tv Power Lunch CNBC July 19, 2013 1:00pm-2:01pm EDT
>> we will see you monday morning. mcdonald's, what are the numbers going to be? those are going to be closely watched. simon, final trade. >> nucore. >> cyh. >> blackstone. >> have a great weekend. we'll sigh you on the other side. >> your luncheon delivery has arrived. detroit has filed the largest municipal bankruptcy ever and today we will show you who owns detroit and who is on the hook. plus, the companies you need to watch for the rest of the earnings season. next week a very, very big week. we'll tell you all about it to get you ahead of the curve. if you live in the northeast and plan on hitting the beach this weekend, baby, it's hot out there. but watch out, there have been several great white shark sightings. no sharknado, real sharks, folk ted within a few hundred feet of the beaches in the northeast. we've got the photos and advice
on what to do. watch your toes, sue. >> absolutely, ty. chilling pictures. wait until you see them. it's amazing how close the sharks are getting to shore. we start with detroit's bankruptcy filing. they filed the largest ever municipal bankruptcy late yesterday afternoon. the city's state appointed emergency manager sought bankruptcy protection rather than taking more money from the battered emergency services department to pay off the debt. today michigan's governor rick snyder said many of the city's creditors aren't sure they'll ever be repaid. this is the cover though of today's "detroit free press." it's a pretty big headline and an optimistic one. it says a chance for a fresh start. well, we certainly hope that's the case, but we don't know yet. robert frank is reporting on how some may see opportunity now in detroit, of course, with the situation, but first, we'll start with kayla tausche on who the detroit bondholders are. >> sue, governor snyder alluded to them but a lot of ink has been given to the $18 billion in
debt held by creditors. that detroit with this bankruptcy has admitted it can no longer service. there are a few slices that make it up. the largest are the roughly $10 billion in unfunded penguins and health care benefits. then there's roughly $2 billion in unsecured debt. the city issued to cover general purposes as well as a pension gap. then finally a separate $6 billion tranche of bonds funding the city's water and sewer operations. here is who holds those and the fallout that could be associated there. you have the public sector employees working currently in detroit. they could see their pension contributions stopped or altered significantly. you have the public sector retirees who could see their checks stop altogether and health care go unfunded, too. on the unsecured side, that's held largely by european banks and sovereign funds. the municipal bond funds like jpmorgan and fid dell ilt's michigan jen tricentric funds ht last stop. it's backstopped by the resident's utility bills. the city did that to keep the lights on in a scenario like
this. some muni bond indices have exposure but it's likely small since industry watchers have expected this. the intermediate fund has 1% exposure. and the i shares muni index has absolutely no exposure to detroit. tyler? >> very, very interesting. a lot of these funds will have some of that but in very small amounts. >> and a lot of them have exposure to the water and sewer bonds which haven't lost value and those are backstopped by the bills. >> thanks very much. moving on now, if history is anything to go by, detroit's bankruptcy filing may create opportunities for hedge funds, distressed debt investigators. robert frank is working on that part of the story. >> it's tough to talk about this at a time of pain this detroit. you could call them vultures, but hedge funds are already circling detroit looking for a big opportunity. several hedge funds told me they are poring through documents and balance sheets to see what the trade is in detroit. now, reports say that a 25
million block of pension certificates recently went to an unknown buyer for about 66 cents on the dollar. if they end up getting 80 cents on the dollar after bankruptcy, that's a good trade. now, a lot of these funds are coming off big success in jefferson county, alabama. that's that other big bankruptcy we're working through now. funds like monarch alternative capital and stone lion capital have purchased more than $600 million in debt in jefferson county. they could reap big returns once that county cuts its costs. like jefferson county, a lot of note holders in detroit are foreign banks. they could be anxious to get out of this risk, get that balance sheet off their books and sell at a big discounts. there are huge risks in buying detroit debt but the smart buyers could make a big profit and perhaps even help detroit get back on its feet. >> thank you very much. robert frank reporting. sue, down to you. >> ty, we're going to focus now on the muni bond yield. it's rising. i just checked and long data aaa
