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tv   Closing Bell With Maria Bartiromo  CNBC  January 9, 2013 4:00pm-5:00pm EST

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for many days ahead. alcoa kicked off earnings season after the bell yesterday. you hears klaus kleinfeld exclusively after that. there's what the stock did. pretty muted day for shares of alcoa. all the attention turned right here as we look to earnings to continue next week. a deluge of reports coming from the nation's biggest banks, especially after what a career it was for financials last year. they led the market. you guys going to be watching the banks closely next week, right? >> we sure will. a lot of trepidation out there, but i tell you, if you're not involved in this market you've missed a lot, and i think going forward, the same thing. this always worries. should be involved in this market. i think the banks are going to do well. >> think we're due for a pullback based on where we've come. >> will see a lot of churning, down 50, up 50 and at the end of the year, at the end of the year you'll be very happy. >> good day on wall street. the dow is going to go out with a gain of 62 points.
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bob benmosche is here. maria picks up the ball and runs with it for another hour. >> it's 4:00 on wall street. do you know where your money is? i'm embroemor, on the floor of the new york stock exchange. stocks break a two-day losing streak today staging a rally at the end of the day. dow jones industrial average is up about 61 points. the high up 90 points early in the session, but nonetheless new money came into the market late today. last trade on the blue chip average. nasdaq picked up ground as well, 14 points even and the s&p 500, high by 4.75 points. earnings kicks off this week. here to break down what's going on in trading and the trading picture. nick santelli is with me along with nate an bad our guests. you've got the s&p 500 target of
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between 1525 and 1575. we close today at 1400. why so optimistic? >> well, you know, maria. i think looking here we've got some upside to equities. we look to the back half of the year just stemming from the fact that the market is overtly negative. focusing on all the negativity. look at year of 2012 and we've had a 16% run in the u.s. equity market and i don't feel like anybody celebrate that had at all. professional investors have gotten more bullish and individual investors still remain sidelined. lots of cash sitting out there. we know there's issues at hand and know the fiscal cliff is coming down the pike but more importantly the global growth story still remains intact. it is going to have a fair amount of bumps but through the bumps we're looking at using those types of opportunities to add risk assets to client portfolios. >> absolutely our share of issues. talk about this in my observation at the end of the show. rick, a lot of optimism about the direction of this market. you just can't fight the fed. where do you think interest rates are going to do, and that's going to dictate where
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you want to put your money because we're talking about zero returns elsewhere. >> yeah, i'll tell you what. here's the way i look at it. i think that we're going to have a giant hiccup in the form of activity slowing due to some of the things embedded in the grand bargain at the end of the year that wasn't so grand. i think tax rates moving up is going to take money that the private sector would invest in, and it's going to cause a lot more harm to the stock market. i still think it could be up, but i think it will act as a governor against a very aggressive move up in interest rates, so the long and short of it is i think stocks could be up but a lot less than our guests think, and i think that fact among several others will keep interest rates from going up much more than some of the other factors, so i think -- i don't even think we're going to spend a whole lot of time above 2.25, much less anything here on a ten-year note. >> that's interesting. brian, let me get your take. how are you advising clients these days? >> well, from the interest rate
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perspective, we do believe rates will be moving higher over time, but, again, like rick was talking, shouldn't be looking to fight the fed here. bigger picture is you're building portfolios right now. the key thing is looking at where the pockets of opportunity are, and from our perspective we want to be more cyclical on those types of pullbacks. you've got some wild cards this year. looking at the chinese markets, for example. we think that the chinese growth story will continue, that we won't see this double dip, this hard landing, and woe think that that could potentially have upside potential but more importantly you'll have the ripples. a lot of things coming up. bureaucrats from brussels headed down to greece. europe back in the news over the next week, week and a half and more importantly as well. got just the earnings story here which will be okay for this quarter, but we really don't believe it's going to be a major upside catalyst looking at the fact that consensus expectations look at a 2.5% year over year gain on numbers. >> the market, i guess, is not
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expecting much but the market keeps going higher. nathan, you've got the debt ceiling debate on the horizon, even if we get another credit downgrade. you don't think that's a big risk either. >> look what happened when we had the last credit downgrade, maria, did just fabulous. bonds you'll get the coupon. look for a 9%, 10%, 11% return or you'll be very disappointed. i agree with rick, and i think what we'll get mostly is the coupon off the bonds. i still like large cap. i'm about 65% in large caps here in the united states. the rest of it is in large caps, in europe and over in asia, and i think that's particularly emerging market debt and emerging market stocks. i like those. we've also increased our stock position by about 5 p. my guess is that this congress is going to give us a few more opportunities, maria, to be buying as a dip before we get to the second half of the year, and when i find myself agreeing with merrill lynch as an independent adviser, i don't know, but i
