Anyone who still needs to do christmas shopping. A week from now you know Christmas Eve is a week from today. Just so you know. Eight days till christmas. Are the best deals yet to come and how late can you order online kelly, and still get it on time . We have your crucial retail details and stocks that are moving on all of this news this holiday season. Are you telling me youre done, that youre already finished . Im 90 done. Also coming up the whos who of the Tech Industry descending on the white house today. The president said he wanted to talk about how to improve healthcare. Gov but the tech titans wanted to talk about the nsa and demands on their company. Would loved to have been a fly on the wall. Hes a sitting judge, familiar to most on wall street he has presided over wall street financial cases for year but judge jed rakoff has written an essay asking why have no highlevel executives been prosecuted . Is that appropriate for a judge to write and will this ramp up pressure to perp walk a bank fed . Open up a whole can of worms here. You should really read it. Its fascinating. In the markets, take a look at whats happening. We have small losses across the index. Dow off a couple points 15882 is the level right now. Nasdaq seeing small declines. Were seeing pressure coming on social media names like linkedin. While on the other hand, a twitter, facebook at least facebook and yelp is doing better. The s p 500, off four points 1782. Lets talk about todays Market Action the fed and all those fun things in our Closing Bell Exchange with heather from Jpmorgan Private Bank rex massey from wilmington trust, greg sxr hightower and Rick Santelli as well. Healthier, heather, i agree with you, you feel the fed doesnt taper until at least the march meeting. Whats your reasoning on that . Do i. Part of it is structural. This is the last bernanke press conference and i think hell take the opportunity to transition the leadership. January doesnt have a press conference. That brings us to march. While the data has been strong youre still looking at inflationary numbers which i think the fed wants to see come up from here. Yellens first meeting is in march, so if theyre going to do anything, i think they wait until the new person starts. Could be. Peter, i wonder how much this is just about the inflation outlook. Everybody knows how important longer term inflation, 1. 5 to 2 range is for the fed, and reminded by the cpr report this morning, were not there. And it come down to that . Well, instead of taking a look at bureaucratic timing of all this i think one thing you have to look at is inflation, and i dont think theyll take action until they see true measures of growth. We can look at the timing of the meetings things like that. When former chairman were there, we would look at the size of their briefcase to determine whether or not they were going to raise rates. Now were not looking at the briefcase. I think what we should look at is just the macro environment and the labor market is doing well but not cannot will he well. I would say march at the very earliest but maybe three to six months beyond that. Simply because yellen has to get her sea legs, get used to the rhythms of these kind of movements and i think we need to give her more time. You agree, dont you, greg . I would agree. I think the fed would rather be late than early. The Economic Data has been good but the risk the fed has in tapering tomorrow is if they have to go back a month or two later and repurchase bonds to reinflate the economy. Deflation is greater risk than inflation. Yellen will want time to get her team in place to analyze the data at her pace. Shes had a dovish track record like bernanke. I think the markets will want her to have some time to make her decisions. Rex, given we could be looking at march or later tapering or the way conditions are evolving in this super low environment, what does that mean for investors . You look with the tlt, long treasury etf up 1 youve seen some longer end of the yield curve coming down. In other words, should investors look for opportunity in the fixed income space, maybe muni bonds where people have piled out . I dont think you want to jump too far. Its only a matter of time before Interest Rates start moving up. We do have a recovery. There will eventually be taper. Its a matter of months. I wouldnt want to step in front of a long bond too quickly. Well lets ask mr. Market about that, Rick Santelli. If you look at the equity markets, its clear, its wait and see time until toemgime. The dow is up a whopping one point. What is fixed income telling you . I think 2s 5s 10s and 30s are going to close at oneweek yield. I think theyre where they want to be at this moment. The buybacks are concentrated in the middle to the tenyear part of the curve. We want to watch how everything fares with maybe the long ends and 5s and 30s spreads. Heres what i find fascinating. I agree with jim grant this morning on squawk box, what prices are going up . Well, lets see. Ferraris, art, stocks bonds, in terms of downside i understand, but to think we should subsidize the economy in the form of these purchases forever, it just doesnt make any sense. As a matter of fact, low Interest Rates by themselves forgetting permanent open market operation buyback, maybe that should be a benchmark against inflation or higher prices. But in the end, it seems as though wire forgetting about one very giant sized risk. That risk is a 4 trillion balance sheet. How that eventually turns out. Yes, indeed. Rick you can imagine the scenario, if a year from now if conditions did like they did in 2013, where this concern is really at the forefront, but right now it seems like you know, unemployments still around 7 . Yes, asset prices have recovered. Its more like 9. 5 or 10 . Exactly. It is worth people unaffected by these buy buyback programs. The cost benefit analyses is not there. Maybe a better mouse trap to catch the mouse. The mouse is the part of the economy that isnt creating jobs. Lets make this relevant to investors, then. Heather, what would you be buying here as we go through this rather uncertain period at the moment . How weaver been structuring portfolios is for rising Interest Rates. Our portfolios have a core component to them, we also complement that with credit which tends to be positively correlated to rising rates and managers who have benchmark agnostic strategy who can be more nimble during this time period. If we see a rise in Interest Rates to 150 basis points, i would consider moving back into negatively correlated assets at that point because of the steepness in the curve and attractiveness. A lot of people have been talking about negatively correlated assets, like real estate. To the point rick was making isnt there such a thing . Dont these prices move reflecting other developments happening across the economy . Yes but largely what youll be watching for is earnings. Were about to come into Fourth Quarter earning season. Were positive on that. We think guidance has been down enough that well get a decent report in the Fourth Quarter. 2014 looks good to us with earnings on the s p at 116. I think rick is scared of the boogey man, 4 trillion balance sheet. Years ago they said wheres inflation . We dont see it. Were not worried about inflation. Famous last words. We like to see rising earnings environment. And the market has been with us. I have to move along, rick, but i know you cant let that go. No, thats all right. Well, in the end, you look at all the managed economies throughout history. Maybe it work force a while. But im sorry, this is a bad stencil. The reason were a great country, free markets free markets, not manipulated markets. If was a corporation or hedge fund, then wed be celebrating behind bars. I see some heads nodding. Thank you for your thoughts on todays market. Appreciate it very much. Thanks so much. Cnbc is your place for live coverage of the fed sdpigs tomorrow. It all begins at 1 50 p. M. Eastern, with a statement. It will be followed by Ben Bernankes final conference at fed chairman although not his last meeting. That press conference will kick off at 2 30 est. We have 50 minutes left to go until the close. Dow adding a couple points here. S p 500 is a little weaker though at this juncture bill. Nasdaq flat. We talk about how this is the most important hour of the trading day. Now there are data to back that up. You want to stick around because you cannot afford to miss new data that proves when you buy stocks make a huge difference in how much profit or loss you may suffer in this market. Also an astounding number of americans havent even started their holiday shopping. Really . How is that possible . Coming up next well take a look at retailers set to catch in on those boxing themselves into a corner. What outrageous gifts do rich people give other rich people . Robert frank has top gifts for the super wealthy. Guess what . Those you can get delivered pretty fast if youre willing to pay tore it. Thats on the list there. Youll want to see what robert has lined up for us coming up later on the closing bell. Chuck vo theres a saying around here you stand behind what you say. Around here you dont make excuses. You make commitments. And when you cant live up to them, you own up, and make it right. Some people think the kind of accountability that thrives on so many streets in this country has gone missing in the places where its needed most. But i know youll still find it when you know where to look. Anncr vo introducin g the schwab accountability guarantee. If youre not happy with one of our participating Investment Advisory services, well refund your program fee from the previous quarter. While, its no guarantee against loss and other fees and expenses may still apply, we stand by our word. Hi honey, did you get the toaster cozy . Yep. Got all the cozies. [ grandma ] with new fedex one rate, i could fill a box and ship it for one flat rate. So i knit until it was full. Youd be crazy not to. Is that nana . [ male announcer ] fedex one rate. Simple, flat rate shipping with the reliability of fedex. [ male announcer ] how could a luminous protein in jellyfish impact Life Expectancy in the u. S. Real estate in hong kong, and the optics industry in germany . At t. Rowe price, we