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Aired at 11:00 AM on Friday, Mar 13, 2009 (3/13/2009)      View all transcripts from this day


00:00:00Letter g this afternoon.
00:00:03G-20 this afternoon.
00:00:04We tackle whether the global economy will work.
00:00:07And the status of the stimulus and jobs here at home.
00:00:09The latest view from the white house.
00:00:12With biden's right hand man, jared bernstein.
00:00:16And crocuses, bright spots in the world in honor of the g-20.
00:00:23This is our show and it starts now.
00:00:27>>> We begin with a check of the major market averages.
00:00:32As you may notice, it's been another one of those days.
00:00:34Up and down and up and down.
00:00:36Up for the moment in the dow and s&p.
00:00:40Nasdaq struggling a little bit.
00:00:42Big cap tech has been having a struggle in the session.
00:00:45Trying to get four in a row for the market.
00:00:47As you heard bob speaking of throughout the session.
00:00:51Showing the oil trade, not much movement.
00:01:06Gus joins us, vanguard's chief financial officer 55 asked you what you were doing personally with your portfolio.
00:01:13And you have told me you hadn't taken a lot of time to move things around and were stig with your allocations.
00:01:20This week if we have four up days and this rally appears to go even one more wee do you believe it is just a bear market rally or something bigger?
00:01:32>> I'll have to confess, i really d .
00:01:36Ouldee arest of the lows.
00:01:38We're not good at predicting sht-term lows.
00:01:41Butif y look at fivyear or TEN-iEARYOU'LL BE VERY HAPPY Apt today's ic >> whatyou think of the bank plan?
00:01:49I know tim geithner, we know the infamous day there was a plan and it wasn't as detailed as perhaps had been advertised.
00:01:57Over the next couple of weeks, we'll get specifics with how this administration will deal with toxic assets.
00:02:06This the giant elephant in the room or have we made too big of a deal of it?
00:02:11>> No.
00:02:11I think it's absolutely critical.
00:02:13The problem is the fact that the financial system is still broken.
00:02:16We can put patches on things here and there, but it doesn't do any good for the long term unless we fix the financial system first.
00:02:24It is absolutely critical.
00:02:25>> Now, this is -- you raised a fair point.
00:02:27A lot of people roll their eyes when you say, well, citi group was up 20% today.
00:02:32They say?
00:02:33What's that, two cents and some obnoxious comment like that.
00:02:36But their point is fair.
00:02:40So many stocks trading at such low prices that a little move doesn't mean much.
00:02:45Are there any names that stand out about the direction of the market than a $2 stock?
00:02:51>> I think what we're seeing is a lot of the things that are mostly beaten up are the ones really rallying big time.
00:02:58I wouldn't really put any stock in a big mover at this point.
00:03:03It's typically short covering or something that's been beaten down quite dramatically.
00:03:07>> General motors up 22% this week.
00:03:11>> Yeah, I'm -- I'd be a watcher.
00:03:14>> And who can blame you for that?
00:03:17That's certainly a fair point.
00:03:20What, gus, is your biggest concern, biggest fear coming over the weekend when we've got the g-20?
00:03:27Anything that is on your mind?
00:03:28>> It gets back to the financial system.
00:03:30You know, we had the big stimulus package.
00:03:32They're talking about a second one now.
00:03:35It's really not useful unless we fix the financial system first.
00:03:41So really for the last year, we've been focusing on what's going to happen with the financial system.
00:03:45Both the banks and the brokers.
00:03:47>> Thank you very much, gus.
00:03:50Have a good weekend.
00:03:51>> Thank you.
00:03:53You too, erin.
00:03:55>> Talks about the economy and the banks.
00:03:56The question is to fix the global economy.
00:04:00To spend or not to spend such the hot button issue on the agenda at the g-20 summit this weekend?
00:04:09The most influential leaders are there this weekend working on some sort of coordinated, "plan" to deal with the crisis.
00:04:18Europe says no plank check on spending.
00:04:25Our own guy johnson is live.
00:04:30>> Reporter: They are not playing ball with timothy geithner's plan.
00:04:35They would like to see around 2% combined gdp.
00:04:39The french and the germans are saying that's simply not going to happen.
00:04:42We're interested in coming to the g-20 meeting and talking about market regulation.
00:04:47Obviously the uk gets caught up in the middle of all this.
00:04:52Our finance minister and chancellor trying to tread a middle ground.
00:04:56But slightly siding with the united states, given the way and uk have played this at the moment.
00:05:03But the french and the germans, the finance minister of germany are standing shoulder to shoulder.
00:05:11Earlier this week, we had angela merkel and nicolas sarkozy saying there are no blank checks.
00:05:19We are not going to spend any more money.
