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tv   Closing Bell With Maria Bartiromo  CNBC  March 12, 2013 4:00pm-5:00pm EDT

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'86 into early 1987. thank you, mr. cash. the s&p, that looks like that will finish lower as well. that's nowhere near an all-time high at 1,555. and finally, a stock to keep an eye on, john watson, the ceo of chevron will be with us. we're talking to maria, that stock today is down about 50 cents or half a percent. my friend, terry dolan, does it matter if we close positively today? psychologically, what's that mean to the market? >> i think psychologically, we are going to close positive. the market is looking at us to get the reconfirmation from the s&p 500 and the upcoming all-time high. i think psychologically, that's what the market's looking for. we can't even get a good sell-off. >> i was talking about that earlier. we did a lot of singles that we're hitting in the market, as we continue higher. you don't get a lot of home runs. not a lot of big moves to the upside. is that good or bad? well, it becomes little tricky
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for a day trader or a guy who wants to be a little bit more nimble. he's trying to spot a crack, maybe short, pick up some alpha that way. but right now the opportunities are nimble and the opportunities are pretty much just stay long at the moment. and nobody likes to hear that. >> so the fact that we don't finish positive today means that we are losing momentum here? >> as far as i'm concerned, a day like today is as good as an up day, after what we saw coming into this morning, if we saw what we saw this morning, that's as good as an up day. it's giving us nothing on the sale side and telling us the trend is in track. >> what are you watching right now, news wise, that is the next event that has to happen, that's either going to push us higher or lower? >> i'm not so sure it's going to be a news event. i'm trying to get clues out of the bond market. >> and the market just up. >> kind of different to that. i'm trying to catch a clue from the fringes of the bond market. thanks, terry. very much. well, look at this. they're going to try. they've got 14 seconds left.
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and they're trying to bring the market back. if we finish positive, it will be eight straight up days and a new all-time high for the dow jones industrial average. looks like we're going to do it. once again, here we go, second hour of the "closing bell," right now. see you tomorrow. >> and it is 4:00 on wall street. do you know where your money is? hi, everybody. welcome back to the "closing bell." i'm maria bartiromo on the floor of the new york stock exchange. it will be a photo finish with the dow, can we extend the winning streak? it looks like it is so close. at this point, if we close at this level, this, of course, an all-time closing high of 14,448, but the trades are still settling out. we'll have to wait for another minute or two to see if, in fact, we end in another all-time high or go negative. there was about half of a billion to sell at the close, so we'll see about that. as you see this market trading and settling out, this can go either way. let's get straight to the day's market action.
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with me right now is michael yoeshcommie, peter anderson, mike santoly, and our own rick santelli. gentleman, good to have you on the program. thank you so much for joining us. michael, let me kick this off with you, as we await to see whether or not this market makes an all-time high. whatever happens in the next couple of moments, you have to feel like this is a victory, given the fact that we have already seen seven days of gains and this market still wont quit. >> yeah, absolutely. but i think you ought to not get too euphoric here. the market is rallying on lots of expectation that the news is going to continue to be positive. i think right now, you need to start taking some profit, rotate out of some stocks. cash out some of the positions that have rallied. we recently cashed out a bit of costco, a bit of baxter. we think it makes sense to take some money off the table. let's see what happens over the next 90 days or so. >> and if you're taking money off the table, where do you want to put it? just raising cash?
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>> it's partially cash, but also moving into other assets that are, we think, down. assets such european staples. companies like nestle, we think, are an opportunity. we still think there are plenty of omissions to rotate into lower priced stocks, particularly stocks that are paying dividends. you still want to be risk on, maria, but you want to take a little risk off the table. you don't want to be all beta when the markets are hitting all-time highs, six, seven, eight, maybe nine days in a row. >> what about you, peter anderson so? what would you be doing at this junctu juncture? >> well, the wheels are still on this wagon of a rally, i would say. and there's still some very, very attractively priced stocks out there, maria. when you look at dow itself, that's one thing. but then if you start looking at individual stocks, there are plenty of stocks out there that are still, frankly, fairly valued. and even in some cases cheaply valued. those are the names to go after here. and i would not shy away from getting a full position in the stocks that you really like.
