Transcripts For CNBC Power Lunch 20160609 : comparemela.com

Saying that it didnt expect the fed to tighten. You could see it, it rallied in the brief oneweek period where it seemed like maybe theyd tighten and raise expectations to 40 . After that crummy unemployment number gold rallied again saying theyre not. Today is interesting to me because its rallying along with the safe havens. I dont think its telling us this is any global panic. What it is telling us it not ohm fits in with the weak dollar trade it also fits in with the safe haven trade. Ive been on this all year and pretty harrowing times for a while but i like it now. This is jim says jack a kind of riskoff trade not an inflation protection trade. There aint no inflation out there. How do you see gold . What is it telling you . Tyler, there say big, red flag with whats going on in gold and people need to heed that warning. Its telling you theres been a loss of confidence in central banks. It really started a few months ago and its been creeping and one of the reasons why especially over the course of the last couple of months weve seen a bit of an acceleration to the move in gold. What it is, it is a warning signal. It might have started out as a reinflation trade but right now turning into that flight to quality and safety, one of the things that more than likely is going to stop any kind of a move in equity. You think it will stop a move in equities. You dont think theres a lot more to run. What have equities been saying to you, jack . Well, one of the things that were seeing with equities and one of the things we have to keep in mind we see nearterm tops happen around quarterly expirations which we have next friday. This breath has been horrible, the volume horrible and the data has been horrible. Everything is leading us to believe that were not going to see a big pop in earnings. This earnings recession weve been going through is going to maintain itself. If thats the case, were talking about a market that is rich looking at it as the multiple and more than likely were going to see an adjustment in asset prices because of it. Yesterday, jim iuorio i was talking to art cashin. Stocks seem to go up not because the companies are doing better or the economy is doing great but because there are a lot of sort of secondary factors that have been cooperating. Oil is higher, the dollar a little softer, bond yields down. How do you see stocks right now . Amen to all of that. Everything that jack said about stocks and the earnings recession, theres been many different times along the way we could have said this. What carl icahn said about stocks theyre being propped up by central banks. We could have say that now, three years ago, four years ago, that probably is the whole story that the world is awash in central bank money. I can name three or four european Corporate Bonds trading at negative yield. If thats the case and seimans money is negative, not like with bonds, gold and the dollar but around the where do you put your money list stocks fit nicely. Jim, come on, talking about a lot of risk with stocks. Theres a lot of difference between buying the tenyear at 1. 67 and commerce bank. I was president of commerce fwhank chicago. Negative Interest Rates are a cancer. Its a matter of time before they start to reflect that in the price action. I would say yeah but heed those warnings. Jim, when, when . Those could be words. Im not disagreeing with you. Were disagreeing on the time frames. Right now the next month, the next two months stocks seem fine to me because of nothing else. I still say that theres ominous clouds that are gathering. I just say theyre way in the distance more than i think you say. Jack, last word is yours. You know what . I think anybody that is looking at cheap premium levels right now should absolutely take advantage of them. We are one or two headlines away from seeing the market readjust and you could see 5 loss in a weeks time and something well all be talking about and everybody will be surprised about it. We want to be prepared for it. Thank you very much. Jack, jim, appreciate it. News alert on the bond market, 30year bonds up for auction. Santelli is on the case. Rick . Absolutely. We gave this one a bplus. 30year auction 12 billion bplus, a little better than yesterdays tens, yield at auction 2. 475, that was the offer side of the one issued market so it priced tight. Lets go through it, shall we . 2. 42 bid to cover. So 2. 42 times oversubscribe to better than the ten option average of 2. 34. Indirect bidders yesterday it was a record. You know whos in this group . I think maybe like foreign central banks, theres some big monetary authorities, makes a lot of sense. This wasnt a record, but it was darned close. 64. 9, lets go through it quickly. If we look at just april, excuse me, recently we had october of 2015 at 66 but other than 65. 1 two options ak, thats the second one thats better, youd have to go back to 2006, so theres ohm a handful of numbers at this level over the last several years, 8. 1 is the only kind of weak link on direct bidding below the ten option average of 11 , very similar to yesterdays tenyear. So 56 billion out the door and a lot of crying of uncle of those who need some real yield which they found in the u. S. 30year bond. Tyler and the gang back to you. Well talk about that right now, rick santelli. Hes talking about the flattening year curve . Here is a generic yield curve on the bottom, time, on the left, field, the price of money. If you lend your friend money overnight, youre going to charge him or her interest . Theyre probably good for t right . What if they want to borrow money for five years . Youd probably charge them more and for ten years, a lot more. Thats why when you get a 30year mortgage from a bank the Interest Rate is higher than a 15year mortgage. This is generally how it should work. Sometimes the yield curve gets inverted. Why would money be cheaper in the future . Bond traders think maybe a recession is Company Coming and the fed will have to put Interest Rates. Thats why were so fearful of an inverted curve. Banks lop a steep yield curve because when we show it to you, a steep yield curve, this is what you get paid when you put your deposits in almost nothing. When the yield curve is steep and you want to borrow money for a mortgage that spread they love it, the steeper it gets. Right now the yield curve is flattening. Why . Why is that . Are we going towards inversion or is there Something Else going on . Lets discuss, because theres a big message in this market as well. More from our guests ron, along with mike collins who manages over 600 billion in fixed assets for prudential. Ron, ill start with you, you wrote a whole book called the message in the markets. What is the message now . The Global Market you worry about. Twoyear german note a negative yield of a half point so in other words, if youre borrowing or lending money to the german government, theyre charging you 50 basis points to do so. You have the entire world with negative Interest Rates thats putting downward pressure on u. S. Rates which in turn as you said is flattening the yield curve. To me thats not only a Global Growth worry sign and also a signature as maybe the worlds getting more increasingly worried about the brexity or the british exit from the European Union as well, a disruptive event. Mike, what do you think, are we headed towards a potentially inverted yield curve . Is the bond market telling us a bad economy is coming or if youre japanese and german, what we get on a tenyear here is really good compared to negative Interest Rates. It is a combination of both factors. You look at yield curves in japan and germany. They pegged the front end of the curves deeply into negative territory so what do you do if youre an investor . You dont want to buy a bond at negative yield. You keep moving out on the curve until you get a positive yield and do that until it gets flatter and flatter. The german tenyear is almost at zero so theyre moving into 20s and 30s. The german and jgb. Japanese Government Bonds. And the german bund curve are flattening like crazy. The next move if youre a logical investor is move into other positive yielding security, the u. S. Treasury market but their curves are flattening, our curves are following their curves lower. The whole qe and negative Interest Rate policy is a big part of it. Is it a consequence of a lot of buyers or is it that something bad is coming . You know, theres definitely also a reflection in the yield curves i think about just slowing Global Growth and the slow disinflationary environment we live in. If the fed continues to insist on being dogmatic and raise rates here in an environment where the Global Growth backdrop is probably telling them not to do anything. You can argue the zero funds rate is neutral. Were growing barely at 2 and probably downshifting to a 1. 5 growth rate. Could you make the case that if they raise rates here its going to lead to a flatter curve. Federal rate hikes lead to a flatter curve. If they insist on raising rates in the environment it probably increases the likelihood of a recession. Worse yet, the fed is just hamstrung. The deeper global yields go into negative rates the harder to be dogmatic. Theres no way without affecting global economies that the fed can lift off from beyond their current Interest Rate policy. This is making it increasingly difficult for them to do anything here. Is it just me or have we been having the same conversation for about five years . No, this is a little different. Why . Weve not been in this deep negative of a yield. 90 of our audience doesnt trade bonds like you. Youre worried about their 401 k or 529 plan and the stock market, this is deep in the deep weeds, what is it saying about stocks . Mom and pops 401 k . Nothing specifically about 401 k s. This is where were getting into different conversations. To me, and i think youd agree, a negative Interest Rate environment globally and a falling rate environment in the United States is sending a message that the Global Economy is weakening, and that given that its happening so quickly and ten years. I understand that because weve been in a deflationary environment for ten years. At this point on a twoyear note in germany theres some concern exprsed is theres something we havent thought about. What does history tell us, if anything, about what happens when you have Interest Rates this low for this long, or negative in that many places around the world . Have we ever been here before and what was the outcome . Not in our lifetime. Typically rates go from high to normal, if you will, thats generally good for stocks. You lower the discount rate, valuations go up. When they go from low to zero and negative i at this it changes the math and changes the game. Historically, really low yields also typically correlate with low growth and low earnings therefore lower equity. Im a stock investor thinking im getting nothing in the bond market. Why wouldnt i get a dividend stock which is expensive by valuation terms but getting paid way more than i get in fixed income. Why wouldnt i do that unless this thing is telling me holy smokes, something bad is coming. Thats the question, is something bad coming . Are we looking toward slower growth, less than 2 , less than 1. 5. And the high dividend play payers would be at risk. In terms of earnings and dividends. It has implications for stock market investors. How quickly this gets translated depends how quickly we see an event or recession. Its important to note and you both can agree on this. This is every known stock and bond market historical model in existence, right . Because weve never been here. Weve never been here. Everybody ultimately and i mean this with respect to you and all of our guests, everybody is ultimately now just guessing. I wouldnt say that. What can you plug into an excel spreadsheet or have your terminal figure out. Its got risks. Yes. We dont have history to tell us what the outcome is. We have history in the 30s and we have history in japan that tells us what happens when real Interest Rates go negative and what the likely outcome is of that scenario particularly if theres a policy mistake like the fed raising rates you go back into recession. Its what we saw in japan over and over and over again. The williams deal just got done, thats surprising. Thank you, gentlemen, sounds like we have a new topic we have to move on to. Ron insana and mike collins thank you both. Crude oil retreating to around 50 a barrel today but harold hamm raising his yearend forecast for oil. Is he right . What do 32 people have in xwhon katy perry, drake and the nfl, their twitter accounts hacked. 