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tv   Closing Bell  CNBC  December 10, 2013 3:00pm-5:01pm EST

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metlife stadium but a $51 per way bus ticket can you buy. note to the super bowl, there's nothing around the metlife stadium. let people tailgate. that's what football is all about. >> that really is the fun police gone a little too crazy. thank you all to all of you out there. for you listening on the radio as well for watching "street signs". >> and to all a good night. "closing bell" is next. welcome to the "closing bell." i'm kelly evans at the new york stock exchange. >> scott wapner in for bill griffeth today. we're watching the market go lower. twitter after spike of 10%. what's behind this incredible two-day run for twitter that's taken the stock to new highs? we'll try to get to the bottom of what's up with twitter. >> interview with charles schwab. we want his take on the
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incredible run for the market this year and also his take on this. a new highly polished bitcoin magazine. there it is. being sent to homes across the nation. remember, mr. schwab invented marketing to retail investors. we'll want to hear his reaction to this one. >> we certainly will. huge news out of general motors, tapping mary berra as new ceo. when will a major wall street bank do the same? we'll take a look into that. >> right now here's what's happening in the markets as we head into the final hour of the day. the dow losing some ground here, trying to hang onto that $16,000 mark but down about 26 points. the s&p is giving up four. the nasdaq is down by three points as of now. 4,065 is the level there. >> joining us in our "closing bell exchange" is amy wu, jerry from platinum partners, mike
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santoli, and drew from hightower, and rick santelli. as we mentioned, drew nordlick to you first, what's going to take police between now and the end of the year? >> scott, we expect to see a santa claus rally through the end of the year when the fed does not taper next week. over the past 30 years the month of december has averaged 1.9% gain and been positive 80% of the time. from there we expect to see an early january rally rallied by new followed by equities and followed by earnings as companies report those to follow. u.s. markets have outperformed most of the markets throughout the course of this year. while monetary policy is expected to remain supportive over the intermediate term, we would use any downside volatility as opportunity to deploy new capital into domestic equities. >> that was pretty well rehearsed.
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amy wu, what about you? we look at these markets. we had an incredible run as he was saying here in the u.s. you know, going into next year, if it's all about earnings or at least dependent on continued growth, what kind of growth are you looking at? >> hi, kelly. usually i'm thinking about hedges, helping people protect their portfolios. we're seeing none of that demand. we're seeing none of that anxiety. the options market, too, is all about upside. we keep seeing s&p call spreads trade. we keep seeing sector upside trade. in terms of what i can see from term structure from implied volatility, it seems like all signs say clear. we don't see a taper factored in until the march time frame. >> drew certainly seems convinced there's going to be no tapering in december. steve liesman, who has pretty good sources, would have you believer otherwise. he's reporting today it's more likely than not you will see tapering at the december meeting next week.
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what happens if there is, in fact, tapering? what happens to stocks? >> i think they get cloperred. we see a lot of volatility for next year with possible range on the s&p with anywhere from 15, 25 on the down side to 1975 on the upside. i think you see the downward move before upward. >> why do stocks get clobbered on that? any time weave seen fed tightening, even with volatility, certainly hasn't been the end of the rally. >> because people are underestimating the amount of nearly five-year rally we have that's directly attributable to the unprecedented liquidity the fed pumped into the market. when that safety net starts slackening, people will take their massive profits they
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generated and say it's time to take profits and that selling will drive the market down. >> rick santelli, jack bogle was talking to kelly yesterday. said he believed the taper was already priced in to both stock and bond markets. i'm wondering what you think, rick, as to whether any of it is priced in anywhere. >> i would say no. i hate to disagree with such an icon but my opinion is no. as a matter of fact, our last guest has it nailed. since 1979 when i first had a membership at cme, i've been through a lot of cycles, tightening and easing. what we're going through now due to qe, if you go to last fed meeting, interest rates have moved higher. look at s&p 500 in that same time period. doesn't look like it's priced in to me. i'm so glad you brought up that steve liesman sounds convinced and he does have good sources. makes me a little nervous.
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but i don't like to have a guide walking me through what the fed will or won't do. i like it to be apparent if anybody does their homework, which is exactly what the problem is. it's not a question of transparency. it's a question of what are they going to do next? have they decided? how can they communicate that? maybe steve's part of that process. just looking at the markets, i don't think it is priced in. especially in equities. i don't think the fixed income is priced in, it's leading the head, ahead of the fed. >> it's amazing to see it back to 2.8% today. rick was indicating there's something around. >> there's something about the mechanism. i don't think anybody can pinpoint exactly how much of this equity market rally and the real calm and strength and credit markets has been because of this policy. i do think because there's this
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great perception that's played a huge role, that alone could mean you have this noisy adjustment period once you get evidence of, in fact, the taper. could stock prices at 1800 at s&p price in? could that be compatible with gentle and well telegraphed taper? sure. i don't think the market is necessarily going to assume that's the way it goes. to me i see the market as being ragged here. it's going to be supply coming out with some offerings later in the week and small caps are lagging. it looks like it's stalled out and resting for a while. by the way, s&p is only up less than 2% since october 29th. seems like we're cooking new highs but it's been settling back and going sideways. >> what about the idea of end of crisis trade we've been talking about selloff today on nbc. you can pick whether it's the government getting out of general motors, europe is stabilizing, stocks are near all-time highs and the taper is
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coming soon whether we like it or not. what about the idea that the end of the crisis trade is about to take hold? >> the end of the crisis is s&p up. now we're recognizing it, acknowledging it. i did a piece like october of 2012 trying to timidly suggest end of uncertainty is coming to an end. it didn't seem obvious at the time. i feel like at this point gold crashed, everything has fallen into place. that's why you need an earning second wind in 2014 to support what the market has given you this year. >> amy, one of the movers we've seen, it's interesting, as these cross-currents we try to figure out whether volatility will settle back into that year's -- year-long low we saw prior to the last week or so. what do you think happens here with the vix in volatility and stocks -- you look out into next year. it's picked up a little bit but a lot? >> as an option strategist i would love it to price where it is now.
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as per bbernanke/yellen, we wil in higher volatility regime. the other thing is i was just in europe for ten days visiting clients. everyone is so bullish on the u.s. i see so many incremental buyers coming in if we get a correction i don't know if has that much room, unfortunately. >> thanks to all of you. stocks are cooling off today but it is nothing compared to the cold and wintry weather slamming the east coast today. >> it's not that cold but definitely snowy. we're feeling it at cnbc mothership. jackie outside. wow, i have to say, it actually looks pretty there. what's happening with the weather? >> good afternoon. the snow just picked up as we've been standing here but it's certainly cooled down throughout the day. this is the first significant
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snowstorm we've seen on winter coast and accumulations in bergen county are expected to be between 3 to 6 inches. this storm wasn't necessarily a surprise but it did wreak a little havoc on the morning commute. icery and slippery conditions on the road. things are getting better. airport travel, let me tell you what's happening at newark airport. jfk, an hour and 15 minutes. laguardia, a little more than an hour at this point. according to we're also looking at inclament weather across the country and flightaware is saying cancellations across the country right now are over 1650 flights. that is fairly significant. in terms of the major crossings, we are seeing bridges and tunnels. there were delays on them previously but port authority lifted those delays. hopefully it won't be so bad on the way home as it was on the way in. back to you guys. >> we hope everyone travels safe. >> yeah, for sure.
