Transcripts For CNBC Closing Bell 20140225

That. But bias for the last half hour or so has been to the downside slightly, but that could change as we go into the hour. And also our own jim cramer is worried. He will join us here in a couple minutes to tell us why he doesnt like some of the patterns hes seeing across the stock market, and it is changing how hes investing. Find out to see what hes doing and why. Also, in arizona this new law that would allow businesses to deny service to gay people may never be signed by the governor because Big Companies are now speaking out against this law. Sending letters to governor brewer. One of those companies is pushing back against the law and will join us on the closing bell today. Lets take stock of markets here. We are seeing small declines across all the major indexes. The dow off 20 points. The nasdaq off 5. The s p 500 off 1. As mentioned yesterday at this hour, it looked like wed be closing at new highs. Well see how the final hour of trade pans out right now. All right. Lets bring in our guests for our closing bell explain. Danny hughes, rex macy, drew in order nor dlike and Rick Santelli. Everybody joining us today, rick aside, is cautiously optimistic. Danny, the caution. What is the caution about . What are you concerned about even as this market does try to power higher . So much caution actually and weve kind of had our foot a little on the break for a while but you still had to participate in the markets like weve talked about. You know, the fed and the government have really incentivized Corporate Cash hoarding over the past few years, and corporations have found better roi in delivering buybacks and dividends, and, you know, at some point thats got to come to an end. So thats a big worry i think Going Forward in the market. How do you invite investors into your stock . So new investors. And how do you keep the guys invested in your stock that would traditionally be in fixed income products if it werent for the fed . So are you let me put this this way. Youre investing but holding your breath. Is that it . Well, not holding our breath exactly. We still have to remain active. Theres still interesting investments to be made out there, but its the Going Forward issue, bill. Theres always a bull market somewhere. Where do we go from here . I think jim cramer could tell us about that in a little bit. Rex, its interesting to look at the dispersion of what people think is going on in the economy. I have people telling me you have to look at how much more sluggishly the u. S. Economy is going to grow over time and here are all the reasons why globally were in a deleveraging phase and Interest Rates are headed lower. At the same time people are passing around this narrative about 1996 and saying after we had a miss in january on weather, we had a strong february payroll number, and then the tenyear was rallying. In other words, people dont really seem to know right now what the paradigm is. Whats your read . Well, you know, that should give you a lot of confidence and comfort. That is what you have just described is a balance in the market. You have got, if you will, buyers and sellers on both sides people making good cases for it to move higher and for it to move lower. Its not a onesided market which is when you get extremes either on the down side or up side. It makes me feel more comfortable. Im comfortable with the equity market. I would be short on the bond market but we see the economy Getting Better slowly. All the data youre pointing to really gets to the fact that were going to have three yards and a cloud of dust. Three yards and a cloud of dust . What was that reference . Three yards and a cloud of dust. Its an old football reference. Okay. Back before there was a lot of passing. The idea is were going to grind and make first downs, but its going to be slow growing in 2014 after a stupendous year in 13. Super bowl did set the tone. Ier in hea er inever heard t. Drew, you would look at fixed income, is that for safety reasons or do you think theres growth in fixed income . From our point of view we would suggest maintaining your active diversification. There are niches we are actively investing. We think investors should maintain their broad based diversification. What we look at is we think the economy and the stock market are two separate animals on the same sa vanna. The Federal Reserve has been pumping liquidity into the market. With the equity market, what we see is the Federal Reserve is tapering, but with their 10 billion program over the next several meetings, its still going to take to the end of the year for them to be done with that program. Thats 315 billion of new liquidity being injected into the market and an expansion of the Balance Sheet. What we found statistically is going back to 2009 when qe started, for every 100 billion of qe thats entered the marketplace, the s p has moved higher by 42 points. So that translates to a 1976 target on the s p which is another 7 from here. So as long as the Federal Reserve is still in the marketplace and regardless of tapering, theyre still printing money, the Balance Sheet is still expanding, we would be active investors in equities. We think there are challenges in the economy and challenges with this quarter but it is going we think it ak selling rates. Im chuckling because there seems to be a lot of couching going on, a lot of fancy ways of saying were not sure whats happening. And to rexs point, thats fine. Thats what makes a market. I want to know what some of the High Conviction trades are right here. Drew, any thoughts . Dani . Sorry, did you say dani . Dani, go ahead. Sure. You know, kelly, i think theres a lot of things that you can look at out there, particularly companies that are actually investing in their future. So cap ex increases. Theres an awful lot of companies that are actually investing in the future in 2014. Big increases in cap ex. You want to invest in those names. In those names and in names that also they could also have buybacks and dividends as well. Theyre not mutually exclusive. I think that, you know, u. P. S. Is a big one. 2. 5 billion in 2014. Tmobile. Energy is a big space as well. Goldmans whole note focuses on the picks and shovels plays that might support a cap ex boom. Rick, if there is a conviction buy right now, gold would be one of them, wouldnt it . What does that say about the market . You know, i think gold could easily go up. I thought it would make a bottom earlier this year, but i guess im still thinking about those yards of dust because when i think of going yard, i think of a home run, and i think the fed has allowed corporate profits to go three yards. Were talking 900 foot home runs. So corporate profits are going great. Dani is worried today. I have been worried for two years. But being worried in this environment doesnt mean you necessarily short the market. But as i look up at the fixed income and i have been harping on this, here we are, weve seen a 2. 69 yield in tens while the s p is flirting with alltime highs. I know you have jim coming up, and thats great, but i think i have the best soothsayer in the world. Just looking at these Interest Rates that failed to follow the stock market up tell me that its all not good in investment land, but picking tops and picking bottoms is always a dicey endeavor. Yes, it is. And, look, thats what it comes down to. Going back to this question as well, so, dani raised an interest point, pick the companies that are doing a lot of investment, a lot of capital expenditure. Rex, what about you . Whats your Winning Strategy here . Well, i think in the big picture you want to keep some powder try because i think there will be more opportunities in the months to come. So cash is your answer . No, no. I would be more at my normal closer to our normal asset allocation. Were a little heavier on stocks than bonds just because at a 2. 70 tenyear were not too fond of the bond market. Where i come from, dry powder is cash. Well, you can look keep the powder dry. Where i came from it was dry powder, too, but when you dont get anything on your cash, im not sure its good dry powder. Thats exactly the point i think were talking about here is the fed is wanting to force everybody into the risk assets because youre not getting anything to hold cash right now even though so Many Companies are. Drew, your conviction if there is one. Thats the key issue. Youre bringing up the exact point i think everybody on the panel is trying to suggest is we are in an environment where the fed is one of the biggest players, the federal government and new legislation is a big player. The economy itself has not found very sure footing. Were not in the 1990s where were seeing 5 , 6 , 7 gdp growth rates. You have to advise looking at multiple different opportunities, diversification, risk reduction, not piling into a single trade because the reality you try a little bit of everything. Nobody knows the exact future. Say it again. Say it again. The reality is nobody knows the future. Exactly. Were in an environment of higher risk and higher volatility. Thats the reality. When you have a player that has introduced 4 trillion into the marketplace, you know, asset prices get skewed and you have to invest based upon what are the knowns, and we know the fed is there. We know theyre going to be there through the end of the year. I know our panelist, Rick Santelli has harped on that before, but thats the facts, theyre there. We need to advise and invest based upon that. There you go. Thank you all, folks. Thanks. Thanks for your thoughts today. I wonder if anybody would consider bitcoin a conviction buy right now. Yeah. Part of a diversified portfolio . Well get to that coming up. Heading to the close, weve got 50 minutes left in the trading session. If anything, were slowly moving south. The dow is down 27 points. The s p is down 2 points. Were about 3 points away from an alltime closing high. Keep an eye on that for you. Losing altitude again, second day in a row this week as we head into the close. The s p even so may be flirting with another record high, but mad moneys jim kramer is getting a little worried about this market. Changing the way hes investing. Should you follow his lead . Jim will join us. Also, disney, theyre the second best dow performer this year. Theyre raising their theme park prices and debuting a digital movie app. Is this all news a dream come true for shareholders or is it still overvalued . Well have a stock brawl. And who wouldnt want Investment Advice from warren but fet right on their phone personalized . Now you can get it sort of. Coming up, well hear from the ceo of a Company Behind quote, unquote, warren, a service that can give you instant answers to your financial services. Think siri for