Transcripts For CNBC Closing Bell 20130222 : vimarsana.com

Brought home more nominations than anyone else. Mandy . Who do you think is going to win best picture . I think its argo. I do think it will be. Im with brandwatch on that. So pathetic, ive barely seen any of the movies up for an oscar so i cant even comment. Very quickly, lets take a look at whats happening with the market. We were down for a couple of days on the back of the fed minutes that really spooked the market, but the dow is coming back to the tune of 96 points. The s p back above 1500 and the nasdaq up by 0. 7 of 1 . Well count you all the way down to the end of the closing day on closing bell. Meantime, thanks so much for watching street signs, everybody. Keep safe, keep warm. Hopefully well see you the same time on monday. Closing bell is coming up next. Hi, everybody. The rally rolls on. Welcome to the closing bell. Im Maria Bartiromo at the new york stock exchange. We are ending the week with a boom. Im tempted to say that the correction has officially been cancelled, but those would be famous last words, wouldnt they . Im bill griffith. We do need a 100point rally for the dow to avoid a third consecutive losing week. Were close to that right now. Its up 94 points. It was up 115 so well see what happens this final hour. Big hour coming up. Stocks gaining even as the government is warning of more doom and gloom scenarios if the automatic spending cuts kick in. One week from today is march 1st. Market seems to be ignorings predictions. Stanley druckenmiller telling me yesterday its no big deal. Who is right, wall street or the white house . And the markets, they are voting right now. Later, canada is angry. The canadian ambassador is here. Hes letting loose about the long delayed Keystone Pipeline project as gas prices continue to spike higher. This story is getting hotter. Youre looking for that interjew view. Its a great story. The keystone story is real job creation potential. Well get into it with the ambassador. Lets see where we stand. The Dow Jones Industrial average up 97. 5 points, as you can see there, just shy of the high of the afternoon. Bill just told us it was up 115 earlier. Nasdaq composite showing gains today. Check it out. Weve got a double digit move here as well, shy of the high with a gain of 22 points on naz daxx damage, and the s p higher by ten points, bill. Two things to watch. Will we finish higher for the week in the dow . We need that 101point gain for that, and will we finish above 14,000 . All things to watch for in todays closing bell exchange. Lets speak to our guests. Michael, what do we make of this week, two different mood swings this week, whats going on . Who is right . Yeah. No. I think this is consistent with how corrections start. Behaviorally everything that leads in a question is starting to outperform, dividend sectors and bond yields back below 2 on the tenyear, a lot of weakness in the emerging markets and cyclical trade so while on an absolute basis the dow isnt moving anywhere, internally in the market theres a lot of defensive ne defensiveness. And all this is completely inconsistent with the recovery. What do you see in terms of flow at the end of the day . Im seeing a lot of cautious flow at this point. A lot of mixed signals in the market this week. Economic data i think overall was bad. Earnings reports helped the market. Dividends, buybacks, m a activity has helped. Im happy to see the market has recovered from the last two trading sessions but this leads into a lot of uncertainty and a lot of Economic Data coming out next week. I think thats going to move our markets. Will you see some profittaking come off the table. What does that mean, cautious flow . A market thats up 100 points. Are you not seeing conviction . Im not seeing conviction. What i am seeing is investors buying stocks earlier in the week are starting to sell them out now and paring down some of their portfolios. Bruce mccain, you think this market needs a correct, dont you . Giving it a firmer flat platform for gains into the end of the year, but i think at this point theres some things investors can do and looking at where they want to be, particularly if you want to move money overseas youre getting a pretty good relative attractive price in moving into the emerging markets, for example, and for those who still need bonds, selloff in bonds, clearly gives you an advantage if youre take money out of equities, so knowing where you want to be and structuring for it is the key right now. And we have been watching the currency markets, Rick Santelli. I mean, when the dollar backed off a bit, thats when the stock market started to pick up speed here today. No. Thats absolutely true and i think, you know, the currency markets have always been a bit rigged, obviously, or there wouldnt be Printing Presses aloud or new dovish countries or governors like japan thats getting it in a weeks or so. In the end, bill, yesterday when he said its hard to talk about treasuries when the fed and the treasurys thumb is on the scale. Right. I always look at treasuries, and i believe that they can still reach a tipping point. Just think, at the end of last year and early this year we had one jump, from 175 where we settled last year to the new range, so were basically up a quarter point, a little bess. But even though they can sell off and the inflows were debated for that selloff, you know, i wish we could have talked to mr. Bullard more this morning about it, because in the end i just dont think we can overcome the purchases and the presence of already owned securities by the Federal Reserve, and we forget about that. It isnt just that treasurys respond with movement and equities. Its very difficult to ascertain how bad things really are when the volatility is getting crushed out of the treasuries, mostly due to what the feds programs are involved with. Michael, what do you make of these sort of mixed signals we get from the fed . On the one and they are suggesting that they are considering pulling back at some point on qe and James Bullard on our air is saying qe is in for the long haul. The fed is going with a mandate of confuse and conquer. Confuse the marketplace as to when qe will be pulled back. The biggest embarrassment now is if the stock market goes vertical and the economy doesnt, the fed in a way has to temper the pace of equity gains. Dont want any bubbles anywhere . What about the suggestion that the Federal Reserve is going to start winding down qe3. You know, what does that create in terms of disruption in the market . Are you expecting that to create a selloff . This is all coming together at a time when were also worried about rates beginning to spike over sequestration and a credit problem this country has. It has to happen at some point. Lets say sequestration does happen. Thats bond bullish and might replace the buying that the fed might overwise do. While you might have concern over the exit plan, we dont know what the supply is going to be. In other words, could you see yields go nowhere. Bruce, we were talking about how defensive issues are relatively speaking outperforming right now. What do you want to buy if youre convinced that were going to go higher here through the end of this year . What will lead us higher, do you think . We think a lot of strength