stocks pulling back a bit from the all time highs one day after the federal reserve surprised the markets by holding the stimulus steady. bob pisani? >> some were disappointed. after people started sorting it out, stocks slid all throughout the day as interest rates rose. that is far and away the most important story. we did see cyclicals gain a little bit, but not much. interest rate sensitive sectors were weak today as rates moved up. banks were weak, too. the volume today, i'm going to call it above average. it's not heavy. but it's above avrmg. the favorite quote i saw today, maria, if the economy was strong the fed would have tapered. a lot of people reflected on that. see the stock market action. look at industrials. there was a small group of industrials that did well today. global industrials did well. take a look at material stocks. another economically sensitive group. for the most part they were down on the day including billiton and rio tinto. flatter yield curve. a lot of the regional market, regional banks were notably weak today. 3%, 4% te kledeclines. finally want to mention hmos weak again. concerns about moving employees out of companies that are in hmos into the exchanges that are not sponsored by hmos. maria, back to you. heather hughes from sun america funds. rex macy from wilmington trust. rex, let me kick this off with you. your observations from the fed action yesterday and what it means in terms of your own investment strategy. >> sure. you know, the most interesting, i think, lesson for us is how uncertain things are. the fed who has said we're going to be very transparent, apparently wasn't transparent enough for the market. the market was caught off guard. so they don't know what's going on enough to know whether they're going to taper a month or two in advance. the market doesn't know. it shows just how uncertain the direction of the economy is. >> that's the thing. if the economy is so uncertain, doesn't that raise an eyebrow ahead of third quarter earnings which are sort of on the horizon in the next couple weeks? >> it does. we're looking out farther than that, though. we're looking at sort of we think confidently there will be 6% year over year earnings by the time we get to the end of '13, '14, '15. that's what we're basing our stock ownership on. growth of earnings long term. when we price that out, apply a 16 pe to it, we think stocks are attractive. particularly given the risk of bonds. we still continue to like the equity market. >> heather, let's talk rates for a moment. yesterday rates came all the way down. just under 3% to about 2.6%, 2.5%. what's the new range in your view in terms of rates? and does that dictate a move into equities? >> yeah. you're right. even though the 10-year caught a bid yesterday, you definitely have seen a dramatic shift. we were at, what, 1.6% on the 10 year in may? and we reached that 3% level. i wouldn't be surprised if we head back higher towards 3% into year end. even with the fed easing. and as far as alternative or attractive investments at this time, the 10-year -- advisers are still very much against or tis like the 10-year in fixed income in favor of stocks at these levels. >> you would put money into stocks as well? >> again, i think going into year end as the guest mentioned, it's a plow horse economy. the markets are always climbing this wall of worry. as long as there's uncertainty, there's still potential buyers and cash on the sidelines right now. and that will be key. along with, as you said, earnings. revenue growth actually will be the key driver going into year end. we're only anemic or weak growth s&p less than 2% kplexcluding financials so far this year. >> where do you think growth comes from in terms of revenue growth for the third quarter reporting season? >> i think third quarter is still going to be mild. it is going to be the guidance they give for fourth quarter where i think we're going to see some positive news there. that's going to help the markets move up. >> we'll leave it there. rex, good to have you on the program. thanks very much. see you soon, guys. meanwhile, banks and billionaires are feeling the impact of the fed's taper te sigs or nondecision, depending on your point of view. two men listening intently to fed chair ben bear nank's words yesterday, bank of america chairman brian moynihan and billionaire investor warren buffett. they were in the nation's capital today. our colleague, becky quick, caught up with them both. becky, over to you. >> reporter: maria, thank you very much. thank you for joining us today. here with brian moynihan and warren buffett. i know you gentlemen are here because you're going to be speaking to about 700 people just after this. we want to thank you for joining us in advance. there has been an awful lot of news. an awful lot of surprise about what happened with the federal reserve. warren, i just want to wonder, it took us by surprise. did this catch you by surprise that the fed decided not to taper? >> only because i've been reading every place people expected something. but i don't have any -- i didn't have any great expectations one way or the other. and it doesn't really make any difference