00:05:21What we want to see is whether or not the plan we've already put in place is going to work.
00:05:26And the argument goes something like this, erin.
00:05:29What we are seeing is the european social security system kicking in.
00:05:33It is bigger.
00:05:34It is deeper than that found in the united states.
00:05:37It's a natural stabilizer when the economy slows down.
00:05:40You see these natural stabilizers kick in and spending increases.
00:05:44However, we've seen some of the international bodies do the math on this.
00:05:47And quite simply, that argument doesn't stack up.
00:05:51Consequently, the pressure is likely to grow.
00:05:53At the moment, they are saying quite simply and they have made this point clearly, talking in the french press this morning, is so pessimistic it doesn't sound like it believes its own plan.
00:06:08Consequently, we'll go down our own road.
00:06:10Consequently this meeting this weekend could be quite divisive.
00:06:15It's almost a build-up to the leaders summit in a couple of weeks' time.
00:06:19That looks like it will be as contentious.
00:06:22You wonder whether or not after this weekend, no agreement whether or not they'll push towards some kind of agreement at that leaders summit.
00:06:28Obviously we will see them producing some sort of communique, which painers over the cracks.
00:06:35Neverthess, e divisions are definitely there.
00:06:37The french and the germans versus the u.s.
00:06:39>> Thank youery mu, johnson.
00:06:41Amazing what christine la guard says.
00:06:44 is so pessimistic it doesn't sound like it believes in its own plan.
00:06:50We have the white house joining us in a few minutes.
00:06:53>>> In order to find out what happens next between the debate and europe, tim geithner urged all nations to take strong action to reverse the world's strong economic course.
00:07:07We decided to span the globe and give you the review of what has already been down in three of the most crucial markets, china, south africa and india.
00:07:22>> South africa limited its intervention to two tax cuts.
00:07:28The central bank with four deeper cuts.
00:07:32Even after the economy contracted for the first time in ten years.
00:07:35The government has certainly not answered calls for a bailout by carmakers here.
00:07:39But talks are continuing.
00:07:41The argument from their side being that the government's $8 billion spending on infrastructure will help shield the economy.
00:07:48On the flip side, we have already seen our mining firms cut thousands of jobs after commodity prices slumped.
00:07:57Bear in mind, with the budget 8% of gdp this year, south africa's hands are pretty much tired in terms of how much more it can spend on the economy without destabilizing the rest.
00:08:12>> Cuts have been announced in india since late last year.
00:08:15$20 Billion.
00:08:16Some people that's not enough for a trillion economy.
00:08:22Others believe auto companies are up after the december quarter.
00:08:28They cut rates by 400 basis cuts.
00:08:32We have seen $6 billion since december.
00:08:38This was announced the first week of january.
00:08:41The focus on the energy sector like real estate.
00:08:45Cheaper financing was made available.
00:08:47And gains in the last week of february where we saw cuts across the board, about 2%.
00:08:53Fuel prices have been cut twice in india.
00:08:55Fuel prices are still administered by the government of india.
00:08:59That's important.
00:09:00Going forward, elections have been announced in india.
00:09:07No major things announced.
00:09:09You can't expect too much more coming out of india in the next three or four months.
00:09:15The gdp to 5% in october and november.
00:09:20It's shown india has grown since 2002.
00:09:24Really the government needs to announce some measures.
00:09:26That's what the government has done, about $20 billion so far.
00:09:30>> China has been hit very hard by the economic slowdown.
00:09:33The government and authorities have wasted no time in RESPONDING TO TaGNOMIC Crisis thep central bank of china has cut interest rates five times in the space of four months.
00:09:43Reducing them by more than 200 basis points.
00:09:46They've relaxed the reserve requirement for banks, allowing more liquidity to enter into the financial system.
00:09:55The chinese government announced a $585 billion stimulus package.
00:10:02They want to create 9 million new jobs this year.
00:10:05Targeting 8% gdp growth and enhancing the social safety net to help the millions of people affected by this global economic downturn.
00:10:14And the chinese have promised to keep everything stable.
00:10:18If needed, they are more ammunition on the fiscal side to stimulate their economy.
00:10:23>> There's a sense much what's going on around the world and different interest rate cuts and money being spent.
00:10:29Now all these countries are part of the g-20 this weekend in london.
00:10:33Can these countries get together and do more than talk and have specific action to help address the financial crisis?
00:10:45Joining us, david gordon, razor group head of research and steve moore, co-author of the "wall street journal" editorial board.
00:10:54Let me start with you, david.
00:10:55The question for you, this is interesting when people lay it out.
00:10:59Three stimulus packages in india.
00:11:01I know they don't add up to a huge dollar amount but they've been slashing interest rates.
00:11:05In china, a target for 9 million jobs to be created.