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like what kate moore had to say. >> what you're saying basically is you've got to be in the market but look for the right places because we'll see selloffs along the way, nathan. >> we'll absolutely see some selloffs. >> thanks, gentlemen. >> no doubt about it, maria. >> see you soon. thanks a lot, guys. stocks snapping the two-day losing streak. bertha coombs is here with the session's big movers, winners and losers. bertha, what can you tell us? >> reporter: leading the way higher today, some of them getting a little bit of a boost perhaps from the jpmorgan health care conference. in the spotlight, a lot of them. take a look at that sector, the s&p health care sector hitting a 52-week high and danaher after an all-time high after pre-announcing strong fourth quarter earnings. vaccines and medical products mckesson a fresh all-time high and seagate, meantime, led the s&p percentage gainers after pre-announcing better than expected fiscal second quarter results and hospira at a three
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month high. today we're seeing stronger volume, and closing the day at the highs. pe perkinelmer announcing a new innovation on a downsyndrome test. bank of america was downgraded over at credit suisse, though the analysts did raise the price target from $11 to $12. cabot, oil and gas and wpx energy both down today along with those sectors which were the losers. maria? >> all right. bertha, thanks very much. looking at equities. let's look at fixed incomes. let me bring joe back. you're favoring fixed income over stocks. tell us why. fixed income obviously has been the place that we've seen lots of money flows over the last several years at this point. do you think that it continues. >> no. we don't favor fixed income so i'm not sure where you get that. we favor emerging market fixed income and with countries with
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surpluses, canada, mexico, australia. we're very concerned with fixed income, and we think what you're going to see is the retail investor going back to owning equities. as everyone has said is they have really underparticipated in what's happening. i just came back from mozambique in south africa and zimbabwe, and you see this vibrant growth in the emerging markets which people are really underexposed to, so we think this coming year, the growth is going to come from those engines, and you really want to participate that way. >> my apologize. fixed income as it relates to the emerging markets. >> yeah. >> so is that the way to partake in what's going on in places like africa? i agree. i'm hearing so much excitement around africa and getting in on the growth story that's really developing there. you want to do it through corporate bonds and fixed income. tell us how. >> the best way to do it is two ways. one, you can own emerging market funds, and the second, or efts,
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and the second that's really interesting is to own the consumer brand. in zimbabwe, and you see them buying cokes and want to get mcdonald's and kentucky fried chicken, brands that to us are low level, but to them are aspirational brands. you'll get growth and a really nice dividend, and if you're going to get yield that's when you think we'll get it and there will be a lot of noise for three to six months, but a really exciting place to invest. the u.s. companies make the growth in the u.s. markets and investing directly in the emerging markets. >> got it. and in the u.s. you favor equities over fixed income. >> definitely, yes. >> where do you think you'll see the growth in equities 2013? do you have sector picks or areas where you'll see the money flows is. >> for us it's very much consumer stateles, so there have to be companies that generate most of the growth from the rest of the world so we do tilt large cap. we do think very much that the
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large cap are where the consumers typically invest in first, so what you're going to see is probably once we get clarity in the next three months or so, individual investors are looking for yield, buying more of these -- these big caps. remember, we did not get the increase in dividends that people were concerned about back to income levels, and so there's a huge incentive now for people to reinvest in dividend-paying stocks, large names that they recognize. typically where it happens. after that, probably next year small caps will start to outperform but for this year go with large caps and dividend and go with names you recognize because they are participating a lot in the emerging markets as well. >> good stuff. thanks, joe. joe duran joining us. a lot more on this vam-peeked digs of the "closing bell." thumbs down from aig's board of directors deciding not to team up with ex-ceo hank greenberg. greenberg is suing over the very bailout that rescued the company. doesn't like the terms, never
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did. ceo bob benmosche will join me to discuss the details. also banks on banks. wells fargo leading the bank earnings. how will the bake's earnings influence the rest of the market? and then happy birthday to the iphone. hard to believe it's only six years old. find out whether apple's plans for a low-cost version will turn out to be a huge mistake or not. you're watching cnbc, first in business worldwide. i've always had to keep my eye on her... but, i didn't always watch out for myself.
