tv Street Signs CNBC December 17, 2013 2:00pm-3:01pm EST
or nine trading days left, if that, i can't even count anymore, you would want to be sticking your neck out either way at this point. interesting series this week. biggest business stories of the year, today blackberry, yesterday best buy, tune in tomorrow we'll tell you what the third biggest one is. that will do it for this edition of "power lunch." >> have a great afternoon, everybody. "street signs" begins right now. will home prices remain hot next year? a question everybody wants an answer to. and we have got it. hi, everybody. welcome to "street signs" on a snowy tuesday. your other hot topics this hour, has microsoft done something that almost nobody can believe? the sad story of the growing group of permanently temporary workers. you might lol, one automaker is doing to make you its bff. >> hello, everybody. the major indices only slightly
in the red today. if it weren't for visa's gain the dow would be down over 40 points and more. santa and his rally better hurry up, and we're seeing the major indices are on track for the first down month since august. though it's been a great year, so far this month has not been that great. >> well, listen, you may not care about stocks, we get it, not everybody owns them, but you probably do care about the value of your house. and most likely this year was a good one for you on that front. what about next year? the value of your home be going up or down? we have a housing hat trick to cover all of your bases. kick it off with diana olick and a huge boost to home builder confidence today, diana. >> that's right. a big jump after a three-month slide. confidence among the nation's home builders jumped a stronger than expected 4 points on the nahb monthly sentiment index. citing pent up demand from the stall during the government shutdown but others are saying
fast rising home prices brought more than 700,000 homeowners back in the black on their mortgages in the third quarter of this year according to core logic. that boost in value is giving homeowners confidence and that confidence is turning into big gains in home remodeling. residential architecture billings hit their highest level in seven years according to the american institute for architects. additions, kitchen and baths, all back in business. it's not that folks are spending their home equity. in fact, more than ever, they are paying all cash. but that home equity is giving them the confidence in their home's value to go back and invest in it. remodeling permits are up 7% year to date from build facts. the remodeling jobs, however, are still mid to low level. during the boom between 2004 and 2007, we saw the high-end renovations but today it's general upgrades and fixing things that are broken. i spoke to an architect in the d.c. area and he says a lot is being driven by homeowners who wanted to move up but couldn't find anything to buy. there is, of course, lots more
on-line, realtycheck.cnbc.com. >> diana said it, remodeling and renovations are at the heart of it. which stocks are ben fitting from this boom? dominic chu has been digging on that over there at the wall. >> most of us being a hobuying home is the biggest purchase we're going to make. not easy to scrape up the money for the down payment and making the principal and interest payments. that's why home improvement is a place for investors to look. feeling more confident about your job but not enough to buy baring house fix up your existing one. that is helping to power some names in the business that aren't necessarily big ones like home depot or lowe's. take wood flooring company lumber liquidators, up 80% in 2013 and retailer restoration hardware, to get your stocking stuffers as well this year, up around 90% and discount home furnishings and housewarer tuesday morning up a whopping 140 some percent. for the experts think the
opportunities are, barclay's home builder analyst steven kim puts mohawk industries as his top pick for 2014. he says the it has the dominant market position in that business and strong global presence. they do all kinds of flooring, ceramic, tile, carpet. rates stanley black and decker underweight citing the industrial and security units that company. overall these names are big, but some investing opportunities lie not just in home depot or lowe'sp. back to you. >> great did you have as always. more of these ideas right now because let's round out our housing hat trick. investors feeling more confident and pimco putting out a note making some very bullish housing bets in the new year. joining us the man who wrote that mark keisel. a pleasure. thank you for coming on. in your note you do note that there are ways to play the housing optimism that are not just buying homes. you have rented you note over half your life in southern california. you talk about lumber and other
select investments. how are you playing the housing recovery you continue to see? >> we like select home builders because they have pricing power. look at companies like toll and kb homes and horton raising prices 10 to 15%. we like building materials companies because we think that the remodel cycle is going to kick in and grow at 8 to 10% over the next two years. we like appliance manufacturers like whirlpool and lumber companies like warehouser. >> what about building products? >> building products are exciting and the reason is that you're benefiting from a remodel and also new construction. so the way to play that is through usg and also through massco. >> what would you avoid? >> well, what we would avoid right now would be first-time home builders. there definitely is a lack of credit availability and household formation has been relatively depressed. and sos basically you want to favor the higher end home