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jackie, thanks so much. 50 minutes to go before we close it up. dow and s&p are in negative territory. dow, 15992. we've given up 16,000. twitter a big story as it pushes past $50 mark. it's more than doubled since the ipo price after yesterday's big run as well. what's behind this move? will it keep going? coming up we'll get a twitter stock brawl. bitcoin meg getting sent to thousands of americans across the country. who's behind this and is this a good strategy for making the currency mainstream or will some retail investors just end up getting burned? we'll talk to chuck, as in charles schwab. he'll weigh in on bitcoin. the markets and a whole lot more coming up in a bit. [ male announcer ] how can power consumption in china, impact wool exports from new zealand, textile production in spain,
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welcome back. dominic chu breaking down the stocks drag down the market. >> starbucks which is moving lower after itg investment research said dated that showed the chain's momentum may have
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slowed this quarter. tough day for lumber liquidator, providing slower than expected profit guidance. midpoint of company's profit guidance was below wall street consensus estimates. on the flipside, gold mining stocks. as gold prices soared on perception reported by steve liesman the fed might begin tapering later on this month. a good day for twitter as well. shares hit an all-time high on positive analyses out of its new advertising product called tailored audiences. twitter has doubled in price since its ipo about a month ago. >> bathank you. with the stock market at these levels, should you be adding twitter 20 your portfolio? >> rob sanderson says, yes, buy that stock. brian evans is warning the valuation is bloated. good to have you both with us. rob, it's sort of undeniable the
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valuation is a little stretched, right? >> very rich stock, no doubt about it. >> why argue to buy it? >> it speaks so the -- to the size. it's a top line acceleration story and open-ended. so long as we're beating on the top end and sticky audience, it's going to continue to be a rich stock. >> brian, you're more cautious on valuation. it seems like valuation has been the least relevant argument for buying or selling any of these stocks year to date. >> well, i think this stock is trading at 50 times gross revenue right now. even with 70% projected annual revenue growth, it would still be trading at four times revenue. we've seen this kind of thing play out before with the dotcom time period where we were buying companies based upon top line growth. but when it quocomes down to if bottom line growth is going to sustain the stock.
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>> rob, don't you want to see this company put up some numbers? show me before you say buy me? i mean, they haven't had an earnings report yet. don't you to want see that? >> that's going to be an important factor for us. we're flying a little blind. we've seen this story before. multiple years of top line. grows into earnings power. we're looking at our valuation in the near term. we missed these emerging growth stories. have you to look out further, see what it looks like at scale and what kind of earning power can drive up there in a few years. >> brian, isn't there something to be said for the power of twitter, analytics, readvertising, the kind of things that propelled facebook to be as successful. this is something that could be a huge growth source for them. >> yeah, it's already there, though. market capitalization. this has already had growth
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projected into the share price currently. so when that's the occasion i'm reticent to put money into it. would i put my mom's money into it? absolutely not at this price. >> where do you think the price should be or what level would you feel comfortable telling your mom to buy it. >> i would tell her 15, 20 bucks a share based on ten-year projected cash flow model. >> why do you think this stock has had this move? it got below 40. everybody was a bit concerned about it. all of a sudden you wake up and you see the stock back north of 50 bucks. what's driving it? is it technical? is it big money coming into the name? hedge funds, perhaps, taking a look at it? what is it? >> i think it's greed, frankly. i think it's short-term profit making. momentum investors like investments like this. i'm more of a long-term. i have an etf on the market
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that's valuation based on based on five-year projections have earnings not five-month poe men item plays. in the short term they have been correct on the momentum thing. if i'm going to hold something for a year or more, twitter is not what i'm buying right now. there are plenty of other good buys out there. >> rob, do you have an opinion why this stock has moved so fast over the last few days? >> i think it's recognition of the open-ended opportunity. audiences is not the most interesting. i think cards and big pools of money, takes them into lead generation, video, successful formats going to drive a lot of growth mere. >> real quick, rob. you heard brian say $15 or $20 a share. how much further could it go from here? >> i think we're looking at a $90 billion market cap in three to five years. >> and that implies what for the share price today? >> that's a triple from here. >> wow. >> so, we've got a difference in
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magnitude between $15 and $150 a share. incredible stuff. thank you for joining us, sharing your views on that one. >> thank you. >> certainly puts $52 in perspective. >> yes, it does. we have about 40 minutes left to go into the home stretch on this tuesday. the dow is giving up about 37 points. the s&p 500 weaker by about four. still above 1800. the nasdaq down about four. >> lululemon ceo stepping down after comments he made. the auto industry, first ever female ceo after mary berra has been tapped to replace dan erickson. will discuss why that is and how much longer it will be the case. tdd#: 1-800-345-2550 trading inspires your life.
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blaming customers for product failure, not the best business strategy but what ended up causing lululemon chairman chip wilson to step down.
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>> courtney reagan on more what has rocked the yoga world. >> finally lululemon announces a new ceo. after christine day said she would retire, lululemon names laurent potdevin as the new ceo. it's not just the ceo seat changing, chip wilson will remain on the board. he made the suggestion women's bodies may have been the problem to the see-through pants that led to the recall of $72 plus yoga pants. that group appears to have forgiven the brand itself for the debacle but wall street still has questions about lulu. potdevin isn't well known. he has spent 15 years as private snowboard company burton and
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also toms shoes. pot dechlt vin has an operational background but may not know retail which is the opposite of what happened with christine day and her background. scott and kelly? >> do we know if they had lost any sort of great number of business to an athletica or nike or under armour as a result of any of the issues that have gone on over the past 12 to 18 months? >> good news is lululemon is releasing earnings on thursday. bad news is we don't know the fallout and how we can correlate that to what might have happened with the shift in market share. we know their growth is slowing a bit but customers are resilient, forgiving the retailer because it came out and said, hey, we made a mistake, recalled the pants. whether wall street believes it or not, at least the customer has been pretty loyal. they keep coming back and spending an awful lot of money
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on that yoga wear. >> lulu is one of the companies you mentioned was having trouble with succession, finding that next ceo. does that imply this choice investors should read as one that's a little more risky, perhaps? >> it's hard to say. we haven't seen a huge reaction in the stock price all day long. it gave up some ground. i think frankly wall street analysts aren't sure. we don't know much about him. yes, he came from a sports background, but the companies were privately held. who knows how he'll deal with a very publicly traded retailer like a lululemon. he knows operations. may not know the retail side. his name wasn't one we knew about, so kind of a surprise. it's hard to say. the jury appears to be a little out, at least on wall street with reviewing the new choice. >> that's so much. courtney reagan with the latest on lulu. >> have you ever bought lulu, by the way? >> i don't. >> their push to men is going to be a big one for this brand.
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>> that's going to be a hard push. >> if they can win over wapner -- >> they have to get in front of nike and under armour. dow is above 16,000, that means it's only down by 19 points right now with 30 minutes or so to go in this trading day. >> by the way, the market is still up about 25% this year. what should an individual investor do? charles schwab joins us exclusively to weigh in. plus, someone who refer luvolutd retail marketing, we'll get his take on the bitcoin magazine. doug yearly tells us if fed tapering is helping housing sales as buyers try to lock in mortgage rates before they spike.
