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tv   Street Signs  CNBC  December 21, 2012 2:00pm-3:00pm EST

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markets are the most optimistic of any out there. like diane said, she is very bullish of 2013 economically and through the stock market. that's why the pull backs. continue to continue to get met with buying strength and it will happen every time. >> yeah, we're down. down 1%. but there is a lot of money sitting there just aching to get back in and it want a reason. >> i hope washington is listening, right? i appreciate it. >> that's all for "power lunch." thanks so much for joining us. good weekend. >> have a great holiday everybody. i'm off next week. merry christmas. "street signs" begins right now. have a great afternoon. >> merry christmas, america. and it looks like we're all getting a big fiscal cliff under the tree this year. lawmakers bumble. stocks stumble. but will they tumble over the cliff? will it doom the middle class?
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will it doom the markets or is this the buying opportunity? you need a step by step guide on how to play the chaos in d.c. plus, the massive storms in the u.s. may put christmas shopping and traveling on hold. but enough bad news, mandy. we have feel good santa stats just for our audience. >> indeed, we do. it the santa's worst day for stocks but notwithstanding today's losses, still on track to be positive for the week. let's get straight down to the nyc with bob. i guess the mark set expecting a deal to be done, right? >> yeah. i want to pointous, this is a very tough close and tough one to call. we have a quadruple witching expiration and rebalancing a 59 close with s&p 500. this happens four times a year. you often get volatility around that close. 188 is the low and problem has been, we hit our lows here. right at open. then broke below them in the middle of the day. that's about 11:30.
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that spooked a lot of people. people are trading once you break below that, mandy, it is a real problem. i have a hard time imagining we will go that way. most people don't bet it. that's a high probability of that happening. but it is a tough call right now. generally the feeling is it should stay down at this point going into the close. let's look at pros and cons for next week. that's what everybody is trying to figure out. how about the upside? there is a deal to be announced ncht next few days. we've had strong gains on the year with six days left. unlikely big portfolio managers will bail. but there are strong point for them to make. very high bullish and complacency. small investors have been bullish recently. not very high short positions. and we've had, mandy, 5% rally in s&p in the last month anticipating a deal is actually going to happen. all this makes it very, very tough to call the next week.
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back to you. >> absolutely impossible to call. but thank you very much for giving it a crack. >> i'm guessing that idiocy in d.c. moved the deal-o-meter. let's check. wow look at that. >> 0% chance. will it move green bit end of the year? we have an all-star lineup. john harwood, steve liesman and larry kudlow. let's start with john with the progress or lack thereof. >> we've had a bit after crack up here in washington, brian, as you may have noticed. last night the house of representatives tried to move on speaker boehner's so-called plan b which would have raised taxes or permitted tax increases back to the clinton era levels on million dollar incomes. he was explaining to the press this morning about why he wasn't able to bring that up for a
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vote. and he said it was because members of his caucus had the perception a mistaken perception, that it was a tax increase. here is the speaker. >> there was a perception created that that vote last night was going to increase taxes. i disagree with that characterization of the bill. but that impression was out there. we had a number of members who didn't want to be perceived as raising real taxes. thalt the real issue. >> democrats picked up the reasoning behind the speaker's statement. he is saying it wasn't a tax increase because tax rates are supposed to rise on january 1st anyway. using the same reasoning, harry reid said today, the house should simply take up the bill the senate passed to prevent tax increases for everybody under $250,000 in income. >> if republicans truly want to insure taxes don't go up january 1st, they should simply pass the
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senate bill. the only reason speaker boehner hasn't brought the bill to the floor sooner is because he knows it will pass. >> of course the question now is, what is going to happen from here? there are a couple of possibilities. one is back channel negotiations between the president, senator reid, mitch mcconnell, maybe even boehner on a bipartisan bill in the senate. but then the speaker would not be able to keep it off the house floor. the other is a fall back kick the can demin muss agreement to temporary for one month put off the sequester, have unemployment insurance extension, doc fix, all those things, but that's not satisfying to anybody, michelle. >> feels like it is a pick a box game and not a single box will be satisfactory at this point. steve liesman, a man with an opinion on everything, what is your opinion here? >> i think john is right. i pretty much put it down the same way. what we have learned and where we are on the cliff, the fir one
