Saying that it didnt expect the fed to tighten. You could see it, it rallied in the brief oneweek period where it seemed like maybe theyd tighten and raise expectations to 40 . After that crummy unemployment number gold rallied again saying theyre not. Today is interesting to me because its rallying along with the safe havens. I dont think its telling us this is any global panic. What it is telling us it not ohm fits in with the weak dollar trade it also fits in with the safe haven trade. Ive been on this all year and pretty harrowing times for a while but i like it now. This is jim says jack a kind of riskoff trade not an inflation protection trade. There aint no inflation out there. How do you see gold . What is it telling you . Tyler, there say big, red flag with whats going on in gold and people need to heed that warning. Its telling you theres been a loss of confidence in central banks. It really started a few months ago and its been creeping and one of the reasons why especially over the course of the last couple of months weve seen a bit of an acceleration to the move in gold. What it is, it is a warning signal. It might have started out as a reinflation trade but right now turning into that flight to quality and safety, one of the things that more than likely is going to stop any kind of a move in equity. You think it will stop a move in equities. You dont think theres a lot more to run. What have equities been saying to you, jack . Well, one of the things that were seeing with equities and one of the things we have to keep in mind we see nearterm tops happen around quarterly expirations which we have next friday. This breath has been horrible, the volume horrible and the data has been horrible. Everything is leading us to believe that were not going to see a big pop in earnings. This earnings recession weve been going through is going to maintain itself. If thats the case, were talking about a market that is rich looking at it as the multiple and more than likely were going to see an adjustment in asset prices because of it. Yesterday, jim iuorio i was talking to art cashin. Stocks seem to go up not because the companies are doing better or the economy is doing great but because there are a lot of sort of secondary factors that have been cooperating. Oil is higher, the dollar a little softer, bond yields down. How do you see stocks right now . Amen to all of that. Everything that jack said about stocks and the earnings recession, theres been many different times along the way we could have said this. What carl icahn said about stocks theyre being propped up by central banks. We could have say that now, three years ago, four years ago, that probably is the whole story that the world is awash in central bank money. I can name three or four european Corporate Bonds trading at negative yield. If thats the case and seimans money is negative, not like with bonds, gold and the dollar but around the where do you put your money list stocks fit nicely. Jim, come on, talking about a lot of risk with stocks. Theres a lot of difference between buying the tenyear at 1. 67 and commerce bank. I was president of commerce fwhank chicago. Negative Interest Rates are a cancer. Its a matter of time before they start to reflect that in the price action. I would say yeah but heed those warnings. Jim, when, when . Those could be words. Im not disagreeing with you. Were disagreeing on the time frames. Right now the next month, the next two months stocks seem fine to me because of nothing else. I still say that theres ominous clouds that are gathering. I just say theyre way in the distance more than i think you say. Jack, last word is yours. You know what . I think anybody that is looking at cheap premium levels right now should absolutely take advantage of them. We are one or two headlines away from seeing the market readjust and you could see 5 loss in a weeks time and something well all be talking about and everybody will be surprised about it. We want to be prepared for it. Thank you very much. Jack, jim, appreciate it. News alert on the bond market, 30year bonds up for auction. Santelli is on the case. Rick . Absolutely. We gave this one a bplus. 30year auction 12 billion bplus, a little better than yesterdays tens, yield at auction 2. 475, that was the offer side of the one issued market so it priced tight. Lets go through it, shall we . 2. 42 bid to cover. So 2. 42 times oversubscribe to better than the ten option average of 2. 34. Indirect bidders yesterday it was a record. You know whos in this group . I think maybe like foreign central banks, theres some big monetary authorities, makes a lot of sense. This wasnt a record, but it was darned close. 64. 9, lets go through it quickly. If we look at just april, excuse me, recently we had october of 2015 at 66 but other than 65. 1 two options ak, thats the second one thats better, youd have to go back to 2006, so theres ohm a handful of numbers at this level over the last several years, 8. 1 is the only kind of weak link on direct bidding below the ten option average of 11 , very similar to yesterdays tenyear. So 56 billion out the door and a lot of crying of uncle of those who need some real yield which they found in the u. S. 30year bond. Tyler and the gang back to you. Well talk about that right now, rick santelli. Hes talking about the flattening year curve . Here is a generic yield curve on the bottom, time, on the left, field, the price of money. If you lend your friend money overnight, youre going to charge him or her interest . Theyre probably good for t right . What if they want to borrow money for five years . Youd probably charge them more and for ten years, a lot more. Thats why when you get a 30year mortgage from a bank the Interest Rate is higher than a 15year mortgage. This is generally how it should work. Sometimes the yield curve gets inverted. Why would money be cheaper in the future . Bond traders think maybe a recession is Company Coming and the fed will have to put Interest Rates. Thats why were so fearful of an inverted curve. Banks lop a steep yield