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welcome back. wells fargo kicks off the earnings season, jpmorgan chase, bank of america, all on deck. going to be a big week. let's check in with kayla tausc tausche. >> reporter: analysts are describing them as the friend who peaked in high school, so to speak. too ahead of the curve. its net interest margin, a key measure of bank profitability that at wells was also once best in class that. saw a big drop in the third quarter, and analysts say it could contract again in q4. consensus for wells is 89 cents a share, roughly 29 billion in
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revenue or flat. the street is more positive on jpmorgan which reports next wednesday. the u.s.' largest bank by assets appeared well positioned to benefit from an upswing in mortgage refinancing. the state of capital markets activity in the fourth quarter could prove surprising. in an industry conference in september the bank's then cfo forecasted a drop of as much as 20% in capital markets activity. and while loans and ipos slowed to a halt debt surged and jpmorgan holds on to that top spot in that space globally followed by bank of america and citigroup. the fourth quarter marks the first time for new ceo mike corbett at the helm. consensus on citi is $1.02 on $19 billion in revenue. analysts say the long-term restructuring as a positive to get expenses at citigroup in order. maria? >> all right, kay. [ laughter ] thanks so much. stick around. we'll bring in a couple of voices to the mix.
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top-notch banking analysts breaking down their expectations and how it may impact the broader market. anton, let me kick it off with you. an encouraging outlook for the banks. been an investor in this group for a long time. you're right. made a lot of money here what. will the themes be coming out of earnings of the bank inters of the fourth quarter from your standpoint? >> mortgage will be something we'll look at again very carefully. certainly a good market. will it continue? we may get mortgage rules out as soon as tonight so, you know, watch for those. those can certainly be headline-grabbing. we'll lock at margin. disappointed last quarter and may bounce back. a lot of merger accounting from wachovia and capital marks will be bright spots for the bigger guys that have stronger capital market units. a mixed bag. margin pressures and better capital markets numbers so all in all these things still look very cheap towards their future. >> isn't margin pressure sort of
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the new normal, if you will, in a lot of these companies given the fact that the regulatory environment is getting worse and globalization is not necessarily on their side where it was so many years ago? is this going to be the new normal? well, i don't think so. here's the question. will the politicians get it right? will we go over the cliff, another debt ceiling and if we don't we could have a very robust capital markets this year, an that's what encourages me for the big money centers. for the smaller guys starved for loan growth and margin pressures they will be buyers. the really small guys will be the sellers and you'll see a lot of m & a opportunity out here. >> jason this morning you raised estimates on three banks. you lowered estimates on nine banks. tell me what was behind that. you're expecting the quarter to be what, more negative than positive for the sector overall? how do you see it? >> fine tuning here and there with overall estimate. i think generally for the
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earnings for the quarter. we think about half our banks will beat expectations. half miss. if you think during the course of 2011 the banks steadily beat numbers and fourth quarter a lot due to expenses they hit a road bump. this year they have beaten consensus through the first three quarters of the year so it's interesting to see what the fourth quarter brings, but we do think the market compression will be an issue, but we think loan growth could surprise to the upside and think banks are finally getting their arms around the new cost structure they need to operate in, and i agree with anton, we do think there could be some positive surprises with respect to some of the trading results. you mentioned earlier, you know, jpmorgan sees revenues up 20%. there could be some upside. >> that's great analysis. and do you think any of this is priced in, or do you think this will be a bit of a surprise on the upside? >> you know, it's funny. look at the last 15 quarters of bank earnings. 12 of the last 15 bank stocks ran up into the quarter, and 13 of the last 15, they actually
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sold off or underperformed the market coming out of quarter so the group has a history kind of trading up into earnings. in this quarter it feels no different. up 9% in the last month or so versus the market up only three so the market seems to, you know, i think anticipate decent results from the space. so they could sell off after earnings, but i think about 2013 as a whole given the fact that we think a lot of banks are putting up growing earnings. we look for dividends and buyback and do think there's upside during the course of the year. >> kayla, anton is talking about the mortgage business and what about the mortgage settlements, what are you expecting? >> as far as the $8.5 billion robo signing settlement jpmorgan's share of that sun clear. wells fargo said it will take a $644 million pre-tax write-down. that's 305 milloff. bank of america is going to see a big hit. jason published on this as well. really unclear what bank of
