Rose 33 . So for the full year, gm sales earned 7 , but that was less than the overall car market increase of 8 . Want to give you a q check of how the car makers are trading right now, separate directions. Ford up by nine cents, gm is down more than 3 right now. Chrysler trading under the fiat umbrella and is about to become completely owned by fiat. Wanted to let you know that coming up we are going to sit down with bob carter, Senior Vice President of toyota motor sales. Finding out about a couple of huge wins for toyota, big news coming out today, and were going to talk to him about what lies ahead in 2014. Well, the automakers had a really good day, so hows the rest of the market looking . Traders at the New York Stock Exchange and the cme group. You know, i want to let our viewers know, keith, were going to be hearing this q a session from ben bernanke. So far he hasnt given us any hints at what 2014 looks like from fed policy. Were you expecting to hear something today . No, i dont. Mr. Bernankes always been a great poker player when it comes to keeping things close to his vest until he gets out in front of the public at one of his press conferences after an fomc meeting. I imagine hes going to set the stage for incoming chairwoman yellen to devise policy for 2014. I dont think hes the type of guy who doesnt want to influence things once hes out of there, so hell sell off into the academic sunset, so to speak. Cheryl or maybe the very lucrative speaking circuit. I do want to ask you about markets for 2013. Weve had a lot of analysts, were hearing some say we need a correction, were looking at a 10 correction, its going to happen in the First Quarter and then others tell you dont fight the tape. What do you think . Its very hard, and the second point its very hard to remove yourself from the equities, especially as we continue with the zero Interest Rate policy both here in the u. S. And globally. However, well start to get some clues here in january and february. If we have an up january and an up february, i think equities are going to be a very good play in 2014. My personal opinion, i think equities will be up in 2014, probably not to the levels we saw last year. That was just a banner year unlike ive ever seen in my career. But i imagine that were going to have a little bit more volatility this year as the fed starts to exit the market with their policies and the other global banks start to pull back and we see improving Economic Conditions both here and in the developing world. So i expect some volatility. We may, in fact, see a 10 or 15 correction, but as some of the experts are pointing out, that is healthy for a stock market. It cannot go straight up forever. Cheryl it certainly is, and i want to move over to dan howe at the cme. Were showing the vixx actually down, but youre saying its something thats key for you to watch over the next few trading sessions, dan. What do you mean . Well, it certainly is. I mean, riiht now no ones really expressing any real fear. Were up a little bit from over the holidays, but thats to be expected. Going into january, a level of 14 on the vixx certainly with regard to a potential change in the fed policy statements i mean with, obviously, the tapering coming up, 14 is not a high level. People are not expressing much fear when it comes to the buying options right now. Cheryl all right. What else are you looking at right now . Its been one of those trading sessions, really yesterday and today weve had all this level especially in chicago, now the northeast, whats really on your radar . The commodities space, the s p, what do you like . Right now im concentrating on the tenyear yield because i think its at a critical point at 3 . If we make any substantial move above 3 , that means, to me, the bond markets probably going to lead. That could cause a ripple in the equity markets. As the tenyear goes substantially above three, im going to take that as a warning sign of getting out. Obviously, im thinking its going to trickle up in the course of the year, so i think its going to go up, but if it goes up in a relatively minor pace, thats going to be fine. If it starts to jerk up 10, 15 basis points, i think that could be a warning sign. Cheryl Something Else for treasuries so far, just in 2014. Gentlemen, thank you very much. My pleasure. Thank you. Cheryl weight loss Product Companies are actually seeing red today. Usually its the other way around, but there was a big federal trade announcement. Lets bring in Nicole Petallides who is back from her own holiday. Nicole . Reporter thank you and happy new year to everybody. We are taking a look at herbalife and a couple of others when you talk about an initiative that now is moving forward from the ftc as theyre looking at weight loss products. And perhaps descent i market descent i have marketing. And just the talk of it, it doesnt mean these companies are doing exactly that. But just the talk of the fact that the ftc is now moving forward, theyre going to have an announcement next week. And doing a new initiative against deceptive claims made by National Marketers of fad weight loss products. And this will now be, move into next tuesday. Thats when this initiative will occur and well find out some more then. Thats when the press conference is. And the press conference may give us a glimpse into some problems or maybe everything is perfect. In the meantime, herbalife has been to the downside. Were also watching new skin and some of the other