Transcripts For CNBC Power Lunch 20140109 : vimarsana.com

Railro. Tyler, well find out. Its not entirely clear theyve receive the governor if he comes to fort lee. The story of governor chris christ christie, has changed. Today for the better part of two hours the blunt nono sense governor answered questions in trenton, apologized repeatedly. He was sad, had to inv in the traffic closures clearly done as a political vendetta against the mayor of fort lee and the straighttalking postpartisan governor insisted he is not a bully. No. Im not. I mean, listen, kelly, politics aint bean bag. Okay . And everybody in the country who engages in politics knows that. On the other hand, thats very, very different, that saying, that, someones a bully. Now, out of a job effective immediately, bridget kel. The governors deputy chief of staff who wrote the now infamous email in september, time for some traffic problems in fort lee after the mayor of that borough apparently was not going to endorse christie in his reelection campaign. Chris christie has said as we reported that hes going to come to fort lee to personally app l apologi apologize. The mayor, just a short time ago said that he appreciates the comments, but says he wants the mayor to wait until the investigation is complete. That investigation is going to go on for a while, but christie says he feels its important for him to come to fort lee today, if the mayor wont meet with him, hell meet with other people to apologize personally. Sue . Actually, scott, let me pick up with a quick question there. How did this press conference of christies end just a few minutes ago . Well, it ended with him talking about this whole situation with, well, if the mayor doesnt want to see you what are you going to do . He said he felt it was important for him to be there personally. He went on for two hours. Took pretty much every question everyone was going to ask, and probably had to do that, and is trying to be as contrite as he possibly can be, and, again, trying to portray himself as anything but a bully. Scott, thank you very much. Sue . Well, time to talk about what the National Implications for governor christie, and in that factor, for any president ial hopes he might have. Eamon javers is in d. C. D. C. Is a tricky down, eamon. So what are you hearing on that front . And what are the possibilities now for the governor . Yeah, sue, obviously all eyes in washington focused on that press conference in trenton which just broke up a few minutes ago. Everyone filtering this through a 2016 campaign lens, even though that campaign hasnt officially started yet and wont for a couple of years yet. Obviously, this is damaging for governor Chris Christie. No question about it, and we saw Something Interesting happen a few moments ago. The white house postponing their Daily Briefing from 12 45 when the press conference was still yog gone to 1 15, we know at that time it will be over with. Having the political and practical effect of keeping the National Media spotlight on governor Chris Christie while that press conference was still ongoing. You can expect the white house will say that was simply a coincidence, clearly, folks paying a lot of attention here. Christie clearly did very, very well here. Is getting a lot of praise already from professional Political Consultants for the way hes handled this, but that one sound bite, sue, you can bet, will come back to haunt him. He said, i am not bully. One of those things that sticks with a president ial campaign in the years to um can. It does. You know, talk to me about the perception, which the governor says is a misperception, that he is a micromanager. He says he is not. The perception in washington and elsewhere, and it became an issue when rumored to be running for the presidency, that he was a micromanager, and, therefore, should have, or probably would have, known about this particular incident. Right. Well, the tans hes taking right now is that he had nothing to do with this. He wasnt involved. These were rogue aides now disciplined. He wasnt even aware of it, he said, until he finished up his session with his physical trainer yesterday morning at about 8 50 a. M. The first time he saw any evidence that his political and his gubernatorial staff had actually been involved in this situation. Hes going to stick to that. If youre going to stick to that you have to say im not a micromanager. These are some of his closest political and gubernatorial aides apparently involved in the situation, if he was a micromanager on on top of those people on a daytoday, hourbyhour basis he would have known about it. More breaking news. Brack to scott. Back again to the Governors Press conference, talking about wanting to go to fort lee to apologize personally. This is towards the end of the News Conference. Lets roll that bite right now. I was going to call him after this. If he wont see me ill see other people in fort lee. I wish he would see me. Im certainly not going to barge into his office. If he doesnt want to see my office, ill go someplace else in fort lee and talk to somebody else in fort lee. I wish the mayor would reconsider. I would come up to genuinely apologize to him for the people in my employ, but if he doesnt want a meeting. I dont know what he means. How a meeting between he and i would be what were the words . Premature and creating a traffic premature and disruptive. I dont know how that could be premature and disruptive. If he doesnt want to meet with me, thats his choice. The governor about ten minutes ago responding to a statement by Mark Sokolich saying he didnt want the mayor to come up and visit him. After that we now hear from sokolich saying that, hes reconsidered and governor christie should come on up. It appears there will be a summit of sorts over in fort lee, the next town over from here. We will be there live when it happens and continue to follow this latest aspect of bridgegate. Back to you. And maybe theyll get together at the old red oak diner, scott. A place i know you know well. Renamed now as the chiller grill or Something Like that. Somehow, stick with business and ask whether Business Executives should take chris tip lead, follow it, and get on top of the situation when things go awry and do it as seemingly forthrightly, instantly and lengthily, as governor christie just did. Former microsoft coo bob and mayor, the howard banks chair in Business Ethics and leadership at the university of nebraska join us. Welcome to both of pup bob, lem begin by asking you, what is your initial reaction to governor christies almost twohour press conference in which he repeatedly apologized, not something you hear Business Executives or certainly political executives do very often. Well, i think its the right thing to do. What happened may or may not be within his per view. Mo most likely it wasnt and those kinds of things happen occasionally and the best thing to do is be up front about it. That is certainly his reputation. Professor mary, were going to take a break and report on a bond market out in chicago. I promise to come back to you instantly. Hold on. Heres rick. All right. 13 billion 30 years actually 29 year 10 month reopening, a minus auction, by far best of the three. Highlights. 2. 57 the bid to cover. 2. 57, chasing every dollar worth of securities available. The last ten auctions, second best. Strong direct, strong indirects and the yield 3. 