Transcripts For CNBC Closing Bell 20150324

This change of environment has occurred, and today the United States government considers the government of afghanistan a really reliable partner. Commitments that are made are considerable. And the funding proposal of supporting Afghan Security forces by 2017 and it has reached to 4. 1 billion. Its nothing less. Its a significant issue. Its a very important issue, and also yesterday there was a new framework of our Economic Cooperation was laid out according to which 800 million were made a commitment were made, those will be spent through the afghan budget but most importantly is the flexibility that has been shown in the area of Security Cooperation, and this flexibility is going to ensure and provide confidence to our Security Forces and our people and also is going to send a very strong message to the region that this cooperation is not short term but is enduring and long term. Our Strategic Partnership is based on a very simple principle. We want the Afghan People through their Security Forces directed by their president and commander in chief to be able to provide for their own security, and our goal is to make sure that we are a Strong Partner in helping to build and sustain effective Afghan Security forces. So from the start when i first came into office we put additional u. S. Troops Coalition Troops and resources into afghanistan to shift momentum at a time when the taliban and the enemies of peace and stability inside of afghanistan i think were moving and had momentum. We broke that momentum. Elections took place, and the Afghan National Security Forces began to build up and get trained and become more and more effective. And because of a successful selection and a National Unity government and the leadership of president ghani we are now in a position where the Afghan Security forces are not only more effective but theyre better directed by the civilian government. Weve been able to draw down and remove ourselves from a combat role, as president ghani indicated, without collapse as was predicted, and Afghan Soldiers have fought and they fought well and obviously theres still improvements to be made, but theyre making significant progress. So the Strategic Partnership involves us continuing to help support Afghan Security forces that means financially. The International Community is going to have to continue to provide assistance to the Afghan Government which is carrying a significant security load not only for itself but for the region and in some ways the world, and weve made a commitment to do that. Were going to continue to provide the kind of Security Cooperation and support that is required, training assisting, advising helping on logistics, helping on developing enabler capacity, all the things that go into a modern military a professional military, a professional police force that can provide security on afghan soil by afghans, and the cooperation and the Strategic Partnership involves building up the prosperity and opportunities for the Afghan People through the Economic Development that was mentioned by the president. So, you know, we intend to be working with the Afghan Government and the Afghan People for a long time and, you know, in many ways our troop presence our military assistance is just one component of what is a much larger process, and the more successful we are in building afghan capacity and strengthening the afghan economy, the more the Strategic Partnership that we have will be like the partnership that we have with many countries around the world, and it will be based on mutual interest and scientific and educational exchanges and Business Opportunities and commerce and trade, and that i think is the goal that were all looking for. Josh. Thank you, mr. President. Youve made very clear that youre not buying Prime Minister netanyahus attempts to walk back the comments that he made before the election opposing Palestinian Statehood and youre reassessing your approach. What could Prime Minister netanyahu do in the short term to persuade you hes serious about Israeli Palestinian peace or hes an honest broker you could work with . And is there any truth to the allegations that israel was spying on iranian talks . Theres some indications reconciliation with the taliban is not going so well and they may not be willing to sit down with you. What makes you hopeful you can get those talks off the ground and do you want the u. S. To be involved in those talks . Let me first of all, address your second question about spying allegations. As a general rule i dont comment on Intelligence Matters in a big room full of reporters, and i think ill continue that tradition, but with respect to the possibility of an agreement that ensures that iran doesnt get a Nuclear Weapon we have not just briefed congress about the progress or lack thereof thats being made, but we also briefed the israelis and our other partners in the region and around the world. And if in fact an agreement is arrived at that we feel confident will prevent iran from obtaining a Nuclear Weapon its going to be there for everybody to see, and people are going to be able to lift up the hood and see whats in there. So, you know, i have confidence that if theres an agreement its going to be a good agreement thats good for American Security and Israeli Security and the regions security. And if it isnt, then there probably wont be an agreement, so there will be i think significant transparency in the whole process. With respect to israels relations with the palestinians i think its important to understand that the issue here is not what i