Least seems to be working. Nicole we are pretty happy about that fact. It felt like the eternity breeze. The Dow Jones Industrial is up 20 points. The s p is also posting gains. Microsoft helping the Dow Jones Industrials. If he were to exercise those options, he will be worth about 840 million. He ranks 22 in the united states. Back to you. Connell we will talk more about that in a few minutes. Yesterdays flash griese was the result of problems with data systems. He says the problem has now been addressed, but he cannot guarantee that there will not be any future problems. Liz claman joins us now. Liz everything seems calm. What a difference from yesterday. In the wake of the flash freeze, the nasdaq has been seriously attacked. Critics say that the nasdaq handled this terribly. In fact, former chairman said the nasdaq did a horrible job. They handled this terribly. He is not the only one. There was not enough communication. This morning in my oneonone interview, i asked him about the critics and he started to push back on harvey pitt. Listen. I think it is hard for people outside. Liz you are taking a snack that harvey pitt. I am just saying for anyone that is not there. It is hard for them to know. Hard for them to comment intelligently in terms of what happens. We solve the problem within half an hour. Certain members made a request in terms of having a longer period to quote. That communication was there. I think to the extent that anyone was not involved, that was as active as you can get. Liz of course there was probably massive mayhem. Many felt they were not spoken to. Bob said they were having people talking and they had hundreds of phone calls incoming and they handled them. You probably wont hear that that was not the case. Many people felt left in the dark. Coming up in the next hour, you have to hear his response to my next question. What about twitter . It is not public yet. Everybody wants that business. You can bet that the New York Stock Exchange is dying to land that ipo. That is next hour. Connell we look forward to it. Good stuff, as always. Charlie gasparino is here on more of the flash crash. Is his job safe . Charlie Management Changes are like we in the wake of this. I will point out bobs job, based on everything that i have heard, his job is safe. Liz god to an interesting comment. There has been criticism. I think he did a great job in handling this in terms of communicating with institutions and major investors. You notice the markets really did not implode. It was all pretty safe. He opened three hours later. People did not know what the price of nasdaq stocks were. His problem was communicating with the average investor. I think duncan has a better handle on this. When you run and exchange, you are running a public company. You are also running a public trust. They look to the exchanges as wall street. If you are not communicating let me tell you something, you would not believe the rumors that were flying. I think they needed some outreach to the public on why it may have happened. What they were doing to try to fix it. This is all about the average investor. By the way, i believe average investors are not engaged in this market. This gets to the point that they are not in it because they do not know if the market is safe. This is where mary schapiro, she dropped the ball on market structure. We do not have to markets, we have a markets, ten markets, black pools. We do not know the price of a stock. Technology is an issue here. Everything is now run by computers. The markets are computerized. When computers run the show, they break down. They screw up. Human beings screw up, but there are others to patch it. Connell all of these things that you brought up, and these are big issues, the fact that yesterday was not a complete mess in terms of market panic, what does that tell us . Is that good news . Charlie this is a big deal. It has the average investors saying i do not want any parts in stocks. They are not investing in these Great Companies like apple. What makes America Great are these companies that are in these big companies. Connell maybe they should be reassured . The average investor should not feel reassured. The markets are broken right now. They need fixing. They need fixing from a structural standpoint. When stuff runs as it is running now, trades are being done on dark pools. We know they had something to do with the listed price. We do not know exactly what is going on. The other issue is the technology. Is it up to the task of running the markets . It is almost all computers and a few humans now. This is paramount. I think the sec is just as much of a culprit. Connell thank you, charlie. Appreciate it. The search for a new ceo at microsoft is another big story today. Charles payne will be here to walk us through what it all means for investors. Bernanke is not there, but the talk of tapering is. Peter barnes has the story. Bringing elon musks hyper loop to life. We will have some new developments there. Keep it here. Stocks hanging in there today. Just below 15,000 on the dow. We will be right back. Right now, 7 years of music is being streamed. A quarter million tweeters are tweeting. And 900 Million Dollars are changing hands online. Thats why hp built a new kind of server. One thats 80 smaller. Uses 89 less energy. And costs 77 less. And its giving the internet the room it needs to grow. This is gonna be big. Hp moonshot. Its time to build a better enterprise. Together. And this pk is the inside of your body. See, the special psyllium fiber in metamucil actually gels. And that gelling hes to lower some cholesterol. Metacil. 