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tv   On the Money With Maria Bartiromo  CNBC  November 10, 2013 7:30pm-8:01pm EST

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hi everybody. welcome to "on the money." i'm maria bartiroma. a surprising and strong number when it comes to the jobs report. is it bad news for the market? the issue with obama care nobody is talking about yet. why the current problems may seem like a walk in the park. what it doesn't do and why it really matters. if you could really know your medical future, would you want to? the high tech company offering a chris cal ball with a q-tip. "on the money" begins now.
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>> this is america's number one financial news program. "on the money." now maria bartiromo. here is a look at what's making news. a surprising and sharp increase in the number of jobs created last month. labor department says the economy added 204,000 jobs in the month of october well above expectations and in spite of the two-week shutdown. unemployment rose to 7.3% and the numbers from previous months were revised upward. that set the markets higher on friday's open, one day of a triple digit loss for the dow industrials. the most eagerly waited ipo, the initial public offering since facebook started trading. twitter soared to $45, a 70% increase from where the ipo was priced at $26 a share. all went smoothly at the new york stock exchange. a contrast to the problems facebook had on the nasdaq. broadest measure of the size and strength of america's economy came in. it measured 2.8%. that was well above the 2% expected.
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the best reading in two years. gasoline prices have been tumbling. the average around $3.25 a gallon and in some areas below $3. the reason, u.s. oil production is booming and the middle east is relatively stable. a busy week for the market's new record. the big ipo and the jobs report. what does it mean for your money? joining now is larry kantor and nathan bacharach, ceo of the financial network. good to see you. >> thank you. >> it was a pretty good week. the job's report on friday, big surprise. 204,000 jobs created for the month. given the government shutdown the expectations were so low. unemployment at 7.3%. combine that with better than expected gdp, what does that tell you? >> it's a strong employment report. no question about it. if you look at the details one of the things that happen is they counted the government
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workers as working because they got paid for part of the pay period, but still strong report. the gdp report, almost a percentage point of the 2.8 was from inventory. it wasn't as strong as it looked. definitely taken together better data in the economy than we thought. >> nathan, do you think this changes in any way the fed's tapering? >> doesn't change the fed's tapering because we have to get a new fed chairwoman first. i don't think anybody will set the table and start serving until she get there is. there's lies and then statistics. i'm looking to see unemployment go up. i want to see people so excited about the job market when they start doing silly phone survey saying are you looking for a job, someone who hasn't been looking for a job goes yes, i am. i think there's an opportunity for me. right now the jobs aren't enough for first-time home buyers to start making up the percentage of the housing market. i want to see first time home buyers rising and i want to see
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unemployment going up because people are optimistic. service jobs will not do much for the economy. you might take two service jobs to equal one in manufacturing that somebody lost six months or a year ago. >> you're not believing it? >> no. i think it's a nice head fake. keep in mind, on the other hand, maria, the one thing you don't want to do is get between an american consumer, their credit card and a mall when it comes to the holiday season. retailers are talking about how much they are concerned about, six less shopping days. they are still expecting 3.9% in growth in sales. they've only averaged 3.3 in the last few years. they are crying wolf and i don't buy it. >> retail has been catching a bid recently. i wonder if there's a reflection of the better retail environment or if this is just looking at valuations and buying retail stock. >> one of the things going on is house prices have been going up for a couple of years and going up at a double digit rate. that's a big difference between
