Transcripts For CNBC Closing Bell 20140918

For independence. And, among other things, i mean, tomorrow is a perfect storm for the market and for market geeks like you and me. You have the scottish results. Right. You have the alibaba ipo. And . You have index rebalancing. Quadruple. A quadruple witching expiration tomorrow. All on the same day. The excitement. It just builds here. I am going to be lurking in the morning while all of this happens. Wont we all . Keep a sharp eye out. We will get reaction to the market and the fed from David Winters, winter green advise others, he is coming up, also continues to be at odds with cocacola and Warren Buffetts berkshire hat away, he joins us exclusively in a little bit. As we said, zero hour for alibaba. The energy really is palpable here on the New York Stock Exchange floor today, more so than normal, eagerly awaitedism po due any time, the pricing will be due any time after the bell tonight. You will hear that news here first and we will prepare you for what should be an eventful first day of trading tomorrow morning right here on the floor of the new orleans stock exchange. Already talk whether theres an alibaba effect in the markets. The dow up 95 points, 17252, pretty much at new intraday highs here. Meanwhile, the nasdaqs up half a percent. Thats the one that has some people thinking perhaps theres money being put to work in the Broader Market that couldnt get a pest of alibaba. That index up half a percent today. The s p, 2009 trading up by fourtenths. And again, pretty close to alltime highs. So much to get to. We have a good group today on our closing bell exchicago. Here we go marg guy patel from wells fargo funds management, john pal is lan zahn any from gfi, peter costa on the floor, uri landsman and rick santelli. Peter costa yes. Why is the market rallying today, something the fed did or did not say yesterday or whats going on . I think its a continuation of what everyone knew was happening, you know, with the they are putting this Interest Rate rise off, they are not gonna admit that they want to raise Interest Rates until some time in, you know, mid2015. I think thats taken a little pressure off the market, people have been looking for a little bit of an Interest Rate rise early, myself included and i think its just, you know, could be more people just focusing on the market itself with the alibaba ipo tomorrow. Dipping into the punch bowl . We did have great news on jobless claims this morning. Bad news on housing starts. Although the revisions were higher. That he is a true. Rick, let me put this to you, what david had to say about the fed effect here against these markets, perhaps no one really care what is they think, referring to the dots a little bit more hawkish, all know janet a dove, all have our back if it goes wrong and know the fed has a terrible record when it comes to economic forecasting. Rick santelli . Yes. Im sorry that was for you, buddy. I wasnt sure. You know, high fast balls. Listen, i cant tell you i cant tell you whats gonna happen when the fed does its exit strategy. I cant tell you whats gonna happen or the day its gonna happen with respect to the end of rates but i think personally that whats going on in the stock market is exactly whats happened every other time,et specials especially the last markets, the rates go up, stocks go up, the new mantra out here does it really matter when they are going to raise rates . I will tell you what, hugely matters when. Harkin back to may of 2013. Matters when youre long and short, dont have a position in the fixed income or equity markets, in a way, all americans have a position in this market and i believe that markets are in such a realtime algorithmic kind of fast trade that it is going to be right up to the end, when the rate rise looks imminent is when you will really see who is swimming with and without bathing suits in the high waters of liquidity from central banks. Yes, we have that to look forward to. M mar guy, what do you make to the fixed income yesterday . Hfrnlt i think it is focused on longterm fundamentals. Inflation is very low. I think right now, steady as she goes, janet has our back. Dr. Yellen did know once again. I think in terms of what rick was saying, i think that you know, it doesnt really matter as much now when the fed hikes rates because the way the yield curve is shaped, you know, we have two trading at 1 and 30s at 3. 3 . In the past, we automatically had a big rate cycle priced into the curve. Now, we cant do that h so, i think at the top, you know, initially, the feds only going to be able to hike to maybe 75 basis points, where the market is now december 2015. I dont think they are going to try to invert the curve right away after they take away this qe, going to go very gradually and because the curve is shaped the way it is at 1 and two years, not gonna want to go over 1 level real quick in order to invert the curve. I dont think thats gonna happen. I think stocks know that the g20 coming up this weekend. I think gonna say once again that you know exhaust ter sit off the table. Prosperity is what we need. We have been saying that for a long time,s officerity versus prosperity, what do you want . You want prosperity, i think drag guy, ecb, full bore, china just eased again, stealthy, i think right now, the market is still flush with liquidity, regardless of what the feds doing, cpi negative and i think just so people know, the what jones is referring to there, a sign the cycle is ending, that or recession could be the next event on the horizon, may be one reason why the fed wouldnt want to encourage that development. Yet the stock market continues to rally and ari landsman, you think today is a very important technical day for the s p. Tell us about it i think if we close at this level somewhere around 2010, you see 2045 probably within the next few days. You know, we the next few days . Yeah. Wow. Yeah. Its an important level. It will have taken out, you know, about a tenday ceiling. While i continue to believe this market offers a little bit more risk to the downside than to the upside, you know, the trend is your friend. Clearly, this is the most accommodative fed ever. It is hard to fight the tape. We will see something in the 1700s the next few months, but also see 2300 by mid2015. So, about 50 up, 50 down, those respect very attractive odds. So im fairly negative longer term. The scenario that youre laying out, putting the 100year flood scenario, all that coming in the next 18 months or something. Said three months. Much sooner than that. I think you could see Something Like 1700, 1750, you know, within the next three, four months. All right. Well, hey, peter, what do you think the market does with alibaba tomorrow . Overall . I mean, obviously, highly anticipated, expected to be the biggest ipo ever it will trade right behind us here. Right. How do you think the whole market responds tomorrow . I think its still a market of stocks a lot of focus and attention on alibaba, where it opens, the timing of it, we have a pool on the floor. You may not want to hear this, a pal on the floor when we think the stocks gonna open. I think that by and large, the average is after 11 00. So, still going to have almost an hour and a half of trading prior to alibaba. This is just our speculation. And we have been hearing 10 30. 10 30, 11 00, think that gives you an hour, hour and a half of trading that has nothing to do with alibaba. I think a lot of focus is going to be on it. Its more about where the moneys going, where the moneys flowing out of and in and i think a lot of money will be flowing into alibaba and out of other stocks. I do think there might be, you know, might be a little bit of a whipsaw tomorrow. The fact we have triple quadruple witching, rebalancing and a lot of cross currents. Trade soft bank tonight, too. Yes. You could trade yahoo right now. Trade yahoo as well. I think plenty of people already have. Yes. Thank you all. Great to see you. Thanks, everybody. Thanks for joining us today. True, as john points out, soft bank will be one indication whats happening, get that price, after u. S. Mark lets close, japan does open a few hours after that. Any case, as we head toward close, the dow is up 103 points, near the session highs, 17260. Again, these are alltime trading highs, same for the s p 500, 2010. The question becomes where do they close the nasdaq, adding 25. A phrase we have heard all day, great scots, todays historic vote on independence could alter the course of europes history as we know and alter the direction of your investments. Our Michelle Carusocabrera is live in he hadden borrow with the latest tally what they are expecting the vote to look like, plus hear from a british official who is so disliked in scotland that last year, he was chased out of a pub. Yeah. Nigel fer raj, almost a global name already in financial markets, we have got him coming up. Also ahead, alibaba, as we said, expected to price its initial Public Offering after todays close. The second we do get the size, the number, were gonna tell you. Thats all coming up hopefully here in about an hour or two. Plus, the pros say that ba ba could add a few billion dollars to yahoo s cash pile. We will find out how ceo might put that to work. And up next, as customers line up for the new iphone, apple ceo tim cook is saying its new mobile operating system will shield text messages, email and photos from the police. Is this a Good Development . We will debate the pros and cons. We will be right back. Wait, wait, wait, its wait, wait, wait. Whoa, does she have special powers when she has the shroud . No. Guys . Its the woven one the woven one. Oh, oh that gives her invincibility. Guys . No, no, no. The scarlet king is lord victors son no dont. I told you you guys are gonna be so surprised when you watch the finale youre so lucky your car has wifi. Yeah. I am. Equinox from chevrolet. The first and only car company to bring builtin 4g lte wifi to cars, trucks and crossovers. E financial noise financial noise financial noise financial noise but what if you could see more of what you wanted to know . With fidelitys new active trader pro investing platform, the information thats important to you is all in one place, so finding more insight is easier. Its your idea powered by active trader pro. Another way fidelity gives you a more powerful investing experience. Call our specialists today to get up and running. Logically day on wall street, whatever reason, the respond to the fed or what, but the dow is up 101 points right now the high of the session, 17,258, record territory, s p, record territory, up 8 1 2 points, 2010, the nasdaq is up half a percent, 4586. A bump of companies, 52week highs on the s p 500, dominic chu rounding up the big numbers. Good afternoon, kelly and bill. Start with conagra, moving high, the market posting betterthanexpected First Quarter profits, conagra shares up 4 1 2 . Also, kohls gaining ground, Citi Upgrades the retailer up to 5 from neutral, citing improved product mix and raised the price target 7 to 17 a share. Kohls up by 1. 