paper, the yields have moved 11 basis points. that will tell you how much things are in flux on a situation like this this day after detroit filed for bankruptcy. the largest municipal bankruptcy in u.s. history. how safe are muni bond investments in general though? ben thompson is the ceo of saferson capital advisers which is a global fixed income boutique. ben, good to have you here. >> thanks, sue. >> as i understand it, you do not think that detroit is basically a blueprint for what we will see in other municipals on a wide scale in the country. >> that is a correct reading. the urgency of detroit's situation was very clear. people have been watching detroit. this, unfortunately, was inevitable. it sounds like there was a rush yesterday to get the bankruptcy filing before it could be blocked by the city pensions. so this occurred even more quickly than i think people expected, but detroit shouldn't be extrapolated to the rest of the marketplace. the issues in detroit are unique
to an economy that's shrunk from a population of 2 million to 700,000. has budget gap of $200 million to $500 million. there are problems around the country with local governments and state governments. not of this magnitude, and hopefully detroit acts as a catalyst to get some of the important conversations going that need to occur now so future detroits don't occur. >> but whatever happens with the general obligation pledge could be viewed as a blueprint for other municipalities that get in trouble, isn't thatorrect? that's the crux of the matter is that the general obligation bonds have been sacrosanct for some time. that may change in this situation. >> you're right about that. that's the biggest concern. the thing most of us are watching most closely in the process. it is interesting that the emergency manager has chose ton characterize the bonds as unsecured obligations. i don't think everybody should acknowledge they're unsecured. there's a general obligation pledge which is full faith and credit. assuming they're unsecured and lumping them in with unsecured kretors, it's a little too early for that.
>> steve rattner was on our air earlier this morning. i don't know whether you were able to really hear that discussion, but he thinks that things have gone so far in detroit that they may need a federal government bailout. is that what it's going to take to keep that general obligation pledge intact? >> unfortunately -- i think to keep everything intact, it probably would. the magnitude of detroit's problem is so significant that i think the emergency manager's initial offer of 10 to 20 cents on the dollar is indicative of how little capacity there is to pay the obligations. this really forces the issue of the long-term liability problem outside of bonds though. this is the pension problems that are very significant. that's a larger number. so how that is handled and how general obligation bonds are treated relative to those categories is really going to be the critical piece. i think a full payment of general obligation debt would be
pretty challenging. >> yeah, i think it would, too. but we're facing it and we'll see what happens. thank you so much, ben, for joining us. appreciate it very much. >> my pleasure. ty, up to you. >> what a thorny problem they have to deal with out there in detroit. speaking of thorny issues, let's talk about some thorns in the earnings eason. there's some roses and thorns. interesting trend emerging. companies that are focused on the u.s. doing much better than companies that are focused overseas. seema mody has been looking into that. what can you tell us? >> while it may be early in the earnings season there's still one clear trend catching the attention of wall street and it's all about revenue. companies with much of it coming from within the united states have grown revenue by 4.6%. so far this quarter. while those with less than half have grown only 1.6% according to thomson reuters. barclays says this is an emerging trend to watch as it shows evidence earnings are becoming increasingly reliant on domestic demand. general mills, costco, verizon,
and csx corporation generate more than 70% of revenue from domestic operations and have reported a jump in revenue. oppenheimer says it's advising investors to stick with u.s. centric stocks because of the relative strength in the u.s. economy. risk aversion among thorn investors and the likelihood that any european economic recovery will continue to trail the u.s. by one to two years. to see if this trend continues, analysts will be watching netflix, ryder, ford and eli lilly which make a significant amount of revenue in the united states as well and report earnings next week. >> seema, you cover nasdaq for us. two of the big nasdaq names, microsoft and google, had their own little issues. speaking of thorns in the earnings patch. >> absolutely. >> yesterday. they had misses. both stocks down today. microsoft having actually it's worst day since i believe 2009. i might need to check that, but look at those numbers. down $4 on microsoft. that's a lot for a $30 stock. down $14 on google.