00:11:08We hear about the stimulus package a lot but don't always hear about that.
00:11:11Around the world, are countries already doing what they should be doing?
00:11:15Or are people falling short of the mark?
00:11:17>> I think countries have begun to step up to the plate.
00:11:21Part of the point that secretary geithner was making is a larger point that the world has to get used to the fact that as we come out of this crisis, the united states isn't going to be the soce entirely of the demand ost of the stimulation of the consumption to restart the global economy.
00:11:40Soe're alrea talking about what kind of a future world economic balance are we going to have.
00:11:48I do believe that there's a real difference of opinion between europe and the united states here.
00:11:53And that that difference of opinion -- the uk is sort of in the middle -- will make it very challenging to reach agreement at the g-20 meeting this weekend on a stimulus and indeed at the april leaders meeting.
00:12:08It will be hard to come to a consensus on this.
00:12:11I actually@ think that the big deliverable coming out of the NeXT FEW WEEKS IS GOING TO BE AN Increase in the role of the imf to enable the imf to respond both to emerging market countries in eastern europe and elsewhere and to poor countries as they're increasingly affected by the crisis.
00:12:31>> How far significant, steve moore, is this rift between europe and the united states?
00:12:41>> By the way, welcome to the belly of the beast.
00:12:43It's nice to have you here in washington.
00:12:45This is such an amazing story, really.
00:12:47It really is.
00:12:48When you think about it, the french and the germans are lecturing america on free market economics.
00:12:55Everything is upside down.
00:12:56I think it's a very significant thing.
00:12:58I'm totally on the side of the french and germans.
00:13:02Government spending stimulus plans have never worked in the history of mankind.
00:13:07The united states, it's interesting because for the last 20 years, a lot of the european countries have tried to move to the more traditional american model of letting free markets work.
00:13:17Now we've got everything upside down.
00:13:19The united states is spending money like old europe used to do and europe is saying too much.
00:13:27>> I'm speechless.
00:13:28You said the "wall street journal" is in the favor of france.
00:13:31My world has -- >> but it's true.
00:13:36>> They point to -- and your paper pointed to -- europe is using facts to back this up.
00:13:41Look at italy and countries like italy that have always run up deficits and they've always had the lowest growth rate.
00:13:49Spending is not correlated with growth.
00:13:50>> That's exactly my point.
00:13:52There's never been an instance where a big burst of governed spending has stimulated the economy.
00:13:59That's the lesson europe learned over the last 20 years.
00:14:02Tim geithner did not go to these countries and tell them to do tax rate reductions.
00:14:06He wants them to increase their government spending.
00:14:08These are countries that already have government spending in this year's gdp, 10 percentage points above the united states.
00:14:16When they're lecturing the united states on free markets, we have something really wrong in this country.
00:14:21>> Thanks very much to bothful you.
00:14:24David gordon and steve moore.
00:14:25We look forward to having both of you back.
00:14:28>> Don't drink the water here in washington.
00:14:30I don't want you to get the washington disease.
00:14:32>> I didn't know what you were going to say there.
00:14:34Now the water isn't even safe?
00:14:36Thank you.
00:14:37>>> So the g-20 is trying to deal with this rift between the two power centers of the u.s.
00:14:44And europe.
00:14:45The question is will anything the g-20 does matter to the united states?
00:14:48Be enough to help the american lower or not?
00:14:59[email protected]
00:14:59>>> Next, joe biden's right-hand man joins us next.
00:15:04Jared bernstein to talk about some of the issues that steve moore just raised.
00:15:08And we go in search of the global focus.
00:15:10We'll be back.
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00:16:340 >>> the g-20 in europe this weekend.
00:17:52The summit testing america's economic leadership around the world.
00:17:56Let's get an inside view from the white house, from jared bernstein, joe biden's economic adviser.
00:18:04Good to have you with us.
00:18:05>> Thank you.
00:18:06>> I want to be honest.
00:18:07I was speaking with a chinese and had met with executives from starbucks to apple and ge.
00:18:14His view was, america, please pull up your sucks and get your mojo back.
00:18:19We're looking to you and need you to do it.
00:18:21You inspire us.
00:18:23That's what we need.
00:18:25It made me feel better.
00:18:26It felt that feeling seemed to be lacking.
00:18:29Can we get it back?
00:18:30>> That feeling is something a lot of people seem to be getting back.
00:18:35Every since the president gave his joint session speech.
00:18:38If you read the speech that the president gave to the business round table yesterday or larry summers gave today at brookings, these are speeches that are all very solid in the following sense.
00:18:50They're a clear, realistic assessment of where we are.
00:18:54They are also speeches that really I think conveyed the sense to which we are up to the challenges that we face.
