Transcripts For CNBC Power Lunch 20131114

Industry lobby group in washington, who said weve built our pricing for 2014 around the idea that all of the plans were going to change. So its very difficult for them, without some relief from the administration financially to make it work, and therefore, make the exchanges work. John, we appreciate it. Apologize for the audio issue we had at the very top. You couldnt hear us. Were surrounded by the traders well, today. Simon baker is here along with steve weiss, joe terranova, and stephanie link. Stephanie, on a year when the Health Stocks have done well, health care is the second best performing sector out of the s p 500 this year. Im wondering what your thoughts are, and what happens with the stocks . I dont think anything he said is a surprise. You have to expect the blame game comes out of washington on both sides. This is a mitigated disaster. The Insurance Companies budget at least a year in advance. So theyre a little offsides in the budgets. At the end of the day, i dont think it matters. Maybe you see them reset expectations next quarter or preannounce, in terms of reduced expectations, but you still need to be in a group that continues to grow, whether the economy is growing or not growing, so i like it. More importantly, what this did was, it sort of casted yellen in a shadow, and that was by far, to me, the more important conversation today, what she was saying. Well, yellen certainly has had somewhat of an impact on the overall market today by virtue of taking what most people expected was a more dovish stance on fed policy, that the market is holding up in that realm. Stephanie link, what are your thoughts on the Health Care Stocks . A lot of the insurance stocks ran up in anticipation of the Health Care Law going into effect. Do they continue to go up now that weve had this snafu . I think they will. And i think the interest egg thi interesting thing is earnings have been reset. The companies, the stocks rallied, they all reported, a lot of them came down. And im focusing on the hmos and hospitals, as well, but they gave out conservative guidance, because they dont have visibility into next year. One thing is clear, though, that the Companies Continue to cut costs. So i think numbers can be beatable should this when this gets fixed, and maybe focus on wellpoint. Lets not forget, joe, because of the political fallout, we did see the speaker of the house, john boehner, make comments ahead of the president today. The upcoming debate on the budget is likely to be as contentious, if not more so. Yeah. Than it was before. That could have a direct impact on stocks. Oh, clearly. Clearly, its having an impact on the ciscos of the world, when you see the federal spending being cut. I think overall, though, that will be alleviated over the next couple of months, and going back to stevens comments, its incredibly important whats gone on with janet yellen in the last couple of days, particularly the emerging markets. We talked about that the other day. Well, clearly, the comments are felt by emerging Market Investors to be favorable, and its provided stability to those assets. Youve had theater on a couple of stages today, right . Youve had the president making his administrative fix to the Affordable Care act. You have had the fed nominee, janet yellen, on the hill, taking questions from the Senate Banking committee. And in the face of all of that, youve had the major market averages at alltime highs. Thats where the Dow Jones Industrials sits now, 15,861, a gain of 40 points. Bertha coombs has been listening to the president , as well. Considering the fallout from all of this. Bertha, what are your thoughts as we heard from the nations Insurance Companies weigh in quite angrily today . Thats right. Karen ignani saying, look, if you change the rules in the middle of the game here, this could be very destabilizing towards the market. Effectively, we have a december 15th deadline here for people who want to have a plan in effect by january 1st. So were talking about 31 days for them to suddenly turn things around and try to say, okay, were going to use those plans after theyve already priced towards the new rules. For the people who are affected, certainly it would be great, it would mean they would still be in compliance, because if they bought one of the old plans, they wouldnt be in compliance, so they wouldnt get a fee. But again, it puts a lot of pressure on the insurers. The other thing not to lose sight of here is that we are also facing that effective december 1st deadline for the website to be working really well. Although this the individual market, this fix today, the broader picture of all the people who need to get on, the fact that they want to have 7 Million People enrolling or need to to have a viable market through the website is a problem. And whats interesting to me was one of the things that a lot of people have talked about the likelihood that theyre not going to be ready by december 1st. And the president today basically said, you know, its not going to be perfect. Listen to what he said. I guess thats not ready, but he basically said we know we have set the bar really low, and they said its going to keep working for the vast majority of people saying obviously its not going to be perfect for everyone. So the bigger problem down the line, while this may be a political issue, the bigger problem and reality for the insurers is whether they can get enough volume of people coming through here in time for their december 15th payments in order to be insured by january 1st. Bertha thanks. Bertha coombs for us. Simon baker in the context of Health Care Stocks overall, youve been more bullish on the market than perhaps some of the other folks that have come through the set in recent weeks. Do you