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is the house apparently within pass any tax hikes with a majority of the majority. the president now it appears aiming only to extend tax cuts for income below 250. senate can adopt a tax cut extension. as john said, the house can pass the extension with democratic support. the issue now, and i'm fascinated to hear what the two best in the business we have on this panel are. and kudlow, think about this. no obvious route i see now to avoid the sequester other than back channel thing that harwood was talking about. and no obvious route for spending cut agreement. if the best we get is a tax agreement -- you're shaking your head, brian. >> because the people that wouldn't vote because they said it was a tax increase, are idiots. because doing nothing is a tax increase. >> we want it give larry his word. but there are some people who say without real spending cuts from the president, it doesn't
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make sense to give peace for two years because agreement limits the amount republicans can fight for over the two-year period. >> i agree. larry kudlow? >> i'm more optimistic on this story. >> not necessarily on spending. i dent see much on spending cuts. look, the boehner attempt was to move the ball higher on the income tax rate threshold and he couldn't do it. caucus wouldn't do it. a lot of that reason is not only higher tax rate by implication but also, they knew that it wouldn't pass the senate and they didn't want to be part of what some members are telling me is ka bookie theater. here is what is going to happen, at least in my judgment. my sources tell me we are going to cross the cliff. we are all going into january. and there is going to be a middle inkucome extension of ta rates. probably permanent. i don't know threshold, probably around 25 250 to 400.
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there will be an extension, i think the markets know that and we are not going to get tsunami of all taxes rising 500 billion. >> larry, i really want to know, because my reporting came up blank on this, is there a road to avoid the sequester. i understand there are little bits they may try to offset. but ultimately, what you are describing is one with a sequester takes place. >> first of all, i'm in favor of the sequester because i believe lower spending and limited government allows the private sector to breath. so i wish it were. but i don't think so. i think in whatever bill the senate passes with whatever deal they make with the white house, they will slim down the sequester so-called, slim it down, until it is almost nothing. look, boehner and his group tell me they want product p.m. if that product is extending middle income tax cuts, which i think it will, it will pass with
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democrats and republicans, and it'll be over. >> i got a serious question for you. in sort after back handed way. i want to go after harry reid a little bit because of the statement last night. basically, here is what we hear. if we go over the fiscal cliff, the middle class is doomed. that what we hear, right? middle class is at risk an everybody is doomed and we are ruined. yet all we do is go back to the clinton era tax rates which harry reid has said, oh, remember how good the clinton era times were. how can they be good times -- it is not led zeppelin. >> the doom and gloom here is that all of the tax cuts expire. that is, according to the cbo -- >> yes but then that puts everybody back it clinton. >> let me finish my point. if all of the tax cuts expire, if the middle income -- remember, three quarters of these tax cuts are middle income or lower tax cuts, the question here, is whether you want to drain the economy of $500
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billion which the cbo says is recession and i tend to agree. i'm here to tell you from owl my sources, that's not going to happen. not going to let it happen. but we will cross the fiscal cliff line into january. then guess what? house members, say republican, since you have stopped tax cuts, that you will cut taxes. here comes the tax cut after january 1st. >> guys? >> yeah, john? >> first of all, i agree with larry, that middle income tax cuts are going to be preserved. this morning he called it a big whale to raise taxes on those people. now he is saying a tsunami. in either case, it is not going to happen, okay? on steve's point about the sequester, remember the sequester is a trillion dollars over ten years. and so, you've got the ability month by month, to ineffect buy down the sequester. so if they take low hanging
