Security. Some law makers are opposed to the agreement. For the first time they are going to sit down and talk peace. They are scheduled to meet in geneva i in january. The United States and japan will not recognize chinas new air defense zone. Beijing kle declared the zone ts past week. Those are the hea headlines f you would like any of the latest stories head over to the website at aljazeera. Com. Real money with ali veshi. Drilling down on oil and the nuclear deal with iran. What is good for you at the gas pump could be bad for Americas Energy boom. And why you may have to start paying to keep your own money in the bank. And how much is too much and what do executives get paid. The pros and beacon cons of sals for ceo. s. Im ali veshi and this is real money. This is real money you are the most important part of the show. Join your live conversation on twitter using the handle aj real money. A Historic Deal for iran could mean relief for americans filling up at the pump. The price prices have fallen sl. Despite the fact that kno no additional iranian crude has hit the market as a result of the deal. Irans markets are the fifth in the world. Any let up in the sanctions will boost supply and push prices lower in the coming months. Irans oil exports have fallen to a half to just a Million Barrels aday since the sanctions took a bite in early 2012. That is when the u. S. Put in restrictions on payments that made it hard for iran to sell its oil. Despite the sanctions iran kept pumping oil and its stored around the world its oil that no one will purchase at the moment. If all goes well with ey iran wh the negotiations with the u. S. An others sanctions could be reduced if that happens a lot of oil will come on line. The question for americans is how does this affect the price they pay for gasoline. The National Average is up seven cents a daa aga a gallon. An miss aanalysts were expectino up over the weekend. A glut of crude would spell relief for you at the gas pump, it could also be a bad deal for Americas Energy boom. All of that extra supply may bring prices down enough to kill the economic benefits of Shale Oil Plays in places like north dakota and other u. S. Boom states. Kevin book heads the Research Team at Clear View Energy partners an Energy Forecasting firm. A Million Barrels of crude flooding the market coul cut cot out Oil Producers here in the United States he joins us from washington, d. C. Kevin, good to see you thank you for being with us. Thanks for having me. This is a complicated question most people would think if you have more oil on the market it will bring prices down. We are in an unfortunate usual place where we are typically not in the United States. The Lower Consumer prices zo cod be bad for a homegrown industry. Lower prices for manufactured goods at walmart have been bad for manufacturing jobs in the you had. Us. United states. The a an analogy is a good o. We produce oil at higher prices than the rested of th rest of t. That puts us at a disadvantage should prices fall. The other way to think about it, if you add oil to the world that is good news for everybody. But not in i if you are in the business of selling oil. You clearly want to watch out for what these Frontier Fields and the shale and oilsands and the offshore projects will look like in a different environment the oil we talk about is west texas and light sweet crude or wti and International Oil is brent crude. West texas is 9 4. 09 a barrel. Tell me why in simple terms our oil is different to produce. Our oil is priced differently. The wti price and the brent price used to be essentially the same please. Price. Its harder for our oil to get to the market and so its pooling in the place the prices are set. That explains the discount. It does not explain its harder to drill into the shale. If you look at oil historically big fields produce for a long period of time shale is not big fields its a lot of little wells if the price falls the shale price can cut of faster tn the conventional pl supply migh. A lot of people didnt know that iran had as much oil reserves as they have to got saudi arabia and then ey iran and canada. Its not because of the fact that there are limitations of what they can export. I understand they have had real problems in the sanctions in actually producing it. Absolutely to run run an oil field it needs maintenance. Technologies that are available throughout the western world but impossible to access under the sanctions that iraq faces. If iranian oil comes on the market and for whatever reason the prices go down lower than what they are now. They have been in a general range. At what price do we have to worry that its going to crowd out american production of oil . So looking ahead at the next year. We see the range for wti of 88 t89to 90 a barrel. If iran was to come back back onstream at the end of next year aiding another Million Barrels to the world that may take another ten bea barrels of. That is getting close to the shale price and its below the prices for the oilsands in canada. Kevin good to talk to you. Thank you so much for making this simple. Its a complicated thing but you made it simple. Kevin is a manager at Clearview Energy partners. Thank you for having me. Bark in thback in the day thd you interest for parking money in their vault. Why banks may charge for making deposits. Bigger salaries in the boardroom and smaller in the stockroom. The widening wage gap and whether ceo salary caps makes sense. That story and more, keep it right here. For years now the frugal and thrifty have earned a pittance. The fed is looking for a policy change that could see you earn less interest. In fact it could cost you money to park your money in the bank. Through quantitive easing the Federal Reserve has injected 3 3 trillion into the economy by buying bonds at the bank and crediting their account at the fed. After five years and three rounds the lion share of the new money 2pn 2. 