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one other example i wanted to tell you about is there are dividend stocks, as your other guests mentioned. there are plenty of stocks out there that are still increasing their dividends in this environment, and trading at pes of about eight to ten times. so they're still very, very attractive in this environment. >> i just want to point out that, in fact, things have settled, and we are, in fact, at another all-time high. 14,450 is the all-time high for the dow jones industrial average, with now eight days of gains in the books, with a fractional gain here one 2.75. a complete turnaround by the closing bell. we were down much of the session today, and in fact, we're ended in uncharted territory. >> yeah, obviously, the default mode of this market is the kind of walk higher when nothing is disturbing the overall picture here. to be honest, i'm mostly focused right now on the fact that we were almost precisely here one year ago. year-to-date gain was almost exactly the same on the s&p 500, in the same march options expiration week, which is what
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we're in. so i really think that even though, without a doubt, the bulls retain the benefit of the doubt on this rally, i do think we have to be on the lookout that all we've really done is readjust stock prices to match what corporate credit has done, high yields have been in rally mode, and they're kind of just walking upward in tandem with each other. so, so far, no reason to think that's going to change anytime soon. but i am on the lookout for something that comes along to disturb that pretty comfortable view right now. >> yeah. it's interesting, rick santelli, because we keep hearing all this talk about the great rotation, money coming out of fixed income, out of bonds, and into stocks. and so far, anybody you talk to keeps saying, who's buying? well, this newfound buying and this new momentum that we saw in 2013 is all from cash. 4 401ks, it's not coming out of bonds. >> end it so interesting that in the eight days, starting on the 28th of february, that brought us to this record, in those eight days, the range of closing
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yields is about 20 basis points. so the surreal effect of what's going on, not to dismiss it, but it really is surreal. i mean, as a fixed income guy, with which great run, i would have suspected interest rates to be much higher. so we do get back to the fed. i always find it fascinating that the people really talking about this great rotation, like stocks, don't want to acknowledge so much that the fed's at the epicenter. but it is at the epicenter, and that epicenter includes fixed income. they are buying $85 billion a month? securi in securities, so the disconnect continues. but it doesn't mean that traders on this floor aren't going with this sort of surreal momentum. very few bears down here in the dow futures pit at the moment. >> are you expecting this better economic data, rick, to eventually dictate the fed's behavior in terms of changing the rate scenario earlier than we expected? >> i think it's going to be a love/hate relationship.
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yes, i think when you get numbers like form's retail sales, if they come out better than expected, of course, we should see rates go up. we should see stocks go up. but in the end, the only thing that matter s on the rate side s will that affect the decision-making process of the fed, or is it possible that data could get so good that we'd reach a tipping point, where the fed still wouldn't be able to keep rates down. those are the dynamics to pay attention to. >> i agree with that. >> who? mike santelli? >> no, michael yoesyoshcommi. >> i don't know if it's really a blowaway trend. i think rick is absolutely right. i don't think the numbers can be so great to move the needle so much on the bond market. i just don't. i think at this point, there still is enough skepticism out
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there, even though we have a market rally eight days in a row, there's enough skepticism out there that i think you're going to continue to see the bond market hold its own and the rally in the market, the equity market, start to stall a bit, as we wait for the next stimulus to come up. >> maria, there's one thing i would -- >> well, wait a second. michael, do you think the market's ahead of itself, based on the fundamentals? >> i think it's probably about where it should be priced. i think the market probably, in terms of optimism, is overly optimistic right now. it maybe is a bit of an apple scenario. maybe good long-term story, but just a bit ahead of itself. that's why if i'm investing, i'd probably put half my money. if i'm in cash, i'd drip half my money in over a period of time. watch and is a see what happens over the course of the next three months. that's how we invest. we're not traders, per se, where we're trying to buy it all in one day. spread it out over a little bit of time, hedge your bets, that way you don't get killed by it at the high. >> pete, jump in here. what were you thinking? >> one other thing, and i think
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we've missed this point, maria. with the fed being so clear about the unemployment level and raising rates, one of the things i do, i am concerned about is, as that unemployment rate does start to decrease, perhaps investors will front run that, so to speak, and start selling bonds ahead of the level of 6.5% unemployment, which, ironically, would create a floor for interest rates, and that the unemployment rate would stay at 6.5%. it could never, theoretically, go beneath that. and i think that's something that we have to watch. that that could signal to the general market that rates will start increasing prematurely, unintendedly, the way the fed wanted it to be. the fed wants rates to continue to stay the same, as the unemployment rate goes down, but that might not be under their control. >> right, sure. because the numbers are moving. thanks, everybody. great conversation. we appreciate your time tonight. and we will see you soon.
