Transcripts For CNBC Power Lunch 20121024

This has been a turning point hour for the past couple of sessions. The hour of power. Sue herera monitoring it all from downtown. The markets did bounce right at the open. Not a huge bounce but the bulls will take it. Were in the green across the board. Is dow is up 52 points at one point, were now up 29 on the dow. Up 2 1 2 in the nasdaq and the s p is up 2. 50 as well. Well see some those gains waning, well monitor it throughout the hour. Breaking news on the housing front. Scott cohn on a huge lawsuit involving the big mortgage mess. These just keep on coming, sue. Once again a major bank hit over the actions of a company that it took over during the financial crisis. In this case the Justice Department says that bank of america continued the fraud that it started that had started at countrywide which it took over in mid2008. According to the civil suit filed by a manhattan u. S. Attorney, as the Housing Market was beginning to collapse in 2007, country wide launched a program code name hustle to crank out new mortgages as fast as they could and sell them as fast as they could to fannie mae and freddie mac. Bank of america of course took over countrywide in july 2008. The suit says by then b of a knew about operation hustle, and even to an extent helped keep it going. The suit says the bank would not buy the faud lent mortgages back from fannie mae and freddie mac essentially leaving the taxpayers stuck with them. The suit notes in 201, bank the americas ceo was quoted as saying, at the end of the day, well pay for the things countrywide did. Now the Justice Department is demanding b of a do just that, it is a 1 billion civil suit. We have reached out to bank of america for a comment. Were still awaiting to hear back. Of course this whole idea of suing a bank over the sins of a former bank has been criticized by House Financial Services Committee Ranking member barney frank. Barney frank will be on the closing bell today at 3 00 eastern time and well hear what he has to say. Hes always colorful. Thank you, scott, very much. Warren buffett speaking on cnbc earlier today saying housing is picking up. Take a listen. In the United States, actually Residential Housing is picking up. That will have a significant effect. It hasnt got ton any big level yet. But his comments are being backed up by new data today showing new home sales jumped and home prices are moving higher. Hold on though, there are also increasing fears about Mortgage Rates and what it actually takes these days to get a home loan. A real estate correspondent diana olick joins us and she has more on that. Hey, sue. In todays report was a real good sign that recovery appears to be sustainable. Take a look. Signed contracts to buy newly built homes up 5. 7 month to month and up a strong 27 from a year ago. Supplies are still low and the median price was up nearly 12 year over year. All this from the trough we saw in the winter of 2011. Now the concern Going Forward is potentially tightening credit. Im just back from the Mortgage Bankers Association Convention in chicago where the overriding themes were litigation, big shock there, given todays news, and new mortgage regulations coming in 2013. These regulations are designed to protect both lenders and borrowers. Theres a fine balance there that we have to figure out and i think lenders will probably err on the side of being conservative before they will find that balance and lend to the fullest. Again, tight lending but Mortgage Rates also rose again last week and are now just ten basis points before where they were before qe3. Despite the fed aging mbs, lenders are not passing on all of those savings, thats again due to high volume so they dont need to lower rates. And high uncertainty for 2013 so they dont want to lower rates. Much more on realtycheck. Cnbc. Com. Diana talking about the fed meeting right now to discuss Interest Rate policy, its stimulus efforts. Its decision expected in about an hour and ten minutes. It looks like election politics may play a part in fed policy down the road. Steve leisman here with part of the story. With the possibility that romney will win the white house, the street is beginning to think a little bit more about what he might mean and a reinvigorated gop in the house and senate could mean for the fed. Right. It is sort of interesting that the conversation hasnt been joined to this point but the rise in the polls has really bro brought it to the fore. What theyre think something a romney presidency means a more hawkish federal reserve, but when more hawkish . The thinking is he will not reappoint bernanke. He said as much. Whats that mean . It means a fed chairman, for example, like glen hubbard. Heres what barclays said. Any new fed chairman after january 20 14 14 14 is likely t more hawkish than under an obama presidency. Lets talk a little bit about whether there is any possibilities should there be a romney victory that he would begin nudging him out above his term ends in 2014. He cant force him to resign. It is a voluntary thing that bernanke would do. Dose