To the fed minutes. Yes, the initial impression was that they were hawkish. Now perhaps the market reevaluating that to some extent. We will get more on where this market and the economy is heading from none other than mohammed el erian. He is here exclusively in just minutes and have some good insight on why the market has continued to rally in the face of so many troubling geopolitical developments. And another tale on the any might be new data that Shows Americans are starting to struggle with paying down their auto loans. This coming after taking out record high amounts in car loans. Some with iks isyear, sevenyear terms. Phil lebeau joins us with the details and why some say it is a canary in the coal mine for our economy. Now lets take a look at these markets. We did take a leg lower as those minutes from the fed hit about an hour ago but since the dow is made up that lost groun grobd and then some, up 60 points to 16980. The nasdaq is up just about a point to 4528. And the s p within a point of closing at an alltime high. Joining our closing bell exchange, Keith Fitzgerald and cnbc contributors jack from index financial partner, abigail from peak theorys. We hope shes wired in and ready to go. Joining us from jackson hole where the fed is set to meek this week is Steve Liesman and from chicago, mr. Santelli, rick that would be. Steve, because you are in a beautiful place, not that were not all in beautiful maces here, ste steve, but youre in an especially beautiful one. Kick it off with your take away from the fed minutes. I think its hard to walk away from reading those minutes, tyler. I think theyre more hawkish than either the statement or maybe other statements that have been paid publicly by fed off e offici officials. I think that could be good. That would be on the outside for when the fed raises rates. If you thought that the fed as the market does would raise rates in the summer, 15. Maybe now its a springtime event. Its certainly possible with the minutes said is that many participants thought that if the data improved more quickly towards their goals, then the fed would have to move more quickly. And some see that labor markets are returning to normal and that the labor under utilization, the socalled labor slack, is a lot closer to being gone than perhaps they believed last year or earlier this year. If thats the case, jack, why are the markets in rally mode here . I think thats good news. If you think about it. You know, remember why the fed is talking about being hawkish or at least why the tone is hawkish. Because were starting to see some real improvement. Were starting to see job growth. Were starting to see some actual action taking place within the economy. Now, you know, when you hear people like paul ryan speaking all you can wonder is where we would be with the multiple with this market. You know, if indeed we did have some real solid managers. Thats whats happening. If the market were if we saw Interest Rates going up because inflation were the problem i think that we would be in a completely different discord here. Rick santelli, let me jump in. Let you jump in a head of a couple of others and get your take . I cant define what janet yellen and company are going to do and i think theres little correlation with using the microscope on the minutes and the outcome were expecting at some point. Normalization of rates. But what i can show you thats concrete is how much the curve flattened and in english what that means is short maturities got tagged, pushing the rates up. The long maturities, they stayed in the hammock. Whether you look at fives to tens or fives to 30s, we like to look at 5s to 30s. That fiveyear held on to a half dozen basis points from 157 to 163. That 5s and 30s hovering in the zone where its the flattest its been in six years. Believe me, if nobody wants to really dig down in the yield curve, you dont need to dig very deep. As long as it keeps flattening that has been a good dynamic that seems to go hand in hand with the long end moving lower in yield because you can flatten the curve even with rates going up. And tie that together for us, abigail, what does that signal to you . You know, i think that when we look at this whole Interest Rate conversation its a smoke screen on the part of the fed. One of their communication tools, i think its entirely premature and relative to what rick was saying about rates, i think that the most important thing to look at here relative to the tenyear is the flight to safety. The continued rally here. Relative to that smoke screen it suggests on the one hand the economy is healthy enough to take some kind of rate hike. On the other hand, you know, they keep kind of moving it up. I didnt see any sign they became more hawkish today. Lets face it, theyre in between a rock and a hard spot. Over heated stock market at underheated economy. What can they say thats new . They have to divert investors. I think they continue to do a great job of that. Keith, your quick thought on what the fed said and whether you perceive them as more hawkish than you thought as steve thinks or not . Well, im with abigail. I think i continue to believe that if fed is grasping and straws and making things up as they go along. Using statistics that are meaningless. The labor pool to wage, all those things are moving in the wrong direction. When i look at the ten year, 2337, that tells me that traders are not letting go of the risk that they perceive in the marketplace. Ill take the rally under the circumstances but the traders not let going concerns me because that suggests to me theres bigger risks out there yet and i want to be cautious in here. I have to agree with you, keith. The tenyear yield is confirmed to go even lower. Suggests that theres more, more to come on