M&A Flurry Doesn't Mean Recovery

" Hey welcome net PM line still apparently content have lunch plans indefinitely but -- dinner happy hour. And so it it is typical pattern time mine I that's gone on."

" Yeah I -- that's Tracy and I'm actually working out technical difficulties with my computer it's actually probably more with me then with my computer but dominant -- out -- say president on the case in politics I don't know if frosting his brain cobwebs. It's it's rough to expect when you get older I think it's sort of when you go out fairly good guys let me -- football and NASCAR Nextel that public not that you would understand you would love sane is like football and golf and things like that. You can't recover like the -- he'll -- the next thing I find -- spent all Sunday traveling in the web I feel like him in a phone I'm probably going to be a font until. Thursday of this week. And -- that's like the over on --"

" A company could you have us every day at lunch so on Thursday we'll check in and -- I don't I don't blame falls by then million kid on Ritalin. But we have actually a really great show today. Craig got them from Jefferies is here to talk about what's going on in the market as -- C university -- Maryland professor talk about unemployment we're going to talk when he tells cent can you tell hiring I should say. Are you going to really get a job this season holiday season coming up are they hiring."

" Look we'll also talk about of relationships site that deals are getting a job you know awful title relationship media. A -- and -- one that actually might help you actually find work down the road so that's of course a very important for everybody -- that's kind of sits here except that -- questioning sites -- people actually read your resonate when you put it online that's the big thing you know you got the monsters dot com of the world that are just dump some of millions and millions of resonates and that's one of the big things I want to talk to this individual about his name is Jeff -- is going to join us later in. I want to find out from him. You how you differentiate yourself if you've -- in hand and you put in the of one of these online sites along with millions and millions of other. Who's going to read it you know I want to find out how they are able to tell people they will read yours and that's obviously unity."

" Parliament. -- an attorney Robert Gray actually consists -- information smarting got away ball smarting from the fact that his tar heel Austin my yellow jackets. This weekend of balloting on Friday to sort of set it up to set the tone for the beat down so now I have to revel in at least of the day after yeah. -- moment he still is still recovering from the be done in basketball last minute that goes without saying that goes without saying this is but by you know any yup we're we're still we're pretenders. I'm the first to admit that until the trials -- on the road but. We digress will take this off line later on you will you can continue to. Glad you're sick like me I'm better you are speaking Latin. It's a north delight he probably could do that smart guy you know bundles forgotten. If an AA guys in an activity that's what it's all about they -- fourteen billion dollars other -- the other fourteen billion dollar deals happen in weeks you know. The by the markets -- fourteen billion total. Discuss -- how little there's been lately and I guess that that's really my question about this whole thing is yes there's an activity and that's always positive in -- whenever you see that's an activity -- it means it is confidence that some sort of confidence going forward right but. Are we making too big of a deal about. The deal here to deal there and Xerox is making the deal that is seven billion dollars chasing deals right I mean -- you guys buying out some smaller rivals and Nina mentioned earlier -- yes who died. Xerox is buying it you know and spending days a couple of times before hasn't quite made it to the altar of private equity a couple of times you know don't count his chickens until they catch you. You know throughout Iraq shareholder. See their stocks under pressure maybe some concern and -- upped the ante and and get a little bit more to actually sealed the deal here."

" Xerox is like the energizer bunny this company has been knocked down -- accounting issues I mean I remember back in the day when I was still editing it was what was you know that poster child for accounting problems back then. And it has come to the plaza the Phoenix and here we are still talking about it I know that CEOs going to be out with Liz and the 2 PM hour on the Fox Business Network so. Love her story she's trying you gotta give they're turning it around."

" You know in services where all the money as these days and you've seen it yet IBM started a few years ago. I you've seen it lately -- buying Perot Systems there your loyalty services contracts this is outsourcing and we know. We've we've seen the flow of jobs you know going out in the country and in this company's involved -- that back office software. So you know it's is all he had to make things run more smoothly Xerox really wants its. Very lucrative market you know high profit margins. I'm also some talk at a craft yet they may he get that take -- they're going to get -- and have to offer little more cash than they could go to seventeen and a half billion out now you're talking about a good solid feel household names. Big cash should play here but -- Kraft shareholders. Haven't really been rejoicing that's stock's been under pressure -- the it was the only guy Dow member that was lowered just a few minutes ago from. Update on that -- there's still a lot of concern out there -- three minutes from trim tabs tonight you know. Twenty billion dollars in new offerings this month alone you have doormat secondary stock offerings IPO's. A lot of stock coming on the market -- summit 28 deaths -- three times more than. Cash takeovers -- stock buybacks which are almost nonexistent right now. Insiders are selling a lot more than their buying of their own company stock so this is a lot of new issue coming on and and not as many buyers out there so it's interesting to see. Companies now stepping in to buy and that could be the signal. Could be a signal. That people are feeling better they've they've built up all this cash when you read about -- cash. These guys are sitting on you know not only in silence the companies are sitting on a lot of cash to know what do they want to do that they want to got hire people but they want to go buy some competitors -- may be. Still and -- I."

" Right as you said dirt cheap dirt cheap -- buying these companies spurred a bargain. You mean but your point is good what is it the right strategic thing to do again just keep the cash from the coffers for the next."

" Right in tide yourself over that's what we're looking towards a sign of the turn -- right Robert thanks and I forgot it Robert Gray with us and info on the IPO -- going on sale or not yet he -- an activity today. Very important -- Beckham joins us right now equity traders speculate face that -- rather Jefferies. And the company is Craig let me get your take on. On dot CO NN AM Monday if you will that would make it a big deal about very little here or is this really. -- positive to see any type that many activities."

