Transcripts For CNBC Closing Bell 20140210

Get ready for the testimony of janet yellen, her first testimony to Congress Tomorrow before the House Financial Services committee. So were in sort of a wait and see mode today. Certainly are. Meanwhile, what a mess over at aol. The ceo now apologizing for citing the cost of providing insurance for, quote, distressed babies and plan to match 401 k payments only at the end of the year. Who should the ceo be looking out for first, his workers or shareholders . Well make the payments at the end of the year or no. That was easy. Also, that report that obamacare is going to cost the equivalent of over 2 million fulltime jobs. That just continues to rattle washington right now. It was a big focus of the sunday morning talk showinp morning talk showins morning talk showinhows, and no Tommy Thompson will be here exclusively. Hes ringing the closing bell for his organization tooteday. Hes got some views coming up. We know were going to hear a little bit more about it perhaps from the gop in just a couple hours time as they grapple with the debt ceiling. We have breaking news on General Motors. Phil lebeau has that story for us. Phil . Bill, General Motors has announced the 2014 compensation for new ceo mary barra. This year she will be making 14. 4 million. That is 55 more in compensation than her predecessor dan akerson collected last year. Of that 14. 4 million, 1. 6 million is in cash. Short term incentive makes up 2. 8 million and 10 million, a little more than 10 million, will be coming from her longterm compensation package. That needs to be officially approved by shareholders at the april annual meeting, but, again, mara barra will be making 14. 4 million this year. Guys, the reason theyre releasing this early, to clear up misperception that is can been floating out there on the web and other place that is she was not making as much money as her predecessor who obviously was fael, shes a female and the concern floating around General Motors is that the perception is that she would not be making as much because shes a woman running the company. And, phil, we discussed this on the program last week because i had raised this issue about hearing mara berra war barajas g half of what her predecessor so. Shes actually making more . 55 more. And thats not surprising. Their longterm compensation package, they no longer have the restrictions that were in place when the Treasury Department had a say in how General Motors was paying its executives. Now that they can make their pay more comparable to others in their industry, their peers so to speak as far as other companies go, they can raise that compensation up. So this clears up thats going to rattle around washington. The ideas that were swirling around. I wonder what she was making two weeks ago before the hue and cry. Doesnt hurt to have the whole world watching to see that theyre going to pay her. Thank you. Lets get back to the indexes. We are seeing a small deklaincln the dow, down 2 points. Lets kick it around. Our Closing Bell Exchange coming your way, gina sanchez, david kudlow, anthony chan from chase is with us at the big board. Axel merck is with us, and our own rick santelli. Gina sanchez, what are you expecting to hear from janet yellen tomorrow . What does the market want to hear do you think . I think the market and i certainly expect to hear that the recovery is fragile but the economy is still growing and that policy will remain unchanged. That will be the most marketfriendly maneuver and i think thats exactly what janet yellen is going to do. Anthony chan, a lot of people are talking today about the fact there will be a panel of experts testifying after janet yellen. They include some hawks like john taylor. How do you think that will affect the testimony, questions, and markets as they watch this all play out tomorrow . I think they will be asked questions based on what janet yellen talks about and, of course, the topics at hand. We know john taylor has never been a big proponent of all the stimulus that the Federal Reserve has put out there, so we sort of have to look at what these guys positions or officials positions have been prior to their testimony to get at least glean an idea of what theyre going to say, but my suspicion is janet yellen will take an evenhanded approach. If shes going to err, shes going to err on the side of caution, and at this point the caution is justified but with another employment report ahead at the next fomc meeting, i dont think shell reveal to mean cards. Do you think she makes any meaningful changes to fed strategy, especially considering this her first fed testimony and it might look like she disagreed a great deal with ben bernanke if she makes any changes at this point. Shes been laying low for a reason, because of the confirmation hearing. This is the first opportunity to speak in public. She maybe wants to get rid of that unemployment threshold for once and for good. The real challenge is all the recovery is based on asset pricprice ed inflation. As soon as those bubbles pop, the glass is half empty. They will work to try to reinflate the asset prices. She might drop some hits tomorrow, otherwise she will do so in march. We had Christina Romer on the program and she effectively said in not so many words she thought the taper was a mistake. I wonder how much of a minority view that is. Is that just something that people certainly more dovish on the spectrum think or is that view more widely held . Well, i mean, the tapering is pretty much baked into the cake here and deviating from it is going to cause quite an uphea l upheaval. She know that is. At the same time she cannot possibly be happy with those disinflationary forces taking over with the yields coming back down. She wants to reflinflate the economy. Were coming back from a great bust. Monetary policy is pushing against that. When you take the foot off the accelerator, the Deflationary Forces are taking over. Yellen does not like that. Thats not in her camp of thought. She will think of something, probably not yet tomorrow, but the market is pricing in a hawkish fed and thats just not going to happen. Were setting ourselves up for a surprise, if not for tomorrow, then in early march. When while, david, the markets last week, incredible volatility. The worst day of the year a week ago today, that 300 point drubbing of the dow. Then on thursday and friday we had the two best days of the year, and, in fact, we finished the week positive. Whats the market telling us right now regarding the economy or fed policy or the price of tea in china, whatever . I think the market is telling us to expect a lot of volatility in 2014. What we saw over the past couple weeks i think is a sign of more to come. You know, last year was easy. You just added beta to your portfolio and you got great returns. Were only a month and a half into this year and weve already had a 6 pullback in the markets. We think this year will be full of more volatility like that. As far as janet yellen tomorrow, your earlier question, there have been a lot of comparisons between janet yellen and ben bernanke. We think this is where she should take a page from alan green span. Saying a lot but not really telling us anything. I think for this go around it would be good for janet yellen to let the market have its certainty that quantitative easing tapering is on autopilot of 10 billion at every fed meeting. Thats baked into the cards, and the market has that certainty. Dont create any new uncertainty for the markets. I dont think that would wash now, do you . If thats what youre saying, i wonder is it safe at this point to say the correction is over . Thats the verdict that already, as bill was saying, kind of in the span of a week people seem to be delivering. I dont know. If we get another correction now, is that a double dip correction or the start of a new one . Weve had a nice rally back. Thursday and friday, the best backtoback days for the market in over a year. But, you know, were going to have more volatility ahead of us. Do we go down again before we go a little higher . You know, but i think what investors need to look for this year is a lot more modest returns than last year and how to diversify their portfolios for the ongoing volatility that were going to see, and that is diversification abroad, diversification in the long short Market Neutral strategies. Just throw the money anywhere and make sure you get a good diversification there. Rick santelli, what is the market trying to anticipate for tomorrow . What are you guys talking about for janet yellen . Well, i think actually can be summarized in something kelly said. She said Christine Romer wasnt a fan of the taper. I think what tomorrow is going to do is its going to divine which investing groups are in christ te Christine Romers corner. If you look at the market today, virtually all of the trades are very close to unchanged. I think after fridays number, theres still many investors that are unsure of exactly how much qe is going to be around in a couple of quarters. So i think that will be the point tomorrow, and i wouldnt underestimate how todays calmness could play into maybe a lot more volatility either tomorrow or after thursdays testimony on the other side of the aisle. Gina, it does have a certain calm before the storm feeling today, doesnt it . It really does, and at these levels, the s p is still a little vulnerable. I think most people who were really hoping to buy a dip were hoping to buy a dip down to 1700 and that just didnt happen. Part of that is because there is growth here. A lot of the concerns around emerging markets, those were really overblown, and were kind of getting to the other side of that. And so now everybody is looking at janet yellen to see if theres really concerns about u. S. Growth. I think that we are going to continue to see growth, but it is going to be a volatile year, and so at levels at this level, were probably going to see some potential, something is going to make someone is going to blink and the markets are going to fall out of bed again, and then were going to continue to peck along along the recori. Well, i think its safe to say we will get some good theater tomorrow the way they have it set up with that second panel of potential critics of fed policy. Well see how the market responds to that. Thank you, folks. Appreciate your insights. Thanks. We are 50 minutes away from the closing bell today. The dow at its low was down 60 points. Then weve come back. Its not been a very volatile day, but its sort of that wait and see attitude ahead of tomorrows testimony by janet yellen. Were down seven points right now. You could say the market is looking for direction today. Weve seen some pretty big moves in the last hour of trading recently so dont go anywhere. Things could look very different at 4 00 p. M. And go pro, the latest Technology Company to file a socalled secret ipo. Were hearing more about these lately and its kind of ironic for a company that brings you images no one else could find, and now theyre filing a secret ipo. And if its good for go pro, is it good for shareholders . Well find out. This is absolutely a trend to watch. Speaking of ipos, one of the best performing ipos last year, the ceo joins us next for the red hot business of keeping your pets healthy. Youre watching cnbc, first in business worldwide. Security solution to keep your Information Safe secure. Century link. Your link with whats next. Impact wool exports from new zealand, textile production in spain, and the use of medical technology in the u. S. . At t. Rowe price, we understand the connections of a complex, global economy. Its just one reason over 75 of our mutual funds beat their 10year lipper average. T. Rowe price. Invest with confidence. Request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. With investment information, risks, fees and expenses time to take care of business with century links Global Broadband network and Cloud Infrastructure. We constantly evolve to meet your needs every day of the week. Okay. Mixed market here. The dow is still down. Were down 8 points at this hour but the nasdaq is having a praed good day up 18 points and the s p up 1. 