that's a pretty good amount on a $900 stock. what's going on here and what do their individual numbers say, if anything, about the technology sector? >> absolutely. it was definitely a double whammy for the tech sector. earnings growth is now back below 3% thanks in part to misses by google and microsoft. next week tech earnings continue with netflix, a top performing stock on the s&p 500 that has been moving higher on strong earnings and an uptick in subscriber growth and another one, just a small one, tyler, apple. analysts estimate apple will report earnings of $7.31 a share, a 22% drop year-over-year. apple, of course, has been facing heightened competition in the smartphone space from samsung as well as saturation in the mobile market. hudson square research tower says new product introductions would be unlikely to move the needle this fiscal year and continues to cephesee fiscal ye3 as apple's lost year. so tech -- >> fiscal year apple's lost year. apple was driving those tech
earnings for years and now since they have slowed down, you don't have that sort of steroid in the cocktail. seema, thanks. see you later. sue, down to you. >> more earnings to talk about, ty. general electric, the biggest winner in the dow today. it hit a new 52-week high. right now it's up 4.5% to 2470. the industrial giant beating estimates. cost cutting and steady orders for its turbine and machinery businesses helping to justify set a decline in quarterly result. honeywell also beating estimates. shares hitting a new all-time high. profits rising 13% from a year ago. strong automation sales helping to improve margins and offset weaker aerospace sales. honeywell raising the low end of its full year forecast. ty? >> sue, we've also got earnings in the oil patch to tell you about. schlumberger, a jamname i can'ty often enough. profits at the world's biggest oil field services company
schlumberger rising almost 50% from a year ago. higher overseas activity offsetting weaker revenue in north america. now, the rival company baker hughes missed the mark and shares there are getting hit. there you see them down about 3% as we look on the board. earnings off 45% because of weaker profits in, yes, north america. sue? >> ty, we're going to go out west. we have an update on that giant southern california wildfire. it's now forced several thousand evacuations not far from palm springs. plus my sometime partner on "power lunch," simon hobbs, is with me. you have an update on some late-breaking news with the travel and leisure stocks. >> you'll probably be aware the big hotel groups are lining up to start reporting earnings. next on the program we'll have an analyst with proprietary access to millions of their future hotel bookings. hear the shocking truth about one area of the lodging industry. that's next. "power lunch" is back in two. come to the lexus ] golden opportunity sales event and choose from one of five lexus hybrids
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wildfires in the mountains east of los angeles not far from palm springs now burning nearly 23,000 acres. that is more than 35 square miles, and it is only 15% contained at this hour. crews using ten air tankers, 17 helicopters, and nearly 3,000 firefighters to battle this dangerous blaze. more than 20 structures have been damaged or destroyed, and mandatory evacuation orders are
still in place forcing some 6,000 residents to leave that area. sue? all right, ty, some big news from the hotel and the leisure sector today. simon hobbs covers that beat for us. he's here first with a new report. >> we can get you ahead of it now with an analyst who has proprietary access to data on millions of future hotel bookings. patrick scoles can see what the ceos see now before they officially tell the market over the next couple weeks. welcome to the program. >> thank you, simon. >> the shocking truth remains within group bookings. what are you seeing? >> what we're seeing is very weak short-term group bookings. basically what we call in the quarter for the quarter group bookings. it's been extremely soft. >> how bad is it? >> we look at the pace of bookings. the number of reservations booked in june and early july for stays in the rest of the
summer and september for groups specifically down nearly 20%. >> wow, from a very low base anyway because they have been the last to recover. >> the base was okay to start with. >> okay. >> but i will say there are certainly areas of strength, certainly the individual business traveler and the transyant business is carrying the hotel industry. >> i imagine this still means d.c. therefore looks very poor. in contrast to other markets that are doing well, honolulu, houston, seattle, san francisco. >> you're absolutely right. most markets are doing okay to well with the exception of washington, d.c. i mean, washington, d.c., it's really seeing a deflation in hotel demand due to sequestration. >> okay. so cut to the chase for me. how do i react to this news as an investor? what is the advice? >> i would say pick your names carefully and try to avoid those names have that large expo shower to conventions and groups. >> who would they snb. >> ryman hospitality, formerly
gaylord. >> how about hmo? >> i would avoid the same. >> la salle. >> hasn't done anything in three years. we have 20% to 25% of their business coming from washington, d.c. they've done a little bit better than the market but still i wouldn't say it's anything to write home about. >> some people think it's a turning point but we'll leave that hanging in the air. nice to see you, patrick. >> thank you. >> patrick scoles on the lodging industry. detroit filing the biggest municipal bankruptcy in u.s. history. $18 billion in total debt, and not much way to pay it back. should the federal government jump in and bail out mo town? and killer great white sharks return to the northeast. all these things do is swim, eat, and make little sharks. before you go swimming this weekend, you better watch our next report. it's no joke. we're live at the beach in two minutes. before global opportunities
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for us in chatham as the great whites are once again back in the northeast in a big way on this very hot summer day. >> reporter: yeah, definitely very unsettling for swimmers here on the cape. i can tell you there's within a total of eight great white shark sightings in recent days, many coming close to the shore. i want you to take a look at the sign. this is what visitors are being greeted with, a shark advisory warning swimmers that sharks are here and to enter the water at their own risk. now, some of these sharks have been photographed from up above by state police and cape cod shark hunters. just to give you a better idea as to what's happening here, we can tell you that six great white sharks were spotted in monomoy island, an island nearby. even more chilling, two more sightings of great whites in chatham on sunday and monday, and in both cases the sharks were even seen within a couple hundred yards off the beach.
