Transcripts For CNBC Closing Bell 20141215

Into the final hour of trade here. Thats the case with the Dow Jones Industrial average and seems like a distant memory. That was just december 5th and almost touched that level and now back towards the 17,000 mark. S p today giving up 8 points and nasdaq off about 37. Oil itself touched new fiveyear low. Were wreaking havoc with the producer. Theres oil. Not much of a bounce there. Now 55. 51 and set the new lows again. Settling down about 3 and since as you can see down 4 continuing to trading and as you know to defy expectations of everybody who wants so december pra desperately to do the bottom picking. A fed meeting starting wednesday. And a lot to get to. Janelle nelson with us. Sam stoval. Daryl kronk. Peter anderson. And our own Rick Santelli joins us from chicago per tradition, as well. Sam, whens the target you guys at s p capital iq have for the s p for the following 12 months . Well, bill, our target is 2250 on the s p 500. Are you changing that as a result of whats going on now with the oil price . Not yet. Certainly, we have more than 12 months to go until that price is reached and sticking with it until the fundamentals have subsequently changed as a result of these technicals. Peter, you say youre playing the upside of Lower Oil Prices. What does that mean . I think the upside is Consumer Discretionary names. We have talked about this in the past but every cent decrease in gasoline prices translates to about a billion dollars of almost a tax incentive. Right . A tax break. So when you look at Consumer Discretionary names, you have to say wheres that money going to go . You dont think thats priced in already, peter . Look, this isnt a new phenomenon. This is going on now for months. Dont you think that these names are already reflecting that . You would think so but, you know, kelly the additional aspect of whats happened this month is the oil price issue. And you know, when we have looked at black friday sales, we all have to remember those are survey numbers. Not hard data. And so, im very bullish that the real Sales Numbers will come in much stronger. Well see those in early january so position yourself now as im doing. Im 30 in my portfolio in Consumer Discretionary and 0 in energy names right now. All right. Janelle, tradition suggests once the tax selling is over at the end of the year and right about now, as a matter of fact, to get the santa claus rally as its called. If Oil Continues lower, are all bets off on that . I think it really depends on posturing. I think it depends on the saudis are saying and opec saying. But these stocks are beaten up, beaten down hard and youve got traders issuing to take a position in them. Thats it. Daryl, are you looking to take a position yet . What at this point tells you that this move is gone far enough and gone deep enough that you can and why would you begin to look at some of these beaten down energy names and down 40 , 50 , 60 from the highs . Good point, kelly. Not yet. Until we find a bottom in wti and brent crude prices, it is tough to take an overweight on energy. That said, when you look at valuations, valuations today on energy as a percent of Global Market cap are at 10year low and some of the price to book, price to earnings ratio is pushing. Will they remove that clause, finally, that theyll keep rates low for a considerable period of time . What are you betting there . What does the price of oil do that possibility do you think . Well, i think on the former question, most traders i talk to do think that phrase comes out. My own two cents to that is it doesnt nail down the date much. Try to get a little turpentine when youre painted into the corner. With the latter, listen. I think thats why it was so important to have normalized rates sooner. Not necessarily snug enough to make a big dent in the economy but enough to send a message. The fed had confidence in the u. S. Economy but i think that time has come and gone and, yes indeed, theres an issue here with this kind of systemic rolling margin call going on in the Energy Sector and thats really what it is. Bill gross and that wonderful interview with sully hinted at the same thing. Too much liquidity out there and no covenant or a lot less in regard to covenants and special guidelines and the highyield paper, these things are bound to happen. It is the catalyst. Ill continue to say that, you know, from the energy perspective, nobody can say what the bottom is when margin is a big issue. 55. 50 was my number and curious to see how it pans out in the morning. Yeah. Janelle, you could argue, in fact, in a way Interest Rates have already gone up. Why . Because oil prices and Inflation Expectations have fallen so in real terms Interest Rates have been moving a little bit up lately. I dont know if you explore what that means for asset prices or what the fed might do in response here . Well, i think the point that rick made was the fact that you have dislocations. Everyones watching the credit market. And i think youre going to see the fed really considering any kind of an Interest Rate hike carefully in light of whats happening in fixed income and currencies. They want to proceed very carefully and not add to the instability. Right. Sam, you guys ready to buy energy yet . No, not yet. When you look at the earnings compiled, they have come down 28 for the Energy Sector since october 6th. S p is down 4 . Whens encouraging to me is Consumer Discretionary is off only 2 and industrials down one half of 1 and implies to me the market is still not baking in a global recession but rather saying that this is really much more of a sector specific problem. And lastly to you, daryl, on the back of this trade in consumer discretion for an or not, do you find it attractive . What kind of names are you buying here . We agree with sam and like the discretionary space and stronger u. S. Growth into 2015. Certainly the tax savings from lower pump prices and, frankly, Consumer Discretionary one of the laggards in 2014 and value there and we think the global industrials also make a good case in todays environment and we still like tech. Why, daryl, just again jump in here. Talking about this money consumerless are saving will be spent, ive heard nobody talk about buying health care, for example. Buying that on the back of maybe people, whether its through higher premiums or because thats where more of the consumer wallet is going these days. S p capital iq likes it . Yes. Thank you. Health care checkup where our Investment Policy Committee talked to jeff lew, the sector group head and people think that the group is overvalued and actually its trading smack on with the 20year relative pe. So its not overpriced. It is not compellingly priced with about 12 Earnings Growth expected for 2015, versus 8 for the s p 500 we think theres upside potential. All right. All right. Thank you all for joining us here. Appreciate your thoughts on the markets. Before mandy, guys, showing the price of oil, we talked about how you know, thats been calling the shots for the equity markets today and yet as we stand here, we are setting new lows. We were a moment ago and at 55. 51 which is a new low. Now 55. 45. So it continues lower. And yet, the industrial average is down just 45 points and not seeing that correlation of earlier in the session. But certainly is one reason why we are still seeing negatives across the board here. As you probably know, the other story we have been all keeping an eye on with horror in the last 24 hours, the siege in sydney, australia. Mandy has the latest developments for us right now. You are right. Market sentiment here, general risk aversion, very early in the trading day today when the Police Outside of the siege cafe in central sydney did storm in to try to end the situation and very sadly ended in tragedy and fatalities. We were hoping far peaceful resolution. It was not to be. Three people died and four others injured. If we break them down, bill and kelly, there was a 50yearold gunman gunman. He was an iranian refugee from 1996. But had very extreme views. And tragically, the other two that were killed were another man, age 34 and a woman 38 and pronounced dead after being taken to the hospital so it is believed that the gunman shot one of the hostages and that gunshot heard was what precipitated the storming of the cafe by the police and paramilitaries and various groups on very, very high alert and as i say its come to a very tragic end and australia is completely in shock. Even though we were raised to a high terror alert back in september with warnings of possibilities of terror attacks on australian soil, we havent had anything like this since all the way back in 1978. Mandy, just one quick followup. Yes. Is it clear what or who caused the deaths or how that happened . Im not completely clear on what occurred with the third death. As i mentioned, the reports is that one of the hostages was shot by the gunman. As for the third death. em not sure in general gun fire and the police stormed in or by the gunman and Details Remain to be seen. Yes. But all the developments well continue to pour out and well keep you updated. All right. Mandy, thanks much. Thank you. Following developments in australia. The market here sees the dow under pressure by 50 points heading into the close. That is off the session lows of 166. Despite this continued downdraft in oil that we were just discussing. S ps off 6. Nasdaq 32. When we come back, hope you saw Brian Sullivans terrific interview of bill gross, the first since leaving pimco. Brian will be with us for the highlights and takeaways of that interview. Also ahead, that collapse in oil prices did not trigger a drop in airfares or fees and senator schumer is calling for an investigation to find out why. We want to know if you think the free markets havent dictated a change or are they colluding on some level. Were back in two. A volatile day to begin the trading week. The dow has been up 123. Down 165. A lot of a result of the volatility in the oil market. Oil right now down to 5year lows. Were down at 55. 