25. There are some stocks making moves today. Morgan brennan . We begin with apple. Up around 2 . Carl icahn is dropping his demand for the company to buyback 50 billion of its shares. This comes a day after proxy Advisory Firm iss said it recommended that apple shareholders vote against icahns buyback proposal. S had bureau is the s ps top percentage gainer after the toymaker gave an upbeat outlook for 2014. And auto nabby surging after i alibaba offered to buy the 72 of the chinese digital mapping and Navigation Firm it doesnt already own for 21 a share. Its a 27 premium off its friday close. On the flip side, Medicines Company which fell after an fda panel said it was divided on whether to recommend approval of its drug to treat blood clots and stent procedures. Back to you. Morgan, thanks very much. The biotech space has been heating up. Check out pet Pharmaceuticals Company aratana. The stock is up over 280 since its ipo last june. Steven st. Peters, the ceo, there he is, and also with us a special friend. That would be tempe. Thats what a chihuahua looks like in winter when they they have to grow their fur. Tempe looks a little upset by the lights or the people. I dont know whats going on but tempe is looking a little peaked right now. How big is this market . You just made an acquisition of another company in that space, but how big can this industry grow . Yeah, i mean, we really dont know how big the market is for pets medical needs. Today 68 of american households have pets and theres over 180 million pets in american homes. So when you really begin to think about pets as family members that are aging with their twolegged family members, theyre developing medical needs, and so the medicines to deal with those medical needs, were really at the beginning of that market today. And so you guys are developing some of the medicines. What differentiates what youre involved with from and i realize its the subject, its the fact youre working on pets and not humans, but in a biotech space thats becoming increasingly populated, a ton of space, a ton of competition going on, how much roadway do you think you have for developing pet pharmaceuticals . So thanks, kelly. We really think that a lot of the medical needs that humans get, pets also get. So were actually accessing innovation from human medicine and then respes yating that for dogs or cats, really finding nuances in the biology that apply to a cat or a dog because as we know, you know, you wouldnt take a medicine as a human that was shown to be safe and effective in a dog. So we believe that if youre a dog, you ought to get a medicine thats shown to be safe and effective in your species. I lost a beloved pet years ago to cancer, and my wife and i after it was all said and done decided we wouldnt go through the chemo a second time. And we feel guilty about it because in part because it was so expensive to spend on a pet. Is that going to be an issue . Cost there is no pet insurance, Health Insurance out there to speak of, at least not on the federal level. There may be private pet Health Insurance, but cost is going to be an issue for a lot of people when it comes time to try and deal with the medical treatment of their pets. Yeah. So, bill, absolutely. And first of all, sorry about your loss. That was a long time ago, im over it now. I will tell you that theres hundreds of thousands of pets that get cancer, particularly type of cancer, and about half the people treat that. And so theres actually over 100,000 pet owners today that are treating their dogs and cats for cancer. So not all people will do it, but theres a very big market that exists today of people who are willing to treat their family members for cancer. But the cost, thats what im getting at there. How are margins . Are costs going up the way they are in Human Health Care world as well . One of the things thats different about the pet market is is it a private pay market. About 97 , 98 of the dollars are spent out of pocket, and so the orphan disease model of hundreds of thousands of dollars of therapy doesnt work, but we do know that 5,000 is not an unusual amount of money for someone to spend on a pet. And in terms of daily chronic therapies, a couple dollars a day people are willing to spend and do spend in the u. S. How long do you think its going to be before youre doing 100 million in annual sales . Well, i cant talk about our individual kind of revenue guidance, but the company at this point has over 15 products in development. Our first product we received a conditional license from the usd a last month. Its a product for lymphoma and well be marketing that product later this year, and then we have additional products that come to market over 2016. So really we have an entire portfolio of products, and so in terms of individual products, we dont really talk about it sounds like within a couple years. Yeah, thats the plan. Huge market. A big market. Steven, good to see you. Thank you, tempe. Its over now. You can relax. I would like to keep him around for the rest of the show. All the people and the lights will go away. Theres a lot of people you dont see around here, folks. Im sure thats what tempe is reacting to. Thanks. We have about 40 minutes left to go. The dow is down by about 7 points. The s p 500 slightly p lly posi. The nasdaq is up 19. One of those people standing by is former health and Human Services secretary Tommy Thompson. We will be waiting in on the latest obamacare controversy, on whether it will cost the equivalent of 2 million fulltime jobs. He says the law is fundamentally flawed, but he says it can be fixed, and he lays out his solution for us coming up next. Speaking of fiks, aol boss Tim Armstrong trying to fix a pr nightmare. But is that the future of these plans anyway. Well take a look. And this aol mess is really a battle between shareholders best interests and employees best interests. We want to know whether you think companies should take actions more in line with the interests of shareholders or workers . Your best tweets cnbcclosingbell coming up. 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Republicans pounced said, you see, we just proved it, that obamacare is a job killer. Democrats ever since have been saying, wait a minute, look at that report. It says people would choose not to work, not that companies wouldnt hire them. Here is chuck schumer, the senator from new york on meet the press yesterday. The single mom who is raising three kids has to keep a job because of health care can now spend some time raising those kids. Thats a family value. But, of course, theres a weakness in the democratic argument, too, because even if its by choice that 2 million fewer People Choose to work, that has an effect on Economic Growth which is what rob portman, the senator from ohio, said in response. You have democrats almost giddy about the fact that were going to have fewer people in the workforce. That doesnt help the workers. It doesnt help in terms of fighting poverty. Now, bottom line, this argument is going to go on through the election. Democrats arent sure that they have neutralized this issue. Republicans are very giddy about it. So theyre going to be trying to press their advantage, and you can expect it to come up tomorrow when janet yellen testifies before a house committee, her first appearance since becoming confirmed as fed chairman, guys. John, thanks very much. More reaction now on this latest obamacare controversy. Yes, in a cnbc exclusive were joined by former health and Human Services secretary, former wisconsin governor, Tommy Thompson here at post 9. Welcome. Youre ringing the closing bell because youre the ceo of physicians realitity trust. Im chairman of the board. Its an honor to be here. Thoou for having me on your Wonderful Program and congratulations on what youre doing. Thank you. Thank you. Look, this is such a tumultuous time for health care in this country. You know, you saw the cbo report, weve got a deadline i think coming up this weekend for people who want to receive who want to enroll in obamacare by march 1st. Where is this all going . Well, i think what you really see is a Health Care Proposal thats now the law of the land that really didnt have bipartisanship and now is trying to be enacted, and its got serious problems. The biggest problem, of course, is not the fact that 2. 3 people million are not going to be employed, which is a huge problem, but the fact of the matter is younger people are not going to be enrolled. This is just plain actuarially unsound. Thats going to sink obamacare unless they make meaningful changes. You have said before on other programs on our network that youd like to see the president call in leaders of the industry and the republican leaders, sit down, and lets solve this problem. But as you well know, governor, the republicans would just rather see this whole thing go away. Theyre not in the mood to try to make this thing work, are they . But its 18 of our Gross National product, and health care has got to work. Health care is not working, and it certainly is not going to work under obamacare, and i dont think anybody can just set aside and watch this thing disintegrate. Thats how washington works now. I know thats how washington works, but its not right because health care has got to be fixed. Weve got to make sure that we have a Health Care System thats viable, and until they come together, and it probably is not going to take place until after the next election, but i am here to tell you as soon as the election is over in november, youre going to see a bipartisanship coalition develop in which health care is going to have meaningful changes thats going to make it fixable and it is fixable and theyll go forward and be able to do what is necessary to really provide health care for the people of this country. So youre saying as soon as after the midterm elections are over this november, and you emphasize bipartisan, what is going on behind closed doors in washington . Theres nothing going on, thats the problem. Nothing is. But after the election people on both sides are going to come to the cloonclusion after going through an election i have been through enough of them. People are going to be asking their congressman and senators, why cant you get anything done. Thats going to resonate