people who will buy it before it goes public. high net worth retail investors, you know, relatively rich people who trade often. and then there's everybody else, the average joe retail investor. that's likely most of you out there. starting with ned i want to go one at a time. ned, good to see you, my friend. we'll talk later about whether one should or shouldn't buy this. what do you think a retail investor who gets on to their trading platform at 9:00 on friday will be likely to pay for facebook when it opens? >> you know, you said $90 a share, i said a 50% premium. this is one of those situations where it depends on how much stock is shorted -- by the way, craig, i want to congratulate you. this is incredible. you must be waiting for next friday. as a retail investor i wouldn't approach the stock on friday or the next monday, tuesday, or wednesday. i wouldn't go near it. would not go near it. >> so you think 50 bucks, somebody gets it for? a 50% premium? >> 50, 60, you're talking about $6 billion in flow. i wouldn't be surprised if that trades three times in the day. >> ned says maybe around 60. do you buy it on the first day? ned says no. ned, what do you think that does in a year? take a guess. where do you think it goes? >> i think it will be lower. i think it will be lower than the highest price we see next friday. and without going into the fundamentals, it's just another new kid on the block that eventually will burn investors and the prices in the new offerings and the ipos are absolutely ludicrous. look at linkedin and the others. yeah, they're selling a little bit higher than the original, but a lot of them haven't. and if you look at the history of ipos, it hasn't been have var good bet to go out there and buy on the opening day. >> now, ned, what do you think it opens out? what do you think somebody gets to buy this stock at at 9:00 on friday? >> i think wyou're going to be more in the 70/75 range when it opens. it will trade somewhere in that neighborhood all day. maybe it ticks up from there. but that's a tough one to buy first trading day. >> you're a no on day one as well. where do you think it is in a year? i just reminded our viewers, google is one of those company that's almost triple a year from the date. >> it's a good question, and it's going to depend on a couple of factors. how are they going to monetize the business? everybody knows facebook is a cool company, 800 million subscribers plus. if the market's doing well and they can monetize and sell ad revenue, i think the stock can go a lot higher from there. >> your guess is probably higher, under normal conditions. it's a good point, though, markets do have something to do with this. it may not just be about facebook. craig, you are one of those early stage investors, a venture capitalist. you get involved in start-up companies, some of which do very, very well and return your money, some of which probably don't do all that well, so you're hoping for the big one. what do you think somebody buys it at on friday? >> i think it's going to come out strong out of the gate. my hunch is somewhere in the mid-40s to 50. i'm not quite as optimistic that it's going to shoot up, just at the valuation, even where it's pricing at, it's fairly rich, but i think it's warranted. >> so to ask you the question about whether one should buy or not is a tricky question, because you were an early investor, you've got facebook stock. but if it weren't you and it came out at 50 bucks, would you put an order in? >> yeah, and to clarify, i would buy it regardless on day one. i learned a lesson with google's ipo. it felt rich coming out in the '80s, and i thought, i'm going to hold off. >> and your general view -- and this is a key point for our viewers. you may still be able to invest in the stock, it may not be important that you invest in it 9:00 on day one. >> so you said it felt rich, are you saying you would or you wouldn't buy on day one? >> i would, yes. >> let's change that to a yes. i would say that the answer to that suggests that you think in a year the stock will be higher than it came out at? >> yeah, i think for sure, over the long haul, with they're a team to bet on. i think the executive team there and touching nearly $1 billion is extremely powerful. and ned is absolutely right. if they can figure out how to monetize that effectively, there's incredible room to grow. >> so you all have reasons to think that. it seems like people are gambling. people are saying, should i cash out this and buy a whole bunch of stock. nadav, how do you as a retail investor, my viewer, calculate whether it's a fairly priced stock and how much you should put into it of your portfolio? >> evening get es back to the individual investor. for me and my clients, i deal with the retail population that's rather conservative. i'm going to have to see a couple good quarters of earnings growth, and then to continue that earnings, and again, as i mentioned earlier. if you can monetize, it's a great company, and i would agree with the last speaker. their team's as good as any team out there. fwo google, obviously, is doing it. i own google and apple for clients and portfolios. and i would love to own facebook, and i will own facebook if, in fact, they can monetize it. and the valuation side, i get, but the reality is that there's a lot of momentum, social media's here to stay. and again, if they can monetize this thing, it's going to be a really good investment. long-term portfolios should own it, if, in fact, we see the earnings growth. >> ned, final question to you. you're not hot on the tech ipo concept, but if at some point this stock settles into a little range, you said you wouldn't buy it on the next friday, tuesday, or wednesday. at some point do you think it's a good stock to get into? >> i would like to see the management a little bit optimistic about to switch to mome mobile. when they come