to me in terms of our business or investments whether it's zero or 10 billion or 20 billion. some day it'll stop. maybe it'll go the other direction. >> although you had been temi ig us for a while you didn't think qe-3 was as effective as some of the earlier programs. >> i think that's right. probably why it's being continued. it hasn't done the job yet that they they hoped it would. but it -- i don't think it's been harmful. what you see in the economy is just this gradual increase, which has been going on ever since the fall of 2009. every now and then people think it's accelerating. sometimes i think it's decelerating. just kind of creeps along. >> brian, ever since this decision was made about 26 hours ago we've been trying to figure out what the fed saw or everyone else didn't. or at least everyone we were talking to ahead of time. you've made an announcement recently you'd be laying off about 2,000 people because of the huge decline in demand for mortgages. i guess you're seeing some of the what the fed has been seen in terms of mortgage business. do you think this move to continue with 85 billion a month will make a difference when it comes to what you're seeing in ter terms of demand for mortgages. >> you saw it yesterday. i think i'd second what warren said. you have an economy which we see very constructive. growing 1.5%, 2%. we don't see a lot of downside risk absent the usual things you can make up. you don't see a lot of downside risk. i think the fed just thinks, i think the chairman was clear about it yesterday, until unemployment is down he's got to keep this economy going the right direction for fear it might go in the wrong direction. mortgages are another way, low mortgage rates helps house wk helps housing starts, helps warren's carpet factories. >> what are you seeing in terms of the overall economy, brian? you've got, i think, one out of every two american households does business with bank of america. what are you seeing in terms of the economy? >> we still see consumers spending. the data that we see, spending for the month of september so far is about 5% to 6% over last year's september. the internet spending grows at twice that rate. you might hear different retailers have different outcomes depending on whether they're on the internet more or less. the overall spending levels are up about 5% to 6% from last wre year. we see it continue to move forward. corporate side, they're very constructive. access to markets is there. it's okay. the question is, it just takes time. i think people wish this were going faster. it's just a lot of work to take a huge economy like ours and get it completely back to where people want it, 3% plus growth. >> warren, if qe-3 hasn't been working to this point and the fed is now saying we have to wait until we see the unemployment level to come down before this happens, is it going to get us there faster? >> i don't want to say it isn't working -- it's hard to say what would have happened if they'd gone the other direction. the economy is improving. but i think probably bernanke was hoping to see an acceleration of the rate of improvement. and what he's seeing, i think, is a continuation of more or less the same rate. maybe if they hadn't been doing it, you'd have seen even less than 2%. who knows. >> i think my question was, though, if you look at them saying we need to see a big pickup in the economy, that's not necessarily something that's going to happen next month. >> no. who knows when it's going to happen. no. you could be looking at this rate for quite a while. but i'm no good on that sort of thing. i really don't try and predict it. >> brian, i know the next fed chairman is going to be your regulator. do you know janet yellen well? do you have any thoughts about who you'd like to see as the next fed chairman? >> we know all the candidates. so that's a question that anybody will answer, i think it's up to other people to make that decision. we'll work constructively with all the candidates i've heard mentioned. i'm sure there's some i haven't thought of. we work constructively with the fed and always will. >> warren, how about you? who do you think the next fed chairman should be? >> i think bernanke. i think if you've got a .400 hitter in the lineup you don't take him out. he may want to leave. but i think -- i think he's done -- since the panic of five years ago, i think he's done a terrific job. i think he ought to get a chance to play out a little more. >> you think the president should ask him to stay for another term. >> that's what i would -- yeah. i don't think that's necessarily going to happen. that's what i would do. >> if bernanke doesn't want to do that, who do you think should step in? who would be wrour second choice? >> yeah. i don't have a second choice. i don't know. i don't know janet yellen at all. i just don't know enough about the various candidates to come up with a second choice. i know bernanke in my view is very, very good. i would not trade him away anymore. -- anymore than i'd trade some of our great managers at berkshire away. >> what do you think of -- >> whoever has that job, at some point is going to have to do something that's pretty much