that bid to safety and i think its om a matter of time before we see stocks correct. Abby, abby, look, if you keep looking at that tenyear yield you will never get into with stocks and you will watch what is the wait a minute, jack. Who says you got to look at the ten year and you cant buy stocks . You cant be long tens and long stocks. Heres the fundamental problem. You cant chew gum and walk at the same time. You cant hold the two positions, jack. The biggest competition for capital in equities is capital that goes into fixed income. That has always been the case. And what we are looking at right now are tenyear yields that are sending false signals. Hey, jack signals 75 of people who own ten years dont sell them. Jack, i think theres Something Else theres Something Else that we need to Pay Attention to here. Its somewhat walky from a technical standpoint but its called a desht cross. It means theres downside momentum. On the tenyear yield, very accurate predictor of when the tenyear year is going to dif. Not in a healthy way but in a bid to safety. For better or worse in 2000, 2008. We also had it before the crash in 2010 and 2011. Can i just add forgive me for interrupting, guys. Forgive me for interrupting. I love when abigail gets wonky but we want to change gears just a little bit and from i think in kate kelly with some news as cnbc has learned more about the reported 17 billion settlement with bank of america and the u. S. Government. What do you know . Tyler, weve been wait for news to this deal had been reached as opposed to a lawsuit being filed which would have indicated that talks had broken down. We now understand that bank of america reached what will be a record penalty settlement for the Justice Department over their handling of Mortgage Backed securities to the tune of 17 billion. Were told that about 9 to 10 billion of that will be criminal penalty and remainder will be Loan Modifications and other consumer relief measures with the final details probably still being worked out. We expect an announcement soon. Maybe as early as tomorrow. No official comments on it yet though so far. This would be a record for justice and certainly a key moment for b of a which owned countrywide and merrill lynch. That accounted for the majority of their exposures to these subprime p Mortgage Backed securities that of course went bad during and after the financial crisis. And that accounts for this penalty really. Kate, thank you. Thank you so much, kate kelly. Steve liesman from jackson hole, steve, i just want to bring you in. This is going to be one of the more significant things to come from the financial crisis. What do you make of it . Well, i think theres going to be some concern. There already is some concern among fed officials. Its not their policy. Its just something they talk about, which is that a lot of these finds come from actions that were taken by healthy banks when they bought sick and ailing banks. The concern is not for the immediate future here but for the next time we have a crisis, there will be no private banks that will come in to rescue ailing banks and do so without public money. And its well to remember that those actions by some of those banks early on gave the public side some breathing room before they were able to come in and rescue the broader Banking System. But theres concern about the next crisis here. According to Jeremy Siegel on this program yesterday we arent going to have another financial crisis for 75 years. Bologna. Its right around the block sdm that and a cup of coffee will get you a quarter in new york city. I dont think thats a smart bet to make. You need to bank on another financial crisis happening. Absolutely. And for how its going to run out. If you want to talk about the the previous conversation i was just going to say s. I going to say about the previous conversation yeah, about the previous conversation go ahead. I guess we have a delay here. I was going to say, i would take i would be more careful about following the words of the Federal Reserve than i would following death crosses on the tenyear. The point that youre raising though, steve, is going to be exactly what the Financial Companies point out. I think well probably hear this trickling out if not b of a itself which wants to put a good face on finally having reached to settlement and putting it behind them, their investors and others who watch this space saying, look, were being penalized for our behavior during the financial crisis which is to help save the system. No, no, no. Go ahead. Jump . Youre talking 17 billion penalty. Everybody goes, who, who, who, were collecting 17 billion. They booked 89 billion. This is a slap on the wrist. What they really wont dont want is a lawsuit that subpoenas all their records. Its a pattern thats begun since the financial crisis. As far as im concerned, 17 billion, okay, they went to the wood shed. But they didnt get smacked around a little bit. Until we see that, its business as usual. Debt concentrates. Consumer credit concentrates. The risks are bigger than ever. What patterns are you referring to . Wait, wait, wait, wait a minute. Ill tell you what from my perspective, first of all, ba zil la is still walking around, okay . Exactly. If youre thinking count countrywide why penalize bank of america. All the fine, all the money we gave them during the big vote, all the billions we gave the banks that were now taking back through the back door. But has there ever been a forensics as to how many people bought cars on refinance one thing to point out is if t. Fact that mozillo is apparently going to be technically accurate here. Rick is being i just want to correct something. We got paid back the tarp money by paying back the tarp money with interest. Yeah, we did. No, we