among the individuals that are candidates and those people are going to be elected is this only the case if democrats dont do well in november . Do you think that acts as a catalyst to reconsider obamacare . I think its going to be a republican year, and thats going to help to make the changes because right now with the democrats in control of the senate, obama doesnt have to make any meaningful changes. If the republicans win the United States senate, which i think by all indications is going to happen, its going to be a republican year, republicans then are going to see we have to fix this, and thats whats going to happen. What would that look like . What are they going to ask for . Whats the quid pro quo . The quid pro quo is basically they have to make it more accountable. Theyve got to take some of the money out of health care. It is very expensive. Its too duplicitous, and its not taking care of young people. They have to get it actuarial sound and republicans will make that. They will allow the exchanges to work much more and in a better way. That doesnt sound like a whole haul replacement and repeal of the program. It makes it sound like obamacare is here to stay, just with improvements. People that tell you obamacare is going to be completely repealed really dont understand health care. Its there, and in another two years its going to be the status quo. They have to make meaningful changes and they can do that, and if people think they can repeal it, its impossible to repeal. Once people start working under obamacare, which they are right now, its going to be very hard to roll it back. Youre going to have to make changes in order to make it actuarial sound, make it more competitive, take a lot of the money out of the system so that the taxpayers can afford it, and this is whats going to take place after the election im fairly confident. All right. Well see what happens. I know theyre anxious to get you upstairs. Dont forget, doc is a great stock. Doc is a great stock. Can i say that . You just did. Physicians realty trust that youre chairman of. Theyre ringing the closing bell. And were up 26 cents today. Thats a good day. That is a good day. Governor thompson, always good to see you. Its my pleasure. Thank you very much and good luck to you. 30 minutes left in the trading session here. The dow holding steady. A lot of the major averages just kind of taking a wait and see attitude getting ready for that important testimony by fed chair janet yellen tomorrow. Weve had a pretty volatile market so far this year, but ipos have actually still been red hot in 2014. And now a new trend is emerging, socalled secret ipos. Up next, well take a look at what that means and if this is the new normal for a lot of these new young companies. And famed Fashion Designer Betsy Johnson is back from bankruptcy and hitting the runway at new yorks fashion week. What is she doing differently to stay in the green . Just read about how she spends her sundays in the New York Times on sunday. And shes still doing cart wheels. Watch out. These new young companies. And shes still doing cart we still run into problems. Thats why Liberty Mutual insurance offers accident forgiveness if you qualify, and new car replacement, standard with our auto policies. So call Liberty Mutual at. Today. And if you switch, you could save up to 423. Liberty mutual insurance. Responsibility. Whats your policy . A very different monday than we saw a week ago when the dow was heading toward a 300pluspoint decline. Worst day of the year. In fact, for a few months there. But today a different day, not as much volatility. The industrial average was down 60 points at the low this morning. As you can see, were down 3 points right now. The nasdaq and the s p slightly positive as we get ready for Janet Yellens first testimony before the House Financial Services committee tomorrow. But the recent volatility of the stock market hasnt been scaring Many Companies off from going public. U. S. Listed ipos have actually raised a total of 6. 8 billion so far this year. Of course, its only february. Seema mody is tracking the ipo movements and has a handle on some companies that could make it to the exchanges in the next couple weeks. Thats right, kelly. Before we get to those names, lets highlight those stats because it has been a record start to the year for the ipo market. 28 deals, 10 of which went public last week, and whats more, these stocks are doing well averaging 18. 4 pop on their first day. The historical average is about 14 . And Renaissance Capital points out that a number of ipos have shown strong follow through beyond the first day. Two examples, re vance and auspx pharmaceuticals. This week biotech continues to dominate with inogen, eagle pharmaceuticals, flexion, and concert pharmaceuticals. Analysts say the outperformance of the Biotech Sector as well as an uptick in health care m and a are Reasons Companies are going public. Stay right there, if you will. We want to talk about something relatively new to the ipo world, socalled secret ipos. There are new rules that allow some companies to go public without putting as much information out there at least until the last minute. This was a portion of the jobs bill that was passed a couple years ago in congress and its about twitter did. Also what a very cool Company Called go pro has announced its going to do as well. They make those small camera that is can go anywhere. They bring in truly amazing points of view. But if going public is about transparency, should perpt nent details about a company be hidden until late in the ipo game as its devised by this new rule . Joining us now, gene irkin. This only pertains to companies with a market value below 1 billion. So whats the reasoning behind this new rule . Thanks for having me. Well, theres really two themes here. One is to reduce the deterrence from going public. Second is just to make the ipo and ipo filing process easier. Gene, back at the time when the jobs act was working through congress, there was some experts who testified and said, look, if we go down this path, the quality of the ipos is going to fall considerably and the individual investor at the end of the day is going to get burned. Why shouldnt we be worried that that still will turn out to be the case. I disagree with that. This is really a question of information timing, not information type. I mean, eventually any company who files a confidence ipo is going to have to release the necessary and pertinent information to allow investors to properly scrutinize and vet them. This rule allows companies to focus on the ipo process with the s. E. C. Without having to disclose how the sausage is being made. But we should point out, the information will eventually come out, just at a later than usual time before the road show begins. So, i mean, im not sure and they do that so that the competitors cant get access to this information, but they will eventually. So im not sure exactly the reasoning again behind the timing of these socalled secret ipos. Whats the advantage . Well, i think its just what you describe. Similar to twitter, it prevents companies who it prevents companies from having to release sensitive Financial Information to its rivals while theyre testing and vetting out the ipo waters. And i got to agree. I think this process works because it allows the company to sort out their finances in private and then showcase their books once theyre finalized. Many of these private companies are young and have time Sensitive Data as well as disruptive ideas. Maybe its better to report out their results once theyre ready to release those results and that product to the world. Of course, as journalists, it dauz make our job a little tougher but i can see why that would be seen as beneficial. Its just interesting because, look, we like to live in a world where you have potential access to more companies, the ability to inject capital where perhaps a real upstart player is going to need it and put it to great use, but at the same time to say that it almost makes it sound like this is just giving companies plenty of time to put their best face forward and i dont know. It feels a little bit like like i would call it window dressing but its almost presenting the best face and then kind of coming forward with more of the detail later. Especially in an age of transparency or supposedly so. Gene, do you a take on that . I would add, i think theres always unintended consequences with every rule, but i dont think with this rule its going to be detrimental to the ipo process. I mean, i think theyre trying to encourage Smaller Companies to test the ipo waters rather than going the easier route on a private sale. Yeah, well, at the same time we know that, look, one of the beauties of the u. S. Is our deep Capital Markets. Seema, how Many Companies are taking advantage of these rules . You know, i dont have the exact number, kelly, but experts i spoke to say that the jobs act is definitely given private companies another reason to list. Now, of course, they do have the ability to sort out their finances ahead of time and then release their data once they hit the road show or right before they hit the road show. Gene, thank you for your thoughts. Seema, well see you later. Certainly kept people busy around here, bill. Yes, it did. A lot of ipo activity last year. A lot more coming this year. The dow, as mentioned, roughly unchanged. The s p 500 a small positive and the nasdaq up about 19 to 4145. To the housing market, for foreclosures could be on the way unless congress acts. What does Congress Need to do and how likely is that to happen . Our real estate pro diana olick has that story coming up next. After the bell, shes known as one of the most colorful characters in the fashion business. I will sit down with designer Betsy Johnson about her rebounding from bankruptcy and what she has planned now for consumers. Stay tuned. Thats why new york has a new plan dozens of tax free zones all across the state. Move here, expand here, or start a new business here and pay no taxes for ten years. Were new york. If theres something that creates more jobs, and grows more businesses. Were open to it. Start a taxfree business at startupny. Com. [ male announcer ] a car that is able to see to calculate, to think and can respond to what it encounters. Even if that means completely stopping itself. Its the stuff of science fiction. Minus the fiction. The 2014 eclass. The most intelligent eclass ever. In todays market, a lot can happen in a second. 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That expired at the end of last year forcing borrowers who had their debt forgiven to have to pay taxes on the short sales, a lot of money, a lot of money they likely dont have. Some legislators want to help but like much in washington, not one plan is getting more traction. Here is more on what happens now is diana olick. Here is a number for you, 2. 