out of the emerging markets, and weve been moving money back not only into those markets directly, but the industries and sectors that benefit the most in the domestic markets. So looking for the names that have overseas exposure that may have run up a little bit on any sort of correction as they pull back, add those into portfolios where they dont already have that exposure. Yeah. And speaking of outperforming, jonathan, what about hewlettpackard having its best day intraday since 2001. It is. Technology is lead being the sector here today, and when you take a step back and look at the overall sectors helping this market move higher and higher, that just adds some confidence back into this market, but i think its more on a shortterm basis. The numbers were getting out of earnings season has added confidence here but well have to look at the numbers coming out next week. The initial claims and reoccurring claims will be very important because i dont think people are truly convinced that the unemployment is moving in the right direction. Bruce, real quick. Would you be putting new money to work in this market right here . We would drag our heels of putting money back in at this point. We think youll get better opportunities, but against the risk of everybody looking for a correction, i dont think you wait and hold everything back for that to come about. All right. Gentlemen, thank you all. Have a good weekend. Take care. Meanwhile, the s p 500 in danger of posting the first weekly loss of the year. The dow could close lower for the Third Straight week on a weekly basis, but right now were showing a weekly gain with the market up 106. Lets get to josh lipton, a closer look at what it will take for the averages to have a winning week. Lets take a quick check of where we stand. The dow, 13,987. Now, for the blue chips to finish the week in positive territory, you have to hit 13,981. The s p 500 at 1513. Your benchmark gauge in order to finish in positive territory, youll have to hit 1519, and finally the nasdaq at 3155. That techheavy gauge will have to hit 3192 in order to finish the week in positive territory. The nasdaq down about 1 on the week. Maria, bill, back to you. All right, thank you, josh. Gott got those numbers all written doubt. Heading towards the close and here we go again. Market powering higher and a gain of 106 on the Dow Jones Industrial average right now. Legendary Hedge Fund Manager Stan Druckenmiller issuing a dire debt warning for our country on the closing bell yesterday. If we dont deal with it in the next four or five years, the same thing is going to happen. Were going to wake up. Interest rates are going to explode, and the next generation, they are going to have a very, very tough time. Its so unfair. We hear from one economist who says the debt doesnt matter and Rick Santelli will be back to chime in. The debate coming up. Disney shares have skyrocketed since bob eager took over the company so why are they trying to strip iger of the chairmanship role in the ceo of the pension is here to explain next. And a look into suspicious trades, like the ones we saw right before hewlettpackards better than expected earnings. The former s. E. C. Chairman harvey pitt will join us later on the closing bell. Stay with us. Uh, im in a timeout because apparently riding the dog like its a small horse is frowned upon in this establishment luckily though, ya know, i conceal this bad boy underneath my blanket just so i can get on etrade. Check my investment portfolio, research stocks. Wait, why are you taking. Oh, i see. Solitary. Just a man and his thoughts. And a smartphone. With an etrade app. Nobody knows. [ male announcer ] etrade. Investing unleashed. [ male announcer ] etrade. How do you keep an older car running like new . You ask a ford customer. When they tell you that you need your oil changed you got to bring it in. If your tires need to be rotated, you have to get that done as well. Jackie, tell me why somebody should bring theyre car here to the ford dealership for service instead of any one of those other places out there. They are going to take care of my car because this is where it came from. Price is right no problem, they make you feel like youre a family. Get a Synthetic Blend Oil change, tire rotation and much more, 29. 95 after 10. 00 rebate. If you take care of your car your car will take care of you. To deposit checks from anywhere. [ wind howling ] easier than actually going to the bank. Mobile check deposit. Easier banking. Standard at citibank. Okay. [ male announcer ] with citibanks popmoney, dan can easily send money by email right from his citibank account. Nice job ben. [ male announcer ] next up, the gutters. Citibank popmoney. Easier banking. Standard at citibank. Disneys stock has doubled since he was named ceo back in 2005. Despite that the california state teachers retirement system wants disney to strip iger of his chairman status and weror have two different executives. The ceo of calsters is here. The stake is about 5. 3 million shares. We reached out to disney and they declined to comment on this issue, we should point out. Mr. Enos, thanks for joining us today. Appreciate it. Good to be here to talk about this important issue. We point out the tremendous gains the stock has seen. You know, using that as a barometer hes done pretty well as chairman and show of the company. Why do you want to separate those roles for him. First of all, if you hadnt point it had out, i would have pointed it out because as a pension fund we made a lot of money the last years off of disney. That is a good thing and they want to recognize that very much. That isnt just to say because of that performance we anoint someone the chairmanship of the conditions and you also need to recognize when Corporate Governance issues start to emerge the best time to look at those are in fact when you have time and ability to do that when the company is not under high duress, so our point of this is, and we want to talk through the issues very clearly. We want the company to stay strong and to continue to perform. We certainly dont want have were concerned about whats happened the last few years financially, but governance is, in fact, a very Important Foundation of a companys ultimate performance long term, and were going to be one of those longterm performers longterm investors like other Institutional Investors in this company. Okay. But sir, i really i dont understand this. Sure. Because when you look at all metrics of disney, they have done extraordinarily well with bob iger at the helm. Right. As chairman and as ceo. Absolutely. Stock up 76 . Earnings soaring. The net income increasing 18 just in the last report. Right. Revenue increases as well. By all accounts this company has done very well. Absolutely. Is this a waste of your time at a time when you actually have much bigger problems at calsters and having to foot that bill . I would ask the opposite saying this would be the most important time ever to make sure our portfolio is as strong as it can be and continues to perform. The idea around this, and lets go back to 2004, when i personally, along with other Institutional Investors, met with the board of directors of disney. We talked through the Corporate Governance issues with the company, and i think we reached a very