5 . Also, sears continuing on the other side to move loser. Credit suisse issuing a negative note suggesting the Department Store should liquidate assets while it still can. It has an underperformed rating, 20 price target on the stock and end with am, which is moving higher, its new iphone 6 models go on sale tomorrow and people are already lining up outside their stores in anticipation of being one of the first to actually get their hands, physically buy the phone itself and hold it. Youre looking at the apple store in new york city, where people, again, already waiting, it just goes to show, bill, kelly, that the cult of apple, no matter what they do, is still alive and well. Back over to you guys. That was the other thing. Does it make it quinn tunnel witching . I dont know. One of those days it all came together on one day. Incredible. Speaking apple, ceo tim cook published a public letter saying apple now encrypts the contents stored on the new operating system, ios 8 devices. If you downloaded it, it means apple will not be able to unlock your phone, even if the government issues a warrant. While it may sound great for individuals, does it pose a broader Security Threat . Joining us now, Edmund Hartnett from bronson Risk Consultants and former nypd deputy chief, also joe loomis from signer spawns. Welcome to you both. Edwin, start with you, general question here is this interfering with legal Police Probes as far as you can tell from what aing has said . On the surface, it seems like its good news for the bad guys and bad news for Law Enforcement, more restrictive, to get a search warrant, robbery warrant than in the past. Bad news for Law Enforcement. You field feel it is shielding the bad guys needlessly. Joe, you dont think so . Give it a month, i think um see circum vision of this type of encryption technology, an example of what happened with the android operating system, where they have the frozen hack in order to break the encryption on that mobile device. I see teams like rocco grillo at protivity, his team is called in by forensic s teams in Law Enforcement to do these type of hajjs to get into the phones under warrant. Now, i truly dont understand. So, if i have a warrant, if im police, why would they currently now need hacking to get information that should be legally obtainable and should it matter what barriers a company uses if the police say that they legally have the right to go after the information . Get tricky because i would think that the court could potentially issue an order and put someone under con tempt, dont provide the password to up lock that device, they could be put under contempt of court and fined by the court, it has happened in the past. Do you want to be fined by the courts and District Courts for disobeying a court order, the worst case scenario, have to circumvent the endescription and break into it kicking the door down in your house, they have a search warrant remark open the door for them or they can kick the door down. What about that, ed, is it a bit disingenuous for a toll claim they have got this cryptic this cure in place now that will keep the police out even if they have got a warrant . There are work arounds and legal ramifications here, too. Certainly r seems like its getting harder and harder, this seems to be more about profit and less about privacy, in my view. Law enforcement right now jumps through all kinds of hoops to get search warrants to get eavesdropping warrants and rightfully so. We should not be able to eavesdrop on people. This just seems to make it even more difficult and apple seems to be kicking the can down the road on this one. Joe, what about that . Well, i think, you know, there are going to be more hoops but i also think that people shouldnt follow fall into the idea set that by being encrypted that its all safe, its a bunker, they can do things they shouldnt do. Because, you know, there are going to be compromises out there, this isnt going to be the catchall, bulletproof environment where i would not be putting things on my phone that potentially Law Enforcement shouldnt see. Who is it that and if you want to weigh in on this as well, who would be held in contempt here . Is it the individual if they dont provide their password . Is it apple if they are basically out there advertising, they are trying to, you know, put up basically trying to make your house impossible to break into without your consent. Its complicated. Is it the carrier . Is it the server . Is it a itself . Very complicated. I think it is being made unnecessarily complicated by apple doing this now. How would you get into an apple phone . Let me just point this out. Im the blackberry devotee here. Blackberry has had this kind of encryption forever and this was a draw for people to want a blackberry. Absolutely. By the same token, does that mean you cannot get a warrant to get information. A blackberry . You can. Thats why Law Enforcement using blackberries today. In my mind, i think people need to understand that there are going to be too manies that can circumvent this type of encryption. Although am doesnt have the keys to the kingdom, it doesnt mean you cant actually circumvent those keys or pick the lock. It just it all sounds so odd to me because, again, if the point just thinking sort of a simple reason why police might want to get information off an iphone, say theres a child kidnapping, they suspect they have the guy that did it and theres information on the guys phone, you know, how does this change their ability to get access to the device . Delay the process of getting the type of evidence and the information required. I would not be surprised if there are going to be specialized groups under classified or top secret clearances working on circum visions to this in order to aid national security. A lot to think through, guys, thank you. Appreciate it this afternoon. Thank you for joining us. The close here, got about 40 minutes left in the trading session. And the dow is up 107 points right now. These right. Coming up next, mobiles operating system has encryption the police wonten able to penetrate. We have been debating that issue. Yes, we have. Think also talking a little alley ba barks arent we . Yes, we will what yahoo ceo Marissa Meyer could do with the billions of dollars reaped from alibabas initial Public Offering tomorrow, a special report coming up from silicon valley. Robert frank running through the winners from alibabas ipo. This time tomorrow, the forbes ritualist will be a little bit longer. 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As i said before, you can feel the extra energy on the floor of the New York Stock Exchange. Looking around at the groups of traders, you know what they are talking about, alley ba barks expected to price this record ipo tonight, some time after the bell rings at 4 00 eastern time, the chinese ecommerce giant kicking off trade tomorrow right over at that post here at the New York Stock Exchange. An listens say yahoo will reap a few billion from its ba ba stake and our josh lipton is looking at how ceo Marissa Meyer could be putting that money to work. Shall . Kelly, its 6 billion, to be exact. What yahoo will rake in after taxes if the ipo price s 68, according to analysts. Two broad options about what ceo Marissa Meyer does with that money, one, capital return, up a clear whether they would see a special dividend buy back or both, but the idea is that a bigger buy back makes sense, in part, because what if we do see, aggressive selling postipo, at least the stock could have some potential support, analysts say. The other option, an acquisition. Meyer has made a lot of acquisitions since she became ceo two years ago. Jean munster of Piper Jaffray telling me he would like to see meyer make a play in content, maybe similar to what we just saw amazon do with twitch, although munster says it would be hard for my we are 1 to 2 billion to make an acquisition and have a big longterm impact. This alibaba ipo coming at a critical time for ya a who in which its core ad business remains chad legged. Yahoo will claim just 5 of the u. S. Ad mark threat year, versus 10 for pace facebook and 30 for google according to e marketer. We do have a vote, we want people to participate in as alibaba looks to price today. The question everybody is asking all week. Want to know about you buy alibaba plain and simple when it opens tomorrow . Go right now to let us know at cnbc. Com vote. Joining us right now with his thoughts on alibaba, chris from the street. Com sitting, waiting patiently a long time to tell us about alibaba. What do you think . Going to be the largest, here we go again. We have been through facebook, been through twitter, now alibaba, just keep getting bigger. This is a monster, bill, the biggest ipo we have seen in the u. S. , going to be 66 to 68 a share, right now, the pricing talk, i would expect probably see around 68, starts to open tomorrow, probably around 80 i have seen. Alibaba is the Biggest Company in china and jack ma has all the intentions to take on the world. Also a big day for yahoo, a lot of cash because of the shares they are going to be selling and heard that eric jackson on the program saying he is concerned by what Marissa Meyer is going to do with that pointing to acquisitions like tumblr, rather have somebody else in charge of yahoo s strategy at this point. You just weigh in on what you think yahoo is likely to do . I have talked to a lot of analysts, investors on the street a lot seem to think this windfall, she is going to be inquisitive. The core business is stagnant. Last quarter, a downturn in the core business. Marissa needs to do something to turn the core business around. She said, you know, take about three years and tumblr doesnt seem to be working out right now. The other acquisition she has made are smaller, not really helping out. She needs to do Something Big to get investors on her side. We talk so much about yahoo and what they will do with the money. We talk about soft bank and the position that they have. We dont talk much about alibaba itself. What are they going to do with this money is a lot of the insiders are selling, going to cash in on their early investment from this company that was founded 15 years ago. Now they are going to be a publicly traded company. Now what . They are going to continue to do what they do. This is for general corporate purposes, acquisitions, been pretty inkiss sive in the u. S. , taking smaller stakes in Companies Like lift and shop runner. So, expect to see more of that. Then just continuing to build up their struck having it, that cost a lot of money to do especially in a country like china. The 20 billion they are going to raise a lot of it is just going to go toward growth and continuing to build that stuff out. A lot of this will ultimately depend on at what price these shares trade and whether you can make an argument for it being a good investment over a five or tenyear period. Lets for the sake of argument say its 70, again, its not just to pick a round number. What price level to you is that itself too high . Facebook opened significantly lower. Yeah, 70 sounds about right, about 30, 35 times earnings, give or take a little bit. So, alibaba really growing, alley pay restructured the deal with, incredibly important part of alibabas future, e Commerce Business is strong. 