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tv   Closing Bell With Maria Bartiromo  CNBC  November 8, 2013 4:00pm-5:01pm EST

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and nothing to stop it. >> thanks, warren. we are finishing very strong. we will be in record territory for the dow industrials. we didn't see that coming 15 minutes ago. it's been just in the last few minutes. stay tuned. one of our guest says a correction is exactly what this market needs. that's coming up on the second hour of the "closing bell" with maria. have a good weekend. >> 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. stocks soaring as the dow closes at another all-time high. momentum picked up in the final few minutes of trading. dow jones up 167 points tonight in unchartered territory of 15,761 and change. an all-time closing high for the blue chip. nasdaq up 61 points, big day on top of the drubbing it took yesterday. up almost 1.60%, 3919.
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and s&p up 1770. money moving into equities in a big way. bob pisani, today's jobs report putting the taper talk back on the front burner and yet we still have a rally in stocks. >> that's right. where we saw damage was in interest rate sensitive stock, the ten-year moving slowly toward 2.8%. take a look at interest rate sensitive groups. we had damage earlier in the week. i'm going to put up the whole we'll, reits, emerging markets, housing, telecom, utilities, all down today. s&p 500, worst day in two months yesterday. look here. that's a perfect "u," a two-day chart. doesn't get been than that. the important thing about today, is the beaten up groups today, the biotechnology stocks, some of the oil stocks, the xop, the airline stocks, and the momentum names like zillow and netflix,
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baent up earlier in the week. financials, higher rates, increases chance banks could charge more for loans, they move to the upside. twitter, slam bang open yesterday but drifted lower going into the close. right off the lows of the day, $41.60. yesterday, opening at $45.10. for the week, the dow was up, but look here. the nasdaq, s&p midcap. the source of a lot of momentum names. transports and midcaps were down despite the improvement we saw today. this was the greatest number of ipos in a week we have had in six years. some big names next week. extended stay america, which owns branded hotels in north america, houghton mifflin, and chegg, and zulily, online children's apparel, a report on all of them.
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have a good weekend. >> you, too. joining us is stephanie link from the street, rich peterson, john manly from wells fargo funds and greg itt from "the economist." characterize the jobs report for us. how did you see it? >> positive number, maria. the street was looking for 125,000. we got over 200,000. that was in spite of the fact we probably had negative effect from the shutdown. bottom line, if we hadn't had shutdown, i'd think the number would have been even stronger. more encouraging with revisions to august and september, where there was no shutdown effect, we now have august with employment of around 240,000. just think about it. if that's what the fed had thought august really was when they went into that september meeting, they might have already tapered by now. >> so, i guess if this jobs report continues and we see this kind of healthy job creation next month, does the taper happen sooner than later?
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>> i think they do it as soon as they can do it without any impact on the economy. they want the economy to have a head of steam. they're just trying to stop money. let the markets guide you. >> what about earnings, fundamental story, rich peterson. >> up 5 .6% for the third quarter. >> that's much better than we thought. >> we started out 3%. best quarter of the year. revenue at 4%, sounds mediocre -- >> that's even better. >> going back to jobs number, there's a big asterisk here. a lot of the jobs are low-paying jobs in retail, hospitality. you had the fact that the -- many of the government furloughed workers were still getting paid, on the payroll they're counted as employed. the fact is also, you know, with the participation rate falling, falling, falling, so the numbers are -- on unemployment rate look very jaunted by the participation rate is going down. great numbers today by the s&p.
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what thursday taketh, friday come back. >> no kidding. dow at all-time high. stephanie link, what about that, talking about unchartered territory for this market, would you put new money to work? >> i think what's interesting is you're seeing a rotation. it's not just the job numbers today and revisions everybody talked about. wages are up a tenth, and two ism reports better than expected, backlogs and employment data and new reports within the ism that were stronger than expected. you had good -- pretty good gdp. a lot was inventory, but still good. goo auto sales. this is leaning to the ten-year moving higher and that means you rotate. you rotate away from some defensive stocks like the utilities and some of the staple stocks and you actually put it back into what the companies -- what sectors will benefit from a higher yield curve.