32 million passwords being shopped around on the dark web. How does twitter get past its trouble . That ahead. Experience the thrill of the lexus is f sport. Because the ultimate expression of power, is control. This is the pursuit of perfection. You dont want to live with mom and dad forever, do you . Boo laughs how do i check my credit score . Credit karma. Dont worry, its free. Credit karma. Give yourself some credit. In a world held back by compromise, businesses need the agility to do one thing another. Only at t has the network, people, and partners to help companies be. Local global. Open secure. Because no one knows like at t. You may have seen the headline before we went to break, the ftc approving a deal between ete and williams, big pipeline deal. Doesnt necessarily mean the deal is going to get done but it is approved with some conditions. Ete has been trying, well they offered a year and a half ago to buy williams, then the bottom dropped out of the oil and gas markets and they were basically trying to get out of the deal because theyre overpaying in many peoples eyes including perhaps their own for williams. Williams has said its dividend, which is fat is at risk if the deal does not get done. Energy transfer may have to use equity to get the deal done if it, indeed, does get done. Are you following this . The ftc says you can do it. Well see if shareholders say the same thing. Oil is down today but some big names in the oil path see prices moving higher. Billionaire investor harold hamm for one. He was expecting oil to hit 60 bucks a barrel over the year. Hes now raising that estimate. So were at 51 right now, 51 52. Toward the end of the year i might have been 15 , 20 conservative. That means hamm is looking at about 72 a barrel bit end of the year. Is he right . Here to talk about this andert issues, tom ward, chairman and ceo of tapstone energy. Thank you for joining us. Thank you. Before we get to oil and oil prices and other stuff ive got to ask you this. Youre the former see yo of san ridge and there was a lawsuit against san ridge, the law firm dropped the lawsuit against san ridge but not you. How come . Yes, i dont know the Details Behind any of the lawsuits that are going on between sandridge, me or others. Well, the lawsuit basically ive just got to ask to this to clear it up because theres speculation when aubrey mcclendon, deceased your former partner was sued for underpaying for mineral rights there was a second alleged conspirator some point to you. Are you that secret unreported coconspirator in the sflaut. I was never charged with any kind of conspiracy or anything else to do with that. All right, tom, we have to move on. I had to ask the news on the last couple of days, youre on the show so ill ask you. Now the price of oil. Do you agree with harold hamm 72 a barrel oil will be hit by the end of the year . I dont know by the end of the year. Id look at to see if theres a change thats happening in the market that makes us believe that production is going to increase. I dont think thats happening. Theres no increase in the capital spending, the debt side of the business is closed, and so until we have something fairly dramatic happen like maybe a doubling of the crude count i dont think we can grow production in the u. S. Yes, we will, unless the Capital Markets open up and make changes and it never happens as fast as investors want it to, we will see higher prices, so i wouldnt be surprised at all if we saw above 60 or even 70 by the end of the year. Tom, we love to count rigs. Friday at 1 00 p. M. The numbers come out. Youre part of the count, you had four operating rig answer come down to three. The price of oil is back up. Is tapstone going to add rigs . Well, i mean were no different than anyone else, so we look at our cash flow and as long as you want us to live within cash flow, then our production stays basically flat, and thats the same way with the rest of the industry. So unless prices move up fairly dramatically, no, were not anticipating moving our rig count up very dramatically. Well stay where we are. We maybe are a little bit different than Public Companies that have different types of currency, but no. I think prices will have to move up even higher than were talking about for there to be a big change in the rig count. Id probably put you, tom, in the five or ten people in america who know the most about oil and gas. Youve been doing this pretty much your entire working adult life. I dont need to tell you your industry has a big history of when things get good, for some reason, you knock your guys, you knock our yen legs out from underneath you by overproducing when prices go back up. Do you believe the industry collectively has gotten smarter or pretty much doomed to make the mistakes the industrys made five and six times in the past 40 years . Oh, no, it will happen again as soon as the Capital Markets open up. We will spend whatever you give us and as long as there is money to hb through the Capital Markets well use that to grow production because thats what were paid for. Whats happening today is, theres been a strategic shift that has caused people to want us to stay within cash flow, and what that means is, the oil and gas business will stay flat or decline. We cant change the decline of the Oil Production in the United States without more capital and right now, theres just not available. One quick question before we let you go. I started off tough and going to end on a note about your town, Corporate Bonds<\/a> trading at negative yield. If thats the case and seimans money is negative, not like with bonds, gold and the dollar but around the where do you put your money list stocks fit nicely. Jim, come on, talking about a lot of risk with stocks. Theres a lot of difference between buying the tenyear at 1. 67 and commerce bank. I was president of commerce fwhank chicago. Negative Interest Rates<\/a> are a cancer. Its a matter of time before they start to reflect that in the price action. I would say yeah but heed those warnings. Jim, when, when . Those could be words. Im not disagreeing with you. Were disagreeing on the time frames. Right now the next month, the next two months stocks seem fine to me because of nothing else. I still say that theres ominous clouds that are gathering. I just say theyre way in the distance more than i think you say. Jack, last word is yours. You know what . I think anybody that is looking at cheap premium levels right now should absolutely take advantage of them. We are one or two headlines away from seeing the market readjust and you could see 5 loss in a weeks time and something well all be talking about and everybody will be surprised about it. We want to be prepared for it. Thank you very much. Jack, jim, appreciate it. News alert on the bond market, 30year bonds up for auction. Santelli is on the case. Rick . Absolutely. We gave this one a bplus. 30year auction 12 billion bplus, a little better than yesterdays tens, yield at auction 2. 475, that was the offer side of the one issued market so it priced tight. Lets go through it, shall we . 2. 42 bid to cover. So 2. 42 times oversubscribe to better than the ten option average of 2. 34. Indirect bidders yesterday it was a record. You know whos in this group . I think maybe like foreign central banks, theres some big monetary authorities, makes a lot of sense. This wasnt a record, but it was darned close. 64. 9, lets go through it quickly. If we look at just april, excuse me, recently we had october of 2015 at 66 but other than 65. 1 two options ak, thats the second one thats better, youd have to go back to 2006, so theres ohm a handful of numbers at this level over the last several years, 8. 1 is the only kind of weak link on direct bidding below the ten option average of 11 , very similar to yesterdays tenyear. So 56 billion out the door and a lot of crying of uncle of those who need some real yield which they found in the u. S. 30year bond. Tyler and the gang back to you. Well talk about that right now, rick santelli. Hes talking about the flattening year curve . Here is a generic yield curve on the bottom, time, on the left, field, the price of money. If you lend your friend money overnight, youre going to charge him or her interest . Theyre probably good for t right . What if they want to borrow money for five years . Youd probably charge them more and for ten years, a lot more. Thats why when you get a 30year mortgage from a bank the Interest Rate<\/a> is higher than a 15year mortgage. This is generally how it should work. Sometimes the yield curve gets inverted. Why would money be cheaper in the future . Bond traders think maybe a recession is Company Coming<\/a> and the fed will have to put Interest Rates<\/a>. Thats why were so fearful of an inverted curve. Banks lop a steep yield curve because when we show it to you, a steep yield curve, this is what you get paid when you put your deposits in almost nothing. When the yield curve is steep and you want to borrow money for a mortgage that spread they love it, the steeper it gets. Right now the yield curve is flattening. Why . Why is that . Are we going towards inversion or is there Something Else<\/a> going on . Lets discuss, because theres a big message in this market as well. More from our guests ron, along with mike collins who manages over 600 billion in fixed assets for prudential. Ron, ill start with you, you wrote a whole book called the message in the markets. What is the message now . The Global Market<\/a> you worry about. Twoyear german note a negative yield of a half point so in other words, if youre borrowing or lending money to the german government, theyre charging you 50 basis points to do so. You have the entire world with negative Interest Rates<\/a> thats putting downward pressure on u. S. Rates which in turn as you said is flattening the yield curve. To me thats not only a Global Growth<\/a> worry sign and also a signature as maybe the worlds getting more increasingly worried about the brexity or the british exit from the European Union<\/a> as well, a disruptive event. Mike, what do you think, are we headed towards a potentially inverted yield curve . Is the bond market telling us a bad economy is coming or if youre japanese and german, what we get on a tenyear here is really good compared to negative Interest Rates<\/a>. It is a combination of both factors. You look at yield curves in japan and germany. They pegged the front end of the curves deeply into negative territory so what do you do if youre an investor . You dont want to buy a bond at negative yield. You keep moving out on the curve until you get a positive yield and do that until it gets flatter and flatter. The german tenyear is almost at zero so theyre moving into 20s and 30s. The german and jgb. Japanese Government Bond<\/a>s. And the german bund curve are flattening like crazy. The next move if youre a logical investor is move into other positive yielding security, the u. S. Treasury market but their curves are flattening, our curves are following their curves lower. The whole qe and negative Interest Rate<\/a> policy is a big part of it. Is it a consequence of a lot of buyers or is it that something bad is coming . You know, theres definitely also a reflection in the yield curves i think about just slowing Global Growth<\/a> and the slow disinflationary environment we live in. If the fed continues to insist on being dogmatic and raise rates here in an environment where the Global Growth<\/a> backdrop is probably telling them not to do anything. You can argue the zero funds rate is neutral. Were growing barely at 2 and probably downshifting to a 1. 5 growth rate. Could you make the case that if they raise rates here its going to lead to a flatter curve. Federal rate hikes lead to a flatter curve. If they insist on raising rates in the environment it probably increases the likelihood of a recession. Worse yet, the fed is just hamstrung. The deeper global yields go into negative rates the harder to be dogmatic. Theres no way without affecting global economies that the fed can lift off from beyond their current Interest Rate<\/a> policy. This is making it increasingly difficult for them to do anything here. Is it just me or have we been having the same conversation for about five years . No, this is a little different. Why . Weve not been in this deep negative of a yield. 