one was even stalking a seal. last year you may remember in nearby truro, massachusetts, a man was actually severely injured when he was attacked by a great white while swimming. people along the beach that we spoke with taking these sightings very seriously. it's not a joke, keeping a close eye out. some, however, didn't even know about the sharks. >> no, we did not know. >> reporter: little disconcerting? >> of course, when you have little ones you always worry. >> reporter: >> making sure that the kids stay closer to the shore. >> reporter: you are taking additional precaution? >> we've been aware the sharks have been here for a while. we tell the kids and they are aware as well. >> if our staff see any sharks in the water or get reports of them in the immediate vicinity we do close the beach for a period of time while we examine to see where the shark is located and make sure things are safe. >> reporter: and we also spoke with beach patrol on the beach a short time ago. they say they are monitoring the
situation very closely, but as of right now lieshouse beach is open for swimming. again, the weekend just beginning here. we're in a heat wave right now in massachusetts so many people are coming out here to get in the water, but a lot of those people only staying knee deep or waist deep. back in to you, tyler? thanks very much for that report from chatham, massachusetts. on the phone with william barone is with cape cod shark hunters, a group of fishermen tracking great white off cape cod. welcome. how do you do what you do? if you see it do you investigator a boat to where you saw it? >> that's exactly what we do, communicate over radio and i drive the boat from the air, basically i give the instructions to our wheel man. his dad goes out and tags the shark.
>> reporter: how many have you seen in recent days, george? >> i'm sorry, tyler. >> reporter: how many have you seen in recent days? >> i've seen half a dozen a few days ago and the next day i saw one. i haven't really been flying that much, you know. one day i spent the whole day out there. >> and these creatures are then tagged with what, a kind of radio beacon so that -- so that you all can -- can know when they are coming close to shore? >> correct. we're working in conjunction with the massachusetts can i vision of marine fisheries, and they have deployed buoys, listening buoys all along the outer cape, so each shark has an individual footprint when he swims within 1,000 feet of these buoys and the information is downloaded to computers. >> how much time do the sharks spend as we're looking at photographs, how much time do they spend close enough to the surface so that you can see them? >> each shark is an individual. some come up and i follow them for two or three hours. others would come up for just a minute or so.
>> final advice to the swimmers, any advice? >> well, the cape is doing a great job of keeping everyone informed. they have posted billboards all up and down the cape, just, you know, be cautious, don't swim with the seals. when we do see a shark, we keep the authorities posted, you know, the harbormasters and the cape could the national sea shore. we tell them where the sharks are observed, and it's going to take layers of, you know, precautions. >> george, we thank you for your time. my advice to the sharks is watch out for george breen because he's watching you, baby. >> you have a good afternoon. >> you, too. with cape cod shark hunters, and if you're smart and stay out of the water and want to read rather than taking your chances with great whites, check out bill gates' summer reading list, "the world until yesterday, what can we learn from traditional so sides," that's one on his list. "the box, how thing him container made the world smaller and the world economy bigger."