" Well I think it goes back to the old saying if you gotta start somewhere right and I think that's we're seeing. With these early stages of not consolidation activity across a number of different sectors here we'd be hearing for quite some time that technology. In particular we didn't see a lot of deal making when equity guys were a lot lower -- during the summer because there was really a yawning gap between. What potential sellers wanted to and price in the potential buyers willing to pay. What we're seeing now is those those bid ask spreads if you will strain to come in and tighten a little bit -- at all likely that because that the buyers are getting more confident with the longer term outlook for the economy for their businesses and therefore have our conference do I expressed by virtue of requiring more businesses but."

" I don't really understand -- because. You know used it in your notes you said the path of least resistance for stocks is most likely higher. But why we still haven't seen top line growth that these companies I guess third quarter will be a very good town and we do see it. The bar from last year was so low anybody could jump over at this point -- as far as compares comparing the numbers goes. We still have very low inventories out there we have a consumer that's still sitting on the sidelines and we're being told. The holiday are going to be and garbage. So. How does that -- for a you know onward upward tight market."

" For me that that the direction of the market in the short term really all boils down to. Liquidity and this is -- really and an over -- term over the last several months here. But I but I basically put it in into three different types of liquidity number one we're all aware that there is a lot of idle cash on the sidelines it's been that way. For several quarters now. But as we start to see some. I increasing confidence that you know clearly we've moved away from the abyss in terms of by the economic meltdown we're now moving more towards the high probability of a top line growth. That's bringing more assets into the market and on any kind of historical measure the amount of -- cash from the sidelines -- he put to work is substantial continues to fight its way into stocks. Number two. -- another measure of liquidity. What are we learning today from you know eight -- mean merger Monday if you will is that. Companies have a lot of excess cash as well that they're they're starting to put to work. That's an important underpinning for the market. In the short term as well and then finally he can't forget about what the monetary policy situation is. That the Fed has told you in plain English that's going to keep. What's effectively his Euro interest rate policy in place -- with respect to how the federal funds rate for a very very long time yes -- withdrawing some emergency liquidity from the system. But they're doing so in in a very disciplined very programmed fashion. Which I think is is a very very. -- I I think not successful balancing act over the yet over the short term."

" But isn't bouncing -- I mean are we creating a bubble all over again we keep rates low. We got all -- cast him aside and then nobody knows what to do it but they've got obligated to do something with it because their portfolio managers and well they get paid did manage money so they got to get it out there. I must feel like we're forcing the issue here we're not really ready did jump in and say let's --"

" Yet -- it was a bit of the stock market by its very nature is always a forward looking discounting mechanism. And I think what stocks are also telling you right now fundamentally sort of setting aside. Some of these more technical liquidity that and -- nation before the stock market's telling you that it has increased confidence in the prospects for top line growth. It feels like teaching history right now with the get back -- the second quarter that was a quarter that was that did that that we're stocks reacted very positively. Not that any kind of top line deviation from from expectations there all came in the hearings line. Driven by cost cutting. We're starting to see as removing the third quarter are earnings season. -- a case that can be made that we may see top winds surprises in the -- you look at the that the increase improve revenue guidance out of General Mills you look at any number of different now revenue upgrades it came at a semiconductor sector. I think right now based on the the the body of information that's out there how we can expect the third quarter earnings season to differ from the second quarter by virtue of a more top line surprises. Do you think that sustainable. The it was mentioned before that right now we've got that very low expectations to begin with yep I would tell you that certainly on a year on year basis that the comparisons are incredibly easy. But I look at. -- it with respect to where analysts' expectations are right now those expectations are well I think the stock market value in most cases is going to move higher. On those those top line beats the real questions going to be as we move into 2010 can sustain itself. Particularly as we move deeper in the calendar year look at the 30 and then market players start to think about when the Fed's going to come back into the picture from a tightening standpoint. To me that's just about the biggest risk that I can put my finger on right now."

" What about the correlation between equities and commodities particularly oil and last week we saw a 9% drop in oil and commodities in the last few days that we followed suit today ABC bouncing back up like commodities following suit. I mean is that you see it danger that the EC that ended the divergence of that maybe going forward."

" Well think about this way you know what what dictates the bill crop prices of commodities -- number one yet that that that's a real time broader. -- Barack Russians say totaled demand practically. With certain commodities like. -- like copper like natural gas like energy. Measures of of industrial demand -- aggregate demand worldwide to the extent that those commodity prices are firming in moving higher it would only fought logically -- and its stock prices should move higher as market players for to have higher confidence that there is a better demand picture out there. The other thing -- to think about though is bill the way as investors start to use commodities as a way to. Protect themselves if you will from can you -- pressure on the dollar that dollar is that the trend like the dollars an -- no question about that that's part of reflection of investors. Willing to take on more risk in non US currency's. But I think it's also -- reflection of the fact that there's longer term concern just about how this treachery how this US government Balanchine is going to be able to fund these deficits between created. By -- government intervention. The that would that this as the backdrop. Up our our -- sector -- continue to be areas like technology because it's got a lot of non US revenue exposure and therefore benefits from -- weakening dollar -- and then in the commodities basically like materials Britain also like energy again a decent place. -- to generate act we think excess returns -- and world with a dollar stays under pressure."

" So just days specific names you like technology like energy some names and he's been more specifically within the energy any deal like. They'll oil services deal like alternative energy are you talking about thrillers where do you -- a focus right now."

" Well I think he'd be exploration and production companies I should probably be the focus at this point this cycle because they are the actual owners of the commodity itself and we're a little more comfortable. Owning the owners of those assets again to more directly benefit. From from the asset value appreciation we expect. -- interesting name that that that was under pressure on Friday. Isaac company Cabot oil and gas COG this is a name that we we -- come under pressure because. -- of -- that they had in. One of the Pennsylvania and resource plays we think the market overly punished that's stock. Hi Andy what we some. Over the weekend is something very very good results out of those Pennsylvania -- that they have. Eight net net this is a kind of situation could have a 1% impact on the NAV the company. The stock was down over 10% intraday on Friday -- opportunistic pullbacks like -- of the types of things we like in the energy space."

