Here. The company in question is called china evergrand group. Its hong kongs second largest developer. You put out a report in 2012, i have it here, some 61 pages or so in which you say the company was insolvent, used bad accounting and said it was a ponzi scream ay mong other allegations. In rendering its decision last week, this hong kong tribunal said, i quote, mr. Left consciously disregarded the risk his report was false and misleading as to material facts, reckless in conduct. Whats your reaction today . I dont think it was reckless in my conduct at all. Scott, look at that report. Its extremely well sourced. Its well documented. Everything is right there. Their accounting, in my opinion, was ponzilike accounting, taking from one person to pay back the person beforehand. And right now looking backwards, it probably wasnt the best idea to write an article on, i think its the largest Property Developer in china. That being said, you cant take away the truth. Hong kong has made conscience efforts right now to curb short selling and curb any kind of criticism within the market that i was giving, and you know, im poud of the fact i stood by it, spent a lot of money on legal fees. The media has been fair and understanding the fact hong kong is trying to suppress my freedom of speech. You stand by your research. They say in part you had no knowledge of hong kong accounting standards. You never checked with an expert on the issue. That you admitted in an email that was included in the report, which i do have, by the way in my hand, and ill quote again from it. You apparently say, according to them, i not have anyone in china doing any of the work. Everything was pulled off the internet, and from company filings. So how do you reconcile that with the research you say you did . Thats actually perfect. Im glad that you said that, because everything was pulled from corporate filings. So if i take whats in corporate filings and put analysis to it, and thats my opinion, how do you turn around and sue me for that . Nothing i put in the report was not public information. It was extremely well sourced. Looking at all forms of information from all forms of media, not just corporate filings, but the fact i wasnt on the ground in china had nothing do with it. As a matter of fact, look what i wrote in that report, and subsequently what happened to the company and the types of financings they took on over the next few years, youll see a lot of that is correct. Most of it. Whats most important is this when i put out a report like that, that might have 100 points to it. Take 2 or 3 of the 100 points, namely accounting issue, call them debatable . Of course you can. Thats just the way accounting works. But then to go ahead and to form a whole suit around that, its just not intellect actually honest for them to do that. Thats what was done. That report had 100 different points in it, and they picked out a few that they thought could be easily tried in a court, and really accounting issues. Thats what they stay focused on. Will you appeal . Thats up to my attorneys on that one, and lets just say i hope its just not jousting. It i appeal i like to think im going to maybe in the court of appeal will be a bit more fair than the first trial was, but ill have to discuss it with my attorney. Making a boisterous case. You dont believe you did anything wrong. Do you want to appeal . Oh, of course i want to appeal. But you know, they say if you cant fight city hall, its pretty difficult to fight Hong Kong City hall. And i just dont want to be in that situation. Although, i do believe what i wrote was correct, but more importantly than being correct, what i wrote was sourced, documented and was my opinion. And in order to have a fair and open market, you must allow people to express their opinions. I thought interesting in one of the releases that i saw, an organize call the securities and Futures Commission says that it would like to acknowledge and publicly thank the u. S. Securities and Exchange Commission for its assistance in the investigation of this case. Have you been contacted by the sec . As a matter of fact, in my initial meetings with the Hong Kong Securities commission, the sec was there and did not take any action against me. Which right there tells you. If as a u. S. Citizen i was doing anything wrong, that they believed the sec, that they should be enforcing, they would have stepped in as well, but as far as i know, the only cooperation by the sec is, we used their offices for a few meetings. And thats where it stopped. You dont expect at this point once the tribunal has now sort of rendered its decision, if you will, that you could be contacted by the sec, or that they would take another look at this particular case . Scott, i wish they would, because if the sec would let me go ahead, i would gladly spend the money to defend myself with this particular case in front of the sec, because i believe i would be judged more fairly and then it would clear the record and show exactly what happened in hong kong. Its interesting. You make the point of sort of what the role of short sellers should be in the