90 of our audience doesnt trade bonds like you. Youre worried about their 401 k or 529 plan and the stock market, this is deep in the deep weeds, what is it saying about stocks . Mom and pops 401 k . Nothing specifically about 401 k s. This is where were getting into different conversations. To me, and i think youd agree, a negative Interest Rate<\/a> environment globally and a falling rate environment in the United States<\/a> is sending a message that the Global Economy<\/a> is weakening, and that given that its happening so quickly and ten years. I understand that because weve been in a deflationary environment for ten years. At this point on a twoyear note in germany theres some concern exprsed is theres something we havent thought about. What does history tell us, if anything, about what happens when you have Interest Rates<\/a> this low for this long, or negative in that many places around the world . Have we ever been here before and what was the outcome . Not in our lifetime. Typically rates go from high to normal, if you will, thats generally good for stocks. You lower the discount rate, valuations go up. When they go from low to zero and negative i at this it changes the math and changes the game. Historically, really low yields also typically correlate with low growth and low earnings therefore lower equity. Im a stock investor thinking im getting nothing in the bond market. Why wouldnt i get a dividend stock which is expensive by valuation terms but getting paid way more than i get in fixed income. Why wouldnt i do that unless this thing is telling me holy smokes, something bad is coming. Thats the question, is something bad coming . Are we looking toward slower growth, less than 2 , less than 1. 5. And the high dividend play payers would be at risk. In terms of earnings and dividends. It has implications for stock market investors. How quickly this gets translated depends how quickly we see an event or recession. Its important to note and you both can agree on this. This is every known stock and bond market historical model in existence, right . Because weve never been here. Weve never been here. Everybody ultimately and i mean this with respect to you and all of our guests, everybody is ultimately now just guessing. I wouldnt say that. What can you plug into an excel spreadsheet or have your terminal figure out. Its got risks. Yes. We dont have history to tell us what the outcome is. We have history in the 30s and we have history in japan that tells us what happens when real Interest Rates<\/a> go negative and what the likely outcome is of that scenario particularly if theres a policy mistake like the fed raising rates you go back into recession. Its what we saw in japan over and over and over again. The williams deal just got done, thats surprising. Thank you, gentlemen, sounds like we have a new topic we have to move on to. Ron insana and mike collins thank you both. Crude oil retreating to around 50 a barrel today but harold hamm raising his yearend forecast for oil. Is he right . What do 32 people have in xwhon katy perry, drake and the nfl, their twitter accounts hacked. 32 million passwords being shopped around on the dark web. How does twitter get past its trouble . That ahead. Experience the thrill of the lexus is f sport. Because the ultimate expression of power, is control. This is the pursuit of perfection. You dont want to live with mom and dad forever, do you . Boo laughs how do i check my credit score . Credit karma. Dont worry, its free. Credit karma. Give yourself some credit. In a world held back by compromise, businesses need the agility to do one thing another. Only at t has the network, people, and partners to help companies be. Local global. Open secure. Because no one knows like at t. You may have seen the headline before we went to break, the ftc approving a deal between ete and williams, big pipeline deal. Doesnt necessarily mean the deal is going to get done but it is approved with some conditions. Ete has been trying, well they offered a year and a half ago to buy williams, then the bottom dropped out of the oil and gas markets and they were basically trying to get out of the deal because theyre overpaying in many peoples eyes including perhaps their own for williams. Williams has said its dividend, which is fat is at risk if the deal does not get done. Energy transfer may have to use equity to get the deal done if it, indeed, does get done. Are you following this . The ftc says you can do it. Well see if shareholders say the same thing. Oil is down today but some big names in the oil path see prices moving higher. Billionaire investor harold hamm for one. He was expecting oil to hit 60 bucks a barrel over the year. Hes now raising that estimate. So were at 51 right now, 51 52. Toward the end of the year i might have been 15 , 20 conservative. That means hamm is looking at about 72 a barrel bit end of the year. Is he right . Here to talk about this andert issues, tom ward, chairman and ceo of tapstone energy. Thank you for joining us. Thank you. Before we get to oil and oil prices and other stuff ive got to ask you this. Youre the former see yo of san ridge and there was a lawsuit against san ridge, the law firm dropped the lawsuit against san ridge but not you. How come . Yes, i dont know the Details Behind<\/a> any of the lawsuits that are going on between sandridge, me or others. Well, the lawsuit basically ive just got to ask to this to clear it up because theres speculation when aubrey mcclendon, deceased your former partner was sued for underpaying for mineral rights there was a second alleged conspirator some point to you. Are you that secret unreported coconspirator in the sflaut. I was never charged with any kind of conspiracy or anything else to do with that. All right, tom, we have to move on. I had to ask the news on the last couple of days, youre on the show so ill ask you. Now the price of oil. Do you agree with harold hamm 72 a barrel oil will be hit by the end of the year . I dont know by the end of the year. Id look at to see if theres a change thats happening in the market that makes us believe that production is going to increase. I dont think thats happening. Theres no increase in the capital spending, the debt side of the business is closed, and so until we have something fairly dramatic happen like maybe a doubling of the crude count i dont think we can grow production in the u. S. Yes, we will, unless the Capital Markets<\/a> open up and make changes and it never happens as fast as investors want it to, we will see higher prices, so i wouldnt be surprised at all if we saw above 60 or even 70 by the end of the year. Tom, we love to count rigs. Friday at 1 00 p. M. The numbers come out. Youre part of the count, you had four operating rig answer come down to three. The price of oil is back up. Is tapstone going to add rigs . Well, i mean were no different than anyone else, so we look at our cash flow and as long as you want us to live within cash flow, then our production stays basically flat, and thats the same way with the rest of the industry. So unless prices move up fairly dramatically, no, were not anticipating moving our rig count up very dramatically. Well stay where we are. We maybe are a little bit different than Public Companies<\/a> that have different types of currency, but no. I think prices will have to move up even higher than were talking about for there to be a big change in the rig count. Id probably put you, tom, in the five or ten people in america who know the most about oil and gas. Youve been doing this pretty much your entire working adult life. I dont need to tell you your industry has a big history of when things get good, for some reason, you knock your guys, you knock our yen legs out from underneath you by overproducing when prices go back up. Do you believe the industry collectively has gotten smarter or pretty much doomed to make the mistakes the industrys made five and six times in the past 40 years . Oh, no, it will happen again as soon as the Capital Markets<\/a> open up. We will spend whatever you give us and as long as there is money to hb through the Capital Markets<\/a> well use that to grow production because thats what were paid for. Whats happening today is, theres been a strategic shift that has caused people to want us to stay within cash flow, and what that means is, the oil and gas business will stay flat or decline. We cant change the decline of the Oil Production<\/a> in the United States<\/a> without more capital and right now, theres just not available. One quick question before we let you go. I started off tough and going to end on a note about your town, Oklahoma City<\/a>. When we look at the oil impact i cant think of a major city thats had more impact with devin and chesapeake and sandridge than Oklahoma City<\/a>. How is Oklahoma City<\/a> doing . Well you know, Oklahoma City<\/a> is a pretty resilient place, and we have diversified over time but we still rely on the oil and gas business as you say. So its one of the many times that the city has seen a slowdown, but well be resilient as we have in the past and come out of it, and actually if you come to downtown Oklahoma City<\/a> today, versus a few years ago, youd be surprised at the activity, so its still a robust city. We have to check it out and get on okc. Tom ward thank you for joining us. Thank you. Appreciate it. Some of the worlds billionaires are becoming more bearish. One big name in particular, if they are worried about the economy, should you be worried . Thats ahead. First the final gold trades crossing for the day. We are back in two minutes. Welcome back to power lunch. Rick santelli on the floor with the cme group. 30year bond auction, look at average. Intraday see how low the yield drop . The low today around 2. 45. Opening it up oneweek chart has the long end is catching up and part of the flattening curve strate strategy. Since january of 2015 for a while we were comp. Ing to february. Now were comp. Ing back to april. Why . Because the cusp is 22. 465. If you look its having an up day but remains under pressure. Sully, back to you. Rick, thank you. The battle for control of viacom is heating up but that is not the only battle inside the company. Also you may want to change your password on twitter or just change you being on twitter. Reports more than 30 million passwords have been hacked and leaked. How does twitter turn the tide, does it spell trouble . For literation after the break. Hi everybody. Im sue herrera. Here is your news update for this hour. High stakes meeting at the white house between president obama and senator Bernie Sanders<\/a>. The two walking to the oval office. Afterwards sanders vowed to work with Hillary Clinton<\/a>. I look forward to meeting with her in the near future to see how we can Work Together<\/a> to defeat donald trump and to a create a government which represents all of us and not just the 1 . Israeli Prime Minister<\/a> Benjamin Netanyahu<\/a> convening a security meeting at the Defense Ministry<\/a> following an attack that killed four israelis in tel aviv last night. Earlier israel posed restrictions on palestinian movement. The trial of Caesar Goodson<\/a> is set to bin good. He arrived earlier at court with his attorneys but the judge must first determine whether prosecutors wrongly withheld details of a meeting they had with a man in the van with freddie gray on the day of his arrest. The cdc releasing a study saying cigarette smoking among High School Students<\/a> dropped to 11 from 28 since 1991 but there are concerns over the use of ecigarettes. 24 of High School Students<\/a> used ecigs last month. Lets go back to michelle. Thank you very much, sue. Gold at a fresh threeweek high driven by the weaker dollar. Gain of more than ten bucks an ounce here 1272 per ounce of gold. Platinum, palladium and copper is lower. Copper lower by more than 1 and silver is higher by nearly 2 . Brian . Thank you. It has not been the best of times for twitter or their investors. Tech crunch reporting that passwords for another 32 million accounts may have been hacked. This comes on top of the nfls twitter account getting hacked earlier in the week, not to mention a string of celebrity accounts like katy perry and Mark Zuckerberg<\/a> apparently being hacked. Lance is editor at large and chief correspondent. We talked about passwords or second factor authorization. Ultimately the best protection is cancel and close the twitter account. Cancel and close it. Most people probably say they like it but dont need it. Do you fear for twitter . I dont think thats the right approach. You could get in a car and best approach not to get in a car. Lance, we have to drive. We dont have to be on twitter. I know people who have quit because of this. Its not a madeup story. First of all we dont know. Twitter says they have their passwords are encrypted. Its not clear if these are current passwords. We do know this group is shopping them around for like 6,000 or 6,000 bitcoin value and of course it is a concern because you know, whether or not those passwords are out there, the fact of the matter is, in recent weeks and months we have seen this ramping up of accounts that have been hacked, and i dont know if thats because people have terrible passwords or not using twofact authentication or other big Services Like<\/a> tumblr and myspace have been hacked and the hackers are activating on it. Eight a big problem. Im not a fan of saying give up on twitter. Is my mike on . Really . You dont think all this publicity really threatens twitter . I mean people who cochoose another, to brians point, why bother . I absolutely didnt stay doesnt threaten twitter. Youve got a good point there. Heres the issue, its