looking weird to carry this phone. not just because it's shaped funny but a blackberry and the world not just to ios and android but to apple and samsung. nobody else can seem to make a profit in this market yet. that said, blackberry isn't staking the future on phones themselves but on security and software and this is going to get people looking at blackberry again and what they're trying to do and differently. >> i mean, you and i talked about this earlier but this is clear. this is an enterprise device. they're going after professionals, doctors and others who would find the size and the shape useful so they can read documents and things. >> exactly. the marketing campaign is work wide. taking advantage of the wider screen and it is -- what jon said, it is a niche product. not everyone will want this phone and there are -- they're trying to bank on the fact it's so polarizing people will try it. right? there's a sea of phones and look the same and this one looks dramatically different from everything else. they want to pick it up and dry it. whether or not they'll make the switch is, you know, pretty uncertain. i think most people want to stick with what they're comfortable with and gets them in the door and the conversation. >> i like it. people miss the keyboard. perhaps, jon, as much as it might be unorthodox to do something like this, people do like to be ahead of the curve and if they feel like the iphone -- i'm the person that has the passport, is that a blackberry it does have a little bit of a cool factor. >> i saw 150 people lined up outside 5th apple store this morning. >> wow. >> okay? remember they did 10 million in sales. just over the weekend. if apple -- i mean, if blackberry does that many of this phone in six months or a year they can count that as a success so it's a bit of a different game but, you know, kelly, you have never been a follower. yes, i can see you carrying this phone proudly. >> we are both of the same ilk but we both of us acknowledge that they've got an image problem, obviously. >> yep. >> do you think chen can solve that? i don't care if anybody thinks i was not cool. what was your response when you saw what i got here? you got a blackberry? blackberry is still around. >> not one but two. >> impressive. >> what do they have to do to turn this image problem they have? >> i think what passport does is kind of fix that problem is, you know, most people written it off as a dead company. right? failed last year with the phone launch. one thing to do to reverse the image is put out products like this that are buzz worthy and people like kelly want to give it a shot. this is different. how do you break this image? >> next month they have got the classic coming out. right? >> make no mistake the thing that matters is the enterprise 12 to manage this blackberry and android and sell it to enterprises and argue this is going to secure you and buy the way we'll compete with air watch which is now owned by vm wear, ibm, anybody else who wants to manage our devices. that's when the profits will come from. if this phone, if they can hand it out to i.t. and say, hey, you can do your work on this, too. that's nice. it's the software to drive earnings on friday and going forward. >> that's the specialty right there. >> yeah. >> do you like the new passport? 58% of the viewers we closed the poll, 58%, unscientific poll admittedly, they decided to vote, 58% like it. >> i have to imagine there's a big cross-section of cnbc and blackberry viewers. this is the phone they should have launched last year and the users have been waiting for. >> well put. thank you for being here. >> will you use that? you take it with you? >> sorry. >> that's fine. maybe later. >> roger and jon. developing story involving the "jersey shore's" the situation. >> i'm waiting to hear you say that. >> dom chu has details. >> i'm not the biggest reality tv fan or person out there but, again, bring you more details because this afternoon we told you that mike "situation" soritino and brother is charged with multiple charges of not paying taxes and conspiracy to defraud the government. multiple charges there. we do -- you can see there he is walking out of the court in newark and he has and his brother pled not guilty on indictment in this tax case. the brothers will return to court on october 6th for a formal arraignment. you can see they're walking out of the courthouse in newark. the federal courthouse. they have pled officially not guilty in this tax case here. they have set the bail for each defendant at a quarter of a million dollars. so $250,000 bail set by the judge for each defendant. again, a developing story. more details as they come in but for right now, for those people who know "jersey shore," interesting developments. back over to you. >> thank you, dom. >> thank you very much. 35 minutes to go here. 166 points higher on the dow. a rally across the board, in fact. keeping an eye on apple shares as we continue to see them struggling a little bit with issues related to people mocking the iphone 6 for bending a little bit and the ios -- >> had to pull -- if you haven't heard, the update issued yesterday or today for the ios 8, they had an ios 8.01 that they issued to try to fix some of the problems in ios 8. now they have had to pull that as a result of some problems so you're back to ios 8 planning to update something but you may want to wait on that one, as well. >> shares off 1%. numerous wall street pros predicting a correction hitting this year. where is it? 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he's on the same cloud as your business. the more hits he gets, the slower your business may get. do you want to share your cloud with a hamster? today there's a new way to work. and it's made with ibm. so -- welcome back. so after two back to back days of triple digit declines for the dow we're seeing a sharp upward move and the question is whether it's a head fake or not. the market moving and the pullback we hear about certainly on hold at least for today. >> let's talk about that. senior director larry mcdonald and chief strategist david nelson. we were talking yesterday, guys, about whether the risk appetite was waning to some degree. in other words, would investors let the market fall a little further than it has traditionally before they get back in. now we have an answer today. we'll see if there's follow through on this. what do you make of the rally today? >> a year ago today i was here with you trying to push me into the lean garza rally moment. is the start of a correction? i don't know. right now. hard tore do my job? sure is. i'm having a lot of trouble finding stocks to sell. i have to work hard right now. >> why is that? talking about valuation? >> finding a stock i like that's growing at the right rate i can get the right price or a deep value stock to buy, the catalyst isn't there and tougher. fewer names to buy. they're there. >> all the pieces aren't coming together. larry? >> we have our 21 lehman risk indicators and if you think of economic sensitivity, oil, commodities, crb, 16% on the downside for brent, 6% for the crb index, if you look at high yield, today equities up. high equity massively underperforming and this morning, we were at 1986 this morning on the s&p and where we were july 3rd but the vix is up 37% from july 3rd. so, something's going on there. real asset managers on the buy side paying out for protection and i guess a lot of people think we'll roll over. >> we're in the same lifeboat. stuck here in the large cap trade and the only thing working. where will i put my money? oil isn't working. commodities vice president worked. emerging markets aren't working. >> there are a couple of even large cap names people are hiding out in saying ultimately if there is a slowdown at play, can the bigger names remain immune from that? >> the emerging markets have not done well and big cap multinational companies made a big push in the emerging markets and how do they keep doing well if their customers aren't doing well? it bothers me. >> thing i think about often is it's our job following the market minute by minute basis every day but if you're a long-term investor and looking for five-year time horizon and you believe the market is higher five years down the road, what are we worried about right now? why wouldn't you be getting in here? >> s&p 17, 16 times