think, as one of the best performing sectors of the year, there will be a rotation away from a more defensiveminded sector into some more risky or more cyclical areas of the market . Yeah. I think weve talked about that on the desk, and i think we all agree, hedge funds up 6 . I think youve still got to stick with the names. I agree with stephanie like tenet health care. I think ultimately people can get insured by the website, those companies are going to benefit and i think the expectations have come down so low, theyll be better next year so id stick with those names. I would say stick with the hmos. Stephanie points out that expectations have been lowered after he werin earnings. Guidance and pricing real conservative. Whos best positioned and understands whats going to happen here in terms of 2014 headwinds . I think unh. I think thats a company that you want to look at, managed care and definitely if youre long, stay with that. Thanks so much. Well take a quick lunch. Power lunch will pick it up on the other side. Tdd 18003452550 where others see fads. Tdd 18003452550. You see opportunities. Tdd 18003452550 at schwab, were here to help tdd 18003452550 turn inspiration into action. Tdd 18003452550 we have intuitive platforms tdd 18003452550 to help you discover whats trending. Tdd 18003452550 and seasoned market experts to help sharpen your instincts. Tdd 18003452550 so you can take charge tdd 18003452550 of your trading. Welcome to power lunch. Kayla tausche and bob pisani down on the floor of the nyse where we have the markets hitting new alltime highs on the douw jones industrial averae and the s p. Well have complete market coverage throughout this hour of power lunch. Were also following the Health Care Story in washington. Well bring you that as well. We are basically your touch point for everything thats happening in the markets and in washington today. Im going to turn it over to Kayla Tausche and bob pisani. Guys, the markets did get a little bit of a boost from Janet Yellens testimony as well in front of the Senate Banking committee this morning. And thats also on the agenda on power lunch. Thank you so much. We have bob here and weve been watching the markets. It seemed like the market pretty much knew what yellen had been planning to say. Heres the problem. The yellen rally was essentially yesterday. The rumors for once about maybe janet yellen would be a little more dovish than we expected happened, and the move happened yesterday. Today, modest moves to the upside on the dow industrials. But the bottom line here, kayla, is i think janet yellen is delighted with what happened because the markets were on the upside on the s p 500. We are at record highs, and on the Dow Jones Industrial average, Interest Rates are flat to slightly down. Put up the tenyear yield. Very little movement. Gentle slope to the down side on the yields. And i think the most important thing is the testimony was remarkably uncontroversial. Nobody raised their voices. Some people were expecting land mines to be planted, aggressive testimony particularly when she said she didnt see any big signs ofs set bubbles. And yet it was all very civilized. Right. Some people were surprised by that. One of the questions she got was about communication or about moves in the market based on what the fed does. She said, look, i understand that rates can spike, stocks can spike. Given what the fed says because of that. I hope to communicate clearly. And of course, i think the market believes that she already has. But kenny, senator pat toomey said what happens when the morphine drip runs out. We keep talking about new alltime highs. But we also keep talking about a potential pullback. How do you spot that . Thats the problem because i dont think anyone was expecting any pullback, so the market continues to march to new highs and will continue to do so. I think you said it yesterday. The market rally add head of her testimony today. Its rallying again today based on everything she said. I think the fear is when its not so much when but how will they be able to do it unless this economy all of a sudden, you know, all the macro data starts to get so good quickly. Thats the only thing thats going to carry us out. Of course, we have touch points in december and well be watching for as well, bob. Slightly different the mo mo monotonic tones of her voice. Wipe some of the sand out of your eyes, bob. I dont want to say that exactly, but it was i expected a little more aggressive questioning. Right. And they asked the right questions. It it was tame necessarily or it wasnt like nobody asked the right questions, but the answers were very soothing in some kind of way. Right. Even senator corker who i expected a little fireworks from was downright solicitous. On that note, back over to headquarters and robert frank. The market keeping an eye on every word that janet yellen says today. Lets go over to Hampton Pearson to talk about that. I dont know if it moved markets, but it may have moved votes. It was the exchange janet yellen had with senator bob corker where he in essence shared a conversation they had had in his office. Isnt the fed, with its tapering policy, basically become a prisoner of its own policy and by extensioextension, a prisone markets . Listen to what really was the moment in todays hearing. It seemed to me and i think you discussed this a little bit in the office that the fed had had become a prisoner to its own policy. Well, senator, i dont think that the fed ever can be or should be a prisoner of the markets. Our job is but to a degree in this case, it did affect the fed, did it not . Well, we do have to take account of whats happening in the markets, what Impact Market conditions are likely to have on spending and the economic outlook. It is the case and we highlighted this in our