But the bond market was plunging this week. And theres been some geopolitical concerns and moving to the sidelines. Well hold up here. Gold Holding Around 1,300 an ounce. Sam walsh of rio tinto is here exclusively. Well find out where he thinks the price of gold iron ore and those metals are going and what it means for the economy. Another bad day for General Motors. The government has imposed a 35 million fine on the automaker for his handling of the ignition switch flaw that caused certain models to lose power without notice. Now our phil lebeau will join us with the story. The incredible video of phil in up of those gm cars when it actually loses power. Its amazing and frightening. Youll get to sort of be in the drivers seat when this happens. And if youre wondering why 35 million. Its apparently the most the government could levee of on General Motors. Well talk about this piece of the story as well. Where we stand in the markets heading to the final hour. The dow is up about 33 points. Look at that, a raly. Considering thats been a pretty flat session so far. Meanwhile, the nasdaq is the one thats been the focus as of late. Adding ten points. The s p finally up, almost to 1875 for the broad market gauge. Lets talk about it in the closing bell exchange. Diana garnett and jeff taylor and ben willis trades on the floor here of the new york stage for Princeton Securities Group and our own Rick Santelli. Diana, im going to start with you. A very quiet day though theres a mini rally going on. After all the volatility, why the quiet day today . Expiration, triple witch or quad expiration and most of the plain vanilla firms tend to back away, believe it on the, so you see a burst of volume which is skewing some of the technical numbers so a burst of volume on the opening because of the settlement of options and you can see the same thing on the close, but for the rest of the kay you tend to see most of the big players stay away and be on the perimeter, buying or selling if it reached a certain mark but not actively trading during the day. You see the charts that reflect that as weve had sideways move through much of the trading session. Equities this week have been up. They have been down. Rob morgan, if youre to summarize for us what weve learned thus far, especially rob is not here. Jeff taylor, ill put this to you. What have we learned from equities in combination with the big move in rates this week as well . What do you think . I think obviously its a very solid week. The thing that actually was a big gamechange they are week was the Housing Market, ffha announcing the huge opportunity with the gses and lenders. Lenders can now submit their loans and have them quality controlled by fannie or freddie, and they have zero repurchase risk, so if you think about that, as we move forward, that means ultimately theres a new shift. Instead of having loans out there that may come back for years for purchase risk, they can be taken day one, a big gamechanger. Funny you bring this up because theres a hot debate over the future of u. S. Housing and to the extent to which fannie and freddie are in the market, supporting the market and all of that, so is it fair to say that all of these developments have meant that effectively the status quo with fannie and freddie before the housing crisis is the status quo today . I think it is. I think fannie and freddie have done a great job coming through the turmoil. They are obviously very profitable right now. Big deal, profitable. Is that Rick Santelli . Hes warming up. Go ahead, rick. Know, i want him to finish, let him get it all out. Okay. Extremely profitable and right now understand 85 of the loans go to fannie and freddie and with the new moves by fhsa as were moving down the credit card and looking for higher ltvs, the fact that banks can send right to the gses is better for shareholders and investors so we dont have to worry about a potential repurchase two or three years down the road. Rick . All right. You know what . They have been in conservativeship since september of 2008. I think its a sham that we cant get these reforms done, and i think an entity in covership taking a more proactive role. Ed demarco wanted to shrink it. His successor mr. Watt wants to expand it so were going to have what sub prime part two and i dont even care if it works out. Nationalization is not in the fabric of this country and in essence what the cut is describing with putbacks back to the banks and all the ratios being changed a bit is in essence the government underwriting housing. They have health care, they have housing. I think enough is enough. If housing cant stand on its own two feet and we cant move mortgages at 4. 5 , theres a whole lot more wrong with the country than nationalizing and lowering credit standards. Rick, look at hold on. 2009 to current right now. These books are privityine, so we have the bubble of the fouryear period, the last four years the lowest delinquency rates in the history of the mortgage industry. Good, then it should be great to turn over the Profit Sector and reform demand. Thats a solid investment. If it was so solid why cant we get it off the books of the taxpayer . Exactly. To who . Its got to come back into the market and right now until the regulations of course theres no capital market. The government comes in, takes over the space. Whether its Student Loans or housing, youre not going to nurture any private label mortgages in that environment. Its a perfect example of government and how they shouldnt be in business. On paper the idea of fannie and freddie were perfectly designed. When the execution went when it allowed to grow and became the piggy bank of every president going back generations. Dont forget barney frank, part of his piggy bank, too. All part