investors or financial anchors. Youre watching cnbc, first in business worldwide. Ameriprise asked people a simple question in retirement, will you outlive your money . Uhhh. No, that cant happen. Thats the thing, you dont know how long it has to last. Everyone has retirement questions. So ameriprise created the exclusive. Confident retirement approach. Now you and your ameripise advisor can get the real answers you need. Well, knowing gives you confidence. Start building your confident retirement today. Well, disney had some magical news, if you will, for investors. A new digital Movie Service and a price increase at its parks. Thats magical. Joule. Boorstin has details. Disney is teaming up with apple to make buys its movies more attractive announcing a cloud based digital Movie Service. It allows consumers to stream for download 420 disney, pixar, and marvel movies and watch them on any apple device. Its launching with itunes just as hit frozen goes on sale for 20 a download. Disneys tapping into a growing business. Industry wide digital film sales grew 50 to 1 billion last year. Though its launching just with apple, disney is in negotiation to add access through other platforms the likes of amazon, microsoft, xbox. The Magic Kingdom park at disney world orlando just raised prices by 4. It now costs 99 for one day ticket. Disneys investment in new parks attractions does seem to be paying off despite raising parks prices a year ago. Revenue at its resorts division grew 6 last quarter from a year earlier. Bill and kelly . All right, julia, thank you very much. So is it a good time to buy more of disneys magic right now . Lets hash it out. Where an investment in the mouse house could be heading. Youre not exactly bearish on this stock. You have a hold on it right now, right . Yes, could not get behind the story but not saying anything is wrong. Why wouldnt you buy the shares right now . Well, i think in order to buy in this market after what media stocks did last year, last two years is you either need to look at the upside to estimates, which is extremely hard for disney. First of all, because there are a lot of moving parts, and then there is you need 30 million in ebitda to move it a penny. Or you need a catalyst for expansion which i do not see. The relative pe is the highest very near the threeyear high so thats where i stand. Just expensive right now. Barton, basically this is a stock that almost the entire Analyst Community loves, that people have called a bulls dream quarter after their last earnings report. Why do you think if we just heard it takes another 30 billion in additional profit to move the estimates higher from where they are today, would is that achievable . Why do you like the shares here . Disney i think is actually not expensive at these prices. The growinge eps i think midteens. Our 80 price target is very beatable. These guys are in a cycle where theyre putting out new franchises and its hard for people to understand the power of this. Frozen is a movie that will do 1 billion box office. It will drive close to 500 million in profit over its life. There will be a sequel, licensed merchandise, theme park rides. Theyve got star wars coming out in a couple years. Each one of those movies could drive money to the bottom line. It will be a sequel every other year. I could see the stock being easily a double digit performer from here. Weve got a price target thats up close to that, and i think theres upside to our price target. I think this company, you know, i think is driving good earnings leverage off the parts of their business that are hard for people to understand. So i think theres upside to estimates. Vassili, i see you have a price target of 74. Is that when you would step back in to buy. Yeah, i would like that. But if i may, i would like to comment what barton was saying. I dont disagree frozen is a big franchise but the benefit you need to know before the movie comes out its going to be a 900 million plus and thats extremely hard to judge. Also about star wars, i dont have anything star wars, but were talking about a film that hasnt been written yet. So thats where i find it challenging to get behind the disney story. Barton, by the way, disney had the weather potentially working in their favor. It sounds like driving people south out of the cold in the northeast is one of the reasons theyve done is well lately. You have got someone who is benefiting from the weather. Exactly. Last word, barton . Theres a lot more to this than the weather. I mean, people are going to disney parks because theyre putting in hundreds of millions of dollars into new attractions. Theyre going because people love the content. Underneath it all is espn which is just an unshakeable franchise giving you good, steady Profit Growth year after year. I think disney is a stock thats been great and i think its got more good days ahead of it. Weve got to go. Thank you, guys. Thank you, gentlemen. Thank you. About 40 minutes left to go into the close, and as mentioned, stocks are losing momentum. Not even momentum, bill, because were negative. Theyre sinking a little more. Dow is off 37 points at this hour, and the s p 500 giving up about 3. The nasdaq is off 10. When we come back, bitcoin may have fallen off the Digital Currency mountain, but despite the implosion overnight, Second Market ceo barry silvers is with us, and hes launching a u. S. Based bitcoin exchange. Well find out what he thinks he knows about bitcoin that others do not. And the man behind the Goldman Sachs elevator gossip has been uncovered and it turns out hes never worked for goldman. How damaging was it . Your best tweets on that subject coming up. Well be right back. Return on investment wall isnt a street. Isnt the only return im looking forward to. For some, every dollar is earned with sweat, sacrifice, courage. Which is why usaa is honored to help our members with everything from investing for retirement to saving for college. Our commitment to current and former military members and the man behind the with all the opinions about stocks out there, how do you know which ones to follow . The equity summary score consolidates the ratings of up to 10 independent Research Providers into a single score thats weighted based on how accurate theyve been in the past. Im Howard Spielberg of fidelity investments. The equity summary score is one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. Like carpools. Polly wants to know if we can pick her up. Yeah, we can make room. Yeah. [ male announcer ]. Office space. Yes, were loving this communal seating. Oh, its great. Yeah. [ male announcer ] the best thing to share . A data plan. New at t mobile share value plans for business. Our best value plans ever. For example, you can get 10 gigs of data to share. And 5 lines would be 175 a month. Plus you can add a line anytime for 15 a month. Sharings never been better for business. Welcome back. So here is a look at bitcoin where prices plunged after it went offline, closed all transactions and Mary Thompson joins us. After going dark last night, they say theyre just taking a break in light of a rash of negative reports about the exchange. In a statement it said a decision was taken to close all transactions for the time being in order to protect the site and our users. We will be closely monitoring the situation and will react accordingly. Now, no word from the exchange on the hundreds of thousands of bitcoins reportedly locked up in mt. Gox accounts. Clients havent been able to access those accounts for several weeks now. As a result, the mt. Gox debacle, the latest in a series of troubles for the digital coin. Still believers have lost a lot of money lately. Bitcoin is down 54 from its december peak, and that volatility is another issue plaguing bitcoin and is likely to slow its adoption by a broader segment of the. Lati population. Lets bring in Second Market founder barry silver, youre still a believer in bitcoin. Off vested interest. Youre in the process of trying to put together an exchange to replace mt. Gox. What do you hear about them . Are they folding . Theyre being pretty coy. Certainly never a dull day in bitcoin land. I dont want to speculate on the rumors but i think it highlights the need for a wellrun, regulated u. S. Exchange and thats really what were focused on right now. Mary, i want to bring you into this conversation as well. I mean, look, how much do you think this will draw more attention from regulators who up to this point have been pretty laissezfaire about the growth of bitcoin. We spoke to ben and he maintains that laissezfaire attitude. We had a regulator in alabama saying hes issuing a consumer alert. Barry, what was your reaction that you heard from some of the regulators and lawmakers you say you have been talking to in trying to set up the exchange . When they heard about mt. Gox, whats the reaction . Did they say we dont want to get involved in this or not . Actually i think quite the opposite. The regulators and ep the banks are saying Digital Currency is not going away and its important to have a safe, secure exchange. If you believe that Digital Currency is here to stay, and i really do think that is the general consensus right now, theres a lot of support that were seeing down in d. C. From the regulators as well as wall street. So, barry, you want to start an exchange which you say will provide price stability to bitcoin as well as transaction transparency essentially. The problem though with bitcoin continues to be safety. There are people hacking into digital wallets. There is malware out there that is stealing bitcoin. You have problems we really dont even know what happened with mt. Gox, but there are technical problems. You might set up an exchange but that doesnt eliminate what seems to be the real problem here is that either the krip toe currency or the infrastructure around it isnt secure. Well, i think the protocol itself is absolutely secure. This has really nothing to do with bitcoin itself. Its the infrastructure the companies are built on top of it. And you just have to remember that bitcoin is very early. This is like the early internet days. Theres going to be early players that dont necessarily take the right precautions, run businesses effectively. Now were seeing real money coming from Venture Capital industry, Marc Andreessen invested 25 million in a Company Coiled coin base, fred wilson in union square investing in the same company. You have the whos who of venture money building the next group of companies that will make it easy to buy to some extent, barry, these guys, they have nothing to lose. They have their money to lose, but what i mean is theres an investment here, an opportunity, and these currencies have proven if you get in early, you might capture more of that