3 trillion is eara quarter point interest for the banks. It doesnt seem like a whole lot. But for a financial institution. Announcer this environment environment where Interest Rates are solo. 25 basis points represents a good return. The question whether to lower the interest paid on excess reserves to get the banks to start lending more of them was raised at janet yel yellen confr makes hearing. Its something we could consider Going Forward. Yellen was noncommittal. The board of governors thought it was worth considering at some stage. Whether the bank is not lending enough or the demand is not there is open for debate. Should the fed stop paying interest the fall out could rain down on businesses an consumers. What the banks may do is cut the interest that they offer on Short Term Bank deposits. And sings those rates are all right low to begin with, they might actually start charging people to deposit their money at the banks. The banks pay a federal Insurance Premium on the depose at this time. Deposit. Like kwa quantitive easing payig interest on excess reserves may prove to be another policy created in the wake of the financial crisis sise that could prove difficult for the fed to do. Now a quarter percent interest on excess reserves may not sounds like much to some folks. The average interest on a checking count is less. If you want to be conservative with your money you dont have to park it in a bank. You are a name we use a lot and i see you on tv. You are a smart guy and commenting on the markets in general. In fact we built up something of a specialty managing money for people that are conservative with their money. We look at each client and what their risk profile is. And at the end of the day their risk profile determines on how we allocate their account and invest for them. The risk profile suggests that some o of your investors dont want to risk their capital or lose it and they might want some kind of dividends or an income stream off it. The expectation is managing for the client you have to you have to understand over a five e or ten year period if you are a dividend investor you will do well. High dividend stocks have done very well and essentially investors have moved towards that. We want to overtime make money and yet have protection buy companies that are growing give dividends and growing at the same time. That protects you against the down side and inflation as well. They dont usually grow dividends and you have seen over the years even if you opened the coke and the pepsi of the world. There are other companies that are there. Kfc zplrvetio, taco bell. Look at companies with strong balance sheets. Look at ford. They are going to zer grow it. High sing ol digit dig single t couple of years. What are the characteristics of the company. I dont want to be in the roller coaster and i dont want to get 25 or 28 a year. I want to beat inflation and i cant do that in a bank account how safe can i be . In stocks . You will still have a down side. If everyone gets sold offer and everything is in a fund. What i will look at is the last ten years. The companies that have not cut difficult debt but raised difficuldividends. One thing to watch for Going Forward is Interest Rates rise and companies that have a lot of debt their cost of debt is going to go up. Whawhat that is going to do ther cost of capital goes hire. And look at that. And look at the companies with the secular growth. These are companies that are growing their revenue because people want their products. This is one thing we noticed with the growth this quarter. A lot of it is from tightening their belt not from growing revenues. I right. You Want Companies that have good products or good businesses, not companies that are cutting cost of goods or cutting their marketing expenses to maintain their dividend. Look at the pay out ratio. What percentage of your earnings are being paid out of difficult. You Want Companies to reinvest and they can grow and make other products. Look at daiggio their difficults are going to grow faster and maintain a strong credit rating. You keep those in mind and you will have a good balanced portfolio in different sectors. You dont want to be all in technology. You want to diversify and say over a period of time. Again when the market goes up 25 or 26 they are not going to be as high but they are knot going to go down 30 because they have a margin of safety in them. You can be in the market and be a little more conservative. Good to see you. Bosses have been getting big pay raises over the years but middle class workers not so much. Coming up well have a closer look at the salary gap in Corporate America and whether a power of the people until we restore our freedoms coming its a radical idea that comes up when we talk about inequality in the United States salary caps for ceos in america. Switzerland put that question to their people of it would have kept managers of making more than 12 times of what the lowest people earned. The swiss voters rejected it. 65 said no. It showed widespread display over fat paychecks. Business leaders argued that it would