good point of conferensc that it was an important chair that is not the show and that clearly was a conferensensus be Institutional Investors and the company. What would those two people have done differently and better than bob iger . Look at splitting these roles up, chairman and ceo. What would you have liked to have instead of the 76 in the gain and instead of the earnings that continued to do well. Right. Where are the holes . Just explain what you would like to see better. The holes are this. Corporate governance is about making sure that you have the right Business Structure for decisionmaking in the long term. So just as things did go astay in 2004, lets go back to the record, exactly, were saying as longterm investors you want to make sure looking out that there is in fact a sound Corporate Governance. Look, im the ceo of a 160 billion pension fund, and i can assure you i have very vibrant conversations with my board. Now, if i was suddenly made chairman of my own board, i can tell you calsters might be the happiest place on the earth for me but not the most accountable Business Structure for our 850,000 members. I guess what were looking for. Its the job of the ceo to manage the company and its a job of the chairman of the board to represent shareholder interests. Right. That is common sense. I guess the question we have is specifically whats wrong at disney on the governance issue that youre looking to . For example, just jerod or a couple days ago we had the new york comptroller here john lew upset about Jpmorgan Chase chairman and Ceo Jamie Dimon in the wake of the london whale thing, and as a result of that they want to separate chairman and ceo on that board because of that problem, so is there a problem at disney that you can point to is what were asking that prompts this discussion . Well, clearly there are warning signs developing around the compensation, executive compensation. If you look at the say on pay vote over the last two years, the vote was 77 that supported that, and now its dropped to 57 . We only have about 55 companies in the entire russell 3000 that have actually had less than 50 , and this company is approaching that strong boundary. The average vote on say and pay in america for russell 3,000 is 91 . So it isnt just calsters a voice here. You have a wide body of shareholders saying theres warning signs developing. Again, youre looking back and saying, well, what could have been different the last three years . Absolutely the Financial Performance is strong, but you want a continuing strong Corporate Governance structure that goes into the future so that in fact there is that continuing protection of governance. Wheres the accountability of calsters . Youre deep in the red. Youve got unfunded liability of how much, 64 billion . Yes. Okay. So there are feelings out there, you know, that this could partly be mismanagement, so who is accountable there . Well, first of all, as you know, the reasons for all pension funds, where they are, is the last ten years of the market, and that is something that is a longterm passive investors primarily we have to endure so absolutely calsters, like any other investors, like your personal i. R. A. And my personal ira all of us suffered those same losses, so i would argue strongly with you that is not the determinant of our financial condition. There are other major conditions as you well know, and you hold many of those shares as well, like exxon and ge where they have a joint chairman ceo role. Are you going after those companies as well . This is a fundamental principle of Maria Bartiromo<\/a> at the new york stock exchange. We are ending the week with a boom. Im tempted to say that the correction has officially been cancelled, but those would be famous last words, wouldnt they . Im bill griffith. We do need a 100point rally for the dow to avoid a third consecutive losing week. Were close to that right now. Its up 94 points. It was up 115 so well see what happens this final hour. Big hour coming up. Stocks gaining even as the government is warning of more doom and gloom scenarios if the automatic spending cuts kick in. One week from today is march 1st. Market seems to be ignorings predictions. Stanley druckenmiller telling me yesterday its no big deal. Who is right, wall street or the white house . And the markets, they are voting right now. Later, canada is angry. The canadian ambassador is here. Hes letting loose about the long delayed Keystone Pipeline<\/a> project as gas prices continue to spike higher. This story is getting hotter. Youre looking for that interjew view. Its a great story. The keystone story is real job creation potential. Well get into it with the ambassador. Lets see where we stand. The Dow Jones Industrial<\/a> average up 97. 5 points, as you can see there, just shy of the high of the afternoon. Bill just told us it was up 115 earlier. Nasdaq composite showing gains today. Check it out. Weve got a double digit move here as well, shy of the high with a gain of 22 points on naz daxx damage, and the s p higher by ten points, bill. Two things to watch. Will we finish higher for the week in the dow . We need that 101point gain for that, and will we finish above 14,000 . All things to watch for in todays closing bell exchange. Lets speak to our guests. Michael, what do we make of this week, two different mood swings this week, whats going on . Who is right . Yeah. No. I think this is consistent with how corrections start. Behaviorally everything that leads in a question is starting to outperform, dividend sectors and bond yields back below 2 on the tenyear, a lot of weakness in the emerging markets and cyclical trade so while on an absolute basis the dow isnt moving anywhere, internally in the market theres a lot of defensive ne defensiveness. And all this is completely inconsistent with the recovery. What do you see in terms of flow at the end of the day . Im seeing a lot of cautious flow at this point. A lot of mixed signals in the market this week. Economic data i think overall was bad. Earnings reports helped the market. Dividends, buybacks, m a activity has helped. Im happy to see the market has recovered from the last two trading sessions but this leads into a lot of uncertainty and a lot of Economic Data<\/a> coming out next week. I think thats going to move our markets. Will you see some profittaking come off the table. What does that mean, cautious flow . A market thats up 100 points. Are you not seeing conviction . Im not seeing conviction. What i am seeing is investors buying stocks earlier in the week are starting to sell them out now and paring down some of their portfolios. Bruce mccain, you think this market needs a correct, dont you . Giving it a firmer flat platform for gains into the end of the year, but i think at this point theres some things investors can do and looking at where they want to be, particularly if you want to move money overseas youre getting a pretty good relative attractive price in moving into the emerging markets, for example, and for those who still need bonds, selloff in bonds, clearly gives you an advantage if youre take money out of equities, so knowing where you want to be and structuring for it is the key right now. And we have been watching the currency markets, Rick Santelli<\/a>. I mean, when the dollar backed off