believe, but its what the palestinians and the parties in the negotiations and the israeli people believe is possible. Thats the most important issue. You know, i have said before and i will simply repeat Prime Minister netanyahu in the election run up stated that a palestinian state would not occur while he was Prime Minister, and i took him at his word, that thats what he meant, and i think that a lot of voters inside of israel understood him to be saying that fairly unequivocally. Afterwards he pointed out that he didnt say never, but that there would be a series of conditions in which a palestinian state could potentially be created, but, of course the conditions were such that they would be impossible to meet anytime soon. So even if you accepted i think the corrective of Prime Minister netanyahus in subsequent days that still does not appear to be a prospect of a meaningful framework established that would lead to a palestinian state even if there were a whole range of conditions and security requirements that might be phased in over a long period of time, which was always the presumption. I dont think anybody ever envisioned in any peace agreement, certainly not one that Prime Minister netanyahu would agree to or that the israeli people would agree to, that overnight you suddenly have a palestinian state right next to jerusalem and that israel would not have a whole range of security conditions that had to be met and that it would be phased in over a long period of time. So the issue has never been do you create a palestinian state overnight. The question is do you create a process and a framework that gives the palestinians hope the possibility, that down the road they have a secure state of their own standing side by side with a secure and fully recognized jewish state of israel . And i think its not just my estimation. I think it is hard to envision how that happens based on the Prime Ministers statements. And so when i said that we have to now do an evaluation of where we are, its not in reference to our commitment to israels military edge in the region, israels security our intelligence cooperation, our military cooperation. That continues unabated and i will continue to do whatever i need to do to make sure that our friends in israel are safe. Thats what i have done since i have been president. And thats not going to stop. And so the israeli people need to know that. But i am required to evaluate honestly how we manage Israeli Palestinian relations over the neck several years because up until this point, the premise has been both under republican and democratic administrations, that as difficult as it was, as challenging as it was, the possibility of two states living side by side in peace and security could marginalize more extreme elements bring together folks at the center and with some common sense, and we could resolve what has been a vexing issue and one that is ultimately a threat to israel as well. And that possibility seems very dim. That may trigger then reactions by the palestinians that in turn elicit counter reactions by the israelis and that could end up leading to a downward spiral of relations that will be dangerous for everybody and bad for everybody. So bottom line just to summarize here number one, our military intelligence cooperation with israel will continue unabated unaffected, and we are absolutely committed to making sure that the israeli people are safe particularly from rocket attacks and terrorist attacks aimed on civilians. Number two, that the evaluation thats taking place is specific to what happens between israelis and palestinians going forward. Well continue to engage the Israeli Government as well as the palestinians and ask them where are they interested in going and how do they see this issue being resolved. But what we cant do is pretend that theres a possibility of something thats not there, and we cant continue to premise our Public Diplomacy based on something that Everybody Knows is not going to happen at least in the next several years. That is something that we have to for the sake of our own credibility, i think we have to be able to be honest about that. And i guess one last point about this because obviously ive heard a lot of the commentary. Theres a tendency i think in the reporting here to frame this somehow as a personal issue between myself and Prime Minister netanyahu, and i understand why thats done because when you frame it in those terms, the notion is well, if we all just get along and everybody cools down then somehow the problem goes away. I have a very businesslike relationship with the Prime Minister. I have met with him more than any other world leader. I talk to him all the time. He is representing his countrys interests the way he thinks he needs to and im doing the same. So the issue is not a matter of relations between leaders. The issue is a very clear, substantive challenge. We believe that two states is the best path forward for israels security for palestinian aspirations, and for regional stability. Thats our view and that continues to be our view and Prime Minister netanyahu has a different approach and so this cant be reduced to a matter of somehow lets all, you know, hold hands and sing kumbaya. S in a matthis is a masser of figuring out how do we get through a really knotty policy difference that has great consequences for both countries and for the region. [ inaudible question ] were going to do that evaluation. Were going to partly wait for an actual Israeli Government to form. Peace is a priority. Dont make premature judgments, and what we have asked from the United States and