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thank you so much. the dow locking in the sixth consecutive all-time high. the s&p 500 snapping a seven-session winning streak today with the standard & poor's actually ending negative. let's go to sue herrera who has the lowdown on the markets today. hi, sue. >> hi, maria. we did manage some new records, but also broke some winning streaks. for the sixth straight session, the s&p 500 did touch a new five-year high, but it couldn't hold on to those gains and the broader stock index finished the session lower, not by much, but just a little bit. in the last minutes of trading, as you mentioned, the dow managed to eke out a small gain, keeping that streak in tact, and making the today the eight straight day of gains for the blue chip average. the nasdaq broke a much shorter streak. after three days of gains, the tech-heavy index closed lower as well. the s&p materials sector did manage to hold on to a small gain, a fraction of a percent, for the 11th consecutive day of gains, tying its record, in the 11-day winning streak that was set in july of 2009. over the past 11 sessions, the
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materials sector has gained about 6%. for the record, it was the third consecutive day that the s&p midcap 400 index traded up to a new all-time high, but it then finished the day just a fraction lower. and the small cap russell 2000 index climbed to a new all-time high for the fourth straight day, but lost it in the final hours of trading and finished down a quarter average of percent. stocks faltered, but gold surged, and the yellow metal traded the session up just under a full percent. >> coming up, the last time the country had an approved budget was april of '09. since then, we've added more than $4 trillion in debt. h house budget chairman ben ryan hopes to end this downward budget spiral with a new budget proposal. we have the first sneak peek at what ryan said. also, apple continuing to lose some shine today. now blackberry gearing up for the new rollout of the z-10 samsung. samsung getting ready to unveil
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its newest galaxy. the smartphone wars heat up. we'll see how it all fun folds, up next. and is nobody safe? now the first lady's information is put out on the internet. she's not alone, the list of victims whose private data has been posted online goes on and on. we have the latest on the battle to combat cybercrime. you're watching the "closing bell" on cnbc, first in business worldwide. tdd# 1-800-345-2550 you should've seen me today. tdd# 1-800-345-2550 when the spx crossed above its 50-day moving average, tdd# 1-800-345-2550 i saw the trend. tdd# 1-800-345-2550 it looked really strong. tdd# 1-800-345-2550 and i jumped right on it. tdd# 1-800-345-2550 tdd# 1-800-345-2550 since i've switched to charles schwab... tdd# 1-800-345-2550 ...i've been finding opportunities like this tdd# 1-800-345-2550 a lot more easily. tdd# 1-800-345-2550 like today, tdd# 1-800-345-2550 i was using their streetsmart edge trading platform tdd# 1-800-345-2550 and i saw a double bottom form. tdd# 1-800-345-2550 i called one of their trading specialists tdd# 1-800-345-2550 and i bounced a few ideas off of him. tdd# 1-800-345-2550 they're always there for me. tdd# 1-800-345-2550 and i've got tools that let me customize my charts tdd# 1-800-345-2550 and search for patterns as they happen. tdd# 1-800-345-2550 plus webinars, tdd# 1-800-345-2550 live workshops, tdd# 1-800-345-2550 research. tdd# 1-800-345-2550 whatever i need.
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welcome back. the smartphone wars coming to a head as blackberry and samsung launched their newest phones on to the market. where does this all leave apple? jon fortt has the story. >> well, maria, i'm not sure apple has too much to worry about for a blackberry quite yet. this tends to be one of the slower seasons for smartphone sales right now. samsung and the galaxy s iv, a different story. they've been gaining traction. smartphone rivals, let's take a look at how they stack up. apple actually won in q4 in the u.s., market share wise. it gained. black berry, show, slipping quite a bit.
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3.2% share down from 8% in 2011. android had 70% of the market share compared to ios's 21%. z-10 preorders start today. t-mobile and verizon also expected to offer that phone at some point in the not too distant future. the question here, though, now in the u.s. is how much market share is really up for grabs, given those numbers i shared earlier, ios and android really have quite a bit of momentum. blackberry will have to work hard to break that. >> all right, john, thank you. and the continuing android invasion, a blackberry revival, unclear plans for the next iphone have taken some of the shine off apple in the smartphone fight. once again, the hot gadget has lost market share. it fell from 72% a year ago to 50% today and apple has also seen its stock decline 19% year-to-date, and of course well below that hay of more than $700 a share. so is apple losing the smartphone wars? max wolf of greencrest capital says the ramped up competition is one more reason apple should be very worried.
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but lina rao says the competition is actually good for the company. good to see you both. max, you first. is the stock auction and the action that we're seeing in the stock telling us that the iphone has lost its grip? >> i think it's telling us that apple is becoming at a point in its maturity where it's evaluated like other companies. that being said, the shares are very cheap. it's probably okay. i think that apple had to make a choice about six months ago, and i was on your show, answering your questions and saying this. i still believe it, between market share and margin. they keep trying to choose both, and that really won't work. so they're going to have to switch off and sooner beats later. >> so you say that they can't choose both. and lina, you say that this competition is actually helping apple innovate? >> i think it's important to note that apple is the innovator here. samsung is always going to be known as the follower, despite the competition, apple has created hardware and software that consumers continue to love.