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welcome back. 2013 has been an historic year for markets with dow and s&p reaching record highs day after day. the s&p, in fact, has soared more than 26%. can the momentum continue into next year? importantly, is the rally bringing in more retail investors? >> joining us in a cnbc exclusive, legend on both wall street and main street, charles
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schwab. can i call you chuck? >> thanks, scott. >> we said we were going to talk to chuck, here we are. the evidence would say the retail investor has seen this market, has seen this great year and started to put money back into stocks. is that what you see? >> they actually haven't left. they were just inactive. sort of went quiet. '08, '09 and '10. they seem to be wake up to the fact their investments have improved by just sitting there tight with it. they didn't abandon in a wholesale manner at all. and i think, you know, given what the fed has done and other economic indicators are looking better and better and better, i have to tell you, i think we have a very robust economy underneath us. and i think any time the fed does some tapering this year or next year some time, it's the appropriate time to get it going. >> what do you glean from your platform that people are doing with their investments? what are they doing -- what are
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they invested in? are you seeing any change lately? >> what we found actually in the last five years, people really need more help. they want more help and advice with respect to investing. they find it's a little more complicated than they thought, whether it's the 401(k) or actual portfolio, that's one of the things i'm here in new york to talk about is our affordability and our guarantee with respect to accountability. >> you haven't just led the industry in this space with regard to bringing fees way down. now you're even going to be refunding people, is that right, if they're not pleased with how their investments have done in a particular period? >> if someone is unhappy with a managed account or any advice we rendered to investors, they can ask us for a refund and we call it our accountability guarantee. so, any quarter that a person's unhappy, it's sort of about time wall street did something about this. so, we're stepping up at schwab to make that happen.
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so, if someone is unhappy with our advice or kind of get -- >> can you weigh in on the discussion of active and passive investing? it seems to have percolated again lately with bill gross and jack bogle. you may have seen bill gross' recent letter, which he specifically mentions jack. where do you stand on this as we have certainly seen a sizeable move from the retail investor into passive funds etf? >> absolutely. we've seen a huge trend in that direction at schwab. not only mutual funds, no-load mutual funds, index funds and etfs. they're wonderful products for investors to lower the costs, improve liquidity, get balanced accounts and portfolios. at very low cost. one s&p fund is now four basis points per annum. it's unbelievable savings to
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investor. we see a huge trend away from individual stocks in trading. not complete bailout. many people are taking up the fact that this is a smart way to invest. index funds are the way to get broad diversification. i don't have to worry about it as much as i used to. another debate that's really raging to some extent right now is whether this market can be trusted and whether high frequency traders are destroying it and undermining market functioning. just to put up an op-ed of yours from the summer, really embraces this issue, talks about the concern that individual investors are fleeing stocks. says high frequency traders are gaming the system. that got a ton of attention, made people worried. i turn around and read -- i don't know if you've seen this, cliff's top ten pet peeves where he says, there's no reason to blame high frequency trading. it has evolved to meet the demand for today's market. it's lowered costs and the people who criticize is-t simply
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don't understand them. >> well, we're not fans at all of high frequency trading. we think it take as way from the marketplace. it doesn't add liquidity it to it. we think it chip as way at confidence of investors who are not pleased with it. i think it should be controlled or maybe even for that matter outlawed as such because it really distracts from the true market system, in my view. so, retail investors when you look at a thing, read about high frequency shutdowns of some particular matter, they lose a little confidence. it's not the end of the game, but it's just one chip along the way. >> would you weigh in on the other big question that's been out there over the last, really, i'd say, sort of picking up steam in the last three, four weeks, as to whether this market is a bubble? some very smart people made comments on either side of that. >> i don't think it's a bubble. i think it's been really enhanced by the liquidity the fed has brought on. it's been the alternative for
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people. fixed income, as you know, has had a 30-year run so people are looking at equities. i think underneath, though, there's a very strong economy that i think in some ways the fed hasn't given the world that much credit about. they've done a great job about adding liquidity to it. all the numbers i look at, except for employment, i wish i would have left a little more. there may be structural issues around that thing that we haven't accounted for. i don't think the fed is going to be able to tweak that much. so that i think you can feel confident we have a very strong economy underneath us. >> one of the reasons i bring this up is because of the magazine that happens to be sitting in front of you. that's bitcoin magazine, right? so, if this is starting to arrive on our doors, what does that say? does that -- does it dismay you that bitcoin has taken on the fervor it has? do you think that's a bubble?
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is that something to be worried about? >> to me that's a bubble for sure. it's a low amount of bits outstanding. and i think it's been priced up so high, so quickly, that it's sort of a fool's game to be playing around with it today. it does go to the sense of where do i put my money? do i want to be liquid? in currencies? in fixed things? some people love gold. i believe about equities. the long-term value of our equity markets will be substantially higher 10, 20, 30 years away from now. >> would you feel comfortable saying, you know, in the next year two or three we will see a dow 20,000? >> oh, i think it's very possible, yes. >> in other words, a lot -- if you look at the depths of 2009 seemed to be what happened in
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the equity markets and the economy to some extent is reverting to the mean and the mean is somewhere below. now the view from 2013 seems to be, no, the impetus is higher. is that hire agher, and is this multi-year cycle that's going to be playing? >> i'm a very confident investor. it will eventually reach that point. it may not be that day but equities will grow. it's innovation, new stores, new ideas, that's where you get the benefited of great american growth story, through equities. it's a matter of time, relax, take the long term view and you'll be just fine in your 401(k) or individual portfolio. >> do you have any sort of feel on whether any of the excitement lost as a result of the facebook ipo debacle was regained with the twitter ipo and what impact that's had on the psyche of the individual investor?
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>> the twitter was substantially smaller than facebook. i think a lot of people were -- it was sort of the first one to come out. i think they're still somewhat crying in their soup about what happened on that particular issue. but i think all these new issues coming out helps the excitement equities are alive and new innovations are coming out, new ideas. it's the growth story, frankly. which i obviously think people should participate in. >> great to be with you. >> thank you very much. >> thanks for being here. charles schwab. >> the legend charles schwab right here, post 9. dow jones industrial average is down 38.5 points. an overall down day on the street. toll brothers saw fourth quarter earnings drop but ceo dug yearley says profits are on top for 2014. cbs is making top ranking,
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shares of home builder toll
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brother headed down by 0.4%. reporting 77% drop in quarterly profits. >> the company did report stronger deliveries and better revenue. join us in a first on cnbc interview is douglas yearley, the ceo of toll brothers. welcome to "closing bell." >> thanks for having me. >> can you characterize how you think the housing market is shaping up today in an environment where we see the ten-year at 2.8%? some on cnbc predicting the taper coming in sooner sthan we think? >> as all the builders have been thinking about lately, our business has been flat since the summer. flat's okay for 2013 considering where we were in '10 and '11. we're anxiously awaiting the spring selling season.