market, and frankly, ive read multiple articles this morning in preparation for our interview where, and including, by the way in the wall street journal, they short of defend the role short sellers play and this kind of decision is bad for free speech, et cetera, but at the same time, there are some folks today who do kind of call out the hyperbolic language that you use in your reports. Will this particular instance cause you to rethink the way you put out your own reports for citron . This situation will make me rethink about writing about anything in hong kong. Especially something that pretty much underpinning the economy of hong kong, property development. This will not stop the way i write, the way ive been writing for 15 years. What enables me to do, by maybe using language thats a bit more colorful than someone else it does draw attention to the report and then people look at the actual content within the report. Maybe, thats just my style. To be more colorful. But if you look at that report, scott, youll see its extremely well documented. Its well sourced. And it comes from a place of honesty. Talk about what your future would be when it comes to targeting or even investing in companies in hong kong. What about Mainland China . Will this force you to sort of rethink any investment that you would make in china . Were talking about a marketplace thats been long criticized for being opaque. Well you know, im long. Lets say im long alibaba. Thats a u. S. Listed company, even though its within china. I have zero plans on commenting on anything in china or hong kong in the future. But that doesnt mean i wont invest in stocks long and short that are traded in the United States that are chinese based. Interesting. I know some people are going to hear you say, okay. So here you targeted a company in 2012 based in part on suspicions of accounting fraud, and yet now youre long alibaba, which other short sellers like jim had on this very program said is guilty of accounting irregularities. How do you reconcile that . Well, first of all, its nice that alibaba is trading as a significant discount to its peer, say amazon, because of a clod of ig regularities that could possibly be around it. Im not discounting, there could be something wrong. In in fact something was wrong i believe alibaba unlike ofgrand could flow into it and not taking on the debt evergrand took on. That said, alibaba went public, i think, scott, two years ago this month. Despite their growth, trading at the same price the day of ipo, i believe. Despite the growth in merchandise and despite growth in their Payment Systems and the ali cloud. So i think once the scrutiny goes away from alibaba, if it ever goes away, the stock has increased very quickly. Back to evergrand for a second before we talk more about baba and other stock positions you have. From what i saw, it looked as if you made 1. 7 million hong kong dollars from this original trade back in the 2012 time frame or so. One of the possible punishments here, aside from potentially seeing you banned from doing any trading in hong kong, would be the surrender of that money. Do you expect that that could be a possibility . Would you be willing to give up the profits made in this trade to clear this matter up . I mean it is what it is. I went to trial. Of course, whatever happens. Ill go ahead and pay any fine, whatever has to be done. Im going through the process, and you know, i hope the market can appreciate the fact, ive never pun lished, i dont try to pubbish under a pseudonym, i dont hind from anything. In you want to sue me, here i am. Theyre out there and i expect backlash. This was backlash and it is what it is. Have you continued to follow the company even though youre not in this trade . In january of this year moodys downgraded the companys debt further in the junk status . I took it off my screen. I dont want to know when did you sell these when did you close out the position, buy back the shares relative to the timing of when you put the report out . I legged into the trade. I think some things were covered within a few days. Some were covered a little afterwards. Once i saw that the stock wasnt going any lower and pretty much the market didnt care about the information. But it was a stock down, according to what i read 20 when you published the report. How much of the gain did you book on the publishing of the report . I didnt get anything close to 20 . I thy might have been 20 of the and recovered, exactly, and recovered the next, you know, the next few days. I do have, you just heard steve weiss ask you a question andrew. I do have a panel in front of me today as i normally do. The gangs all here, and they do, i know, have some questions for you. Joe terranova, jon and pete najarian, open the floor up. Jim . Andrew, curious, you have such a wide Hunting Ground from stocks to short. Why not just stay away from chine in . I understand a lot of accounting issues in china, between the rest of the developed world there must be so many targets to look at. Do you think about just staying away from china . Where were you in 2012 . Yes i do. In the future i