" Kind of enacting a break a few minutes but quickly I ask you on this top line growth and it I'm still such a skeptic about it because we can't cut margins anymore that we can't lay off any more people know what is carrying inventory. And the consumers not buying so I get the whole commodity play I actually can't. Being pushed into the technology -- but as far as the rest of the overall market. I'm not -- top line growth and that's in any -- this market is still like climbing on air it Scott potential to topple."

" Yet I think where you come back to -- whole premise is that. Companies have been able take out a lot of cost to their operations as demand has really softened. What that sets up though is when the top line growth does come and I think that there's about case to be made that all of this government's cumulative action. And all of the economic data streams that are available to listen to show that he did that the trajectory is higher off. Obviously have a very depressed lows when you really expect that much cost -- your your your your your your company at that low point in the cycle what that leads to his. -- it outsized gains on the upside on the earnings line because you brought those costs down so low in other words. It doesn't take a lot of additional revenue to have outsized impact on the earnings -- into the --"

" I guess some -- such a skeptic about and we see it in the discretionary basis point margin so much they can't they got nowhere to go on this one. What about let's go back to the Fed now the Fed has really done. A -- in try to infuse money into the market not entirely working what do you want to see the Fed do next what should be exit strategy be here I."

" I think that what's happening right now is guy is really that the best course of action that is. Incrementally withdraws some of these emergency liquidity programs that would put into the marketplace. At the -- here in in the fourth quarter and the first quarter. 2009. And it. Bring those out of the market. Revert back to a more normalized monetary policy. And I think we need to do is look at them the Fed funds rate picking up -- it's frankly your rent your last resort. -- that -- they're going to do that they've started to communicate increased confidence in what's happening. Across the economy here recognizes that there is a lot of slack in the system still and it's so long as that's the case. Don't expect them to move that fed funds rate anytime fast in the market expects. Yes that's the problem with this whole thing we're going to be in this flat line I think for why do you think it's -- into -- you think we have ten years -- not now. You know fair questions of and we debates quite a bit yet too important differences here. That they think we're pretty important you know number one there's a demographic difference between -- Japan and the US which puts longer term pressure. On savings rates and and and now hopefully puts to net selling pressure on now on that market never to -- had fed and treasury a move much more aggressively. -- address the issues that came up in 2008 in 2009. I finally a -- on Japan also was I think some. Misguided and I tax policy just is that economies start to get its feet back under that that really -- some of the wind out of its sales."

" I -- we appreciate it thank you really inside -- Thank you having nitrate packed them how to Jefferies."

" And company giving us a whole love bunch of insight into. -- what's going on with the markets and what we're looking for I mean I gotta tell you something I'm with you go into the top line growth -- even if we -- from the compared to standpoint. This year versus last year which we should it be better bomb I still don't think that it's sustainable in the long run as long as he's don't have people. That people that don't have jobs and people that are worried about losing their jobs no one's going to go out make especially big ticket purchases nobody is going to do that because it has to worry even people that are wealthy. Are still worried about what next year in 20112012. And."

" But even the wealthy they're not impervious to this very appealing to their fore closing on homes they're handing in cars. You know there's there's this web site out there that you can pick up somebody police. And go through the -- on the Mercedes the Hummer is -- it out."

" And a big part of that is people living beyond their means slaps huge and it's not very little margin for error with people in terms of their debt versus their income. And then you know when they got too much into debt they said -- and dishonesty on faculty cars the first thing they know."

" And that's why I'm with you aunts -- move and I don't think we're off to Paris is yet but we are after a break right now. We will be right back it's your body Josie Jeff Flock color. At the end they've eaten. We are back."

" Flown back -- Cotter in burns with the you know I was in Texas all last week. In Austin -- is up barbecues in the best barbecue in the way all her son. All somebody five he also before the end of the -- I promise you that -- might even give you fix that we're fixing go to Jeff Flock right now. I would bring -- barbecue Jeff because Zell boy did I need some good okay. Last weekend you've got this information on this now account is that correct."

" Well you know you reason you're probably eating pig is a failure very thrifty fellow and you're probably getting a heck of a deal on it that's the deal these days we've assembled. A group of pig producers here. And I think finishing operation here and via. The town of sycamore Illinois and retaliate maybe you can tell. -- kind of a windy day the the the fall his return but I want to take you inside this facility. We've got to I don't know how many have left I'm Mike Mike Altman Lewis who runs Illini -- Cambodia India. But it's billions it quite full yet -- its own little old belt and a thousand head and right now the bottom line is that a lot of amounts to be. If if Bob follows this and we can see. Just how many miles these are these are pigs that are now being what they -- finished. And we sort of scared of a little bit about able to see -- You raise them to what what point. Average Marc -- is about 265. Pounds so these figures will be in here -- fifty pound right now in the near afforded him months. Eldon Gould who is a -- producer got a operation nearby you're getting -- How much ahead for these pigs and what's the breakeven."