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taper, i think it's a bit of old news. i think everybody knows it's coming. to predict the exact month when it comes i don't think is affecting our business. mortgage rates are still at historic lows. buyers have been a little cautious lately with some of dysfunction of washington, d.c. we feel -- we're cautiously optimistic about where we're headed in 2014. >> can you talk about, you know, your houses typically go to slightly higher income buyer. are they still largely buying in cash? what's mortgage financing here and what trends do you see heading into 2014? >> about 20% of our buyers are all cash. the ltv for our buyer, the amount they put down, is about 33%. they're only borrowing 67%. so, our clients don't have a problem qualifying for mortgages. that's not really an issue that we have to worry about, thankfully. this is the second, third,
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fourth home purchase for our clients. they tend to be financially very sound with great credit ratings. we've been fortunate even through the downturn this wasn't an issue we had to deal with. >> i've talked with some folks who follow the industry very closely who have said that they get the feeling that come consumers are anad frad to make a purchase on a home because they're afraid they're buying into another bubble. can you address that? >> we're a long way from a bubble. you know, very -- very little land has been processed through the approvals, through this downturn. builders are not building speck inventories. mortgages are difficult to find for the first time buyer, second time buyer. qualification today is extremely difficult. this doesn't feel anything like a bubble. i think that's a long way off. as i mentioned, the business has been relatively flat for the last few months. all the demographics are on our side. pent-up demand is building.
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we're only producing 900,000 new homes per year. the average per year for decades has been 1.5 million homes. so we're a long way from being heated. >> will you incentivize if business is slower than you otherwise expect? >> market by market, community by community we consider that. right now we're not increasing any incentives. we have built backlogs through great sales. we study that every week on every community. right now it would not be our intention to increase incentives and we're cautiously optimistic that '14 will not require that. >> i'm curious to some extent why you guys aren't building more? i know that might sound crazy but if we've underbuilt for several years, if your buyers are in extremely healthy shape as it sounds like, what's the disconnect there? or are you being extremely hesitant in order to keep home
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prices and your profitability as high as possible? >> we're not a spec builder so we don't get out in front of the market. all of our homes are built to order. we take a nice deposit and build the semicustom home for the client. the client has been absorbing fairly significant price increases that all the builders put into place last winter and spring. and i think the buyers are also cautious right now, based on dysfunction that's occurred in washington, d.c. and a little uncertainty as to where the economy is headed. we think we're fine for all the reasons i've given. i think that's what's gone on right now. i think some buyers on the sideline -- remember, november and december really aren't months when we sell a lot of homes. this is the season to be jolly. not the season to buy a home. we really need to wait until february to see where the market is. >> last question. what is the hottest region in terms of demand you're seeing
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around the country right now? >> i'm going to name three. new york city urban. we're on our 20th high rise in manhattan. jersey city, hoboken, brooklyn. california, coastal california for us is very strong. we just announced a huge deal we're doing out in california which is really a game-changer for the company through the acquisition of shapelle properties and dallas and houston, texas, are doing very well. >> tells you something about what's happening around the country. douglas yearley, thank you for joining us today. appreciate it. >> thanks for having me. >> 12 minutes to go before we do close it up here at post 9 on wall street. the s&p right now is down. dow's down about 45. >> i'm thinking about the 20th high rise project in this greater new york area. with you see the cranes, we see them outside all the time. happening in texas, california. don't adjust your television. there's nothing wrong with your set. there could be something wrong with you. a super bug is on the attack and
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we're back on the floor. you see across the board, the dow, nasdaq, s&p under modest pressure.
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joining us, david nelson, chief strategist, bob pisani is with us as well. david, to you first. there seems to be a pick up in the relief the taper is going to come, perhaps next week. what does that mean? >> i think we're way too focused on the taper and the fed. the knee-jerk reaction, if we get it next week, people will probably sell it. but that will be an opportunity to get in. >> you don't think the taper is all that matters? i mean, that's all anybody cares about. >> there's a lot of reasons to like this market. stocks are getting -- a lot of companies are getting shareholder friendly. john deere, $8 million in market cap. that's an enormous number. >> i think the big story nor next year is whether or not we'll get earnings improvement. taper aside, 4%, 5% this year. can we do, 6%, 7% next year? you get the budget agreement in place. you get a firm agreement with a taper and the fed controlling whether or not we're going to hike rates.
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that's now 2015. don't you think that the market could be set up for a reasonable year? 8%, 10%. >> my base call is 7%. img we could do higher than that. the thing i worry about are the things i can't quantify. military conflict, natural disasters, what's going on in the east china seas. i can't quantify that. i have to remain invested until i see something change fundamentally. right now i like the market. >> david, you alluded to when you mentioned deere, the buyback. this has been a year and rally fueled by buybacks across the board. is that a theme we'll see into 2014? >> i think it is. i think this activist investing for the likes of carl icahn who go into companies, they want the money back. they're starting to give it back to investors. what i would like to see next year, if we would see real revenue growth. we haven't seen that.
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>> you're right about the buyback. that's been the main driver of the market. the other thing that's important is success in ipos. tomorrow we'll get auto home, chinese auto dealer coming and big brand name this is week. we'll get hilton and amc entertainment. big movie house coming. these are big brand names and they've done well. >> would like to see more m&a in 2014. it's been a bit below some folks' expectations. >> look, goldman is positive on m&a. it's certainly good for them. i think we'll see some modest m&a. interest rates are going higher that could weigh on that. there's a lot to like this market. coming out of boeing -- everybody wants this company to move to their hometown. those are very good for stocks. stocks have a leg up here.
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>> and everybody complains the market is boring. david, you do the math here, if we go up one, two points, suddenly you're 25 points on the year -- >> climbing the wall, unfortunately, there's no wall of worry because there's not much to worry about these days. >> all they do is complain about the market. i'll take this any day. slow melt-up. >> we're back after this with the "closing count down." i have low testosterone. there, i said it.
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we're back on the floor for the closing countdown. a down day on the street. not a down day for twitter. twtr back above 50 bucks. that stock is up 6% today. certainly one of the stocks of the day. the other one has to be general motors. getting a new ceo. i think earlier than a lot of people expected. daniel akerson is going to retire. mary berra will take over. she's been at that company 30 years at least. two of the most interesting stock stories. let's bring in guy, senior portfolio manager. everyone will be looking towards the last two weeks of the year and whether next week brings the taper. what do you think will happen 1234. >> the probability is above zero
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but still fairly low. >> you still think so? >> yeah. we think this is a fed that wants to err on the side of caution. you are seeing jobs improvement, economic improvement but we think yellen want to see more explosive upside to the company before they take away the punch bowl. >> last time the fed had a window to taper. everybody expected it. they didn't. now most people don't expect them to taper in december. what do they do? >> market consensus has been coming around to higher probability of taper, so i think markets would react not too negatively, but you would see a correction of all risk assets. >> a great year in the market. any room for santa claus to get down the chimney? >> it would be highly irregular lar not to have a christmas or santa claus rally. >> you get the feeling we're at this sort of end of crisis trade? there's not much there to worry about. the government is out of general motors. get a budget deal.