unprecedented starting with a $3.5 trillion balance sheet, still growing. it's easier to buy than to sell. they don't have to sell. i mean, but playing out the last -- the last half of this game is -- is very different than the first half. brian would know a lot more about that than i would. but i think bernanke ought to be given a chance to play the whole game rather than just the buying end of it. >> brian, what do you think just about the exit strategy? we spoke with stan druckenmiller today. you said he worries the academics at the fed don't necessarily know some of the problems that could come up with this exit strategy. >> i think they've studtied it. they've thought about it. they're playing out the exit strategy as we speak. in other words, the dialogue and transparency and clarity. if you ask the people who work on a trading desk around wall street yesterday, a lot of them were set up the wrong way. nal happen. it'll go through the system. 0 year bond's restabilized at a different level. remember, it doesn't go far back that it was 100 basis points lower. the first 100 basis points was a 60% move as opposed to 10% move. it has to be carefully crafted. not only in the united states but around the world. but i think people can get in the science of this. i think the clarity that has been through all the central banks, we'll get out as the economy improves. that's the piece people are missing. they're thinking they're getting out without the economy improving to the rate they want. given a strong economy growing at whatever rate they need to feel that unemployment is coming down, this will be, i think, somewhat less of a pressing question. given the first thing. they're not going to get out until there is a strong economy. you have sort of a chicken and egg. >> i don't think it's impossible that five years from now that you have a $3.5 trillion fed balance sheet. they may take it back to where they're not going one direction or the other. but i don't think it's impossible that they just decide they'll sit at $3.5 trillion like they used to sit at $1.5 trillion. >> stan druckenmiller also said today in terms of qe-3 as a citizen he's concerned. but he said as a money manager he thinks this is great news. because he thinks equities will move higher. at least in the intermediate term. what do you think about that, warren? >> well, the lower interest rates are -- the more assets are worth, basically. to the extent that qe-3 is -- is keeping interest rates lower than they would otherwise, it probably keeps asset prices higher than they might be otherwise. there's other variables. if that doesn't exist maybe it's because business is a lot better. there's more than one variable. there's really dozens of variables. interest rates are a terribly important variable in the valuation of assets. >> when you look around at the market, though, it's definitely moved significantly over the last four or five years. >> sure. >> we've seen some major pickup. when you look around, are there still deals that you can see like the deal you did with brian with bank of america? do you still see good positions or have stocks just moved too far? >> they've moved a long way. they were very cheap five years ago. ridiculously cheap. that's been corrected. they're probably more or less fairly priced now. i don't think -- we don't find bargains around. but we don't think everything -- things are way overvalued, either. we're having a hard time finding things to buy. >> great. we're going to continue this conversation. we will air it tomorrow morning on ""squawk box." in the meantime, maria, is there a quick question you have? >> i'd like to get their thoughts on regulation. it seems the profit story is very much in place. as profits have gone off for so many companies, so have the expenses of regulation. jpmorgan paying $800 million. what's on the horizon for bank of america in that regard? >> yeah. brian, maria asks just in terms of regulation, obviously you see what's happened with jpmorgan today with the amount they're spending on this. with the expenses that have gone up along with this, can you just tell us what's on the horizon with the regulatory front for bank of america? >> well, we've had a lot of discussion about this the last few years with maria and others and yourself. because we got through this -- we got into some of these issues especially on the mortgage area earlier. we put a lot of this behind us. we continue to work through it. this is is a period a lot of regulations got passed to stop all the different things we weren't doing right. if you look at it from a broad perspective, we doubled our capital. in the company and industry. we've quadrupled liquidity. we've simplified the company. that is where the right place to take it for the customers was and the shareholders. i think most of the people in the industry are doing that. i think the regulations are pushing us harder towards that outcome. >> gentlemen, haung very much. we'll continue this conversation as we mentioned on tape. maria, right now back to you. the rest of this conversation tomorrow morning on "squawk box." >> we will be watching, beck. thanks so much. always great work