a question of trust and the longer that twitter doesnt take a big and aggressive sort of statement in action on this, in any way, the more theyre going to see the trust erode and twitter has been telling people look, were looking into these breaches. The data is out there and were matching against it, were telling you that our data is fine but i think that they have to get more aggressive. Thats one of the reasons i did, in fact, say that twitter should force at the very least all verified users to use two factor thint indication. Not have it as an option, force it. That has to happen. Verified accounts are for people talking to millions of twitter followers and some of them, these are not just celebrities. Theres people who represent states, these are important people. Its not a big deal to do. It will be better for them, and it will probably wipe out like 90 of these hacking issues. Could we swish gears to yahoo lance . Sure. A lot has made about yahoo getting bought for 3 million, a third what have twitter is currently valued at, but that aside, make the bull case for lance, for yahoo lance. I know youre not a finance guy but listen, you know the internet is good or better than anybody else out there. What in yahoo has value . They have like twice as many users as twitter. And heres the thing, they have a number of Good Properties<\/a> and they have a lot of good technology, including mobile technology, and more importantly they have a lot of eyeballs. Yahoo s always had a lot of eyeballs. All three of the metrics are i would say probably declining or slowing down. Now is the moment to get them. But whoever does buy yahoo is going to get big value and probably big return and of course i think that it will be quite painful for yahoo as a company. If you get bought theyll cut down, were going to see people go. Melissa meyer will not survive. Ive been watching yahoo for a decade and kept thinking theyd come out and figure out if they were a content or tech company. Never figured it out. It caused them huge problems and now its like a fire sale. If yahoo gets bought and kind of becomes a part of Something Else<\/a>, and the book is written, maybe by you, lance, the book is written on yahoo and what happened, will you say it is a people problem or did they just get outteched . Its a people problem because people made the decisions to not go forcefully in one direction or another. Well said. Lance ulanoff, appreciate it, buddy. Its a pleasure. Billionaire investor george soros selling equities and buying gold. Lets bring in chad morgan and jack ablin, chief Investment Officer<\/a> at bemo private bank. Chad welcome, good to have you. Jack, good to see you. Let me start by asking you, you have reduced or more defensive in your equity position and 55 fixed income. And also we have a healthy slug within the gold market as well. We would advise investors to move up the quality spectrum. We believe were in a low return environment. When you look outside of the United States<\/a> we believe theres a tremendous amount of fragility. Our expectation is for a 2. 5 to 2 Global Growth<\/a> number far beyond the expectation of imf. How do you make money in fixed income with yields this low. Where are you in that category . Its a gray area. Its a total return kind of result here. If you look at tlt or edv, theyre two longterm Government Bond<\/a> etfs. Theyre up in excess of 10 year over year, far beating it far better than equities. Without a doubt as well as playing defensive with gold has served everyone right this year. This again is all about valuation, s p 500 is running out at 17. 5 times pe mull tip well little Revenue Growth<\/a> and earnings growth. Jack your reaction here. You have been pretty cautious as i recall, how do you feel about what chad just said and where chad is making money . Sure. We are defensive, tyler. Were not ready to jump out of a window, but you know, that said, i think that we do need a transition. Our main beef is just valuation. I think with the markets trading between 15. 5 times and 18 times, yesterday we got to 17. 99, so were kind of backing off a little bit here. I would say if we could get the market to pull back some, and it wouldnt even have to be that much. I would use it as an entry point. Longer term, we do need a transition. I think that if youre looking at this what does that mean, jack . What do you mean by transition and how does that event sure, ultimately we need to rebalance our economy to move a lot of these savings and cash out of corporate coffers and into consumer coffers and i think were hearing it certainly from the candidates, were hearing it abroad, and i think that transition, while over the longterm is probably the right direction and will be bullish, i think over the near term could be pretty harsh. Let the record show you like dividend payers like chevron, John John Johnson<\/a> and lps. Where are you tilting with equity . Companies well capitalized that dont have a lot of debt. So dr. Pepper, dps, rising dividend 150 15 year over year. As well as church dwight, both companies could asquare tuckin acquisitions. Baking soda company. Right. You put the baking soda in the dr. Pepper and all crazy stuff. All crazy things happen and operating leverage with both companies. We see upside of 10 to 15 over the course of the next 18 to 24 months. Dont try the baking soda and dr. Pepper at home, friends. Good to see you again, gentlemen. Go to powerlunch. Cnbc. Com and see two other stocks jack and chad say you should add to your portfolio as well. So renting, buying, moving up the ladder, affordability in housing is getting worse. What it means for housing and you, and housing stocks. After this. When a moment turns romantic why pause to take a pill . Or stop to find a bathroom . Cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain, or adempas for pulmonary hypertension, as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, get medical help right away for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision, or any symptoms of an allergic reaction, stop taking cialis and get medical help right away. Ask your doctor about cialis and a 200 savings card. I could get used to this. Now you can. When you lease the 2016 es 350 for 329 a month for 36 months. See your lexus dealer. Tempur sealy boosting its stock buyback. Pandora upgraded from buy to hold. Axiom capital sees greater opportunity for the online Music Service<\/a> to build a differentiated and successful service, that stock is higher by more than 3 and you can now get amazon fresh in the united kingdom. The Company Unveiling<\/a> a british version of its Food Delivery Service<\/a> and those shares are higher by 51 cents. S can 727. 15 per share. Time for todays power pitch. What it takes to be the next big thing. My name is doreen bloch, ceo and founder of poshley. Real time consumer Intelligence Platform<\/a> for the 382 billion industry. More than 90 of women engage in the beauty category and brands always feel like theyre behind. I started my career in the Technology Industry<\/a> and as an avid Beauty Consumer<\/a> i saw an opportunity to bring together big data and beauty to help solve this problem. The poshley proprietary technology, consumers answer 4,000 possible questions about themselves. We use the Consumer Insights<\/a> to empower brands with research and promotion. To date, poshleys consumers answered more than 20 million questions about themselves and poshleys team in San Francisco<\/a> and new york city works with more than 40 clients including loreal, unilever, stowaway cosmetics and more. Our clients include hedge funds, retailer, publishers and agencies who want to stay on top. Welcome to todays power pitch. Lets meet the panel. Joining us is angelle investor kelly keenan trumpbour. Also with us venture capitalist nir liberboim. His portfolio includes beauty sample subscription compy ipsy. And Andrea Turner<\/a> moffitt. Doreen is in the hot seat. It was fascinating to hear about what youre doing. I want to give your presentation a b, im really curious about how youre differentiating from other companies that are out there trying to get into this space especially with women as consumers in the health and beauty space. Poshleys differentiator is that were a data company at the core and we really focus on our Technology Platform<\/a> as a way to distinguish ourselves in the market. I think its the big data meets beauty is really a core difference from anyone else in this space, whether its beauty ecommerce, sample Subscription Companies<\/a> or blogs that are tarting this industry. Nil . I thought you did a nice job talking about the problem youre trying to solve, sourcing real time consumer feedback. Two gaps in the pitch, one around financials and the other around the Competitive Landscape<\/a> so i gave your pitch a b. How do you avoid consumer fatigues . tough to answer a lot of questions for free. What keeps them coming back for more . Consumers receive complimentary products participating on poshley. Com. Consumers find it fun, fast. Its all mobile friendly and this keeps them coming back time and again. Our returning visitor numbers are more than 50 every month and when it comes to consumer receiving a product they answer 10 to 15 times more questions about themselves. Andrea . Great delivery. You gave me a good understanding why you started the business, Value Proposition<\/a> and key milestones. You neglected to tell me the Key Highlights<\/a> of your Business Model<\/a> and revenue traction. For that reason i gave you a b. What pain point are you sofg for consumers and how are you attracting consumers to answer the questions . Consumers are attracted to poshley tot com they get a chance to receive complimentary products personalized for them based on their data. Instead of receiving a shipment that has a bunch of Beauty Products<\/a> that may not be right for them its targeted based on the data theyve provided. We have scaled our consumer database in three ways. We work with influencers, theres a lot of wordofmouth of course and finally premium publisher integrations where publishers like time inc. Are licensing our technology. Kelly . So youve got consumers who are taking quizzes, and youre get action information that way. Thenlers about buyers. So what do you do when their behavior as buyers conflicts with the answers that theyre giving. What does your model do to reconcile that . We actually have a fair amount of Big Data Technology<\/a> that accommodates for anomaly detection. One of my favorite examples if a consumer tell us they dye their hair neon green and tell us theyre not experimental when it comes to their makeup routine, that would flag an anomaly in our system and were able to do a variety of things with that, either flag the user as maybe a bad actor is what its called in a big data space or remove the data from the system. Andrea . Tell me more about your Business Model<\/a>. I imagine the Beauty Brands<\/a> and the hedge funds are paying you. What are you charge in we are a btob company. We have ad hock research campaigns, sampling campaigns as well as our largest channel, which is a sass subscription model for access to the data. We want to know if the panel is in or out. Kelly, what do you say . I really think this is very interesting and theres a lot going on here and thats why i have a hesitation. I hear a lot of Data Analytics<\/a> but theres something that resembles what ive seen in box companies. All of it is good and i see strong potential. At this point i have to say out. Nir . The Beauty Industry<\/a> is highly data driven so i like how poshly created a fun way for consumers to share their data. However the market is highly saturated and not sure how proprietary the technology is so for now im out. Andrea . Im still on the fence in terms of consumer demand scale across a first market segment. For that reason im out. Three outs, doreen, what is your reaction . We have to keep pushing to the next level of attraction. Thank you for the feedback. And thanks to doreen block of poshly andagists kelly, nir and aman ta. That is todays power pitch. Welcome back to power lunch. Im sue we rah rah with breaking news. The Washington Post<\/a> reporting president obama will endorse Hillary Clinton<\/a> this afternoon, and campaign with her next week in washington. Our john harwood is working that story and he will get back to us in just a couple of moments. Once again the Washington Post<\/a> says that president owe pa ma will endorse ms. Clinton this afternoon and campaign with her next week in wisconsin. So guys, the conversation continues and Bernie Sanders<\/a> as you know is scheduled to meet with the Vice President<\/a> later this afternoon, so we will be getting news out of that particular meeting as well. Back to you guys. I guess no surprise. Shocking news here. It would be news if he supported somebody else. If he said im not ready to endorse. I wish we