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fruit savings and pop that into a bill, they could turn off the he is set offer temporarily while they work out a longer -- >> that's an interesting point. >> why is it a whale or tsunami? because we are going back to the time when bill clinton was president. apparently everything was great and everybody paid taxes. >> from the top rate. >> bush's tax cuts were for every income level. >> that what i'm trying to explain to you, brian. the fact is, if the bill totally expires, totally, january, february, march, then everyone is going to pay higher taxes. and this economy can't take that. the clinton tax rate -- >> i think it is a white elephant. >> the clinton tax rate is somewhat a distraction here with respect to the whale or tsunami after reception. what you're not going to get, i'm here to tell you, the reason will reveil. the white house, senate democrats and house republicans
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will not risk a $500 billion across the board tax hike that will lead to recession. they will not do it. >> i agree with you on those point except be a who am i to disagree on economics. but we are going back to '99. more american families spend more on their smart phone bills than the tax hike will cost them. >> on that economic point, what do you think, steve? >> i wouldn't want it risk that. >> the trouble brian is this. when you're in a zone where you do 1 to 2% growth a quarter -- >> 3.1. >> well, that's the last quarter. no one thinks it'll continue this quarter. economy is not able to with stand shocks like dramatic change -- >> it is not a serious shock is my point. why is it a serious shock to raise taxes on the family by the same amount they pay on their cable bill? >> because the cable money is allocated. >> they make a lot less money than you do brian and a lot of
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people live right on the edge. >> how do they make it through the '90s, john? >> oh, give me -- you know what, john, if you know anything about me, my mother is a high school drop out. i grew up middle class at best. my dad lost his job. we grew up under a three bedroom one bath house. if anything i grew up poor at best. >> there are people who can't afford to have their taxes go up. >> i agree with that. but people are not paying a a federal income level. social security will go up. >> this is a very important point. >> ier that all the time, we are doomed, doomed, doomed. and what i would like to ask is this. why are we doomed now with the same tax rates in 1999 didn't doom us? same family? >> i'm not saying we're doomed and i think some of that has been exaggerated but the point larry and steve are making is valid. if you take that much aggregate
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demand out of economy when we are in recovery that is pretty fragile, that would not be a good thing. you can take some out. >> also, let me just add -- >> final word to larry. >> let me just add this point. >> it is not just federal taxes, brian. if you look at the deal, state taxes are higher. local taxes are higher. property taxes are higher and sales taxes are higher. there is more going on here. overall tax burden for usa, typically middle income people, who won't get an extension of payroll tax cut, overall tax burden is substantially higher than ten or 15 years ago. that's the reason why. it may not be recession. but you don't want to risk a recession. and i think that's very wise. >> i'm not arguing for the tax hike. listen, john, i'm not trying to
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yell at you. but i have a good job and my wife has a good job. i can give you the math. we would like to redo our kitchen. if this tax hike goes through, there will be no renovated kichen in in my house. >> i'll get you a good cabinet and kitchen guy. i will help you. >> it is going to impact contractors. you make a joke about it. make your jokes about it. it is not going to hurt me. it will hurt the contractor, appliance company and those people. the working weal. and i'm proud to be one because i busted my ass to get here. >> i think taxes are higher. i wouldn't ris tobacco right now. -- i wouldn't risk it right now. i don't think you would want to risk an across the board tax hike in this economy. that the sensible position. >> okay. >> everybody, thank you very much for playing. larry, i believe you will devote a lot of your show to the fiscal
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cliff talks. it'll be on the kudlow report. that's tonight, everybody, live at 7:00 p.m. here on cnbc. >> "street signs" slate is just warming up. will probably catch on fire soon. latest on the huge big winter storms slamming the midwest. >> this mystery chart we are putting up in front of you, is one of the best trades of the year. if you got into this, it did pay off for you and paid off big time. what is it? we will tell you later. tdd#: 1-800-345-2550 this morning, i'm going to trade in hong kong. tdd#: 1-800-345-2550 after that, it's on to germany. tdd#: 1-800-345-2550 then tonight, i'm trading 9500 miles away in japan. tdd#: 1-800-345-2550 with the new global account from schwab, tdd#: 1-800-345-2550 i hunt down opportunities around the world tdd#: 1-800-345-2550 as if i'm right there. tdd#: 1-800-345-2550 and i'm in total control because i can trade tdd#: 1-800-345-2550 directly online in 12 markets in their local currencies. tdd#: 1-800-345-2550 i use their global research to get an edge.