from becky. when carl icahn talks, guests listen up next. the billionaire investor will be here giving me his take on companies that could be a -- find out which firms are on his target list. interest rates have been dipping due to the federal reserve continuing its stimulus plan. find out if now is finally the time to get off the fence and go with that refi or mortgage before rates head north again. next time they might not stop. later, syrian president bashar al assad and his family have amassed a fortune through a web of moves that would rival organized crime. later, what assad's taste for the good life is costing syria. you're watching the "closing bell" on cnbc, first in business worldwide. stay with us. we route your order to up to 75 market centers to look for the best possible price -- maybe even better than you expected. it's all part of our goal to execute your trade in one second. i'm derrick chan of fidelity investments. our one-second trade execution is one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. welcome back. herk's board rooms best beware. carl icahn lays it out in an op-ed this morning in the "wall street journal". carl joins me right now exclusively on the telephone. carl, good to have you. thanks for joining us. you think board rooms are still broken. >> hello? >> hi, carl, you're on the air. >> i hear you. with that bell i couldn't hear you. >> you think board rooms are broken? >> yeah. i think it's dysfunctional. i think it hurts the economy greatly. obviously there are good companies and there are good deals and there are good directives but far and few between. >> is that why you don't see a lot of women on boards? it's largely men and they're getting the men they know? it's sort of lots of buddies there on boards? is that the point? >> i think there's a lot of cronies. it's a lot of cronyism. i really, maria, can't say it's women or men. but there is a lot of cronyism on these boards. the ceos have their buddies on for years. sometimes it's the other way, actually. sometimes the boards have -- have been there for years. you can't get rid of a board unless you really go to vast extremes. the trouble is in this country that you really don't have a democracy. even a political system, if you don't like the president, you don't like congress, you have an ability to vote them out. but you don't have that with corporations. it's sort of a futilistic system. actually a dictatorship. >> i understand what you're saying. what about the pushback that some would say, look, everybody can't have a vote on compensation, on who's in management, because everyone, all shareholders, are not necessarily educated as to the int intricacies of the company? >> yeah, i think that's true. i'm the first to say that you don't micromanage. i mean, the reason we have done so well is we don't micromanage. but you can say -- have a say when you vote. and, therefore, if you really had a vote and these ceos making 700 times more than the employee and the stock is going down, you would vote them out, i would think. but you really don't have the vote. because you really can't mount a proxy fight. there are all kinds of rules and regulations. laws that stand in your way. those laws should be changed. >> right. that's really the most e fwrgres of them, right? when the stock of the company is not doing well, clearly the tragedy is is not working, yet the management team is making all this money. 700 times the average worker. what is it going to take, do you think, carl, to actually move the needle on that? >> i really think maybe the time is coming that people are becoming much more aware of this. you have high unemployment in this country. stock market is doing well. but are they doing well for the wrong reasons? you have very low interest rates. that, i think, does help the economy somewhat. but it's interesting to note that even with those low interest rates, we are not doing that well. we have high unemployment. i really think that you must -- i mean, you know it's just the tip of the iceberg that the ceo is getting 700 times more. that's symptom of the problem. the problem really is you've got the wrong ceo in many cases. that's the real problem, right? you have the wrong ceo, he's not running these assets that he has -- that he has responsibility for in a correct way. therefore you have unemployment. therefore you can't compete. you can say the market is doing well. we are a reserve currency. we have all that going for us. there's no reason to have the unemployment we have. there is a reason. the reason is you're not running the companies properly. and i'm sort of talking against myself. i may be out of a job. because if you change laws, there would be a lot more people doing what i do. going in and really changing the board. and that's why we've done so well. again, at a risk of being a -- i think it proves my point. if you bought a stock in 2000, you're up 1,100%. the s&p is not even up, i think, 50% or 80%. i forgot the number. i put it in the editorial today. >> one of those companies you mention in the op-ed today is dell. you write, it's just one example of a retick lousily dysfunctional system lacking strategic foresight. the