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america's numbers will look like. the bank has said it will be modestly profitable, but when you do the math, that doesn't really add up, they are going to be spending about $1.1 billion in cash for that occ and fed robo signing settlement. have $2.7 billion on their settleman with f-fee that they hadn't previously reserved for. >> right. >> that's also going to come off the bottom lines. it's hard to imagine they could be modestly profitable but maybe they will surprise. >> anton, wrap us up here. your best pick in banks ahead of this earnings season. >> i like regent and citi on the money center. >> jason? >> we'd go with citigroup among the large caps and maybe a bank in east west among the mid-caps. >> thanks for sticking your next out. see you soon. we'll be watching the earnings and what it does for the broader market. we'll see you soon. >> up next, aig's board says no good on joining hank greenberg's lawsuit. the insurance giant shying away from greenberg's suit alleging the government took advantage of
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aidentifying. the head of aig, show bob benmosche here exclusively on the other side of the break and boeing says it has extreme confidence in the 787 dreamliner. how safe are they following the string of recent mishaps? top industry experts will join me. stay with us on the "closing bell." ♪ ♪ ♪ [ male announcer ] don't just reject convention. drown it out. introducing the all-new 2013 lexus ls f sport. an entirely new pursuit.
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against the government. mary thompson joins me now with more on this issue. mary. >> reporter: the board to join the lawsuit probably saved it from a public relations nightmare. keep in mind the insurers in the midst of an ad campaign thanking america for its support during the financial crisis. aig repaid last of what it owed on the bailout that was engineered by the treasury and the new york fed at the height of the financial crisis in 2008. now, the board's decision follows a board meeting this morning where the new york fed treasury and others presented their points. robert steve miller said the board fulfilled its fiduciary duty and the board reject it had entirely meaning it won't pursue the claims on its own or allowing greenberg international to pursue the claims in aidentifying's name. the ceo from 1967 until 2005, greenberg's long criticized the government's handling of aig during the financial crisis. his term filed the suit on
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behalf of other aig shareholders, the suit claiming, among other things, the firm's investors weren't properly compensated for the 80% stake the company took as collateral for the rescue packaged back in 2008. calls for clarification on the decision were not delivered. back to you. >> joining me right now in an exclusive interview, ceo benmosche. thanks for joining us. >> thank you, maria. >> very important time for the company and shareholders are out there watching this. first off i've got to say reading the court of public opinion, lots of headlines. now we've got a lawsuit against the government. the government bailed out this company. why did you even look at this. tell me exactly what happened and how you came to this decision not to join hank greenberg's suit. last summer at the end of the summer in august, the courts asked aig to make a decision of whether they wanted hank greenberg to proceed with the lawsuit on behalf of aig which
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is a derivative lawsuit as well as his own direct lawsuit on behalf of shareholders at the time of the financial crisis so starting in august, since the court asked us to mick a decision, the board said let's lay out a process and let's understand what the lawsuits are about and let's understand what they mean and then decide for aig whether we should be included and should he continue to actually represent aidentifying on this lawsuit which he wasn't, but he had operated independently, and so that's when a derivative suit is. this is unusual because you either have a derivative or direct. this is both, and so since mid-august the board has been going through this with very careful reviews of the pros and the cons and the issues and so on and finally came to a conclusion today that said it's not in the interest of aig, our policy holders and clients and employees as well as the shareholders and public at large. it wasn't in aig's interest to
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proceed or have greenberg proceed on aig's behalf so that's what happened. he will continue this lawsuit on behalf which is a direct lawsuit, on behalf of the shareholders at the time of the crisis. >> and of which he is a large one. >> right. >> and his wealth was tied up in this. >> absolutely. >> so the bottom line is the courts asked to you look at this. you've been looking at this. came to a decision and here you are today. you've been in meetings with the board discussing this. i know hank greenberg was at some of those meetings, correct? >> so give me the reason for the lawsuit. what went on in these meetings. what can you tell us in terms of the public and people out there understanding why this lawsuit is out there? >> this is about a question of fairness versus what you're required to do to be fair, and that's the lawsuit, and so, for example, one would ask if -- if bear stearns got some support
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lehman was allowed to go bankrupt, aig was asked to provide all of this value to the federal reserve for its loan, but then soon therefore others were given an opportunity to become bank holding companies and have access to the fed window, why didn't aig have the same opportunity and so this is about fairness. this is about in hapg's mind that you took an enormous amount of the company. why did you do that? we think it's not fair. we think it's aggressive and don't have a right to do that. that's the argument. as far as we look at the situation. it's a crisis. the government had to act. it acted, and aig is here because we needed liquidity and this is a liquidity issue for asignificant, not a solvency issue and we needed liquidity. this is the deal the government cut and we've been able to pay that all back with a profit. we're moving forward. hank is going back and saying the shareholders paid way too much for that loan right and the