41 or thereabouts. Again, 55. 18. So, you know, the selloff in Oil Continues. The dow down 57 points and holding its own right now. All the more reason to keep an eye on oil because exxon is an outperformer of the dow this session up by about. 5 . Thats interesting. Oil down 4 in the trade. Bill gross giving cnbc a first Live Television interview since leaving pimco. Hope you saw the interview with Brian Sullivan from janus there in denver. Brian, great job. Give us some of the highlights, bud. Yeah, thanks very much, bill and kelly. I appreciate that. Noil a second because i did ask bill about that, as well. There were two parts of the story. Departure of pimco, maybe some saying that it did not go well and bill was acting odd lately. We wanted to talk to him and be blunt and ask what he felt the situation was and thing about it, getting to know bill, he is incredibly intelligent and sensitive, as well, like we all are. I asked if he felt that people everybody written about him and said about him if he felt misunderstood. Heres what he said. No. I think the vast majority of the public understands exactly who i am. Like i suggested for past 25 years, my investment outlooks, they know whats inside of bill gross and so i think they have a sense that they know that that will continue, as well. We talked about the fed, fed on wednesday. Oil, you mentioned 55. 43 for wti. I asked him if he watched the price of oil and the impact might be. Heres what he said. Oil determines currency movements. Currency movements determine, you know, spread markets. Risk markets. Highyield markets. Potential for bankruptcy or solvency with companies and countries and once you have a major commodity like oil affecting not just the real economy but the financial economy and motion like it has been moving down rapidly, then financial markets, you know, try to readjust. So there you go, guys. I tried to ask him bluntly will the fed raise rates next year . He said, close. That was the answer. Its manny being manny. Like bill being bill. When you get the know bill, he is misunderstood and i think sometimes too smart for his own and quirky with the sense of humor, as well. I would agree with that. Yeah. Thats answered of janet yellen anyway. But let me ask you this, though. You know, with the dramas over. The soap opera and all that. Now performance. And so far, his new fund janus lagged to some degree the pimco total return fund. Ironically, in part because of investments he made before he left. We brought that up, bill. Great point. I have to give him a bit of a victory lap. He took the lumps. Always good to cnbc. Good to our show. The stuff that you were being killed over last year has now become money good and its a same strategy and those guys are going to get the credit for it even though in large part much of that was his trade, as well. You know, he sort of disputed he had underperformed and comparing against highyield, yes. Thats the stock market but in the universe, he had done very well. The bottom line is bill gross is one of the most successful investors of all time. One of the most successful entrepreneurials of all time. He built that company and 2 trillion Asset Company and has enriched thousands if thats failing, guys, i hope some day to fail that way. I would like to fail like that. Well, yeah. Listen. Brian, a question. I thought it was interesting, as well, asking about the management style, he said if anything he thought it was too loose and lax before he left. I know. I know. People hammering him, too tough and that and a taskmaster but we forget he was not a boss. It was his company. He founded the company. I think theres attachment to the baby and compared to it off air and family and still feels probably a little bit hurt by the way things were handled. Maybe willing to give up power and they said no. It is his baby. So i think we cant look at him like he was just the bond king. That was his company. He built it. Hes happy here now. The ceo of janus is spectacular to cnbc. They have a firm here to grow in fixed income and equities. The reality is that this, folks, i mean, one takeaway, dont forget, from this time, this eight hours in denver or whatever we have spent here is that Janus Capitals going to grow so these other firms of the world, Janus Capital might be coming after them and hiring bill gross was a big part of that, guys. All right. Well done. Good to see you. Thanks. Safe trip home. Thank you. See you later. 40 minutes left. A little bit lower. Dow down 74 points here. And i tell you. Were watching oil as much as were watching the stock market right now. But the industrials down in the trading range today. The weakest name in the dow is mcdonalds. Its off more than 2 . Some pressure on a name like american express, as well. Should benefit of oil lower, thats the weakest link today. Whens the strongest . Exxon. Isnt that ironic . People looking for that fortress Balance Sheet thats bantied about. Thats a hard argument to make right now. Keeping an eye only it with 40 minutes to go. Theres the s p 500 heat map by the way. Some dispersion. It is not one of those 90 down days by any stretch. And why do you think the airlines are not cutting ticket prices, he asked indignantly . Oil is collapsing. Or is it just the free markets or the airlines agreeing among themselves not to cut right now . That could be collusion. Give us your thoughts on that. Well have our live unscientific poll results showing as we do our interview with the pros coming up in a moment. Welcome back. 35 minutes to go here. 100 points off the lows but pressure on the dow again some concern about the continued relentless you could say move lower in oil prices today. Dominic chus rounding up the movers for us this monday. What do you got . Start off with deal related news here. Petsmart agreed to be bought by private equity firm bc partners for 8. 3 billion. Lets stay with the deal theme. Jantd pa Janet Partners pushing for a sale and americas biggest pet store chain being bought in the biggest leveraged buyout in the u. S. This year and riverbed technology agreeing to be bought by toma bravo. For 21 a share in cash. Another theme, activist hedge fund eliot management and they have been pushing for a sale here, as well. They make computer networking related products. As markets struggle for positive territory, a sector trying to find a footing is energy like you said, kelly, on a seesaw ride today and negative on the day. Among the standouts, Diamond Offshore and nabors industries. Two of the hardest hit on the oil slide. And marathon petroleum. And end with the airlines. Delta, southwest, united, american air seeing gains today as Oil Continues like you said in that decline in prices. Back over to you. We didnt mention dow transports up today. There you go. Makes sense finally. Speaking of airlines in particular, new york senator schumer asked for an investigation of why airfares and fees did not decrease despite the plunge. The oil prices gone down dramatically from over 100 a barrel to 60 a barrel. Thats had Airline Profits go way up. Why are the ticket prices going up, as well . That is just really unfair and wrong. We want to know what you think. Go to cnbc. Com vote and why the prices havent budged. Free markets or is there some sort of collusion going on here . Lets kick it around. We have phil lebeau and you think its collusion, andrew. Why . Yeah, i do. How do you prove that . Well, you know, look. The doj can prove it. Were just asking for an investigation. We dont know whats happening but we do know is equation of when you have expenses coming down, you have record profits, usually ticket prices go down and these airlines have a history of colluding, manipulating the prices so they say sunlight is best disinfecta disinfectant. Lets find out. Phil . No. Andrew should know better than to mix apples and oranges. Airfares, to investigate, thats fine. Look at the record profits, thats because of fees. Thats because theyre charging baggage fees. Cancelation fees. You want do get at the front of the line, you pay a fee for that. Thats whats driving the profits right now. So senator schumer with all due respect is going for a pick on the airlines because theyre profitable right now. Come on lets not get fares are not a problem. Hang on, andrew. Thats a perfect leadin, phil. We had the ceo of hawaiian air not too long ago and asked him that very question. Why not bring the fees down with oil prices coming lower. Heres what he said. With energy costs coming down, would it behoove you as a gesture to the public to bring some of the fees down do you think . I think the industry did a good job of controlling the costs and keeping the cost of traveling about the country affordable. So the answer is no . The short answer. The short answer is going to be depends on the competition dictates. It will depend what the competition dictates. Right . Would you do it . Kelly and bill, running an airline, would you do that . Of course not. Its not collusion that is not collusion, andrew. When you have no, its not. Why