8 million. Thats the number of short sales done since 2007. Add to that hundreds of thousands of Loan Modifications where the Principal Amount was lowered. Money that was tax exempt for borrowers. That exemption expired six weeks ago and has not been extended. B borrowers like tony are on the hook. He got his short sale approved but it would a month too late. He could owe the irs around 30,000 which he does not have. Now with this debt relief act not being extended as of yet, im really nervous now. So im staying unlate p late at. Just cant sleep at night. Its causing a lot of stress. Now, remember, the banks were actually mandated to do principal reductions in legal settlements. Thats why the foreclosure and delinquency numbers are down. Loans in foreclosure down 28 from a year ago. If you think the crisis is over, think again. There are still 3. 24 million delinquent loans out there according to black knight financial, plus 1. 24 million in the foreclosure process. Add it up, 4. 48 million loans that could be helped by either a short sale or principal reduction. There are several bills in congress that could extend the tax relief one or two years. But so far no movement. We have lots more on this. All right, diana. Thank you very much. Heading to the close. 15 minutes left, call it 14. The dow down 6. The nasdaq and s p with fractional gains right now. Still cant believe they havent resolved this issue in congress that diana was just talking about. Remember when we were discussing this and we said they wouldnt leave this out there. Its government by committee of politicians. Thats why. All right. Well see what happens on that front. Meantime, aol chief Tim Armstrong may have taken his foot out of his mouth and fixed his 401 k faux pas after blaming a change in his plan on sick babies. Hes only laying out what Many Employers are considering, the fate and future of your 401 k . Thats coming up. Stay tuned. I dont even know how to answer that. I mean, no one knows how long their money is going to last. I try not to worry, but you worry. What happens when your paychecks stop . Because everyone has retirement questions. Ameriprise created the exclusive confident retirement approach. To get the real answers you need. Start building your confident retirement today. Where you think youre gonna go when your times all gone . [ male announcer ] live a full life. The new lexus ct hybrid with an epa estimated 42 mpg. The further you go, the more interesting it gets. Lease the 2014 ct 200h for 299 a month for 27 months. See your lexus dealer. We are at the tenminute mark before the closing bell down. And the dow is down 7, was down 60 at the low. Not nearly the kind of volatility we saw last week around this time. The nasdaq is up 17, 18 points, and the s p is a point higher. Joining me talking about the markets, joe quinlan and erin gibbs from s p capital iq. What changed . We are down 300 points a week ago today. Then we had our two best up days of the year on thursday and friday. And now were going sideways here. You know, i think a lot of it had to do with, one, seeing the negative numbers from the pmi for the managers index. That was a big disappointment for january versus where we were in december. Then we got the good number for services. Manufacturing was bad but services was good. Manufacturing was terrible but service was great. We care about fundamentals again. I certainly hope so. But were sideways today. Were waiting for china to come back online. They have been during the holiday so theyre going to kick back into gear. Europe is looking a little better. Really here at home, u. S. Economy i think is gaining momentum and gaining steam with or without tapering. I think a lot of the confusion is all the negative numbers we have seen recently for december and january, theres been this constant excuse of bad weather, bad weather, bad weather. But is it real or is it an excuse . I stayed in. The weather was bad. I think people dont want to go out and search for homes in the middle of a snowstorm. So we kind of have to have this wait and see pattern until we can return to normal, particularly for housing. Are you putting money to work now . What are you doing . We are putting money to work. Were looking at the cyclical sectors in the u. S. Were looking at parts of the emerging markets like mexico. So we still like energy, information technology, the industrials. We see good growth coming in the spring. Were going to have a snap back in the housing. The downturn in spending weve seen in the last couple weeks. Were looking for good nominal gdp growth above 5 . Even if the fed keeps the tapering coming oh, yeah. Thats a sign of strength. The tapering means the economy is getting stronger. We hope. Thats going to bring in more capital. My concern is as long as the fed keeps tapering, what were really looking for are do people start buying houses again. If they keep tapering and we dont see that housing recovery, thats a much bigger cause for concern. Theoretically as they taper, long rates should be going up, theyre not but that we had a huge jump last summer and a huge jump last fall. As long as they stabilize and people start buying houses, i think thats where what were really looking for. You still think earnings have been pretty decent this quarter. Earnings have been exceptional. Right now were looking at finishing Fourth Quarter sorry the year, 2013, at 6 and earnings next year at 8. 5 . Revenue though . Revenue has come down and that is concerning zefl. We came from a high of 3. 6 to 2. 8 for twis2013. I think revenues will pick up, overseas, here at home. I think 3 , 4 revenue growth. Thats better than we expected going into this year. But is that what the market is anticipating . This volatility weve had so far early in 2014, if we believe that the market is trying to guess whats coming, is it really forecasting a better economy . I think it is, bill. I think the big question theres problems in the emerging markets. We know that. Now the investors are looking at, listen, the u. S. Is growing, japan is growing. The developed economies are leading the way. We havent thought of that in a long time but thats what happened. We started the year priced for perfection. Theyre taking it all in stride here. Erin and joe, good to see you both. Thank you. Well take a break, come back with the closing countdown for a monday. After the bell, the curling craze swept the olympics four years ago and its roaring back once again. Cnbc is the evening home of olympic curling, and we couldnt be more proud of that, but if you are still not exactly sure what it is and what its all about, our own Michelle Carusocabrera is in sochi. Theyll have a primer for you on curling coming up. More market news and curling coming up on cnbc. When possibilities become reality. With centurylink as your trusted partner, our visionary Cloud Infrastructure and Global Broadband network free you to focus on what matters. With Custom Communications solutions and responsive, dedicated support, we constantly evolve to meet your needs. Every day of the week. Centurylink® your link to whats next. Here in philadelphia you can access a philly cheesesteak anytime, day or night. Just like you can access geico anytime, day or night. There is only one way to celebrate this unique similarity. Witness the cheesesteak shuffle. Cheesesteak, cheesesteak its the cheesesteak shuffle huh every day, all day, cheesesteak, cheesesteak every night, all night cheesesteak, cheesesteak 9 a. M. Cheesesteak 2 p. M. Cheesesteak 4 a. M. Cheesesteak any time ruh geico. Fifteen minutes could save you fifteen percent or more on car insurance. Became big business overnight . Like, really big. Then expanded . Or their new product tanked . Or not . What if they embrace new technology instead . Imagine a companys future with the future of trading. Company profile. A Research Tool on thinkorswim. From td ameritrade. We got a couple minutes left here in the trading session. Lets just look back. You know, this is a weeklong chart of the dow. So were missing the 300point drubbing the industrial average took a week ago today, last monday. Then we were sideways tuesday, wednesday, and then it was off to the races. Today not so much. Very much a sideways move. We all maintain that its probably theyre waiting for janet yellen. Peter costa, fed chairs have been scrutinized before with their testimony. Whats different this time is we have a new entity this time. We have no idea how shes going to perform or what shes going to say here. Right. I think that this could be a very telling, you know, meeting. I think listening, nuances, all the things we used to go with going back to bernanke when he first came down. We have to learn what her words are. Another new wrinkle, theyre bringing on a second panel, a shadow panel after her, and its made up in some cases of hawks, monetary hawks, and they are there to respond to her testimony. So we could get some fireworks tomorrow. Its like the republican rebuttal to the president s state of union. Exactly. That will be interesting. Listening to the hawks, i think at some point they will be heard but i dont think it needs to be now. I think the market is going to do all right. I think the next week will be about earnings. Well get through tomorrows testimony and then well still deal with the earnings. Throw you a little curve. We all talk about what the market wants to hear from janet yellen. What do they not want to hear from her tomorrow . What would disappoint this market . I think if she wants to accelerate the tapering more than it already is, i think that that might have a negative impact on the market, but i think youre not going to hear that. Shes not likely to do that. Shes been a big proponent of this. I dont think youre going to see any curveballs out of her. I think what everyone is expecting is pretty much what were going to get which is okay because its about earnings. Lets continue with that. We still have two weeks left. Still about fumndamentals. Thank you. A question vie yet davery quiet. But is it the calm before the storm. Meantime, the second hour of the closing bell with kelly evans and company right now. See you tomorrow, kelly. And welcome to the closing bell. Im kelly evans. Stocks in a Holding Pattern ahead of new fed chair Janet Yellens testimony before Congress Tomorrow. Here is how we are finishing the day on wall street. Looks like well finish with green arrows across the board but the gains are relatively small. The dow hanging on to that 15800 level. The s p adding a couple. And the nasdaq the stronger performer up half a percent to 4148. This despite some weakness in social media names. Lets bring in todays closing bell panel. David greenhouse, Kayla Tausche and dom chu and guy adami. Whats going on in the markets here . Youve talked about it all day. Everybody is waiting to hear what janet yellen has to say tomorrow. The fact that they have this Shadow Committee after the testimony i think is pretty interesting. I was just talking to brian kelly, fellow lumber bringer, if theres any hawkish tone whatsoever to her, it could throw a little bit of a monkey wrench. Remember, the s p is up, what, 60 handles in 2 1 2 days. I think its a little too much too fast. I think we have to sift back a little lower. Dan greenhouse. A lot of this is about janet yellen. A lot of this is about the fed or maybe its not. Are we making too much of this or is this the most important event of the year . Its the really important event. Its the first time shes speaking in front of the House Financial Services committee but i