builders like toll as well as areas that see significant job growth like horton in texas and north dakota. >> sounds like you're ignoring some of the other high flying home builders then? >> we're being selective and in general you want to focus on those areas that are land constrained. the classic saying is that where you want to buy, there's limited supply and so if you focus on where the job growth is in the cities like toll brothers and also in southern california, kb homes, that's really the premier land locations roo it no. >> i'm glad you said the "s" word, supply is something we have not talked about nearly enough. when interest rates rose a little bit and signs of bumminess in housing all the negatives came out. the reality is you look at a town like seattle, one month of inventory on the market, you note a 14-year absolute low for homes that are for sale right now. >> yeah. if you look at the numbers, you got 2.1 million existing. you've got less than 200,000 new. if you look at a 30-year chart
of the inventory as a percentage of the working age population it's at 30-year lows. those home builders that have land in those areas with job growth, should benefit. >> what do you think is going to happen to house prices? house prices in the united states are up about 22% over the past 18 months, but still down about 21% from the peak back in 2006. what will 2014 bring us, mark? >> well, we're calling for basically mid single digitses. call it 5% in 2014. we have seen very strong price appreciation and we think that will cause demand to curtail off a little bit. >> maybe that's healthy, instead of having continued double digit price gains which might start making people think we're in a bubble again. >> that's right. this is a market that can withstand modestly higher interest rates as well as we continue to see job creation, we're creating 2.3 million private sector jobs a year, as long as that job growth stays healthy, this market can handle
modestly higher interest rates so despite even say a 10% or excuse me a 3% ten-year know, housing can still rise 5% next year even with modestly higher rates. >> i'm glad you said that. very few people are and i agree with you, buddy. thank you for coming on. >> thank you. >> mark likes massco, toll brothers, warehouser and others. um next, the dow is down in december. change that. when is the santa claus rally going to happen. get to work. the four ways a taper is like the taper. >> and later on, you will never ever guess what might be this year's hottest tech toy. certainly has all of us on "street signs" krachg our heads. and why the banana trade may soon go we're going to say it, apologies, bananas, all ahead when "street signs" returns. the american dream is of a better future,
just 24 hours time at this exact moment tomorrow, well, 11 minutes earlier we'll know if the fed has decided to cut back on its bond buying spree that has become known as the taper. before there was the taper, there existed a cute taper. it's a large herb ba vor. scientists announced they have found a new species of said taper said to be the biggest discovery of the 21st century.
they need to find new discoveries. that did get us thinking what do the taper and a taper have in common? take a look. >> reporter: for reasons you need to know the difference between the taper and the taper. reason four, when this guy says -- >> well i actually am looking forward to the taper. >> it's not this cuddly fur face he's excited about seeing it's this one. reason three. when he says -- >> if there's a true taper there better be a true taper. >> reporter: behold the true taper. no matter how large his appetite for greens, he's always a true taper. ben's taper not so much. particularly if he doesn't seriously curb his appetite printing greenbacks. reason two. when you hear him say -- >> i think what's in play now is the size of the taper. >> reporter: he means, size matters. and while a ma lay yan taper can
way weigh up to 800 pounds we have no idea how much this heavyweight weighs or more importantly how much he'll pull back on his enormous bond buying. reason one. when this gentleman asks. >> is the economy strong enough to sustain a taper? >> reporter: we know the economy can probably handle this taper. but we have no idea if it will sink or swim under his taper. >> let's bring in steve liesman. i know it's all a little fun but we have to find new and exciting ways to talk about all the things that are going to be happening this week and i bet the taper never expected to be so famous, right? >> i isn't think so. and what we should have done is polled our people on the tapir, not the taper, i am going to be talking about the other taper, his taper, bernanke's taper and show you what the results are from our cnbc/ fed survey and what's happening. we are talking about tap-a-p-e-
starting here, looking for a taper in april next year, now looking for a taper in february is the average amount and even 55% are saying it's by january of this year. how about stopping qe, that's not changed. pretty much the end of 2014 and hiking rates. they've moved back or closer to the taper, but not changed when they think qe will stop or when the funds rate will be hiked. and part of that is the economic outlook of this group and you can see here, pretty consistent. this is the forecast through each of our surveys here for 2013 in the blue line and 2014 in the green line. they've been very consistent about there being 2.6% this year and it being an acceleration of more than a half a point for next year. they were optimistic over here for 2013 but that came down and they've been pretty consistent in this 2% range. still looking for the 0.4% increase next year in gdp. another reason, they're a little more opt mystic on holiday