dell board for years presided over the loss of tens of billions of dollars in market value at the hands of ceo michael dell. most people will say when it's a founder running the company, the founder is going to work that much harder to ensure success. >> yeah. but that's not true at all. sometimes the founder is the worst guy to run it. we proved that in a number of cases. we really made -- like at biogenerbi biogen. i can show you a number of companies like that. chesapeake. they're not bad guys, these founders. i think michael dell is a smart guy. that doesn't mean he's the right guy to run a company. it takes a different skill set. sometimes. not always. go ahead. i'm sorry. >> please finish. >> i'm just saying, it takes a different skill set. what really must happen is, mutual funds, these large funds, some are doing a good job now. some are becoming aware. but they should recognize they have a fiduciary duty here. they run billions and billions and billions of dollars of shareholder money. they should really take on the mayor responsibility of holding these guys responsible. and for the most part, some do. but for the most part, they sort of walk away from it. they'll paut a little proxy fwrp together or lean on some advisory firm to tell them how to vote. i think the voting in many cases is an extremely important thing they do. they want to somehow in many cases disavow that responsibility. and i think that should be something that could be done. i think shareholders should be made aware of the fact that if they are in a mutual fund, is that fund taking on that responsibility. >> you say with the advent of twitter and other media you're intending to make shareholders more aware of their rights. which is one of the reasons that you've been out there pretty vocal. >> i hope that's going to work. it's what got us out of the dark ages. it's what happened with the renaissance with the printing press. there's a little bit of an analogy there. not much, maybe. >> where's the most egregious situations. you talk about what you said 25 years ago at the texaco annual meeting a lot of people died fighting tyranny. at least i can fight against it. you mentioned dell. what other companies do you believe could be helped by a shakeup in the board? >> yeah. well, there's so many of them, maria. obviously we own some. but we have some unique situations now where we don't always say that when we get into a company you should change the ceo. in many cases we really get to work with them. you don't even have to change some of the board. it's interesting. sometimes when we get into a board situation, you find there are a lot of really good board members, but, you know, it's bit of a herd mentality. they're there. they don't want to really shake up the ceo, their buddy for years. when you get there some of these guys agreed with us. some of these guys can turn around and do the job. more importantly, i think it's the laws that allow it. you can't blame a ceo. you can't blame michael dell. listen, if he can get away with this, why not? you look at the dell situation. a dictatorship, it doesn't take that many votes to take down a dictatorship. they had three elections. shareholders turned it down three times. yet the laws of delaware permitted it under business judgment, whatever. what do you do? you know, i guess the point, under business judgment maybe you can go out and kill little girls on the street. it was business judgment. it helped the company. >> you can see how tough it is to turn the ship around. thanks to you to making this really getting this out there. let me switch gears for a moment, carl. we were just talking to warren buffett. he basically just told becky he thinks this market is fully valued. what do you think? >> the market is what? what did he say? i can't hear you. hello? >> yeah, i'm here. >> what did he say? i couldn't hear -- >> oh, i said we were just talking to warren buffett. he just said that this market is fully valued. talking about 17 times earnings. i know you're looking at specific companies. in terms of putting money to work in equities, yesterday new record highs for the dow and the s&p 500. where do you stand? do you think this market is fully valued? >> yeah. i agree with him completely. again, at the risk of being a -- we're up 30% this year. yet we have a huge hedge on. or our loss said we did better than 30% because i agree with what warren buffett said. i think that right now the market is giving you a picture. t false picture. the market says you're doing well. i don't think companies are doing well. they're taking advantage of a low interest rate. obviously you don't have to be a financial genius to understand if i can borrow at 3% or 4% and buy assets, maybe my own stock that's yielding 9% or 10% or 11% i'm going to make a lot of money. in one sense or another that is what's going on. i do think at 17 times that you have to be pretty well hedged. i at no time know warren buffett said it, but i agree. >> what's your take on real estate right now, carl? citigroup, apparently, we're hearing is putting on the block of jc penney owned by -- to take them out of the name. 17.5 million shares between 1305 and 