The ceo making some comments, saying they did not finish as strongly as they would like, but part of it is the expense reduction role. That has been a big scene for all the big banks now. The common ratio of 10. 5 . Citigroup says it is committed to achieving its financial target for 2015. Shares are down in early trading. Lets bring in bill. You have been studying banks as an author for the past decade. To be investor, the numbers feel like a disappointment. Based on the way you look at the world, city is a bank to be fact the ceo the is trying to go back to the basics. I know the former republican nominee mitt romney said corporations are people. I do not know if we need to be praising individual institutions, but i think while these banks will be struggling to figure out what the new environment is and how to work with the new environment and make money with the new environment, this could actually be the golden age of all straight. If you think about it, what is really going on . There is far less competition than there used to be on wall street. We lost bear stearns. Competitors smaller banks. And some of the big mortgage lenders have been swallowed up. Much less competition. Like competition. Raw material is basically free. Either they are getting their money from the fed or from depositors. They are getting it for free. Interest rates are so low. Theyre not making a ton of money on it, then. Does notther industry have to pay for raw material . Wall street does not have to pay for it. If they cannot make money on it, i almost think that is their fault. You are talking about standard landing. Guess lending lending. Whether they use it for trading or proprietary. Wherean evolving world there is not much competition and they do not have to pay for their cost to capital. Why are we not seeing better they are highly geared to the economy and it has been slow. Quest but getting better. The combination of a better economy, and no competition. If you are right and then weomy celebrates, should see a lot of revenue celebration. We have not seen that yet. There is competition, just not from the other banks. Regulators. If it were such a golden time for banking, then we would see massive profitability and we do not. We know for a fact the bottom line at all of these banks, theyre under pressure. Citigroup reported . 82 per share. Analysts were expecting . 95 and that is just the estimates game. It is not a profitable business. They are destroying shareholder value. How could that be a golden time . Every institution has their own quirks. Paying 22spite billion of fines last year will probably make 20 billion of net income next year. Their stock was up 26 . They virtually have no competition. If they could get out of their that bank could take off. It virtually has no competition for what it does. With youd not disagree more. I just ran through the numbers moments ago. I want to sing a requiem for the golden on goldman got goldman bond trader. Last year it had a in a revenue of 8. 5 million. Generated fixed income trading revenue 8. 8 and jpmorgan, a year after the london whale trading scandal, had fixed income of 15. 5 billion. It is not a rounding error. We are talking about Goldman Sachs, almost half of what jpmorgan is. That is a stunning development. I really do not think so. I think the institutions are different sizes and it depends on how much capital they allocate to these particular businesses. Goldman has been notoriously excellent. Capital management trading, they are having trouble with return on that day. One thing they can do, this is another aspect of the golden age for banking, that i think competition will come down. Between . 40 and . 50 of every dollar of revenue if you want to improve return on equity, if you want to improve net income, if you want to do something shareholder friendly, you will have to cut compensation. They are losing a lot of talent. A lot of talent is going to private banks and hedge funds. Not everybody who wants to come to wall street, all those can get jobspeople at hedge funds and private equitys ear the myth of everybody leaving to go to hedge funds and private equity, good luck. It comes in waves. Wanted to beybody in the. Com world. When that fell apart, they came back to wall street. Can attract the best and brightest because they pay regardless if it is less, than any other profession. People get concerned about it. We want to get to best buy. It is not looking so good this morning. Shares are considerably down. Samestore sales for the Holiday Shopping time fell almost one percent. 9 there. Pretty bad. Whole goal here was to lower prices and improve customer service, have a Mobility Platform so you could buy things on your mobile phone. Best buy being severely challenged by the likes of amazon. You check out what you want, and you go buy it from amazon. How do you change it . They were really able to do. In the weeks leading up to the holiday, there are all these stories in the media about how bad best buy was. Maybe now they are not that. People believed in it. Electronics are hard. At the end of the day, it is just a commodity and it is hairy competitive. That brings me back to banks. If you can offer the best rate on a loan, essentially, you are becoming a commodity. It really is relationships. These banks and their clients are like a black hole. Once they become clients of the banks, they start putting their hands in every pocket of the client to do every kind of service from these guys and it is hard to extract yourself. There is just not the kind of competition there used to be. Now havegle big deal to go to jpmorgan chase. They are the only ones making these kinds. There is another