70 doesnt sound too high to me. I can see 100 a share by the end of 2015 or so. Kayla following this story for us pointed out the other day that as we all know, for chinese people, the number 8 is a lucky number. And they probably would want an 8 in the number, maybe 68 would be the price just because it is that lucky number there i would point out also our vote, we are asking viewer whetherthy would buy alibaba, 60 , unscientific, 60 said they wouldnt buy the stock now, wonder how much this will carry with the average public out there the investment public. A little bit different, we you a the average investor with face back, really into it because i think thats lot because of the domestic company, alibaba not really known in the u. S. They opened up this site called 11 main but not a big site yet. Gonna see more institutional buyers, investment banks, hedge funds, and not going to be for the Retail Investor now. A tiny question before we go, this report from bgc on the options side of this is circulating about a yahoo aol tieup. Can you comment on the likelihood ever over that happening . Ive seen reports that alley that aol and yahoo could tie up. Thats always been spec lateded about. I cant see that happening. I do know that marissa and tim strong, aol ceo talked. Whether that leads to anything, who knows. Both at google, Stranger Things happened. I wouldnt put my money on it. All right. And there it is closed the poll and it is roughly 60 40 of our viewers, 60 , 59 would not buy alibaba shares tomorrow when it opens. See what happens there. Chris, good to see you. Thanks for stopping by. The keyword there might be when it opens. Most people gotten in at this point. Maybe we will be covering the opening. On closing bell tomorrow. Lets hope not. Got about half an hour to go here before the closing bell today with the dow up 109 just about. We could come back, huge story from this week, will scotland wage tomorrow as an independent nation . We will go live to edinboro for the latest count on this historic vote. Plus, we will talk about what could change immediately, will especially with your money, if the yeas carry the day. Thats coming up. I have a cold. I took nyquil but im still stuffed up. Nyquil cold and flu liquid gels dont unstuff your nose. Really . Alkaseltzer plus night rushes relief to eight symptoms of a full blown cold including your stuffy nose. breath of relief oh, what a relief it is. Thanks. Anytime. I wish. Please, please, please, please, please. 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Rally day on wall street, three of the four averages on record territory, the dow industrial average, the s and p 500 and the dow transportation average, which has been there for a while anywaying the nasdaq higher as well today, we have got a pretty good rally going into tomorrow and some of this may be the resulted of expectations for the expiration tomorrow, an index rebalancing, all kinds of technical stuff going on in addition to the ip of. Ed financials, goldman in particular helping the dow today. Du pont a big lalrier for that. Scott land holding the historic vote today. Michelle in edinburgh with how the scots are turning out at the polls, looks like participation is high. Very high turnout expected today. The polls close in an hour and a half. We know that theres been a steady stream of voters all day long. We expect millions of people to have voted, because 4. 2 million registered voters. The yes vote was definitely the passionate vote. We saw the yes voters bringing their children, taking pictures, thinking that they perhaps on the verge of something quite momentous and hist toirk. The no vote was very much one of fear, worries about the economic consequences, the economic fallout, separating from the United Kingdom. The markets are acting like they believe the last surveys that showed the nos in the lead and that it will likely be a no vote tomorrow. Take a look at what the british pound did today. Nearly twocent move in the last 24 hours. Crossed 1. 64. Thats twoweek high. It fell as low as 1. 60 we saw the first polls which showed that the scots could vote yes for independence. As we have seep those numbers fade away a little bit, the british pound has come back, take a look at what the london footcy, the major index here in the United Kingdom, trading at the london stock exchange, moved higher into the close, the vast majority of the scottish stocks traded there ended the day higher. That means that if tomorrow, we actually do get a yes vote, the markets are set up for a lot of volatility. Listen to english economist, jim oneil. If it is a yes tomorrow, the pound will probably fall substantially. And there could be some discount applied to not just scottishbased stocks but also british ones relative to where we are today. Some discount applied. So prone to understatement. That means that they would fall and potentially sharply, totally contrary to expectations, the time you wake up in the morning, probably, unless its too close to call, have an answer. Michelle, we are on the edge of our seats for that one, stay with us. We here want to bring in a special guest as well. Nigel fer raj, the leader of the United Kingdom Independence Party who is in favor of scotland staying as part of great britain. As a result is quite unpopular inside scott land. Do you worry, the fact that it is so close, what has this done to scottish saturday . Do you worry that i mean, no matter which way the vote goes, since its so close, half the populace is going to be ticked off about this result, right, nigel . The last time i saw real strife and Division Within parts of our community here was during the miners strike in 1984, you know, where families, towns and cities were divided over the issue of that big strike on the british coal fields. This, im afraid, whatever the result, and i isnt it will be a no and perhaps even a more slightly comfortable no than most people are predicting, it wont just die here, see, what the leader of the Scottish National party has done, he has bred in many of the young people in scotland a real nasty loathing hatred of the english. He is bitter. It is nasty. It has manifest itself the last few weeks in intim days and in violence. Im afraid if there is a no vote, i would not be in the least bit surprised tonight, probably tomorrow night particularly, to see some fairly up pleasant scenes in some scottish cities. So, youre quite right. After this very, very contentious campaign, i dont think anything of the uk will ever be quite the same again. We are heading after a no vote, heading for quite a big constitutional change. Nigel, the irony of hearing this from are you, you are the man many say is stirring up a lot of the british antieuropean feeling that is similarly tearing apart society. Do you know, if any of my supporters voters had behaved as alex salmons had, i would be the biggest pariah ever seen in this country. We love europe. What we dont love is the European Union and undemocratic bureaucracy governing us, we want to be free, the rest of europe to be free. You said we want to be free r you know, you can hardly blame them for giving voice to a feeling that we are seeing not just in scotland, not just in england, but frankly, across much of the world. Well, they dont want to be free and the reason why salmon is a false prophet is he is saying, divorce ourselves from westminster but sign us up to brussels, so actually, he doesnt want to be independent at all, he wants scotland to be a province of a new european state, he would be left, if he wins tonight and gets the yes vote, with no option but to sign up for the euro and frankly, very little end pep dense at all. But i repeat the point his supporters, his supporters have behaved badly, behaved with violence and intimidation and he has refused any point to condemn such behavior. Michelle, what have you witnessed while youve been there this week ahead of the election, in terms of the passions and the political rhetoric thats going on there . I was surprised at how leftleaping i would say sometimes verging on socialist a lot of the scots, especially the yes voters r i think the real division has come down to that the scottish mps had made very clear that they want to continue the welfare state. Thats why they like the European Union. And thats why they are against a lot of the conservative and the conservative government down in london. They dont want means testing for benefits. They dont want to privatize public anything in the public sector. And so, thats another reason why they dont like nigel fer raj. Nigel, response to that before we go . Well, i agree with that, and i respond by saying what weve seen from this campaign is the nearlethal combination of socialism and nationalism. Its a very, very nasty mix. All right. Well, its all coming down to the polls close, what, a little over an hour, we will see what happens. Nigel, thank you for joining us. Michelle, good job as always. Checking back with you as news warrants. Heading toward the close, 18 minutes left in the trading session here. Art cashin told us that the bias was the side on the close, evidencing itself, the highs of the day, the dow up 111 points. S p 2011. Alibaba ready to price its initial Public Offering. After the bell, we will bring you that figure the second it hits wall street. Dont go anywhere. Dont miss our special report on student debt surging among an unlikely demographic, that would be the retiring baby boomers. Former massachusetts congressman barney frank, our own larry kudlow will weigh in during the next hour of our show. How would they fix the growing are student debt crisis . They are not exactly shy, as you know, with their opinions. We look forward to that conversation coming up on the closing bell. Chces in retirem. Know that proper allocation could help increase returns so you can enjoy that second home sooner. Know the right Financial Planning can help you save for college and retirement. 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[ male announcer ] ship a pak via Fedex Express saver® for as low as 7. 