899 below the yield in the wi market, but right at 1 00 eastern. A minus auction. Yields have fallen across the yield curve after the results were out. Tyler, back to you and your interviews. Thank you very much, rick. Professor, you know, one of the things you do is have a chair in leadership. Here was an example of leadership. What great would you give governor christie if you were his professor . The chair is also in ethics. Its the howard hawks chair and leadership and ethics. The grade i would give him a bplus. High marks for the way he handled the press Conference Today and for taking quick action, but i think that he could have done more in his administration to make sheer thuz kinds of things dont happen. So you sort of reading between the line, dont mean to put words in your mouth, professor, you seem to be downgrading him a little bit on the ethical part of the ledger . Right . I do. Yes, i am. I think that one of the issues that he might be having is, and the interview that i read, he said that he spoke with his employees and gave them one hour to tell them if they had additional information. To me that sounds like a bit of an intimtation and fear climate, and if he can be more open and allow people to speak more openly in his administration, it would help avoid these kinds of issues. Bob, youve worked with powerful people in the business world, and know that sort of the dynamics of Office Holders in a corporate setting. Is it credible to you that the government, that the governor, the ceo of his state, would not have known or been told by a deputy chief of staff that what was going on was going on in fort lee with respect to the hearings . Is that the way executive councils work . Its quite possible, and, in fact, in my i believe its probably the case that he wasnt aware. The reason is, these are large, complicated organizations. You do your best to communicate what you believe are the principles. The right thing to do is to give examples of the kinds of things that people should avoid, and the repercussions for engaging in such activity, but the fact is, these organizations are large. You try to delegate responsibility and occasionally these things happen. Bob, mary, thank you very much. Well pick up later on this same toing, extend it farther. Meanwhile, down to sue and the businesses at hand, which is the markets right now. Indeed. A little down side day, although not by much now, ty. Down 12 points on the Dow Jones Industrial average. Last trade, 16,450. Basically flat, s p, down half a point at 1,836. 91. Nasdaq down a fraction as 764. And the auction, ricky gave an a minus to. The tenure, whether or not we move above the 10 mark. Yesterday we saw it tick up above the 3 mark and theyre watching that down here, too. Ty, over to you. Sue, thank you very much. Were facing a fif mg down day in six since the start of 2014. Not the streak, dominick, you like to start a new year with. Is it time to start thinking about taking some profits . There are, i guess, some stocks that are still climbing the wall of worry. Its interesting. Market veterans, you said, will often refer to rising markets in the face of head winds, as bull markets that climb that wall of worry. So in a way it means no matter what there are always going to be issue, concerns and oftentimeses it doesnt hamper progress. There are too many of these worries to count, but here are a few of the ones as of late getting attention. First, the possibility of weaker corporate earnings. Cliff noreen thinks costcutting and productivity have peaked. Meaning Profit Growth may have to come from selling more product. A novel concept. Second, what about Rising Interest Rates . The chief u. S. Economist stephen is concerned about what happens if fed tapering leads to rising rates and will that hamper momentum in the economy . Third, what if europe takes a turn for the worst . And a note to goldman note clients, Goldman Sachs said while growth in the region is forecast to be better the turnaround is far from complete, and then theres the worlds second biggest economy, were talking about china, of course. Andy bush of the bush update is worried about what happens if there is a slowdown in gdp there and what the ripple effects are if that does happen. Now, those are just a few of the worries, but each, like pink floyd said, is just another brick in the wall. So, sue, lets keep climbing that wall of worry and see if stocks can find some footing in the face of those head winds. Back to you. Thank you. Well see. And talk about this with kenny and bob pisani. Not bad, down 15 on the trading session. Interest rates in play, obviously. What are you watching . And you can almost feel in kind of the lack of volume. Right . Once again kind of on the slow side compared to where weve been. People are waiting. All of this anticipation especially after yesterdays adp number, which came in much stronger than expected. Upgraded they raised the prior months adp number. Revised up. People are anticipating what does that mean for tomorrow . A strong number does that mean the fed could taper faster than we think . Hold on one second. Okay. Weve got to go back to dom for a market flash. Diamond foods, San Francisco based Snack Company paying 5 million to settle civil charges that the company and two former top executives misled investors by lying about walnut costs to boost earnings, in addition, diamonds former chief executive officer Michael Mendez agreed to pay a 125,000 penalty and settle without admitting or denying those charges. The sec said that in its statement. The companys former chief Financial Officer stephen snee still fighting, sue, the secs charges. Back to you. Stocks up 1. 25 . Bob, you were saying . Watch the numbers tomorrow from the nonfarm payrolls. Whisper number over 200,000. Get 210,000 keep the three year, not moving that much, 3. 03 a few basis points, well be all right. Look whats going on here today. Winners, health care and financial, and losers are emerging markets in the retail stocks. Real dill appointment to see retail numbers. And china, ipos pricing this week alone. An issue for that market. The emerging market, chinas down in the beginning of the year. All emerging markets are down. 4 , 5 and 6 weighing on material names, coal names and steel names weak at well. And kenny, last word. Part of the markets are down because the anticipation of a fed pullback and then if our numbers continue to get stronger, are they going to pull back faster and what does that mean for the emerging markets . You have to keep your eyes open. Absolutely. Ty, over to you. Sue, thank you very much. I think bob took the words out of stephen liesmans mouth. Tomorrow, the big jobs report. He, steve, has five good signs that you think we, that tee up think report tomorrow . Behind the optimism on the street. Claims coming in, tyler, 330. A bit better. Falls to 349. Not the most reported leading indicator above of tomorrows jobs report. Here are five. Adp. Three month average, 324,000, just the private sector, and the government sector not taking away jobs. Both employment indicators are up in december for the supply management reports. Service and manufacturing. Small business, nfib, reporting best jobs numbers since 2006. Of course, gdp is significant suggesting improved job growth, up 3. 5 in the second half of the year. Finally, challenger coming in with the lowest job cut totals for 2013 since 1997. John challenger, this morning on squawk box putting that number into context. We havent seen a cut this low since like youd said at the beginning. Back in the late 90s, before the dotcom crash. Layoffs were very low. Economy rolling. Think than. Thats a 97 number. Tyler, 30,000 in the month of december. There we go. Threemonth average of adp versus the bls or government report, steadily on the way up. We try to dwluz threemonth average to get rid of the monthtomonth noise. Finally, forecast for tomorrow. 