similarity to be drawn. The chairman of best buy put out a statement saying they have in a longterm strategy, very much like what we hear from citigroup. Class we are not changing the strategy. We are staying the course. Class have you ever seen the leader of a company saying they do not have faith anymore . Ron johnson had a lot of faith. Has been working out so well for him. It did not work out for ron johnson and mike ullman, the jcpenney, making very difficult decisions now. Julie is following that story. Jcpenney is making a move to get rid of 2000 employees. Yes. Were talking about three percent of the stores, two percent of the workforce. It is relatively small. The company says it is underperforming stores. Smallerbe stores with formats. Ron johnson does not have much of an imprint on. It is ones that were not working in tertiary markets. That is what jc any is doing. This is part of the longer strategy to roll back almost everything ron johnson had done. Lets talk a little bit about omen and his effort to reverse what johnson had done. Doing,the things he is he is reinstituting the commission. We are talking about around 40,000 people affected by the move. The idea is, you have some of these people who are veterans of jcpenney and johnson promised them, when the company starts to turn around, you will be compensated. Is not turning around. You have to give them something as the carrot. The commission is coming back for 3000 folks. He brought back coupons and other types of promotions and brands. Got rid of one of the first things he did is to bring back cash registers. He took them off of the floor and devices in the hands of the salespeople. Again, we are trying to draw similarities between Retail Companies like best buy and jcpenney, and the industry you know best, banking. You are a customer of these department stores. What strikes me is customers were so willing, so eager, to abandon jcpenney when they felt as though the company had let them down. You might expect similar behavior from a customer at here that has not happened. It remains at the top of the tables institutionally. Thank you. My point. On the retail front, more confidence in jpmorgan than ever before. I do not know about that here at the consumer level, people view banks like congress. Not very well. Out ofel like banks made the financial crisis and got held out. That continues to exist. There is just no competition like there used to be. The competition [indiscernible] there is no rate. What is the rate on your deposit . Zero. There are thousands of banks. There are not that make the big loans to corporations. If you have got the balance sheet, there is a lot you could do with it very but it is competitive. It is competitive, of course. Tough place to be right now and you are glad you are not a banker. Im glad im not a banker for completely different reasons. You could still make more money being a banker without risking your own capital. That is the bottom line. Class coming up, we will talk about Something Else where you can make money online gambling. I met a guy who made 15 million in casinos playing back blackjack. You can head to our website. Sheldon makes his case against online gambling. I am just very much against it. Morley against it and i think it will kill the entire industry. It has the potential. I am here with trish regan. Our guest host, bill cohen. We have been talking a lot about banks and goldman earnings out. City earnings out. Not so good there. One trend is really clear. Salary. They are declining in terms of what the bankers are making. Bonuses these days are not as good as they were before. The am dying to hear what founder of Venture Capital has to say about it. Now teachestion startup 101 at draper university. Beingyou very much for here. Thank you for having me. Lets talk about the growing divide between what is happening on wall street and what is happening on silicon valley, a world you know by virtue of being a Venture Capitalist. On the subject of bonuses, Goldman Sachs is still a lucrative place to work. Average compensation about Goldman Sachs was 384,000. Less than it was in 2010. What would you say to a 23year graduating from stanford or 24yearold with an mba . Go to Goldman Sachs . No. Draper university. We set the school up so people like that not quite knowing what they would do, but they have spark, they will go out and the heroes. What we try to do is encourage them and push them wherever. You would not mind if they went back to wall street . Know if that is their mission. We want them to look at wall street as something to change. We would be looking to change wall street. Time we is about changed wall street. Tell us a bit more. Startups growhe and build big businesses. And wall street takes over they make them go public. Are a young person in your graduating with an mba and you have a choice between graduating with Goldman Sachs are going to the likes of google you will probably go with silicon valley. A lot of people will. Is new and fresh. They have got a great food court and a great building. They have got a campus at google. Is a whole different kind of life. If they are engineers, they are paid more. All of a sudden there is a little bit. A difference between engineers. This geographical. Bill gates used to say his competition was not larry at oracle. His competition was Goldman Sachs because it was a war for the best and brightest. That war is still out there. If you are a finance tight or a history major, you are like i was, who then went to wall street. There is no way you will be an engineer at google. It just will not happen. Generalissimo generationally, there is a shift for people not making a