spending. see if we can do that chart. first look at the economic impact of the health care act and what you see here is near term and long term our group of 42 economists and strategists think the impact will be lower growth, primarily through higher health care costs and lower employment. no effect, very few people think the effect will be stronger. we asked both near term and medium term and the answers were very much the same. take a look at holiday spending. they're a little more optimistic on the christmas season than in october. we asked will it be better, the same or worse than last year? in october only 31% said better, now 51% looking for a better christmas than last year. fewer think it's going to be the same and the same think it's going to be worse at 31% or about a third. so mandy, looking for better growth next year, looking for an earlier taper and, of course, a little bit better holiday spending. to you now. >> thank you very much, steve liesman. let's move on and see what markets are up to. all three indices have gained over 20% this year, the real medal does go to the nasdaq, up
about 33% this year. the symbol has brought a slight but needed chill to the festivities with all down about 1%. will we see a santa rally or will the grinch steal all the market cheer? bring in michael farr and joining us here, five-star fund manager bill smeeds. i'm going to get you because you're sitting next to me. do you think we'll see a rally into the end of the year or does all that depend on whether ben bernanke will don that santa claus hat? >> the history of the last two weeks of the year are pretty positive. this is a positive year in you're holding a winning stock and you sell it before the end of the year you have to pay the tax on it next april 15th. if you hold it into january you won't. a natural bias toward holding winners and then there's a natural bias towards selling losers. there just aren't that many stocks that haven't participated this year. >> do the events of tomorrow, the fomc meeting could that skew on what history has told us? >> it could.
there's froth in the market. a lot of excitement over a concept stocks and at least this year, small and nasdaq have won compared to more conservative approaches and, therefore, you're always at the risk of a dynamic change in the short run if psychology. >> michael, we're going to lay out our predictions this week for next year. stocks are probably going to do 3 to 5% gains for the dow, don't find a lot of reasons to be excited. do you? >> yeah. i -- it's hard for me to tell you why i feel positive, brian. i should apologize to my friends in new york and the northeast because yes, it really is like this behind me outside today. >> you're done. >> in naples, florida. just got to 80. i'm sorry. it's -- and listening to that mandy say bananas and everything gets better from there. i think there's been so much cash, brian, on the sidelines, so much liquidity. we haven't had any real velocity of money and once the fed's
program comes into i guess clarity, yeah, i think the market could continue to rally. i can't imagine 20%, but i could see 10%, maybe a skooch better. >> we have to give you an opportunity to counter that. >> well, and i would agree with brip's point. main street success would be what would cause his prediction to be right. in other words, the -- if, in fact, housing makes a comeback, if, in fact, millennials emerge and form households and buy houses, what will happen is the capital begins to get demanded by the real economy and the history is that begins to draw money away from common stocks as to be used -- >> my view is going to be -- again, advance look is $310 billion in buybacks or dividend paid out, buybacks record high, you're not going to be able to continue to see that pace. corporations don't have the cash, i don't think, to do that. >> howard would argue the payout
ratio is still historically low. the average of the last 20 years is 46 % and we're maybe 33% now. and our companies that have a lot of cash, generally high levels of free cash flow and i love estimates what their dividends should be. >> a flat market for six months. go ahead. >> i'm sorry, but i think, too, if you look at interest rates going a little bit higher and bond prices falling more, i think that's a very unattractive category. as he says payout ratios are not quite historically high so i think that continues to fuel money into the stock market, continues to support those prices. we haven't had a correction for two years, so i keep looking over my shoulder where it's very warm and sunny and -- but, you know, looking over my shoulder i keep waiting for one but i don't think a correction is the worse thing in the world either. i think there's still a lot of good things in place for a slow, steady up. >> michael and i are from the same era and it looks a lot like
the middle of '83 to the middle of '84 which would make brian right, michael right. what you wanted to do the correction of '83/ '84 buy the thing you wanted to own for the next 10, 15 years. are we going to worry about 10% correction when you could be building wealth for ten years. >> flat market for six months and a rally in the fall of 2014. bill and also michael, thank you very much for joining us. >> and be sure to catch live coverage of that fed decision right here on "street signs." it will take place 2:00 p.m. eastern time tomorrow. it will be followed by fed chairman ben bernanke's final news conference as the fed chairman -- it's going to be a huge day. we've talked about it a lot. the fed will do something tomorrow. could be the day. we'll find out. has microsoft really done something that probably nobody would have ever thought they could do. >> plus, ford has a bad case of fomo. the new approach to the good old american brand. looking at covered call strategies to generate income?
