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>>> YOU KNOW THAT SAYING MARCH
COMES IN LIKE A LION, BUT FOR
THE STOCK MARKET RIGHT NOW IT'S
MORE LIKE A BEAR.
GOOD AFTERNOON.
WELCOME TO "THE CLOSING BELL."
>> I'M MICHELLE CARUSO-CABRERA
IN FOR KELLY HE WAS.
SHE'S BACK TOMORROW.
STOCKS ROCKED ACROSS THE GLOBE
FROM THE UKRAINE CRISIS AND THE
UNITED STATES IS NOT IMMUNE.
THE DOW JONES INDUSTRIAL AVERAGE
IS OFF OF ITS LOWS DOWN 158
POINTS.
AT THE WORST MOMENTS IT WAS DOWN
250 POINTS.
A DECLINE TO 16,163.
A DECLINE OF LESS THAN 1%.
THE NASDAQ ALSO OFF OF ITS LOWS
WHEN YOU LOOK AT THE INTRADAY
PATTERN.
IT'S LOWER BY 29 POINTS.
A DECLINE OF 2/3 OF A PERCENT.
THE S&P IS COMING OFF THE
BOTTOM.
IT'S DOWN 18 POINTS.
>> LET'S TALK ABOUT EVERYTHING
DRIVING THE MARKET LOWER WITH
ABIGAIL DOOLITTLE, CHRIS WHALEN
IS A NEW YORK BASED AUTHOR AND
INVESTMENT BANKER AND AN EXPERT
ON SOVIET HISTORY -- THE HISTORY
OF SOVIET POLITICS.
BRIAN JACOBSON, DAVID MOLNAR AND
OUR OWN RICK SANTELLI MONITORING
ALL THE SAFE HAVEN PLAYS.
BRIAN JACOBSON, YOU SAY YOU WANT
TO BUY EVERYTHING YOU CAN GET
YOUR HANDS ON ON THIS DIP.
WHY ARE YOU NOT WORRIED WITH THE
REST OF THE MARKET ON WHAT'S
GOING ON WITH UKRAINE?
>> I THINK THIS IS JUST AN
OVERREACTION TO WHAT'S GOING ON
IN
LAD, YOU WROTE ABOUT NATIONAL
SECURITY ISSUES AND THE SOVIET
UNION.
DO YOU AGREE WITH THAT?
IS IT OKAY TO STEP INTO THE
MARKETS HERE?
BECAUSE ULTIMATELY THIS ISN'T
GOING TO HAVE A SYSTEMIC EFFECT
ON THE REST OF THE GLOBAL
ECONOMY?
>> I THINK, YES, I DO.
I THINK IN A TACTICAL SENSE THIS
WAS JUST ONE OF THE HEADLINES
THAT NO TRADER COULD PREDICT,
BUT ON THE OTHER HAND THE
RUSSIANS HAVE BEEN TRYING TO
KEEP CONTROL OF THE UKRAINE FOR
HUNDREDS OF YEARS GOING BACK TO
KATHERINE THE GREAT.
THEY WILL NOT TOLERATE AN
INDEPENDENT UKRAINE.
I SAW AN INTERESTING NOTE THIS
MORNING, THERE'S ENERGY IN THE
UKRAINE THAT COULD SUPPLANT THE
RUSSIANS AS FAR AS BEING A
SUPPLIER TO WESTERN EUROPE.
THERE'S A LOT OF THINGS GOING ON
HERE.
WE'LL HEAR MORE ABOUT IT.
THIS ISN'T GOING TO GO AWAY.
>> DAVID MOLNAR, YOU POINT OUT
WE'RE HOVERING AROUND THE FIFTH
ANNIVERSARY OF THE BEGINNING OF
THIS BULL MARKET FROM THE LOWS
OF MARCH OF '09.
IT'S GETTING LONG IN THE TOOTH.
IS THIS MARKET JUST RUNNING OUT
OF STEAM.
IS THIS A GOOD EXCUSE TO SELL
TODAY?
>> YEAH, BILL, I THINK THAT'S
EXACTLY WHAT WE'RE SEEING HERE
IS THAT THE MARKET IS A LITTLE
BIT EXTENDED, A LITTLE BIT TIRED
AFTER A BIG RUN HERE OFF THE
JANUARY LOWS.
WE NEEDED TO SEE SOMETHING COME
ALONG THAT WOULD CREATE AN
IMPETUS FOR CONSOLIDATION, EVEN
A SHORT-TERM CORRECTION, AND
THIS HAPPENS TO BE IT RIGHT NOW.
I AGREE WITH THE PRIOR TWO
GUESTS THAT THIS IS PROBABLY
GOING TO BE A SHORT-TERM
CORRECTION.
IT'S NOT NECESSARILY, YOU KNOW,
A CHANGE IN TREND HERE, BUT I
WOULD POINT OUT WE DO HAVE
FRIDAY'S EMPLOYMENT REPORT
COMING OUT THAT'S GOING TO
DICTATE A LOT ABOUT, YOU KNOW,
THE FUTURE DIRECTION OF FED
POLICY, THE FUTURE DIRECTION OR
HEALTH OF THE ECONOMY, AND SO
I'M NOT SURE THAT THE COAST IS
CLEAR YET.