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take a look at the mess in midwest. old man winter showed up just under time to gum up travel plans right before christmas. with 1400 flights cancelled. and 300 power outages going on right now, exactly at the rate time that we do not need it. >> no, we do not need it. also a crucial weekend for retailers. for all of you procrastinators, this is a big weekend. will profits also get snowed under? evan, how bad is it really, out there? are we going to be able to get our last-minute shopping in? >> good to talk to you brian. yes, most people will get shopping in. most of these impacted areas,
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new york, philadelphia, entire i-95 corridor has seen more rain than snow. frankly, most of the snow is happening where people want it to occur. so for knows locations, it is good. for people that are traveling, you know, flight delays, train, driving, you know, may seen an impact there. but people will be able to get to the stores during weekend. according to national retail federation, almost 90% of us have shopping to do, myself included. >> absolutely. myself included as well. evan, is there potential for post christmas storm, and a bad one? >> mandy, yes. we are watching another event that could come in right after christmas. it is still too early to tell where it will be rain an snow. we are definitely looking at some resip tags. that also impactful as well. the week following christmas right up from new years is very important for businesses with a lot of people being off. a lot of people get gift cards. that the most gifted item and retailers don't recognize that revenue until gift cards are
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redeemed. so everyday up until the end of the year is important. we will keep a close eye on that. >> how is the year going to shape up? this year, warmest new york city is over a hundred years. we have terrible storms. everywhere in the country got bizarre weather. you have any vision of looking out and saying, is it another bizarre year next year? >> most businesses do plan off of last year. unfortunately from a weather perspective, that typically just doesn't occur. we have one of the warmest winters and least snow in 50 years. today is the first day of winter earn it feels like it. we will get colder. i would expect businesses to see a lot more cold and snow than last year. favorable for seasonable items and hopefully people will see snow blowers under the tree this christmas. >> evan, keep warm, sir. >> happy holidays. >> things that make you go hmmm. think your job is hard, you've got nothing on santa.
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take a look at who gistilogisti would take for us to do his job. it would take 712 million workers to deliver 760 million pounds of gift. >> what can red and white do for you? is that new motto? >> a lot. >> coming up, final round of our fierce competitor series. today's brawl. me versus harwood. no, i like john a lot, but don't agree with him all the time. the final will begin in minutes. >> and gold financial play that turns out to be one of the best trades of the year. "street signs" is back after this break.
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our countdown of the best trades of the year continues with a look at financial stock that is really, really soared. fast money halftime joins you with more. scotty, dot revealing. >> we will good to the wall. there it is. bank of america. what a year it has been. stocks been on a steady climb the last 11 months. reaching its highest level since the summer of 2011. there are many reasons why.
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housing has come back. that is helping, given the bank is the number two u.s. lender by assets. but there is more to this story. brian moy han, cut head count and the bank is focussing on businesses. less than many other financial stocks in the s&p 500, and just this week, noted banking analyst meredith whitney, upgraded the stock. >> in bank america's case, they will generate over $18 billion in capitol and return to shareholders. he have not seen an opportunity like this in four or five years. >> that's a big moment for meredith. kwee questions do remain as we set to enter the new year. mainly, how does the bank growity revenue and earnings. that's the key question into 2013. housing certainly helped. fiscal cliff today, not helping.
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as you know, not doing well today. >> thank you so much, scotty. >> up next, bracing for impact. what happens to your money when and if we good over the cliff. you may know my opinion by now. >> blackberry under a jam, but is the company toast? oh, well, the year is nearly over. we will have a fresh boat load of puns in 2013.
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it beat the street by 14 sent a share. here's the thing, gross margins fell. they fell for the eighth straight quarter. that's bad. but based on their current projections, that streak of falling gross margins is likely, not guaranteed, to end next quarter. traders like it. stock is up 6%. >> i'm going to throw in a little bit of domestic here, it was strong in north near ka. balanced out in europe and slowing demand m china. >> but if we go over the fiscal cliff, the middle class can't buy the $185 shoes. >> there you go. throw that one in there. yum brands, this is falling.
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stop. it has to do with the safety possibility of chicken for kfc. food authority in china say there may have been an excessive amount of antibiotics in some of the yum brands kfc chicken. they are facing a lot of competition from taiwanese and japanese competitors. yum is growing hugely in china. watch yum brand stock take a lit after hit on that one. >> this is doing quite well on its revenues. >> yes. eps in inline but as mandy noted, sales are up. is up skripgss with strong growth. that stock up 37% over the past year. >> this is a name we don't often come up against. it is soaring today so we will throw it in. >> soaring, and this is a small company, slightly bigger than $500 million in cap because of the move today.