" Lower at our bought 95 dollars ahead -- like bail by the entire ignited product press. And I expect they'll break even as above -- phony scholarship. Well so now 21 avalanche 43 months. Lack of profitability. And you said and those other two months or so hot either. No there there they were just break even -- obviously one that's been negative force along two month to break even all that good. That does that help -- princess. Here that. And and just in terms of reasons so -- you know people know. Detailed view at a perfect storm of bad news first of all. Input prices got high -- Bob. About it would come over here and take a book in that the end them and as it is stretch of a little -- that's the -- what they're eating now what is that that group that through. But that they would be -- brown color and so most soybean meal. This these sound like distillers. You know the prices have come off -- that a little bit now but they were tremendously high that they had the economy going in the tank. And then you had somebody come along and say. This is swine flu even though swine really had time to do whether and -- write downs on the morning of I think it was it was. On April 20 or about April to you know exactly did that came out and essentially. That is what is really -- the airport industry because. Demand is just down not only have you got me international markets have backed off of the domestically right and you know and it's it's a shame you know but. You know the perception is reality you know people see the headlines swine flu and you know they just don't have the fact that it really is you can't get flu from a pig in fact there we took over -- want it we could. That criteria but. I seem to have scared them away them."

" Jeff you know a lot of what I'm looking -- me curious about what really showed the corn feed their last summer summer before this past summer fourteen months ago. -- it was so expensive then -- feel that this jackets so much less expensive now is that helping them on the I would think if that would help them turn the corner a little bit."

" That is one of the positives right now that the input cost have come down and of course the other big input cost of his oil because that you know fuel prices to run all the farm equipment so those. Items that help but if you got pigs at 95 dollars ahead I mean I could give you. Not one of these -- but an entire big -- For 95 bucks and you break even at 135. You do the math you it's it's not pretty thanks Jeff we appreciate. Yeah thanks guys --"

" Animal lover -- actually -- All of the crazy part is we have brother Jimmy's on our show your question German magazine and so we had the you know so."

" This just stick to what's gone out of my head they're they're cute in many of the either coming back. I have I have called finished and brought comedian. They finished until it and smoked for a few hours in get a little pork shoulder -- lot of pork shoulder on might might -- have children. But that's piglet you're talking about that's fine my name -- fan knows that and 95 dollars ahead. -- likened the sound of that not good for the farmers though good for the those are those who love barbecue dad and brother -- is here with. Barbecue we miss you because we needed someone to the key element of particulates and he -- called that a that a guest appearance."

" Backstage -- yeah I -- that I was about agencies here now to talk about our. And the day day."

" I think we can expect in the tech sector as well I think these are pretty added too pretty and I think people that Apple had predicted that's that we were going to see a lot of this happening in the Biotech sector -- sector. The technology sector because frankly what they both have in common is all these guys have a lot of money sitting on the sidelines on the ballot sheet. And you have companies that are still in spite of the run up in the markets are still undervalued and have great growth potential so what does it signal is that. These industries these sectors that we expect to go out and go shopping -- they're doing. Just that but Billiton the two things that I kind of want to mention is that you know and I am had been talking about is on air all day today is. Not good this is a good it metric for sentiment saying we knew what and any activity does for the market is continues to signal that this is. It's certainly a bullish a bullish move on on anyone that does any type of and any activity that. This is not an indicator of anything that's going on the credit markets because both of these companies. Xerox as well as -- they're doing these deals in cash and stock so you cannot sit there and apply this and say. In the credit markets aren't frozen everything's good with that would that with the debt markets again because you can't see you can you disease extrapolate on the debt market -- We have we have seen however other deals get done financed by debt. In these two examples today that is not the case that this is more the sentiment claimed more than anything else you ask me. Or is it -- isn't more of a sign of desperation. Xerox again almost went for dead still teetering over the last couple years not many people buying. -- you're cool you know you -- mature and yeah yeah. I -- well it's it's make or it it is make or -- you know that that's what these technology particularly Biotech I mean really you have a pipeline it is very hard to come up with a pipe it is risky and expensive. To develop -- pipeline so this is something reading continue to season Biotech companies the big one's gotten say we're going to hand take cherry picked these smaller companies that have proven drugs. Already so we don't have to do it herself the tech companies are saying hey. It's -- we got money. We want to be an emerging markets that's one of the things at Xerox is doing and we want to get into all this flight data processing staff these new services businesses that technology is getting into that this is what everybody's doing Cisco and Oracle HP all these guys are doing."

" In any Cisco out of the SE a total services company it's going to and increase their services revenue from -- three and a half billion dollars to ten billion dollars in just the next couple years so."

" That's where there and both these companies say that these deals will be creative and I created this basically means is going to added to their -- to their earnings. Any year so it's not like these deals are going to continue to to sandbag their earnings for years and years and years to come dancing chaos -- a year which is a good metric that this is good media deal making and that they've been sitting on -- more -- your -- time."

" On the yet that this thing about the pharmaceutical industry is so many of these big -- names now they have drugs that are going off patent. So this is a great concern that there pipeline is going to dry up that they're not and having to replace these drugs when all of the the of the -- The generics get in and I are taking over so let's. They look they look to some of these -- names and also growth across the country any one of the big things that -- wants to do with this deal is to get into. You -- particularly Eastern Europe some of the more emerging. Economies in Asia as well."

" Mean but that's the beauty of it all like. You have as a Biotech you you create a Biotech could you want to be scooped up. But these emanate deals even then I'm I'm I'm so skeptical skeptical about everything these days and everything he has -- can't apply. Can see just as skeptical as I am not worth your -- is that why you're here because I know what I look like this evil karma."

" Europe be here you're naive. Compared to me it's so is everybody out there are naive and you know either way too many below because they've been margin since March I think what thank you headline path. She wasn't -- well look you know I mean."

" Cover it if you're talking about the market were coming offload forever ruined. Based on fear that the financial system's going to -- I think -- you know some comeback is warranted. We've talked about and the name I mean I'm I'm very cynical about emanate in general I mean this that the the facts throughout their nine out of ten. Deals that happened never meet the objectives that they talk about on day one. And expensive it seems like judge has -- awful lot you know a lot of companies you know people say well this is great opportunity companies aren't aren't that expensive right now but. When you look at earnings they are very expensive because companies are nonperforming. So while. So. You know the statistics studies also say that that companies always over pay these deals. And I think you know craft is right on the precipice -- they increase that this for Cadbury they're going to be overpaying -- while -- is a is Wall Street's greatest con. Drilling in a lot of ways because it's a huge -- generator for the street and they get to walk away and the companies that the deal. With the problems to check the CEOs collect the cash in the shareholders left holding the bag."