names, sometimes you think of it as personal care, but they also have Nutritional Supplements in their umbrella as well. So we are seeing them coming under pressure with this one. But i looked at weight watchers. Slightly different, but that ones doing great today. Cheryl and we should say new skin had a great 2013 even though the stocks been down today, its been a high flier. I dont know, nicole, can you eat six doughnuts and lose weight . Thats what i was told. Reporter i think, yeah. Cheryl nicole, thank you. See you in a bit. Closing bells going to ring in 54 minutes. Federal reserve chairman ben bernanke getting set to take questions in what could be his final speech as fed chairman. We are going to bring you that live when it begins. Right now hes doing his prepared remarks. And from smart bands to google glasses, the samsung watch. 2013 was the year that Wearable Technology went mainstream. So whats in the pipeline for this year . Dont want to miss it. She keeps you on your toes. You wouldnt have it any other way. But your erectile dysfunction it could be a question of blood flow. Cialisadalafil for dailyly use helpyou be Ready Anytime the moments right. You can beore confident in your ability to be ready. 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And of those who believed they had power to do more. Dell is honored to part of some of the worlds great stories. That began much the same way ours did in a littldorm room 2713. This magic moment cheryl okay. The first major snowstorm of the year blasted through the northeast last night with some areas getting as much as a foot and a half of snow. Lets head to janice dean, the weather machine. Shes standing by in the fox weather center. Janice . Reporter yes, cheryl, we have another storm we are watching, if you can believe it. Some areas actually north of boston got two feet of snow. That was where the jackpot is. And were still seeing blustery conditions, so people are still urged to stay indoors, especially because of the cold temperatures. If you can believe it, more cold air, colder than we have seen thus far. Can you belief that . Wind chill as we go further out in time for the upper midwest, this is where our next arctic plunge is going to come in this weekend, so here are the wind chills, 30 in international falls, this is 1 p. M. On saturday, 27 in fargo, its all going to move south and eastward. Look at green bay, we have a big game on sunday. This could be one of the coldest nfl games they have played where its going to be, oh, 2 degrees. But at game time, around 5. That is the air temperature. Chicago as well. You could set some records with your daytime high on monday of 10. Thats not the wind chill, thats the actual air temperature. So heres our next storm system across the great lake, the ohio river valley, and its going to be cold enough for snow as far south as the Mississippi River valley. Incredible amounts of snow we could get out of this one. Oddly enough, were going to kind of see a swing into warmer temperatures along the east coast, so mainly a rain event, but very short lived because the cold air is going to plunge south and eastward heading into next week. So theres some of your snow totals, 612 inches where you see the blue shaded areas, mainly a rain event here for the east coast but again, cheryl, as i mentioned, were going to see those cold temperatures heading into next week moving into the northeast. Blizzard warnings for the northern plains, Winter Weather advisories ahead of the storm system, and weve got a lot of winter to go yet. I think 75 days left until spring. Cheryl oh, wonderful. Janice, really quick, i hear youre a big green bay fan, right . I do like the packers. Cheryl okay. So are you more concerned about football or the weather . Ive got to say, its oldfashionedded financial. I mean, to see football. To see the guys playing in really cold temperatures, thats kind of fun. Cheryl for us [laughter] it wont be the coldest game, i believe that was 1967, and the air temperature is 13 in green bay, and they won. Cheryl okay. I knew it, i knew you were going to come up with a smart stat like that. Thank you, janice. Reporter nice to see you. Cheryl despite all the hype around is Samsung Smart watch and google glass, the consumer has fully to embrace Wearable Technology. Joining me now, ive got brian sozi and pete, marble Senior Technology editor whos kind enough to put on the bag google glasses. My pleasure. Cheryl do you like them . Are they kicking with consumers . I wear it fairly regularly. Its hard to explain exactly what it does for you because its not just the camera which a lot of people make a wig deal about, its really the display as well and the network connectivity. So its basically the internet on your face finish. [laughter] which sounds a little weird and scary, but at the same time, you know, if you try it and you sort of have that experience of either sort of getting directions fed to you right here or just googling stuff and getting alerts, you suddenly realize cheryl duds it take a while to get used to them . It does. It takes a while to get the hang of using both your voice and this interface, because you have to tap as well and slide your finger to use it. But once you do use it for a while, its kind of like, okay, i get it, you know . Youre kind of in the zone. And, you know, when i sit down for long periods or, i mean, i usually just take it off. Cheryl okay. Brian, what do you think . Is this one of your