benefit as theyre built out. Thats a different thing than saying this is something thats safe for the general public. You have to separate bitcoin the Digital Currency from bitcoin the technology. There really is no debate that bitcoin as this protocol, as this technology, it has the potential to radically transform the way people send money, the way merchants accept payments and thats where all the money is being invested. I dont think you can separate the currency from the in fact because you need the Monetary Base and quite frankly the exchange to make it possible. Let me pursue marys question in a different way. Isnt it possible that bitcoin as a Digital Currency is damaged goods . Its beyond repair . You have the problems with mt. Gox, and theyre missing 744,000 bitcoins, somewhere missing around this world. The use that bitcoin has been put into use for, for drug running or whatever it has been, money running. Digital currencies may have a future but does it have to be bitcoin . It doesnt have to be i believe it is bitcoin. If you look at the Price Performance of bitcoin today, major, major hit of mt. Gox and the rumors, but it is still a 6 billion monitor base of Digital Currency. The supporters, both early and more recent adopters, our confidence has not been shaken at all. I have to ask you though, you were trying to set up a structure that basically will involve certain costs and certain legal costs especially. It might mean a lack of i should say a withdrawal of some of the features some people are attracted because of bitcoin whether its anonymity or a faster way, a cheaper way to change money. When you set up this legal structure, how do you make sure you maintain all the characters of the Digital Currency that its biggest advocates want to keep . Well, our structure that we envision is actually a collaboration among the global banks, the bit counsel companies, and the regulators. We have had a number of very indepth conversations with all the key players. Theres a lot of interest in coming together to build an exchange and also actually a Central Clearing business. So the idea is to create an exchange, clearing, as well as an sro or selfregulatory organization that will provide the gorer nance and oversight. Who are the global banks youre speaking with . In speaking with a lot of them, certainly theyre starting to do some research on it, theyre looking at it with some interest. I havent heard anything from any of the ones i have spoken to who say this is the future, we want to invest in it. So tell us who you have been speaking with and who on wall street are the ones behind this willing to back your venture. So im not going to name names. Theres been half a dozen bankses were in conversations with right now and i would just say stay tuned. Thats a tease. Thank you, barry. Thanks, barry. Thanks for having me. Mary, appreciate it. Yeah, good job. Heading toward the close. 30 minutes left in the trading session. The market drifting south. The dow down 39 points. Its the s p were watching to see if it can close at a new high. Were five points below a new alltime high right now. In the meantime, samsung unveiling its latest smart watch. Yes, we have another wearable device. The question is whether this one will be a game changer in the wearable space. Will it struggle like the original version . Well get you an up close look at the gear two. Thats next. Just like steve jobs, it turns out bill gross may not be the most pleasant boss to work for if you believe this mornings wall street journal. But is being demanding and difficult a key to success. Coming up, kevin oleary and marcus lemonis. After shark tank tonight, its the premiere of an all new season of the profit. Well be back in just a moment. Tdd 18886486021 there are Trading Opportunities tdd 18886486021 just waiting to be found. 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My sinuses are acting up and ive got this runny nose. I better take something. Truth is, sudafed pe pressure and pain wont treat all of your symptoms. Really . Alka seltzer plus severe sinus fights your tough sinus symptoms plus your runny nose. Oh what a relief it is here is a look at shares of jpmorgan. Down almost 2 . Kayla tausche joins us. We know theyve had the investor day. What can you tell us . Dimon and his deputies all day have sounded a positive tone about the future for Jpmorgan Chase while acknowledging some nearterm headwinds for the bank, namely capital. Dimon just wrapping up his comments moments ago and acknowledging they have 900 billion in safe assets sitting at the Federal Reserve. That will continue to be a headwind because they cant lend a lot of that money out because theyre keeping it for their liquidity ratio. It will also keep them from significantly increasing the amount of money that theyll give back to shareholders. Dimon saying their ccar submission, which is how the fed will determine what they can give back to the shareholders is not fundamentally different than the 6 billion in buybacks they got approved for last year. He did make a comment about the weather. He said a drop in fixed income trading revenue we saw toward the end of last year was just weather and could continue into the beginning of this year. We didnt get an especially optimistic tone about the Investment Bank which is still having a hard time keeping that return on equity target going, but he did seem very optimistic about the u. S. Economy. He said taper will be volatile, but the market will be able to absorb it. He said fiscal policy has been a surprise strong point in the economy and he feels good about where the economy is in its recovery process. Kayla, thanks. Notice he also was talking about how apple and maybe google i think it was trying to eat jpmorgans lunch. The space, bill, between tech, payments, banking is all becoming very hazy. Samsung has introduced some fun gadgets. Our next guest has brought a couple for us to see. Yes. Mark spoonhauer is editor in chef of laptop mag. Com and theyre both watches. Were all going to be wearing tech watches eventually. I guess were going feature retro to a certain degree. What i love about this one in particular is this is the gear fit. So you do have the fit one. This is the first how about i do this. Tell us about it and ill hold it. It has a curved display. Its the first device of its kind with a curved color display and it sort of looks like the future. This looks like the future of wearable devices would you wear this, kelly . Let me have a look. Lets see. Now, the interesting thing about some of these devices, im never i dont wear a fit bit but many of my friends do. Its very similar. Theyre a little worried about some of the recalls lately with the products and some of the wearable tech devices, want to make sure theyre safe but do you put it on the wrist or more of an arm band . You put it on the wrist. Theres a heart rate monitor on the under side. When youre out running, you can monitor your heart rate and tweet at the same time. Terrifying thought. Similar to a smart watch, you can get notifications on this device and control femedia play back. This is more full featured. This i recognize. This is the gear two. It has some of the features of the original like the builtin camera. You can control your tv with it. This is going to be the more expensive of the two. Whats interesting is of the two, theres been a lot more buzz about the fit bit i keep calling it the fit bit. Because thats where the market is going. The whole wearables market is going to be about 30 billion by 2018, and i think the ones that focus on fitness will be the ones leading the charge because thats what people really care about. So this one will track your steps, your heart rate and really just your progress in general and it will sync with a phone like this. Theyre doing a good job of rounding out the ecosystem. Put differently, while it does srng with your phone it has to sync with your phone so there are a lot of people saying is this really that feasible . Are people going to have if theyre using a bluetooth would have to have their phone right there. Does that inhibit a lot of the adoption . Not necessarily. These are designed to be more standalone devices. That goes a step further because it has built in four gigs of memory. You can take your miusic play list to go. I have my laptop, i have my ipad, my blackberry, why do i need one of those guys . What does that add to my tech life . I dont think its going to be replace anything. I think at the beginning it will be more about complementing devices. This is sort of like the hub and Everything Else acts around it, but the pc as we know is suffering. This is going to be the new hub and all the other gadgets will act around it. Have we put to rest concerns about wearing all this technology on your body, especially some of the blue trut bluetooth, the is it you have thats more powerful. This is low power bluetooth so its less radiation. They dont act as standalone phones. They communicate with other device that is have the radio inside. Price point . Not yet. If i had a guess, this was around 299 when it came out. I wouldnt be surprised if this was slightly under it, maybe 199 change but well have to see. 199 for the orange one im guessing. And the black one was about 299. Exactly. Yeah. Good to see you. Okay. This could finally be the year of the wearable device. Well see. Mark, thank you. We will see. I would much rather wear it here than i would here. I could see you doing that watch. Thats me all right. Where were we . The dow is only off 22 points at this hour. Although we are still negative across all major indexes. Sure only by a little bit but it looks like, bill, at this hour we will once again approach perhaps test, if you will, but in the reclaim new highs. Still have three points to go there to the upside. How is the market going to close . Jim cramer wouldnt be surprised if the answer is not well. Hes cautious. Hes worried. Is he bearish . Well tell us coming up in a moment. And after the bell, pimcos bill gross long hail as the bond king is being presented as a monarch who rules with fear and an iron hand if you read the wall street journal. But is it true that a lot of people who are successful later get accused of being a bad boss . Its all later on the closing bell. He gave me some blood tests. Showed it was low t. Thats it. It was a number. 