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they licensed some technology to pfizer, which obviously is a huge big partner. that enables drugges to be self injected sub cutaneously, ie, under the skin. >> and it rears its head once again. herbalife, a story we have been following all week. a little bit of damage control going on at the company, would you say. >> another 18% today. folks, the stock, the last three days, just terrible for herbalife. the news here is that not only is an an update but, an analyst day january 7 where they plan to directly address bill ackman's point. no doubt they will work through the holidays. coming up with maybe all 320 pages, that's how long it was, of ackman's presentation. so they will come back and good on the aggressive the week of january 7. they need it. >> and to remind everybody. bill ackman came out with a short and said it is a pyramid
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scheme. >> the last 24 hours have been a doozy for rimm. the stock surnled as it lost less money that forecast. josh brown on twitter was like, don't print the shirt yet, sulli. it changed in revenue model and stock fell. down again today. rim ceo was saying basically everything's fine because the blackberry 10 will be a game-changer. so let us bring in the aformentioned josh brown. he made big bet on rim. and i want it mention josh to our viewers. some on twitter didn't understand it. it wasn't, pick any stock you want. we gave you guys either boring slow growth stocks or high risk names to choose from. i want it make sure everybody knows that. it wasn't like this is some great pick you picked out of 5,000 stocks. >> no. if i today do it again, without knowing what happened in the year since, i would probably still pick something like this in a contest.
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you have to pick something that is going to be really high bet why and also buynary. hero or zero. to pick something like apple, which everyone already loved at the time. >> well, herb picked johnson&johnson. you still might just win this thing. >> as chief correspondent about rim or "street signs." there is so much pass vice em, you got the spike. the good news is they are adding catch wick quicker than anyone expected. no now, the bad news is that they lost a million subscribers in the course of this quarter but more than that they talked about the new tiered data
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revenue model. they got a downgrade this morning. the concern here is what kind of concessions did they give to carriers to get widespread adoption of blackberry 10 and obviously unknown but the street is shooting first and asking questions later. >> do you think the company is able to survive onity own? >> yeah. listen, i'm not saying this is a great bet that even the most bullish analyst that really follow the stuff are giving it a 30% chance. so that not a great probability that blackberry 10 will be this huge thing with the wp. but i think it is a great trading stock. a lot of people made a lot of money on the way up from six. the market put its foot down and said, look, maybe this is not a viable entity long-term. >> blackberry 10 doesn't just have to be good, it has to be amazing. josh, we got to leave it there. you still may be the winner. >> we'll see. >> spl people on twitter
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misunderstood. they thought you meant pick anything you want. how to cash in on the cliff. not yet, we still have time left. >> what about the cliff? what will it look like on january 1st? >> a mccar mac novel. kidding.
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coming up on closing bell, we will look at whether this is a buying opportunity or time to get out of this market at least for the end of the year. then we look to congress. we have democratic congressman sandra levin with us. just ten days to go until the fiscal cliff. and we get the republican response from congressman mulvaney. he was threatening to vote no last night. we will hear if he want to go over the cliff rather than make a a tax compromise. should be a wild last hour of trading today, mandy. see you then. >> looks like it. less than 90 minutes before the closing bell on what is the last full trading day before
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christmas. market down on a down side, off their elt mat lows, but they are up for their dow. mark, i'm not going to ask to you lock into your crystal ball and tell us what is going to happen with the fiscal cliff. i don't think even the leaders in d.c. know what will happen. >> right. >> what is your take on what we do? you're a buyer. >> i would definitely view in as a buying opportunity. unfortunately i that i resolution of the fiscal cliff has been priced into the markets and that resolution coming before the end of the year. and it is just looking more and more like that's not going to happen. every time there is this significant lack of product, you will see the markets pull back. come january of next year, early february, when we have to start talking about the debt ceiling issues as well, i do think there will be resolution to the fiscal cliff. i definitely think, we're not feeling the full fiscal cliff. as soon as that happens, it is
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going to be bullish as equity. i will use this as an opportunity to increase your equity positions. >> in what? what are you scooping up at this lower price? >> right. so the core of our strategy for a lot of our long-term investors is to host high dividend paying stocks but over the course of the next year, once we do see this resolution, i think the cyclical sectors are going to outperform the defenses throughout 2013. that's where i would move my money right now. >> probably apologizing to everybody out there but if you believe on your heart of hearts, it will doom the economy? >> i argue that it won't and it won't ruin is. everyone else disagrees. which tends to lead me to think that i'm right. >> if you just look at the increase taxes on the middle class families, it may seem like it is not a lot. but it is going to hurt the
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entrepreneurs and small business owners that create jobs. i'm an entrepreneur myself and if taxes go up, rather than hiring employees next year, maybe i hire two or three. there are less jobs i'm able to avoid. i do think it will hurt and it is a matter of looking beyond what is going to happen in middle class families. >> it is is not rocket science. to say, you like vote a phone, apple, taking advantage of the pull back and also home depot. thanks. >> thank you within mark. >> your taxes will go up and many politicians say basically that plid el class is doomed if that happens. let's dig into us more. is that true? let's ask co-director for policy research and dan mitchell atcato institute. dean, first you. many politicians tell us we are all dooned.
