The next battle face aing dysfunctional government is come in just a few months. Why one former ceo says he feels used and america is going to hell. And a fashionable forecast. The man behind more than a dozen Luxury Brands tells us whats hot and whats not. On the money starts right now. This is americas number one Financial News program. On the money. Now maria bartiromo. Heres a look at whats making news as we head into a new week on the money. A crucial Financial Report out on friday. The economy created 155,000 new jobs for the month, and that was slightly below expectations, but the unxmt rate states at 7. 8 , which was actually unchanged from november because november was revised upward to 7. 8 as well. Well, after a painful and protracted battle in government, president obama signed a compromise bill avoiding the fiscal cliff. It makes the bush era tax cuts permanent, except for individuals with incomes over 400,000. It also extends jobless benefits for the longterm unemployed, allows the payroll tax holiday to expire, which, by the way, raises Social Security taxes by 2 for everybody. The measure increases taxes on Capital Gains and dividends to 20 for those making more than 400,000. Reaction from business was fierce. Its amazing how the politicians on both sides of the aisle were talking about how the bill to address the fiscal cliff needed to be balanced, and what came out couldnt have been more imbalanced, sort of by definition, with nothing but tax increases. We have to get something in a couple of months because all we did was push it out a couple of months before we have to address these issues again. Well, im encouraged in one sense in that at least the vast majority of american taxpayers will know what their rates will be and theres not that much of an increase. The markets were happy with the deal kicking off the new year with a bang. Up 300 points on wednesday. The best day in more than a year. Then the market fell slightly on thursday. Stocks, though, rose on friday. Avis is about to swallow up zip car. The Car Rental Service buying the Car Sharing Service for 500 million. Avis is trying to broaden the base and reach a younger demographic. The u. S. Has avoided falling off the fiscal cliff for now, but there is much more to come. Is washington the biggest threat to our economy these days . Joining me now is mohammed elarian, cochief Investment Officer of pimco. Thanks for joining us. Great to see you again. Thank you, maria. So lets start with the jobs numbers. The economy adding 155,000 jobs for the last month. The Unemployment Rate at 7. 8 . We can d see strength in the construction and manufacturing sectors. What do you think this report tells us about where we are now in the economy . It tells us, maria, that the economy is healing and that the labor market is healing. Not only did we create 155,000 jobs, but we also increased the purchasing power of the labor force by 4. 1 yearonyear, and we also saw some improvement in the structural indicators. The longterm unemployed are now down to 39 of total unemployment. Thats the good news. The bad news is that its still a very gradual process, and in particular it is vulnerable to dysfunction and polarization in washington. Total dysfunction, mohammed. Lets talk about that drama over the fiscal cliff. Of course, the drama, i guess, goes away temporarily with this agreement on tax rates, but in just a few Months Congress is going to have to deal with the debt ceiling, and im being told, you know, the debt ceiling, the sequester and then a continuing resolution to Fund Government spending is going to be an even bigger fight. What do you expect in the next couple of months . The sequester and the continuing resolution. Whenever theres an agreement, maria, we look for two elements. Content and momentum. Was the content sufficient, and clearly it wasnt. Thats why we have another crisis coming up. Also weve got no momentum. Its not as if democrats and republicans came out feeling good about this. They came out feeling bad about this, and, therefore, theres absolutely no momentum for cooperation, so markets better have the seat belt on because were going to have more Political Drama in the next few weeks. Were all talking about taxes going higher on the rich, and, yet, this Social Security tax is going to hit everybody. What impact will this have . So, youre right, in terms of economics, the biggest impact is on the payroll tax because the propensity to consume or put another way how much of each dollar is spent on goods and services is highest on this payroll tax, so this is a critics. The good news is theres enough momentum in this economy to absorb the impact and grow at 1. 5 to 2 . Not a great growth rate, but certainly not a recession. Here we are talking about tax with this most recent debt deal, but were going to see some pretty significant spending cuts in the debt ceiling deal, right . Yes. Were going to have to resolve what was left untouched. There will be agreement on longterm and medium term reforms on the spending side, so that we can focus on other things. What about the Federal Reserve . That was also in the news. The fed releasing the minutes this week. There was word that a number of members of the fed wanted to stop this bond buying program, the socalled quantitative easing at the end of this year. Here we have spending cuts and uncertainties in the economy, and the one stimulus that everyone has been really looking forward to, the Federal Reserve stimulus, is now being threatened to come to an end this year. Yes. The market got worried and said, oh, no, maybe the fed is not as committed to qe and stimulus as we thought. I think thats the wrong interpretation, maria. What we think is more likely is that certain members are putting a market out. Theyre reminding others, including the politicians, that