Everybody wants to work in Silicon Valley. At a time when banking is so banking, even when the market is up, will they use will they lose young talent . A stigmais definitely against the big banks in san francisco. I cant deny that. Do the any city really to what we heard from goldman investors earlier this week where they want guaranteed returns and goldman is resisting saying we cant give you those kind of guarantees. But our bank 32 . To . Ut our banks ready is there a true shift happening . Earlier today, rob kaplan said that banks will make a ton of money. They can pay the giant fines. But will they attract top talent, innovative people . Do they want to be in a business that has lost its sexy, its popularity, its pride . Where i live, people are looking at start up saying that they look pretty good as opposed to the big banks. Talking about another story happening today, bitcoin, we have been talking about it all through the holidays. We did the 12 days of bitcoin. These anonymous guys founded a currency called coinye. It is named after kanye west. This was not happy about and he sued them. They did not quite back down. Finally they said, ok, fine, ok, fine, coinye said kanye wins. Many people think that that is what bitcoin is about. It could be like netscape. Yes, it is new. It will be exciting, but it wont actually work. It raises a question, look, if Digital Currencies will be legal, you will have these issues. One country where they are saying, no, bitcoin is not coming here, thats china. And the Central Bank Says that you cannot deposit bitcoin. Another story we are following out of china is apple. China has been working on this deal with china mobile, the largest carrier in the world. Finally today, we know the details. This is a detail that is many years in the making. China mobile will start selling the iphone on friday. Who better to talk about this then john sculley, former ceo of apple. John, thank you so much for joining us here today on the show. Apple has had some big challenges in china for a number of reasons. Is china mobile going to be the secret weapon . It was no secret that they were going to have a deal with china mobile. I think people hadnt put into context just how large an opportunity this is for apple. Given the amount of customers . 750 million subscribers to china mobile. Apple, even as their premium pricing is going to sell an awful lot of iphones, i understand that just in first day since they announced it come over a million iphone orders have come in. China mobile is offering a free iphone with their highest data rate plan. For you, is that extra neri . The idea of get is that extraordinary . Sayyears ago, no one would a free iphone. I remember matt miller standing at the iphone store saying that, if this cost at 800, i would still pay that. Is that possible . I dont think so. Like bmw. More google is more like tesla. Bmw has been very successful. Apple sells very high quality products. But i think they are in a great position out. Tim cook has done a terrific job of positioning them to make money not just on the hardware, but it is starting to commoditize and start to make money on the services, the app store and itunes. Even in china, there is a terrific amount of usage of their services on the iphone come even though the market share of the iphone is relatively small. The iphone, even though the market share of the iphone is owing to the small. Yes, a lot people are using it. Theence of the guys unsubsidized cost is more than 700. That is more than the average chinese persons monthly salary. People in china are saying we want larger screens. Why will they pay that much money for a product that isnt even what they want . Lothe reality is that a people in asia obviously china is part of this do want bigger screens. The product is kind of between a the crossablet between a phone and a tablet, not my word. The phablet is tremendously popular in china. And it is popular throughout all of south asia. But doesnt Samsung Galaxy kind of look like a phablet . It does. It looks like a tablet. There arent a lot of things by samsung that look like apple products. Samsung went one step further than apple with these larger screens. Sam song unquestionably does a google job with the hardware. Where they havent yet shown the same level of competence and talent has been on the software and the services. In Silicon Valley, they built a big campus to get into this, but there is not much evidence yet that they will have the same level of success with Software Services that apple has with itunes and the app store. [phone ringing] iphones. Ng of we have been talking about google buying a digital thermostat maker. It has bought a dozen or so robotics companies. The last new product they introduced was the ipad many the ipad mini, which is just a small version of the ipad. Is apple feeling the pressure to come out with some new products . Are they looking a little behind . They dont feel like innovators. Well, i think you have to look at are they doing what they want to do . Apple has always been a company that says we sell to the people who love us during anytime you introduce a new apple product, the installed base of apple owners will go out and buy it. And apple can stay up at that high because people love the experience. Apple is about great experiences. No, i dont see a big innovative product since tim cook has been ceo. That even when steve jobs was ceo, a new product only came out every six years. When will the next one come out come out . Tim cook has set the expectation that went 14 will be a big air. Will it be the tv . Will it be the watch . Would be Something Else . He has set the expectation that Something Big is coming. What about a product that nobody cares about, the blackberry . Is it officially dead . I hope not. Oh, my goodness. I cant believe i am hanging out with you guys. Is there anyone in seven cisco that owns a blackberry . Not necessarily by choice. There was a story that i can talk about a little now because it is afterthefact. I was actually organizing a group to go in and bid on buying blackberry. We saw a lot of hidden value, assets in a company that was really in desperate trouble. The company decided to not go forward with their auction. They pulled the auction and they brought in one of the most respected ceos in the tech world. Billion tofor 5. 2 sap. And he has brought any traffic number of people. If anyone has a chance to turn it around, it will probably be john channon. I love the keyboard. I still love the keyboard. But, come on, what else . Beshe hidden value of it is. We are interested in it because we have a company in south florida that does the next generation of biod. We are building all of at ts data services. Blackberry Enterprise Services carrier relationships around the world. If we could put those two businesses together, we could create a business as big as workday overnight. So we would have decoupled the hardware decide hardware devices. We would have kept the blackberry Enterprise Services. If john channon called you today and said, john, i need your help, be my partner, would you take that call . Not take a call from john channon . They have dropped the word interim from his title. So it looks like he is it to stay. They are pretty excited. John scully, well continue with you after this break. We will talk more with former apple ceo john scully. Next up, the nsa. We are in a different age today. Surveillance in the cold war, summaries chasing each other around in the ocean is different than dealing with shadowy enemies who seek to do great damage. This face it. The homeland of the u. S. Is the number one target. Welcome back to street smart. It is the latest in the nsa