and "how children succeed," and i actually just ordered this one yesterday, "made in the usa, "the rise and retreat of u.s. manufacturing" and "whistling vivaldi." bill gates' reading list, sue. >> i think it's fantastic, very eclect eclectic. lots of different things on there. something for everybody. >> bob pisani, down 32 points on the trading session. it's a summer friday and, you know, i think detroit's bankruptcy has everybody kind of sitting back and taking notice a little bit. >> that's definitely an issue, although we've been talking about it for quite some time. i think the important thing is that microsoft and google took a lot of oomph out of the tech sector and ge and ingersoll-rand and the industrials have helped the optimism, at least modest optimism back.
take a look at those sectors. no surprise that the industrials are in the lead. that's because of what's been going on with some of the earnings reports this morning here. take a look at what i call the big four in terms of earnings that you want to look at. our former parent company, ge, terrific numbers there overall. that's a five-year high, ingersoll-rand had excellent numbers as well. these are big, big global industrials. honeywell at an historic high today and whirlpool which is a consumer stock, they are not far from an historic high and their guidance for the second half of the year was well above expectations. that's part of this gain right now, folks, is we promise you the second half of the year will be better. look at what honeywell said on the conference call. follow that one. they said order rates were improving. they mentioned the eu, european union positive, huh, really? china was picking up. they increased the low end of the guidance and really basically whirlpool did the same thing. we promise you, folks, things are going to improve in the second half of the year and the market buys into that. this is a very, very old story.
finally i just want to note here in terms of investor enthusiasm, the public enthusiasm. money keeps going into bond funds. bond mutual funds. remember, he had four years of outflows. beginning in january we've had inflows, and this week we had 3.75 billion inflows into stock mutual funds. sue, that is the 28th straight week of inflows, and the largest we've seen since early january, so, you know, is the public back? they don't care? well, they had been caring this year and we've seen real notable ones. bond funds also had inflows. not getting a rotation but just getting money back into the markets. >> very good point, bob. thank you very much. some trouble in tech land with google and microsoft today. that's been weighing on the nasdaq, and bertha coombs is here to brief us on all of that. hi, bertha. >> reporter: that's right, sue, microsoft the biggest weight on the nasdaq, but it's not the biggest decliner in the nasdaq 100. that's intuitive surgical. that's off 12%. the company is lowering its guidance after it had already warned for the current quarter,
and take a look at the stock, a real high flyer, up 58 $585. want more information about the design of its robotics. accounting for much of the decline of the nasdaq 100 but not the only disappointment. google off the lows, google disappointing, ebay disappointing and intel disappointing making for the naz tack 100 big caps to be the worst performer for the week, and it certainly doesn't set things up very well for apple next week. a lot of people are probably nervous about that. >> i would think so, bertha. thank you. to the gold market. a modest gain in gold right now as we're going into the close. sharon epperson is tracking the action down the street at the nymex. >> reporter: gold prices up 8 or 9, right around 23 an ounce. still not able to break above that 1,300 level and a lot of
traders have been waiting to see that happened. a lot of week for gold and gold prices below the 1270 level at some point during bernanke's testimony to get very close to the 1,300 level and unable to break through that mark. we're continuing to watch the etf action as well as china has launched some new gold etfs but in the a lot of funding interest in those right now. >> back to you. thank you, sharon, very much. to the bond market right now, where we've seen the yield on the ten-year note tick down a little bit and part of that i'm told is linked to some continued worries over the situation in detroit, the bankruptcy, the largest municipal bankruptcy. ies that triggered a move slightly into treasuries today and mostly in the intermediate part of the curve. the note is traded on the -- about the 2.49% is what we have on our ticker. i'm not sure that that latest yield is correct, 2.48 so it's ticking down a little bit more
than it was earlier on so you're up to date on today's bond market report. >> detroit's bankruptcy does highlight some of the risks with municipal bonds. is it a good area for investors right now or not? we welcome back katie nixon for northern trust wealth management which has more than $200 billion in assets under management. a great day to have you here, and it's good to see you again as always, but there is a lot of nervousness in this market, even though we all knew detroit was struggling. we know it's been a long-term decline in population in detroit, so maybe we shouldn't be surprised, but it's having some ripple effects through the market today. >> sue, i couldn't agree with you more. shouldn't be surprised from the events as they unfold in detroit. it's a tough situation but one that's well forecast in the market for quite some time but i do think it reinforces the importance of the quality of bonds they have in the portfolio. core fixed income and core municipal bonds. the risk control assets so it's very important that we know the