have the ability in 2014 appoint the chairman an vice chairman and another member, beginning already actually. But the thinking is whether or not there is a war of words. And steven stanley, the economist steven stanley, doesnt think that bernanke would win that. He said, the fed chairman could resist the pressure, could trigger a potentially triggering an ugly standoff. In that standoff bernanke would have the low cards. Bernanke wouldnt want to politicize the fed but one wonders whether bernanke, knowing that mr. Romney has said im not going to reappoint you, whether mr. Bernanke would say some time in 2013, okay, im going to step down and give you the chance to appoint somebody now. So bernanke would be urged by people who know the fed and love the fed not to do that. To say no. Because that would be giving up the feds independence. On the other hand, this is one of the things thats being discussed now. Assume there are strong gains in the house, strong gains in the senate. That the republicans control both houses of congress and the presidency and theres strong criticism of the fed. Bernanke could maintain his policy and his independence, and yet that combination in congress and the administration would rewrite the feds mandate. Tricky thing as to how the fed would maintain its independence. A reminder, the fed is expected to release its latest decision on Interest Rates and its view of the economy at about 2 15 eastern time. You can read all this about this discussion we just had on cnbc. Com. Well do that, thank you. Street signs is also going to be all over the potentially market moving news with the reaction and analysis, including pimcos number one guy. Break news from the bond market. 35 billion in 5year notes up for auction. Rick santelli track being the action at the cme. Earlier this week we had an aplusplus auction. Whats this one look like . Today it is nothing but average. It gets above the sea today for 35 billion fiveyear notes. We priced within the range. 774 is the yield. 2. 91 10option average on bid to cover. Indirects at 43 . 10auction average. This auction right there, whisker under 43. It was pretty solid in the auction camp this was a little over 15 . Yeah, its pretty much average. What we gave away on bid to cover we gained a bit on direct. Pricing was solid. It is an average. Tomorrow is the last of the three 29 billion 7year notes. The market regaining its footing just a little bit after yesterdays thing. Where is the economy headed and what is the biggest headwind right now . Joining us, a guy who invests all over the world, 830 billion under management. He supervises them. Back with us on power lunch. Richa richard, good luck, before i forget, at the marathon in two weeks. Thank you, im going to need it. Youve done it before. 25 years ago so gravity has caught up. Okay. What is the market trying to tell us here . I dont think anything surprising. Its been interesting to me listening to the commentary in the last day or two. We had weaker earnings well advertised. We thought qe3 wed see lower growth in the economic data. We knew this. We didnt know wed have a meet in terms of politics. The bigger debate is until we figure out whats happening in the white house, but much more importantly whats happening in congress. House we dont expect to change. The senates actually up for grabs for the first time. It is a net gain of four. Or actually three, because if romney wins the white house, then the Vice President would have the tiebreaker. It is not that farfetched an idea. Were going to come back and talk a little more about politics second halfhour. But let me turn you back to todays housing news and the housing news that has been building over time. How do you assess the Housing Market in the u. S. Right now . So Housing Market for us is bottoming. That is consequential. But i think the critical point to me is not that it is going to be the delta that drives growth Going Forward, it is the double negative. Its less bad and a little bit better. Housing has fall ton a little bit less than 2 of gdp from at its peak, 6 to 6. 5 . Trick to me is the sentiment indicator. What youre watching bernanke try to accomplish from qe3 from asset class inflation, if housing makes people feel a little bit better, youll see that reflected in sentiment and consumption. By wait, were seeing that. Richard, well talk more in the next halfhour about politics and so forth. Down to you, sue. Tell richard not to worry about that marathon. Anybody could will sleep at night at manage 800 billion doesnt have to worry about the marathon. To politics now. Donald trump is unveiling his very big announcement regarding president obama. John harwood is in washington. He has the details. Whats he got, john. Sue, yesterday donald trump was on our air saying he would have a major announcement about the race. It wasnt major at all, turned out just to be another publicity stunt by donald trump appealing to the crackpot fringe of american politics that raises questions about Barack Obamas americanness. He offers 5 million for the publication of Barack Obamas passport application