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and samsung is following in those footsteps. >> i think that used to be true. i think we saw the iphone 5 be catch-up phone that showed apple could have a great phone, it's a great phone, that was as big and as fast, in other words, lte 4 with a bigger screen, so i think they have that role in the pc space. i think they definitely still have that in tablet, although there's more pressure coming. but i think they've lost that mantel in the smartphone -- >> but you have to point out that apple has this important ecosystem around it. it has the ipad, it has -- >> yes. >> the itv, it has its macs, and samsung doesn't quite have that. >> they do have tvs, and quite a large market share, and the android market, you know, app system has the gmail, has google drive, has the entire nexus universe and the chromebooks. and the chrome operating system are coming on strong and they're offering a netbook computer at a price point of $250, basically $1,000 less than apple's entry
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competitor. >> but there's an important point there. the point is that samsung is beholden to apple -- i'm sorry, is beholden to google. apple actually has control over the hardware, the operating system, the software, and i do think that puts samsung at a little bit of a disadvantage. >> until we see more from the operating system they're working on. but remember too that the motorola purchase puts google into the hardware software together universe and we also see amazon, the tech world's most successful margin killer entering the space aggressively in the phone market, if delayed, as well as already with some success in the tablet space. >> well, motorola hasn't really, known to be a big player, at least as not as big as samsung, in the smartphone wars. and i think, you know, we'll see what happens with google motorola. if google really puts innovation at the forefront with this integration, then it could be, you know, a viable competitor. but we'll see. >> the nexus 4 shows us that we can do it when they want to.
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that phone is very affordable. it's pursuing a different audience. but the growth in the smartphone space isn't much the developed world, isn't people who can pay a premium. it's the developing world for whom the phone and maybe the tablet are going to be the basic internet interface for them. that's going to be mobile commerce or ecommerce is going to come through that platform. i think if you look at the app network on apple, google app's are among the most downloaded and most used. so google has its nose under the ios tent as well. >> what about pricing? the price of devices keep going down. is this going to hurt margins? >> i think it has to. i think you're going to have to choose between margins and market share, particularly if you have google and amazon, the two most effective big tech margin killers in the world, coming into your space. or, you can have a small market share and charge a huge premium. >> but apple -- >> the only problem there is you need to have the best product, bar none, every time. >> but apple is going to be releasing, as we know, a cheaper phone. and, you know, it really could be competing with some of those
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lower priced phones, you know, that are being offered right now. >> absolutely. >> all right. we will leave it there. great conversation. we appreciate you both. thank you so much. for putting out there a great insights. we will see you soon. thank you very much. up next, $22 billion. that's how much cash oil giant chevron has on the books. find out whether a dividend boost or a stock buyback is in the cards when i talk exclusively with john watson, coming next. and later, are market forces finally kicking in as the cost of college skyrockets. some schools have begun offering free semesters, even cash back to attract more students. we'll have the details, coming up. stay with us. come? with fidelity's new options platform, we've completely integrated every step of the process, making it easier to try filters and strategies... to get a list of equity options... evaluate them with our p&l calculator... and execute faster with our more intuitive trade ticket. i'm greg stevens and i helped create fidelity's options platform. it's one more innovative reason
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[ male announcer ] yes, you could business pro. yes, you could. go national. go like a pro. welcome back. oil giant chevron says that it will grow its oil and gas production more than 20% by 2017. 25%. and so for this year, investors have been rewarded with a 9% gain in the stock. joining me right now in a cnbc exclusive is john watson. he's chairman and ceo of chevron. good to have you on the program, john. >> maria, thanks for having me. >> you had your analyst meeting today and that was one of the headlines that came out of the meeting, growing oil and gas production by 25% by 2017. how are you going to do that? >> there was two things i talked about with the analysts, one was our performance. we've grown earnings faster and our stock price has performed. i also talked about what we have going forward, which is the 25% production growth. and our growth is really centered in australia and the gulf of mexico.