statement when we saw a big jump in rates. We did have to ask ourselves whether or not that could potentially threaten what we were trying to achieve. Thank you. Im just a little bit of a prisoner, not fully, i understand. And that was the Lesson Learned from last spring when the fed began to hint about a possible strategy to begin the end of tapering, the market reaction, and you heard janet yellen and senator corker go into the consequences of communication being perhaps not understood in a timely fashion. So it got her some credibility and probably some more votes towards what seems to be confirmation as the next chairman of the board of the federal reserve. Back to you guys. Okay, hampton, thank you very much. Lets talk a little bit, robert, with kenny and bob because that exchange between senator corker and ms. Yellen was not only very revealing but just before that, she was asked whether or not there were asset bubbles out there. And she said she didnt see them. And kenny, your point about the fact that if she doesnt see an asset bubble, there may be more room on the upside in this market. Well, listen. Whether or not she sees an asset bubble, i think the conversation thats happening is that this is complete disconnect. And we keep talking about it between where the stock prices are and where the economy is. She herself said that we are still in a fragile recovery. And so in my opinion, i think prices reflect something much better than a fragile recovery, which is where the disconnect is, which is what is causing some frustration. This goes to my point of what we said earlier. I thought with that moment with senator corker, that was going to be the moment when some fireworks were going to fly at this point. And yet it didnt happen. Look what she said. She said were not a prisoner of the market, but we do have to take into account the market reaction. And senator corkers response to that was, well, thank you very much, ms. Yellen. We appreciate it. It was downright solicitous. I thought that was the moment where things were going to kind of take off, and it didnt. It did give you tea leaves with rates. She said it did give the fed pause about how fragile the recovery was and how we should act. But kenny, if youre watching the bond market and the stock market at home and youre watching that confirmation hearing, what are you taking away from this, and how are you treating it . That the market has more room to the upside because the feds not going everywhere. As long as Everybody Knows that, the pullbacks going to be very shallow. Theres certainly lots of money that wants to come. People will start to come out of the bond market and push into 2014 in the equity space partly because the recovery is happening but it will be slow. Theyre not going anywhere for a while. Shes got room here judging by the reaction of the congress there, when she said theres limited signs. What . You know, show where my emails were everybodys piling into highyield funds for the last three years. The bond market, too, is pretty unimaginable. She was politely asked about it and again politely said, and again, no showdown, no confrontations, no trying to lead her into dark alleyways, none of that. Is part of that just because it was now her first appearance . Everybodys trying to play nice in the sandbox . But still. Wouldnt you . I think the first time you dont have to play nice in the sandbox. But this is congress. All right, guys. Exactly. Were going to take a quick break. When we come back, there have been some very big job cuts announced at a major defense contractor. Well tell you all about that. Jane wells is working that story when power lunch continues with the dow and the s p at alltime highs. Its as simple as this. At bny mellon, our business is investments. Managing them, moving them, making them work. We oversee 20 of the worlds financial assets. And that gives us scale and insight no one else has. Investment management combined with investment servicing. Bringing the power of investments to peoples lives. Invested in the world. Bny mellon. [ bagpipes and drums playing over ] [ music transitions to rock ] make it happen with the allnew fidelity active trader pro. Its one more innovative reason serious investors are choosing fidelity. Get 200 free trades when you open an account. vo our new planes dont fly any faster. But it sure feels that way. Because with power ports. And wifi. And inseat entertainment, for everyone on board, now when you fly, time flies too. Flight Attendant sir, were about to land. vo were adding a brand new plane, with all this, every week. Its just one way were building the new american. Welcome back. Right now we have the dow and s p both at alltime highs. Up again today. The dow right now near highs of the session, up 45 points. The nasdaq is less than 40 points from 4,000. The s p Holding Steady at 1789, up just 7 points. And this is a big but, there are warning signs out there. Despite what we just heard from kenny and bob, we have three reports that you need to pay close attention to before your next trade. Well start with seema mody at headquarters. Over to you. Kayla, more than 90 of companies on the s p 500 have reported earnings. Thats roughly 450 companies. But get this. Fewer than ten have been able to beat street expectations on their top line, bottom line and issue Earnings Guidance thats above the estimate for q4. Were calling it the triple threat. First up, lam research, this past quarter marked the highest in history, surpassing the 1 billion mark. It grew by nearly 200 basis points. Analysts say its been able to rise from the semiconductor and cap ex spending. The environment is improving and thats expected to continue into 2014. Netflix, this has been one of the turnaround stories this year. Popular success of its original content