00:18:59And the way our plans fit together to deal with the problems of the demands side of the equation through the recovery package, million markets, housing.
00:19:10And to do this all in the context of a responsible budget.
00:19:13I really think that the plans we're articulating.
00:19:17The way we're presenting them are bring a sense of confidence, as you described.
00:19:21>> Jared, why do we need to ask europe to spend more money on stimulus packages for lack of a better word?
00:19:31Our reporter raised a good point.
00:19:35I won't bring steve moore into that.
00:19:38That wouldn't be fair.
00:19:40But our reporter had a point.
00:19:42Europe has a more broader social net.
00:19:45Why ask them to do more deficit spending and create a rift between europe and the united states?
00:19:52>> When you're thinking about european stimulus you have to lo at thf fact th they're autoti stabilizers.
00:19:58The kind ofieces of thea stimulus packages that kick in automaticallare part of the mix.
00:20:06Thed of hole in the ground of a magnitude tha we need more coordinated stimulus like our recovery package here.
00:20:16It may not nd to be at large.
00:20:17Because their stabilizers go deeper than ours do.
00:20:22But the demand contraction that the globe is facing is such that these are absolutely necessary coordinated policies so that we help each other in that regard.
00:20:32Jared, I want to ask you this.
00:20:34We're going to be speaking to one of the unions right after you are on.
00:20:37I know that is a specific area for you.
00:20:39This is something that crush chuck grassley indicated may move forward.
00:20:48I encourage microsoft to ensure americans e given priority and job intention.
00:20:53Microsoft has a moral obligation to protect american workers by putting them first.
00:20:57Is that an american sentiment?
00:20:58>> Look, it's a sentiment that you certainly hear a great deal these days.
00:21:03And it doesn't surprise me.
00:21:05Because the unemployment is at 8% and 12 million people out of work.
00:21:11That's why our plan -- the core of our plan is job creation.
00:21:15What you'll find is that those kinds of arguments don't have the same currencies when the unemployment rate is coming down, at 6, 5, 4%.
00:21:25Critical to our thinking is less in the area you mentioned and much more in the area of getting the economy going again and creating jobs, dealing with the problems in the housing mket in t cwnte of a responsie budget.
00:21:36>> Jared bernstei thank y as always.
00:21:40>> My pleasure.
00:21:41>/ We always put you onwith steve moore.
00:21:43>>> While concerns about protectionism swirl around washington, how will the american worker be affected by the stimulus bill?
00:21:50With that line from the letter from senator grassly to mitch ballmer at microsoft, you get a sense of what's at stake.
00:22:03Stewart from the af-cio with us.
00:22:12I would like to address what chuck grassley wrote.
00:22:16Microsoft has a moral obligation to protect american workers.
00:22:19You add that to some of the other things in there, in the companies can't hire foreign workers unless an american worker couldn't do the job.
00:22:31It sounds faz we're going in a protectionist direction.
00:22:35Do you dispute that description?
00:22:37>> I wouldn't call it protectionist at all.
00:22:40We have to get our economy going and workers in this country working as much as possible.
00:22:47We need all the protects we need to fulfill the stimulus package or economic recovery package should be built in this country.
00:22:54The steel should come from this country.
00:22:55The concrete should come from this country.
00:22:57We should make sure that we've exhausted the pool of american workers before we import any other workers.
00:23:06It's important to -- >> let me just ask you this, to be honest.
00:23:09The problem is americans want to buy things inexpenseively.
00:23:16Americans will choose to buy something that costs less.
00:23:18If you make it cost more, the american standard of living drops.
00:23:22It costs more to make it in america.
00:23:24To say you're protecting american jobs, you potentially have an issue with a lower standard of living, don't you?
00:23:29>> The important thing here is getting the economy going and pumping money into the economy.
00:23:34Into the pockets and hands of workers.
00:23:37That's why a very important corollary to the economic recovery is the employer free choice act to allow workers to form unions again and bargain collectively xwaen.
00:23:51It's important to note that the economic recovery package is not just about pumping money into the economy right now but improving our infrastructure.
00:23:59Rebuilding our infrastructure, which iturn improves productivity for the long term and to make money and be productive for the long run.
00:24:11The economic stimulus package is very important to american workers.
00:24:14And the point I was going to make, as america goes, so goes the world.
00:24:20Our falling into this pit is dragging the rest of the world with us.
00:24:25So everybody in the world has an interest in our coming out of this.
00:24:30>> Yes.
00:24:32Is it possible though -- and this is not a union question.
00:24:34This is an american standard of living question.
00:24:36>> Sure.
00:24:36>> As we come out of this, we've proven that the world is more interconnected?
00:24:45Is it possible that we end up with a much more global pool of workers with the indication that wages in this country come down?
00:24:53>> Doesn't have to be that way.