there are costs and risks involved in what the fed is doing. They dont want the politicians to believe that the fed can carry the whole burden for this economy. Bottom line, mohammed, what do you want to do in this environment if you are an investor in the market . So it depends on your starting position. If you have already taken on a lot of risk, youve done really well and time now to trim it back, we have economic uncertainty, we have political uncertainty, and we have a certain amount of policy uncertainty coming out of europe. We should take some chips off the table. Risk assets. Equities and higher bonds that have done extremely well. If you are conservatively positioned, stay there, because theres still value, although not great value. Prices have really about an artificially elevated, and the most incredible thing is keep an eye on the fed because the fed is the only thing thats keeping valuations above fundamentals. If the fed steps away, then valuations will come down. All right. We will leave it there. Mohammed, always wonderful to have you on the program. Thanks so much. My pleasure. Thank you, maria. Well see you soon. Mohammed elarian joining us. Up next, were on the money. A bank ceo that says the fiscal cliff deal is a raw one. Why he says this country is going to hell. His quote, want mine. What he would do to fix it. Later, the french ceo who oversees some of the best dressed names around. From gucchi to mccartney to your are anning shoes. Retail conglomerate ppr. Well take a look at how the stock market ended the week. Is he mad as hell and doesnt want to take it anymore. The former chairman and ceo of Wells Fargo Bank is blasting the fiscal cliff agreement and to put it mildly is not happy with washington or this deficit deal. Dick joins me now with more on that. Li there, maria. So many Business Leaders are calling this deficit deal a disaster or joke. You are included. Let me ask you, isnt some kind of deal better than nothing at all . I dont really think so. All were doing is kicking the can down the road. We have the debt increase coming. We sec west rags. We have the continuing resolution. We just go from one minicrisis to another. Dont solve anything. Most importantly, dont give confidence to the American Public or american businesses that were dealing with our problems in a way that is going to help grow the economy over time. Yeah. That makes a lot of sense. I mean, it feels like the economy is handcuffed, and businesses are not going to spend money if they dont have the certainty. Let me ask you, because this congressional deal had few, if any, spending cuts. How is it possible that after all of this talk about raising taxes on a small number of people, not putting a dent in the debt, the 16 trillion debt, how is it possible that this congress accepted higher taxes with no spending cuts, and what kind of spending cuts would you like to see . Its stunning. Its inconceivable to me. We should be adopting what simpsonbowles did that said for every dollar of revenue well, need 3 worth of expense cuts. Its very simple. Thats the only way we get to with wr we need to get. There are many areas of expense reductions, but fundamentally we have to attack entitlements. Thats theyre growing at a level that is unsustainable, and if we dont address entitlements, we are going to be in a fiscal mess forever, and were going to have slow growth, and were never going to get out of it. Do people understand this . How do you educate or engage the American Public to get more involved in this debate . I mean, whats the average consumer or investor missing out on, and what do they need to do . Well, i think education is very important. I think thats where both parties, particularly the republicans have done a terrible job of influencing public opinion, but you have to simplify the issue, and the way i like to talk about it is that if you take our countrys fiscal situation and put it in family terms, we have a family thats earning 22,000 a year thats spending 38,000 a year, has already on its credit card balance 143,000, and that balance is increasing at 10,000 to 15,000 a month. Now, that family will never be able to pay off that debt, so their children and grandchildren are going to have to do that. I dont think thats what American Families really want to have happen. You know, for a little while the Regulatory Environment was front and center. What can you tell us about the Financial Services sector . People are not sure about the financial sector, about capitalism in general. It seems like because of this fighting in washington its setting the tone for the average persons mood out there and their feelings toward lawmakers as well as bankers. No question about that. Half the rules still havent been formulated. Most of those will have a negative impact, in my opinion, on the economy, and, you know, it just adds to the problems that we have. We still dont even know its supposed to come out very soon about how we are supposed to lend money from a mortgage standpoint, and the Consumer Protections agency is working on that, but theyve been working on it for two years, and were finally seeing the housing coming back, and, yet, we still dont know what the rules are on based upon how we are supposed to make a mortgage. So what did you mean specifically when you said america is going to hell . Well, just what weve been talking about. Its totally dysfunctional. We have an economy that in my opinion that can be growing at 50 to 75 faster than we are. We can have lower unemployment. Its not the economy. Its not macroenvironment. Its our own politicians in washington that are causing our economy to be slow and our unemployment to be high. Thats the country is going to hell when that occurs. 