" animated great point these are cash deals we're not seeing the credit markets but dropped. Given out money to -- worth the."

" Private equity I mean there's no private equity there because the financing isn't isn't there right now. That's the only way they're going to make money on these deals as with cheap financing that they can get their fees and get out. So you don't -- private equity and that's why premiums won't be driven that high and volume won't be driven at high. You know this month we only have we still have less than a 150 billion dollars an -- for September with all these even with all these big deals and that's that's. That's about what we have left November right after. The collapse you know. So I think that. We need to sort of -- that could take a step back and get some perspective about what's really happening in the Yemeni markets. It's it's nothing compared to the -- 2006. In 2007. When we had. Private equity firms snapping on in involve bidding up every deal companies rushing shifted due to deal because they're afraid that some predator confirmed going to buy their. The company that they're looking for so it was a real friends -- then that's not what it's like -- a little more rational self."

" We're not to get too overly excited about the -- activity when not to get too overly excited about the credit markets that are still relatively frozen is no secondary markets out there really securitization markets of all the there's still -- completely locked up there -- already get excited about if anything."

" But in and general well. You know that doesn't -- anyway it'll fall back. Yes but whenever -- else fails well fed and the pigs are down obviously I can't get a good barbecue why why there again the -- is that. If -- doesn't seriously be. You know. I think we should be happy with stabilization and shouldn't be happy with slow growth because the reality is is that with the government throwing all this money into our financial system. We don't want a quick turn around because that's going to put listeners and in a real pickle I think that I think what we'd like to see is it's. Slow growth in the government easing out of the financial markets until they stand on the room. And we don't want predator confirmed going out there and burning everything is cheap we don't want the credit markets that the to -- overnight and suddenly be hot the man and that's what got us into the trouble to begin with we need to change the system a little bit before we go back. To. What we have before."

" In your MarketWatch com he cited a study by deal logic saying that emanate was part essentials humor is coming out everything's -- well actually did a little. Look at that IPO market and that's even worse yeah it's well that we had a good week last week we had a good week but it was all it's all relative results of those two is now a lot of I heroes from China this -- today. We've got about fifty. Initial public offerings in 2009 verses about a 151 in all of 2000 aid we're down about 66%. FMR."

" You know and the IPO market to me is a really special place because that's where your ingenuity pays off that's with a BC firm go to exit their investment think it's their big pay days. And the reality is is that if we don't have a healthy Yemeni market if we don't have investors. Willing to go in and buy these companies at this stage in the game when they're just going public when they're ready to take that next step. That I think that that shows something problematic with our economy and with with our. With our a corporate landscape right now you know we need we need small companies we need ingenuity that's for the jobs are gonna come from. Four for a recovery for economic recovery and a small companies. And investors don't feel way to exit their investments for the profit. He would IPO market and I think that that's very telling in terms of were really out."

" It just to finish the -- thing -- of eleven of the fifty our tech companies and so the point again that is this tech market going to pull us out of this mess. Did try and they're trying but it's not nearly what we sought in the past and you -- numbers. 2007374. IPOs that year and it doesn't -- to 2000 which is close to 700. IPOs so we're way off were."

" Are we were still. What do you like where we are right now though because -- the last at least we have sort of stabilize the little that we had. A down week you know down three days at the end last week on the on -- will be diving almost two and a half percent for the week. But in a bounce back a little bit today we seem to be. After a couple of days down being okay with that and then more money coming in off the sidelines you were talking about to stabilize things then you like where we are we went down so much in March. Now it's sort of bounced off of that are we where we should be are we even higher than where we should be maybe a little lower than women should be in your mind."

" Well you know the Christian fight it's a confidence game and there was a great reporter actually in the journal today about how many how many. Analysts are now expecting third quarter earnings to go blow past expectations because expectations were so low. So you've got the initial expectations now you get the revised expectations the companies coming in with better than expected earnings. To me that's going to push helped push the market torched 10000 by the end of the year. Now is that a realistic. Is that realistic level considering what we know the kinds of profits companies are making at this time I'm not so sure it's something seems to be a little out of sync. That the market is getting ahead of itself not the market always pursued you know anticipates a recovery but I'm not so sure that this is going to be the the speedy recovery that the market seems to be betting on."

" Yet because I think you're right the market is way ahead of itself in that the numbers probably will be good because compared to last year year over year numbers are going to be fantastic I think it was sold to things. But over the last couple quarters we've seen. Margins squeezed we've seen inventories fall there's an almost not there's no fat left to cut them except an apartment. Yet that's too much stoke."

" You you don't want to be two months and I think any consumer -- the consumer confidence. Is is improving for people Florence spending money. And and and there's still there's still a lot of negativity about. Or or the forecasts are not looking so good in regard to. Pre holiday sales so I think I think he -- investor should be a little bit cautious."

" It wouldn't talk to -- reach a little later on odd jobs that I think it's where everything stems from. Jobs you're confident about not losing your job if you did got a new job that you sort of spending money and consumables that coming back so that's will deliver the lid on the show. Thank you so much for joining us -- it's -- I MarketWatch good stuff this consecrate. -- What and I want a break and we'll come right back and we'll talk about jobs and we'll talk to look at a Barnes is well. -- got a -- death indeed he does a good job and it does a great job. Thank you David."