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participant exactly how this meeting went down today here at the white house. the meeting has broken up. we saw some pictures at the top of the president and the technology ceos getting ready for the meeting. we saw the ceos coming out. it was a very unusual session, though, about two hours and 45 minutes all told and here's what i can tell you from a meeting participant. the meeting about the first 45 minutes of this session was focussed on healthcare.gov and government i.t. problems. the president and then the vice president arrived after that discussion and then they spent the next two hours with the ceos discussing the nsa, the prism program, and issues like that. they also talked about bulk collection of information, the electronic communications privacy act, fisa court reform and some of the broad proposals for change that ceos have released. the participants we're told from this meeting participant made the cases to the president for transparency during the meeting and we also know that the ceos
have released a statement to the media about what happened today. here is the statement. they say ins essence they're grateful for the opportunity to have the meeting but they would like the president to take leadership on this issue so clearly, guys, we're getting a sense here of what happened, the ceos were pressing the president for change here in the way the intelligence community deals with the nation's technology companies. >> all right. eamon javers at the white house, thank you, buddy. appreciate it. good news whole foods ceo telling cramer that something that should make their store fans very happy. >> and later in the show, what james bond, huge bling, and baseball -- a baseball all star all have in common. the must-see video of the day that will have you hanging out in public. [ male announcer ] the new new york is open.
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street talk time. we hit the stories and some of the investment recommendations we've dug up and thought you might need to know about. hess has been added to the list at bank of america. >> yeah. called the u.s. one list, like their select buy. we really like this stock list. the rating remains a buy. target at $115 but note, folks, that target price is 43% above he's current price. the stock up 50% this year. the company evolving in part because of activist pressure, sold off things, changed management. hess has been a stellar stock and bank of america thinks it's going to continue. >> adobe which is lower despite an upgrade to a buy. >> the stock has been hot so i guess you can't blame people from pulling back, down 1%, right. either way sees good revenue and margin growth to the software to service platform but note again, the target, $71. 22% above the current price. the stock already up more than
50% year to date. >> wasn't it on the biggest loser on the s&p around the same time. >> worst last week and best yesterday. roller coaster stock. >> hewlett-packard, upgraded to overweight from neutral at jpmorgan. >> helping again, hot stock stays hot. i did find this to be an odd call given the year that hpq has had. they're placing a december 2014 price target of $35 at hpq, another 27% upside. they've come out, citi said this the other day and think pc markets and sales are bottoming out. we've heard that now from citi. i know. >> and wasn't it only like maybe a year ago we did a segment called, is the death of the pc upon us? >> i got to tell you, we'll move on to the next stop. i bought a laptop, i had a tablet with an attachable keyboard. i've gone back to a laptop because the ipad great for getting information, it's not great for creating information so i wonder if they're right or maybe i'm just an idiot.