earnings. brazil, 10 to 12 times earnings. brazil, you have an election that could go very well for a capitalist movement and brazilian equities have been trounced by the dollar so think about the dollar. the dollar's moved up substantially here because of this -- i think the fed leaks to take out considerable time in the length. >> ecb had something to do with that, as well, right? >> yes. and the scotland thing. brazil is hit with a perfect storm of -- >> that's fine for two to three years but five years, when's somebody to do with the longer time horizon here? >> well, i thought the surprise, you brought it up, the surprise of the year for me is the dollar going higher. it's ingrained it shouldn't do well and caught everybody by surprise. it adds to my concern because a dollar going up for them i think it's a tough go right here. i think a lot of investors are concerned. this is the only game in town. i mean, the only game in town. the last one standing and we're all in the same lifeboat and ready to push out anybody trying to get me out. >> nervous nelly nelson. there you go. >> thank you. >> you can use that. >> here. i'll write it down. >> see you. thank you for your thoughts. >> thank you. we have half an hour to go now. still as mentioned, strong day for the markets but questions remaining as to whether the one-day snapback is beginning of something more or a relief move after two sharp days to the downside. >> have you heard in this? the iphone 6 bends. we thought it was not designed to do that. plus, some drivers say that they've been having issues connecting wit the car's bluetooth and service disruptions have cropped up related to the ios 8 operating system. all the details on bend-gate and sync my phone gate and all the other gates in a moment. up next, cyberark software up in the first day of trade. >> alibaba would have taken that. >> at the nasdaq, the ceo speaking with us next. we'll talk about the ipo surge. also, home depot, cyber security mess. we'll be right back. when fixed income experts work with equity experts who work with regional experts who work with portfolio management experts that's when expertise happens. mfs. because there is no expertise without collaboration. in a we believe outshining the competition tomorrow quires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present. it's in this spirit that ingu u.s. is becoming a new kind of company. one that helps you think differently about what's ahead, and what's possible when you get things organized. ing u.s. is now voya. changing the way you think of retirement. could mean less waiting for things like security backups and file downloads you'd take that test, right? what are you waiting for? you could literally be done with the test by now. now you could have done it twice. this is awkward. go to comcastbusiness.com/ checkyourspeed. if we can't offer faster speeds or save you money we'll give you $150. comcast business built for business. welcome back. our dominic chu starting us off with the big movers on the session. hi, dom. >> groon across the board. let's start with green dot. that stock is up over 20% after walmart offering the checking accounts to serve the under b k banked part of the population and shares up on the day. kb home down 5% after a miss. the company blamed delays in mortgage closings and construction delays. you can see there down 5%. and citizens financial largest banking ipo in years and priced below expectations but managed to post a strong gain putting the stock near the bottom end of the expected range and the shares up by about 7%. no such problems, though, with cyberark software. that ipo priced well above the range and has kept on going to the upside. it's trading up over 70% on making the first debut here on the nasdaq so a nice pop there for cyberark software. back over to you. >> thanks. joining us in a cnbc exclusive is cyberark's ceo and final few moments of trading here, congratulations but do you feel like you left some money on the table? you could have priced it higher apparently. >> hi, bill. hi, kelly. exciting to be here at nasdaq. a great day of launch but no. we're really long term thinkers and that's what brought us here so we're excited to have green behind us and feeling very good about this. >> and what do you plan to do with this capital? will this, for example, help you hire talent? it is competitive for developers and pretty hot time for your industry. >> definitely. cyberark introduces a new layer of security that actually protects organizations on the inside. billions have been spent on trying to keep attackers out. our customers we help them defend from attackers in the network or attacking from the inside. while we have a great footprint in the fortune 100 and 15% of the global 2000 we feel like we're scratching the surface. this is our opportunity to really go and expand globally and hit on the levers that brought us here. >> certainly the timing is good given the news about home depot. the timing of the ipo, i mean. and the 56 million cards that were hacked by the bad guys in that case. we think back to the target case. realistically, can we solve this problem? can we feel more secure some point or keep looking to guys to put out fires one after another as they crop up? >> well, cyber security is a field that requires real innovation and that's why xaenls like cyberark emerge where we understand how the attackers are working. we research how advance attackers are breaking through security defenses and dpaens like ours that will protect customers going forward. the pendulum has indeed swung to the bad guys and there's been many years of lack of innovation in the space and optimistic that multi-layers of security to help organizations focus on their business. >> who are the bad guys and what kind of patterns are you seeing right now? >> yes, kelly. the bad guys shifted. it used to be the bored high school hijacker in the pajamas. it's nation states and well-funded hackers. why rob a bank if you can break in remotely from another continent and steal credit cards and bank information? we're dealing with very motivated hackers and often nation states going after intellectual property and attacks are on the rise. but we're also seeing on the positive side that customers are shifting strategy. they understand that there's an adversary out there and taking multi-layered security approach to protect themselves on the inside. >> they're smarter, motivated. did corporations just become complacent with their security? we heard maybe home depot knew about problems, i.t. people who since left warning them they were susceptible to very -- this kind of a hacking attack. are corporations properly prepared at this point in the world of cyber security? >> there has been complacency and deep dependency on doors and keep the bad guys out with social networks and ability to send targeted phishing attacks, they're making it inbound and catching corporations by surprise. we are seeing chief security officers get smarter, get paranoid and how they should be and actually assume a new approach. something that was haerery and you have a chance to recover. >> just a final quick question. i wonder, some companies are almost priced insensitive given the importance of what you and others in this space are doing. do you worry there's too much money thrown by, for example, venture capital company generally speaking that every company under the sun is getting capital right now and that in other words there's perhaps a little bit of a bubble developing in this area? >> not every twaen funded is going to become an independent company. but it does spur a lot of research and innovation healthy for the industry. cyberark worked many years and we have focused on customers and real growth and we have had profitability and built a real business around this and we have the opportunity to continue to innovate organically and to pick up things along the way. >> understood. udi, thank you so much for joining us. again, congratulations on the stock being up 70% and we'll see. we have about 18 minutes to go on the first day of trading. >> thank you very much. it's been an exciting day for the team. >> i'm sure. thank you, udi. closing 18 minutes left, the dow up 161 points as the rally continues after the two-day decline we saw. why you may want to consider beefing up the portfolio with bank stocks. yes, bank stocks. morgan brennan has a special report coming up. virgin group founder richard branson at it again. he's taken great vacations like this one. he wants his workers to have great vacations, too. as many as they want. literally. unlimited vacation policy. at his company. that story still ahead. hi! can i help you? 