plan on not righting about china or hong kong. Recently put any other report about a company in japan. A fantastic short cyber dine and want no part of writing anything that has to do with china or hong kong. Lets go back to baba a second. Baba is suspected of having fraudulent accounting. As a matter of fact, the sec is highly is spacious, why theyre investigating them. Also rumored not rumored but known to trafficking counterfeit goods. Got all the hallmarks of being very, very troubled. Even merchants in china talk about issues with their, you know, their oneday big sale. Bill 14 billion of sales which everybody is suspicious of, and, in fact, every company in china serves basically at the whim of the chinese government, including alibaba. Concerned with the red flags, yellow flags to even own alibaba . A peace offering, which controls im not totally antichinese. Here, i own baba, or something you really believe in . I get what you say, being relatively cheap and discounted amazon. Thats never a reason to own a stock, as you know, if its rotten to the core, which boba may be. Baba may be. Investing in china is a complete different animal than investing in u. S. Ive learned this over the years, over being wrong and right many times. Part of it is understanding the fact while baba might have some hair on it, might have a lot of hair on it, if it has not been completely shaven down yet it can easy grow into what it can be. Alibaba, you cant every discount the future of the commerce in china or the United States. Much more, no competition with walmart or retailers, omni channel retailers, you have alibaba. Alibaba could easily grow into any problem its had in the past. If the problems were there. Im not going to discount the fact of, yes, there are problems. Yes there are many red flags, and thats why the stocks 96. The exact same price where it was two years ago. Andrew despite amazon, i think, if you go back two years, amazons more than doubled. Let me move on to another stock which you mentioned last on the program. Had you been short facebook with a part of a thesis that said, how much better can the story really get . The stock had a nice run. Everybody likes Mark Zuckerberg. They believe in what the business is doing. Are you still short facebook . I dont have a position on facebook right now. Although i believe facebook will become a tremendous short once the engagement numbers slip, and i think well see them slip. Every piece of research on facebook has an asterisk on the bottom and everything based and engagement levels. So in the next few years i dont know what quarter its going to be, i believe well see the engagement numbers missed. Also scott, important to note. When i said i was short 235 facebook, turned around, destroyed estimates. Stock up 1 , 2 . What if they name, in line . We have a stock market. Its a market. A market has to generate new buyers and sellers every single day, and part of the thesis on facebook, the short thesis, was, whos left to buy it tomorrow . And thats, i still think a problem for the stock. Nothing to do with Mark Zuckerberg or the company. It has to do with the people remember apple. Three, four years ago. I mean, four years ago, a matter of when apples going to hit 1,000. Not if. All of a sudden one day apple went from this growth stock to a value stock. And for the next two years just went lower. So nothings to say that cant happen to facebook also. Andrew a good place to leave the conversation for today. I really appreciate you join me live in l. A. See you again soon. Have a great day. Great. Citrons andrew left. We reached out the sec, securities and Exchange Commission and deshriclined to comment. And evergrand, did not hear back from them. If we do, well let you know. Breaking news on ag stocks. Don chu following the action. Stories earlier about possible talks tweeg agrium and potash. Reopened at the top of this hour. Those shares are still up markedly. Potash up 10 . Agrium up 5 , 6 , those levels are solid and where they were when the halt happened, although off their best today. Keep an eye on this and all the other stocks catching a bid on the Ripple Effect here. Back to you. Doc, thoughts on this one. Youve been following it all morning long. Trading it all day. This is, of course, based on thing a grithe ing agrium potential people rumored the first 20 minutes of the trade today, judge, there was going to about deal. They halted the stock because it jumped too much. It hit the trading curves and so forth and then they reopened it and now have admitted that there have been talks. So this huntsman mosaic all of them, on fire today, and the volumes in the options imply that somebody thought something would happen this week if not today. Just a week ago, a week ago monday, scott, august 22nd talking at the end of the show, final trade. Looking at . Telling you about cf industry. Aggressively buying to the upside. This name is not a part of this but an ag name and lifting over 26 a share. We had the conversation about cf talking about what bill ackman would do with his money. Possibly thats in this wheelhouse. An awful year. Down 35 