David, let me kick it off with you. The markets hitting fiveyear highs this week. Amazing of whats going on as the markets flirt with all time highs. The markets doesnt care about sequester. Should we be carrying on it . Its going to depend on the four ps. Profits exceeded forecast for the fourth quarter, as you know. Secondly is personal income. Wall street journal on this past friday talked about the wage growth is anemic. Only up 2 . Thirdly is production. Thats the hiring. The hiring not the wages but the hiring. And thats been relatively anemic, as you know, as well. The fourth p is politics and is sequestration. I think one of the things that your investor based and your viewing audience have to be aware of is a potential debt downgrade. Another debt downgrade by the United States where we go down maybe to aa, aa, were aa plus now or aa or a plus. If the profits can continue strong, if the hiring can pick up a little bit, if the wage growth can pick up a little bit and politics dont get in the way, maria, the market can go higher. Politics has not gotten in the way for the most part. Even though we have back and forth on spends cuts, the markets are going higher. Whats the impact of the market at record highs or near record highs . Does that help the republicans who want to push for cuts or does it help the democrats or, i mean, does it put pressure on one side . I think it helps the republicans at this point to see a market that is not reacting negatively to sequestration, that doesnt think taking 85 billion out of this 3 trillion budget is that big a deal. If that continues, if the markets continue to rise or at least sort of stay where they are and you dont see huge inconveniences to people based on this sequestration, thats very helpful to republicans and it means that we get probably more budget cuts down the road. Harder for obama to make the argument that we cant cut more spending. So its difficult for obama who has also said in leading up to sequestration that we would see horrible impacts. Let me play a clip for you, ben. I want to get your reaction from paul ryan, earlier this week. He down plays the impact of the sequester. Listen to this. Do we believe that the government which spends 3. 5 trillion this year can do 85 billion less . Yes. Do we believe that a government that spends more than 100 billion a year in what we call improper payments, money that shouldnt be spent, should go without raising taxes . Yes, i agree with that. Is that right, what he says . What the democrats would say is we can cut that much money. 85 billion is not the problem, the problem is how the cuts are implemented. Theyre across the board. Theyre not taking out the improper payments, waste, fraud, abuse across all the programs. Head start is School Lunches is stuff that really matters to people. A lot of cuts in the Defense Budget that could be problematic for National Security. They would say we would like to cut spending, this and more, but do it in a more targeted way and balanced way. They want to close tax loopholes and eliminate private equity hedge funds, take away oil and gas tax. Loopholes, they call them. Its not the amount, its the manner which that amount is taken out and theres no revenue included in it. What about the fed, david . This week, i guess the markets were reassured that ben bernanke is going to be there still buying bonds, the Bond Buying Program very much in place. How important is that . Is that what is supporting this market or is it more than that . Maria, last year the market was up 16 total return. Its up another 6 through friday, as you know. I find the feds help is basically been supporting the markets. We need fundamentals to kick in. Hes doing the best he can. People like to criticize ben bernanke. The fed is doing the best they can. The two parents are Monetary Policy and fiscal policy. One parent is exceedingly lenient and generous with gifts of candy and toys and the other one is extremely stingy. Thats congress and the president. Isnt the fed bailing out the policymakers . At this point they are. And ben bernanke has said this in all of his testimony, can you, congress, please deal with your fiscal situation a little bit better than you are . And he doesnt want to see the austerity the way its applied through sequestration. He made that clear through his testimony. He would like to see longterm deficit reduction, addresses Social Security and medicare which crushes us when the baby boom retires. But he doesnt want to see a lot of money come out it right now. In the face of all of this, david, what should we do with our money today . Wow want to find places in this great big world of ours where the is being released. You want to own some japanese equities. Secondly, is you want to look at mexico. And they are basically going to release the straitjacket that theyve had on their energy sector. Thats why your drillers, so you can play that through mexican equities, play it through the big u. S. Drillers. You want to buy your u. S. Global gorillas which we talked a many times, which are the u. S. Multinationals that sell at relatively attractive valuations, pay good dividends, Global Management focus. Thats what you want to be looking at. Gentlemen, thank you so much. Great conversation. Appreciate your time today. Up next on the money, the changes ahead at home and abroad due to the sequester cuts and a look at what the administrators in Government Agencies do to carry out the doomsday scenario. He worked with springsteen, janis joplin and more. Take a look at how the stock market ended the week. Back in a moment. This week, why stocks dont alright, lets go. Shimmy, shimmy chocolate. Shimmy, shimmy chocolate. We, we chocolate cross over. Yeah, we chocolate cross over. [ male announcer ] introducing fiber one 80 calorie chocolate cereal. Chocolate. The one and