a century s old tradition to pick a pope for the 21st century. the conclave is about to begin. reporter: we re live in san francisco where bay area catholics will be praying for a new pope. we ll tell you about a special mass taking place here in san francisco. reporter: and a teacher accused of tying up a student, a 2-year-old girl who refused to take a nap. we ll tell you how school leaders are responding this morning. how a fire scene quickly turned into a crime scene in the north bay. mornings on 2 begins right now. well, good morning. welcome to mornings on 2. i m dave clark. i m tori campbell. it s tuesday, march 12th. happening now in 45 minutes, the college of cardinals will gather at the claple for a final prayer before the start of the conclave in the vatican. earlier this morning, mass was held to pray for the election of the new pope. [bell tolling] at 8:30 this morning, our time, after the final prayer, the cardinals will walk from pauline chapel to the sistine chapel. once inside the doors will be locked and conclave will officially begin with the 115 cardinals inside. the first coat could happen as early as vote could happen as early as early as 9:00 a.m. well, this is being celebrated by catholics all over the world. brian flores is in san francisco where the city s archdiocese has asked for a special mass and prayer for a special papal election. brian? reporter: well, no question, dave, that this is a very special day for many roman catholics throughout the world and the bay area. in about an hour, many will gather here at st. mary s for a special mass. this is a very busy and exciting time for many catholics. just a few days ago here at st. mary s, they held a special mass to prayer for pope benedict xvi. this morning, they will pray for the cards and the election of a new pope. the archdiocese called for all parishes in the archdiocese to hold masses today. some would like to see changes. others would like to see it remain traditional. regardless the picking of the pope cannot be understated. i think that s the excitement about this. there really is no headliner. there s nobody that s favored going into this conclave as there was the last time around. and so anything could happen. reporter: now, here s a brief breakdown of what we can expect in the next few hours the cardinals held a very special mass. at 7:45, they will leave the hotel and then head to prayers at the pauline chapel. at 8:30, there s gonna be a procession to the sistine chapel. and then at 8:45, they will enter the sistine chapel and the prayers begin. and they could place their first vote by 9:00. if there s no vote by 11:30 this morning, they will head back to the residents and try again. if there s no pope selected by friday, there will be a special prayer session and the cardinals will continue as usual. brian flores, ktvu channel 2 news. make sure you stay right here for continuing coverage of this morning s beginning of the conclave. we ll bring you a live report from rome. that s coming up at 7:30. you can also get the latest information on ktvu.com and have it sent right to your mobile device. just go to our home page and click on the papal conclave tab. 7:04. overnight a house fire in novato led to the discovery of a marijuana grow operation. firefighters had to use a chainsaw to cut through the walls of the home to put the fire out. it started about 11:30 last night on marion avenue. no one was living in the house and firefighters say it was just being used to grow pot. the cause of the fire is still being investigated. in vallejo, a 15-year-old boy was shot and injured trying to help his younger sister get away from gunfire. it happened about 8:00 last night on alabama street. police say a group of men started shooting at a person who was standing near the boy and his sister. a stray bullet hit the boy in the leg as he tried to rush his sister inside the apartment. the boy was taken to the hospital and is recovering. so far, no arrests have been made. 7:05. a criminal investigation has now been launched into disturbing allegations made against a preschool teacher in pleasonton accused of tying up a 2-year-old girl. ktvu tea alex savidge has been on the story since ktvu s alex savidge has been on the story since 4:30. you are back to tell us what the pastor just said in a news conference. reporter: a short time ago, the news conference was held and they are extremely disturbed by the allegations and they are doing what they can to help the little girl. this complaint was filed goence a woman who used to be a teacher at centerpointe christian preschool. she s accused of tying up a 2- year-old girl who apparently refused to take a nap. within the last half-hour, this was the scene in front of the school and they are trying to be forthright. they learned excuse me. we learned, they told us, that the little girl who was involved in this incident no longer attends the school. a complaint filed with did the department of social services say the teacher bound the girl s wrist and ankles with masking tape and took a photo and then everything came to light when the teacher showed off the picture at a social gathering at the school. here s what one of the church elders had to say about these accusations. we re devastated and shocked. this is a horrible incident. we deplore it in the greatest way possible. we re seeking to do our best for everybody in the midst of this happening. so yeah, we re completely shocked. reporter: now, we learned a short time ago, the teacher in question resigned before this incident became public. church leaders say she did undergo a criminal background check as well. it s unclear when the incident happened a week ago. we do expect that they will offer more details on this case later on today. that s when we were told what we were told by pleasant tonight police. in light of this, centerpointe will be suspending classes for five i das beginning this friday five days beginning this friday. there will be a parents only meeting held at the preschool at 6:30 tonight. live this morning in pleasanton, alex savidge, ktvu channel 2 news. 7:07. the man in petaluma now facing child endangerment charges. 13-year-old trevor smith died on his way to a birthday party at lake mendocino. the 41-year-old man organized the trip for his daughter and some of her friends. his pickup truck ran out of gas and trevor got out to help push it on the road and he was killed. starting this summer, san francisco s laws about walking dogs, groups of dogs, will be enforced. anyone walking more than four dogs at a time will have to have a permit. no one will be allowed to walk more than eight dogs at a time. dog walkers must have $1 million insurance and leashes cannot be longer than eight feet. san francisco passed those laws more than a year ago but has not been enforcing them. that will change, though, on july 1st. 7:08. hey, sal, you are watching san jose. how are they doing? well, right now not too bad. although we re watching it closely. things are getting busier. we re also looking at the commute. but the fog is kind of a little bit of a story earlier this morning. it was absolutely clear here and it seems to be moving around. there seems to be more fog today than yesterday. just keep that in mind. some areas are clear, others are foggy. moving along and taking a look at the commute at the toll plaza, westbound, 25-minute delay. it s been steady for that length of time before you make it past the metering lights. if you are driving from livermore to pleasanton, the drive here is okay. and then from hayward to fremont, we re getting a little bit of slow traffic there as well. 7:09. let s get to let s go to rosemary. more widespread fog. take a look. i am getting this might be san francisco. you can t tell. san francisco, oakland it is san francisco, i m being told. but again, we have overcast skies. some of us dealing with patchy dense fog, once again. i m starting out with a still shot of the radar and you can see rain in washington, oregon is drive. california, high and dry. temperatures will continue to warm under this ridge of high pressure. a little bit of moist flow at times. a weak, weak onshore breeze bringing back the clouds and patchy fog. the ridge of high pressure, the associated sinking area is helping to pin it to the ground. you can imagine it kind of pushing it down as it as it continues to strengthen. that s what we re seeing this morning. widespread, patchy, dense, novato and petaluma reporting visibility down to .25. san jose overcast skies but it doesn t look like it s right there at the ground level. so you should be okay. but just take it easy out there. notice it is widespread. half moon bay reported visibility three miles right now. as we progress to the morning hours, it will burn off by 8:00, 9:00. looking better. by 10:00, 11:00, it takes until it finally pulls out of the bay. notice the coast still with the fog by the afternoon. mostly sunny skies for most of us. right now, temperatures a few degrees warmer than where we started yesterday. 40s to low 50s around the bay area. a combination of the low clouds helping to insulate us this morning and the warming trend we re experiencing helping to keep our overnight lows and our morning lows warmer. 51 san jose at the university, low 50s in sunnyvale. the afternoon highs. we still are looking at peaking with our temperatures on wednesday. some of the warmest areas so far this season. we ll begin a cooling trend, thursday, friday, into the weekend. the overnight lows remain comfortable in the afternoon. upper 60s to lower 70s with your weekend in view under fair skies. back to the desk. it didn t have to happen. why one local lawmaker says the tragic shooting of two santa cruz police officers could have been prevented. he s not been the president s biggest fan. now find out how donald trump is offering to help the white house. welcome back. it s a gray start for many of us out there. the low clouds and fog will burn off later this morning, leaving us with sunshine and afternoon highs, slightly warmer than yesterday. 7:14. congresswoman jackie speier will hold a hearing on why the u.s. military dropped rape charges against the man accused of killing two santa cruz police officers. speier says the tragic shootings in santa cruz could have been prevented if jeremy goulet would have been court marshaled because then he bo have faced the possibility of a life sentence. instead of rape charges were dropped after gouelet excepted a less than honor accepted a less than honorable discharge. leon panetta said they looked the other way and he says when that happens, at some point, somebody pays a price. and chuck hagel says that a case of sexual assault in the air force will be reviewed at the top levels of the pentagon. hagel, just back from visiting afghanistan, sent a letter to barbara boxer. boxer had asked hagel to look into a case where an air force general dismissed the charges against a lieutenant colonel convicted of sexual assault. but in his letter, hagel says he does not have the authority to reverse the general s ruling. 7:15. in about 15 minute minutes from right now, house republicans in washington, d.c. will give details of their budget plan. kye da campbell is in our kyla campbell is in our washington, d.c. newsroom with some of the details of the plan. kyla? reporter: former vice presidential candidate paul ryan is leading the house republican charge. here are some details of his budget he wants to spend $41 trillion over the next decade. that s about 5 trillion less than democrats. congressman ryan also says big savings would come from revealing ma-care but democrats obama-care but democrats are against the plan. now, senate democrats plan to fire back with their own plan later this week. we know they want to keep obama- care and raise taxes. in a few hours, they will meet face to face with president obama. the president is heading to capitol hill this week, shuttling from the senate to the house to meet with members of his own party. democrats will get a better idea from him on how much wiggle room there really is when it comes to taxes and entitlements in order to reach a deal with republicans. i did just hear back a few minutes ago from senator barbara boxer s office. she believes the plan we re about to hear from ryan in 15 minutes will threaten the medicare guarantee for seniors. she thinks he will slash spending that creates investments and jobs. we ll hear from ryan in a few minutes. i will have an update on his plan next hour. kyla campbell, ktvu channel 2 news. donald trump says he s willing to donate the money to keep the white house open for tours. that s right. all of the white house tours were canceled because of the across-the-board sequester cuts. that prompted a tweet saying that trump should pay to keep the tours going. the white house secretary says he doesn t know if it s technically possible to a to accept outside funding for a secret service operation. mary joe white is expected to face some mary jo white is expected to face some pretty tough questions about her legal work representing some of the biggest banks in the nation. she s expected to win confirmation. if she does, she will become the first prosecutor to become the top federal regulator of wall street. it looks like the 49ers have picked up a player who helped the ravens beat them in the super bowl. anquan boldin has been traded to the 9ers for a sixth-round draft pick. the three-time pro bowler had six catches for 104 yards and this touchdown in the super bowl. this trade and the deal to send alex smith to the chiefs cannot become official until 1:00 today. some of the biggest names in 49ers history will be emmortallized with streets named after them. a small street running along the new santa clara stadium will be named marie p.debardelo way. another will be named bill walsh drive. the stadium will sit where those two streets. debardilo was the maytry arc matriarc of the 49ers. a burglar took two prices of jewelry from pieceses of priceless jewelry pieces of priceless jewelry from coffer. someone broke into his house in las vegas. a 12-year-old boy told police he made a prank call known as swatting that brought the police to ashton kutcher s home in los angeles. the d.a. s office says said the boy admits he s responsible for making a false bomb threat and computer intrusion. he s also accused of making false 911 calls involving the home of busten bieber and a bank. the judge will probably throw out those charges but they are likely to be considered when the 12-year-old is sentenced. top celebrities in hollywood and washington, d.c. have been hacked in their financial information shared online. a website published private financial information, social security numbers even credit reports of ashton kutcher, jay- z, mel gibson and even more. hillary clinton and joe biden were hacked. not quite as deeply as the others. the l.a.p.d. and the fbi are reportedly investigating. and michael vick will not be going out on this month s book signing tour afterall. that s because the philadelphia eagles quarterback received what his publisher called credible death threats. he was due to do signings in atlanta, new jersey and pennsylvania. as you know, michael vick spent 18 months in federal prison, pleading guilty to dog fighting charges, starting in 2007. 7:20. there s patches of fog in some parts of the bay area. sunshine in other parts. meteorologist rosemary orozco will have the forecast for your neighborhood next. and the man who heads up the cal state university system wants to hear what students of all 23 campuses have to say. if you are driving on highway 4, it looks like a little bit of slow traffic and some fog. a lot of fog kind of moving into some areas. we ll tell you more about the foggy commute coming up. if you like shrimp, then you re going to love sizzler s shrimp combos starting at just $9.99! four kinds of shrimp, seasoned just right and served in three new combinations. at sizzler! the chancellor of the cal state university system is touring all 23 campuses. his latest stop sacramento state. that s pretty good. that s tim white. he says he wants to connect with the student, faculty and staff after the entire csu system has been facing years of budget cuts. he says he s looking for ways to help keep the costs down by helping students graduate on time. he says he understands the value of a dollar which is why he cut his salary by $42,000. i didn t want to have arguments about my salary. i wanted to get down to the business. well, thanks to the passage of proposition 30 and new state taxes, the tuition will remain the same next year. the filming of a television show in downtown palo alto is expected to bring delays for drivers. university avenue between waverly and webster streets will be closed from 4:00 until 8:00 tonight. drivers are being told to avoid that area if possible. however, businesses in that area will remain open. additional closures are scheduled to start at 9:00 in the morning but are not expected to have major impacts. the show being filmed takes a look at the silicon valley. that s what sal is doing right now. you are watching the silicon valley? we are. as a matter of fact, we re watching all of the commutes. but that commute getting up to cupertino and sunnyvale looks good. rosemary and i have been talking about the fog. we started at 4:30. when i looked at this picture at 4:30, it was absolutely clear around the fog has moved in since. it s kind of moving around. this is a look at the westbound bay bridge. the traffic here is moderately avenue as you drive up. it s about a 25 to 30-minute delay at the toll plaza. it s about normal. let s go to the livermore valley. traffic coming in from tracy is slow as it normally is. the only good thing, we don t have anything unusual on the commute. it s about 40 minutes from grantline. let s go to rosemary. some of us socked in by the fog sal is talking about. you can see it floating on by. sunrise is upon us. the official sunrise coming up right about now. 11:45 minutes of daylight for you. we ll watch this burn off. and leave us with san jose in the bay area. upper 50s to mid-60s at lunchtime. and then for the afternoon a few degrees warmer than yesterday. 70 for oakland today. 72 san rafael. 76 in napa. 75 livermore. 75 for you morgan hill. by tomorrow, some of our warmer spots hitting 80 degrees. could be the warmest day of the year thus far a. as we get into thursday, friday, we ll knock the highs back. in time for the weekend, partly cloudy skies. temperatures cooler but still looking good. upper 60s and the low 70s for the afternoon. i will have a widespread look at your morning temperatures coming up. 7:26. in one hour, the college of cardinals will file into the sistine chapel. we ll go live to rome for more on this morning s historical ceremony to elect the new head of the catholic church. reporter: the city of san jose is tackling the issue of homelessness today. we just spoke to some homeless people living underneath this bridge at the guadalupe river. well tell you what they had to say and we ll tell you about the proposal the city is putting forward. happening now, in just about 15 minutes, the college of cardinals is scheduled to leave their hotel and head to the pauline chapel. there they will hold a final prayer before proceeding to the sistine chapel for the official start of conclave. craig boswell is live in rome now with more on the historical events taking place today. good morning, craig. reporter: good morning to you, tori. it s afternoon here with a really horrific weather day. rain and hail. the cardinals, we are bea to see them one final time we are about to see them one final time before they lock themselves in. earlier we caught up with the american cardinals as they were leaving the residence headed toward the vatican before they go on lockdown. packed and ready to begin, the vatican. the entire group of cardinals will take part in mass led by angelo. they will take an oath of secrecy before the conclave, likely similar to one the members of the staff took yesterday. there s no clear front-runner to be the next pontiff. let s say the cardinals will have to choose someone who is not just start but a leader in the 21st century. the last two papalcies we elected the smartest man in the world. maybe it s time to elect someone who listens to the other smart people in the room and the church itself and brings these creative people together. reporter: after the cardinals reached the votes required, the new pontiff will have little time. about an hour ago and then they ask by which name you want to be called which gives us those for consideration may have given this some thought. reporter: cardinals are not obligated to vote on this first day of the conclave, but it s likely they will. when they go in, they lock themselves into the sistine chapel. we are ally told roughly three and a half, four hours after that, we ll get information through the iconic chimney, whether it s the black smoke, that no pope has been selected or the white smoke that they have chosen a new pope. not expecting there will be a conclusive vote this evening. i know there s thunder and lightning out there. so we might have to pull the live shot in a second. but i m just curious, can you talk about the level of the security that the vatican has gone to try to keep this as secret as possible? reporter: if you are talking about electronic devices, yes. they won t work. there s even an electronic curtain that s been put up around the sistine chapel to keep any type of communications from taking place. it s interesting, the collision of hundreds and hundreds and hundreds of years of history with the modern times as they go into this conclave to elect a new pope. all right, craig boswell, in a very rainy rome for us this afternoon his time. for the first time two americans are being mentioned as mainal candidates. one of them is papal candidates. one of them is timothy dolan, on the left of your screen. the other candidate, sean o malley on the right. he s been credited with taking a hard approach to priests accused of abusing children. this morning s start of conclave is being celebrated all over the world. coming up at 8:00, we ll have a live report from san francisco on a special mass being held. breaking news from san francisco. right now, the police are investigating a suspicious death in the city s tenderloin district. just 90 minutes ago, the police found a man s bod i do on ellis near body on ellis. it s not clear what led led up to his death. we ll what led up to his death. we ll bring you the latest. ktvu s janine de la vega, live? san jose to tell us some of the options on the table for the homeless. reporter: dave, i want to first tell you that i m in downtown san jose. there s a group of people living under this bridge at the guadalupe river. a couple of them don t fit the look of what a homeless individual should look like. i spoke to them and they hope that hope is on the way. this encampment being cleaned up cost the city around $30,000. once of the cities, the council wants to partner with caltrans and the water district to continue to do homeless to avoid the homeless camps being set up. one homeless man said he used to be in prison he says nobody will hire him because of his record. panhandling with signs, will work for good. i just want a job. if i can get a job, i can take myself off the streets. reporter: this would implement a no-trespassing policy for anyone living in parks and other areas. they would be cited if they did trespass in these city parks or creeks. they plan on talking about a long-term goal that s going to be discussed today at 1:30. now, coming up in the next hour, at 8:30 on mornings on 2, you will hear from one of the city councilman proposing this idea of trying to fund long-term strategies. we ll tell you about some creative funding ideas that he has. reporting reporting live from san jose, janine de la vega, ktvu channel 2 news. leland yee is convening a hearing today in sacramento about the poverty rate. the u.s. census says kate california s poverty rate is the worst in the country. almost 25% of the state lives in poverty. they will talk about what s contributing to the high poverty rate. a morgan hill mother has been sentenced to 60 days in jail for using her 10-year-old daughter to help steal groceries. 38-year-old marcie araka will be allowed to serve her time in a public work detail because of her work detail. she ran off and left her daughter with a cart of stolen groceries after being caught by a security guard and was arrested in nevada. police in alameda are searching for five suspects in a bracen robbery attempt that happened across the street from police headquarters. police say the suspects demanded cash from the victim in the parking lot of a 7/11. they did not 7-11. they did not seem to care. police are looking for two other men and another woman. it s rather concerning that it is such a brazen attack within close proximity to the police department. police say the suspects may be driving a black four-door ford f-150 and a 2008 or 2009 silver chevy trail blazer. let s get right over to sal at 7:37. what are you looking at? the south bay. rosemary and i have been singing the same soong. the fog is moving in song. the fog is moving in. rosemary is a better sicker. northbound 280 get singer. northbound 280 getting up, slow traffic. highway 17 kind of foggy as well. the fog is morning around. i want to let you know it s not foggy at the bay bridge but it s certainly slow. as we go to a live picture of the bay bridge, it s backed up for about a 25 to 30-minute lay improved for a delay, improved for a bit and then it slows down again. at the 24 interchange, traffic is slow from 242 to alamo and danville. 