records, his college records, he also continued to raise questions about the president s birth certificate which of course has been released. So nothing for anyone to actually Pay Attention about. The Obama Campaign said direct your questions to the Romney Campaign since donald trump works for romney. The Romney Campaign doesnt want to have anything to do with this either, guys. John harwood, thank you very much. Shares of facebook seeing their largest oneday gain since its ipo in may after gaining gains in the key mobile advertising space. Has the social network finally figured out how to make money in mobile . Julia boorstin joins us from california. Hi, julia. Hi, sue. Well, it does seem to have figured mobile out. Ill tell you how Ceo Mark Zuckerberg plans to turn facebooks biggest challenge into its biggest potential opportunity after the break. [ male announcer ] this is karen and jeremiah. They dont know it yet, but theyre gonna fall in love, get married, have a couple of kids, [ children laughing ] move to the country, and live a long, happy life together where they almost never fight about money. [ dog barks ] because right after they get married, theyll find some retirement people who are paid on salary, not commission. Theyll get straightforward guidance and be able to focus on other things, like each other, which isnt rocket science. Its just common sense. From td ameritrade. The smasht genertock market is the best place to have money. To technology now. What do you know . You actually can make money on mobile. Check out shares of facebook. Right now up 4 on the day. Thats a 20 gain in that stock. The social media giant getting free upgrades on the back of its earnin earnings. Is facebook finally figuring out mobile . Julia boorstin is in beautiful newport beach, california with more. Reporter facebook surprised wall street with 14 of its ad revenue coming from mobile. Thats over 150 million. It is a big leap from the zero mobile revenue just months ago. Ceo Mark Zuckerberg said were just getting started. Wall street expects the revenue to grow before the run rate. Mobile helped facebooks advertising grow to accelerating growth up from 36 a year ago compared to last quarters 28 growth rate. Washington will be watching to see if it can maintain that acceleration. Zuckerberg says the company is looking for mobile revenue everywhere asking each team to own mobile monetization for their products since day one. Cheryl sandberg, the ceo, talked about tools to marth mobile consumers and rolling out more mobl ads to keep up the growth. On these trends, citigroup upgraded the stock to buy saying two of the biggest facebook risks, zynga dependency and mobile monetization, appear to be downsized. But facebook will keep growing mobile to a larger and larger percentage of its overall advertising revenue to keep up with its mobile users growth. Well have to see how all of these changes and all of this mobile growth impacts the selloff that we could see when facebooks lockup expires over the next couple of weeks. Julia, thank you very much. Were also apple, a day after it released its much anticipated ipad mini and one day before its widely watched earnings report. The stock up more than 15 this year but well off the highs. There you see it up 1 today. Yesterday not a very good day for apple. Tech reporter jon fortt back from the apple event out in san jose. Hes here at global headquarters. Lets first talk jon, welcome. You must have had a long red eye flight. But at any rate, talk about the pricing. Was it a surprise that it was as high as it is . Surprised some people. 325. They want 1ded 1. 99. I did a piece saying no way theyd sell this below 300. But i dont think thats necessarily a problem. Well see. Because apples been beating the other tablets at 199 with a 500 400 ipad already on volume. Now theyve got a cheaper one, it fills out their lineup. They might just continue to beat them they can come in at 329 and see how it goes. It may do fine. It is easier than to cut the price back down and it would be to start at 299 and say, wait a minute, lets take it up to 349. Weve now had 2, maybe 2 1 2 product announcements under tim cook. I got sense that yesterdays the stock market wasnt all that favorable. Compare the last couple of product announcements under come with comparable product announcements under jobs. I got to say, first of all, apple became the Biggest Company in the world by Market Company under cook so the bar is higher in some ways for him. Id also say the original ipad launch, the stock tanked on that, too. There were negative reviews about it. Of course it turned out it shook up the entire computing category. I remember asking on that day, why do we need this . But turned out we fell in love with it. Lets talk a little bit about earnings. We have to look at iphone number, 25 million, plus high news. The ipad number. People got spooked yesterday. A big reason the stock tanked. Tim cooks commentary on china. But people are looking to the Holiday Quarter more than this one for whats the really big deal. Jon, you have a big interview