" We'll Baghdad via live they see what I had here on the -- Tracie -- got some notes not many just a few things here few little tidbits. On job seekers in know what else. Get this up. This the survey here that show that Wal-Mart was the institution that does symbolize America today and the of those -- those who were surveyed. And thought that they would rather change places that George Clooney. For a week. Rather than the president. But just barely and -- he was a very small percentage of those that was surveyed said by the chief plays -- any man on there that we George Clooney. Some said Barack Obama I gotta tell you something I mean. I worked as hard as anybody not really. But Tiger Woods to me he just made ten million dollars weekend look at his personal life who is married to."

" The president works way too hard for me he's he's under far too much scrutiny by the chief places a wind change and plays with Tiger -- I'm going to go on play -- this afternoon."

" Think long and hard about -- and millions more places where it."

" Cindy Crawford. The First Lady was it was the what are what women most likely wanted to treat without actually -- him. So Peter Barnes and the reason I brought the note of the fact that Peter Barnes you think I read a lot of stuff."

" I think it places with Peter Peter Barnes reads so much stuff and I all weekend long you've been reading the consumer financial protection agency."

" On draft that of Barney Frank put out there right now so I don't you know word by word Peter."

" Hey Chris I can't help myself the bathroom. You -- that up rather well."

" Yeah that's yeah that's a VD edition sitting -- so -- sound effect on drunken."

" Brigantine high hat in the symbol you guys have to -- and they the first -- are graphic they have -- Ben Bernanke and me I think got another."

" That was that was a regular feature the the way I don't -- that we're going to lay off your your Ben Bernanke. Similarities there."

" yeah. Are you can do that. Okay our particular data protection yeah -- Meister. Seriously okay I want to show you this is this is the bill. That the administration. Setup bribe the text of the financial regulation reform bill about an inch thick right okay this is what Barney. Did -- it. All --"

" Create yeah yeah. Yeah you talk about spent the weekend reading. Yeah outwards just basically -- basically reading the Washington DC phone book. But what's going on here as you know the administration set up its proposals on our re regulating -- financial markets in light of the financial crisis you know we had a few problems here. And up a big part of this is how to protect consumers going forward in other. Consumer groups say that -- lot of Bob mortgage brokers and and banks and and financial firms. Names not known names mentioned here I've took advantage of people during the today at during the financial crisis during the housing bubble selling on sub prime mortgages that they didn't understand selling -- option arm. Mortgages that -- you know. Good lord I have the -- explain that chaotic and all those things work okay. So this is all about going forward. How to make things simpler easier. More comprehensible for people in the sales marketing and structuring of these products well. Barney Frank has listen now to consumer groups. And to the banking industry in particular community banks and the community bankers are saying hey mister chairman. Chairman of the house financial services committee holding a hearing on this Wednesday that's why we're talking about it today thing mr. chairman let's have some of these provisions are going to kill us number one. This is Washington trying to tell us how to how to outsell and create our products that's the heavy hand of government so he pulled out. A provision for plain Vanilla products that the administration had favored. Number two they took out some legal standards that would've given. People. Made it easier for people to sue. Financial firms if the product they bought didn't work out for them and a lot of banks that hey wait a minute you know will try and change the way we sell these things but. If you if you do this will get sued every time somebody has a problem with a mortgage please don't do that so we pulled that out as well and make some other changes but. -- groups say it's not all bad as far as they're concerned that they think that there's some provisions in this that -- actually strengthen consumer protection in particular. A provision that allows state. Financial regulators to have basically as much power as Washington regulators so they like having. Fifty more cops on the beat if you well and the reality is there a bunch of provisions in the administration proposal that we're not going to fly and the Senate so I'm told by lobbyists that. Chairman frank made some changes and this thing. To make sure that this that it wouldn't get kickback from the Senate when it went over from the house so that's where we are with -- all of this but it's very important stuff. It's very hard to appear now -- is it just more stuff or -- like bigger just bigger tight or something with it legitimately more. Garbage. -- Well but that that there. First -- Washington you know owns half of these banks now so the effect right we kind of cannot they have a little bit of leverage here. And the fact is is that the politicians are very angry. And and and there's a whole other side of this as you know which isn't there work. Plenty of people out there who did not but we're not responsible during the housing bubble they did go out and you know. Buy a house and get an option arm mortgage because they thought they'd be able to flip it and three months for a big profit but they were doing lots of investments. Nobody really talking about that. So I thought. But the fact is is that is that the banking industry is -- Washington loud and clear the Fed has already adopted new regulations and credit cards and in mortgages that actually. Take effect this Thursday going to be doing a story about -- bit later as well. And and the it and things are gonna change so when you're going to get a mortgage or credit card or home equity line of credit. It will be. Explain better you'll the terms and conditions will be explain better the marketing will be a little bit clearer and then you know it's kind of -- to make sure that you don't get it over your head them at -- personal finances responsibly -- and I'm not a -- way she did have that you -- have -- have an MBA and understand some of these products back there in the bubble -- it -- some of this stuff is what's crazy."

" area well we India on I have an NBA no idea what the heck -- I was doing when I in my first mortgage. I think Peter that you read through that floor thank you bear the heavy when you when you got a mortgage did you actually read the mortgage doll does not just -- as I. Did you you're you're nodding he. But it did absolutely no I didn't read it true I think I."

" She's like sports I sat at -- everywhere and then like four copies and I read off our copies I'm so skeptical I think nicotine's I've heard that one of the copies from."

" Dear SCI banks -- Peter -- I can pay their graduate congratulations on the new gig an economic okay -- guy or reading to do on consumer. Protection -- was really -- in DC as the yard when Peter to the next few reaches into and as we come back. Congress need to receive mail and yet the jobs of what kind of on Friday and talk about that we come back."