understand the connections of a complex, Global Economy. Its just one reason over 70 of our mutual funds beat their 10year lipper average. T. Rowe price. Invest with confidence. Request a prospectus or summary prospectus with Investment Information, risks, fees and expenses to read and consider carefully before investing. So if you havent even started who hasnt started . I donlt know anyone like that. Thats silly. Youre not alone. Courtney reagan looks at the number of proceed kraster ins and where theyre heading for last minute shopping. And the weather is putting further pressure on those people, isnt it . Andmy, too. Its not pleasant out here. The latest survey shows 32 Million Consumers had yet to start their holiday shopping. Now, that was on december 9th. So, that means retailers have some time potentially to finish the season strong. Except for half said theyre going to do their shopping, finish it up, online. You have the combination of a ticking clock, so to get those packages to your door in time for christmas, plus bad weather, that could scare shoppers into stores. So, we checked in with shoppers in california, theyre mixed online versus in store. Heres what they said. I mostly finished it. I did it most of the time and now im shopping for me and getting all all the specials. I like trying on sizes and being able to see it in person. Reporter heres a video of the small traffic. Both here at the mall behind us and one in l. A. Not an abundance of foot traffic at either one, snow or no snow. 29 say theyll finish up shopping by tomorrow. 14 by friday. 12 will finish saturday. Last holdouts 10 waiting until Christmas Eve. They say theyll finish at Department Stores first, followed by discounters. Well see what happens, but retailers holding their breath on these final eight days. Yeah hoping for a little santa claus rally of their own. Stay with us if you would. Our our eretailers as a result dominating the game and is there any way for brick and mortar to catch up . Lets bring in a couple of experts. Steve from Berman Capital joined by john moore, senior retail analyst at bemo capital. Kelly and i were talking earlier, she said what you feel, that there seementzs to be a Tipping Point toward online retailers. Its a paradigm shift. Its accelerated, but now a point where 130 million tablets that have been sold. Everyone is buying iphones or cell phones. Its easier that way. Youre seeing amazon sales have skyrocketed. They went from 31 in the Second Quarter to 39 in the Third Quarter and black friday their numbers were up 40 . What people dont realize is amazon is ten times the size of walmarts online business. The numbers are just amazing. Does that mean john because so many people like to focus on amazons valuation relative to lack of earnings do you bet on an amazon here . What are the ways to play this space . Other things have you to look at you can still bet on bricks and mortar because a lot of those stocks are down and out. Valuations are very cheap. Expect taking expectations are really low. Think about childrens retailers this season, theyve really been benefiting from the very cold weather. So, youve got kids sweaters kids outer wear. Childrens place uction, not expensive stock, doing a great job. Really on the comeback we think. The number of people planning to shop on christmas, maybe 9 of those surveyed. That speaks to the gift cards and ecoupons people can buy at the last minute. Isnt that amazing . I think, too, people are so valuedriven these days. So many folks are holding out, trying to take advantage of retailers desperation. They know the closer it gets to christmas, the better chance they might have of getting a deal as retailers try to sell that merchandise no how deep the discount. Of course, you take the risk of some inventory falling and as you say, its that ecard gift card, cash in on christmas day, loading up the ipads and iphones people open under the tree. Its amazing that number has doubled. I understand there are always going to be companying like a best buy. Do you agree here you should bet on some cheap value traditional brick and mortar games or the disrupters those taking advantage of the online boom . I think the world has changed. I think what you have is a better opportunity. The people the samsungs and apples that are selling all these devices, theyre winning. Amazon i mean, the amazon is unusual, a oneofakind entity. Its hard to say whether or not to buy the stock or not because the valuation is so difficult. There are segments tjxs, off retailers are doing great. I was going to say, there are a couple of retailers, fabulous brand names like a gap or limited which runs Victoria Stores and bath body works, those are brick and mortar but they have a presence on the web. They can benefit from both. The feeling early on im talking about late 90s, is that if a company had both brick and mortar and online, it would be cannobolizing each other. Yeah. A lot of the specialty nordstroms, Urban Outfitters, anthropologie have done it that way. Reporter to that point, macys is opening a new Fulfillment Center in oklahoma. Macys is doing one of the best with omni channel offering for consumers, in store and online. Many think its a winner this season. They can hopefully continue that trend throughout time building these Fulfillment Centers and using the stores to fulfill from the web. I was going to say, even Urban Outfitters, which steve mentioned, heres a company that has you know, theyre telling us that within a couple of years, theyre going to get up to about 50 of their business coming from ecommerce. So, dont count some of these traditional bricks and mortar guys out because they are really getting with it. Theyre really building up that ecommerce building in terms internet and mobile apps. I was telling kelly before we went on the air, years ago when i was doing power lunch, i remember having a couple retail analysts on the show and i was shopping online at that point and i said i think this could be big some day. They both said to me no 2 3 is what youll get, maybe 5 of retail sales down the road. Wasnt this inevitable or a big surprise to you guys . Its inevitable that the mobile devices have changed the world. Instead of being 5 10 of your business, it could be much more. The thing Urban Outfitters has done is they limited the number of stores they have to 250 stores. So, you could do a lot of Business Online and they have 50 50 split. You go to retailers like American Eagle or gap, they have 1,000 stores and they have to downsize, cut the someone has to a buy them up and consolidate. Appreciate it. Snuffles reagan get back in. Heres the dow, not a ton of Movement Head of the fed meeting tomorrow. Just waiting for that fed meeting. Boeing playing hard ball with Washington State workers. Not so much with investors. That stock has been flying high after announcing a huge Dividend Increase and a very big stoke buyback. When we come back well hear from one person who says the sky is the limit for boeing shares. Did you see this one . Paul mccartney, whos worth nearly 1 billion look at that disappointed after failing to catch a free tshirt at an nba game last night. Hes competitive. Come on. We want to know what you think about that, if you have a caption for the video. Were having caption contests. Tweet us cnbcclosingbell. Americans take care of business. They always have. They always will. Thats why you take charge of your future. Your retirement. Ameriprise advisors can help you like theyve helped millions of others. Listening, planning, working one on one. To help you retire your way. With confidence. Thats what Ameriprise Financial does. Thats what they can do with you. Ameriprise financial. More within reach. I wanna spread a little love this year [ male announcer ] this december, experience the gift of true artistry and some of the best offers of the year at the lexus december to remember sales event. This is the pursuit of perfection. This is for you. [ male announcer ] bobs heart attack didnt come with a warning. Today his doctor has him on a bayer aspirin regimen to help reduce the risk of another one. If youve had a heart attack be sure to talk to your doctor before you begin an aspirin regimen. Not a ton of followflew with yesterdays rally. Whats going on today . Not a lot of action here ahead of the big fed decision. Lets kick things off with bigger movers of the day. Frontier communications up around 9 . Thats after the telecom said it would buy at ts land line business in connecticut for 2 billion in cash. The deal gives frontier 900,000 phone lines and 15,000 broad band internet connection. Then two other big movers in large cap, Computer Stores device makers sea Gate Technology and Western Digital are up around 3 4 on the heels of upgrades by jpmorgan citing slower migration away from hard disk drives to flash memory products. Financial data factset is down. Well cap it off with boeing. The stock is flying higher after they announced late yesterday it would boost dividend by 50 and approved 10 billion buyback program. Largest in the companys history. Boeing shares are up 8 1 so far this year. Back over to you. Dom, thanks very much. Lets talk about that. Could boeing stock fly even higher from here or will it finally be grounded . I got all the lame puns out of the way. Thank you for that. John joins us from gfi group saying it has more room to run despite the climb. Guys, welcome. John first to you, i would love to know why after this run you think boeing goes higher from here . We think actually boeing has a beta of one. We expect the market to go higher. Backlogs are nice. We love buybacks. We love when the companys on our side. The Institutional Ownership is below 80 . We think that will ramp up. Dont think you can have another nice move of boeing. As well as the fact theyre buying back about 10 of the float. Theyre going to have to go and compete against boeing to get exposure to the stock. Yeah youre not exactly bearish on this stock. It hit your price target and you said enough was enough for the time being. Is that it . Yes. Boeing has been a great story over the last year. Executing really well on their biggest program. New program was 788. Down from being a cash loser to being almost break even. Hopefully in a year and a half. There