really did, rick. You can look at the records. Regardless. Why dont you call jamie dimon or call did we get paid for the risk . Another point, rick, is that countrywide one at a time, everybody. Within at a time. Kelly, real quick. Word trickling out that is accurate. Subject to a new civil lawsuit related to his behavior when he ran countrywide filed by the attorney in los angeles. Just out simultaneously with the b of a news. Still no criminal sanctions. Mozillo, correct. The important point of the crisis which is in many cases its been the institutions and not the individuals fingered for what went wrong. Right. Now you can argue theres a reason for that but at the same time it would be a lot easier in terms of a narrative and in terms of preventing some of the harms the next time around to really identify those people who you think may have personally been liable for what happened and opposed to institutions which have morphed almost beyond recognition these days. Few people were held accountable. A gentleman from Credit Suisse found guilty of concealing the exposure to Mortgage Backed securities. The woman who worked at b of a as the socalled Hustle Program found liable of fraud. Let me ask you a question, kate. Keith said, i believe, that b of a and the other banks as penalized as they may have been, view it largely as a slap on the wrist and we have avided deeper penalties and subpoenas that dig into all kinds of stuff and steve who says, ah, but wait a minute, next time around these banks are going to be so chastened and so fearful of getting in over their heads and subjecting themselves maybe to large multibillion dollar penalties that they wont be there the next time they might be called upon to help out the system. Where do you come down on it . Well, i think this has been very painf fuful for b of a, ty. If you look at their net income, the past penalty theyre paying here alone, 9 billion, we dont have the exact number yet, that exceeds their net income for the past four quarters combined. They have paid 60 billion to date in fines related to the Mortgage Market and the financial crisis, Mortgage Backed securities and so on. This will bring them closer to 80 billion. That is serious coin. And their stock price in many peoples view than depressed for some time. And its been very difficult for their ceo to manage through this though it appears he has been. Rick, i want you to briefly weigh in on this. If these banks werent willing to go ahead and buy up one another as they were failing, then it would have been entirely on the u. S. Taxpayer potentially to fund this. Would that have a better outcome than letting these bampgs, the health there up with, absorb it on their Balance Sheet . Yes, not bailing them out. Orchestrating making sure peoples savings were taken care of like sheila baird did. No, we cant do that. We cant do that. Thats free market. Welldone, rick. Appreciate everybody weighing in. As we incorporate that news into the discussion we are already having an quick programming note. Scott wapner will be interviewing attorney general Eric Snyderman about the lawsuit on cnbcs Halftime Report tomorrow at noon. Dont miss it. So 45 minutes to go, tyler, and the dow is up 65 and the s p 500 here is sitting pretty much if it closes at this level, 1987 and change at an alltime high. Yeah. Just about. 7 of a point below it. Mohammed el erian will give us his reaction to the fed minutes and looking ahead as the policymakers meet out there with steve and the moose in jackson hole if their annual powwow. Wait until you hear when he thinks the fed will raise Interest Rates and his take on this suddenly red hot stock market. I would like to see moose out there with steve, by the way. Also coming up, auto sales, we know how hot they been but a new report is showing more car and truck owners struggling to make payments. Should we be worried about auto loans overheating and what that could be with the economic recovery . And keep it right here for hewlettpackard and l brands. Results out after the closing bell. They could set the tone for the markets tomorrow. Well be right back in a moment. E financial noise financial noise financial noise financial noise spokesperson you can get a 1,000 turbocharged with a new card volkswagen turbo. So why are we so obsessed with turbo . Because theres nothing more exhilarating than a powerful ride. And you can get that in places you might not expect. Like the passat. And also in the funtodrive jetta. In fact, volkswagen has sold more turbos than any other brand over the last ten years. That is a lot of turbo. 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Were within a half point of that. Half s p point. And the nasdaq is also higher by about three. Kelly . And some late session help here potentially as art cashin mentioned a moment ago. Theres a buy order, 600 million shares on the close. Well watch that and also the big movers helping to drive these markets higher today with our Bertha Coombs. Bertha . Kelly, the big movers. But lets start with international, soaring on news germanys infineon will buy it for 40 a share in cash. Apparently trading up about 47 . Just below that 40 bid. Meantime, apple hitting a fresh record high as investors look to its september 9th event. And likely new iphone unveiling. The companys market cap near 604 billion by far the most of any publicly traded company although well below its own record. Right now its trading up near 101. On the flip side, hertz after the rental car agency said the result will be below the forecast. It is trading down nearly 10 on that news. But well end with American Eagle flying in the face of whats been a really rough retail earning season after the teen retailer posted better than expected Second Quarter results desp