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government's response would be you wouldn't be here if it weren't for the loan. that's the argument and we feel you shouldn't be part that have. >> i understand the argument and you know hank has been on this program a lot to explain how he feels about this, and the fact is aig was treated differently than citigroup, for example. >> yes. >> aig was treated differently than other companies, government taking an 80% stake. why wasn't there ever an option to, you know, maybe take over the financial products part of the business. the insurance part of the business was thriving, right? >> yes. >> why don't they let that business go and not acquire 80% and let the stocks employment and all the shareholders lose that money? >> maria, we could sit and hypothesize all the things of the past. i think i said once on your show. my daughter's friend gave her some good advice, and he said, you know what? i've given up all hope of a better past. it happened. it was a crisis. the world was in meltdown. the government reacted.
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did what they could, and my view right now is all i can think about is we had to pay back america. it came with a profit. we have a strong vibrant company. we're thanking america and we have to go forward. >> right. >> this is -- i don't know what was the requirement by law to make judgment "a" versus judgment "b." i think at the end of the day that that judgment was made in crisis and the courts will have to mick a decision. >> unfortunately throughout all of the upset of 2008 aig became the poster child of the financial crisis. how much of the public opinion, the court of public opinion that says, you know, that's terrible of aig to even be suing after the government saved it. how much of that went into your decision not to go along with hank greenberg because we both know that aig was treated differently. >> i think that our decision is based on all of that issue whether it's public opinion, our
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clients, our employees, but keep in mind what's important for this company is that we're a company that makes promises, and we're a company that you have to trust and, therefore, when people look at how we behave and act, the government gave us this support and we've paid back that support but without it we would not be that strong today so the real question is did they approach that problem correctly and legally. that's hank's argument. did they pay a disproportionate price for that. that's their argument, not ours and we have to focus on the strength of the company but it all plays well in terms of our thinking that we have to look at everything and that's what the board did. >> i understand this. let me ask you this, hypothetically speaking. what if hank greenberg wins this lawsuit. does that open up to shareholder lawsuits who will say they lost out on that payout and hank greenberg just one? >> that's a possibility. we made a conscious decision that says that the probability
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of that happening, the cost of the company's reputation now to proceed would not be in the shareholder's best interest, and i believe the shareholders will be better off by the company doing bert over time and not faced with all these headwinds of reputation in the past. the past will bring us down and if we continue to grow this company successfully and get the morale to improve and do the right things for our customers, i think the shareholders will be better off so that's really the conclusion of the probability of success. how much of that would go to the existing -- the shareholders at the time versus the existing company. i think in the end we made a good trade, and the trade is on for the credibility of the company and going forward. it's not acceptable socially for aig to have taken this money and to think that we can come back and sue the government because you made too much money on the deal. it may be a bad deal, but a deal is a deal, and we can't go back. i wasn't there at the time. most of the board members weren't there at the time. we have to -- we have to just
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move forward. we can't go bark and make the past any better than what it was. >> and i'm sure at that point in time it was so extraordinary there wasn't room to sue then or fight back then and say these weren't the right terms because you know hank greenberg was out there yelling and raising his hand back then too. >> everybody was. >> everybody was. >> the bank of america was, the merrill lynch situation. >> that's right. >> you will the lehman thing going under. you had citibank and its issues were going on, morgan stanley. people were questioning whether they would viable. goldman sachs, so you have all of this going on in this swirl, and there was just -- in my opinion they did the best they could with what they neo-knew at the time and a deal is a deal. >> all right. i know you've been dominated by this on these meetings today, but before we let you go, what kind of a deal are you looking at for aig? here we are a new day. going to be a tough year. what are you expecting? >> well, we just had a meeting on the west coast with our 500 sales managers and their leaders
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for all of aig, life and retirement, for example. the enthusiasm is unbelievable. the excitement is there. sales are up. morale is up. our clients are feeling good about this company. they lost new ad program and say that we're taking america and doing the responsible thing. my sense is from the proper casualty business, the mortgage insurance business and the life and retirement, everything looks on a positive trend you, and if we can do well in the worst of types as we did in the last three years, two years and looked at how we've turned this thing around, i feel we'll continue to see momentum in 2013 so we're expecting a good year. >> you're the leader and have to take the company forward from where you are right now rather than looking in the past. >> bring it back from the past, it just doesn't work. got to move forward. the best thing for the shareholders, old and new, is to continue to improve the quality and the growth of this company. >> do you think it was a good idea, bad idea that hank is suing? what's your take in. >> i leave it up to hank to decide. he has his view.