WE'D LIKE TO SEE THE DATA COME
THROUGH THIS WEEK, BUT CERTAINLY
THIS COULD BE THE TIME THAT WE
SEE A PULL BACK.
>> I THINK DAVID IS REALLY
MAKING A GOOD POINT BUT
SOMETHING I HAVEN'T HEARD
EVERYBODY ELSE TALK ABOUT IS
VOLATILITY.
THIS YEAR IS REALLY ALL ABOUT
VOLATILITY.
WHEN WE LOOK AT THE START OF THE
YEAR, WE'VE SEEN THIS MASSIVE
PUSH TOWARDS SAFETY.
WE'VE SEEN BONDS, YEN, AND GOLD
RALLY.
INTERESTINGLY THIS CAME RIGHT
TWO WEEKS AFTER THE FED'S TAPER,
NOT THE REACTION YOU WOULD
EXPECT.
SO I THINK THAT INVESTORS ARE
TELLING US THERE EVER WORRIES
OUT THERE.
THE UKRAINE SITUATION IS JUST
ONE.
THE FACT IS WHETHER OR NOT IF WE
KEEP IT SIMPLE IT WAS WHETHER OR
NOT IT WILL AFFECT THE CORPORATE
PROFIT OUTLOOK.
IF IT DOES, IT WILL HAVE A
BIGGER IMPACT ON THE STOCK
MARKET.
IF NOT, IT'S PROBABLY JUST A
SMALLER BLIP BUT IT'S A PIECE OF
VOLATILITY AND THE FACT WE'RE
SEEING THIS SHIFT TOWARDS SAFETY
REALLY SUGGESTS THAT WE'RE GOING
TO SEE CONTINUED VOLATILE IN THE
RISK ASSETS AND I WOULDN'T --
>> SPEAKING OF THE RISK TOWARD
SAFETY, RICK SANTELLI, DESPITE
THE CONCERNS ABOUT THE LONG-TERM
DEBT OF THE U.S., WHEN THE WORLD
IS TERRIFIED, WHAT DO THEY BUY?
U.S.
>> IF EVERYBODY HAS BEEN WILLING
ALL ALONG TO LOOK THROUGH ALL
THE REAL FUNDAMENTAL NEWS THAT
AFFECTS STOCKS NEGATIVELY IN THE
UNITED STATES AND SAY, STEP IN,
KEEP A LEVEL HEAD, AND BUY, THEN
FOR SURE THAT LOGIC SHOULD BE
APPLIED WHEN THE UKRAINE IS THE
DYNAMIC.
YOU KNOW, IN AN OVERLEVERAGED
EVERY DOLLARS MARGIN SORT OF
WORLD IN FRONT OF BASEL, IN
FRONT OF THE EUROPEAN BANKS TO
GET THE RATIOS DOWN, IT MAKES
PERFECT SENSE TO SEE EUROPE WITH
UKRAINE IN THEIR BACKYARD AND
SOME OF THEIR EQUITY MARKETS
DOWN, BUT FOR THE LIFE OF ME I
HAVEN'T HAD A GOOD CONVERSATION
WITH ANY OF THE TRADERS AS TO
WHY THE U.S. STOCK MARKET IS
DOWN OR AS TO WHY THE DOLLAR
INDEX REALLY HASN'T BEEN FLIGHT
TO SAFETY.
AND TREASURIES, CERTAINLY YIELDS
HAVE GONE DOWN AND WE CAN PUT IT
IN THAT BIG BAG THAT IT'S FLIGHT
TO SAFETY, BUT OVERLAY AN S&P
CHART OR A DOW CHART ONTO THE
TEN-YEAR NOTE YIELDS AND YOU
WILL GET THE RIGHT IMPRESSION.
IT REALLY IS TRADING TICK FOR
TICK WITH STOCKS.
NOW, HAVING SAID ALL THAT, IF WE
START TO SEE SOME SETTLEMENTS
UNDER 2.58% WHICH WAS THE LOW
YIELD ON FEBRUARY 3rd AND THE
ONLY THING THAT SEPARATES US
FROM COMPING ALL THE WAY BACK TO
LAST FALL, THAT WOULD GET MORE
MOMENTUM.
REMEMBER, ALL MARKETS ARE
TRADING AN OL ON ALGORITHMIC
MARKETS.
>> CHRIS WHALEN, OBVIOUSLY WE
WORRY ABOUT THE IMPACT ANY
ECONOMIC SANCTIONS COULD HAVE IF
THERE'S RETALIATION.
THEY HAVE THE HANDLE ON NATURAL
GAS.
THEY BEING THE RUSSIA, ON OIL.
THE SECOND BIGGEST NATURAL GAS
AND OIL PRODUCER IN THE WORLD.
>> RIGHT.
>> ISN'T THAT ENOUGH OF A WORRY
TO START SELLING STOCKS TODAY?