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the fed will taper. i could go on and on and on. >> the economy will grow better 2014 than it has any time since the crisis. so, yes, the worst is finally over. >> thanks. second hour of the "closing bell" begins in seven seconds with kelly. >> hello and welcome to the "closing bell." i'm kelly evans. investors have hit pause on the strong rally. the dow shedding about 50 points giving up that 16,000 level. nasdaq down about eight. s&p 500 giving up five or six points. hanging on there at 1802. what's happening in the market? let's bring in today's "closing bell" panel to figure it all out. jon fortt, carol roth and josh brown. also kevin o'leary. author of "cold hard truth on
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men, women and money" and of "shark tank" fame which you can see on cnbc starting january 7th. j.b., what did you learn from the market action? >> i saw the s&p down and i thought something was wrong with my monitor. it's a strange sight. it's this push and pull. portfolio managers are trying to decide if next year is muddle through, the s&p is fairly valued. if next year is dyed in the wool true expansion, both in terms of the economy and wages and all of these things, then we're probably not expensive. we might even be cheap. we don't know. of course, the fed decision is looming over everything. that's how you get a day like today where there's no decisive action other than a few standout names like twitter. >> kevin, when you look at the world, what do you see? you look into 2014 and you think what? >> all i care about is cash earnings. i'm loving what i see.
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record earnings. record stock buybacks. record dividend increases. this is what markets are about. i'm bullish. i'm loving 10% earnings across the s&p 500. i think we're good for 8% to 10%. i'm a bull. >> and it sounds -- all right. carol? >> everything that kevin says makes me nervous. i worry about the quality of earnings. we have a market overpumped by the fed we don't know if these earnings are sustainable. i'm looking, can we transition from the financial engineers, stock buy backs to have that top line buy back and will companies start hiring people. i'm very excited washington may not be a roadblock. sounds like we're getting close to a budget deal.
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that's the best boone for the market. >> we are on headline watch coming out of washington this hours. sounds like progress ahead of an agreement friday. people would much rather talk about tech than washington. >> washington wise, you know what they say about horseshoe and hand grenades. they've scared us before. taking a look at some of the stocks i like to track, it's interesting to see which ones are up strongly today. yelp, facebook, pandora, zulily. they were suffering two weeks ago so maybe the fear is off and hope is back. >> have you figured out what's going on with twitter the last couple of days, jon? >> i haven't. what i keep hearing is there's this optimism around retargeting strategy, ad tools out there. maybe people saw what happened with facebook and how they got too pes micktic too quickly. >> when you look at the market
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action in december, sometimes these names, social media names do better in a weak tape than a strong one. does that tell you something about growth or am i confused? >> there's two phenomenon in play worth mentioning. first, the santa claus rally tends to emphasize nonquality stocks. not that they're bad stocks but people are not jumping for the high dividend, high roe type companies. they're really looking for the growth and the stocks they can move. if they can juice a portfolio up, these will let them do it. the funds are getting the bigs inflows this time of year because that's how investors operate. i'm putting my money with the hot hand. guess what? they'll buy the stocks that got them there which is clearly facebook, yelp. >> a point carol raised and something we hear quite a bit of.
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the more everyone sounds about 2014, the more worried people are and worried we'll miss this and get in as the door is slamming shut and how can we have as good a performance as we saw in 2013. >> i think it's important we have a lot of carol. she's a naysayer. half glass empty here. at the end of the day, markets drive earnings. we now realize companies, not the country, are running themselves very, very well. they diversified about 47% of their sales. high growth gdp areas. that's where the earning is coming from. i like what i see. a meteor could hit new york, i get that but i want to invest. >> the flow of funds report, if people haven't looked through it, it might be 100 pages, go to you can see of the house rebound because much this market but something on the valuation
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point. nonfinancial equities relative to net worth of these companies, 98.5%. in other words, we're basically one for one. that's the highest level since 2002 with a hat tip to jpmorgan for pointing this out. yes, we're fully valued, perhaps, we're moving further in that direction 37. if we have another strong year, kevin, what are people supposed to think about how safe their investments are? >> before the financial crisis, you would sit here and talk about a 23 pe and not think that's expensive. we're around 17 and you're wining already. >> it used to be grease is the word. now it's is growth the word. >> what no one's talking about is the potential for corporations to finally release the cap ex cracken and start to expand r & d higher and raise wages. i'm not saying it's in the bag but if it was, we are focused on
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the top line and how much cash can they return to shareholders. >> unstable government policy at the state level. >> it's chaos out there. i wouldn't spend it. no cracken out of my company. >> release it! >> i want to get guy adami taking a quick look through the market today. what jumps out at you? >> the auto is really interesting. move in general motors has been fascinating. what is interesting to me is the fact -- you look since april, general motors is probably up 35% give or take. ford is up because everyone is worried al mulally will leave. the downstream plays have been interesting. the autos to me stood out. >> we're looking at toyota, a honda that looks like a built of
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a laggard. tesla has the green arrow next to it. >> tesla scares me. i think josh would agree. i think the momentum in this stock hooz been taken out. now you're just flipping a coin. not to say it can't go higher but i think it's a coin flip. they could easily go down 5% to 8% on any given day. why is toyota not rallying? to me it's a dollar/yen trade. i think toyota has a trade in kind. i'm surprised that given the move we've seen in dollar/yen towards this level that toyota hasn't pushed toward 135 level. it's a laggard i might think about chasing here. >> if you like the longer term trend. today we saw a bit of a pause on that. guy, stay right here. speaking of what's happening in auto space, we have breaking news on general motors. how many times have we said this in the last 24 hours? phil lebeau with mary barra just being introduced as new ceo.
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>> we got this video of mary barra being introduced as ceo. the introduction and a few remarks to her as she's introduced to gm employees. >> i would like to introduce your new ceo effective next month the 15 tth. mary. i would like to say thank you to dan and the board for entrust meg to lead this great company because i truly believe -- >> mary barra talking with employees at general motors headquarters today. she'll take over as ceo on january 15th. one thing to keep in mind, kel y i listened to her remarks and they were all about do the right thing, build the right products and get back to work. this was not about, i'm the first female ceo. she clearly understands the historic significance but her point to the employees today, that's nice that i've been appointed ceo. now let's all get back to work. >> yeah, absolutely. phil lebeau, thank you so much.
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that video is interesting, too, to finally see her out there with the other executives. this is her moment. it's a moment, perhaps, for gm more broadly. they just announced, u.s. fully divesting their stake in the u.s. automaker. she has an interesting challenge. >> they're getting more aggressive than some of their peers. people are asking, why is gm lifting off and ford is stagnant? you would think they would have similar characteristics in terms of the way they trade. gm is going to buy back stock. gm is going to do more on the dividend than ford is willing to do. that's interesting to see them get more aggressive at this juncture. >> guy, we have to let you go but how about that point? do you think ford should be more aggressive on the financial engineering side of things to keep pace with gm? guy adami? >> i'm here. can you hear me? >> yeah. >> just the last four, five months the stock has underperformed. i think ford has done everything right all along. to me the stock is taking a pause. i think it's only because of the
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concerns al mulally might leave. either way, you get resolution one way or the other with him. that stock goes higher from here. i think ford is just fine. >> phil lebeau, thank you. jon fortt, i'm going to let you finish that remark. >> emerging markets, that's something i'm concerned about. china, a lot of the other emerging markets have not been performing well for these companies. u.s. can only give so much. learning for earnings growth. >> we have not spent enough time talking about that. we promise to coming up. plenty more ahead on today's market. coming up, howard marks saying stocks are not in a bubble. wait until you hear what's worrying the oaktree capital chairman. les moonves, never short of opinions, and he'll share his take on the fast changing advertising and media world.