shows as well as a growing Subscriber Base has fueled sales and profitability. Shares up about 270 year to date. And then theres bed, bath beyond, attractive products, competitive prices have helped them surprise the street with its earnings report. Although, analysts say, amazon may be an impending threat. And lastly, microchip technology, the only company that made the triple threat list this quarter and last quarter. Top and bottom line beat guidance, also higher than what the street was expecting. Williams financial says this is particularly impressive given many of its peers guided well below expectations. There you have it. Less than Ten Companies that made that list. Again, its a beat on their bottom line, top line as well as on guidance, kayla. Seema, i think i helped bed, bath beyond. I moved earlier this year. You go there, you think you want to spend 350, you have one thing on your list and you end up spending a lot more. Dominic chu, the big names in the last bubble, ones that still exist, how are they doing today . First, its the coupons that get you every time. Lets look at four different stocks and two different stories from the last time we had a pretty high market. Were talking about the tech bubble. And some stocks that really have emerged better off than they ever have been. The first one is priceline. Com, the Online Travel company. During its peaks in the internet bubble, this stock here got as high as get this this is massive 990. Value really extraordinarily. When the bubble burst, it got all the way down to as low as around 6 here. And thats going to be key here because as we burst this bubble and go up higher, the trajectory of this stock has been nothing but extraordinary all the way back up to the 1300, 11 level. Another stock that matches that same kind of mold is western digital, the hard disc drive maker. This stock here at the bubble peak, a big one as well. Take a look at this because it was up as high as get this 54. 75. Thats a big one here. At the lows, this stock got down pretty low. You can see at that level in the 2000s, it was 1. 95. Now its 75 today on the heels of Cloud Computing demand. Two other being sos that arent quite as solid a story. Take a look at this. The Communications Equipment maker really during the peak here, this was a massively valued stock. You can see here around 1200. At its lows, it got all the way down around that 13ish mark there. You can see. And now the trajectory has been pretty much flat ever since then. A fraction of its former self. And well finish off with one last one here. This is Specialty Glass Company corning. All the way at the peaks, another massive one, 113 per share at the peak. All the way down as low get this around really, you can see 1. 10. And now 17. So the question, then, becomes when youre an investor, are you picking the pricelines, or are you picking the jds uniphase . Kayla, thats the huge question for a lot of investors. Wow, dom, so many of those stocks back from the dead. Its amazing to see them at those levels. Some investors say forget new tech. Old tech ironically may be the place to be. We have sheila at the nasdaq with that part of the story. Over to you, sheila. Hey there, kayla. Thats right, forget about those highflying new tech names that took the nasdaq higher. Oldschool technologies, microsoft, ibm, qualcomm, that may be the place to be if youre a next trade. Thats the word from david bianco at deutsche bank. And also tom lee at jpmorgan. He told cnbc that he thinks that mega cap tech is a very good trade over the next few years. So three reasons why theyre so bullish on meg ka cap. Number one, they are cheap. You look at the valuations at Companies Like intel, qualcomm, also ibm. They are right now below their fiveyear average when youre taking a look at forward pe. And theyre also below that of the markets. Number two, yes, they are definitely considered cyclical stocks. But right now the defensive characteristics of those stocks are looking pretty good. Just take a look at the dividend yield right around 2. 2 . Also their big Free Cash Flow yields. In fact, those numbers match right in line with consumers and staples companies. So a lot of those defensive characteristics right now are positive. And finally, when you think about the overall economy and its growing and as it gets better, i. T. Demand, cap ex, corporate budgets, they should all start to get bigger. Thats going to give them that cyclical boost it needs for a positive catalyst. Were coming off earnings season which has been arguably mixed when youre talking about oldschool tech names. Look at cisco, the biggest fana the dow. Very low expectations into earnings now. That could be the positive upside for the future. Robert, over to you. Youre watching now involving boeing, the machinist that the plane maker rejecting a controversial contract proposal. It could have big ramifications. Our phil lebeau in chicago. Phil, this seemed like a real important vote not just for boeing but also for the Labor Community as a whole. Absolutely because this is one of those plumb possibilities out there in terms of where boeing puts the 777 x plane. The union, the machinist in seattle, had a chance to vote on a Contract Offer which would extend through 2024. Twothirds of the members voted it down last night. Heres a sense of what they were feeling as they were voting. I was quite certain it was not going to pass. I could not see my brothers and sisters taking this and the way it was presented to us as extortion and accepting it. They choose to take the 777 x the same path they took the 787 and commit corporate suicide, its their business. Its not ours. Keep in mind, boeing offered a guarantee of the 777x being built in the puget sound if the union agreed to that eightyear contract which would have had