50. [ male announcer ] ship a pak via Fedex Express saver® wait, wait, wait, its wait, wait, wait. Whoa, does she have special powers when she has the shroud . No. Guys . Its the woven one the woven one. Oh, oh that gives her invincibility. Guys . No, no, no. The scarlet king is lord victors son no dont. I told you you guys are gonna be so surprised when you watch the finale youre so lucky your car has wifi. Yeah. I am. Equinox from chevrolet. The first and only car company to bring builtin 4g lte wifi eye welcome back, looking at record levels for the major indexes, dow up 113 points, 1726indexes, dow up 113 points, 172617269. 17269. Nasdaq a good day overall, look at some of these numbers here, the important thing is we had a great open, all ten s p sectors up. Some talking about the alibaba effect. Bottom liner what you saw is a lot of hedges unwound, a lot of guys bought protection ahead of the fed meeting, afraid the fed might be hawkish. They werent, they are unwinding that position. Also the options and futures expiration, quadruple witch. Some affect, difficult to sort that out. Explain what traders are calling the alibaba effect. Look at the nasdaq, five days ago, monday, rather, a lot of people sold tech stocks, people thought people to buy alibaba tomorrow. People didnt get the allocations. I think thats very minor affect, maybe a little bit look at the vix, volatility index, the fear index. Yesterday, it collapsed at 2 00 when the fed meeting came out. What that means, traders stopped buying protection, whats happening today, follow through to that one. By the way, everybody keeps asking me, gonna get allibaba te indic indices, not. Not going to include in the s p 500, not eligible, in the United States and not going to be in many of the other etfs, will be in a couple, ipoetf, have Kathleen Smith down here tomorrow to talk about that, ipo the symbol there. Guys, back to you. Bob, thank you. We have got only about 12 minutes to go before the close. Watching the key levels on the major index. Later, activist investor David Winters will be along, choice words recently for Warren Buffett and cocacola the last time he was on. Wait till you hear which companies he is looking to shake up right now. When fixed income experts work with equity experts who work with regional experts who work with Portfolio Management experts thats when expertise happens. Mfs. Because there is no expertise without collaboration. Right here. With a control pad that can read your handwriting, a widescreen multimedia center, and a headup display for enhanced driver focus. All inside a newly redesigned cabin of unrivaled style and comfort. The allnew cclass. At the very touch point of performance and innovation. At the very touch point of performance and innovation. This guy could take down your entire company. H . Stay with me. On thursday a hamster video goes online. On friday it goes viral a network choking phenomenon. Why do you care . Hes on the same cloud as your business. The more hits he gets, the slower your business may get. Do you want to share your cloud with a hamster . Today theres a new way to work. And its made with ibm. Joining me right now, Courtney Ratliff from luke capital. What do you make of this run . Is this all sort of a sigh of relief after the fed meeting yesterday, do you think . I think a sigh of relief. I think investors are excited about that wonderful ipo coming tomorrow. I think that some companies are probably oversold earlier in the week simply because different investors were actually trying to raise capital in order to put alibaba into the portfolio. I think who is complaining about an up market these days . We are at these record levels. Absolutely. Are we getting ahead of ourselves, the old thing that we have been talking about forever, havent had a correction in a couple of years now. Inclined to put new money to work . Absolutely. In the u. S. , might end the year around 21 00, i dont expect a correction to come until probably after rates begin to rise next year, with the assumption that they will either raise rates in march or during the first half of the year. So, i dont see a correction coming until this time in 2015. I think different investors, especially Institutional Investors are positioning their portfolios for that correction, but i think it will happen in the u. S. And then see rallies in other areas, other markets. Do you invest for growth or are you investing defensively in the class, you would think at these levels here, after the bull move we have had the past five years, people would start investing defensively here, just in case . What are you doing . In the u. S. , im investing defensively. I think the rest of the world, clearly in global marketplace these days, you can find growth in a lot of different markets right now and beginning with the ecb and japan or doing right now, we are going to continue to see monetary easing there and what thats gonna do is cause potential buying opportunities in both europe and japan are as well as a lot of emerging markets. Do you care about the Scottish Independence vote tomorrow, from a market perspective . Do you think it has an impact . Absolutely. I think i read somewhere that, you know, scotland leaving the uk is like texas leaving the United States. I think that was the what ive seen there. What we have seen so far is the pound continues to rally, anticipating a no vote. Doesnt seem to be a lot of hemming anywhere. In other words, people are leaving themselves exposed for the possibility of a big surprise if it turns out to be a yes vote tomorrow. If scotland leaves, i hate to say it but like i said, like texas leaving the u. S. You move on. You figure out what happens. I think scotland will be more at risk than obviously the uk at the end of the day. You have salmon coming in via the british channels, so i think at the end of the day, scotland leaving the uk has more of an impact on the scots than it doesen at uk, they wouldnt like it but the end of the day, less of an impact economic loin them, which is a larger economy. Let take a break, shall we . Come back with courtney and look at the market as we head toward the close, the count down here. Also, get ready, here it comes, alibaba pricing, highly anticipated initial Public Offering moments after the close tonight. You will get that figure the instant it hits the tape. We will find out how big its going to be and how it might trade tomorrow morning. Youre watching cnbc first in business worldwide. Firms mob. And minus our expenses. Perfect timing. Were offering our bestever pricing on mobile plans for business. Run the numbers on that. Well, unlimited talk and text, and ten gigs of data for the five of you would be. Oneseventyfive a month. Good calculating kyle. Good job kyle. You just made partner. Our bestever pricing on mobile share value plans for business. Now with a 100 bill credit for every business line you add. Im spending too much time hiring and not enough time in my kitchen. [ female announcer ] need to hire fast . Go to ziprecruiter. Com and post your job to over 30 of the webs leading job boards with a single click; then simply select the best candidates from one easy to review list. You put up one post and the next day you have all these candidates. Makes my job a lot easier. 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Major averages, dow, s p, russell not the russell, supposed to be the transports, thats my bad, not yours, any rate are the dow and the s p in record territory, the nasdaq doing smartly, even the russell, which has been suffering lately, as we know, a big laggard here, that has come back to some degree as well today. And i tell you what, spin around, i want to show you the post where alibabas going to trade tomorrow. You can walk around there now, but bob pisani, come tomorrow morning, you wont get a seat here very easily. Thats glenn, by the way, the designated marketmaker, the dmm, whos going to be in it. We will be standing right here on the post. Where its going to be trading this morning, get the whole view of everything, give you a blow by blow, play by play description of whats going on. Mark joining Courtney Ratliff and i here. What think the impact of alibaba is going to be on the market . I wont comment directly on them but the sector overall the financial markets, i think we are going to have a really good impact, impact the tech sector favorably and clearly, i think youre going to see the markets react and seeing it now, priced into the markets this week. What was the index you were talking about . Kweb . Very few etfs include alibaba, most excluded because the indices wont allow it in. One of the only, the crane shares, china, etf, kwet is the cymbal. Very heavy volume in that today, see another one, another one called ipo, the rehn sanction capital etf, symbol is ipo. Youre investing defensively. Do you Like Technology at this point . I absolutely Like Technology and i love apple right now, as a matter of fact. I feel like its oversold. I like it at that price and i will continue to like it. All right. Very good. Got to go, folks. Thank you. Thank you. See yall later. Going out with a gain of 108 points, an alltime high for the dow and the s p. Stand by. Here we go. We will get the pricing on alibaba coming up in moments on the second hour of the closing bell with kelly evans and company. I will see tomorrow. Buckle up. Buckle up and welcome to the closing bell. Im kelly evans. Where do we begin . Go out with markets closing at alltime highs here, charge he can in, the indexes, dow add egg 107 points on the session, 17, about 265 that is going to be the new highwater mark. Same for the s p 500, trading up 7 points, closing at 2011. Nasdaq adding 31 points for its part. And we are going to go straight to our dominic chu with breaking news. What can you tell us, dom . What we have is important developments on the oracle front here. Earnings numbers not out yet but what we do know as of this time is that current chairman and ceo, Larry Ellison of oracle announced that he will step down from the role of ceo of the company. In his place, oracle has promoted ceos current president s mark heard and sap practice katz ceos of the company. So, again, Larry Ellison, current chairman and ceo of oracle has announced that he will step down. He will have safra cat. And mark hurd, both copresident s of the company right now ascend to the role of ceos of oracle. Ellison one of the most public ceos in america, also one of the highest paid ceos in america. He, again, stepping down from his hole as ceo of oracle. He will remain the chief Technology Officer, so, still play a role in oracles operations, but the ceos roll will go to current president s, mark hurd and safra katz, kelly, back to you. Dom this is huge news, Larry Ellison, one of the most highprofile ceos in this country. Oracle, the second Biggest Software company in this country. The shares down 2 1 2 ,ity produce a panel and get their thoughts, robert wolf from 32 advisers, cnbc contributor, carol roth, very