a bit, thats when the stock market started to pick up speed here today. No. Thats absolutely true and i think, you know, the currency markets have always been a bit rigged, obviously, or there wouldnt be Printing Presses<\/a> aloud or new dovish countries or governors like japan thats getting it in a weeks or so. In the end, bill, yesterday when he said its hard to talk about treasuries when the fed and the treasurys thumb is on the scale. Right. I always look at treasuries, and i believe that they can still reach a tipping point. Just think, at the end of last year and early this year we had one jump, from 175 where we settled last year to the new range, so were basically up a quarter point, a little bess. But even though they can sell off and the inflows were debated for that selloff, you know, i wish we could have talked to mr. Bullard more this morning about it, because in the end i just dont think we can overcome the purchases and the presence of already owned securities by the Federal Reserve<\/a>, and we forget about that. It isnt just that treasurys respond with movement and equities. Its very difficult to ascertain how bad things really are when the volatility is getting crushed out of the treasuries, mostly due to what the feds programs are involved with. Michael, what do you make of these sort of mixed signals we get from the fed . On the one and they are suggesting that they are considering pulling back at some point on qe and James Bullard<\/a> on our air is saying qe is in for the long haul. The fed is going with a mandate of confuse and conquer. Confuse the marketplace as to when qe will be pulled back. The biggest embarrassment now is if the stock market goes vertical and the economy doesnt, the fed in a way has to temper the pace of equity gains. Dont want any bubbles anywhere . What about the suggestion that the Federal Reserve<\/a> is going to start winding down qe3. You know, what does that create in terms of disruption in the market . Are you expecting that to create a selloff . This is all coming together at a time when were also worried about rates beginning to spike over sequestration and a credit problem this country has. It has to happen at some point. Lets say sequestration does happen. Thats bond bullish and might replace the buying that the fed might overwise do. While you might have concern over the exit plan, we dont know what the supply is going to be. In other words, could you see yields go nowhere. Bruce, we were talking about how defensive issues are relatively speaking outperforming right now. What do you want to buy if youre convinced that were going to go higher here through the end of this year . What will lead us higher, do you think . We think a lot of strength out of the emerging markets, and weve been moving money back not only into those markets directly, but the industries and sectors that benefit the most in the domestic markets. So looking for the names that have overseas exposure that may have run up a little bit on any sort of correction as they pull back, add those into portfolios where they dont already have that exposure. Yeah. And speaking of outperforming, jonathan, what about hewlettpackard having its best day intraday since 2001. It is. Technology is lead being the sector here today, and when you take a step back and look at the overall sectors helping this market move higher and higher, that just adds some confidence back into this market, but i think its more on a shortterm basis. The numbers were getting out of earnings season has added confidence here but well have to look at the numbers coming out next week. The initial claims and reoccurring claims will be very important because i dont think people are truly convinced that the unemployment is moving in the right direction. Bruce, real quick. Would you be putting new money to work in this market right here . We would drag our heels of putting money back in at this point. We think youll get better opportunities, but against the risk of everybody looking for a correction, i dont think you wait and hold everything back for that to come about. All right. Gentlemen, thank you all. Have a good weekend. Take care. Meanwhile, the s p 500 in danger of posting the first weekly loss of the year. The dow could close lower for the Third Straight<\/a> week on a weekly basis, but right now were showing a weekly gain with the market up 106. Lets get to josh lipton, a closer look at what it will take for the averages to have a winning week. Lets take a quick check of where we stand. The dow, 13,987. Now, for the blue chips to finish the week in positive territory, you have to hit 13,981. The s p 500 at 1513. Your benchmark gauge in order to finish in positive territory, youll have to hit 1519, and finally the nasdaq at 3155. That techheavy gauge will have to hit 3192 in order to finish the week in positive territory. The nasdaq down about 1 on the week. Maria, bill, back to you. All right, thank you, josh. Gott got those numbers all written doubt. Heading towards the close and here we go again. Market powering higher and a gain of 106 on the Dow Jones Industrial<\/a> average right now. Legendary Hedge Fund Manager<\/a> Stan Druckenmiller<\/a> issuing a dire debt warning for our country on the closing bell yesterday. If we dont deal with it in the next four or five years, the same thing is going to happen. Were going to wake up. Interest rates are going to explode, and the next generation, they are going to have a very, very tough time. Its so unfair. We hear from one economist who says the debt doesnt matter and Rick Santelli<\/a> will be back to chime in. The debate coming up. Disney shares have skyrocketed since bob eager took over the company so why are they trying to strip iger of the chairmanship role in the ceo of the pension is here to explain next. And a look into suspicious trades, like the ones we saw right before hewlettpackards better than expected earnings. The former s. E. C. Chairman harvey pitt will join us later on the closing bell. Stay with us. Uh, im in a timeout because apparently riding the dog like its a small horse is frowned upon in this establishment luckily though, ya know, i conceal this bad boy underneath my blanket just so i can get on etrade. Check my investment portfolio, research stocks. Wait, why are you taking. Oh, i see. Solitary. Just a man and his thoughts. And a smartphone. With an etrade app. Nobody knows. [ male announcer ] etrade. Investing unleashed. [ male announcer ] etrade. How do you keep an older car running like new . You ask a ford customer. When they tell you that you need your oil changed you got to bring it in. If your tires need to be rotated, you have to get that done as well. Jackie, tell me why somebody should bring theyre car here to the ford dealership for service instead of any one of those other places out there. They are going to take care of my car because this is where it came from. Price is right no problem, they make you feel like youre a family. Get a Synthetic Blend Oil<\/a> change, tire rotation and much more, 29. 95 after 10. 