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i talked about two big l&g products we have, liquefied natural gas that will bring gas to the growing markets of asia. and i talked about deepwater environments particularly in the gulf of mexico. >> is morocco an opportunity for you? i know these are the main priorities, the ones that you just mentioned. >> well, morocco is an area where we picked up some acreage recently. in fact, we've entered half a dozen or so countries. those are longer term plays. those are exploration plays, where we'll do seismic work and drill and then if we have discoveries, we'll have production. i think the important point is we are investing and we've had an exploration record second to none over the past ten years. >> i want to get back to the gulf of mexico. we all know it has been tough for companies to get the permits required to actually operate and get the product in that region. so i'll come back to that. because one of the big talks at the analyst meeting was all the cash on the bookses. $22 million in cash on the books. what are you planning to do with that money? >> our financial priorities have been to pay and increase the
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dividend and increase the dividend as the pattern of future earnings and cash flow permit. that's why we're making the investments for growth in the future. we've kept a little bit more cash on our balance sheet than some other companies. one, because we've generated more cash from our investments, but also because there could be ups and downs in the oil markets around the world, and we have these big projects underway, and we need to have a bit of a cash reserve in the event that oil prices were to go down, which we don't expect, but may happen, or, in the event that exchange rates or others are impacted. >> or you have a disaster, that an oil company can actually be afflicted. i mean, like a spill somewhere, or an issue, a verdict against you in ecuador. these are the kind of things that you want to have that buildup. >> well, there are risks in our business, but actually, one of the things i told the analyst is that we have the best safety record in the industry. we had our best spill performance ever. in fact, we're the best in the industry when it comes to spill performance. and when it comes to ecuador, that's a pretty well-documented fraud. and i've got no intention of
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paying the plaintiff's lawyers who perpetrated this fraud. the latest evidence that we have in this case is a judge that was bribed in ecuador came forward and gave testimony in the united states and corroborating bank record information supporting our contention of fraud. so we're keeping cash on the balance sheet for the ups and downs of the commodity cycles, not because we're expecting to have those sorts of unusual payments. >> sounds like you're facing a shakedown of sorts. >> well, that is what's happening in ecuador. and the only way we can resolve it is through international courts, or we've tried to engage with president kraya in ecuador. thus far, we haven't been successful. but we'll defend ourselves against this fraud and look forward to continuing our investment elsewhere. >> all right. so you raised your dividend for 25 straight years? >> we have. >> every time you've raised the dividend, somewhere around the second -- you raised your dividend last in the second quarter of last year. >> that's right. >> so you're not going to miss this year, 2013. do you have an increase coming in the second quarter, john?
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>> well, we've increased the dividend over the last 25 years, and i'm not going to get out ahead of any dividend increase going forward, but we understand that our shareholders value steady growth in the dividend, and we invest to make sure we can do that. >> connect the dots, if you will. okay, let's talk about shale. because this is a story i am so hot on. i love the shale exploration and production story. last week, we had on the ceo of conoco phillips. and he talked about the opportunity with me last week about shale. listen to what he had to say. do we have that sound bite? >> well, it's tremendous. it's a renaissance for our country, certainly for our industry, and for our company as well at conoco phillips. it's driving tremendous changes. go to north dakota and see what's happening up there in the state, what we're doing here in texas, what's happening in colorado, what's happening in ohio. it is changing the landscape and it's changing it for the better, helping this economy grow. these are good, high-paying jobs with great benefits coming in this industry. >> is that the way you see it?
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>> i think those comments are spot-on. you know, there's an opportunity to generate a couple of trillion dollars in tax revenue over the next 20 years. there's an opportunity to generate millions of additional jobs. all we have to do is have a regulatory environment that allows development to take place. we have to have a fiscal system in place, instead of thinking about imposing punitive taxes on our industry. and we need to have an environment that gives us the permits that we need to produce. >> well, it's an interesting point. because, you know, it's the same idea as we're seeing in the gulf. the regulatory environment and the lack of permitting that everyone is waiting for has stopped or slowed down production. let me ask you about that. what, specifically, in terms of the regulation out there, is hurting or slowing things down? >> well, what we'd like to see is more acreage made available. if you look in the gulf of mexico and around the outer continental shelf of the united states, 85% of our acreage is not available. and, in fact, the oil and gas production increase that we're benefiting from in this country, we're not seeing it on federal
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lands. we're actually seeing declining production on federal lands. so we need to have those lands made available and we need to have timely issuance of permits. and we also need to be sure that the epa is enforcing prudent environmental laws, but not going too far. >> i guess part of it is, obviously, the environment. you've got, you know, people right now protesting the keystone pipeline. so can you ensure, categorically say, that this is not going to impact the environment, that this is actually not going to move the needle in terms of affecting our wildlife, our, you know, nature? >> maria, we have 2.5 million miles of pipelines in this country. they're everywhere in this country, including in the area covered by the keystone pipeline. we can put in pipelines and produce from pipelines very effectively. obviously, we have to take the right precautions in our industry, we have to have sound