curve because when we show it to you, a steep yield curve, this is what you get paid when you put your deposits in almost nothing. When the yield curve is steep and you want to borrow money for a mortgage that spread they love it, the steeper it gets. Right now the yield curve is flattening. Why . Why is that . Are we going towards inversion or is there Something Else going on . Lets discuss, because theres a big message in this market as well. More from our guests ron, along with mike collins who manages over 600 billion in fixed assets for prudential. Ron, ill start with you, you wrote a whole book called the message in the markets. What is the message now . The Global Market you worry about. Twoyear german note a negative yield of a half point so in other words, if youre borrowing or lending money to the german government, theyre charging you 50 basis points to do so. You have the entire world with negative Interest Rates thats putting downward pressure on u. S. Rates which in turn as you said is flattening the yield curve. To me thats not only a Global Growth worry sign and also a signature as maybe the worlds getting more increasingly worried about the brexity or the british exit from the European Union as well, a disruptive event. Mike, what do you think, are we headed towards a potentially inverted yield curve . Is the bond market telling us a bad economy is coming or if youre japanese and german, what we get on a tenyear here is really good compared to negative Interest Rates. It is a combination of both factors. You look at yield curves in japan and germany. They pegged the front end of the curves deeply into negative territory so what do you do if youre an investor . You dont want to buy a bond at negative yield. You keep moving out on the curve until you get a positive yield and do that until it gets flatter and flatter. The german tenyear is almost at zero so theyre moving into 20s and 30s. The german and jgb. Japanese Government Bonds. And the german bund curve are flattening like crazy. The next move if youre a logical investor is move into other positive yielding security, the u. S. Treasury market but their curves are flattening, our curves are following their curves lower. The whole qe and negative Interest Rate policy is a big part of it. Is it a consequence of a lot of buyers or is it that something bad is coming . You know, theres definitely also a reflection in the yield curves i think about just slowing Global Growth and the slow disinflationary environment we live in. If the fed continues to insist on being dogmatic and raise rates here in an environment where the Global Growth backdrop is probably telling them not to do anything. You can argue the zero funds rate is neutral. Were growing barely at 2 and probably downshifting to a 1. 5 growth rate. Could you make the case that if they raise rates here its going to lead to a flatter curve. Federal rate hikes lead to a flatter curve. If they insist on raising rates in the environment it probably increases the likelihood of a recession. Worse yet, the fed is just hamstrung. The deeper global yields go into negative rates the harder to be dogmatic. Theres no way without affecting global economies that the fed can lift off from beyond their current Interest Rate policy. This is making it increasingly difficult for them to do anything here. Is it just me or have we been having the same conversation for about five years . No, this is a little different. Why . Weve not been in this deep negative of a yield. 90 of our audience doesnt trade bonds like you. Youre worried about their 401 k or 529 plan and the stock market, this is deep in the deep weeds, what is it saying about stocks . Mom and pops 401 k . Nothing specifically about 401 k s. This is where were getting into different conversations. To me, and i think youd agree, a negative Interest Rate environment globally and a falling rate environment in the United States is sending a message that the Global Economy is weakening, and that given that its happening so quickly and ten years. I understand that because weve been in a deflationary environment for ten years. At this point on a twoyear note in germany theres some concern exprsed is theres something we havent thought about. What does history tell us, if anything, about what happens when you have Interest Rates this low for this long, or negative in that many places around the world . Have we ever been here before and what was the outcome . Not in our lifetime. Typically rates go from high to normal, if you will, thats generally good for stocks. You lower the discount rate, valuations go up. When they go from low to zero and negative i at this it changes the math and changes the game. Historically, really low yields also typically correlate with low growth and low earnings therefore lower equity. Im a stock investor thinking im getting nothing in the bond market. Why wouldnt i get a dividend stock which is expensive by valuation terms but getting paid way more than i get in fixed income. Why wouldnt i do that unless this thing is telling me holy smokes, something bad is coming. Thats the question, is something bad coming . Are we looking toward slower growth, less than 2 , less than 1. 5. And the high dividend play payers would be at risk. In terms of earnings and dividends. It has implications for stock market investors. How quickly this gets translated depends how quickly we see an event or recession. Its important to note and you both can agree on this. This is every known stock and bond market historical model in existence, right . Because weve never been here. Weve never been here. Everybody ultimately and i mean this with respect to you and all of our guests, everybody is ultimately now just guessing. I wouldnt say that. What can you plug into an excel spreadsheet or have your terminal figure out. Its got risks. Yes. We dont have history to tell us what the outcome is. We have history in the 30s and we have history in japan that tells us what happens when real Interest Rates go negative and what the likely outcome is of that scenario particularly if theres a policy mistake like the fed raising rates you go back into recession. Its what we saw in japan over and over and over again. The williams deal just got done, thats surprising. Thank you, gentlemen, sounds like we have a new topic we have to move on to. Ron insana and mike collins thank you both. Crude oil retreating to around 50 a barrel today but harold hamm raising his yearend forecast for oil. Is he right . What do 32 people have in xwhon katy perry, drake and the nfl, their twitter accounts hacked. 