ton of money but interested in what tim is talking about, building something and then making a lot of money. I thought that was the case and then i looked at the statistics from the stanford is the school, which show finance remains the most popular destination for Stanford Mbas to payance continues better. The average first year salary for a stanford mba is 150,000 in finance and 115,000. You could eat here. Are going. Re people you have tech catching up but finance remains the most attractively paid profession for people coming out of stanford with an mba. The information might be slanted a little. A lot go out and start their own salary startshe at zero. What they are really thinking is longterm, this is the right thing for them and they end up making a lot of money that way. Maybe not. What is cooler . Class wall street is not cool. Wall street allows you to make more money than you could anywhere else and take no capital risk. Five years ago, it used to be cool. Into it in the 1980s, it was cool. Class we will be back in two minutes will. You. Ank now best buy getting slammed in the free markets here. They reported sales in the holiday time. Of almost one percent. Sales nine percent. ,iscouraging news for best buy which is trying to turn things around. Another stock to keep an eye out if yahoo . We are here with tim draper. Were reports going back to september that she was not happy with him. Was her guy and she brought him in, but she was not pleased with sales result numbers. She has turned yahoo around. We have a couple Companies Meeting yahoo s lunch. Were taking advantage of the implosion of yahoo . And did anong extraordinary job getting people back to work. A breath of fresh air. Class also getting people literally back to work. Right. She brought them back. A good idea. What is the company to do . Proceed forward and find the right person for the job. She thought he was the right guy. She has got a big opportunity. Yahoo will continue to run without a coo. They have got plenty of management, maybe too much. She has done a beautiful job so far. A big supporter of hers. A lot of you will have been frustrated we have not seen more out of yahoo . The big question is, are they ever really going to be able to compete with google . I do not know. It will be a long struggle for yahoo . A lot of Companies Get to be and then lose their edge. It is very difficult to come back from it. That is what i take advantage of. Startups. What does a startup need to ofnow to take advantage yahoo s weaknesses . I know what glam is doing. They are hiring all of yahoo s salespeople. But they are not doing so well. The coo got fired because alec ad sales are not doing well. They have better jobs because they have something more to sell. You do not think she has got the right product to sell it . She has to do what she has been doing. In the technology world, things change quickly. She has to go out there and grab more new technologies. She has got a good base of and infrastructure and all of that, but not the best technology anymore. She needs to go out and buy a lot of Interesting Companies that will maybe take yahoo to the next level. Investors have really given her the benefit of the doubt. How long do they continue to do that . The markets will rise and way they look at yahoo . I am not a shareholder of yahoo anymore. It is nice to have an alternative to google in the search space. Working on making it better and better. She is doing her best. Im impressed with what she has been able to do with the company. We have got breaking news. Scarlet joining us with numbers. Class Consumer Price index coming in line with estimates. Prices rose 1 10 of one percent, in line with analyst estimates. In terms of jobless claims, lower than what economists tend look for. 326,000 from last week or lower is better. 30,000,ious week, revised down to 328,000. Jobless claims are coming in slightly weaker slightly better because the number was down. We will continue to monitor the market impact, but no real big move so far. Ben bernanke makes his final speech as fed chairman today. It is a warmup act. Peter cook is with us now. The house overwhelmingly passed a trillion dollar spending bill yesterday. Does that mean jack lew can breathe easy about the debt ceiling, the next deadline looming at the treasury . Not an opportunity just yet for him to start breathing easy. That is the remaining speed got speedbump. He will talkre about it in the q a session. It is still a headache for the treasury secretary of the administration. No one knows at this point exactly what the tradeoff will be and what republicans want in exchange for raising the debt ceiling. It is still a mystery exactly what the deal will look like. What are you hearing in washington about the prospects of how wall street will be doing and give it a death of 1000 cuts. Is it still top priority for wall street . It is. You saw a whole fight from Community Bankers about the impact, certain aspects of the rule could have on them specifically. The one thing that is clear to me is there are very strong supporters and if there are efforts efforts, you will have democratic members of the u. S. Senate make a big fuss over that. Changes, but for the most part, it will remain intact. Do the banks have a sympathetic ear . Is jack lew responsive to the idea that the bank should be able to hold coos . What are we likely to hear from him . What may have surprised some folks on wall street is given the fact he spent time at citigroup and understand some of the banking issues, that he was among those who pushed so hard for the rule to be put in place. His timeline to get it done by the end of the year that drove