200,000 jobs up from 191, 193. Unemployment, 7 , improvement but elevated. One should not understate there is still weakness in the job market. And number of longterm unemployed. Big number. Steve liesman, we know youll be all over it tomorrow. Sue, down to you. Ty, coming up on power lunch two stories of rule breaking. Morgan brennan has the first for us. Morgan . Alcoa in big trouble for bribing officials overseas. That straight ahead, sue. And it wasnt quite as big as a fine. The federal authorities arent after this new york knick, but the nba is, the old shoelace trick and bribery made in the usa. Well talk about that coming up next. Watch the left side of your screen here. Youll see the New York Knicks guard jr smith untying the shoe lace of the other player. Nba had it with him. Fined him 50,000 for recurring instances of unsportsmanlike conduct. The top official of the nba happened to be at that game in detroit. The shoe lace i mentioned, something smith has been known to do in the past. See if it helps him when they play the miami heat at the garden. I dont think lebron will fall for that. I dont think he either. Thanks, ty. And paying settlement charges. The sec said they bribed bahrain to obtain rights to businesses there. What can they learn from this and do about it . With us, bob herbold, who sits on two of the boards and from the university of nebraska, and im going to you, if i could first, bob. You know, theres two trains of thought on this. One of which is doing business overseas is nerve e never the same as doing business here. Are there ways to get lucrative contracts where taking bribes is pretty routine . Its a real challenge. For example, in china, ive had recent experiences with a company where, frankly, the sales practices in Certain Industries are different than they are here in the u. S. , and you have to train and train and train your people that youre simply not going to accept that. That you have to live with that disadvantage, and if youre a u. S. Based company, that is a price that you pay. The fact is, as we talked in the earlier segment, communication to the employees as to whats expected and the ramifications are absolutely critical. Mary, weigh in on that, if you would, because, you know, in this increasingly Global Environment that multinationals and even smaller businesses in the tech arena that are now doing business overseas. You know, when business as usual in one country is not the same as business as usual or business that is legal in another country, those businesses face some very stiff ethical challenges. I agree with bob. It is a real challenge, and the foreign corrupt practices act, the one that tells us we cannot engage in bribery over seas is the one that People Struggle with quite a lot. For many of those countries, thats their normal practice. We do it, because we want to uphold hire standards and believe that having National Implications<\/a> for governor christie, and in that factor, for any president ial hopes he might have. Eamon javers is in d. C. D. C. Is a tricky down, eamon. So what are you hearing on that front . And what are the possibilities now for the governor . Yeah, sue, obviously all eyes in washington focused on that press conference in trenton which just broke up a few minutes ago. Everyone filtering this through a 2016 campaign lens, even though that campaign hasnt officially started yet and wont for a couple of years yet. Obviously, this is damaging for governor Chris Christie<\/a>. No question about it, and we saw Something Interesting<\/a> happen a few moments ago. The white house postponing their Daily Briefing<\/a> from 12 45 when the press conference was still yog gone to 1 15, we know at that time it will be over with. Having the political and practical effect of keeping the National Media<\/a> spotlight on governor Chris Christie<\/a> while that press conference was still ongoing. You can expect the white house will say that was simply a coincidence, clearly, folks paying a lot of attention here. Christie clearly did very, very well here. Is getting a lot of praise already from professional Political Consultants<\/a> for the way hes handled this, but that one sound bite, sue, you can bet, will come back to haunt him. He said, i am not bully. One of those things that sticks with a president ial campaign in the years to um can. It does. You know, talk to me about the perception, which the governor says is a misperception, that he is a micromanager. He says he is not. The perception in washington and elsewhere, and it became an issue when rumored to be running for the presidency, that he was a micromanager, and, therefore, should have, or probably would have, known about this particular incident. Right. Well, the tans hes taking right now is that he had nothing to do with this. He wasnt involved. These were rogue aides now disciplined. He wasnt even aware of it, he said, until he finished up his session with his physical trainer yesterday morning at about 8 50 a. M. The first time he saw any evidence that his political and his gubernatorial staff had actually been involved in this situation. Hes going to stick to that. If youre going to stick to that you have to say im not a micromanager. These are some of his closest political and gubernatorial aides apparently involved in the situation, if he was a micromanager on on top of those people on a daytoday, hourbyhour basis he would have known about it. More breaking news. Brack to scott. Back again to the Governors Press<\/a> conference, talking about wanting to go to fort lee to apologize personally. This is towards the end of the News Conference<\/a>. Lets roll that bite right now. I was going to call him after this. If he wont see me ill see other people in fort lee. I wish he would see me. Im certainly not going to barge into his office. If he doesnt want to see my office, ill go someplace else in fort lee and talk to somebody else in fort lee. I wish the mayor would reconsider. I would come up to genuinely apologize to him for the people in my employ, but if he doesnt want a meeting. I dont know what he means. How a meeting between he and i would be what were the words . Premature and creating a traffic premature and disruptive. I dont know how that could be premature and disruptive. If he doesnt want to meet with me, thats his choice. The governor about ten minutes ago responding to a statement by Mark Sokolich<\/a> saying he didnt want the mayor to come up and visit him. After that we now hear from sokolich saying that, hes reconsidered and governor christie should come on up. It appears there will be a summit of sorts over in fort lee, the next town over from here. We will be there live when it happens and continue to follow this latest aspect of bridgegate. Back to you. And maybe theyll get together at the old red oak diner, scott. A place i know you know well. Renamed now as the chiller grill or Something Like<\/a> that. Somehow, stick with business and ask whether Business Executives<\/a> should take chris tip lead, follow it, and get on top of the situation when things go awry and do it as seemingly forthrightly, instantly and lengthily, as governor christie just did. Former microsoft coo bob and mayor, the howard banks chair in Business Ethics<\/a> and leadership at the university of nebraska join us. Welcome to both of pup bob, lem begin by asking you, what is your initial reaction to governor christies almost twohour press conference in which he repeatedly apologized, not something you hear Business Executives<\/a> or certainly political executives do very often. Well, i think its the right thing to do. What happened may or may not be within his per view. Mo most likely it wasnt and those kinds of things happen occasionally and the best thing to do is be up front about it. That is certainly his reputation. Professor mary, were going to take a break and report on a bond market out in chicago. I promise to come back to you instantly. Hold on. Heres rick. All right. 