quality of the bonds that we own. >> but you do not think from what i understand that the detroit situation will be repeated in numerous municipalities across the country. >> no, sue. detroit is a very unique situation. there are several unique situations of credit stress in the muni bond market but the general health of municipalities has never been better, tax revenues have come in above estimates. they have gotten their houses in order post the financial crisis so the general -- the general health of the muni bond market remains very high. >> you are now overweight developed nations outside the u.s. that's the latest note that i have here. >> we are. >> why and what areas in particular do you like? >> you know what, it's really because we see the growth outlook really bottoming and even improving in developed ex-u.s. markets, in particular the uk, even across the eu and specifically in japan so we really like japan right now, as a matter of fact. beginning stages of really showing impact on the economy,
credit creation, loan demand up, consumer confidence up, consumer spending rise so that's a very interesting area also and that in combination with the low valuations and low expectations makes it a good place for investors to look. >> right, and i know there's an election in japan over the weekend and we'll see what the result of that is and he can control both houses because that would give him a lot of strength. >> exactly. i mean, the ability to really push through some of the needed regulatory reforms that are needed. >> there was a lot of talk at our delivering alpha conference earlier this week about the natural resource play, and the commodity play. where do you stand on that? there's basically two thoughts, one it's going to continue and china will get its act together, and the other is that basically it's played out. >> you know, sue, we have downgraded our -- our outlook on emerging markets, specifically in china, recognizing now that you've got this tough situation of a slowing economy and a central bank that is more focused on reform than on stimulus, and commodities tend to be very highly correlated to
emerging markets and to china in particular so we're neutral on commodities at this point as well. >> katie nixon, good to see you. >> stay cool out there. very hot, appreciate it. >> let's listen in to president obama, he's in the briefing room right now. >> and how people have responded to it and how people are feeling. you know, when trayvon martin was first shot, i said that this could have been my son. another way of saying that is trayvon martin could have been me 35 years ago and when you think about why in the african-american community at least there's a lot of pain around what happened here, i think it's important to recognize that the african-american community is looking at this issue through a
set of experiences and a history that -- that doesn't go away. there are very few african-american men in this country who haven't had the experience of being followed when they were shopping in a department store. that includes me. there are very few african-american men who haven't had the experience of walking across the street and hearing the locks click on the doors of cars. that happens to me, at least before i was a senator. there are very few african-americans who haven't had the experience of getting on an elevator and a woman clutching her purse nervously and holding her breath until she had a chance to get off. that happens often, and i don't
want to exaggerate this, but those sets of experiences inform how the african-american community interprets what happened one night in florida, and it's inescapable for people to bring those experiences to bear. the african-american community is also knowledgeable that there is a history of racial disparities in the application of our criminal laws. everything from the death penalty to enforcement of our drug laws, and that ends up having an impact in terms of how people interpret the case. now, this isn't to say that the african-american community is naive about the fact that african-american young men are
disproportionally involved in the criminal justice system, that they are disproportionally both victims and perpetrators of violence. it's not to make excuses for that fact, although black folks do interpret the reasons for that in a historical context. they understand that some of the violence that takes place in poor black neighborhoods around the country is borne out of a very violent past in this country and the poverty and dysfunction that we see in those communities can be traced to a very difficult history, and so the fact that sometimes that's unacknowledged adds to the frustration, and the fact that a lot of african-american boys are painted with a broad brush and
the excuse is given, well, there are these statistics out there that show african-american boys are more violent, using that as an excuse to then see sons treated differently causes pain. i think the african-american community is not naive in understanding that statistically somebody like trayvon martin was probably statistically more likely to be shot by a peer than he was by somebody else. so -- so folks understand the challenges that exist for african-american boys, but they get frustrated i think if they feel that there's no context for it and that context is being denied and that all contributes
i think to a sense that if a white male teen was involved in the same kind of scenario that from top to bottom, both the outcome and the aftermath might have been different. now, the question for me at least and i think for a lot of folks is where do we take this? how do we learn some lessons from this and move in a positive direction? i think it's understandable that there have been demonstrations and vigils and protests, and some of that stuff is just going to have to work its way through as long as it remains nonviolent. if i see any violence, then i will remind folks that that