own robert with us for more on todays market, also christian goop and fast money trader, john najari najarian. Welcome everybody. And talk for a second about safra katz, somebody you know. I went to college with her. I havent seen her in probably 30 years. He was bright then. He she must be a lot brighter today. He is also one of the highest paid typically executives in this country. He is. Also has, i think, the biggest lifestyle of any ceo that ive ever followed. He just bought the island of lan knife. He of lan knifai. The india wells tennis tournament, the americas cup. Doing all that, such a micromanager and so competitive in his business, in oracle, that, i mean, this is a blockbuster. I have no idea why he would step do down. Curious whats out there. Not the ceo who steps away from things lightly. A culture standpoint interesting, two big heads of sales who left in the last three months, head of north american sales who stepped down and asia pacific seams as well. Now three really major people, including the ceo of the company who was a legend stepping down. Want to ask, interest j, your thoughts and knee jerk response to this . My knee jerk response is these are handpicked people by mr. Ellison. And in particular, he came out and just reamed the Hewlett Packard board when they got rid of mark hurd, saying he is the closest thing to steven jobs in silicon valley. Thats high praise, now putting his money where his mouth is, kelly, by basically making these coceos, mark hurd being one of them them. The stock will settle in here around the 40 level when people assess what is going to be the future of the stock and likely to be moving up distributions of cash through dividends as well as share buy backs. Thank you, dr. J. Stay there oracles earnings have hit the tape. Looks like a slight miss on the bottom line. They are also increasing the buy back. Lets bring in mad moneys jim cramer now. Jim, great to have you here this afternoon, with your perspective on this huge transition. Mark hurd now assuming sharing the ceo role at oracle. Im gonna take the other side of the trade here. Mark hurd, i think, has been running oracle for some time. I think that larry talks to him a lot. I think that larry always has him on the phone when he thinks its necessary, chief Technology Officer, as we see, he and ms. Cat , the finance side, are a good team and i dont think theres anything wrong with larry. Hurd day care the lions share. You want to sell the stock down, sell it down hardware, sell the stock down, not as clean a quarter as i would like acquisitions, sell the stock down because we are all so used to seeing huge huge numbers coming from cloud like adobe two quarters ago, i would not not huge. Not human for anyone who follows the company like i do. What is not great is you want to see their earnings per share blow away and you didnt get it. Dr. J, your response, you caught that . I did catch that. And i dont disagree with jim. I rarely do. I dont disagree with that assessment, i think youre spot on, the guy, like i say irk hand picked by Larry Ellison to lead the company and i think they have got two strong leaders, so, the we have all seen, though, jim, what happens when you have two quarterbacks. I dont know that youre gonna stay with a twoquarterback system, but nonetheless, this is something that i think is not a big negative for oracle, but i do think it signals a different oracle Going Forward. Thats why i said, jim, that i think under mark hurd, they are more likely to push more cash back out to shareholders than Larry Ellison was willing to do. That could be. Assume that they are very lucky to have a Succession Plan in place they could do a spurofthemoment announcement. And as a shareholder, you know, Larry Ellisons one of the most invested guys in oracle and the world by a multiple. So my guess is he is picking people in safra and mark he has the utmost confidence in because no ones more vested than he is. Jim . I think safra finance side, look, this is coceo, saw coceo at sap, that didnt work, i think this is going to be an office of the ceo, they have different divisions. I agree on the notion i agree on the notion it is a hand picked crew and its all set, but again, i come down to the numbers and i wanted to see more. I want the company to win in the cloud and also beat the top line and the bottom line and sometimes thats hard to do, we know when adobe, for instance, did their shift toward the cloud, you saw the numbers not look good but want the breakout of the cloud. Breakout of the cloud here looks pretty good. I think thats why the stocks not down a lot. The buy back, they have been buying back stock consistently, but again, headline number is what matters. You will see other companies that report numbers in tech that we have just loved, whether they be Companies Like sandisk, western digital, they just blow it out. Techs, got to blow it out, got to blow it out, even the stock, this low expectations, this is the smallest quarter of the year, least important quarter and got to see the hardware break down, but i dont not a great quarter. Whoed that thought for one second. Bring our dominic chu into the conversation with more details on the quarter. What can you tell us . Get you up to speeden at numbers, obviously, the conversation is very much around Larry Ellison stepping down here. The profit numbers for oracle, like you said, kelly, 62 Cents Per Share on an adjusted basis that misses the average analyst estimate of 64 cents. So, a narrow miss there on the bottom line. As for sales, sales come in for the quarter at 8. 6 billion dollars. The estimates were for 8. 78 billion dollars, so a narrow miss on the sales side as well. They also, like you said, added an additional 13 billion to their Stock Buy Back Program, so those are the three headlines on the numbers front. I will add this to the conversation that jim cramer was just having with you guys about it its interesting that oracle did not call safra catz and mark hurd coceos in the statement, rather, they made specific mention to the fact, again, that the company has promoted oracle Ceo Safra Catz and oracle ceo mark hurd, all sales, service and vertical Industry Global business will continue to report to ceo mark hurd. All finance, manufacturing and legal functions will report to oracle Ceo Safra Catz. All software, hardware, engineering functions will continue to report to oracle chairman and cto, Larry Ellison. So its interesting, you would think that coceos is implied but they make no specific mention of the coceo title, rather calling each of them individually, kelly, their own ceo in their own right. Back over to you. The and dom, thank you. Carol, your thoughts on that . You know, its interesting. I heard what jim was saying but for me, i like at this company, almost a tale of two companies here. Their coulder business, off business where Pricing Trends are going in the wrong direction, i think they will have continued competition for folks like salesforce. Com. So even though they are a cash flow machine, the core business is still struggling. What do you do in that standpoint, jim . You think that Free Cash Flow is going to be used for an acquisition or just return to shareholders . Does the stock really go anywhere from here . I think the cash flows going to be used to be able to be more, aggressive in the cloud, which therefore means that earnings per share wont be as much of a focus as i would like to see, because as we know from the cloud companies, thats not exactly what they focus own. They focus on real estate. They focus on mine share, taking away from each other, a land grab in the cloud, oracle has to shift over to the cloud in a way that doesnt hurt the earnings per share. Thats the tugofwar. But i dont think its gonna mean more money return to the shareholders. And can i just say, look, Larry Ellison, great businessman, this company has had inconsistent quarters for a long time now. And we are not used to that from the old oracle. Maybe we will get a little more consistent now. Even if its not necessarily in the eps number, but lets lets not minks any words here, its not like oracles been, like, great. It hasnt. Far from it jim. Its so darn cheap, even if they screw it up, a chance to come back, what youre seeing, why suspect the stock down more, the answer, not a expensive stock, not priced for anything that good. In is not that important a quarter. I think mark is look, i would tell you if you didnt know any better, marks been running the company and larrys been checking in, not larry been running the company and mark checking in, but they are behind in the cloud. They got to catch up. I want cloud revenues to be blow away, adobe threequarters ago. Is this the breakout quarter . No they did an acquisition, hard to read the number also, real currency, real currency issues here, got to become out, this is going to take a lot of time to be able to understand this quarter. Larry ellison not delivered a consistent quarter in how many years . Go for consistency, even if it means land grab cloud. Jim, hold that thought, everybody stay where you are, a quick break and come back with more on the bombshell news, Larry Ellison stepping aside as ceo of oracle, the company he helped cofound and went public for 15 a share back in 1986. We will be right back. Welcome back, more news, reaction now to the news that Larry Ellison stepping aside as ceo of oracle. Joining me now is david againny from gva research, cnbc contributor, jeff seinfeld, very own jon fortt and rejoined here by jim cramer, welcome, everybody, jon fortt, first to you, your response, what does it mean, indicate for oracles future . Disagree with a lot of whats been said up to this point. I think its important to remember, Larry Ellison was not technically the chairman before. Now he is executive chairman. He is still at the top here. I think a lot of people are discounting safra catz, more than finance. She doesnt talk publicly a lot, been out saying she didnt want the ceo role. I think its important pa she has that title here, shows she is very much involved, perhaps in the running to take even more of a role down the line. As far as oracles performance, doing really well compare to their enterprise peers, particularly in this cloud and mobile environment. If you look at a cisco, if you look at even an ibm, yes, theres been inconsistencies in their technical numbers but their growth trajectory to, how they have done with expanding the hardware business and for rays into cloud have been relatively solid. Operating, i think, from a position of strength. Mark hurd has done well there since his transition from hp. Do not discount the impact of safra catz a the fact that Larry Ellison is the executive chairman. And though those two will be reporting to the board and not technically to him, larry still ounce about 20 of this company. He is still in charge. David as well talking, goes back to the quarter as well, jim cramer says they got to blow it out on the cloud. Jon fortt saying their cloud forays are pretty solid. Sought sharesed trading down, company losing about 4. 