year to date. I agree with petes in nearterm, a phenomenal trade. Jon mentions mosaic. I love them. Seeing consolidation in the ad space, specifically, mosaic around a 30 million, 10 billion valuation cap. A name follow with pete and made money in cf, stay now in the ag trade and move some of that winning Investment Strategy into mosaic. Thats going to have long life to t. And the monsanto deal. With monsanto pursued aggressively. Gives you an idea how much there might be to the upside in some of these names and to joes point a stock sold off 35 from the beginning of the year, cf at that time. Theres potential there that there could be a series of deals. Much better balance sheet, though, for mosaic. Far more attractive to someone looking to come in and be an acqui acquirer. Good stuff. Just getting started. Much more ahead on the Halftime Report. Announcer one wall street analyst sees upside in the big mac. This note on mcdonalds is getting a lot of attention. Our call of the day is next. Plus hunting for yield through three letters much of the country still sees as evil. Mbs. And tomorrow on Halftime Report legendary investors lee cooperman. See where he thinks the market is going and where hes finding value. Tomorrow on halftime. When whirlpool builds an appliance, they put everything they know into it. But once its sold, there usually isnt a way to keep improving that product. Today, whirlpool can analyze iot sensor data from connected appliances on the ibm cloud. So they can continuously learn how customers are using their products. And how the machines respond. Harnessing data to make great products better thats what the ibm cloud is built for. We are back on the Halftime Report. Baird upgrading mcdonalds to outperform. The firm had a hold on that stock more than two years improving Investor Sentiment and dividend shifting to nor businesses among the reasons for the move today. Our call of the day. What do we make of it . Allday breakfast, home run. Now down 7 over three months. What do you do with it today . A sharp decline since may. I wonder part of that, a nice recovery, and clearly changed. I wonder if its an attraction to the dividend yield . Trade for me, at least, fairly valued. I dont know if i get too excited. I still want to look at burgers, pizza, papa johns. Jackinthebox on the backs of gadobas. Their everywhere. And still stores will roll it out. Alld allday breakfast will continue to be a ponchts you buy the stock . No. I dont think the allday breakfast is fluff to pull against the higher wages they have to pay here. Yeah, kiosks and ways to address some of those wage issues, but overall, i think this is one of those people thats going to, one of the groups, anyway, thats going to suffer with higher wages. Jim . Got to remember at 19 times this analyst estimate for next year, thats pricey for mcdonalds on a historical basis. Why is it at that xwlefl because of what you mentioned, joe, the dividend. One of the bellwethers for the dividend paying stocks people have been after all year, but there will come a point in time. 3 yield . 3. 1 yield and frankly you can find higher yields in similar quality stocks. We all agree a fabulously run company and a great brand. Issues with the price. Wait a little longer to get a better price. The story played out at this point. A little trouble with comps last time reported. One of the reasons the stock corrected. Not compellingly cheap. Analyst missed it. Knows he missed it. Looking for an opportunity to get in. Took it. Best at market stock. Im convinced the feds going on september 21st. At that point im not sure dividend stocks work as much anymore. Get more bang for your buck rather than in a 1 happy meal playing other sectors. Raises a whole another conversation about, yes, dividend stocks may take a hit. Utilities, telecoms, quality stocks still get them that pay a dividend. Not everything will be thrown in the trash can. Absolutely. Hit by this company, its still well run but an extremely competitive space. So im not playing. Easterbrook understands the competition theyre dealing with now and because of that, look at what their plan is, he wants to change the rate of change for mcdonalds. When you look at this analyst notice, the most important part, nobody brought it up. He didnt say today. Not the bottom of the stock. A 6 to 12 month call talking how the valuation level could rise up based upon a couple metrix changing. A lot to the said for the stock. The way they buy back shares, return capital to the shareholders. 3 dividend yield, forget that corner point. I dont think it affects the stock. 