dishonors what happened to trayvon martin and his family. but beyond protests or vigils, the question is are there some concrete things that we might be able to do? i know that eric holder is reviewing what happened down there, but i think it's important for people to have some clear expectations here. traditionally these are issues of state and local government, the criminal code and law enforcement is traditionally done at the state and local levels, not at the federal levels. that doesn't mean though that as a nation we can't do some things that i think would be productive, so let me just give a couple of specifics that i'm still bouncing around with my staff and so we're not rolling out some five-point plan but some areas where i think all of
us could potentially focus. number one, precisely because law enforcement is often determined at the state and local level, i think it would be productive for the justice department, governors, mayors to work with law enforcement about training at the state and local levels in order to reduce the kind of mistrust in the system that sometimes currently exists. you know, when i was in illinois, i passed racial profiling legislation, and it actually did just two simple things. one, it collected data on traffic stops and the race of the person who was stopped, but the other thing was it resourced us training police departments across the state on how to think about potential racial bias and
ways to further professionalize what they were doing, and initially the police departments across the state were resistant, but actually they came to recognize that if it was done in a fair, straightforward way that it would allow them to do their jobs better and communities would have more confidence in them, and in turn more helpful and applying the law, and obviously law enforcement's got a very tough job. so that's one area where i think there are a lot of resources and best practices that could be brought to bear if state and local governments are receptive, and i think a lot of them would be, and let's figure out a way for us to push out that kind of training. along the same lines i think it would be useful for us to examine some state and local laws to see if it -- if they are
designed in such a way that they may encourage the kinds of altercations and confrontations and tragedies that we saw in the florida case, rather than defuse potential altercations. i know there's been commentary about the fact that the stand your ground laws in florida were not used as a defense in the case. on the other hand, if we're sending a message as a society in our communities that someone who is armed potentially has the right to use those firearms, even if there's a way for them to exit from a situation, is that really going to be contributing to the kind of peace and security and order that we'd like to see, and for those who resist that idea that we should think about the stand
your ground laws, i would ask people to consider if trayvon martin was of age and armed, could he have stood his ground on that sidewalk? and do we actually think that he would have been justified in shooting mr. zimmerman who had followed him in a car because he felt threatened? and if the answer to that question is at least ambiguous, then it seems to me that we might want to examine those kinds of laws. number three, and this is a long-term project, we need to spend some time in thinking about how do we bolster and reinforce our african-american boys, and this is something that michelle and i talk a lot about. there are a lot of kids out there who need help, who are
getting a lot of negative reinforcement, and is there more that we can do to -- to give them a sense that their country cares about them and values them and is willing to invest in them? you know, i'm not naive about the prospects of some grand new federal program. i'm not sure that that's what we're talking about here, but i -- i do recognize that as president i've got some convening power, and there are a lot of good programs that are being done across the country on this front, and for us to be able to gather together business leaders and local elected officials and clergy and celebrities and athletes and figure out how are we doing a better job helping young african-american men feel that they are a full part of this
society and that -- and that they have got pathways and avenues to succeed, i think that would be a pretty good outcome from what was obviously a tragic situation, and we're going to spend some time working on that and thinking about that. and then finally i think it's going to be important for all of us to do some soul searching. you know, there's been talk about should we convene a conversation on race? i haven't seen that be particularly productive when, you know, politicians try to organize conversations. they end up being stilted and politicized and folks are locked into the positions they already have. on the other hand, and families and churches and workplaces, there's a possibility that people are a little bit more
honest, and at least you ask yourself your own questions about am i wringing as much bias out of myself as i can? am i judging people as much as i can based on not the color of their skin by the content of their character? that would i think be an appropriate exercise in the wake of this tragedy. and let me just leave you with -- with a final thought, that as difficult and challenging as this whole episode has been for a lot of people, i don't want us to lose sight that things are getting bett better. each successive generation seems to be making progress in changing attitudes when it comes to race. it doesn't mean we're in a post-racial society.