surveillance saga. Today we learned that the agency has placed serve place Software Realm of world that allows the u. S. To conduct surveillance on those machines using radiofrequency technology. This is according to the new york times. We are here with john scully, the former ceo of apple and also present at pepsi. But i want to bring in chris strong who covers the nsa and Cyber Security for us. Chris, as i understand the story, the United States government can get into computers ends eye on computers that are not even connected to intonternet hearing computers and spy on computers that are not even connected to the internet. The u. S. Is able to insert exploits into devices before they are actually shipped abroad. This would be the company basically covering products basically being asks us being accessed by government officials. The other way is that you have essentially some kind of a device, like a usb drive that is attached to a computer, and that begins to excellent trait data data and to exfiltrate send it back to the u. S. Government. John, what you think . A few years ago, when the israelis presently, with some help from the u. S. Government, were able to break into the Iranian Nuclear development ,enter and did it without wires this was kind of a breakthrough in technology that we really didnt quite understand. This sounds an awful lot to me like the stock net technology. What you think, chris . I agree with you. It had the capability to essentially phone home, which is the ability for the malware to be able to receive commands and to aibute information back central point. And that was kind of one of the biggest exploits that kind of reshaped the debate over Cyber Security. It showed that you are not just talking about malware that is on computers just to kind of monitor what is happening there. Youre talking about malware that can actually cause physical distraction. Because the virus was intended to wipe out the iranian centrifuges. Since then, there has been a lot of concern obviously inside the u. S. Government about the capabilities of adversaries to kind of bring that back to the u. S. Is this all way too much information . John, could we say that, edward stoneman, you may have cracked something, but something we didnt need to know . We may not need to know everything. But it is one of the rare examples in government in our democratic system which you know is messy and sometimes inefficient, but sometimes it works pragmatically. My guess is that it may take a few years. But as a bipartisan effort, our government will figure this thing out. And we will come up with rules that we can live with. At the same time, it wont eliminate our ability to be able to track the things we really need to track. So its not going away. It may go away from the headlines in the news, but it will go away in terms of its use by the nsa. We had an 18tweet series about this very thing saying we are increasingly on some collective thinking couch. Oh, my word, i cant believe that spy agencies spy. On the one hand, they are supposed to catch the bad guys. On the other hand, they are being told dont spy. I went to simulate a university. One of the programs we had there was on cyber crime. And the estimates they had was that about 15 of the r d spent in the world every year goes into criminal type it to these that is done by criminals, very smart technical people in places like china and russia and Eastern European countries. This aint going away. I think we do have to have some level of security surveillance. It probably be a lot more control than may be limited from what we had before. But it is not going away. Do you want to make a final point . Everybody is watching obama on friday. He will make his public speech in terms of announcing what kind of changes to the nsa program there will be. Air is a lot of attention given ,o the nsa breaking encryption hacking into cables abroad on Companies Like google and yahoo and it remains to be seen if obama will make any substantive changes to that. All right, chris strong who covers cyber securities for bloomberg. John sculley, former ceo of apple. We will be right back. We are here joined by john sculley, former apple executive and president and ceo. According to the labor department, only 12 of women workers get paid time off to care for a child. But states and congress are hoping to change that by offering Insurance Programs and new legislation for a family leave. Therding to economy since, share of women working in country is sort in countries such as germany have passed the u. S. In those countries, women get leave that are six months or a year. Emily, you could say it would be a game changer if more women here could stay home for that amount of time. I would go back to work. ,ut do you honestly think especially think about technology companies, that need to build their business, could they say to their employees, you can be off for a year . Could they afford to do that . They are differently working towards that can at least Silicon ValleyCompanies Like facebook. The policy that she instituted is that men get the same amount of leave as women to encourage fathers to take the time off with their children as well. The question is everybody going to take it . One of the questions i have is how dealing courage people to take the lead that they actually have . Obviously, businesses are not doing a good enough job of it. There is another piece to the story. The technology we have today versus 2007, when the first iphone was introduced, it really enables people to do incredibly Amazing Things working from home. So you could give somebody time off to be at home, but you could also be able to enable them to get back into the workforce working from home parttime. In fact, parttime workers are the fastestgrowing part of the new jobs created in america. Feel the heat sort of rising up between us. Possible for companies to change their expectations of their employees and say dont come in on weekends . Dont sleep under your desk. That is hard to do because, certainly in the hightech industry it is hard to do. Women are the untapped talent pool for americas recovery among i think. Americas recovery, i think. Who has the best grades in universities . Women, not the man. Who are the most adaptable in an area that is not it that is no longer a commandandcontrol economy but one that needs relationships . Women. There should be more women on boards and in executive positions. If you start doing those things, ladies, you will start to see more constructive policies like more time off. Do you think that we need quotas . No. That would be an uncomfortable way to do it. What we need to do is get awareness in getting women into higher visibility roles in companies. You need more role models out there. But dont you think attorneys realize there are not more women at the top . I think they realize it, fory, but they realize it the moment in the conversation and then they go on into the five other things. One of the issues is that women still make . 