2, by the way. On the price target. Any stock at any time is 10 up and 10 down. Slightly more than 10 up. Not enough to get me in. You mentioned telecoms and utilities. Down 4 , 5 . You believe a cyclical tilt to the market now, why sit there and wait 6 to 12 months in a mcdonalds when you can look at a different progrowth type of stock . Okay. Up next, Airlines Taking flight after a management move. And Abercrombie Fitch is sinking today posting another quarter of sales declines. Is it beaten down now enough to take a hit on . More after the break. You know that thinkorswim seamlessly syncs across all your devices, right . Oh, so my custom studies will go with me . Anywhere you want to go the markets hot sync your platform on any device with thinkorswim. Only at Td Ameritrade whether its connecting one of or bringing wifi to 65,000 fans. Campuses. Businesses count on communication, and communication counts on centurylink. Enepeople want power. Hallenge. And power plants account for more than a third of energyrelated carbon emissions. The challenge is to capture the emissions before theyre released into the atmosphere. Exxonmobil is a leader in carbon capture. Our team is working to make this technology better, more affordable so it can reduce emissions around the world. Thats what were working on right now. Energy lives here. Back nears 12 30 on the east coast. A look at the market picture. Dow down one quarter of 1 . S p 500 a fractional loser, four points, 2176. Nasdaq about the same down 9. 5,223. Courtney reagan has the latest headline. Hi there. Whats happening at this hour. The Agriculture Department closed offices in five states after receiving anonymous threats. An Agency Spokesman is working with the fbi, federal and local Law Enforcement to determine whether the threats are credible. The six closed offices are in colorado, connecticut, maryland, North Carolina and west virginia. The latest nbc survey National PollShows Hillary clinton with a 6point lead over donald trump. 4842 . A bit narrower than an 8point lead a week ago. Fedex, shipping services and Solutions Offered to customers in all Retail Stores nationwide beginning friday. Fedex teamed up with office max since 2009 and the relationship is being expanded to office depot. Mourners gathered in the italian town ahead of the state funeral for some of the victims of last weeks earthquake. This as italy observed a second day of national mourning. At least 292 people were killed in the quake. Thats your cnbc news update for this hour. Back to you. Thanks for the headlines. Trader blitz. Abercrombie fitch tanking today after reporting weak guidance and posting a 14th straight quarter of sales declines. Ugly. Look at that it is. Bodes ill for the sector as a whole. Started with retail earnings earlier in the month, positivity from the likes of macys, nordstroms. Jack jcpenney. Retail is toxic. Stay away no matter how cheap. And airlines. Outperformi outperforming. Ray j, you own american, twice . Not happy. A 14 million severage package even though he had none. Talk about that later. Nice. He was there a long time. Was there and the airlines are unbelievably attractive. Waiting for that new shareholder class to come in but i still own american airlines. Own them all. Fuel costs are cheap. Unhedged. Profiting from it. Zikas hurting a little bit, but a good group. Ual on the board now. That lb. Slummer jay schlumberger . Excellent. A phenomenal acquisition in international a while back combining hardware cameron has with the software, analytics schlumberger has. Hall iburton has u. S. Revenue. Schlumberger the real opportunity. Keep in mind, halliburton deal didnt work out. They needed that. Hershey on pace for its worst day in 14 years. Just do not one of those names, scott, back to june 9th. 10,000 of the july 100 calls were bought. From 75 cents to 17 in value. So gives you an idea. Jon and i talking about it earlier and other trades for today. This one absolutely magnificent. People were looking for the name, thought somebody was out there. There was. Mondalez, nobody knew the answer, hershey would say, see ya later. A slow start, things may be about to change in the ipo market. Talking about the names that could be set to jump into the market, next. And hunting for yield. We break down an investment thats yielding almost 6 , but some say it brings up haunting memories of the housing collapse. Halftime report back in two minutes. Everyone said its so hard to be a musician, but i cant imagine doing anything else. Now that the train makes it easier to get here, the neighborhood is really changing. Im always hopping on the train, running all over portland. I have to go wherever the work is. Trains with innovative Siemens Technology help keep cities moving, so neighborhoods and businesses can prosper. I can book 3 or 4 gigs on a good weekend. Im booked solid for weeks. It takes ingenuity to make it in the big city. Narrator it wasnt that long ago. Years of devastating cutbacks to our schools. 