1310. in terms of vernado or real estate investment trust, what's your take right now on that area. >> i'm not going to speak about vernato. i don't know that company. in general raem estate is ridiculously overvalued. it's absurdity. i can't understand it. you look at these urban centers. you look at the rent these businesses pay to be in new york. that's another symptom of what's wrong with corporations. why do they need these lavish offices in manhattan for? what good does it do except it's a good place for the ceo to reside if he wants to live in manhattan. i'm using that as a very small example. i think real estate is coming again to the top of a bubble. but i am not a real estate guy. i can talk about companies that we invest in. i'm happy to do that. i can talk about corporate governance. i'm not a real estate person. >> you still buying apple, carl? are you still buying apple? are you still buying apple? >> i think apple is very understand vam lued. the reason being a little bit of what i'm talking about. they have a tremendous amount of cash. their stock as a multiple, warren talked about 17 times. you look at the multiple of apple. it's much lower than that. they're making a great deal of money. you're paying the way i look at it maybe 450 billion. take away the cash. paying 300 billion for it. you can go and you can look at it and say that you're bringing in about 45 billion a year on that 300. if you go buy stock, you could probably bring that cost down, that multiple, to three times the earning picture. yeah. i think it's very undervalued. not that i'm a technology guy. i'm not going to opine on whether they should do one phone or another. i do think they've got a great product. a great ecosystem. yes. i think that's undervalued. i think the market is very overvalued, generally speaking. >> good to have you on the program. thank you very much. see you seen. carl icahn joining us. breaking news we want to get to right now on prudential. >> in a te feet for prudential, the regulators upheld its designation, prudential financial's designation as a systemically important nonbacked financial institution. prudential has 30 days to respond to this designation. and it says it is considering all its options. prudential declined to say or to comment further. someone close to the company said those options might include going to court to challenge this designation. also, of course, they could just accept it outright. keep in mind there are only three -- or two other companies that have been designated systemically important that are not banks. those being aig and fwrksge. regulators are considering other companies as we. they argue as an insurance company it doesn't face a run on the bank so should not be included in this designation. back to you. if you've been putting off deciding to buy a home and getting a mortgage or pursuing a refinancing, this may be your last best chance. rates falling again after bernanke kept the punch bowl spiked. will it just be temporary? we'll take a look next. stay with us. ♪ ♪ [ female announcer ] you're the boss of your life. in charge of long weekends and longer retirements. ♪ ask your financial professional how lincoln financial can help you take charge of your future. ♪ little things anyone can do. it steals your memories. your independence. ensures support, a breakthrough. and sooner than you'd like. sooner than you'd think. you die from alzheimer's disease. we cure alzheimer's disease. every little click, call or donation adds up to something big. ...amelia... neil and buzz: for teaching us that you can't create the future... by clinging to the past. and with that: you're history. instead of looking behind... delta is looking beyond. 80 thousand of us investing billions... in everything from the best experiences below... to the finest comforts above. we're not simply saluting history... we're making it. sfwlnchts welcome back. so much for horrible septembers, right? the dow losing ground for only the third time this month. dominic chu with the lowdown. >> there were specific names that stood out. at least from the downside. mainly larger insurance companies and regional banks. take a look at insurers like lincoln national, metlife. both down by around 3%. lower interest rates end up hurting investment returns for these companies. also regional banks. regions financial. keycorp. they get hurt as well when longer term interest rates fall. remember, they make less money from their traditional lending activities. another notable downside mover here is disney. investors are reacting to news its pixar animation studio is pushing back the release of a couple upcoming movies. the stock was also downgraded to equal weight or neutral rating at morgan stanley. let's cap it off with a big mover to the upside. small tech biotech company ca called acceleron. shares ended up huge. it specializes in cancer and rare disease treatments. large biotech company cell gene also bought into its ipo. yesterday's nontaper discussion by the fed was good news for mortgage ratings. up next, we take a look, how low could rates go now that the fed is keeping the foot on the stimulus pedal? is this the last chance to get in before mortgage rates head to 5% and beyond? later, middle east strong men have a long history of hoarding wealth even if nations are impoverished. assad seems to be no different. we take a look at how he's holding on to his country and his fortune. ing more to make their money do more. 