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that's financials for sure. that's where you want to put more money to work. industrials, those two sectors are the most highly correlated to higher interest rates. those are the two areas you want to be invested in. we may not see a higher market, but i think you'll see this rotation. that's pretty powerful. >> the rotation, are you also rotating money right now? how do you do it? >> we don't want to own financials because of regulation. we own technology. >> so, financials, regulatory -- >> i worry about it. >> it's going to keep on -- >> i don't know. >> that's why the valuations are where they are. look at some insurance stocks. trading at 0.7, 0.8 trangible book value. that's way below the 1.5, 2 times these stocks have historically traded at. you get a bank like jpmorgan trading 17% discount to its peers, it typically trades at 5% people premium. >> let's face, it the corporate sector right now is probably in the best shape it's been in in a
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long time. trillions of dollars of cash on balance sheets. we've yet to see the corporates move that money in the form of new job creation, in the form of new investment. is now the time? does that start opening up? >> the question is much of that money is overseas. until congress takes action to allow repatriation, those funds will be overseas. >> no one wants to become montgomery ward, no one wants to get left on the side. when the train pulls out of the station, they'll all do it at once. it's not a long time away. >> too much cash for too long, could be a negative 37 then the angt vis activist investors coming around. greg, what is going to be the next catalyst you'll be looking for to get confirmation, in fact, the economic data has improved. what's your most important red flag? >> two things. i think the november jobs report becomes very important to see whether once we get past the
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shoun period, signs and strength we saw in october continue. the other thing is next thursday, jal januanet yell ln r confirmation hearing. we'll get signals on how strong she thinks the economy is and what steps she thinks the fed needs to take to keep that strength going. we'll have a better idea a week from now whether it's qe infinity or whether the taper begins sooner rather than later. >> in terms of the taper, have you changed your expectations? >> i think it's a later development than sooner. we don't know what happens with the budget rules in january, once the resolution, so when that occurs, the fed may wait until first quarter of 2014. >> stephanie, real quick, what are the catalysts? what are you looking at in terms of big market moves? >> cisco is next went. it's important for cisco and also important because they give you a lot of data on the global economies because they reach a lot of different places. and then big retail, nordstrom,
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walmart, macy's. >> talk about a surprise, how about jcpenney, surprised everybody. nice move in the stock the last two weeks. it retail performing better then, in your view? expectations are low? >> those stocks have been laggards within the consumer sector. but i do think that they're getting traffic in the store. cosco, 6% comp, 4% traffic. peep want to go in there. if you offer them discounts -- i'm not talking about profitability. i think they are luring them in, for sure. and with oil prices lower, there's a little more money to be spent. >> also the fact you have a short calendar. 45 days until christmas. if retailers aren't discounting -- >> 45 days until christmas. >> i got the numbers. >> maria, i was going to point
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out one of the strong spots in retail was 45,000 jobs created. the fact that retailers are in a confident enough mood to be adding to their payrolls at this time of the year suggests we might have a pretty good christmas period. >> i like what you're saying, all of you. thanks very much. have a great weekend. we'll see you soon. >> thanks marks rhea. >> much more ahead on this busy edition of the "closing bell." with the dow at an all-time high, are we headed for a pull back? would a correction actually be healthy in the long run? seema mody is here to lay out the correction. and stick around for our krkz debate. blackberry's new ceo will get $85 million in stock awards if he can turn around the company. for at least five years. that's a lot of money but he has to earn it. is this is the new model for ceo pay. that's coming up. later on, should parents be buying tablets for their young children. tablet makers are targeting kids. we'll tackle the hot topic
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welcome back. the dow finishing the week at all-time high tonight. s&p 500 ending shy of all-time high. talk amongst so-called smart money is persisting on a
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correction for the market. seema mody on that story. >> hi, maria. with more stocks hitting 52-week high, experts say the market is due for consolidation or are a selloff of some sort. if we get one, which sectors will get hit the hardest. last three times the market posted 6% move to the downside were in may, august and september of this year. in may, the biggest losers were in the utility, financial and consumer staples space. the second major selloff was in august. once again, it was financials and consumer staples as well as telecom. the most recent selloff was from september 18th to october 9th when the dow lost roughly 1,000 points, financials, materials and consumer staples got hit the hardest. that's the consistent trend overth past three selloffs. consumer staple stocks have lagged but year to date it's one of the leading sec are tors. oppenheimer bets one of those sectors will lead this market higher which might tell us, if we get a selloff, it won't be the usual suspects that bring us