7:38. let s go to rosemary. we re waking up with the low clouds and pog. if singing would help it go away, i would do it. it won t help. if you could see from 1200 feet, 1500 feet up, this is what you could see, sort of a big pillow. those low clouds socked in by the fog along the coast as well as our inland areas and the low clouds widespread into the east bay, oakland, hayward reporting overcast conditions as well as san jose. the satellite and radar here, a few high clouds passing through. this kind of breaking through the northwest and north flow morning around this high pressure. the high pressure also helping to contribute to this patchy fog. let me show you what sort of happens so that warm, sinking air asoaked with the ridge of high pressure that s bringing up this associated with the ridge of high pressure that s bringing up this, is bringing up the sinking air. please be careful out there. it will stick around for the next hour or so. i do expect it will burn off. inland areas will see the clearing first. it will clear inside the bay, right around 11:00 or so and the coast will be last. temperatures this morning, 40s to low 50s. as expected, the afternoon highs helping the overnight lows, so this morning, we re a few degrees warmer and if you have the clouds, chances are you are insulated a bit more. 48 to foster city. 48 to menlo park. la fayette, 44. mt. diablo, lost the reading here but they are in the mid- 50s atop about 3500 feet. that s an indication that we have the warmer air aloft and the cool, moist air at the surface. the extended forecast, the warmest temperatures coming in tomorrow into thursday, friday and your weekend, temperatures begin to cool. but still feeling really nice. partly cloudy and dry with your weekend in screw. upper 60s to low 70s in the forecast. i will have an extended look at your afternoon highs coming up. 20 minutes before 8:00, happening right now, the senate intelligence committee is holding its annual open hearings on worldwide threats. this is a live picture. we just saw dianne feinstein among the witnesses testifying at the hearing, are john brennan, here s robert mueller. and james clapper. among the threats likely to be discussed, north korea, iran and al qaeda affiliates in infrastructure in africa. last month, the mars rover curiosity wall street drilled a small hole into a flat rock on the surface of the planet. that revealed an unexpected gray in contrast to the red/orange surface. curiosity took pictures and scientists have been analyzing it. coming up next we ll go live to congress as paul ryan introduces the republican plan and why democrats will say it will go nowhere in the budget battle. and a soda nan was supposed to go into effect today has been ruled illegal. the downd and s&p have ral littled for seven consecutive sessions. the dow is currently up 18. another record and the s&p is just within ten minutes of it s all-time closing high set in october of 2007. the nasdaq, though, is down about 11. happening right now house republicans are releasing their budget proposal. house budget committee member, paul ryan s plan includes a repeal of president obama s healthcare reform. however, critics say it will never pass in the senate, where democrats are the majority. five u.s. troops have been killed in a helicopter crash in southern afghanistan. the helicopter went down last night outside of kandahar city. nato says it crashed in an area where there was no enemy activity. so the cause of the crash is under investigation. earlier in, two other u.s. troops were earlier in the day, two other u.s. troops were shot and killed. north korean leader, kim jung un , is telling his front- line troops to be ready for a possible war with south korea. tensions, escalated after the panel voted for new sanctions on north korea after a nuke test last month. north korea has threatened to cancel the 1953 cease-fire that ended the civil war with the south. south korea says the north cannot nullify the cease fire and called the threat a ploy. and the cause of a navy jet crash in washington state is being investigated. the plane went down about 8:45 yesterday morning about 50 miles west of spokane. all three people on board were killed. the bodies are expected to be recovered later today. navy officials say the plane crashed during a routine training mission. 7:46. this morning, in washington, d.c., a senate committee again takes up several gun control measures. the senate judiciary committee will debate a bill calling for universal background checks for gun buyers. this man s 6-year-old son died in the connecticut school shooting rampage. the committee is considering dianne feinstein s assault weapons ban. more bad signatures may have been found in the forgery probe of former san francisco supervisor. prosecutors are looking into forged signatures just found on campaign forms in 2001. the supervisor resigned and plans to plead guilty on monday. well, a bay area leader is in trouble with the same city he represents. ktvu s maureen naylor live in our newsroom now to tell us about the problems surrounding a city councilman in richmond? this all centers around corkry buzay. according to the contra costa times the city is upset about his property being littered with junk and they want him to clean it up. ktvu shot this new video of the property, where it was easy to spot bags and litter. the property is a 28,000-square foot lot with an office on it. according to the paper, behind the fence are old cars, car parts, metal and industrial tools. the lawyers for the city say they want him to clean it up and say he s in violation of code violations. the man says he has a business license for auto repair at that very site. this all dates back to 1987 and has been an ongoing legal night since then. back to you. a new york supreme court judge struck down the ban on large sugary drinks just hours before it was supposed to take effect. the ruling means super-sized sodas, sweetened teas can still be sold in restaurants, movie theaters and sports arena. the ban was supposed to go into effect today. michael bloomberg plans to appeal the judge s decision. this battle is being followed in richmond, where voters rejected a soda tax in november and just like new york, the author of richmond s failed measure-n plans to continue to fight for it. 67% of voters said no to the city tax which would tack on 1 cent per ounce on sugar drinking. but the beverage industry spent billions to defeat it. i felt cheated and i felt like these people came in and bought the boat here. a field poll last month shows people may be sweetening on the tax and 68% say they favor it when they were told that the money would be spent on childhood nutrition and exercise. america has a favorite new bern ridge, water. americans now drink an average of 58 gallons of water a year. a third of that is bottled water. soda was the old drink but current consumption has dropped. experts predict that water will remain the most popular drink for years to come but it cannot say if the bottled water will increase or not. you can no longer get plastic bags at stores in palo alto. last night the city council extended to vote to extend the ban to now include retail stores and restaurants as well as grocery stores. if you shop there, you will have to bring your own or you will have to pay for a paper bag. ten minutes before 8:00. a surprising discovery in a bay area home. what deputies are saying about a major pot bust and the unusual call to police that prompted it. walk like a man fast as i can the jersey boys score a victory in a california courtroom. we ll tell you how. welcome back. a skier trapped inside of a fast-moving avalanche, not only filmed it, he lived to talk about it. look at the pictures. this happened in bozeman, monta n the avalanche carried him a thousand feet down the mountain. the snow built up and slammed him right into a tree. luckily, his friends they saw it. they were able to dig him out. he survived with a dislocated shoulder. marin county sheriff deputies say a man accused of assaulting her roommate with a baseball bat has been arrested. authorities say 27-year-old kelsey winterkorn was arrested on suspicion of attempted murder. deputies also found a marijuana- grow operation with more than 700 plants. the boys of jersey boys are getting ready for a performance but they are also celebrating a legal victory. just yesterday, a court ruled there did not violate copyright laws by using a seven- minute clip from the old ed sullivan show. it was ruled they were able to use it due to its historic significants significance. you saw that, tori? yes. it was great. great to see it again. let s check in with sal. we re looking at the south bay. i ve been looking at the map to show you trouble spots we ve spotted. northbound 87 near the cap stall expressway, there capital expressway, there s a road hazard. and 101 right near the 880 interchange, just minor changes but the traffic is slow. northbound 101, traffic is backed up from at least the capital expressway as you drive to the airport. if you are drive og the freeway between driving on the freeway, there s a drive time of 25 minutes. that s better than it was yesterday. we can thank the better traffic heading south but across the peninsula, we already have some slow traffic through san mateo county. no maimer problems there. let s take a look at some live pictures, some fog is moving into the bay. 880 northbound and southbound in oakland, you can see the fog and also at the bay bridge toll plaza, we have a back up of about 25 minutes. now let s go to rosemary. the low clouds and fog pretty widespread. fear up for that as you get outside. sfo reporting arriving flights. some of them experiencing delays and giving au sweeping view there across the bay in the oakland estuary, kind of soupy out there. slightly warmer temperatures this morning. the warming trend in addition to those low clouds helping to insulate us. widespread 40s to low 50s. as we get into the afternoon, mostly sunny skies and temperatures will top out above yesterday s highs. 75 santa rosa for today. 76 in sonoma, 73 for kentfield, off to the east bay, 75 walnut creek, upper 60s to 60s to low 70s in the santa clara valley, 37 for san jose, 75 morgan hill. i expect some areas like morgan hill, maybe napa and livermore to warm to about 80 degrees tomorrow. 69 san mateo for today. 74 in woodside. 66 for san francisco, patchy fog remaining at the coast aleast part of the day. low 60s for pacifica. the extended forecast. repeat tomorrow with our temperatures. we do begin a cooling trend as early as thursday. not necessarily cool. we ll still be well above average. anywhere from 5 to 10 degrees above the seasonal average. we ll continue the trend with temperatures remaining in the upper 60s to low 70s for the afternoon. i will tell you when i expect this gray to burn away. a bay area family s search for a missing oakland woman is taking a new turn. new information police gave them that has family members changing their focus. reporter: it s a big day for catholics around the world and here in the bay area. we ll tell you about a special mass taking place here in san francisco. reporter: new details are coming to light this morning about a pleasanton preschool teacher accused of tying up a little girl. it s prompted a police investigation. we ll tell you how the school responded this morning when mornings on 2 continues. if loving you is wrong i don t wanna be right [ record scratch ] what?! it s not bad for you. it just tastes that way. [ female announcer ] honey nut cheerios cereal heart-healthy, whole grain oats. you can t go wrong loving it. bee happy. bee healthy. with clusters of flakes and o s. oh, ho ho. it s the honey sweetness. i.i mean, you.love. welcome back. i m tori campbell. i m dave clark. happening now in rome we re getting closer and closer now to the official start of the conclave to elect the new pope. right now, the cardinals are in the pauline chapel for a final prayer. now, earlier this morning, they gathered for mass to pray for a success until conclave. conclave successful conclave. [bell tolling] in 30 minutes from now, the card procession into the sis stein chap. once the sistine chapel. once the doors are locked, the conclave is underway. the members of the catholic church say the need for a strong pope to unify the church has never been greater. the first vote could come as early as 9:00 a.m. catholics all over the world are anticipating the selection of a new pope. right now, there s a mass in st. mary s and brian flores is there talking to people about the significance of this morning. good morning, bribe. reporter: good morning. as you mentioned, there s a special mass taking place right here at st. mary s cathedral starting at 8:00. no question, this is a big day for catholics across the world and here in the bay area to pray for those in the conclave. now, of course, this is a very exciting day for many catholics, exciting times. just a few days ago, they held a special mass to pray for outgoing pope, pope benedict xvi and the officer of bishop will lead a special mass here at 8:00 a.m. to and the archdiocese of bish will lead a special mass here at 8:00 a.m. and the archdiocese will lead a special mass at 8:00 here. i would love any pope that comes just carry on the tradition of the church and obviously, you know, adapt it in a way that s best for the modern world. it s really important because, again, we need a leader, we need somebody, someone to look up to, to tell us how, when and to follow christ teaching. reporter: now, here s a brief breakdown of what we can expect in the next few hours. the cardinals just held a special mass a few hours ago, as dave mentioned, the cardinals are currently in the pauline chapel. around 8:30 our time, there will be a procession from the pauline to the sistine chapel and then they will enter the sistine chapel, the doors will be shut and the conclave will officially begin. at 9:00 a.m. and 10:00 a.m., there will be prayers and the cardinals could place their first vote. if a pope is not selected by 11:30 our time, they will head back to the residents and vote another day. as we go back out here live, it depends how long this will take. brian flores, ktvu channel 2 news. 8:02. the long time tradition of picking a pope is getting a digital enhancement. logos bible software has developed a app that links you to the latest papal collection. users will get access to a twitter feed that details the selection process. the cardinals themselves will be completely cut off from all outside communication. they will have no telephone, no newspapers, no television and there will be no tweeting. stay with ktvu for continuing coverage of the start of the conclave. you can get the latest information on ktvu.com and sent to your mobile device. click on the papal conclave tab on our own home page. back here at home, a pleasanton preschool is gonna be closed for several days. a teacher there has been accused of tying autopsy 2-year- old girl because she refused to take a up a 2-year-old girl because she refused to take a nap. here s more. reporter: we ve learned that the teacher in question actually resigned before the accusations surfaced just last week and school administrators who spoke out this morning said they were simply stunned by what this woman was accused of doing a 2-year-old girl at centerpointe christian school. she reportedly bound the child s feet and hands after the girl refused to take a nap. a short time ago, church leaders held a news conference to talk about this incident. we don t know exactly when it took place but they said this little girl who was involved has been pulled out of the school. her parents pulled her out last week. according to a complaint filed by the department of social services, the former teacher bound the child s wrist and ankles with masking tape and took a photo and the teacher is accused of showing off the picture at a social gathering to several staff members of the school. one of those staff members just happened to be the mother of the child in the photo. she reported it to police. church leaders say they are doing whatever they can to help the little girl s family. i talked with the family and they are devastated. any family would be devastated. we are caring for them in the best way possible. they ve asked for privacy and we want to give that to them. but we are seeking to administer in the pest way possible to them. reporter: in the best way possible to them. reporter: and in light of everything that s taken place, classes will be suspended until friday so staff can undergo additional meeting. there will be a parents -only meeting tonight for questions parents only meeting tonight for questions. the teacher did undergo a criminal background check and pleasanton police have opened a criminal investigation into this preschool and we do expect that police will be offering up new details in their investigation at some point later on this morning. we re live in pleasanton, alex savidge, ktvu channel 2 news. the family s search for the missing relative is expanding after police released new information. 31-year-old erica maskaleris has not been seen or heard from since last thursday. surveillance video from a bake rig at 34th and telegraph shows bakery at 34th and telegraph shows her out on a daily walk. police announced she was seen in west oakland after being reported missing. her family and friends plan to shift their focus in the search. we ve given out probably around 1500 fliers to help and we re just hoping that somebody s memory will be jogged at this point. maskaleris s family is offering a $1,000 reward to help find her. this saturday marks one year since sierra lamar disappeared on her way to school. family members plan to mark the date with a balloon release in morgan hill followed by a fund- raising event in fremont. antolin torres-garcia is charged with kidnapping and murdering lamar but her body has never been found. torres is expected to enter a plea to the charges next month. the man accused of the movie theater rampage in colorado may enter a plea today. james holmes is expected to plead not guilty by reason of insanity. if he does that, a judge has ruled holmes can be medicated while taking a polygraph exam with a psychologist. she s accused of killing he s accused of killing 12 people and injuring others during that rampage in colorado. breaking news from washington, d.c. the senate judiciary committee just approved expanded background checks for gun buyers. however, the legislation still has to go before the full senate. the committee is considering several measures aimed at reducing gun violence. two weeks peg, the committee heard emotional testimony in support of tougher gun laws from a man who whose 6-year-old son was killed in the shooting. the committee is considering senator dianne feinstein s ban. let s check in with sal. see what s happening at the toll plaza. it s slow. the backup has been steady at 25 minutes or so. you can depending on that for the next at least half-hour it usually takes it to unwind. sometimes at 9:00, it get the better. let s take a gets better. let s take a look at the toll plaza. it s about a 25-minute delay. no major problems. also this morning, we re looking at the foggy san francisco commute. i just put that up to show you that we can t see anything except a little bit of traffic there at the very bottom of your screen. no major problems on the peninsula on southbound 101. we re moving to the south bay. we ve had slow traffic on northbound 101 getting in to san jose from southern san jose. let s go to rosemary. good morning. we re dealing with the gray sky. a live look from oakland. you can see it s kind of gray even though you can t see the sky. winds light, light. light and variable. we do have a very weak onshore breeze. we ll talk about that in just a moment. i want to point you to a photograph. rain over washington, oregon dry. we re dry. not going to see any rain for the next several days. so we do, again, have this moist pacific air that continues to push in ever so slightly and just enough to bring the development of that fog. now with the ridge of high pressure over us, the ridge of high pressure that s bridging us this wal jim in the afternoon, it also has sinking air and that s what s pushing that fog all the way down to the ground. it s kind of pinning it and making it patchy and dense at times. novato and petaluma reporting visibility down to a quarter mile. between napa and santa rosa, a half-mile, two miles. widespread gray along the east bay, down into the south bay. i do expect it will burn off because the arm air associated with this ridge of high pressure will help to mix it out. in the short-term, it s tough. be careful. let me show you when i do expect it will mix out of here. as we get into the 9:00, 10:00 hour, it slowly begins to burn off. our inland areas will start to see the sunshine. sun is up. many of us can t see it. by 11:00, noontime, it s pulling out of the bay area and we are looking at just along the coastline into the afternoon, mostly sunny skies for all of us. our temperatures are gonna again warm up over yesterday s highs. 45 in concord, 45 in fairfield. 48 in napa. a combination of the warmer air in place without the sunshine over the next hour or two, we ll begin to see the change. we need it to burn off. patchy fog this morning. mostly sunny for the afternoon. temperatures anywhere from 2 to 4 degrees above yesterday s highs. the warmest day will be tomorrow. we re looking at 80 degrees for tomorrow of our bay area communities. thursday, friday, temperatures begin to drop off. upper 60s to low 70s with partly cloudy skies in store for your weekend. notice the afternoon highs, fairly comfortable. widespread 40s around the bay and for the inland areas as well. i will have to a look i will have a look on the extended highs coming up. controversial ads depicting osama bin laden and the accused fort hood shot shoot forthood shooter are on ten muni buses and they don t have any plans to take them down. they ve been labeled a hate group by the southern poverty law center. we don t think that we should use taxpayer dollars to litigate over first amendment rights of this group. san francisco supervisors are scheduled to vote son a resolution condemning the ads. muni says the ads are protected free speech. kind of a playful new analysis shows jerry brown quite playful from his predecessor. how he and arnold are different in terms of the gifts they received while they were in office. fresh off his trip to north korea, dennis rodman has his sights set on rome with just one goal in mind. well, well, well. growing up, we didn t have u-verse. we couldn t record four shows at the same time. in my day, you were lucky if you could record two shows. and if mom was recording her dumb show and dad was recording his dumb show then, by george, that s all we watched. and we liked it! today s kids got it so good. [ male announcer ] call to get u-verse tv starting at $19 a month for 2 years with qualifying bundles. rethink possible. is more fun than ever. sees better than ever. charges faster. and will charge. cool. and heat. from your phone. fact: leaf never needs gas. ever. good for the world. built in america. now, leaf s an easier choice than ever. shop at choosenissan.com. low clouds and fog this morning. mostly sunny skies for the afternoon. temperatures will be slightly warmer. i will have an expansive view of your afternoon highs coming up. 8:14. happening now, the college of cardinals is getting ready to file into the sistine chapel. want to show you a live picture of st. peter s basilica in vatican city. the 115 cardinals are scheduled to enter the famous chapel in about think minutes. once all of the cardinals are in about 30 minutes. once all of the cardinals are inside, the doors will be locked. according to tmz, dennis rodman is flying to rome today, hoping to greet the pope to greet the new pope. this comes after he flew to nourk and met with with after he flew to north korea and met with kim jung un . congressman paul ryan s budget will get some major bush pac from democrats. kyla campbell has more. reporter: congressman ryan and the house account budget committee want to repeal obama- care. they believe it will save hundreds of billions of dollars. democrats won t sign on it. ryan says his plan to cut wasfulful and protect wasteful spending and protect medicare, what he says is going bankrupt. the gop wants to close loopholes and says it would create jobs and increase wages. now, prance the toughest battle republicans will face, repealing obama-care, ryan argues. we need to repeal and replace obama-care. we will never be able to balance the budget if you keep obama-care going because obama- care is a fiscal train wreck. reporter: the spending plan will be repleased later released later. also starting today, president obama is on capitol hill meeting face to face with lawmakers to discuss budget negotiations. we ll help to see if this helps move the process along more quickly. kyla campbell, ktvu channel 2 news. 8:1. a record number of 8:17. a record number of americans are on food stamps. new figures from the u.s. department of agriculture shows a record $47 million collected food stamps in december. the interest government is giving up the government is giving up paper social security checkses. but some californians still get them. paper checks are still mailed to 7800 people in alameda county, 5600 people in contra costa county and 6600 in santa clara county. a look at the gifts given to governors of california shows a big difference between jerry brown and his predecessor, arnold schwarzenegger. schwarzenegger routinely reported about $15,000 in gifts a year, including a bathrobe from giorgio armani and a crystal eaglehead from the president of france. brown reported $2500 in gifts last year, including a $150 ticket to a lakers game from l.a. mayor, antonio villaraigosa. the deal worked out to end a strike at the period of oakland late last year, it may turn port of oakland late last year, and it may turn out to be expensive. the san francisco chronicle reports talks begin with the two other unions this week and they want big benefits and very few concessions. japan says it is the first country now to extract national gas from an underseized source known as burnable ice. this is a breakthrough that could tap into a brand-new energy source. engineers says engineers say the gas was produced from drilling. 8:19. ski resorts in lake tahoe hope a united front will help bring the winter x-games to the sierra. squaw valley and heavenly resort have decided to put their daily competition aside to focus on bringing the games to the area. tahoe was picked of one of as one of eight finalists. both resorts say they are excited to work together since the games would bring about 20,000 people each day to the region. i can see you doing that. i m gonna leave that the experts. okay. 8:20. they are smart. they are some of the bay area s brightest young scientific mind. we ll tell you why they are in the nation s capitol this morning. also, the warmup in the bay area continues. meteorologist rosemary orozco will tell us how long this beautiful weather will last. traffic on 87 a little bit slow getting into the downtown area. as you can see there s a little bit of a line there hon northbound 87. we ll tell you more about the morning commute and the bay weather. [ female announcer ] the one for all. mcdonald s dollar menu, home of the meaty, melty mcdouble you love. .and other amazing tastes, for just a dollar each. like the bold hot n spicy mcchicken, and the new grilled onion cheddar burger topped with caramelized onions and melted white cheddar. everyday, as always, there s a lot to love for a little on mcdonald s dollar menu. the winners of the annual intel science contest in washington, d.c. will be announced. six bay area high school students are among the finalists. the top prize $100,000 scholarship. kelly zhang of orinda attend the college preparatory school in oakland and she s working on technology that would allow surgeons to spot cancer cells during operations. before surgery, you get mris or ct scans but those only get the main idea, the main shape of the tumor but you can t really see individual cells. that s a really big challenge for the surgeon because they don t really know what exactly to take out. other bay area students are kevin chin of fremont, kevin garby. of sara toe ta. of tara toga. the drakes bay oyster company s legal fight to reduce the rays could affect many national parks. an appeals court could issue a warning that expands, reduces or even eliminates commercial activity on lands. that may affect ranches and timber and mining operations in national parks like yosemite, yellowstone and the grand canyon. the 9th circuit court of appeals will hear the case in may. 8:24. i want to check in with sal. is fog still causing a problem, sal? it s pretty foggy. it s foggier than it was. look at 237. the fog is almost everywhere in the bay area, so you might want to think about that if you drive. this is the westbound bay bridge. it s been a steady back up of about that minutes of about 10 minutes. as we move to the east bay, pinole, richmond, traffic beginning near san pablo dam road. highway 4 has not been that great. so traffic, antitook, pittsburg and bay point, 680 is slow from alamo. despite the low clouds and fog we re dealing with. a warmup will continue for your afternoon. temperatures unseasonably warm. we re talking 5 to 10 degrees above the seasonal average. take a look over the oakland estuary. it s gray. can t see sunshine but we will. it s going to burn off a little later this morning. by 11:00, 12:00, it should burn from around the bay. by noontime, it s a mild one. upper 50s to mid-60s and our warmer areas will top so right at 76 in sonoma. mid-70ss in sonoma. these warmer spots likely to hit 80 by tomorrow. did you see clearlake? 