would reject the idea that somehow were rallying in front of her testimony. We have no idea what shes going to say. The overwhelming likelihood is she sticks to the playbook thats been in place. I just dont understand why she would deviate from that playbook in front of a meeting that she hasnt even chaired yet. We will hear from her tomorrow and then on thursday. Guy brought up something really interesting. See what you think about this. There is going to be its not just janet yellen who will be testifying tomorrow. There will be a couple people, experts, also giving their view on monetary policy. They include a couple more hawkish names like john taylor. So theres this thought that if thats coming up, that there might be more of a conversation, more political pressure on janet yellen that would somehow make her strike a more hawkish note. Does any of that ring true . It doesnt. The reason why is fed chairman janet yellen is looking to make a mark not in a bad or good way, but to establish her credibility. What she wants to do is identify the fed as independent, which it always has been or is viewed to be. Technically it is. The reason why you have this reset, if you will, is the markets really need to figure out what exactly janet yellen is going to say about the future of the fed in this, her first ever real public testimony since taking the job. If she does do this, a lot of investors are going to view this kind of maybe perhaps balance, if you will, being brought to this tone to really identify what janet yellen says about the new fed. We know the fed is an hang on one second because theres a couple things that arent happening that are kind of interesting at the same time. Earnings havent been a disaster. They have actually been okay. We, meanwhile, were talking about merger and acquisition activity, although today, kayla, it was notably quiet. People have been betting on these m a stocks thinking companies have so much cash, this will be a catalyst, but kind of a quiet day. They have a lot of traders who are wondering why they came into work today with the snow overnight and a big day tomorrow. It was really just staging for the rest of the week with such a rangebound trading day but there wasnt anything. Mcdonalds global samestore sales, hasbro, you dont have anything to hang your hat on. Everyone is looking at janet yellen. I do not think they will bow to political pressure. Thats the last thing someone in her role would want to do in their first public appearance on the job. Lindsey, there are a lot of cross currents, a lot of speculation, a ton of scrutiny. Its not an enviable position. What do you think happens tomorrow . Certainly not. I know yellens testimony is an important event but i think the market is focused on the key here and that is jobs. The market is trying to differentiate between temporary weakness and underlying fundamental weakness as we saw a disappointing january report on the heels of a weaker december juxtaposed with strength that we saw in october and november. So really the market is trying to discern that underlying trend all against the backdrop again as the other guests mentioned, yellens testimony to which we will look for more guidance as to how she sees that economic trend. Sara, as we have been watching a great counter rotation, if you will, counter reformation or something, in the bond market because, look, if the fund flows the last couple weeks have been crystal clear, people are piling out of equities and into bonds. And nobody expected this. Bonds were so hated at the end of last year. Everyone loved stocks. Guess what . The fund flows tell a completely different story. If you look at the new data actually from last week, investors yanked money out of Global Equity funds, 28 billion. That was the worst week for equity fund flows since back in 2011, and meanwhile, the money was pouring into bond funds. 15 billion. So the question is why . What can the bond market tell us right now given the conversation that you guys are having . Number one, it was a lopsided trade. Everyone piled onto one side of it. So it snapped back. Jeff gundlach saying that particularly is why you actually want to own some bonds on january 14th. You also have weakness in the global economy. Emerging markets are still not okay and the outlook is a little shaky given what the Federal Reserve is doing, tapering its quantitative easing, and the u. S. Story. Its not like a straight shot up. Its not at what some economists call escape velocity, that things are perfect and going well. Its going to be a burchy ybum recovery. Perhaps you should own some bonds at least in your portfolio or at least look to the yields as a sign that not everything is okay. Right. Sara, we just put up a quote from Jeff Gundlach who is doubling down because remember around this time or around middle of last year, he said i think the tenyear is going down to 2. 5 . Now, that came right as we were getting this unraveling with taper talk last time around, but he is standing by that call, dan. Is he crazy . No, i dont think hes crazy, and far be it from me. But generally speaking with respect to what sara is pointing out about the global uncertainty and the fight to safety and bond yields, it shouldnt be entirely surprising. If there was going to be trouble in emerging markets and trouble in domestic equity markets that investors would pull money out and find their way into the bond market. Back to saras point about bonds being hated at the end of the year, the question is not can you time the first two weeks or the first month or the first two months. The inquire is what are the likely path for the Asset Classes over the next 6, 12, and 18 months . The themes from before hold true which is the bias for bond yields should still be higher. And i would just add in, as you are talking about Janet Yellens testimony gnotomorrow,e is going to try to make the nint Interest Rates will stay super low. Interesting to see what she says about the unemployment rate, but tapering is not tightening. It doesnt mean Interest Rates are going to change. So perhaps dont fight the fed. When were talking about structural demand for some of these Asset Classes, dom, it was interesting in barrons they had an interview with the woman who runs harvards Endowment Program and she was talking about their asset allocation. Guess how much of the harvard portfolio which is in the past been seen as kind of the model for endowments, first of all, her target return is 8 . Its not just Pension Funds reaching for yield. Guess how much of her portfolio is in u. S. Equities . I dont know, maybe a quarter. 11 . Wow. 11 . And thats somewhat indicative of where a lot of people are just pouring money into credit, pouring money into the bond market, and, you know, you need the retail buyer, someone else besides Just Companies buying back their own stock here. Absolutely. And thats why some strategists will tell you its okay to have some bonds in your portfolio whether its for a flight to quality or just because the world doesnt look like a great place right now and the ferveg is on hold for a very long time, super loose monetary policy. Perhaps dont dump all your bonds in your portfolio as you were hearing toward the end of last year. I will say this, again, when we talk about bonds, we dont say that bonds are exactly synonymous with treasuries. Its not all going to treasuries right now. When we talk about the fund flows, the majority of those Bond Fund Flows are into the general taxable bond community. That can be everything from Corporate Investment grade to high yield to municipal not municipal for taxable but just a lot of bonds despite the fact equities have been volatile, companies have had no trouble raising money, raising debt, borrowing in this market whatsoever. Were off to another great start. We are off to another great start. The problem is the beginning of the year is always an earnings season. You dont really have as much activity in january as you do during other points of the year. When i was talking to a few Capital Markets bankers i was saying are you seeing an influx of activity because rates are still low . They said, no, because theyre not technically really allowed to do that as theyre nearing earnings. So they might hit this window on the wrong end of it. But it doesnt seem like Interest Rates, as sara was mentioning, are going to go up skyrocketing anytime soon. It does feel thats exactly right because it goes back to the general theme of the economy where we see each component of the economy still positive but losing momentum. So this is certainly not indicative of a strong recovery to justify a raise in rates in the near term. So, again, looking to yellens testimony, shes going to have to convince the market, this is part of the challenge, that rolling back, continuing to roll back accommodation in terms of monthly bond purchases is not the same as rolling back accommodation in terms of raising feds funds rate. Can we talk about a couple stocks real quick . Sure. For example, twitter. Weve discussed this one ad nauseam. There were certainly a lot of people there was lots of ink spilled over the weekend on the fact that its metrics look weak. We thought it would trade sub 50. It basically got there. I think it flushed a lot of folks out. I think the trajectory in the stock is probably lower. I think it sifts into the mid to low 40s, but right now given what we saw last week, i think theres a really good chance you sort of trend back up to 58 or so. Its all about trading these things. To try to you know, to buy this and say six months from now youre going to see twitter at 65, i think thats a fools errand. I think you have to learn how to trade them. I think you put in a tradeable bottom last week in the name. All right. Are you going to Say Something . Guy, i apologize, i think i missed something in the middle. Do you think its likely to go to the low 40s or the upper 50s . From here i think the first move is to the upper 50s. I think the trajectory in the stock is such that it has to trade down. You have a lock up coming up, a major lock up coming up in april. I think once the volume, once the flow comes back in the name, i think its all been a supply demand story. The supply being the amount of shares thats out there which is what took the stock to the levels we saw. If you ask me in six months, where is the stock . I think its 42 to 45. We also have a ton of earnings on tap, guy. Any names in particular youre trading ahead. We have a conton of consumer products. Hartford, i thought they did exactly what they should have done. Prudential is a neat name. Going back to the original point, i really think the deflation has been the battle all along. I think theres a good chance tenyear yields go back down around 2 . Im in the gundlach camp times two. All right. Thank you very much for joining us as we try to figure out how to make the market. A very different tone from the 300 point selloff we were looking at seven days ago. Olympic curling is coming up on cnbc at 5 00 p. M. Yes, its that time again. But get your Second Screen ready and not that one. Guy adami and the fast money freestyle will be streaming live and that starts at 5 00 p. M. Thank you, guys. Well see new a bit. Escape from new york