13 billion 30 years actually 29 year 10 month reopening, a minus auction, by far best of the three. Highlights. 2. 57 the bid to cover. 2. 57, chasing every dollar worth of securities available. The last ten auctions, second best. Strong direct, strong indirects and the yield 3. 899 below the yield in the wi market, but right at 1 00 eastern. A minus auction. Yields have fallen across the yield curve after the results were out. Tyler, back to you and your interviews. Thank you very much, rick. Professor, you know, one of the things you do is have a chair in leadership. Here was an example of leadership. What great would you give governor christie if you were his professor . The chair is also in ethics. Its the howard hawks chair and leadership and ethics. The grade i would give him a bplus. High marks for the way he handled the press Conference Today<\/a> and for taking quick action, but i think that he could have done more in his administration to make sheer thuz kinds of things dont happen. So you sort of reading between the line, dont mean to put words in your mouth, professor, you seem to be downgrading him a little bit on the ethical part of the ledger . Right . I do. Yes, i am. I think that one of the issues that he might be having is, and the interview that i read, he said that he spoke with his employees and gave them one hour to tell them if they had additional information. To me that sounds like a bit of an intimtation and fear climate, and if he can be more open and allow people to speak more openly in his administration, it would help avoid these kinds of issues. Bob, youve worked with powerful people in the business world, and know that sort of the dynamics of Office Holders<\/a> in a corporate setting. Is it credible to you that the government, that the governor, the ceo of his state, would not have known or been told by a deputy chief of staff that what was going on was going on in fort lee with respect to the hearings . Is that the way executive councils work . Its quite possible, and, in fact, in my i believe its probably the case that he wasnt aware. The reason is, these are large, complicated organizations. You do your best to communicate what you believe are the principles. The right thing to do is to give examples of the kinds of things that people should avoid, and the repercussions for engaging in such activity, but the fact is, these organizations are large. You try to delegate responsibility and occasionally these things happen. Bob, mary, thank you very much. Well pick up later on this same toing, extend it farther. Meanwhile, down to sue and the businesses at hand, which is the markets right now. Indeed. A little down side day, although not by much now, ty. Down 12 points on the Dow Jones Industrial<\/a> average. Last trade, 16,450. Basically flat, s p, down half a point at 1,836. 91. Nasdaq down a fraction as 764. And the auction, ricky gave an a minus to. The tenure, whether or not we move above the 10 mark. Yesterday we saw it tick up above the 3 mark and theyre watching that down here, too. Ty, over to you. Sue, thank you very much. Were facing a fif mg down day in six since the start of 2014. Not the streak, dominick, you like to start a new year with. Is it time to start thinking about taking some profits . There are, i guess, some stocks that are still climbing the wall of worry. Its interesting. Market veterans, you said, will often refer to rising markets in the face of head winds, as bull markets that climb that wall of worry. So in a way it means no matter what there are always going to be issue, concerns and oftentimeses it doesnt hamper progress. There are too many of these worries to count, but here are a few of the ones as of late getting attention. First, the possibility of weaker corporate earnings. Cliff noreen thinks costcutting and productivity have peaked. Meaning Profit Growth<\/a> may have to come from selling more product. A novel concept. Second, what about Rising Interest Rates<\/a> . The chief u. S. Economist stephen is concerned about what happens if fed tapering leads to rising rates and will that hamper momentum in the economy . Third, what if europe takes a turn for the worst . And a note to goldman note clients, Goldman Sachs<\/a> said while growth in the region is forecast to be better the turnaround is far from complete, and then theres the worlds second biggest economy, were talking about china, of course. Andy bush of the bush update is worried about what happens if there is a slowdown in gdp there and what the ripple effects are if that does happen. Now, those are just a few of the worries, but each, like pink floyd said, is just another brick in the wall. So, sue, lets keep climbing that wall of worry and see if stocks can find some footing in the face of those head winds. Back to you. Thank you. Well see. And talk about this with kenny and bob pisani. Not bad, down 15 on the trading session. Interest rates in play, obviously. What are you watching . And you can almost feel in kind of the lack of volume. Right . Once again kind of on the slow side compared to where weve been. People are waiting. All of this anticipation especially after yesterdays adp number, which came in much stronger than expected. Upgraded they raised the prior months adp number. Revised up. People are anticipating what does that mean for tomorrow . A strong number does that mean the fed could taper faster than we think . Hold on one second. Okay. Weve got to go back to dom for a market flash. Diamond foods, San Francisco<\/a> based Snack Company<\/a> paying 5 million to settle civil charges that the company and two former top executives misled investors by lying about walnut costs to boost earnings, in addition, diamonds former chief executive officer Michael Mendez<\/a> agreed to pay a 125,000 penalty and settle without admitting or denying those charges. The sec said that in its statement. The companys former chief Financial Officer<\/a> stephen snee still fighting, sue, the secs charges. Back to you. Stocks up 1. 25 . Bob, you were saying . Watch the numbers tomorrow from the nonfarm payrolls. Whisper number over 200,000. Get 210,000 keep the three year, not moving that much, 3. 03 a few basis points, well be all right. Look whats going on here today. Winners, health care and financial, and losers are emerging markets in the retail stocks. Real dill appointment to see retail numbers. And china, ipos pricing this week alone. An issue for that market. The emerging market, chinas down in the beginning of the year. All emerging markets are down. 4 , 5 and 6 weighing on material names, coal names and steel names weak at well. And kenny, last word. Part of the markets are down because the anticipation of a fed pullback and then if our numbers continue to get stronger, are they going to pull back faster and what does that mean for the emerging markets . You have to keep your eyes open. Absolutely. Ty, over to you. Sue, thank you very much. I think bob took the words out of stephen liesmans mouth. Tomorrow, the big jobs report. He, steve, has five good signs that you think we, that tee up think report tomorrow . Behind the optimism on the street. Claims coming in, tyler, 330. A bit better. Falls to 349. Not the most reported leading indicator above of tomorrows jobs report. Here are five. Adp. Three month average, 324,000, just the private sector, and the government sector not taking away jobs. Both employment indicators are up in december for the supply management reports. Service and manufacturing. Small business, nfib, reporting best jobs numbers since 2006. Of course, gdp is significant suggesting improved job growth, up 3. 