some changes to the pension, a 1 a year pay raise. They would have had to pay more for their health care expenses. The state of washington also offered major tax snent tiincen boeing, but thats not going to happen now. In fact, ceo yesterday before the vote was counted said theyre already looking at other alternatives as a location for the 777x. We will consider other alternatives if the vote goes negatively. There are options for us to look at. And we will evaluate them and decide. And, in fact, we can tell that you boeing has already begun the process of looking at other locations. They are active already this morning. In fact, i just talked with one person within boeing who said listen, were not slowing down. Were Going Forward here. And thats the reason, robert and sue, when you look at boeing shares, theyre at an alltime high because investors look at this as a winwin. Either they get a deal in seattle or theyll relocate somewhere without unions and with lowered costs and a big tax incentive deal. Thats the latest on boeing. Guy, back to you. Phil, thank you. A lot of states and a lot of countries even really wanting that boeing business. Boeings defense rival lockheed also in the news. The Company Announcing huge job cut as cross the country. Lockheed shares on fire this year, up 50 . Jane wells live in los angeles with more. Jane . Reporter hey, robert. The stock was down, but now its up. Ceo marilyn houston says, quote, i regret these actions, actions that include 4,000 job cuts, four facilities closing, downsizing of another, all to be completed by mid2015. Now, a lot of these jobs are in space, missiles, information systems. And the company is offering to help those who are let go with job placement assistance and severance which will result in a 35 cent a share charge for the current quarter. For example, in akron, more than 80 of the jobs will be cut there. And everything closed except for the air dock, which you see there. Houston says lockheed has already reduced its work force by 30,000 employees in five years. And after these closures, it will have reduced its footprint by 4 million square feet. Quote, there is more work we must do to help our customers achieve their missions and prepare for the continued reductions in u. S. Government spending. Wells fargo says lockheed continues to reduce its cost structure faster than the decline in company revenues. Lockheed, quote, remains one step ahead of the budget downturn. Sue . Jane, thank you very much. To the bond market now where we did have a 30year bond auction that didnt go all that well. This morning. The tenyear went pretty well yesterday, but the 30year did not go all that well today. Basically, the yield was 3. 81 , when issued, 3. 79 . The bid to cover, though, which is the measure of demand was relatively weak at 2. 19 . And that is well below the 12month average. So we have seen right now the tenyear in terms of the yield moving to 2. 72 , which is something that the equity traders are watching very closely. Interest rates very important to equities these days. Youre up to date on the bond market report. Robert, over to you. Thanks, sue. Next up, a video that will make you jump. It made a customs officer take a leap in shanghai. See why next. And well told you two weeks ago about a new internet scam where cyber criminals take your pictures, your emails, your music for ransom. These same guys did Something Else that could cost you big time. Theyre good. More on power lunch in two minutes. [ male announcer ] once, there was a man who found a magic seashell. It told him what was happening on the Trading Floor in real time. The shell brought him great fame. But then, one day, he noticed that everybody could have a magic seashell. [ indistinct talking ] [ male announcer ] right there in their Trading Platform. [ indistinct talking continues ] [ male announcer ] so the magic shell went back to being a. Shell. Get live squawks right in your Trading Platform with think or swim from td ameritrade. The criminal minds behind the crypto ransom attacks were launching a Customer Service center to help victims get back their files. Joining us is contributor herb weissbaum who wrote about this latest development today. Its really pretty unbelievable. Not only do they want ransom, but they now value Customer Service. Well, sort of value Customer Service. What they found themselves in a situation where theyre leaving money on the table. Theyve gotten this malware on computers all across the globe, and its locked up the files. But some people have had a hard time paying the ransom in order to get the key to unlock them. So theyre now offering this Customer Service site to make it possible for you to pay the extortion money theyre demanding. You know, how come they cant find these guys . I mean, it would seem that with the reach of the International Police presence thats out there, they would be able to round these guys up and punish them. They may be able to do that, but these guys are probably in countries where theres no cyber laws kind of thing. Theyre under the radar. They bounce this stuff around, all kind of different servers. And the payment meth. Theyre using green cards and big coins. In both cases, green dot cards you dont need an i. D. Big coins, the whole idea of that was designed to be a Virtual Currency hard to track who the people are. So it takes years to develop these cases. And they may be able to do something, but its really not easy to find them. I would assume that were going to see more of this type of thing. I mean, once someone is successful at getting money out of people, other people want to do the same thing. All of the Security Experts i spoke to say this is now the new normal. Because theyre using big coins, they now have a global currency in order to get the ransom payments