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in one second, he made a trade, we looked for the best price, and the trade went through. do the other guys guarantee that? didn't think so. open an account and find more of the expertise you need to be a better investor. welcome back. even the russell doing well today. it's up about .8%. the nasdaq leading the way up almost 1%. the dow adding 153. alibaba's back above 90. there you go. >> i saw that, yes. bounce there. banks stocks outperforming the broader market over a month. that may have something to do with the fed likely raising rates in the next year. really? >> morgan brennan will take a closer look for us now in the latest installment of the sectornomics series. >> i know it's surprising. the fed and the financial sector. currently up 7% year to date. and outperforming the dow's 3% gain but it's really in the past month that we have seen a greater rotation by investors into this cyclical sector and while it's come off a bit this week, it is one of the topper forming sectors for the month and so that's what's driving it. it is the fed. take a look at this chart. if you take a look at this chart, you will see where we have a spike this month. it is right around the fmoc meeting. amid that speculation of a more hawkish view on interest rates. financials are poised to benefit of the rising rates because it would be indicative of a strengthening economy and see increased demand for credit an higher yields on bank asets. when you dig down into the sector's groupings, you see that trend even more so. diversified financials, one of the top groupings, up 2.5% this month. names like cme group, intercontinental group, ice. mcgraw-hill companies, all up about 5% this month. and neck and neck with commercial banks and universal banks like bank of america and jp morgan and the regionals and analysts say offer the purest play on rising rates and pnc and suntrust bank. this dynamic is also why real estate investment trusts have dropped 5% this month. they have been outperforming the rest of the year, dropping 5% this year and they have been benefited from a low rate environment so take a look at the financials. we'll see what happens as those rates begin to rise, potentially, next year with changing fed monetary policy. back to you. >> it is a good story. >> we have on the day of the ipo of citizens financial, too. >> exactly. >> in the green right now. really appreciate it. we have 12 minutes to go into the close here, bill. >> all right. we have got the -- go live to the naz democracy for a check of the latest market action in technology and calpers chief investment officer speaks with us about the public pension fund giant's decision to exit hedge funds completely. art cashin said the bias to the close is to the downside. stay tuned. and our jackie deangelis at the nasdaq with the latest goings on there. with a good day for that offering of cyberark. >> that's right. action-packed day here at the nasdaq. watching the nasdaq composite and the nasdaq 100. up about 1% today. of course, erasing yesterday's losses and the best day that we have seen from the nasdaq since august 18th. good day and i want to point out apple is kind of a wallflower here down about 1% on the day. but bed bath & beyond with a monster move today up more than 7% after a beat and a raise. many of the retail names following suit here. you had deloitte with a report of retail holiday sales better than last year and investors seemed to like that. the bio techs did really well today, as well. gillead sciences and vertex pharmaceuticals there. >> thank you very much. we're coming back with the closing. time for the closing countdown already with the dow up 157 points. >> and after the bell, the iphone 6 does a lot but did you know that it also apparently bends? calling this bendgate. not supposed to bend. dropped cellular service have been reported as a result of the new ios 8 operating system. you can say huh oh. we'll cover it all coming up. keep it right here. you are watching cnbc first in business worldwide. go ahead and put your bag right here." 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[ indistinct talking ] [ male announcer ] right there in their trading platform. ♪ so the magic shell went back to being a...shell. get live squawks right in your trading platform with thinkorswim from td ameritrade. okay. rally continues here. we have come off the high here. the dow up. the nasdaq's had the best gain of of 1%. s&p up. russell 2000 up .8%. focus on the s&p. if we could get a -- there we are. bob, three days. >> reversion. >> two consecutive down days for the s&p and then we move back higher again. are we taking out the old high? >> no, we are not. >> close there. >> down fractionally. big question is why exactly did we drop 30 handles in the s&p 500 in the last 2 days and then bounce back today? >> this is ben willis as we know. >> vague thoughts of a china slowdown, ben. i thought the headlines weren't there to justify a 30-point drop in the s&p. >> only headline you need at this time of year is september. the whole market is walking on a hot tin roof and anything's going to spook it. no one's sure where to go. all the trades, some asset classes unwind. you saw the pressure being led by the small caps, s&p 600, russell. the death crush yesterday. all that's come off. formed the bottoms like you pointed out and the reversion. >> things can only go so far. i don't know if you have a chart of brent crude but a huge bounceback in the last two hours. i called and said when's going on? >> there was bombing over benghazi around this time. >> there you see west texas. put up brent. >> a nonoil producing section of benghazi. that's what moved prices higher. >> commodities complex under pressure for many reasons and dollar pricing of the whole complex and also the realization finally that there's more oil on top of the earth than 30 years and hard to justify brent or west texas intermediate above $90 a barrel. >> bio techs, what caught your attention there? >> the whole group moved with some of the indications of, again, other companies in health care realizing there's value in the companies oversold and making bids. so you have a 2% move on the upside of the nasdaq bio techs today and the underpinnings of that start of this that the money is back to work and sold -- we can't buy a correction in this. >> charles evans coming on today making dovish comments saying we should not be a hurry to raise rates and remember what happened in 1937. this is charles evans, head of the chicago fed saying we remember 1937. 1937? prematurely. the markets moved down that year. >> part of depression era lore that they reacted too soon. >> too soon. >> put us back into a second downturn in the economy. >> jackpot yenet yellen said hs worried and the overvaluations, a shot across the bow in the social media and bio techs and the bio techs are flying in her face. >> the point is -- your point i agree with is you can't buy a correction because the federal reserve is standing there telling everybody we're in no hurry to do anything and if anything falls apart, we are there. >> what will you do here? >> i've been bullish in stock markets looking for the correction f. you're looking for a correction, it has to be by stock or by sector at best. that's the only correction we are seeing. mentality paid off for a year. >> back again. thank you, ben. bob, good to see you. off the highs but a decent gain third day in a row triple-digit move for the dow and this time for the upside. stay tuned. much more to come in the second hour of "closing bell" with kelly evans and company. i'll see you tomorrow. welcome to "the closing bell," everybody. i'm kelly evans. take a look at how the major indexes are closing here. dow jones industrial average after back to back losses recovering some of that. a triple digit move to the upside. the nasdaq up 1%. the s&p doing pretty well up 15. the russell fighting back, too, here adding about nine. bring in the panel and talk about that. trading activity of the public offerings. we