are a couple big risks in the stocks people havent taken account of. The biggest is the program thats making half their money in the commercial business. The triple seven. The backlog is getting pretty low. They announced a successor plan meaning orders for old orders will start moving lower. People having to factor that into their estimates. The flipside is boeing has to invest about 10 billion just to build the plant for that new plane. Not bad news but big haul on cash. If thats a big haul on cash why turn around and increase dividend, do a buyback and put cash forwards other purposes they could be investing with . I think thats one of the reasons we like the stock. Obviously, Free Cash Flow is very good. That will increase. They have half a trillion in backlogs. The fact the sequester is rolling off, defense spending is probably going to increase. The world is not getting safer. Its getting more risky as in ukraine, asia we see basically in the middle east as well. Those are factors short term that will drive defense, not even to mention they might spin off defense and aerospace. Thats another catalyst. As well as the fact getting back to the oil and gas situation and the fact that the u. S. Is going to be the best place to manufacture anything over the next three to six years, so the fact the costs will be going down you know thats one thing people arent factoring into the equation. Just in terms of the backlog, its true. Boeings backlog is stunning. Sitting over seven years. The issue is it looks like a lot of demand from the market has been pulled forward. Rates are low. Its easy to get money to buy a plane. Fuel prices are high. Theres a good argument for buying a plane earlier and swapping out that old, inefficient plane earlier. If you look at boeings old estimates for underlying aircraft demand it looks like production rates are five or six years ahead of where they should be. Its clear future demand is being pulled forward into the current period which means there wont be a lot of growth if you look out in future years. I want to bring up from a different point of view boeing has been able to play one state off another to get the best possible deal for the location of its manufacturing here, which is not a great deal for states. It has been proven this tax incentive Gaming Business is just a net loser for everyone but the company involved. I guess its a good sign from a shareholder point of view and perhaps thats why they felt more confident being able to go ahead with this dispersement plan. I think this is notice time for union eberus. I think thats another positive. The reason why theyre doing the buyback. Dont fight the fed and dont fight boeing. I think i think that the Union Negotiations and boeings decision to move the plant elsewhere for 777. Thats going to make them a lot more competitive over the long term. No question about that. You also have to recognize that boeing is doing that because the investment will be required and this new plant is going to be enormous. Pressure in terms of cash is going to be significant. Its great for boeing but youll get paid for it in 2020. If youre patient. Good to see you as always. Thanks for your thoughts today. Half an hour left to go before the close now. The dow is up 14. As we said earlier, interesting moves even within this space where you have high fliers with regard to a yelp but linkedin is lagging. When we come back diana olick tells us why you might to want remodel your porfolio. Facebook rolling out video advertising as latest effort to boost bottom line. Some people really dont like auto play videos. I love them. Who doesnt love them . 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Eye opening number on builder confidence rising to highest level since august. The real money in housing isnt heading to new homes. Its actually heading to remodeling. Diana olick whats going on here . Two things. The return of home equity and the return of confidence in home values. Both of those are making homeowners look at their homes in a more positive light. In that light theyre seeing what they want to change. First, fast rising home prices brought more than 700,000 homeowners back into the black on their mortgages just in the Third Quarter of this year according to core logic. That equity gives homeowners not just the ability to remodel but that confidence. So in turn residential architecture billings hit highest level in seven years this fall according to American Institute for architects. Additions, kitchen and bath, back in business. Folks are not, however, pulling cash out of their home to finance their projects. They are more than ever now paying all cash. Remodeling permits are up 7 year to date. That from build fax. Remodeling jobs are mid to low level. During the housing boom and remodeling boom between 2004 and 2007, we saw highend renovations but today its more general upgrades and fixing things that are broken. I spoke to those saying they want to find new homes but they cant find what they want so they are choosing to renovate their own. This is the way its supposed to be. Isnt it . I mean we went through a huge boom an unsustainable boom. Then we went through this crash where so many were under water. Now were get back to what we would consider a normal sort of set of activity by people as they fix up the house that they want to stay in. Right. Except that a normal activity would be that maybe as folks get home equity and they feel they can sell theres that pentup moveup demand, but they are not doing that as much. Thats why when we talk about Home Builders and home builder stocks, what you want to do is look at Building Material makers going into those renovations rather than just Home Builders. I would love to know the demographics. If its somebody in my generation, were not looking to move up too much. The kitchen, im talking the kitchen. Thats not low level. It depends. Thats going to add to the price of your home down the road some day. Thats normal. Thats not flipping and burning. Doest does require home prices to keep moving in the right way, at least. It does. We expect home prices to see gains but they will ease because they were going up too far, too fast this year and thats not sustainable. Diana thank you so much. Good luck with the kitchen. Yeah. That can ruin a marriage, too, by the way. See you later. Where are we . 23 minutes left in the trading session here today. Were going out flat today. Wait until the fed News Conference starts tomorrow at 2 p. M. Eastern time. Youll see it here on cnbc. Until now, its unchanged. We just dipped negative slightly. New data proving socalled smart money trading at the close giving you more reason to watch the program, but proof this is the most important hour of the trading day. Sky fall you ever want to channel your inner james bond . Now you can by chatrting the yacht from skyfall. Sing it adele stick with innovation. Stick with power. Stick with technology. Get the new flexcare platinum from Philips Sonicare and save now. Philips sonicare. My mantra . Family first. But with less energy, moodiness, and a low sex drive, i saw my doctor. A blood test showed it was low testosterone, not age. We talked about axiron. The only underarm low t treatment that can restore t levels to normal in about 2 weeks in most men. Axiron is not for use in women or anyone younger than 18 or men with prostate or breast cancer. Women especially those who are or who may become pregnant and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. Report these symptoms to your doctor. Tell your doctor about all medical conditions and medications. Serious side effects could include increased risk of prostate cancer; worsening prostate symptoms; decreased sperm count; ankle, feet or body swelling; enlarged or painful breasts; problems breathing while sleeping; and blood clots in the legs. Common side effects include skin redness or irritation where applied, increased red blood cell count headache, diarrhea, vomiting and increase in psa. Ask your doctor about axiron. Tdd 18003452550 searching for trade ideas that spark your curiosity tdd 18003452550 can take you in many directions. Tdd 18003452550 you read this. Watch that. Tdd 18003452550 you look for whats next. 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We are looking at what stocks at the nasdaq still have room to go, despite all of those big gains. Weve been coming through analyst price targets and find three names analysts think are poised to pop. First up on the list, is vertex pharmaceuticals. Analysts are expecting 40 increase. Oppenheimer says if you look the pipeline, its strong. The company has been cost cutting. Second up is ebay. This is interesting because this stock has been an underperformer this year, basically flat on the year. Analysts are projecting the stock to go up about 20 in terms of their price target over the next 12 months. They say, the earnings group, guidance picture have been terrible this year. If you look at fundamentals of the Business User activity is growing and thats what counts. Rounding out the list, cisco. Another underperformer a controversial stock in terms of how its doing but analysts project the stock will rise 15 to 17 over the next 12 months. Bottom line with the story, ebay guidance story, earnings story, not looking pretty. They say First Six Months of the year may not be great but networking is big, its a profitable business. Computers always need to talk to each other and thats where cisco plays a big role. Back to you guys. Thank you very much. Meanwhile, theres now a stock market phenomenon we need to bring to light, dont we . Youve heard us say this is the most important day of the trading day. Now the proof. The smart money gent get into the market until the afternoons and that can change the dynamic of how much you make or lose. Heres a chart showing you xhaktly what were talking about. Look at gains if you buy after the close. With us for more art cashin from ubs who flagged this phenomenon in his note this morning. What do you make of it . I think there are a couple of aspects to it. If you bought at the close and sold at 10 00 the next morning, you made about 8 . Since the market is up 10 , you captured most of the gain. From 10 00 to 3 00 virtually nothing happens. Then if you bought at 3 00 and sold at the close, you lost 4. 