could have been a fly on the wall in the meeting with sanders and the president this morning. That would have been an interesting conversation. Yep. This is a stakeout for sanders at the senate, everybody waiting for him. I was confused by his message today, said im going to campaign in d. C. , i want a recount in california and congratulations to Hillary Clinton<\/a>. What . I thought the same thing and i was wondering what is going on here. I have people much smarter than i am with political stuff saying the more delegates he has, the more leverage hes going to have in his platform is going to have at the philadelphia convention. You come in with a lot of heat and a lot of mojo, the more delegates you have, you can shake the tree a little bit. Sure. I spoke with a bernie supporter today who says is he trying to rally 200,000 bernie supporters, maybe 300,000 supporters at the dnc, so all the permits for protest of the dnc are all related to bernie. Were going to take a break. Dont move. More lunch coming up after this. Jake reese, day to feel alive jake reese, day to feel alive the call just came in. Shes about to arrive. And with her, a flood of potential patients. A deluge of digital records. Xrays, mris. All on account. Of penelope. But with the help of at t, and a network that scales up and down ondemand, this hospital can be ready. Giving them the agility to be flexible reliable. Because no one knows like at t. Man 1 i came as fast as i man 2 this isnt public yet. Man 1 what isnt . Man 2 weve been attacked. Man 1 the network . Man 2 shhhh. Man 1 when did this happen . Man 2 over the last six months. Man 1 how did we miss it . Man 2 we caught it, just not in time. Man 1 who . How . Man 2 not sure, probably offshore, foreign, pros. Man 1 what did they get . Man 2 what didnt they get. Man 1 i need to call mike. Man 2 dont use your phone. Its not just security, its defense. Bae systems. Markets are down. Darden restaurants which represents olive guarden is trading at an alltime high. It went public back in 195. James smucker trading at an alltime high, its ipo 1959, and conagra alltime highs back to 1972. It was founded in 71 when nebraska consolidated mills changed its name to conagra. Power lunch is back in two minutes. Its time for the your business entrepreneur of the week. With orders coming from around the globe the owner of gergis in morgantown, West Virginia<\/a> was nervous at first but practice made perfect. Hes shipping hand made sandals to more than two dozen countries around the world. Will your business be ready when growth presents itself . Our new cocktail bitters were doing well, but after one tradeshow, we took off. All i could think about was our deadlines racing towards us. A loan would take too long. We needed money, now. My amex card helped me buy the ingredients to fill the orders. Opportunities dont wait around, so you have to be ready for them. Find out how American Express<\/a> cards and services can help prepare you for growth at open. Com. Jon harwood in washington at the white house, momentarily we expect to run tape of president obama, i almost said president clinton president obama enforcing onetime secretary of state Hillary Clinton<\/a>. John, this is probably the least unexpected. Its completely expected and president obama signaled to Bernie Sanders<\/a> in his meeting this morning this was going to be happening because two sanders sources communicating with me a short while ago saying they expected it to happen. I watched it on my phone, he says on the video that im with her, im fired up to go out and campaign for her, of course fired up was the term that he used in 2008 when he ran and was elected president. He congratulated her on making history as the first female nominee of a Major Political<\/a> party. Run the bite that you just referred to, lets go to the videotape. Look, i know how hard this job can be. Thats why i know hillary will be so good at it. In fact, i dont think theres ever been someone so qualified to hold this office. Shes got the courage, the compassion, and the heart to get the job done. Its a little bit curious to me, john, that he would choose that kind of taped format to do this as opposed to coming out into the press room and that looked like it was a produced campaign ad. Reporter yes, it was very well produced and it was interesting, the language in the ad where he says i had a meeting with senator sanders this week. Well of course that meeting was today, so it indicated that they made this video at a time when they werent certain exactly when the meeting would take place and when the endorsement would take place but yes, that was produced that way. I think it may be a drum roll to his appearance with her next week. We hear wisconsin, where that joint appearance will be, but this is going to be a very closely coordinated campaign. Remember, major figures john, wisconsin would be significant. Governor walker, the fight against the unions there, that makes sense to me. Reporter well its a democratic leaning state that has voted for democrats six times in a row, but its been close in some cases, and thats been identified as one of the potential targets for a Trump Campaign<\/a> trying to break through in the industrial midwest, and pennsylvania is part of that, ohio is part of that, wisconsin, perhaps even minnesota, and so i think yes, there is strategy behind that for sure. Give us a quick wrapup on the president s meeting with mr. Sanders. Is the president thus the peacemaker between those two camps . Reporter well hes beginning the process of making peace. Bernie sanders when he came out issued a very conciliatory statement when he praised the administration both president obama and Vice President<\/a> biden for not putting their thumb on the scale. He congratulated Hillary Clinton<\/a> on her victories. He said he was going to campaign through next weeks district of columbia primary, but what he talked about was not Hillary Clinton<\/a>. He didnt criticize her in the slightest. It was all about the issues that hes for, d. C. Statehood and income inequality that sort of thing. Thank you very much, john harwood reporting from the north lawn. Lets look at Hillary Clinton<\/a> responding to the just released announcement endorsement from the president. Honored to have you with me potus. Im fired up words the president himself used and ready to go, h that would be Hillary Clinton<\/a>. Youre good like that, tyler. Or a stick figure on its side, an emoticon we dont know yet. The dow industrial is lower 46 points, the nasdaq lower by 21 points, the s p lower by a little more than 6 points. Gold continuing to rise oftentimes higher by 9. 80 per ounce 1,272. Brian . Billionaire investor george soros is once again billionaire investor george soros. I dont know, hes apparently getting back in the game of actively managing money and bearish views are getting a lot of attention as it usually does but is he usually right . Kate kelley is looking at his track record. Hey there michelle. George sores ahad its ups and downs since 2011 when the billionaire returned outside money to his investors and converted what was a hedge fund into a Family Office<\/a> known as Soros Fund Management<\/a>, about a 30 billion asset job and that manages primarily soros own personal assets. In 2013, Soros Fund Management<\/a> returned some 24 , an arakive number to be sure and less than the s p did that year. For this year soros is up only slightly according to a report last night in the journal on par with the average hedge fund and competitors in the macro space where the investments are in all sorts of assets not just stocks. With george soros reported return to more active Investment Management<\/a> the company has had good calls. Bullish bets on gold, we were just talking about, including a major position in barrett gold up literally 164 this year and a company in position in the gold etf had done well as the yellow metal has risen 20 . At the time a position bearish on the market, not the obligation to sell in the near future etfs that track the s p 500 dont look so good in light of the markets roughly 3. 5 rally so far. On the individual stock side, two things worth mentioning, two of his top holdings, kennedywilson and hispani Hispania Activos<\/a> may rally if the brexit doesnt happen as soros is predicting. He thinks europe is weak in part because of the Immigration Crisis<\/a> and lumentum and biavi, both are rallying. Quick caveat before i wrap this up. Im basing this on filings that could always be dated so were deducing a little bit here but thats based on what weve seen so far. Kate, i always remember him for breaking the pound. 1992. Thats it, where he made his name. It would be interesting if his brexit call proved because he made his name on this pound prediction many years ago and once again hes looking at europe and britain specifically for a macro event that could really rattle markets. Yep, well be watching. Kate kelly, thanks. Soros is not the only billionaire who is concerned about the economy. Robert frank is here with us, not the aboutle nair, he might be getting close. Wealth is not contagious. I wish it was, give me some, sneeze on me, buddy. What other billionaires are worried about the Global Economy<\/a> . Billionaires are normally the great optimists in the economy but right now filled with gloom and dime. Carl icahn agreeing with soros saying stocks are falsely propped up and citing worries about china and sam zell saying global trade was down 15 last month, the most important measure and he said hes a net seller in this market. Before that, we had market maven stand drucenmiller saying the bull market is exhausting it self and likened the asset bubbles to 2008. They could see problems and could be the smart money but may be reflecting the sad state, sad here ironically of the billionaire economy. Last year billionaires lost 570 billion in combined wealth, that was its first decline since the financial crisis. We lost 202 billionaires last year, they dropped off the forbes list. Highend real estate slowing, the art market is down, the stocks are flat. So basically in their world, theyre not seeing many signs of optimism, whereas on main street, where employment and wages are a bigger deal theres a little bit more sign of optimism. One discipline in. Heres my beef. All those people and smart and successful than ill ever be. What are they doing about it . Theyre betting on it. In some ways. Im wary of that you canning their book. Its nice to be a billionaire and to make those kinds of calls. And calls that obviously as were seeing today affect the market. All right. Are things Getting Better<\/a> or worse for investors overall in we bring in shonndron thomas oversees more than 150 billion give or take as head of funds and managed accounts at Northern Trust<\/a> asset management. First time guest on cnbc, good to have you with us. Good to be here. Are you bearish or bullish . How do you react to the four who are shallmen of bearish billionaires, zell, soros, druckenmill enearths on. Mark twain quoted my death was exaggerated. The environment we find ourselves in, put it in context, the trend of growth five years ago was 4. 2 deployablely. Today thats 3. 