isnt it then . Oil prices go up, the tickets sky roorocket and when they go , it takes because at the same time andrew, if you go back to starting to spike last time, its they started instituting fees at the same time jet fuel prices spiked last time. About five years ago. They decided, look, we are going out of bankruptcy. It is time for us to charge people for shipping a bag. Time to charge them for changing the reservation. Charge for anything we can. Thats running the business. Collusion is if they all get together and say lets keep it high. And then, you know, thats the way it goes. No, thats not how it works. How come the fuel charges not peeled back yet . Doesnt make sense. Theyre way down. Yet they have them. This is an industry with a history of colluding on prices and not necessarily saying theyre doing it but saying lets investigate. Lets take a look and see whats going on. As long as youre looking at fares. Look at fares. Drop the part about fees. Separate the apples from the oranges. All right. But wait a minute, phil. Are you saying they should be dropping the fees then if prices are coming down . No, they shouldnt. Thats running the business. Spirit airways are going to charge you for anything that you bring on to that flight or if you want a glass of cocacola. What about the fuel surcharge . If you go back and generally look for the most part and not see fuel surcharges looking at ticket prices. Very rare. You see it on International Flights and not domestic flights. They have incorporated that in here with the rest of the pricing over time. And look at whats happened with fares. Inflation adjusted. Fares are not much higher than they were ten years ago. So i look at this and i hear this complaint all the time. It seems to me that this is the easy thing to complain about. They seem entitled or they want the sense of entitlement of cheaper to fly before and it should be then. They werent charging before for bags. They are now. Thats the difference. There is a positive nugget in here for 30,000foot view and typically seeing the airlines cut fares and fees when they have to. If they dont feel that they have to in this case, again, theyre under it is not a fuel business but selling you a seat and if they feel like the macro environment is good enough to sell you that seat without having to cut the price, that hopefully tells you that this plunge in oil prices is not because of an unhealthy consumer they cut supply of number of flights since 9 11, right . If they do that in unison with other competitors then thats a problem. Remember, deregulation went through in large part to lead to more competition, lower prices and prices have gone up in the last five years while the fuel charges have plummeted. All right. Well, ill say that the viewers who have chosen to vote in the unscientific poll on air agree with you, andrew. 60 . We just closed the poll. 60 vote collusion over the free markets and i think everybodys galled. You know . Flying is not as fun as it used to be and who wants to pay the fees and surcharges right now . I just wonder, phil, we have to go but theres got to be an advantage out there if one airline were to jump in front, slash the prices and you dont think they get a surge of business, phil . Quick last word. Where does it come from . There are no seats. Max capacity practically. Exactly. What will you gain by doing that . Thats a point. Healthy an environment out there. Thank you. Not long ago we did that already. Move on. We are moving lower heading toward the close. Less than half an hour to go and the dow off more than 100 points. Again, back below 17,200. Hard to believe it was after that strong jobs report on just the friday before last we were almost touching 18,000. S p by the way below the 50day moving average. See four components that are positive, boeing, at t, home depot and walmart. So some of the consumer discretionaries are doing well. Where are we going here . Well have more ahead. I said what i was supposed to say. Wild market. Skup cll candy shares up ne 50 this year. The maker tells us what hes seeing this Holiday Season and how he plans to pump up the volume on the skull candy strom even further. Stay tuned. Oh what fun it is to ride. Get the mercedesbenz on your wish list at the winter event going on now but hurry, the offer ends december 31st. [ho, ho, ho ] lease the 2015 c300 4matic for 419 a month at your local mercedesbenz dealer. Welcome back. Despite the pressure we have been seeing in the markets lately, skull candys stock had an impressive run so far in year up nearly 20 . Whens driving the resilience . Lets talk about it, the trends for the Holiday Season, as well. For that and more were joined by the president and ceo of skull candy, hobie darling. Pleasure. Thanks. Great to be here. Always appreciate it. Assess the year you have had. I mean, this is the year that beats was bought out and, you know, a lot of competition in your industry. What hows it been for skull candy . For us, its been great. We do thing that is are interesting to consumers and Youth Culture piece and so much of skull candy. Good things happen and seeing that in the business and the stocks so, you know, right now living the dream in park city and alls good. You have come there from nike. Taking over a company as bill kind of indicated and small fish in a big and competitive pond. So tell us about 2015. What are your plans to increase market share and what do you have cooking for the holidays . Sure, absolutely. 2015, were looking at great things. For us, the biggest piece is how do we take the magic of the Youth Culture brand, bring in amazining innovation from the consumer . We know that the consumer lives in digital, gaming, streaming, music. They have music with gaming. Thats a massive market so for us were listening to the consumer. Were going to innovate a ton and looking for great things for 2015. Go ahead. Finish your thought. Im sorry. No. I think for holiday, you know, for us, you look at Consumer Electronics and especially branded and thats a great category to be in inspiring the consumer and exciting them, so, you know, for holiday, whether thats launching new things of gaming like halo, slayer Edition Gaming headset, new crusher products, the holiday looks good for us and excited about it. The demographic you just cited that is your key audience, you know how fickle they can be, hoby. Are you in the aggregate, trying to sell your product, are you an electronic product or a fashion statement . Yeah. Great question on that. We never think as a fashion brand. Number one, we go were a lifestyle and really born on the mountain out of creativity, art, music. That passion really to change the world. Thats why skullcandy was born and then taking that angle for amazing innovation through electronics and i think we are about consumers and then innovate with tech and excite them. Do you see yourself in the wearable categories . Well always look at whats our consumer looking for . For us, again, we play in two massive cat goirls when we think about having a great Gaming Business where our highend Gaming Division astrohas 90plus percent market share above 200 and music and almost no other thing where, you know, 7 billion people on the planet and all of them love music. Were two great categories and consumer says skullcandy, think about wearables and where that goes, well always get smart enand we aer and we are in two great categories. Beats was bought out and you were talked about as an acquisition possibility. Im sure the phone rang. Wouldnt you be the next Logical Company to go in that category . For us, we keep doing great things for the consumer. If we have Great Innovation and we can continue to have a great lifestyle brand born around that creative art sports piece, you know, we are going to do great things, whether thats as an independent company, with someone else, but we think 100 as an independent company and keep driving to be great on that. I thought he might say close. Yes. But the answer is more like ceo 101 answer to that question. That was perfect. Thank you, hoby. Good to see you. Appreciate it. Appreciate it. Cheers v. A great holiday. You, as well. Living the dream in utah. 20 minutes left here. Coming back. Down 74 points right now and missed the volatility in the early part of the trading session and the dow up 123. A bounce from last weeks selloff on the open this morning. And then down 165 but now you see where we stand right now. And the nasdaq and small cap russell average leading lower on this monday. Next, live to the katd rogers whos been clocking the action all day for us. Stay tuned. Welcome back. Stocks kicking off the week to the downside. We mentioned the oil impact and the story there and the declines and the nasdaq yet again faring worse. Kate rogers, whens driving that . Nasdaq down near 1 . The come positive it itself on track for the biggest monthly drop since october of 2012. Nasdaq with the biggest twoday loss of october 13th and downside bio tech names really hit. All down over 2 today. Small caps also getting hit. The russell 2000 down over half a percent today and down near 2 for the week. Now on the upside, riverbed technology continuing to climb on the news its being bought and that stock up over 8. 5 this hour and consume earls names like staples, ross stores, Bed Bath Beyond big gainers right now. Kelly and bill, back to you. Kate, thanks very much. Oil the story of the day again. Another volatile session. Jackie d is back at the nymex. Good afternoon to you. Traders scratching their heads today and not expecting the action to the downside we saw and west texas intermediate closing at 55. 