5 . The morning trade lately has been dominated by the international investor. Bingo. Right into about 11 30, before noon when europe closes at that point. Is that whos buying . I think thats correct. I dont think its so much the retail fully. I think it is europe joining in and others looking for an advantage. It is truly a global market. The interesting thing, the losses in the final hour. That would kind of bear in with the very poor performance of the Hedge Fund Community over the last year. So, theyre probably trying to fight it off. Thats why theyve lost out. Final two active part of the year bob pisani has been waiting patiently to go on the air with us. Welcome. I think its an interesting phenomenon phenomenon. Im not sure i associate it with retail money smart money, dumb money. Most retail traders are flat at the end of the day. Day traders, they go home flat. At the end of the day they have to start buying. Theres a natural tendency for the market to move up in that first half hour. Then those people who are active traders who have to get out, tend to look for periods during the day when they lighten up. It makes sense to have more upside in the first half hour and more downside in the last half hour. This is a miniature version of the First Six Months of the year first middle trading period of the year when the market you know tends to rise or tends to fall. I think its a fascinating trading pattern. Thats why to take this beyond whether its a trading pattern if theres a signal we can glean from it thats why analyzing who is doing this buying, if you believe the guys who run the institutioning have an advantage and paying attention to the weakness and the close, thats the point, i guess, bob. Well, the other thing is that the last hour is very important simply because of the clock. If you use the analogy of the stock market as a poker game n that last hour youre running out of time to bluff. Have you to show your hand one way or another. Because youre always pointing out to us trading gets very sincere. Its incumbent to point out anyone thats a longterm investor, this doesnt amount to a bill of beens. This is for the guy who gets in for a short period of time day traders, arbitrageurs. I think its fascinating. Its just a natural tendency for traders who have to get in in the beginning of the day. They trade intraday and they have to buy at the open. That tends to push open up sideways midday and decline at the end of the day. Its fascinating to say, lets get in at 9 30 buy s p futures, tell them at 10 00, as a way to get an advantage to buy and hold throughout the year. If youre a shortterm trader its an interesting trading pattern. Don hayes who had the last hour indicator. I lost track of that. We may have to dig it out based on this survey. Mr. Cashin my pleasure. Thank you very much. Mr. Pisani, join us when you can stay longer. Heading toward the close with 13 minutes left in the trading session here. Hows the buy sell pressure right now . Dollarwise a little to the sell side. Very strange mix. The s p looks 50 50. Theyre waiting for the fed meeting. Right. And the dow is virtually unchanged, up a point. All eyes are on the fed tomorrow. Will they or wont they . Well try to do this tease without saying that t word. Former minneapolis fed chairman gary stern is here to tell us what he thinks ben bernanke might do coming up on the closing bell. Are tight. But its hard to get any work done like this. Then came this baby small but with windows and office. It runs my work stuff. And i can use apps like flipboard for news or xbox video to watch the shows im never home to see. And i can still get work done at the same time. Excuse me, do you mind if i. Yep. Honestly, i wanna see you be brave this is for you. [ male announcer ] bobs heart attack didnt come with a warning. Today his doctor has him on a bayer aspirin regimen to help reduce the risk of another one. If youve had a heart attack be sure to talk to your doctor before you begin an aspirin regimen. I wanna spread a little love this year [ male announcer ] this december, experience the gift of exacting precision and some of the best offers of the year at the lexus december to remember sales event. This is the pursuit of perfection. Here at fidelity, we give you the most Free Research reports customizable charts, powerful screening tools and guaranteed 1second trades. And at the center of it all is a surprisingly low price just 7. 95. In fact, fidelity gives you lower trade commissions than schwab, Td Ameritrade and etrade. Im monica santiago of fidelity investments, and low fees and commissions are another reason serious investors are choosing fidelity. Now get 200 free trades when you open an account. Welcome back. We have breaking news. That story from sunday night, horrible tragedy at the mall in new jersey not far from here the New York Stock Exchange where the young 30yearold daughter was shot and killed during a carjacking initially city officials put up a 10,000 reward seeking information for those carjackers who are still at large. Now short hills mall itself kicked in another 20,000. So the reward for information is now up to 30,000. Again, its just a horrible story. The carjackers are still at large at this hour. So 30,000 is now the reward on that story. About ten minutes left here. The market is just flat going into tomorrow, waiting for the fed meeting. Joining us right now is dan mcmahon from Raymond James and mike santoli from yahoo finance. Youre not expecting anything from the fed tomorrow . No. I expect theres a very small chance the fed does anything. Maybe in terms of policy maybe clearer guidance. You think they change the language . I think theyll give you some kind of potential clarity. What do you expect, dan . I think much of the same. Nobody wants to hand the incoming head some type of hot poe potato they have to deal with. Its coast through, give it to the next regime. What if i agree with you. I dont think they do anything until march when janet yellen is ready to take over at the earliest, but what if they hit metrics theyre after . They want 6. 5 inflation, and if they got close to that bernankes hand would be forced wouldnt it . I think taper will go on a schedule i think weave gotten it with the exception of inflation. Inflation gives them a free pass. Other conditions are just as they were in september when they diplomat do anything. Tenyear note yield is the same mortgage yield is the same. Seems to me they have the excuse to do very little. I think the bigger takeaway for investors is even when they begin this process, Everyone Wants to see it start, i think. It doesnt mean you have a real clear path to what happens next. Youre still going to be sitting on every single data point from there on out. Does that affect any way youre looking at investing in this market right now . No. Were cautiously optimistic about 2014. We expect some pullback in the neighborhood of 5 to 10 . Certainly due arent we . Certainly. Well over due. Theres a bear story all the good things are priced into the market so were well overdue. Short opportunities are presenting themselves, if you listen to some investors who can short stocks. Its not changing our thesis. We know its all but a certainty in 2014 that the taper will begin to end. Its just a matter of when and how and what the velocity will be. What do you want to invest in . What prevails here . Are you going tore early cycle stocks . Is this the beginning of a we are probably avoiding the Interest Rate sensitive stocks a little bit. We like the growth stocks. We like those stocks that have had decent stories but not outrageous valuations heading into year end so not so much the high fliers. We think some opportunity in tech. Whereas so long as the gdp continues to rise there will be some growth in stockswell. Its great parlor game as well on wall street what the market will do the moment they utter the c t word, right . I think you get a bounce to the upper end as a reflex move. I think whats gone on in december is interesting. You had to have certainty december would be this easy levitation trade. Its gotten burned off. Maybe you just bounce up to the upper end and see if there are real buyers there. If they say theyre going to think about tapering you think the market rallies . No. If they actually do nothing, we get confirmation they do nothing, and then were back to where we were before. I know youre a longterm investor, but we love playing these shortterm gains. Were actually seeing more selling into rallies than we are buying of the dips. Really . Yes. Derisking a little bit f thats a phrase or a word. Taking some risk off the table, taking advantage of the strong year and positioning themselves for14. Got it. Thanks. Well take a break and come back with closing countdown for tuesday. Apparently all Paul Mccartney wants is a free tshirt at a basketball game. Do you see how disappointed he looked when he didnt catch it . Paul ease up there. I guess those beatles royalties arent paying what they used to. Give us a good caption for this very funny video. Tweet us cnbcclosebell. Well reveal the best responses coming up. [ male announcer ] how could a luminous protein in jellyfish impact Life Expectancy in the u. S. Real estate in hong kong, and the optics industry in germany . At t. Rowe price, we understand the connections of a complex, Global Economy. 