6 . While we feel that pressure its a lot to say that were seeing the demise or pushing ourselves into a global recession. Most of these investors, one way or another, and i guess that most investors, individual investors that you work with, they make their money, maybe not their billions but they make their money being long, not short, by being optimistic, not pessimistic. The interesting thing is, the trend in that sense is your friend, right . So over time markets are upward sloping and the context that we have is, even when there are these existential threats or shocks in the economies or the Global Market<\/a>s, investors are not thinking im going to get out of the market. Its more about im a longterm investor, the operative word being long so how do i stay long . I think a lot tells us not whether im along but how do i do it. How do you do it. If you think about it, theres nothing new in terms of what were seeing from investors. It you look at the flows, etfs are a good proxy. The two biggest categories, taxable bonds, youve seen several billion and tens of billions of dollars flow into taxable bonds and also seen it in commodities. Thats gold. Thats what soros is doing and a safety play for them, right . Agreed, agreed. Whats interesting, though, is beyond gold. The 12 billion that went into commodities while 9 is gold, 3 billion is broader commodities so what that shows you theres a rotation into areas that were underappreciated and that are providing some lift actually in the portfolios. Brian spoke yesterday with faber. Mark faber. We could have went with faber. Long time bear. Mark faber is obviously known for the contrarian sort of weird views and he said that the brexit, the brisht etish exit, stand that word, that brexit might be good for stocks. Do you agree . I dont know i would say its good for stocks but i think the concerns about it seem a little overstated. Now, britain of course is the fifth largest economy but if you think about it in relative size to the u. S. , 23 of the Global Economy<\/a> or if you look at china, not the same kind of effect. The other thing is if you have a brexit, i think the practical reality is while theres some challenges potentially for the uk, you could see that Growth Potential<\/a> displaced to other parts of the European Union<\/a>. I dont know that it belies so much risk for the global economies. What if its the end of the European Union<\/a>, if they want to leave, then everybody else leaves. Thats where i think in the end nobody gives a darn one way or the other. They dont use the euro. Theyre part of the European Union<\/a>. If you can leave and they want to leave, do you worry about the unraveling of the whole eu and does that impact us in some way . Do we have to sit tight through the volatility . What is definitely out there is the fact were going to see volatility because of concerns over these events, certainly you have what we call tape risk but in terms of putting a high probability on the demise of the European Union<\/a>, thats not something that we would put a high probability on and dont think its that sort of threat. Thats why we step back and again have that longterm view. I think it is also important that when we talk about this brexit, the vote is coming up, but even if they vote to leave, what will it be, probably like a decade before anything happens. Before it unwinds. By the time they unwind everything, godzilla could rampage the earth. Something you mentioned, turning back, the flows in your complex and in funds general, etfs, fixed income, nixed income, been that way for years. 20 years. For years now. Uhhuh. Are people putting money in at the wrong time . Its been a nice total return. So when i look at an overall portfolio, you have two things youre looking at fixed income to do. Youre looking at the fixed income to provide you a source of income but also looking to balance the risk. I dont think its a situation where people are at the wrong time putting money into fixed income. Think about the relative play. We could say the u. S. Fixed income market doesnt look attractive historically, but if we compare the same tenyear yield to what you get in terms of return if youre looking at other developed economies and what theyre paying on their year. True. You have to look at it both in terms of that. Im a baby boomer. I am going to be 62 in a couple of months. I, like most baby boomers are coming to the point i have to rely on my portfolios, i hope not too soon. Rely on my portfolio for income. In a world of 1. 6 yields on tenyear u. S. Treasuries and lower around the globe, where do i go to get the yield, the income that i want . Right, this is a great question and one of the things that we talk to investors about is dont look just at fixed income but think about reliable sources of income. In your portfolio you have the opportunity to invest in high quality stocks that pay a really strong difficuvidend. He doesnt whand were not allowed to. We invest in dividend. Generally speaking. Beyond that think about it, infrastructure, kicks off dividend, Real Estate Investment<\/a> trust, and if we were talking ten years ago, you wouldnt have had as many alternatives but today you do. Last question year, you deal with baby boomers, you deal with gen xers and gen yers. How are they different in terms of behavior . What do the newer investors want . Baby boomers tend to be relational. They ask you. If you look at gen x we ask ourselves, gen y they ask each other. Different approaches how they invest. Crowd sourcing it. Gen y is crowd sourcing it. Gen x they hunt their prey. What were seeing is transcy is very important. We find that you actually are better off with millenials able to really have a situation where theyre more risk averse. So those are the kind of things where were seeing very different from the baby boomers. I actually think thats why you see some of the trends you see toward certain fund. I think he just called us gen xers bossy. We made our minds made up and you have to convince us not to . You definitely have to convince without a question so the adds a long time ago that say just trust us, the e. F. Hutton and all that, dont appeal much to gen xer. Im a baby boomer. People ask me what do millenials want, they want my job. And want to do it from home on the couch. Exactly. Great add. Thanks very much, good to have you with us. Thank you. Were going to show i a live picture of the White House Briefing<\/a> room, awaiting josh earnest for the briefing talking about president obamas not surprising endorsement of Hillary Clinton<\/a>, she appears to have sewn up the presumptive nomination for the democratic ticket. When this happens, if theres anything of note well bring it to you. Dont move, power lunch will be right back. To get to the places you really want to go. With the united mileageplus explorer card, youll get a free checked bag, 2 united club passes. Priority boarding. And 30,000 bonus miles. Everything you need for an unforgettable vacation. The united mileageplus explorer card. Imagine where it will take you. Uh, maybe we should call i. T. Igoing to clean betteran electthan a manual. Was he said sure. But dont get just any one. Get one inspired by dentists, with a round brush head. Go pro with oralb. Oralbs rounded brush head cups your teeth to break up plaque and rotates to sweep it away. And oralb delivers a clinically proven superior clean versus sonicare diamondclean. My mouth feels super clean oralb. Know youre getting a superior clean. Im never going back to a manual brush. Welcome back to power lunch. Once again a live picture of the White House Briefing<\/a> room. There you see nbc News Reporter<\/a> Peter Alexander<\/a> on the left getting ared to go life. Were waiting to hear josh earnest, see if he talks about president obamas earlier endorsement of Hillary Clinton<\/a> for president. And as soon as that happens, well let you know. All righty. The battle for control of viacom front and center. Ceo philip doumond speaking at an Investment Conference<\/a> but other things are going on at the company as well. David faber is here with the details. This is the story with some juice. Oh yeah, keeps going. Today to your point, tyler, mr. Doumond speaking for the first time with the war between the board and the chairman broke out speaking specifically about a deal he has been trying to negotiate selling a Minority Stake<\/a> in the paramount studio and giving us some details this morning at that Investment Conference<\/a> specific to the talks held and what the deal would look lick. It would involve an investor, we believer that investor most likely Chinese Company<\/a> buying a 49 stake in paramount. In his opinion it would be a tax efficient deal and one that would unlock value of more than or equal to at least 10 a share of viacom stock. How it would do that . Take in some of the cash from actually the sale and then on receivablely given the valuation put on the studio as a result of the deal, it would have the effect of raising the overall perception, perceived value of viacom oz an entire entity. Earlier this week in reference to that war that is ongoing, national amusements, which is the Controlling Shareholder<\/a> of viacom and cbs changed the bylaws at viacom and changed them so that any deal involving paramount would require a unanimous vote of the board of directors of viacom to be approved. What does that mean . Sherry redstone and most importantly Sumner Redstone<\/a>, of course, who are the two openers of national amusements, Sumner Redstone<\/a> owning 80 would need to vote in favor. Previously mr. Redstone has said at least through doctors and the like that he is not in favor of a paramount deal. Most recently dr. Spar a psychiatrist who examined mr. Redstone quoted saying mr. Redstone was particularly displeased with mr. Daumans decision supported by mr. Abrams former trustee to sell part of paramount pictures. Mr. Redstone said he clearly expressed his feelings about the sale to mr. Dauman and mr. Abrams but in his view they ignored his wishes. Dauman is trying to speak loudly so sherry and Sumner Redstone<\/a> can hear him. He can talk all he wants about the potential value of the deal but it appears based on the statements once it gets to the board level theyre not going to vote in favor and its unclear whether you get a buyer willing to engage in negotiations given that possibility. Given the possibility it would be blocked. Exactly. National amusements, redstone senior and sherry have the power to change unilaterally the bylaws of viacom without the rest of the viacom board that is correct. Written consents to viacom that amended viacoms corporate bylaws effective immediately, that was june 6th when we first reported it. There has been no challenge, a lot of challenges on various things but none to this as of yet from vie extra coms board of directors which stands in opposition to the Controlling Shareholder<\/a> for whom they serve. A company will ultimately have underlying value but you wonder as a shareholder why would you bother when you have this situation so problematic. Who is running the company . Is he really clear in the mind . Im not sure. Im not convinced. No and obviously mr. Dauman to your point and mr. Abrams in their submission to a Massachusetts Court<\/a> even spoke about dr. Spar, saying its materially contradicted by the stipulations made by defense counsel in a separate action in which they said he was a victim of impairment, mr. Redstone and dementia was susceptible to undue influence. What if it is your baby . Nobody lives forever. It must live beyond. The only word that comes to mind in this whole thing for me is internecy. Youll stab me, david, youll stab me and well both slowly bleed to deal. Feels like everybody is losing here, people have lost confidence in dauman, takes both sides of the coin, dont know Sherry Redstone<\/a>s goals are. Sumner redstone is not going to get better or younger. Hes 93 years old and the ratings at some of the networks are in the tank. I agree. The companys paralyzed right now. Board of directors is doing what they feel is in the best interests of all of their shareholders. Dpichb whats going on it makes it difficult in terms of the employees to a certain extent and management and frankly you have a board waiting potentially to be replaced, going to be likely at some point by national amusements. So theyre all sitting there. Youre right. Shareholders are losing out here. Mr. Dauman is going down this road with paramount in a belief he can deliver a transaction that delivers value. If somebody comes along with a price they cant refuse that could change those, sherry and thats the key. Will it change sumner and sherrys mind . To brians question what is it exactly they want. Having conversations with people who are involved here and advising on both sides they have not spoken, that is dauman and Sherry Redstone<\/a> and sumner recently and its not clear that what they want conceivably. Dont they want dauman out . That is believed to be the case but at this point they have yet to move to replace the board of directors but i believe that will take place still. The best thing to do would be to get together and if igthis out. Sit down and figure out some way to have a dialogue around this, that maybe can meet everybodys were looking at the White House Briefing<\/a> room, excuse me for interrupting, where josh earnest, the press secretary is expected to comment within minutes on thats viacoms board room. And empty seat there. Sometimes president obama shows up at this thing. Lets see. This may remind me of, see if it plays out like this. The family behind dnl, they were never going to sell. They were never going to sell and then along comes Rupert Murdoch<\/a> with a price so enormous they all sold. He paid so much for it, he had to write it down. I think that is the hope in this case and why mr. Dauman and bankers try to move ahead with it, with the idea being they will find engagement on the other side, this say once in a lifetime opportunity for a potential buyer and theyll deliver a deal even sherry and Sumner Redstone<\/a> feel is sufficient. Its very much unclear that is the case. What happens if Sumner Redstone<\/a> dies . The trust kicks in and the trust is controlled now by people who we believe are loyal to Sherry Redstone<\/a>, so its much the same situation that seems to be occurring right now. Again you get back to the question of when and if this board is replaced and a new ceo is installed. People arent reading vanity fair or deeply involved, because theyve been covering this a lot, deeply involved in the Redstone Family<\/a> saga. The