" Came -- box in this lab we had a Dow that's about a 149 points right now it's not terrible not a lot of volume -- people home for the holidays Jewish holiday but. We'll take a weekend and thankfully we're also got abducted him reaching with us today to economist professor at the University of Maryland and night. My advice don't old friend on and I did that in scoreboard. Twice a week now we're playing together Peter right. But once a week -- due Wednesday that's good for you lobby there still will be bison of -- I look forward to bet that it will try again."

" We're all here we are all looking forward to I sincerely looking forward no one is looking forward the nonfarm payroll report that comes out on Friday. We're hoping maybe against hope that we're going to get some sites have a pleasant surprise but. It just seems to me like the weekly numbers we keep getting is just the same old bad news even a little bit better just not going to cut it. Well what's your initial thought -- what's coming up on Friday morning."

" Well all analysts are saying we're going to show that we've shed another 200000. Jobs -- real problem. That I have with -- at all is that the weekly initial jobless claims remain hot over 500000. Still lower than before but there's still high. The second that we know is there are six people looking for every one job. And the companies are not any jobs mean you know it's really hard to find anybody that's hiring. That's what happened -- job loss numbers. Have gone down so much a lot of they're expecting that it's time they'll be a big revision. That's the first thing in the second is that most of us are confident that we are in a recovery. But it may be a lot less than the consensus forecast of 3% for the third quarter indicates. For example are all expecting a tactical adjustment for an inventory build. Now maybe. General Motors and Chrysler have call people back but look at them. Inventory numbers we've been getting that continued to plummet. In order retail sales remain weak so in other employment picture is not going to get better any time zone."

" Here's the part that bothers me I saw this -- today. Unemployment for young Americans. It is at a record high since World War II 52 point 2% of our young people eighteen point five unemployed. If they're not out there getting jobs and typically those a lot of those people are employed by our small businesses who and are six million small businesses not getting any help from this government. So these young people are not getting jobs they're the ones that go out there first time home buyers go by car all the exciting seven supposed to do right -- causing get your job. -- we're not seeing that we're not seeing any purchasing. In our economy."

" Let's remember that half of our population our our young folks don't have a college education. And then I'm going to get one it's it's unrealistic to think that everyone is going to work for fox at the University of Maryland itself what and this administration. Is is is not going to do anything to support for example manufacturing them only underwhelmed. About how it is handled the manufacturing crisis other than to -- the union at that Chrysler General Motors. A lot of young people go to those places to start they go to construction jobs in terrible shape. The bottom line is that president Obama's economic policies are failing -- employing everybody. At a hospital. There was some sort of national health service or by saying he's going to create five million green jobs talk about our role -- that day. I mean the bottom line is this guy keeps saying things that sound good but don't deliver. He said he could solve the problems on the campaign trail both Republicans would dumb and didn't get it right well bottom line is the country is getting thicker. Not Weller and it doesn't look good and the stock market's going well frankly because American companies are doing so well abroad. And we can make profit scaled down with just 2% growth in the United States."

" It whatever viewers wrote in -- but the exact time you said it Harold Smith from towns -- where are those five million clean energy jobs Obama campaign on I'm noting he seems to now. Quickly because we have to run what do you expecting Friday an upside surprise or down sad."

" Not expect it would -- kind of a 200000 jobs lost if I'm wrong it's going to be in the wrong direction that in that number's going to be worse. Super battery Q thank you so much we'll tell them later -- is air. That's -- quick -- by deal Wednesday -- Ricci is. Well known for being. Right writes yes but also for. Be a little harsh on the president the last president's. Economic plans it was not just that it's it's not a political thing now and I and I believe it started with Clinton went through the Bush Administration. And now that the Obama administration as well using using using the stakes right. A leading is where we bipartisan. No question absolutely if any 14 I would talking about retail Craig Rowley joins us right now vice president and head it pays hate groups. Retail practice in Dallas. -- just thought livid about that it and it Craig -- we're talking a little bit about. All of this season and other consumer has the come back do you believe the consumer will come back to it it. Obviously not to where we sought in the -- 20052006. But to a degree to where we can start to recover in this particular sector."

" But the consumer is that is wanting to come back last year they were caught in the like a deer in the headlights with the downturn surprised. This year they have money to spend but they're being very cautious. They're looking for value when they're looking for products that they need."

" And I think it comes back Chris you've been reiterating -- comes back to the job market can still -- going to lose your job even if you have cash in the coffers you're going to hold tight to it. Craig you did a survey and one of the numbers that surprised me the most was. 28% remain optimistic that this is going to be a good holiday season compared to last year about 60% thought that. This time next year it everything would be better and it's not an -- yes. We both have talked to a lot of people over the last couple months that had been initially said. Ever going to come out for Christmas they've been hiding out ever -- got cabin fever they're going to come out and spend. And that just doesn't seem to be what what's going to happen this year."

" No I -- and we expect consumers to be very cautious this year certainly -- percent of retailers think they're going to do pretty well. And and that's those retailers that have great value and I've really gotten their merchandise sharp for the customer. On the other hand there's a third of retailers who thinks this year sales -- going to be more challenging than even last year which was difficult. Probably the biggest difference this year for retailers. Is -- planning for it in last year's survey which was done in September it was done before the meltdown. And everybody thought it was going to get better than the market crashed and and the consumers out our -- like for Christmas."

" Greg what of these retailers doing to step up if at all for this holiday season no are they not going to hire those temporary workers that they have in the past."

" We'll retailers that planned their staffing levels to match their sales and most retailers have a a ratio which is they can afford to spend anywhere from. Four to 10% of sales on on sale -- help. So everybody this year is planning to hire the same number or fewer. Seasonal help than they did last year. That's being driven because they're planning frankly -- sales they're planning less merchandise. Which means -- planned for less help."

" Craig your surveys also -- that said that instead of just big promotions on Black Friday the day after Thanksgiving we're going to see these all the way through new years. Did you try -- for customers like us but these companies have this last discounts for how long now they have no -- Martins left I mean. How does anyone expecting to make a dime or is it just a matter let me get through this without having to shut the lights off."