tomorrow. We want to tell but a programming note. Jon has a first on cnbc interview with microsoft ceo Steve Ballmer tomorrow. Talk about a guy who needs a hit. Ahead of the big release of windows 8 and its surface tablet. He needs a hit more than Alex Rodriguez needs a hit. Boeing shares hitting the skies this morning. Theyve beat their earnings estimates. Raising their outlook. The stock is up. 33 . Is it time for you to get in . Take a look at the days most active stocks. Bank of america is still up on the trading session despite that lawsuit we told you about at the bing beginning of the show. Sirius is on the list, at t and facebook. Well take a closer look at the telecom and social space after a quick break on power. The dow is up 18 points. Welcome back to power lunch. Im courtney reagan. Shares of Norfolk Southern sitting at session lows right now, down almost 7. 5 . The Railroad Company did post quarterly profit that was disappointing, down 27 . Also revenue disappointing in its two biggest segments. All of this garnering two downgrades today, citi downgrading from buy to neutral, bb and t downgrading from buy to hold kreting economic concerns as far as coal exportation is concerned as well as earnings management Going Forward into the first half of 2013. A monster day for earnings today. Boeing and at t among the heavyweights out. Zynga comes out after the bell. Apple and amazon getting ready to report tomorrow. Jeff kilberg, founder and ceo of kilberg capital management. Earnings per share of 1. 35. Estimate was just for 1. 13. The company also raising guidance for the remainder of the year. Do we like it . We do. For the first time during the dismal down beat earnings season weve seen them forecast a strength, an outlook to 2013. Theyre increasing their military planes as welling a commercial planes. This is positive and i think it changed Market Sentiment today. In an economically sensitive sector. Weve seen some of the other industrials like utx not able to do as well, but here boeing doing very nicely. At t earnings inching up a fraction of a percent but revenue falling slightly. Slowdown in the wireless companys contract cub scribe. E subscribers. At ts been late to the game. We saw them looking at verizon. Despite the fact at t is a 60 larger market cap here we really want to see them expand services. Right now despite the fact that they beat on that bottom line, it is a little lackluster and they have to be continue to draft ver son. Facebook beating expectations, having its best day ever right there, 4. 06 higher. You like facebook at the open. Ive liked it all the way here. Youve suffered. I certainly have but this is exciting. And i tip my hoodie to zuckerberg here this is a story, i think he should finally get some street credibility. Just a month ago everyone did not think they could address the mobile situation. He did. Unlike the yankees, he knocked the cover off the ball. A tip of the hoodie to Mark Zuckerberg. Love that, jeff. Thank you. Markets ticking higher after yesterdays selloff. Does confusion have its costs . A man with the answers, jpmorgans richard matigan. Well have an exclusive sitdown with the man many say was responsible for Internet Security after this short break. But gold prices are on the move. Sharon eppersons tracking things at the nymex. Holding on to this 1,700 level for gold. Looks like we may close just above that mark. Down about 8 here for the gold market, around 1,701 as final trades come in. Of course there is a lot of caution here ahead of the fed policy statement coming out. And also, of course, in light of the fact that were still seeing a great deal of uncertainty about europe. Yes, the flash pmi data from china was positive and that gave a little bit of a boost to gold overnight but that was short lived. Were seeing gold prices actually that are on track for their first monthly decline in four months time. We havent seen gold prices break below 1,700 an ounce since september. We saw that briefly earlier in the session. Across the board in the met aal complex, silver and copper prices down as well. The concerns in the Global Growth area are of parement concerns in these markets. To the trading action. Steady as she goes. Up 23 points. Bob pisani joins me. We arent expecting much from the fed. Narrow trading day, even on the advance decline line. Dollar a little stronger, commodities a little bit weaker. Whats not weak housing starts. Great number this morning. Im getting very excited about housing. New home sales highest since april 2010. Home builders all to the up side. I said im not expecting much of the fed. One thing i want they ought to upgrade their outlook on housing. I think the last meeting they taushgd about some signs of improvement on the housing. They ought to be more aggressive on the housing upgrade. I dont feel that strongly about other things from the fed well, if Interest Rates are edging up a little bit and we see refis and new loan applications wi application are going down. That doesnt bode well. Housing starts highest since 2008. All the numbers are moving in the right direction. I