make it harder to attract top talent and leave swisswiss companies at a disadvantage. In the United States there is a huge wage gap between ceos and workers and as randal shows us its getting bigger. There is an old saying that a rising tide lifts all boats. The u. S. Economy has expanded and corporations have grown and everyone working for these companies are reaping the benefits, right . Not exactly. The salaries for ceos have sky rocketed the Workers Compensation has barely moved, up 5 in the same perio period. Widening pay disparity hurt employee morale. They get angry when they see those at the top making a disproportion wh whydisproportif wealth and not distributing it to all of those that helped the company achieve the goes. Zero is ahere is an example s last year. 1 i1195 files more1195 times moe worker. The that is a ratio of 1034. 1. Mcdonald received 13. 8 million the average employee 22,000 a year. At general electric. The ceo made ha 441 times mo. Some corporations justify it as a reward for boost the value of the the shareholders stock. They began to tie it to stock operations anoptionoptiooptionsa real short term mindset where american managers have come to manage for the short term as opposed to the longterm health of the enterprise. The gap between Corporate Executive pay and wages wasnt us always so vast in the 80s workers began falling farther and farther behind. Corporate leaders were taking home 120 times more and today ceos earn on average 204 types more than workers there is no sign that the area will improve but it will become become more transparent. When they report the difference between what the bosses earn and what they pay their workers. Now today on twitter and facebook i have been asking you should ceos have a cap on their compensation. Shawn says yes. They should use it to make the compancompany more profitable. I have to say i think more of you were against the idea of ceo salary caps than in favor of it tweet me what you think or leave maplme a comment on facebook. The ceo ma pay is all about retn on talent. The three simple letters rot should hold the heaviest weight when figuring out the pay structure. Gary is a ceo and he joins plea from california. He is the author of several books and i had a privilege working with you on. Great to see you. Good to see you. With what is the take and you hearted the story anheard the s. The figures seem so out of whack. Why should ceos get paid more than the average worker. They do. I never dreamed i would be in this chair today. But when you start legislating and pay and other things. There has been a great no. Over the last four and a half years to reregulate everything. I think you will find unintended consequence it is you go down the path. I dont think its the right path to go doubt fo down for am. How do you determine what is right. What is the tie you should make . Companies make a lot of money. Is there a tie that you should make to executive pay that corse corresponds to a raise that everybody gets or shareholder value what makes the most sense . As a ceo you do need to look in the mirror and the disparity of what you are innin earning ae rest of the company. Clearly that is something that each individual needs to do. There has been a movement over the last four or five years to tie compensation to shareholder value. For me twothirds of my pay is based on how the shareholders do whether in good times or bad times and that has been the movement. Some of the numbers you see are reflexes of the game in the stock market which z not necessarily mainstream. You are in the business of getting exdivision for major corporations. So you see the trends that go on. When a Company Comes to you and says we want to hire a Senior Executive or ceo. Do they know how they want to pay that person or do they come to you for that aid advice. They do come to us for that advice and they do have a sense. I will tell you today, and the rest of the decade. Ally, there i ali. People are leveraging the dont they took on and that is the number one thing. There is a fight. For growth and relevancy and boards are willing to pay up for the candidate that can make the difference between 5 percent growth and 10 growth. You talk about the return on talent what is the best description of what that means. The return on talent are simply the talents available for shareholders. As a ceo its one thing to set strategy and vision and business. I think we have lost our guest but i government most out of him that i wanted to. That is gary he is the ceo. I want to give you our final thoughts tonight. Im talking to you about the city of life paris and the steps to the eiffel tower. Today a portuguese man bought is th19steps. 19 steel steps and 12 feet high and part of the original 1 18 89 tower. Why this man wants to buy these steps or what he is going to do with then i have no idea. My favorite part of this story is the man was thrilled because he got it at a discounts. The more expensive steps are smaller than his here is to a practical bargain shopper. . Rrntion we all are looking for goodies even if they do amount to a i 12foot high pile of ste. On tuesdays we have on call workers who are assigned work only hours before they start. Im ali veshi, thanks for joining next time a computer is better at answering trivia questions than hue manages. Managehumans. Youre in the stream. School lunches are as much about food as they are politics. We from innovators on the front lines of the School Lunch Food fight. Our digital producer is here. Waj