00 rebate. If you take care of your car your car will take care of you. To deposit checks from anywhere. [ wind howling ] easier than actually going to the bank. Mobile check deposit. Easier banking. Standard at citibank. Okay. [ male announcer ] with citibanks popmoney, dan can easily send money by email right from his citibank account. Nice job ben. [ male announcer ] next up, the gutters. Citibank popmoney. Easier banking. Standard at citibank. Disneys stock has doubled since he was named ceo back in 2005. Despite that the california state teachers retirement system wants disney to strip iger of his chairman status and weror have two different executives. The ceo of calsters is here. The stake is about 5. 3 million shares. We reached out to disney and they declined to comment on this issue, we should point out. Mr. Enos, thanks for joining us today. Appreciate it. Good to be here to talk about this important issue. We point out the tremendous gains the stock has seen. You know, using that as a barometer hes done pretty well as chairman and show of the company. Why do you want to separate those roles for him. First of all, if you hadnt point it had out, i would have pointed it out because as a pension fund we made a lot of money the last years off of disney. That is a good thing and they want to recognize that very much. That isnt just to say because of that performance we anoint someone the chairmanship of the conditions and you also need to recognize when Corporate Governance<\/a> issues start to emerge the best time to look at those are in fact when you have time and ability to do that when the company is not under high duress, so our point of this is, and we want to talk through the issues very clearly. We want the company to stay strong and to continue to perform. We certainly dont want have were concerned about whats happened the last few years financially, but governance is, in fact, a very Important Foundation<\/a> of a companys ultimate performance long term, and were going to be one of those longterm performers longterm investors like other Institutional Investors<\/a> in this company. Okay. But sir, i really i dont understand this. Sure. Because when you look at all metrics of disney, they have done extraordinarily well with bob iger at the helm. Right. As chairman and as ceo. Absolutely. Stock up 76 . Earnings soaring. The net income increasing 18 just in the last report. Right. Revenue increases as well. By all accounts this company has done very well. Absolutely. Is this a waste of your time at a time when you actually have much bigger problems at calsters and having to foot that bill . I would ask the opposite saying this would be the most important time ever to make sure our portfolio is as strong as it can be and continues to perform. The idea around this, and lets go back to 2004, when i personally, along with other Institutional Investors<\/a>, met with the board of directors of disney. We talked through the Corporate Governance<\/a> issues with the company, and i think we reached a very good point of conferensc that it was an important chair that is not the show and that clearly was a conferensensus be Institutional Investors<\/a> and the company. What would those two people have done differently and better than bob iger . Look at splitting these roles up, chairman and ceo. What would you have liked to have instead of the 76 in the gain and instead of the earnings that continued to do well. Right. Where are the holes . Just explain what you would like to see better. The holes are this. Corporate governance is about making sure that you have the right Business Structure<\/a> for decisionmaking in the long term. So just as things did go astay in 2004, lets go back to the record, exactly, were saying as longterm investors you want to make sure looking out that there is in fact a sound Corporate Governance<\/a>. Look, im the ceo of a 160 billion pension fund, and i can assure you i have very vibrant conversations with my board. Now, if i was suddenly made chairman of my own board, i can tell you calsters might be the happiest place on the earth for me but not the most accountable Business Structure<\/a> for our 850,000 members. I guess what were looking for. Its the job of the ceo to manage the company and its a job of the chairman of the board to represent shareholder interests. Right. That is common sense. I guess the question we have is specifically whats wrong at disney on the governance issue that youre looking to . For example, just jerod or a couple days ago we had the new york comptroller here john lew upset about Jpmorgan Chase<\/a> chairman and Ceo Jamie Dimon<\/a> in the wake of the london whale thing, and as a result of that they want to separate chairman and ceo on that board because of that problem, so is there a problem at disney that you can point to is what were asking that prompts this discussion . Well, clearly there are warning signs developing around the compensation, executive compensation. If you look at the say on pay vote over the last two years, the vote was 77 that supported that, and now its dropped to 57 . We only have about 55 companies in the entire russell 3000 that have actually had less than 50 , and this company is approaching that strong boundary. The average vote on say and pay in america for russell 3,000 is 91 . So it isnt just calsters a voice here. You have a wide body of shareholders saying theres warning signs developing. Again, youre looking back and saying, well, what could have been different the last three years . Absolutely the Financial Performance<\/a> is strong, but you want a continuing strong Corporate Governance<\/a> structure that goes into the future so that in fact there is that continuing protection of governance. Wheres the accountability of calsters . Youre deep in the red. Youve got unfunded liability of how much, 64 billion . Yes. Okay. So there are feelings out there, you know, that this could partly be mismanagement, so who is accountable there . Well, first of all, as you know, the reasons for all pension funds, where they are, is the last ten years of the market, and that is something that is a longterm passive investors primarily we have to endure so absolutely calsters, like any other investors, like your personal i. R. A. And my personal ira all of us suffered those same losses, so i would argue strongly with you that is not the determinant of our financial condition. There are other major conditions as you well know, and you hold many of those shares as well, like exxon and ge where they have a joint chairman ceo role. Are you going after those companies as well . This is a fundamental principle of Corporate Governance<\/a>. Common sense, should be separation between the chairman of the board and the ceo so were not launching a campaign against all companies, but this is a company, we have a 260 Million Investment<\/a> in, and it has a history of some problems going back ten years around governance that were fixed, and the company has done a good job, but now you see investors asking questions about their executive compensation, asking questions about proxy access and asking questions about that governance and frankly they can be responded to and that company can continue to be a success so thats what wed like to see. Youre not going to highlight apple and exxon mobile as far as making sure they also split those roles. Its interesting that youre highlighting disney and youve got these other major stakes in Major Companies<\/a> with the same person as chairman and ceo. As i said to you, the particular reason here is