3 amazing benefits in 1 super fiber. Connell a nice day here in new york. Microsoft stock is surging today. Charles payne joins us. Anytime i see a ceo or bigname person say they are leaving and the stock goes up, you say, oh, my goodness. Charles talk about and on a long career. Everyone is happy. Everyone is happy that this guy is out. Shareholders, the industry. Steve ballmer did not do a good job. Some of these older companies, i think on top of its his management skill was really embrace it. I do not think he was good at listening to fresh ideas. It was like a lumbering giant. Connell we can sit here and have a pointless conversation, but we could have a more conversation about what is important for that ceo. What do they have to do next . Start to deploy the cash. Make a lot of acquisitions and start to go after this space. When you have that kind of cash that they have, you can buy a company for 400 million. Look at oracle. They buy a new Company Every single day. From a 10 million start up to a large rival that is publicly traded. People do not want to work there. I will overpay for your company and you have to stay for four or five years. Right now what this has done is it has put a floor under the stock. Connell Charles Payne is not buying microsoft. Charles i am not buying it. Connell i am looking forward to the special that you are hosting next weekend. 6 00 p. M. Eastern. Charles every single day. I know things like the flash freeze yesterday there are so much more important things. America is not proof. Connell listeners may be liking pandoras music. Nicole they have had increased expenses. They are having to lower their guidance. Down 12. 5 today on pandora. You do have a lot of the analysts making comments. Pandora remains a compelling play on mobile. They still like it. As you noted, six months after, continue on listening. We will continue to watch pandora. Certainly getting hit hard today. Connell we will talk about obamacare coming up next. Particularly, how it affects your savings. The new batman, ben aflac, do you care about it . Are you angry about it . Anyway, we will talk about that coming up. We will be back talking to Grover Norquist. [ villain ] well mr. Baldwin. It appears our journey has come to a delightful end. Then i better use the capital one purchase eraser to redeem my venture miles for this trip. Purchase eraser . Its the easy way to erase any recent travel expense. I just pick a charge, like my flight with a few taps, its taken care of. Impressive baldwin. Does it work for hotels . Absolutely thank goodness. Mrs. Villain and i are planning our. You scare me. And i like it. Lets go whats in your wallet . 22 minutes past the hour. San Diego City Council will vote today on a proposed agreement with the mayor who has been accused of making unwanted sexual advances. Reports are that he will resign. Terms of the deal have not been revealed. Protesting in cairo. The demonstrations have forced Egyptian Military to be diploid around the city. Todays protests are seen on whether morsi can keep up the pressure despite an intense security shut down. Officials say the two sides have agreed to allow reunions of families separated by the korean war. The first meetings in three years will take place next month. Back to connell. Connell thank you. Elon musk, this story we talked about a couple weeks ago, the question now, can it be brought to life . It looks pretty cool. Tesla motors ceo had the proposal. He proposed it earlier this month. You just get into that tunnel and you are flying at ridiculous speeds. The problem, of course, will be finding the support to get it done. That could be difficult. It is cool to look at. If you sleep ben affleck, do you see batman . He is taking on the role. We have some time to adjust to this. The first time batman and superman will share the screen. We all remember his role in daredevil. Bernanke turning down the role and also decided to skip the jackson hole summit this summer. There are many speculating when he will start tapering. Peter barnes has a very special guest. The president S Health Care law could cost you more in taxes. Grover norquist is coming up. Keep it here on markets now as we look at the winners on the s p 500. You know throughout history, folks have suffered from frequent heartburn. But getting heartburn and then treating day after day is a thing of the past. Block the acid with prilosec otc, and dont get heartburn in the first place. [ male announcer ] one pill each morning. 24 hours. Zero heartburn. Still to come tipper in by september. It is possible if you listen to the people inside the fed, peter barnes has been talking to, he will talk to was in a moment. The hit on housing, latest numbers are scaring off investors. They were brutal this morning with some of the people who were scared off could be running to gold. Charlie gasparino was talking about this, up to levels we havent seen in a couple months and sandra smith will check in from the pits of the cme. For getting this massive halt in trading on nasdaq, investors are seeing big gains on major stock averages this year but implementation of the Affordable Care act gets closer, 3. 8 surtax from that law could sneak up on investor profits. We bring Grover Norquist in, of americans for tax reform these stories come in and even though i feel like i attention, 3. 8 . The Obama Administration and congress when the past obama care tended not to highlight the tax increases that the 4 obama care. And Capital Gains which is at 15 , obama moved it up to 20 . And 3. 8 , and 24 , back to where it was before reagan came into office. And on Capital Gains taxes, and they were in dividends. 39. 5 . And it was a tremendous assets, through dividends. And to 23. 8 . Than other Investment Income in chapter S Corporations and other investments like that, 43. 4 , 3. 