out and amend their statements and say, look, it's hurting us already, i get a little nervous. they're telling you at the outset that maybe the earnings aren't going to be good at shorter term and i'm paying 100 times earnings. i don't know what the heck i'm going to pay for it. what does bother me, i've been a part of so many stalks that have had great potential, 1999, and 1998, and went to the ashes. and there was no phoenix rising from a lot of those stocks. i'm not saying that facebook isn't the greatest novel idea in the world. a billion subscribers. but that also opens up the competition out there. you had the linkedins of the world and a lot of other social internet-type companies and there's no barrier to entry in this -- you know, facebook was there. they did a great job. i'm not knocking them for that, but the competition is going to be intense as you go forward. and making money, you guys were right. monetization of the product is going to be really financial. i don't know how they're going to do it if they don't know how they're going to do it now. >> craig, answer those questions. the idea that facebook ---io iy know, everything's going mobile. everything's happening on your device and it's tougher for facebook to get the advertising that's relevant on to a phone. >> two things that have me feeling optimistic. one is that in the business that i'm in, early stage investing, i see the cap table of a lot of start-up companies. mark zuckerberg's name is never on a cap table. and that's unlike virtually any other executive founder, certainly in silicon valley. it shows me that he's laser focused on growing this business. and the second is, you know, i read yesterday about kind of mark's influence in bing's redesign, and integrating social into search. he participates in the hackathons at facebook. and it really shows me that he understands the product and the business and where it's going. a very different story from yahoo! or some of the other businesses that are available to investors. >> craig, thank you so much. it's interesting -- yeah, go ahead, ned. >> one comment, and craig, i don't know if you were there or not, but i knew another inventor, and i would call mark an inventor. another inventor, many years ago, got laser vision on one particular product and drove the company right into the ground and that was somebody called dr. land back in polaroid when he had the concept of coming out with a pocket camera. amazing, 30 years later, he's right. but he drove that company into the ground because he spent so much on the product and he couldn't make it work. >> all right, interesting that the guy who's invested in this, craig, thinks it's going to come out at the lowest price. here's what you've got. you've got 60, 75, 50. last week we had matt mccall saying you may not get it for less than 90 on day one. ned and nadav say don't buy don't buy it on day one. and ned thinks it's lower a year later from the first day, the two other guys say yes. you'll have to make your own decision as to whether you put your money in the stock. coming up later, mark zuckerberg courts wall street's billions and does it in that hoodie. is it a sign of the times or is this immaturity? up next, it's been four years since the financial crisis, and already wall street is is betting bigger than ever. it seems that lessons were not learned. there's no one better qualified to answer that question than my next get. shelia bair is credited with saving the banks during the last financial crisis. she's up next. you're watchi ining your mun on. 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[ applause ] [ male announcer ] go online to reach every home, every address, every time with every door direct mail. like in a special ops mission? you'd spot movement, gather intelligence with minimal collateral damage. but rather than neutralizing enemies in their sleep, you'd be targeting stocks to trade. well, that's what trade architect's heat maps do. they make you a trading assassin. trade architect. td ameritrade's empowering, web-based trading platform. trade commission-free for 60 days, and we'll throw in up to $600 when you open an account. jpmorgan chase is the country's largest banks. it's also one of the banks that emerged from the crisis in 2008 from relatively good shape. throughout the crisis, jpmorgan made a profit every quarter. jpmorgan's ceo jamie dimon has led the war on regulating the banks, but his stunning announcement that jpmorgan has loss $2 billion in trades over the past six weeks and could face an additional $1 billion of losses made some jaws drop on wall street. >> the new strategy was flawed, complex, poorly reviewed, poorly executed, and poorly monitored. the portfolio has proven to be riskier, more volatile than we thought. >> the admission by dimon and the bank will hurt jpmorgan's reputation as one of the best risk managers among the big banks. what does it say about our financial system overall? shelia bair is credited with saving the banks during the last crisis. she's the former chair of the federal deposit insurance operation. currently a senior adviser at the pew charitable trust. shelia, good to see you again. >> thank you. >> there's a lot of things going through my head on this, but when i heard it, it took me back to september of 2008 when i had to struggle to understand this thing about credit default swaps and aig and how they were engaging in fwhbusiness of insug themselves against risk without loss. i thought, is this happening again? >> i don't think it's happening on a broad scale and i would attribute jamie dimon with saying that his bank made mistakes. it was in contrast to 2008 when people said, it wasn't my fault, other banks were doing it. he's owning up to the fact that this appears to be something spectacular to his institution. they made some serious mistakes. it does make you wonder, though, this is one