weve had quite an involved history with diss anything, good and not so good over these Corporate Governance<\/a> issues, and thats what we try to do. Keep the company going. Weve met with the company and other investors have met with the company and there is a shareholder initiative on this issue that we support. Fur dont get victory and dont necessarily see a change in the executive suite, youre going to sell the stock . Of course not. Thats not how large Institutional Investors<\/a> invest their money like this. That is why were active on this issue. If it was simply a matter of selling stock i wouldnt waste my time or yours with the conversation. The point of it is that we will be with this company for the long term, and thats when you want to make sure youre vigilant. I mean what, did we learn from the last ten years by not being vigilant to a lot of Economic Issues<\/a> . Now were saying obviously that this is something that need strengthening again, and there needs to be a conversation with shareholders, just as the company had indicated back in 2004 if there was need for changes, and that hasnt happened. All right. Do you still like having exposure to stocks the way you do in this environment. Would you continue to put money the way you have into the equity market, seen, given what weve seen. We think the u. S. Economy is showing signs and we continue to invest in the equity markets. Thank you for your time today, sir. Really appreciate that. There is a debate though about whether or not splitting up the chairman and ceo role is appropriate, and theres a fair amount of people out there who say when you have one person in charge, it actually works because they are in charge of all, you know, aspects of the company and thats why the company does so well, but i can understand the other side, too. It works until it doesnt work. Yeah. And then its time to split it up. A company that blows away all expectations on disney and you question why. Exactly. 40 minutes before the closing bell sounds on wall street. A market thats up 92 points on the dow. A 90 chance of failure, what one wall street firm is predicting for the newly launched blackberry 10, and find out if its time to hang up on this stock after its had a huge runup over the past few months. What happens in vegas stays in vegas but that doesnt apply to rome. What happens there may hit every investor hard on monday morning. 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This ge locomotive can tell you exactly where it is, what its carrying, while using less fuel. Delivering whatever the world needs, when it needs it. After all, whats the point of talking if you dont have something important to say . One wall street firm is throwing cold water on hopes that blackberry with complete its turnaround. Se seema mody is live with more. Reporter mkm partners downgrading blackberry shares to sell. The analyst lowering his price target to 10 bucks a share, writing that this reflects the lower probability of success we attribute to blackberry 10 following our own testing of the z10 and the momentum stallout in the uk after two weeks. Further concern if blackberry can really hit the ball out of the park with its line of smartphone devices. The stock is down about 6 on the week. Maria, back to you. Seema, thanks so much. Was blackberry a buy on weakness, or is the new phone a disappointment . Is that all she wrote for the stock. On the technical side of the story j. C. Ohara with phoenix Partner Group<\/a> and on the fundamentals zachary karabell. Good to see you both. Zachary, first you and the fundamentals. What do you think of blackberrys prospects . The new phone may be as great as everyone says, i havent seen it, but it is a really, really, long, hard and uncertain road for blackberry to climb to recapture a mind share and market share enthusiasm. I gave up my blackberry six months ago and got an iphone. You know, the fact is it is really rare for a company to go down as quickly as blackberry did with basically one product, right . They did not diversify and then reverse course and go up again. People point to apple in the 1990s, but for every one of those theres a palm which, you know, we all remember and died a quick and ignominious death. Good analysis there. J. C. , what about the charts . How do they look to you . The charts are showing theres real indecision between the bulls and the bears. I could give you five cases for the bullish and five for the bear. The charts are at a very interesting point. Looking at a longer term chart, a gigantic run up to 18 which acted as resistance and then we pulled back. We stopped on the 50day moving average. The bulls need to vigorously defend this 50day moving average. Weve seen historically if we break to the downside the prayers will break and take over the stock. Right now the shorter term trading pattern is falling into a wedge shape and thats basically a gigantic battle between the bulls and bears right now. They are fighting for control of this stock and the two levels that im really watching are 13. If we break below 13, the bears have control and if you go above that, the bulls will take over. You havent decided . I think theres a lot of burlish and bearish talk. Ill follow the break and ill trade that. Go ahead, zach. One of these cases where there may be a really volatile high motion trade because its such a binary outcome, but how this stock does will depend actually on whether or not blackberry actually sells phones. Short term, options window where you trade volatility, but just from a fundamental level, its very hard to think it a this is like a longterm commitment investment given all the negative trends for blackberry right n. O. W. Now. Well leave it there. Gentlemen, thank you so much. See you soon. 30 minutes to go. What do you think . Will we do it . The dow needs to be up 101 points to finish higher for the week. Were up 96 points right now. Its pretty close. I dont know if were going to do it, i dont know. As we first pointed out yesterday, there was an unusual spike in hewlettpackards shares a minute before they reported the better than expected quarter. Former s. E. C. Chairman harley pitt will join us. 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Its up 13 plus right now, but whats also, of course, raising eyebrows is the spike we saw in the stock and in the volume just minutes before that report was released last night. Josh lipton breaks it down for us. Hey there, bill. Action in hewlettpackard. We want to highlight for viewers and that we have flagged for regulators yesterday as we headed into the close. We suddenly saw that stock pop, and that move on solid volume. Volume really picking up in the final hour of trading. Now, this was before hp reported quarterly earnings. Jon najarian, options monster cofounder reported we saw heavy volatility in the options and then the stocks surged higher and rocketed up. The pcmaker reporting better than expected Quarterly Results<\/a> and forecasts. Najarian said somebody thought there would be a bullish report or somebody knew there would be a bullish report. Cnbc has contacted the s. E. C. , alerted them to the action. Their response, no comment. Bill, maria, well keep you posted. All right. Thank you, josh. An expert on what happens when there are suspicious market movements