do think there is an upgrade. Im getting excited about china as well. I know thats choppy and we arent sure how it is going but the pmi number this morning better than expected. Hong kong has closed at a 52week high in the hang seng. This hasnt been a great year for china. The local market, the shanghai market, where only locals, chinese nationals can buy into, had a terrible year. Its now off since the beginning of september is up almost 6 . Thats when they started talking about stimulus and the bottom. I dont know. It is a close call right now. I agree. There are some people obviously betting that were at a trough in china. Absolutely, bob. Thank you. To the nadz now. Seema mody is following the big movers over there. We got to watch the levels on apple. Thats whats moving the nasdaq right now. The stock back in the green, up. 3 . Other big movers were watching netflix. Several sale side analysts cutting their price target on the stock citing weak subscriber growth, disappointing earnings. The stock hitting a threemonth low. But there are bright spots. Biotech and pharma. Better than expected earnings or regen. Americas Business Leaders pushing for a resolution on the fiscal cliff. Leading the charge today, General Electric chairman and ceo jeff immelt. Heres what he said earlier on squawk box. Were a member of a group called fix the debt. Theres almost 100 ceos a part of that. It basically endorses simpsonbowles. Think everybody believes well be plus or minus 10 of simpsonbowles. Lets get it done. Lets get it done. Whats wall street looking for . Back with cio of Jpmorgan Morgan private bank. Sue will joining questioning in a moment. Richard, over the next couple of weeks and certainly right after the election there are going to be lots of people out there saying, well, it looks like romney may win, so you should invest in this, you should buy this, you should sell that. Well, obama won so you should sell that and buy this. Is that any way to invest . Is that any way to run a portfolio . Is that anything you ever do . Its a great question. Im going to distinguish between investing and trading. Im sure there will be some pbrt trades around this. Similar to the discussion whether bernanke will stay in the fed . I think whats more is what happened in congress. Romney wins, probably good for business, pro beta. Bigger issue is where are we going on growth, muddling through. Where we going on earnings. Balanced and positive. You invest on a trend and you invest with a horizon of six months, 12 months, 18 months. So im hearing you say, if you want to trade by all means. The election, go ahead, take your mad money and do that. Lets turn to the fiscal cliff. You just heard mr. Immelt say that were probably going to end up within 10 or 15 of the simpsonbowles idea overall. So lets get it done. Do you think that is where were going to end up, and do you think that theres the political will to get something done before year end . The two people that have not swung directly at simpsonbowles are president obama and ryan. I think thats because at the end of the day, each are recognizing whatever is put back on the table, thats probably as close as were going to get a resolution. Ryan was on it but didnt vote for it. But he hasnt bashed it publicly. If he were lambasting it line by line, that may provoke him this afternoon in doing so obama hasnt really embraced it. Not embraces versus not attacking in a political forum, especially in an Election Year is a big deal to me. The issue is timing on this. To me the Inflection Point to the market is, if we can stem two bridges to have a real discussion around simpsonbowles, thats good news. Gentlemen, if i could turn you, richard, past those two events and where to invest now. Bob pisani just pointed out the fact that there is a lot of speculation out there that china has bottomed in terms of stock market performance. As you look around the globe, do you like that particular area of the world, or are you, as you have been in the past, looking at some opportunities in europe . Where are you looking globally . For our Global Investment committee this week we actually brought in an expert on emerging markets. We spent an hour and a half going through that, sue. Asia for us, a huge point of interest right now. China as well. But more broadly emerging markets. Theyve really suffered in the space of the last 12 to 18 months as the rest of the worlds recovered. So the interesting risk rotation i think in this financial depression debate youre watching Central Banks push, mean low yields, credit rally. Moving from the defensive nature of the u. S. Into emerges international markets. Thats high on our list, so is europe. Were looking to add especially to growth portfolios as we look ahead into next year. Lately when weven interviewing a lot of of big mon moneymakers like yourself, high grade or high yield still in terms of corps prats is front and center. Are you still in that camp or not . Is that trade too crowded right now . So weve been weve talked about high yield for last 2 1 2 years. Exactly. It is still a fair trade. I think