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(announcer) scottrade... ranked "highest in customer loyalty for brokerage and investment companies." welcome back. the fed's decision to continue the $85 billion buying beyond program a month has sparked an immediate drop in mortgage rates yesterday. will it also spark another spurt of home buying? diana olick on that. over to you,maria, you're right. rates dropped pretty dramatically after the fed tabled the taper yesterday. let's take a look at first where we were before that. 30-year fixed about 4.80% for the conforming loan data on the mortgage bankers association last week. since may rates are up well over a full percentage points which translates into about 20% less purchasing power for the average home buyer. where are we today? of course, it depends on what lender you're going to. 4.25% is a real possibility today. you're going to have to pay points, of course. the range seems to be between 4.35% and 4.5%. if you have good credit and if you have a large down payment. this according to mortgage news daily. interesting, though, the realtors say that rates will not help the housing recovery going into fall. they say that august was, in fact, the last hurrah. why? sales were up 1.7%, but they say that this was buyers jumping off the fence, buying a home, because they were afraid of rising rates. where will rates go from here? well, the answer, to be determined, of course. we know they could go a little bit lower for now. but they will likely start rising again, especially as we head towards that next important jobs report. maria? >> diana, thanks very much. more reaction right now with fred glick, president of u.s. loens mortgage and real estate agent and mortgage broker. david licken, managing partner with mortgage banking solutions. gentlemen, good to see you. david, is the decline in rates after the fed decided not to taper going to be enough motivation to get those buyers back into the market? what do you think? is that enough? >> it should be. you look at where rates -- a lot of people were procrastinating and not taking advantage of the lower rates. this is their opportunity. i think the uncertainty in the market is still out there. it depends on which market. it will be a regionalized reaction, maria. you're going to see markets with inventory to work through, they're not going to be motivated as markets where there has been a shrinkage of inventory like here in parts of texas. specifically austin, texas. you're going to see people wanting to get into it. it's going to be an indian summer so to speak on the real estate markets. i agree it's going to be short lived. we got higher rates ahead. >> fred, why do you see the fed's nonmove as a double edged sword? >> well, basically we're going to see interest rates come down a little. i kind of disagree with dave. i think we're going to see lower interest rates for a long time. because the other side of the story is that the jobs aren't coming back. we still have high unemployment. we still now have with this nontaper a situation where people say, maybe the job market isn't as good as i thought. maybe i won't keep my job. it's all about i'm going to keep my job, i'm going to plant roots. that's not the case anymore, possibly. >> you know, we've seen a number of banks lay off mortgage division employees. refinances have slowed. we know that. did they bet wrong on the fed, david? and a possible revival of refis and purchases? >> they did. a lot of people were anticipating and it was priced into the market, therefore the recovery that you saw, the falling interest rate, it was priced through the market we were going to anticipate tapering. yes, everyone's talking about the refinance app dropping off. purchase applications are there. i love fred's optimism about interest rates are going to stay low forever. but look at the job -- the unemployment -- or the jobless claims today. look at the new housing numbers, existing home sales that came in stronger. each one of those numbers as they continue to come in stronger are going to put more pressure. the feds are monitoring one aspect of it. foreign policy. what happens in syria. what what happens with fannie mae and freddie mac. continued uncertainty is what i'm an tticipating. >> how high do mortgage rates go in the next year? >> i think you're going to see interest rates climb as much as a full point. i don't think the market can go much further than that. i think that's a worst case scenario. i think an optimistic scenario is we're going to hang in the high 4s through the rest of this year. probably through first quarter. then we could see interest rates go up into the 5s. it's all going to be determined upon what we see in economic data. a fed saying they're monitoring, they didn't say they're taking the hands off. we're going to be here forever. they said they're closely monitoring it. they