91. An moving lower in the after hours session here. We havent seen that level for a close since may of 2009. Meantime, brent crude trending around 60 at this point. A rough day on both sides of the atlantic. A fiveyear low for brent, as well. Meantime, opec over the weekend defending its inaction on supply if you will. Saying that it made the right decision and wont be looking to cut supply any time soon and the uae oil minister saying theres no need for emergency meeting and opec isnt a swing producer, not fair we correct the market for everybody else and sending signals that it is not going to make a move in terms of what its doing with production. Meantime, signs that the price drop in wti impacting the oilproducing states domestically. You have layoffs in texas. Alaska maybe making revisions to the 2015 revenue budget and you have the little data points trickling in that eventually are going to impact the market. Traders are worried about that, guys. Back the you. Thank you, jackie deangelis, at the nymex. Im addicted to the aaa daily fuel gauge. Friday the average national for regular 2. 60. Today, just, you know, after a weekend, 2. 54. I cant wait to see what it is tomorrow. It should be great. You say im nerdy. Were nerdy about different things. Thats well put. 14 minutes left in the trading session here. The dow down 92 points. As we head lower. Not quite following the decline in the oil market we have seen this afternoon here. Counting down to the close on this monday for stocks, straight ahead. Later, sony tumbling. Almost 10 in just the last 10 days. The hacking leaks take a real toll and a hot shot lawyer to stop Media Companies from publishing what theyre uncovering. Can that work . This is a great debate. Two top legal minds will tell us coming up. Stay tuned. And dig some more. Because, for me, the challenge of the search. Is almost as exciting as the thrill of the find. announcer at scottrade, we share your passion for trading. Thats why we rebuilt scottrade elite from the ground up including a proprietary momentum indicator that makes researching sectors and Industries Even easier. Because at scottrade, our passion is to power yours. My baby drove up in a brand new cadillac. Look here, daddy, im never coming back. Discover the new spirit of cadillac and the best offers of the season. Lease this 2015 standard collection srx for around 359 a month. Many americans who have prescriptions fail to stay on them. Thats why we created programs which encourage people to take their medications regularly. So join us as we raise a glass to everyone who remembered today. Bottoms up, america. See you tomorrow. Same time. Another innovation from cvs health. Because health is everything. Welcome back. About ten minutes left in the trading session. The dow down 78. Art cashin said that really the buys and sells pairing off in the close so no real pressure either up or down from these levels right now. Joining me, we have bob pisani on the floor and old friend, it says here steven gilfoyle. I have no idea who that is. We know him as sarge. Good to see you. What are you thinking here . Are we getting close to a bottom . What do you know . I dont know. We havent seen that pure capitulation and everyone is scared. No one is scared yet. What i do see is algorithms. Since about 1 00 this afternoon, it hasnt gotten two or three points away from it almost to a fault. I heard that was 1999. Is that the number youre watching . Moving right here about 1992 right now. Sinking last three days. This is a critical level for you . Right about that level. The real problem is trying to figure out the collateral effects of oil and you can see that today. People lightning up as oil dropped again. This is a seasonally light volume time of the year. Well, tendency for the market to rise. Its a seasonally light time and moderate selling and the market tends to droop here and worries me that the russian stock market down 11 . 12 today. Ruble killed still. 25, 28 decline this month in the russian stock. How will they pay for the imports . Rain export product oil down 40 . How will they pay for everything . Thats the concern out there. Thats i think the biggest global x factor. Russia looking at a gdp drop of 5 . Russia is almost a wild card now. They may become unpredictable. One thing to make us nervous. How do you try to play that then . You know, where do you see markets move and anticipating that . Thats a hard thing to play. You have to edge your bets and play your game away from that. We are looking at the airlines. Not impacted by the oil thing. Theyre not cutting the prices in the Holiday Season and overhead is dropping significantly. Youre seeing retailers do not very well but okay. Not sinking with everyone else. Exactly. Theyre seeing their overhead drop. Theres several ways to play this. Theres short on russia. Rsx is available. You can short germany. Look what happened to germany today. Straight down. Germany fell like a cliff. Down almost 3 into the close today. A terrible almost in the booth anticipating the answer. Down 50 year to date and saw that coming, right . Unless that happened in the last two weeks here. Yeah. Almost, almost in the last two weeks but not quite. 40 something percent. Well get a quick break. See how we finish out this day, already multiyear low for the price of oil and taking a toll on the stock market. See how we do here. 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[ho, ho, ho, ho] lease the 2015 ml 350 for 579 a month last couple of minutes today, more volatility to begin the week. A rally. A bounce from the big selloff of last week. Oil moved lower. So that took the stock market lower. This is the s p were watching. Sarge is watching this. Wti which was just down here. Heres the slide that caused the selloff in the stock market and kept going especially in the afternoon session and now 55. 20. Lows we havent seen since may of 2009. Decline of 4. 5 on top of Everything Else thats going lower. Volatility, the vix, going higher again. And today look how weird that is. Youre right, bob. This is a straight day. Now down a fraction at this point. After spikes earlier on. Expiration going on this week and i think something strange going on. A technical bit of trading . Thats my story and sticking to it. A weird chart. 1992 or thereabouts. Drawing a big line on that . Or a fine point . Thats what i would like to see us break above. I dont see us going near 2000 today but thats a level to watch for tomorrow. So if we go below 1992, the next stop is 1995 . And 1978 as a significant level. It is possible if oil keeps going low, wont that happen . Take a look at oil. Showed that chart. Supply chasing demand and going on for quite sometime now, we cant put an accurate target on the price of oil. Oh by the way, the fed meets this week, robert. Thats right. Usually the day before the fed announcement, the market tends to trade up on that. Theres trading lore around that. A lot of traders expecting a bounce today. They got it for ten minutes. Not much, yeah. Oil didnt cooperate and a problem. I mentioned jerlny. Just completely fell off the cliff. Germany is trading on russia and oil. Theyre a significant partner of russia. Its hard to figure out the knockon effects of oil. Thats one of the reasons we saw germany. Now you see the links you dont necessarily think of until you see somebody trade on it and point it out to you. Do you think they take out the clause, rates will be lower for a considerable time . If they dont, what does the market do . Yes and pricing that in. You think thats in the market . Seeing stock douns and areas not that much to do with the price of oil. Anticipating the fed. Seeing the change. Great to see you, buddy. Thank you. See you around. Bob, thank you, as always. So, going 0 wut a decline of about 100 points on the industrial average. And were below the 1990 level on the s p. Well see what that means for tomorrows trade on the closing bell heres hour number two with kelly evans and company. Thank you, bill. Welcome to the closing bell, everybody. Im kelly evans. Here at the bell, the dow giving up 105 points. This after a really tough finish there on friday. And as Oil Prices Keep sliding even after that settle at a multiyear low again today. S p 500 giving up 13 points or about two thirds of 1 and look at the nasdaq, underperformer on the session. Lets get to it with the panel. Joining me around the table, larry kudlow and our very own kate kelly and also with us for more is fast money trader guy adami and mandy drury following the terrible siege in australia today adding to the market jitters. Welcome, everybody. Mandy, can you give us first the latest in australia . Yeah, absolutely. Three people died including gunman and two hostages and certainly our hearts and prayers go out to the families of those that are deceased. But, you know, you are right, kelly, because police stormed in to the cafe in sydney where the hostages were being held sort of early in the trade today and added to the risk aversion going on as we saw the markets move to the downside. And i guess the fear here is, you know, probably asking, whens that got to do with the markets . Fear is seeing this kind of lone wolf, lone gunman acting like this in the name of jihad, then you sort got to question, does this spark off attacks in australia or around the world to do similar things and i believe a security official here in the united states, kelly, said that the u. S. Government is advised by australia