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Its clear, theyre waiting for the fed announcement tomorrow. What does the market want to hear, do you think, to rally . I think the market wants to hear the fed is going to take a prudent look at tapering. That theyre not going to that theyre going to do it in a contro fas the market should be able to accept that. Interest rates are saying part of this tapering is built into whats going on here f you look at the bonds over the next six months as they tick up. These yields are saying to you, tapering will end at some point or another. Also a reminder that you know the markets will determine Interest Rates in the future not necessarily Federal Reserve policy. Were getting back to that now. The fed has been so lucky with low inflation right now. The prevailing wisdom is any time they Start Talking tapering, market sells off big. The partys over. The easy money party is over at that point. Do you buy that at all . I think that is that a dip you buy . I think its a dip i buy, yes. I actually think the market may rally over the tapering scenario. A lot is built in. A lot of expectations are built in. The other thing the market will look at closely is, again, the inflation and the real rates versus nominal rates of interest. As the market begins to assimilate market rates are relatively well. Interest rate necessarily run away from the fed and run away from objectives at the same time. I think its congruent as long as the market can stay in check. Were going out flat here. A little dip to the downside in terms of buying some selling as we await the feds announcement. Well have live coverage beginning at 2 30 eastern time tomorrow. Meantime, stay tuned. Its kelly evans and company on the second hour of the closing bell. Ill see you tomorrow. Welcome to the closing bell. Im kelly evans. Were taking a look at markets as they move to the sideline waiting for the fed announcement tomorrow. Dow finishing in the red. Down about ten points despite trying to stage a late day rally. Nasdaq and s p are weaker by five points. The indexes for those of you watching the numerical levels. We didnt quite get much closer to 16,000 despite yesterdays rally, but lets bring in todays panel. We have our very own jane wells, cnbc contributor Jane Roth Kate Kelly and joining us is fast money trader brian kelly. Brian, what jumps out to you about the Market Action and youre not allowed to use the word fed . Im not . Then the fmoc. The action today, it was a nonevent type of day. We had really good rally after pmi numbers. A day of going sideways doesnt bother me too much. I think tomorrow will be a nonevent. If you wake up and say, the fed might taper today, youre not doing your job. Money managers have been thinking about this for months. Theyre fully positioned. Thinking about year end, you go a little higher and you look toward 2014. Kate i see you nodding. I think people are excited. Taper or no taper, i think this market has legs to it. Ive been talking to Hedge Fund Managers about what the new big thing is going to be for 2014. Whats the new exciting asset class . Sticking with equities . Im getting equities, equities, equities maybe ipos across sectors. Theres a lot of euphoria and the fed is less of a factor. I love you said that sharon. Its the exact opposite of what i cover in commodities for gold. A lot of folks are saying no matter what happens tomorrow the sentiment in gold has been so weak for such a long time outflows from the gld, largest gold etf have been earth shattering in the last couple of months. In terms of what were seeing in weakness in oil price, a lot of traders i talk to say, of course were looking for the fed in the afternoon but theyll be watching to see what the numbers look like in terms of the inventories for oil because thats more likely to drive that market. True. Jane . Five women on the set, wheres the red wine . Its under the table over here. I think for look, im a main street type of person. Everybodys saying the taper is factored into the market. I find that to be complete baloney because every time someone says its baked into the market, then it isnt and everybody freaks out. Youre so right. Its usually about the certainty. I know its kind of a farce because there is no such thing as certainty in the market but i think the perception of certainty. So i dont know that the fed is actually going to taper, even give specific guidance well taper in january but they are going to hopefully reiterate some metrics here. I think thats really what the markets looking for. Speaking of the metrics, theres so much focus on the Unemployment Rate and i cant wait to ask gary stern about that, that interview is coming up later this hour goldmans recap of 2013 they were saying here are the ten things we said were going to happen we nailed them, except we missed the Unemployment Rate. Its come down to 7 . Theres a difference between the unemployment number and u6 number. Even though we have 7 , we have a very low participation rate. If you look at the u6, which is over 13 , i think thats a bigger factor and the fed will lean on that when making a decision. Heres another question. Are people skeptical about the data to begin with . You remember the conspiracy theyres our own jack welsh with espousing, is that legitimate on the one hand kate the employees at department of labor who werent doing the calls they were supposed to and fudging the numbers and then the clear downward trend. The Unemployment Rate and the key point, on the Labor Participation rate. If youre the fed youll say, sure, its down but we would like where i live people are working but not working as many hours. Theyre working at jobs that pay less money. Maybe theyre not technically part of the unemployed anymore. They had benefits and god forbid they try to go on healthcare. Gov. Exactly. To be underemployed, even looking at all the gains in the market, people are saying i dont want to participate because i dont have the disposable income to invest in this market. One of my colleagues was asking why arent people seeing as record highs . I said because theyre underemployed. Thats why theyre concerned and were not seeing the participation in the markets. Brian, we were flipping through the sectors. It looked like tech and materials were the only two that were up today. Which is still interesting because those two sectors where i feel theres the most potential buzz going into 2014. Is this a preview of whats to come . If you you think the Global Economy is Getting Better which is what all the pmis are showing, you want to be in material sectors n commodities n base metals. These are all areas that you have less mining cap ex. They could be supply constrained in a growing Global Economy so the risk here is to the upside. This issue about commodities, to talk about and the manager survey just confirmed this for december commodities are still a hated space. So f youre putting faith in what brian suggested, sharon, do you go with copper long position . No. Its a difficult or socks. There is a base metal etf, dbd, which is heavy copper. You also get all the other zinc led, aluminum or go with alcoa. Its starting to perform fairly well. The mining index has been one of the most hated index of the year. Maybe its poised for a bounceback. Should they not wait until after the end of the year for those doing tax loss harvesting equities are up 30 , you have to be careful with some of these beaten down names before the end of the year, arent you . People im talking to are saying just that. Theyll wait until the beginning of the year even if there is a rise up. One trader said if you look at where weve been in terms of shifting out of gold into equities, even if we have a taper, if there is any fluctuation in the equity market, could we see gold get a bounce, even with a taper . Thats something to watch and a lot of folks dont know the answer of how much is baked into this market. But the sentiment thats going to have to shift overall. Remember when everybody thought gold would never go back to 1,000 again . How long ago was that . No no back up. Back up. Oh well never top 1,000 again. What was that, like three years ago . That was at the same time you could buy oil for in 2009 it was still sub 1,000. I dont know if that conviction was there. If wasnt that long ago. If you want to talk about the biggest blown call of 2013, what was it . It was to be long gold inflation protected securities everything and this at a time when a lot of pension money or whatever you want to call it they had to have this as key pillar of their. Portfolio portfolio. That pillar collapsed. Short gold, silver and coffee were the best short positions this year. Really . Coffee is in a massive rout. Its like 20odd percent. Chocolate, cocoa. Always go long chocolate. Wheres the red wine . Quietly can starbucks has benefitted from that margin. Brian, a couple names, themes you want to keep an eye on for tomorrow . I couldnt help put look at the tlt. The cpi report comes out, pretty much every component except rent is declining. No surprise that is rallying. That is going to be ground zero for tomorrow. You know as we look into 2014 i personally am short bonds for our portfolios. And i think thats going to be the way to position for 2014. What you look for tomorrow you guys talked about the Unemployment Rate if the fed decides to taper, do they lower that threshold to the end of qe down to 6 the unemployment threshold. Right. I want to know what they say about that inflation rate, too. Lots to glean from the state. 1 50 p. M. Eastern. Thanks, everyone. You can catch brian on fast money at 5 p. M. Coming up on this show tech titans gathering the at the white house, not for a Holiday Party but to discuss the troubled government website, job creation and nsa. Now video ads are coming to facebook. What will do that do for the bottom line and will users like the experience . Thats coming up. The American Dream is of a better future, a confident retirement. Those dreams, theres just no way were going to let them die. Like they helped millions of others. By listening. Planning. Working one on one. Thats what Ameriprise Financial does. Thats what they can do with you. Thats how ameriprise puts more within reach. Welcome back. If you went looking for a tech titan in Silicon Valley today, you probably wasted the effort. Anyone who was anyone was at the white house, including our own eamon javers. This was no holiday celebration. Reporter we had ceos of Facebook Google yahoo more than a dozen all told. An unusual session by white house standards. Two hours and 45 minutes. We got to see some pictures of the executives as they began their meeting. We got to see a little executives as they came out of the white house. We tried to ask them a few questions. They werent biting on answers. Thats because so much of the conversation today was on this sense sensitive nsa spying between u. S. And tech community. Very sensitive conversation at the white house. Speaking of which, wasnt there some dustup at the press getting access to the meeting at all . Reporter absolutely. There have been tensions here that