top trends for 2014 . Absolutely. Us techies, we know about this stuff. You poll your mom and dad on the street, they have no clue, think its something you buy in best buy. But i think that shows that the Technology Companies havent made it an intimate device, a device you dont have to think about. You still have to think about it, its another item you have to charge, but next year this is going to rain down on many retailers, and you definitely benefit from it. Cheryl youre bullish. Im bullish, but i want to caution investors. Not everybody is going to go out and buy Wearable Technology on day one. I think once they hit about 300, yes. Cheryl pete, if you want to put your regular glasses on [laughter] but the watch as well. I mean, thats the other thing youre wearing. I want to show our viewers, if you could just raise up your wrist no problem at all. Its the Samsung Galaxy gear. Its a smart watch. Its a very i mean, its a more accessible piece of technology. Consumers can really wrap their heads around a watch, you know, its not a weird thing on your head. The thing is with smart watches and this product in particular, i dont know if its done the killer app. Theres not a thing it does that people point at and think, oh, wow, i need that. Cheryl does it burn calories . Does it cook for me . [laughter] no, im serious. People are demanding of their device. Its going to give you alerts from your smartphone so you dont have to see whos calling, you can look here, either take the call on the watch or dismiss it. You can get other alerts like email, texting, that kind of stuff. And theres a lot of fitness interaction. Cheryl what do you say . I think it shows there hasnt been that one breakthrough type of product. Next week we have the ces, but i think ultimately apple needs to come out with that gamechanging product that everybody understands and is accessible at 3, 400 a pop. Cheryl maybe this is just me, but fashion. You know, i dont think im going to walk around with google glasses on my head. I want something thats a little more attractive. I mean, momentum that come into play in all doesnt that come into play in all of this . Definitely. Its huge in wearables. Smart glasses or displays, whatever you want to call them, thats a really big factor because its hard to design a piece of technology thats unobtrusive. A watch makes more sense, and once you get down to those single function fitness trackers, like the nike fuel bands, because its much easier to design a stylish piece of technology that does one thing. Cheryl brian . I think youll see Tech Companies partner with louis vuitton, celebrities to get out there and say cheryl to make them pretty. These are amazingly awesome, but those fuel bands have sold over two million year to date, and now were starting to see shops. I foond one in new york, stops starting to get intimate be, interesting, gets the consumer excited. Cheryl i got one more christmas. My favorite gift, actually. Liz clamans going to be at ces next week, what are you expecting . One blockbuster thing wearables, definitely. Theye going to explode. Youre going to see Companies Big and small come out with wearables. I dont think theres going to be any big slash shi ones because theyll debut at their own events, or ktv is going to get 4ktv, and i think just more personalized gadgets that sort of use your personal data like fitness trackers, thats going to spread to your car, your appliances, all that stuff. Im looking for, one, qualcomm. Qualcomm quietly led with a watch that launched this year, also theyre going to be playing in the chip sector, but also i wallet to see whos competing with google. Massive expectations on google glass cheryl that was nice to be on top to knock you off at the same time, and thats where theyre sitting right now. Liz is going to be out there next week, so were looking forward to ces. Guys, thank you very much. You can put your regular glasses back on. Appreciate you wearing the glasses for me, thank you. Well, we have a lot coming up including a bell thats about to ring in 41 minutes. And just moments from now ben bernanke could make his last major Public Comments as fed chairman. Were going to go live to philadelphia as soon as he begins his q a session, see what he has to say. And the latest auto Sales Numbers are coming in, and toyota was among the automakers reporting disappointing results for the month of december. A fox business exclusive with Senior Vice President and how he is gearing up for the fight with u. S. Automakers this coming year. [ male announcer ] nearly 7 million clients. How did edward jones get so big . T me just put this away. Could you teh our kids that trick . [ male announcer ] by not acting that way. Its how edward jones makes sense investing. Its how edward jones my dad has aor afib. Brillation, he has the most common kind. Its not caused by a heart valve problem. Dad, it says your ib puts you at 5 times greater risk of a stroke. Thats why i take my warfarin every day. But it looks like maybe we should ask your doctor about pradaxa. In a clinical trial, pradaxa® Dabigatran Etexilate mesylate . Was pven superior twarfarin at reducing the risk of stroke. And unlikearfarin, with no regular blood tests or dietary restrictis. Hey thanks for calling my doctor. Sure. Pradaxa is not for people with artificial heart valves. Dont stop taking praxa without talking to your doctor. Stopping increases your risk of stroke. Ask your doctor ifou need to stop pradaxa before