>> don't look at me like that, give me that look. >> irobot is -- apparently -- getting an upgrade to a strong buy from market perform. >> we talked about the stock the other way. the rum ba maker, people like you have that don't want to do housework. that was for the last look you gave me, for what you said. raymond james upgrade it. target price $39. also upgraded yesterday. the ceo colin angle will be on "fast money" that was for the look you laughed when i called myself an i idiot. >> benz trading lower after eight initiations. >> poor benz down. luxury good retailer. fashionista stuff. all the initiations after the ipo. the stock only up about a buck from its ipo. that is not great. half the analysts out there, i'm going to summarize because we're running out of time, half say it's a good stock, buy it, half have a hold on it.
wall street has given vince, pretty cool looking kind of a big -- >> yeah. >> all right. this one is a real head scratcher and we mean this with all due respect to microsoft. most reports have their surface tablet not selling real well, right? however yesterday, we checked and on their website all four versions of these surface 2 tablet are sold out. let us bring in josh lipton. josh, two ways to approach this story and mandy and i were sort of talking about these angles today. one they made five of them because they didn't think they were going to sell them and it looks good but it's not. b, one and b, they're really selling hot. which one is it? >> yeah, brian, so if you want those new versions of the surface tablet, it could be tough to find. if you go to microsoft web store you'll see versions of surface 2 sold out and it looks like about three of the four versions of the surface pro 2 have sold out. i was talking to rick sherlin, the well-known analyst, he was
saying that he actually a few weeks ago hit the stores in new york city, looking to buy a tablet, but they weren't available, couldn't find one. same time rick said, of course, it doesn't seem to be crowds clamorsing for a tablet. i did call microsoft and spoke to the company to get their take. they said it's a demand story. demand has been better than probably expected. also, they said they did not make as many of these tablets, right. that kind of maybes sense. microsoft certainly doesn't want a repeat of what happened a couple quarters ago. you remember microsoft took that nearly $1 billion charge to write down the value of unsold tablets, so certainly wants to avoid that kind of bloated inventory again, guys. >> controlled supply, creating a lot of demand. thank you very much for joining us, josh lipton. >> whole foods opening its first store in brooklyn this morning. think the company can't grow anymore? take a listen to what one of the coceos told jim cramer on "squawk on the street" this
morning. >> are there that many opportunities left in the country? >> probably more than 1,000. the market continues to grow and i think we're thinking internally we could do maybe 1200 stores in the united states at this point. >> yeah. >> because the world is continuing to change. >> so will this strategy pay off? richard ross joins us on the charts and andy bush, publisher of the bush update on the fundamentals. rich you and the charts, how does wfm stack up techniciallyt >> the chart is an outstanding technical position. start with that long-term chart to give us a little perspective. since the bottom in 2008, this stock is up over 1700%. look at that well defined trend line we've been tracking many years here and that 150-week moving average. when we zoom into the shorter term chart you're going to see why whole foods is a high conviction technical setup here. we did have that gap down shares about 15% off recent highs but
what i love is the bullish base of support, swais consolidation for the past month. right on the 150-day moving average. a high conviction setup on the long side. i think we break above resistance at 58. we close that gap and retest that high around $65 and move higher from there. this stock is a buy right in here, brian. >> you say it's a buy but fundamentally andy, a situation where whole foods is targeting areas which may be historically consumers would not be willing to pay for the organic specialty foods. is this a smart strategy for them? >> i think it is. they're trying to reflect change in consumer demand and taste. obviously going towards more organic, more, you know, really higher end better food. that's the best way of putting it. the problem with whole foods is that they missed, right? their same-store sales were lower than expected so they can open a lot of new stores but if they're missing on the same-store sales then that's the problem and that's what happened in november when they had their
conference call and released their numbers. that's why the stock dropped. the question is moving forward what cap they do? i think they've got the right strategy because yes, people want better food. i mean whether it's in the united states or china, that certainly is the case. so i think longer term, this is going to work for them. but they got to keep their same-store sales up without hurting their brands overall. on a note what i think is interesting is that out of 28 analysts who cover this company, 14 have holds on it, 14 have buys, no one is overweight. so to rich's point, yeah, i mean i think when you look at stuff like that, that's good because people are on the fence on it. if they execute properly the stock will go higher. >> good point. talking of higher up over 900% over the past five years. in a very successful stock. thank you, andy. catch "mad money" tonight because jim cramer will have more with the co-ceos of whole foods 6:00 and 11:00 eastern. >> i know jim is a fervent watcher of this show so i hope
he's listening because i have an important question i want him to ask both of these co-ceos. is it true from what i've heard you have to wear skinny jeans, a flannel shirt and black rimmed glasses to get into that whole foods in brooklyn? >> do you mean do you have to be a hipster? >> lack of shop lifting, can't fit anything in the pantses. >> you got the hipster beard. >> the one bag thing. still ahead on this fine show the high price of cheap goods. serious story. charges that some of the biggest retailers are saving money by using cheap, undocumented and oftentimes almost abused workers. >> plus, oj is feeling the squeeze while banana prices could soon go bananas. first, bill an kelly, what is coming up on "closing bell"? >> we get to follow bananas. always talk about how the final hour of trading is the most important hour of the trading day. we now have the data to back that up. >> we're not just saying it. stick around because you'll want to hear about new info that proves buying stocks at the close is actually pretty profitable for your portfolio.