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down. >> seem mar >> seema, stick around. we want to bring in nicholas who says a correction will be good for the market but they says the big fall is not far off and will be messy. nick, you're expecting a correction and you think that's positive. why? >> yes. the bottom line is we've had a great run year to date, up 25%, 26%. nothing grows to the sky. ultimately there needs to be a correction to pull valuations back down to logical levels. we're particularly concerned about earning expectations next year, still being too high at 122, 123. more like $115 a share. stocks are fairly valued but a correction would really help us get in a better entry levels. >> so, you're just looking for a buy on the dip scenario, then. >> absolutely. underlying fundamentals for corporates are very high. record high margins. record high profits. those are the kind of numbers investors should want to be
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involved with. >> let's talk about the correction you're looking at because you think -- you said it's going to be messy. what does that mean? >> first of all, nothing grows to the sky but apparently money grows on qe. i use that as kijd nd of a joke. there has been deterioration all along in the last month, month and a half. jobs data was good, yields spiked. maybe we get back to the taper fear once again come first quarter. leadership has been narrowing. now we're only talking about large caps. emerging markets aren't participating still. small caps are weakening. they've done fairly poorly relative to the s&p the last few weeks. there's a bit of a bid in some defensive sectors. in terms of the msessiness, the over lying theme is you will continue to see consistent forms going forward. the trend has been smooth in an unusual way. it could be messy from the standpoint with traditional volatility which everybody thinks does not exist where the fed is backstopping the market. >> where is the froth in the
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market. seema, technology stocks you're covering at the nasdaq. there's been a lot of momentum names driving this market. where's the most froth in sectors or poised to fall? >> it was the sectors that started this rally in the early part of 2013. those defensiive sectors that ld this market higher. those are the names from the traders i talked to move higher and seem to be sectors investors think will move this market even higher. you look at utilities. that's another sector people are eyeing. some of the cyclical names in consumer staple place. these sectors that have a high dividend yield given we're looking at low interest rates right now. people want yield and that's where they're going. >> where do you see the froth in this market? >> i think it's unequivocally in small cap names and at relative ratio basis cl has been hard to get past into 2011 levels. i think you're talking about the most speculative areas of the
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stock market. we're seeing cracks in the storied stocks, tesla, high momentum names. small caps are breaking. large caps is the last place. a correction can be nasty when it comes. >> nick, what about you? despite expecting a correction you still think corporate profits are outstanding. how big of an impact will that have on the markets over the next year, the fact the corporate sector is in the best shape it's been in in years. >> that's a good point. corporates are doing very well. profits are high. cash is high. the worry i have is next round of debates in d.c. currently fcos are holding a lot of cash but they have to be their own bank. if the financial sector falls apart again, the unrest in d.c. going into budget and deficit debate will worry cfos we have to hoard a lot of cash. it will be be a very slow process to unwind that cash and get it invested back into the economy. >> maria, that continues to be an ongoing headwind market makers say will be the dysfunction in washington. will that be the factor that,
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perhaps, stops the s&p 500 from moving higher. >> yeah, it's a fantastic point, seema. let me ask you in terms of the correction you're expecting. how significant? >> i think can you go a good 10%, 15% in the first quarter. we've had a lot of delayed corrective junctures. the market is being overwhelmed by new cash, has kept going higher despite intermarket deterioration. i think at some point the fed is risking 1999-style bubble. they might have to taper the stock market's enthusiasm rather than taper the bond market. wealth effect is not filtering through to the economy yes. jobs data is exciting but may be revised lower. we may see continuation into the year higher as i and others have been negative. i'm patiently waiting for a correction. we may see it next year in the next three months. >> nick, how significant of a correction are you seeing? >> we're looking for 10% to 15% as well but we think there's another 5%, 8% upside in the market right now.