00:24:54The world is very interconnected.
00:24:57We should use trade and globalization to raise the standard of living for workers across the world.
00:25:01Not lower it.
00:25:03When you looked at how -- took a drop, the rest of the world could take a gain.
00:25:10You might end up with a gain.
00:25:13>> Not the rest of the world.
00:25:15If you look at how europe integrated their economy, they used that to raise portugal and spain.
00:25:22Not to lower the swedens and the denmarks and the germans.
00:25:28There is no reason we can't use trade to improve t living standard.
00:25:31All of the benefits of trade should not go to the elite, but to the workers as well.
00:25:35So that's what we're focusing on.
00:25:37It's not protectionism.
00:25:39It's trying to enforce workplace standards, worker standards and environmental standards as we nowhere trade.
00:25:46>> Briefly, before we go, on this issue of card check.
00:25:52Business doesn't like it.
00:25:53They're squaring off.
00:25:54Would you consider the compromise some have put out there, which is that someone could go, give someone the card and vote, whether to have the vote.
00:26:07Then you vote for a union.
00:26:08But that ballot is secret?
00:26:10Would you consider that compromise?
00:26:12>> Erin, I'm never going to say never.
00:26:15But we expect to pass this bill as it is written today.
00:26:18We've had 30 years of stagnant wages and declining wages.
00:26:22It's time workers got back the freedom to form unions.
00:26:29We've had third years of failed trickle-down economics.
00:26:31We have to lift it from the bottom.
00:26:33That's wha the employer free b >> STEWART, THANK YOU VERYbMUCH.
00:26:38d >> for the 11,000-member afl-cio.
00:26:48>> An automaker boosting production?
00:26:50A global crocus coming up next.
00:26:5200 on cnbc reports, we're talking billions with some of the world's most well-known billionaires.
00:26:59Michelle caruso-cabrera able to get amazing access to their day to day lives.
00:27:04A lot have lost a lot of money.
00:27:06Hear about their mistaked fears tonight at 8:00 eastern.
00:29:37' >>> we've been looking for bright spots, not only in america but the global economy as well.
00:30:04We found one.
00:30:06Asian countries apparently may be stabilizing.
00:30:08That could boat well for america.
00:30:12Nick at bank of america securities -- you made me laugh, michael.
00:30:23This is our global crocus of the day.
00:30:25You've got not just one sign of stabilization in asia, but seven.
00:30:32What is stabilizing mean?
00:30:33>> It doesn't mean full recovery.
00:30:34Remember, we're in a global balance sheet recession and will need a global balance sheet recovery.
00:30:41What you're seeing in asia is the production has been cut massively.
00:30:46Inventories have been cut massively.
00:30:48To the extent at any incremental increaemand is going to be cut and productions and inventories rebuilt.
00:31:00I think the markets have picked this up.
00:31:01I think there is definitely within global markets a shift towards the cyclical taking place at the moment.
00:31:09>> There's something to be said for the fact that you saw a 30% drop overnight in exports from asia.
00:31:14Even if there really should only be down 10%.
00:31:17That would imply some sort of growth?
00:31:20>> What's happening is, first of all, on the market side, I mean, you're seeing the market certainly move towards cyclical.
00:31:26Emerging markets, believe it or not, a very cyclical asset class, trading at an all-time high.
00:31:34Tech ithe best-performing - seor year to date.
00:31:38I think whatarkeare snfing is that in asia you'reinning to see signs of macrostabilization.
00:31:45Manufacturing activity levels have picked up.
00:31:46Manufacturing confidence has picked up.
00:31:48Money supply has picked up and so on and so forth.
00:31:52>> In terms of investing in asia, what do you buy?
00:31:56>> China has worked.
00:31:57Tech beginning to work.
00:31:59A still unloved sector.
00:32:02We upgraded the semiconductor stocks in asia.
00:32:06That trade is working very well.
00:32:09If you're looking for a trade at this moment, taiwan and korea are the places for a recovery in global growth expectations.
00:32:17>> Michael, thank you as always.
00:32:18Good to see you.
00:32:19See you again soon.
00:32:20>>> Next, the latest on action in today's trade.
00:32:24A few names stand out.
00:32:26One of them of high relevance to everybody watching.
00:32:29And the new administration.
00:32:33Obama, people across the country love him.
00:32:36But congress don't really feel that way.
00:32:38We'll find out what hardball's chris matthews thinks when we hear from a couple of the republican leaders we spoke to today in congress.
00:32:45We'll be back.
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00:35:50>>> Less than 90 minutes to go in the trading day.
00:35:52You see them lined up.
00:35:54Your money, your markets.
00:35:55What is the next move?
00:35:56Oil futures, trading down slightly throughout the session.