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choose the doctor that's right for you. find your perfect match at and thrive. welcome back. the dow and s&p 500 snapping
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two-day win streaks. dominic chu, what was driving it today? >> we'll begin with h&r block, just out with earnings after the bell, they company reported wider than expected loss. smith and wesson moving higher in after hours after posting second quarter earnings that beat street forecasts. then cvs caremark and cardinal health moving higher after announcing a joint venture to create the largest generic drug sourcing operation in the united states. abbvie show 96% of patients in hepatitis c trial. gilead's hepatitis pill approved by fda, price came under fire from pharmacy benefit manager express scripts.
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abbivie to the upside and gilead to the downside. >> thanks very much. as stocks continue at or near record levels debate on if a major pullback looms. my next guest worried about the level of risk people are worried about taking, howard marks. billionaire investor from oaktree capital joining me on the floor of the exchange. welcome. >> nice to see you. >> we were talking about valuations in these markets. i wonder do you look at the market and see evidence of froth, a bubble or are equities still cheap? >> you're talking about equities. equities were in the dog house for 12 years. that's the longest time in my experience from 2000 to 2012. they've been picking up in '12 and '13. i think they went from cryingly cheap to roughly fairly valued now. i don't think they're overvalued but debate on both sides. >> is it the credit cycle ultimately driving things here? how do you look at the landscape in terms of baseball innings or
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whatever analogy you want to use. where are we? >> i think what's driving things is the low rate of interest as mandated by the central banks. if you can only get 1% or 2% on high yield treasuries, something else looks good at 6%, stocks at something, and normally the expectations of everything else would be higher. >> does that mean if those interest rates start to move up because conditions are normalizing this is the end of the game going into 2013? >> that's extreme to say the end of the game. i think that every -- all judgments in the investment markets are relative. if this pays this, this should pay that, et cetera. i think everybody expects higher interest rates. though moved up since bernanke talked about tapering. they may move further but i don't think a great deal more when it actually happens. and i think that, you know, have you to be balanced now. there's nothing which is cryingly cheap today like it was a year and a half ago which means today you have to build some caution into the things you're doing.
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you can't be aggressive today and not mindful. >> i imagine the distressed opportunities you are famous for is much fewer between than in the past. given what you just laid out, where are you buying? where do you see opportunities? can you be as specific as possible? >> i would love to be specific so you and all your watchers could emulate us, in fact, step in front of us but i'm probably not going to do that. there are things to do in credit far and few between. europe is basically probably better than the u.s. pockets around the world. shipping is an area. you know, the average viewer can't invest in a ship. basically private investments are higher to invest in because the public can't invest in them and drive them up. it's a challenging period. as you say, not much in distress. we have a moderate economic recovery, low interest rates and accommodative capital markets.
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these are not the circumstances that give rise to opportunities in distress. so, again, i say, my intro the last couple of years at oaktree has been move forward but can caution. we're not so terrified we're afraid to move forward but we insist on caution in the equation because today is not the time for aggression. it's not the time for mindless risk taking. >> just for people investing with oaktree, to what extent is demand from pension funds of the world really driving appetite for the kinds of products that can return 8% or 10% so they can make their targets and keep this system going? >> that's very important, kelly. today treasuries give one, two, three. high grade bonds give four. stocks give six or seven. a pension funds need 7 or 8 on average. if stocks and bonds give 1 through 7, how are they going to pull the average up to 8? the answer is they need alternatives, credit, things
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that return 10 or things that have a shot at 15 or 20. >> so, this cycle, are we halfway through it? are we three-quarters of the way through it? >> it's very hard to say, to be categoric and quantify things like that. but i think we are -- i think prices are on the high side of fair for most assets. >> that's a great way to put it. we hope you'll come back and let us know when they're way too high. >> i will. >> howard marks of oaktree capital, thank you so much. >> my pleasure. >> let's send it back to dominic chu with a quick market flash. >> let's see what's happening with mastercard. what we're seeing is the company announcing a 10 for 1 stock split. it's closing at $764. split that ten ways. this share split will happen as of the end of business january 9th, 2014. in addition, the company is also declared an 83% increase to its
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quarterly dif lend to $110 per share. they announced an additional $3.5 billion stock repurchase program. again, the ceo over at mastercard saying today's actions reflect our ongoing commitment to deliver shareholder value. $3.5 billion share buyback and 10 for 1 stock split for mastercard shares. back over to you. >> wow. these stock splits, may be more companies looking at high praic tag and going that route. cbs ceo les moonves seems to have cbs poised perfectly for the next wave of media. david faber catching up with him live and exclusively next. ♪ ♪ i wanna spread a little love this year ♪
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and from national. because only national lets you choose any car in the aisle... and go. you can even take a full-size or above, and still pay the mid-size price. (aaron) purrrfect. (vo) meee-ow, business pro. meee-ow. go national. go like a pro. welcome back. despite all the changes in tech noelg that have impacted the tv business over time, there has been one ceo the champion of network television even as others predicted its demise. under the watch of les moonves, cbs has become the most watched tv network with some of the most popular shows on television and new media platform. david faber along with les moonves this afternoon. david? >> thanks very much, kelly. as you say, we're joined by leslie moonves, ceo of cbs. another great year for the stock price. another reason you're smile
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right now. you always make predictions with me. i remember, it may have been a year ago. you started off in terms of the ratings. wasn't going that well. you said, we will end in first place. you did. this year you are, overall. how about predictions in terms of the demo. >> who knows what's going to happen with the demo. nbc is off to a terrific start this year. deservedly so, black list and football. we're leading in total viewers by a fairly decent margin. i'm very pleased where we are, solid position. broadcast television is up overall. sports is phenomenal. football, our highest ratings in 19 years. so, that's good. the advertising climate is very upbeat, so -- >> i heard you -- a number of people here at the conference said things were a little soft, so we've been asking that question. you don't see it. >> we haven't seen it. scatter is fine. scatter is fine. it's near the holidays. we're extremely pleased with how
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our advertising has been going all year. we'll make our budget for the year and '14 is looking very promising. >> that prediction, number one. >> in total viewers we'll be number one. i'll tell you that. in terms of demos, who knows what's happened. fox has the super bowl. everyone is doing well. it's a good year for broadcast. >> it's funny you talk about sports with the nfl up so much. you were answering questions, particularly about sports programming and said you're happy with the four you've got. nfl, ncaa, pga stuff -- >> and nfc football. >> which had an incredible game. >> does the fee ever stop or keep -- >> the good news about all four deals you mentioned, we have them for more than a decade. so, we know what they are. look, we're going to be profitable in every single one of those sports this year and during the length of these
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contracts. it costs a lot of money. the nfl especially costs a lot of money. you know why? ratings are phenomenal. you don't have to worry about technology. people watch it live and it does extraordinarily well. we're very happy with our profile. >> this is the first time you and i have had a chance to speak since the infamous blackout of the summer, of course. cbs taking off time warner cable subscribers. you said it wasn't fun being dark, although many would look at it and say it was a clear victory for cbs. why not feel like, hey, it went just about as well as it could have. >> by the way, we're obviously happy how it turned out. we're happy with the resolution. we felt we got paid appropriately for what our content delivers to an audience. we kept our digital rights, which was very important. the process of being dark and not delivering content to your customers is not a good one. you hear about it from everybody on the street. you hear it from congress
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people. you heard hear it from the fcc. it's not good for the consumers. we've never been dark before. at the end of the day, the resolution was very favorable to us. we're pleased with highway it ended up but it's not fun being dark. >> time warner cable figures into a lot of conversation at this conference and elsewhere amongst investors about consolidation. given you had a pretty public fight with those guys and, of course, content seemed to prevail, do you worry about consolidation amongst distributors? >> not really. look, there's been a lot of conversation about time warner cable from comcast and charter and potentially cox. it's nothing that worries me. we have great relationships with the mvpds, most of them and we look forward to having great partnerships with them. however it happens, however it plays out, we'll be fine because we're delivering pretear content. we're delivering good sporting events, good prime time events, et cetera. they're always going to need us.