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our message to clients is lighten up into year-end rally. and be in a good position to k078 backed to names you like in the first quarter of next year when we get that pull back, which we feel strongly will happen. >> you're looking at the fact we've had a fantastic year in stocks. it's time to take a break and then get back in at better prices. are you also a buy on the dip guy? >> depends on how severe the dip is. i think the next real rotation will be ee meshlgi emerging mar. it's lagged all year. >> look what's going on in india, the infrastructure, brazil and doing policies to actually keep foreign capital out. look what's happening in the emerging markets. >> but we had the end of the world feeling, especially with india, and rajan comes in with central bank, sensex is higher. if we're tryly in a secular bull market for equities, the develops markets did well. you had extreme in japan, u.s. and europe.
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it only makes sense emerging markets are the next in line. >> we'll leave it there. appreciate your time tonight. we'll see you soon. $85 million in stock awards for the new blackberry ceo. but there's a catch, a big catch. debate on ceo pay packages. if blackberry set the model for what most companies should offer their top executive. later on, another hot button issue. should young children be allowed to have their own tablets like ipads? we'll weigh both sides of the controversial issue. i put in the hours and built a strong reputation in the industry. i set goals and worked hard to meet them. i've made my success happen. so when it comes to my investments, i'm supposed to just hand it over to a broker and back away? that's not gonna happen. avo: when you work with a schwab financial consultant, you'll get the guidance you need with the control you want. talk to us today.
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welcome back. breaking news on cvs. jerusalem yeah wi >> simon and schuster is withdrawing from all forms of the book "embassy house" recommending book seller do the same. simon and schuster saying the company is notifying accounts so they may return the book, which was written by an author under a pseudonym. that author was also the story for cbs news' "60 minutes." this comes after cbs news admitted an error about the u.s. attack on benghazi. laura logan says it was wrong to trust author dylan davies and we made a mistake. this raised questions about obama administration's response. >> the rest of the market doing well. green arrows making a comeback
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as we wrap up another good week for the bulls. dominic chu running through the big movers and shakers. >> let's start off with the winners for the week. gap, up about 12%. the apparel retail reported solid gains in sales for october and gave an upbeat outlook for third quarter. also a good week for microsoft as well. up about 6% to a 12-year high. the company said it narrowed down its search to five candidates to replace ceo steve ballmer. also negative report on earnings. tesla losing 15% of its value as quarterly earnings disappointed investors and a third model s car caught fire and caught a lot of investors' attention. the third time in six weeks here. the national highway transportation traffic safety administration just put out a statement saying they were in close contact with tesla and local authorities gathering information on that particular incident. and blackberry, of course, falling 15% as well.
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this on news it was no longer for sale at $9 a share. earlier today reuters reported that its board rejected proposals to break up the company despite interest from the likes of companies like microsoft and apple. back over to you. >> amazing. thank you, dom. we have more on blackberry. the company releasing interim ceo john chen's pay details. chen will receive a base salary of $1 million with bonus up to twice that amount and stock awards potentially worth some $85 million. there's one catch. the majority of those share awards will only kick in after chen completes five years with blackberry. the event chen is fired without cause, will he be paid up to $6 million. is this the pay-by-performance metric, the right model for ceo pay? joining me is john martini, who thinks this is a fair transaction while robert weisman from subcitizen disagrees.
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is this pay-for-performance model the right way to go? let's talk about that. robert. >> it's a good step forward and it's nice this is -- the value doesn't divest until you along time. there's just too much money on the table. we're seeing a constant pattern of ever-increasing ceo pay with no limit. you are generally seeing people get paid for bad performance, including the now departing ceo of blackberry. >> john? >> well, maria, i have to say, it's impossible for me or robert or anyone else to say whether this is an appropriate amount of pay. you know, i've said this time and time again. the people who can determine that best are the boards of directors, who know the particular situations that their companies face. in this case, blackberry's in a dire situation. everybody knows that. this individual is a turn-around specialist, a valuable commodity to this company and his price tag will be high because he's done it before, he's done it well.