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household prices going down. that's building household wealth and also supporting consumer spending. >> that's a positive? >> yes. >> we have housing affordability back to where it was in 2009. the point is, we're not getting -- i think we need to have a broad base on housing. if we're going to get past the stumbling forward, we have to see broader participation from all parts of the market. >> right now housing is going up. we're talking about sales starts at an annual rate of 30%. we're not even in the middle. what's happened and it isn't because of a special policy. it's because market cleared. prices collapsed. it was going down for six years. that's a long time. now it's clearing and you're seeing it move up. this is just a pause. >> i believe the movement in the housing market will be self-defeating because prices keep going up, and the affordability of the house, your $100,000 loan will become 15 or 20% more expensive. there's been no wage growth for
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the average person. that's where we have to see participation in the economy if we'll be able to look back and go housing is a good solid, stable foundation. >> let's get this straight. number one, it's never happened. the unemployment rate hasn't gone up. everybody thinks this happened. the unemployment rate starts going up, that's when the fed doesn't start tapering. >> housing prices never go down. the great recession, larry. >> the reason why labor force participation is going down, that's aging of the population. it's a new reality. >> i'm talking about unemployment, larry. >> i'm just telling you what's happening is people from 45 to 54, labor force participation in that age group is 80%. 55 and over it's 40%. what's happening is there's a
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huge number of people, because of the aging of the baby boomers, that's going from the first population to the second. >> riddle me this, how come is we have two million people over the age of 65 to keep working. if they felt good to stop working, we would have a different scenario. >> this is just plain arithmetic. >> is this new math? >> no. just listen for a second. you have people going from an age group where there's much participation to one where there's lower. >> yeah. >> labor force participation over the last ten years has gone from 32% to 40. >> they follow directions. >> that's swamped by the aging part. that's why things are going then. >> let's talk about putting money to work. we're in a melt up. market hitting all-time highs this week. are you concerned about valuations? are we moving into bubble
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territory or are you still a buyer of stocks? >> i don't think it's a bubble. there are little on the expensive side but well within the range of historical norms. they are cheap relative to bonds. bond yields are low even after the selloff. even if the fed does start tapering, zero rates is extraordinary monetary report. the corporate sector is in fantastic shape healthwise. if the economy is picking up, and it looks like it may start to do so, you see earnings improve. >> so you want to buy stocks? >> yes. >> what do you think? >> i knew there would be something we would agree on. bonds have a new role. that's stability. you'll no longer be able to get eternal returns. maybe bill gross will have to rename his fund to "we're doing as best we can." i do like stocks, but the average bear market started at a pe of $11.
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they usually died around 19 pe. this one started at 13. so at 16 you have to ask you yourself, are we halfway there, two-thirds of the way there? we have some room to go. compared to what's out there there's not a lot of options. >> we'll leave it there. nathan kantor, larry bacharach, great to see you both. up next, website glitches may not be obama care's only woes. a flawed website and millions of cancelled policies will impact everybody's insurance cost. we'll get the dollars and cents. if one test would tell you your medical future, would you take it? the brave new world of what dna determines as we take a break and look at how the stock market ended. back in a moment. we went out and asked people a simple question:
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how old is the oldest person you've known? we gave people a sticker and had them show us. we learned a lot of us have known someone who's lived well into their 90s. and that's a great thing. but even though we're living longer, one thing that hasn't changed much is the official retirement age. ♪ the question is how do you make sure you have the money you need to enjoy all of these years. ♪
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delaying the affordable care act wouldn't delay people's cancer, diabetes or parkinson's. for millions of americans, delay is not an option. >> kathleen sebelius defending her action to keep the site live. delaying the law might cost us more than we think. joining me is former aetna ceo ronald williams and former very month governor and medical doctor howard dean. good to have you on the program. good to see you. >> consumers seem to have sticker shock. a new survey found the number one reason people didn't enroll on the exchange was not because of the technical glitches but weren't sure if they can even afford the play. if people feel they cannot afford it and decide not to go into the system, can obama care still work? >> first of all, i don't think that's true. i think with the tax subsidies people will afford the plan. most of the policies people are