5 in the second half of the year. Finally, challenger coming in with the lowest job cut totals for 2013 since 1997. John challenger, this morning on squawk box putting that number into context. We havent seen a cut this low since like youd said at the beginning. Back in the late 90s, before the dotcom crash. Layoffs were very low. Economy rolling. Think than. Thats a 97 number. Tyler, 30,000 in the month of december. There we go. Threemonth average of adp versus the bls or government report, steadily on the way up. We try to dwluz threemonth average to get rid of the monthtomonth noise. Finally, forecast for tomorrow. 200,000 jobs up from 191, 193. Unemployment, 7 , improvement but elevated. One should not understate there is still weakness in the job market. And number of longterm unemployed. Big number. Steve liesman, we know youll be all over it tomorrow. Sue, down to you. Ty, coming up on power lunch two stories of rule breaking. Morgan brennan has the first for us. Morgan . Alcoa in big trouble for bribing officials overseas. That straight ahead, sue. And it wasnt quite as big as a fine. The federal authorities arent after this new york knick, but the nba is, the old shoelace trick and bribery made in the usa. Well talk about that coming up next. Watch the left side of your screen here. Youll see the New York Knicks<\/a> guard jr smith untying the shoe lace of the other player. Nba had it with him. Fined him 50,000 for recurring instances of unsportsmanlike conduct. The top official of the nba happened to be at that game in detroit. The shoe lace i mentioned, something smith has been known to do in the past. See if it helps him when they play the miami heat at the garden. I dont think lebron will fall for that. I dont think he either. Thanks, ty. And paying settlement charges. The sec said they bribed bahrain to obtain rights to businesses there. What can they learn from this and do about it . With us, bob herbold, who sits on two of the boards and from the university of nebraska, and im going to you, if i could first, bob. You know, theres two trains of thought on this. One of which is doing business overseas is nerve e never the same as doing business here. Are there ways to get lucrative contracts where taking bribes is pretty routine . Its a real challenge. For example, in china, ive had recent experiences with a company where, frankly, the sales practices in Certain Industries<\/a> are different than they are here in the u. S. , and you have to train and train and train your people that youre simply not going to accept that. That you have to live with that disadvantage, and if youre a u. S. Based company, that is a price that you pay. The fact is, as we talked in the earlier segment, communication to the employees as to whats expected and the ramifications are absolutely critical. Mary, weigh in on that, if you would, because, you know, in this increasingly Global Environment<\/a> that multinationals and even smaller businesses in the tech arena that are now doing business overseas. You know, when business as usual in one country is not the same as business as usual or business that is legal in another country, those businesses face some very stiff ethical challenges. I agree with bob. It is a real challenge, and the foreign corrupt practices act, the one that tells us we cannot engage in bribery over seas is the one that People Struggle<\/a> with quite a lot. For many of those countries, thats their normal practice. We do it, because we want to uphold hire standards and believe that having Higher Standards<\/a> will help increase standards around the world. For company, though, what they need to do is what bob said. They need to train and train, but they also need to have the right kinds of ethical climates and cultures. The way you get ethical climates and cultures, make sure you reinforce the values that are important to you and that you have a lot of opportunity for open communication. So you have to make sure that youre not pressuring for results, over the importance of being ethical. Exactly. What i was going to put to you next, bob. Which is, the resultdriven bottom line. Not just for many employees who are jumped on how well they did in those new markets, but also to shareholders, who expect a lot out of the Companies Whose<\/a> shares they hold. Absolutely. Thats the challenge for leaders of corporations. Theyve got many pressures that they have to deal with, and consequently, these ethical decisions are highly important, and key priorities need to be put against the principles and the communication of those principles to the troops. All right. Thank you both very emergency. We appreciate it. Bob and mary. Ty, up to you. All right, folks. Alcoa, talk about them, gearing up to report profits after the bell. The ceo will be on the closing bell. Thats klaus, and why so many analysts are getting so bullish on aluminum, even though the price of the metal has been what . Declining . Declining. Thanks, tyler, yes. Aluminum prices nose dive down about 37 from their 2011 peak. Now historically aluminum stocks moved in tandem on the lme. Look at this chart of alcoa to see what i mean. According to Analysts Investors<\/a> might want to think twice before assuming alum num prices give full valuation of alcoa stock. The reason, alcoa and others diversifying business. Cutting down smelting operations and bug king up on things like truck wheels, Industrial Gas<\/a> turbines and aluminum body panels. Case in point. Alcoa supplying body panels for fords new f150 pickup truck. The industry is looking beyond aluminum into nickel and even titanium. Products used in aircraft. How important is diversification . Well, for alcoa, it accounts for 57 of total revenues, and 79 of aftertax operating income through the first three quarters 2013. Analysts say alcoa is a thought leader in diversification. Other company, soon to follow suncht interesting. An Interesting Company<\/a> diversifying its operations. Morgan, thanks. Go to dominick for a quick market flash. Thanks, tyler. Jpmorgan, planning to sell or exit over time its business of issues prepaid cards for corporate payrolls and government tax refunds and benefits. Reuters reporting the cards which have been offered with cash and Treasury Services<\/a> to companies and governments have become a headache of risks and operations and regulations. Last month jp morgan warned some 65,000 holders of the cards, their personal data may have been axed by computer hacker who just attacked its network in july. Watch the shares, exiting at least one card. Back to you. Dom, thank you. More now on what our top story was governor Chris Christie<\/a>s crisis, apologizing for a staff member causing a massive traffic jam in fort lee, new jersey, for political payback. New jersey General Assembly<\/a> majority leader Louis Greenwald<\/a> joins us, a democrat, responding to the George Washington<\/a> bridge scandal and joins us on the newsline right now. Thank you so much for joining us. First, your reaction to the governors News Conference<\/a>, and do you believe him . Well, look, im im glad that he stepped forward. Im glad he held his members of the staff accountable, and i think, you know, with the absolute spotlight that is on this issue, i think you have to take him at his word at this point. My advice and recommendation would be, with everything thats at stake, the emails presented, the public has an