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and it's an arm's length transaction. i think it's entirely appropriate. >> what about that, robert? who's to judge what kind of price should be paid here? the outsiders and not necessarily the board. >> well, i think we have a lot of experience with how boards look at this stuff. and it's always pay more. the consultants always say, pay more. it's an ever-escalating arms race that -- you know, we talked about a market correction. we need a market correction when it comes to ceo pay. they're getting too much. it's not just an issue for the company. not just an issue even for the shareholders. it's really a societal question going on here. there's too much wealth at the top. this is a big part of what's driving it. >> what about that? >> well, again, i just don't think that's the case. i don't think ceo pay is -- although like all ceo pay has gone up, it's probably gone up a little higher because they do have a little more power in the whole grand scheme of things. but in this case, and this is a
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classic example, where you really needed this particular guy. there are very few people who can do what john chen has already done. and he's a guy who has plenty of money. he probably needs this job like he needs a hole in the head, the lawsuits that are going to come out of this thing if there's bankruptcies, entanglements, the reputational risk. it's an awful lot. he took a reasonable package here. it's a lot of money, if he's successful. if he stays for five years and this company stays intact for five years, will he have been very successful and made a lot of people a lot of money. and he certainly should make money in that case. >> isn't that the truth, though, robert? you make a good point, john. robert, what about that? there is a catch here. >> that the company has to stay in business, yeah. >> that he has to stay for five years. >> the five-year piece is a -- there's no question, that's a good piece of this. it's different than what a lot of the other performance-based pay deals are. so, i think that's clearly a positive thing. it's just the scale of it. the guy does have a lot of money. what's the difference between
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$75 million and $40 million? >> well, i mean, that's for him to decide. but i do think that this is different than a lot of other company's pay-for-performance is amounting to today. most companies today have a more graduated scale of pay-for-performance. they're basically saying, you can receive a certain level of equity awards. that's going to be enhanced significantly if the company performs at a certain rate. here this is a company that needs to stay in business for a period of time. they need to get through some significant challenges. so the board correctly said, time is of the essence here. we need to keep getting through these challenges. if he stays for five years, that will have been success. every company's different. and this pay package is very different than most ceo's companies. and this board was in a good position to determine that. the government is not.
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the goth can do a lot of things well. determining pay is not. >> what kind of pay package would you have preferred? >> i think the long-term element is clearly a positive feature but it's too much money on the table. you can say the board just makes the decision but the board made the decision about the previous ceo and he's getting millions of dollars after the company failed. >> so, then, what's the point of the board if you don't have the decisions presented to the board to come up with a solution? why would you, an outsider, have better authority on this subject than the bothered of directors of blackberry? >> well, it's obviously the board's decision. that's not really anything at issue. what we're talking about is whether the board made a sdood gigs good decision or not. my point is they're paying too much. as an outsider i have a different view beyond just their contract negotiation, which is looking at social and societal impact of this and the
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ever-escalating race to higher ceo pay is having huge problems on our society. it's not the case, by the way, that everybody else's wages are going up. minimum wage isn't moving and average wage hasn't moved in 30 years inflation-adjusted. we have seen a rise in disparity between ceos and regular people. that's a big social problem. >> all right. you make a good point. john, final word. >> i just don't believe this is indicative -- in some cases you can point to that. i don't think this is indicative of a societal issue. and that's the -- every case has to be looked at its own. this is a very separate situation. i just don't see that here. >> we'll leave it here. gentlemen, thanks very much. appreciate your time on this. up next, the most powerful storm ever to make landfall in recorded history. hitting the philippines with deadly force. winds near 200 miles per hour and 30-foot waves, threatening millions. the latest developments. we'll take you there.