surgery or a medical or dental procedure. Pradaxa can cause serious, sometimes fatal, bedin dont take pradaxa if you have abnorormal bleeding or have had a heart valve replaced. Seek immediate medical care for unexpected signs of bleeding, like unusual bruising. Pradaxa may increase your bleeding risk if youre 75 or older, have a bleeding condition or stomach ulcer, take aspirin, nsaids, or blood thinners. Or if you have kidney problems, especially if you take certain medicines. Tell youdoctors about all medicines you take. Pradaxa side effects include indigestion, stomach pain, upset, or burning. If you or someone you love has afib not caused by a heart valve problem. Ask your doctor about reducing the sk of stroke with pradaxa. Cheryl pour power mover of the pour is fire eye of the hour is fire eye, hitting an alltime high today. Right now its at 56. 25, thats a gain of more than 15, more than a third of the stocks value. It is really jumping today. This is following the companys announcement it has acquired a rival corporate security firm. Wall street analysts applauding the latest move, Goldman Sachs raising its price target to 45 from 40 a share. Were past that now, guys. The companys shares have more than doubled since they debuted in the month of september. This is definitely a stock you should keep an eye on definitely throughout the year. Auto sales for the month of december coming in low or than expected, but 2013 still ended on a positive note. So what does 2014 have in store for the top automakers . Were focusing on toyota today. The company missed december forecasts, but the annual Sales Numbers up 7. 4 . Our next guest has the rundown on the auto giant for the coming year. Joining us now is bob carter, Senior Vice President. Bob, its great to see you again. Well, good afternoon. Thank you. Cheryl yeah, happy new year. Congratulations. Certainly, 2013 was a strong year coming in at 15. 6 million vehicles, big increase. How did you feel about 2013 as a whole . Did it meet your expectations . It did. We had a wonderful year. The overall industry was up 1. 1 million, that was about 7, 7. 5 . That was more than we expected this time last year. And then toyota had a fantastic year. Our cars, our trucks, our new models all sold very well. So were very pleased with the way 2013 ended up, but were even more optimistic as we look into 2014. Cheryl analysts are expecting, lets go to the numbers for 2014, the analysts always have to come in and up their estimates. 16 to 16. 5 million, but theres a little bit of concern from some in the community, analyst community, about competition. Can you respond to that . This really could be a very tough year especially with the Fiat Chrysler news that we got this week. Well, competition is good for the overall customer. So we actually look forward to it. The industry in 2013s going to settle in tonight when everybody reports at about 15. 6 million, and everybodys consensus is itll be over 16 million next year. Theres a lot of new products coming to market. Whats driving the Business Today isnt so much the pentup demand, but its strong economic numbers. Were seeing improvement in the housing market, housing sector which is pushing truck sales. Interest rates are low, and Consumer Confidence rebounded in december back to january levels. So were seeing actual economic factors versus just the age of the inventory thats on the road thats driving our Business Today. Cheryl i was talking with two guests a few moments ago, we were talking about ces next week. But ces has become a major player in the automotive world, and youre going to be debuting a new concept car next week. So what can we expect . Were looking at it right now. This is the fuel cell vehicle. Tell us about it. Yeah. Im actually looking forward to ces this year. Ill be there tomorrow. But were going to be doing our north american debut of our fuel cell vehicle that well be bringing into market in 2015 or perhaps even a little sooner. But essentially, what the fuel cell is, its a full electric vehicle that takes the Power Generation and puts it onboard. You put in about five kilograms of hydrogen, and its zero emission. The only emission that comes out the tailpipe is a little bit of water say to have por. Its vapor. Its a terrific new technology, one that i think is going to change the Auto Industry over the next 10 to 20 years. Cheryl i was loooing at the camry, you know, 2013 again, best selling car of the year, 12 years in a row for the camry. Weve learned hybrids also selling alltime sales records. Do you think theyre going to be where the true volume of sales is going to come from this year . Is that where youre putting your hopes . Yeah, were seeing hybrid grow every year. We finished up last year at 345,000 hybrid sales, thats roughly 6870 of the alternative fuel vehicles that are in the u. S. Its our core technology. But what were seeing is that hybrids initially ten years ago was very dependent on the costs of fuel. Now, the good news is this year fuel prices have moderated and actually come down to fiveyear lows, yet hybrid sales are still very strong for us. So hybrid power trains are now across the mainstream industry, and its something that were going to continue to develop and bring to market. Cheryl you know, retail sales, i mean, obviously, thats what the analysts are going to judge you on and what your competitors are going to judge you on. What about the issue of ford and General Motors now because, certainly, they