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Our very own jim cramer said on his mad money show last night that hes worried about the market here and turning a little more bearish and he joins us now with more on whats gotten him concerned. Jim, it is great to see you. Welcome back, sir. What are the red flags for you here . I want to use the term skeptical because the market is at 17 times earnings but weve got two tracks developing. Weve got a rational track and thats the banks are rational, some of the retailers are rational, some of the technology is rational. Then the second track which is bordering on what i think could be the third rail if were not careful. Talking about tesla. When i hear a price target that is double what the price target was before, i think of qualcomm in december of 1999. The fabled 1,000 price target. I dont want to see this kind of stuff because it draws people in and makes people blindsided. Im trying to prevent that. You had and the hoopla over facebook and their purchase of whatsapp at 19 billion. We are getting a little frothy with the valuations that were hearing about in some of the deals, too, right . I think here is the problem. If youre facebook, youre looking at a think like whatsapp and say if that would come public it would probably be valued 30 billion compared to twitter, compared to yelp, compared to linkedin. Maybe all the comparisons are false. Thats what we saw. 19 billion looks like a bargain versus what it might go in the ipo market but if they dont monetize it correctly, bill, then its a mistake. If they monetize it correctly, yes, it will be terrific. Jim, i love hearing from people who have been in and out of the market for so many years, how they view today in terms of historical parallels. So to you is this a market like the late 90s . Is it the mid 90s . Is it even useful to make that kind of comparison . It is useful to say if a few more things happen, then we need to be more than concerned. For instance, if there are a lot of companies that write checks to other companies for numbers we dont know, netflix writing a check to the Parent Company of this Network Comcast and it drives the stock up 10 , i dont want to see that. If we see a lot more ipos based on vapor, i dont want to see that. We have a stock today, it is a great company, zulily, okay, i even said this morning on squawk on the street, this should be up a couple box today, maybe even more. 16 bucks . I mean, i need that to happen over 16 weeks, not over 16 minutes. Wow, jim, were showing that right now. 36 higher today . Its a Technology Company. It can be a rifval to amazon. Thats great. That doesnt mean it should go up 15 points. Starbucks worried about coffee prices, that goes down a little. Disney has been rallying every day since the quarter. Takes a little breather. I dont want anyone to ever lose money in the market, but we need some good, meaning stocks not going up every day on nothing. But we have this other track and im talking tonight about tesla and i have to tell you, yes, its absolutely true, if they can if he has a Battery Technology thats disruptive to the trillion dollar grid of electricity in this country, my hat off to him. Otherwise that price target puts it above gm and ford. Ford is going to make more cars per hour than they make per year. Its a concern. Exactly. Im skeptical. Youre skeptical. What does that mean then whats the takeaway for the individual investor watching us right now. What is jim cramer telling them to do here then . I think if you own some netflix, which i have liked at 100, i liked at 400, take some of the cash off the darn thing. You can play with the houses money at this point. If you really like tesla, well, terrific, you just made enough you can take out some of that money. And maybe reapply it to a company thats selling at 14, 15 times earnings that maybe actually could be undervalued. Look, this is not a blanket assault. Google is not an expensive stock when it comes to 2016, 17. Thats the time frame people use. Im saying when i see stocks go up and i hear those price targets, when i hear the double the price target, i am thinking, okay, nasdaq, were going back to the composite, were going to that week in march where it goes to 5,000. Were 14 years later. Were still not that close to it. I dont want the attack of the price targets. Yeah. That would take us back to the 90s then. Yes. Thanks, jim. Looking forward to the show tonight. Thank you. Thank you. You have the interview with phil fernandez. And i have dominos. Theyre not an expensive stock. Im okay with that one. Theyre delivering the pizzas, jim. And a Technology Company as well. Thats what Dunkin Donuts told us. You can see him tonight at 6 00 p. M. Eastern time on cnbc. Art cashin just told me 1 billion for sale as we head to the close. We might get more selling pressure as we head to the bell with 12 minutes left. The industrial average is down about 40 points right now. Now, and this is fascinating, is tax reform back on the table . A new gop plan has emerged that promises to cut rates and also tax the super rich. So whats the catch . And is it really going to happen . Thats all coming up next. I always say be the man with the plan but with less energy, moodiness, and a low sex drive, i had to do something. I saw my doctor. A blood test showed it was low testosterone, not age. We talked about axiron the only underarm low t treatment that can restore t levels to normal in about two weeks in most men. Axiron is not for use in women or anyone younger than 18 or men with prostate or Breast Cancer. 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About eight minutes left in the trading session here. Art cashin telling us there was 1 billion for sale. A lot of supply coming to the market at close, could push stock prices lower. The dow down 35 points. The s p down 3. 75, 4. 5 points away from an alltime high. Larry cantor, managing director at barclays is with me. I know youre more the longterm perspective guy, baugh lateut ls market is acting like its walking into a stiff wind. I dont really see that. I think after the 30 gain last year, we were down before, now were kind of flat, thats pretty good with the fed tapering and the economy looking like its slowing. If anything coming into this year, bill, i thought the biggest risk was the economy would grow too fast and people thought once the fed stopped tapering, they would start hiking rates. Now with inflation coming in and growth on the soft side, everybody is believing the fed that tapering doesnt mean tightening. Thats pretty good market thing for the markets. You have seen the fixed income market pretty stable as well. You take comfort maybe comfort isnt the right word, but you believe the slowdown were seeing in like housing and some of the manufacturing reports weve been getting lately are not all that great. You think thats okay. You wouldnt panic about that right now. Right. I think its okay for the markets. I think the markets have very little to worry about. Theres no big fight going on in washington. I dont think anybody is worried about a recession. Its just that were not getting the kind of growth bounce everybody expected. Now, admittedly, weve had terrible weather and its hard to parse out how much of this is weather but we saw in the second ha of last year growth in excess of 3 . We saw a big rise in inventories and now youre paying the price. I think house something going to be fine. What about jim cramers point he made, the teslas and netflixs and some of the high flyers getting out of hand. Does that concern you . A little bit for those stocks. You have to worry about anything thats just zooming up and has only one direction. But the overall market does not look crazy, and, you know, again, the economic environment here is pretty good. I think its easy to believe the fed. Youre not going to see any tight. Ing this year. Remember, even though theyre tapering, theyre still pumping in a lot of money into the market for the rest of this year. I got it. Larry, good to see you. Thanks, bill. Larry cantor joining us. Were going to take a break and come back with the closing countdown for this tuesday. After the bell, the 20th century regarded as the American Century for its explosive growth, but coming up a new book says the best is yet to come, and we are on the brink of an economic renaissance in the 21st century here in the United States. How likely is that . Well find out. Stay with us. Peace of mind is important when youre running a successful business. So we provide it services you can rely on. 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Coming up on the twominute mark with the dow down 36. First, lets go to seema mody with some breaking news. The u. S. Department of transportation says oil by rail shipments must move under stricter haaser douse material classification. They must test oil samples before shipment. Bill, thats the latest. That recent spill several months ago, that was a big problem there and they are trying to find safer ways to transport Energy Products around the country here. Quickly, the s p down 3. 5. Doesnt look like we will get an alltime high. You would need to be at 1,848 and change. Were at 1,844 right now. There were a couple bright spots this morning. Macys and home depot did turn in earnings. Both are trading appreciably higher. Home depot up 4 with macys up 6 , bob pisani. These are the two strong ones. They were the outliers. Thats right. Ill tell you what you want to watch for, tjx, ross stores, they will be reporting this week. They havent said too much, and they were big darlings. I think theyll be more interesting. Because we knew these guys were going to be strong. They were in the market area everybody liked. At some point traders are going to throw in the towel and say if we cant get a new alltime high, its going to be poi the slope down in the last hour is not as dramatic but we just drift lower. We havent been able to close at a new high two days in a row. Technically now this gets a little more iffy. They Start Talking about this a little bit more. But overall i would note a lot of market laggards like energy are starts to move up. Its not like its turning around a little bit. It just cant hit new highs. By the way, happy birthday yesterday. Thank you. Thank you, bob. See you later. Well close out this trading day. Again, disappointment for the bulls. No alltime high for the s p 500. The dow down 28. Stay tuned for hour two of the closing bell now with kelly evans and company. Ill see you tomorrow, kelly. Thank you, bill. Yes, wee just hit the closing bell and lets see whats happening. Im kelly evans and stocks have given back their earlier gains. Here is how were finishing up the day. The dow will give up 26 points. Not the worst of the session but not the positive we were looking for. The s p 500, the nasdaq giving up about 1 10 of a percent. 