regulators to put it together. Does that mean he is not open to modification . Not at all. Give aartment will listen but he surprised some in the Banking Community by how hard he push for the boca role. I would not imagine he will be leading the effort to undo it and any substantial way. One thing you will hear is him spelling out the next steps of regulation form. They are not done. We will be hearing from you later. Ben bernanke making his final speech. We will take you to beverly hills, a live shot, where an will who played thor unveil the 2014 Oscar Nominations any minute now. You can catch the entire rollout on our live events channel. We will be right back. We are zeroing in on the performance of the business of california. He is the are heading a plan to split his home state into six different states, six californias. I call this gerrymandering california because you have got a lot of different political views in a lot of different. Laces you find a way to do some segregation here. California today is not governable. Peopleone group of really interested in immigration. One group of people really interested in water. Another group of people want to , thature Technology Government adjusts to new technology as they happen. When napster came out, we did not know how to deal with it. Six different states. They have already they want to be canadians like you. He have to skip over oregon and washington state. Northern california is another. Yes. Sacramento and all the way across. Silicon valley echo valley . California, all they care about, really, is water. They see the world. This is where all the ardor culture happens. L. A. As well. L. A. Becomes its own state, great for hollywood. West california includes a insideof other counties the area. South california, where san go and Orange County are conservative in one place. All there in one state. A red one. It will break up in a number of different ways. I do not know exactly how. Six californias will have two senators like every other state in the union. Yes. These six states will compete for the county so the counties can actually move if they want to go to a different state. They self organize what is the point of all of this . It sounds interesting and challenging intellectually, but governments are monopolies. They need competition. There are 49 states competing. There are. California, the weather is great and nobody wants to move in the state knows it. That state is having a difficult time. Does this have legs . Are people supporting it . Yes. The guys in jefferson are jumping up and down. Jefferson, this includes the is two thirdsere of their economy, marijuana, grown in this jefferson area. Imagine they will be a little bit like colorado. I would think the value systems in each of these places would be different. Quite different. They are already. California is trying to manage all of this and they are practically bankrupt. Class this is your solution. What about the states without enough people or enough interests . Montana and wyoming. Important to have your constituents close to your government. I would believe may be looking at it a different way, saying, lets split new york into three pieces and taxes into five. This sounds more like political gridlock been a viable and practical solution. It ends up being less your because people have closer contact with their government. There a higher cost . I do not think we could make it a higher cost. California is the highest and the Worst Service in the entire country. We are first and cost for education and 46 in performance. 46. We are the biggest state. Happen via one of the things people say is most wrong with california politics. Yes. Absolutely. It is interesting. The initiative was set up as something that would probably never happen. Now thernment is so bad Ballot Initiative became the way we are being governed. Is,only way i am thinking instead of having one california, create six new californias. Think of the creativity that would come from that and all of the communication that would go on. An interesting idea. Would you do about the educational system . One of the greatest in the world. Would encourage you to work the same way. Comes the money for ucla from the state of california. 100 of the forms they have to fill out come from california. You can do better. Compete good and they in a very free market, the Education System is competing in a free market, and it is doing incredibly well. They are really good schools. They continue to be. It is a fascinating idea and all we need is more senators. Breaking news. Scarlett is joining us with the Oscar Nominations. They have only gotten through a couple acting categories. Best supporting actor. That is the one a lot of people Pay Attention to. Theyre going through screenplay and music and animation films. That is second. Best supporting actress, nominated bradley cooper, 12 years a slave, and we will continue to monitor the headlines here for best actress and best supporting actress. It looks like amy adams nominated best actress for american hustle. Sandra bullock for gravity. We will be right back after this. Are in and him himim him hi in my upcoming documentary most people only get a peek at the spectacle that is las vegas. Willing to spend 100,000 a hand. Someone like don. He is a blackjack player that lives the life of a rockstar. Club,on johnson once in a celebrities pay their respects. Engineered and it picked up the tab. Class with everyone. I will try to customize the package and give him what he wants. What it takes to dazzle timesody today is 100 more ambitious and complex and challenging than the war. A before. Class always tempting new gamblers. We train the