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saying are getting canceled are not real policies, they're the kinds you pay $50 a month and get your insurance canceled if you get sick. people don't have a perspective. i think this is going to work. i don't believe we ought to delay this. we ought to try to work the kinks out. >> a lot of people have come on the show and said to me they were paying $200 and now they have to pay $500. it's much more expensive for people. ron, the 150 million americans with employer sponsored plans will see their premiums and deductibles increase as well. so hewitt predicts 10% rise for 2014. what's driving the cost and what does obama care address in terms of these issues. >> i think what's driving the cost is the really the underlying rate of utilization of health care services and normal price inflation which has been on going. i think in fairness there is
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also an additional cost related to the additional benefits. i think i would quickly make one comment which is health care is local. what we've done is really shift the burden of health care costs. if you're older and you are in a state like new york, your premiums will probably be lower. >> howard, the american academy of actuaries sent congress a letter warning against delaying the individual mandate or extending the open enrollment period because it could have significant implications for health insurance, coverage and cost. what does it mean for the sis tell and patients if congress does either? >> here is the big problem? there are two major problems here. one is the computer glitch and so forth and so on. the second biggest problem, which is actually the biggest problem of all is what ron just said. we do not have a system that controls cost. if you want to do that, there's only one way to do it, and that
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is to end fee-for-service medicine and have per capita, per patient payment. >> what about the networks? ron, people are paying more because they're getting more benefits, but there are complaints that these plans are offering fewer providers in network. so insurers shrinking their provider networks in order to stay profitable? >> what the insurers are doing is really taking a community that, say, has five hospitals and going to two of those hospitals and the affiliated physicians and saying we're going to take the 100,000 members we expect to get. instead of spreading them over all of those, we'll concentrate those in those institutions that will give better rates and we believe will produce good quality. really it's all about affordability for the consumer. >> howard, on top of the smaller networks, a recent survey says 40% of doctor practices aren't sure they'll participate in the exchanges. >> people will participate because it's too big not to. i'm finding myself in agreement with the insurance industry
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here. that doesn't happen very often. this idea of shrinking the network is fine as long as you have a robust insurance market. that happens anyway when you get employer-based health insurance, the employer chooses for you. now you'll choose it yourself, and you'll choose by cost. >> what you think this debacle means? do you think voters will rerm this for midterm elections? >> they'll definitely remember it. if this thing gets fixed by december 1st, it's going to help democrats. if it continues, it won't be helpful. >> gentlemen, good to talk with you. appreciate your time, howard dean and ron williams. up next "on the money," a dna test that could tell your future and maybe save your life. meet the woman aiming to make your health data as searchable as google. back in a moment. hurt you. what if you didn't know that posting your travel plans online may attract burglars?
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[woman] off to hawaii! what if you didn't know that as the price of gold rises, so should the coverage on your jewelry? [prospector] ahh! what if you didn't know that kitty litter can help you out of a slippery situation? the more you know, the better you can plan for what's ahead. talk to farmers and get smarter about your insurance. ♪ we are farmers bum - pa - dum, bum - bum - bum - bum♪
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if you could take a $100 test that would tell you your susceptibility to disease, a heart attack or the chance to live to 100, would you do it? anne wojcicki is with me. she's the founder of genetics company 23andme. good to have you on the program. your consumer dna test costs $99. is that right? >> yes. >> what is that material telling you? >> it's an online test. it's a little tube.