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>> as long as you're getting paid for it. >> as long as we're getting paid for it. >> i want to move to the balance sheet, if we can. the outdoor spin is on track for first quarter of next year. >> correct. >> that's very soon. what is the plan with capital freed up as a result of that, some other things that are happening, many say you'll be severe underlevered if you can. you have a lot of firepower for potential acquisition, should you choose to pursue them. >> there's nothing in our eyesight in terms of an acquisition or big acquisition. obviously, when the spin happens, we're going to have a lot of cash. our intent is to return a big chunk of it to the shareholders. i anticipate a very large share buyback in the first quarter. >> that's an important component of your story thus far. >> no doubt. but we haven't borrowed to do that. we've done it with earnings. as you look forward, obviously, we'll get a lot of money from the spin. we will buy back shares. we will look -- if there's any strategic thing that makes sense to us as a content provider.
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we will have the ability to do that. i sleep very well at night knowing we're going to get the outdoor money plus we have borrowing capacity if we need it. i don't like being in debt. >> you don't like being in debt. >> we haven't talked about your controlling shareholder in a long time. how is he feeling about all this, given not just you but yesterday i interviewed felipe from viacom. any word from sumner? >> sumner is very encouraging. i speak to him often. he's very pleased with our stock price. he's very pleased with viacom's stock price. >> i bet he is. >> felipe has done a great job there as well. when you look at the two companies, sumner is a pretty happy chairman. i always want sumner to be happy. >> i bet you do. you like to mention all the shows, whether it's "survivor" which interestingly you said you didn't actually -- >> no. >> -- favor at the time many years ago. >> at the time i was pitched many years ago i thought it was the craziest idea we ever heard.
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we put it on reluctantly in the summer and fortunately they didn't listen to me. >> do you have a favorite of all those shows? >> a favorite? >> you mention "the good wife" a lot, by the way. >> i love "the good wife," i think it's truly the best show network television today. the writing, acting, superb. it's one of my favorite. i have a lot throughout the schedule. i don't pick my children. i love them all. >> leslie moonves, appreciate your time. >> wow. great stuff. david faber with les moonves at conference today. coming up next, we'll discuss who wins and who loses from the so-called volcker rule that was approved by regulators today. big implications. ♪ [ male announcer ] how could a luminous protein in jellyfish, impact life expectancy in the u.s., real estate in hong kong, and the optics industry in germany?
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welcome back. we want to check in at, the hot list, lighting up with a lot of stories people are keeping an eye on. allen, we had this interview last hour, the bull/bear debate on twitter where one guy said it was worth $15, another one saying $150.
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are you seeing a reaction to that online? >> we are. i love it when you have guys going opposite ways. we just put up the write-up and it's climbing up the charts already on the website. i got high hopes for that piece. but it is up against some heavy hitters. number one out of the box is what we're leading with, patty dom's write-up, she wrapped up all the themes we've been hitting on today, about all the good things happening in the market. employment numbers are straightening out, housing market pick up, a little more consumer sentiment, automobile sales. >> and people want to read about it. >> people are diving in and loving that piece. we've also got another one back to obama care. you know i love obama care. >> of course. >> we've got another threat to obama care, inertia. a brand new survey that shows among uninsured, the folks obama care is supposed to help out,
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two-thirds of those people aren't aware of the new laws and feeling they aren't prepared for it. readers are gobbling that up. we already have 12,000 hits and climbing and climbing. >> and we're spreading the word. >> finally, diana olick is weighing in with her look at what's going on with the mortgage rates and mortgage market. mortgage debt is growing. you might take that as a sign people are borrowing more money because it's a sign foreclosures are going down. she's digging deep into the numbers. our readers are digging deep into it. >> the nuance is so important. allen, thank you so much, sir. appreciate it. have a good evening. apparently people aren't clicking on volcker so much but one of the more important stories today because it's official. tougher bank rules are here to stay. fed, securities and exchange commission among those voting to approve volcker rule. kate kelly in the middle of the action in washington. what's the early read? >> reporter: i think it's a two-fold read. honestly, the top line is that
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the banks got less of a blow than they might have been expecting. they're not saying mp about it today. i've talked to a number of traders and bank managers who are keeping largely mum, saying they're going through it. although there have been some jokes about the length of the overview, which is 900 pages, although the rule itself is 70. having said all that, the banks have been subjected now to a pretty broad definition of proprietary or prohibited trading. yet there are a number of loopholes that will allow them to continue doing business as usual, involving underwriting, market making activities on behalf of clients, involvement of government trading. that's a huge win for them. on the more headache side of the ledger, a much more rigorous sort of compliance and paperwork regime they'll be dealing with when this is coming into effect in july of 2015. they'll have to provide mission statements for every single trading desk. and appropriate client strategies. and things to go with that mission. as well as other things including ceo certification of
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compliance with the volcker rule for larger banks. a number of sort of red tape factors that i think will actually create some deterrence. >> it will be interesting to see how banks respond. we to want bring in the panel on this. i'm thinking about people -- submit your tweets, what is the mission statement going to look like for each of these various trading options? what are we talking about principles, rules even for the volcker rule and what it's trying to get at? >> one thing i wonder is how we'll view this in context when it takes effect. i think july 2015. think about that, 18, 19 months ago, the dow was near 12,000. s&p, 1300. how are we going to feel about the banks 18, 19 months from now? i don't know. >> i wanted to bring some black cloth to put on this desk as the day we should be mourning. when you go back five years from
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now, we'll realize we made a big mistake. >> you hate volcker. >> i hate it. >> the rule, not the man. >> we have, to think of this as the infrastructure of the country. financial services control every part of the country. we have the world's strongest banking system. we put shackles on them with unintended consequences we have no idea. punt this for two more years, get a much more business friendly administration in the white house and then deal with it. >> deal with it after its perpetuated the next boom and bust psych snl. >> welcome to capitalism. are you kidding? that's what we have. >> not a lot of stake. the fact of the matter is that it's very much backwards looking. they're always behind on regulations. there are a lot more smart people on wall street than that there are in washington. to think the banks won't find some way around that -- >> the pay is not as high as it used to be. >> that being true, i still think there's a way to figure out whether they rename, go outside, do spin-off, spin-off. they'll find a way -- >> i disagree with every single
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thing that's been said on the desk. kevin made a good point that financial services supports every facet of the economy. here's the problem -- it took over every facet of the economy. it's meant to be in a supporting role. it got to the point where it was 35% of profits for the whole nation and clearly we saw what the end of something like that becomes. it's not pretty for anyone. i think -- >> this doesn't solve the problem. that's the issue. >> nothing's going to solve the problem of basic fear and greed. that will be with us forever. i don't think regulation is the only answer. but i got to tell you something, i really don't understand why it's such a horrible thing to have trading activity separated from banking deposits. >> i don't think it is a horrible -- >> what service is being provided? >> i'm a client -- >> -- that my deposited is being used to pump up prices in indonesia? >> determine what a market already made a fact for decades at work, for decades, you have one bad cycle and you have to change the whole system? i completely disagree.