public and raise expectations, a good thing. The catering to high end players starts before they even think about coming here. They will bring a player from the east coast to las vegas. The mgm property has a mansion, 29 villas under a climate controlled zone. You stay for free . Nothing is free. Will give you a secret inside baseball and casinos. Jim is the ceo of mgm. He owns 10 casinos and dies getting perks that everyone of them. Lets say you spend 1000. We will theoretically win 200. I can clock you to induce you to come out. Compact comp you to induce you to come out. The well will three up theoretically lose 100,000. I should be willing to give him 80,000 worth of stuff. From point a you to point b, i am probably not burning 80,000 worth of fuel. The margin on the highend is higher. That is why casinos will do just about anything. Player debuts january tight second, tuesday at 9 00 p. M. Eastern. This guy has an amazing story. A mediocre blackjack player. Within the span of 10 months, he masters the game, goes and casinos in atlantic city, walks with 15 million playing blackjack. He did not cheat or count cards. How . This is part of what we get into in the hour. He was able to take advantage of the vulnerabilities the casinos now face. They are desperate to get people bet him, whales that will 100,000 dollars a hand, that they will make the odds you are playing against sometimes pretty favorable. Amazing. Never quite favorable. I walked out as soon as i either lost 20 or 120. Probably not a good target. Among my family, when we make thats, their five cent bets. [laughter] that will not keep anybody out. An interesting look at the challenges the industry faces. Making that without cheating or counting cards is amazing. Thank you. Editorand contributing editor here. Also, the man with california, six separate states. The founder of draper university. We thank them both for joining us here. It has been a fun hour. We will be right back. And betty liu will be with you in a second. Breaking news. Best actress, amy adams. Meryl streep for oral her sondra bullock, nominated previously and one in 2000 nine. Best actor, leonardo wolf of wall street. Kristen bell, matthew , and nebraska. The best picture category is wide because they expanded the number of films being considered. They basically doubled it. This year, nine nominees. , her, captain phillips, american hustle, once again, wolf of wall street, and 12 years a slave. We want to get back to markets now. Bloomberg television is on the markets and a rough day for retailers. Shares of best buy plunged 30 after the company came out with a holiday sales numbers. Inching lower. J. C. Penney down three percent after it says it will fire workers. We are back once again in 30 minutes. 30 minutes to the opening bell, this is in the loop with that he loop. The countdown begins now. Welcome back. Here is what were working on. Best buy sales fell during the Holiday Season and the first new videogame console in years did not draw as many shoppers as expected. That is tanking in the premarket. The labor market continues to improve despite the december labor report. Jobless claims decreased the least since the end of november. Another round of Bank Earnings this morning, including citigroup. More on wall street in a moment with the guest host of the hour. Discoveredmberg news a successor to microsofts Steve Ballmer is being considered. One of the mostwatched changes particularly in tech. Jon erlichman is helping to break the news for us and is joining us from l. A. What do we know about why he would make the right fit for microsoft . People first hear about this, they say, this is under the radar despite the fact you are talking about an accomplished executive in a big company. When you look at what he is and company likeo a microsoft, it makes more sense. Youre talking about an International Company and a company that deals with both the consumer and the business market. That is exactly what microsoft has been trying to shift its business to get in the hands of more consumers, creating hardware to keep its Software Business relevant. They are going between two different worlds. The bigcertainly one of factors of why he is a candidate. There are a number of insiders being considered. He is up against a big slate. Has taken some time. You are right. Microsoft could go in a lot of different directions. Have talked about a lot of insiders, whether it is people like tony were stephen, obviously familiar with the inner workings of microsoft. Compare that to somebody running a large International Company, microsoft has had a lot of thinking they have had to do, including going after some candidates not ready to take the job, and tried to take the turnaround ahead for a company like microsoft. There was a sea suite shakeup. The ceo now firing her number two. What happened here . It has a lot to do with performance. The stock has done a great performer. Marissa has done acquisitions. The reality is if yahoo did not its stake in we would be focusing a lot more on yahoo . It has not been all that strong. That is the story. It is quite strange after a year to keep these guys out. Thank you so much, jon erlichman. Top news in the financial world. Earned 4. 60 per share, well above analyst estimates. Fell 19 from a year ago. Blackrock firstquarter earnings the estimates. The money manager set its First Quarter profit increased. The company boosted its Quarterly Dividend by 15 . Citigroup missed estimates. Earned . 