5 billion in market cap on this news alone. Is that warranted, in your view . I think what people should be encouraged about here is the fact with respect to ellisons change to be an executive chairman, he is also chief Technology Officer for the company. He is going to be very much focused directly on the Engineering Resources of the company and on research and development and innovation r people may have been about critical of hurd when he was at hewlettpackard and prior to that at ncr for perhaps cutting too deep in terms of basically paring back on r d. I would argue that the moves here give us a triumvirate and really have ellison focusing very much on the core of this company and what innovation they have and how thats going to reaccelerate growth on a goforward basis. So i would say this realign. Here should actually serve to encourage investors, that along with the 13 billion increase in the Stock Buy Back Program should speak volumes. Is this encouraging news from your point of view, mr. Sonnenfeld . No, its not. A number of fact our erudite panelists are missing. Im disappointed its no the come out so far. Nobody can argue that is a planned succession. Every Single Person thats in this discussion right now has to look at the camera and admit, this is a disruption, this is a surprise, this is not what the market is expecting, theres not a single analyst on the street, nobody will call into the show and say we knew this was going to happen. This was a shock. Why thats not good management. Ing going on here. Second, this is a very unstable management arrangement. Companies only do this on very rare occasion it is theres some degree of a board battle, some degree of a transition, of somethings taking place. Or if they have grown up together, like they did at Goldman Sachs and frankly, Goldman Sachs, one of these cocoeo arran coceo arrangem didnt work with hank paulson, and corzine. Points well taken. Let me just get jim crimer to respond to those, everybody. The third is they are losing market share, kelly, really critical h a mass exodus in sales management. They have had two dozen people leave in recent weeks at the top. They have been fighting over loss of market share in the cloud to salesforce. Com and this is a shrieking irony, 24 years ago, management conferences, Larry Ellison was possessed, facilitating debaits, talking about the cloud. For him to be losing market share here now to sales force must drive him crazy, nobody was talking about back then what he was talking but netbooks and things like that something sales guy just left, lost the number one asian sales head. Something going on here. Okay. Jim cramer, what about these points here about the timing, about the succession, about the top executives leaving . Jeff is the succession expert, but larry got his head beat in on the cloud. I mean, he whatever he was doing was not the cloud. He is anticloud. I mean, the cloud i know that mark benoff has made larry knows mark well and i think larry built a Great American company but they have been trying to play catch up in the cloud forever. Frankly, under if this was their cloud under larry, then they caught a doubt get out from under the cloud, because larry did not do a good job on the cloud. I think thats what everybody knows. I think marks come in, i dont know about the relationship. I understand that you could argue it was shotgun. But i also know that frankly, marks been running this company for a long time now. And larry doing a lot of things. Everybody who follows oracle knows that h why not give him the job . Why split the job . I dont know why they didnt do that i agree with that, jeff, thats an interesting question, but larrys doing a lot of Different Things besides working at oracle, mark hurd and so is safra catz. [ overlapping speakers ] the R D Organization has continued to report up to larry for quite a while now, when the strategy took off and oracle took over sun microsystems, larry took a very strong happened in that as well. So not saying he is in there every day. But thats been a disaster. Sun micro has been a disaster. [ overlapping speakers ] the margins on the hardware business have been fantastic. Now the growth rate haas not always been what they projected, take a look at the struggles that all manner of Legacy Enterprise companies have had transitioning to the new data center model, cisco being a prime example, oracle has not had nearly the types of struggles that those others had, no, not been a completely smooth transition, hard to think of one company that has had a completely smooth transition, but oracle has done pretty well. A different type of company. Remember how much of this capillary ellison still ounce, the fact these executive chairman is significant. And i have to think you have to see this coming, he is no spring chicken. He is pushing 70 right now. [ overlapping speakers ] got to leave it there, so sorry, love to keep this going, so much else to get to this hour as well, really appreciate your thoughts, that was jeffrey sonnenfeld, jon fortt, jim cramer, David Geraghty weighing in. We have got another ceo change at a big company. Dominic chu, whats happening . So much news, kelly, so from the Technology Side to the Consumer Staples side of the equation, check out whats happening with clorox, clorox announced that they have promoted ben know door from the executive Vice President coo role to become the new ceo at clorox. In addition, the current ceo and chairman will stay with the company and remain as chairman of clorox. So, again, don news, staying as the ceo of the company staying as the chairman of the company and ben know dorer elevated from coo to ceo and dominated to the board of directors. Again, dorer has run about every division at clorox at some point, from glad products to household cleaners to cleaners. Again, so he is a veteran of this company and now gonna be the ceo, kelly, back over to you. So, a couple of major changes in the c suite this afternoon. There will be much more on oracles coming up on mad money at 6 p. M. With jim cramer around reminder as well as people talk about what happens with the legacy of this megacompany with 185 billion market cap it went public within a day of microsoft going public in 1986. Since then, oracle up, 89,000 . Microsoft up about 64,000 . I dont think anyone Holding Shares since then either one of those names crying too many tears over that performance. Coming up, alibabas ipo could price any second now, gonna get instand analysis when we get those numbers, plus, tell you about the million and billionaires this debut will also instantly create. Also, is invest activist investor David Winters a believer in this record rally . Is he getting cautious . Join us exclusively late other the closing bell. You are watching cnbc first in business worldwide. Act i. Scene 3. Open port twentytwoohoneseven on the firewall for customer db access. Install version twopointthree of db connector and ensure verbose flag is set in case of problems. clapping sound isnt the cloud supposed to make business easier . Get the one that can connect to the systems that you already have. Today theres a new way to work. And its made with ibm. Whos going to make it happen . Discover a new energy source. Turn ocean waves into power. Design cars that capture their emissions. Build bridges that fix themselves. Get more clean water to everyone. Whos going to take the leap . Whos going to write the code . Whos going to do it . Engineers. Thats who. Thats what i want to do. Be an engineer. Join the scientists and engineers of exxonmobil in inspiring americas future engineers. Energy lives here. Welcome back. Alibaba could price the historic ipo any time now. Robert frank is here. Robert, we do know whatever dollar price we get here, its probably going to create several instant billionaires, isnt it . Going to be huge. This ipo not only one of the biggest in history, one of the biggest Wealth Creation events in history. Jack ma the biggest in history. His shares set to be worth between 13 and 14 billion. Now, thats based on the conservative price of 66 to 68 bucks a share. He is selling more than 850 million worth of shares but his remaining stake, get this, will be more than the entire net worth of Rupert Murdoch and elon musk. The second winner, joe si, worth 5. 5 billion, selling 300 million of shares, get this, the sounder of soft bank, a big indirect billionaire boost, owns 34 of alibaba which ounce 20 of soft bank, his proportion at stake worth around 10 billion. Alibaba will make jack ma the richest man in china and son the richest man in japan. What will he do with the money . Bea longs to society. A couple million, a rich guy, 10 to 20 million, its capital. Over 100 million, he says, thats Society Giving it to you saying you guys run it so its not my money. Wow. Wow. A lot of that going to charity, which is great news. For those charities, absolutely. And meanwhile, as we should remind people, we have a sense of the range for this thing, dont know exactly the dollar level. We have been polling people trying to get a sense from our panelists even. We asked whether people care what the price point is, such a frenzy in some spaces, but nathan also saying out in the midwest, his clients, they respect so keep. They didnt get in. Thats what could make this so well done because there isnt that retail sort of boom, just institutional. We are hearing on twitter around facebook went public, everybody was talking about it and saying, how i do get in . How i do get in . Youre not hearing that about alley ba barks really more of the Institutional Investors. The first choice is you have to decide do you want to play in china. Right. Then you decide consumer, retail, tech. The first place, china. A lot of people say right there. Correct. Thanks, robert. Student debt isnt just for young people anymore. A surprising number of people that arent too far from retirement age are still saddled with huge Student Loans. Up next, barney frank and larry kudlow discussing possible solutions to what many believe is a looming student loan crisis. Perhaps a taxpayer problem as well. When change is in the air you see things in a whole new way. Its in this spirit that ing u. S. Is becoming a new kind of company. One that helps you think differently about whats ahead, and whats possible when you get things organized. Ing u. S. Is now voya. Changing the way you think of retirement. That corporate trial by fire when every slacker gets his due. And yet, theres someone around the office who hasnt had a Performance Review in a while. Someone whose poor performance is slowing down the entire organization. Im looking at you phone company dsl. Go to comcastbusiness. Com checkyourspeed. If we cant offer faster speeds or save you money well give you 150. Comcast business built for business. The student loan crisis isnt just impacting young people. Its now starting to hurt people nearing retirement age and our scott cone has the details. Hi, scott. Hi, kelly. Around 2 million Older Americans have Student Loans. That, in itself is not a huge number, at least not yet, but these people are much more likely than those in other age groups to be in default and the amount of debt is skyrocketing. Take a look, from 2. 