>> also facebook, a little indigestion going to give our users ad nauseam rolling out video advertising this week. >> big move. we'll look at whether that could end up backfiring and costing the company its users. all that and much more on the "closing bell." >> see you at the top of the hour. tdd#: 1-888-648-6021 there are trading opportunities tdd#: 1-888-648-6021 just waiting to be found. tdd#: 1-888-648-6021 at schwab, we're here to help tdd#: 1-888-648-6021 bring what inspires you tdd#: 1-888-648-6021 out there... in here. tdd#: 1-888-648-6021 out there, tdd#: 1-888-648-6021 there are stocks on the move. tdd#: 1-888-648-6021 in here, streetsmart edge has tdd#: 1-888-648-6021 chart pattern recognition tdd#: 1-888-648-6021 which shows you which ones are bullish or bearish. tdd#: 1-888-648-6021 now, earn 300 commission-free online trades. tdd#: 1-888-648-6021 call 1-888-648-6021 tdd#: 1-888-648-6021 or go to schwab.com/trading to learn how. tdd#: 1-888-648-6021 our trading specialists can tdd#: 1-888-648-6021 help you set up your platform. tdd#: 1-888-648-6021 because when your tools look the way you want tdd#: 1-888-648-6021 and work the way you think, you can trade at your best. tdd#: 1-888-648-6021 get it all with no trade minimum.
orange juice lovers are feeling the squeeze as oj prices continue to climb. orange juice up more than 18% over the past month alone. on fears of a smaller crop, brian. >> staying with fruits, banana prices could soon go bananas. a fungus attacking crops worldwide. true story. killing the variety of bananas which if you didn't know and i didn't one of the widely known in america that we eat. recently turned up in mozambique and jordan, the mun gus, could make its way to latin american which is the biggest banana exporter. we thought that story had peel. in light of the holidays, we've been talking where the people can get the best deals they're shopping but oftentimes cheap
goods come at a high price. joining us is the associate editor of vice media wrote a fascinating story called permanently temporary. the undocumented worker behind the holiday season's low prices. welcome. first off, what prompted you to pursue this story? a lots has been made about income inequality and labor unfairness. why did you go after this angle? >> this story has been covered in a few different venues before. so we partnered with pro publiclyka and a reporter named michael bell to pursue the story further and make a documentary about the lives of temporary workers in the industrial warehouses that supply our consumer goods, the things we buy at big box retailers. >> we are a nation obsessed with low prices. >> sure. >> even though we're cnbc whatever, anybody who has watched me or mandy for a while knows that we have highlighted for years that this country if you want to get wages up, at some point consumers, not the government, not the fed, not the president, not congress, not gop, not democrats, consumers
have to make a decision about what we want to do to support our neighbor and if means paying a little more we have to do it. >> yeah. in order to -- >> that's not really a question. >> that wasn't a question but it might be the right attitude. look at the industrial supply chain, the way our goods go from the places they're made to our homes, there's so many people involved with that process. the way that a lot of big box retailers have made things happen, depressed prices across the board such that the last person in that chain, the temporary worker, is essentially, you know, stolen from. their wages get stolen from. >> where is the system breaking down? we've got a statement from walmart in a moment but what was something that came out from us asking them for a statement they use a third party supplier to provide the workers, right? not actually walmart saying i'm going to use a temporary undocumented worker, they're using another party that sources the workers. to what degree are the big box retailers separated from the system? >> quite a bit. that's the entire -- the system in a sense is based on classic