theres no sign that that gunman was connected to known terrorist organizations. And he really was acting on his own and in protest of australias involvement in various come pains that the u. S. Spearheaded like in afghanistan, iraq, obviously against isis and he had a website that made those extreme views very, very clear. Mandy, thank you. Following this for us all day. David, there were so many moving pieces in the market and seemed like oil might bounce and oil. What happened . Why did he bounce down 100 . I was surprised. Seems like things would work out today. So goes the market and oil. Oil sold off and the market kind of fell apart, as well. You know, honestly, kelly, i look at this market and say we are setting up for interesting buying opportunities. Talk about oil specifically if you want but its a price the oil of today, 56 and change a barrel, its pricing in drastic scenarios as far as by the way, look at russia. Look at the ruble. If you want to talk about a correlation, theres one. What a pity. Really tragic. Youre trying for them. You know who else goes down . Iran and venezuela. If i knew nothing about the american economy, the fact theyre going down makes me bullish as hell. One thing about mandy and she and i have talked australian politics a lot down through the years. Im an imgraegs reformer. Okay . Ultimately. This shows how important Border Security is. It just shows that. And its something that washington should think about. They didnt address that in this budget. Hows that going to change with the new gop Congress Next month . Its a good question. I believe theyre going to be much tougher on Border Security. Thats why they left the department of Homeland Security budget to end in february. But i hope the republicans get together. They got to use the next couple of months to put their own plan on the table. It will make this country feel safer and give everybody more confidence and the tragedy in australia, all right, its a lot like us. Okay . Its a great country. American ally. We should learn from this and how important it is. Absolutely. Kate, lets focus in on the oil piece for a second. I was hoping you would say that. What a decline. I spoke to a trader this morning and i think tends to be articulate on the issues and said people need to stop thinking of it as a stock with fundamentals. I was reading barrelclays Research Says technical term and resistance of 73 and possibly of we heard that all the way down. And pierced that floor and overreaction perhaps to opec sayinging we wont cut and reiterated over the weekend in duba dubai. They want to see if shale producers will trim in the u. S. Who knows if its a bluff . When youre dependent on oil revenue for the economy, you have no choice but to keep pumping. Venezuela needs oil at 110 a barrel. Theyre still taking 60. Absolutely. Im going do back to basics here. I absolutely agree with what youre saying. The combination of Lower Oil Prices and a rising dollar is essentially fundamentally extremely bullish for the u. S. Economy and the stock market. I have no idea when this correction will end. Its bullish helping the american and business. Agreed. Anybody to ship anything. Right . Using fossil fuel. Hold on. All production costs are going to be lower. Agreed. However, theres a school of thought, though, thinking of energy of a huge come poe innocent of the s p, digest contributor 10 . 10 . So the question is isnt there a contagion effect being ignored . No. How do we make money in energy . Right. The way i look at it. Two kinds of sellers out there. Sell earl that is are hedge funds that won this game. Pressing the shorts and ones that lost and liquidating across the board. Are things pressed down too much here. Lets get guy adami in the conversation, as well, guy, because this gets back to the point of secretarygeneral of opec over the weekend blaming speculators of driving oil price down. You know, it is funny. How blaming speculatospeculator. Theyre to blame for taking it up over the years and now to blame for taking it down. Speculators combine to any directional move. Thats the point. Only time to typically hear about them and people rail against them are taking a price of thing that is people need to buy and higher. But youve heard not anything until that comment of speculators to the downside. A pushback to larrys comments and agree to disagree but the one thing he left out maybe conveniently, maybe not, 10year rates 2. 18 . I think under the scenario to have given you if youd asked larry or just about anybody else six months ago, they would have said the ratds would be significantly higher. If growth is as robust as we think it is or last two weeks the market said it is why do Interest Rates keep going down. Go inside the 10year number and see that the tips rates, the real rates are actually rising a bit. Okay . While the nominal rate comes down. Larry, this is a perfect way let me jump in. Bill gross sat down with Brian Sullivan and asked about the top trade right now, he mentioned the security. Take a listen. You can buy a 10year tip note with an Inflation Expectation of 1. 5 . The feds target is 2 . And, you know, to not buy a tip at 1. 5 break even is to suggest that the fed simply cant reach their objective. That they cant print enough money. I think they can. Larry . Isnt he all im saying is, i think i agree with mr. Gross. I didnt hear the context. Worldwide, we have zero inflation and low growth and help explain in my view worldwide longterm Interest Rates but, but, but watch those tips rates if the real rates go up thats going to put a floor underneath the market rate and well see bullish sign is if the Inflation Expectations moved higher. Gross is very consistent on this point. Had a huge position before getting to tips at janus. Look. I dont think this is bad. It just is. It just is. Okay . The market is. You have to respect the market where it goes. Well see what the fed has to say on wednesday regarding the wording and so forth. Would you acknowledge its an underappreciated point and the inflation and who cares about Inflation Expectations . I dont want to talk about it. But, larry, as you would know, if Inflation Expectations drop and in five years time people expect less inflation, and that means real terms are moving higher. And that does matter. Youre right. Good point. By the way, i just want to tell you, how pleased i am that inflation and Inflation Expectations are going down. Im a guy who wants zero inflation. I quoted paul volcker in the article. He thinks price stability and dollar stability are the key rolls of the fed. Lets not forget the u. S. Dollars rising. King dollar is back. Okay . Thats had an impact on Lower Oil Prices because the worlds reserve currency prices and commodities. This is great. This is great. Hedge funds, i dont know what theyre doing and trying to say its 2008 it is not 2008. I do think oil prices coming down will ultimately look at the Industrial Production report today. Kate . I think people are focused on inflation, though. People are starting to worry that the fed wont raise rates next year in a low inflation environment. Dont you feel like the dword is whats deflation . Whats deflation . Larry, there are i want to hear this out. Opposite of inflation, is it snot. Deflation means for a long period of time, four or five, six, seven years youre running minus 3, minus 4, minus 5. We are nowhere near that. I know. But if theres a point of lack of inflation and see the curve move in the opposite direction . Good, good. The lack of inflation is fabulous. Im saying its part of the discussion. In your purse and the money in the Corporate Bank accounts better purchasing power, makes everything cheaper and that is progrowth. Its the tax cut we need. Longs you dont have debt. Hold that thought and stay right there. Next, we also want some actionable ideas from david on how to play this and more on todays Market Action and the charts saying about the next leg of this move and the hacking of sony meanwhile playing out like a Box Office Drama with eyepoppieyepop ing twists and turns. They had an all hands on deck meeting after hiring david boise. The published emails are quote stolen property. Well look at the attempts of damage control and target in the cross hairs. Five banks banded together to sue them on behalf of every American Financial institution whose discuss merles compromised in the data breach of 2013. The suit alleges target negligent of allowing the hack to happen. Well talk to the lawyer representing the banks when we continue. Youre watching cnbc, first in business worldwide. Debate continuing here. Stocks having a rough time trying to rebound. Just how linked are stocks and oil now . Lets bring in cnbc market analyst Steven Grasso and guy adami, staying on, as well. Steve, you called the move in equities today and said watch the 50day, the 100day. Does that have anything to do with the price of oil or just this started to set up a couple of weeks ago an guy hit on it earlier. If it really is a demand issue, then its going to pull in equities. I heard you debating it. About the dollar, oil. Its not positive if youre looking at Global Growth being crimped. So if were questioning where china is right now and japan, questioning germany and france will right now, then you have to question where the u. S. Is and how that fits in. Are you calling into question the strength of the Global Demand picture in this oil move . What do you think is going on . Well, absolutely. We have to remember that Commodity Prices do not drive economies. Economies drive Commodity