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meteorologist are calling the typhoon to slam philippines the worst storm ever. >> super typhoon haiyan is what
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it's called and stlongest storm on record. slammed into the philippines on friday. at least four people are dead. hundreds of thousands of people have been forced from their home. loss of power and communication have paralyzed many areas. experts warn the death toll could soar once aid workers reach the hardest hit areas. floodwaters were as high as ten neat feat in some area. the philippines have about 20 typhoons hit the nation every year. but experts are calling haiyan one of the strongest tropical cyclones on record with sustained winds of 195 miles per hour. gusts as strong as, listen to this, 235 miles per hour. relief workers say they are struggling to provide food with blocked roads with landslides and fallen trees. we're hearing estimates of $14 billion in damage. the storm is expected to move to vietnam next. a key location for clothing and
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apparel manufacturing. >> we to want size up the storm. paul walsh of the weather channel and joe of weather bell analytics. how does this storm stack up with other storms? >> well, as -- as was just reported, it looks like it could be one of the strongest on record. according to dr. jeff masters, our expert with the weather company. he suggests this could be the strongest one we've seen on record. doesn't mean the strongest ever but the strongest storm on record. it's quite a storm. >> joe, you say there are similarities to the 1935 labor day hurricane that struck the keys. how so? >> yeah. that's a more remarkable storm. let's remember this is 15 degrees north of the warmest body in the world, the southwest pacific basin. 1935 labor day hurricane where people actually survived and were in the storm. this was satellite estimates people were looking at here. we didn't have satellites back in 1935, at least not that i know of. people said the winds were over
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200 miles an hour. when they assessed the damage, a lot of people believed the winds were over 200 miles an hour. that's a storm, again, about 550 miles further north in the atlantic basin. this is a great storm. it's like arguing over who's the greater coach, vince lombardi or bill belichick. right at the top, no question about it but it's not like we haven't seen something like this before. >> when you say 200-mile-an-hour winds, i mean, compare that to hurricane sandy, which was like 80 miles, right? what was the -- >> well, sandy -- remember, sandy was a very large storm over a large area, so the amount of total energy in the storm, that's why we have power and impact scale at weather bell to account for the area of the storm also was pretty great. sandy was not in the same category as hurricane hazel in '54 which was a category 4 storm in october, hit the north carolina coast, or the 1944 hurricane up the eastern seaboard, 600-mile dye diameter
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of hurricane winds, or '38 which had wind gusts of 168 miles an hour, blue hill, massachusetts. can you see blue hill from boston. you can imagine how big those storms. >> wow. paul, i mean, what kind of an impact might a storm like this have on the u.s.? >> well, as joe noted, the kind of energy and the kind of storms we're seeing now in the philippines has happened here in the u.s. when it happened in the past, we weren't quite as built up. if we had a storm like this that hit in miami, that was not even this big, the impact could from an insured loss perspective could be really, really high. some estimates it could be greater than $125 billion in insured losses. there's a lot of risk on the east coast still. >> and the risk is on the east coast. what are the expectations for the east coast, then, in the u.s.? >> well -- >> i'll tell you the east coast and gulf coast as well -- go ahead, joe. >> like the warm cycle like the 1950s, they're ramped up. this was a remarkable year in
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the atlantic. i've never soon a warm cycle of the atlantic with such low tropical activity. a lot of dry air that's put a cap on global activity. it spread you into the atlantic and other factors involved. we're playing a dangerous game here. you take the 1947 hurricane that went into new orleans from the southeast, if you had katrina strength at the angle that hit, that would put new orleans under 15 to 20 feet of water, even with the new dikes. so, we're very concerned about the overall situation. but that's what nature does. if if you're going to live on the beach, there's going to be problems. >> when all is said and done, what is behind these superstorms? >> well, well -- i'm sorry. >> no. >> that's okay. yeah, i'd say, maria, part of it, these are naturally occurring storms. we see these periodically. it's hard to say exactly what's causing them. i wouldn't say that climate change is a directed contributor to these. that's something that's still being discussed.
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but one of the things that is -- that makes these storms for those along the east coast is the fact that sea levels are rising and even expected to continue to rise. >> sea level rise in the atlantic could be a product of the warm atlantic multidecadle isolation. we'll see what happens when we get out of it. when the asian continent began cooling pacific ramped up because there's hypercooling in the pacific when there's been a lack of activity through the years. >> gentlemen, we're going to jump. we'll be watching and watching your coverage. thanks much to you both. appreciate the time. stay with us. "closing bell" comes right back. making them work. we oversee 20% of the world's financial assets. and that gives us scale and insight no one else has. investment management combined with investment servicing.
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welcome back. if you build it, will they come? better yet, should they come? samsung will be the latest technology company to launch a new tablet for children on sunday. there's some controversy on whether kids should have their own tablets to begin with. josh lipton with the story. josh? >> yeah, maria, this holiday season a lot of kids might want their stockings stuffed with tablets. there are a lot of tablets now on the market for kids. they're fun, easy to use and parents use them as babysitters. samsung is the latest to jump into this hot market with their new galaxy tab 3 kids tablet. available in the u.s. this sunday at places like this best buy store i'm in. the specs, seven-inch display, eight gigabytes of storage,
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powered by android jellybean, the cost 229 bucks. why is samsung jumping into this market? they say the kids tablet market is big business. >> the total toy industry size is about $20 billion, and certainly electronics and entertainment properties are a growing percentage of that. i think it's viable to say this is about a $1 billion market in the u.s. >> kids are using mobile devices, including tablets, a lot more. in the last two years, the average amount of time children spend using mobile devices has tripled from five minutes a day to 15 minutes a day. that's according to commonsense media. but parents do have concerns about tablets. and pediatricians say they're justified. american academy of pediatrics discourages screen time for kids under 2. maria, pediatricians i spoke to say parents at the very least should have some sense of how much time their kids are spending in front of the screen.