restated. they brought clarity and c consistency to their commentary. we're going to monitor economic reports you cover so well each and every day. >> what's the impact of that, fred? do you agree with that? what would you say the implications are? >> i, again, think we're on this nice plateau of jobs. i've said this a million times. there's no "it" to make us just appear to have to hire tons and tons of people in this country. we're turning into a giant service industry. servicing ourselves. so the problem is, the creation of jobs. period, done, end of sentence. the chairman even said until they get below i think it was 6.5%, they're not going to go anywhere. so they're going to keep buying and buying and buying. they're going to keep buying mortgage backed securities. they're going to keep the rates low. i think this is going to be for a long time. i mean, there is no one like screaming at me calling me, oh, my god, i have to refi yesterday. or i have to buy yesterday. even though rates went down a quarter of a point. it's just not there. the comfort factor isn't there. it's nothing you can measure in a statistic. that's the problem. >> we'll leave it there, gentlemen. great conversation. up next, the global outrage against syrian president assad has not changed his standing as one of the richest men in the country. how he amassed that fortune may not have been, shall we say, via traditional channels. up next, what assad's wealth is costing syria. stay with us. ng you really love, what would you do?" ♪ [ woman ] i'd be a writer. 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(vo) meee-ow, business pro. meee-ow. go national. go like a pro. in a world that'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. >> welcome back. so the average income in syria is $2800 year. >> the average citizen in syria makes $2800 a year. but assad and his wife live large. personal wealth has been estimated around billions of dollars. >> it' a. >> commonoffshoots. they have their close end associates as part of the wsh if you will, a business enterprise. >> chief among those associates is this man. makhlouf. he claims he's a legitimate businessman. the u.s. has -- what about those sanctions against the regime? they've barely made a dent. that's because assad tends to move money through friendlier places like russia. in fact, experts say the true extent of the assad regime's fortune may never be known unless the regime falls. back to you. >> scott cohn. up next, will stocks close at record highs tomorrow? wall street's money pros weigh in next. get you prepared for the opening bell. back in a moment. to look for the best possible price -- maybe even better than you expected. it's all part of our goal to execute your trade in one second. i'm derrick chan of fidelity investments. our one-second trade execution is one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. >> welcome back. 30 seconds on the clock for each of our next guests. we are joined right now by steven rosen and michael underhill. what do you want to prepare for for tomorrow? >> i think investors that are looking for a clue they will probably be disappointed. >> we just don't know which way. >> we will leave it there. >> michael over to you, what do you want to watch for tomorrow and get prepared for tomorrow? >> we are looking at euro zone confidence tomorrow and their confidence of whether it will be consistent? i think you're going to be continued volatility. and anticipation of what is going on, deficit. >> we will take a shore break. and finally today, my observation of what this market may focus on now that the fed decision on tapering is out of the way. investors are turning their attention to the result of the third quarter. just what is priced into this market and how are the trends looking for the third quarter? investment firms telling clients today to expect weak trends for trading results. trading could be sluggish but there is a wide discrepancy. some expect it to be flat, others down as much as 20%. the management of these firms have been telegraphing mortgage reduction volume down but we could see better trends in fourth quarter. loan growth had been accelerating on rising rates as borrowers were rushing to lock in cost. the theme in regional banks could be rotating into higher investments. jp morgan despite government fines, bank of america, city ask goldman sachs all up on the year. maybe even more important for the market if these expected week trading results come to fruition. before we take a look at the day where we saw declines. the dough tonight down 40 points. and the s&p 500 down about 3 points. that will do it for closing bell tonight. i will see you tomorrow. stay with cnbc. fast money begins right now. this is "fast money". here's tonight's line-up. bears in hibernation. so far investors in bear suits have gotten destroyed but as everyone faces the taper fake out, it's time to face have you come too far too fast? losing its luster. goldman sachs joins the douw on monday. we have a wall street smack down. and back to the future. intel's futurist is joining us with the machines of the future. >> karen,

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