CNBC's Fast Money: Weiss: I Was At Ground Zero On 9/11 but I’m Still Not Trading on Bin Laden - CNBC

My wife was the first to see the news.

She was very happy, much more so than I was, perhaps because she was in the dark on 9/11 as to my whereabouts, while I knew exactly where I was—at Lehman Brothers headquarters across the street from the World Trade Center.

It took a couple of hours before I could get through to her, but the uncertainty was such a small price to pay versus the sacrifice of others.

Four months later, the FBI was in my driveway as my wife came home from picking the kids up at school. They wanted to know why I didn’t show up for Flight 93, my relatively last-minute decision not to make a business trip to San Francisco. It beat any investment decision I ever made.

I often still wonder why I had never realized I was to be on that flight that day until the FBI told my family. Every night from then on, as I put my daughters to bed, they would ask me to promise them that I wouldn’t be flying the next day.

I was back at work early on 9/12 in our administrative offices across the Hudson River in Jersey City, N.J. I was there with 20 others trying to figure out how we were going to stay in business while watching our building burn across the river.

The air was still acrid and ashes floated above us the following day as I returned to the Ground Zero neighborhood with a colleague to look at vacant office space offered to us by another company. But the firm quickly decided that we couldn’t bring our people back to that area.

Of course, Lehman stayed in business through hard work and teamwork, only to ultimately be brought down by a much stealthier attacker: the twin forces of leverage and greed.

While Bin Laden’s death is a cause for celebration, it is perhaps more a day for reflection and gratitude for those who have given their lives, both innocently and in service of our country.

But Bin Laden’s death is not an investible event unless the satisfaction of his demise leads to a more optimistic outlook from a personal standpoint. But I would caution against this approach, since the first lesson of investing is that there is no place for emotion in analysis.

In order to justify trading off this event, one must assume that Bin Laden had some influence upon the markets that has now been eradicated—and that’s not the case.

Stock Market and Investing: Silver's Shine Is Fading Fast - CNBC

Silver's shine is fading fast, and the market for the precious metal may have reached a top in a speculative, mad dash by ETF investors.

"The last move higher over the last month or so has really been driven by the strength of the retail investment demand, so the levels up here are not supported," said Suki Cooper, precious metals analyst with Barclays Capital.

"At levels above $40, we've seen some concern rising on the industrial demand side. The last leg higher has been investment-driven, rather than fundamentally supported. In that respect, the correction was due. I would say from a demand support point of view, we have levels that have been tested in other metals, but we haven't had a chance to test that in silver," said Cooper. "I think now prices are going to test where physical support comes in."

Silver [SICV1 41.055 -1.521 (-3.57%) ] has tumbled in the last two days, with Comex futures losing 10 percent on Tuesday alone, and the July contract finishing at $42.585 an ounce. Silver came within reach of $50 an ounce last week, and its all time nominal high, just above that level. The popular iShares Silver Trust ETF [SLV 40.58 -2.25 (-5.25%) ] lost more than 5 percent Tuesday, on volume of more than 211 million shares.

Moves by the CME to curb speculative buying with three increases in margin requirements in the last week have helped cool the metal's run.

"When something's on fire, there's lots of finger pointing. You've seen it in oil, and you're seeing it now of course in silver," said John Stephenson of First Asset Investment Management, in an interview on "Fast Money," in response to a question on the increase in margin requirements. Stephenson does not think silver's best days are behind it, and he expects the metal to reach $60 an ounce by year's end.

"The last two days have been pretty disappointing for people like me who are bullish silver," he said. But he added the world's awash in money looking for a home and gold [GCCV1 1536.70 -3.70 (-0.24%) ] and silver will continue to be magnets for it.

A larger-than-expected interest rate hike Tuesday by India and a slowing in Chinese manufacturing data earlier this week also led to selling in silver, which helped pull down other commodities. Commodities were also lower with emerging markets, on growth concerns.

Silver, up 150 percent since August, has been one hot commodity and it has been dubbed the "poor man's gold," as investors flocked to it while gold prices rose to $1500 and higher.

On the industrial side, silver is used in photography, solar panels, cell phones, computers and cars, in addition to jewelry. Cooper said at $50 an ounce, silver becomes 16 to 17 percent of the cost of producing a thin film solar panel.

Cooper said the latest buying frenzy was driven by investments in ETFs and silver coins and bars. At the end of April, for instance, eight silver ETFs held 15,486 tons of the metal, up from 14,582 tons in February. The April total was up just 10 tons from March, but at the same time, speculative accounts declined.