capitalism. you want to get the lowest prices and be able to essentially outsource the work that you can't do in-house. >> do you think they're turning a blind eye? >> at this point there's been enough research out there they could, they should know this is happening. whether or not they can enforce something is another story, but walmart has a great amount of basically power amongst the supply chain. they can do things. when light bulbs and stuff like that -- >> we've been critical of walmart too, but let's be clear, i mean, this is not just walmart. walmart gets the attention because they're the largest like mcdonald's got most of the attention on the income inequality argument because they're the biggest. the biggest got the biggest target as well, speaking of target, other stores involved in this, not just a walmart issue. >> this affects every consumer good in our house. they have to go from a container to a warehouse, warehouseto a container. seems like it's a system that works without people, people run it. >> i'm going to -- sorry, kevin,
going to rant about something for a second. a lot of these stores, i'm blessed to have a good job, she got her ged at 23, go to these stores, why do you shop here? i have to my income has been cut. lost my job at the shoe factor. why did you lose your job? because the production moved to china. right? and now i have a job making 30% less on the overnight shift at the local motel. basically, some cases people are shopping at the stores that they have to shop at because they lost their job. that's the downward spiral of wages. >> one of the things i saw in talking with people a lot of workers can't afford the goods they're actually packing and unpacking supposedly supposed to be lows cost, low price or lowest priced. so what's happening is we're creating essentially an underclass of people who can't participate in the consumer economy we have so much faith in to sort of be the balllast of our american system. >> in a perfect world if we can ween ourselves off low prices everyone would benefit. a fascinating story and
everybody should go out and read it. thank you so much. >> thanks very much. >> by the way, as i was saying we did reach out to walmart and again, it's not just walmart, lots of big box retailers are in this situation but because walmart was mentioned in the article, they told us sometimes walmart uses third party suppliers for labor especially around the holiday season. however, we hold these companies to the same strict standards that we do for all of our suppliers. we make sure the workers are paid properly and have proper working conditions. if there is a particular case where it is not so, they should bring it to our attention immediately. >> still ahead on a lighter note. >> yeah. >> while some are lol'ing at one automakers so-called fear of fomo we might take ford to task a bit. >> and there is a viral video prank that was -- that really will make you think twice about talking on your phone in public. >> go ahead. >> yeah. >> yeah, yeah, it's great to get the free food. [ female announcer ] thanks for financing my first car.
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>> that was the most buzzed about video of the day. it's comedian greg benson and he's crashing loud cell phone conversations at the airport. i mean, i think you've done this, haven't you? someone talking loud next to you and you whistle in their ear. >> i do. when someone is on their phone loudly next ear. >> when someone is loud next to me, i swear to god, i'm -- they're like, can you stop whistling? i'm like stop talking on the phone. this is why people don't like me very much but i do it. >> what i don't understand is how people are just so happy about the whole world hearing their conversation. >> it's bizarre and it's one-sided. at least put it on speaker so we can participate. there's another trend of the whole noise when you get a text. you're sitting next to someone, they may not be on their phone talking, but every ten seconds, ding, ding, ding. it's like, you know what i mean? >> and some of them even have a little tune.