have exploded into public view between White House Press corps and white house itself over how much access particularly still photographers, but how much of us have to this white house. There was question who would be allowed into this meeting. The white house did allow a video crew at the top so we could get pictures of what happened at the beginning of the meeting. Theres been a real battle here about access to this white house. How unusual is it for a meeting like this or relationship with the white house to get to this point that its, as you say, exploding into public . What happens now . Reporter the real sort of area when this blew up was on air force one going to Nelson Mandelas funeral, bill clinton on the plane, mr. Bush and the white house allowed their own photographer to go in and take pictures but they didnt allow any actual reporters in for that. That was the flash point where a lot of reporters said hey, wait a second you cant cover these events yourself. Have you to allow real reporters in otherwise the white house gets to select the message, the image, they tailor it all when they decide what to release on social media. What reporters have been saying is theyment real reporters independent of the white house to go in there. Troubling turn of events. Thank you for recapping it. Eamon javers in washington. Facebook in the meantime is rolling out online video ads that will automatically Start Playing on users news feed. Is if a good plan for investors . Stock today up 2 on the news, nearing 55 a share. Joining me ross gerber, whose firm advertises on facebook but not a fan, and larry from dyna link a facebook shareholder. Larry, are you worried about backlash . Im not worried. This is a wonderful thing long expected. The most powerful operating system in the world. The idea is youve got to be in video advertising. Thats where big dollars will come, big revenue, big advertisers. Its a de facto system and targeted ads on video is king. Its huge. I think this will add another 1 billion in revenue. Where does that put facebook shares if youre right . I think theyll finish the year u i think it will hit over 60 by the end of the week. Next year at this time i think its 100 stock. This is longterm growing advertise refer new main stream. High tech, high touch. This thing will take off. Ross you could argue people are used to ads on Television Ads all over youtube so this wont be that big of a deal for fusers and advertisers will like it. I think video ads have a nice element to it. What facebook is doing is selling out for the short term to get money into shareholder pockets today for maybe the experience longer term. Let me tell you, i think its a fine line between what amount of ads im willing to take on facebook and still use it before im just done with it. Im pretty sure theyre there now. Any more ads, im done. I disagree. The whole world is going to video advertising. As we continue on the video on the mobile as we go to smart tvs. It will be high tech high touch. But larry, whats interesting is im not disagreeing with that. Ross is not disagreeing. I dont go on facebook for that experience. I want to see what my friends are doing. I want information from the people i care about, not from advertisers. I advertise on facebook and the engagement is incredibly low compared to google or yelp. You have to ask yourself as an invoeer on the short term, i think youre right. Its great for the stock short term. Remember there was this Great Company invented the television called rca. Where are they today . Im going to bet big money advertisers come to it because everything flows through it. Its where you have to be in advertising. People are doing that larry do you have a facebook profile . I do not. So youre not youre a shareholder seriously. My business is on facebook. I do not have a personal facebook profile pp. Ask your kids what nair using . But also ask them what its like . I can tell you even now when i get linked to youtube videos from my friend i hate opening them half the time because i have sit through, click through to get past the ads. Our Attention Span is so short today. These kids, their Attention Span is so short. Are they watching too many videos . Not really unless its really good, the anchorman ichltd i trailer for the video, theyll watch that you have to be in it to win it. Ross, are you and your kids on instagram . Yes. My kid is 1 1 2 so hes not using that. Instagram is what facebook used to be and what it should be. Theres no ads on instagram. Exactly. And they own it. If you look at the note from oppenheimer today, they slapped a 16 billion valuation on it. Instagram is incredibly popular right now. A lot is the traffic migrating from facebook to instagram. I give them credit on the acquisition. It was a very smart move. If you look at the other Companies Big in social media and growing, whether its the snapchats of the world or whatever, theres so much competition. People are just migrating. Younger people are migrateing to Different Social Media sites. Thats reality. I disagree with you. Have you to be in video advertise advertising. This will catapult them over next year and into the future. I think theyll take over and go up against google and youtube. And i think twitters vine will take it all over. Triple digits in 2014. Well see if youre right. You should sign up for an account. That, too. Movie goers turned moguls might happen. Some loyal customers of amc offered ipo price. [ male announcer ] heres a question for you the energy in one gallon of gas is also enough to keep your smartphone running for how long . 30 days . 300 days . 3,000 days . The answer is. 3,000 days. Because of gasolines high energy density, your car doesnt have to carry as much fuel compared to other energy sources. Take the energy quiz. Energy lives here. Bny mellon combines Investment Management investment servicing, giving us unique insights which help us attract the industrys brightest minds who create powerful strategies for a countrys investments which are used to build new schools to build more bright minds. Invested in the world. Bny mellon. [ bagpipes and drums playing over ] [ music transitions to rock ] make it happen with the allnew fidelity active trader pro. Its one more innovative reason serious investors are choosing fidelity. Get 200 free trades when you open an account. Welcome back. You may be able to join the ranks of walt disneys of the world or own a piece of the studio. Amc expected to price its ipo in what may be the ultimate customer rewards program. Well have julia about this one. How do you turn movie tickets into people being stockholders of amc . Amc is one of the biggest theater chains out there. Theyre really hoping all their movie goers will also want to buy into their ipo, which is expected to price after the bell and begin tomorrow morning. What amc is a little different. It reached out to members of stubs and offered them a opportunity to buy into the ipo between investing between 200 and 500 on shares. Theyre using a system called loyal three, allowing members to buy into ipo without all the extra fees. Kelly, i think this could be a Smart Marketing move. If they get investors to feel really committed to the theater chain, then more reason they should go to amc rather than one of their rivals. At the same time, reports demand for this ip on is a little tepid. The two rivals are cinemark and regal. This loyal three offering direct to consumers is relatively small. Its a small piece of the overall ipo offering but its kind of a fun marketing play. But there are a lot of reasons why amc has advantages over its rivals. They charge higher prices on average. People spend more on beverages. They have a lot of fun extra things like reclining seats and bars and lounges attached to their Movie Theaters. At the same time they are more highly leveraged than either of the other two major companies. They still have the overhang from the lbo. Appreciate it. Is this a stock you should buy tomorrow when amc hits the open market . Joining us david menlo. No one knows more than ipos. I love this deal. Its a rags to riches story where we had a leveraged buyout and all the people with cash thought they would make a grand slam and ended up selling at the bottom. Im gesticulating wildly to kate kelly. Please. This is an interesting deal. I asked a couple of sources on wall street what they thought about this process. They were dubious. Bear in mind some do the traditional ipos so they dont appreciate being cutout. But they said remember vonage in 2006 facebook last year. Any time you have this attempt to have customer participation is not a guarantee of a good afterperformer. Those stocks notoriously did badly. When you have a movie going crowd that knows more about cp30 than ipos. You have chains that went private, merged sold and coming back public. Was there any value that was created or is this really a Financial Engineering play . With 2. 2 billion on the books, it seems like this was a financial play more than actual value being created for the underlying chain. Its interesting if you go back to 2004 when the deal was originally announced for leveraged buyout of 2 billion, i think it was 1. 6 billion in equity by the time the Chinese Concern came around in 2010, they bought it for 700,000. We had three unsuccessful attempts to bring this Company Public in 2007 for a valuation that was 2. 87 billion. Now were seeing a valuation at 1. 