Speculators, which would include hedge funds, held 3,887 tons as of April 26, down 1,877 tons since Feb. 8. The all-time high for speculative holdings was 10,904 tons in late 2004, she said

"At the moment, the floor is going to be provided by a pickup again in retail investor interest, or it's going to be provided as we've seen in other metals, where physical demand comes in to buy support," she said.

Why High Gas Price Effects May Be Different This Time - CNBC

Kelsea Hanrahan spends a lot of time on the road.

The Long island, N.Y., consultant gets reimbursed 50 cents a mile for gas from her job. That used to net her an extra $50 a week in pocket change.

"I was pocketing money because my car is fuel-efficient, but now most of it's just going to the extra gas price," she says.

Brian Park doesn't have that luxury.

The Fort Lee, N.J., lawyer and his wife cut back on their driving and recently gave up their gym memberships to offset the extra $60 a month they're paying in gas costs.

"When I hear from the news that the gas price will skyrocket above $4 per gallon it freaks me out," Park confided as he filled up his Honda.

With the average price of regular gasoline now hovering near $3.80 a gallon nationally, prices at the pump are nearly a dollar higher than a year ago.

For the average American who drives about about 15,000 miles a year and uses roughly 750 gallons of gas annually, that dollar increase per gallon has eaten about a $750 hole into the household budget per car.

Americans have seen prices this high at the pump before, during the spike in 2008. Analysts expect to see the same kind of individual spending cutbacks we saw then.

"In 2008 we spent 12 months with gas above $3," and that resulted in notable changes in consumer spending choices, says David Portalatin of NPD Group. "Nearly half reduced their gas consumption by consolidated shopping trips, 29 percent cancelled or modified vacations, 25 percent found alternatives to driving. The more sustained price spike, the greater the impact."

Perhaps because consumers have traveled this road before, some analysts say this time around the impact may not be as pronounced across middle-class and higher-income consumers as it was in 2008.

Retail analyst Rich Hastings says retailers like Macy's [M 24.68 -0.03 (-0.12%) ], Costco [COST 76.41 -0.04 (-0.05%) ] and Bed Bath and Beyond [BBBY 54.52 0.46 (+0.85%) ] have done well in recent months, because their consumers tend to be more affluent. Hastings sees a battle royale looming for lower-end consumers between Wal-Mart [WMT 53.63 0.11 (+0.21%) ] and the dollar stores.

In 2008, price-conscious consumers traded down from the retailing giant to the dollar stores, and he says they've not really come back. This week Wal-Mart announced it would match its competitors' low-prices.

Hastings believes this time around the nation's largest retailer will be very aggressive to fight for market share.

"If they want to get really nasty they could keep those prices even lower and force other retailers to go even lower and force other retailers to go through margin compression, and mark-down deduction expenses," he says.

For online and catalog retailers like Amazon, [AMZN 182.29 1.81 (+1%) ] Overstock.com [OSTK 14.51 0.36 (+2.54%) ] and LL Bean that often entice customers with flat-rate and free shipping, higher freight costs could also pose a threat to margins, says James Matthews, a business parcel shipment consultant with Source Consulting.

"The trickle down can be considerable," Matthews says. "A lot more people are buying online. Companies can only absorb that charge for so long without having to increase the prices somewhere."

Yet, as oil futures have climbed back above $100 a barrel, this time around shipping fuel surcharges at FedEx [FDX 93.43 -0.65 (-0.69%) ] and UPS [UPS 72.61 -0.62 (-0.85%) ] are not as steep as they were when oil prices were at the same level in 2008.

In April three years ago air freight surcharges were close to 20 percent ,according to Source Consulting Research. This month, the air surcharge is hovering at around 11 percent.

"In recent years, when FedEx increased shipping rates, it also partially offset the increase by adjusting the threshold at which the fuel surcharge begins," says Jess Bunn of FedEx investor relations.

This time around, already accustomed to paying higher prices, customers may be feeling a little less sticker shock and be better prepared to make alternatives.

That expectation prices will rise is what really worries economists such as Nicolas Colas of ConvergEx.

While the Fed has said it believes the inflationary impact of the energy price is transitory, Colas says they have to be concerned that inflation psychology may become more fixed.

"The Fed knows they have to worry about inflationary expectations," Colas says. "Once you lose control of that psychology as a central bank you're in a tough spot." Colas thinks people are close to that point.