president obama has graciously supported it is to support an of aafghan owned Peace Process and were confident this approach will bear results in time. Peace is always difficult, and it requires focus, attention, and sacrifice, and thats what we are willing to do to bring it about. Thank you very much mr. President. I have got a question to mr. Obama. You just mentioned that afghanistan is still a dangerous place. While its a dangerous place, is it the right decision to draw down the force level at a time where its a dangerous place and meanwhile Afghan Forces are less equipped and they cannot fight truly truly. Translator president , my question is the question the piece process, what was your initial or your request from the United States president . Translator the United States has agreed with us that the Peace Process will be led by afghans and afghans will be will continue this process and it will be led by afghans, and this is obvious for us, and we are thankful for the support. Afghanistan is still a dangerous place. The way its going to become less dangerous is by Afghan Security forces and Afghan Police being capable of keeping law and order and security in the country, and that is not going to happen if Foreign Forces are continually relied upon for the basic security of afghanistan. So there are going to be specialized areas where we can cooperate dealing with some of the most vicious terrorist networks. Theres going to be intelligence cooperation and counterterrorism cooperation, and there are going to be pegsized areas we can provide Logistical Support and training and enabling support, but the fact is that unless Afghan Soldiers and Afghan Police are able to maintain security at some point some day the United States and other Coalition Forces would leave, and the good news is what weve seen as weve removed ourselves from combat roles is the Afghan Security forces have stepped up and although theyre certainly not as well equipped as Coalition Forces, they are better equipped than the taliban. Theyre better equipped than the haqqani network, and so with the kind of leadership that president ghani is showing as a commander in chief, with the leadership thats being shown by a growing cadre of military officers up and down the military chain, Afghan Forces are proving themselves and discovering that in fact when they fight they can be successful, and we want to stand with them in that process because we are very much invested in your success. Mr. President , thank you for an outstanding visit. Thank you. President obama wrapping up a formal News Conference in the east room of the white house with the new president of afghanistan, and clearly the headline there is our commitment, the u. S. Commitment to afghanistan militarily is going toferg go longer than anticipated. We will maintain the troop levels by the end of this year rather than cutting them in half, but clearly the president had israeli relations on his mind as well when he was asked about that that by far was his longest answer during this News Conference today. Lets see what our john harwood makes of it all at the white house for recap and reaction. Hi john. Hi, kelly. As bill said the protracted draw down of troops leaving 10,000 troops there longer than originally planned that was expected. I think the most attention at the News Conference will go to his remarks about israeli Prime Minister netanyahu, and he really sharpened those lines. He indicated that it wasnt about his personal relationship with netanyahu, but indicated that he takes president netanyahu at his word, that he does not intend to pursue in the foreseeable future a twostate solution solution, which is u. S. Policy he believes its the right u. S. Policy, and so he said we have to evaluate whether we pursue a policy based on something Everybody Knows isnt going to happen. So the white houses response since the israeli election has been to not downplay the disagreements between them and netanyahu but, in fact sharpen them, etch them more vividly as a way, i think, of trying to put some pressure on netanyahu to come back to him. Now, netanyahu, of course, did that with our Andrea Mitchell after the interview and said well i didnt say never a twostate solution but the president made clear that he wasnt buying that. He said nobody said it was going to happen overnight. The question is whether it can happen anytime soon or whether a process can begin to allow that to happen and he clearly believes that this is going to be exceedingly difficult through the rest of his term. All right. John harwood there at the white house. Thanks, john very much. And we now officially welcome you to closing bell. Welcome back kelly. Thank you. Welcome. Im here. Its tuesday, the dow is down 87 points. And weve got a lot to cover here, much more on the markets, the tragic plane crash there in the Mountain Region of france. We have all of that covered as we head toward the close with the dow down 90 points at this hour. Well have much more to continue for this tuesday in just a moment. Stay with us. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. I have a cold with terrible chest congestion. I better take something. Theraflu severe cold doesnt treat chest congestion. Really . New alkaseltzer plus day powder rushes relief to your worst cold symptoms plus chest congestion. [breath of relief] oh, what a relief it is. Hello. I am a fully automated Investment Advisory service. I can help you choose investments. Monitor them. And rebalance your portfolio. I can do a lot of what humans can. Except have a real conversation. If youd like that, you can always speak to someone at schwab. They arent algorithms. Try not to hold it against them. Say hello at intelligent. Schwab. Com welcome back. Heading to the close, about 35 minutes left in the trading session, and were losing ground here. The dow down 84 points. Just off the lows of the session set moments ago with the s p down 9. The nasdaq is down 10 points but social media has been very strong today. Facebook at an alltime high again, and twitter right out of the gate this morning up 6. 