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environmental practices, but we have a good track record and it's getting better all the time. >> i thought that it was interesting that the administration released the results of that examination into pipeline. on friday fight, at 5:00 at night, it sort of went unnoticed. but the bottom line is what came out of that report is that it is not harmful to the environment. >> well, no, we're going to need oil and gas for a long time in this country. and canada has been good trading partner with us for many years. it makes sense to bring that oil to the united states, rather than have canada export it to another part of the world. >> so what would be an appropriate growth rate? having said all of that, let's say you do get what you want and the regulatory story turns in the industry's favor. i don't know, it's 50/50, really, if that actually did happen. but if it were to have a growth rate, would shareholders look at chevron? >> we're spending $37.6 billion this year and a quarter of that is in the united states. we are making difference in the
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marcellus shale and in pennsylvania with the acreage that we have that we've added to. so if we have more acreage made available, i would hope that a higher proportion of our spending would come to the united states. but fundamentally, we go where the opportunities are. >> do you think the u.s. will become an oil -- an energy exporter at some point, like we've talked about so much? >> i think we could become an energy exporter. it will be very difficult to become an oil exporter. what i see is, we'll be producing more natural gas than we need and we can export that. we're still likely to see imports of liquid fuels, of oil going forward. but we can certainly make a big dent in those imports by allowing more investment. >> and real quick, front and center today is the budget. paul ryan coming out with his proposal. are you expecting that you're going to lose some subsidies and tax breaks that oil companies have right now as a result of the new budget proposals? >> maria, chevron had a 43% effective tax rate last year. no industry pays more taxes than we do. to me, it's been a false
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narrative around our industry. we pay our fair share of taxes. now, i am in favor of comprehensive tax reform. and some of the provisions that we benefit from, that other industries benefit from, certainly those can be a part of the debate, on lowering tax rates. but what i've seen so far is increases in tax rates, and i haven't seen any discussion about comprehensive tax reform put forward concretely. >> i'm glad you mentioned that. because there's so much talk that the oil companies are evil and yet you look at the numbers and it's an extraordinary number in terms of the taxes that you pay. >> $20 billion in income taxes last year for chevron. >> as an industry, just $20 billion for just chevron alone. good to have you ton the program, john. fixing our nation's debt, the last time house budget chairman paul ryan unveiled a budget, he was accused of pushing granny over a cliff. how is he being treated now that he has another budget proposal out? larry kudlow will be up with an exclusive interview with ryan, next. and then imagine logging on to your computer and seeing your private financial information posted all over the. that's exactly what's happening to a growing number of big
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names, including the first lady and the vice president. the latest ton government's effort to battle cybercriminals coming up next. back in a moment. you should know that axiron is here. the only underarm treatment for low t. that's right, the one you apply to the underarm. 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 doctor, and for a 30-day free trial,
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welcome back. house budget chairman paul ryan unveiling a new framework to
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tame the nation's growing $17 trillion deficit. ryan speaking exclusively with our very own larry kudlow and that interview ending just minutes ago. larry is in washington right now with the debrief. larry, great to see you. what's the big takeaway? >> hi, maria. you know, i started out by asking him, you're calling for repeal of obama care, which is the law of the land. and you just fought an election over this and you lost. are you sticking, you know, are you poking a stick into obama's eyes? here's what paul ryan told me. >> you think we should just give up our principles when we put out our budget vision? that's what i ask people who say, why did you repeal obama care? first of all, we think it's a terrible law. second of all, this law has yet to be fully implemented. there's a lot left to go here. and we think as people see the ugly details unfold, we believe this law will collapse under its own weight for lots of reasons. and we believe in a patient-centered health care system, not a government-run health care system. >> so, really, one of the points that i got out of this is that
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the house republicans, and i take it some senators in the republican party, like ted cruz, who is also coming on tonight. maria, they're going to do everything they can to defund obama care, in order to stop it from going into place. that was one of his key points. >> you know, it's interesting, larry, i mean, how else are they planning on reining things in. surely, he had comments on medicare, medicaid, social security, the entitlements? >> he did. we talked a lot about that. and one of the things that came out is that ryan is willing to compromise. ryan is willing to go for a grand design, maria, that would include entitlements and spending and tax reform. he didn't want to get specific, he didn't want to negotiate with himself. i made a couple of passes at it, and he didn't want to do it. all i'm saying is, his attitude was positive and he claims that obama's is also positive.
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>> all right. we'll be watching your exclusive tonight, larry, on the "kudlow & company" program, here on cnbc. larry, thanks so much. 7:00 p.m. eastern, thank you, maria. >> we'll see you on "the kudlow report" at 7:00 p.m. tonight. up next, college tuition on sale. how about clipping coupons for college credits? we'll talk to some now doubting if college is worth the money. and later, what do paris hilton, ashton kutcher, and j - jay-z have in common? there's actually a financial story here and it could affect you next. it's marching to the beat of a different drum. and where beauty meets brains. it's big ideas with smaller footprints. and knowing there's always more in the world to see. it's the all-new lincoln mkz.