really are stepping up their game not just in the United States, but also globally. Do you think toyota can make more of a global footprint, not just here in the u. S. . Yeah. We have a very strong global foot print. Emerging markets are very important for us. Here in north america, some of our highest growth is coming out of markets such as south of the border down in mexico. But the u. S. Is really the core of our north american sales, and you mentioned retail sales. Thats where we focus. We were very pleased that when the numbers came out this morning, toyota again was the number one brand in the United States and throughout north america. Being number one with retail consumers. Cheryl lexus also has done very well. Yeah. Lexus had a fantastic year. It was over 273,000 units, up 12 . And were seeing the luxury end of the market. That luxury consumer, actually, the growth rates in luxury are even healthier than were seeing in the general industry. So its a very good market for lexus, and then when you consider the numerous new product launches we have coming in both 2014, 2015 for toyota and lexus, were really optimistic of the next two years ahead. Earl. Cheryl before i let you go, one of the things thats changed so much about cars is they really are becoming their own computers. At what point, though, are you concerned about safety and all of the, quoteunquote, gadgets we have in our car this is do you ever worry people arent focusing on the road anymore . Yeah. Everything we design first of all, our First Priority is safety. Theres nothing more important to us than that fact. But as we design new entertainment centers, new cell phone technologies, we keep an eye on safety because we dont want to add any driver distraction. And while the government, the standards are being developed to have industry standards, we are working with legislators and regulators to make sure that we lead that development. Because there is that potential of too much information and taking yoor hands off the road or your eyes off the road. So everything we want to focus is the safety of that driver. Cheryl again, bob, congratulations on 2013. It really was a great year for toyota and, by the way, jeff flock says hello and sends his best. Thank you very much. [laughter] cheryl thank you. Bob carter, toyota motor sales Senior Vice President. Closing bell going to ring, 29 minutes away. Were actually waiting, at any moment were going to start to get some comments from Federal Reserve chairman ben bernanke. This could be his last speech before he hands over the reins to janet yellen, so anything he says could move the market. So far we havent gotten anything impactful from the him, but in the q a you just never know. Some of the senatorrest economists smartest economists in the world are in philadelphia with the Federal Reserve chairman. Well be right back, stay with us. [ me announcer ] this is the story of the dusty basement at 06 35th street the old dining table at 25th and hoffman. And the little room above the strip ma f roble avenue. This magic momt it is the story of wherevery great idea begins. And of those o believed they hathe power to do more. Dell is honored to be part of some of the worldgreat stories. That began much the same w ours did. In a little dorm room 2713. This magic moment cheryl here we are on the second full trading day of 2014, and the dow is higher by 71 points. Yesterday, pretty rough day for the markets. We are seeing volume pick up. Two people that know exactly what i mean, Nicole Petallides on the floor of the New York Stock Exchange, also got sandra smith in the pits of the cme. Actually, sandra, i want to go to you first to talk about volatility. That seems to be what is on the minds of the guys down on the floor of the cme. What are they telling you . Jr. So just to give you an idea where volatility is today, cheryl, the vixx is what we use to measure volatility, its basically looking at Stock Options in the s p 500. Were looking at the vixx down nearly a full point today, and its below 14. Its at 13. 5. For the entire year of 2013, it averaged about 14, so ere below the average of volatility that we saw all of last year alone. So still showing a lot of complacency in the market, cheryl, something to keep in mind when we see volatility or we see complacency in the market, sometimes it can indicate a turn around from what has been the overall trend which is, obviously, where the stock markets been higher. Something thats certainly on the radar of a lot of traders as we see Commodity Prices moving to the downside today. Energy prices down pretty much across the board. We got that delayed government report on oil and distillates, inventories in the latest week, all of which showed basically a biggerthanexpected drawdown. And so we got a big reaction in the markets. Crude Oil Prices Falling by more than a dollar to 94. 25 a barrel. So we definitely had some movers at the cme, cheryl, and volatility was certainly one of them, even though it trades right across the street at the cboe. Cheryl and, you know, nicole, sandra was talking about oil prices and actually the fact weve seen prices pulling back the last few sessions. Thats been great, nicole, for the Airline Stocks that have been performing really well so far this year. Reporter ultimately, and mart of that, also, is not only because of Lower Oil Prices but also just some great numbers out of some of these airlines which show the capacity and load and the revenue on the rise for the latest month, especially since you had the thanksgiving holiday which helped them along. The big picture, though, as i see these airlines with significant gains today, jetblue up over 5. 