where before they had to sort of tailor this to each region, dollars or pesos or pounds or whatever. Now they have one currency for the scam, they can launch it all across the globe with the same payment method. Yes, i think this is the new normal. Much more malicious malware. Before it would freeze your computer. Now it enkrimts your files. You pay the money for the key or you dont get your files back. Boy, youd better start backing up those files and have a good backup. If this gets into your system, youre in trouble. Perfect place to end it, herb, thank you very much. Youre welcome. Thats what kaylas going to talk more about right now. Thats right, sue, just like the last guest mentioned, its no question that big coins are becoming more popular in international crime. The new York Department of Financial Services is cracking down on the potential abuse of currencies like big coin. Here at the New York Stock Exchange with more is new yorks superintendent of Financial Services, ben loskey. Thanks for being with us. You are actually on cnbc in august when this inquiry began. You said the first step would be issuing subpoenas to some of these companies that deal in big coins. What did you find, and what is the next step . So what we found is this is a fascinating industry. Its growing incredibly fast. A lot of investment in it from serious investors. And it raises a lot of very unique difficult issues, especially about Money Laundering. What were trying to do at the department of Financial Services is see what we can do to both regulate it, prevent Money Laundering, protect consumers without squelching it, without throwing the baby out with the bathwater. We decided were going to hold a series of hearings related to big coin soon. Ben, its robert frank. You mentioned that you dont want to squash this, but basically what makes big coin valuable is the fact that its not regulated. Its not traceable. Dont you realize that you will kill this if you try to regulate it, and isnt that your real intent . No, fair question. And i think, look, were going to try and regulate this in a way that doesnt kill it. If the only benefits of bitcoin are the anonymity it provides and the only true use of it is to do things like Money Laundering or illegal transactions, then i think well have to, you know, really think hard about whether it should survive. At the same time, if we regulate it fairly and honestly, i think that ultimately maybe it will thrive because we dont know. It doesnt you know, there are good arguments that it doesnt just provide benefits related to Money Laundering. But it also potentially allows transactions to happen with less cost, more efficiently, without certain frictions. So we have to wait and see. One thing that we were talking about during the break was potentially causing some of these companies to have a license. That would be costly. That would create a lot more regulation for these companies. But bitcoin is just one of various industries that you have decided to begin regulating. One of them Pension Funds. I know that youve recently put out some statements on regulation of the new York Pension Fund industry. What sort of work are you doing there . So we regulate all the public Pension Funds in new york state and new york city. And were doing a very indepth look at all kinds of issues because those are hundreds of billions of dollars in those funds. A lot of retiree money at risk. And when you look at what happened in detroit and whats happening in other states, very important that we regulate these massive Pension Funds well. And one thing were really thinking about is the consultants that are being used by the Pension Funds. And we recently sent out a lot of subpoenas to talk to that industry to really hear from that industry, the consultants, about why theyre recommending the investments theyre recommending to the Pension Funds because often we suspect there are conflicts involved. And we want to make sure that Pension Funds are getting the best advice, getting unconflicted Investment Advice and that the consultants are independent. I though we have to go, but just the last question, one of those notices did call for whistleblowers inside the Pension Funds to get in touch with you and let you know if theyre seeing any of this activity. What sort of activity if im inside some of those Pension Funds should i be looking for if im thinking about blowing the whistle . Well, its not just inside the Pension Funds. Ist also people who work on the investment side at the Money Managers or people who work as consultants. We want to hear really if any kind of things are seen as problematic. We really want those consultants to be independent. Within the Pension Funds. We also want to hear from anyone who sees other problems. So its a hotline we set up. You can be anonymous if you want and were taking it very seriously. Ben loskey, thank you so much for being with us. Well certainly have you back to catch up on where these inquiries go. Sue, over to you. Thanks, kayla, very much. Tim took might be the head of apple, but the soul, the heart and the guts of the company, arguably, belong to this man, design chief sir johnny ive. Together with steve jobs produced some of the most iconic products ever made which overturned entire industries and helped apples stock to skyrocket to new heights. Imagine this at the top of your resume. The iphone with nearly 300 million sold since 2007 and hundreds of billions of dollars in sales. The ipad and the ipad mini. The dominant tablets on the market with nearly 200 million sold. And the macbook computer, 122 million sold and counting. Leander kinney has written a book about mr. Ive, and he joins us. Welcome. Thank you for having me. Very few people know much about mr. Ive. Tell me what hes like. Hes a super nice guy and very