1,845, that closing level is not going to do it. Lets get right to it with todays panel and its a goods one. Joining me marcus lemonis, sharon epperson, josh brown, and shark tank investor, author of the cold, hard truth on men, women, and money, kevin oleary. Josh brown, you had a piece today where you effectively called this out as a frothy market. It echoes some of the concerns jim cramer was telling us he had in the tech space. How worried should people be granted we were a little down today but generally speaking about the market . Tech space lets talk about the biotech space which would make the tech space blush right now. This is a sector thats up 70 , seven zero, over the last year. Thats the entire industrys worth of stocks. 122 of the biotechs in the russell 1000 are not even profitable, and i think what we really want to focus on here is that this can continue for a long time. So just saying its frothy in and of itself is not indicative of a market top. I think if you think about, look, the nasdaq in 1999 in january was at 90 times earnings, you would have said thats frothy, and then the nasdaq went on to go up another 130 from there. So i think thats what the hot money is focused on right now. Mr. Wonderful, i want to know if this is a mr. Wonderful stock market still because youve liked it generally here. Do you think for people who might have been on the sidelines, its still safe to get in the water . The only concern i have other than josh is a negative nelly on this thing is this. I dont see confirmation in the bond market. I would love to see a three handle on the tenyear telling me that all these great earnings were seeing confirmed by the bond market. Thats why you should be sharon, what about the signals coming from your space . Its like just as soon as we had a january, a february rally in some of the metals and industries, now were starting to look a little softer and china concerns are socoming to e fore. Look at natural gas. Weve seen the biggest two day slight in Natural Gas Prices that weve seen in six years. We had gotten pretty high in Natural Gas Prices and it was driven by some fundamentals but a lot of speculative buying driving prices up. Thats something were seeing in terms of the pull back in nat gas. You mentioned china as a factor and perhaps what were seeing in the oil market with a little bit of pressure on those prices, but also looking at what the supply situation is going to look like. So that also may keep a little bit of a lid on oil but oil seems to be on pretty much of an upward momentum. Weve been having this discussion on the show about whats happening with profits in this economy. Frankly, the s p 500 for whatever the feds role has been has pretty much tracked the increase in profits from the lows during the recession. There could be no more appropriate time to bring the profit q profit back this evening. Im excited about the retail numbers. Im feeling good about the pent up demand well see in the spring. Youre a believer in the pent up story . I am. Are you seeing any evidence of this in camping world . I see it in my own business. And a lot of businesses im invested in. Those companies who have their inventories in good shape and have good margin disciplines are going to be just fine. Theres been an energy hit of 20 billion because of higher bills. Weve seen Consumer Confidence sagging a little bit. What gives you the confidence, especially whether its in your business or across in these others that if you buy that inventory right now, that consumer is going to show up in march, show up in april, show up in may . Sunshine and warm weather is what gives me the confidence. Nobody wants to go outside right now, so the minute we get a little sunshine, and weve seen it over the last week, we had a couple breaks in warm weather in retail sales went through the roof. I want to get fast money contributor steve grasso into this conversation as well. Hes just off the floor, and, steve, here is my question. I dont love to play the charts, but if you talk about the chatter around here, its been whether the s p can test and recapture that 1848 level. It didnt do it again today. How significant is that . Well, here is the thing, when technicals work, once you keep pounding against a certain resistance or beating down against a support level, the more you do it, the more it weakens it. Right now were in no mans land, right . If we break through, theres no other resistance. So we kind of just float from there. Having said that, this is a great time to be taking profits because no one knows where this market is going. Nobody on that panel, no one here. Kelly, i want to bring two other charts, i dont know if well get them up there in time, but this is what a lot of guys are fixated on right now. What led us down this year were retailers. They got smoked coming into january. Here is something you should be aware of though. The xrt is now leadership once again. Its up 8. 9 off the lows from february 3rd. Wow. That is just scorching hot right now. The other thing is the all country world index, this is a chart a lot of people are pointing to. Its just taken out the may of 2008 highs. This is 44 countries from around the world, 85 of the investable markets. This is a very significant breakout, and if you look into the internals, almost everything is working within. Go ahead, steve. Its also people betting on the fact that this weather issue is going to be a kitchen sink event, but also with the debt ceiling agreement, you wind up getting those tax returns back out, those checks back in the mail, so people have more discretionary spending. But tough look at nat gas prices. Theyre up tremendous yearoveryear. That could hit the wall. This is whats so interesting. It comes back to what we were talking about. If everything seems to be lining up for maybe clear sailing ahead, then why is it that the tenyear Interest Rate is trading at 2. 7 and its actually come down this year and there are plenty of guys on the street who think it could go to 2. 5 . Here is an upside scenario that could happen over the next four months. Gdp growth which is the tide that rises everything would probably right now were in an anemic situation, 1 gsmq1. If we could see a 4 gdp, then you would see the handle on the tenyear cross over to 3. 00 . Thats the upside scenario. If we dont get, that i think were going to go flat to down in q2. Its mixed signals, sharon, is it not . Its no mans land, i love that phrase. It feels like were in a little bit of no mans land and everyone is trying to sort it out. I think some individual investors will take the refund checks and they will hoard them and see how this plays out. The idea as soon as they get those checks theyre going to then invest or go out and buy something right away, im not so sure. A lot of people are very concerned about their clients money and very concerned about where to put it right now, and theyre saying the individual investors, the clients that they have are saying they want to keep it on the sidelines until they see a clear path ahead. Steve, go ahead. Sharon knows this better than anybody. I spoke about it yesterday on closing bell. The average price of nat gas was 2, now its four spot 88. Thats a huge increase. People start catching up on their bills, thats costing them to heat their homes. What should people who are getting that refund check do with the refund check this year . I know its going to change a little bit but lets boil it down. You log on to mt. Gox. Com, put the bar mitzvah money in it with the refund check. Im laughing but its a serious issue. There are a lot of people who are trying to get money out of mt. Gox and cant and others who are saying its just growing pains. Im going to agree with kevin. If we can get a little growth in the gdp, i dont think 3. 5 to 4 is real stick but if we can be north of 2. 5 touching 3 , well be in good shape. The credit market for consumers is still pretty good. If you get the refund checks, depends how liberal the credit market is going to be in lending to you are talking very positive. We need a good Corporate Tax restructuring. We need good Corporate Tax reform. Then you get your gdp numbers. I think everyone on that panel can agree on that. I will say, the proposal that the republican congressman is likely to put forward as we understand it would involve some mix of a surcharge on the wea h wealthy and would maybe do something with the mortgage deduction exemption, but more importantly this would bring the Corporate Tax rate down to lets call it income tax rate to 25 from a high of almost 40 . The jct, the joint center of taxation, says it could add a percentage to gdp growth each year. It sounds like s p 2,000 at that point. Guys, last thoughts here before we have to jump. Just want to circle back to this selloff we saw a little bit today and, josh, is there anything about the fact that we just couldnt make it happen today that has you a little bit more worried . I guess i dont buy into no mans land. I think were less than 1 off of alltime highs. This market obviously deserves the benefit of the doubt. Every time its had a pull back, you have had people put their pinkie to the corner of their mouth and a change in character . No, not yet. It hasnt happened yet. In the meantime, the trend is still in force. All of the internals are backing up this move and i dont think it will be a long time before we see us punch through, and when we do, maybe that will be accompanied by something taxwise or the weather gets better or whatever. And the tenyear would confirm. It could happen tomorrow. Who knows. Guys, thanks. You can catch steve coming up on fast money at 5 00 p. M. In just under an hours time. Forget all the talk about a sluggish economy, the u. S. Is on the brink of a dramatic growth face. Author Joel Kurtzman is making that argument in his latest book. Find out which sectors he thinks will solidifys americas position as the dominant economic power of this century. Also ahead firestorm in arizona. Apple, National Football league, and pets mart, just a few names that have taken a stand against controversial legislation that would allow businesses to deny service to gay and lesbian customers. Keep it right here. Youre watching cnbc, first in business worldwide. Price. And walk limit automatically tries to find it for you. Just set your start and end price. And let it do its thing. Wow, more fan mail. Hey ray, my uncle wanted to say thanks for idea hub. O well tell him i said youre welcome. He loves how he can click on it and get specific actionable trade ideas with their probabilities throughout the day. Yea, and these ideas are across the board bullish, bearish and neutral. I think you need a bigger desk, pal. Another one . Traders love our trading patterns, now with options patterns. Whats not to love . They see what others are trading like the days top 10 options trades by volume and get ideas yea i have an idea how about trading that in for a salad . [ male announcer ] so come trade at the place thats all about options and futures. Optionsxpress. Open an account today and get a 150 amazon. Com gift card when you call 18883303137 now. Optionsxpress by charles schwab. Welcome back. Another near miss today for the s p as it tried to recapture its alltime high. The dow also in the red but hardly big losses. Lets get more from seema mody. Lets start with some of the big after the bell movers. First solar shares tanking. Revenue and earnings came in way la low estimates. Guidance also short of expectations. And then theres Dreamworks Animation also lower on earnings of 20 cents, missing street estimates of 32 cents. Fourth quarter Earnings Results included an impairment charge of 13. 