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welcome back. breaking news right now. right to phil lebeau we go. >> breaking news from the federal aviation administration. it has approved bog ed boeing's for a certification program to certify the new 787 dreamliner battery. this proposal includes a number of tests that boeing will have to meet before the faa can lift the grounding. there will be more test flights, more testing, and if boeing meets those expectations for the new battery fixes, maria, then we could see the grounding lifted, perhaps over the next several weeks, maybe by mid-to-late april. maria, back to you. >> phil, thanks so much. up next, buy one, get one free. suppose you get a deal like that from a college? are market forces finally impacting the cost of higher education? senior correspondent scott cohn now with the story. over to you, scott. >> maria, in all our reporting
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on the crushing college debt situation, this is a topic that keeps coming up and keeps making people angry. college tuition rising at many times the rate of inflation. why is it? is it because government's support for higher education is down and the schools have to make up the difference somewhere? or is it because colleges are adding all kinds of fancy amenities to attract students, luxury dorms and rock climbing walls cost money. or is it because student loans are so easy to get, so colleges can raise prices as much as they want? whatever's going on that, that great equalizer, the free market, may finally be coming into play. moody's says one third of u.s. colleges, private and public, are seeing tuition revenues flat or falling. 17% actually seeing revenues decline. moody's says it's a combination of the economy and political pressure. "the wall street journal" has a report today about alma college in michigan offering cash rebates and free classes after four years. we reported last year about davidson college in north carolina, which five years ago eliminated loans from all
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financial aid packages, offering grants instead. college tuition is still rising, about twice the rate of inflation, but according to the latest consumer price index, but maybe, maybe some relief is in sight. maria? >> stay right there, scott. let's bring in financial economist lindsay piegsa for a little more on how to solve some of these problems. thanks for joining us. you have some suggestions for bringing free market principles into the college cost principle. tell us about them. >> i think we need to recognize we do need a solution, as this is an unsustainable scenario. as the government continues to subsidize student loans, all we're doing is pushing up tuition, in some cases up to 50%. so i want to see an increase in affordable and efficiency by increasing those free market principles. in theory, it sounds great. from a demand standpoint, i would like to change the conversation, which has been one of entitlement, which has been one of fairness, and look at secondary education from a cost/benefit scenario. and we need to do this on individual student levels. many students go off to college, elated with the idea of simply
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graduating, but they don't take into account what it actually means to take on tens of thousands of dollars worth of debt. so we feed to have a better education program in terms of financial coursework for students. we can easily do that on the state level by mandating that for students that are looking to take on student loans, in the context that not everyone benefits from college. and that's something that we really do need to focus on. 30% of students that come out of college go into jobs or end up on career paths that don't require a four-year degree. now, the other side of that argument -- >> yeah? >> the other side of the conversation is the supply side. we need to limit the amount of loans that are given out. we need to increase the scrutiny for loans, make a more academic base, rather than needs-based. so we reduce those underqualified students from the university system. we can also reduce the fields that are applicable for these loans. so we make sure that there's a viable market demand for these fields that we're entering. >> so, scott, if the government were to stop subsidizing college loans, what might the reaction be from colleges or even from students? >> i think if you just want to have rich people to be able to
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afford a college education and to be able to afford the advantages that do come from a college education, then that may be the way to go, to cut down student loans and just make everybody pay. there is a lot of debate about whether all these available student loans, that pretty much any student can get, whether that is what forces tuition up, or some of the other factors that i mentioned, including the fact that support for higher education is declining, and the schools feel like they have to make up the money somewhere else. that is a big issue, and it's particularly a big issue in these days of austerity. so what would happen if they cut out student loans? a lot of people would not be able to afford to go to college, and then the debate would be whether that is appropriate. >> and what about, you know, smaller schools, lesser-known schools that could shut down. lindsay, what about that? free market principles, if they take hold, are we going to see a completely different landscape in terms of the number of schools and the quality of schools out there? >> oh, sure, we're going to take
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competition take hold. and it's not just going to be the rich that are able to afford college tuition. we're not going to completely negate any sort of student loans for underprivileged students, but we want that make sure we're getting the most qualified students in the university. highlighting the idea that not everyone benefits from going to college. we need to switch that conversation. it's not an entitlement. it's not a given fact that you are going to go to fact after high school. and i think that's really the focus that we feed to shift to, making sure that it's the most qualified individuals. >> how do you judge qualified, though? is it qualified economically? is it qualified academically? i mean, there's a lot -- a lot of this goes hand in hand that people who are underprivileged or people that come from low-income families and low-income schools may not be able to -- may not do well in college, but that doesn't necessarily mean that they're not qualified, does it? >> well, but it speaks to the idea of the cost/benefit. so if they're not going to do well in college and they're going to spend maybe $20,000, $30,000 a year, come out of college and get a job that only
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pays maybe on a one to one ratio, is that beneficial for that individual to take on that debt and carry that around for the next 10 to 15 years? that's the analysis that we do have to be cognizant of. and i think a lot of students, as they enter into the possibility of going to college for the next four years, don't take that into account. they don't have that knowledge up-front. >> realistically, do you think any of this changes? do either of you think any of this really changes in this direction? >> i think that we're seeing some of it change with what we just talked about. that there is this pressure to keep tuitions in line, and there are these market pressures, because the big free market principle that's at play here in all of this is that the job market is terrible for these graduates, and so there's less of them deciding to go to school in the first place. and in a lot of ways, take away all the government back student loans and everything else, the free market is already having an effect. >> i completely agree. there's less incentive to take on $100 or $200,000 for a college education if you're
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coming out of school with very low job opportunities or minimal wage opportunities in terms of growth. so i think we'll continue to see students make that decision. >> thank you so much for that. we appreciate your time. we will keep watching this. thanks so much, lindsay, scott, we'll see you soon. so what could push the s&p 500 to an all-time high tomorrow? our panel of top market pros will give you a leg up on the money, next. also ahead, hacked and mortified. we'll get you up to speed on the latest cyberattack that has celebrities on edge. plus, what's being done to rein in cybercrime. stay with us. r the annual shareholders meeting. ♪ there'll be the usual presentations on research. and development. some new members of the team will be introduced. the chairman emeritus will distribute his usual wisdom. and you? well, you're the chief life officer. you just need the right professional to help you take charge. ♪
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welcome back. hacking america. the latest scheme has targeted a who's who of big names in washington and hollywood. including vice president joe biden, ashton kutcher, and beyonce. eamon jafrz has been covering the cyber crime beat all day, joins us live from washington. eamon, even the first lady has been compromised. even if it's not technically a hacking, what is going on? >> that's right, maria. we're getting new information this afternoon. the secret service tells me they are investigating this incident. but what we're learning here is it might not have been a cyber hack technically per se. let me start here by briefing you on just who is involved here. a whole range of political figures here in the united states.