it doesn't mean that racism is eliminated, but you know when i talk to malia and sasha and i listen to their friends and i see them interact, they are better than we are. they are better than we were on these issues, and that's true in every community that i've visited all across the country. and so we have to be vigilant and we have to work on these issues, and those of us in authority should be doing everything we can to encourage the better angels of our nature as opposed to using these episodes to heighten divisions, but we should also have confidence that kids these days i think have more sense than we
did back then and certainly more than our parents did or our grandparents did and that along this long difficult journey, you know, we're becoming a more perfect union, not a perfect union, but a more perfect union. all right? thank you guys. now you can -- >> that was president obama, a very reflective, sue, and personal president obama giving his first extended comments post the trayvon martin verdict. >> absolutely. >> that came down last saturday. it was very interesting. he went to some of the historical reasons for the way people in the african-american community feel and have reacted to that verdict and then laid out some of the things that he thinks we as a nation ought to be thinking about and doing with
respect to -- in the wake of that -- of that case. >> absolutely. basically a four-part proposal, if you will. as you said, it's not necessarily a plan but some of the things that he's been thinking about. we should note this was completely unexpected. the president usually does not attend the briefings, and he just walked in, and even the wires said surprise visit by president obama with these comments obviously, as you mentioned, ty, very reflective. and it will be interesting to see where the conversation goes. when we come up next on "power lunch," we're all about the bull. >> the bulls run in spain. they thrill thousands in mexico, and in lower manhattan the bull sits still projecting power. when we come back, the story of the bull that watches over wall street. how did he get there? who created him? why? it's all two minutes away only on "power lunch."
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a few blocks from here is even higher on the list. i'm talking about the bull that watches over wall street and all of lower manhattan. >> we don't know exactly the meek of the bull but i think it's strange. >> this is the famous bull of lower manhattan. >> it's a classic. it's a classic. >> it's become one of new york city's biggest attractions. people from all over the world come to see it, to be near it, to touch it. >> some people tell me that if you touch the bull, it will give lucky so i did it. >> the bull is the star of a new film called "my life in a canyon of heros." >> back in 1989 just before christmas i was impounded and put in a warehouse in queens. >> it's captured a lot of attention, enough for the smithsonian to notice. it's now a smithsonian in notion short film finalist. >> while the film isn't meant as a political statement, in some ways i'm trying to take the bull away from the bankers and sort of back to the people. >> the 7,100-pound 16-foot long
bronze bull was sculpted by this man, italian art iist arturo di modica. what was your vision? >> to give people the power for a better future. >> in front of sneescnbc's came immortalized him to the man on film. you've just met for the first time. what do you think of the work? >> it's fantastic and did a really, really good job. >> the bull was a christmas gift of the people of new york city after the 1987 stock market crash. arturo claims the new york stock exchange wanted a bear, too, but that wasn't in the cards. >> after the stock market, you know, crash, that's my idea of what i'm going to do, i did the bull because the bull means power. >> the sculpture moved downtown just a few blocks to bowling green park where it still sits today. >> this is the perfect place for the bull. and incidentally, the bull has
to remain on public display. that was one of arturo's requirement for the city to have the bull. it's a great piece. >> what a wonderful little story there. who knew all that have? the bull is down there, and he just sits there watching out for wall street. the bull's not really running at this hour on wall street, sue. >> absolutely. we want to let you know that the mayor of detroit will be on "closing bell" this afternoon. you won't want to miss that. that's at 4:00 p.m. eastern time. have a great afternoon, everybody. "street signs" begins after a break. wi drive a ford fusion. who is healthier, you or your car? i would say my car. probably the car. cause as you get older you start breaking down. i love my car. i want to take care of it. i have a bad wheel - i must say. my car is running quite well. keep your car healthy with the works. $29.95 or less after $10 mail-in rebate at your participating ford dealer. so you gotta take care of yourself? yes you do. you gotta take care of your baby? oh yeah!
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in the 1950s detroit was one of the largest cities in america with one of the highest per capita incomes in the nation but the motor city suffered decades of decay and urban blight and today it's gone bankrupt. a special edition of "street signs," live from detroit starts now. >> welcome to "street signs," everybody. i'm brian sullivan in detroit. mandy is back at cnbc hq, and we're live for you all day here in the motor city.