00:35:59Let's check in with art cashin for the final 90 minutes.
00:36:06Down 2% on crude.
00:36:09Do you think we'll hold, four in a row?
00:36:11>> Yeah, I think.
00:36:12I don't think it's going to be spectacular, as I wrote on my comments this morning.
00:36:17When you close at the very top of the move, as you did on tuesday, the next day is wobbly, usually, which we saw on wednesday.
00:36:26Yesterday we closed at the top and got a wobbly day so far.
00:36:30I think we'll be all right, but not a rocket shot late in the day.
00:36:34>> What about monday?
00:36:35>> Actuallmonday and t]esday p WE'RE GOI TO FINDaT WHETHER This rally has shelf lif if it's going to fade lik some of the ones did in november and october and in december.
00:36:48We need something in here.
00:36:49We've been heavily oversold.
00:36:52Somewhere in here in the next couple of weeks we'll have a major rally.
00:36:56Could be this or what springs from this if it fails.
00:37:02>> Spring being the operative word.
00:37:06Maybe the weather will make a difference.
00:37:11Now joining us for today's option action, jimmy.
00:37:15All of them widely owned by most americans.
00:37:21>> If you think, late last week we saw tremendous bullish plays in names that have carried through this week.
00:37:26Today, bullish plays in ge, citi bank, health care names, humana AND EFTs.
00:37:34This is a good rally.
00:37:36This to me seems like the options market are agreeing with the market as a whole.
00:37:41We've had three strong closings and two neutral closings.
00:37:45Art seems fairly bullish and i am too.
00:37:48Today if we're going to get a r I don't think it matters.
00:37:56Ge is up 60 to 70% in a matter of days.
00:37:59To me it seems like it's okay if someone wants to take that money off the table.
00:38:04Same thing with ge and citi bank.
00:38:06I think we'll have another neutral close today.
00:38:08I'm bullish next week as well.
00:38:11>> Jimmy, thank you.
00:38:13I was surprised.
00:38:14I didn't know what to expect from you two.
00:38:16That was rather heartening.
00:38:19Much more with jim and melissa lee in the hot actions trade at 11:30 eastern standard time.
00:38:30>>> Senator richard shelby told me earlier today he does not believe in too big to fail.
00:38:35He said he has major differences with ben bernanke on that.
00:38:39Chris matthews joins us with the washington rift over banks and whether there is the political will for another stimulus package or any more money for the banks.
00:38:49It may be a more important question than whether we need more stimulus or money for the banks.
00:38:53We'll be right back.
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00:39:42D >>> r nextuest willive us a preview of his show this weekend.
00:41:47Chris matthews, most of msnbc's " >> you're on this sunday.
00:41:57>> It's a good show.
00:41:58That's all I'm going to say.
00:41:59Not because of me.
00:42:00You had some really good guests.
00:42:02One of the things that we wanted to get your view on, is because everybody on wall street is obsessively watching washington.
00:42:11On wall street, they're not good at gauging whether they mean what they say in washington.
00:42:17Let's listen to this from senator shelby.
00:42:20>> I don't believe anything is too big to fail.
00:42:22When you keep it open, you pump a lot of taxpayers' money into it.
00:42:26That's what they're doing.
00:42:28I have differences with that, with chairman bernanke and others.
00:42:32We let the market dictate everything else.
00:42:36We could let the market dictate this.
00:42:41>> The senator is in opposition and not responsible.
00:42:44If you're in opposition, republicans are in opposition, if something fails, he won't be blamed for it.
00:42:50>> He'll say no all the way down even though he knows the zero may be yes.
00:42:55>> There are so many in congress who benefit from opposition.
00:42:59If you have to pass a deadline extension, a budget, a bailout.
00:43:05It's easy to vote against it, as long as somebody votes for it.
00:43:09Will they actually let the bailout fail?
00:43:11I think on the republican side, they will.
00:43:13The democrats' problem is they won the last election.
00:43:16They've got to produce the votes.
00:43:19>> What happens if we need more money for aig at this point such is there the political will to get it?
00:43:26>> No.
00:43:27I watched speaker peli saying no more fiscal stimulus.
00:43:31Why is she saying that?
00:43:33She knows most democratic members don't want anymore.
00:43:36She can't count on any republican votes.
00:43:39If you take 45% of both houses roughly, you don't get any of them automatically.
00:43:43Then all the democrats to go with you and then get some republicans in the senate.
00:43:53The whole bet on inaction.
00:43:56They have won't do something in congress or in the bailout area.
00:44:00>> I have to admit from the reporting from treasury, if they feel they need more money, they would be able to get it, they could make the case?
00:44:10But politically, that seems impossible.
00:44:14Not just the aig, but any other example.
00:44:22>> They have two people to blame.