5 , us airways up 5. 5 as well. But the big picture is were coming off a great year on wall street, and that often is followed by a good year. However, this is an Election Year as well. So you have midterm elections. That may be the wildcard later in the year, but in the meantime, you have many people on wall street who still feel that the trend remains to the upside. The one other wildcard is the fact of the correction. Now, a correction usually would come much more frequently than what weve seen, right . We havent seen one for over two years really, and so a lot of people are waiting for some big correction. In the meantime, were sitting here at 16,500. So while the trend still seems to the upside, the wildcard is also like when is that big pullback that everybody else has been waiting for . Cheryl sandra, she brings up a great point, several analysts have told us theyre looking for a correction, a healthy correction, 10 , 12 , sandra. But thats got to be an economic event. I want to let our viewers know were waiting on comments from ben bernanke, this could be his final comments before he hands the reigns over reins over to janet yellen, and the fed could really be the driver. In particular if they get negative numbers with gdp, if they see something in the jobs numbers they dont like, sandra, thats where all of us could be facing a correction, not just the stock market, but the bond market as well. Reporter well, you used a very important word there when you described the correction, and that would be a healthy correction. So youve got basically wall street analysts across the board that are pretty much bullish as we start 2014. Thats certainly starting to show up as far as investors buying the stock market today. They to mention a lot of reasons or a lot of potential pitfalls for the sell off, and that is what will the fed do next, uncertainty on obamacare, on taxes. But something that sticks with me is something sam stoveall said, great years are often followed by good years, and so a lot of these wall street analysts arent just pitting their hopes of another bullish year based on raw market fundamentals, theyre looking back at history, and history does show typically when we do get such an up year, we tend for the most part we tend to get a positive year the next year. So a lot of these hopes on a continued market rally this year are basically just using history as a reference. Thats something a lot of traders will definitely put their money on. Cheryl sandra smith at the cme, nicole, thank you very much. David asman, going to be here at 4 p. M. Eastern time, were getting breaking news in to fox business, our partners at the wall street journal are reporting that the winklevoss twins, you remember the twins, famous, of course, for their tanglement with Mark Zuckerberg and facebook years ago, cameron and tyler, theyre actually going to be backing a new hedge fund. Now, the winklevoss twins also had been heavily involved in pushing bitcoin, another side of the story that david asman and i have talked about. But theyre going to be backing briarwood chase management, this is the first time theyve ever made a hedge fund investment. Anyway, this is something theyre getting getting into no. Briarwood focuses on microcaps. There they are, the 32brothersr their entanglements with facebook and Mark Zuckerberg when they were in college. But thai all grown up now theyre all grown up now. 9 minutes to go, coal stocks were not very hot in 2013, but with many of the big names falling more than 24 , its been a sector that you really want to keep your eye on, and the sector could begin and to heat up this year. All of that thanks to who else, rich edson is standing by in washington with more on this one. Reporter looking ahead to the 2014 midterm elections, cheryl, and republicans are trying to blame the administration for the decline in coal and tie their Democratic Senate challenges to president obama. Coal stocks have fallen 13 since the president was reelected. The energy sector, meanwhile, is up 18 . Analysts credit the natural gas boom for much of that shift, though they say forthcoming eps regulations may get much more expensive. Renewables, over that time, up 55 . Republicans need to pick up six seats to win control of the u. S. Senate. There are several states president obama lost in 2012 with Democratic Senators up for reelection this year. A handful, like west virginia, arkansas and montana, are coal states. I think coal is going to be a major issue in the campaign, an issue that republicans will use to try to tie these Democratic Senators or Democratic Candidates to president obama. Its important to remember that republicans only need to win republicanleaning states in order to get to the majority, and i think theyre going to use coal as an issue to tie these democrats to the president in order to try to win. Reporter Many Democrats in coal states are distancing themselves from the president on energy issues. One Republican Campaign aide says these democrats are simply playing for the wrong team, and theyre giving democrats control of the senate. Republicans also have to hold their own seats, especially Senate Minority leader Mitch Mcconnell in kentucky, another coal state. Back to you. Cheryl rich edson high out of washington