of the government process, its not a private enterprise. I just want to hear what you think about this as well, because the problem is forget who all contributed to it. Where we stand today is in the following situation. If we try to get rid of fannie and freddie everybodys home value is probably going to decline. Its been six years, kelly what do you mean on the dime . What have they been doing . I dont think thats going to happen. Taking it for what it is today, for what it is, what do you do with it now, diane . Apologist for the government. Ladies, this is their turn. Theres almost no situations where the government has the opportunity to step in and perform in the long run better than the private sector. Never happens. It never happens. If you think about Companies Like the United StatesPostal Service versus, you know, federal express, ups, all kinds of opportunities for the private sector to step in and do a much better job, but lending into the private sector, lending to households, is not the big story that we really should be focused on this week, certainly not in isolation. Theres also been a lot of lending thats gone on, smaller notional amounts that have been going into smallcap companies, so i think thats another key. Thats the subprime. Thats a great point. Rick, go ahead. I understand the frustration. You know what keeps me up right now it is certainly the underperson formance of the russell 2000. Theres no reason that the russell should be underperforming this dramatically for this long. Let me move on to that. Ben willis, youve been following that like a laser beam. Why the russell 2000, why has it performed the way it has . People most of the viewers, most i should say most of the nonviewers of cnbc, the general public, the usa today viewers, only look at the s p or the dow jones. The fact of the matter is the russell 2000 is probably one of the most minimum wage or indices as far as pension fund is related to so the Money Movement weve seen, and it was evident the other day with the mutual fund flows, the money thats been coming out and flowing, one the canary in the coal mine hauls has been the russell 2000, the s p, within those you see the devastation, the bank index, in the Home Builders index that barely got a bounce or a reprieve from the good numbers we just happened to post on the multifamily sales numbers, so the russell 2000 has been a great indicator of where the market is heading. If we were looking at it as an idea of the perfect sector correction, so without really taking the legs out of the whole market that was the fear yesterday. The idea that the whole market will be able to rotate out of sectors into safe havens. Seen utilities perform well in that idea, but that we had a little bit of a scare yesterday when we saw i believe the selling was motivated not by americans but by our european counterparts. Right. That cause that had downdraft that we saw, but if you want to get an idea where the market is headed on any given day, watch the russell 2000, that will give you an idea. We had a bounce off our lows the other day, well ahead and before the s p or the dow bounces but its a great trading tool. Midpart of a recovery is also a great time for small cap because this is exactly when Largecap Companies stop having as many opportunities as they have and they want to go out and buy growth. Small caps is even a better time now. Glad you could make it. You want to jump in here. Yeah. Im agreeing with diane. You like the small caps more right now, dont you . I do. I like the smallcap space. We had this risk off period of time during the bad winter. Diane is absolutely right that as we continue to go through this bull market, were going see a rotation back into small caps, and i absolutely agree with diane on that. Youre calling a bottom here . Absolutely. Yeah. Now is such a good time to be in the market, but if you have to be in the market, be very specific. Small cap has been underperforming dramatically. Thats where id like to place most of my assets right now. Thats where i think well have the biggest bounce is in that small cap space. Weve been in a market of stocks, not the small cap markets. The russell 2000 a big example of that. The other day when we were selling off 200 points and there as big panic. Big investors make money when everybody else is losing theirs. When stocks go on sale theres a run for cover. Thats the opportunity to be buying. Im not calling a bottom or top but thats when you should be looking at the names youre comfortable with. A guy by the name of peter lynch started a little fund with that idea. Buy what you know and save some money to buy them when they are cheaper, a pretty good investment stock. I certainly hope there are more smallcap buyers than tool buyers at sears. Got to go. Thank you all. Rick, i still feel like this housing thing is unresolved. We do have a little bit of a rally under way relatively speaking. After practically a full day of unchanged, now were starting to move higher here with the dow up about 50 points. And what youre seeing there is one piece of a heated debate about the Housing Market and if it is finally getting its mojo back. Mortgage insurance giant Genworth Financial ceo will give us his take on the housing recovery or lack thereof. And Biggest Companies disclosing their holdings. Also General Motors getting slapped with a 35 million fine for failing to report an ignition switch defect in a timely manner. In a world thats changing faster than ever, we believe outshining the competition tomorrow quires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. Some slight gains from the major averages right now. The dow is up 47 points just off a high that was set moments ago with the s p up six, the nasdaq up 18 and weve included the