8. We a smaller valuation for a company that will deliver far more than anyone imagined. Does this sound crazy for a movie goer it may work for Warren Buffett to buy things he believes in no it does work. So many people dont understand leveraged buyout exactly. Why they shouldnt buy stock. Maybe they should start to buy something that they do know and start to understand it. And starting at 100 with something, if theyre like me they spend 100 at the Movie Theater any way every year. Exactly. With kids, thats not unfeasible. This is an opportunity for people to understand what it means to get into the ipo market. Its very risky from a company standpoint Customer Loyalty perspective. What keeps them sticking and loyal could cut them the other way if the stock doesnt do well, if they dont get the allocation they want, that could make you not loyal to the brand. I covered amc in the mid2000s for thethe wall street journal and there was so much resentment against that destroy. The trade association would go out. A movie is still cheaper than mini golf or basketball game but people are like you paid a lump sum for the movie and why are we paying 7 for popcorn. Jane will be first in line how much do you go to the movies . How often . Im not normal. I go like twice a year. That is normal. Id like to get in here, if i can. Yeah go ahead. I really believe this is a Financial News channel, the best out there. Its nice to be able to talk about the ipo process, but what we need to be focused on is the experience of the customer. When a customer gets in there and realizes these upgrades that are are going object in the next five years, strategic initiatives, this will completely change how investors are just to make sure i have you straight. Youre saying, yes this company has been through a rocky period. Yes, its going to be valued at a discount to its rivals but if you believe theyre going to upgrade the offerings and be able to make more money, then you should be involved in this ipo . Without question. The question on that david, i guess if theyre going to use the money from the ipo to pay down debt and they have so much debt on their balance sheet, where are they getting money to upgrade the chain . Theyre not going to pay down the debt. Theyre thinking theyre going to pay down the debt. They have two note offerings of 600 million each trading at a premium. They might pare it down slightly. They still have 400 million in cash they can use for the upgrades. Look, this is what makes the market right . David menlo, appreciate your time. Wall street has tomorrow circled on its calendar for weeks. Fed decision day. Fed chair Ben Bernankes last hoorah. The taper question will finally be answered and former fed president gary stern is joining us next. Consumption in china impact wool exports from new zealand, textile production in spain, and the use of medical technology in the u. S. . At t. Rowe price we understand the connections of a complex, Global Economy. Its just one reason over 70 of our mutual funds beat their 10year lipper average. T. Rowe price. Invest with confidence. Request a prospectus or summary prospectus with Investment Information risks, fees and expenses to read and consider carefully before investing. 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Tdd 18886486021 call 18886486021 to learn more. Tdd 18886486021 so you can take charge tdd 18886486021 of your trading. The Federal Reserve concludes policy meeting with big announcement on stimulus and what Ben Bernankes final meeting as fed chairman will hold. All of this seen on the closing bell. My next guest thinks it will begin tomorrow. Joining us on a cnbc exclusive, former minneapolis fed chair gary stern. Thank you for joining us. Good to be with you. You looked quite closely, you seven on a number of boards. You think they will taper tomorrow. Why . Yes, i think it will but its a close call. Some are concerned about the pace of the economic expansion. I think they will taper because most conditions are right. The economy is doing better. The labor market has improved. Much of the uncertainty surrounding the budget has been resolved now. It certainly has diminished. And, you know there will never be a perfect time to start. This seems like a good time. Thats why i think they will. What about inflation . We just had another reminder this morning, the Consumer Price index, pretty much every component falling month on month. Its up roughly 1. 5 if you average out headline year on year. Why not safe than sorry . Thats the counterargument theres no rush into this. Clearly thats what they decided back in september. I think its a close call. They could decide that again. On the other hand the inflation news its lower than their target. But there still is positive inflation. And if youre a central banker you dont want inflation to get out of hand. Thats a reason. While i think inflation doesnt get as much weight overall, but the performance has been from my perspective satisfactory. Has your view on the fed balance changed . Did you think years ago the condition would be more inflationary as a result of all this quantitative easing and have you been surprised they are not . No. Im not one whos greatly surprised. I think theres a lot of inertia in the inflation process which is to say, when inflation is low, tends to stay low. When its high, it tends to stay high. Its hard for Central Banks to move it around a lot one way or the other. Clearly, weve had low inflation for quite some time now. I expect that will persist even with all the stimulus. And do you think that your successor at minneapolis fed is indicative of people more generally coming around to saying you know what even despite as proactive as the central bank has been either they can or should do more because of the weakness . Clearly, some people think that way. Narayana may be one of those, although i let him speak for himself. The economy and markets have responded to some degree. It may be were in what i would call a Rhinehart Rogoff deal. That means the pace following a major financial crisis tends to be disappointing and subpar from perspectives no matter what policymakers do. Do you think that means they shouldnt . The reason im asking theres a back story here as well with whats happening at the minneapolis fed. Some economists who have left and the direction, again, that his own views have developed. Is your sense that activist policies as central bank is useful and has an impact and has a role . I think in this case the quantitative easing and purchases the fed has undertaken clearly have had what i would call a positive wealth effect. Theyve had an effect on equity values, bond values. That filters into spending. It has been positive. In my judgment it has not been a game changer, which is another reason why i think its appropriate to start to refocus policy at this point. All right. Well have to leave it there for now. Gary stern, thank you so much for coming by while in town and have a great holiday. Cnbc will be your place for live coverage of the fed decision beginning at 1 50 p. M. Eastern tomorrow. It will be followed by Ben Bernankes final News Conference as fed chairman at 2 30. Coming up, 636 million, if you can believe it, and climbing. Thats the bounty in the mega million lottery. Also, take a look at this. Sir Paul Mccartney estimated to be worth more than 636 million himself, but he still desperately tried to grab a free tshirt in the crowd last night. Is that fitting of a former beatle . Tweet us your caption caption cnbcclosingbell. Tures. To help communities recover and rebuild. For Companies Going from garage to global. On the ground, in the air, even into space. We repaid every dollar america lent us. And gave america back a profit. Were here to keep our promises. To help you realize a better tomorrow. From the families of aig happy holidays. I want to spread a little love this year [ male announcer ] this december, experience the gift of unsurpassed craftsmanship and some of the best offers of the year at the lexus december to remember sales event. This is the pursuit of perfection. My customers can shop around. But it doesnt 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. Thats health in numbers. Unitedhealthcare. [ male announcer ] what if a Small Company became big business overnight . Like, really big. Then expanded . Or their new product tanked . Or not . What if they embrace new technology instead . Imagine a companys future with the future of trading. Company profile. A Research Tool on thinkorswim. From Td Ameritrade. [ male announcer ] the new new york is open. Open to innovation. Open to ambition. Open to bold ideas. Thats why new york has a new plan dozens of tax free zones all across the state. Move here, expand here, or start a new business here and pay no taxes for ten years. Were new york. If theres something that creates more jobs, and grows more businesses. Were open to it. Start a taxfree business at startupny. Com. Welcome back. Whats popping on cnbcs hot list . Allen joins us with the breakdown. Whats at the top . Its pensions today. This time its sort of a flipflop of our usual pension story. Usually we have something about cities blaming pensions for Public Service employees for bringing down finances and stuff. Some researchers at boston college, they took a look at it. And they found that it was actually mostly due to bad decisions by local budget administrators. Were leading with dont blame pensions for cities woes. Nice writeup. Our second big getter earlier today, our futures internet only show interviewing mark faber, he said qe will last forever. It will never end. Wow. Thats why we call him dr. Doom. Essentially his rap is that this is going to sputter out. If they do a little tapering tomorrow, theyll have to take that back. Im going to short that prediction. Our third go getter fascinating piece on our staff, taking a look at north korea and the recent execution of jan sang thaek. He amassed a business conglomerate so this could be seen as the purge of 1 in korea. Fascinating look. Readers are eating them all up. All are logging at about 100 readers a minute. Thank you so much, sir. Again, that qe story doing well on the eve of this big fed decision. No surprise perhaps, people are finally understanding whats happening with pensions. Federal judges often issues rulings and opinions on cases and thats all they say on the case. Judge jed rakoff wrote a scathing piece in the wall street journal. Scott cohen is here following the story and the fallout from the judges unusual essay. This is really amazing, in the new york review of books. Its one thing if you or i talk about, why havent there been any high level prosecutions following the financial crisis . This is judge jed rakoff a sitting judge out of the Securities Division of the new York Attorneys Office so this is cases he may hear. He says im not saying there was fraud, but a lot of people say there are. If theyre right and failure to bring cases in this issue, bring people to trial, is in his words one of the most egregious failures of the criminal Justice System in recent memory. Pretty strong