75 to a mans dollar. For many families, when their children are school age and they have lots of conflicts, they say as a family, guess what, theres not enough time. Someone needs to stay home to take care the children and that decision gets made based on finances. And in us families, if the man makes more than a woman, she says i will have to raise my hand and go home. So until women are making the same amount of money as men, when they have is limitations, more women will say i will take the fall. A man amen. I need a high five for that. , ladies, i am older than you are. When i was in college and women were better students than we were, they all limited they all ended up in limited job careers. John, i wish we could have more time on this, it will change. Welcome back to street smart. We want to take a quick shot at the markets. This, before we get into we have to take a quick look at these markets. They are green. We are having a positive day. The s p 500, the dow and the nasdaq are. Volumes are thin, which is extruded area. The start ofust the year. January is usually a huge month for the industry. The volume is somewhat suspect. People are still feeling somewhat cautious about the market. Still a lot of uncertainty out there for sure. I want to do a little Word Association game. Staying on the subject of women in leadership, basically just show up what comes to mind when we throw some of these things out at you. Emily chang, do you like her . Absolutely. [laughter] hillary clinton. Great leader. Maybe well have a chance to shine in the future. What are her chances . I dont think anyone could really say with any confidence who will be the candidates. So much happens between now and 2016. At this moment, it looks like the nomination is hers to lose. You are a longtime friend of the clintons. Didnt use it next to her . I did, but i should say that i am not a democrat. I was a republican. I am now an independent. I am fed up with what is going on in both parties. I think kerry would be great, i think but i am hillary would be great, but i am waiting to see who the republicans come out with. What do you think of elon musk . I think he is one of the true innovators everyone uses the word innovation and it is thrown around glibly, but he actually does it. Tesla. It with he wants to go to mars and live there. My god. He is. [laughter] how about mary vara . Who . Lets move on. I think there is a point there. She is the new ceo of gm. I did know her name. Im sorry. It was her first day. I actually saw her in the background because the sound was off on some of the tv things. I did not know her name. Theyre interesting to see someone stepping up to run an oldline company, not a new hightech company, but an old one company. She really has a pretty big following. People think she is going to be great. This is a story this have been covering for weeks. She is a person who grew up in the industry at the company. Now we will find out if this is her opportunity. I want to get your idea on Tech Companies if they are here to stay or we will be getting about them in two years. What do you think of [indiscernible] outstanding. An absolutely wonderful idea. I use it. We are seeing a whole trend towards we no longer have an ownership society. You rent it when you need it. Whether it is mover or left whether it is mover there it is uber or lift. I have tried the other services. Thats my job. But theres so much controversy on search pricing. People get really pissed off. Shouldnt have too when you knew the car the most. When youre walking along the streets in new york and the taxis are in the change over time, you will pay almost anything to get something. It is a great ride and a great service. Another great company, snap chat. What a great company. This is one i would never have thought of. The whole idea of Companies Like instagram or snap chat, which is clearly aimed at a young generation who just get it right away and who, by the way, dont care about privacy, they will share photos on anything, anywhere, anytime, except the photos disappear. Some people say that they are protecting your privacy more because the photos disappear. Somebody was saying to media the day when we were talking about global glass and i said, gee, i dont think people would be comfortable if i had my google glass on and i am looking at someone. What am i really thinking . Am i under seen them in my mind or something . You dont get it. Google glass is for the young people and they dont care. They arent into privacy the way you are, john, and your generation. Google glasses what i had next. What do you think of it . I think the idea is great. Either way, i think google is more like tesla. Google goes for the big breakout idea. Whether it is google glass or other connected things, automobiles, google is really thinking big. So i think google glass has to be looked at in the context. I think the real first market though will probably be in the service industries. So if you are a technician and you want to be able to pick something, you can see an instant video. You can look up something that is important. So i think it will have an enterprise story, maybe a gamer story. I think there will be some vertical markets on it before it becomes a mask used product. Yes or no, is google more innovative than apple right now . Yes, it is. It is working on big breakout things where it is not quite clear what the product is. What apple is great at his Building Products that you love where every detail is perfect and no compromises. But you have to be able to wait until all the pieces are together. Apple doesnt really invent technologies. Google is really google is willing to take a swing at it. That is not what apple does. It takes everybody elses technology, as all the dots, as a fashion statement to it, a very different kind of innovation. Nest thermostats are pretty fantastic. Guess where they came from. Apple guys. Yes, tony bedell came from apple. He gave you the ipod. It is a brilliant product. His followup product is the Smoke Detector and he is probably working on others. It is all part of the connected world that we are living, the hyper connected world that we are moving into. I need to head out to the newsroom for the rigging news where oliviadesk sterns has more. Johnson johnson is selling Ortho Clinical Diagnostics unit to carlisle, the private equity group, for 4 billion. Carlisle plans to operate Ortho Clinical Diagnostics as a standalone company. The rest of it will be in cash. Ortho is a company that makes diagnostic equipment that tests blood for everything from cholesterol to fertility hormones. Interestingly, in this deal, there were three deals there were three hitters. According to this person, three final offers made, one from carlisle. That is the one the one that is the one that won. Was one from cvc Capital Partners and Leonard Green partners. I was speaking with someone from glasco from glaxosmithkline. He said this is exactly what he expects to see happening, the vesting off older units and slimming down. Is interesting because buying is not what we see private equity firms doing lately. In the last year, they have been in the selling mode. So itll be interesting to see a big buyout of carlisle to start off the air with blackstone. We will be back with more with john scully. You are watching the 3 00 p. M. Hour of street smart in tests like these nationwide, more people chose pepsi over cocacola. Is nice and smooth and taste is good. Take the pepsi challenge. Taste buds decide. I love that. If only commercials today could be that good. The pepsi challenge has been around since the 1970s and it is something that are guest host john scully knew about. Were you involved in creating the pepsi taste challenge . I was a part of it. We had a great team. I will tell you the back story on it. We started in san antonio, texas where we were sold out 91 by coca cola peer you are being outsold 91 by coca cola. Up with this idea of why dont we go out and capture the expression on the face of people who never even thought of having a pepsi. He discovered that they did not pick the coke. They picked pepsi. We are going to do a surprise taste test. Why dont you do that, my friend, john, take the challenge today. We just need to get serious for a second. Emily. The famous red specs. They have been written about in the blog. They have. I want to be a team player and get a tear of my own. Red