of the best managed, larger banks in the country, if this kind of thing can happen, what's going on in some of these other institutions. >> it brings us back to the question of regulation. that's now a big deal. senator carl heavlevin has alre said, it's the banks that are faile that are now engaging in risky behavior. let's talk about the regulators. this is always a problem. where the banks are going to hire the highest priced people that can work their way around this stuff and regular urtors f it very difficult to keep up with this kind of regulation. >> they do. and the top of my reform list has been getting more entities into capital banks. you'll always have unexpected losses and bank managers at well-managed banks, things happening at those banks that are stupid and generating unexpected losses. if you have a thick capital cushion to absorb those losses, you'll be able to stay ahead of it. but trying to micromanage institutions, or even with hoards of examiners going in there and hoards of regulations saying you can do this, you can't do that, things will all fall through the cracks. i think, also, regulators immediate to put a high priority on simplifying these banks, their legal structures, dividing a commercial bank from the security firms. having intermediate boards and managers there to provide more oversight of these institutions. i think that would be a tremendous boon to better management and i think that would help shareholders also understand what's going on inside of these institutions. i was speaking to a fairly sophisticated investor group recently. this is before all of this came out, obviously, and i said to them, i said, raise your hands, who in this room understands what's going on inside jpmorgan chase. and not one of them raised their hands. so i think shareholders have also an onus to put more discipline on the institutions and find out what's going on inside of them. >> we should tell our viewers, because i think many of them will not understand the highly complicated world of credit default swaps. this was done by what was call a proprietary trading desk. in the old days, investment banks made their money by matching up investors and people who needed money. these trading desks, they're a relatively new creation and they have traditionally made a lot of money for the banks. >> they have. and obviously, wis this core of what the volcker rule is trying to get at. which is trying to ban taking directional bets on the market, just to generate profits. not accommodate a customer, but generate profits for itself. i'm still learning about this, but it appears this was a hedge, or an economic hedge. it was a hedge designed to protect jpmorgan chase against broader economic risks, that it confronted in the market. the volcker rule, at least as it's currently proposed, may have actually allowed this. but a lot of advocates have been saying that the fed and the other regulators need to narrow the hedging exception in the volcker rule to make sure those hedges are tightly correlated to the underlying risks they're trying to hedge. if you have a good hedge, you shouldn't have this happen. if you have a loss on one side, you should have a gain on the other to offside it. a $2 billion on one side of a hedge is quite problem mat ibat is going to lead to a lot of questions. fl and you have an article coming out in "fortune" about the discussion we've been having over the last several weeks about interest rates and what the fed will do. i'm going to tweet that out to our viewers and we'll continue that conversation. shelia bair, always great to see you. thank you so much. >> nice to see you, thank you. coming up next, could governor romney's about-face brag about saving the auto industry cost him the key bat e battleground state of ohio and maybe the election? 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[ male announcer ] new icy hot arthritis lotion. powerful encapsulated menthol gets icy to dull pain, hot to relax it away. power past pain. republican presidential candidate mitt romney told an ohio tv reporter last week that he can, quote, take a lot of credit for the recovery of the u.s. auto industry. >> it was the uaw and the president that delayed the idea of bankruptcy. i pushed the idea of a managed bankruptcy. and finally when that was done, and help was given, the companies got back on their feet. so i'll take a lot of credit for the fact that this industry has come back. >> romney was a vocal opponent of bailing out the auto industry. in 2008, he wrote a "new york times" opinion piece entitled "let detroit go bankrupt." in it, he wrote this. "if general motors, ford, and chrysler get the bailout a their chief executives asked for, you can kiss the american automotive industry good-bye,." well, the government shelled out $81 billion to gm and chrysler, ford didn't take any money, and that money is credited with helping them through bankruptcy and many experts contend avoiding liquidation, potentially saving millions of jobs in places like michigan and ohio, where auto is king. now, perhaps democratic strategists and cnn political contributor james carville summed it up best. >> and i mean like today, this auto bailout thing, i thought that was an onion headline when i first saw it. >> joining me now from washington, cnn's chief national correspondent, john cking. john, i have a thesis i want to run by you. mitt romney has already lost this election because of this. voters in ohio, autoworkers and union workers are alienated by his status on the the bailout, because it is gm country in large part. they will hand that state to president obama and without ohio, probably, romney doesn't get to the white house. what do you think? >> you're absolutely right about the last part, without ohio, romney most likely doesn't get to the white house. no republican has won the white house in modern times, ali, without ca