77. 77 danville. 75 did i say 77? 75 danville. 75 for antioch. down no the santa clara valley, 73 in san jose. 74 los gatos. a pretty day in santa cruz for the afternoon. 73 expected for you. 69 san mateo, 66 in san francisco. notice along the coast, a little bit of a different story, a little bit of patchy fog. low 60s in the forecast, for the afternoon tomorrow, there s that 80 degrees and we dip a little bit on thursday but the cooling trend continues into the weekend. upper 60s to low 70s. still above average in many cases. lows feeling pretty good as well. we have our soccer games and little league games with partly cloudy skies. dave? all right, rosemary. we re watching rome in the next couple of minutes. the college of cardinals will begin the procession to the sistine chapel as the process begins to elect a new pope. these are live pictures from the vatican. we ll take you live to rome for more on the final moments for the beginning of the conclave. the city of san jose is tackling the issue of homelessness today just a few days after one of the biggest encampments was cleaned you. we ll tell you what the city is planning to do was cleaned up. we will tell you what the city is planning to do today. [ teen ] times are good, aren t they, kids? it s nice having u-verse, isn t it? see back in my day, we didn t have these newfangled wireless receivers. fangled? no, we watched march madness in the living room. that s where the tv outlet was. what is he talking about? and if mom was hosting her book club that day, guess what.you missed it! we couldn t just move the tv all willy-nilly all over the house. ohh! ohh! kids today have it so good. ok. [ male announcer ] call to get u-verse tv starting at $19 a month for 2 years with qualifying bundles. rethink possible. happening right now in rome, the college of cardinals just about to begin the procession into the sison chapel. these are live pictures from rome. we re really fooling the history of what s happening right now in rome. the procession has not begun. but the cameras are panning back so you get a feel of where they are going to be headed. and what is gonna be happening shortly. once they get inside the sistine chapel, the doors are gonna be locked, the conclave will officially begin. the first vote on a new pope could happen as early as 9:00. we re gonna watch for a second. look at some of the faces. try to gauge the mood and you can see the diversity of the cardinals who will be voting. it s interesting, the 115 cardinals who were under the able of 80 who will be voting in the conclave. they are due to begin leaving their residence to move into the saint martha hotel inside the vatican and they will stay there for the duration of the conclave. they are standing up in their chairs right now, prayers are taking place as well. votes will be taking place in the sistine chapel. then they will be escorted back and forth so they won t be disturbed and they will be off limits from the outside world. again, these are live pictures as the procession to the sis stein chapel is about to begin. let s turn to our reporter erin mclaughlin. reporter: hi, dave. at any moment, we spoke this procession to begin. the cardinals will take their way into the sistine chapel. they will be chanting the litany of the saints and the lowest rating cardinal will start first. the highest ranking cardinal will be the last into the sistine chapel. once inside, they will take an oath of secrecy and then the doors of the sistine chapel will be shut. the conclave will have begun and it s a process that shrouded secrecy tradition and prayer. now, again, these are live pictures. we re watching the procession to the sistine chapel. erin, if you can still hear me, have you heard anything about when the procession may begin? reporter: it s expected to start at exactly half past. i haven t checked my watch. it s possible they could be running a few minutes late, dave. but it seems they ve stuck to schedule so we ll have to wait and see. an erin, if you can and erin, if you can hear me we have satellite delays because you are in rome the weather, know, is very inclement and it s pouring rain and you are getting lightning. will that affect the procession in any way? reporter: you know, dave, it has been absolutely pouring this morning. it s not clear how this will actually affect the proceedings. once the cardinals enter inside the conclave, all eyes will be trained on the chimney above the chapel. we ll be looking for smoke. take a listen. cardinals preparing to embark on what could be the most important day of their spiritual lives. they will enter the papal conclave, elect their next leader and set the tone for the future of the catholic church. the group began with the traditional voted mass. my brothers, let us pray that the lord will grant us a pontiff who will embrace this noble mission with a generous heart. reporter: preparations for the papal conclave has been underway since pope benedict xvi announced he was retiring last month. once the cardinals are votes, all eyes will be on the vatican chimney. black smoke signals an unsuccessful vote. white smoke means there s a new pope. a couldn t tender must get two- thirds of the vote. once the pope is elected, he will choice a new name and be vested in his papal gar importants. a you new thing added, when the cardinals and fathers leave, the first stop is in the pauline chapel where the holy father will enter alone and pray. reporter: it can take anywhere from 30 minutes an and hour an and 30 minutes between the white smoke and the appearance on the balcony of the new pope. back to you. thank you. the procession is underway. the procession sot sistine chapel where you have 1 the procession to the sis seen chapel where you are sistine chapel where you have 115 cardinals inside. ula of those who don t have anything to do with the conclave will turn around and leave the sistine chapel when the master ceremonies says all out and the great doors of the fresco chapel are shut. conclave literally means with key. they ve literally locked the doors and they stay in a special dormitory, if you will, on the grounds of the vatican assuming a pope is not selected this evening. it s expected that won t happen. they will take a vote tonight in the vatican city but it will most likely last a few days. i want to mention, some people may not be aware of this. not everyone has changed to daylight saving time so normally, it s nine hours rome is eight hours ahead of us. it s eight hours ahead in the vatican. as we look at these live pictures of the vatican city and the cardinals, i m looking at the diversity of the cardinals who were here from all points of the earth who will be voting and electing. we ve been hearing throughout the morning there s no favored person that seems to be standing out as a possible selection for tosh to be the new pope. there is a cardinal from milan who is a strong possibility, hungary, the czech republic but a couple from the united states mentioned as well, from l.a. and boston. so certainly a possibility. typically the pope is from europe. so it would be unusual if the pope was from outside of europe. so that would be interesting to see where the church goes from here. you ve been to the vatican, i ve not. i m looking at the pictures and i m also looking at how beautiful the surroundings it s stunning. every single inch is a masterpiece of artwork and statues and just unbelievable decor. we re looking at the outfits they are wearing, literally from the middle ages, the style and the color. so this is something that we will be following throughout the day. once there s smoke coming from the chimney, ktvu will cover that. we re watching history, we re watching it live as the cardinals are making the procession into the sistine chapel. imagine sure you stay right make sure you stay right here and you can get the information at ktvu.com and go to our home page and click on the papal conclave. you can also fet this sent to your sent to your mobile device. janine de la vega is live in downtown san jose where many homeless people have been living on the streets. good morning, janine. reporter: good morning, tori. last week, the city did a big cleanup of anker campment near the airport. some of them are living near the creek beds. we actually saw several people go down and they told me that they live underneath the brick. some of them say they ve been trying to look for jobs but they are really hoping that help is on the way. after last week s cleanup of anker karnment, members of the an encampment, members are trying to stop this. city officials say there s not enough funding and affordable housing for the homeless. one councilman told us that the city has a reactive model to combating homelessness. they want to change that. we spend millions of dollars on emergency response, emergency rooms, creek cleanups. when we could be directing a lot of those resources towards housing and reducing the burden on the back end. reporter: there will be a no- trespassing policy at the parks and creeks. this is being described as a tough-love approach to help homeless get back on their feet. there s also talk of repurposing outdated parking meters in downtown allowing pedestrians to enter. there s some i can see some trash in there. sit is concerned about the sanitary conditions. they don t want anybody living on the street. they run into the problem of this not having any funding. but they lan plan to but they plan to discuss strategy that starts this afternoon at 1:30. janine de la vega, ktvu channel 2 news. let s bring sal back. you ve been talking a lot i know you are talking about the bridges. you ve been talking all morning about the fog. the fog is thick. you are gonna see it in your traffic pictures. i want to show it to you first on the golden gate bridge. pretty foggy. there was a report of a crash northbound 101 at this area near the toll plaza. but it ended up not being a major incident. it didn t look like they found it. also looking at the east shore freeway, there is a crash reported near university after. the problem is, we can t really avenue. the problem is, we can t see up there. so far, i don t see a lot of slow traffic heading up there. if it is there, it s reported to be blocking the left lane. normally, we could see that. but we can t because of the fog. bay bridge is backed up toker about a 25-minute delay. livermore traffic a lot of slow traffic on 580 still pretty thick getting into the main part of livermore. let s go to rosemary. in some case, it s grown worse rather than better. plenty of sunshine. waiting to warm us up. our temperatures are still above what we felt yesterday at this time and for the afternoon, temperatures will soar once again. this is the south bay, stretching into the delta. concord reporting fog. into the sonoma county floor, marin county. this is going to be with us. it will be 10:00, 11:00 before we finally see it leave the inland areas. by noontime, it s pulling away from the bay and then mostly sunny skies. temperatures, low 40s to 50. 51 in mountain view. afternoon highs for today. mid-70s. santa rosa, 76 in napa, 70 for hayward. 66 san francisco. low to mid-70s. san jose and cross into morgan hill. extended forecast, the heatup will continue wednesday, still on track to be the warmest day. the temperatures drop off for the weekend. no rain in sight. overnight lows, 40s. back to the desk. a brazen robbery attempt just feet from police headquarters. where it happened and the surveillance video police hope will lead to an arrest. plus, how this property is causing headaches for a bay area city councilman in the area he represents. reporter: and a christian teacher is accused of tying autopsy student. the woman has since tying up a student. the woman has since resigned. who sees that she s due for a mammogram. mary has one that day. that s when she finds out she has a tumor. she has a successful surgery and because her health provider has an amazing connected system, she has her life. i don t know what you have but i have kaiser permanente. kaiser permanente. thrive happening now the college of cardinals is now inside the sistine chapel. this is a live picture from vatican city. you can see that there was a chant imploring the saints to help them choose the next pope. they will take their places in the chapel with frescoes by michael angelo. we re waiting for the door of the sistine chapel to be sealed. once that happen, the conclave has officially begun. there are others outside of the college of cardinals inside the chapel. that s why they will not be officially in conclave. they will then be quietly praying for the voting can begin to elect the next pope who will lead 1.2 billion into the catholic church. the first vote could happen by about 9:00 this morning. it s highly unlikely a vote will be selected today. this is an amazing picture. the colors. they have it restored. some of the historic paints inside the sistine chapel are just breath-taking. all eyes will be on the vatican chimney. black smoke means no new pope. white smoke means a pope has been chosen. there will be all of the electoral ballots handwritten and a lot of times the cardinals will change their handwrite when they vote. they ve gone to great lengths to three to make this as top try to make this as top secret as possible. we ll stay on top of this and continue to follow this for you throughout the date here on ktvu. 8:48. let s bring you up to date on some of the other top stories san francisco police are busy investigating a suspicious death. it happened near the powell street b.a.r.t. station. the body of a man in his 30s was found on ellis in stockton about 6:00 this morning. the investigation continues. in novato, a house fire last night led to the discovery of a marijuana grow operation. fire started around 11:30. the house was vacant. no firefighters were hurt. police in pleasanton have begun a criminal investigation into allegations of pleasanton preschool teacher tied up a 2- year-old girl. the teacher allegedly took a photo of the child and showed it to her coworkers. alex savidge is live in pleasanton. the pastor of the school held a news conference just hours ago. reporter: yeah, and that s when we learned that the little girl involved in this incident was actually pulled out of the school last week. church leaders did speak out this week, they said they are simply stunned about the accusations against this woman who used to work for centerpointe cyst christian school christian school. she is accused of binding the girl s hand and feet because the girl reportedly refused to take a nap. we re told the teacher resigned before these accusations against her surfaced last week. according to her filed with the department of social services, the former teacher bound the child s wrist and ankles with masking tape and then took a photograph of the girl and she s then accused of showing off the photograph at a social gathering. she showed it to several staff members of the school. one of them happened to be the mother of the child in the photo. the mother called police. a criminal investigation was launched. one of the church elders said he was surprised. it s absolutely deplorable to us that any person, including the children under our care would in any way do something so terrible as this incident. children are made in the imagine of god and deserve to be fully respected. this is a dehumanizing incident that we re greatry grieved over. reporter: greatly grieved over. reporter: that teacher did undergo a background check. now in light of these allegations, the school will suspend classes until friday so the staff can undergo official training. the parents will have a meeting here at 6:30 tonight at the school so the parents can have any of their questions answered. the church elder said this is the only incident they know of involving this teacher. but pleasanton police have owned a criminal investigation and will be taking a closer look at what took place and whether this teacher was involved in any other cases. live this morning in pleasanton, alex savidge, ktvu channel 2 news. eight minutes before 8 before 9:00. police are looking for five suspects in a brazen robbery attempt across the street from police headquarters. police say the robbers demanded cash from a victim just a few feet from alameda headquarters. two of the suspects can be seen in this video. the city of richmond is demanding that a property owner clean up his property. this is making news because the property owner is a city councilman. maureen naylor is live in the newsroom. the city wants the richmond city councilman corky to get rid of piles of trash. the property in question is located on carlson boulevard in richmond under elevated b.a.r.t. tracks and right next to the richmond greenway. ktvu shot this video of the 28,000-square foot lot where it was easy to spot bags and litter. according to the contra costa times, the city is upset about the mess on his property, including old cars and industrial tools. they want the councilman to clean it up. they say the 69-year-old man is in violation of several kids. but he told the paper codes. but he told the paper this is a political bipartisan hunt. he says he has a business license for auto repair pat the site and there s no telling when this will come to an end. in the newsroom, maureen naylor, back to you. and we ll have more of mornings on 2 right after this. stay with us. hello? the words are going this way-there s no way. oh, the lights came on. isn t technology supposed to make life easier? at chase we re pioneering innovations that make banking simple. deposit a check with a photo. pay someone with an email. and bank seamlessly with our award-winning mobile app. take a step forward. and chase what matters. yer always after me lucky charms! whoa. i forgot how good these taste! [ lucky ] they re magically delicious the one and only, cheerios it is ticket tuesday. today s winners will get to check out grammy award-winning lady antebellum. three viewers will get three 60s for april 26th. for your chance to win, go to ktvu.com and put in the secret word nashville. well, that s our report for this morning. we thank you for trusting the ktvu channel 2 news. be sure to watch the news at noon, for more on this. as we leave you, we have live pictures from today s conclave just about to begin in cat van city. these are pictures of the 115 cardinals who will vote in the conclave. they are due to start doing that momentarily. they will be taking an oath that they will come forward individually individually and place their hand on the book of the gospels which is prominently displayed on the podium that you see there and taking an oath and then following the oath-taking, key people t
it looked. plus two greyhounds and one wannabe, and how to keep the girls together. introducing boob glue. what? a couple of guys were out fishing when they hooked the big one. they claim their boat was dragged about two miles out into the sea trying to land this monster fish. two miles? mm-hmm. you can see the mud getting stirred up by this behemoth beneath the water. when they finally get a good look at this thing, take a look at this prehistoric-looking beast. what is that? it looks like a dragon. it s like three three fins. wait for it. a saw on the end of its snout. that s a 16 1/2 foot sawfish. oh, my goodness. watch what happens here. oh, my god! that s a [ bleep ] i m telling you about. the sawfish takes one last quick snap at the boat. the guys claim that saw gashed their boat. the fish got away. they say luckily the fish was as big as the boat they were in. there would be no way they could land this thing, plus they say it s illegal to catch these types of sawfish. is there a photo of what these things look like online? oh, my gosh. it has a mouth like a stingray. that looks like a chain saw. big, gnarly looking fish. you don t see those things often. pretty neat. thank god. oh, my gosh. i want you guys to look at this surveillance video from outside a pizza joint in orlando, florida. pay attention to what s going on with this man and this woman in the corner of your screen. first, you see her slap him. he begins choking this woman. he has his arm around her, then grabs her neck with his hand. she is trying to fight back. but keep watching. she loses consciousness, then he slams her to the ground. few seconds. she is able to get up and move. that woman is monet willet. if i who have felt any other way, i could have died. this argument started over a minor fender bender. i m telling him back off. back off. i struck him because i was cornered. now, was it right for me to hit him? no. according to willet several of her teeth were knocked out when she was thrown to the ground. you can see as soon as she comes too, you see her put her hand to her mouth it locks like she s checking her teeth. why is nobody going to help her? when this argument started, someone inside the pizza joint did call 911. it took a bike officer about five minutes to arrive on the scene. police did find this man. they talked to him, but they did not arrest him. at the time police didn t know that this video existed. they at first said they completed the investigation, but now that the video has come to light, the investigation is open once more. so this guy could still face charges. i have to start this one by saying that it is incredibly difficult to watch. we are looking at a very busy street. right up at the very top, we see a person that happens to be 12-year-old jade phillips. she is waiting to cross the street. and then she goes for it. oh, no. did she get hit twice? she completely miscalculates it. she s hit by one car, that impact sends her into the next lane, where there s a bus coming in her direction. oh. oh, that s awful. immediately you see people running out. that little boy that you see there, that s her friend that was with her. he goes towards the back of the bus because it looks like that could be her in the video, right? but that s not her. that s just her backpack. he immediately gets on his knees, looks under the bus, and realizes his friend is stuck under the tires of this bus. it turned out that she was pinned under the front tires. she did survive this accident. she is expected to be in the hospital for several weeks. she s in critical condition because she did suffer a broken skull and clavicle. it s a shame this happened, of course, but also a remainor to cross where you re supposed to cross. sergeant phillip gillardo was overseas, his family didn t know he was back. so they went to a hockey game. the cincinnati cyclones. tonight s second ceremonial puck is charisma phillip and fon gillardo. this group is missing one piece as their father is actively serving in afghanistan. they are going out on the ice and expect iing to drop the puc. it appears twister forgot the puck. twister is the mascot. tonight s game puck is being delivered by a special guest. please welcome to the ice, charisma and phillip s father and fawn s husband, army sergeant first class phillip gillardo! they forget they were on the ice. they started running to dad. mom got stuck and the hockey players helped her over. look at the look on this kid s face. obviously the ref wasn t in on the stunt here, you see he came over with the puck. they need a puck? no, no it s a surprise. happy reunion for all. the cyclones made it possible. it s a dude s dream day at a shopping center. racing your bicycle through a mall. what s the deal with this race? we have the story. and he s having his dudes have been daring dudes to do stupid things for ages. it s one of our past times. here we are in indiana in a family dollar parking lot. friends of joakim cook dared him to jump into this puddle. harmless, but he has new shoes on. jump in the puddle. a dollar to jmp in the puddle, a harmless prank,ut haa! don t know if that s some giant pothole, a sinkhole, i have no idea. it s definitely to the your average puddle, but joakim goes in and is under water up to his head. oh. you see his one friend shooting the video cracking up. his other buddy comes over and helps joakim out soaking wet. and his friend sounds like nick right now. let s listen. [ laughter ] this is the middle of a parking lot! what if someone had driven through this! this is a giant hole! did they know that was there? they say on their youtube description, they swear they thought this was a puddle. let s find out for sure. because we have joakim cook from elkhart, indiana, joining us right this minute to talk to us. what happened? my friend, he knew the puddle was deep, but not that deep. he dared me to jump in for a dollar. i was like why not? it s just a puddle. what was going through your mind when you found yourself underwater? pull myself out. i cannot swim. i went into the family doctor, they say they swore they fixed it. what are your friends saying to you? first they said sorry. then they congratulated me. i had no idea this was going viral until i woke up this morning. they said joakim, you are so famous. you should thank us now. did your buddies pay up? did you get the dollar? i m going to ask for more. i think it was worth more than a dollar. i think you re right. were your shoes ruined? clothes were fine. you shou shoes were done. what size and what shoes? size 11, lebron s. we ll buy you new shoes because you went through this incident. that would be great. one of my childhood dreams coming to life. racing your bicycle through a mall! i all wanted to do this when i was a kid. i thought, man that would be so much fun. this is a series done in the czech republic through a mall in downtown. we re riding with michael procop, he s wearing a drift hd camera. he jumped from the first floor to the second and then back down. isn t that awesome? they have ramps set up all over the mall. there was 35 riders invited to this event. here he goes down the escalators which is just downhill on a mountain bike. all the spectators along the hallways in the mall are getting an up-close look at the guys storming through the hallways. what if they missed that? that marble floor is not forgiving when you hit it with your bones. neither is a downhill mountain bike course. the finale. check out this jump. big head of steam, up an over a huge crowd in the center of the mall. finish line. tiny talk. say hello. hello. good girl. good girl. say hello. hello. say hello. hello. say hello. hello. good girl. good girl. i have a feeling on april 27th of this year, the best bar mitzvah is going down. april 27th, 2013 don t you know i m going to be a man that day? dorell is having a bar mitzvah. he used a little queen to get his message aross. it is my bar mitzvah not only did he do we will rock you he sang a little of we are the champions. it s my bar mitzvah my friend their version of bohemian rhapsody is heavenly. i see a little boy becoming a man do you think he will regret this when he s 18? i m just a young boy hoping for some money you can t regret this. this is showcasing what your personality was like at 13. i m embarrassed of my 13-year-old self. you have to love all the stages of your life. this is cool. i weish i had a video like that when i was 13. a lot of work went into this. they used mom, dad. he did give it a little modern touch. my bar mitzvah style. it s my bar mitzvah my bar mitzvah style i think this is a great way to invite people to your bar mitzvah. these guys are trying to pull down a tree limb. this never goes well. is it real or smelly next? and this is beck, he has a sleeping issue. it s amazing this doesn t weak hi when you have a tree branch on a tree on your property that you want to take care of, generally you will call the landscaper. these guys decided to do it on their own. this never goes well. here, three dummies, they have tied ropes to this branch up above. hey. they pull on it, and it snaps. gee, what