535 people are causing, you know, 240 Million People to suffer economically. Thats just not right. Amazing. Dick, good to have you on the program. Thanks so much. Thank you, maria. Well see you soon. Up next, were on the money what the duchess of cambridge, the daughter of a beatle, and a fashion phenom have in common. Three letters that make up one of the fashion worlds biggest powerhouses. Ppr ceo on the luxury consumer. Look for us on facebook mariaboard romeo. From high tops to couture. French conglomerate ppr blankets the Retail Industry with a staple of nearly 20 and luxury and lifestyle brands. Like Kate Middleton favorite alexander mcqueen, gumpy, and stella mccartney, and puma. Ceo francois, husband to actor selma hyak oversees the Company Founded by his father. He wants to turn it into a fashion and sports powerhouse, finding its way into consumer closets the world over. You have restructured the company. You have an emphasis, obviously, on the Luxury Brands as well as on sports, on puma. Weve been transforming the group from a financial conglomerate where we were three years ago into a very Specialized Company dealing in the ready to wear and accessory business. I looked at what was the last 50 years in terms of growth. It was 800 Million People. Americans, japanese, western europeans. The next 50 years we are adding three billion new consumers china, india, brazil. Lets add indonesia to that, for instance. The growth that we come in front of us in the next 50 years have nothing to do with what has been achieved in the last 50 years. The only difference is that it will be done in those new markets, one, and the specificity of those markets. Young people loving brands, loving sports, and becoming rich much sooner compared with what weve been enjoying in the other markets, which will be very strong growth in the next ten, even 20 years. These are mega trends, and also in that mega trend is the fact that women are outnumbering men. Women of color, asians, latinamericans, and youre looking at young people as well as women really driving business. When it comes to Luxury Brands, when it comes to ready to wear accessories, its very much driven by women, of course, and when it comes to sports, 15 to 25 years old customers, very, very important in those countries. We have although brands on to deal with those customers. I think we are ready for very, very nice adventure in the future. You announced a joint venture with yukes to boost the online selling. How important is technology, given the fact that such an important customer is this young person who is savvy with technical following . For me being online its part of the reality of every brand inside ppr. We need to have perfect ecommerce activity to make sure that the basic ecommerce functions are at the right level, but this is not enough to differentiate yourself from the other brands, so the next step would be even more important. Fashion designer alexander wang, named creative director of ballenciaga. This is a highend fashion house. Does appointing a Young American designer mean your staple of brands is shifrting. The designer is shifting. He is amazing with this young guy, and he did such a wonderful job in building his own brand here in america. Its an International Brand now. He wants to express his talent also in another dimension, which is very high luxury brand. When you are at a fashion show, what is going through your mind in terms of, you know, whats on the runway . Do you see beautiful clothing . Do you see, you know is that the nuts and bolts of the business . The fashion show is a very important moment. It is only 15 minutes, but its a concentration of the theme of the season, technical skills, new materials, new colors, sometimes new design for the brand. Everything is put together in a very harmonious activision of the designer, and you need to understand that so what is hitting the stores is consistent with that activision. Im glad we touched on technology because i wanted to say you were an intern at hewlettpackard early in your career. You know that. Thats wonderful. Does that give you a sort of underpinning of how Important Technology is to the business, or is this just such a long time ago . Im passionate about technology. I love programming. I love new technologies, and im continuing investing in new technology. Yeah, its not only about our businesses. Its also whats happening in the world. Well be watching. We hope youll come back soon. Thank you very much. Thank you so much. Francois henry joining us. Well look at the news that will have an impact on your money, and cash only at the holy sea. Why electronic transactions in vatican city are having a crisis of faith. Many hot dogs are within you. Try peptobismol togo, its the power of pepto, but it fits in your pocket. Now tell the world daniel. Of peptobismol togo. For more, check out the website otm. Cnbc. Com. Hope youll follow me on twitter and on google plus. Look for maria bartiromo. First, though, take a look at the stories coming up in the week ahead that may move the markets and impact your money this upcoming week. Earnings are out for the fourth quarter. The Earnings Period kicks off on tuesday. When we hear from alcoa, monsanto and wells fargo, among others. We get the latest and greatest in technology with the Consumers Electronics show that ginsz in las vegas. On thursday the European Central banks governing council will hold its first meeting of 2013. On friday well learn if the u. S. Is importing or exporting more goods with the report of the International Trade balance. And, finally, today purchases near the pontiff are cash only. Starting new years day the vatican began declining electronic transactions like credit cards and debit card payments within the walls of the holy city. The freeze follows a decision by the Italian Central Bank that the papal state did not comply with International Regulations regarding money la