specs are not in my drawer today because my kids have it. Here we go. Ok. Hold on, cheers. We are starting with x. Bring it. Hey, good luck. What do you do if you dont know your product . Ok, good luck. Ok, here good. I think i know. Cheers. Here we go. Know, john. Gosh, no, i dont know. Pepsi, coke. X is pepsi . I was going to say x is coke. John is right. The man knew his product. How many times have you done that . Heres the interesting thing. To honolulu to launch the pepsi challenge and i was being interviewed and they were asking me to describe what it was and the lady who was interviewing me said why dont you take the pepsi challenge. I did and i lost on television. Before cables was television. So only the people in honolulu fortunately, this was before cable television. So only the people in honolulu saw it. A lot of changes have been made in the way we are marketed to. But are there any really extra dairy campaigns right now that you can identify with that you can say wheres the beef or eye makeup or . . Or im a pepper i really cant. Pepsi challenge and then the 1984 commercial that launched the imac. It is all about big ideas. Now it is marketing that a nation. How do you break through . Today, it is all about connecting to the person exactly when they are about to make the purchase in the store and give them a coupon. It is a completely different way of marketing than the way we marketed back in those days of great thematic campaigns. Speaking of a not different way for marketing super bowl, 4 million for 30 seconds. Would you buy that . Nokia but i no. But i did what but i did buy one for 1 million back in 1984. The world changed. Today, you can do things with social media. Online do things with experiences where you connect to people and build up loyalty over time. So you are really looking for innovative ways that are as out ofthebox today as the 1984 pepsi. How about hosting the the halftime show, which is what you see is doing. That is an idea, but it has been around for decades. Let me ask you a question. Who sponsored the halftime show last year . I dont have a clue. That is the point. Would you buy a product because they sponsor the halftime show . I can remember madonna did the halftime show in dallas. This year, it will be bruno mars. But can you honestly say you know who it is . No caps on im basically going to be a bigger beyonce fan because she is doing the halftime show. But because of groupon and all of these businesses, are people using coupons more and more . Two or three years ago, i would not go to a grocery story and and see men in front a woman using a coupon to buy cereal. I do not use coupons. I think you groupon is interesting only because a lot of people get their coupons and never actually use them. The more interesting thing to me is the electronic coupons that are coming on. One of the companies i am involved in is mobean. We can beam that coupon to major people like Procter Gamble and different foods at a coke. At the moment that you are about to make the purchase or walking down the aisle, i know something about you can remember, we can track everything. And offer you the incentive because we know that last week you were in the store and you bought that thinking about her. So this time, i will give you a coupon for it. And you bought that peanut butter. So this time, i will give you a coupon for it. What is the saying . Buy peanutgoing to butter, youre going to buy peanut butter. If youre going to buy jelly, youre going to buy geller buy jelly. I like the glasses. You need to bring those back from san francisco. Justin bieber has one then you know. Need a, i think you pair. Those look good. Thank you. You are watching right now president obama rounding out his cabinet. He is announcing that he will nominate the founder of a latino owned Community Bank in la and cabinetalifornia secretary. We are back with former apple ceo john scully. You can continue to watch the president speech online happening right now. It looks like we are making progress at least. One step at a time. I am all for talented women. That is our biggest opportunity in america. Getting women into role model. Ositions to attract more women obviously, getting the papal between men and women. On to talk to you a little bit about something you are equal getting the pay between men and women. I want to talk to you little bit about something you are doing. Are by 2020ates that it will be up to 50 billion wireless connected devices, which is really the era of sensors. Sensors are like these little tracking devices to wearables. Sensors will be everywhere and that will be machinetwo machine. So no humans are involved. So sensors are out monitoring things. We talked about number we talked about uber earlier, searching price during that conditions. You can monitor electricity use by every product and say, during certain times of the day, when electricity is cheap and available, we will make it cheaper. And if it is not, we will make it mark spencer. Nice glasses. John scully, iq for joining us. Emily, thank you so much. All right, street smart coming to a close. Another intraday record high. News there. Od adam and i have you covered. Yes, we do. But number 10, General Motors down 1 after saying its 2013 profit will modestly improved as it introduces its 15 uber frustrated vehicles in the u. S. This is as mary vara officially takes the coc. A real changing of the guard over there. The sock about fox. Thus lets talk about fox. S one is dropping out dropping about 5 today. Profit and revenue fell short of analyst forecasts. Number eight is x one, down nearly new sent. It cut its revenue forecast for the year. I think it is the second in two days for this type of company to cut its forecast. They say the reduction was caused by the delayed sales of its machines to customers in russia, mexico and france. Petsmart shares dropping. Credit suisse downgraded the retailer. Tosays company is vulnerable lower traffic as customers deal with that winter weather. Theres so much stuff now online. Do you necessarily need to go to has mark . Arrow post all is up about aeropostale is up about 1 . They contacted at least two privately firms. Number five is apple, up about 2 . Dina mobile says preorders of the iphone has reached one Million Units ahead of sales. Apple reached a Distribution Deal last month after six years of negotiations. It took a while. So this will be big for the next quarter. Parks you realize you realize that china mobile has more subscribers than america has people. Is that big. It is incredible. There is also a much smaller news item. Settlement with parents who sued the company about the ability of children to buy things on apps without getting parental permission. So apple will pay 32. 5 million to settle this. Thats good. That actually happened to you, right . They certainly tried. They try all the time. But you have to enter a password and they havent figured out the password yet. Smart. Give them a year. Stan 2 after a court struck down rules about internet content. Internet providers will not charge per charge netflix. Ship ompanys nesler the cubbies listenership will increase even in spite of the recent concerns about competition. Lets number two is regeneron. Stock rating to outperform because of valuations. The drugmakers pipeline value will take longer to realize profits. All right, lets get to our number was stock of the day. It happens to be bank of america. Climbing 2 , the highest since 2010. One reason for the jump in earnings is that it is reducing the number the amount of money is paying due to the decrease in mortgages. [bellringing] seaworld ringing the bell there. I have been under a lot of fire there after a documentary that we will talk about. Nasdaq in the green there. You can see. 6 gain. More economic optimism, you could say, as a result of the beige book. It came from the fed in the form of the beige book. It also came in the form of producer prices, which are up about. 