the reality is the expectation on returns really needs to be reset. Were not going to see a year next year where high yield returns 12 to 14 . It is going it be to be a yield play so expect 4 to 6 returns. That will affect how people see it on an aftertax basis. We continue to own high yield. Investment grade for us is expensive right now. If we look at the position of it based on the treasury issues, id rather own high yield. In fact id rather own emerging market debt than i would investment. In about 38 minutes well hear from the fed and they will probably leave rates where they are. May make some talks about the bond buying, the qe. How has qe affected the economy or as set values or what youre doing in your portfolio, and do you expect it will in 2013 . So qe directly this may be controversial on the economy is literally pushing on a string. It is not having any direct cant. But theres a leap of faith. If it can instigate the fact we feel a bottom in housing, a wealth fact pass through and feeling people are investing in markets, that directly correlates into conception and consumption. If you look at the rolls, theyre up in retail sales, and in broad sentiment, its about greece. Mild indirect with greed because of asset reflation. Good luck in the marathon. Thank you, ill need it. Jpmorgan, private bank. Were also watching oil on the back of yesterdays dive. Right now checking how owl prices are performing. West texas crude has dropped more than 10 in the last two months. Jeff kilberg says this is oils last leg down before shooting back higher . Thats what i see, sue. We did see those inventories. That was that kneejerk reaction that cracked 85 in wti. Like you were talking about earlier, the chinapmi flash, some better economic. The qe data were about to hear, this is like the bottom of crude. I like to play that around this 31 level. The stop underneath at 28. 50. I think there is room to the up side as we will see crude oil go back up to 100. Yes, 100 by the end of the year, sue. Back to you. Yikes yikes, jeff. Thank you very much. See you in just a little bit. The threat of state sponsored cyber terror is strike beingality the United States. It rises every day. This month secretary of defense leon panetta warned of a pearl harbor like attack. Next, the man many says is responsible for developing Cyber Security in the first place. The ceo of checkpoint in a rare and exclusive interview right here on power lunch. As we head out, a look at the biggest percentage gainers on the nyse. Spartech up 60 . China hydroelectric up 16 . Lumber lick tate date quidators than 12 . Back in a moment. In charge of. How theyll live tomorrow. For more than 116 years, Ameriprise Financial has worked for their clients futures. Helping millions of americans retire on their terms. When they want. Where they want. Doing what they want. Ameriprise. The strength of a leader in retirement planning. The heart of 10,000 advisors working with you onetoone. Together for your future. But im still stubbed up. [ male announcer ] truth is, nyquil doesnt unstuff your nose. What . [ male announcer ] alkaseltzer plus liquid gels speeds relief to your worst cold symptoms plus has a decongestant for your stuffy nose. Thanks. Thats the cold truth lets see whats coming up on street signs. Mandy drury is here to tell us. It is the big fed decision today at 2 58 eastern. Well have preand postannouncement analysis. Doesnt even matter whos in the white house. Wouldnt believe whos saying it is a winwin either way for your money. Get ready, folks. It is time for another herb told us so. Well look at two stocks getting crushed. Herb is doing his victory lap and whether or not there is any relief in sight for these two stocks. Lots coming up for the big fed day special. Thank you, mandy. See you at 2 00 p. M. Eastern. Last month you may recall officials in the pentagon accused the iranian government of being behind a series of web attacks on u. S. Banks. Well, today the New York Times reported that iranian hackers were able to break in to the saudi oil giants Computer System earlier this year wiping out almost threequarters of the data on their servers. Today we have the man that many say invented Internet Security. Hes the ceo of checkpoint. Welcome, gill. Nice to have you here. Is there thank you very much. Good afternoon. Weigh in on this. Do you think iran is behind the wave of web attacks that i just mentioned . I have no clue. What is your suspicion . I really dont know. These attacks can be done by anyone, by individuals at home, by governments. By any organization with commercial motives. It is interesting, is it not though, that the cyber threat of these attacks hains creased so dramatically in just the last few months, it seems. I think the detection of things and finding out damages is increased. The risk has been there for many, many years. For the last three years these risks are going up in the exponential way. We see it all the time. You see it all the time. If thats the case, how prepared or unprepared do you think the United States is for this type of infrastructure attack . I think