8 billion in 2005 for ages 65 and older to more than 18 billion today. And that number doesnt cloud people like rosemary anderson. She is 57, with 126,000 dollars in debt, about half of it interest. She went back to school in her 30s, got sick, got divorced, hasnt been able to make a payment in eight years, so the interest piles up, older adults typically have other debts, fewer potential sources of income and the government can tap their Social Security if they default. There has to be a different structure and a different policy that is applied to people who are older going back to school than they are when youre 20 years old. It just makes perfect sense to have that change in structure because our life expectancy, a, isnt the same as a 20yearolds and that you have different ways that you could pay it back. Lots of ideas under consideration, the most contention, the Interest Rate, for roses mary, thats 8 1 2 and under current law, she cannot refinance. Kelly . All right, scott. Incredible stuff. Thank you. And joining me now for more on what this means to the economy and what should be done overall about it, i am joined, as on every thursday, by cnbc contributor and former congressman, barney frank and cnbc senior contributor, larry kudlow. Welcome to you both. Right now, everybody, before we get into this, go to cnbc. Com vote and tell us, should the government stop making these Student Loans . And larry, what should be how do we fix a problem of somebody who 30, 40 years later still has existing student loan debt, they have much less income anymore to be able to pay back . Well, look, i want to make two very quick points. Number one, there such a thing as personal responsibility. You know, the example that you make, the woman hadnt paid any back in eight years. She had been working part of that time. I dont like the sounds of that at all. Number two, there is a bipartisan bill, democratic senator mark warner of virginia, republican senator marco rubio of florida, that would reform something called the incomebased repayment system which would allow individuals to work with the Government Loan Program and establish Monthly Payments that they can afford. I think seniors would also be eligible. At least it will slow down this incredible government Student Lending bubble which has caused a tuition bubble. Larry, is that something let me ask you something, barney frank, isnt that Something Like what the president has already done here, to begin to change the repayment plans to an incomebased system . Well, you have to do it on several levels. The most important thing we can do now as a society is to change the policy Going Forward, because it is important for us to be able, for two reasons, to encourage people to go to college who might not be able to afford it. One is its a very important way to mention equal i. I asked ben bernanke and alan greenspan, given we have more inequality people thinks is healthy, how you do he will with it is controversial, what they propose, both said Community Colleges are an Excellent Way to transmit to people, particularly lower economic segments the kind of job skills that they need and you know, the Community Colleges teach the kind of job skills, nursing, tv technicians, et cetera that dont get offshore, hard to stick a needle in somebodys butt from india. And i apologize to joe for one second, sliding up and down the inequality scale here from the low end to the high end with the news on Larry Ellison, i just want to go back to our dominic chu at headquarters, dom, sounds like we have the third major ceo change in 35 minutes here. Whats going on . Thats right. A third one. So in addition to everything we have been saying, check out whats happening with jetblue, right now, we have learned that robin hayes, who is the current president at jetblue, will ascend to the ceo title, effective february of 2015. Again, robin hayes, the current president , will become the ceo effective february 16, 2015. In addition, current ceo dave bar jer will retire, will step down as of that date. Robin hayes, meanwhile, is expected to join the board of directors around that same time as well, so, again, a lot of Management Changes, first Larry Ellison, then whats happening with clorox, now jetblue, so again, huge announcements from the c suite this afternoon, of course, on the same day that alibaba expected to price its ipo. Back over to you, kelly. Thank you very much, dom. Just so everybody sees whats happening here, jetblue shares responding to the tune of 5 higher on the news that the ceo is leaving, larry and barney frank, im so sorry, we need to give this student loan discussion its proper due, let come back to that if we can and get your thoughts here real quick on this rapid succession, if you have any specific thoughts on jetblue, clorox and oracle or a sense if this is an attempt at a thursday afternoon news dump or whats going on here . The most interesting one was the one you covered earlier on changing oracle. Thats fascinating one. I know all the players there. We dont have enough informing. I mean, i was listening to your prior discussion. Its these things seldom work, okay . They seldom work, you are taking out one veteran guy and youre putting two more people in i happen to know the people, particularly safra catz, i dont know, i think theres something we will know about this in a few moments or some time, the people on the board of directors going to speak up. Oracle hadnt done all that well lately. I think jim cramer, my bud, did i right, but theres something here we dont know. Barney frank, sir, do you have any thoughts you want to add as well for some color this afternoon . Well, i do want to congratulate the man who said that the new ceo was ascending, i think thats good metaphor. I think one of the advantages of being in office, i dont have pressure to tell people much more than i know and im not an expert on the internal workings of any of those three companies, so ill pass. Fair enough. We appreciate it and apologize again about the news. Larry, real quick . I just want to say, i agree with barney frank about Community Colleges and Technical Schools. I just wanted to get that in. Where i disagree is with senator Elizabeth Warren who wants to tack million tax millionaires to give everybody a break, okay . Community colleges, Technical Schools and you can manage it monthly. I think thats the way to go all right. We appreciate what you do for the millionaires. We have to be careful about some of the we have to be careful about some of the forprofit schools, some of which have been abusive. I think Elizabeth Warrens argument that we should reduce the Interest Rate Going Forward is a very reasonable one and the other thing i want to say is larrys always been somebody i admired and now i have a new ambition, because im apparent lakers correspondent and contributor and larrys a senior contributor, so im going to work hard to get to larrys status. Well, we will report when you asend to that role and appreciate the time from both of you this afternoon and for rolling with this news. I still call him i still call him chairman frank. I still call him chairman frank. As should i. My apologies to chairman frank and senior cnbc contributor, larry kudlow. We are on alibaba watch still. The potential laly largest ipo could price any time. We will get you the number shall the analysis when it happens and let you know what price we will start trading at tomorrow morning. Plus, he blasted warren buffet for knot being critical enough over cocacolas controversial executive pay plan and then sold all his stake in berkshire halt away. Activist David Winters telling us what his next move is and also his take on the alibaba listing. We will be right back. Way to plus our so whata Accounting Firms mobile plan. And minus our expenses. Perfect timing. Were offering our bestever pricing on mobile plans for business. Run the numbers on that. Well, unlimited talk and text, and ten gigs of data for the five of you would be. Oneseventyfive a month. Good calculating kyle. Good job kyle. You just made partner. Our bestever pricing on mobile share value plans for business. Now with a 100 bill credit for every business line you add. train horn vo wherever our trains go, the economy comes to life. Norfolk southern. One line, infinite possibilities. Machines will be sprayed to be made. And making something stronger. Will mean making it lighter. One day, factories will work with the cloud. One day. Is today. We begin here at Head Quarters with our dominic chu. Kelly, again, just to kind of put more news on the table here, home depot is confirming that the malware used in its recent breach has been eliminated from its u. S. And canadian networks. In addition, information on 56 million unique payment cards may have been compromised as part of that signer attack. Home depot also said its q 3 sales are still on track. It reaffirmed its fullyear Sales Guidance and raised its fullyear earnings kind guidance above wall street forecast. See there, home depot shares down marginally hours. Back to you, kelly. Thank you very much. My next guest called cocacolas executive pay plan outrageous and excessive. He argued cokes buy back program was hijacked by the company and just last month, Winter Greens David Winters went one step further by parting ways with another key partner, selling his stake in Berkshire Hathaway and joins me exclusively. Welcome. Kelly, great to see you. Ky get your thoughts here, a series of newsy events since you have sitting down here about oracle, speaking of excessive pay, or rack raquel, clorox, jetblue, home depot now malware news, your thoughts on any or all of the above . The key thing is companies have to be run for the shareholders, the shareholders are the boss. And if the shareholders do well, management should do well. But management has to be aligned, kelly, with the underlying owners. Do you think in the case of oracle, because i picked that because Larry Ellisons comp and executives are not just him has been a source of much focus, its excessive relative to certainly what a lot of the peers peer ceo peer group is making. Has that held you back from oracle as an investment . In general, look, we want people to do well. But if they do excessively well, especially the company doesnt do so well, were not interested. At