Is Elizabeth Warren Going To Break Up The Big Banks?

Jeff Macke analyzes the morning business headlines,
5:45 | 07/12/13

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Transcript for Is Elizabeth Warren Going To Break Up The Big Banks?
Mixed this morning but no one's really worry the Dow was poised for its highest ever open right now want to bring in -- MacKey from Yahoo! finance good morning -- Good morning time -- -- I'm doing well and it's Friday and perhaps we are expecting a big market today like we did yesterday. Now we're kind of respect -- traders to just leave as soon as possible -- at all time highs it's not broken everyone just kind of tiptoe no sudden movements everything's just fine. -- -- bit sweet and nice rally -- had a great week a huge move. Ever wanted traders generally a little nervous -- we start taking these all time highs so I'm not expecting any sudden movements at all today want to get past about the first half an hour. -- just a few weeks ago we had a sizable sell -- the Dow fell 151000. Are expecting this kind of volatility is as the new normal. You know -- actually it was more abnormal we didn't have that kind of volatility since November the market really discounted tickets way out and and was almost monotonous in its point 1% gains over and over again which it made better example -- -- big sharp stick. But -- volatility 1% moves are not that abnormal. And so -- this is -- returned to just where markets are kind of supposed to -- and they're driven by. Events -- news it always moves faster lower than it does on the way up. And so what we saw was a classic selloff couple weeks ago and you could see those people fleeing back into stocks yesterday day before in the -- -- folks that didn't trade at all. Just -- come back in the C a marker roughly where -- -- -- three weeks ago. All right Jeff mortgage rates hit a two year high yesterday Adam bond prices come down. Well bond prices may have calmed down but the mortgage guys are gonna take rates wherever they want to take him. And the truth is -- the genie is out of a bottle in terms of eventually rates are gonna go higher in the bond market the Fed can't do much to control it. This -- a real impact on the folks at home -- -- getting into something not so want to hear. Because mortgage rates are going higher. And housing market -- -- the mortgage mortgage applications -- for me -- are going down mean fewer people are walking and trying to get a mortgage for brand new house. That means right now is a critical time for the housing market. It's very important watch this -- over the next few weeks because real human beings. Actually have to go in and apply for mortgages is opposed to a lot of these funds that have been buying houses and rent amount of folks. Keep your eye on mortgages because they're contracting sharply are ready with just kind of higher rates if we see a real move higher on the thirty year no one's going to be buying a house. Especially not a high prices with no down payments on high well -- -- this bike is already happening should the Fed have been as cautious as it happens with taper. You know this actually kind of funny it adds if your -- you have to read their statements and I am they haven't changed their tune. Not not one single time -- Bernanke said he -- in every zoos were taper. He's never really Saturday he set a specific point at which is going to taper what he said over and over again and this monotonous match -- not make way. Is if the data is good. We're going to let rates go higher if the data is -- we're gonna continue to stimulate the economy its data driven right now the data is OK I don't expect -- do anything and I expect the Fed changed their tune. Particular -- Bernanke's leaving in January is I think -- would just like stocks themselves ever wonders -- -- be cautious -- sudden movements things are broken why fix them. I -- today's earnings season that's thanks release -- numbers but in Asia. Good JPMorgan Wells Fargo -- reported really nice numbers. Bank earnings are sort of hard to -- in terms of what's really happening economically because banks have so many moving parts. So many different assumptions and -- but you know we saw right before the market opened it was a warning from UPS than big brown shipping company. A lot easier to get your arms around that -- is the banks UPS says that that activity in the business community slowing. That is more important than what the banks are earning seven that banks are fine -- banks generally are fine Intel or not which was signed 2008. All right and you know this Massachusetts senator Elizabeth Warren is pushing a bill to break up the big banks so first let's talk about what exactly it would do. Well it's called glass. Eagle which is the idea that -- where you go do your community banking. Should be different than say Goldman Sachs which is gonna do a lot of investment banking and really gonna act like more of a hedge fund and the Glass-Steagall was -- have a Great Depression law. That they put in after the banks collapsed in 1929. And and thirty. It was a reacted -- and -- now we want to -- -- again eighty years later essentially trying to undo what we've already done in the banking system. It's what you need to know folks at home is that it's a lot of rhetoric they're not gonna do anything -- its. It's been calling for bank reform is like kissing a baby if your politician I was gonna get all that man and yet if you say bad things about the bankers -- the truth there -- Washington and Wall Street are pretty tightly connected at the hip which happens to be where they put the wallets so you're not gonna see anything except a bunch of noise. That would thanks react. The banks not really you know it -- again. Then it's going to be noise of the politicians would like this to be as scary as possible and they'd like to say that the banks are either gonna baby in this heated battle over whether or not we're gonna reinstate this law to retard -- -- It's not going to happen. Frogs around yeah it's fun theater it's it's better than some of the summer movies coming out to watch these guys in Washington DC make much noise about cracking down on the banks. They're not going to crack down on the backs of it's just rhetoric. Jeff I love that you're equal parts skeptic and optimist. I feel like an -- today. Well I'm I'm a little skeptical the -- but I'm optimistic that'll continue next week so I'm. Kind of looking at my watch and thinking maybe it's -- called a weak market wise we've got a great weekend and you know -- -- did you enjoy that will what are you can enjoy. -- that must be investor talk for enjoy your Friday everyone's history and that's exactly at current -- Kate thanks let's take one more look at the Dow right now it is up. Sixteen points and once again our thanks to act yet -- -- tenth street.

This transcript has been automatically generated and may not be 100% accurate.

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