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screen time should be limited, they tell me, to one to two hours per day. back to you. >> josh, thank you so much. so, it all boils down to one question -- should little kids have tablets? with us right now, jeff gardere, clinical psychologist, and tobet cline. good to see you. thanks for joining us. she's also the author of "how toddlers thrive:what parents can do for children's age 2 to 5 to plant the seeds of lifelong success." jeff, let me kick this off with you. you think having tablets at a young age allows self-empowerment? >> it does allow self-empowerment. this particular tablet will have a lot of educational programs on it. it's a good thing. we see even with kids with autism, they've been able to develop communication skills. however, that being said, i think there is some real issues with addiction to these devices. we're seeing at a younger and younger age.
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even though this can open up a world for a young child and help them with cognitive skills, it can also be a downfall, too, and get them into this addiction a little bit too early in their lives. >> are you saying, then, you need to manage this? you need to manage the time children are on the tablet? >> absolutely. and as we saw in the video that you showed, there was a parent sitting with a child. that's what i would prefer to see, that the parent play with the child instead of josh, as he said, using it as a babysitter. and that's a big, big problem. >> twhat do you think, those kis that have been exposed to tablets since birth are more disconnected with the real world as they grow up or is this a positive? >> i think it's a real concern we have to all be aware of, is that the issue is balance. this is the most rapid time of brain development. you're planting the seeds of later success for children. we have to be sure that the tablet is one more toy in the toy box and not their main mode of playing.
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because that's not how children develop at this age. they develop through interactions with people and the environment and figuring out the world. with all their senses. >> so, what's the answer then. should kids have tablets? >> they really -- at a young age, they certainly don't need them. so for young children they don't need them. for kids with special needs, there are great uses. for a typically developing child it's not needed for everything else they can dob with play, be outside, inside, interacting on their own terms and making their own decisions. >> i'll disagree with my colleague a little bit here and say, do i think children need them. this is a super fast world. information highway. this gives them an advantage. but i will agree with her that absolutely parents need to be involved. we have to be careful that children, especially those at risk with social issues, interaction issues, who are very shy, phobias and so on, you have to be careful with those kids and make sure it doesn't become the main form of communication for them with the world. >> so, what's the risk?
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>> the risk is if you're not -- the risk is, if you make this a babysitter and if you just give it to your child as a pacifier, that they're going to have issues academically later on because they're not going to be able to focus on their schoolwork. >> tovah? >> yes. also there's an emotional issue here that in those early years you're setting the foundation for emotion regulation. children being able to wait or not be satisfied all the time. there's a lot of information thrown at them from a tablet or an iphone. and, you know, the world is not made up of just getting satisfaction every moment. you really have to balance it as one more toy they have, but not -- certainly not their main mode and for parents to be cognizant of how much time they're using it. like jeff is saying, when. should not be a pacifier. that's a very, very slippery slope. >> yeah. >> that's a very good point. in cars, for example. >> yes. >> parents sometimes give the kids a tablet to keep them busy while driving in the car. >> sure. that's right.