a shock. it s a really large branch. there s a dude up in the tree recording this? mm-hmm. why didn t they send him up with a saw. his friend said don t stand under the branch. good warning that that friend didn t listen to. oh [ bleep ]. oh. no. yeah. the branch falls on one of the dummies that was under the tree. is he dead? no. but here s the kicker, there are questions on the legitimacy of this video. people wondering if it was set up. when the branch breaks off, the camera doesn t pan over. stays up there, and then there s a lot of laughing, which i think the initial reaction would be, oh, if you see a large branch laying on ton of your friend on the ground. he would have screamed in pain, right? i don t know. we have seen videos of dudes doing a dumb thing. are we going with real or fake here? real. i also say real, it s not that great of a video. i go with real, too. fake. i say fake. we want to know what you think, head over to facebook.com/rightthisminute, tell us whether you think this is real or fake. guinea pig says get your own lettuce leaf. it s time for another edition of gayle s animal rou roundup. we start with aussie. aussie s owner posted a video to our facebook page saying watch how aussie dreams. and snores. i wonder what he s dreaming about. that s what i wonder, too, what could he possibly be thinking of right now? i think they dream about chasing squirrels, chasing birds, bunny rabbits, nas wthaty they start with the paws. not the only dog that snores. beck snores, too. see if you can identify this snore. it s like a cartoon snore. he snores like daffy duck. it s amazing that doesn t wake him up. it s so loud, like this flapping sound by your ear. now that s the cutest dog snore possibly ever. one last video. this one doesn t have any snoring, but this video is from finland. we have two gray hoeyhounds her. they have their jackets on, doing a practice run. coming up behind. the little chihuahua that could. the legs are just a bit shorter. it makes for a slower dog. i like how they come back to get him. the person who posted it, loose translation says greyhound in the mind. it s all about what you think. you think you can run as fast as a greyhound? he probably could, just impeded by the jacket. see that ref in the green? he just broke a leg. doesn t look that bad when you see it from that angle and in real time. slow it down, you ll be summer s just around the corner, let s get you in the mood now. oh! oh. human slingshot 2x, from devon supertramp. this looks like a blast. homemade. up and off you go. you can see them being pulled down that ramp by that big manry on the other side of the lake. looks like tons of fun. how do you avoid the belly flop. i m amazed by the people who get flung off the air by this ramp and have the body control. the cool thing about this is the whole video sponsored by vuray. if you go vuray and put in dsthr code, you get 30% off. i wonder how you get to be a devon crony. i think we re in the club, but so far no insight to the shoot. ladies, i think you might agree that sometimes it s difficult to keep your girls in place. oh. yes. that s for sure. sometimes they kind of have a mind of their own. without a good sports bra, you re on your own sometimes. whether large or small, introducing boob glue. what? boob glue is a spray-on adhesive that promises to eliminate the sagging, bulging and the dreaded quadquadraboob. where am i applying this to? you stick it to your boob, and theed ed adhesive sticks yo boob to your bra. i like the idea that you have glue, a lot of times you look and you will see the ridge of your bra because of gravity. now i get it it makes everything smooth. yes. it almost looks like she had implants this is created by a california-based beautician, and is set to be released next month. if you re screqueamish, i have warn you because we re about to see a gruesome injury. in a french rugby match, it s not a player who is about to get hurt, it s the referee. watch the referee in the green jersey, that s machu rshg reyna. he suffers a fraction to his tibia and fibula. it doesn t look bad from there. look at it in slow motion. do i have to? there was a stoppage in play. another angle here. it completely turns the way it shouldn t turn a nasty break. rugby is a violent sport. guys falling all over the place, flying all over the field. sometimes you get caught up in the mix. this guy definitely did he will be on the self for a while. we wish him well. that s our show, folks. thanks for joining us. we ll see you tomorrow.
lori: a very good monday afternoon. i am lori rothman. melissa: i am melissa francis. the dow and the s&p and the green. lori: it is a tough sell. is it time to take another look into bonds? please say if you blend it, they will come. ethanol gas is squeezing refiners. how you may be forced to pay for it at the pump. lori: the ryan budget plan. let s get you set up with the first market check. it is time for markets now. nicole petallides. nicole: what a day on wall street. another day and another intraday record highs for the dow jones industrials. you would think the market is overbought. a little too nervous to short the market. celebration for the polls out there with record highs for the dow. i wanted to also take a look at the vix, the fear index. 1176. obviously, this fear gauge is a barometer of what people think will be likely over the next 30 days. i wanted to take a look at dow component general electric. now we are hearing about the nominations for a board member. that would be mary schapiro. she has obviously a lot of know-how in regulation and corporate governance and the like. that will happen on april 24. back to you. lori: thank you, nicole. melissa: fox business contributor phil flynn of price futures group is in the pits of the cme. i think you have to look at asia, really. numbers were very disappointing. later in the day, we got a number out of india that shows auto sales fell 25% from a year earlier. when you look at growth, you always look at asia. when you get numbers like that, it is pretty disappointing. we saw a pretty good ride in rbob gasoline prices. the whole sellers were panic buying this morning. phillips 66 had a power outage. look at the crude oil future right now. it was $91 at one time today. we have heating oil down. gasoline has reversed. down $0.2.03 on the day. natural gas, small prey keeping game. could be a sign that spring is coming. lori: my next guest warns investors not to forget about bonds. bill o donnell. please do have you joining us once again. let s start with your take on the selloff last friday after the jobs report. the message of the bond market is expected a strong number, but it was stronger than even the most optimistic economists expected. we did see a good buy with a reach those levels. lori: you are not readjusting your range for the tenure; right? what should we expect for the ten year yield. arrange roughly around 2.15%, amy down to 180, 170. that is where support resistance is up. very strong housing sector. improving bank and household sheets. all of that helping to lift up above the range that we have, for example, last august and september. we just moved to a higher range. it is true. lori: it is kind of a conundrum. with that surprisingly strong jobs report and you have increased your range, where is the best entrance point? do you see some more buying room? we saw some on friday after the jobs number. we saw some the of sick long-duration fund managers come in and buy just as they did on february 14 these levels, especially for longer maturity is attracting the eye. i am impressed by the flows. lori: you mentioned the fed keeping rates capped. are you concerned about risks there? oh, absolutely. the recent testimony by the fed chairman, as well as another speech, too much squashed those fears. by the same tone token, i would expect that there is still not that what enthusiasm about the 7.7% unemployment rate because a lot of that came from people who left the labor force. lori: i have to do one final question, when to refinance your mortgage. i like the positioning in the treasure market. it is a lot less long. i like the fact that we are up near the top. anyone looking to refinance their mortgage ought to wait another two-four weeks. you may get another quarter percentage off. lori: rate stuff. bill o donnell, we will check in again soon. melissa: the budget battle begins tomorrow. rich edson is in washington with the details. rich: it is more like budget week in washington. for the first time in four years, senate democrats will likely unveil a budget plan. the budget contains no tax increases and allows for tax reform. they also claim ryan s plan balances the budget within ten years. ryan says it is up to the present to compromise. will he resume the campaign mode? will he resume attacking republicans and imputing our motives? will he sincerely change and try to find common ground? that ill we hope happens. democrats say it is up to republicans. senate democrats and chairman are expected to lay out their opening position this week. murray s will contain further tax increases for the wealthy. back to you. melissa: thanks so much, rich. scott garrett, peter walsh will face off on the merits of the budget proposal hitting capitol hill this week. you do not want to miss that. we are going back. lori: a look at the books. karl icahn getting a look at dell financials. challenging the bid to take the company private. melissa: does spring forward have you down? how a nap on the job may boost your productivity. i love it. lori: a power nap. all stations come over to mission a for a final go. this is for real this time. step seven point two one two. rify and lock. command is locked. five sonds. three, two, one. standing by for capture. the most innovative software on the planet. dragon is captured. is connecting today s leading companies to places beyond it. siemens. answers. and his new boss told him two things cook what you love, and save your money. joe doesn t know it yet, but he ll work his way up from busser to waiter to chef bere opening a restaurant specializing in fish and game from the great northwest. he ll start investing early, he ll find se good people to help guide him, and he ll set money aside from his first day of work to his last, which isn t rocket science. it s just common sense. from td ameritrade. melissa: it is time to make money with charles payne. a stock that will have you rolling in dough. charles: and lot of people have a bad taste in their mouth. they had that accounting scandal. that is when the stock was high. the books were a little cooked, if you will. her next level could take it i would like to see wall street on board a little bit they have crazy flavors. but go to their website. melissa: i remember that. charles: they are doing very well. they still have a real negative feeling towards it. lori: we will have to get more details on that. just bring on the bottom of your screen. nicole: some of these analyst calls. taking a look at best buy. the shares have been edging higher. up about a half of 1% at 20.25. the price target is currently now raised to $26 up from $10. there is a year to date chart on best buy. they have bullish sentiment. new management is in the very early stages of a multi- year turnaround. let s talk about apple. apple that has been under some pressure. down about 1%. there are concerns about iphone sale trends that we have been seeing. some concerns there. in the meantime, we are hearing that samsung has some new features. i scrolling technology. that is reportedly a new feature on the samsung galaxy. back to you. lori: you know all the tricks to the trade, nicole. we understand that three earthquakes above the 5.0 magnitude level has rattled california. no damage has been reported at this time. we will continue to keep you posted. melissa: karl icahn has signed a confidentiality form with dell. last week icon wrote those board a letter saying he had taken a substantial pace in the pc maker. the committee currently conducting has said it would welcome icon to participate in the process. lori: avoiding the tax man. corporate profits stashed overseas. it is growing. melissa: sun, sand and oil. drillers setting their eyes on paradise. details ahead. 21 minutes past the hour rail. this is your fox news minute. former mayor convicted of corruption charges including federal racketeering. kilpatrick had been accused of widespread corruption. company patrick resigned from office in 2008. about 10,000 south korean and 3000 american troops are taking part in military drills right now. north korea reportedly nullified the 16-year-old that ended the european war. choosing a successor to pope benedict gets underway tomorrow. the cardinals have voted to wrap up their pre-conclave nomination . i am jamie colby and those are your news headlines on the fox business network. back to melissa and lori. lori: thank you. stashing cash overseas. here is elizabeth mcdonnell. liz: the tax rate is 35%. that is where the debate is. the e is the leader here. 108 billion. 70% of the cash overseas. that is why david einhorn is saying bring the cash back. we need those revenues overseas. honeywell is saying more than half of its revenue is overseas. you are housing your patents and your copyrights on purpose overseas to avoid taxes. why not bring it home. both sides are coming in on this. here is the president last week saying a new statement about raising corporate taxes and overseas profit. we need to make our tax code more competitive. ending tax breaks for companies shipping jobs overseas. liz: the president has already said he wanted corporate tax reform. this is what he wants. we know that dividend taxes have gone up. melissa: that does not sound like the same thing he just said. that is jobs not cash. liz: he is equating higher taxes which jobs here in the united states. i ll tell you something, you know, this is a big debate in washington, d.c. exxon mobil paid a huge tax bill. when they had a tax holiday and this is what apple and other tech companies want melissa: everybody always says it does not work unless they are permanent. liz: that is where the debate is right now. dividend taxes have gone up. this is a debate that is heating up. lori: do, liz. melissa: the search for oil has headed toward the tropics. it is substantial oil reserves. for oil production could be on the horizon. the bahama petroleum country will be heading the project. look at that beautiful water. offshore drilling has been a hot button issue. lori: you kind of sound like you need a vacation, my dear. melissa: i love the idea. all right. big plans for ethanol backfiring as refiners are forced. we will tell you why you may pay more at the pump. that is next. lori: also take a look at the of and downs on the dow. we are back after this. . .. friday night, buddy. you are gonna need a wingman. and my cash back keeps the party going. but my airline miles take it worldwide. [ male announcer ] it shouldn t be this hard. with creditcards.com, it s easy to search hundreds of cards and apply online. creditcards.com. i took my son fishing every year. we had a great spot, not easy to find, but worth it. but with copd making it hard to breathe, i thought those days might be over. so my doctor prescribed symbicort. it lps significantly improve my lung function starting within five minutes. symbicort doesn t replace a rescue inhaler for sudden symptoms. with symbicort, today i m breathing betr. and that means.fish on! symbicort is for copd including chronic bronchiti and emphysema. it should not be taken more than twice a day. symbicort may increase your risk of lung infections, osteoporosis, and some eye problems. tell your doctor if you have a heart condition or high blood pressure before taking it. with copd, i thought i d miss our family tradition. now symbicort significantly improves my lung nction, starting within 5 minutes. and that makes a difference in my breathing. today, we re ready for whaver swims our way. ask your doctor aut symbicort. i got my first prescription free. call or cck to learn more. [ male announcer ] if you n t afrd your medication, astrazeneca may be able to help. lori: how about another edition of stocks now? as we do every 15 minutes, back to the floor of the new york stock exchange and nicole petallides. the dow is climbing ever so higher. now at session highs with a gain of 40 points. it is pretty amazing to watch the dow jones industrials up 40 points at 14,437 and change. we ve seen many names on the dow with up arrows. some are hitting multiyear highs, annual highs. that includes 3m, j&j,, disney, american express, boeing and united technologies. fedex another name hitting a multiyear high. i want to look at genworth financial a name we re following on the s&p 500. it is at a 52-week high. we ll add to the list of highs. at baron s, they are raising it to upgrade from second outoutperform from a sector underperform. baron s over the weekend noting that the company s stock could double and mortgage and health care pricing. noting new leadership at the company as a positive catalyst. as i talk about genworth financial i should note it is the number one performer in the s&p 500 index today, helping it along. back to you. lori: a lot of good info as always, nicole. thank you. melissa: gas prices coming down slightly in the past week but could a u.s. ethanol mandate send them shooting back up? a 2007 law requires u.s. refiners to blend more ethanol into gas even each year. in order to monitor this increase, the epa requires that each gallon of renewable fuel produced have a unique number attached to it. it is called the rin. like a credit. if a refiner can t meet the ethanol target it can purchase the rin as the requirement purchases above the 10% mark blending hit the wall and price of credits or the runs are hitting through the roof. what does it all mean? john kingston, global director of news at plats. this is what confused me about the article in the wall street journal but we ve talked about this, but if you re producing ethanol already, why do you also get the credit and how us did it work? the surplus was a credit banked to serve future needs. that ethanol bank is rapidly drawn down as the renewable fuel standard rises, amount of gasoline consumed in the country drops and you mentioned the wall, the wall in this country is 10%. that is generally amount considered safe for automobiles. the ethanol industry, renewable fuels association would disagree, almost everybody looking at dispassionate point of view, sees there is 10% blend wall. with decline in gasoline consumption, rise in renewable fuel standards you re starting to push against that the activity in the rins market is frenetic last couple weeks is get everybody ready for next year. melissa: i have a bunch of questions you said. i don t have to have as much ethanol as it says it does if i have the credits? you can blend 8% credits. melissa: is that say at pump. it says 10% ethanol. melissa: it may not. contains ethanol and a lot of rins. is might contain ethanol. no reason not to. a question of companies and operations and what kind of balance they have. it will vary from company to company. i was speaking to a person, some companies are up against the limits and others have fair amount of room. melissa: you can purchase these things on the market instead of putting more ethanol in. one reasons why refiners don t want to sell ethanol in it, there are bunch reasons. people don t like gas with more than 10% ethanol. there is big pushback. even aaa said it is not safe to put ethanol than greater than 10% if your car that not flex-fuel vehicle. aaa is very clear. however it is a little murky . melissa: you but government is still mandating? the government doesn t mandate 10%. that is the problem the government mandates a flat number. the number is rising consistently. melissa: as our demand for fuel drops the number is staying the same some abouting larger than 10% by default. that is the run crunch point. if the government were to say, okay we ll take last year s gasoline consumption and renewable fuel standard for following year is 10% you really wouldn t have this problem. where this, this is all sound very difficulty and obscure where this could result in some impact on consumers it will hit in imports. u.s. is net product exporter but some part of the country still a significant importer of gasoline. if you re an exporter of gasoline year-over-year you look at your economics. your economics now, i m going to send gasoline over to the u.s. but i too have to meet the renewable standard. now i have to buy rins at whatever price. that price may destroy the margin of sending the shipment over. that is number one. number two, if you re a u.s. producer and the economics are not food you might decide to export it rather than use it here. this sounds all very up in the clouds and, inside baseball but this is where it could start to affect supplies. melissa: from here, how much of an impact could it have on the price for consumers? i don t know where. last week s an executive from marathon said it added ten cents a gallon i don t agree with. melissa: too high. i think so. i don t know when it will start to impact. i don t know that it is linear. there is actually a final rule for 2013 renewable fuel standard has not been finalized. i wonder if the epa is listening to all this, thinking you know what? maybe we should bring it down a little bit. melissa: right. there could be relief on that. this all happened in the last few weeks. melissa: yeah. so it s a, funny happened in the last few weeks but everybody knew it was going to happen some day. it was a question of when. melissa: question when we got to the point when demand is falling so much and things pop up. all of sudden you have the price and this is a bizarre situation where the government getting involved in the market trying to gerry rig it one way or the other eventually has unintended consequences. they assumed gasoline consumption in the 2007, the gasoline consumption in the u.s. would rise ad infinitum. that has not happened. we re down significantly. nobody forecast this. but the rule making or rules have not really reacted to that. the epa will have a chance this year when they finalize the 2013 rules, to lower it and say, you know what we are losing less gasoline. melissa: a complicated issue. you made it understandable for us. we appreciate it. okay. lori: this news alert. the race for the presidency in venezuela really heating up. acting president nicholas maduro and enrique caprillas launched scathing attacks against one another even as mourners line up to view former president hugo chavez s body. tte election is more than a month away set to take place april 14th. maduro is seen as the favorite. thousands of his supporters filled the streets of caracas pledging their support especially since hugo chavez hand-picked him to succeed. melissa: so much for a smooth handover. lori: never happens. that was wishful thinking especially in venezuela. melissa: it is going to be interesting to see how it plays out what it means for the energy market what we were just talking about. from the anchor desk to the boardroom, morgan stanley is in talks to an addition to executive management team. charlie gasparino is here with exclusive details next. lori: sleeping on the job? we don t do that. melissa: come on. lori: letting workers catch a few zs in the hopes of boosting productivity. melissa: how nice. lori: that story is ahead. it s monday. a brand new start. your chance to rise and shine. with centurylink as your trusted technology partner, you can do just that. with our visionary cloud infrastructure, glal broadband network and custom communications solutions, your business is more reliable - secure - agile. and with responsive, dedicated support, we help you shine every day of the week. good afternoon, i m sandra smith with your fox business previous the blue-chips extending last week s rally today scoring another record intraday high. the dow jones industrial average up about 42 points at 14,439. casual dining restaurant chain denny s dropping the expansion plans in southern china. the company was planning to develop 50 franchise restaurants with great china international group over the next 15 years, the first of which was supposed to open this year. denny s has not provided details why this deal was terminated. hostess brands creditor silver point capital and hedge fund reportedly expressed interest in buying hostess snack cake brands including those twinkies according to the new york post. private equity firms apollo, global management and cd set a minimum offer of $410 million in january to buy the unit. that s the latest lori: morgan stanley in talks to make an addition to its executive management team. fox business senior correspondent charlie gasparino joins us with exclusive details on the telephone. hey, charlie. hey, guys. we should point out there is no word yet from morgan stanley on anytiming or whether the talks somehow broke off. i don t think that is going to happen, to bring in gary kaminsky, former top money manager at neuberger berman. most recently i guess the capital markets editor of to be specific of cnbc. no word when that will be announced. we understand they are in the middle of finalizing the deal if it breaks off, it breaks off because they couldn t agree on dotting this and crossing the ts. in all luckily hood gary will join morgan stanley tomorrow as vice chairman of its brokerage department. there is lot of interesting aspects to this story. let s break it down what is the most important. the most important thing for morgan stanley and people who own the stock is this. james kborm man has a plan basically to make morgan stanley the most profitable and best-run brokerage firm in the country. they have roughly 18,000 brokers. the largest brokerage firm. they want to do that through sort of synergies with other parts of the firm. that is where gary will come in. he will try to make the investment bankers work with the brokers. for example, or the brokers work with the investment bankers. brokers especially at morgan stanley deal with high net worth indivduals, people that own small companies. they want to keep the deal flow from those companies inside morgan stanley rather than send it out to earth firms. that is part what he is going to be doing. clearly it s a big job. you can clearly say that if this thing does happen, this one of the biggest jobs on wall street and maybe one of the most important and here s why. you know, we deal with small investors. morgan stanley deals with more small investors than anybody on wall street with that brokerage division. gary will be reporting right to craig fleming who runs it and he will be a key part of that management. this is a pretty big deal if it happens. i m only qualifying, listen, i ve been covering deals and deal-makers all the time. you know there are last-minute things that blow things up. if i was betting man i would say, this is not going to blow up but you never know. lori: and, charlie? yes. lori: speaking of big name dropping there is talk here warren buffett may have had something to do with all of this. i don t think so. i mean, i don t think you leave a big, a job like at cnbc and take a job at morgan stanley because of warren buffett. as you know, warren buffett disagreed vehemently with something gary kaminsky said on the air. i think gary was more right than wrong. cnbc issued an apology essentially for it. it had to do with whether buffett and berkshire buy back stock. when gary said is that, warren buffett is somewhat hypocritical. he was talking about it is great, how jpmorgan was doing a stock buyback or another firm, that buffett made the comment on cnbc. gary said that was somewhat hypocritical, buffett never, nevers buys back stocks. baloney, i bought back