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>> you also said he was treated different didly. >> i don't know if there's any damages or lawsuit here, and that's what he'll have to find out. he feels somehow they were treated differently, and they were. the question becomes so what. >> you're great to join us on a day that you've got a gold and have to travel. appreciate you joining us on this very important day where so much news was flowing on aig. >> thanks so much. >> bob benmosche joining us, ceo at aig. let's get to hampton pearson in d.c. >> reporter: hilda so li s is stepping down as labor secretary and in a lengthy letter to colleagues she says she submitted her lesser of resignation to the president this afternoon reading in part growing up in a large mexican-american family in california i never imagined that i would have the opportunity to serve in a president's cabinet, let alone in the service of an incredible leader. for his part a statement from
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president barack obama praising hilda solis for her contributions saying she was a critical member of the economic team as we've worked to recover from the worst economic downturn since the great depression, strengthen the economy for the middle class. her efforts have helped to train workers for jobs of the future, protect workers' health and safety and put millions of americans back to work. hilda solis stepping down as secretary of labor, and you've heard the statements from the president acknowledging her service as well. now back to you. >> do we know who is going to take that job, hampton? >> the short answer is no. this is a bit of a surprise, i would think. and, again, the news just breaking within the last hour or two in washington. >> you're on it. thanks very much. up next, dreaming of safety. boeing executives doing damage volfollowing a wave of separate incidents following the 787 dream liner of we'll talk safety with aviation pros next and a foolish move or another road to
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welcome back. boeing is trying to appease wall
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street and main street after a string of incidents involving the 787 dreamliner planes. boeing's shares up on the day reclaiming what it lost yesterday. been a tough day for the stock. transportation reporter phil lebeau has been covering the developing story. phil, what can you tell us. >> reporter: bounceback day for boeing as we saw a number of analysts on wall street saying don't get too down on the dreamliner. ultimately it should be a successful airplane. look what we're looking at over the last month when you're talking about the dreamliner. documenting the problems we saw in december when it came to electrical issues causing a couple of the planes to either make an emergency landing or have some rough flights and then this week you had the fire on monday, a fuel leak in boston of another dreamliner and this morning a plane grounded due to another issue. a phone press conference with reporters defending the reliability of the 787 dreamliner.
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the takeoff schedule according to chief engineer, more than 92% of the time it's been scheduled to take off, it has taken off, and with regards to the lithium i.p. batteries people are worried about because it was the cause of the fire on monday, the chief engineer stands by the use of those batteries. >> we do have over 1 million hours of safe operation of these battery sells and flight and so i continue to be very confident in the battery technology and in the system implementation of that technology. >> and, again, us a take a look at shares of boeing, a bounceback day, up 3%. a number of analysts coming out today and saying, listen, before you sit there and say that the dreamliner nothing but a problem-filled plane, remember, it is in the launch phase, maria and these are these teething issues we talked about. for boeing it was another day in the headlines but certainly a day when investors are stepping up saying we still think that this aircraft ultimately will be successful. maria? >> a very important point, phil.