4 . And you will want a little bit of inflation, it suggests there is growth. Financials ending up 1. 2 . Telecom the best on the day with 1. 5 gain there. Look like looks like it might be a record for the s p. Its a record for the s p, but heres the funny thing it is closing flat with where it closed on december 31, right. If you remember the first trading day of january, we traded down. We are back to where we finished the year on the 31st. We are at a new record for the year, and flat with where we were, right . I will take it. We are up. We are tracking these stores ahead of tomorrows open. We want to welcome comedian chuck nice. How are you doing . Doing well. Market is up. Cannot complain. Lets talk about with what has been going on with amazon, what will happen this evening. There is a vote among workers in a delaware warehouse to vote on joining a labor union, a unit of the aflcio. Its only 30 people we are talking about. The Distribution Center has this teen hundred people who actually work there. The company has about 100,000 people who work for it. In terms of the actual numbers, not that significant, but this would be the first union in the United States for amazon. There have been some attempts at union station, a broad, but this would be the first here. Analysts have said there have not been bigger attempts to unite because the workers are relatively well paid. They get benefits, yada yada yada, but amazon has been very vocal about not wanting unions. You are chomping at the bit to jump in. Listen, when you take care of your employees, they are less likely to unionize. We all remember that iconic scene from norma rae. It was not we want more lunchtime. That was not the grievance. It was, we are working in egregious conditions. That is not the case with amazon. I will tell you this much my admonition to those people who are trying to unionize better watch out. Jeff bezos will just buy a company that makes robots. The way they are running those Fulfillment Centers they have rows and rows, shelves of stuff, and people walking in and grabbing it. It should be automated. People walk up and down the rows. Why is that not automated . That is a revolutionary way of delivering goods to people. You want a book and a box of candy, and they are kind of the same size, so we put them in so that kindin of makes sense. However, you do not want to give this man an incentive to to replace you. The reality is even if there was a union if there is a union, they might be able to protect themselves against that. You look at union shops, and you see this on television certain people can only touch certain buttons because it is all unionize. That is what people hate about unions. Thats where unions get themselves in trouble. Words, it cuts both ways, right . Note, these guys are machinists, so they fix machines that are there. They will always have a job. They will be fixing the automated robots at the service center. We will see what happens tonight. In the meantime, we are also watching the new york times, who cited some leaked documents that say the nsa can monitor leaked documents on computers even if the computers are not connected to the internet. A little scary. There are 100,000 computers around the world that allow the u. S. To conduct surveillance and effectively connect a superhighway to conduct cyber attacks. I do not need to get into the intricacies of all this technology. I think that the bottom line takeaway for all of us is if you were worried about the nsa before, maybe tapping into your internet connection, now you have to worry about them tapping into your computer without the internet. They say they are not doing it domestically, though. Thats what they say. It sounds like and this is from leaked documents, so its not just what they say. Its what we have learned as part of the snowden lee, and it looks like it is mostly foreign governments. Here is my only fear this is exactly how cyber nine systems became selfaware and the machines rose up and took. Ver the earth somebody who knows what im talking about right now, lives and their moms basement is like, hes right. Imagine all right here is my iphone, right . Imagine if my iphone had a little chip in bedded in it, in bedded imbedded in it. Very lowicates over a frequency radio wave that can travel a great distance. I do not even know it is in there. Its amazing. On, mama is calling. Its amazing with the nsa. Lets be for real first of all, russia has done the same thing, but they did it with him drives, and they gave it up to diplomats at a meeting like, here, this is on us. But they told people. The truth of the government is the government is not worried about you. They know mostly you have a boring life and they know what youre doing on your computer, and mostly its. Lets be for real. Mostly it is porn. Lets be for real. Who is watching penny stocks . Thats me. We were talking about nestor, up 19 yesterday, because people , thesed it with nest company that google bought. Thats a private company that makes thermostats. Company that makes Traffic Control systems bought by the state of rhode island. A little confusion in the takers. Amazingly, the stock was up this morning, now back to flat. Amazing. Not down . How much did it increase . 1900 . It was trading less than half a penny, and it went up to 1. 2 six or seven cents it went up seven point to sixe o or cents. Watching,out there nets ticker is not the company that google bought. I will say its funny, actually. Hewlettpackard is not hp. Its hpq. Sysco, thesco and food company. Every time you come on the show, we get another retailer closing a store. Macys last time. Now we are getting news that jcpenney is about to close 33 about 2000 jobs. Olivia joins us right now with this breaking news. Hey, there. Jcpenney is set to close about 33 Underperforming Stores. They have also announced they are going to cut about 2000 jobs. This is the latest sign that the battered Department Store is struggling to turn things around under ceo ron johnson. We also heard from jcpenney today that they are going to revive the pack of giving Sales Representatives revive the practice of giving Sales Representatives a commission in stores to reignite Revenue Growth and persuade employees to stick around. It is tough times at jcpenney. The Headline News there that jcpenney is going to close 33 Underperforming Stores and cut about 2000 jobs. This is a company, obviously, that has been under a tremendous amount of stress and pressure. Bill ackerman coming in, making big moves tom a of course in the stock. Did not work out so well or him for him. The company has had an incredibly challenging time and has not been able to really. Ecover look at all of the changes that have had to be made, rolling back the changes that ron johnson made. The latest one being the commissions coming back. This is a little more dramatic of a move, to close the early three stores. There has been talk all along about jcpenneys real estate. In other words, there is some value away from retail. If they are closing these stores, what are they doing with the physical stores . There are still some questions about that. We have more breaking news the house has enough votes to pass a spending bill. This is a vote that is not a huge surprise, but an important vote nonetheless. Hows passing the last few the house passing in the last few moments this omnibus spending bill that funds the government for the next eight and a half months. This is