stocks once 20 years ago. you get the point. lori: absolutely. cnbc came in and issued an apology and i think there were obviously hard feelings there. i don t think that s the reason why he took this job. this is a damn good job if it works out for him. lori: i d say. thanks for details on it. charlie gasparino. melissa: as we do ever 15 minutes, and check the markets. nicole at the new york stock exchange. you re watching major movers. yes indeed i am. blackberry. don t call it research in motion. that is old news. it continues to gain throughout the day. tomorrow is the finally the day you can order the new z10, the blackberry z ten everybody was eagerly awaiting the products. you can go in the store on march 22nd and make the purchase. what is announced on january 30th is finally coming to fruition and get in there to buy this thing. everybody waited a year and a half for this one at least. obviously big news for blackberry. as a result we re seeing the stock get an incredible pop on this launch news. dick s sporting goods, this is different picture. down arrows, under incredible pressure for dick s sporting goods. they came with profits completely under analyst estimates. they misjudged cold winter weather. that was mild and didn t make sales they anticipated. the stock is down over $5. as i noted a 10% drop much back to you. lori: don t count out blackberry just yet. that s for sure. nicole, thanks. workers all over america facing a daily wave of afternoon fatigue. employers are fighting back with nap time. melissa: i love it. lori: is this nursery school or corporate america? i don t know. anyway one firm in paramus, new jersey, modeled an unused closet with a recliner, a fountain and a bamboo rug to help its 20 employees fight those midday crashes. but now time is only a small step in curing what some experts call a national epidemic of deep deprivation. nearly 43% of the americans, ages 13 to 64 say they rarely get a good night s sleep on weeknights that is according to the national sleep foundation. other week-starved commuters go for longer commutes for another hour of shuteye. people end up with diabetes and depression and sounds like companies take notice. melissa: you could go in the closet to take a nap? how long can you go in there? i need two hours. how would that work snut. lori: i don t think somebody would even bling. turn off the lights or look away from the kmuter that is enough to refresh you. melissa: are you napping in your office and i don t know about that? lori: either that run across the street to starbucks for a caffeine hit that is my vice. melissa: there you go. if you were watching last hour you missed an exclusive interview with celebrity chef bobby flay. cheryl casone talked to him about his company s expansion plans and why owe is waiting to open a location of his burger chain in new york city. take a listen. very expensive to build a restaurant here. so much so that the $10 check average at bobby s burger palace. it would take a lot of $10 check averages to pay the rent. not to say we wouldn t do it. at some point i will have to make my wife happy. she keeps saying to me every time i want a burger i have to go to paramus to the burger palace? melissa: he talked about the rising price of beef and how it is affecting his business. he is not ready to pass those costs to consumers. lori: that is a good way to fight fatigue. eat well. has to be more of a priority. did we learn any lessons from the great recession? too big to fail is back in the headlines on a new push in washington break up the banks. melissa: walking the walk and talking the talk, a look at google s talking shoe. can you get your hands on them? . melissa: too big to fail back in the spotlight as banks face a second round of stress tests from the fed. peter barnes is in washington, d.c. with more. peter? that s right, melissa. big banks will be under the microscope all week in washington on too big to fail. the fed will announce bank capital plans on thursday for the 18 largest banks that just went through those stress tests. a house committee will hold a hearing thursday on too big to fail. a senate committee holds a hearing friday on jpmorgan chase s $6 billion trading loss with the london whale and big bank critic, richard fisher, president of the dallas fed will hammer big banks again in another speech on friday. to critics like fisher, too big to fail that the big banks will get government bailouts if they get in trouble and all that gives them competitive advantages. dodd-frank financial reform was supposed to fix all this. critics say it did not go far enough. they want congress to step in to break up the big banks which are pushing back. force the banks to spin off the trading operations, simplify their operations. split up the conventional banking and this crazy wall street risk-taking. that is what we saw 50 years or 60 years under glass-steagall. we saw that kind of split between wall street speculation and conventional banking. we need to restore something like that. we serve a lot of global customers. so breaking up the u.s. banks would force those customers, nonbanks, to look elsewhere to do business. and that puts, again, puts us, u.s. banks, at a competitive disadvantage. and handful of lawmakers are are proposing legislation to put limits on big banks an even break them up. but the legislation faces uphill fight in congress because of intense big bank opposition. melissa? melissa: pete, thanks very much. lori: they oppose, really? yeah. lori: first was google glass. now google introducing a talking shoe. can t wait to see this to showcase its advertising program. it was created in cooperation with zack lieber. it has a pressure sensor, gyroscope, speaker and bloo tooth technology. they have a experiment with new social media and can develop you a personality and motivate you to move for. no way. it is a promotion emotional item and won t be available in stores. melissa: all you need a shoe chatting at you to run faster. lori: technology is going crazy. melissa: coming up tonight on money , elizabeth petrikas and her attorney will join me first on fox interview about a precedent-setting decision a judge made to throw out the prenup with her husband. he said he would force her to sign a prenup he would tear it up as soon as they had a wedding and or had kids, based on that, the judge threw it out. it is totally precedent setting, if you think you have a prenup, you may not. you want to watch 5:00 p.m. eastern here on fox business. it s new law. really astounding. lori: sorry to chuckle on people s misfortune. melissa: i almost required a prenup but then i said it was rude. lori: all is wonderful love and war in my house. coming up one big money strategist says stocks have more room to run. raymond james has strategy for investing in the record market. tracy byrnes and ashley webster take you through the next hour of markets now. don t miss it. today is gonna be an important day for us. you ready? we wanna be our brother s keeper. what s number two we wanna do? bring it up to 90 decatherms. how bout ya, joe? let s go ahead and bring it online. attention on site, attention on site. now starting unit nine. some of the world s cleanest gas turbines are now powering some of america s biggest cities. siemens. answers. it s delicious. so now we ve turned her toffee into a business. my goal was to take an idea and make it happen. i m janet long and i formed my toffee company through legalzoom. never really thought i would make money doing what i love. [ robert ] we created legalzoom to help people start their business and launch their dreams. go to legalzoom.com today and make your business dream a reality. at legalzoom.com we put the law on your side. and make your business dream a reality. (train horn) vo: wherever our trains go, the economy comes to life. norfolk soutrn. one line, infinite possibilities. [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] it s so close to the options floor. [ indistinct shouting, bellinging ] .you ll bust yo brain box. all onhinkorswim from td ameritrade. tracy: good afternoon, i m tracy byrnes. ashley: i m ashley webster. so can the dow make it lucky seven in the win column? blue chip index is up 35 points at this stage, headed for another record high. raymond james chief strategist jeff saut says there is eneven more upside for stocks. he will tell us how to play this market coming up straight ahead. tracy: gop congressman paul ryan ups the ante on his new budget plan. it is the best solution for cutting our nation s massive debt and will it get anywhere in deeply divided washington? congressman scott garrett and peter welch will debate it this hour. ashley: are wall street capital gains about to lure its biggest fish? billionaire hedge fund manager john paulson may be headed for sunny san juan. those details are ahead. tracy: it is a big loophole. i m surprised more people haven t gone. ashley: perhaps they will now that they re getting news. top of the hour. time for stocks. the dow is up 35 points. let s head down to the stock exchange with nicole petallides. great news for the bulls out there, ashley and tracy. the dow jones industrials once again hitting record intraday high. if we close right here and right now this would be new all-time closing high for the dow jones industrials. i m looking at s&p up one quarter of 1%, sitting at multiyear highs sitting at 1554. nasdaq as well. we re continuing to see the bank stocks doing well. drug stocks with up arrows as well. let s take a look at some financials now. jpmorgan and bank of america, two names in the dow but also citigroup and wells fargo, two names we re focusing on in the banking industry because those two hit multiyear highs right now. citigroup at 47.55, a gain of 1.8%. the vix, fear index which is a gauge and barometer how people are feeling and volatility, they expect in the s&p over the next month or so you are actually seeing it below that 12 mark. it is at 11.76. tepid markets and not so much fear and worry. you can see it down 6 1/2%. back to you. tracy: nicole, we ll see you in 15 minutes. breaking news from charlie gasparino. who else. morgan stanley planning to appoint gary kaminsky as the brokerage unit. this is being planned on according to a source we ll have more 3:00 p.m. eastern hour on countdown to the closing bell . tracy: gary wendt from neuberger berman to cnbc. back to the business where the money is. ashley: i guess so. tracy: speaking of money, it keeps flowing into exchange traded fund that track the s&p 500. will this market momentum push the benchmark index to a record high? sandy smith with today s trade. hey, sandy. talk about the dow record but talk about the s&p 500? this is broader gauge with the stock market. s&p is flirting with highs of the session at 1554. let me quickly remind you where the record high is. 11 points from where it is now hit in october of 2007. 1565 is the closing high to keep in mind there flip the screen. you will see the intraday high to watch is just above there at 15, sorry, 157 of. that is another number to watch 1576. we flirt with all-time highs on the session. as you look at s&p 500 year-to-date it is underperforming the dow, 9% this year while the dow is up 10%. when you look at investor interest, this is why market analysts are pouring in to say the retail investor could push this over the record edge, simply because they haven t been participating in the rally. they re measuring this. this is a case in point, index universe. they re saying $1.8 billion of retail investor funds have been pouring into the etf. so far in the month of march, only six trading days so far this month. you re talking about a lot of money. s&p etf, tracking the s&p 500. that is where investors are flocking to. other s&p etfs to watch, ivv and vvo. guess what, tracy and ashley? the stocks leading s&p 500 rally is netflix, up 95%. best buy up 70%. some consumer names and h&r block and technology companies, hewlett-packard, micron technology, celgene, a health care company and also dell. those are the biggest winners so far on the s&p. while the dow is flirting with records, keep in mind we re getting close with the s&p as well. ashley: yes we are. best buy, don t get it. i don t have a good time in there i don t. sandra, thank you very much. our first guest is not concerned about record highs on the market. he says stocks will end this-year higher than where they are now. jeff saut, raymond james chief investment joins us. jeff, thank you. the last time you were on the program was just prior to the state of the union address, beginning or mid-february. you expected a five to 7% correction. we really haven t seen that. do you still think we re set for a correction? do we just keep moving higher? oh, historically that s what you get this far into a buying stampede. i thought the state of the union wrong feetedly by the way would be a catalyst to give you a five to 7% pull back. it was just plain wrong. the buying stampede continues. dow theory buy signal confirmation when the dow jones industrial average sprinted out to new all-time highs thus confirming what happened with the transportation average in january. the buying power index is getting ready to cross above the selling pressure index. that indicates stocks will be higher a few months from now. all of that said, you are subject to some kind of pullback at any time but i continue to think as i did back then that pullbacks are for buying. tracy: sandra smith just reported there is money going into the s&p 500 etfs, which is a good thing. a lot of people worrying that the average retailer is missing this run. so if that s the case then, shouldn t the advice just be get in and who cares when you do? well, i think you have to be selective on a stock by stock basis unless you are playing the indexes. we just had last week the raymond james 34th annual institutional conference with nearly 800 portfolio managers and over00 companies presenting and 300 companies presenting. it is not just retail investors not keeping up with the dow joneses. the institutional crowd has been too cautious for the most part. they re sitting on too much cash and they re underperforming. your report is exactly right. you could have the tide break here and see a lot more money come piling in on the upside. ashley: at some point it gets too expensive and we re reasonably prices some would argue and some would say not, we have more to go, do you have to wait until we see the correction and buy on the dip because these stocks may become overbought? i told people a few weeks ago if we re not getting some kind of pullback, what you do you decide how much money you want to commit to equities, say it is $100,000, then you break that into four tranches of $25,000 apiece and commit the first tranche of $25,000 2 1/2 weeks ago. then you set a point in time, be it two weeks forward or a month forward where you will commit another $25,000 tranche whether we re up or down or so forth. according to dow theory and according to the money flow indicators, this bull has a lot farther to run. tracy: old dollar-cost averaginging, right? buy on the dips. transport seems to be where you re focusing your attention these days. kansas city southern, american railcar industries. this is play on the economy as well, isn t it? yeah. they re economic sensitive. transports actually percentage wise outperformed the dow year-to-date. kansas city southern, which has a, good rating from our fundamental analyst here at raymond james, we have been in it for about seven or eight months now and we think it s a play on mexico. the mexican median wage in the next couple years is going to be below that of china. and so mexico, the theme is, that mexico s going to be the new china for the u.s. and kansas city southern has the fairway or rail beds up from mexico into the heartland. ashley: interesting. very good stuff. jeff saut, jeff, thank you so much for joining us. we appreciate it. it s a pleasure. ashley: mexico is the new china. basically because labor costs are actually less in mexico than they are in china and a lot closer. right. hope he is right. coming up, president obama harshly criticized congressman paul ryan s last budget. so how are he and other democrats going to respond to the new one out this week? congressman scott garrett and peter welch will debate that next. ashley: google glass not even on sale to the public yet but one business owner is already panning them. we ll tell you why next. first time to check how oil is trading at the beginning of the trading week. we re seeing oil slightly lower at $91.61 a barrel. we ll be right back. it s monday. a brand new start. your chance to rise and shine. with centurylink as your trusted technology partner, you can do just that. with our visionary cloud infrastructure, global broadbandetwork and custom communications solutions, your business is more reliable - secure - agile. and with responsive, dedicated support, we help you shine every day of the week. he s going to apply testosterone to his underarm. axiron, the only underarm treatment for low t, can restore testosterone levels back to normal in most men. axiron is not for use in women or anyone younger than 18. axiron can transfer to others through direct contact. women, especially those who are or who may become pregnant, and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. report these signs and symptoms to your doctor if they occur. tell your doctor about all medical conditions and medications. do not use if you have prostate or breast cancer. serious side effects could include increased risk of prostate cancer; worsening prostate symptoms; decreased sperm count; ankle, feet, or body swelling; enlarged or painful breasts; problems breathing while sleeping; and blood clots in the legs. common side effects include skin redness or irritation where applied, increased red blood cell count, headache, diarrhea, vomiting, and increase in psa. see your docto and for a 30-day free trial, go to axon.com. tracy: time to make money with charles payne. this hour he is covering chipolte, a tasty stock that may have some vegetaria vegetarian-friendly options. charles, what is this? the stock is under some pressure, guys. tofu to the rescue. tracy: no. a little worried because i got to tell you something, tofu has this, this reputation of being good for you, it is starting, people starting to say it is not really good for you anymore, at least the processed version, the american version. when you process you get rid of anti-nutrients. they say you create toxic carcinogen from high pressure. problems would be thyroid, weight gain, lethargy. hair loss. premature puberty. cancer brain damage. the guy they hooked up with chipolte mexican grill he is no joke. tracy: he is really awesome. ashley: not having any tofu? he makes artesian tofu. what happened was he came here with his family from the vietnamese boat lift. he came here. he was a money manager. all this tofu, it is unrecognizeable and unpalatable to most asians. ashley: i ve been saying that for years. i m not asian. have you really? ashley: yeah. this guy is super star. written three books on this. and maybe it starting to listen. starting in the san francisco area. this is smart place to start. will it save the stock? they have missed last two earnings reports. the stock is off 100 points from the high. i would not jump in. i would like to see them with a pretty good earnings report and sort of suggest they righted ship a little bit. one of these stocks ultimately you get back in. ashley: growth growth policy, don t they? triple number of stores. more than any restaurant they re trying to grow. i think they should. one thing that they doohave, remember what big-time short, one of these guys who always shorts and masters of the universe shorted it and said taco bell was taking clients from them. i have customers, i don t even consider them in the same realm as taco bell. but i do think it was part of the economy and part of growing pangs and hiccups that come along with it. i m not going back into chipolte mexican grill yet. i like this idea. the guy is amazing. not sure tofu will be answer to their woes but we ll see. ashley: all right. tracy: on my cracker barrel list of places i have never been. it might stay there. you haven t been to cracker barrel? tracy: cracker barrel, nor chipolte. one across the street though. tracy: yeah. they don t let us out. ashley: doesn t go to the gap either. thank you, charles. appreciate it. all right. ashley: story about google glasses. probably won t be available until next year, these glasses. there is lot of buzz about them but one seattle bar already banned them. the 5 point, which is known to be a seedy place according to its owner, won t serve anyone wearing the $1500 glasses. owner says, people who come in his bar don t want to be known and definitely don t want to be secretly filmed and put on internet. on the bar s facebook page he is warning in not such nice language a kick in the pants would be encouraged for any violate, to. he admits, maybe part of a joke to have this reaction but he is also serious because he says the bar is a private place. that could be the issue for some of these people who walk in with these glasses. people don t want to be seen. don t want those people in the bar. tracy: i m on the bar owner s side on that one. what happens in the bar stays in the bar. ashley: now if you re wearing google glass. there is that. quarter past the hour. time to go back to nicole petallides on the floor of the new york stock exchange. dow is up 42 points. we ll take it. that s right, another winning day on wall street. tack in the nasdaq composite which is fractionly in the green. i hear you, nobody wants to be filmed without having to sign a release. look at urban outfitters. talking about a very popular retailer. reporting quarterly numbers after the bell. up one quarter of 1%. year-to-date urban outfitters up 5%. under their umbrella also, includes anthropology, free people, among other names. but do you have some analysts talking very postively in these last two weeks about urban outfitters. higher today. back to you. tracy: thank you, nicole. we ll see you in 15 minutes. as she mentioned stay tuned for fox business for complete coverage of urban outfitters earnings after the bell, 4:00 p.m. eastern today. coming up the gop s new budget plan, does it have any chance of passing congress? congressman scott garrett and peter welch will debate that next. ashley: first, how is the dollar moving as we kick off a new week? oil is moving lower. the dollar it is weaker and down against a lot of currencies, including the euro, pound, looney, mexican peso, go figure, yen, weaker against the dollar. we ll be right back. 20 minutes past the hour. i m jamie colby. this is your fox news minute. there have been a flurry of earthquakes rattling southern california within moments of each other. originally when they struck shortly before 10:00 a.m. local time they were measured magnitudes above 5.0. now they have been downgraded by seismologists. the u.s. geological survey web site now says they were smaller ranging in magnitudes from 4.7 to 2.7. former detroit qwami kilpatrick convicted today of federal raketeering and other charges. prosecutors accusing kilpatrick, his father and city contractor of widespread corruption, extorting bribes from contractors, who wanted to keep their city contracts. those are the news headlines at this hour on the fox business network. i m jamie colby. i will send it back to ashley and tracy. ashley: jamie, thank you very much. appreciate it. sure. ashley: congressman paul ryan revamping his budget plan that drew heavy criticism from president obama last year. the new ryan budget calls for more spending cuts than the last plan, and yes, it would balance the budget much sooner. rich edson in d.c. with the latest on the ryan budget. rich. we can expect even more criticism from democrats this time around. budgets like this are opening negotiating positions. republicans stake out theirs tomorrow when chairman paul ryan will and democrats will do so later this week, first time in four years. ryan s budget features no tax increases and offers a way forward on overhauling the tax code. ryan s plan balances the budget at some point in ten years. aids say medicare will be converted for premium support system or voucher system say democrats and he repeals the president s health care law. while republicans want to get rid of obamacare, it is likely impossible this congress. the level of spending and revenue of taxation that s embodied in this document really is more important and more of a reflex what republicans are all about than frankly repeal of obamacare and some very sharp cuts to medicare and medicaid. democrats branded ryan s budget dangerous, saying it features deep cuts for the poor and he will terry elderly while protecting the wealthy. on wednesday, chairman patty murray releases her budget. it will likely protect far more government spending than ryan s plan and include tax increases on wealthier taxpayers. back to you. ashley: trying to find common ground. rich edson, appreciate it. let s talk more about this. more expectation around the house republican proposal. we re joined by republican congressman scott garrett of new jersey, democratic congressman peter welch of vermont. congressman welch i will start with you, first, already everyone is saying this is going nowhere fast. paul ryan wants to repeal obamacare. republicans tried this somewhat 35 times to repeal this. is this going anywhere? no. and i hope he knows that. it is really a dead end. this was a decision of the election. so doubling down on another 35 times of repealing obamacare just gets us going nowhere. bottom line, there is an opportunity here if the republicans acknowledge that president obama won. the common goal is to get sustainable spending. there is ways to do it. one, clean up totally outrageous tax code. 1.2 trillion in spending in the form of giveways, often times to special interests. we ought to eliminate that. or rein it in. and then secondly. there are things we can do to reform health care. have prescription drug price negotiation that would save medicare and taxpayers $160 billion which would be a substantial savings. that s through just having price negotiation like we have from the va and we have in medicaid and like a lot of companies have when they have an employee-based plan. tracy: representative garrett, i have to say, this is the most middle ground i ve heard from a democrat in a really long time. how come we can t come to the table? because from my understanding, patty murray will release her budget on wednesday. increasing taxes on the wealthy yet again. and of course no entitlement talk whatsoever. so, yes, in washington with politicians it is always easy to criticize and hard to actually come to the table with an actual plan. tracy: right. for that reason we haven t seen anything from the senate democrats in over four years. we haven t seen anything from the president since he has been in office that actually passes with his fellow democrats. so would be great if they actually finally put something on the table. i wonder whether because we passed no budget, no pay bill, they realize they don t so something they don t get paid over there if they many come to the table maybe we find the common ground. i tell you this we re already receiving revenue in country at higher levels basically anytime in history. we re seeing tax rates near the top ever. so to say we need to put an added extra burden on the economy of higher taxes on this economy, not quite sure that is the direction to go in. tracy: many will agree with representative garrett on that, congressman welch, because, we all feel like our paychecks are cut in half based on what is happening lately. but i think we all agree there