>> WELL, NO, IT IS A WORRY.
WE COULD HAVE A WAR BETWEEN THE
UKRAINE AND RUSSIANS, BUT TO
RICK'S POINT, WHAT IS IMPORTANT
FOR THE U.S. STOCK MARKET IS
WHAT'S GOING ON WITH THE
ECONOMY.
YOU KNOW, I WAS ORIGINALLY
PLANNING TO TALK ABOUT THE
HOUSING SECTOR WHICH IS SLOWING
DOWN.
I THINK WE COULD SEE HOUSING
PRICES FALL THIS YEAR.
LARGELY BECAUSE OF TOO MUCH
REGULATION, OTHER FACTORS, SO
THIS IS A DISTRACTION.
IT'S A VERY IMPORTANT ONE, BUT I
DON'T REALLY THINK WE SHOULD
TAKE OUR EYE OFF THE BALL WHEN
IT COMES TO WHAT'S DRIVING OR
NOT DRIVING THE ECONOMY RIGHT
NOW.
>> BRIAN JACOBSON, WHAT WOULD
YOU THINK IF WE SAW YIELDS DROP
AS SHARPLY AS RICK WAS TALKING
ABOUT?
WOULD THAT BE A GOOD SIGN OR
BAD?
LOWER YIELDS HELP THE ECONOMY
BUT AT THE SAME TIME IT'S
BECAUSE EVERYBODY IS SO
FRIGHTENED.
IT'S NOT NECESSARILY A GOOD
THING, IS IT?
>> YOU CAN HAVE YIELDS THAT ARE
TOO LOW AND I ACTUALLY THINK
THAT THAT'S THE ENVIRONMENT
WHICH WE'VE BEEN IN.
WHY ARE THEY SO LOW?
IT'S NOT BECAUSE THERE'S SO MUCH
LIQUIDITY.
IT'S BECAUSE THERE'S A LOT OF
FEAR.
THE FED IS BEGINNING ITS
TAPERING PROGRAM BUT YET THIS
FLOOD OF FEARS HAS OVERWHELMED
THE FED'S WITHDRAWAL OF SOME OF
ITS MONTHLY STIMULUS.
SO I THINK THAT IF WE DO SEE
YIELDS GO TOO MUCH LOWER, IT'S
ALL A QUESTION OF WHY, AND I
THINK REALLY THE REASON NOW IS
BECAUSE YOU'D SEE A SPIKE IN
FEAR, AND THAT WOULDN'T BE A
GOOD THING, BUT AGAIN IT'S THE
TYPE OF THING I THINK YOU CAN
JUST SORT OF LOOK THROUGH AND
ACTUALLY THINK THAT MAYBE IN A
MONTH FROM NOW WE'RE GOING TO
SEE THAT THIS IS ACTUALLY --
WE'RE ON TO THE NEXT STORY.
>> RATES ARE LOW BECAUSE THERE'S
NO DEMAND FOR CREDIT.
>> I CONTINUE TO THINK THAT
RATES ARE LOW.
WE'VE SEEN THIS RALLY IN RATES
THIS YEAR, 40 BITS IN THE
TEN-YEAR IN TWO MONTHS BECAUSE
INVESTORS REALLY ARE CONCERNED
ABOUT SOME SORT OF REPRICING OF
RISK AND THIS HAPPENED TWO WEEKS
AFTER THE FED TAPERED.
THAT'S NOT A COINCIDENCE.
>> THERE'S NO DEMAND FOR CREDIT
ON THE CONSUMER SIDE.
>> IF YOU ACTUALLY LOOK AT THE
CONSUMERS' BALANCE SHEET, CREDIT
LEVELS HAVE RETURNED.
IT'S STOP DECLINING.
THERE'S STILL DEMAND FOR CREDIT
IF YOU LOOK AT COMMERCIAL AND
INDUSTRIAL LOANS --
>> HOW ABOUT MORTGAGES?
>> EVEN ON THE MORTGAGE SIDE,
WHAT'S GOING ON THERE?
THE DECLINE IN THE AMOUNT OF
MORTGAGES HAS EFFECTIVELY SLOWED
ACCORDING TO THE FED'S RECENT
FIGURES.
>> NO, NO, LOOK AT THE FDIC
DATA.
>> THAT'S WHAT I'M REFERRING TO.
THE DECLINE HAS SLOWED.
I HAVEN'T SAID IT'S COME BACK
BUT THE DECLINE HAS SLOWED.
>> I DISAGREE WITH THAT ALSO.
IF YOU LOOK AT EXISTING HOME
SALES, THEY'RE AT AN 18 MONTH
LOW.
EVERYBODY IS TALKING ABOUT THE
WEATHER --
>> ARE WE TALKING ABOUT ECONOMY
INSTEAD OF UKRAINE?
>> THE ECONOMY IS A LITTLE MORE
IMPORTANT HERE.
>> THANK YOU, FOLKS.
APPRECIATE IT VERY MUCH.
>> SEE YOU LATER.
>> THIS MARKET REALLY HAS COME
BACK.