Consultant Kelsea Hanrahan certainly is. She's bracing for gas to top $4 a gallon this summer.

"I'm expecting it," she says. "That's where it seems to be heading."

Mad Money's Jim Cramer on CNBC: Cramer Explains What's Key to This Market - CNBC

Cramer on Tuesday marveled at how the market continues to push higher despite a long list of negative economic news.

"For the first time in a long time we're witnessing true bull market behavior where buyers don't scare easily and are willing to massively overpay anything with growth," Cramer said. "There's a shortage of, well, fright."

Consider Chipotle Mexican Grill [CMG 266.12 8.16 (+3.16%) ], which has seen shares soar. Investors continue to pay 39 times earnings for the stock, even though one would think it's dependent on consumer confidence, housing, net worth and lower gas prices. Yet the stock continues to go up. So long as Chipotle has earnings momentum, Cramer thinks growth-orientated hedge funds will continue buying shares. The second it loses that momentum, however, he expects the stock to fall sharply.

"Chipotle just won't go down, won't take a dive because that's what happens in a bona fide bull market," Cramer said. "In every bull market I've ever seen there have been anointed stocks, stocks that can do no wrong, stocks that make no sense to anyone but the people who buy them."

This rally is not about Chipotle, though. It's about the mechanics of the market. When it comes to fast food operators, Cramer would rather own McDonald's [MCD 75.37 0.37 (+0.49%) ], but he respects the buying power. That's important because in this market, money mangers don't care about price-to-earnings multiples. They care about growth. Hedge funds care so much about growth that they are willing to pay up for it.

"Recognize the power not just of the growth story, but of the undeterred buyers who are about to get a whole new influx of cash to propel Chipotle and other momentum names ever higher," Cramer said. "That's the key to this market."

Stock Market and Investing: Jobs on the Horizon as Market Drifts Higher Into Quarter-End - CNBC

Markets are already looking ahead to Friday's March jobs report as the next directional driver.

Stocks Tuesday floated higher in thin volume trading, with the biggest gainers the telecom and energy sectors. The Dow was up 81 at 12,278 and the S&P 500 was 9 points higher at 1319.

The dollar was also higher and bond prices were depressed, in part on comments from hawkish Fed officials that suggested the Fed should end its easy money policies sooner rather than later.

"It all comes down to Friday and the non-farm payrolls," said Boris Schlossberg of GFT Forex. "What if it comes in at 120,000, or 130,000, and unemployment goes back up to 9 percent? There's going to be a tremendous amount of resistance on the part of the FOMC to give it up." Economists expect about 200,000 jobs for March.

Dollar-yen was also higher Tuesday, surpassing the levels it hit after G-7 central banks intervened against the yen March 18.

"Since Plosser and Bullard, we have had 150 point rally. You can call this the second intervention — the Plosser-Bullard intervention," said Schlossberg. He was referring to Friday's comments from Philadelphia Fed president Charles Plosser and St. Louis Fed President James Bullard's comments, made today and over the weekend.

For Wednesday, investors are watching the ADP private sector payroll report for signals about Friday's jobs report. It is released at 8:15 a.m. The Challenger jobs report is released at 7:30 a.m. There is also another Treasury auction at 1 p.m. of $29 billion in 7-year notes. Wednesday's Fed speakers include Bullard, who is in London, and Kansas City Fed President Thomas Hoenig, who also speaks in London before the New York market open.

While bonds saw selling, stocks rose with little explanation Tuesday. Traders in the stock market dismissed comments from Bullard that the Fed could cut short its quantitative easing program. But the stock market has also ignored more trouble for banks in Europe and Japan's problems with its leaking nuclear power plant.

Another potential negative for stocks was the consumer confidence report but the market moved past it. As gasoline prices rose, consumer confidence fell to a weaker than expected 63.4 in March, after hitting a three-year high of 72 in February.

"Black swans are swimming in flocks now," quipped Jack Ablin, chief investment officer at Harris Private Bank. Traders have expected stocks to move higher into the end of the quarter Thursday, as portfolio managers shuffle holdings.

"One of the metrics we use is cash on the sidelines, and it's still nearly 25 percent of the capitalization of the stock market that's sitting on the sidelines in cash...that could be filtering in. Every day this goes on, it might be convincing these retail investors to be in there," said Ablin.

"Everyone's bemoaning the large government involvement, but that's what's keeping this going," he said. "We're getting pretty cautious here."