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do you believe that is true? >> i think that is bad news to leave those tax rates in place given where the economy is today. that is almost an impossible si scenario. even if we get to january 1st and there is no deal, now the impact of the economy will be virtually zilch. so the idea we will get recession is baselically nonsen. >> so we good over the cliff -- what do you think, dan? >> i think it is bad news to go over the cliff, even if we go over the cliff and there's no deal. but that doesn't mean we have a recession. the reason i don't like the tax rates is because of the long-range potential rate of growth. obama is using there to get to class warfare tax increasees. which makes me so depressed that i had to wear my christmas
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outfit to cheer myself up. >> there's nothing wrong with that. we can all use a little cheering up today, dean. maybe the problem is we don't know how to define middle class. politicians define middle class as everybody making less than 250 and's buff poverty line. a family making 125 a years in iowa is probably doing all right. >> that's right. but also, let's keep in mind, the 250, let's say i'm making 250, 260, 270, 280. so someone making 260,000 a year, they are tell meg they pay 3% higher tax rate in 10,000 that will kill them, you have bigger problems then. >> you just hit on something so important that we have been streaming about on this show for a while. as i pointed out, 83% of the rich under the president's plan also make less than 500. they are the working wealthy.
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that's where i kind of went off today, that it is not the children. it is doctors and lawyers and accountant that may have mba loans that really may get whacked here but how much -- >> not getting whacked. >> it depend where you live, also. >> i understand. i'm not saying the people are rich. but we are just talking about taxing them above 250. they are paying an extra three percentage point. it is hard for me to see someone earning 300, 350, whatever it might be. that's not a huge amount of plan. >> then why would the tax rate of someone making a hundred doom them? >> it is an question of dooming them. it is doing it to everyone. it is not going to decimate to someone earning over a hundred k. p tuls a lot of money out of economy. >> some people are over the edge and some are not. that means less demand in the
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economy when we need more demand. we have 12 million people. we shouldn't be cutting back demand right now. >> is there a possibility dan that this is like a y2k moment? we're talking about it, fearing it. yet when it comes it won't be nearly as bad as we are expecting. >> there's no question there is a lot of exaggeration. sometimes people on my side say tax increase causes recession. i don't think that. i think they spark long-term growth. if we have government spending, people ask like, oh, my goodness, grandmothers will be starving in the snow. i agree with dean, it doesn't kill anybody to have the government take another 3% of some share of their income. but let's ask the more fundment alquestion. why should we take more of anybody's income to feed a government that is already far too big. government spending almost doubled under bush and obama picked up the baton and is
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racing in the same direction with spending. we don't have a problem of too little washington. we have a government that far too big. that the entitlement pro problem and obama is totally unserious about dealing with that. >> a absolutely, they have to get serious about dealing with that. >> by the way, average u.s. home is 300 square feet bigger today than ten years ago. all right, build a battle is the find chapter in our series. they will step into a fire, and only one will emerge alive. who will it be? it is like a japanese stage show. more after the break. it's a new day.
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time for final installment of our fierce competitor series. home improvement retailers stepping into series. home improvement retailers stepping into the ring today. this is lowes v. home depot. >> joining us today is jen nissen. executive safety president of sw retail advisers and a cnbc contributor bert flinger.
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first of all, courtney reagan, who needs no title because she is herself sets up today's fierce competitor escort. >> thank you very much, mannedy. you may not think of homedy poes and lowes as traditional holiday retailers. bring it on do it yourselfers. in the ring, home depot versus lowes. home depot comes in with more than 2,200 stores in north america, while lowes has more than 1700. going into this holiday season, home depot's same-store sales are up 4.3% year over year with lowes coming in up 1.8%. last year, both had holiday numbers that packed a punch. each is equipped with knockout holiday programs.