8. Connell in some ways. But probably in fairness to all of us, the socalled taxing the rich is what they were talking about during the debate. You make more than 200,000 you will be hit by this. Connell when they presented it there will be small tax increases to the, quote, rich and this is what it means. What the fact economically . Anytime you tax you get additional incentive, lots of different things, it will reduce the amount of Investment Income people have. If you are investing getting Capital Gains and dividends and the government is taking a larger chunk you cant reinvest money that disappeared. Connell one more question related to politics. Ids tax increases you describe, the surcharge and increased tax and dividends, of these words shutting the government down over . Should republicans push to not implement these types of things and say we will stand strong and if it comes to it, we will go all the way and shut the government down . There has been a proposal put forth by senator ted crews and a few other senators suggesting we should defund obamacare. That doesnt deal with the taxes. Doesnt stop the taxes. That only stops various parts if it were to pass and the president were to cited he is more likely to give you his liver than sign the defunding of obamacare. I would not plan on that happening and the republicans in the house and senate have been moving away from that as a negotiating point. Watch for them to look for delaying the individual mandate the way the president has delayed some of the Major Companies mandates and also some of the caps and labor unions. Watch for a delay of the individual mandate. That might happen. Connell the of the votes, the political leverage to push for the and delay those even though they are a minority, House Republicans can push that through . House republicans could have defunding the whole thing and also could pass the length and may indeed. What matters is democrats in the senate, seven of whom are real and running for reelection in states that voted for mitt romney are nervous. Devoted 4 obamacare, they live in states where people are very unhappy. Because the president has been delaying parts of obamacare, a little difficult for a straight face to say we cannot delay it for you, we could delay for labor unions or big business or Insurance Companies but not you, it is possible the democrats in the senate who are vulnerable seek to raid their leader and obama and say lets be made. Not abolish but delay. Connell that is something we try to separate, the realistic from the broker norquist, nobody knows more about a tax situation in washington. Good to see you. On to this next topic one of our favorites, capering in september, expected to be the major focus with some of the top minds in economics gathering for the annual conference. Always a good time and peter barnes has a special guest. Take away. Peter we are joined by an economic professor at the school of business at the university of chicago. Thanks for joining fox business. Everybody is talking about capering and when does the fed start dialing down the 85 billion a month in quantitative easing bond purchases. What do you think . The minutes made it really clear that they havent made a definite decision yet, a few people think they should do if sue and by september, and lets be patient and see where the data are so those people will be persuaded by not what happens to the lemon report in september. Connell the august report on september 6th. Exactly including the revisions for july and june because there is a lot of volatility in these numbers and they tend to be revised 60,000, over a three month or rise in. Connell if numbers come in for the jobs report, what will they do . I dont think there is a specific magic number but if it is north of 200,000, a strong report and positive revisions to the previous month, that will probably push a few people on the edge over the edge to do it. If it is less than 150,000 with negative revisions, probably people will step back but the nightmare scenario is it is somewhere in the middle which is the most likely outcome and will cause, more consternation. Lets assume theres a decent number and they decide to do it, they cut by ten billion, something small or something larger . Twenty million month . It will depend on how the data are looking. My guess is they will probably do on the order of 20 plus or minus five billion, like the step down. One of the reasons they want to do this is to test the waters and see what the implications are for the economy and the markets when they take a step down. Connell markets have not been handling this, havent pulled the trigger on the policies, just the chatter, the discussion about it by ben bernanke starting in may and coming forward where we see this massive move in Interest Rates. How big of a problem, management problem is this going to be . It shows the power of the open mouth operations. Open market operations, just talking about them moves markets dramatically. Also happened in japan before the central bank bought a single additional japanese Government Bond to talking about it, dramatic change in the stock market and the exchange rate. So this is a very important issue. Relatively new tool and the market and the fed are trying to deal with it. This also is a bit of a challenge that there is a transition. Peter can investors expect more volatility until the market becomes comfortable with this, until capering is large . Or what . Will take a little time on both sides to get the communication strategy right and for the markets to digest and understand the chairman never uses the word caber because that suggests a Straight Line down. And they will wait and see what consequences are. And learning how the fed will talk about it will take time. Peter the chairman said this would be a measured step, so not every month can you count on 10 or 20 billion a month until they stop altogether by the middle of next year when the Unemployment Rate should be at 7 . They want to see how the data at evolves and robust economy. Peter one of the other big issues is the leadership change. Are you at janet yellen person or summers . The president is in the unusual situation having a lot of people to choose from, not only the main candidates the former shares, former vice chairs of the fed that people are talking about, people with ph. D. S, people who have been in those seats before congress and the International Community talking about these issues, Battle Tested and ready so we are lucky to have such a good police. Peter will this transiti