" told all my friends. If you really want to find something you really want to get this Christmas got a -- Retailers this year are very carefully managing them their merchandise inventory levels. They're making sure they have the right product in the store and they're going to be watching it starting this about what sells what doesn't sell and adjusting it. The objective for retailers this year. Is to plan their promotions planned their markdown -- got wind up with a landslide of markdowns that occurred the week of Christmas. And the week after Christmas last year."

" But then why not wait. Am native son and a market for let's say it's flat screen TV why wouldn't highway so that we before Christmas when they're desperate and they practically handed to me."

" Well -- the challenge will be is if it's something you really want and it's hard in the market. The end retailer aren't going to have the extra inventory this year they've cut their inventory levels five to 10%. So they're looking to be out of stock. For the most popular items on December 25."

" I got -- I have most these retailers squeezed everything they can at a cost savings right now because we have we've got to see earnings coming out here. -- in the next three weeks we're going to solid earnings season for the third quarter. They've really basically slash everything they can add that bottom line now they're going to have to start adding to the top line."

" I have -- actually that's good news for the retail marketplace that retailers went into the recession before everybody else did. And they took there expand production faster and deeper than everyone else. And we're already seeing that as the clients I work with -- that money flow to the bottom line. It's dramatically improving their cash flow which then frees them up to do things like inventory management hiring when they need to. But every -- I work with this -- how -- we grow the top line and particularly how do we grow the top line next year. What about advertising spending they see that being reduced right now but -- wholesale. People are being very careful what their advertising dollars and really asking where my going to get a bang for my buck. So you're seeing a lot in the way promotions and variable -- drive people of the store. And also frankly last minute changes to circular to help drive merchandise that. Is is being slow moving -- really hot so what what a -- to see that advertising being the same are probably little more conservative than last year."

" Doesn't let me -- you know while the -- is -- public good for us consumers. Reduce staff reduced inventory. So you can't get the product he can't get the help and the stores it doesn't make for a very. Pleasant shopping experience. Which is why then -- you go to Amazon dot and he's got online as what I'm Vannatter and this morning."

" What we're democratic here yet but. Okay thank you I think it's great great -- joining us there vice president -- groups -- retail practice at a Dallas Texas. In omelets and -- having nervous time for them and the reason why -- and the squeeze everything out. Other cost structure so now than in order to get. You know growth in any income they're going to have to grow the revenue with the top line and that's just not going to happen right now. You know that's everybody's concerned."

" This seems to be a theme for the out of because again I am I'm skeptical I don't want to be I'm not a deputy there. But I can't for the life -- fineness -- line and now we know that yet fact that I can't really seat flat screen TV yeah."

" Well needed job we've got somebody joining us next to -- to help you through social networking site. --"

" Hey welcome back at the end I'm okay ever on these days seems to be one opposed to resonate somewhere. And we have thankfully the CEO and founder of code red dot US. Yeah. Here to help us now he has what he's calling a social its social media needs to jobs boards to get that right. --"

" Yeah we we -- closer recruited. Really change in the way that people with -- five years experience connected companies that find jobs -- like to say it's more professional and based but really more personal than Lincoln. Let you go beyond just the traditional resonate or even just a job posts and what kind of both sides of the army we should get to know each other."

" So they didn't say when people -- at a college you're out of five basically what you're saying you guys just launched I -- right at the end of may. -- already up and running for awhile now. The big question that Chris -- both have is. How we know that. Companies are going to read these things are so many of these sites and you named to Linkedin FaceBook. Terrorist -- resonate everywhere these days had I know they're going to read it -- your site."

" Sure well every company could it has signed up so over 400 organizations. Really ranging from fortune 500 companies to small nonprofits. Have signed up on code and are actively recruited. And includes guy goes Bechtel. Starbucks Adidas. In all these companies to have jobs listed on -- Thousands of them currently and they're actively recruiting recruiters are on the site looking for -- so we bring together the talent pool would also the companies that are actually. -- they're looking for people."

" how do people really differentiate themselves on your site because obviously resonate can tell. A recruiter a lot about a person but so much of that deal what impresses the recruiters calpers in carries themselves. The initial introduction sure we -- you separate yourself and in the fact that you know I had a three point two GPA and I was involved in student government."

" Well -- exactly and I mean will we really try to help people. If you haven't three point QG gate and then the sex perfect it's great for you however you don't you want to talk more about kind of who you are. And what makes you get hurt concerning the fact that you're also well. Relatively news of the job market you don't have much our professional experience code as a great way to kind of go on the site and are -- only about. You know who you are really -- what's become. I really highlighting attributes and and really look at personnel in your life experience. The recruiters value the hanging in today's economy."

" Somebody sent -- I see you as you said guy goes there's opportunities it Geico yet the companies listed here. But again I now if I'm playing my resonate I'm near zero to five years work experience. Odds are good it's not a whole heck of a lot how do I distinguish myself and make myself jump out -- YouTube -- of -- sure you know. And my special talent. Yet."

" The proposed really built so customizing your kind experiencing what one pilot in a notice a lot of the profile start with what we called me three which is an opportunity the state. -- brief statements. About yourself. The captain -- it -- find yourself you know separate yourself from -- hat and then you can also it -- either he's just -- get a picture could be. Roads will you adjustments. In India and I like it others on the web we're we're in."

" Have we -- we live we lost eight we did the wave right on now but as Jeff -- CEO co-founder of coded that US -- mean there are fair amount companies listed here. Siemens go 49ers as a matter fact is yeah. A couple of what do they look at board you are you -- says Chris Cotter apply strong safety Anchorage I have. Let's see here."

" The loss yesterday --"