absolute right to complete transparency, and i think the greatest way to rebuild public trust at this point is to provide those emails without the redaction. So we can see exactly who were on the emails, who knew what, when they knew this information, what they did with it, to completely open this up. The public has a right, the public trust has been broken. These actions are the most outrageous abuse of public trust for political purposes. It reminds you, takes you back to the days of watergate and nixon doing something absolutely absurd. To be clear, youre calling for the complete release of all of the emails involved in this particular scandal. Would you like to see further action by the governor in terms of removing Staff Members<\/a> . Or did he do enough . Well, i think by providing the emails with with, you know, complete transparency, it may tell us if there needs to be further action. I think at this point its hard to say without having, you know, an unvarnished view of the emails. I think in addition to that, while i understand the governor and, he should, as an executive, wants dig deeper and ask questions as to his staff and what they knew, i think, you know, to be honest, the public is probably going to want, as they should, an independent review. An independent council to come in and review. Now with the u. S. Attorneys office doing a preliminary investigation, i think we need to be conscienous we dont wanto disturb any of the evidence. The truth of the matter, i dont know that the governor himself with the hirings that were made and the actions that he took today is the best person to do that independent review. All right. Assembly leader greenwald, thank you for joining us on the phone. We appreciate it. Thank you for having me. To the market now. The gold market is closing at this hour. And the last trade on gold is up about 4 on the trading day at 1229. 70. And governor Chris Christie<\/a> apologizing at a lengthy News Conference<\/a> overish the bridge scandal. Has this killed any president s dreams he might have, or not . Plus, marijuana and money. Pot prices soaring in colorado after legalizing that drug. Well talk about that in just a minute. Were going to talk to someone who just got his license to sell it for Recreational Purposes<\/a> and well see what kind of demand he has seen. Make it happen with fidelity active trader pro. Its one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. Everything looking good. Velocity 1,200 feet per second. [ man 2 ] your looking great to us, eagle. 2,000 feet. Still looking very good. 1,400 feet. [ male announcer ] funny thing happens when you shoot for the moon. Ahh, thats affirmative. [ male announcer ] you get there. Youre a go for landing, over. [ male announcer ] the all new cadillac cts, the 2014 motor trend car of the year. That its given me time toabout reflect on some of lifeseen biggest questions. Like, if you could save hundreds on Car Insurance<\/a> by making one simple call, why wouldnt you make that call . See, the only thing i can think of is that you cant get any. Bars. Ah, thats better. Its a beautiful view. I wonder if i can see mt. Rushmore from here. Geico. Fifteen minutes could save you fifteen percent or more on Car Insurance<\/a>. So ally bank really has no hthats right, no hidden fees. S . Its just that im worried about, you know, hidden things. Ok, whys that . Well uhhh. Surprise um. Well, its true. At ally there are no hidden fees. Not one. Thats nice. No hidden fees, no worries. Ally bank. Your money needs an ally. Welcome back to power lunch. A 30year bond action. A solid auction. A minus. Look at intraday chart. Rates dropped a bit after the auction. The old way it used to be after supply. The two day chart. Left or right, about the same yield. Right . Two day of fives. How the right side yield is so much higher . Your curve flattening. The big buzz on the Trading Floor<\/a> today. Tyler, well return after two minutes with power lunch. In my world, wall isnt a street. Return on investment isnt the only return im looking forward to. And my parachute definitely isnt golden. [ male announcer ] for some, every dollar is earned with sweat, sacrifice, courage, which is why usaa is honored to help our members with everything from investing for retirement to saving for college. Our commitment to current and former military members and their families is without equal. Start investing with as little as 50. [ male announcer ] when you wear dentures you may not know that your mouth is under attack, from food particles and bacteria. Try fixodent. It helps create a food seal defense for a clean mouth and kills bacteria for fresh breath. Fixodent, and forget it. If you have a business idea, we have a personalized legal solution thats right for you. With easy stepbystep guidance, were here to help you turn your dream into a reality. Start your Business Today<\/a> with legalzoom. The markets on hold a little now. Gearing up for earnings season which begins today, of course. Bob pisani to handy dhap for us. Bank stocks and health care pap big loser, retail stocks. 50 off sales in the holiday season, still had companies coming out and reducing their retail outlook for the quarter. Pier one, family dollar, american eagle, reducing guidance. Whats going on . Obvious. Internet is taking a big chunk out of store sales. In the third kwaushgs quarter, e company, samsung, apple and amazon. Thats why were not getting a lot of sales growth in the stores. Online is starting to bite into over allsales. Moving on, another winner. Oil numbers keep dropping. Oil prices keep dropping down to new lows here. Seeing airlines with big moves to the yum side. United, american, delta and southwest. A few clear winners, but also several losers. I also include emerging markets as another loser right now. Sue, back to you. Okay, bob. Thanks. Ty, send it back up to ec. Sounds great. Were just next door to fort lee where all the controversy was taking place last fall, the traffic signals. I drive through fort lee every dpap of course, its gotten governor christie into some hot water. The outspoken leader of the garden state she he ays he is s. I come out here today to apologize to the people of new jersey. I apologize to the people of fort lee, and i apologize to the members of the state legislature. I am embarrassed and humiliated by the conduct of some of the people on my team. Here with us now to discuss this further, michelle and brian, welcome, guys. Hello. We all know you were stuck in traffic that day. I dont remember it. I do. One of the things christie said was, politics and local politics is not a bean bag. Youve covered a lot of local politics. Right. Is the kind of retribution by an Office Holder<\/a> or his or her staff commonplace . Oh, i think it is. Now, to this degree where you affect potentially millions of people . At least thousands of thousands and thousands. Busiest bridge in the world, havent seen that, but certainly, you know, he said im not a bully. You know, i kind of think he is. And i kind of think a lot of people liked it. Thats what they liked about Chris Christie<\/a>. Hes right at you. The youtube video, in the face of the teachers dooring the whole debate about what the budgets would be in the state. This is a little of his persona. Somebody doesnt get the job they wanted, a local office is not located in your town or whatever, you and i were talking earlier. I thought it was remarkable that he spent basically two hours onstage basically saying, bring it on. Come on. Answering anything. Tyler, eheres my view, i ca only say this as a new jersey resident. If you like Chris Christie<\/a>, is this going to make you dislike him . No. Exactly. You know, my dad is probably a christie fan. Hes not going to change his views of, all right, now im going to vote for clinton or somebody else in 2016. And if you hate Chris Christie<\/a>, this will probably make you hate him more. I dont know if anybody id love to hear from the audience on twitter, who will change their view of the governor because of this. Be honest in a different way. The only reason were talking about this is because she considered a frontrunner in the 2016 president ial race. If this was joe blow in another city in america, doing the same thing, nobodys going to talk about it but the local times picayune. The fact its getting this much coverage is a de facto sign of his poppopularity. Lots of people will talk about this all day long. In about 20 minutes on street talk. I love that. Yeah, man. Talk about grease. All right. Dominick with a market flash. Talk about this. Exxon mobil down graded to a neutral and ap recent runup in price in approach of major expensive projects. Maybe a drag on profits. Exxon recent gains leave a little more in terms of upside the left to justify the readings watch those xom shares. Back to you. Thank you, dom. Coming up next, our signature segment. The power house. Top real estates in america, today, the suburbs of new york city. How much do homes buy for your money . And low inventory. Soaring prices. Talking marijuana. Store owners in colorado are raking it in, but theyre facing a big problem with all of that cash. Well explain, when power comes back. [ male announcer ] this is the story of the dusty basement at 1406 35th street the old dining table at 25th and hoffman. And the little room above the strip mall off roble avenue. This magic moment it is the story of where every great idea begins. And of those who believed they had the power to do more. Dell is honored to be part of some of the worlds great stories. That began much the same way ours did. In a little dorm room 2713. This magic moment we know were not the center of your life, but well do our best to help you connect to what is. At top of this hour. Restaurant wars. We are pitting stock against stock on food street and new jersey governor Chris Christie<\/a> in the hot seat. What this means about his potential road to the white house. Well debate that. And also, why should we pay attention, a look at that as well. Lots of things coming up, guys, street signs, top of the hour. Back to you on power lunch. Its power house time this week in the suburbs of new york city. Looking at beautiful Westchester County<\/a>. Anthony is an agent there. Anthony, welcome to the program. Run through stats for Westchester County<\/a> for Single Family<\/a> home, Third Quarter<\/a> of last year, median sales price, 652,000. Average,ss 862,000. You see the year over year gains. Sales up 23 total last year. Inventory, though, down. Suggesting, anthony does it not, housing are moving . Houses moving at about a sixmonth inventory level. Six months on the market or inventory level . Sixmonth inventory level. About where you want to be in this kind of market. West chftor, a vast county north of new york city. So different markets would be very different depending where you live . True. Our office, we are in lower Westchester County<\/a>. Basically were seeing i have about a 50 year over year baglogue ba backlog of closings. Three bedrooms, 2. 5 baths, 17,050 square feet. A starter house in west chaster . Tell me about it. A great starter house. You can own this for about 2,700 a month. The comparable to renting a 2,000 apartment. It would be a great way to get in to the market. What makes this one stand out . Thatting whos like a very nice you got to like red there, i guess. Its very well maintained. A home in the middle of our historic district, on the lower price point of the district. The average sale price, in the areas between 500 and 600 doesnt look like that right now, does it, anthony . Its icy up there. Been cold. Second listing. 740 pelhamdale avenue. List price, new rochelle, 19. 162 in taxes. 3,700 square feet. Look lovely. Tremendous home. Low priced. End of the day, taxes fair and reasonable. 4 piece of property. About half an acre. Look at the woodwork throughout the home. The home is from 1905. More than a 100yearold house. Yes. Beautiful. 659 grand if you want to get in there. List price, 1. 1 million. 23 grand in taxes. Four bedrooms, 3. 5 baths. 4,100 square feet in new rochelle. A split he . A ranch, modified. The woman that lives in the house takes care of an elderly parent. They put in a beautiful extension to accommodate a living room bedroom and kitchenette. For a well, used to call it an inlaw suite or a child. Unique. Its definitely a great value for this home. Its in an area of up to 2. 2 million. On the lower price. Look. Beautiful. Hardwood floors there. Yes. Anthony, thank you for being with us. Taking us on a tour of Westchester County<\/a>. Appreciate it. Sue, down to you. Talk a little about marijuana. Absolutely. What were going to do ty, because the marijuana business is booming in colorado. Well speak with one pot store own about demand, inventory and prices right now. Also a lot of Marijuana Dispensary<\/a> owners are facing a big problem with all of the money theyre making. Jane wells is in denver with that part of the story for us. Janey . Reporter sue, there is one key player missing from colorados joint venture. The banks. They have to abide by federal rules. Cant have illegal drug money. And according to the feds, exactly what this is. Welcome to the Rocky Mountain<\/a> cash state, next. Legalzoom has helped start over 1 million businesses. If you have a business idea, we have a personalized legal solution thats right for you. With easy stepbystep guidance, were here to help you turn your dream into a reality. Start your Business Today<\/a> with legalzoom. Were here to help you turn your dream into a reality. If yand youre talking toevere rheuyour rheumatologistike me, about trying or adding a biologic. This is humira, adalimumab. This is humira working to help relieve my pain. This is humira helping me through the twists and turns. This is humira helping to protect my joints from further damage. Doctors have been prescribing humira for over ten years. Humira works by targeting and helping to block a specific source of inflammation that contributes to ra symptoms. For many adults, humira is proven to help relieve pain and stop further joint damage. Humira can lower your ability to fight infections, including tuberculosis. Serious, sometimes fatal events, such as infections, lymphoma, or other types of cancer, have happened. Blood, liver and nervous system problems, serious allergic reactions, and new or worsening Heart Failure<\/a> have occurred. Before starting humira , your doctor should test you for tb. Ask your doctor if you live in or have been to a region where certain fungal infections are common. Tell your doctor if you have had tb, hepatitis b, are prone to infections, or have symptoms such as fever, fatigue, cough, or sores. You should not start humira if you have any kind of infection. Ask your doctor if humira can work for you. This is humira at work. Demand is high, inventory is low, and prices are surging. The pot business is booming in colorado after legalizing Recreational Marijuana<\/a> use. Many marijuana dispenries are phasing a dilemma with all the money theyre making. We explain. I do the farm report. Not quite ready for harvesting yet. The rollout pretty smooth but big hurdles. One is banking. Thats because selling pot while illegal state business is not a legal federal business, so no credit cards all cash, few bank accounts. Stores