needs to be tax reform. i think we could all agree this could be a huge revenue creator and saver, spending saver at the end of the day. how do you do that and come to the middle? well, first of all, the issue of tax rates is off the table now. i mean rates went up on folks over 400,000. tracy: but, patty murray will propose more increases again on wednesday. changing taxes is not off the table clearly. yeah. i don t know what will be in her budget, i don t think the president is talking about new higher taxes. what he has been clearly talking about is cleaning up the tax code, where i think there is widespread acknowledgement that it just, it is a disaster. it is anti-growth. tracy: right. and often times doing bad economic consequences. so, the debate with us whether we take some of the revenues and invest them in education and infrastructure which is something i would strongly support. we have to have a growth component to our budget discussion. tracy: representative garrett, i want to give you the last word because we re running out of time. we re hearing more and more corporations parking money overseas. payroll tax cut is hurting people at home how do you fix this? one thing in paul ryan s budget does we ll vote out make more tear tomorrow territorial tax system, get companies overseas, u.s. companies not to be taxed twice and bring the money back to this country without a penalty. that will go a long way to fixing the tax code. second point on tax reform, tax reform is only reform don t take it from one pocket to another pocket. in other words tax it in another way. thank you. wow! you guys had a little kumbayah moment. we ll see about that. tracy: congressman garrett and congressman welch, congressman garrett is my representative in new jersey. thanks. thank you. ashley: very gene y all. i hope that is a good sign. tracy: i hope so too. ashley: puerto rico is not just a popular vacation destination. isn t that beautiful? find out why some rich americans are deciding to call it home. tracy: if only. look at some winners and losers on the s&p 500 as we head out to break. dow is up 42 points. mcgraw-hill up 3%. look at that move today. we ll be right back. dow pushing higher for a 7th straight session, and nicole, in a tight range, but the upside. how do you feel about the market? it was a record week, and, today, people predicted this over bought market might see a little bit of selling, and, yet, interday highs, again, did you anticipate this? i did. if you go back to the conversation from friday, this is what we spoke about the the momentum in the market wants to move the market higher. there s negative news from china over the weekend and this morning, but the market shrugs it off and looks at positive news. buyback news, mna effects on the market, and it seems now the market is taking the good data letting the market evaporate higher. it won t quit, not just yet. back to you. thank you, nicole, back in 15 minutes. wealthy americans are increasingly interested in puerto rico as are not so wealthy americans like myself. it s not just a vacation destination, but as a home thanks to a 1-year-old law that gives them a big tax break. gerri willis has more i didn t know this existed. yeah, john paulson, the fellow who bet against america in mortgages made a fortune off our backs, he s a new yorker, facing a 50% effective tax rate, but if he goes to puerto rico, he owes no tax on any of his capital gains, so that s what we wants to do. apparently, some other nine americans have done the same thing. he would be the tenth. you got to understand that if we don t change the tax code, this is what happens. the loophole is if he s a resident of puerto rico, he does not owe u.s. tax on gapes? or puerto rico. no taxes. who wrote that? somebody in puerto rico because they want to bring in people like do you want him to have residency there? we re going to see a lot of this. big story in the wall street journal today is how companies park money overseas, and individuals parking money overseas, but it costs so much less to do that. when you think about the $9.5 billion that otherwise would be in our country based here, it just makes a lot more sense. although, 50% would be in the coffers of the irs being wasted so go figure. that s a good point. it s true. what s going on tonight? doing something really interesting. we re taking a look at some administration officials who say despite the fact the federal government is the largest it s ever been and taking in more money than it ever has, they don t have the tools needed to do their job. the fca and eric holder both saying, you know what? sire, but we can t do what we are supposed to do. we ll tell you all about it. already feel anger welling up. thank you. them you re on track. yes. the willis report tonight at six and nine eastern here on fox business. oil closing up just 11 cents, edges lower most of the day, but finishing up 11 cents at $92 a barrel. oil closing up for three straight sessions, but not by much. all right, coming up, pension fraud. fcc taking action against another state for misleading investors about big money holds in the pension. the judge is on the story next. all right, first, as we do every time at this time of the day, look at the 10 and 30-year treasuries. temperature year unchanged, 2.05%, and the 30-year, there it is, up changed as well, 3.25%. we ll be right back. we ll be right back. today is gonna be an important day for us. you ready? we wanna be our brother s keeper. what s number two we wanna do? bring it up to 90 decatherms. how bout ya, joe? let s go ahead and bring it online. attention on site, attention on site. now starting unit nine. some of the world s cleanest gas turbines are now powering some of america s biggest cities. siemens. answers. this is your fox business brief, and it s now official, morgan stanley appoints komenski as the vice chairman as charlie reported joining in april. he s currently the capital market s editor for cnbc. much more in the 3 p.m. eastern hour op countdown to the closing bell . the outlook in the industrial economies improving with japan and the united states leading the way. the oecd says recession hit eurozone showing signs of improvement. march madness starts next week promising big money for the ncaa. a recent study found that the tournament generated nearly $6 billion in advertising revenue over the last ten years. that is the latest from the fox business network giving you the power to prosper. too big to fail takes center stage again as major banks face a second round of stress tests from the fed. now, peter barnes joins us now from washington, d.c. with more on this story. peter? well, hey, ashley, big banks in the spotlight all week on too big to fail. you got community bankers opening their annual convention in las vegas today, and they want congress to clamp down on their big banking brothers. the fed will announce a bank capital plan thursday for the 18 largest banks. a house committee will hold a hearing thursday on too big to fail itself, and a senate committee holds a hearing friday on jpmorgan chase s $6 billion trading loss from the london wale. now, to critics, too big to fail means big banks still get bailouts if they are in trouble, and all of that, the critics say, gives the banks competitive advantages. dodd-frank financial reform, that was supposed to fix all of this, but critics say it did not go far enough. they want congress to break up the big banks, which are fighting back. it will produce more competition, i think, for the consumer. it ll produce more benefits and competition for the real economy companies that use these bank s services and are often both investors and real economy companies that are often overcharged by the banks. if a bank gets in trouble, there s living wills, stress tests, and orderly lick dation authority giving federal authorities to seize a bank that s failing and wind it down. if there s a cost to the taxpayer, the money is paid back through an assessment on the entire industry. now, a handful of lawmakers propose legislation to put more limits on big banks, even breaking them up, but all of that faces an uphill fight here in congress because, guess what? the big banks are lobbying hard against the legislation. of course they are. peter barnes in dc. thank you, peter. you bet. a battle over intention holds. they charged illinois with fraud for misleading municipal bond investors on unfunneledded pension liabilities. illinois agreed to settle charges, obviously, and will pay no penalty, a shocker. joining us for more on this, fox news, judge, nothing, a slap on the wrist? nothing. same happened with your home state and mine, new jersey, in 2010. basically, the fcc said to new jersey then and said to illinois earlier today, you committed fraud by marketing securities, getting people to lend money to the state without revealing to them the true nature of the risk attendant upon the lending because you re not bringing in enough income to guarantee the payments of the debt and repayment of the loans. right. new jersey was accused of doing that, signed an agreement said, we did it, but we won t. illinois signed the same agreement. they do not treat banks or private lenders who trade publicly with the same kid gloves that it does a government because if it took money from the government, that s taking money from the taxpayers, and the purpose the investigation was to protect the taxpayers. it s a catch 22. the best the fcc can hope for is to make lenders aware of the fact that the states will lie and cheat and commit fraud so look before you leap, and it embarrass the states into revealing what was done, but no sanctions will be assessed, 2340 no fine levied, nobody goes to jail, and no individual to embarrass. you have to admit it, but there s no teeth. correct. think about how ridiculous it is. the federal government found fraud on the part of one of the state, and the manner in which it treated people who entrusted their money to the states. it doesn t identify the names of the people who committed fraud. it doesn t make them pay money back. it just says don t do it again. but there s got to be people scratching their head saying we have to change the rules. well, if someone loses money as a result of what the fcc uncovered with respect to illinois, there s a treasure-trove of material that the fcc uncovered for the lawyers for those who lost the money, and that is information can be used by those lawyers in the lawsuit against the state, but if nobody loses money or sues or the state of illinois borrows from one column in order to make another column look solvent, there will be no lawsuit or further exposition. anything in jersey? no, no, no. good question. same thing. we won t do it again. it s not really that toothless. what it does is shine a light on the careers of people, if we figure out who they are publicly, who caused this to happen, and it basically says to institutional and individual lenders, look before you leap. just don t assume because it s a state government that that they tell the truth. or municipality regulated by the state that they tell the truth and the cash will be there when the bond is due for redemption. crazy, muni bonds supposed to be the safest thing on the planet. supposed to be. they were. they were. judge, glad you were here for that. it s mind boggling. disturbing. thank you, judge. a quarter till, time for stocks, back to nicole at the nyc. a market that just won t quit. you heard john talk about the fact that the markets continues to go up, everyone anticipated the momentum is in the upside, and after a week of record setting days last week, we are doing the same thing today. 14441 was the high of the day on the dow. you see the s&p s up a quarter percent. nasdaq s up one-tenth of 1% right now. how about we take a look at blackberry. the new 10,s z10, finally, tomorrow, the long awaited day that you can actually preorder this blackberry 10. on march 2 # 2, walk into the store to buy the blackberry 10. in the u.s., it was delayed due to longer carrying texting fees here. in the u.s., at&t said presales begin tomorrow, a big deal for blackberry, formally known as research in motion. it was under scrutiny and pressure. we waited a long time, about 18 months for them to get the product out and launched january 30th. it was pushed back, pushed back, and, finally, tomorrow, the real deal day to order this thing if you are interested. back to you. all right, nicole, thank you very much. blackberry 10, debating i have one, and i think i have generation 3, but i m so behind, annie coal s further behind because she has the run with the rolly sides. the blackberry aticus, something like that. disney striking gold with the prequel to the wizard of oz so will it save the lackluster box office in 2013? that story s next. oh, but first, look at today s winners and losers. the dow seen in the same range, up 39. retailers, sears, up more than 2.5%, bed, bath, and beyond up also 2.5%. we ll be right back. [ cows moo ] [ sizzling ] more rain. [ thunder rumbles ] [ male announcer ] when the world moves. futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with papermoney to test-drive the market. all on thinkorswim. from td aritrade. all on thinkorswim. a brand new start. your chance to rise and shine. with centurylink as your trusted technology partner, you can do just that. with our visionary cloud infrastructure, global broadband network and custom communications solutions, your business is more reliable - secur- agile. and with responsive, dedicated support, we help you shine every day of the week. well, the feds easy money policy left to yield starved investors to turn to junk bonds driving up the price of assets to record levels, so is there a high yield bond bubble? let s bring in ron, portfolio manager at the high yields fund, only actively managed etf on the market. thank you for joining us. investors scramble for yield, any yield, are we in a junk bond bubble? well, a certain percentage is in a bubble. if you look at the most liquid names out of 1.4 trillion dollars corporate bond market, about 30%-35% is a bubble, and that s all the stuff that s large index and large mutual fund owned. you could say there s a lot of big asset managers out there thirsting for yield, and companies basically issue a lot of crap? that s exactly right. all of the crap is getting refinanced because of the asset class, and the highly leveraged companies, and even the companies that don t have good balance sheets and cash flow statements are getting refinanced and pushing out maturity so doomsday is at a later date. ron, how can you obviously maximize return, but minimize your risk? well, you have to buy hyld. in high yield bond markets, you have about 30-35% of the market that is played in by, you know, the big index funds and the big mutual funds leaving 70% of the market that s really untouched, and we re still seeing above 8% distribution yield between 9-10% overall, all returns, total returns, and so there s a lot to do out there, and it s a big, big market. you make a distinction between the passively managed funds and yours that is actively managed. what s the difference there? well, they are restricted by charters. they can t own any companies that have less than a billion dollars in debt outstanding, and the side has to be between 400 and 600 depending which index fund you look at. we have no restrictions. we can buy anywhere with any rating between bb-plus to ccc. we go to the value. we look for values for securities under valued and they have appreciation left in them. yeah, because when you look at investment grade corporate bonds, sometimes yields are oftentimes less than 1%. yeah, we have seen deals come out that 75 basis points over libor, just unheard of, and with the ten year over 2% now, you know, a lot of the low bonds and long duration portfolios take a hit, so investment grade is not the place to be right now. and, finally, ron, are you concerned about the rally seen in equities in this so-called rotation out of fixed income into the market? yeah, you know, we start with fundamentals of the companies, and we re not seeing any top line growth, and we re not seeing any line growthment things are stable out there, and for a bet investor, it s fine, but equity guys, you get expansion on the moment. s, and that s not a good scenario to invest in. all right. very good. ron heller, ceo asset management, we appreciate it. thank you for having me. all right. well, at movie theaters a year ago this weekend, disney had a disaster with john carter, and now disney rises again with oz: the great and powerful, hopefully for a belter result. dennis kneale has that story. hi, guys. the wizard is back, baby, the $300 million gamble wins the box office raking in $150 million worldwide, and $80 million here in the u.s., and oz had the best opening this year, taking in three times as the opening the jack the giant slayer, and it was the third best opening for a film in march ever trailing only hunger games, and alice in wanderland, cheering up hollywood pepping up a box office down 15% so far this year. it s sweet vindication for the mouse house. a year ago, there was a big john carter loss losing $2 murks billion. the stock was up today as well. disney could look at the next sequel fran chiz. franchise. it did well overseas even though oz is not big there, and this may do better among dulgts than children. 15% were teenagers, and 52% was couples. it s in spite of mixed reviews and scorching in the new york times with the malignant calling, oz, quote, disspiritting, small ideas, and ugly visuals. oh, really? ugly visuals. mila kunis, michelle williams and rachel weis ugly? i don t think so. you keep reporting on the movie just to say their three names and just to show their pictures, don t you? eventually, mila s going to call. [laughter] just to say hi. hold your breath, but god bless you. you are back tomorrow with another story and mila. and next hour of trading, renowned trader, sharing dow targets for 2013 and beyond, and, yes, the numbers may surprise you. countdown to the closing bell is next.
a time. but connolly says, over a few years, n.e.c.c. went national. he told us that quantities of drugs increased by a factor of 1,000. we became a manufacturer overnight. so we were basically trying to have the best of both worlds trying to manufacture without the oversight of a manufacturer. and there was we all got. pelley: a month before the first steroid death, connolly says he warned his supervisor. something s going to happen. something s going to get missed and we re going to get shut down. pelley: what did you mean by that? that we were going to hurt a patient. we were just thinking hurt a patient. we weren t compounding anymore we were manufacturing. pelley: when you went to your supervisor and told him that, he said what? that s verbatim. he shrugged. that was his response for a lot of our questions or comments or concerns was a shrug. pelley: meaning? just do it. either he didn t care or he was powerless to change it. pelley: as joe connolly predicted, n.e.c.c. was shut down by the authorities. the president of the company is barry cadden, and when subpoenaed by congress, he pleaded the fifth. cadden declined to be interviewed for our story. today, his lawyer told us cadden does not know how the contamination happened. the state of massachusetts examined n.e.c.c. s lab in 2011 and found it satisfactory, but tomorrow on this broadcast another company insider will tell us how n.e.c.c. concealed its true operations from inspectors. we ll have our full investigation for you on 60 minutes this sunday at 7:00 6:00 central time. the winter storm that hit the midwest and mid-atlantic states is now bringing rain, snow, and high winds to the northeast tonight. yesterday, parts of virginia got as much as 20 inches of snow. at last word, more than 100,000 homes and businesses were still without power. further north, giant waves and 50-mile-an-hour wind gusts have been battering the coast. jim axelrod is in massachusetts. reporter: the wind and waves are battering coastal towns from rhode island to maine and pushing water into the harbors. rick judge is the fire chief in situate. it seems with each tide is a little more intense than the previous one, because the water doesn t have a chance to recede from the previous tide. reporter: the storm grounded more than 700 flights; 160-plus were canceled at new york s laguardia airport. jeff glick was trying to get back to st. louis. i guess what are you going to do about it? we don t own a private plane, so we re at the mercy of the airlines. reporter: on the jersey shore, the high surf breached sand berms, up to three feet of water poured into some towns still recovering from super storm sandy. residents were trapped in sea bright, new jersey. we ve had, you know northeasters, but this is the most amount of water i ve seen since sandy. reporter: here in situate they re anxiously awaiting the next high tide tonight, but they re even more concerned about the one that will roll in after that, tomorrow morning at 8:00. and scott, this storm could dump as much as eight inches of snow inland before finally heading out to sea. pelley: more weather tomorrow, jim. thanks very much. the senate today confirmed john brennan to be the director of the c.i.a. brennan has been president obama s top counter-terrorism adviser, and earlier spent 25 years at the c.i.a. the confirmation came after senator rand paul ended a 13- hour filibuster. he d been demanding that the administration say publicly whether the president has the authority to use a drone to kill a u.s. citizen on american soil. in the end, both paul and the president got what they wanted. and here s nancy cordes. no president from no party gets to be judge, jury, and executioner. reporter: kentucky s junior senator was seeking a guarantee that drones would not be used to target citizens on u.s. soil unless they were engaged in a terrorist attack. i will speak today until the president responds and says no we won t kill americans in cafes; no, we won t kill you at home in your bed at night. reporter: senator paul s monologue reflected wider confusion over the government s use of weaponized drones, a controversy which erupted in january after the president nominated his top terrorism adviser, john brennan, to head the c.i.a. under brennan, drone strikes overseas have increased 500%. we only take such actions as a last resort to save lives when there s no other alternative to taking an action that s going to mitigate that threat. reporter: the filibuster caused a sensation online and drew some support from paul s g.o.p. colleagues. others, such as arizona s john mccain, called him misguided. we ve done, i think, a disservice to a lot of americans by making them believe that somehow they re in danger from their government. they re not. reporter: do you really believe this administration wants to kill americans who are sitting in cafes? not necessarily. but i ll tell you why i think it s an honest question and a serious question. our drone strike program now currently does kill people in cafes overseas. you don t have to be holding a weapon to be killed by a drone strike overseas. so that s a standard that i don t think is acceptable here. reporter: this afternoon, the attorney general sent senator paul a terse two-sentence letter assuring him that the president does not have the authority to order drone strikes on u.s. citizens here at home unless they are engaged in combat against the u.s. senator paul said he s satisfied, scott, but still has concerns about the program. pelley: nancy, thank you. tonight, a man who was once osama bin laden s right-hand man is in the hands of the united states. sulaiman abu ghaith was flown to new york to face trial for conspiring to kill americans. and we asked bob orr to tell us more about him. reporter: sulaiman abu ghaith is one of the last remaining members of osama bin laden s inner circle. abu ghaith, who married one of bin laden s daughters, was a chief spokesman for al qaeda, a leading propagandist in the months surrounding 9/11. on september 12, one day after the attacks, abu ghaith appeared next to bin laden in this al qaeda video, warning america to brace for follow-up blows from the terror group. but when the u.s. military launched its war in afghanistan in late 2001, abu ghaith dropped out of sight. in early 2002, counter-terrorism officials say, abu ghaith, and a handful of other al qaeda fugitives fled to iran where they spent several years under house arrest. he resurfaced some time last month in turkey. u.s. intelligence was tipped off, and sources say abu ghaith was arrested by the fbi last thursday, february 28, and then secretly flown to new york. on monday, a federal grand jury in new york indicted abu ghaith on a charge to conspiracy to kill united states nationals. the capture of abu ghaith further thins the ranks of a badly depleted al qaeda. only a few top operatives remain around the leader ayman al- zawahiri. among them are two terrorists with u.s. connections, california-born adam gadahn, and one-time florida resident adnan shuknjumah. sulaiman abu ghaith will make his first court appearance tomorrow morning in new york. critics say he should actually face military charges at guantanamo bay, and they re accusing the administration of quietly sneaking him into the civilian court system. pelley: north korea appears to have angered its best friend in the world. today, china joined with the united states and voted at the u.n. to increase economic sanctions against north korea. recently, the youthful new dictator there, kim jong un, tested a nuclear weapon and a ballistic missile. earlier today, the north koreans staged a massive rally and threatened a preemptive nuclear strike against the u.s. but their missile isn t that good and the white house wasn t impressed. hugo chavez never missed a chance to demonize the united states when he was president of venezuela. today, his countrymen said good- bye. some waited ten hours to file past his casket. chavez died of cancer on tuesday. the funeral is tomorrow. will the nation s toughest restrictions on abortion survive a legal challenge? why did a bolshoi ballet star order an attack on his boss? and from the looks of it, it was a good day to stay out of the water. when the cbs evening news continues. remember when you said men are superior drivers? yeah. yeah. then how d i get this. [ voice of dennis ] .allstate safe driving bonus check? what is that? [ normal voice ] so weird, right? my agent, tom, said. [ voice of dennis ] .only allstate sends you a bonus check for every six months you re accident-free. [ normal voice ] .but i m a woman. maybe it s a misprint. does it look like a misprint? ok. what i was trying. [ voice of dennis ] silence. ask an allstate agent about the safe driving bonus check. are you in good hands? [ male announcer ] pain not sitting too well? burning to feel better? itching for relief? preparation h offers the most maximum strength solutions for all hemorrhoid symptoms. from the brand doctors recommend most. preparation h. don t stand for hemorrhoids. both tylenol and bayer advanced aspirin are proven to be effective pain relievers. tylenol works by blocking pain signals to your brain. bayer advanced aspirin blocks pain at the site. try the power of bayer advanced aspirin. pelley: yesterday, arkansas changed the landscape in the national battle over abortion rights by enacting the toughest restrictions on abortion of any state. we asked our chief legal correspondent jan crawford to tell us what this will mean. reporter: support for the law in arkansas was so solid, the republican-led legislature managed to override a veto by the democratic governor who said it was flatly unconstitutional. called the human heartbeat protection act, it s the only law in the