82 per share. The estimates were for nine cents. The Fourth Quarter profits did more than double. They have been suffering with fixed income trading. Sally, theost is leader of some of the top firms. Weigh in on the banking environment and leadership. Great to have you this morning. It makes me inspired to hear you say all that. You have done so much. Leadership. T bank people want to know and this is a general question, the American Public wants to know if we have the right leaders now on wall street. Yes. It is interesting. One of the things i worry about iswe go into this crisis that a mythology, an urban myth, is built up around the former ceos. They were not smart enough. Andalways hear, the lawyer was isolated and stan was also isolated. Jimmy allegedly smoked pot. There was a fatal flaw image and that led to the downturn. The truth is, they are all really smart. The question is, how freaking smart do you have to be . Even jamie dimon, and they do not come better than him, he can have significant multibillion dollar stumbles. You are saying the guys running wall street are not any smarter than the guys running it before that got us into the financial crisis . They are all very smart and enormously hardworking. The challenge, these are complex organizations. Can my brother in law to run one, he is very smart. With the combination of that and significant leverage of these banks, they are less than they were, but not lately leveraged. Combination they have come down. That is how you grow. Or shrink very dramatically. Part of what i have been thinking about is the shareholder. They own a lot of equity and more equity as a percent. Many of them are paid based. Takeis the fastest way to up our oem coproduce equity. The denominator gets smaller and you pop it out. They want as little equity as possible. You are very active on linkedin. You talked about superman on we shouldt and said, not accept the ceos of a Large Financial Institution have to be just right superman in order to steward their companies and, by extension, their economy. A bit of what youre talking about now. In many ways, people look to the ceos on wall street and say, these are superman, smart guys. Even super smart people can make mistakes. Have we taken out enough complexity and reduced the leverage enough . Are they safe enough . Inwe have the right teams place around them . No one person, even with the cult of personality, can do it all. Do we have the right teams . Diversity of background and thought. But that is what i want to talk to you about next, your work, you have bought the company. Get on topic. I have been watching the Oscar Nominations. I have been glued glued to my terminal to say who has gotten nominated. You have been going through all of those names and the business of the oscars. What happens now . A couple of highlights. No real surprises on the active award nominations. There are a couple worth mentioning. You have a couple of courses who get nominated and say a lot of stuff about how it is an honor to be nominated. It is probably true with a real life taxidriver hired to be one of the pirates in captain phillips, a movie about tom with tom hanks. He was nominated for best supporting actor. Some of the other nominees, jonah hill, bradley cooper, and he was disappointed when he did not get the award at the golden globes. In terms of best film, nine nominees. The category has been expanded in recent years. The usual suspects heading into the oscar nomination season got the nod, including american hustle. 12 years a slave also won it. Last year, ben afflecks argot. One of the female acting christians, Julia Roberts and meryl streep both one for their roles in august. For the famed hollywood producer, very active in promoting his movies. To get actors nominations. He is very active once the nominations are out to get the golden statue. Spent 150now they million to win that statue. Exactly. He is credited with inventing a formula. It is very formulaic. He keeps a lid on budgets to as efficient as possible in terms of finances. Previous investors have been produced on average of 21 billion budgets. Our goal broke it a little bit by putting it higher. Harvey has a formula and he sticks with it. He shops festivals. And i for content. He looks for stuff and buys it for cheap and turns it around. He bought the rights to book the book, Silver Linings playbook, before it was published. He does small strategic rollouts and does not try to open a movie at every single Movie Theater across the country. Spending to begin after he gets nominated. Thank you so much. Chief markets corresponded. We will be back in a moment. Missed theayer has chief operating officer after a year on the job. The first highprofile exit of an executive under meyer not yet named a replacement. We are back with the citigroup executive, the ceo. You and i have talked many times and we have written about women in this easily. We bring up mercer wire meyer. Undue pressure on her to turn around yahoo and also to prove at the topa woman spot. Is it too much pressure on one person . She got a lot of attention for any number of reasons. She is bright and smart and hardworking and a comp list. She is trying to turn around a company interesting to all of us. This is not a company ive never heard of. Many of us use yahoo . She is very much in the spotlight. The good thing she is recognizing, it appears, is that stocks have done very well. The stock is not the company and she is got to run a company. She needs to make decisions and it was that she made a quick one here, decisions that can be difficult, about the best way to run the company. You have got to make your decisions. Sure. The worst thing you can do is, well, i better keep on trying with that. You suddenly go from obscurity to become a rockstar ceo when you are a woman at the top spot. There are only 22 other fortune