selfselfefacing. Steve jobs reportedly called him his spiritual soul mate at one point. The Creative Force apparently that this gentleman has and had has really changed the world. Where does he get his inspiration . They get it from all kinds of places. I mean, theyve had all sorts of strange sources. You know, a mouse they made came from a drop of water. But each product is different. And a lot of it has to do with just the real hard work of really exploring something. You know, like the iphone didnt come fully to everybody. It was the result of a lot of r d work, many, many years. It took 2 1 2 years of a lot of effort to put it together inside apples lab. How involved is he with the Company Still . Jony ive . Yes. Oh, you know, completely. I mean, he is the you know for those who dont know. You know, hes become hes sort of taken over steve jobss role, which is being in charge of hardware and software. Hes also actively designing their new spaceship headquarters down in cupertino, doing charity work. Hes very involved with the company, very much involved in new products. Theyve got great stuff picking up in the lab. Its going to be exciting. Fantastic. Best of luck with the book. The power house is in the great north. Whats your buying power in minneapolis . That is coming up next. I am today by luck. I put in the hours and built a strong reputation in the industry. I set goals and worked hard to meet them. Ive made my success happen. So when it comes to my investments, im supposed to just hand it over to a broker and back away . Thats not gonna happen. Avo when you work with a schwab financial consultant, youll get the guidance you need with the control you want. Talk to us today. Welcome back. This is shanghais airport. And that is a passenger loading a crate full of snakes illegally onto an airplane. Introduce a customs officer. Watch him jump. Yep. There were 121 snakes all endangered species curled up and packed in boxes with blackstockings. They were sent from seattle to hong kong, picked up by that fellow in shanghai. The punishment could be prison for life. One of many lessons here, sue, dont bring snakes on a plane. One of many lessons. One of many lessons. I hate snakes. Me, too. Lets quickly switch to the power rundown. Lets start with jpmorgan and its failed attempt for a twitterbased q a session. Kayla, youve got the details on it. Oh, man, sue, badidea is just the beginning. But thats what jpmorgan is saying after its attempt at a twitter q a. Didnt go quite as planned. They planned to have its vice chairman and a key dealmaker on the ipo take over its twitter feed today and ask users to send questions using the askjpm. What ensued was a flood of tweets, some hilarious, others downright harsh. My favorite tweeted would you rather negotiate with one horsesize eric holder or 100 ducksized eric holders . Do your settlement lawyers and social media people sit at the same table for lunch or different tables . And alex pareene probably summed it up best tweeting, why did you think this would be a good idea . Now, the tweets came pouring in. And jpmorgan quickly tweeting that the event was canceled. They are going back to the drawing board. This sort of social media backlash, one of the reasons another big bank executive, Morgan Stanleys Ceo James Gorman stays away. No, i dont engage in any social media because unfortunately ive found that people have tried to mimic me at different points. Probably a lesson that some have learned the hard way, including jpmorgan. But if you think that the populous backlash has eased, five years after the financial crisis, you would be sorely wrong, sue. Absolutely. Absolutely. Well, lets stick with jpmorgan, but this is a different topic. New york times front page article today on the fruitful ties to a member of chinas elite. According to that report, the bank had been paying a chinese womans Consulting Firm 75,000 a month. The woman used the alias lilly chang, but thshe turned out to the only daughter of the prime minister. Theyre cutting the ties with that daughter. I mean, weve always known that one way to get Business Done in china certainly is by different relationships, but it seems as though maybe this is the only way to get it done. What do you think, robert . Yeah, having lived in asia, i think a lot of companies that do business in asia, not just asia but also Eastern Europe and latin america, i mean, this is the way Large Companies often do business. You basically, you know, get close to the local culture and the politics through the relations and the family members of the top guys. So i think a lot of companies are going to be looking closely at this thing. We all thought everyone did it and it was fine. Right. Absolutely. Lets move on to asset bubbles which janet yellen basically addressed earlier this morning saying she doesnt see one, but, you know, the art market, robert, just seems to be forming a bubble. Although weve been saying that for a couple years now. I know. Based on what shes saying, no sign thats going to pop any time soon. Art prices have always been abstract to most of us, but now theyre downright surreal. Last nights sothebys auction ended with andy warhols car crash. It sold way ov the 80 million estimate marking a record alltime for warhol. He also paid off for steve cohen, he sold off more than 70 million worth of art last night including his Warhol Liz Taylor portrait, going for 20. 3 million. And a Gerhard Richter piece, he bought it last year, sold it last night for 26. 4 million. Its just not art, the flood of money in the world is pumping up assets of all kinds. The worlds most expensive diamond, sue, was sold last night. Sothebys selling a 59carat pink diamond for 83. 