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and i i think that's absolutely fine because it's a limited drive. you know what's going on. you know where they are with that tablet. but also you should limit the use. you pointed this out earlier. it should be no more than one hour a day, maybe two hours no a day, maybe two hours tops on a saturday or sunday. >> make sure they know there are barriers. >> absolutely. try taking one of these things away from a kid who has an issue with this, if they throw a temper tantrum then you know you have a problem. >> final comments? >> i would recommend less time than that, a day is not that long for a child who is two or three or four. and we don't have any evidence of what the long term effects of technology versus being in the real world is for children to learn how to problem solve and be creative. and empathic to people. >> we'll leave it there. thanks for your insights to you both. appreciate your time. have a good weekend. up next a new way to watch football, the latest craze to hit the internet. we'll tell you what it's about and highlight former college and
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pro football coach barry switzer getting in on the action and driving advertising dollars to boot. right here on closing bell. my customers can shop around. but it doesn't usually work that way with health care. with unitedhealthcare, i get information on quality rated doctors, treatment options and cost estimates, so we can make better health decisions. that's health in numbers. unitedhealthcare. how old is the oldest person you've known? we gave people a sticker and had them show us. we learned a lot of us have known someone who's lived well into their 90s. and that's a great thing. but even though we're living longer, one thing that hasn't changed much is the official retirement age. ♪ the question is how do you make sure you have the money you need to enjoy all of these years. ♪
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so call liberty mutual at... today. and if you switch, you could save up to $423. liberty mutual insurance. responsibility. what's your policy? welcome back. former college and pro football coach barry entities ore the forefront of the latest internet craze called second screening,
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he has the attention of advertisers as well, jane wells with the story. take it away, jane. >> maria, switszer may have figured out an ingenious way to cover college sports without having to leave his house. it's a second screen solution, you watch oklahoma play on tv and lose to bay ror, you listen to his commentary via web cast as he watches the game at his man cave called coach's cabana. coach's cabana did well enough last year that entities kper panned it to 14 schools, brought in more coaches, is starting to get advertisers, why watch on a second screen? if you love the sooners, you want his take. >> i'm talking about the game, what makes the game -- what they're trying to do, what they're trying to establish, what they're playing on defense, offense, what their philosophy is. i'll second guess calls down and distance situations, plus or minus territory, where they are on the field with certain situations. >> here's the thing.
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since coach's cabana never shows the games, they don't have to pay rights to ncaa. so you're watching it on another screen. he can use the web casts to entertain potential recruits without breaking rules. >> i'm not working for the university. they don't pay me, they didn't pay me much when i worked for them. you know what i mean. stoops makes $6 million, i made $24,000, i won 38 in a row and made $28,000 a year, i think i was short changed. >> i do, too. maria, if it works, and it is a work in progress, he's a genius, if it doesn't, it didn't cost that much. >> it sounds genius, really. thanks so much, jane wells. still to come, money and medicine, one of my favorite topics, if you can know your health future, would you want to know it, wait until you hear what one company is doing with genetic testing and how that could change health care as we know it. back in a moment. that posting your travel plans online may attract burglars? [woman] off to hawaii! what if you didn't know that as the price of gold rises, so should the coverage on your jewelry? [prospector] ahh!
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make it happen with the all-new fidelity active trader pro. it's one more innovative reason serious investors are choosing fidelity. get 200 free trades when you open an account. and finally tonight, probably one of my favorite subjects marriage of health care and technology. the wife of google co-founder sergei bryn wants your saliva, really your dna. and genetic testing startup, 23 and me, collects dma from saliva samples from a consumer test that could predict your medical future. from the possibility of contracting a disease to the
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chance of living to 100. i talked to her this weekend on my weekend program, on the money. >> you spit in the tube. you send it back to us, we extract the dna out of that. then we look at a million data points in your dna and tell you a ton of information about your health and also about your ancest ree. we started this company, because we wanted to empower people to get access to valuable information about themselves and have a roadmap for how they could be as healthy as possible. so we focus on preventive care. i might tell you for instance you are high risk for having a blood clot. you probably travel a lot. so if you're high risk for a blood clot you might be able to justify being in business class or saying, i'm going to take aspirin before i'm on the flight. or being aware and communicating with your physician saying, i have this risk. >> you founded the company in 2007. you secured more than $100 million in four rounds of funding? >> correct. >> and one of your first investors was your husband, google co-founder sergei bryn.
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you have announced a separation, how involved is he in the company today. >> he is super supportive. we're great friends. and he's super supportive of everything we're doing. >> such an interesting story, for more, watch this weekend on the money, check your local listings for time and channel, that's on the money this weekend and it repeats on cnbc sunday night 7:30 p.m. have a great weekend, everybody. that does it for closing bell tonight, fast money begins right now. ♪ ♪ i want to know what the koala says. i'm sitting in for melissa lee. hi everybody our traders tonight are steve grasso, brian kelly, guy adami. great to have you with us.

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