only, cheerios beyond washingtons debate over the march 1st automatic spending cuts, those at the american agencies doing work, domestically and internationally, must contend with the coming cuts. Dr. Raj shah is the administrator of the United States agency for international development. Mary schiavo is the former Inspector General for the department of transportation. Good to see you both. Thanks so much for joining us. Thank you, maria. I want to kick it off with you, raj. Under the sequester, the state department and u. S. Aid, foreign aid is 1 of the federal budget. Whats at stake as you look at the acrosstheboard cuts . Thank you, maria. First, i would say that my agencys mission is to advance Americas National security and Economic Prosperity by working in future emerging markets. And really, what the steps were taking to handle the sequestration challenge, as painful as they are, are consistent with our approach since we took office. Weve been cutting programs and focusing on a businesslike resultsoriented strategy that engages private sector companies, often Great American companies, towards the mission of helping to build more stable and more secure emerging markets. Walk us through the process of having to administer this. Are you having to phase out programs . Over the course of the last three years we phased out over 300 programs based on a very rigorous return on investment approach to what were going to get as we go forward. And, of course, this is the international story. Lets talk about the domestic story, mary. You were Inspector General at the department of transportation during the Government Shutdown back in 1995. Give us some insight into the process of managing operations while having to administer these cuts. Well, it was an entirely different attitude. And i think that attitude needs to be resurrected here. We were basically told, look, youre a federal manager. You were hired to manage a multimillion dollar agency, for the whole d. O. T, multibillion dollar agency. If you cant manage an 8 in this case budget cut, then youre not a very good manager. We were told just to do it and to make sure our customers, who are the american public, feel as little pinch as possible. Where now it seems to be the opposite. Everyone is running around saying, oh, everyone is going to be hurt. The bottom line, for example, in the federal aviation administration, 24 billion, theres 11 thats exempt. 11 billion. 13 is subject to sequestration. So its not as draconian and the world is not going to stop. But what about the cuts that were hearing about through the faa and potential impact on Domestic Travelers . How would things be different if the agencies had the discretion to manage the cuts themselves and are you expecting a lot of upset this week given the Domestic Travel situation . No, and if there is an upset, we have to ask what are these federal managers doing. Because, remember, they have discretion within the department. Now theyre saying theyre going to pose the air Traffic Control towers. There have been reports starting in the 90s that several hundred air Traffic Controllers need to be shut because theyre low activity and they would be a huge savings if they would farm out some of these towers that theyre threatening to cut. They have been asked to close. They have been asked to private advertise, a private tower costs at 500,000 a year. Faa tower costs about 2 million a year. Many of these cuts have been on the books for years. This is a Market Correction for government. If approached with the right attitude they can do tremendous good for the public and for the bottom line and might everybody come out with more discretionary funds to really do things that matter like finish the next Generation AirTraffic Control program, for one. So i dont think the public should feel the cuts at all. And if they are, i think that its intentional. A good manager can manage an 8 cut. Thats very good. Very good news, mary. Raj, what do you see as the big damage of the sequester drama . For far less of 1 of our federal budget we put more than 4 Million People on aids treatment in africa, we saved 220,000 children under the age of 5 from malaria in africa, we have supported 8 million Young Children including 3 Million Girls being in school in afghanistan. And if we fall back on those commitments around the world, others look to america to lead. And we put ourselves at National Security risk. And i felt that very viscerally last week when i was at the highest ranging official, first u. S. Official to be there in more than 20 years because theres an opportunity to advance a country and to reclaim a nation from a terrorist organization that has an avowed desire to harm america and americans. And its all for less than 1 of the budget and we do our work now in a deeply business like manner. Its a real dilemma. Looking to do the right thing outside of the United States when youre facing tight budgets inside the United States and wanting to do the right thing for americans as well. Good to have you both on the program. Thanks so much. Thank you. See you soon, raj shah and mary schiavo. Next up on on the money, the man with the golden ears. Clive davis will join me on the big business of music, including what hes listening to now. Find us on facebook, look for maria bartiromo. Back in a moment. Lucky charms . yer always after me lucky charms whoa. I forgot how good these taste [ lucky ] theyre magically delicious the one and only, cheerios if you name any of the bestselling recording artists over the next few decades, my next guest has been intimately involved with their careers, in fact, led many of them. Clive davis was president of columbia records, founder of both arista and jay records. Memoir can called the sound track of my life. Clive davis and that book continues to rise on the bestseller list, now