5 million or a loss of 12 Cents Per Share on its turbo film. In terms of todays big winners, tesla on fire. The best performing stock on the s p 500. Two big reasons here, Morgan Stanley putting out a bullish note writing tesla has the opportunity to not only disrupt the car industry but the electric Utility Industry by customersizing battery packs and the tesla model s named Consumer Reports top auto pick for 2014. Blackberry shares on the move after rolling out a new phone for the indonesian market. Ceo john chen talked to cnbc about bbm, its Blackberry Messaging Service and how that presents a big opportunity. Cisco marking the biggest bond sale of the year. The book was oversubscribed. Some are wondering where theyre not using the 47 billion of cash on its books. Most of its cash is overseas and they would rather borrow at low rates. And river bed tech. Back to you, kelly. Seema, thank you. Despite the recent weak employment report, our next guest cites four key reasons why america is on the brink of an Enormous Economic growth spurt. Which us a Joel Kurtzman. Hes the author of unleashing the second American Century. Joel, great to see you. Great to see you. Thank you. Its interesting to watch the way that publishing trends change because a couple years ago every book on the newsstand it seemed was about how there was never going to be growth in this country again, the great stagnation, that whole theme. What makes you so confident now that just a couple years into the recovery things have dramatically changed or have you always felt this way . Well, no, i did not start out optimistic. It took me a long time in studying a lot of facts before i changed my mind. And what i have seen is that we have enormous amounts of creativity that people are not taking into account, and theyre not sufficiently taking into account the energy revolution. Those are transformational. And i want to bring the panel in on this as well. Theres four tenets youre talking about. You mentioned creativity in energy. Gigantic amounts of capital and unrivaled manufacturing depths. How many of these are truly specific to america . Are these four things resources that other countries dont posse possess . Absolutely in terms of the changing energy landscape. I mean, i think joel is right. The reason why its changing and why hes changed his opinion is five years ago you couldnt say that we are where we are today in terms of the reserves we have, in terms of the production that we have, and in terms of the way that that is happening and the way thats going to be transported as well and perhaps exported as well. So that has changed dramatically and thats a very north american centric development. Joel, what do you think . Yeah, its only happening here. The technology that weve developed, were a decade at least ahead of the rest of the world. We have more deposits now that are addressable than any other country in the world. This is transformational. Take the industrial might of the United States and put saudi arabia on top, and thats our future. And, marcus, you see this firsthand, kind of the incubation level, you have experienced this. Is it the factors he cites or is it Something Else and these are just symptoms of some kind of, you know, american Human Capital . If you visit businesses like kevin and i do and youre dealing with people that are on the front lines and in the factories and in the warehouses working, the american spirit is not beatable. The work ethic i think thats starting to come back that may have faded in the mid 90s where people felt entitled, starting to really go away. The generation thats really leading the pack i think are the kids that have been out of college for 10 or 12 years who are willing to do whatever it takes to make a living and whatever it takes to make that business successful. Kevin, whats your perspective on this . I think theres something missing on joels Shopping List of upside. I want to ask you about it. You dont talk about the Regulatory Environment, particularly for Small Business in america, which represents 23 million businesses. Its also 54 of the sales in our economy. And definitely theres been a sea change of negativity on the Regulatory Environment that holds them back from hiring. Why arent you discussing that in this study . Well, thats a big issue. The regulatory framework, whether were talking about Financial Regulation or whether were talking about business, and the tax structure as well. But i think that these regulatory issues can hold us back, but they cant stop us. The forces forward are just too strong. Joel, if youre right, what does that mean for growth in this country, for inflation, for productivity . Just yesterday we were having a discussion with Marshall Auerback who says the growth rate is much lower and that was echoed by the cb o when they were looking at the impact of obamacare. I dont agree with that at all. I think that our longterm prognosis for the next ten years is extremely strong. I dont think that you can have the Energy Bonanza that we have and not see an effect across the entire economy. So people who say that our growth is going to be slow are not taking that fully into account. And so bottom line, what kind of growth are you talking about . Are you saying were going to have another late 90s moment here in this country just as everyone was writing it off . Yes, i think so, and i think it will be longer. All right. Thank you so much for joining us. This is going to be fascinating. I think were all hoping that there is some sort of animal spirits element here so well watch it. Thank you, joel. Youre welcome. Now, meanwhile, the meet is on in arizona, speaking of unique things in the states. Governor jan brewer facing pressure from the likes of apple and petsmart to veto is controversial bill that would allow businesses to deny services to gays and lesbians. One of the companies speaking out joins us next. Understand my charts, and spend more time trading. Their quick trade bar lets my account follow me online so i can react in realtime. Plus, my local scottrade office is there to help. Because they know i dont trade like everybody. I trade like me. Im with scottrade. announcer ranked highest in Investor Satisfaction with selfdirected services by j. D. Power and associates. Ive got a nice long life ahead. Big plans. So when i found out medicare doesnt pay all my medical expenses, i got a Medicare Supplement insurance plan. [ male announcer ] if youre eligible for medicare, you may know it only covers about 80 of your part b medical expenses. The rest is up to you. Call now and find out about an aarp Medicare Supplement insurance plan, insured by unitedhealthcare insurance company. Like all standardized Medicare Supplement insurance plans, it could save you in outofpocket medical costs. Call now to request your free decision guide. Ive been with my doctor for 12 years. Now i know ill be able to stick with him. [ male announcer ] youll be able to visit any doctor or hospital that accepts medicare patients. Plus, there are no networks, and virtually no referrals needed. See why millions of people have already enrolled in the only Medicare Supplement insurance plans endorsed by aarp. Dont wait. Call now. Welcome back. Arizonas governor is feeling the economic heat. They say money talks, and its talking loud and clear as some big names are urging the governor to veto legislation that would allow businesses asserting religious beliefs to deny confservices to gays and lesbians. Backers of the bill say it protects Business Owners religious freedom. Gays and lesbians say it gives businesses a right to discriminate. Marriott, apple, and American Airlines along those urging governor jan brewer to veto the bill. Intel has just weighed in against it. So has the organizing committee for next years super bowl as well as other business groups. Weve had four Companies Call us to tell us that well be dropped from their list as a potential investment location unless governor brewer very toes the bill. The business groups say the law and all its controversy would hurt the state competitively, but the Libertarian Cato Institute thinks that concern may be overblown. It is not an invitation to discrimina discriminate. Its a way of reinforcing that religious liberty is an important value just like equality under the law is an important value. Nbc news citing people familiar with governor brewers thinking says shes leaning toward vetoing the bill, but she has until the end of friday to decide. Officially, she says she hasnt decided yet. Scott, the clock is ticking. Thank you so much. With us now is david lenhart, the ceo of pets mart which is headquartered in phoenix, arizona. David, its great to see you. What would you like to see the governor do here . Great to see you, kelly, and thanks. This is an important topic. We absolutely would like to see the governor veto this bill. We think its bad for arizona business. We think its bad for the people of arizona. David, do you think arizona more broadly is becoming toxic to business . You know, were a Hometown Company here in arizona. Weve been here for the last 26 years. Arizona is good for business, but this bill is not, and it undermines that, and thats why we are urging the governor to veto this bill. Are you urging this from a personal point of view . Is this something youre hearing from employees . What is your main concern as a business . Yeah, we are hearing this both from our associates and our customers. At petsmart diversity and inclusion is a key piece of who we are, a key piece of our culture. We fundamentally believe our communities, our customers, and our associates all deserve equal respect, and this bill does not do that, and thats why we are absolutely opposed to it and urging the governor to veto it. As i understand, if she doesnt veto it, it does become law after this weekend. What do you do in that case come monday morning . Yeah. First of all, i hope that does not happen. Thats one of the reasons im here today. But if it does happen, we will continue to work with our legislators, continue to work with the governor to minimize its impact. You would leave the state . Were a