5 right now. A lot of discussion about why, and that continues apace here. With our Closing Bell Exchange this hour. Lets get to Kimberly Foss amy wu fromr Rbc Capital Markets david kelly, and our own rick santelli. Thank you for your patience. David kelly, clearly theres more trepidation in the markets, a lot of caution right now after the fed meeting. Theres a feeling that maybe earnings will come in disappointing, that growth is slowing, and i know you agree with that but why do you think markets are still hovering year alltime highs right here . Well, the thing is that the u. S. Needs to slowdown a bit. The biggest risk the u. S. Was facing in the last year or so is it was going to overheat and this high dollar is acting as sort of air conditioning for the u. S. Economy. Its cooling it down a bit. The Federal Reserve is late in setting up a soft landing, but the dollar is doing a little bit of the work for us. So im pretty okay with where the economy is. Its growing more slowly but its in no danger of going into recession. Slow growth is probably what we need given the limited capacity this economy has to grow. Rick santelli too strong . I heard overheat. I guess an average of 2. 42 gdp, the fed even downgrading their gdp under 3 . I just dont know how that can be overheating. I know if we grade on a curve most likely it would be but things like our debt and various impact of wages in the u. S. You dont grade on a curve there. I really think that the fed day changed everything from the perspective of, you know even if something were to occur in september, that is two lifetimes away for the cur ration of most traders in the marketplace, and i think that explains how the long end is going down. I think it explains part of why the dollar is giving up some grounds with the thoughts that a rate hike is further than near. And if you connect the dots im not a dot fan, but as they are, the dots are going down. Here is the fed kind of delaying with lower dots. I think the only conclusion a logical market do continental draw is play it as if the economy slows and we dont have to even really worry about it in september. That makes everything fit. Amy wu youre expecting some more volatility in this market. How much more . Is that what the Options Market is betting on right now . Well bill it is and one thing i have said before is obviously near term we had a few more dovish comments from the fed, but longer term people are still enacting hedges. One thing i would point out today is most of the focus had been on s p, on multinationals, but the small caps the russell, were actually seeing hedges enacted on that ahead of earnings season which tells me people are shifting their focus not only from dollar everything out there, but theyre also looking at home domestically and theres fear there too. In other words, they are expecting earnings to come in disappointing and cause the market to sell off, is that what youre saying . Theyre hedging against that . Were seeing april put spreads which likely captured a good bulk of earnings in the small cap underliarseunderliers. Jinds i understand the job market data has been strong. You cant really ask for a lot more than that. Is that what youre referring to or do you mean that you think the u. S. Economy has actually been overheating or that was really a risk of late . No. The real problem the u. S. Economy is it has a lack of capacity to grow. When i say the economy was heading for overheating, its really because the Unemployment Rate is down about 2. 2 Percentage Points in the last two years. If it did it for another two years, we would be down in the mid 3s and thats obviously overheating. So the problem is weve only got the capacity to grow at about a 1. 5 maybe 2 rate here. I agree with rick id love to see an economy that could grow at 3 i dont think 2. 5 is good. There are plenty of other ways to measure capacities Interest Rates being one way. You could hardly argue it shows this economy is overheating. Interest rates dont tell you anything because theyre so manipulated by Central Banks around the world. Its not that the economy is overheating right now, its just that you have to get ahead of it and were running out of available workers and thats the biggest capacity constraint on the economy. Kim, we havent forgotten about you. As the Federal Reserve continues to delay raising Interest Rates, your clients looking for income are going to have to find it elsewhere than the traditional areas. Where do they go . Do they have to take on that much more risk to get the kind of income that they can live on these days . Yeah well our thriving retirees are really searching for yield, and the caution there is not to overallocate into the equity markets and expose yourself to more risk than you can handle. At some point i agree with them Interest Rates will raise. It may not be in april, may not be in the fall it may be early in 2016 but for us im asking my clients and im telling them to control the things they can and that is to make sure their allocation is commensurate with their ability to take risk and stay in the markets, diversify globally, and to rebalance