russell as weve established this week. It has been, as ben willis suggested, a leading indicator for the rest of the market and were watching this on this option Expiration Date, by the way. A lot of Different Things going on but a decent rally shaping up meantime, billionaire investors, including Warren Buffett filing disclosures about their latest holdings and dominic chu couldnt help but notice some similarities there. Bill, kelly, there are fanatic elements especially with a couple of different stocks and trades in those stocks and lets start off with a stock in the headlines again for all the wrong reasons. Included general. General motors, they have agreed to pay that hefty 35 million fine. Phil lebeau has been talking about that related to the recall of vehicles because of the faulty ignition switch. Theres a slew of Money Managers that have either trimmed or completely gotten out of their stakes in General Motors. Now, george soros and Warren Buffett here have trimmed their stakes andy will orrin cooperman, David Einhorn among the names that have completely sold out of General Motors as of the end of the last quarter, march 31. The overlaps are happening on the buy side. Take a look at stocks like American Airlines. Dan loeb and carl bass taking over new stakes and appaloosas david tepper and john paulson both are increasing their shares of American Airlines stock as well so airlines a common theme for a couple of these big investors. Then theres a name that a lot of whales are really pounding into, and we talked about it yesterday as well. This is verizon. One of the most interesting trades so far this this 13 f season, Warren Buffett, berkshire hathaway, that 11 million share position, john paulson, 8. 7 million shares and dan loeb at 3. 3 million shares. On the other side, david tepper getting out of 4,000 shares of verizon. Still, very big names and very interesting to see where that verizon trade goes from here. Back over to you. Thank you. And lets get some reaction now with the former s. E. C. Chairman harvey pitt, harvey, good to see you. Welcome back, harvey. Good to be with you. What dom is getting at is herding behavior that we see when we look at the filings in every single quarter. What point do the number of filings trigger the s. E. C. Notice . Where do the rules stand on this today and in your view do they need to be revisited . Well, i think this has been a recurrent theme. In the early 70s i added with others the s. E. C. Institutional Investor Report which was looking at whether there was conscious parallelism on the part of major investors. It stands to reason that people are very bright and are well resourced they may well come up with similar investment trends, so the mere fact that we see a confluence of Investment Decisions does not by itself suggest that theres anything wrong. On the other end, if there were collaboration. Right. And communication, that would be a very different kettle of fish. But how would you prove that . Well, it is difficult, but what you would look for are communications and trying to get at the substance of whether people were trying to move simultaneously or collaboratively. Its highly unusual with respect to most portfolio managers, many of whom go to Great Lengths to prevent others from finding out what their positions are. Whats the lag time on the 13f files . I mean, from the time they take the position until it has to be revealed in those s. E. C. Fil filings . The results are due quarterly and then 45 days after the quarter, and what winds up happening is that by the time these reports come out people may have changed their entire direction in a particular stock or altered how much they own. And the reason i ask, the reason i ask, and i dont mean to interrupt. Is that a legacy going back to a time when it took that much time to collate the papers and figure it on. Were in a Technology Age where theres instant access to information now. Should we be revisiting that lag time to allow for a more timely revelation of what people are owning right now. Thats an excellent question, and this was these time frames were sent 35 years ago. In the quill pen and parchment era, so, yes, i think they need to be looked at again. Its a its a slightly doubleedged sword. On the one hand you want to get more information out, but on the other hand it will coerce some people into changing their own views when they see a lot of other people making certain Investment Decisions. And that, harvey, is one last thing that i wanted to ask, to go back to the original discussions about an idea, because the essence of what people do on wall street to some extent is talk about ideas, share ideas, so where does the s. E. C. Stand on something lets call it relatively formal like an idea dinners. Idea dinners have become very popular. Most advisers tell their clients be very, very careful about this. Its one thing to say, for examp example, i think Technology Stocks are on the rise. Here are five or six or seven good ones. Its another thing to say i have focused in on pit company and i think everybody should be in there buying right now. Im going to take this to the maximum i can get it. Is it the naming of a specific company and would a name like verizon count, or is that too big to matter . Naming a specific company is not per se problematic, but it starts to get you into very dangerous territory and look at if youre trying to Produce Market movement to help your own position. Thanks, harvey. Good to see you. Have a good weekend. My pleasure. Harvey pitt, the former s. E. C. Chairman back when they did have pen and quills. I dont think its the last time well talk about this issue. No, no. 35 minutes to go in the close. Last day before the trading session. Looks like we could be going out with a