there always can be done more. I think most of the infrastructure needs a little bit of update and upgrades around that but i think overall, the world has security in it. What i found interesting about this perhaps you can address this is specifically, as it pertained to the u. S. Banks and the denial of service attacks that occurred last month. They seem to be downplayed by the officials of the banks. Obviously they want to reassure consumers certainly, but that seems to me to be a very vulnerable point of the u. S. Monetary system. Would you agree with that or am i overstating it . I agree and i think these attacks are also very, very hard to protect against because it is coming from tens of thousands and hundreds of thousands of sources and it is really hard to block them. But i think we and other companies are doing that every day. Weigh in on defense secretary leon panettas address last month. He was talking to a number of Business Executives here in new york and he warned of a pearl harborlike attack on the u. S. Internet infrastructure. Do you agree with that . It was a very strong statement saying an aggressor nation or Extremist Group could gain control of critical switches and derail passenger trains or trains loaded with lethal chemicals. He went on to say they could contaminate the water supply in major cities or shut down the power grid across large parts of the country. Do you agree with that . I dont know if it is that extreme but i think the risk is absolutely there and i think we need to be prepared and every business it is not just the government agencies, it is not just the infrastructure of companies. Every individual have to be prepared against that because every individual can be part of an attack. What does the United States need to do now to upgrade its infrastructure security . I think there is a lot of new technologies which needs to be implemented. I think we just the reason im saying everyone of us, because these attacks are not carried by Foreign Government attacking our infrastructure. Its these foreign or these organizations, wherever they are, infect tens of thousands or millions of computers and these agents create the attack. Each one of us can be part of that attack without even knowing it. So i think we all have to defend ourselves and every company at least with my business is dealing with corporations have to get the latest security updates and the latest commitment to deal with cyber attacks. I wonder, we just looked at the stock price of checkpoint. As i mentioned, a lot of people think you are the father of Internet Security at this point. Stock is up 2. 66 today but the stocks been underperforming over the last, say, 6 to 12 months. Why is that . What is wall street not appreciating given the strong statements weve heard from washington. What is it that theyre not seeing in your stock, do you think . I think we had a very nice runup of the stock price in the last three years. I think theres now some kind of overreaction or fear about the future. I dont want to relate specifically to whats going to happen next quarter but i think overall the need for securitys something thats been with us for many, many years and i think we will continue to lead with the right solution and the most sophisticated solution for any kind of financial cyber attack. Gil, thank you for joining us. To courtney now with a market flash. Thank you. Take a look at three stocks on the move because of the results of a bankruptcy auction. Walter Investment Management has won a bankruptcy auction for residential capital. This is the mortgage unit of allied financial. It filed for bankruptcy in may. I believe it was Nation Star Mortgage that lost this battle. As a result, those shares are down about 16 . Thank you, courtney. The countdown to christmas is on. 61 days, 10 hours, 31 seconds to go. If youre looking for a present for the person who has everything, perhaps this designer bike by gucci might be of interest. But is it worth the cost . Well give you the rundown. It is expensive. Thats one thing for sure. Well be right back. Oh. There you go. Wooohooo. Hahaahahaha im gonna stand up to her no youre not. I know. You know ronny folks who save hundreds of dollars switching to geico sure are happy. How happy are they jimmy . Happier than a witch in a broom factory. Get happy. Get geico. Fifteen minutes could save you fifteen percent or more. [ male announcer ] it was designed to escape the ordinary. It feels like it can escape gravity. The 2013 cclass coupe. Starting at 37,800. Welcome back. Time for the power rundown. With us today youre here in the house so were going to put you to work. Were going to get our moneys worth. Kayla tausche is here with us. Start with facebook today. A company you guys both know intimately. Has it finally turned the corner on how to monetize mobility . Thats a fancy way of saying make some money. I think its turned a corner because it is making any money. It is a veritable chunk of its ad revenue, 14 from 0 three months ago. It was really 0 tlrs . Well, they gave no guidance. So for all we knew it was z0 . You know