with us next. Harvey pitt, the former chairman of the securities and exchange commission. Mr. Chairman, good to see you again. Welcome back, harvey. Thank you, good to be with you. What do you think . Does this look fishy to you . Well, in my experience usually people arent lucky this way. I think it definitely looks very suspicious. So what happens now, harvey . I mean, when youre at the s. E. C. And they see Something Like<\/a> this, whats the protocol . Well, the first thing is this probably got kicked out of the s. E. C. s market Data Computers<\/a> that watch how the markets react and corollary Market Reaction<\/a> to an announcement of a transaction or event, so i would suspect that people are looking at this, and the s. E. C. Staff will then go to the various brokers that executed these trades and get their information about who actually put these orders in for which the brokers executed them. Just executing an order though, thats not illegal. You have to figure out the intent. You have to know whether they had inside information at this time. How does this work in this 21st century of ours with all the presumably Great Technology<\/a> at your fingertips at the s. E. C. . The s. E. C. Will probably get from hp a chronology by email or electronically in which every person who knew about what was going on will be listed. They will then look at the people who are behind the trades and go to the brokers and try to find out not just who place the the orders but who was behind the placing of the orders. Theres a lot of leg work that has been down by the staff has developed a real expertise in doing this over the years so they are quite capable. Where are we these days in terms of crime moving higher, trying to push the envelope and get an edge fraund lengthy . Can you compare this moment in time to others . Yes. And i think what weve seen, maria, is weve seen a move away from wall street which has learned a lot of lessons and now what were seeing is these are either hedge funds that weve seen a lot of recently or its corporate america. People who had access within a corporation and abused the trust of knowing that data. Are penalties just not Strong Enough<\/a> . I mean, people are still doing this. You look at this story with hp. You look at the h. J. Heinz story before Warren Buffett<\/a> announced the deal, the whole thing. Is the rirk osk reward balance,n the bad guys decide to do the insider trading, is it more profitable to do it and worst the risk because the penalty is not all that strong . The penalties have been ratcheted up over the years, and while you can always have them stronger, i dont think the problem here is the severity of the penalties. I think its simply in bad Economic Times<\/a> people are looking for whatever advantages they have, and its a triumph of hope over experience. Wait a minute. Bad Economic Times<\/a>, i get that, but this was going on during the dotcom boom. Those were great times, else especially on wall street. It goes on a lot, and the only thing i can say is that there are a lot of people who believe that maybe, maybe they have come up with a way to get away with that kind of crime and eventually the government will watch up to them. It may take a while, but the government will get there. Thats a good point you make. It may take a while. How do you feel about the s. E. C. s resources today . Weve got a new commissioner coming in likely, mary jo white, whats your take on her, and do you think that the s. E. C. Has the wherewithal and the resources to actually do what needs to be done in a world where they are taking on many, many more situations with dodd frank . They are overseeing many more institutions. Do they have enough power to do so, and when i say power, i mean resources, people and knowhow i think the new chairman when shes confirmed, mary jo white, is going to be sensational. Shes smart. Shes creative. Shes effective. I think shes a wonderful choice. With respect to the s. E. C. s resources. The s. E. C. Has been understaffed, undermanned for a long time, and dodd frank has exacerbated that situation. Ive never met a chairman or a former chairman of the s. E. C. That said, you know, were fine. Weve got enough money. But i think in this case they really have been really desperate for resources. So we hear, again. Thanks, harvey. Thanks, harvey, very much. Always good to see you. In the final stretch for the week. 20 minutes before the closing bell sounds on wall street. Hey, looks like were going to do it. Think we will . Up about 105. Thats to end positive for the week. Were in the green for the week right now. By the way, did you see, the dow has been positive every single friday this year so far. Wow. Fridays are good. This very resilient market despite all the sky is falling warnings due to hit in a week from now. Why is wall street ignoring those dire predictions . Sxwlnd a huge event overseas that can impact our investments. Michelle carusocabrera here with the latest. The first elections in italy since the First Financial<\/a> crisis. What depositly need to do in order to keep the Financial System<\/a> stable. The answer is live next on the le bel live from rome. s number . Bring it up to 90 decatherms. How bout ya, joe . Lets go ahead and bring it online. Attention on site, attention on site. Now starting unit nine. Some of the worlds cleanest gas turbines are now powering some of americas biggest cities. Siemens. Answers. [ male announcer ] to hold a patent that has changed the modern world. Would define you as an innovator. To hold more than one patent of this caliber. Would define you as a true leader. To hold over 80,000. Well that would make you. The creators of the 2013 mercedesbenz eclass. Quite possibly the most advanced luxury sedan ever. See your authorized mercedesbenz dealer for exceptional offers through mercedesbenz financial services. Welcome back. Mary thompson is stepping in now with some breaking news on that fight between Greenlight Capital<\/a> and apple. Mary. Reporter thats right. Its a victory for David Einhorns<\/a> Greenlight Capital<\/a>. Judge Richard Sullivan<\/a> ruling in favor of Greenlight Capital<\/a>. Einhorn had sought to block shareholders from voting on proposal two of apples proxy. The judge basically granting that injunction, and had a this means is that apple is blocked from allowing Share Holders<\/a> to vote on whether or not the firm should issue preferred shares. Now, for apple this shouldnt change anything because the company had no plans to issue preferred shares, something David Einhorn<\/a> proposed yesterday in an hourlong Conference Call<\/a> to his investors. He wants apple to use the preferred shares he referred to in order to unlock or distribute some of the 137 billion in cash that apple has on hand. The next date in this case is march 1st, the judge saying that at that point both parties should submit a joint letter outlining the next contemplated steps in the case as well as a joint Management Plan<\/a> and scheduling order. Back to you, maria. The stock has done nothing so apparently its had no material impact. Meanwhile, elections matter. This weekends election in italy could have an impatient here. Michelle carusocabrera is joins us to tell us why. Just the stability of the european Financial System<\/a>. What investors need to