winter green, our investors have to do well and then the ceo can do well. So you now think Warren Buffett isnt running his company in a shareholderfriendly way . Well, we are concerned the management at Berkshire Hathaway, which is laid out very clear principles over many years against excessive pay and that everything is for the share hold others, they seem to have thrown those principles out the window, so, for us the case of cocacola or generally speaking . Well, specifically in the case of cocacola, we are very concerned that, you know, they have been so against excessive pay, especially when it wasnt deserved, and they have gone ahead and essentially sat on their hands and supported this whole, you know, travesty at cocacola. We think its a bamboozle and so therefore, you know, from our perspective, kelly, we have sold our berkshire and we want to move on to companies that work hard to make their shareholders rich. Before we get to those companies, have you heard from Warren Buffett on this since the by the way, those b shares have continued to trade higher since you sold out of that position. Sure. Sure. Originally, when this all came out, buffett came on cnbc and was very open that he agreed with our position, that you know, there was a problem at cocacola. And yet, you havent seen him do anything more, perhaps its because he and others have often felt as though executive pay isnt the main reason why you should suddenly do a big Management Change. In other words, that could be more disruptive to a company thats trying to improve shareholder value. Cocacola, we think theres change coming to coke. One way or another. How big . How much change . Could be very significant, again, with whats happening now with all the ceo change. They havent done a good job running the business. They havent treated their shareholders well, the business is a good business, Everybody Loves coke around the world. So we think with simple fixing of the underlying business and business and probably Management Change you think new tar kent could be the next go . We dont know next, some point, we hope that the board does make these changes, despite their comments, they have said that they had Broad Shareholder support at the end of the meeting, now with the s. E. C. Filings, we know there was major opposition to their plan and see ultimately, around the world that unless the shareholders and the management walk hand in hand, eventually, theres change. Im glad you raise this point, because this is a huge part of the reason why theres some concern about alibabas listing tomorrow, what is your take on alibaba . A great story, for us, we are focused on valuation, kelly and i think theres still, though the markets have gone up, theres a lot of companies that have been left behind. And where the prospects are good. So, we dont want to pay at winter green big prices, we want to get a lot for what we pay for. And i understand alibaba probably doesnt fit in that bucket. Do you have a problem with companies who are run through the Cayman Islands effectively or companies that do give their founders more shares . In other words, the new york model as opposed to the hong kong, one share, one vote model . We like hong kong. I dont think theres a fixed rule, but the key thing is that youve got to have that sense that managements working for you, that every day, they jump out of bed and they want to make money for everybody, that all share hold verse to win and it cant be heads, i win, tails, i win bigger for management and the shareholders get left behind. Could you quickly rattle off, for example, four or five of those companies where you do think you see favorable conditions . We very much like Canadian Natural Resources in canada, we think its very undervalued. We Like Union Pacific here in america. Thats got phenomenal land bridge. We love the management and what theyre doing. And then in malaysia, we like gentech a Gaming Company that runs aqueduct here in new york and they are very smart. And you have positions in all of these . Absolutely. Long term. Okay, swatch absolutely. Longterm. And swatch, is that your Biggest Holding . We love the watch business. Despite the concerns, people love watches. Why arent you, you know, have a huge position in apple here then . Well, its a teeny piece of apple. And we think that swatch is a pure play, and we think when they come out with their smart watch, itll be wonderful. But even, even beyond the smart watches, theyve got a fabulous array of low, medium and highend watches. And people want to differentiate themselves around the world by wearing a watch or beautiful piece of jewelry. David winters, i know weve hit on a number of issues. Thank you so much for your time this afternoon. Good luck in the myriad battles you are waging and please come back and keep us posted on them. Appreciate your time. Now, Larry Ellison stepping down oracle, as you can imagine, burning at the cnbc. Com hot list already. Well tell you what readers are looking for on the ellison move and how you can access more information with our new app. Stay tuned. Does she have special powers when she has the shroud . No. Guys . Its the woven one the woven one. Oh, oh that gives her invincibility. Guys . No, no, no. The scarlet king is lord victors son no dont. I told you you guys are gonna be so surprised when you watch the finale youre so lucky your car has wifi. Yeah. I am. Equinox from chevrolet. The first and only car company to bring builtin 4g lte wifi to cars, trucks and crossovers. Just take a closer look. It works how you want to work. With a Fidelity Investment professional. Or managing your investments on your own. Helping you find new ways to plan for retirement. And save on taxes where you can. So you can invest in the life that you want today. Tap into the full power of your fidelity greenline. Call or come in today for a free oneonone review. But parallel parking isnt one you do a lof them. Ings great. Youre either too far from the curb. Or too close to other cars. Its just a matter of time until you rip some guys bumper off. So, here are your choices take the bus. Or get Liberty Mutual insurance. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. See Car Insurance in a whole new light. Call Liberty Mutual insurance. With the top speedou compare of comcast the top speed of business dsl from the internet. Phone company well, theres really no comparison. Why pay more for less . Call today for a low price on speeds up to 150mbps. And find out more about our twoyear price guarantee. Comcast business. Built for business. Welcome back, the big news this hour. We thought it might be alabi baba. Larry ellison stepping down and it is burning up our website. For that alan wastler joins us now with more. And alan, a lot of people need to know about the new app today, as well. Thats right. This is the new app. You can get it on the app store now. Lots of new features, a lot of great interactive dudads to play with. Lots of fun. Right now, the Larry Ellison oracle story, burning it up for us. 30,000 people have already looked at the thing. It hasnt been on that long. The other thing drawing people, our scottish coverage. Thats going to make it rough on the call. And i think i see do i see a kilt there, alan . Yeah, you might see. This is my family so im doing it just to honor the vote today. Not saying which side, but to honor the vote. All right. Always full of surprises. Thank you, sir. Three ceo changes at major companies. How is that for an hour . Well get more reaction to the big news this afternoon. Oh, by the way, we also get alabi baba, the voresults of th vote in scotland. Plus the iphone 6 goes on sale when we come right back. Big day . Ah, the usual. Moved some new cars. Hauled a bunch of steel. Kept the supermarket shelves stocked. Made sure everyone got their latest gadgets. Whats up for the next shift . Ah, nothing much. Just keeping the lights on. laugh nice. Doing the big things that move an economy. See you tomorrow, mac. See you tomorrow, sam. Just another day at norfolk southern. Welcome back, time for a fivesecond final thought. Well start with the wolf of wall street. I love that. Thank you very much. So to me, the biggest news was when the fed yesterday revised the gdp down for the next three years and it looks like our vshaped recovery that weve been speaking about for five years will no longer be talked about for the foreseeable future. By the president included . I dont think hes brought up a vshaped recovery. He was more of a kind of, its going to slowly continue to move forward. But the fed has talked about a vshaped recovery post recession. Is it w, f . This is brought to you by the letter u. Just a dash . To me, the oracle news is so huge. And just the way it came out when you think about Larry Ellison as a micromanager and the way that he so meticulously controls everything ask to have this sort of dropped in our lap, im really curious to hear what the aftermath is going to be and what were not hearing yet. I think as robert and i were talking about, theres definitely more to that story. Yeah, look, theres something we dont know yet. I dont know what it is, i dont know how big it is. But something about this felt hurried, sudden and huge. It felt like a normal company and not a normal company wouldve plotted this out over a longer period of time. Anything else in particular here as we look to friday . Ali baba is going to be fascinating. It feels like such a disciplined ipo. I like this, good for markets, shows that ipos, we may be over the sort of facebook debacle. But an interesting challenge for the underwriter because theres no lockup on a lot of the shareholders, which is really the first big ipo weve seen like that. So itll be curious to see how it prices and trades. And how scotland votes. I think, i hope they stay part of the uk. I think itll be best for the economy. And probably best not to upset financial markets. Who knows anymore. Thank you so much for this hour. So much to cover and really appreciate it. Lets hand it over now to fast money and melissa lee. And melissa, take your pick. We got a lot of news. So were covering all angles and one angle is yahoo. Why yahoo could be a takeout target. The take the acquirer, the potential acquirer will surprise you, guaranteed. Stay tuned, over to you guys. Thanks, kelly. Fast money starts right now live from new york citys time square, im melissa lee. Our traders tonight are pete najarian, dan nathan, John Najarian and guy adami. Three key market events unfolding. Scotland closing its polls right now. Will it become an independent country . The latest as the numbers trickle in. Oracle, meantime, getting hit after announcing Larry Ellison is stepping down as ceo. Revenue coming in late in the First Quarter. The call getting underway right now. Weve got all the latest headlines, and any minute now, we will get the pricing on ali