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home depot is the largest seller of fresh christmas trees in the country while lowes has given iphones to some 40,000 employees to handle transactions more efficiently, putting these two in a class of their own. >> by friday, analysts told me both home depot and lowes sold out of generators in abdomen number of locations. lowes shares are the underperformer of the pair, so there could be more upside there, but home depot tends to be favored by the ladies. and we all know how important the women are when the comes to shopping. >> absolutely. i love those diy stores. court, you have your opinion, but so do our guests. we've been siding over the last two segments, but today, jen, i'm going to start with you. >> at first i thought this is a slam dunk. but then i thought about what lowe's has done. they've brought in lower prices,
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driven the business by doing that, they've done all these line reviews where they looked at the individual segments of the store and fixed them. so i said, well, gosh, they've done all these great things. but then the valuations look a lot alike and home depot has the game won with the contractors. they'll never catch up with them on that and there's also a big structural difference in the real estate itself. home depot has much better real estate than lowe's. so when it came down to the bottom, lowe's has done a lot of the right things. management haas has been beaten up over things they couldn't change because of the structural differences. but when it was all over, i still had to say i'm going with home depot. i wanted to be different from the rest of the world, but i couldn't bring myself to make that decision. >> stuck with it. >> stacey, more conviction on lowe's or home depot? >> home depot. same thing with jim.
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>> lowe's was killing it a few years ago. i heard lowe's is faced more by women because they had wider aisles and you didn't have a lot of congestion, sort of cart battle jousting. however, lowe's has fallen behind, especially in terms of their investment in technology. they didn't have the internet in stores until last year so on their salespeople couldn't help people price comparison. certainly the execution home depot, the real estate, they have bigger exposure to the pro business, as jan was saying it's 35% of their business, 25% for lowes. so you can look at the numberes and try to convince yourself to invest in the underdog, but the numbers tell you there's a reason why home depot has beat out lowe's 13 of the last 14 quarters. >> and lowe's won the cage match last decade, both with women and with contractores and pros. home depot in the last 1,000 days under the great leadership
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of frank blake has totally turned the tables. lowe's, when i gave a presentation to the chief marketers association in 2009, the lowe's people were arrogant, making disparaging remarks about home depot. >> so you're saying almost lowe's got cocky? >> too cocky. >> and it was over. >> maybe they got a little slow, a little comfortable, right? >> comfortable and what frank blake has done with this team is the strategy, the leadership, the marketing, the merchandising, it's the perfect retail reflection of the three founders who were the geniuses of category killer retailing. bernie marcus, arthur blank, tim langone and it's a total turn around from the mismanagement when the cage match was won by lowe's. >> so basically you're going with home depot, as well, then? >> home depot. mandy, when you were in the hong kong, you had to cover home depot and china.
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home depot in canada is going to eclipse lowe's and also you have frank blake jr. who is an a.r.m. army range ner iraq. and to him to be promoted to take over canada or more of the u.s., you have two parts of the family who will win the battle in this case. >> and i have to agree with bert. i think the leadership is unparalleled at home depot. it will be hard for lowe's to get in there and compete in that area. i like the messages that come out of home depot. i think they're a little more memorable for lowe's than a lot of consumers. the merchandise in some categories is somewhat undifferentiated. so if you have better messaging, you're going to bring more into home depot that's lowe's. i have to dmid admit, my father is a small business owner. he has a company that he makes and designs these custom kitchens and bathrooms. and in some respects, home depot is a competitor but he also goes into there to buy his supplies. he leads towards home depot.
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>> thank you very much, courtney, thank you very much to our special panel, as well. happy holidays to you. >> happy holidays. >> throw menards into that one next time. >> next, we have the thing that makes you go smooth. i think your friends will understand. oh no, it's actually my geico app...see? ...i just uh paid my bill. did you really? from the plane? yeah, i can manage my policy, get roadside assistance, pretty much access geico 24/7. sounds a little too good to be true sir. i'll believe that when pigs fly. ok, did she seriously just say that? geico. just click away with our free mobile app. so why exactly should that be of any interest to you? well, in that time there've been some good days. and some difficult ones. but, through it all, we've persevered, supporting some of the biggest ideas in modern history.
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