have senior contributor from cnbc larry kudlow. mr. larry kudlow. i don't need to say it anymore. erin gibbs. robert frank and guy adami. >> hello. >> great to have everybody here. larry, there are a couple of -- i'm thinking about the conversation we had last hour with david nelson where he said i don't feel like i can get a good sense of when's happening in this market right now. it's hard to find cheap stuff, an argument to made for the market. >> i'm positive with a small "p." i don't think the next major move in stocks comes until we slash the corporate tax rate to 20% and stop double taxing foreign profits. >> really? you think it's a move on corporate taxes to do that? >> next year. next year. hugely good. profits are still rising. that's a plus. now, here's what i really like. underpinning the market. dollar up. king dollar up. gold down. i love that combination. that tells me non-inflationary growth and one editorial point, janet yellen, i think her actions are more hawkish than her rhetoric. and i remind people, i remind people that the fed ends qe in a week or two or three. and she's followed through. she's followed through. and of course, they're going to raise rates slowly next year. >> guy? >> larry kudlow, you know, i got to tell you. royal if i rigty right now with the panel. you push back and say the strength in the dollar function of an improving u.s. economy or is it more function of the fact that other economies are in such worse shape and the actions of our central bank have empowered other central banks to take action in kind? >> guy, look at. i think the dollar is strong because the truest measure of the dollar is the price of gold and you could use broad commodity indexes, too. what we are seeing for the last several months, gold falling, commodity indexes. oil basically soft and the dollar strong. that's why i think on its own, you ask is it the fed? i think it is partly the fed as i said. i think yell season more hawkish in the actions than the rhetoric and i think the economy is improving a bit. >> but it is also -- this is guy's question, robert. you know this. you see the affect on the safe haven markets and how poorly the rest of the world is doing to some extent. >> never before has the new york stock exchange felt so far from the u.n. as today. you have a conversation there that is so frightening and so important and yet a couple miles away here we are, looking at numbers, green arrows. everything is fine and the fact thatdy a report this week, the wealthy, billionaires almost 30% in cash. >> wow. >> cash. these are -- so the average billionaire has $600 million in cash. and that -- that says two things. someone a lot of missed the rally and can't bring themselves to buy the market. >> is it overseas? >> some of that is. some of that is. may be partly tax issues. but lot of it is they can't bring themselves to invest in this market. >> who is it? >> a lot of cash. >> i want -- one of the characteristics of an average billionaire? is that like an on average billionaire? >> opposed to -- >> about 160 pounds? what's it look like? >> average age of 61.5. >> oh, all right. >> there is an average. >> i know you do the work on this. that's why i asked. >> i wonder, erin, if robert has a point that these markets if you knew the conversation happening at the u.n. how serious a threat we're facing, how difficult it is 0 understand what the policy is, to do anything about it, here the only affect we have seen to point to it today is an increase in the price of oil. >> we have good fundamentals. earnings growth of 8%, 9%, 10% over 12 months. though the dollar is strong, my big concern is that we have not seen revenue revisions downward because there are a third of revenues from overseas. and that's strong dollar can have a big impact, particularly for consumer staples, information technologies and no revisions to date and four weeks out from earnings season. >> is that because it's hard to predict the impact? >> we have had a 10% drop over the past month. you can do the math and figure out that your revenues aren't going to be the same converting to the dollar. i would look for surprises. >> look. i think you make a point. i think some companies are more sensitive to a dollar rise than others. but don't forget. in the '80s and 9'90s fabulous for the stock markets and the economy. here's my generic point. don't forget that export prices are higher. you're right. but import purchases are much lower for everybody. businesses and consumers. so that's a huge advantage. >> i think my concern is really just about next quarter because we have had that 5%, 10% move so quickly. slow and steady, easy, no problem. i'm worried how to handle third quarter earnings. >> let's bring in warren myers just finishing trading joining us here in the exchange. warren, good to see you. welcome. and look. what do you make of it? same question bill was asking. do you feel like the conviction is there on the two-day selloff we had to start the week or on the sharp if you want to call it sharp rebound we are looking at today? >> i still think there's an underlying upward momentum in the marketplace and continue to be there as long as we get comments like out of the chicago fed president today. saying that the fed is actually going to keep interest rates low at least for a considerable time further. and that's been the floor in the market for a while and going to continue to be there. so, you know, we had a couple days, three days of a selloff and looking how quickly that turned around i think it shows there's still upward momentum in the marketplace an continue to be there for quite sometime. >> do you think this charles evans rally then? >> i think -- if you look over the last six, eight months we have had no selloff of any considerable measure. every time there's been a dip, there's been a stop, quick stoppage and rebound and i think you saw that again today. until that trend changes, i think that's where you have to go with. >> before coming back -- hang on. guy, it's one thing to have a 4% selloff. surely two-day selloff can't be it. >> i think everybody talking about death stars and death crosses and those things, that's what i think put the air back in the market. you know, you know that i have been in this russell camp going the iwm down to 108 and when the armchair technicians started to look at it saying we are doing the death cross, that's basically empowered the bulls to come back. i think the russells lead lower. on the spe growth, yes. is it 9% or 10% or financial engineering going on? i would submit a lot of that has to do with buy backs and revenue growth, the chasm of the two, is probably about as wide as it's been in quite sometime. >> can i make a point on what mr. evans said? if you look at inflation sensitive market price indicators which is always been my discipline talking before, gold is down. the dollar is up. commodity indexes soft. okay? look at the break even spreads in the tips market. >> we have been saying this all week. they're lower by some measures today than at any other point with the fed embarking on quantitative easing. is there a deflation problem that's percolating? >> i think it's price stability and some respects the fed should pack up and go home. they've done a hell of a job. they are going to normalize next year and i think slow. i think it will be very cautious. what would be better? what would be better? if the fed is less accommodative, give me an expansi expansionary policy in the form of a tax cut. >> what about the deficit, larry? >> we'll grow our way out of the debt. >> all right, all right. we will see. thanks, everybody, for being here this afternoon. stick around for guy coming up with the "fast money" crew at 5:00 talking to a top analyst of sectors to buy on the soaring greenback we have been discussing. the answer might surprise you. stay tuned. and get ready for the bank of wall street. the retail giant set to offer low-cost checking accounts to customers over 18 that pass an i.d. check. why is walmart going so hard after customers? big banks typically don't want. that's next. and apple fans have been bending over backwards to get their hands on the new iphone. perhaps now discovering it can be easily bent itself. now an update for apple's new operating system is causing operators to lose sell service. will the issues take a toll on what have been stellar sales for the company and scare you? that scare you away from buying the new iphone and a chance to vote on this coming up and billionaire richard branson giving unlimited vacation days. will it work? 