live out of washington, thank you very much. Want to let all of you know at any moment we expect to get some live comments from the current Federal Reserve chief, thats ben bernanke. This could be his last Public Comments before he hands over the reins to janet yellen. And hes speaking at the American Economic association. As soon as the q a begins, were going to take you there live, listen this to what he has to say. See if he gives any clues to what he and janet yellen have been talking about behind closed doors. Be right back. Welcome back. How is everything . Theres nothing like being your own boss and my customers are really liking yo flat rate shipping. Fedex one rate. Really makes my life easier. Maybe a promotion is in order. Good news. I got a new title. And a rais management couldt makehat happen. [ male announcer ] troducing fedex one rat simple, flat rate shipping with the reliability of fedex. [ male announcer ] the parking lot helps by letting us know whos coming. The carts keep everyone on the right track. The power tools iroduce themselves. All the bits and bulbs keep themselves stocked. And the doors even handle the checkout so we can work on that thing thats stuck in the thing. [ female announcer ] today, cisco is connecting the internet of everying. So everyone goes home happy. Cheryl want to show you how the markete doing on this second trading day of 2014 on this friday, obviously. Twelve minutes until the bell rings, and stocks actually were able to reverse earlier losses following fed chairman Ben Bernankes speech in philadelphia. I want to show you these numbers actually, lets go live to Federal Reserve chairman ben bernanke right now. Equity Mutual Fund Investors took negative returns almost every other day, and, in fact, they lost about 50 between the crisis in early 2009. So if investment should all be profits and no losses as in the case of the money market mutual funds, shouldnt the fed have acted equally aggressively to buy up stocks . Or was it a big mistake to support the money market mutual funds . The first thing could be in the chapter about wacky ideas. Ill point out i have two very distinguished colleagues who also are happy, im sure, to take any questions that might come up [laughter] particularly about production values. [laughter] the actions to, which, by the way, were led by the Treasury Department to protect the money market funds were not about protecting the investment of any particular individual or group. It was about avoiding precisely this issue of one of the key ideas in a financial crisis is whats called a fire sale ecker thalty, the idea that when large numbers of people are forced to sell assets at a given moment, itll drive down prices the sustainable price level because theres not enough liquidity, not enough buyers in the short run, and that in turn will feed back, reduce the net wealth of other asset holders who in turn will be forced to sell and you get into a vicious cycle. The money market funds that were in a run were pulling cash out of, first, the repo market which finances a lot of assets held by brokerdealers and others and also the commercial paper market which funds both financial and nonfinancial firms in the short term. So it wasnt at all an issue of protecting the wealth of any given group in the same sense that intervening with various companies was not an attempt to protect the wealth of any given group. It was, rather, an attempt to try to avoid a cascade of falling asset values and fire sales which the run on the money market funds was already creating. But the equity funds had to sell assets too. In fact, indeed, it cascaded 50 . But they werent run bl, thats the point. Neither are money market mutual funds as long as they act like [inaudible] you get 2 more okay, next question. My question is the mechanism do you think i cant hear you. Is that on . [inaudible] try anyway. Okay. My question is the mechanism by which quantitative easing is seen to work. Your original statements back in what is called qe1 suggested that what you were doing was targeting higher inflation and that, or avoiding deflation. And the impression that that generated was that higher inflation would generate a lower funds rate and generate more stimulus. But your more recent statements suggest that quantitative asing works through reducing Interest Rates, buying securities which reduce Interest Rates. Which is the more immortant mechanism that you are attempting to use here . Is it rising inflation or lowering Interest Rates . No. I think youre mixing together goals and mechanisms. The goal was to avoid deflation. So one of our concerns besides the weak recovery at this time of qe2 was that inflation as today but even more so was very soft and moving down, and we were concerned about deflation risks. And, of course, deflation is not a zeroone thing. Even low inflation can create problems. So we adopted the quantitative easing policy with the objective of raising the inflation rate to meet our target. And at the same time, by doing so we, of course, we would lower real Interest Rates and help the real economy. So that was the objective. The mechanism and, of course, theres a lot of debate about exactly how this works and so on, but the mechanism that we have focused on is based on sort of a Tobin Friedman type of world in which buying up assets has an effect on the yields of those assets. That was the mechanism which i discussed today in which we were which i talked about in jackson hole