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>> 80 years, 75 years glass/steagall protected us so, of course, that had to go. in its place what we ended up with was essentially companies so big even the smartest people, jamie dimon's brilliant, the rest are brilliant, it doesn't matter. they're too big. they can't possibly be -- >> hold that thought for one second. even though the top level is important here, we can also look at what's happened to market reaction today as these rules have come out. take a look at some banks that are supposed to be hit hardest by this in terms of revenue share. goldman sachs, morgan stanley up better than 1% today. >> because they largely priced this in. they've already been separating their trading desks. this is not a shock to them. i've got to tell you something, if you look at bank of america and citigroup, this will affect less than 10% of their revenue. thinks like market making and investment revenue. they've been making preparations for this. >> i think what this does is it opens the door for a lot more
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fines. i think there will be a lot of loosy goosy -- >> that's horrible. >> i know. that's my point. >> i think you vehemently agree. >> it's opening the door for loosy goosy interpretation. i think what's going to end up happening is there will be a lot of settlements -- >> would you consider 40 to 1 leverage, not loosy goosy in 2006-2007? is that structured and orderly? >> we have to find the right solution to the problem. i don't like solutions that don't solve the problem. >> we'll look back five years from now and i'll be right. >> you can see a lot more of kevin o'leary on cnbc when "shark tank" comes to the channel next month. female krooez haceos have r across the sea. you can see a lot of names there. the real question is, why not wall street? our panel weighing in on that next. [ male announcer ] once, there was a man
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scipps. >> better than a 7% move. mary barra is the latest to join the exclusive club of fortune 500 ceos. joining us meg whitman, you can see there board women ceos across the fortune 500 companies. there's something missing from this group and it's a woman running a big wall street bank. the question i want to ask to the panel is whether that's just by chance or is there something, josh, about the big banks that is keeping women from being in charge at these institutions and should we read anything from it. >> you have a female ceo in a very male dominated industry like automakers. you have a female ceo running both ibm and hp. >> i don't know if that's true.
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>> woman is running the most powerful -- >> janet yellen. >> carol has firsthand experience with this. >> i do. i think there's a big elephant in the room. it's not just in wall street, across the board. we have nice examples but women aren't getting as many opportunities. they're not getting the mentorship. >> why do you say that? >> because of sexuality. there's an inherent elephant in the room in that we haveov sexualized. when i was working for an investment bank, i count an accounting error filed in the q10. they give out the award? what's my award? any guess? i think we have a picture of this. it was for best legs. that was the award i got, was for best legs.
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this is -- >> that's actually a picture of the -- >> of the actual award. the fact it's actually a horse's behind with legs was not lost on me. >> what was your reaction when you got that award? >> at first i was like, well, you know, i'm glad they can joke around with me. but the fact i had done all of this hard work and that was the first thing i had been recognized for, if i had been recognized for something else and then the joke came, i think i would have been okay with it. >> you know can-w carol this would never happen in today's environment. >> no, it actually did happen. still, decades later -- >> you won again? >> she's going to get -- >> i did not win again. any time i go out to dinner with a business colleague, i always get flack. oh, you're going out with, the ceo of so and so, is his wife coming? why would his wife come? it's a business dinner. it's the perception it's an older man and younger woman spending time together. if we don't address this women will not get the opportunities to rise through the ranks and be
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able to be promoted to ceo positions. >> there was that dust-up over why twitter didn't have a female board member before it named marjorie scardino. >> it's not just about banks but using our resources as well as we can in the country. you don't want the next steve jobs to be in the wrong job. you want that next person regardless of gender or ethnicity to run companies. >> they're trying to do that in japan now. japan has this huge problem. >> the market has toe be the market on this. they're looking for people that can perform. >> exactly. everybody needs the opportunity to perform. >> we have to have awareness of the issue. the only way we can solve it is for people like you to mentor other women. >> listen, i'm happy to hire and fire a woman just as fast as a man. it should be based on execution. >> amen to that. >> that will be the next show for you, mentoring women, helping them through the ranks. it's an important point and
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>> welcome back. watch out for super bugs. drug resistant infections that kill 23,000 people are year in the u.s. alone. the cdc calling them a quickly growing and extremely huge problem. what have you learned? >> reporter: we're in lexington, massachusetts, they are one of the premier anti-biotices makers. essentially what has happened is we have used anti-biotices so much that a lot of bacteria has become resistant to ant anti-biotices. we are in a race to try to treat some infections that involve diarrhea, things that we used to treat readily now in a hospital, if you get a version of die ree
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that you will likely die because it is so drug resistant. it is a big problem. some of the things that are happening, last year congress did pass legislation to provide incentives like a longer patent period for drugs that are developed. for the manufacturers, it's still a problem because you're putting a drug out there that will go into reserve and it's not as though something like cancer, a cancer drug where you will get more constant usage. >> i had no idea it was so deadly. it sounds more so than in the past. trying to follow this story and keep up with it. there is almost some parallels here. appreciate your time this afternoon. twitter stock took flight today. high times for the social media company and you have been winging tweets. up next your twitter thoughts.
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which is what our goal had said. saying so, which button do i click? a lot of people going back and forth on this one. peter tweeting to say i would be happy to split the different. e-mails and tweets in this discussion about female executives and the lack there of on wall street. >> don't you think that boards are preprogrammed to look for every opportunity they can to balance their board this way? we don't have to worry about it. for ceos and cfos. >> it should be that way.
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>> i'm talking about ceos. >> the actual data is that only five% of s&p 500 are women and that's probably trending upward. it's just a question of the speed at which that happens. and unfortunately, a lot of people making these decisions they are from another era. >> i will just say that your comment reminds me of the mitt romney binders full of women. >> i'll solve it for you right now. i'm from the government. i'm here to help you. >> that is is a place that is going zero. >> we will have to leave it there. great panel. thank you so much for being there. hope we can do it again.
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>> is that right? >> they have been on the hyped wire. remember, of course, this is an industry that really booms but also busts so put those kbes together. >> the energy boom in this country is not just about oil and fraccing. >> fast money starts right now. live from the nasdaq market site in new york city's time square, i'm melissa lee. we've got a tiger cub on set to give us his 2014 play book. find out why he thinks the coffee chain is losing momentum. twitter breaking out $50 a share rally for the second straight day. it's mur than double the ipo price. traders tonight are tim seymour, dan


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