Hometown Company, kelly, as i said. Weve been here 26 years. Arizona is good for business, and we would continue to work with our legislators and the governor to, you know, minimize the impact. I assume you have raised these concerns with the legislature and the Governors Office directly . Yes, we have. Weve actually attached our name to a Coalition Led by the Arizona Technology council. It is many small and Large Businesses across the state that are all, again, in support of the governor vetoing this bill. And can you tell our viewers in this country or across the world who may be watching why it is that this bill has already become legislation . Is it something about the belief system that arizona has . No one paid much attention to it and suddenly it was an issue . How have events transpired to this point . Yeah, kelly, i dont pretend to be an expert on arizona politics, but what i can tell you is fundamentally as a corporation and as petsmart, we fundamentally believe in diversity and inclusion, and this bill undermines that concept, and thats, again, why we are very strongly urging the governor to veto it. So were not overstating it here by saying this bill, if it stands, would allow businesses to turn away gay and lesbians if they didnt believe if that wasnt in accordance with their belief system . We believe that that absolutely could be the case, and, again, that goes against who we are as a company, which is why were speaking out so strongly against this. David, thank you so much for joining us. Again, appreciate it. David is the ceo of petsmart headquartered in phoenix, arizona. Thank you, kelly. Public shouting matches, a man at the top running amok. The wall street journal painting an unflattering portrait of pimco cofounder bill gross. He just denied it here on cnbc this afternoon. After the break, well discuss if a certain amount of aggression comes with the territory of building a mega business. Well be right back. Ameriprise asked people a simple question can you keep your lifestyle in retirement . I dont want to think about the alternative. 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. Welcome back. Former pimco ceo mohammed elerian left the firm in january leaving the financial word to speculate as to why. And today the wall street journal reporting that personal clashes with founder bill gross drove elerian away. The article painted an unflattering picture of the culture and bill pimco himself. Earlier gross said the story was overblown and down played the report. Its not the first time someone who is mega successful has been accused of being a jerk. Steve jobs, in fact, comes to mind in in case. Here to weigh in with more, jeff cox, finance eder to of cnbc. Com. He want to get thoughts from our financial, but, jeff, first your take. Is this the flip side of the success coin . Well, kelly, i think it was harry truman who said if you want a friend, get a dog. I think that thats very true in politics. Its also very true in business. When you get into the high finance world, a lot of ceos have a reputation for being tough managers. To me managing is always about three words. Its about setting the tone. And how you act as a manager is going to set the tone. Now, the other part of that is what are your results. For a long time for a guy like bill gross the results were there, so you couldnt hear about those kind of stories. Now the results arent there is much. Pimco had a tough year, theyre having a mediocrier the ieyear year. Theres a staying institutions are the shadows of men. When it comes to some of the banks in particular, weve seen a lot of focus on Corporate Culture and whether it was fostering bad behavior, for example. But in this case, and i really i want to hear what kevin has to say about this, in particular kevin, does success excuse bad behavior . Does success is bad behavior necessarily a part of success . How do you disentangle these issues . I look at it as an investor. Im not investing to make friends. Im investing to make money. I dont care if the manager is difficult to work with. All i care about is execution of the Business Plan and results. You dont care how the sausage gets made, right, kevin . I dont care, but gross is in a different situation because its very easy to measure his metric every day, and there he is sitting on billions of dollars of tenyear Government Debt which i think right now is a land mine, a toxic waste because when rates move up, you are going to lose a lot of money in that portfolio. It was easy to make money in his strategy for decades as rates went down. Not so easy now. That poor guy is in a pressure cooker. I dont blame him. It absolutely is a pressure cooker. Its a tough business. Josh, you know a little bit about that. Were not just talking generically about business. This is the investment business. Its very different. You can do everything right as kevin said, you can execute. I do this, i do that, and it works. And on wall street, thats not the way things go down. Sometimes you can be perfect, but the results dont do your way. When it happens for a prolonged period, which is what were seeing with some of the major funds at pimco which is not billions but trillions, theres a lot of pressure. Theres ego on the line lets you could see two guys who respect each other kind of i have been on trading desks where the market has gone against us. I can tell you this is not that rare. Marcus . Lets get back to the focus which is whats the behavior like and is success an excuse for having bad behavior . The answer is no. So i invest to make money, too, but i expect people to behave in a way thats consistent wait a minute, some people would say youre guilty of bad behavior because youre mean to the people involved in trying to shore thats kevin. Im not mean to the people. I get them focused on the basic principles of making sure their place doesnt close, but i always do it with respect and i always do it with a sense of discipline. And what i want people to do is not say, if he has success, he has a license to be a jerk. Right. You dont have a license to be a jerk. Under any circumstance. People say that steve jobs to some extent had a license to be a jerk. In fact, if you look at the narrative surrounding him, it justifies over time his behavior through what he achieved and thats true with a lot of people whether theyre artists, certainly musicians. I think its fascinating to focus on the personalities of these ceos. I was a sociology major, i love that. As an investor, what matters is are they making money for you and do they have a plan in place to continue to do so. And i think what were learning now with the situation that they have at pimco is now they have six deputy chief investment officers. Theyre trying to set a secession plan in place, trying to set up people who will be contrarian to bill gross as mohammed perhaps was. You do need that to a large extent. You need that in order to continue to make money. Thats what investors should be caring about and as long as the returns on their pimco but thats quite a statement. Kelly Pimco Total Return Fund could not have possibly had a good year last year. It had a bad year. Its 242 billion in bonds. Its not going anywhere. They dont have license to ride the s p. So i think if you look at all bond funds, you didnt have this much turmoil at the top lets say where dan fuss is running the shop or a doubleline. This is a pretty specific personality clash. If i could circle back on my original point here, this really comes down to, like i said, when bill gross was doing very well and as kevin said when it was a convenient environment aroundizy for him to do well, you didnt hear about bill gross behavior. Now, when the results arent there, youre going to hear about these things, and youre going to see what kind of a tone is bill gross setting, and when things go bad, can he keep his head and can he steer pimco back to the place where it was before. Lets be honest, i dont care if bill gross gets his employees hosed down with water and hits them with an electric cattle prod, i want to know thats the point im making. Hes got to deliver and hes not delivering now. If he can beat the index, thats all i care about. Hes not beating thats the question though, right . Hes even with the index this year. If you only invest with people because theyre nice, youre probably going to go broke. I think theres a balance between being tough but being respectful. I would like to see a motif built around companies that are held by nice, quote, unquote, ceos. They dont really exist. Thats exactly the point. Who can think of an example in sports they talk about somebody being a players coach. Usually synonymous with being a loser. Can you think of a ceo who is lauded for being a good guy . Lets sing kumbaya. All i care about is returns. Is it possible you can be both . Does being successful yes. You can be a good guy and be successful, but on the street we all have a thick skin and theres a reason for it. The guys that get results are the guys that are really tough on the people that work for them but theres a line that you dont have to cross either. All right. Guys, thank you. Lower thank you, jeff. You can read more about his piece online, cnbc. Com. Lower tax rates but a new surtax on the rich. House republicans are proposing a sirchly fid code that would slash the tax rate but there are a few catches. Up next, how would you like to have Warren Buffett give you Investment Advice on your computer . A tech startup has a siri for investors that could change the makeup of your portfolio. Its ceo and cofounder will be here in a moment. Dont go anywhere. 