the budget ceasefire we. Ave been talking about this is a continuation. The deadline was tonight to get this done. They passed a threeday extension. Now the has the house has passed this larger bill, and the senate is expected to take it up in the next day or so. Perhaps as early as tomorrow night and passage in the senate as well. Every single federal agency takes off the board, assuming the Senate Passes it as well, the prospect of another government shutdown. It is at a higher funding level than republicans wanted but a lower funding level overall than what the president had asked for initially. Thanks very much. Jcpenney news for a nt because you were here i and a retail jinx is what am a retail jinx is what it is. Time. Were talking last these retailers like macys, like jcpenney caught in the middle are really stuck because it is, like, all or nothing. Whats funny is that these retailers actually mirror our society in some respects where we have kind of the reich ration of money the migration of money to a few people, and the people in the middle are the ones that are totally squeezed. These retailers, who are mid level or midpriced retailers walmart and those guys, they are doing ok. Then you have your very high end, and they are doing very well, but these midpriced retailers are getting smashed. I think its a matter of timing. Who knows . As we see hopefully news about the funding of the government and that type of thing happening, maybe there will be some more confidence in our economy where we will see some more spending in that midlevel range. These guys might rebound. Also, there is a pullout from adt. We also find out they have passed this eightmonth bill. 25 of americans think Congressional Republicans are doing good job and only 30 say democrats are doing a good job. Its amazing. It is kind of funny. That is the way our government is set up a government of checks and balances, and it looks like everybody is losing. It seems like a positive step. It is. Maybe the numbers will get better. Its funny because there was a saying that was going around last title, which was, hopefully, this fever will break. Maybe that is what we are seeing. Maybe its broken. We hope. Thank you so much. All right, coming up, everyone, we are going to talk about mortgages. Adam is going to explain. Do you need a mortgage . Call your bank or because he desperately needs your business. Let me show you what we learned over the past 24 hours courtesy of bank america jpmorgan, and wells fargo. Mortgage originations in the First Quarter look how much they have fallen. Basically cut in half at bankamerica. Wells fargo, which basically wrote one out of every five mortgages in this country a fell 38 are sent. Take a look at what happened to the 30year fixed mortgage rate. It had gone from about call 3. 30 , which was the low, to 4. 30 . Compare the Monthly Payment to where it is now, on a half 1 million mortgage, it cost you almost 3000 more per year. That is real money. That is why mortgage originations have dropped off. The Monthly Payment is going up. That is the problem. The question actually becomes gets hurt who gets hurt . It is not necessarily new mortgages. It is refinancings. You refinance here, not down there. It is not the homebuilders who get hurt. It is more these guys. The mortgage insured. They are the guys who had the huge runup on volume. Ig in gseke nc ngic investment. Relative to how much these have gone up, the s p looks flat. That is absurd. If you have people that are not taking mortgages, as we have learned from the banks, how can you possibly have volume coming from the mortgage insurers . That is the group that is vulnerable. Good stuff. Thank you. Coming up, seaworld turns 50 this year. We will talk to the ceo after the break. Lots of controversy these days. Today, seaworld is celebrating 50 years in business. Executives just saw them ringing the closing bell on the floor at the new york stock exchange. The company had originally planned a Party Tonight featuring the traveling penguins but had to cancel after some elephant Animal Rights groups had threatened to protest. This is the latest challenge since the movie blackfish questioned the treatment of the animals cap that the theme parks. We are joined by ceo jim atkinson from the floor of the new york stock exchange. Thanks for joining us. Kind of a bittersweet day. Adding it all up, how do you deal with this . We are delighted to be here, recognizing our 50th anniversary. 50 years is a long time, and we have quite a storied brand and the normandy of milestones we have accomplished over that time. Issueme we have great with the film. We do not agree with the premise of the film. It is an activistdriven agenda film. I have to say it has not affected our performance, our results. We Just Announced record Fourth Quarter results and record annual results for the company. Fourth quarter attendance for the seaworld rants and annualized revenue for the company, so it has not affected us, but clearly, we have great issues with the film. We are proud of how we care for our animals. The approximately 20 Million People who visit our parks know that. I see one of your penguin ambassadors, as you call them, has joined you. Guys like willie nelson, joan jett you used to play one of the bandsongs heart it seems like there is. Lot of pr to struggle with when does it end . It is unfortunate that people in the activist community target performers like those you mention. You have to put some context on that. The aggregate of these petitions with these performance does not these performers does not even equally single days attendance for our company. In some to put it perspective. At the end of the day, we are proud of the care we give to our animals. Those who know us and know our business well understand all that. Our public and the guests do as well. Have you considered filing a lawsuit or any kind of legal action against the Production Company for this . We have not taken any options off the table of avenues to pursue or consider. One of the delicate things we have had to consider is that our aggressive engagement in the matter kind of makes it more newsworthy. The fact of the matter is the film is owned by cnn and magnolia pictures, and cnn has aggressively or motive the film on its news networks, so we do not feel we are getting quite a fair shake there at all. Would you consider legal action, then, against the network . We would not rule out any action they get to the truth of the matter, and that is what we are focused on. We have taken efforts to put more of the stories related to the film on our website. If you go to seaworldcares. Com, you will see all of that. It is frustrating to us. I started as a teenager in this company. I know full well the care for the animals we have, the research and conservation we do, so when people attack that, it is very, very challenging, but i will say i try to keep those in some perspective. They will pass. We are a 50yearold brand celebrating today, and we are coming off of record results. Let me ask you because we only have about 30 seconds left here having seen the movie, it is tough. I know you have not captured a whale in 35 years, but how is breeding in captivity any better than not going out and catching one . Having animals you can connect to people through our park is something we are very proud of. There are some great things you can see on film and tv and movies, but there is something about being there in person, being live, and our companys ability to connect people with nature and animals in a way that moves and inspires us is perhaps what i am most proud of in my career and work with the company. For us, we make no apologies. We make no apologies for