00:44:23They can blame the mob at the gate.
00:44:25The poor people coming from mexico and the streets and the bad neighborhoods, the criminals, if you will.
00:44:30They can blame them or they can blame what we call the rod at the top.
00:44:35The people who blew it at the top.
00:44:38Who's getting blamed?
00:44:39You see more television on illegal immigrants or more about bernie madoff and the people on wall street?
00:44:44We are in a blame the top mood right now in the country.
00:44:48The hardest thing for a politician to do is give money for the top.
00:44:51That's the hardest thing to do.
00:44:52>> Well put.
00:44:54>> Because right at the top is a bigger problem than mob at the gate.
00:44:59At another time when things are getting better, we look down on the poor people.
00:45:03When things are getting worse, we identify with the poor people.
00:45:06It's very interesting.
00:45:07And it's very rational.
00:45:09>> Very well said.
00:45:10Speaking of that, let's talk about some of the least popular people apitol hill.
00:45:18It's not pelosi and reed.
00:45:21One of them is boehner and one of them is o'connell.
00:45:28>> People are still reacting to the previous administration.
00:45:31That's why they voted for a change.
00:45:33Having said that, I don't think we ought to run the government by polls.
00:45:36It's not surprising that leaders of congress are not popular.
00:45:39They're generally not popular, even when times are good.
00:45:43>> We don't always want to basis everything on ratings, right?
00:45:47>> Yeah.
00:45:47But I think the polls are pretty good for the house as a whole.
00:45:50Congress as a whole.
00:45:51They're up.
00:45:51Because they're doing things.
00:45:53They look busy.
00:45:53I think the republican leaders have really gotten beat.
00:45:56I think he's partially responsible.
00:45:58They did what bush told them to do for eight years.
00:46:00He told them to do the wrong thing politicalally.
00:46:04>> He's trying to say it was bush.
00:46:07>> They weren't seen as leaders.
00:46:09Bush was seen as the leader.
00:46:11>> What can they do to be seen as the party of growth and ideas as opposed to a party that says no to a popular president?
00:46:19>> Play your own strengths.
00:46:22I can logical, taxes.
00:46:23Always the republican strong suit.
00:46:25They oppose taxes.
00:46:26When you vote in a congressional race, you think we'll pbably have to pay more parking tickets.
00:46:32You're going to get parking tickets.
00:46:34You're goingget sessment going up.
00:46:37You'll have to pay more money from the government.
00:46:42Erhing gets taxed.
00:46:43I have a little better shot votingepubcan becausethey ve le of an agenda with social spending.
00:46:48They tend to survive by being the anti-tax party.
00:46:53Specifically come out for full-out amorization.
00:47:00Defend charitable contributions to your alma mater.
00:47:04Everybody wants to give money to the college they went to.
00:47:07100% To your church or synagogue.
00:47:11Why are they chintsing on the stuff that has kept america growing?
00:47:18If republicans focus on that, like a football game, focus on the weak guy in the line, and the weak guy is taxes.
00:47:25And particularly itemization.
00:47:27Don't go after high rates.
00:47:30Because everybody thinks high rates are for the rich.
00:47:33>> Hope they listen to you on this.
00:47:35>> The smart move if you're a republican, come out for an immediate cut in the payroll tax.
00:47:44Working people who pay a very high payroll tax, back into their pay envelope next week.
00:47:51That means real money to spend, not borrowed money, earned money to spend right now.
00:47:56Republicans can do that.
00:47:57>> Who says this guy would ever run for democratic senator?
00:48:02You've got the slogan.
00:48:05Thanks to chris matthews.
00:48:06Good to see you.
00:48:07Jim cramer up next.
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00:51:04>>> Breaking news right now on bernard madoff.
00:51:06Matt nesto's at the alerts desk.
00:51:09>> Hi, erin.
00:51:11Thanks very much.
00:51:12We just got word that his lawyers, bernie madoff's lawyers, have filed for an expedited appeal of that revoked bail, saying they want a decision on that as soon as possible.
00:51:20As you know, he went to jail yesterday awaiting his sentencing in june.
00:51:24But for now they're asking, they have filed.
00:51:26It's official.
00:51:27They want a quick appeal to see if that could be turned over and he can be free in this penthouse apartment like he was prior to yesterda ck tyou.
00:51:35>> Thanks very muco "you, matt nesto.
00:51:37And it is now time to stop u5trading.
00:51:39"Mad money'sjim cramer isé.
00:51:41And m is nd enough today to take t timep a dw sort of a little bit of a washington focus.
00:51:46Right, jim?
00:51:47>> Certainly.
00:51:48Certainly, erin.
00:51:48>> Jim, so I wanted to give you a chance to react to -- it was interesting "power lunch" had them all on the screen at once to show the push from the administration.