country to ban almost all abortions after 12 weeks the point when a fetal heartbeat can be detected by an abdominal ultrasound. the law s sponsor, jason rapert, said it won t be the last. i believe that you will see many states take the legislation that s been filed here in the state of arkansas and file that in their own legislatures. reporter: but critics say it s the latest frontal assault on roe v. wade, the supreme court decision guaranteeing a woman s right to abortion. seven states, including arkansas earlier passed laws banning most abortions after 20 weeks. those laws also will face legal challenge. lawmakers at the state level are sensing an opportunity at the supreme court. reporter: donna crane is the national policy director for the abortion rights group naral. anti-choice lawmakers in the state think there s an opportunity to get the supreme court to reopen the row v. wade decision and make abortion illegal in some and maybe all cases. reporter: senator rapert called the law an opportunity for the courts to develop a more humane abortion policy. when there is a heartbeat there is life, and an innocent life is something that should be protected. reporter: opponents are preparing legal challenges to block this law from taking effect, but rapert insists it s constitutional. he points out, scott, that the law has exceptions for rape, incest, if the mother has a medical emergency, or if prenatal testing after 12 weeks reveals the fetus has a lethal disorder. pelley: but a long way to go to the supreme court. jan, thank you very much. on wall street, it s getting to sound like a broken record. and it is. the dow gained 33 points today to close at 14,329, the third straight record high. the federal reserve said today that the stock market s recovery, along with rising home prices, have now pushed household wealth back to where it was before the recession. there are more twists in the drama involving the world s most famous ballet company and that s next. ] include headache abdominal pain, and diarrhea. call your doctor right away if you have persistent diarrhea. other serious stomach conditions may exist. don t take nexium if you take clopidogrel. ask your doctor if nexium is right for you. find out how you may be able to get nexium for just $18 a month at purplepill.com pelley: there were more pelley: there were more plot twists today in the acid attack on the artistic director of the bolshoi ballet. the performer accused of planning the attack told his side of the story in court. here s elizabeth palmer. reporter: the bolshoi theater, the most glamorous in russia, and home to one of the most prestigious ballet companies in the world. but behind the scenes, an ugly drama of jealousy and violence is playing out. pavel dmitrichenko made a name for himself playing villains on stage, but today, he was led handcuffed into a moscow court accused of a real-life crime. i didn t order anyone, he said, to splash sergei filin with acid. sergei filin was the glamorous artistic director of the bolshoi, but in mid-january, outside his apartment building a masked man threw a jar of acid in his face. surgeons are still fighting to save his eyesight. dmitrichenko did admit to police that he had masterminded the attack, but he said he thought it would be a simple beating. the acid, he said, was the idea of the hit man, yuri zarutsky. irina noikova runs the bolshoi press office. this particular thing, apart from being simply horrible, it s also disgusting. but they want to try to destroy the face of one of the most handsome men in the company, surely, one of the greatest artists of this company? reporter: no one knows for sure why dmitrichenko ordered the attack, but backstage speculation puts a woman spurned at the center of the scandal. anzhelina vorontsova, a talented ballerina, was passed over for the lead role in swan lake by sergei filin. the word is he said she was too fat, and that her boyfriend, dmitrichenko, was simply seeking revenge. elizabeth palmer, cbs news london. pelley: israel tonight is fighting an invasion of biblical proportions. locusts have crossed the border from egypt, threatening to destroy israeli crops. according to the bible, of course, locusts were one of the ten plagues inflicted on egypt to force the pharaoh to release the israelites from slavery. beaches along florida s atlantic coast were closed today after thousands of black-tipped and spinner sharks were spotted along the shore. we re told this is part of the sharks annual migration north. every american school kid learns about the u.s.s. monitor, the civil war battleship. up next, a fascinating postscript to her story. i remember the day my doctor said i had diabetes. there s a lot i had to do. watch my diet. stay active. start insulin. today, i learned there s something i don t have to do anymore. my doctor said that with novolog® flexpen® i don t have to use a syringe and a vial or carry a cooler. flexpen® comes prefilled with fast-acting insulin used to help control high blood sugar when you eat. dial the exact dose. inject by pushing a button. no drawing from a vial. you should eat a meal within 5 to 10 minutes after injecting novolog® (insulin aspart [rdna origin] injection). do not use if your blood sugar is too low or if you are allergic to any of its ingredients. the most common side effect is low blood sugar which may cause symptoms such as sweating shakiness confusion, and headache.éñéñ severe low blood sugar can be serious and life-threatening. ask your health care provider about alcohol use operating machinery, or driving. other possible side effects include injection site reactions and low potassium in your blood. tell your health care provider about all medicines you take and all of your medical conditions. get medical help right away if you experience serious allergic reactions such as body rash, trouble with breathing fast heartbeat or sweating. flexpen® is insulin delivery my way. covered by most insurance plans, including medicare. find your co-pay cost at myflexpen.com. ask your health care provider about novolog® flexpen® today [ male announcer ] this is george. the day building a play set begins with a surprise twinge of back pain. and a choice. take up to 4 advil in a day or 2 aleve for all day relief. [ male announcer ] that s handy. what developers have the green-light to build. how their vision, goes up from there. next. (regular) (live) pelley: finally tonight finally tonight, america is about to pay final respects to two of its fallen heroes more than a century after they lost their lives. but we can t tell you who they were, and david martin tells us we may never know. reporter: it s a solemn fact that the remains of americans killed in conflicts dating back to world war ii keep coming home from distant battlefields. today was different. those flag-draped caskets held unidentified sailors from the civil war. two human beings buried under there for 140 years or so. reporter: joe hoyt was one of the divers who discovered their remains in 240 feet of water off cape hatteras, north carolina, when they had gone down with one of the navy s most famous ships, the uss monitor. arguably more significant than almost any shipwreck certainly in u.s. history. and to get down there and actually see it, there s really nothing else like it. reporter: the hull of the monitor still lies where it sank, designated a marine sanctuary. but its gun turret with the remains still inside was raised from the bottom in 2002 and brought to the mariners museum in newport news, virginia, where anna holloway is head curator. this is the ship you read about in fifth grade, the monitor and the merrimack. reporter: the pride of the union navy earned its place in history on the day it fought the confederate ship merrimack to a draw. this was the first battle of ironclad warships ever in history, and that s really what makes the battle of hampton roads of march 9, 1862, so significant. reporter: but 10 months later the prototype for today s iron warships went down in a storm. she had a pretty short and violent life. very short life, but a very monumental one if you think about her impact on modern warships. reporter: when the turret was brought up, pieces of the sailors lives came with it. this mismatched pair of shoes gave silent testimony to curator david krop about the shift s final moments. about the ship s final moments. i think about the chaos and i think if there s water coming into the ship, it s dark, you may just grab what s closest to you, put those on in order to get out of the vessel. reporter: each artifact is a possible clue to the identity of the two unknown sailors. this particular ring was actually found on the right ring finger of one of the sets of human remains inside of the gun turret. reporter: but despite facial reconstructions and dna samples, there is still no positive identification. history has not yet given up all its secrets about the monitor. wouldn t you like to know what that would open up? that s been the question since day 1 when this key was found, what secrets are locked behind that. so we don t know. we would love to. reporter: on friday, the two sailors will be laid to rest at arlington national cemetery, still unknown but with the full military honors they deserved. david martin, cbs news, at the mariners museum in newport news, virginia. and that s the cbs evening news for tonight. for all of us at cbs news all around the world, good night. captions by: caption colorado comments@captioncolorado.com your realtime captioner: linda marie macdonald we are left to ask, will the pain ever end? gathering in grief and saying good-bye to the fallen santa cruz police officers. [ music ] sergeant loran butch baker daddy, i love you more than you will ever know. officer elizabeth butler. good-bye, my love. their memorial service full of sorrow and silver linings. butch and beth s legacy gives me true hope for tomorrow. the 30-mile motorcade starting this morning in santa cruz greeted with salutes as the procession passes by ending at the hp pavillion in san jose where the american flag and sea of officers await. good evening, i m look. i m allen martin. you know, as the good guys go, they were two of the best. mourners came by the thousands today to pay tribute to detective sergeant loran butch baker and detective elizabeth butler. but the most heartbreaking goodbyes came from the fallen officers families. [ bagpipes ] reporter: two fallen officers whose lives were cut short surrounded by thousands who traveled many miles to pay their respects to the first officers ever killed in the line of duty in santa cruz. police chief kevin vogel on detective elizabeth butler. elizabeth just wanted to make sure santa cruz was safe for families like hers any way that she could. she wanted a place where families can go to the beach, walk on the boardwalk, ride the roller coaster, hike, cook, or even get some of those delicious morning buns at kelly s. reporter: deputy chief steve clark was asked to speak about the humor of his good friend sergeant butch baker. in fact, governor, has anybody ever told you, sir, that you bear a striking resemblance to me? [ laughter ] actually, butch was one of the first people who pointed that out to me. reporter: alexus butler spoke of how proud she was of her younger sister elizabeth she was a breath of fresh air in the lives of so many. reporter: but the silence was deafening when elizabeth s partner and father of their two boys brought young joaquin with him to the podium, the two children without a mother. i want to share with you a vow that i had wished to her as i view her body. i whispered to her that i would take
reversed himself also and is now creating this front group that s going to raise a lot of money lou: you re talking about the organization for action. exactly. to accomplish his agenda, yes. lou: for what? to accomplish his agenda. that s exactly what he s doing. lou: yeah. of so, basically, what we ve got to do then in this sort of view of democracy is we ve got to get a bunch of billionaires to contest the principles, the issues that will determine the destiny of the nation, and as long as we ve got countervailing billionaires, we have a political system that works, is that right? [laughter] right. lou: thank you very much. it didn t work too well last time. it didn t work too long last time. lou: ed rollins, matt patrick, thank you. thank you, lou. lou: poor matt patrick. that s it for us tonight. thank you for being with us. coming up next week, haley par bear joins us, andrea tantaros, and thank you for being with us tonight. have a great weekend. good night from new york. charles: a $205 billion deficit in just 28 days. here s the outcry. well, all the guys crying foul and cutting a measly 5 billion a year. the longer these cuts remain in place, the greater the damage to our economy. a slow grind b that will intensify with each passing day. charles: welcome, everybody, i m charles payne in for neil cavuto. and as lawmakers whine about those automatic spending cuts, news our deficit topped $205 billion last month. gina london says if washington is crying over small cuts, how are we ever going to worry about this monster of a deficit? gina, we want to start with you. this is nuts. i mean, the bigtime money piles up, and we keep looking at this $85 billion which in the grand scheme of things is the proverbial drop in the bucket. the drop in the bucket is exactly right, charles. if you look at february of last year compared to february of this year, we went down in our deficit each year from $235 billion last year in 20 the 12 to $205 billion, it s like $25 billion is all we ve do with a $600 billion tax hike that we have just paid. you look at those kinds of numbers, you d have to multiply that times eight, in other words a 4.6 or 8 trillion dollarax increase on mostly middle class americans just to stop adding to our debt. this is really where we are. these clos in washington, d.c. make the greek politicians look, you know, really fiscally sound these days. charles charles all right. linwood, what do you think about that? well, i mean, she s right on. $85 billion over seven months, which is what the sequester will cut from march 1 til the end of september, and we ran way over that in one month. and the reason we have to get our debt under control is because that s how we re going to really turn the economy around. our debt is now over 100% of the size of our entire economy, and it s really constraining growth. of it s one reason why we re seeing such a stagnant recovery. charles: you know, ford, i guess at this point can we all admit we do have something of a spending problem? well, i think we do, and what it shows is how ridiculous the president s sequester shenanigans were. the deal here is very simple. you know, the president thinks we can tax our way out of this, and he doesn t want to talk about it, and the fact remains if we tax everybody in this country who made over a million dollars this year at 100%, that would only bring us up to $726 billion, and the deficit this year is going to be 8-900 billion. the bottom line is until we modernize entitlements, medicare, medicaid, social security which are 62 president jr 62% of federal spending, if we don t address entitlements, this is going to continue. and the sad part is the president doesn t want to talk about it was by not talking about it, essentially we could wind updevaluing our currency and hindering private sector job growth which is the only way we re going to get people back to work. charles: gina, we just had a jobs number, the president may look at that and say what a robust jobs number, we can spend a whole bunch of money and have a robust economy. i wish that were true. it s not that simple, and we all know it. and nobody knows, you know, how those numbers really break down yet. but this is the deal. this is a print and borrow do-si-do that this president has had us on from the beginning of his presidency, and that is his approach to this. americans are going to have to make a decision and, certainly, the gop in washington, d.c. is going to have to make a decisioning whether they are going to continue this print and borrow do-si-do and just tax people if we re really talking about taxing this tet away debt away. and they re going to have some serious spinal cord. charles: maybe, linwood, the answer will be sort of like this payroll tax hike when the new health care taxes can kick in, and we re already seeing where at least 35% of them are going to be paid by people and families that make less than a quarter of a million a year, maybe when it starts to hit main street in the wallet, the people who heard they will be immune to this stuff, maybe that s when the tide turns. well, i hope so. look, i have more confidence that the tide is turning, charles. if you look at 2004, government spending wasn t even an issue. and it was still, you know, bush was still spending, and he was spending about as bad as obama. but the point is if you look at what the public cares about, right behind jobs and the economy is government somebodying. so there s still a long way to go on educating americans on difficulty of addressing this problem by really modernizing the entitlement programs as ford was saying, but i think we ve seen americans come a long way since 2004, charles. charles: well, you know, ford, that s interesting because americans have come a long way, and yet the election outcome wasn t much different than four years earlier. and there s still this issue of people not wanting their entitlements to be cut. they re okay with the notion of cutting them but just maybe not mine. well, that s the american way. unfortunately, if we re actually going to get the debt under control, both parties are going to have to be honest. the gop s going to have to say, you know, have some spinal cord, but aso the democrats are going to have to be serious about what the effects are. and we can all sit here and talk about this, but really the folks out on main street really don t know about this. all they know is we ve got a serious problem, and nobody s explained to them why it s eventually going to hit their bottom line. charles: how do you explain that to them in a way that gives them a sense of urgency? a lot of times it feels like, okay, something real bad s going to happen 20, 30 years there now. and that s exactly right. and if we don t get this under control, essentially, there aren t going to be any more jobs. a lot of people say, gee, we need to increase the minimum wage because the price of milk s going up. the value of your dollar is going down, and at the end of day we ve got to put measuring back on a path to fiscal sanity. charles: gina, i started with you, i want to end with you. the idea that both parties can be, quote-unquote, honest with the american public, is that where i lose all hope? [laughter] perhaps. it s definitely going to take some tough talk. and, again, the gop needs to stand their ground, and i really believe this would be the smart thing for them not only economically, but politically. the american people are feeling this. they packaged this as a, this $600 billion tax increase as supposedly on the rich. we all know this hit social security taxpayers more than anyone else, and most of those people are middle class. so washington, d.c. is lying to us, and if the gop would call out the democrats on this, i believe it would really behoove them to do so, especially let me say one thing. it s not just the gop calling them out, it s also explaining the problem. we can say the gop has the high ground right now, but both parties really have to be in this together. charles: absolutely. we need honesty, and we need someone to really, truly articulate this. you guys did a fantastic job doing that, and i appreciate it. all right, president obama s reaching out to his honchos. he s calling the top ceos, but not this ceo. the former apple head who s worried the president s talking and taxing too much and cutting too little. but, first, after the tax whack is the big mac getting attacked? why the bad news out of mcdonald s has people worried that this recovery is in reverse. [ woman ] if you have the audacity to belie your financial advisor should focus on your long-term goals, not their short-term agenda. [ woman ] if you have the nerve to believe that cookie cutters should be for cookies, not your investment strategy. if you believe in the sheer brilliance of a simple explanation. [ male announcer ] join the nearly 7 million investors who think like you do: face time and think time make a difference. join us. [ male announcer ] at edward jones, it s how we make sense of investing. why do more emergency workers everywhere trust duracell? duralock power preserve. locks in power for up to 10 years in storage. now.guaranteed. duracell with duralock. trusted everywhere. hey, travis. get some friends, loser! so, are you all right, man? yeah. let me help you out. thanks. lean on me, when you re not strong, and i ll be your friend. see you around. yeah. i ll help you carry on. charles: the white house celebrating as some jobs start to return. the economy adding 236,000 jobs last month, and that, well, that s got the administration saying that the recovery is gaining traction. well, tell that to the peeks at google s motorola unit or jcpenney s, those companies cutting thousands of workers, and people are cutting pack, get this, on buying big macs at mcdonald s. u.s. sales fell last month. so from big macs to e. mac who says the economy s still slow, so the white house should show down on the victory lap. al lewis is also with us, but got to start with you, e. mac. maybe too soon for the pom-poms. yeah, sounds great, but, you know, when you start revised, of course, the government revised down january by 38,000. the rate of growth in jobs is at an 18-month low. we re still creating only 191,000 jobs. this really is the worse four-year recovery since the great depression. charles: you know, margie, listen, i think we have become because this is the worst postrecession recovery ever i think we ve become so accustomed to such weak numbers that we do feel great when we get a number. 200,000? wow, that is amazing. but is it really amazing? well, we ve had 37 straight months of private sector job growth. the last time we had such a strong 37-month record was in the mid 1980s. i mean, i think we re seeing some recovery here that has taken us out of where we were at the end of 2008 which was a really serious and for the whole country. charles: right. and i think we ve made a lot of ground. now, of course, we re not out of the woods yet. of course, when i talk to voters around the country, i do focus groups around the country, people say i m struggling. i m struggling to make ends meet, i m struggling to stretch out my paycheck, i m struggling to pay my mortgage, and that s still true. and it s not until the economy recovers further and unemployment goes down a little bit more that people are going to feel a little pit more optimistic. charles: i ve got to tell you, al, i think unemployment s got to go down a whole lot more, and i certainly wouldn t use superlatives like strong to talk about the job market. and instead of focus groups maybe those 4 .8 million people who have been chronically unemployed, there s some things to be worried about here: there s a lot to be worried about here, charles. you know, we re still nine million jobs short of where we were pre-recession. and this is really slightly better job growth. we ve got the trend right,. but at this rate we re not going to turn to pre-recession levels unemployment until 2017. now, in some ways that s the good news because the only thing good about this economy is our federal reserve keeps dumping money into it, and when they get unemployment low enough, they re going to stop. so i don t know whether we should be cheering this or maybe a little fearful of this. but the fact of the matter is i think this is business as usual. we always get these strong economic numbers at the beginning of the year, and at the end of the year we re going, wow, that wasn t such a great year. charles: you know what, al? you re young. 