hitting number two. Good to have you on the program. Congratulations on the book and the success of your career. Clive, youve worked with so many music legends at the beginning of their career, when many of us did not realize what was to come. How do you know when a musician is going to be a commercial hit and really connect with paying audiences . Well, my first test, id never signed an artist before. We have to go back to the monterrey pop festival, 1967. And i saw janis joplin and big brother and the holding company. And, you know, it was the midst of a music revolution. I got that just that feeling, overpoweringly feeling, whether its a cliche, that tingle up your spine. I dedicated myself to signing her. I did. And then i started trusting my ear when i saw santana, when i saw bruce springsteen, earth, wind, and fire. Gradually i built this track record of signing artists who were not just hit artists but became hall of famers. Superstars, hall of famers. Did you want to go into the Music Industry from the beginning . You were a lawyer. I got there through luck. This is pure luck. I became the lawyer for columbia records. I was the lawyer for five years. And one day my boss first offered me the Musical Instruments division because he was becoming a group president. By luck, his executive Vice President wanted that, kind of looked at me and said, okay, youre going to have columbia records. It happened just like that. What a career. So what happened i mean, youve seen so much. What happened when apple came on the scene . Technology has changed so much about how consumers interact with music, digital music, sales replacing the actual physical purchases. I cant remember the last time i saw a record store. My personal work has not changed at all. I have to find the stars of tomorrow. Whatever the form of delivery is, whether it was a cassette, cd, or digital. But the record industry was late in embracing the digital revolution. So regretfully, there was a substantial number of people in the public, you know, who thought they could get music free and instead of coming up with a legal way to make all this happen, it was illegal and has been illegal and theres a lot of piracy and thats affected you. For me, i look, is this one of these cases where the underlying business is made obsolete by technology . No way. Music is as vital today as it has ever been. So gradually, root out piracy, as we embrace the revolution, this year for the first time records worldwide sold more than the last year. So i know were making progress. But we were hurt for a few years. Who are the big stars of today . Well, the big stars, adele from a Commercial Point of view is the biggest. Her album worldwide sold 22 million. Unbelievable. I have a grammy party every year, the night before the grammys. This year i wanted to show the lumineers, i put as a duet Jennifer Hudson doing ms. Gladys knight heard it through a t. Grapevine. My test is to get that audience lifted out of their seat. Love that. How do you listen to music . Do you subscribe to streaming services . When youre enjoying music, what do you do . Listen to streaming. Im aware of everything. But for the i have to worry about going over the hill. I mean, ive been very fortunate. Every week, i take a tape of a record that just hit the charts so that my ears dont go over the hill. Ive seen too many of my peers get wounded in the songs and tempo of yesterday. Youve got to keep up. So i got to keep up. Not all of the response has been positive. What about kelly clarkson. She took issue with your comments about her. Has there been a reaction to the opening up in this book that has surprised you . No. Kelly, we had a difference of opinion on memory, what my reaction was to one of her songs, what her reaction was to two of my songs. Quite to the contrary. In the industry, everybody is buying gifts for every employee, whether its entertaining or educational or revealing. I mean, you know, ive got to say the reception has been spectacular. Clive davis joining us, music legend. Up next, news for the week that will have an impact on your money. A look at benedict xvi when we come right back. Stay with us. For more on the money, go to our website. I hope you will follow me on twitter and google plus, as well, look for mariabartiromo. Look at the stories coming up that may move the markets an impact your money this week. On wednesday, the Federal Reserve beige book will look at regional economies across the country. Thursday well find out if the u. S. Is importing or exporting more. And on friday, the big one, the Labor Department out with the next monthly jobs report. That tells us how many jobs the economy lost or gained in the month of february. Typically a market mover. When it comes to your retirement do you plan ahead or just pray . Pope emeritus benedict xvith has done both. The first pontiff to resign in nearly 600 years forced the holinessy to make quick decisions regarding benedict benefits in his golden years. Retaining the private Health Care Policy as well as free lodging and caretaking by a small group of german nuns. His holiness will receive a monthly pension of around 2500 euros a month, thats nearly 3,300, close to the maximum monthly Social Security payout for american retirees. Thats the show for today. Thank you for being with me. Next week, join us, is it googles world and were just living in it . Nikesh arora will join us. Have a great week, everybody. See you next weekend. [ male announcer ] nows the time to save 5 off every day with your lowes Consumer Credit card. You dont decide when vegetables reach the peak of perfection. The vegetables do. At green giant, we pick vegetables only when theyre perfect. Then freeze them fast so theyre are as nutritious as fresh. [ green giant ] ho ho ho. Green giant i just finished a bowl of your light Chicken