30,000 teachers laid off. Class sizes increased. Art and music programs cut. We cant ever go back. Ryan ruelas so vote yes on proposition 55. Reagan duncan prop 55 prevents 4 billion in new cuts to our schools. Letty munozgonzalez simply by maintaining the current tax rate on the wealthiest californians. Ryan ruelas no new education cuts, and no new taxes. Reagan duncan vote yes on 55. Sarah morgan to help our children thrive. Welcome back to the Halftime Report. After a sluggish start to the year the ipo market could be set for a comeback. Bob pisani is at the new york stock exchange. Half of what we normally see. When will we get a thaw . It should happen in the fall if the markets hold upu up. Outperforming, twilio up 260 . Talons up 54 . Two characteristics in common. First tech stocks and growth. Several Tech Companies with good growth have a shot at coming public soon. Those data center storage. A Subscription Service with managers, managing technology. And consumers that might qualify including elf beauty pap lowcost Cosmetics Company and yettie. Highend coolers. Theyre hot now. And strong brand names, not much in the name of topline. Good sample, makes auto motive radios. And whats not working . Whats going to have a tough time . My group. Biotech and unicorns. A big group. Biotech worst performing sector in the year. After a huge stink weve seen around the epipen fiasco and drug pricing in general, a lot tougher time going public. The unicorns are a separate problem. Uber, airbnb, snapchat, all have high private valuations. Without earnings, its going to be hard to support that in the public markets. I wouldnt look for any of them this year. Scott, its all about growth of some kind. Back you to. Bob pisani knows this better than anybody at the new york stock exchange. An interesting way to play this. I really think the way to play this, in the bracket banks, tom of the list, Goldman Sachs. The ipo market has been in starts and fits all year. If it really gets going, i dont think thats anywhere near estimates for Goldman Sachs. Particular, Goldman Sachs is buying back a lot of share s slightly below book value. On a book value basis, 2. 7 dividend yield up about 20 from the recent low but still off 7 from the start of the year. I think theres a lot to like for Goldman Sachs in the ipo mark. Steve i dont know what to make what people should make about this. Ends of the year. Youve got the election. You have some people thinking the fed will go in september. Other people saying the markets toppy. Where are we in the cycle. Lots to consider for any Company Going public. How should investors view this . Theres been such a dearth of ipos. Typical cycles just happened to happen over the last couple years. Private equity whauants out. No exit. It will try to happen after labor day. Youll see the road show starting, then a two, three month window to have it. Expect to see if the market holds up it will come. Not an ideal, friendly market. However, what youve seen, youll need to see catchup in performance. Amenable to take the hottest deals out there. I think it will still be challenging, but wont be for lack of effort. In terms of the market overall, look, the lead between clinton and trump has been narrowing. It was ten points. Now its six, we just heard. Thats going to put people on edge, because i dont believe that most think trump is good for the market. Not that they think hillary is, but the lesser of two evils. And so its a very tenuous market. The question that i was having with some Hedge Fund Managers over the weekend, is the market complacent . To me a slam dunk the fed goes september 21st, and it is now that i speak to, those people, a disastrous number on pay roll on friday. Fed funds 18 moving up from 9 in terms of fed fund futures before yellen spoke. Yesterday when i last looked, 79 predicting 25 to 50. More than the yellen statement, the fischer interview liesmans interview was phenomenal. He just moved the ball forward. Yeah, yeah. One thing to have a statement and speech. Another to have a live interview. The most coordinated fed speak leading up to yellens speech we have ever heard. Up next, hunting for yield in a place that still scares many americans. First, though, brian sullivan, whats coming up on power . Thanks. Und are the heat lamp on power lunch, slapping apple with a massive multibillion dollar tax bill. What Companies May be the next ones to have a big tax target on their back. Plus a house call from americas doctor. The u. S. Surgeon general is here. He will talk drug prices, zika and americas growing opioid epidemic. Free food on sunday. Will the plan bring bag cck chipotle customers . Well talk about it next on power lunch. Announcer Halftime Report with scott wapner is the place for marketmoving interviews. You dont call a company a sewer because the company made a mistake. Announcer real money we are short both tesla and solar city. Announcer real debates. People think that globalization has hurt businesses. Its not. It is technology thats hurt businesses. Competition is a good thing. I dont want to go back to a single marketplace. Announcer the most profitable hour of the trading day. I love this show all i do is get to tweet about this show im on the show. This is the greatest moment of my life announcer the Halftime Report. Weekdays at noon eastern. Were back and on the hunt for yield. Our next guest has ideas investors might find dangerous. With us talking Mortgage Backed securities through mutual funds. A wide product, but we do have mutual funds. Good to have you on the show. You did see the movie the big short. Scares a lot of people. I did. That situation is different than what led up to the financial crisis. Mortgage credit in 2008 was frankly a poorly underwritten over leveraged sector. Kind of the