other weird aspect of the story you think oh, give it to your duaughter. They were estranged for years or decades, sumner and his daughter didnt talk for a tlinlg. Suddenly in the last year or two gotten cozy. She was back in the house is the way it was described to me, actually in l. A. In his residence. Youre right, that was not the case for some time. Mr. Redstone does not speak otohis son, brent, sherrys brother, who he engaged in a lawsuit with, a number of years ago and theres been no contact im aware of since. Here we go. Here comes josh earnest. Thank you, david. Good afternoon, everybody. He waited for you. I appreciate your patience on the schedule today, obviously both senator sanders and secretary clinton had announcements they wanted to make today and so i was doing my best to get out of their way and give them the opportunity to go first and now i am here to answer any questions you may have about their announcements or topics that may be on your mind today. Kevin you want to start . Thank you. I guess lets just start with the obvious. Could you give us a little bit of a readout of what the president and senator sanders talked about during that hourlong meeting . Did they make any requests of each other . Well, obviously the president was pleased to have an opportunity to welcome senator sanders to the white house, and congratulate him on the remarkable success that he enjoyed in the context of his democratic, his campaign for the democratic nomination for president. Senator sanders competed in every state across the country, and earned more than 10 million votes for his campaign. Thats a remarkable accomplishment and the president complimented him and congratulated him on his success. I think he could describe the conversation as a friendly conversation that was focused on the future. Part of that future conversation was about the importance of the upcoming general election. Youve heard the president say on a number of occasions how important it is to him personally that he be succeeded in office by a president who is committed to building on the remarkable progress that our country has made over the last seven and a half years. So that certainly was an important part of the conversation, but it went beyond that. There also was a conversation about the longterm future of the Democratic Party<\/a>, and senator Sanders Campaign<\/a> enjoyed so much success because he was able to inspire a lot of young people, both democrats and independents to support his campaign, and to be engaged in the political process. Thats a good thing. And president obama and senator sanders had an opportunity to talk about what work they could potentially do together in the future to ensure that the Democratic Party<\/a> of the 21st century as diverse and vibrant and inclusive, thats been a long stated goal of president obama and obviously president obama had his own success in building a coalition that involved a lot of Young Americans<\/a> and not all democrats. Senator sanders built on that progress and theyre hopeful theyll be able to Work Together<\/a> in the future, not just at the National Level<\/a> but also at the state and local levels as well. Did they make any requests of each other . Ill do my best to protect their ability to have a private conversation but i think what is clear is that theres a lot of agreement about the way forward. Obviously theres a lot of agreement when it comes to the future of the Democratic Party<\/a> that i just described. Theres also a lot of agreement about the highest priorities that the next president will have to grapple with, and so these priorities range from issues like addressing the economic inequalities and encountering the influence of special interest our politics, issues that senator sanders discussed quite expense tensively on the campaign trail and issues president obama had the opportunity address and as you heard from senator sappeders in the driveway there was a discussion of other issues, Economic Opportunities<\/a> for the mittle class, keeping our commitment to veterans, making sure we give College Graduates<\/a> in the country the opportunity to succeed and not just be weighted dwoun extraordinary debt. These are issues president obama has spent the last seven years fighting for and senator sanders has spent a significant amount of time talking about the issues, not just in the context of the president ial campaign but decades of public service. Im sure the president gave the senator courtesy of letting him know that he will be endorsing secretary clinton in the coming moments or hours. Could you just provide a little bit of how the president broke that to him . Im sure it was probably expected but, and what was the response, and is the president disappointed that senator sanders did not go out, outside of the white house and talking to reporters did not endorse Hillary Clinton<\/a> . Let me start by saying no. Senator sand ersz has been quite clear that he intended to compete for votes in the upcome district of columbia primary scheduled for tuesday. I dont think anybody had the expectation that senator sanders was going to deviateiate from that plan. At the same time to go back to your first question, the president s had the opportunity to speak to senator sanders three times in the last week and as a result of the conversations its fair to say senator sanders was not at all surprised by todays announcement. Roberta . Did the president ial senator sand sanders im not going to get into details of their reactions. I assure you senator sanders was not surprised. He began his statement in the driveway in front of the white house today by saying that president obama and Vice President<\/a> biden had made a commitment to him early in the process they would not put their thumb on the scale, and senator sanders himself said how much he appreciated that president by ma and Vice President<\/a> biden kept that promise. When was the video recorded and why was it decided that the endorsement would be done through video rather than having an event or some kind of other alternative . The video was recorded on tuesday, and i think secretary Clintons Campaign<\/a> has already announced that there will be an event and the president is very much looking forward to traveling to green bay, wisconsin, title town, with secretary clinton, to appear with her in person at the Campaign Event<\/a> and build support for the campaign and the state of wisconsin, a state that president obama won twice. Does he have other plans next week to do campaignrelated events for secretary clinton . Thats the only Campaign Event<\/a> on the schedule at this point, but i would anticipate its the first of many Campaign Event<\/a> between now and november. You mentioned things the president would like to see working together on the issues. Did sanders also have things that he wanted to see from the white house or did he have any particular asks . Well, ill let senator sanders characterize the points that he raised in their meeting. Look, and i think he did that again when he spoke to all of you a couple hours ago. He was quite direct about his appreciation to the president for keeping his promise not to weigh in, in the primary process, and give democratic voters across the country the opportunity to make a decision about who should represent our party in the general election, and you know, senator sanders, i think, again as when i spoke to the president briefly about his conversation with senator sanders, i think both men are pretty enthusiastic about the opportunity that lies ahead, not just in advance of the general election, but over the course of a generation to ensure that the future of the Democratic Party<\/a> looks as diverse and vibrant and inclusive as our country is. Did the president ask sanders to step out of the race sooner rather than later . Did he want them to step out before the d. C. Primary . As i mentioned yesterday when i spoke to a group of you, senator sanders has more than earned the right to make his own decision on his own time frame about the future of his campaign. And the president certainly respects the important work that senator sanders has done on the campaign trail. He certainly respects the strong support that hes built in all 50 states, and that means that senator sanders gets to decide what the future of his Campaign Looks<\/a> like. Ill just point out, again, when senator sanders spoke to all of you after meeting with the president that senator sanders reiterated how critically important it is for president obama to be succeeded by a president who shares our values and is committed to building on the progress that this country has made under president obamas leadership. That certainly was part of the conversation in the oval office and senator sanders, when he spoke to all of you made clear that was a priority. I mean, what was the point and the outcome of this meeting . What was decided between the two of them . Well i think the point was for president obama and senator sanders to continue the conversation that theyve been having over the course of this week and look in some ways this is a conversation that dates back to january when or february whenever it was that senator sanders was here at the white house much earlier in the campaign, and so again, i dont think there was any expectation either on the part of senator sanders or president obama that senator sappnders was going to make an abrupt change to his campaign strategy, which at this point has included competing in the d. C. Primary scheduled for tuesday. Why release it on twitter and why have it come from clinton instead of the president . Well i think obviously it makes, theres some intuitive decisions about why its important to give secretary clinton the opportunity to make this news. Obviously i saw some of the early comments from her campaign she was deeply appreciative of the president s endorsement and the president was pleased to have the opportunity to share it but it certainly is the decision for secretary clinton and her team to make about how best to use this material to advance her campaign. And you see, speaking of twitter, you see a lot of sanders supporters now putting out their continued support for sanders, many of them saying well, its bernie or nobody. What do you think is going to be the president s best approach now that he is going to be on the trail in a matter of days to winning over those people . Well, listen, first of all, it is going to be secretary clintons responsibility to win over those people and im confident that she will have a very forceful case to make about the values that she represents, and so i think shell have a strong case to make but thats ultimately a case she will make but president obama certainly has a lot of credibility with the voters, i think that is true. President obama, over the course of the last seven years, has fought very hard for many of the principles and priorities that senator sanders has been talking about over the course of this campaign. Senator sanders has devoted an extraordinary amount of time to making sure that wall street doesnt raun amuck and trample n middle class families. Ill spare you a long resitation everything president obama has done, implementing wall street reform and big banks making risky bets and expanding Economic Opportunity<\/a> for the middle class, entirely consistent with a message that was spread by senator sand erer campaign that clearly deeplys reflate ed with young and old, democratic and independent across the country. Heres the last thing. You heard senator sanders say to all of you a couple of hours ago how critically important it is that president obama be succeeded by somebody who shards our values and is dedicated to those progressive priorities, so there are any number of people, secretary clinton, senator sanders and president obama who can make a very forceful case to those who were enthusiastic supporters of senator sand erern the primary. Josh, you mentioned that the president obviously we know will be out next week with secretary clinton and tend to be out many other times. How eager is he to get out there on the campaign trail again. Is this like one more campaign for him . The president is very enthusiastic about the opportunity that he will have over the course of next several months to make a strong case in support of secretary clinton. I think that is evident from the comments that president obama made in elkhart, indiana, last week. The stakes in this election are high particularly if you take a look at the u. S. Economy. Weve made enormous progress over the last seven years digging out of the ditch created by the worst economic downturn since the great depression. The private sector is what led the recovery but the private sector would not have succeeded without the important policy decisions that were made in the first couple months of president oba obamas presidency. Those voters focused on