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Tdd 18003452550. You see opportunities. Tdd 18003452550 at schwab, were here to help tdd 18003452550 turn inspiration into action. Tdd 18003452550 we have intuitive platforms tdd 18003452550 to help you discover whats trending. Tdd 18003452550 and seasoned market experts to help sharpen your instincts. Tdd 18003452550 so you can take charge tdd 18003452550 of your trading. Welcome back. Ever wish you had the opportunity to especially ask Warren Buffett for some advice . With us now the cofounder and ceo daniel nadler. Welcome, first of all. Thank you. Are you here trying to destroy whats built around us by giving everyone a little individual Warren Buffett in their phone . Were trying to augment the tools people have. A lot of the tools you have see are 20 or 30 years old. Financial technology has not kept up. You can ask your iphone very complex questions like whats the fastest way to get to whole foods and it has to do some intensive computations, if you want to ask a Computer System what happens to u. S. Defense stocks, theres no system you can that using natural language. Youre confident you can build that kind of system . Youre trying to get people further along the line of data. Trying to surface data as quickly as you can. The engineering challenge is building a natural language interface you can ask financial questions of. Were already there at answer your question. In terms of the data you surf. Is it all about building a framework and a system whereby its about recognizing that i may be asking, you know, should i put should i invest in apple . Is it about identifying my personal information to see whether thats a good idea for me or is it about analyzing the market and macroconditions and apple itself and then being able to deliver a response . Its more the latter. More about analyzing the market. More about creating a statistical an notation of the world. If you watch a sports game and lebron james is at the threepoint line, it will tell you his shooting percentage. Events happen in the macroenvironment. Theres no statistical an notation of the world. Theres no real time annotation. If this works as you envision, give us one example how that might work for a given query. A real example was july 3rd of 2013 when oil prices topped 100 a barrel. There was the morsi coup in egypt. A lot of traders were wondering what happens under these conditions, when oil is trading above 100. Weve created a system you can ask in natural language how do Energy Stocks trade in the 24 hours following civil unrest in the middle east or and Oil Prices Trading above 100 a barrel. Thats an example. Youre letting the phone take my job. Thats fine. I will find Something Else to do. Hopefully the phone will augment your job. And a i can invest better as a result. Daniel, thank you for being here. Lower tax rates, new surtax on the socalled rich. Wait until you hear if that surtax applies to you. Well be right back. Lities becoe 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. Make it happen with fidelity active trader pro. Its one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. 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 . Welcome back. With some breaking news on sac capital, kate kelly joins us now. Thanks so much. Weve been waiting for some details about the reorganization of sac capital into a family office, and we know as of today theyre going to reorganize into four different units, long short, macro, quad, and steves personal investments. Their new name which theyre in the process of finalizing will be announced sometime in april. The new structure takes affect may 1st. A couple interesting tidbits, the staff has shrunked to 850 employees. There will be the appointment of a chief surveillance officer or cfo, someone who will ward off the type of activity that got them in trouble, Insider Trading convictions of former employees and so on. Wow. Some big structural news, kate, for one of the biggest firms out there. Thank you so much. Thank you. I should also mention, kelly, theyve returned almost all of their public money which is something they were going to try to do. That still leaves them with how many billions of steves own money . I heard they would have 9 billion in total. Still a pretty impressive amount of money overall for a firm that once managed up to 16, then more recently 14 and now 9. And a series of Insider Trading scandals. Thank you. Republicans putting out a simplified tax proposal calling for an income tax rate cut but also a surtax on high earners. John harwood joining us with the latest details. Is there any chance of this moving forward and democrats signing on . No. And theres not very good chance of republicans sign on either in terms of the entire party. Just a little reality check on this. Mitch mcconnell, the Senate Republican leader, came out from a party before losing that chairmanship. Heres whats in that draft. First of all, just like the reagan tax reform in the 1980s, it collapses to two rates and theyre lower than reagans. Theyre 10 and 25 rather than the 15 and 28 that ronald regan had. There is a 10 surtax on income over 250,000 over 450,000, rather, the plan is expected to have the tax rates at 10 or 25 for 99 of taxpayers. 40 of Capital Gains tax would be excluded from taxation. Theres also a bank tax, this gives you one of the reasons why, kelly, this will be controversial among republicans as well. In order to get those rates down to 25 , youve got to do an awful lot in terms of raising revenue elsewhere. So theres going to be a version of the financial crisis responsibility fee that obama proposed a couple of years ago. Socalled bank tax. Theres all sorts of deductions that are likely to be trimmed in this proposal and thats why theyre not talking about those today. Thats why republicans dont want to move it, because if you limit the exclusion for Health Care Premiums that employers pay, that can be called a tax on health care. If you exclude the charitable exemption or reduce the exemption for charitable giving, that is going to generate opposition. The same on local and state tax deductio deductions, mortgages. Its a big mine field. A big mine field is the best way to put it. John, thank you so much. I want to open up the discussion now to the panel and look at whats kind of ironic about this, it reminds me of the immigration infrastructure thing. This is what people want to do and why it will never happen. You might as well talk about a marshall invasion. This will never get through the senate. Its almost like an opening to a conversation rather than anything in its completion. If we pretend that it could politically get done, do you find any reason why there are problems with whats being proposed . Yeah, because theyll roll back the surtax. They wont be revenue neutral. All youll get is the tax cut. At the end of the day those earning 450 and up is the cutoff, theres no way thats happening. Why . Its politically unpalatable. It seems like now is the environment for it to be politically i would like to see us tackle repatriation of all of this capital that theyre holding overseas because theyre deathly afraid of paying taxes on it. I would rather see that come in country and be unleashed, Something Like that. I dont see why mortgage interest deductions or Something Like that should go. What do you think . Im having a hard time with those ideas. Thats a manifesto of really bad ideas. Any time that you dissuade people to invest capital or punish success in america. We would be lowering the income tax. We would be exempting 10some of it. Over 450 of Capital Gains. Why would i do that if i was being charged a surcharge for success . What would you do . The only modern economy in the world that doesnt have a user tax. I would drop tax rates to corporations to zero and id put the personal income tax to 25 and then tax everything that you want to use on your own discretion. User taxes are everywhere. Theyre ubiquitous. They work. You can decide what you want to work. Sharon . I dont think this has any chance of going anywhere, and when you talk to folks about what is being proposed here, no one thinks its going to get, as john mentioned, any traction, even among republicans broadly. So i think were just talking about kind of semantics here, but one of the things that may perhaps be more palatable to some on the democratic side would be seeing at least some continued taxation on these higher income levels. I dont know if the surtax thats the investment income. What the super wealthy are most interested in protecting. Thats the bulk of their income. We have to go to markets. Quick last thought here. Marcus. I havent seen the math on all of this. I dont know what it will add up to or subtract to. It seems like what sharon said, pie in the sky. We need a template. We need to get the discussion going. If nothing else, a followup for that reason. Get the final tweets in. Whats less damaging to Goldman Sachs. It never actually worked there. Turns out he worked for citi. You can tweet us your thoughts at cnbc closing bell. Well get to that after this. Which is why usaa is honored to help our members with everything from investing for retirement to saving for college. Our commitment to current and former military members and their families is without equal. [ indistinct shouting ] [ male announcer ] time and sales data. Splitsecond stats. [ indistinct shouting ] its so close to the options floor. [ indistinct shouting, bell dinging ]. Youll bust your brain box. All on thinkorswim from td ameritrade. Welcome back. In case you havent heard today, the gselevator has been revealed. The guy doesnt work at Goldman Sachs. Is this less damaging . There have been much more damaging lies told in elevators. I think its more damaging that goldman was looking for the guy inside the company when he wasnt even there. Are you surprised at this one . I think we should start pimpoelevator. Love that handle. You guys were having a tee bait about the minimum wage during one of the last breaks and have you resolved anything on this issue . Washington and fix it . Theres no debate. Its a really bad idea. Great idea. Fantastic idea. The reason its a bad idea is some incremental job is not being created because a vendor or business operator, will its take massachusetts, there are 17 employees, they will not hire another one until they find out if theyre paying 4 more for the existing ones. The market should decide not some government officials. Raising the minimum wage is a good idea for a couple of reasons. Number one, people cant live off of 8. 50. Theyll be living off of zero because they dont have a job. People spend money on advertising, travel, nonsense. Its better to pay them. I guess we didnt resolve something. Thank you all for being here this afternoon. Really appreciate it. By the way, be sure you can catch kevin oleary on the shark tank marathon. It is shark tank tuesday after all. And the profit is on at 10 00 p. M. Marcus, any teasers . No, im trying to be like kevin. Mr. Wonderful. Like him. Arent we all. Fast money is coming up in a few seconds. Melis melissa, lee, whats on tap . Hey, kel, its crazy here. The brouhaha, the implosion of bitcoin. We have the guy whos been out since valentines day protesting. He is still there and he is going to phone into the show. You will not believe what he says about bitcoin now. All right. Oh, by the way, kelly, did you know that its the reformed brokers birthday today. Its your birthday . It is. Its karen finermans birthday. Tonight we have a very special surprise. A series of surprises, actually. I cant believe you didnt tell me. Im not wishing you happy birthday. Your present was hanging out with all of us. Over to you, melissa. Thanks, kel. Were playing all of karens favorite songs throughout the hour. Fast money starts right now. In new york citys times square. We have tim see more, steve bros so he, karen