like 3d cannabis where i am, able to have a bank account because owners also have a landscaping business. For many others, bank is a safe, stuffed as medical profits make room for this new market. We may be able to open up an account. Soon as they start smelling our money and it smells like marijuana they investigate us and close down our accounts. We may have accounts two, three months. So many in the industry are, their accounts are getting closed left and right. It really is a huge issue. The Denver City Council<\/a> passed a resolution asking that these businesses have access to the federal Banking Institutions<\/a> and theres another problem. If you have all that cash on hand, and this is a business the feds consider illegal, youd better not be caught with a gun. Sue . Indeed, janey. Thank you very much. Appreciate it. Lets talk to someone who may be facing that very dilemma that jane outlined. Well meet the other than of star buds of denver. Brian rudin, left his job as a lawyer a couple years ago to open up a medical Marijuana Dispensary<\/a> yesterday got the thumbs up to operate for recreations use of marijuana. Are you facing the issues outlined in janes report in terms of how to protect your cash, where you can deposit your cash or not . Well, thanks for having me. And, yeah. I faced the same issues that the rest of the industry faces as well. So what do you do with your cash . Well, with as much as possible, we pay all of our bills, pay all of our taxes, any vendor that accepts cash, thats how we pay them. We get money orders to pay things like our sales taxes. The state actually takes cash now as former payment for licensing fees. So city of denver, same thing. We pay our licensing fees in cash. Its not uncommon to walk in to the state or the city with 10,000 cash, plunk it down and pay your fees. And i understand business is booming . Is that correct . Both on the medicinal side and now that youre approved for Recreational Use<\/a>, i assume youre seeing greater demand . Yeah, we really are. So at star buds in denver we open for Recreational Use<\/a> yesterday. Didnt have huge lines like the other stores did, because we hadnt gotten the word out yet. Im sure after this well start getting slammed like the other stores, too. Brian, let me ask you a couple questions. First, have you heard from that other Company Whose<\/a> name yours sounds rather like, starbucks and whose logo yours rather looks like . Youre an attorney. If you havent heard from them, i suspect you may. I dont know if you have children, but what would you tell your children about the use of marijuana . Your first question that other company ive never heard from at this point. If i do, i dont sell a product like theirs and my name is different. So i suspect it will be okay. If not, well, then well figure that out. As far as kids go you know, under colorado law, this is a product for people 21 and older. And, you know, im a big proponent of marijuana, but also a big proponent of using it in moderation. So, its not for kids. What about those who perhaps have an issue with drug abuse, and there have been studied that have indicated that Recreational Marijuana<\/a> use opens the door to harder drugs . Thats the fear of some who are on the opposite side of your argument. What would you tell them . Well, if you look at the Actual Research<\/a> and the studies, thats just not true. Marijuana is not necessarily a gateway drug. Thats been fear mongering weve had in the past. It goes back to the days of reefer madness, if you will. But if you look at the reality, marijuana is safer than alcohol. Its less addictive than alcohol. And its safer and less addictive thaddict ive than all of the prescription drugs out there. A lot of patients on the medical side given up percocet and oxycodone and are functioning better through marijuana. Its been a huge improvement in their lives. Thank you for spending time with us. Good luck with your business and we hope youll come back and give an update soon. Thank you very much. All right. Three of the biggest etf winners in todays trading, coming up next. Aflac aflac got em. Yeah, hes clean, boss. Now listen to me, duck. I have an associate that met with, uh, an unfortunate accident. While hes been incapacitated, somebodys been paying him cash. Now, is this your doing . Aflac . Now, if i met with some such accident, would aflac pay me . Nice. This is your stop. [ male announcer ] find out what aflac can do for you and your family. Aflac . [ male announcer ]. At aflac. Com. For you and your family. Aflac . If. Hey breathings hard. Know the feeling . Copd includes emphysema and chronic bronchitis. Spiriva is a oncedaily inhaled copd maintenance treatment that helps open my obstructed airways for a full 24 hours. Spiriva helps me breathe easier. Spiriva handihaler tiotropium bromide inhalation powder does not replace fastacting inhalers for sudden symptoms. Tell your doctor if you have kidney problems, glaucoma, trouble urinating, or an enlarged prostate. These may worsen with spiriva. Discuss all medicines you take, even eye drops. Stop taking spiriva and seek immediate medical help if your breathing suddenly worsens, your throat or tongue swells, you get hives, vision changes or eye pain, or problems passing urine. Other side effects include dry mouth and constipation. Nothing can reverse copd. Spiriva helps me breathe better. Does breathing with copd weigh you down . Dont wait to ask your doctor about spiriva. [ bell ringing, applause ] five tech stocks with more than a 10 . Change in aftermarket trading. All the tech stocks with a market cap. Of at least 50 billion. Are up on the day. 12 lowvolume stocks. Breaking into 52week highs. Six upcoming earnings plays. That recently gapped up. [ male announcer ] now the world is your Trading Floor<\/a>. Get realtime market scanning wherever you are with the mobile trader app. From td ameritrade. All right. Lets get you up to date on the markets. A little caution tomorrow in the markets. Down about 31 points on the Dow Jones Industrial<\/a> average. S p down about 2. 25. Quiet trading there. Nasdaq composite down about 14 points. Very good auction today. The 30year auction came off with an a minus grade from ricky and now the yield is 2. 98 . Yesterday we were bumping up above the 3 mark. Today not so much. Again, theres caution ahead of that jobs report. Tomorrow the estimate is for a gain of 200,000 jobs. Well see whether or not there are revisions. Thats what a lot of people are looking for, whether or not we have upward revisions or downward revisions. Most people are anticipating, perhaps, an upward revision to some of the previous reports, which would lend more credence to the fact that the jobs picture is slowly but surely improving in the u. S. And the dollar right now has been basically steady, waiting for that report. Pro shares, ultra short. Oil is up 2 . The spider Regional Bank<\/a> index up half a percent and market vectors biotech tie up almost 1 . I dont know about you, sue, i am struck how cautious and tentative a start stocks have had in this 2014 so far. Absolutely. We gained better than 25 last year. Maybe thats what it is. Probably explains why. Thats does it for this edition of power lunch. Thanks for watching, everybody. Street signs begins now. Can you guess the worlds best performen stock market so far this year . You probably wouldnt believe it. The surprising answer is coming up. Hi, everybody. The other hot topic on this thursday, new jersey governor Chris Christie<\/a> not getting a surprise. He wants bridgegate, could it slam down his hopes in its president ial race . 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