Prices so what have we learned since this summer . Japan not only in recession for the fourth time in seven years but a much greater recession than we thought. Properties slumping. China bringing demand down there and germany and france per last readings escaped recession by the barest of margins so we have a lot of supply in the market and my fear is, yes, this is theoretically a great thing for the u. S. Consumer. Lets keep in mind about the premium hikes that were seeing thanks to obama care. A lot of this savings, tax savings we are getting out of the pump transferring that from the energy side to the health care side i remember this point last hour. Hi, kate. Kate kelly here. I think thats well put. In terms of economic cycle, havent we moved from commodities into an exploitation cycle and having turbulence and transition from one phase to another and the question of crude oil prices in the u. S. Especially and also with the opec countries are we overproducing and overinvested and taking the pain as we rethink whether to continue to do this in a lower priced oil regime . Well, certainly. Now, keep in mind, kate, that the production has been rising but just as you saw with the Natural Gas Market five years ago, what happens when the production and economics are there . We pull down the economics so it is not as expensive and the margins for producers are much lower today than they were just three years ago so, therefore, yeah, to your point, we certainly have a lot of production on the market and this is the fear. This production still going to get to the market. Lets take opec into consideration. Venezuela, theyre long bond trading just over 40 cents on the dollar. They have to continue to produce regardless of price. Well of course. Theyre totally underwater. They have to do what they can. David, a couple of as we sort to sort through winners and losers, what do you see . I mean, when you have an issue like this, supply reacts and reacting. We are seeing cap x cuts of the guys and we are getting into a point of oil of a level of its very interesting and there are opportunities here and i mentioned on the show a couple weeks 0 ago on cnbc and look here and say, over the next six months, aee, can you make money in energy . Should we be looking to bottom fish and certain names dislocated by the selling or such negative sentiment in year end . Hold that thought for a second. We are getting news just right now on boeing. Phil, whens going on . Kelly, boeing is raising the quaertdly dividend by 25 . Going from 73 cents a share up to 91 cents a share. Boeing also going to be initiating a Share Buyback of 12 billion. Again, boeing raising its Quarterly Dividend by 25 . Back to you. Thank you, phil. Guy, 12 billion Share Repurchase program. Got to put money to work somehow. The Financial Engineering continues. Petes been all over this. Its interesting. Look at Spirit Airlines over a couple of weeks. Thats been whacked but i think thats an interesting level. The way to play this is in the airlines. Jetblue is my favorite. Real quick pushback and talk about other things. Jump in here, please. I dont know if larry is still there. He is. King dollar, im with you, brother. So with you except that i think the dollars rallying for the wrong reasons. Only reason the dollar is rising is everybody else is in worst shape than we are. Japan is absolutely throwing a powder keg at their economy and i think completely lost control of things so our dollar rallies because everyone else is worse than we are. I really dont buy that. I mean, there may be a kernel of truth to that but i would give you two other factors. U. S. Economy continues to improve. Surprising the experts. I mean, todays Industrial Production number even with mining down, mining is energy down. Consumer confidence. Retail sales. All helps the dollar. Number two, Federal Reserve ending qe and changing their language at some point and minor Interest Rate hikes next year. They will become not tight but less accommodative. So, therefore, a fed less accommodative and an economy thats doing better helps king dollar. Its a good sign. All this business, oil prices falling, can i just say, its a supply shock. Steve, it is a supply shock and it helps the very economies you mentioned. I know japans in a recession. I know most of europe is in a recession. I get that but its coming this price adjustment is coming. Mostly from a supply shock. Eventually equilibrium will step in. A quick last word, steve . With king dollar, that makes our manufactured goods that much more expensive trying to sell into lagging economies. So how long does that take for it to catch up to u. S. Manufacturers . Because what we buy and with regard hold, hold. And with regard to the Industrial Production numbers, lay ri, that you seem to be trumpeting, 5. 1 of the number from automobiles. Well, as we learned from the american banker today, automobile purchasing is subsidizing by a surge in subprime loans. I dont think thats a great thing and the other driver is 5. 1 increase in utilities. Thank novembers polar vortex for that. Ill bet you anything, larry, that Industrial Production number next month is nothing like we just saw. Steve grasso, give us the last levels to watch before you go. The s p cash, 1987, below that in the cash right now. We have to stabilize there. If we dip and retest that 200 day, 1946. Not the end of the world with a rising 200 day. The dollar has more room to climb and oil has a lot more room to fall and the market will not be bought until oil stabilizes. Whats the percentage correction in the s p . 5 . Right at 5 . Fivish. Thats been the look for yield right now, xlu the utilities and long and up 24 year to date. Why are people reaching if that are . We have to go. Thank you, gentlemen. Bye catch guy with the rest of the crew at 5 00. Theyre talking about opportunity in junk bond market. I got to hear this one. Thats all straight ahead. Coming up here, just like one of the old westerns, sony circling the wagons around the stupid owe. Executives are holding a companywide meeting to address the leaked emails and embarr s embarrassing hacking. Well get the latest on the meeting and a hiring of a wellknown lawyer to try to hold the media from reporting on the leaked information s. The newses media accepting stolen information . That debate is next. Also, anger in some circles of wall streets pushback against parts of doddfrank in the latest spending bill. A top exec weighs in on how they need to redefine the role and importance to the economy. Were back in two. You trade with fidelity. One you wont find anywhere else. Onesecond trade execution. Guaranteed. Did you see it . In one second, he made a trade, we looked for the best price, and the trade went through. Do the other guys guarantee that . Didnt think so. Open an account and find more of the expertise you need to be a better investor. Welcome back. Sony lawyering up and asking the media to stop reporting on controversially leaked emails. Saying its stolen property. Julia boorstin following the story for us now has the latest. Hi, julia. Hi, kelly. Sonys holding an allhands employee town hall right now. Started about 20 minutes ago. Sources say the ceo and cochairman are speaking. This comes as sony hired famed attorney david boise and sent a letter to news organizations including the New York Times and rico demanding that they avoid or destroy what he charactereriz charactererized as stolen information of the studio and said you will be held for damage or loss arisinging by dissemination of you including any damages or loss to spe and loss or trade secrets resulting from your actions. Now, whether sony wins in court against the news organizations is an open question coming as this mornings film the interview the hackers say sparked the attack criticized the media for giving the hackers exactly what these criminals want by publishing the leaked information. As you can see, sony stock has taken a hit since news of the hack broke back on november 24th. Now, of course, kelly, this seems to be far from over. The hackers promise to dump more data by christmas when the interview is scheduled to open nationwide. Back over to you. All right. Its not over yet. Julia, thank you. And as the leaks continue and if sony has legal ground to stand on asking the news media to stop publishing the leaked information, we have two attorneys. Welcome to you both. Floyd, your answer quite simply is no. Why . Well, because its a general proposition, the press can publish information no matter where it comes from. Theyre quite right to say this was stolen information in the first place and because of the First Amendment the press gets a lot of protection and what it can print no matter where it gets it from. Cant violate the copyright law an trade secrets. The fact that they have this information does not mean they can use a you will of it. Absolutely free of legal consequence. But they are not in trouble because of who they got it from. Paul, you seem to think they are. Is that right . We really agree on a lot of things. There is a lot of information which they could not publish irrespective of the First Amendment but i would say under the circumstances the world is changing and people have an expectation of privacy in personal emails and at some point when Media Outlets take that information for no public concern interest, no interest in public concern over whether someone said in hollywood about someone else but to titillate the public and we have to say, if they obtained this information illegally, not that they were