Earnings reports are expected Wednesday from Family Dollar [FDO 52.40 1.00 (+1.95%) ] and Signet Jewelers [SIG 44.80 0.85 (+1.93%) ]. Mosaic [MOS 78.85 1.18 (+1.52%) ] reports after the closing bell.

In Washington, the House Financial Services' Oversight and Government Reform subcommittee meets on TARP. The Senate Appropriations Energy and Water subcommittee holds a hearing on nuclear safety.

The Senate Committee on Agriculture, Nutrition and Forestry meets on high gasoline prices, and the House Financial Services Oversight and Investigations subcommittee meets on the cost of implementing Dodd Frank

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Why Won't the Fed Accept A Profitable Deal From AIG? - CNBC

For months, the Federal Reserve has insisted it has an exit strategy in place and has all the tools necessary for reversing the extraordinary monetary policy put in place during the financial crisis.

But now, faced with a formal offer to exit at a profit from one of the thorniest crisis-era holdings on its balance sheet, the Fed has remained silent and seemingly without a strategy.

AIG has come forward and offered $15.7 billion for the residential mortgage-backed securities in the Maiden Lane II portfolio. These assets were taken by the Fed in the darkest days of the AIG [AIG 36.55 -0.40 (-1.08%) ] bailout to secure a $22 billion loan that was part of the broader bailout.

The assets, mostly subprime residential mortgage-backed securities, have paid off and kicked off interest income while the loan has been paid down to the point where just about $14 billion is outstanding. So the $15.7 billion offer from AIG would mean the Fed would clear about $1.5 billion in profit on the assets.

The Fed could be excused if the offer had only just been made. But, in fact, the idea of AIG taking back these assets has been out there, in one form or another, since at least September. AIG has been busy raising money for what would be one of the biggest RMBS transactions since the financial crisis.

And yet, the Fed acts like it’s the first time it’s heard of the offer.

AIG CEO Robert Benmosche, in an interview on Squawk Box this morning, said he had still not heard from the Fed on its 10-day-old formal public offer to buy the Maiden Lane II portfolio. AIG had also not heard from the Fed on its behind-the-scenes offer to buy the assets in December.

Both the NY Fed and the Board of Governors in Washington declined numerous interview requests from CNBC to explain its thinking behind the AIG assets.

Fed watchers said they thought it made sense for the Fed to get these non-conventional assets off its book at the earliest opportunity. One source said he found Fed ownership of AIG subprime so troubling that he believed the central bank should unload them at almost any price, let alone at a profit.

Lou Crandall of Wrightson ICAP, said: “If I were the Fed, I would cash out and close the books.” He added that he would be happy to hear anything from the Fed explaining itself and, in an email, provided reasons that he thought could explain the Fed’s actions. He added that he barely believed his own reasons.

First, he said, the Fed may see it as premature to sell assets from a monetary policy stance. But then Crandall added, “I cannot imagine they think a transaction of this size would have macro implications.”

Second, he thought the Fed might think it will make more money by holding the assets. But then Crandall added that he’s pretty sure (as am I) that the Fed thinks such considerations shouldn't motivate a decision.

What has been especially frustrating to one person familiar with the matter is that taxpayers make out either way, and may do better if the assets reside on AIG’s books. Taxpayers own 92 percent of AIG, so let’s say theoretically that AIG underpays the Fed for the assets.

Taxpayers would capture all the upside by virtue of their equity ownership in AIG. What’s more, a dollar of interest income on the books of the Fed is worth only a dollar. A dollar of interest income on the books of AIG gets a multiple when express in stock value. Taxpayers will realize those multiples when and if the US treasury’s position is sold, perhaps as early as this spring.

This person thought, "They (the Fed) are just paralyzed on this question because they have been so beaten up by AIG."

There are those who believe the Fed should auction the assets and maximize the value. Word that Barclays [BCS 18.85 -0.10 (-0.53%) ] and others may be now be interested creates the possibility of a bidding war that could ring the last penny of value out of the assets.

The Fed would, of course, have egg on its face if the values came in lower than the AIG offer, but it’s reasonable to assume the offer in the table would be a floor. Still, the question is why a Fed that has been reasonably diligent about thinking about and even testing innovative strategies to unwind its easy monetary policy seems to blindsided by the question of how to handle the AIG offer for Maiden Lane II.

What’s clear is the controversy over what the Fed took onto its books from AIG has now changed into the conflict over what the Fed takes off its books from AIG.