32 million passwords being shopped around on the dark web. How does twitter get past its trouble . That ahead. Experience the thrill of the lexus is f sport. Because the ultimate expression of power, is control. This is the pursuit of perfection. You dont want to live with mom and dad forever, do you . Boo laughs how do i check my credit score . Credit karma. Dont worry, its free. Credit karma. Give yourself some credit. In a world held back by compromise, businesses need the agility to do one thing another. Only at t has the network, people, and partners to help companies be. Local global. Open secure. Because no one knows like at t. You may have seen the headline before we went to break, the ftc approving a deal between ete and williams, big pipeline deal. Doesnt necessarily mean the deal is going to get done but it is approved with some conditions. Ete has been trying, well they offered a year and a half ago to buy williams, then the bottom dropped out of the oil and gas markets and they were basically trying to get out of the deal because theyre overpaying in many peoples eyes including perhaps their own for williams. Williams has said its dividend, which is fat is at risk if the deal does not get done. Energy transfer may have to use equity to get the deal done if it, indeed, does get done. Are you following this . The ftc says you can do it. Well see if shareholders say the same thing. Oil is down today but some big names in the oil path see prices moving higher. Billionaire investor harold hamm for one. He was expecting oil to hit 60 bucks a barrel over the year. Hes now raising that estimate. So were at 51 right now, 51 52. Toward the end of the year i might have been 15 , 20 conservative. That means hamm is looking at about 72 a barrel bit end of the year. Is he right . Here to talk about this andert issues, tom ward, chairman and ceo of tapstone energy. Thank you for joining us. Thank you. Before we get to oil and oil prices and other stuff ive got to ask you this. Youre the former see yo of san ridge and there was a lawsuit against san ridge, the law firm dropped the lawsuit against san ridge but not you. How come . Yes, i dont know the Details Behind any of the lawsuits that are going on between sandridge, me or others. Well, the lawsuit basically ive just got to ask to this to clear it up because theres speculation when aubrey mcclendon, deceased your former partner was sued for underpaying for mineral rights there was a second alleged conspirator some point to you. Are you that secret unreported coconspirator in the sflaut. I was never charged with any kind of conspiracy or anything else to do with that. All right, tom, we have to move on. I had to ask the news on the last couple of days, youre on the show so ill ask you. Now the price of oil. Do you agree with harold hamm 72 a barrel oil will be hit by the end of the year . I dont know by the end of the year. Id look at to see if theres a change thats happening in the market that makes us believe that production is going to increase. I dont think thats happening. Theres no increase in the capital spending, the debt side of the business is closed, and so until we have something fairly dramatic happen like maybe a doubling of the crude count i dont think we can grow production in the u. S. Yes, we will, unless the Capital Markets open up and make changes and it never happens as fast as investors want it to, we will see higher prices, so i wouldnt be surprised at all if we saw above 60 or even 70 by the end of the year. Tom, we love to count rigs. Friday at 1 00 p. M. The numbers come out. Youre part of the count, you had four operating rig answer come down to three. The price of oil is back up. Is tapstone going to add rigs . Well, i mean were no different than anyone else, so we look at our cash flow and as long as you want us to live within cash flow, then our production stays basically flat, and thats the same way with the rest of the industry. So unless prices move up fairly dramatically, no, were not anticipating moving our rig count up very dramatically. Well stay where we are. We maybe are a little bit different than Public Companies that have different types of currency, but no. I think prices will have to move up even higher than were talking about for there to be a big change in the rig count. Id probably put you, tom, in the five or ten people in america who know the most about oil and gas. Youve been doing this pretty much your entire working adult life. I dont need to tell you your industry has a big history of when things get good, for some reason, you knock your guys, you knock our yen legs out from underneath you by overproducing when prices go back up. Do you believe the industry collectively has gotten smarter or pretty much doomed to make the mistakes the industrys made five and six times in the past 40 years . Oh, no, it will happen again as soon as the Capital Markets open up. We will spend whatever you give us and as long as there is money to hb through the Capital Markets well use that to grow production because thats what were paid for. Whats happening today is, theres been a strategic shift that has caused people to want us to stay within cash flow, and what that means is, the oil and gas business will stay flat or decline. We cant change the decline of the Oil Production in the United States without more capital and right now, theres just not available. One quick question before we let you go. I started off tough and going to end on a note about your town, Oklahoma City. When we look at the oil impact i