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thank you. stay right there. boeing may of confident in the dreamliner 787, one expert has some concerns. he worries why it's taking so long to get the root cause of some of these issues, and he's not at all comforted that boeing says the incidents are unrelatedance joins us now along with phil lebeau and myself. hans, what's raising your eyebrows most. tell us where the concern lies. >> well, my biggest concern is that boeing keeps us in a period of speculation because we don't -- we're not finding out what the problems have been. the houston problem goes back now almost a month, about a month. that's a long time, and -- and it's -- the longer this period of speculation lasts, the more it opens the door to people imagining the problem to be bad, and the worst case would, of course, be a catastrophic loss of an aircraft mid-flight on a long haul flight, a loss of
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life. so the more quickly boeing and all the other suppliers are definitely involved, the more quickly they come up with -- with an explanation of the root cause and also, of course, right along with this, with the credible explanation of what the fixes are, the faster we end this period of speculation. the problem might be simple. it could be some substandard parts that entered into the production process. it could be some minor design problems, but it could be major design problems. >> yeah. >> we don't know. >> that's a really good point, but what about what phil says? you made the point earlier, this is the launch phase. >> yeah. it is a launch phase. >> go ahead. hans, go ahead. >> yes. it is a launch phase, and launch phases always have problems. in fact, the 787, if you look at the dispatch reliability, and, phil, you just mentioned that being very high, and i've said
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the same, the 77 looks very good. i remember in the late '80s when the 747 was introduced and getting all sorts of praise and took two years before they were able to work through the xwliches. now the difference is that -- that was a different era. electricity was on board, yes, but it didn't play the very important role it's playing now. in those days -- >> you don't think this stuff is unrelated. that's really critical here. >> no, i don't -- you mean the various incidents? >> yeah. >> the 787. i don't know. i honestly don't know. i honestly find it hard to believe an explanation that says it's all unrelated if there's no explanation of what the causes were. >> i see. >> once they say what the causes are, then they are -- then we can see whether or not they are related. >> right sflt system of the 787 is highly distributed. it's a wonderful system designed for safety and redundancy and
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hand safety, et cetera, so if you say, well, we had an incident in this cabinet "a" and now we have one in cabinet "c." two different cabinets. >> yeah. >> but it doesn't in any way shape or form imply that the cause is not the same. >> that's a good point. >> well, we're going to watch this because obviously this story is not over just yet. final comment from you, phil lebeau. >> just that, maria, there's more to come. >> yeah. >> this is an investigation with the ntsb going on so stay tuned, so to speak. >> thanks, gentlemen. appreciate it. we'll leave it there and follow this very important story. >> up next, vegas, baby. mobile mania sweeping the consumer electronics show. our tech reporter jon fortt smack dab in the middle of it all. back to sin city live in just a minute. i don't spend money on gasoline.
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such as rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. ask your doctor about cialis for daily use and a 30-tablet free trial. welcome back. who is winning the battle between mobile devices and this year's consumers? our tech reporter jon fortt on the promising future of mobile devices. jon, over to you. >> reporter: well, i'm going to give you a hint on who is winning here. i'm here with an electric ford focus. can i control a lot what have it does right here from this phone. check the battery charge and start the car, even unlock the door. now a decade ago the pc was just emerging as a digital hub. ipod had just come out. people were figuring out what they could connect to their computers as far as digital
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cameras, other things like that. windows was really on the rise. here it's about the cell phone taking over a lot of that role. massimo, for example, has a $250 pulse objection imter that connects to a phone monitor. monitors your heart rate, blood oxygen level and cobra has an iradar system that keeps your car ticket free because it crowds sources and lets you know where the speed traps are. lg even has a robotic vacuum cleaner that you can spy on through a web cam as it cleans your house, and now, door's open because i did that with the phone. maria? >> that is way cool, jon. thanks so much. jon fortt with the latest winners in this mobile explosion that we continue to see. the iphone turns 6 today. apple is reportedly looking into launching a lower cost version of the wildly popular phone. will it be a cheap iphone, and
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is that good for the company where products are seen as a status symbol? bring in our tech experts, roger kay isn't sold on the idea but alex gonagh says apple has no choice saying it has to expand the customer base. good to see you, guys roger, you say with the cheap iphone we're beginning to see the unraveling of the apple story post-steve jobs. >> yeah, maria. steve jobs was absolutist. he said, you know, it has tonight best and it's very easy. walk into the store, black and white, you're done. 15 minutes you're out. now you have this other possibility. it's beginning to muddy the image. i think really from here it gets murkier and what you're seeing is the loss of the great focus of steve jobs. >> interesting. alex, is the cheap iphone a sign that a s&l going through the product cycle way too quickly, or is this just, that you know, the way things work? everything is a commodity out there, and there are a lot of products on the market. can they keep being the highest priced phone out there?