you cant make as much money off those mobile ads, the higher percentage that becomes, the less money theyll make overall. They just really started trying. Right . They werent trying before. Now they are trying. Theyre making some money. Long term will they be able to make big money . Too soon to say. It is a very difficult thing. I think of the old Media Companies that ive worked for. Im an old guy. And the solutions to new media problems usually dont come out of old Media Companies. Wonder whether facebook, even as new as it is, is almost kind of an old Media Company in the new media space. Hard to believe were even having that conversation. The company was just invented eight years ago. Exactly. They just rang the bell on me. I was having so much fun. I was on a roll i was on a philosophical riff. Apple, ipad, 150 higher than the kindle, surface. Jon, we talked about whether it surprised tu came in at this price point. Whats it mean for them as a business . It means theyll probably sell a load more ipads. They were beating the pants off the competition when they were charging 300 more. Now its half that as far as a premium. I think we have to see the reaction to preorders. Is this new ipad going to be a death blow to the other tabletmakers including the surface which is out later this week . I dont think so. I think apple has such a loyal following. I for one have an ipad as well as an iphone and full disclosure, im considering getting an Android Device instead of my iphone. But to the extent that a consumer feels like they need a smaller device, they dont already have an ipad, this is a great option. But i think that you cant get people to convert from the big ipad and say, for half the price which do you like better. Youve seen the surface, youve seen the mini ipad. I held it yesterday. It is really nice. Definitely like it better than the surface. Question is whether i liked it better than a fullsize ipad. Moving on to the next one, the gucci bicycle. Hot wheels for the 1 . Look at this gucci bicycle. Want to guess the cost . 14,000. Its a joint deal with a big bicycle frame maker and manufacturer over in italy. I dont know why were talking about this. 14,000 is a lot of money to spend on a bike. Would you ever do it . Im pretty clumsy. Id probably ride into oncoming traffic. I dont think id buy any bike for that matter. This seems a little expensive. We were talking during the break about the fact that people who are really intense mountain bikers they already spend upwards of 500 on some of these things. You were a cheerleader. You did back flips. I know youre not clumsy. It is easier than it probably looks. No, its not. I have always had to deal with gravity, jon. Something neither of you have. It is not too much to spend for a bike for somebody whos a serious bike enthusiast. But the bike enthusiasts i know wouldnt be caught dead on a gucci bike. Maybe it will do well in italy or something. Well send one to lance armstrong. It used to be popular to show off you were rich enough for that. If they make a stationary bike version of this . A gucci spinner. All right, guys. Thanks. There it is. Look at it. It is pretty. Coming up next, our fed day coverage kicks off at the top of the hour. Were going to pregame with pimcos bill gross. And well see what he thinks about the decision when it comes at 2 15 eastern time. It all starts in just a couple of minutes. Really in four minutes, exactly. Well be right back. Mike rowe here at a ford tell me fiona, whos having a big tire event . Your ford dealer. Who has 11 major brands to choose from . Your ford dealer. Whos offering a rebate . Your ford dealer. Who has the low price tire guarantee. Affording peace of mind to anyone who might be in the market for a new set of tires . Your ford dealer. Im beginning to sense a pattern. Buy four select tires, get a 60 rebate. Use the Ford Service Credit credit card, get 60 more. Thats up to 120. Where did you get that sweater vest . Your ford dealer. But i still have a runny nose. [ male announcer ] dayquil doesnt treat that. Huh . [ male announcer ] alkaseltzer plus rushes relief to all your worst cold symptoms, plus it relieves your runny nose. [ sighs ] thank you [ male announcer ] youre welcome. Thats the cold truth we are just minutes away from the feds latest decision on Interest Rates. We want to check the market. Its been holding pretty steady during our hour on power lunch. Were now up 16 points on the dow. Only two on nasdaq. S p 500 is up just under two points. However, guides, i was noting transports. Which a lot of people watch to see some sort of confirmation of the latest move in the dow. We have a selloff, a big one, in the transports of just under 2 . Were down 83 points. It strikes me as interesting because that comes on a day when we have another 1 down draft in oil prices, ty. Everybody down here is watching that really closely. I think s p is at a very interesting location. Five points above, 1,421. Lot of investors have to come back in. Technically youll see people have to come back in. So a lot going on in the next couple of minutes. Thanks very much