on a regular basis, and particularly were looking still towards the utility sectors to add value and to create income for them. Long term were keeping bonds very, very short but were adding municipals into the portfolio as well. Youre not alone. Thats becoming a crowded trade as they say. Thank you all, folks. Appreciate your patience waiting for us. Time for a news update now with sue herera. Whats going on . Here is whats happening this hour. The faa unveiled a new policy to speed up approval for the use of commercial drones in the United States under certain conditions. The agency said it would award blanket certification allowing companies exempt from the ups pan on commercial drones to begin using the aircraft at altitudes of up to 200 feet during daylight hours. President obama as you saw here on cnbc just finishing a joint News Conference with afghan president beganghani. The white house said the u. S. Will keep its current complement of 98,000 troops in afghanistan through the end of 2015. Ruth porat is leaving her job as cfo for Morgan Stanley to take the same position with google. Its raising hopes that the internet giant may return some of its huge cash pile to shareholder and be more disciplined on how it spends on big research projects. And amys kitchen has voluntarily recalled about 74,000 cases of frozen and prepackaged products containing spinach. There are concerns the products may have been exposed to listeria. The company says it has not received any complaints of illnesses from those products. Youre up to date. Thats the news update. Back to you guys. Thanks very much. I love amys products. The tamale. You have to try it. I dont think theres any spinach of that hopefully. Once again, spinach, something to keep an eye on there. We have 25 minutes were keeping on eye on this market which is lower, down 80 points on the industrial average. S p is down 9. Nasdaq down 9. Were now wondering if we can close above 5,000 once again. Yes, we are. Were still playing that game. It feels like weve gone back in time here. Coming up the latest developments in the tragic germanwings plane crash in the alps and what may have caused it. Were back in two. Stay with us. Corrects for lane drifting. And if necessary, it will even brake all by itself. It is a luxury suv engineered to get you there and back safely. For tomorrow is another fight. The 2015 mclass. See your authorized dealer for exceptional offers through mercedesbenz financial services. Grind virtually any kind of food waste into an unending source of electrical power for a city . When emerson takes up the challenge its never been done before simply becomes consider it solved. Emerson. Can it make a dentist appointment when my teeth are ready . Can it tell the doctor how long you have to wear this thing . Can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . Welcome back. 23 minutes to go. I think the wall street journal journalfront page tells you a lot lot. It includes words like mystery, trying to figure out these markets. Today feels like one of those days where the dow off 81 the s p off 9, the nasdaq off 10. Youre still searching for a culprit. Presumably earnings will bring that to us but right now were in a vacuum here. Yeah. And in the meantime the search continues for answers about the tragic germanwings plane crash in the french alps this morning. Phil lebeau has been covering that story for us all day. Whats the latest right now . Because its 8 30 at night and after dusk in the southern alps, most likely were going to see a curtailed search and rescue, if you will for the rest of this evening, but the Important News is that they have recovered one of two black boxes from the germanwings plane that crashed this morning in Southern France as it was going to dusseldorf, germany. 150 people were on this flight. All of them believed to have been killed. The plane descended at 4,000 pete feet per minute leading into the crash. Look at the descent of the plane over the last eight or nine minutes of the flight. It went from 38,000 all the way down to 6,500 feet. So the main question for investigators right now, it focuses on this it was an orderly descent. It didnt just fall out of the sky. But there were no alerts from the cockpit crew. The pilots also didnt contact airtraffic control, and it leads many to wonder was it a mechanical failure. This germanwings plane was inspected, not a full mechanical inspection, but it was inspected yesterday. The pilot of this plane had more than ten years of experience. Bill, it will be interesting to see if tomorrow perhaps we get some early analysis of at least one of the black boxes that has been recovered. All right, phil. Thank you very much. Lets talk about this see if we can figure some things out. Joining us is anthony roman, president of roman and associates and denny kelly who is principle at kelley james and associates, both former pilots who now have their own accident investigation firms. Thank you both for joining us. Anthony, this eightminute controlled descent from 38,000 feet and no communication with the cockpit. What does that suggest to you . Well initially it would suggest a scenario in which the pilots are either incapacitated or absolutely faced a catastrophic cascadeing series of events which required their full attention. However, this flight path thats being described, this 4,000foot per minute descent thats described as orderly and reportedly along the same flight path that they were following strongly suggests pilot incapacitation in some form. It doesnt appear yet any evidence to suggest that they were struggling to maintain control