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[light instrumental music] ♪ female announcer: recycle your old fridge and get $50. schedule your free pickup at: next time you shop in walmart you may be able to check out with more than clothes and groceries. sharon? >> that's absolutely right, kelly. walmart customers can now bank where they shop. the nation's largest retail is teaming up with green dot corporation to offer checking accounts to anyone over 18 who passes a basic i.d. check. the accounts from wall administrator's new bank of go bank won't require a minimum bank and no monthly fee if you deposit over $500 a month. if you fall short of $500, then the fee is $8.95 which is actually comparison to some other banks but the big draw is go bank will not charge bounce back or overdraft fees which can run as high as $34 at traditional banks and the other thing that many people are pointing out that it may offer is many people who are unbanked and underbanked and talking about 10 million households according to the fdic, this is a place to go that is beyond where they would be able to go with a traditional bank as well as for many of those who may have overdraft fees now, this is a place that they may want to turn initially. back to you. >> sharon, stay right there if you would. thinking through this, robert frank, are the banks put on notice if they haven't been by various services chipping away at the share? >> walmart tried to get a federal charter and couldn't. the issue i have is, look, this is walmart trying to subsidize a business to get people back in the stores. they have to do this. but this could be a big risk. i mean, banking is not a simple business. the banks have said, look, these low income people have had a tough recovery. compared to everybody else. i'm not sure the money's there and may be taking on more risk than they know. >> sorry. go ahead. >> i think this really as a way to get low-income households typically spend all of their income so if you're in there already doing the banking, more likely to spend all of your money on basic goods that walmart offers. goods, foods, clothes, medications. >> they don't have income! >> can they balance it out? >> sharon, if you're still there -- >> i'm here. >> what's the buzz? look. they're taking risk as bob said and who's got the cash cushion if we see the defaults and the overdrafts which they're not going to charge fees for? do they have the kind of typical cash cushion that the federal reserve or the fdic would ask of the commercial banks? >> green bank, the company that is teaming up here with walmart, is fdic insured so that's not the red flag you may think but there's a red flag and mentioned earlier talking about consumer who is are really living paycheck to paycheck if they even have a paycheck and so rather than really have a plan on how much they should spend and put away, they go into the bank. walk up to a certain area of the bank to a kiosk or something and get a go bank card. get the starter kit for $2.95 and then they have a checking account and then they can use it on anything that they want and whether or not they're really going to be able to be disciplined with this type of availability for checking, yes, we want them to be banked but i don't know if it has the same type of financial education type tools that say a community bank would offer or a credit union. >> just people know the company sharon's referencing is up 25% today on the news, erin. >> that is my biggest concern because when you look at the potential revenues, you know, 10 million households without a bank, say assume 1 million of them take this opportunity. that's only 107 million in revenues. that doesn't justify a 25% increase in go bank. so, i'd say i would expect that to go back down on a short-term trade. >> perhaps people see an evolving world in banking and started with the big banks and perhaps where we end. in other words, if my relationship is with my phone, is this just kind of risking that they lose that relationship and it moves them towards the back end, less exciting part of banking? >> these are people the banks didn't want. these are people banks said we can't afford you as a client. >> but i also -- i don't understand -- i never understood this. as you said, walmart is trying for years to get -- why should walmart be a bank or financial services company? what's wrong with that? >> the banks in trying to get the charter the banks fought it as saying basically they don't want the giant gorilla in the room. >> competition. >> i agree with you. >> essentially government-run banks that -- >> how good as bankers. >> how about the existing banks? you think they're good as bankers? >> much worse. >> i'm just saying walmart crowd, seems like a bright crowd. may make mistakes. can't be worse than the big banks too big to fail. >> you can expect, guys, down the road consumer financial protection board looking into mobile banking and all of the others a peblg s s a suspects whether they're credible and that they're looking at this, if this is the new way of banking, they're paying close attention to make sure that consumers protections are really covered here and make sure that there are those financial education tools and the biggest concern is will there really be the people who have been unbanked or underbanked, will there be the protections there for them so they're not in even more financial distress. >> fair point. i think better to be banked than unbanked and wait to see for now. thank you so much. appreciate it. iphone 6 and 6 plus have a lot of new features. flexibility probably isn't one of them in this sense. the phone apparently pretty easy to bend and it's creating an uproar on social media. apple hearing about issues with the update to the new ios 8 operating system and pulling the update and yet another problem with the iphone 6. you probably didn't hear about it. syncing with bluetooth in cars. also ahead, companies exploring delivery by drone. it's a step further. making drones dance. there they are in a new performance. more of this incredible video later on "the closing bell." stay tuned. when change is in the air you see things in a whole new way. it's in this spirit that ing u.s. is becoming a new kind of company. one that helps you think differently about what's ahead, and what's possible when you get things organized. ing u.s. is now voya. changing the way you think of retirement. hi! can i help you? i'm looking for a phone plan. it has to be a great one, and i don't compromise. ok, how about 10 gigs of data to share, unlimited talk and text, and you can choose from 2 to 10 lines. wow, sounds like a great deal. so i'm getting exactly what i want, then? appears so. now, um, i'm not too sure what to do with my arms right now 'cause this is when i usually start throwing things. oh, that's terrifying at&t's best-ever pricing. 2-10 lines, 10 gigs of truly shareable data, unlimited talk and text, starting at $130 a month. big day? ah, the usual. moved some new cars. hauled a bunch of steel. kept the supermarket shelves stocked. made sure everyone got their latest gadgets. what's up for the next shift? ah, nothing much. just keeping the lights on. (laugh) nice. doing the big things that move an economy. see you tomorrow, mac. see you tomorrow, sam. just another day at norfolk southern. what if we finally had that would be amazing. hey, what if we took down this wall? what if this was my art studio? what if we were pre-approved? shut up! from finding to financing, how'd you do that? zillow. welcome back with some more breaking news on harvard's endowment fund. dom? >> cnbc learned that harvard's chief investment officer right now will become steven blithe an ascend from managing director of public equities at the harvard management company to the chief executive officer. jane mendilo said he was stepping down at the end of the 2014. steven blithe managing director of public equities got his phd from harvard and masters of mathematics in cambridge, as well. he was a trader, heading up interest rate trading and a former morgan stanley trader on rates, as well. steven blithe, going to lead the harvard endowment and learned that the harvard