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>> well, you know, i agree with a lot of what roger just said. maria, we talked a long time about some of the cracks forming in the apple story. but they do have to go in this direction. there's just simply too much variety, too many price points in the android ecosystem and it really is about ecosystem, as jon just pointed out. the work with ford fusion, the work with other devices. so, apple can't stay in a single price. it has to broaden. if you look at what's it done in the past, the ipad mini, very succe successfully, it hasn't been afraid to go into the new market. i think apple will go in that direction. i think it can be successful. it's one of the key reasons we're not as a guy on the stock right now. >> the gross margins take a hit with cheaper products? >> i would think so. and that's why we've been recommending playing other parts of the ecosystem. playing a qualcomm, playing a bro broadcom. and we just came from an interview with verizon, very
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interesting, they are here, bigger and better for a third year in a row in a new position. it's about those air waves and that 4g connectivity right now. >> so many ripple effects. gentlemen, thank you. we'll see you soon. appreciate your time tonight. >> thank you. up next, tomorrow morning's movers tonight. our panel tells you what you need to know about your money tomorrow. stay with us. ♪ [ construction sounds ] ♪ [ watch ticking ] [ engine revs ] come in. ♪ got the coffee. that was fast. we're outta here. ♪ [ engine revs ] ♪ impact wool exports from new zealand,
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all right, 30 seconds on the clock. our next guests will tell you what to be prepared for tomorrow, what moves our money. joining me right now, david fleischer and brickland dwyer. gentlemen, good to see you. david, you are up. what moves money tomorrow? >> great, maria. it's going to be about banks, jobs and earnings. as for banks, the ecb and bank of england are meeting tomorrow. nighly unlikely there will be a change in rates. if so, it will be a head turner. as for jobs, consensus, about 12,000 improvement. in the numbers swing the other way, that will move the needle. and as for earnings, i'm going to cheat a little bit and move ahead to friday. wells fargo will be interesting to see what that sector says. also, about an insight into the overall economy, drivers such as housing. >> all right, we'll leave it there. brickland, you're up.
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what's on your radar? >> yeah, well, tomorrow we'll be looking at two things. number one, the president is expected to announce his pick for treasury secretary. looking at the hill to gauge their response to see how contentious the debate is likely to be for his confirmation. you know, treasury's running out of cash fast, so, they need to move quickly. the second thing we'll be looking for is esther george. she'll be speaking tomorrow afternoon. she's a 2013 fomc voting member, will be asking the question how hawkish is the hawkish member of the fomc. is she likely to descend or comply? >> got it. thank you, gentlemen. appreciate it. quick break and then my thoughts on the markets and whether you should be in it. next. pinch... and zoom... in your car. introducing the all-new cadillac xts with cue. ♪ don't worry. we haven't forgotten, you still like things to push.
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ally bank. your money needs an ally. with multiple lacerations to the wing and a fractured beak. surgery was successful, but he will be in a cast until it is fully healed, possibly several months. so, if the duck isn't able to work, how will he pay for his living expenses? aflac. like his rent and car payments? aflac. what about gas and groceries? aflac. cell phone? aflac, but i doubt he'll be using his phone for quite a while cause like i said, he has a fractured beak. [ male announcer ] send the aflac duck a get-well card at [ male announcer ] how do you turn an entrepreneur's dream... ♪ into a scooter that talks to the cloud? ♪ or turn 30-million artifacts... ♪ into a high-tech masterpiece?
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♪ whatever your business challenge, dell has the technology and services to help you solve it. and finally tonight, my observation on all the money still sidelined and where it is not generally a good idea to fight the fed. we know this market has its shares of challenges, with the dysfunction in washington, to a slower global economy and choppy earnings period for the fourth quarter. analysts already adjusting their expectations much lower, looking for growth and earnings of just 3%. even with all the uncertain tips and fighting over the fiscal


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