of the aircraft. It could suggest a complete systems failure, a catastrophic depressionization that incapacitated the pilots at 38,000 feet. You have 15 20 perhaps 30 seconds to don your oxygen mask and that is a much more violent event than most people think it is. Speaking of the aircraft though the a320 is there any reason to think its unsafe . Well theres been a lot of airbus accidents in the last year or two. The airbus is a little bit different than the boeing airplanes or the other airplanes in the fleets in that its what we call all electric. Its all run by the autopilot. There have been an airworthiness directive put out that said if certain parts of the autopilot, mainly the static system ice up or in some way are made that they cant work properly the airplane would be out of control and the pilots cant do anything about it. But i agree that this descent at 4,000 feet a minute sure wasnt that high, and i cant imagine why the crew would not get on the radio and call and tell people they were in trouble unless they were incapacitated. The pilot cannot override anything that may go wrong with the autopilot . Is that what youre saying . In this particular instance, no they cannot. The airplane is strictly run by the autopilot, and, in fact, if the airplane in this particular instance if this system malfunctions if the airplane points starts going downhill pointing down and they pull back on the side stick controller it does just the opposite. It makes the airplane go down faster. Now, in this particular incident, i dont know that this is a factor but theres just no reason that i can think of why that airplane would do what it did without the flight crew being incapacitated. It just doesnt make sense. Anthony, what about you . Well i agree with your other guest. This is a complex scenario and thankfully the black box has been recovered, and that if undamaged, will reveal the secrets what questions do you want answers to from the black box, anthony . Well considering the flyby wire system, which is programmed to override pilot inputs in certain circumstances, id be very curious to see if the pilot struggled to maintain control of the aircraft and were overridden by the software in the flight data computers. That would be critical. The other critical items would be if the angle of attack indicator outside of the plane were frozen so that they provided information that was inaccurate to the Flight Computers causing the Flight Computers to begin a controlled descent that couldnt be overridden by the pilot. Denny, as i understand it pilots are taught to quickly put their oxygen mask on if there is a loss of cabin pressure. Yes. We have no way of knowing if that was the case here, but do you suspect if it was the loss of cabin pressure they would be able to still do that and that becomes the bigger mystery why they still didnt communicate with the control towers jen way . They have quick donning oxygen masks. They can get those on in one or two seconds. They have microphones in them and they press a button and they can talk to anybody they talk to with a regular radio. Thats why they cant you know, its inexplicable why the crew didnt notify somebody that they had a problem. If they did have a depression if i was flying the airplane i would go down faster than 4,000 feet a minute. Id go down about 6,000 or 8,000 feet a minute at least initially. Right. You got to get the airplane down where people can breathe and youve also youve got to know underneath you when youre going down how high the terrain is. If theres 9,000 foot mountains, you got to stop the airplane at 11,000 or 10,000 feet and they didnt. Okay. You know why didnt they call somebody and tell them they were in trouble . More questions than answers at this point, thats for sure. Anthony, denny, thank you both for joining us today. Thank you. Weve got 15 minutes to go here. In fact, only 15 minutes until the close. The dow is hanging onto 18,000. The s p below 2,100 and the nasdaq watching this one pretty much hugging right now just below the 5,000 level. This despite its relative outperformance today helped by some names like twitter, like facebook. Not a lot of other places to hide in this market today. Right. Big question on capitol hill today, why is the federal government pressuring banks to choke off loans to certain american businesses . Thats what some in congress have been asking after those businesses complained long and loud. You will learn about whats called operation choke point when we come back. But at t. Rowe price weve helped guide our clients through good times and bad. Our experienced investment professionals are one reason over 85 of our mutual funds beat their 10year lipper averages. So in a variety of markets we can help you feel confident. Request a prospectus or summary prospectus with Investment Information risks, fees and expenses to read and consider when we come back. Before investing. Call us or your advisor. T. Rowe price. Invest with confidence. Hello. I am technology that is changing investing forever. I am a fully automated Investment Advisory service. I can help you choose the right portfolio. Monitor it. And even rebalance it. Ive been called innovative. Revolutionary. And just plain smart. Id blush at the compliment if i could. But i cant. So. I wont. Say hello at intelligent. Schwab. Com in case you missed, it the House Financial Services committee today holding a hearing on something called operation choke point. Essentially, the Obama Administration was targeting businesses suspected of being a front for Money Laundering but critics say it actually was targeting Legal