00:51:56You had the president.
00:51:57You had larry summers, tim geithner.
00:51:59Everybody's been speaking this week.
00:52:01What did you think of larry summers today?
00:52:02>> What a great tone.
00:52:03This is the larry summers that we remember from the clinton administration, when he went on you always felt like you know what, it's in the government's hands, don't worry about it, the government's going to take care of its end, you guys just go about your business.
00:52:18I love that speech.
00:52:19I thought it was most heartening and it was very in keeping with what we've seen in the market this week.
00:52:24>> So what did you -- are you sort of in the camp, then, that says that overall the administration's getting the tone right?
00:52:30They're being honest enough about how bad things are, but also trying to take a leadership role and inspiring people to step up and look toward a brighter future?
00:52:39>> I think so.
00:52:40No demonization.
00:52:42I think some interesting things, that summers actually put the health care context of listen, business, this is going to help you.
00:52:48Don't think that this is about upending the system.
00:52:51This is going to make you more profitable.
00:52:54Larry summers' speech reminds me that there's a pro-growth part of this administration that was left over from clinton.
00:53:02This was one of those speeches that made me feel like, you know, what they are pro business.
00:53:08That's something new from these guys.
00:53:09I think they got some religion when they saw the market go down so much.
00:53:12>> Jim, you know, it was interesting listening again this morning on c-span radio to the president's comments yesterday to the business roundtable, that he spoke about the magic of capitalism.
00:53:26>> Right.
00:53:26>> The magic of free enterprise was the words he used.
00:53:31He used the word "magic," which I thought was interesting.
00:53:35And he then went on to reiterate something he said during the campaign, which is he's in favor of corporate tax cuts.
00:53:41Obviously, that's an audience to which he would say those things.
00:53:43But can we read more into it?
00:53:45>> I think anytime you hear the word "tax" and then "cut" from president obama your ears perk up and you realize that, you know what, this is not a pure redistribution model president, this is a president who recognizes that corporations create jobs, which is something that had been called into question.
00:54:02It's also a president who basically is saying look, i know, I know the deal, unless business starts doing better, unless people start making more money, rich and poor, we are not going to get out of this.
00:54:15Again, change in tone, which would be, if you didn't know any better, kind of a sign that look, we're sorry, if we hurt the market, we're not about hurting the market, we're about making everyone more prosperous.
00:54:26Look, that's a good message to spread.
00:54:28>> And how high are your hopes for the bank plan?
00:54:32The plan to deal with toxic assets that's going to come out of treasury.
00:54:38They seemed, jim, a whole lot more confident about what they're going to put out this time than last.
00:54:42>> What I really hope for is one plan.
00:54:44I do not like that every day -- I mean, when the treasury secretary came on "saturday night live" and he took those phone calls, I said geez, why did he humiliate himself like someone else did and come on tv and then I realized oh, my, that's an act.
00:54:57It was actually an actor.
00:54:59But it would be great if geithner just said listen, here's our plan, I agree with ben bernanke.
00:55:05Just agreeing with ben bernanke is game over for the people who keep shorting the bank stocks.
00:55:09Ben bernanke's got the magic.
00:55:11>> We'll leave it on that note, jim.
00:55:13Thank you.
00:55:13>> Have a good weekend.
00:55:14>> You too, jim.
00:55:1600 and midnight eastern right here on cnbc.
00:55:20We'll be right back.
00:55:21>> And a quick reminder.
00:55:23All the recommendations expressed by jim cramer are solely his and are not the opinions of cnbc.
00:55:27And may have been previously disseminated by him.
00:55:30Before acting on a recommendation, consider its suitability for your circumstances and consider seeking advice from your own financial advisor.
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00:57:31LEARN MORE AT [ Dog Barks ] >>> All right.
00:58:26Well, we just wanted to update you on something we'd asked you earlier in the program, and that was what automaker is actually increasing production?
00:58:34It was part of our search for a global crocus.
00:58:38Well, michael hartnett, as you heard, had some signs of stabilization in export-reliant asia, but this one was one of the most interesting.
00:58:44The world's largest automaker, toyota, is planning to increase production in japan as soon as may.
00:58:53That's just something to think about, especially when one considers how tough the auto industry has been lately, and perhaps it adds to what we have been reporting on earlier this week, which was that auto sales in china were up 24% to 25% just in the month of february and the best-selling cars in china in february were none other than joint ventures with general motors, biggest gainer on the s&p today.
00:59:16Let's hand off to "closing " >> Announcer:com news now.
00:59:23>>> Lawyers for bernie madoff file an appeal of the decision that sent him to jail.
00:59:28They're asking the appeal be heard quickly.
00:59:31>>> Stocks are mixed.
00:59:33The major average is still on