that. You Just Announced record numbers coming out in march and spite of all of that. Thanks for being with us. Thanks so much. Coming up, we will be talking about General Motors. Time now for our big story a new era for americas largest automaker. Mary barra officially took the helm today is the first female ceo of a global car company. Pretty big day for america and pretty good state pretty good day to start. Gm forecasting modest improvements for the year, and it introduced its First Division payment since 2008. Will barra usher in an even better gm . They came out with the dividend. They came out with a new cfo yesterday, all ahead of her the first day. In some ways, do they have all the heavy lifting out of the way . Might it mean theres not as i mean, she could focus on the business and the product, but things likedends dividends, maybe they could wait a month. People focus on detroit right now. I just came back from the detroit auto show, and she is a huge hit. I have not seen anybody that popular there how many reporters were swarming around her . About 50 people. About the most i have seen since 50 cent, seriously. When you think of people who wanted her job and did not get it, what does that mean for business as usual . Think the assignments are changing. They have the new cfo. The new north america cfo. She had to be replaced as Products Development chief. Its not like there was a whole lot of scramble. A floating executive vice or chairmanl isopel, im sorry, he leaving the company. But there are some new positions. The former cfo is going to be president , and thats a new job or someone to be under the ceo and the president at gm. They have not have that for a while, so there are some adjustments, but mark reuss is a strong ally of hers. They have worked together for decades. His real strength and passion is in the product, product of element, and the need for them as you said, so much of the structural work has been done that it is really about making better chevys and better america andr north for china, and that is really what they can focus their efforts on, and thats what they need to do. She got a big endorsement from one of americas you ceos, jackeatest welch, who had some good things to say about her on bloomberg this morning. Take a listen. She has all those tickets punch. She has a great background. She worked her way up, went to stanford. Lets give her every break in the world and hope she knocks it out of the park. She has been there since she was 18 years old, so this is a woman who should know this Company Inside and out. But in some ways im going to play devils advocate does that ever worked against you . Maybe it is too incestuous at some point. Her dad was actually there before. She is a life or, her dad was as well she is a lifer. It is the safest choice they could have made short of cloning alan mulally. I think she has a strong team with her. They are introducing 50 new 15 new cars in the u. S. And 17 in china. That says a lot, write . More new cars in china than here. The last emperor of china was buried in a buick, and the next emperor of china might be born in a buick. Hard to believe. But it is a huge market. I dont think there will be any more emperors in china. The point is it is a huge business. ,s you talk to guys in detroit you have been at the auto show with matt miller for several days, what are people saying . China is hugely important. A lot of the effort here lately has been concentrating on the u. S. Market. It has now grown for years in a row. It will probably grow again this year. Not quite at record levels, but it isnt very healthy levels, and everybody is making money. China is messier. It is hard to get your money out, to repatriate your profit. It is still really a growth market. A lot of investment going in. There is always the risk they will overbuild. Ford is trying to grow rapidly. Gm. Everyone is trying to grow there. Its the biggest market and the fastest growing, so it is a very exciting place for everyone to try to go. What about luxury vehicles . Does gm have a shot at capturing the luxury space in the u. S. And a big or more meaningful way in a big or more meaningful way . That are doing it well enough. Cadillac is one of the biggest growing brands. They are building great cars. I was in a cadillac cts over christmas, and it was fantastic. What they need is a flagship car , and we have not seen that yet. The guy who used to be the cfo and now is moving up to d the gmt describe Balance Sheet as a fortress. What are they doing to save for a rainy day . We found out today this is the first time they had given up dividends since 2008. They are holding out money a little bit, but they also said they will invest, and that is what i am most excited about. The fortress Balance Sheet is something they love to talk about, but the important thing is they are making investments and being cautious with dividends, which is great for investors. The best thing for investors is a gm that makes good products said herself, stops making crappy cars. We are going to olivia for breaking news on yahoo the chief operating officer at yahoo is set to leave as of tomorrow. He has been chief operating officer since november 2012, so he came in a little bit after marissa mayer, who arrived in july 2012. Again, the chief operating officer of yahoo leaving effective tomorrow. For a little more context, a report out of adweek said apparently he did not get along mayer. With ms. Meyer this is a report going all the way back to september. As you typically see in any shake up, sometimes it comes down to personalities and whether or not you are all on the same page and you may company forward. At the end of the day, you have to be able to walk into some of these office, trust the person, interact together it is a human thing. I mean, you could have the greatest Business Plan in the world he is actually one of her first hires, too. Amazon has avoided going union until now, maybe. We will discuss what that means for the Worlds Largest retailer. Plus, as the house votes on the budget, we will look at some of the biggest government money wasters oh, this is going to be good of all time. A group of amazon employees result tonight will vote tonight on what could result in the first ever unionization at an amazon facility in the United States. What would that mean for employees and consumers . Joining us now, the man who spearheaded president reagans economic policy, and the Economic Institute president. Great to have both of you here. First of all, why do you think they are doing this in the first place . The workers, that is . Because they want to be represented by a union for wages, work conditions, and all that, and they have a perfect right to do that, and if they want to, go for it. There is some thought that if you treat your employees well, and you pay them well and give them the right benefits, there is not a ton of incentive to go and unionize, but maybe perhaps in this particular case, and jack welch said to me this maybeg that he wonders if theres a management issue at the plant driving employees to say that they would be better off unionizing. Both things ined the article, and it could well be that. It seems to me that people who have collective bargaining have a voice at the table with the employer. They are able to shape their working conditions, get better wages, and they will be able to band together for things that they want. This is something you would want if you are being poorly treated, but theres lots of people who feel that is a good in, even if you feel that you are being well treated. I think they have a case for that. In this day and age, are they really better off, do you think, being unionized than