right before qe2 as well. So thats the basic mechanism that we have argued. Thank you. Christian [inaudible] world bank group. I just wanted to ask whether you could share with us a little bit more on sort of how you balance transparency and accountability with Central Bank Independence and what challenges other central bankers might face in trying to follow your example. Why is it a question of balancing . So, well, okay. Let me, let me try a specific example. Finish i think i understand where youre coming from here. So the very specific example, and i have a long footnote in my speech which if youd like to take a look at it, itts on the february web site which talks about the socalled awed fit the fed legislation. Audit the fed legislation. That legislation is misnamed. Its not about auditing in any common sense at all, and as i tried to emphasize in my spoken remarks, the fed is toroly audited thoroughly autodidded. All of its transactions are thoroughly audited. As i said, weve always had a very good record there. Moreover, the gao, the Government Accountability office, which is a arm of the congress haa access to virtually everything that the fed does and comment, criticize, report, etc. The one exception, and heres, i think, what youre talking about, the one exception is that there is an exemption in the law for gao auditing individual Monetary Policy decisions. So the gao under current law is not allowed to rom in the and say give me the records of your last fomc meeting, we want to have an independent review of whether you should have raised or lowered Interest Rates at the last meeting. So that exemption in the gao law which was put in in the 70s by the congress, we view that as an appropriate balance on the one hand the fed is very transparent, very open. Gao has broad access to all of our activities, and, of course, Monetary Policys very transparent. We have minutes, the transcripts come out five years later, etc. , etc. But the Congress Took the view in the 70s that exempting Monetary Policy decisions was needed in order to prevent congress from using gao audits as a tool for influencing shortterm decisions made by the fed. So theres a balance there as you point out between independents and transparency. What the socalled audit the fed legislation in various forms would do is it would remove that, basically. After fomc meeting and second guess guess the fomcs decision which would be pretty inconsistent with any common view of Central Bank Independence. So i think thats, the balance where it is now is appropriate. I think i would resist giving congress day after authority to secondguess our policy decisions. I think it would be bad for the economy if the public and market makers, Market Participants thought that essentially whatever the fed did was subject to immediate reversal, or substantial pressure by the congress. Question from a student. Okay. So i asked my students if they had a question for the chairman. And there were a number of them. One, which i wont ask is what about bitcoin. [laughter] which i know he knows about. But i thought a really interesting one was this. If you knew in 2006 what you know now, what step or steps would you have taken then to prevent or ameliorate the financial crisis and subsequent severe downturn . Well, thats a really unfair question. I mean the reality is everybody, every policymaker has to make, this is the nature of policy. It has to be made in very, very foggy conditions with very imperfect information. A lot of uncertainty. So, i would, if ordered to do anything i think i would not only have to know everything in advance, everybody would know have knew everything in advance. In other words, if i went out and saying all of sudden im arbitrarily raising Capital Requirements five Percentage Points the banks would say what . And would be very difficult for congress and regulators to agree. I think the crisis was very complex, involved many, many issues. One of the concerns, you know, i want to respond a little bit indirectly because of a point that oneill raised which is the usefulness of macro prudential type measures. One of the practical questions, even if you think you have got macro potential measures at work can you put them in place quickly enough, responsively enough, preemptively enough and i think that is one of the things the bank of england is working to try to find mechanisms for more Rapid Response so to speak and i think that is one of the real challenges. For example, before the crisis the fed put in new guidance on commercial real estate for banks which meant, which strengthened the criteria for Risk Management and said that you shouldnt have too much cre on your balance sheet, et cetera, et cetera. That process went through, took more than two years of negotiations and discussions and sending it out to banks and banks have time to implement. In order to make this work, the macro prudential things work well have to have a more nimble system. That is a big part of this. So the answer to the question bill raised is that, im sure there were some things that could have been done but unless everyone collectively knew what was going to happen and was willing to Work Together cooperatively to take the necessary steps it is not obvious that you could have avoided it. Maybe one more question. Larry sideman, university of delaware. You rightly expressed concern about the premature phaseout of fiscal stimulus at the end of 2010. Do you think in future recession it might be