see is a leader or Leadership Team<\/a> that knows how important it is to right italys finances so Interest Rates<\/a> stay low. If you owe a lot of money and the interest you have to pay on it starts to rise a lot, it gets a lot harder to pay it back. If you look at italys Interest Rates<\/a> over the last week and last couple of weeks, they have started to rise because investors are nervous that the outcome of this election might be very unclear. Lets show you the four candidates and what investors are hoping for. Left to right, hoping that the candidate on the left, luigi brusani, appears to be in the lead, comes out number one as the polls suggest. He doesnt have enough to control the entire government so investors are hoping he might form a coalition with the man on the far right, mario monti who is the current prime minister, not elected, a technocrat and has done a lot to try to improve italys finances. The problem is that may not happen because you have two disrupters. Silvio berlusconi, the former prime minister, three times now making an incredible comeback, despite all kinds of issues with the law, and also a comedian who has also suddenly skyrocketed into the polls, really capitalizing on all the discontent here in the italian so seat because they are angry abo about. Wow, what a story. Talk about a comeback. Silvio berlusconi. Back again. Thanks, michelle. Up against a comedian. When in rom. All right. There are so many things we were saying but we wont get to them right now, but we are watching this market very carefully. 15 minutes left. The dow up 106 points. If we were to close there wed be positive for the week, and we certainly werent thinking that was going to happen. I dont know if you want to answer this question, bill, but has the fed been holding this market back . Sounds a little nuts, but our next guest says reducing economic stimulus could spark a bigger and a stronger rally. Wow, cant wait to hear that reasoning and canadas ambassador to the u. S. Is blasting the media for biased reporting on the longdelayed Keystone Pipeline<\/a> as gas prices soar. Of course, this issue takes center stage, and hell be here later to defend his position later on the closing bell. Welcome back. The conventional wisdom is that this market has been artificially propped up but our next guest says the market doesnt need the fed right now, is that what youre saying . Definitely had an influence up to this point. I think the marginal small returns Going Forward<\/a> is actually going to hurt it. It carried it and helped and now its time to take off the training wheels and let the economy. What did you make of the selloff we saw the last two days that occurred precisely after the feds minutes came out suggesting that they were thinking about reducing the quantitative easing . Sdmt market has to adjust to the reality which means they dont need that Going Forward<\/a> but thinking about two, three years down the road. If the fed starts to raise Interest Rates<\/a> which is the right reason, economy is Getting Better<\/a> and inflation is contained thats a god point for equities. Theres so much debate about the Downside Risks<\/a> of the fed and the potential for unflakes. What do you think. Andres is right on when he says this market is being propped up about the the fed, but now should they be stepping out of the way . Would that be a positive . Its a sign of health, a sign that the patient is able to walk out of the helicopter without europe came in with bad pmi minutes. China and we had the pmi numbers in the states. They have not come in good. Now the last three, quester risk, you and maria have been talking about. Gasoline prices are up 50 penalty, 47 cents in the last month, and finally the the gasoline prices. I knew you were going to forget number seven. Its in there somewhere, david. The sequester, gasoline prices and payroll taxes going up. The tax thing. You threw me off. Youre talking about the challenges, so you think the market gets through all of this. Market has acquitted itself well. It will be eight weeks in a row and that was a negative the market had run too far too fast, and if this market turns like this, thats a good sign. Arent we due for a correction at some point . I think at some point youre due for a correction. I always worry when markets go up in a straight line, either downside or the upside, not too good. Some of this is probably healthy but for longterm investors equity is still the unit. As earning, they will raise the dividend, the china mobile contract possibility, the lowpriced iphones. Pie some apple. Its come down, 13 to 15 . And right now the stock is trading and its up not even 1 . As bill mentioned earlier, hasnt really done anything. How much do you want to be exposed . Drug stocks, maria, johnson, pfizer, abbott, buy those stocks, up 9 , 10 . They are leading the market. Defenses, a sign of looking for yield. Would you take financials then if you think that the fed when they reduce quantitative easing presumably rates go up and that could be good for the financials. Also on the back of housinging right, if housing prices continue to go up higher, it helps lending as well as prices and overall the wealth effect starts to take concern. Will we sit with unemployment at a high number and a jobs number comes out nextied. Next friday is st. Frances day and we want to Danica Patrick<\/a> a very fast finish in the daytona 500. More on that coming up on Danica Patrick<\/a>. You mentioned earlier this industry overall is like so popular, and so i think people will love what weve got coming up on that. In addition to the apple meeting, you also have the gdp report out next week. Last time we saw a contraction. Well see if that actually goes positive or goes contraction again. Buy japan on a hedge basis. The entire company. Were going back with the clothing countdown for thisied. Millions. Americans have an error in their yesterday report and worse than that its hard to have one of those becomeses. Also, the os sars handing out this woman is berg the gold san. Find out if this is a golden opportunity to buy the commodity. But first, youre watching cnbc, first in business worldwide. [ male announcer ] it was designed to escape the ordinary. It feels like it can escape gravity. The 2013 cclass coupe. Starting at 37,800. Otherworldly things. But there are some things ive never seen before. This ge jet engine can understand 5,000 data samples per second. Which is good for business. Because planes use less fuel, spend less time on the ground and more time in the air. Suddenly, faraway places dont seem so. Far away. [ cows moo ] [ sizzling ] more rain. [ thunder rumbles ] [ male announcer ] when the world moves. Futures move first. Learn futures from experienced pros with dedicated chats and daily live webinars. And trade with papermoney to testdrive the market. All on thinkorswim. From td ameritrade","publisher":{"@type":"Organization","name":"archive.org","logo":{"@type":"ImageObject","width":"800","height":"600","url":"\/\/ia801407.us.archive.org\/19\/items\/CNBC_20130222_200000_Closing_Bell\/CNBC_20130222_200000_Closing_Bell.thumbs\/CNBC_20130222_200000_Closing_Bell_000001.jpg"}},"autauthor":{"@type":"Organization"},"author":{"sameAs":"archive.org","name":"archive.org"}}],"coverageEndTime":"20240617T12:35:10+00:00"}