part of it, not that they were conspirators and know they obtained it unlawfully, some point people who communicate should be able to express themselves and not fear that its going to get throughout in the media. Paul, you said the world is changing and definite lit but the law isnt changing and people assume people protect other peoples rights of privacy and what have you but what are the legal ramifications. It is not about right or wrong and whats legal and not and i think we are in a sich ration right now pretty cut and dry. Im not a lawyer but stepping back saying it seems to me that the medias kind of gentlemen, hold that thought for a second. The australian Prime Minister, we understand, is now speaking live to address the siege in sydney. Well listen in. Australians caught up in the horror of yesterday. Five other people, four hostages and a New South Wales Police Officer have been injured. State and commonwealth agencies are investigating. Understandably, there is a lot of speculation but it will take time to clarify exactly what happened in martin place and why. What we do know is that the perpetrator was wellknown to state and commonwealth authorities. He had a long history of violent crime. Infatuation with extremism and mental instability. We know that he sent offensive letters to the families of australian soldiers killed in afghanistan. And was found guilty of offenses related to this. We also know that he posted graphic extremist material online. As the siege unfolded yesterday, he sought to cloak his actions with the symbolism of the isil death cult. Tragically, there are people in our Community Ready to engage in politically motivated violence. The events in martin place also show that we are ready to deal with these people professionally and with the full force of law. I want to thank the New South Wales police and all the other agencies involved for their professionalism and courage. Yesterday premier badge showed great steadfastness and sydneyers can be proud of their calm in a testing day. Australians should be reassured by the way our Law Enforcement and security agencies responded to this brush with terrorism. There is nothing more australian than dropping in at the local cafe for a Morning Coffee and its tragic beyond words that people going about their every day business should have been caught up in such a horrific incident. Our hearts go out to all of those caught up in this appalling incident and their loved ones. On behalf of all australians, i extend my sympathy to the families of the two hostages who died overnight. These events do demonstrate that even a country as free, as open, as generous, and as safe as ours is vulnerable to acts of politically motivated violence. But they also remind us that australia and australians are resilient and we are ready to respond. Now, i do intend to go to sydney early in the afternoon to be further briefed by New South Wales police and other security agencies. I also intend to say thank you as best i can in person to New South Wales Police Officers and others involved in this appalling incident. Ill do more media then and take questions at that time. When we do have a better idea of exactly what has happened. Plainly, there are lessons to be learned and we will thoroughly examine this incident to decide what lessons can be learned. But i do want now in the hours immediately after the conclusion of the siege to offer these words of comfort to those caught up in it and reassurance to the australian people. And thats the australian Prime Minister tony abbott addressing the nation. It is about 8 30 a. M. Australian time. Were going to take a quick break and pick up with closing bell in a couple of minutes. You used to sleep like a champ. Then boom. What happened . Stress, fun, bad habits kids, now what . Lets build a new, smarter bed using the dualair chambers to sense your movement, heartbeat, breathing. Introducing the sleep number bed with sleepiq™ technology. It tracks your sleep and tells you how to adjust for a good, better and an awesome night. The difference . Try adjusting up or down. Youll know cuz sleep iq™ tells you. Give the gift of amazing sleep, only at a sleep number store. Find our best buy rated c2 Queen Mattress with sleepiq. Know better sleep with sleep number. Starts at 6 30 a. M. On the vo rush hounose. Und here but for me, it starts with the opening bell. And the rush i get, lasts way more than an hour. announcer at scottrade, we share your passion for trading. Thats why weve built powerful technology to alert you to your next opportunity. Because at scottrade, our passion is to power yours. Welcome back. A data breach of 2013 still haunting target. A group of banks banding together and suing the company for allowing the hack to happen and the judge is letting the suit go forward. Courtney, bring us to speed. Thats right. Target said shoppers moved on from the breach. One lawsuit in particular filed against target is a classaction brought by five Financial Institutions issuing credit and debit cards that were compromised in last decembers point of sale system hack. The plaintiffs say they have spent billions of dollars to replace cards costs that shouldnt be theirs to bear and arguing targets negligence and failure to prevent the intrusion is to blame. Target says it had quote state of the art tools and security measures were compliant with all payment industry requirements at the time of the breach. Further, targets claim it had indirect relationships with the card issuers and asked a minnesota judge to dismiss the case because no court ever held a thirdparty special relationship is a common law duty of care on merchants but last week the judge allowed the lawsuit to go forward. I reached out to target and given that this is pending litigation, they cant comment beyond whens been filed with the court. Kelly, i know you have more now. We do, courtney. Thank you. Joining us is the lead attorney for the banks in the suit. Its great to have you. You say that the reason why you might win in this case is because theres not a lot of legal history to go on. Is that right . Well, there is not a lot of legal history but there is a very interesting statute that applies to target and all the transactions and thats the minnesota plastic card security act. And that really does create the duty to banks that you were introducing in the opener introduction. Your central argument is basically theres three levels in the relationship between when you buy something and pay for it and that the failure at this case was purely targets and so the banks shouldnt have to be compensating people for what happened. Is that right . Yeah. The debate is when something is breached at a retailer or at a merchant who bears the loss and should not be the banks. They didnt do anything wrong. I think the evidence will show that target did. They had warnings. They didnt know how to use the system that they had installed properly. And the messages that went up to management never were reacted to. So i think the case can be made that target dropped the ball and as between target and the banks, target bears the risk of loss. Kate . You know, im going to make what could be a dramatic analogy but the mortgage liabilities of the baches since 2008 in terms of their behavior in underwriting or insuring or selling subprime loans, is Cyber Security hacks and the financial liability to accompany them the new overhanging litigation costs for them . Is it the new liability that theyre exposed to in the coming years . We just came out of a segment of the sony hack and the legal issues there. Now talking about target and regardless of fault, this is something that somebodys holding them back for on the transactions remedied. So in other words is this a new albatross around the necks of the Financial Institutions . Well, i dont think it belongs around the neck of the Financial Institutions. I think it belongs around the neck of the merchant who had a system that was allowed to be hacked and more importantly didnt serve the purpose because they didnt either know how to use it or the messages that they received were not reacted to. So i mean, its a negligence issue. How many banks were hacked into . How many banks were not hacked. It was target. I beg your pardon. Commercial banks have been hacked into. And important information. I thought youre talking about in this transaction. No. Im talking about generically. Kate is arguing a very interesting point. We live in a new world. Hacking is not something you said target allowed them to hack. What im suggesting to you, sir, target did no such thing. Target suffered the same hacking problems as the very banks that you are representing. And i think the law is going to have to come up with a solution to this. I think youre right. I think the law has to come up with a solution and the risk of loss in my view is borne upon the person responsible and in my view target is responsible because they had warnings, they didnt heed them. They could have prevented it. They stored data they shouldnt have stored. They did not operate the system that they had paid consideration for, the security system. They did not operate it properly. And therefore, the banks suffered the loss. All right. With all respect, i dont disagree with your statements. I think theyre too narrow. Because the banks have suffered the same hackings and allowed to use cuyour word and i dont thi its the right word, got out into the public sphere, people in glass houses shouldnt throw stones. The banks have the same problem of target and therefore i think there