that could be h allen ching position to be in and isolating. Not part of a very big group. You want to change that. Theirse women did not get because there is an article about me in the paper. These are tough women. There is an overnight change that happens. She was swarmed. There were a bit jillion arguments about her. Nose to the grindstone. Anytime you are spending and beyond those articles, to understand what your employees rating. The work you are doing right now, youre trying to be more diversified. You are also looking for companies to do the same thing. What is your reaction so far . Is a taste for diversity. Having everyone to think the same way in a room, six people thinking the same way, one person should get rid of it. The Business Case for diversity is so compelling. The impact we can have by fully a nine percentis growth in gdp. This matters. Companies have better performance when they have more diverse teams. They are reaching out to markets that are growing. They are reaching out to the customers, women, millenials, etc. Is he on you know it lipservice . You talk to anybody. From the very top to the very bottom. Lets be clear. Forave made no progress years and years. And financial services, we have ofe back there if the top these companies and the number of women employed in the industry has gone backwards. We could talk about whether that is lipservice or whether that is wellintentioned people hitting the same now with the same hammer again and again. Making the same progress. We are not making sustained progress here. He want to get to the point where it is not new anymore and we are far from that. Lets talk more about this in a moment. We have to go to a commercial break. Much more right here. The Bank Reported a big miss for the Fourth Quarter in terms of slumping bond trading revenue. The cfo saying the rates were flat in the Fourth Quarter. Low Interest Rates will continue to drag results. The goal costs will actually remain elevated and the bank is not done yet with cutting expenses. We will be back after this. Welcome back. Boomer television is on the markets. They are on the move lower today. Record close yesterday for the s p 500. Pretty much flat on the year. Full circle from where we ended. Is watching those earnings. They are not necessarily liking what they see. Best buy shares down sharply. Analysts, being involved with 85 and moving the diversity agenda ahead, running merrill lynch, i truly believe i am my team could add value. We were actually doing something that matters. You felt that way as well. When you came in to turn it around, you came in and turned around merrill lynch, you felt as well you needed to make this effect and you did. What with the biggest lessons you learned . At turnarounds are interesting. We really talk turnaround this morning. We have got yahoo and best buy. One of the lessons we learned, turnarounds are hard and do not happen overnight. Have got a business moving in a direction. Quest you are on an internal compass. Quest absolutely. Your competitors are not any by with arms folded and saying, lets just stop until those guys turnaround. Theyre moving ahead. It is not just that you have to fix what is broken. You need to leapfrog ahead. That is very big risk one is taking. Do that at merrill lynch. Most turnarounds fail. You have such a storied career. We have all the ceos, what would you say to 25yearold self . I would give her a hug. In my 20s, i did not know what i wanted to do. I was investment banking. Enjoyed and parts of it, my skills were set for. But i was really lost until about one month before i was 30, when it hit me out of the blue that i needed to be an Equity Research analyst. Up till that point, i thought, i cannot find my place. That is what youre 20s are for. You are allowed to figure things out for a while. I always give that message to young people and to my kids. You do not have to know what you will do but keep a lot of options open and build a lot of skills and do business the right way and things will work out. Quest thank you for joining us. Quest congratulations on a book. Great have you. The former ceo. I could go on and on. But i have to take a commercial break. Coming up, worth 300 million dollars. She does not even own a hair brush. She reveals how she really spends her time off. Jcpenney. Store closings and staff reduction. 2000 jobs cut. Julie hyman has more with what is going on with the turnaround. If you look at the cuts we are warning learning about, 33 stores will be closed. The store is closing are in markets around the country and also tend to be the smaller byres not really revamped the former ceo. They are not really in big cities, for example. The company says it will save 65 million annually by closing the stores and it says it is underperforming stores. Recently announced it would be closing some stores as well. Jcpenneys problems are deeper than that, but you are seeing a retrenchment on the part of retailers. Indeed. Doing to is mike reverse ron johnsons movie apoplexy as artie done a lot. Ron johnson got rid of cash registers initially on the floors of jcpenney and put devices in the hands of the salespeople. Coupons went away and those are back. Promotions went away and those are back. Commissions had gone away from the top salespeople and sales commissions are returning to about 3000 salespeople, primarily focused on selling things like jewelry and higher ticket items. He reverse all of those things. It is now just a matter of getting people back in the stores. Thus far, we have gotten a lot of confirmation that is happening. Not at least from those numbers. Thank you so much. For more on jcpenney, i would like to bring in