endowment gained over 15% this past year just a step below yale's endowment which was reportedly gaining 20% over the course of the past year. kelly, back over to you. >> thank you. perhaps an interesting signal we ran public equities. moving on. the new iphone bending the update to the new ios was so flawed it was pulled and now famous for saying, there's one more thing. phil he brlebeau, what's going ? >> have you tried using the iphone 6 driving? if you haven't, well, you might be in for a surprise or two and point out that when we tried it earli earlier, it did work the way it was supposed to work but some people say that the iphone 6 is not matching up on the bluetooth the way it should be and go on an apple forum and see complaints of people saying, hey, it is not matching up. we came across a couple of those. one saying the 5s worksed great. the bluetooth cut off all phone conversations to sync. i can't pair my iphone 6 with the audio unit. it doesn't show up under the parable devices. in fairness to apple, we tried out an iphone 6 on a half dozen different vehicles and some on the forums as not being able to use the bluetooth function with the exception of one vehicle that had a minor issue, they all worked and that minor issue is one that you would see with any smartphone. not just with the iphone 6. by the way, we should point out that automakers, all of them, they have offices in the silicon valley and one today said we have an office out there. we work with the automakers. this is part of making sure that if there's a software glitch and occasionally already there are some to fix it quickly. live tv can work. i have you programmed into the bluetooth. let's see if the phone call goes through. >> oh! are you trying it right now? what kind of car are you in, phil? ah, there it is. >> acura mdx with bluetooth. i can talk to you this way and this way. you haven't picked up the phone. >> breaking so many laws right now. reading script, texting while driving. i'm concerned. >> and there's a police station right up here. how do you like that? >> i'll hang up. you do the same. goes to show that the problems are perhaps spotty although certainly real as you have indicated. drive safe, phil. thank you. good to see you. >> reporter: thank you, kelly. >> phil lebeau on the story and the roads. another issue of the 6 and 6 plus appears to be that they bend. check out this video folks on twitder calling bendgate. we want the know if you haven't purchased the iphone, does this discourage you from buying it? go to cnbc.com/vote right now. our poll is open. joining us to discuss this is shane snow, chief creative officer at contently. >> contently. >> thank you. welcome. look, first of all, classify these under first world problems and secondly classify them perhaps as apple problems or are these problems with any big thin phone? >> with any big thin phone. a few years ago we had the flip phones to flip them too fast. you step on them. phones are breaking all over the place. this is more expensive and more painful sitting on it and bending. >> isn't it the issue that apple didn't have a cheap flip phone and now it's a bendy -- >> so the 4, for example, the two glass sides. people breaking this all the time. shattering the glass. >> can i ask a -- this is -- i'm not a big high tech guy but i'll get the small iphone on order. >> the old one? >> no. the new one. >> smaller of the two. >> i'm going to get the small. but don't people if you put it in the pocket, i mean, crush it. >> that's my concern. >> i don't think -- unless, you know, you have to be crypt night. >> no one does this with their phone and the video of someone like really cranking on it. no one does that with the phone. i sit on the subway and the amount of force to do that might -- >> can you bend it right here if you wanted to? i'll buy you another one. >> this is my friend's phone. i'll give it a shot. >> i see play. >> did you see that? >> activated siri. >> but the issue here appears to be this isn't just an apple problem. a lot of the other device makers for phones of this size and scale bend, as well. does that matter? do people have to be aware or is this some sort of a major stumble? >> made out of aluminum, a malleable metal, other phones are made out of plastic that, you know, is less attractive but it also -- you drop it an just kind of dents or bumps around or breaks it apart. if it bends, it's stuck. >> and then you have a marketing game. no other phone is as flexible as the iphone 6. >> it is unusual for the company, erin, isn't it? >> i just say buy a samsung. >> is that what you have? >> yeah. >> does it bend? >> no. it's plastic. doesn't stay like that. >> fall apart when you drop it? >> no. i drop it all the time. it's wonderful. >> put it back snogt. >> yeah. put it back together. take the battery out. for me -- >> samsung is my old one. i'm going apple. i have to do it. i love this bending. i'm not going to do this. >> i want to ask, the poll is closed, 64% of people say it doesn't discourage them. the update issue with ios, the bending of the phone, the bluetooth, are they serious enough to be a real problem for apple or together? >> i don't think so. the ios update can be solved and not that big of a deal. bluetooth thing will be solved with software. the bend thing, i mean, there's a few videos of people doing it and 10 million people bought the phone last week and we have heard very few reports of it. >> i just want to quickly despite the personal preferences, i don't have any problems with apple. i still like the stock and i don't see it having hit on the earnings. >> only off 1% today from all-time highs. shane, thank you. we have had -- trying to break phones, breaking traffic laws. things are out of here. >> with his bare hands. >> superman over here. last week calpers exited the investments in hedge funds. what is behind that move and where will it invest the money tied up? chief investment officer is here next and this is a rendering of a building that will soon contain manhattan's most expensive real estate listing ever. you will be shocked by how much the building's penthouse triplex will go for. robert frank is here to tell us. today could be the day. the day we give you hope. relief. a cure. today, we believe every life deserves world-class care. as one of the top four hospitals in the nation, over 100,000 people from around the world come to cleveland clinic for care each year. and we're ready for you with a second opinion or a same-day appointment today today today and everyday. call today, for an appointment today. machines will be sprayed to be made. and mang something stronger... will mean making it lighter. one day, factories will work with the cloud. one day... is today. with the top speedou compare of comcast the top speed of business dsl from the internet... phone company well, there's really no comparison. why pay more for less? call today for a low price on speeds up to 150mbps. and find out more about our two-year price guarantee. comcast business. built for business. welcome back. the california public employees retirement system is an eliminating the hedge fund program altogether. there's chatter of following suit and threaten the industry. and here to exclusively explain the move and offer his take on the market in his first interview as the permanent chief investment officer is ted eliopoulos. welcome. good to see you. >> kelly, thank you for having me. >> what a stir you've created, really. is this about the fees? about the performance? we're talking here about two dozen hedge funds and about a $4 billion move here. >> well, first and foremost, you know, we're a very large investor. our investment portfolio is approximately $300 billion. the hedge fund program in stark contrast is quite small. it's $4 billion. or a little over 1% of the overall portfolio so we conducted a very thorough review of the portfolio and at that scale the hedge fund program too small for a meaningful impact either on the return or the diversification for that overall $300 billion portfolio. >> un. you were one of the first to get into the hedge fund business and may be small relative to the portfolio a move for a while appeared to help returns and we should remind viewers, you are trying to get -- still 7.5% return for the obligations of workers in california so there's a real important reason why people in the industry