>> the bell tolls, you know, for thee, and the bell tolls for the phone because i might put it in the garbage. ford put out a report talking about 2013 consumer trends. it contained phrases like fomo, the fear of missing out. why would they do that? phil, is this ford's attention to be cool, omg? >> i don't know if it's an attempt to be cool. i saw the report. i listened in as they were going over the features of the forecast for trends they see impacting the auto industry. frankly, there was very little here that stood out and you said, wow, i can't believe that somebody came up with this. a lot of it is a lot of, yeah, we all kind of know that. when i discussed this with auto dealers and others in the auto industry, they all say the same thing, yeah we kind of know that already. i'm not sure the use of fomo or
jomo is a big deal. >> my parents would scratch their heads. >> what's jomo? >> joy of missing out, like put your car on do not disturb so it goes straight to voice mail or something. but that would never resonate with parents. that generation probably doesn't even know what it is. they're clearly trying to tap into youths. do you think youths care that much about cars these days? i think they're more excited about technology and gadgets as opposed to a new car. am i wrong there? >> that's what a lot of studies are showing. it's showing young people, maybe 20-somethings, aren't so interested in buying cars. they're not seeing them as status symbols they used to be and judging each other on the technology they own, wlits the iphone or flip phone, so on. so i think companies like ford and other automakers are really trying to show they're with it. and hip and cool and can use words like fomo and jomo and
incorporate it into their products. >> why doesn't ford just build better cars? >> they have good cars. they have the best looking lineup front to back -- >> my uncle worked there for decades. he was a total ford guy. i'm not bashing ford. when you can pay $30k for a beautiful mercedes clk, i would like that. >> you go back and look at the taurus before alan mulally, he said, let's bring that back. it was a dog. it wasn't just a dog. it was a dog with fleas. they have a refreshed lineup. that's why sales are up. jomo and fomo are great for talking about marketing. they are trying to use technology to reach younger buyers. at the end effort day, if you don't have a decent car or truck, you won't do well. that's why ford is doing well. they have better cars and trucks now.
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mega is under $636 million. lump sum would be $341 before taxes. the drawing is tonight at 11 p.m. the odds are 259 million. if you took the annuity, a guaranteed payout. >> if no one wins tonight, jackpot could go to $1 billion. first time ever. talking $1 billion, got a billionaire on your christmas list this year? i wish i did. robert frank is here for the top three gifts for the super rich. >> we start out, our super rich gift guide with a yacht. this is not just any yacht. the yacht used in "skyfall," 138 feet tall, grand dining room with piano, shower with daniel craig. can you charter it off the coast
of greece for $13,000 a day. a nek with $60 million from moad, luckry jewelry. a day with derek jooit jeter. christie's is auctioning off, you and friends have lunch with derek jeter and memorabilia and glove. between $110,000, proceeds going to charity. could be a tax write-off. >> do you get a gift basket? >> i don't know what you're talking about. my favorite is a bottle of whiskey. it's from louisville, kentucky, only making 273 bottles. this will cost you $4,000. i love this because growing up, i spent every christmas in louisville, kentucky, with my grandparents.
my aunt mary made the best bourbon balls in the world. >> what is that -- it's $4,000 for the bottle. how much per drink? >> more than i would ever -- >> it's per sip, so -- >> how many sips -- >> 25 ounces in 750 millimeters -- >> a man who knows his whisky bottles. >> if you were stingy on a shot, usually 1 1/2 jiggers, 1 1/2 ounces, so maybe 16 pours for that, so 4,000 divided by 16 is a lot more than i can calculate in my head. >> it was a rhetorical question but appreciate the effort to calculate. >> $250 a drink. there you go, cnbc math right there. >> you know the sign on the side of the bottle like, savor wisely -- >> $250 a drink. am i right? >> tune into this very fine show tomorrow. what do we have? the biggest fed day of the year, folks. >> we all might need a cocktail
tomorrow. tomorrow could be the day they pull back on bond buying program. we made light of if today but it's a big, big deal and ben bernanke's last as fed chairman. >> 2 p.m. make it a date. >> thanks for watching. >> welcome to the "closing bell" on a tuesday. i'm kelly evans at the new york stock exchange. >> i'm bill griffeth. so far there has been no follow through to the big rally we saw yesterday. up 120-plus points yesterday. down four points right now. i think they're just waiting until tomorrow with the fed meeting announcement. >> every time the meeting comes around, people say, maybe this time it won't shake the markets as much as last time and it seems time we're proven wrong. >> of course it will. we'll talk about it. these are the other stories we're following today.