2 million, nearly twice the record previous paid. Wine, stamps, manuscripts, sothebys going to hold its first car auction in a decade. Just looking to park their money somewhere, anywhere because theres more of it coming out of the fed. Absolutely. Wow all right, robert. And sadly, i dont think it was sues or my significant others bidding on that big pink diamond. But one can hope. Big news on the Housing Market next, before the break, another check on the markets. Were at alltime highs for the dow, 15,871, near highs of the day. The s p up just 7 points. The nasdaq, meanwhile, 35 points from 4,000. Weve got more power lunch for you in two minutes. Americans take care of business. They always have. They always will. Thats why you take charge of your future. Your retirement. Ameriprise advisors can help you like theyve helped millions of others. Listening, planning, working one on one. To help you retire your way. With confidence. Thats what Ameriprise Financial does. Thats what they can do with you. Ameriprise financial. More within reach. Welcome back to power lunch. If youre looking to buy a home, be ready to bid fast. Homes are selling on average 30 days faster today than they were just a year ago. That according to zillow. Rising Mortgage Rates, rising prices and very low inventory has competition fierce as buyers fear affordability will only get worse. The National Average in september, 86 days on the market. Down from 1916 a year ago. Where will you have to act the fastest . San francisco. Homes there stay on the market barely 48 days. Next, sacramento and then dallas at just 60 days. Where do you have a little time to spare . The new york metro area. Thats including northern new jersey, long island and a few northern counties. About 151 days on the market. Then kansas city and cincinnati, ohio. The folks at zillow say be ready with your financials in line, but dont bid out of your comfort zone. The supply situation should ease in the new year, especially as Mortgage Rates continue to rise. More, of course, always online. Realtycheck. Cnbc. Com. Sue . Thanks, diana. It is power house time. This week were in minneapolis. Kate beckman is with the regions coldwell banker. Welcome, kate. Nice to have you here. Thanks for having me. Lets take a look at the stats for the twin cities year to date. The immediate yap list price, 219,000. Sales price median, 192,000. 3 1 2 months of supply inventory. Average days on the market stand at only 84. Our first listing, it is 1275 lafond avenue, list price, 199,900, 3,000 in taxes, three bedrooms, two bathrooms, 1780 square feet. We really have it in space with this lovely home. Just take a look at that gleaming natural woodwork and hardwood floors. Its situated in the midway area which is midway between st. Paul and minneapolis. It will soon be connecting the two cities by central light rail line. A beautiful home. Very affordable, friendly neighborhood. Obviously the commute is better with that light rail line going in. Lets go to the second listing. 9104 trotters lane. List price is 340,000, taxes, 3,000 approximately, four bedrooms, three bathrooms and 3113 square feet. Thats a beautiful home. Its a beautiful home. Were moving out to the suburbs on this one. Although still probably only 15 minutes from downtown st. Paul, 20 minutes from downtown minneapolis. Beautiful open floor plan. Plenty of room for everyone. If you can see that lower level rec room with a walkout, its a rambler. Really ease of living in this home. And woodbury is a fabulous community. One of the Fastest Growing communities in minnesota named money magazines top 20 greatest places to live in 2012. Fantastic. All right. To the power house of the week, 3501 zenith avenue south. This is in minneapolis. The list price, 1. 2 million, 25,000 approximately in taxes, four bedrooms, four bathrooms and 4,500 square foot. Very stately home. Oh, this is a beauty. Its been elegantly restored. It was built in 1929. And it is still boasting all its original charm. But it really has been updated for todays living with all new mechanicals and central air. Minneapolis is the city of lakes, and this one is just steps from minneapoliss largest lake, lake calhoun, where you can enjoy a myriad of Recreational Activities including biking or running around the lakes on its park and trail system or fine dining at one of its lakeside restaurants. Really a wonderful home and wonderful neighborhood right in minneapolis. And beautiful hardscaping. I love that outside patio. That must be wonderful in the summer. Absolutely. That private walled patio is just lovely. Even when its a balmy 45 to 50 degrees like were seeing today. They could still enjoy it with a portable heater or fire pit. We had that here yesterday. Well leave that to minneapolis. Thanks, kate. Pleasure to have you with us today. Appreciate it. Thank you. That does it for this hour of power lunch. Guys, we have to do this again. Wed love to, sue. You know, weve got to take a quick break, but street signs is up after the break. High on their agenda, the best day of the year to shop, and its not black friday. Might be thanksgiving thursday. But on this thursday night, catch an allnew american greed, cnbc at 10 00 eastern and pacific. If you like music and if you like going to concerts, you cant afford to miss this one. And keep in mind, the dows at an alltime high. See you tomorrow. vo you are a business pro. Maestro of project management. Baron of the buildout. You need a permit. To be this awesome. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. You can even take a fullsize or above, and still pay the midsize price. aaron purrrfect. vo meeeow, business pro. Meeeow. Go national. Go like a pro. She loves a lot of its what you love about her. 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Why jpmorgans failed twitter experiment may more abosay more the problems with twitter, making sense of the headspinning