2017, no big deal, right, liz? he is young. i m not that young. you re not too young to remember that this economy charles, you ve been saying this, too, we ve been in bubble territory since the late 80s, and i don t know if the government has realized that this economy has been almost destroyed by five bubbles since the 80s, housing, real estate, dot.com bubbles, so one analyst said it s as if the u.s. economy was or wearing platform shoes for the last 30 years, but the policies haven t been reset to account for that. that s the iue. they ve been so used to the numbers coming charles: do you think the string of bubbles is because politicians are so afraid of a hard landing, a short hard landing but a hard landing to readjust that it s always about somehow we ve either got to find a soft landing or a false premise or, you know, false facade because we ll be voted out of office? yes. and that s why the federal reserve is now on that political fast track. the danger zone is, is that when the economy starts to improve, then the fed pulls back, then the stock market says, wait a second, th federal reserve is getting out of the market, holy cow. they can check in, but they can never leave. that s a dallas fed charles: orr the bronx tale, now you cant leave. roach motel. [laughter] charles: margie, we spoke with austan goolsbee earlier. i m not sure if he meant to make this point, but he talked about how rapidly government spending declined last year, and i thought it was entering that as that declined so rapidly, the economy started to build momentum. you d think maybe at the white house they may say let s step back a little bit, particularly after the sequestration drama which so far has been much ado about very little. is there possible that there could be a change in course? el, i think there are a few things to pay attention to. one is overall views toward how the country s doing, and when you look at voters overall optimism, it s not where we were before the crash in 2008, but it s improved over where we were just a few months ago, and it s improved over where we were in 2011. so there is in 2010. so there is some real improvement there. and also as far as sequestration, i mean, that s really the next real hurdle. because we re only a couple days into it. you have almost a million mothers, pregnant women and children whose food support might be cut off. you re talking about formula for hungry newborns that might be cut. these are some serious, serious spending cuts charles: margie, we re running out of time, and i ve just got to say one thing. wouldn t it be better to have a great economy where people could buy their own food, buy their own milk? they have a job they have pride in, it wouldn t be about whether or not the government could deliver a check to them twice a month? i think everyone agrees that that s the goal. but what if somebody doesn t have that job and don t have that food, what should we do? should we do nothing? charles: maybe create an economy al, i ll give this to you last, but i think we should just create an economy where this happens and not artificially to your point about the fed earlier. well, the way to do that, charles, is by adding jobs to this economy, and none of the policies that we ve pursued so far are adding jobs. so, you know, i don t know. charles: all right. we can t just that s not what the jobs report says. real estate prices with free money. the jobs report is pretty lame. charles: let s leave it there. like i said, we re in an age of mediocrity being fantastic. all right, guys. hey, listen, the job withs bill burning down, but you d never guess what company s rising from the ashes. a former apple see eurozone on ceo on what happened alec, for this mission i upgraded your smart phone. right. but the most important feature of all is. the capital one purchase eraser. i can redeem the double miles i earned with my venture card to erase recent travel purchases. d with a few clicks, this mission never happened. uh, what s this button do? [ electricity zaps ] you requested backup? yes. yes i did. what s in your wallet? charles: apple and google going their separate ways, each doing a 180. but not a good reversal for apple, down a whopping 63% from its all-time high. google, order, well, it s rocketing and twice hitting all-time highs just this week. and now it s taking apple s seat as the most-owned stock by the 50 largest u.s. mutual funds. the former apple ceo gil amill owe on what s going on. when they were saying apple was going to a thousand, a week later it started to collapse. well, you know, the products by the way, charles, it s delightful to be with you. charles: same here, thank you. let me just mention, if you look at what apple s doing now and in the recent past, what they re doing is they re upgrading the existing product line they have. there hasn t been any new sort of hypnotic kind of new product coming into the market at this time. at the same ti, they re also getting serious competition from people like sam supping and the iphone, everybody s coming out with pads of one kind or another, tap lets and soport. and after all, steve jobs is gone now, and it s only natural for people to think that is tim cook up to the job. i think he s very admired, i think he s very capable, but filling the shoes of a steve jobs is very difficult. i think all of those things have weighed against the apple stock. charles: l s talk about the tim cook aspect because this is one that intrigues me a lot. it s hard to quantify the impact, but my point of view, yeah, he s sort of like larry holmes following muhammad ali, but by the same tokennen, gil, when tim cook speaks, i don t get the feeling he wants to win every skirmish. he wants to lose the war, but if they lose a little battle, i don t get that feeling whereas steve jobs wanted to win every single skirmish, and i think tim cook has lost the confidence of wall street. well, i can t comment on that. you ll have to comment on that. i think that he s definitely has a different style of management than steve does. steve, as i know all too well, was a very intense guy. and he took no prisoners. i think tim cook is more of a people person. i think there s a lot of things about that that are good. i think the employees of apple, frankly, like it better. but what hneeds to show is that he s going to when an issue comes up or when there s lack of performance, he s got to demonstrate leadership s. and so far people are still wondering whether that s happening or not. charles: there have been a couple of hiccups. the iphone launch, the maps, you had a couple key executives leave. are we getting to a point, though, some sort of major inflection point where they ve got to deliver? in other words, before the average investor, not the wall street pros per se, but just the average investor who s hanging in there with apple before even they give up? apple is still surprisingly a cheap stock. the p to e is still pretty low. the real issue that they re worried about, i think the street s worried about, is not not fundamental business is great. the issue is are they going to have a repeat of, for example, the iphone 5 launch where the spire inventory that apple put on the shelves is gone in one weekend, and then it was another month before they could restock? that definitely doesn t send warm feelings to a lot of people. so i do think they have to sweat the details a little more than they appear to be doing. charles: yeah. and, again, listen, for me execution is, to your point, that s unforgivable, but that s not the longer-term thing that i think scares a lot of people. in other words, okay, maybe next time they ll execute and have the inventory, how about people just wanting it? i keep hearing stories that demand is down, stories that leak out all the time that maybe they re making fewer ipads this time and this. i mean, almost everytng seems that there s a major slowdown. maybe from a stock market point of view it ll be good because expectations on the company will get lower, but they re going to have to do something to wow everybody one more time, no? that s exactly what i was saying. i agree with that completely. i think what s happening on the existing product line is that the s curve is kicking in, and, you know, when you re at the beginning of the s curve, it s really glious. but soonerrer or later that s turns over again, and that s kind of where apple is on most of its products right now. it needs something new and exciting and startling to captivate everyone s imagination and to prove that, you know, tim is up to filling steve s shoes. charles: on that note, startling, something out of left field, maybe a revolution in watches, maybe a revolution in television. could those be the two places that they show that the p apple magic is still around? well, you know, i think they would depending, of course, on the details, i think that they would certainly offer that. i think especially on the tv side. the patterns, paver patrns of people relative to tv has changed dramatically with the rise of the internet and other technologies. and the television model hasn t really caught up with that change yet. so i think apple could really do something important here. i think the watch thing is sort of cute, but i m not, i m not convinced t that that will be, that will have a big impact on their earnings. charles: not a dick tracy fan? [laughter] well, i love dick tracy. but to be honest, if i had one, i wouldn t use it. [laughter] charles: well, you know what? i don t even know how to use the gadgets i have already. gil, i really thank you. i appreciate your expertise, and we ll see you real soon. thanks a lot. charles: former labor secretary robert rice on a tea party rampage not only saying they re extremists, but claiming they are holding the u.s. hostage. next, the tea partiers tell robert, well, he s just not [ male announcer ] how could a luminous protein in jellyfish, impact life expectancy in the u.s., real estate in hong kong, and the optics industry in germany? at t. rowe price, we understand the connections of a complex, global economy. it s just one reason over 75% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investi. charles: well, the tea party under attack again, this time from a former clinton labor secretary, robert rice, writing on his blog. quote: the president should let the public sea the tea partiers for who they are, a small, radical minority intent on dismantling the government of the united states. as long as they are allowed to dictate the terms of public debate, they will continue to hold rest of us hostage to their extreme itch. extremism. katrina pearson and dade webb, as you can imagine, are fuming. katrina, i want to start with you. i mean, the attack on the tea party has been instant, it s been nonstop and, in my opinion, completely unfair. well, it s been completely unfair but, charles, the tea party is dead, didn t you get the memo? how do we go from the tea party, a, not even being real to being a political arm of the republican party to being, yeah, it was an organic party but it s dead to all of a sudden being some grand group that s going to take over the government? i mean, even coming out of berkeley, that s insane. charles: well, i think he s saying they ve already taken over government, certainly enough of government to be obstructionist. well, you know, obstructionist is a completely different story because it fends on what you re obstructing. and what we witnessed a couple of nights ago when you can t even get the attorney general to say, no, we don t want to kill americans here at home, i mean, we probably should be a little bit more obstructionist moving forward considering we don t know what they re trying to do. charles: you know, david, this kind of language, you know, you and i have talked about this many times in the past, and i see a one-two thing going on here, and i m going to be completely honest. about a week or so, last week when the president was talking sequestration and all that stuff, he talked about there was one point in his press conference where he says it was just some people down in washington who maybe don t like him, they draw horns on his head. really what i think they suggest sometimes is that these people are motivated through racism, like a lot of people simply in the tea party are racist, they don t like the president, therefore, you can never get any sort of deal done in washington d.c. so what he ll do is go around and take the guys who maybe aren t racist to lunch every now and then and see if they can work around them. well, that s a gat sounding attack, but it s not true. let s face it. there are millions of americans who object to this president, there are millions of americans who voted for him who now object to him. they get buyer s remorse. they have to paint extremism, and the if the tea party is this massive group that s so powerful, why are we relevant to their dialogue? because of simple facts, charles. we changed the narrative back to what americans recognize. you can t spend more than you earn. you can t be fiscally irresponsible. you can t run a country on debt and deficit. and the real satire in d.c. or the sad satire is that they turn around and tell us we can borrow our way to success when 77,000 people or so have left the full-time work force this month or last month charles: here s the thing and more than that are going on the part-time rolls. charles: i know what you stand for, i ve watched it from infancy. but the public perception, i feel like perhaps the robert rices out there win it with the overtures like this. they really are losing. here s where they re losing charles: how does the public see the tea party? the average person, do they think they re racist, mean-spirited? some of them buy that narrative, but not most americans. most americans fall into i don t know, and that s to be fair. but there are more and more americans who are looking at these pocketbook issues and these kitchen table issues and saying, i get it. what we ve done is the most dangerous thing to the administration. we ve changed the narrative from government being the provider of first resort to government being the provider of last resort. we want opportunity. we want a federal government within the boundaries of the constitution, a government that does what it was formed to do, protect the nation. charles: katrina, you know, you started off, and i know, you know, obviously, you re being somewhat facetious saying the tea party was dead. it does feel like, though, it s lost a lot of steam from those midterm election victories a few years back. what the does the tea party have to do in order to redane that momentum and also brand itself instead of letting robert rice brand them? well, i think the branding position of the tea party has already been done. you ve seen a lot of tea pertiers shift into what we call policy mode. we re actually engaged in the political process. many people are now running for office, many people are now working for candidates existence establishment campaigns which you saw happen right near texas with ted cruz. and i think it sime to really get serious. but as far as branding, something else that we didn t talk about yet that s in this blog is that their painting us as the divisive group in this nation when you didn t see tea partiers pushing grandmas over cliffs, you didn t see tea partiers telling pregnant women they re not going to get to the go to the emergency room. no one is playing any type of us against them with the exception of the liberals, and they re trying to make us own their damage, so it lets us know we re doing what s right. more people are starting to resonate, and that s getting back in charles: i will say this, david, but i think you guys are both right with respect to people starting to get this in part because they are feeling it. all of these people promises were made to, i won t hurt you, i won t hit you, i m just going after those rich guys, well, there s a payroll tax hike, there s a paying for obamacare. so regular people, david, are starting to feel this, and i know ultimately that does help your cause. but between now and a gigantic epiphany in this country, what happens? with we need to debate that robert rice doesn t want, the administration doesn t want. robert rice won t debate on the merits, keynesian versus austrian, insert whatever term you want. they don t want the debate, they want to stifle it. the tea party says let s have the debate. our elected officials are hired by us to do the job, then let them go up and do their job. charles: they re not going to have the debate, it s so much easier to defeat you guys with the help of the media and misinformation. you guys are both fantastic, we ll see you again real soon. hey, you know, you can t shop unless you can prove that you re not mad. that s right, a push for anger management that s got millions of shopper ors really angry. you can t fire me, i quit! think you can replace me with some other guy? go ahead, it won t be the same. you may think i m losing, but i m not. anyway, you get the charles: guns are big business, commercial sales of weapons and ammunition hitting $5 billion just las year, and they re growing by double digits. on the phone now, democratic florida state senator audrey gibson pushing a bill that requires bullet buyers to take anger management classes. representative gibson, thanks a lot more joining. this seems on so many levels to be sort of absurd. why would someone take an anger management course before they can buy bullets or maybe a gun? well, first, thank you so much for having me. and the bill does not talk about the purchase of ammunition. it s a public safety bill, actually, first that says we will put into statute the same waiting period for all firearms that we have for handguns. the other part of the bill talks about the fact that, um, before the purchase of ammunition, anyone purchasing ammunition would take a two-hour what i call an introspection anger management class. two hours, you can take it online, at your house, you don t have to go anywhere. it s not pointing fingers, it s not charles: well, it is pointing fingers in a sense that, you know, since newtown it s felt like almost any legal gun owner has, it s sort of like if you re not for all of these incredible changes to the laws, perhaps even the constitution, that you are de facto aiding and abetting any mass shooting. and it s felt like this from immediately, like there were people out there who never did like the second amendment, and they found an opportunity to go ahead and make this sort of harsh, you know, move against people who rightfully own guns. and by the way, 99 percent of these lawful gun owners don t commit any crimes. so i do think it is finger pointing well, if you let me say something, i don t know about the other people, all i know about is this legislation charles: but what s the purpose for the anger management course? it doesn t point fingers at anyone. it does no ban any guns. it does not ban any ammunition. it just ss let s look inside and see what triggers, what triggers may be, may be that would cause me to reach for my gun. charles: okay, senator gibson, what if i have an anger management issue? can i have a gun? i ve never committed a crime, i ve never hurt anyone, but i fly off the handle every now and then. can i have a gun under your rules? the rule doesn t say you can t have a gun. it has nothing to do with that. charles: then what s the purpose of it? take the course, take the two-hour course, print out the certificate, keep your certificate in order to be able to buy ammunition. for ten years. it s good for ten years. because the bill is not designed to be prohibitive. charles: well, it sounds like it will be prohibitive, and it sounds like it s going to label people. it doesn t label anyone. charles: would you propose doing the same thing for people who want to buy a car? enter we have road rage laws for people who act out in their cars. charles: we have a lot of laws for people once they ve committed a crime. i m talking about before they buy a car, because peoe have done a lot of damage well, let me tell you this, let me tell you this. the, um, legislation that i proposed doesn t suppose that someone s going to commit a crime. that s not it at all. charles: what is the purpose it doesn t presuppose that. charles: what is the real purpose, the honest purposesome yeah. the purpose charles: to demonize people in. the purpose that i said in the beginning is public safety and introspection. so there may be charles: what does that mean though? i don t understand what you re saying. i described it. charles: i don t get it. so you want to feel comfortable, you want to feel comfortable judging who might want to buy bullets out there? you want to have the bill doesn t, the bill doesn t judge anyone. it simply lays out to purchase ammunition anyone, anyone, anyone can take the two-hour anger management class charles: and, of course get the certificate and print it out. charles: like a had lot o these things that have been suggested, the criminals, the people who go out there and shoot people every day and shoot innocent bystanders, of course, they ll never take one of your anger management courses, will they? well, then they will never get any ammunition. charles: oh, they re going to get it, they get it now. all right, thank you. charles: thank you very much. you re welcome. charles: well, the president breaking bread with lots of republics lately, but that could actually cost you lots of bread. the washington legend worried more tax hikes are on the menu. charles: well, the scare tactics didn t work, but looks like the charm tactics might. because now senate republicans are open to working with the president after getting wed and dined by the president. and many of the gop are worrying that means they ll join john mccain and lindsay graham in being more open to revenue. former democratic senator bayh on dorgan hopes that s true, he says more revenue s needed. he s joined by former republican senator bob bennett. senator dorgan, we want to start with you. listen, i guess after clubbing the republicans, beating em up pretty good the charm defense offensive, rather, with was -@maybe the last arrow in the quiver, but you think it might work. well, what i hope will work is that people talk about these issues, significant and serious issues the country faces, and describe conditions under which compromises can be reached. fact is, we need to solve these problems, and the lack of going back and forth and trying to find common ground has not been very beneficial. so i think what is going on now is fine. and, by the way, in order to solve these deficit problems, we have to do a little of everything. you need restraint, you need entitlement reform, fiscal restraint, spending restraint, and you also need some additional revenues. charles: and with all due respect, everyone says that. that s the answer that every single person o both sides of the aisle, for the most part, will say. and yet when it comes to cobbling some sort of a deal together, we don t necessarily get that. i agree that maybe breaking bread isn t so bad. certainly it s better than going on tv or across the country in campaign style, but having said that, senator bennett, compromise mns that both sides give up something. what do the republicans think the president should give up? well, compromise doesn t necessarily mean like a financial deal, okay, let s split the difference between these numbers. compromise can mean look at my problem, and i will look at your problem, and maybe we can come to an agreement here. not a compromise that sacrifices anything, but a recognition that the other guy may be right. one of the problems here is that neither side is willing to give the idea of good faith to the other, and as a consequence you get expressions of bad faith on both sides and then accusations of bad faith poisoning the well which makes it impossible to make any kind of a deal, even one on which both sides could agree. it s the poisoned atmosphere here that s the problem. charles: so i like the way you framed that, but if that is the case and both sides are adamant about their belief system and they can t be swayed, should compromise be like a financial deal, not necessarily a 50/50 split, senator bennett, but perhaps i ve got to give up something in return for something else? well, let s take a look at what s now going on in the controversy over the closing of the white house to tours. as people on the right are coming up with a whole list of things that they think could be shut down by the government and make more sense than shutting could be shutting down the tours. why didn t they put those in a piece of legislation and send it to the president for his signature or his veto instead of driving us to a sequester which takes the congress out of it entirely? it s now the congress by pushing to the sequester has put the president in a position where he has complete control of what gets cut and what doesn t. and now they re not liking what he s deciding. but they re the ones who gave him the power to decide. they should have said, okay, mr. president, these are the kinds of things we think should be cut and then have him look at some of them and say you may very well be right. that may be a dumb thing, and that s how you get a deal. not this kind of tremendous confrontation that s been going on. charles: right. i guess, senator dorgan, on that note they feel like, okay, the president with some of these things it feels like false shenanigans, a lot of volunteers do the tours, the guy in charge of the operation just got a massive pay increase over the last few years. when the public learns about things like this, maybe they win a little bit of a public relations victory. maybe this is what the problem is, maybe they re too busy trying to score public relations points and not getting down and cobbling something together. but do you agree, senator doan, with the idea that compromise isn t a financial compromise but somehow persuading the other side to adopt your ideology? well, first of all, nobody s scoring any points here. i mean, my gosh, the sequester is an assault on common sense. it s thoughtless. so neither side s scoring common, you know, scoring any points. i just think we shouldn t be suspicious of people that want to compromise. that s the lubrication of democracy has always been when people think differently about issues, sit down at the table and can try to come to some resolution. what s happening now is there s no resolution on anything because there s complete, total gridlock. let s not be suspicious of attempts to find common ground. charles: do you agree though, at the end of the day when it s all said and done, the president is the one who somehow has to find a way to bring both sides of the aisle together on these critical issues? well, the president should do that, but be you re going to have pares dancing, you ve got to have a pear. and i think all sides need to understand the country s sick of this. the country s fed up with grid lock. it s time for people to sit down and understand that we all wear the same jersey, usa, let s fix these problems. charles: gentlemen, thank you. senator dorgan and senator bennett, maybe you guys can come back and whip these guys into shape because as of right now it doesn t look too good, but we appreciate your timeand i learned a lot. thank you. thank you. charles: well, everywhere you look, you re going to have to pay up. taxes are going up on gas, on with the spark miles card from capital one, bjorn earns unlimited rewas for his small business take theseags to room 12 please. [ garth ] bjors small busiss earns double miles on every purchase every day. produce delivery. [ bjorn ] just put it on my spark card. [ garth why settle for less? ahh, oh! [ garth ] great businesses deserve limited reward here s your wake up call. [ male announcer ] get the spark business card from capital one and earn unlimited rewards. choose double miles or 2% cash back on every purchase every day. what s in your wallet? [ crows ] now where s the snooze button? we don t let frequent heartburn come between us and what we love. so if you re one of them people who gets heartburn and then treats day afr day. block the acid with prilosec otc and don t get heartburn in the first place! [ male announcer ] e pill eachmorning. 24 hours. zero heartbur charles: taxpayers are getting whacked this week. several states pushing gas tax hikes, that s going to hit you when you drive. one of them peddling a tax on people who ride bikes. and now california councilman wants to tax e-mails and to take that money to fund the cash-strapped postal service. i kid you not. liz macdonald sees a trend here, states increasing taxes in a sneaky way to increase their spending. margie andal are back with us. liz? it almost makes you think state officials are thinking what can we tax next? it s like the train of thought there is making all local stops. let s see what else we can tax. by the way, you re probably going to need more wiewr accurates to bureaucrats to collect that e-mail tax. so this is sneaky, and the real dang for taxpayers when they enact these taxes is that they say, listen, we re going to replace the income tax, lower the income tax, the sneaky danger is those taxes stay in place, and income tax either goes up or goes back. if they try to abolish it. charles: and we ve seen this kind of stuff before. you know, margie, this sort of hints at this entitlement cull chair that we must have a post office, x amount of branches, and it must lose $5 billion a year and someone s got to pay for it. this is absolutely nuts. well, it s just one city council per s plan. i mean, look, i don t think you re going to see a groundswell of support for an e-mail tax. i would have to sell some of my shoes just to pay for the tax while i ve within sitting here in the studio i ve been sitting here in the studio. so i don t think you re going to see that take off at all. charles: but, al, it is interesting though that when in doubt, look for a new tax. i mean, this is how politicians go about their job these days. well, somebody s going to have to pay for that 2008 financial crisis, and i think sneaky little taxes and ideas to raise revenue are going to be the order of the day for years to come. but if you want to fix the post office, you know, reracks the pension restriction relax the pension restrictions that congress put on them in 2006, maybe cut back saturday delivery as the postmasterrer general himself has proposed. and you know what you tax? tax junk mail. an increasing amount of their business is junk mail. just tack that. concern just tax that. charles: that s the only business they re doing. you want to end up in that business too? deficit? that is the only business that is working. with the gas tax is entirely different because some have not raised it in a couple of decades. they went to improve the roads they think it e-mail tax will not happen spee met with the housing collapse what stayed in place? prerty taxes never went down. and i would say if you want to be reelected, a stop taxing your citizens and look up the books for what you could cut out there is a lot of fat. charles: unfortunately, there s always something they see we can spend money on. there s always something. improving roads in reducing traffic is always something that people look to spend money on. charles: that is why i paid my tolls. not all metro areas have tolls see you are in favor of mortals? voters should be part of the er