epitome of the epicenter of the financial implosion. Look at data today where the sector is today, its a different animal. The idea of how to make money in the space for, lets say Retail Investors is how . With your funds . Well, look, right . So mortgage isnt large. People throw in mbs. A 7 trillion marketplace, roughly guided mortgage credit, betting on the manager or investment billing to reunderwrite, mortgage credit. Our perspective, opportunities in mortgage credit. Finding managers and most fixed incomes shops. The ability to reunderwrite the ability to am i, are you, are we going to pay or mortgage or not. Where would you say we are in the credit cycle . I read a story today i think it was in ubs out there saying were at top of the cycle, nearing it. From a corporate perspective, again, we are closer to the end than even the middle. One of the reasons we get excited about mortgage credit, a relatively isolated insulated asset class. Think about the credit fundamentals that backstop the collateral. Housing, job growth, economy. Right . U. S. Centric set of dynamics that drive the value. Outside of the traditional Business Credit cycle this particular eight class is relatively insulated. Everybody has questions for you. The last couple of years credit investor, the attraction to being in cnbs, attraction to being a nonagency, because of the fed support. Do you believe that continues as we move forward in the cycle that cmbs is the place to be and nonagency . Yes. On nonagency. Again, look at at least how were investing our dollars and expression where were finding value it is a very pure play on the nonagency residential because the fed supports the agency . The fed supporting the component but look at the drivers of value on the nonagency side. Right . Effectively youre betting on home prices, job growth, u. S. Economic stability and continued growth. Argue, depending where you are on the political spectrum, growing fas enough, et cetera. Supporting drivers and value buying in analyzing continues to be attractive. We look at, in our shop, at a lot of short Duration Funds seems theyre looking at a lot of different circuits of the fixed income market. Front and center, Mortgage Backed security also asset backed securities. Arent too different and stuff further afield, like emerging market debt. Whats your take on being more pan global, whatever you want to call it, looking at other spectrums of the fixed income market . Look we look everywhere. You know, our perspective is that theres enough opportunity to kind of at home isolated to the u. S. , which is a market that has less uncertainty around it and especially eamericaing markets. A short duration fund, we have. If its treasury, agency shortterm corporate, you know, agency treasury short term structured credit. Both Mortgage Backed securities. Again, leaders in the ability to reunderwrite cash flows. Taking liquidity risk, rate risk, identify the risk you want to take. Big on credit risk. We believe certain sectors of the market Mortgage Backed you can understand the bets youre making. Steve . So theres an issue with a rising rate environment. Even though i believe were going on the 21st, still in measured environment going forward, but its called negative complexity. For viewers at home that dont know though terms it means theres a reason. There is. Puts you to sleep. Essentially youve got longer duration terms of you dont have prepayments. Sure. Missing the up side in terms of the new paper coming out and higher yields that are being paid on the mortgage debt. So that sort of puts you in an underperformance situation relative to what you put out there by buying new coupons. How do you deal with that . In a mortgage poor follow port yoenchts our assets are trading that frankly sitting, waiting, have the borrowers pay off their mortgage. North of 6. Right . Sitting and waiting so to speak is attractive and frankly if we get prepayments a call option on the portal yo. You think the feds going in september . No. At all this year . Yes. You know, i think were probably in the middle of consensus one time this year. I personally dont see them going before the election. What happens if they doughgo september . How does it impact your funds . If you believe the fed will raise based on the continued strength of the economy, effectively, immaterial event for us. Interesting such a difference of opinion on both sides of the coin. Those who think the fed will go. Steve, all i cant understand how you see the i cant understand how see the other side. Greg sees the other side. But that speaks to the confusion and the messaging from the federal reserve. One day you get one speaker says we want to go twice in the year. Yes, but thats my point. But i made the point who cares what everybody else says other than janet yellen, the fed chair and stan fisher. Stan fisher came right on this network and said probably two sounds great. My point is over the last two weeks there hasnt been a fed governor who hasnt said were not going to go. So youve had lockhard, george how do you reconcile . I think they raise once this year and i think election relative to the u. S. Is such a wild card while they state they dont allow kind of nondata driven perspectives to influence their decision, thats enough of a wild card i think theyll wait. Good having you here. Great to be here. Appreciate it. 