words. Is there blowback by him sticking his neck out for being able to continue taking these cases . Well well see what happens. I mean hes very careful, if you read this article. Its like a 4,000 word article. Hes careful not to make pronouncements on any specific cases. By the way, thats one of the things the doj faults him on that they dont say theres any one case that he says should have been brought to trial or person he says should have been brought to trial that wasnt. Well see what happens if he gets one of these cases. Its a fair bet he will if a case comes along. A defense attorney is saying, hey, look at this article from late 2013 where the judge basically showed his bias. Well see what happens. Right, exactly. It could affect his own ability to issue a ruling in some of these cases. Scott, thank you very much. Want to bring the panel into this one. Because i live in california where everybody is wants someone, they want blood, they want someone to go to prison for this. You could argue, people were lying its the epicenter with the mortgage meltdown. Yes. Its difficult to prove guilt beyond a reasonable doubt where there are various levels Countrywide Bank of america paid most of it. Last month when i interviewed prosecutor bob wagner, part of the jpmorgan 13 billion, i said when is someone going to go to jail. He said we have been looking into it for months now. Months. You mentioned an interesting point. I want to bring this up. The article isnt that long new york review books. It goes beyond wall street here. One of the points the judge is making is the whole culture has shifted from going after people to going after companies. He says for a company to be liable, one of its Senior Management has to have been guilty of misdoing anyway. If you go after the company and not the individual, its basically you know, you you save time and resources, et cetera, but he has this line where he says many innocent employees and shareholders are punished for crimes committed by unprosecuted individuals. Its contrary to elementary notions of moral responsibility. I think the challenge here is im all for personal accountability. In this particular case, theres such a web of mess and so many things that caused this, that its difficult to prove fraud. The people who lied on their mortgage applications, the applications that got passed the cdos the credit default swaps that had nothing to he makes the point. Im totally sympathetic to this point of view but he says the commissions report on this uses the word fraud 157 times. If you go back to the element of those who are hurt by this the people were these not sophisticated investors because thats another argument he says, its not about whether you whether those people should have been responsible for what they were buying into he goes, in that case you would let every seller of every fraudulent product off the hook. What i found interesting i was just koring this case downtown before i came here that deals with Insider Trading, Michael Steinberg accused of Insider Trading and the jury is deliberating right now. This article takes what could be interpreteds direct shot at manhattan u. S. Attorneys office because they have put a lot of prosecutorial muscle into Insider Trading cases with great success. Theyve had 76 convictions. The issue is it takes man power away from more plain i shouldnt say plain vanilla but more obvious financial crisis cases from the very people thats one of the points brought up too, is how much money has already been spent in litigation and all these things and do they really have a case against win individual. By the way, while were talking about fed and employment, lets remember because of sequestration, these offices are notoriously shortstaffed. Every time i want to give you a quick final word. In terms of clarity, its very easy to present Insider Trading case and have it be very black and white. I think in terms of a fraud here, thats very challenging. Negligence yes. Sloppy work yes. Fraud at the highest level criminal negligence. Thats his point too. Exactly. Its a fascinating read. Hope everyone reads it. We want to see what happens in the steinberg case too. Forget toys and clothes. Some peoples idea of the perfect christmas idea is to keep the fed pumping money. They always have. They always will. Thats why you take charge of your future. Your retirement. Ameriprise advisors can help you like theyve helped millions of others. Listening, planning, working one on one. To help you retire your way. With confidence. Thats what Ameriprise Financial does. Thats what they can do with you. Ameriprise financial. More within reach. vo you are a business pro. Seeker of the sublime. You can separate runway ridiculousness. From fashion that flies off the shelves. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. You can even take a fullsize or above, and still pay the midsize price. natalie ooooh, i like your style. vo so do we, business pro. So do we. Go national. Go like a pro. Welcome back. There is some excitement drawing for tonights megamillions drawing. Morgan, ticket sales are piling up. Every time i write down the figure, it jumps higher. Thats true. Call it jackpot fever. Megamillions continues to surgery ahead of tonights drawing as last minute ticket buyers flock into Stores Across the country. At 636 million, this jackpot is the second largest in lotto history, 656 million. It breaks down to a 341 million sum before taxes. What you pocket depends on state. So of the 43 states you can buy tickets no income tax like florida and texas, the reports new york which takes almost 9 of taxes up front. Thats not stopping new yorkers from trying their luck. They are selling tickets every hour. The numbers ramping up florida is up to 789 per hour in the midwest, were looking at ohio is up to 393,000 an hour. Kelly, back to you. This is crazy. I know were almost at the record high. Speaking of states. Some other surprises in terms of the best place to buy tickets. It turns out california doesnt take a cut of the winnings officially, is that right . That is true. They do not hold any taxes . If you are, they will take those taxes at the end of the year when you file your tax returns. Another interesting number for you 87 million. Thats how much the federal government will take if you take the lump sum. It doesnt mean a lot of time. Thank you. 13. 3 of that. Is that a lot or a little . Thats the state tax. 13. 3 . Thats a lot. Lets say you won the megamillions jackpot, what would that buy you . Robert, are the super wealthy indulging in . Christmas its all about the kids so we will start with a dollhouse, check this out. It has polished wood floors and a hand painted mural t. Price for that 57,760. By the way, thats unfurnished. For the adults in the room. We have watches. Theyre very big. So we pick this reference 101. It comes with a tour of a watch making facility and a Champagne Toast we have a party package, selena gomez, you can dance with mark balas the combined price 350. That doesnt include food or drink, though. I called it the qe package. You will appreciate this. On the qe cruiseship. More importantly, we get qe from Santa Bernanke tomorrow. Thats what the rich really want is that other qe. We will see if they get it tomorrow morning. I think we can add a Holiday Package for j. Wells here. That would be a steal. More expensive than anything on that list. Thats way too high in for me. I cant fit those zeros on my screen. Thank you. God, what is the world coming to . Where is ringo when you need him . Sir Paul Mccartney looking like he can use a hand. At what . He is trying to catch a t30. Yes. Well i guess i gave you the answer. Just what the exbeatel was doing . Yeah, he wasnt performing. Well be right back. [ male announcer ] how could a luminous protein in jellyfish. Welcome back. Earlier, we asked you to tweet us your video for Paul Mccartney trying to get a free t30 in the nba game. Heres that video again. Yeah thats paul in the corner there. Here are some of your captions yesterday, that t30 didnt seem so far away. Another viewer tweeted us yokos fault. That always seems to come up. Its like the guy that said you may not have won the t30. You can have someone shoot the t30s at him next time. Take a look at jamey wright diamonds christmas card. I believe we can show you a picture of it. If you have seen over the top ones before this kate i dont know if its over the top or kind of artsy. Its an offbeat sense of humor. Jamey wright has a lot of personality. You know hes made a name for. Partly on that and good results. We had an eccentric sense of humor at all. What is happening . Heck no this is what happens when you have too much money and you bring someone in to produce the family holiday card. Okay. Heres what were going to do. You will all throw tennis balls and hit them around. I would like to commend jamey wright for keeping a low profile. Way to go. Yeah really. Compared to last year where they look so somber this is at least i guess telling us things are going good. In this photo, he is watching a new game. Hes been served. Thats not bad. She does this on the fly, folks. You also by the way, we were talking about stories for tomorrow t. Fact that face boong can read your postings as you can typing them this is news to me there there was a story in the Los Angeles Times right now that face boong can read your what you are typing even if you dont post it that it was discovered through some research and to me. Creepy. That is creepier than somebody that has access to your machine at work can look up any key stroke you made even if its something deleted. Thats standard corporate security. This is a perfect transition to irobot. Thats coming up huge things to the panel. Melissa lee, these irobot they no what you are thinking. Kelly, do you like to vacuum . Not a huge fan. No. All right. I dont mind. We got the ceo of irobot. That stock was up 17 . It is up a lot right now. We are talking to the ceo about that. All the news in the headlines by goggle and boston dynamics and drones we will ask them about the defense business as well. Take it away. Fast money starts right now. Im melissa lee. Heres tonights lineup. Tech support at the white house. The ceos meeting with president obama today. If the companies are