is virtd julily no league precedent and start from scratch on the legal ramifications. Last word, bucky. How far do you think this would go . To the Supreme Court . It could go to the Supreme Court but i think the question youre asking is proper. Where should the risk of loss be borne in our society. I think thats the right question. Thats precisely what im asking. Were paving on a relatively blank slate. This law is not well developed. Cyber security is relatively new. Certainly the law will have to be developed in this case. Thank you. No, no. Thank you. I appreciate your openness to that argument. Thank you being here. Bucky zimmerman, representing the banks in the case against target and will have huge implications for whos liable for these kind of incidents Going Forward. Christmas has come early for wall street in the form of a 2k3w Government Spending bill over the weekend. Weakens certain parts of doddfrank and did the street shoot itself in the foot . Leading adviser weighing in on that and importance of Financial Services generally coming back. [coughing] dave, im sorry to interrupt. I gotta take a sick day tomorrow. Dads dont take sick days, dads take nyquil. The nighttime, sniffling, sneezing, coughing, aching, fever, best sleep with a cold, medicine. Welcome back. Critics say wall streets efforts to restore the Publics Trust after the financial crisis harmed again when language in the budget bill rolled back some derivative reforms. This comes at what my next guest calls a critical time for the industry to redefine the importance to the u. S. Economy. Joining me is bob jane from 425 billion in asets under management globally. Welcome. Good to see you. Thank you. This is a Pivotal Moment for your industry, much maligned, often berated. People say why do we need the big banks . What do you say . You know what . When i look at 2014, there were a couple of big things that happened. Volatility came out from nowhere. Its been dormant and geopolitical risks out of nowhere and one is liquidity crisis and when it disappears, its hard to figure out what happened and right now what you have is much fewer liquidity providers and many more takers and i think for the benefit of society and the economy the financial industry has to make the point of how to add value and many ways. Taking money from pensioners. And bringing it to entrepreneurs and economies that do that well do very well. Taking money from china, emerging markets to invest in developed developments. Investing it in emerging markets and that financial intermediation is an Important Role and liquidity. We have to make the point we are doing this. Its fascinating when right now two months on from what that october event and treasuries moving wildly for no real reason and swings like that, do we see more and more of that next year Going Forward . You dont know its gone until you dont have it. Its abstract. It was called not a black swan but a black elephant and in the room and everyone knows its gone and hard to figure out what to about it. What do you recommend . Is there an industry solution or not . I think part of it is the broader point is that everyones baetding up on the Financial Services sector and people making markets either through the regulations or through electronic trading maligned and harder for them to step up and provide liquidity in these guys. Some argue actually to your point of matching big Pension Funds and longterm investment and a case of why dont i just make a 30year debt issue, for example, to fund a piece of the highway and give it right to the pension fund and 30year money and looking for a rate of return . The Asset Management sector, if you think about the Pension Funds in america, theyre trying to make a 7. 5 return and they have done over 20 years and tougher in the next 20 years and to find the opportunities inn areas of infrastructure and we started a fund in europe where theyre moving away from Nuclear Power in many countries and replacing billions of dollars of financing and were helping them do that. I guess in theory when you think about the Global Nature of capital, you know, so a u. S. Investor might want 10 for something that another investor wants 8 and so make that Capital Market efficient you need you need a Global Financial intermediation. When you bring up these returns that Pension Funds are looking for if thats why we saw what now in retrospect looks like a housing bubble that tumbled into a commodities bubble maybe getting unwind . Is this a unhealthy dynamic to make a return that perhaps is unrealistic . Yeah. I think i agree with that, although there are still lots of opportunities in places where theres too much stuff and not enough money. Like infrastructure. Thats a place you have it. Everyone talks about Bank Distance entire mediations. Banks have been lending for years now its difficult with the regulations and taking those activities and moving them to the Asset Management side and the bank is earning healthy returns on those. Final world look at the world in 2015, interesting areas to watch or under appreciated opportunities . I think a couple things. First of all the markets tend to find the pain points. Oil is coming down. Thats going to create second and third effects that the markets havent take noon account yet. I would look in the areas wheres theres been pain in 2014 in the emerging markets, some of the currency markets and in the oil markets. Bob, thank you for being here. Ceo of Credit Suisse Asset Management happy early holidays as well. Well hear from cnbcs managing editor alan washer about which stories are heating up. Stay tuned. You dont need to think about the energy that makes our lives possible. Because we do. Were exxonmobil and powering the world responsibly is our job. Because boiling an egg. Isnt as simple as just boiling an egg. Life takes energy. Energy lives here. Welcome back. When bill gross talks people listen and thats the case on cnbc. Com isnt it, alan was her. It certainly is. Brian sullivans interview burning it up right now. People seem to be focusing on the comments about the economy that might burst a little bit next year, but then retreat back to a 2 level. Thats whats getting most traction right now. Were seeing a lot of action on the Roger Mcnamee interview from squawk alley. The big investor from elevation partners. Now is not the time to be playing the market an his own cash is in 70 in t bills. Go figure. The hot rumor of the day, everybody wondering about this whiz kid 17yearold made 72 million. Scott wapner talked to him, maybe not. We have his writeup on the site getting a lot of track sln thn. The story that gets more interesting by the hour it seems. Good to see you, thank you. Take care. Back at headquarters, ten days from christmas, is the market looking at more coal in its stocking . The panel weighs in next. 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. 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. Welcome back. Theres a look at where we closed today. I said it was 105 we were down. When things settled out we were off 99. 99 points on the Dow Jones Industrial average. Does that, david, change how were set up for tomorrow some. No. Look i think were set up for tomorrow the way were set up for tomorrow depending on where oil trades i guess. But look to the end of the year i was out earlier saying were going to continue to see a bid to the tape. Im not worried here at all. I feel like its played out. I like oil into next year. I really youre crazy. Im telling you, i think were at the point now where things have absolutely gotten to the point where they have been dislocated. People are really look, corrections are great first of at all. No doubt. In the market or oil price . Either way. Healthy, more efficient and more probabilititive. Im a buy the dip guy, remain buy the dip guy. Everybody is a buy the dip guy. How do you know oil at 60 is the dip some. I dont know. It could go to 35. When you see the stocks, Oil Stocks Start to trade a little higher as Oil Continues to go down, weve seen a bottom, and i think that were at that point right now, maybe 50, maybe 49, but were getting to that point, im not calling the bottom in oil per se, because we probably have a little more Downside Risk here, but look ahead, six months from now. David, you were trying to tell us how to make money. Last word. In the Energy Environment and the interesting thing were seeing, apache selling off lng stakes. Youre seeing shakeout in the Energy Sector and going to be a merger quick. Larry, five seconds. Warren is basically right. They should have kept the push out on the derivatives. 5 . I dont know the specifics. Shes got this one right. That is a great place to leave it. Not her biggest political supporter. Thank you for being here. Fast money coming up. Whats on tap, melissa lee . Opportunities in the high yield market as high yield is selling off on energy concerns. Speaking of crazy, i got to hear this one. Straight over to you guys. Thank you so much. Fast money starts right now live from the Nasdaq Market site in new york city, im melissa lee. Piece najarian, brian kelly, karen fireman and brian adomi. The rally that couldnt. Stocks trying to bounce back after fridays selloff but another 4 drop in oil not helping the broader oil. The s p closing below 2,000 for the First Time Since late october. With just 11 trading days left this year is more volatility ahead . We certainly saw huge increase, the vix up 76 last week. Right. Human rhuge run. With all the mochlts in the market started up over double digits to the upside