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Call today and ask how to get these savings plus a 250 prepaid card. Comcast business. Built for business. Welcome back to power lunch. Oil now giving back its morning gains and then some, this despite a tropical depression that could disrupt production in the gulf of mexico. Anthony, are you surprised to see oil down today given these weather concerns . Im not, seema. When you look at the storm and the path it looks like it will make a right turn right before louisiana and avoid major production areas. These rigs are able to withstand a one to two category hurricane and this storm will be nowhere anywhere near that. Jeff, what does this mean for oil . Will it head back below 40 a level . Seems a challenge to go that low. Remember, nearly 20 of Oil Production is in the gulf of mexico and 50 of the refiners in the gulf of mexico. So if this storm does intensify into a hurricane, we may have some anxiety into the market, but remember katrina, no one expected that intensification of the week of katrina. Hope its not the same for folks in florida. All right. Well be joined by a colorful commentator Jeroen Blokland on cnbc. Trading nation. Com. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Its a very specific moment, the launch window. We have to be very precise. If were not ready when the planets are perfectly aligned, thats it. We need really tight temperature controls. Engineering, aerodynamics a split second too long could mean scrapping it all and starting over. Propulsion, Structural AnalysisMaple Bourbon caramel. Thats what were working on right now. 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Creating new ways to engage at every imaginable touchpoint. Its a new day in retail, and together, were building the store of the future. Digital works for retail. Lets talk about how digital works for your business. Okay. Welcome back to Halftime Report. Cant wait for tomorrow investing legend leon cooperman will be here exclusively for the hour. Well talk markets, well talk specific stocks. Well talk the fed. Well talk the election. You know lee always has a lot of thoughts on a bunch of different things. Well get into all of it tomorrow. Markets close about three hours from now. We want final trades. Palo alto, joey, im going to you reports after the bell today. I gave up on palo alto trading around 1. 43, i think stephanie bought it, i think thats a good sign. I think of the currency headwind in the report is going to be whats most interesting to analysts and investors. Lets see if you can break out. Fitbit, dr. J. Weve got some strong upside speculation in this one, judge. Unusual activity . Well, for unusual id say isnt it always unusual . In Fitbit Tom Jones is singing right now. I should be your theme song, you guys. Should be. Its not unusual didnt mean you sing it. Rather sing and dance. Have you seen that video . Its wildly popular. Oh, man. Morgan stanley. I like this. As a matter of fact, earlier we were talking about the ipo market and Goldman Sachs and some of these names. Morgan stanley is involved in the ipo market as well, but what i like most is the option activity were seeing there today. Theyre buying some upside calls, the october 33 is very active. Keep an eye on these names. Banks are trading very well. Bank of america was just at a high. I think Morgan Stanleys going to continue to go higher. Wells fargo, weiss. Wells fargo, theres my doctor impersonation. Wells fargo, b of a, which i bought more of last week, xlf, its going to keep coming. Hes convinced. And particularly hes not complacent. Come on, im talking here. Give me my time. We can still hear you. Given the skepticism about the rate hike it means that theyre going to go even further. So i select the throw blackrock in there and Asset Managers, theyre breaking out. Actually, Asset Managers are more skeptical because of the massive fee pressure across them. Theyll still go for now. Just be careful. This feels like the first time weve been talking positively about the financial. Feels like all year weve been saying down 10 on the year, down 20 on the year. But theyve come maybe its the first time youve been listening. Ends up running in place though. Now maybe theres more clarity on what people think the feds going to do. Banks have been up 10 out of 11 days. Finally were starting to recognize it. Banks are saying a rate hike is coming. Reits coming out Financial Sector on september 1st. Heres whats on the menu, European Unions pot o gold, why apple suddenly owes ireland 14. 5 billion in taxes and why ireland is saying no thanks to the eu. A house call from americas top doctor, the u. S. Surgeon general joins us to talk about drug prices, zika to americas growing ogro growing opioid epidemic. And an exclusive look inside the day of the life of hillary clinton. What eamon javers found as he pores through her daily