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you spit in the tube. send it back. we extract the dna. we look at a million data points in your dna and from that we can tell you a ton of information about your health and also about your ancestry. >> that's amazing. this makes health data and the access much more democratic. you know mapping was once something the very rich could do. now the price has come down. tell me the future you see for this in terms of individual patient care, costs, prevention, fear of knowing too much. that's one thing. are people afraid to do it because maybe they don't want to know what's ahead. >> we started this company because we wanted to empower people to get valuable information about themselves and for them to get roadmap for how to be as healthy as possible. we focus on preventative care. i might tell you you're high risk for having a blood clot and you probably travel a lot. you might be able to justify in business class or saying i'm
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going to take aspirin before i'm on a flight. a lot of what 23andme is doing is helping people think about what are they genetically predisposed to and how can they manage that so they can be as healthy as possible. >> what kind of disease are you seeing most? are there areas that you see that are very common in most people? >> we look at everything from are you a carrier for cystic find broes skis fibrosis or breast cancer or diabetes. we also look at drug response. some people respond and some do not. a lot of that is based on your dna. >> that's face nating. you founded the company in 2007. you secured more than $100 million in four rounds of funding. >> correct. >> one of your first investors was your husband, google
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co-founder, sergei brin. you two have announced a separation. how involved is he? >> he's super supportive. we're great friends. >> the results from his own genetic testing -- >> he had a family history of parkinson's. he's got 50/50 odds for parkinson's. we do a lot with michael j. fox. we're the world's largest parkinson's community and how can we best prevent it and being part of the cure. >> as health care and technology are finding more opportunities working together, this marriage is so exciting. should we be concerned about this personal information getting beyond ourselves, getting in the wrong person's hands? >> i think there's a huge advantage of having a big data set of health care information. my goal is you walk into the doctors office and they could say you're five years away from being diabetic based on your behavior patterns.
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we want to have that kind of information to say you need to make these changes in order to prevent any kind of disease. >> are you getting the buy-in from consumers or are they worried about privacy? >> privacy is a huge priority for 23andme. we have no business if we can't guarantee your privacy. but what we've also found is people want to share this information. you might get your genetic data and you might want to share it with your physician or your family and other people. people want to share. they also want to do good with the information. if your data could be part of a cure -- >> you're on the cover of a magazine. congratulations. the most daring ceo in america. do you have an uphill battle convincing the medical community that genetic testing is helpful to people? >> i think we've had two battles. one is we're direct to consumer. we believe they should have
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right to this information and they will make the right choices. the genetic information is just a new technology. it's not taught in medical schools. we're out there pushing genetic information to get tint broad medical system. >> good to have you on the program. >> great to be here. >> anne wojcicki joining us. we'll take a look at the impact of your money and where your money goes the furthest. a look at housing markets across the country. finding million dollar neighborhoods. top towns for real estate when we come back.
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for more on our show and our guests check out our website. hope you'll follow me on twitter and google plus. take a look at the stories coming up in the week ahead that may move the markets and impact the market. earn season is winding down, a few companies to watch include walmart, cisco, macy's and news corporation. monday is veterans day. the stock market will be open wild the bond market will be closed. a salute to our troops. on wednesday the treasury department will release the budget. on friday sony's playstation four will hit store shelves. a big event. finally, a $63,000 question. where in the u.s. can you find the best bargain on a house? cleveland the answer. a coldwell banker survey called it the most 56 fordable housing
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market in the country. the average price of a four bedroom, two bedroom house is $63,729. if bargains on the north coast don't do it for you the more traditional of malibu is the most expensive. sample average price topping $2.1 million. cleveland rocks real estate. that will do it for us today. thank you for joining me. next week the author of the book everybody is talking about. "double down." mark halperin and john heilemann go inside the 2012 presidential campaign. each week keep it right here where we're "on the money." have a great week, everybody. i'll see you again next weekend. when we made our commitment to the gulf, bp had two big goals: help the gulf recover and learn from what happened so we could be a better, safer energy company. i can tell you - safety is at the heart of everything we do. we've added cutting-edge technology, like a new deepwater well cap
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and a state-of-the-art monitoring center, where experts watch over all drilling activity twenty-four-seven. and we're sharing what we've learned, so we can all produce energy more safely. our commitment has never been stronger.
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>> my name is jeff allen, and i'm back. it's a new season of the car chasers. all right! i buy, fix, and flip cars. this is a money-maker. >> sold! >> but i don't do it alone. i've got perry, a real artist when it comes to restoring cars. >> i think you should take these carburetors, just throw 'em outside. >> meg, my better half. she keeps all of our spending in check. >> we don't do cars to set bars. we do cars to make money. >> and eric. he builds, he wires, he repairs. >> i'm pretty sure this is legal. >> there's nothing this mad genius can't fix. >> she is purring. listen to that. >> my main competition is still


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