and were not talking about kurt russell, were talking about banks. Up next, dick bove saying a deluge of lawsuits is driving the big banks out of new york. He says that makes as much sense as las vegas driving out casinos. And Tim Armstrong backpedaling from his decision to pay out 401 k matches at the end of each year. Will this be the trend anyway for 401 k plans . Our panel will weigh in on that. We want you to weigh in on whether companies should align themselves more with employees when it comes to these 401 k payouts. Tweet us cnbcclosingbell. Thk has a new plan dozens of tax free zones all across the state. Move here, expand here, or start a new business here and pay no taxes for ten years. Were new york. If theres something that creates more jobs, and grows more businesses. Were open to it. Start a taxfree business at startupny. Com. In todays market, a lot can happen in a second. With fidelitys guaranteed onesecond trade execution, we route your order to up to 75 Market Centers to look for the best possible price, maybe even better than you expected. Its all part of our goal to execute your trade in one second. Im derrick chan of fidelity investments. Our onesecond trade execution is one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. Welcome back so some breaking news on obamacares employer mandate. John harwood has the news from washington. Kelly, remember that the employer mandate was delayed a year. What the Treasury Department has announced today is that it is phasing in the employer mandate even more slowly than that original delay. Its only going to apply in 2015 to the employers that have 100 or more employees, not the ones between 50 and 100. Remember, it doesnt apply to people below 50 employees. Also those firms in their first year will only have to provide Health Coverage to 70 of the employees in their firms. Thats, again, to cushion. In 2016 the mandate will be applicable to businesses between 50 and 100, but theyre slowing it down. Also cushioning some of the rules that allow employers to determine what their payroll is at the time that they have to apply coverage to smooth out some of the seasonal variations. But a couple of ways in which the Obama Administration is trying to accommodate complaints from employers in implementing that mandate, guys. John, this is potentially a big move, and it comes as we have, i believe, a deadline this weekend for individuals who want to sign up for the exchanges. Has there been any move with regard to the individual mandate that you can glean . No, not at all. And there is no deadline this weekend on the individual mandate. The dleadline for individuals i march 31st to sign up, so people still have the months of february and all of march to sign up. I see. So february 15th is for people who want coverage as of march 1st. Thats on the individual side. This is on the employer side which affects the total number of people who will be in the exchanges. Well, it doesnt affect it that much because most big firms already offer coverage. This is something that its part of the reason why the employer mandate doesnt hit that much. Now, its possible that with the exchanges up and running, some firms may drop coverage, so that number would diminish, but right now most large firms already offer coverage, so its not it doesnt have an impact on a vast swath of the workforce in the United States, although a significant number of employers. Another move in terms of the deadlines. John, thank you very much for trying to is up rise all of that from washington. The big apple is home to some of the worlds biggest banks, but are new yorks regulators driving them out . From alleged wrongdoing on hiring practices in china, new twists in the foreclosure fiasco, officials continue to put banks in the legal crosshairs. That has dick bove shaking his head. He joins me along with andrew stultman, specializing in securities litigation. Dick, this line caught a lot of peoples attention when you said your view here is new york wont stop until its driven the banks out. Do you really feel that way . Yeah, i do. They obviously are not going to drive all the banks out of new york but they are driving them out of new york. Think about, you know, where bny melon is. Goldman sachs had to add new people. They did it in new jersey and utah. Citigroup is the Third Largest employer in singapore with jobs, all of which could be in the United States. Although they have pushed a lot of jobs to south dakota. Morgan stanley is pushing jobs to japan and to china. So if you go company by company, the first thing you recognize is there arent very Many Companies. There used to be at least a dozen banks and Brokerage Firms that are headquartered in new york that were of great size. Theyre not there anymore. And of the ones that are left, they are putting money and jobs out of new york. Why are they doing it . One of the key reasons is because you had three attorney generals in a row who cant stop suing them. In fact, today we had this unique situation where, you know, weve got the brooklyn District Attorney suing banks for something that mcdonalds just did in vietnam and the whole world is cheering mcdonalds for being in vietnam. You mean prioritizing its own in this case making use of connections to get the business yield on which you say should actually be a matter of fact. Well, as a matter of fact, you know, the situation that im mentioning in vietnam, of course, is mcdonalds opened its first, you know, new shop in Ho Chi Minh City of all places, and the franchise went it isnt just the franchise. Its the countrys distributorship went to the daughter of the prime ministers husband. You know, in china when jpmorgan made a consultant payment to the daughter of the old prime minister, the s. E. C. And the brooklyn District Attorney jumped all over them. Thats not fair. Andrew kelly go ahead. The point is basically there should be priority and preference for banks in new york as opposed to what appears to be a piling on. Thats one of the most ridiculous things i have ever heard. Look, if you dont want to pay the fine, dont do the crime. The banks have nobody to blame except themselves, and for them to be pointing their finger and saying, gee, the regulators are beating us up, this is so unfortunate, were going to move elsewhere. You have yourself to blame. Jpmorgan paid 20 billion in fiennes last year. They have Six Department of justice investigations. If you dont want to be piled upon, simply dont engage in activity that melts down the global world wilde economy. Not to mention the trends are two over arching phenomenon that dont have necessarily anything to do with the regulatory action youve cited. Lets take that statement, if you dont want to pay the fine, dont do the crime. Lets take the statement of jpmorgan just paying 15 billion in fines. Who created the fine there . Was it the jpmorgans conduct. They didnt create the fine. Sure they did. The problem was done by the people who Washington Mutual, it was done at bear stearns. The people at washington how about the london whale debacle. They paid 2 billion. The shareholders of jpmorgan and jpmorgans shareholders did not commit the crime. If you believe that those people who committed the crime should pay the fine, why are the shareholders of jpmorgan paying for the fines that for the crimes that were created by carey killinger and jimmy cane, neither of whom are you going after . So the net effect is you have made the decision to fine the people who did nothing and to let the people who have committed the crimes go free. So if you believe in if you t to pay the crime or the fine stuff, you ought to do what you say. How about a 2 billion fine for the london whale debacle. The firm shouldnt have to just that fine was ridiculous. It made no sense whatsoever. The regulators arent willing to do that. But the banks have nobody to blame but themselves. And to claim that the regulators too rough on us, give me a break. You almost melted down the Global Worldwide economy in 2008 and the fact that more of these firms any of these firms werent criminally indicted is stunning. To simply have to pay the fine is the minute yimum you should to do. The banks did not create the Global Financial crisis. Sure they did, dick. If you understood economics and finance, you will know that the financial crisis was created by an excess how come jpmorgan paid 15 million in fines for shoddy mortgage passes . They didnt pay them sure they did. They paid them for shoddy mortgage practices that Washington Mutual did and that tell the state attorney generals that. Please. The net effect is well, the attorney general said it pretty clearly. These fines were not being applied to jpmorgan because of what jpmorgan did. It was applied to jpmorgan because of what other companies did. Dick, i will say in this regard you actually agree with the point that jed has made which is by not going after individuals and going after institutions, the entire prosecutorial system has gone completely off track. Exactly right. In other words, if people really believe that the people who committed the crimes should be fined for committing those crimes, then they should go after the people who committed the crime. Kelly, you know what you do . You go after the companies. Look at what happened. Once Arthur Andersen was you went after the shareholders of the companies. Weve seen no 95 of the shares of jpmorgan are owned by go ahead, finish the point. An apologist for the securities industry and im sorry but its that sort of attitude that led to what happened in 2008 and thats why nothing has changed since 2008 took place. Ill give you the last word there to defend yourself mr. Bove. All right. Well, to assume that nothing has happened since 2008 means that you have not looked at any of the laws, regulations, or rules that have been put in place since that period of time which have been stunning in terms of their impact on the consumer and the financial industry. And the meantime, the actions will speak for themselves. Thank you very much. An important issue, especially in new york. Tim armstrong trying to turn back a storm of controversy, doing an about face an aols decision to Delay Company matches until the end of the calendar year. He faced backlash when he blamed the move on the cost of sick babies. Well discuss this controversy next. We want to know if you think companies should align themselves more with their employees instead of shareholders when it comes to decisions like 401 k matches. Tweet us cnbcclosingbell. Your thoughts in a little bit. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Or how ornate the halls are. Tall the building is, it doesnt matter if there are granite statues, or big mahogany desks. When working with an investment firm, whats really important is whether the people behind the desks actually stand behind what they say. Introducing the schwab accountability guarantee. If youre not happy with one of our participating Investment Advisory services, well refund your program fee from the previous quarter. Its no guarantee against loss and other fees and expenses may still apply. Chuck vo standing by your word, thats what matters the most. Welcome back. The dow is seesawing near break even more for much of the day. The open Cloud Company announced its ceo has retired. Its Fourth Quarter earnings came in line with street expectations. Organic Food Producer annies also down in the after hours after reporting weak are than expected Fourth Quarter earnings. A pair of Cyber Security stocks on the raise. Palo alto is in talks to buy an Israeli Security firm. And fire eye says it plans to start selling intrusion prevention systems which help companies detect Cyber Threats that breach their fire walls. Lastly, we end with aol, finishing the day in the red. The company reversed a controversial change to the 401 k Retirement Plan which would have replaced regular matching cc was a once a year lump sum payment. Tim armstrong apologizing for singling out two unnamed female employees as reasons why the current plan is too costly. It still raises the question is this where 401 k plans are going . Should workers be in line with employees or shareholder obligations. Dom, what do you think . When i first heard about this story, i thought, you know, this is a company who even offers a match to begin with. Not all companies do. Thats a real perk, first of all. Second of all, does it really matter . Its a cash Flow Management issue. Theyre still going to end up paying you the same amount of one. Think of it like a wall street bonus where you dont get paid until a certain time of the year. The real issue for the average investor if youre a 401 k plan is whether or not that fits into your financial plan. What youd like to do is maybe take 1,000 a month and spread it over a year so you can dollar cost average in rather than taking a sniper shot and a onetime buy of that lump sum of money. Thats big. Do you worry that people then when they see a lump sum like that will, you know, be more likely to borrow and think about using the money in other ways . That certainly could be a result of this, but i think the bigger issue here, and, of course, i dont think aol did this in the most politically correct manner or the best image for the company, but i think this speaks to the bigger issue of companies are struggling to offset these Rising Health care costs. And most of the woe tales weve heard from been from small businesses, mom and pop stores that had to let employees go. Here we see a big guy not immune from the costs either. If Health Care Benefits begin to increase, you have to offset those in other areas. In this case its in retirement and saving benefits. Kayla, i guess, look, if its not an obligation, you know, its on the company. We can all talk about 401 k s and how important it is to save and all of these things, but it reminds you almost again of what the president announced, not that thats an ideal option either, but people need more than a nudge. They really need the vehicle there to help begin this process of saving for retirement or look at the crisis were talking about and how Little People have saved in this country today. It is a good reminder to average joe investors that if your Company Offers a 401 k you should be contributing. I think aol was coming from a good place. Tim armstrong last week when he made the comments about the 7. 1 million in additional obamacare costs theyre trying to offset, he said our last priority of people we would like to use our money to contribute towards their funds ever people who have decided to leave the company. They have decided aol is not the ri right place to work. On wall street no one leaves if their bonus is coming in february. They dont leave in january. If its coming in june, they dont leave in may. Thats something you know is a line in the sand and you dont leave before this happens if its really that important to you to get. Dan, what do you think . Listen, i come at this from a textbook standpoint leaving the company aside. The rule of a corporation is to maximize shareholder value, profit maximization, and if Tim Armstrong and the board of directors or any given board of directors thinks its in the companys best interest to change the contribution to an elective benefit to employees, then i dont understand, clearly this wasnt done in the most politically correct way and to borrow the president s way, it was probably done stupidly but the pressure is there is what youre saying. I dont understand why theres any outcry whatsoever. If they want to give you money in 12 payments or give it to you in one payment, youre still getting extra money in terms of a contribution to your 401 k . People are just basically worried this is the First Step Towards more phasing out of 401 k benefits. But thats fine then. If youre an employee of aol or any company and you dont like the benefit plans, you are free to go somewhere else. Well, it becomes a problem of the commons. Everyone has to offer them or else no one will offer them. Someone will eventually offer it. Well tweet at each other during the break to continue no . All right. Whats heating up the website . Our hot list is coming up next. Its fax weshion week in new yo and we have Betsy Johnson in the house. We want to talk about her comeback from bankruptcy and what it takes to make it in the fashion world. Dont go anywhere. Youll experience reliable uptime for the network and services you depend on. Multilayered Security Solutions keep your Information Safe, and secure. And responsive dedicated support meets your needs, and eases your mind. Centurylink. Your link to whats next. A 401 k is the most sound way to go. Lets talk asset allocation. Sure. You seem knowledgeable, professional. Would you trust me as your Financial Advisor . I would. I would indeed. Well, lets be clear here. Im actually a dj. [ dance music plays ] [laughs] no way i have no Financial Experience at all. That really is you . If theyre not a cfp pro, you just dont know. Find a certified Financial Planner professional whos thoroughly vetted at letsmakeaplan. Org. Cfp work with the highest standard. Welcome back. Time to check in with the website and see what people are clicking on today, allen, because the markets werent doing it for them. Market was kind of boring but we had that obamacare bullet that zinged into the website. You broke it earlier. Basically another delay, this time for small businesses. They got until 2016 instead of 2015. People are reading all about that one. Now, we also have a feature from diana olick talking about the looming foreclosure problem. Thats because congress failed to renew an exemption for when you get mortgage forgiveness. Thats going to count as income which makes people say, well, why would i do a short sale then . I will just move to foreclosure. That could derail whats been happening in the real estate market. Third on the website, olympics. We have a feature up about why theres all those empty seats. Apparently its not so much a question of not selling the tickets. Its that in russia apparently people like to get to the venue right on time but theyre not counting for all the security they have to go through. And so its ending up with people not making it to the games. So thats our top three right now. Well, well see if the seats fill up as they wise up, allen. Thank you so much. Good to see you. That housing story is such an important one. Weve been talking about it all show. Speaking of hot top pics, the nations debt ceiling fight is in the news. John harwood rejoins us. I guess theres been some movement this evening. Republicans will be meeting tonight as the leadership and the members try to come up with a strategy for raising the debt limit. Everybody wants to do it. Republicans dont want this fight again. They were hurt by the shutdown. They want to talk about obamacare this year. And so theyre looking for a way to pass it. We expect they will raise the debt limit in the house this week before going away for president s day. The question is what terms are attached to it. Now, it is expected that one of the terms may be a tweaking of Veterans Benefits that were cut to some degree during the last budget deal with some offsets. It wouldnt increase the deficit. They would pay for it in some ways, but this would provide cover for members who dont want simply to vote for a debt limit. Theres another potential item which is the socalled doc fix, raising physician reimbursements under medicare. Not clear whether thats going to be part of it, but thats what this meet something about tonight. The good news is nobody has got the stomach for a fight and it looks like were headed for a resolution to this well before the end of the month. John, its dan greenhouse. Let me ask you a question about the 30 or so House Republicans that apparently wont vote for a debt ceiling under any circumstances. When pressed on whether or not this pushes an ultimate agreement further to the left, that is to say that it actually worsens their position, what is the response . The response is its true. Everybody knows that if you do a deal with a coalition with republicans alone, its going to look differently than what you can do if youve got to have democrats, and thats something that republicans have been dealing with ever since they took over the congress. The fact that some people dont want to play on the team that the leadership or run the play that the leadership has called means that in effect it does shift a little bit towards the democrats, but some of these members are so strongly motivated by their initial position that theyre simply not willing to go along. All right. John harwood with the latest on that one. John, thanks very much for now. And just want dan, from an investing point of view, the debt ceiling is back with us. Were so used to it at this point it doesnt look like well go to the final hour so where does that leave investors . I can tell from you our experience, we had a horrible scare in the summer of 2011, a near 20 stock market crash in a very short period of time culminating in a 6. 7 correction in one day following the s ps downgrade. Since then investors have cared much less. I think to John Harwoods point, republicans seem less likely to push the issue to the brink, so really weve spent about two years discounting this and largely speaking at this point i dont have any conversations with clients about the debt ceiling almost at all. Lindsey, do you . You know whats interesting about the debt creel something that were waiting for yellens testimony and the debt ceiling may be a little more political than normal. Chairman bernanke was the one that continued to champion the idea of bringing fiscal policy in line with monetary policy. So it will be very interesting tomorrow to see if yellen is pushed on some of the questions regarding the federal budget, the debt ceiling and other issues on capitol hill. Right, xexactly. From riches and rags and hopefully back to riches again, Fashion Designer Betsy Johnson on her remarkable comeback from bankruptcy two years ago. Her story and what she says is hot on the runway right now. Also later we take you to russia with a curl. Coming up on cnbc, everything you wanted to know about curling, wall streets favorite olympic sport. We help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. So ally bank really has no hthats right, no hidden fees. S . Its just that im worried about, you know, hidden things. Ok, whys that . Well uhhh. Surprise um. Well, its true. At ally there are no hidden fees. Not one. Thats nice. No hidden fees, no worries. Ally bank. Your money needs an ally. voseeker of the sublime. Ro. You can separate runway ridiculousness. From fashion that flies off the shelves. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. And only national is ranked highest in car rental Customer Satisfaction by j. D. Power. natalie ooooh, i like your style. vo so do we, business pro. So do we. Go national. Go like a pro. Where you think youre gonna go when your times all gone . [ male announcer ] live a full life. The new lexus ct hybrid with an epa estimated 42 mpg. The further you go, the more interesting it gets. Lease the 2014 ct 200h for 299 a month for 27 months. See your lexus dealer. Welcome back. Its fashion week in new york city and i am now joined by one of the most renowned designers throughout the fashion world, Betsy Johnson herself. Her wild styles, her cart wheels down the runway have generated worldwide recognition, but it hasnt been without speed bumps. Her company filed for bankruptcy in 2012. Now back from the brink under new ownership by her close friend steve madden and betsy is here with us at the stocks exchange. Great to see you. Thanks so much for coming. Believe it or not. I hope you dont ask me to do a cart wheel. Thats what grandma has to do. Do you train for these cart wheels or you do a lot of these . I think its bad luck if i practice. Usually if i practice, im so unfit that when i practice, i ruin myself. So i wing it. One day i know ill fall and ill get up. It brings us to the point so some extent which is there are so many lines competing in the fashion world right now, and you look at the success of michael kors, for example, just doing amazing. Why is it that its been more of a struggle for you . Because im more weird. Is that what its all about . I really like to do the clothes i want to do. I have kind of represented doing your own thing for all these years, and im just not made for mega steve madden, were doing mega mass production there, but for me and my little retail pink operation, i really liked doing my own thing to the nth degree. I didnt care if we made 50 or 500. We barely made 1,000. So i had a 38year run with my retail stores, and then we sold, and you know what happens when you sell. Things change. You lose some control. A little bit. Maybe a lot of control. Thats putting it mildly. Yes, yes. And then when steve picked me up again, i wanted to continue working, so im creative director of the brand, and its very creative instead of very bottom line, are we shipping, damages, return. And were looking at some of your designs now. This is what you are made for. That is what i did. Now, thats my prom dress. Not quite black, but i grew up in my 50s 55 to 60s in prom dresses and tutus and ballerina stuff and costumes. What do you consider your role in society, in the world . Well, im just you know, its all about staying power, and, boy, have i stayed around, and i still love it, and my show coming up is really the most me show, the best show of my life. Can you see my tshirt. Its called betsys hot. I love this. Betsys hot, thats the theme of the show. What grandma is hot. And its not just as you have struggled with whether to grow the fashion line or do other kinds of endeavors, effectively the market cap tailizes on who you are. You have a reality show coming up. Its kind of like taking the betsy brand out through a bunch of different venues or avenues instead of trying to be, for example, a michael kors. Oh, yeah. My partner and i, we werent sharp enough, experienced enough to play with the big boys. You have to know much more than we knew to be able to play that game, and we knew it, and so we just worked really, really hard and kept making our very pink mark, and i think thats what its about. And i never wanted that corporate world. I function well with steve on the creative zone, but i want to be the inspiration. Im the little inspiration of the world, and i love that. Thousands, millions of. And we so appreciate you coming by. Its amazing. I didnt know until i went bankrupt how much i was loved. Really. Thats what adversity will tell you. Exactly. Good luck on your show in the next couple days. Thank you for having me. Betsy is hot. Thank you for coming here. We should have her dress us. That would be interesting. Times square on a billboard. Media is amazing. Can you believe it . Live stream. In times square. In the biggest screen in the world. Thank you, betsy. Coming up next, what do hipsters and wall street have in common . Its curling. Well be showing this over the next couple weeks and you dont want to miss it. Well be right back. Boots and pants and boots and pants and boots and pants and boots and pants and boots and pants. Voiceenabled bill pay. Just a tap away on the geico app. Huh, 15 minutes could save you 15 or more on car insurance. Yup, Everybody Knows that. Ren. Seriously, you met her like three times. Who . Geico. As mentioned, starting tonight at 5 00 p. M. Eastern, curling Takes Center Stage on cnbc and it will stay there throughout the olympics games. Michelle carusocabrera is in sochi for us. Its not like ice hockey, its not skiing, sponsors are few and curlers have to work for a living. Michelle, what do they do . Curling is a growing sport in the United States in large part because every time theres a winter olympics, theres lots and lots of coverage on Networks Like cnbc. If youre interested in curling, there are more and more places in the United States where you can try it. Plainfield curling club of new jersey where members come to throw, sweep, even grab a beer. Holy smokes, these are heavy. These stones cost the club a cool 500 bucks a pop. They glide so easily across the ice. This is how its done. But setting them in motion, its kind of hard. Okay. Thats not how its done. Sweeping dont forget to breathe. Tiring for the novice. The members of the club tell us after the winter games they always see a big increase in the number of people who want to join the curling craze. An olympic boost, but curling is far from becoming a professional sport. Mark simple is president of the club. There are curlers who do curl on a weekly basis, that participate in tournaments that do pay out money, but, again, everybody has a day job. Most curling is done with clubs in the United States, but many curlers hope it becomes big enough and as common as bowling alleys. In minnesota theyre trying a full on business, although its still not for profit. Curling may not be big business yet, but wall streeters love the sport. Mark says its because its a thinkers game. Theres a lot of strategy involved. Its not just throwing a rock down the ice. You usually have to think a couple shots ahead. Its almost like chess. A game of chess where a lot of yoga would help. Speaking of yoga, when you watch curling today, check out jared zezel, he has a lunge that would make any Yoga Instructor jealous. He says he doesnt do yoga. Kelly, i dont believe him. Back to you. And weve been asking, youve been tweeting. Up next, your thoughts on whether companies should align themselves more with employees or investors when it comes to paying out 401 k matches. Really what i should be telling su curling coverage starts here on cnbc at 5 00 p. M. Coming up, we will talk a little bit more about that. Were also going to get to those tweets as promised. Workers versus shareholders. Is it an either or . Well be right back. Thats why new york has a new plan dozens of tax free zones all across the state. Move here, expand here, or start a new business here and pay no taxes for ten years. Were new york. If theres something that creates more jobs, and grows more businesses. Were open to it. Start a taxfree business at startupny. Com. You want everything. Orks were open to it. An expert ford technician knows your cars Health Depends on a full, complete checkup. The works. Because when it comes to feeling safe behind the wheel, going the distance and saving at the pump you want it all. Get our multipoint inspection with a a Synthetic Blend Oil change, tire rotation, Brake Inspection and more for 29. 95 or less. Get a complete vehicle checkup. Only at your ford dealer. We asked people a question, how much money do you think youll need when you retire . 500,000. Maybe halfmillion. Say a million dollars. [ dan ] then we gave each person a ribbon to show how many years that amount might last. I was trying to like pull it a little further. You know, i was trying to stretch it a little bit more. [ woman ] got me to 70 years old. Im going to have to rethink this thing. [ man ] i looked around at everybody else and i was like, are you kidding me . [ dan ] its just human nature to focus on the here and now. So its hard to imagine how much well need for a retirement that could last 30 years or more. So maybe we need to approach things differently, if we want to be ready for a longer retirement. Theyre the days to take care of business. When possibilities become reality. With centurylink as your trusted partner, our visionary Cloud Infrastructure and Global Broadband network free you to focus on what matters. With Custom Communications solutions and responsive, dedicated support, we constantly evolve to meet your needs. Every day of the week. Centurylink® your link to whats next. Welcome back. So two screen viewing, keep it here for the latest olympic curling action coming up in a couple minutes, and here is where that Second Screen i mentioned comes in. Fast money freestyle will be streaming live on fast money. Cnbc. Com. Melissa lee joins us with a preview of whats coming up. This is a first, kelly. Were going to have a do you by the breakouts in apple, tesla, or yelp and the ceo of the first publicly traded bitcoin company. This is 30 minutes uncensored, commercial free. I dont know how im going to pick my screen. Thank you, melissa. Well look forward in just a couple minutes. Tell guy we say hello and all that. In the meantime, should Companies Take action that is favor interests of shareholders or employees . Here are some of your tweets. Roger tweets, employees versus shareholders . Im thinking most would be for whatever group they happen to be in. Taking care of work certifies taking care of shareholders. Joshua tweets employees are a dime a dozen. Investors on the other hand are not. Ouch. Not a great verdict on employees, is it . Wow. By the way, look, they have to favor shareholders, kayla. Had isnt really a choice unless youre in a different structure. But i think if youre taking care of your employees, thats a basic principle of entering the working world. You expect your company will give you a modicum of support. If you as a company cannot support your employees well, youre probably too big. You probably have too many employees if you cant take care of all of them. Lets not forget steve jobs said take care of customers first and everything will take care of itself. If only workers were customers. If only they were and if only they paid for everything like maybe investors do. I dont know. There has to be a happy medium somewhere. Everyone, thank you for joining us this afternoon. Lots to get through and now as this is the type of performance you dream about she just brought the house down