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former alaska governor sarah palin, fbi director robert mueller, the vice president, as you said, joe biden. also hillary clinton. and celebrities involved as well seeing their information showing up on an apparently russian website. beyonce, britney spears, kim kardashian, mel gibson, and jay-z. but what we're learning is a little bit more detail on exactly what happened to these prominent figures. in a statement from transunion, now, that's the credit reporting service, they put out some information about what exactly happened here and how this data ended up, saying "sophisticated perpetrators of these fraudulent activities had considerable amounts of information about the victims, including social security numbers and other sensitive personal identifying information that enabled them to successfully impersonate the victims over the internet in order to illegally and fraudulently access their credit report." so what's going on here, maria, is these people had this information in advance. they entered it into the transunion website as if they were michelle obama or beyonce.
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and they got these credit reports. and that apparently is the information that's now showing up on this website out in public, maria. >> amazing. and it's a lot more people than just that who's who, obviously. but this is -- feels like it's getting worse, eamon. >> yeah, absolutely. very scary. >> eamon jafers with the latest there. 30 seconds on the clock for each of our next guests on the panel. they'll tell us what else we should be looking for tomorrow as we prepare for tomorrow's opening bell. sahak manualian from web bush securities. mabain faber from cambria investment management. and michael block from phoenix partners group joining me. good to see you guys. sahak, 30 seconds on the clock, what do you want to be prepared for tomorrow? >> tomorrow morning we'll be focused on two key economic indicators. first the import price index which rose last month due to higher fuel costs and building materials. second retail sales, which have been rising for the past three months. the broader markets break out while momentum has not been confirming. this makes us a little uneasy in the near term. one stock we'd like to highlight in the environmental services space is stair cycle, outtransformed $102 price
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target. the company reported solid earnings last month. and technically it breaks above its consolidation zone. we think it should be bought here. >> we will be watching here. meb, you're up. what should we be keeping an eye on? >> our etf has an aggressive equity allocation right now, particularly with beaten down foreign markets. but what has me particularly concerned right now is domestic reits. they've more tran tripled since the march 2009 low. been the best-performing asset class but they've done that because of a supportive global macro backdrop. the historic high yield curve. but the problem is they're in the top 10% of worst valuations ever. so we're looking for signs of price deterioration to possibly reduce or altogether eliminate our repositions. >> okay. good stuff. we'll watch that. michael, over to you. what are you looking at for tomorrow? >> first thing i'm watching is the b.o.j. confirmation hearings over in japan. over the past couple of nights one of the candidates, deputy governor candidate iwata, has run into some opposition from the main opposition party there. i'm looking for that to get
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resolved so the bank of japan can get to work propping up that economy. second thing i'm watching are those february advance retail sales here in the u.s. u.s. retail has been a big growth engine. we need for that to continue. finally i'm watching jens widman of the bundes bank speaking in cologne tomorrow. >> he can say something in terms of the european story? >> he's one of the smartest guys in germany and all eyes are on germany with elections coming up in september. they're going tonight guys that save europe. >> we appreciate your time. up next, why activist investors should be picking their spots and sometimes they just pick the wrong ones. back in a moment. on their 401(k) to hidden fees. is that what you're looking for, like a hidden fee in your giant mom bag? maybe i have them... oh that's right i don't because i rolled my account over to e-trade where... woah. okay... they don't have hidden fees... hey fern. the junk drawer? why would they... is that my gerbil? you said he moved to a tiny farm. that's it, i'm running away. no, no you can't come! [ male announcer ] e-trade. less for us. more for you.
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