nonunionized at amazon . I do not like the forced union state. I do not like where you do not have a choice, but where workers get together and want to negotiate for a union, that is their right, and i perfectly agree with them doing that if that is what they want to do. You really need to let the discuss, andelves employers should not be threatening them. They should not be firing. Orkers it is something that the workers themselves should choose whether they want to do that. If they choose to have a union, then management should meet with them and discuss the contract. Thats a great way to put it. What do you make of the fact that what seems to be at issue here is not wages or salaries but more like benefits, seniority, etc. . Im not surprised at all. Theres lots of places where basic rights being treated well, who gets access to what shift all those kinds of things being treated fairly, having some seniority these are basic things that people want and can get with a collective bargaining agreement. It is not always about getting much higher wages. Totally. E i think it is perfectly up to the Union Members to do that. Think companies should threaten workers or do any of that stuff, but in the same breath, i think all choices should be done through the unions, and if they wish to be unionized and negotiate separately, they should be allowed to do that as well. That is why im so much in favor of right to work, where you get to choose whether you are with a union and you get to choose whether you give money to the union for political purposes. But as long as you are right to work, im fully in favor this is an interesting thing. I would like to elaborate on this. What do you see as wrong with him just taking the union wage from your pay . I do not think they should take money and give it to political purposes that you do not want them to, even more than companies should take it out of your pay. Win unions spend money on politics, it is some voluntary contribution. What comes out of actual union dues, unions lobby for legislation that people care about. Unions are one of the Biggest Forces for dealing with workers orp in your state Unemployment Insurance or minimum wages in your state. These are the things that really affect working families. Things like social security. That people want, and they have every right to together we will be watching let me make a point if i can. In california, the California Teachers Association is the single largest political contributor, twice as large as the next largest. Yes, but that is from voluntary contributions no, but it is not voluntary. It is extracted. You do not allow them to sign this. Im sorry, you do not understand how it works. Mandatory dues. Not right. Not right. Its mandatory dues go to political purposes. Mandatory. If they are the biggest contributor, it is from a Political Action committee, just like corporations, and by the way, do shareholders have a right to vote on when a Company Since treasury money a company spends treasury money shareholder should not be required to do it, either. Companies should not spend money a company should not be able to contribute to guys, we want to continue this would we can get you on the same set and you can actually see each other. It would be a great roundtable. Thanks, guys. We appreciate it. A look at what is next on taking stock. I will speed to larry pope, the chief executive of smithfield foods, who were purchased by a company in china last year at a price tag of nearly 5 billion. We will find out what is going on with the sale and the company. To a we will introduce you Company Called get human, bringing you the Human Element for your Customer Care experience. They will tell you how coming up at the top of the hour on taking stock. Today, congress voted on the big omnibus budget deal. If it passes the senate on friday, it will fund the government through september. We will take a look at some items in past budgets that have been truly outrageous. Here are a few stunners for you. I am really looking forward to tomorrow because we have the ceo of tommy boy records. The guy is a legend. It is 56 past the hour, which means bloomberg tv is on the markets. Lets get you caught up on how the markets ended the session. A new record high for the s p, up about 10 points there. Up nasdaq gaining the most, by about 32 points. We also saw a little bit of action in the treasury markets. Up ever sooming slightly, a move of about two basis points, a sign the u. S. Economy is improving. We also are watching oil. West texas climbing today after a report showing that u. S. Inventories are at a 22month low as imports have been plunging. The Unemployment Rate fell to a fiveyear low of 6. 7 last month, but the female Participation Rate is at a 20 year low. One of the reasons may be that the united dates is one of the few countries that does not require paid Maternity Leave the United States is one of the few countries that does not require paid Maternity Leave. Bloomberg news has been looking into why it is worth looking at paid Maternity Leave now, and she joins me from washington, d. C. Thanks for joining us. Obviously, we know senator gil a brand known for bringing her child to capitol hill senator hillebrand senator gillibrand is wellknown for bringing her child to capitol hill. I think its a great moment because the u. S. Really has some issues with female labor Market Participation and is looking for ways to solve that. California, rhode island, and new jersey have some sort of paid Maternity Leave solution. These congresswomen are looking for ways to introduce this nationwide. What are the economics of Maternity Leave . Have there been studies showing what kind of cost it is to employers or what potential benefit it might be to society at large to keep women in higher paying jobs . It can be a cost to the employer and to the employee, but it is worth it. In return, these women get 12 weeks to stay with their child and take care of them, and then they return to the labor force and are more productive. How does the u. S. Look compared to other countries around the world . Thats a great question. It does not look great. There are only two countries around the world that do not have paid Maternity Leave, and the u. S. Is one of them. The other one is papua new guinea. I read that only 12 of americans have access to paid Maternity Leave. How can that be possible . Like goldmanyers sachs, bank of america, dell they offer it to their employees, and as i mentioned, there are three states that already introduced a requirement, so california, new jersey, and rhode island actually require that, and women who live there can benefit from that. You would think this would be the kind of policy a lot of egg employers, particularly with deep pockets, would want to extend to their female employees in order to keep them. There are now so many talented women looking for jobs officially, so this is one way to attract them. The companies that really care, that really want to recruit the best talent, they would offer these benefits, so the issue here is that these benefits are offered to very welleducated women, women who are already paid, but maybe not necessarily to waitresses, for example. Thank you so much for your time. That is it for on the markets. For wednesday, generate 15th, 2014. I am pimm fox. This hour, well focus on business and people that are more than meet the eye. I will be speaking with the chief executive of smithfield foods, the worlds biggest producer of hogs and parts and pork. We will discuss the deal. Also, we will talk about food safety. Plus, the cheese executive of dsp joins us. It is the largest independent provider of eye Care Insurance coverage in the United States