the former fashion director. It is great to have you with us. Jcping at the problem with they need to buy into the cult of personality. Shoppers are connecting emotionally to pop culture icons. It does not have any. There is not one in the mist. Youre talking about celebritys. That work for target. And kmart. Nicki minaj and adam levine. It is the age of empathy and the cult of personality retailer. Retailers want to buy something that has personality. Jcpenney, people may not remember this. They have pretty good brands. They are not associated that well with jcpenney. Also, their brands, online sales are skyrocketing. One reason all are cut by jcpenney, people are shopping online and need to be told a story online. You can relate to nicki minaj ethier van joe. You have Oscar Nominations this morning. I was glued to hear them all. You have Sandra Bullock and jennifer lawrence, meryl streep. What happens between actresses and the designers . Read carpet dressing is big business red carpet dressing is big is this. It is real estate absolutely. There are risks. The watches they wear. Three ways to play. Face e is the prestige play. They bought a dress that was 10,000, but tom ford did not make any announcement she was actually wearing the dress. Very prestigious for designers to pick one person to dress. Worked with a the actors and elevates her brand. They only pick one. A lot of times. They pay to play or there is a prestige play. A lot of extras to watch the will the awards. It is oh is the first question, what are you wearing . Moneyy get paid a lot of to wear those clothes. As someone who gets paid a lot to wear those close, gisele. Someone called her a billion dollar supermodel. She is annoying a lot of women. She said she does not own a hairbrush and has not drank soda in 10 years. Hate the newld not england patriots. She needs to take a note from tom bradys book. Fumble. Got to when you are pretty common imperfection is what connects you to the female population in america. Fromeed to take a note brooke shields. You have got to be funny and selfdeprecating and light. She is generating a lot of heat around her. Is a Smart Marketing move. The bottom line is i worked with gisele for years. She is a girls girl. She is fun and easy to work with and one of the best out there. Is a Smart Marketing move. Some of the things she is saying , i think are being misconstrued. Before we go to break, lets get the global outlook. Suspended at the global air due to a heat wave. Temperatures soared over 150 degrees. We could use some of that. The heat strength Electricity Supply and sparked wildfires. Stay in the loop for much more. Some of thetomorrow, the formerr will be in the loop with us. We will be back. It is 56 past the hour. Glover television is on the markets. Minuteske a look 30 into the trading day, where we are trading. We have declines across the board. Not big ones. A lot of people looking at the earnings report. Numbers from Companies Like best buy and citigroup. We are seeing those shares fall and the over market overall market fall as well. Other stocks, the ad industry. At giants. He outpaced the s p 500 last year. Advertising events. You would think this might be another blockbuster year for these guys. They may not be the case. Joining me now along with rich. Thank you for joining me. Found in termsu of the gross profits prospect. Cut 6. 5 . Solitary the problem with the. Tocks a lot of good news have been baked into the cake. You know these are coming. It is not so much of a surprise coming. That said, the olympics and world cup are big events for these guys. They have done a lot of sales. Related to the events. They are presold. Right. The Advertising Products created that you can see on tv, they start six months ago. The media buying element to the olympics, it could be a little tough because of flat a mere putin. It will be hard for Johnson Johnson and bmw to get behind the olympics. Some advertisers will not be advertising. Maybe a little cautious because what he said is very bigoted. Adyour forecast for overall is higher than the 6. 5 . What we talked about, we think there ad is is 1. 5 downside to the numbers and the economy we had last year. To three percent percent upside to the numbers. In a more robust economy. Instead of what they called the quadrennial events, we look at the overall strength of global markets. Some of the things we are focused on, residential investment, and x port. Come inctors seem to the middle of the year, boost the u. S. Economy and the Global Economy and then the multiplier effects take place for the rest of the year. , itake a long story short is to kind of look at these things as a marathon and not a sprint. Downside risk and upside risk. The downside is in the warmest part and the only warm part of russia. You could get rain and 50 degree weather in the winter time. That could be problematic. Down here skiing, nobody can watch it on tv. It is a really exciting game. The fee for world cup same situation. A competitive world cup and upsets and things like that look at the groupings. If all the major teams get out group play, we have got to go. Thank you so much. Thank you both so much. We will be on the market again in 30 minutes. Market makers is up next. Live from bloomberg headquarters in new york, this is market makers, with Erik Schatzker and stephanie ruhle. Best buy blues. They price cuts and a new strategy did not help the retailer. Holiday sales fell unexpectedly in the stock is down then most in 11 years. Bernanke last days, what could be his final speech as fed chairman later this morning. Plus an interview with a former colleague who was at his side during the financial crisis