watch you and study where the performance is and take from this you're not seeing it in the hedge fund space. >> right. and it's very important for calpers as a public institution to be very transparent and very accountable for our investment decisions. you are right. our hedge fund program begun over ten years ago and when we began we were very forthright and explicit about the purpose of that program and transparency and accountability of those returns over the ten-year time period as a hallmark of calpers. similarly, when we make a decision to end a program, we feel an obligation to the public to explain our decision and our rationale, really in order to hold ourselves accountable and be transparent to the public realm since we're a public institution. our decision and our rationale to end the hedge fund program really is exclusively tied to our view of what's in the best interest of the beneficiaries you just mentioned. we serve to provide retirement and health benefits to 1.6 million californians. >> right. >> our decisions are premised on when's best for our california beneficiaries. >> what do you mean by that? i don't follow. >> so in making our decision on hedge funds, it was really tied to what i just mentioned. we have a very large portfolio. we're differently situated to many other investors in the marketplace. endowments, foundations are a much smaller scale. one of the we cuellar things about the portfolio is how big it is and for us in making our hedge fund decision, we looked at the relatively small scale of the hedge fund program and its real inability for a meaningful impact on the total portfolio. we also looked at the, you know, at the cost and complexity of the hedge fund program and decided that it just would not practical or beneficial for us to scale up the portfolio to a size meaningful in the portfolio and as a result we made the decision to end the program. >> and that's what i was getting at because as you know in response to this, the hedge fund industry has said, look, we don't see other clients following suit. they all feel comfortable with the investments. so last question we have to go but i guess you guys then don't mean for this to be a message so much about your dissatisfaction with the hedge fund investments that you have had? >> it's not about the performance of the hedge fund program or about the industry in general. for us, it's ending the program because it doesn't serve calpers purposes for the reasons i've established. >> understood. >> but it does have a big impact in the marketplace and we understand that and it's a responsibility that we have to tell the truth as we see it. >> and, ted, thank you so much for being here to explain it and one of the biggest in the space so tell us what else you'll be up to. really appreciate it. >> yep. thank you so much for inviting me. >> ted eliopoulos, cio. the obama administration making its move to halt tax inversions this week and treasury secretary's plan is not wowing everyone including the u.s. chamber of commerce. the chief tax counsel joins us next. the drones are heading to the circus, cirque du soleil adding drones to the eye popping circus act. we'll tell you what the innovators of the big top are up to just ahead. 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"have a nice flight." ♪ music plays ♪ music plays traveling can feel like one big mystery. you're never quite sure what is coming your way. but when you've got an entire company who knows that the fewest cancellations and the most on-time flights are nothing if we can't get your things there, too. it's no wonder more people choose delta than any other airline. 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. you can't get any thbetter than that. trains. siemens trains are not your grandparent's technology. they're something that's gonna change the cities we live in today. i find it so fascinating how many people ride this and go to work every single day. i'm one of the lucky guys. i get to play with trains. people say, "wow, we still build that in the united states?" and we say, "yeah, we do!" welcome back. we have been hitting tax inversions here from all angles. the white house implementing rules to make it less attractive to u.s.-based companies but will it be affective? according to my next guest all the administration has done is make sure the profits never come back to the u.s. joining me now is caroline harris, chief tax counsel at the u.s. chamber of commerce. caroline, welcome. you might have thought the chamber is pleased the rules not harsher to some extent relative to what could have been. sounds like you're not, though. >> i think we are not pleased. i think we have an uncompetitive tax code. the too high rate and anti-competitive worldwide system of taxation. i think this goes after a sort of third level of benefit that comes with inversions to repatriot earnings without triggering u.s. tax and treasury's touched on these and as you have said they further locked out u.s. cash from coming back and added complexity and they need comprehensive tax reform. >> i agree with what you're saying. when's going to happen here is, number one, our companies keep their money overseas and no investment or job creation here. >> right. >> number two, here's my big question, doesn't this bring in overseas foreign companies to start buying out american companies? >> absolutely. if we don't reform our tax code, we don't lower the rate, we don't shift to a more international competitive system, we absolutely let american companies become sitting ducks for foreign takeovers. i agree. >> i think we'll see more of this like merck, because they're seeing higher growth in the u.s., now many european companies are willing to buy the u.s. just to get this higher growth. and then they get the lower tax rate and a big concern. >> let's get back to reality. i mean, reality is that everyone would like tax reform. there's a big spread on what that rate should be. and it's not going to happen. not going to happen for at least another couple of years and so in the meantime, isn't it treasury's job to maximize revenue under the current structure and impose the rules? isn't that their mission as a government ent the i? >> i agree with "the wall street journal" editorial today. jack lew cannot add. >> zero gain. zero. >> not going to make a buck on this. in fact, this whole idea of losing the revenue base is just election year b.s. take a look at the charts as a percentage of gdp. actually, corporate revenues by the martian's own forecast supposed to go up to about $350 billion. that's a gigantic record setting number as a share of gdp. this is politics. >> getting no money from this? >> you're not a patriot. you want rich corporations and the pathetic part -- >> everybody also seems to agree at the same time that nothing's going to get done in congress on this issue. it is not just politics, actually. there's a problem if you don't like the way the tax code is now and nothing happening out of congress. >> it's politics for six weeks. caroline, let me ask you if you're still out there. >> absolutely. >> next year, next year, humor me, there's a republican house and a republican senate. and they basically put together a business tax reform plan. you know, dave camp's given you basis for it. rubio's got a plan. mike lee, out in the paper today. now, who's to say you couldn't get through that next year? >> i think it's possible. you obviously much more optimistic for pro-growth comprehensive tax reform with a republican-controlled senate and house. becomes a question of whether the white house wants to step up and play ball and acknowledge what we need to do is drop rates for all businesses and make a more internationally competitive system so our companies can compete and not become foreign targets. >> larry, do you think the president if the republican congress put forward legitimate tax complete tax corporate reform veto that? the white house. >> i don't know. it's a good, tough question. i don't know. the issue is the rate. i prefer 20%. and the second issue is territorial business. however, one of my heroes, former president bill clinton, came out for this very reform. he said, lower the rate and stop double taxing the foreign profits and people won't worry about inversions. i say, bravo to mr. clinton. he is a supply sider. >> thank you so much, caroline, for joining us this afternoon. along with the shares of companies affected did decline after the news came out of treasury and see where it goes from there. there's a new deluxe apartment in the sky. this penthouse triplex in manhattan about to be listed for a record breaking $130 million. it may also spur a new tax for owners of these high-priced big apple dwellings. we'll tell you about it next and richard branson taken pretty great vacations. here he is kite surfing, for example. now he wants workers to have great vacations, too. as many as they want, really. that story straight ahead. you do a lot of things great. but parallel parking isn't one of them. you're either too far from the curb. or too close to other cars... it's just a matter of time until you rip some guy's bumper off. so, here are your choices: take the bus. or get liberty mutual insurance. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. see car insurance in a whole new light. call liberty mutual insurance. welcome back. looking to make a statement, with your next real estate purchase, 520 park avenue in manhattan might be a consideration. it is about to become the most expensive new york real estate listing and it might be more expensive. robert frank, what do you mean? >> penthouse triplex penthouse next year for $130 million, the most expensive listing ever in manhattan. it's over 12,000 square feet. that's about seven times the city average per square foot. foreigners are targets the most possible buyers. the tax on this property would be an additional $5 million, a year, an top of the property taxes and maintenance. dying to hear what larry thinks of this. but hong kong, singapore, london have all imposed recent taxes on foreign buyers because we're seeing so many wealthy foreigners bid up prices in these markets that locals get mad, they pressure the governments and they say, you've got to do something. >> larry? >> they already pay taxes, as you mentioned. and they pay transaction taxes coming in. >> 1%. >> that's correct. i want to say this, our sanda nista doesn't like that. he's going to use the estimated in revenues to spend on his pet projects. do you think new york -- >> like affordable housing? >> whatever. do you think new york isn't taxed enough? do we think that? seriously. >> it's really a question about -- playing devil's advocate here. that's fine. somebody has to sort of talk about whether it's better to move towards a tax system that draws more of its revenue from these kinds of expenditures as opposed to trying to raise it from people who don't have $130 million to spent on a pent howe. >> first of all, i don't think we need more taxes at all this new york, except if the economy was growing rapidly. >> i was talking about over time. wouldn't it be better to shift the pie -- why not tax people overseas on buying mansions in -- >> this is the difference. i don't want to shift the pie. i want to grow the pie. >> grow and shift. >> and foreign capital will do that. we should be a haven for foreign investment. we are not. that's a big problem right now. our tax laws, our regulations, this -- this is a different. apartment buying -- you want to make it hell, say you have an entrepreneur -- >> even the wealthy in new york are in favor of this. i think of all the plans to raise taxes on the wealthy in new york, this one might actually pass. >> i would sanction the russians. they're bad guys. i'm cool with that. >> not taxing them. >> i just want money to come into the united states. i really do. >> i have no view on the tax. but money's going to come to new york no matter what. >> you think? >> yes. new york has a lot more going for it -- >> cheaper relative to some of those markets. >> and the other markets have a tax. >> if i were the deputy mayor, i would not be advertising the greatness of new york because we're going to raise your taxes. that would not be in my powerpoint. >> yeah. >> there might be a position waiting. unlimited vacation sounds like a good idea, at least it does to richard branson. he's got a new policy or a non-policy as he might call it. we'll take a look at it when we come back. s changing faster than ever, we believe outshining the competition tomorrow requires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present. became big business overnight? ♪ like, really big... then expanded? ♪ or their new product tanked? ♪ or not? what if they embrace new technology instead? ♪ imagine a company's future with the future of trading. company profile. a research tool on thinkorswim. from td ameritrade. a research tool on thinkorswim. sometimes they just drop in. always obvious. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances. it's music to employees' ears, take as much vacation as you want whenever you want. that's what virgin group founder and billionaire businessman richard branson is telling his staff. the one hitch is employees must work at one of virgin's main offices in new york, london, geneva or sydney. netflix also gives staff unlimited holiday time as inspiration and says he doesn't expect people to abuse the privilege. i wonder if the panel agrees. the u.s., and you guys know this if you spend time abroad, nobody takes their vacations. and they're not really jobs that matter if you clock in and clock out, are they? >> marissa mayer had the total opposite view. she said, everybody at yahoo! has to come to work. no more off-site, logon -- i don't know who's right and who's wrong. >> doesn't that tell you maybe there's more of a yahoo! problem than a work problem? >> i agree with you. >> erin, can you delineate your time when work time and non-work time or is it fluid? >> completely fluid. for my entire time, it's totally fluid. for our group, i could care less. >> robert? >> i think in this bifurcated world of the high-skilled workforce that's always on, this 24/7, even when they are on vacation versus the mass of workers who don't really like their job, don't enjoy it and are not -- when they're home, they're not working, they're plugged out. i think it really depends on the industry and the worker. for creative workers that are naturally driven to be good at their job and help their company, it's not going to matter. but i think for a lot of people that would abuse it, i think there's a large workforce, a lot of companies in the service industry, in particular, that this would not work for. >> by the way, don't european workers -- they're on permanent holiday, right? >> works great in france, doesn't it? >> france, italy, spain -- it's all coffee break. you have to have a schedule when the store is open in italy. and it's just a little window. you have to be there on time. >> this is probably more about the service economy than it is a story of the -- >> it is. and branson is on permanent vacation. can i just say that? the guy shows up on our air. he looks like he just got off his island. his life is just one long vacation. if i could have his life -- >> this is my office. it is this mobile device. it doesn't matter whether i'm on a train maybe skydiving -- whatever these things are called -- >> if you're as rich as branson, what the hell? you'd be on permanent -- unless you had feelings of guilt. but work ethic is very important. >> curious to see how it works on his airline when the pilot was just -- oh, wait, sorry. >> vacation day. >> sthair going take a quick lo. cirque du soleil known for its magnificent stunts with humans now will be seeing drones. these are now drones part of the cirque du soleil shows. and getting glowing reviews. >> very cool. even though the federal authority haven't imposed rules yet. this is great video. >> and typically, let's say art, we've seen them a lot with photography and film. but this is unique. they're using them to an animate them. >> how about this lampshade drone for terrorism? >> how wonderful as it explodes in your face. >> time now for "fast money." melissa lee over to you and the gang. thanks so much, kelly. this is "fast money." i'm melissa lee. dan nathan, josh brown, karen finerman and guy adami are our panel tonight. the nasdaq logging its best day in over five weeks. one notable underperformer was apple. two black eyes for apple today. the latest, the company annou e announcing it's pulling its ios 8 update after a slew of complaints, on the heels of the iphone 6's bendgate. for more on this story, let's bring in jon fortt who joins us