the economy we have a strong case to make about the wisdom of the decisions made by president obama and the commitment by secretary clinton to those principles, but i also think it was pretty evident from that video and from his appearance on the tonight show with jimmy fallon that will air tonight at 11 30, a free plug, peter, for your network. Appreciate it. But i think anybody who has an opportunity to watch that interview will see the president is quite enthusiastic about this election and about the prospect of being succeeded in office by secretary clinton. I noticed in that video he seems to give secretary clinton some credit for the bin laden decision, its mentioned in the video. But that was really his decision alone. What role did she have in that critical decision . I think the point of that video, where the president talks about her courage and her compassion and her heart and how her service to the country are critically important to or critically important to his decision to endorse her in this campaign, and i think the point that hes making in the video is that he chose to have secretary clinton by his side for the first four years of his presidency. As he was making difficult decisions that had enormous consequences for the United States<\/a>, and our citizens. Shes certainly in that picture where the decision is being executed and she certainly was an important architect of the kinds of Foreign Policy<\/a> decisions and Strategic Decisions<\/a> that president obama had to make over the first four years of his presidency. I dont know if youve keeping track of your twitter feed. I have not. It may surprise you donald trump tweeted. Im not surprised. Obama endorsed crooked hillary, he wants four more years of obama, but nobody else does is that what he wants, four more years of obama . No, i think there have been a number of occasions over the last several months where you all have pointed out to me some differences between secretary clinton and president obama, so they do not have the same opinion on every issue, but i think again, just to go back to this video that was released today, the president said unequivocally he does not believe at least he cant remember somebody who has been more qualified, a candidate thats been more qualified to hold this office and after getting to know her personally, working closely with her in the first four years of this administration and spending more than a year on the campaign trail competing against her in the 2008 president ial election, the president s had the opportunity to watch secretary clinton perform up close and hes seen her tenacity, her dedication, her commitment to a set of principles that they share, and thats why their president s quite enthusiastic about her campaign. Lets move around. Thanks, josh. Could you at this point confirm that the president did vote for secretary clinton during the primary . I did not ask the president about which box he checked on his ballot, but im not aware that he changed his mind at any point over the course of the primary. Now that the endorsement is officially out i want to sort of revisit a question that you were asked a couple days ago about the first lady. Shes going to be doing an event on the state of women next week. Can we expect to see her now that we have our first woman nominee, sort of make the case for secretary clinton on the campaign trail as well . Well, listen weve been listening to josh earnest, White House Press<\/a> secretary discuss president obamas endorsement of Hillary Clinton<\/a>. As you just heard, if you were listening, donald trump has started to tweet. Hes put out one tweet that says obama just endorsed crooked hillary. He wants four more years of obama, but nobody else does Hillary Clinton<\/a> has responded in her twitter account, she retweets what donald trump just said and then says delete your account. An official twitter war between the two presumptive nominees, perhaps starting up. 10yearolds. 10yearolds. If we go to twitter for a second its amazing, such a platform for discussion, everybody follows it and yet evaluation, the struggles, it always astounds me. We use it so much and yet it cant seem to get out of its own way. Its like yelling into a room and runner off. Hey you know, and now its down to, this is the level of political discourse. Just smack talk. I dont know what that means but my producer said thats what kids use to say they dont like you. As i was saying, 10yearolds. Or shut up. I think the technical term is pblt nahnah. I dont need this, i already got those. Im done on that. Yeah, delete your account matheson. Trading nation, the gold miners at highest level in two levels. Weve got the always polite Larry Mcdonald<\/a> and the always dapper debonaire ari wald. Larry the miners have done great. We were at a miner convention in january. Its all profit, do you think theres more left in the stocks . Well, late last year in the Fourth Quarter<\/a> when there was no bigger bull on the gold miners than i guess one of the greats it was our firm and myself. I would say lets get something straight here. I think a lot of investors are watching us right now, thinking about the gold miners. If you were long gold miners, youre actually in a rate trade, gold miners are being driven by fed policy and driven by the 10. 5 trillion of money thats in zero interest Government Bond<\/a>s in the world. Thats whats driving them. So in the last couple of weeks we had four or five fed governors starting to talk up a rate hike and a jobs number destroyed that. Youve had massive student body move back into the gold miners in a big way, so theyre overbought here, i would be a seller here and you want to wait for a better point to get back in. You did make the call originally so now youre saying overbought, you loved them, now you dont. Well done, larry. Ari, go to you on the charts. Do you see oversold or overbought, buy or sell this thing . They are overbought here the message would be to buy them on pullbacks. Looking at the charts we do see a longterm turnaround in the trend here. Weve been saying that for some time as well. The gdx, the etf, the gold miners etf is back in a range it was in a few years ago, between 22 and 28. Current price of gdx is around 26 so closer to the upper end of that range. I think for new positions its unattractive here but i think 23. 50, thats the 50day hard of hearing average and at that level youre at the threshold where the risk reward becomes attractive within the parameters of the range i just laid out. They dont like it technically or fundamentally. Point taken. Ari, larry, thank you. For more trading head to our web side tradingnation. Cnbc. Com. Dont delete power lunch. Were back after this. Now the latest from tradingnation. Want and a word from our sponsor. When trading this group its important to consider a companys pipeline of drugs as well as schedule for research and development. Those results can often have a dramatic effect on price action. Lets talk housing whether you want to bet or buy its harder and more expensive to find a place to live. Diana olick . Something new is going on, rents are rising faster just outside major metros than they are in those cities and thats likely because so many people are fleeing the city center hoping to get something cheaper in the burbs. Brooklyn, new york, seeing a bigger drop in affordable rental listings than manhattan. California compared to San Francisco<\/a> and skats dale compared to and scottsdale compared to phoenix. Portland and seattle. Theyre becoming more unaffordable than the San Francisco<\/a> bay. In San Francisco<\/a>, about 60 of onebedroom homes are renting for 3,000 per month and thats six Percentage Points<\/a> higher than one year ago. In the dallas areas, the share of affordable listings is falling. As for home buyers, theyre in the same boat. If you want to know more about that, go to cnbc. Com. Thank you very much. Homebuilders losing gains. Lets bring in Ralph Mclaughlin<\/a> and bob wettenhall. Thats the most ineloquently intro read. Youll get over it. We know prices are going up. Is it going kill the market or are people going to borrow more . Higher prices means fewer buyers, no . You know, the last time we were talking we said helium is in the house. Weve got a lot of room to run. So the pace of increases might moderate. When rent goes up, it starts go up. When youre renting and your rent keeps going up and up every time you renew, you feel pushed into housing. No doubt. Youre seeing a migration from very core areas into less expensive regions and what we see a terrific job market, low Interest Rates<\/a> working together to provide the Housing Market<\/a> with a broadbased push. Its a fantastic setup. Ralph, are there enough buyers out there, qualified buyers to power new Home Building<\/a> and thereby to help the stocks of the companies in that business . Yes. We think so. And the primary reason is that inventory of existing homes is down. Its down a lot, and its especially down for starter home buyers. Its pushing people toward new ones. Is it the ones at the entry level or stepping up like the ones that build the higher end homes . Well, the beneficiaries of rising prices obviously are existing home owners. Starting home buyers are not benefiting. Theyre having to spend a lot more of their income. But certainly new homebuilders will benefit. In many markets its tough to build new starter homes. So its really more in the middle to upper end of the new Home Building<\/a> market. Oneword answer, bob, quickly. Best idea right now among Home Building<\/a> is . D. R. Horton. If you think renters are going to move out to the suburbs, theyre the guys making it work. That was a 127word answer. Sorry. Got it. D. R. Horton. Thanks, bob. Thank you, ralph. Cnbc disrupters. The ceo of survey monkey next. eeeeohmumohweh hush my darling. dont fear my darling. the lion sleeps tonight. hush my darling. man snoring dont fear my darling. the lion sleeps tonight. woman snoring take the roar out of snore. Yet another innovation only at a sleep number store. Time now for a look at one of the disrupter companies. Ju la boorstin. Thanks so much. Thanks for talking to us today. You just made this big move into mogul analytics. Yes. Why are you moving away. Were not moving away. We have been disrupting whats been an expensive traditional market. Traditionally they charged a lot. We believe its a right, not a luxury. We expanded internationally. Now were taking this to an analytics business. So you recently had to lay off about 13 of your staff. How does that fit into your Business Plan<\/a> and maintaining that pace of innovation. Sure. I mean the Technology Industry<\/a> is characterized by Companies Like<\/a> us that have some real exciting growth initiatives. Some work. Some grow at double digits for many years and some dont grow that quickly. For us, we had extended into the audience business that didnt work so well. Weve reallocated the market into bigger markets. We tried, didnt work to the expectations we had. We took down the work force and reinvested that its been a tough year for the past year or so for the company. You lost your friend and surveymonkeys former ceo david goldberg. How do you move forward and keep things going. Dave died over a year ago. He was a dear friend of mine and a mentor and a leader. He built this company. His reputation and legacy lives here with this employee base, so we dont walk around mourning and moaning his loss. We celebrate his life and what he brought us. We wear these shirts. He would celebrate us kind of going out there and kicking ass, and we see a bunch of different Growth Opportunities<\/a> that are going to yield that. Were kind of in an aggressive mode. Surveymonkey has partnered with nbc. The polls are all over the place. How can you convince people polls are right. I think our polls are pretty good. Some have been off. The elections are definitely the olympics of the polling world and it happens every four years. We interview 15,000. We called donald trump the leader in the field a year ago. Here we are today. We have two candidates who have unfavorable ratings over 60 . Those are record highs. I think the Bernie Sanders<\/a> exit here, were going to see what hillary is able do in terms of migrating his base to her. Thats going to be critical. But this is a statebystate fundraising warfare. We look forward to seeing surveymonkey continue to disrupt. Thank you. Guys, back over to you. Julia, thank you very much. Dont miss another at 6 50 p. M. Eastern. Its called blippar. Thanks for watching power lunch. Closing bell starts right now. Yes, hi, everybody, welcome to the closing bell. Im kelly evan. Actually im feeling a little disruptive. Im bill griffeth. Bearish comments from george sore yoos and carl icahn. And how much is yahoo s busy really worth . Also an update on viacom, that whole report. 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