Companies that the white house found morally objectionable. Eamon javers is in washington to clarify some things for us. Hi bill thats right. Its the House Financial Services subcommittee on oversight and investigations that is holding this hearing. Its going on right now and the chairman of thef fdic is testifying about the fdics role in this program which was design designed to go after fraudulent banking transactions. It was an fdic and department of Justice Program but the chairman of the committee who you see there, sean duffy, says hes concerned that federal bureaucrats are using too much of their own discretion as they go after some of this fraud. Take a listen. I fear that activists at the doj and the fdic are abuseing their power and authorities and going after Legal Businesses and in effect theyre weaponizing government to meet their ideological beliefs. The top democrat on the panel, al green, congressman al green, says that he thinks whats going on is the fdic is just doing what they ought to be doing. Take a listen to him. We should not confuse the fdic doing its job as a regulator as evidence that it is doing anything more than fulfilling its mission. And, guys one interesting question coming up here at this hearing, a congressman from Washington State asked about Legal Marijuana businesses and how banks are being required or not required to interact with those business. He wants some guidance in writing about how Marijuana Companies can interact with the Banking System a whole new issue in american finance, guys. Eamon, thanks very much. Joining us right now is representative lane lieutenant ka meier who has been a vocal critic. We asked the fdic to join us in this interview as well. They declined and referred us to todays testimony. Congressman, thank you for joining us. Just know were going to be tight on time here for which we apologize. As you know the fdic has modified operation choke point. Theyve sent out a few letters modifying it because of some unintended consequences for example religious organizations being caught up in this operation choke point. They have advised banks to take it on a casebycase basis rather than industry biindustryy industry. That doesnt satisfy you at this point . No, we have to understand what is going on here. Its a joint effort between doj and fdic to intimidate and bully banks into quitting Financial Arrangements that they have with their customers based on the ideology and the value systems of the fdic and the doj examiners and lawyers, but it hasnt stopped. We have been monitoring this. I have a website that has an email address on it that we get choke point stories all the time from different individuals. The oversight and Government Reform Committee did a report both on doj and on the fdic using their own internal emails and memos that they received and from that report its obvious that this is a concerted effort, that theres a culture within each agency that supports this activity based on ideology and based on value system rather than the rule of law, which they are the regulators. I fully support their mission to try and go after Money Laundering, but this is not what theyre doing. Theyre going after businesses based on their own moral beliefs and ideology versus whats right or whats wrong, and this has got to stop. We know that some of the businesses caught up included as eamon mentioned, some Marijuana Companies. Others are tobacco companies. A host you wouldnt necessarily object to on moral grounds. Is it just the religious institutions and affiliated groups getting caught up in this that you object to . Do you think that was accidental or intentional and that thats the real purpose of choke point . The fdic had a list of 30 industries, including gun manufacturers, ammunition manufacturers, gun shops, tobacco shops, credit bureaus. A lot of individual companies that are doing Legal Business in a legal way, and they decided on their own and within their own emails, their own this data on these reports, it indicates that their own emails indicate they had a debate internally is that legal or not legal. Let me ask you this. Clearly theyre trying to stop Money Laundering and a lot of businesses theyre targeting deal in cash in many cases. How do you stop the Money Laundering then if you dont go after some businesses and there will be some unintended consequences then . There are plenty of laws on the books that already exist. If you read the memos from the report it indicates what they want to do is they didnt want to go case by case by case which is their job. Instead they went with entire industries and they made the comment that those Legal Businesses doing Legal Business were just Collateral Damage and as a result too bad. That is wrong. Congressman lieutenant ka meier, so much to talk about. We wish we had more time but thank you for your time at this point. My pleasure. Thanks for having us. You bet. Heading toward the close. We have the count dourn already coming up with about 7 30 with the dow down 88 points. Coming up after the bell, seven ceos raking in 700 million in dividends alone when you add it all together. Are enough investors riding this di dend train . Stay tuned for a special closing bell report after this. Friday night, buddy. You are gonna need a wingman. And with my cash back, you are money. Forget him. My Airline Miles will take your game worldwide. What im really looking for is i got two words for you rewards. Theres got to be better cards than this. [ male announcer ] theres a better way with creditcards. Com. Compare hundreds of cards from all the major banks to find the one thats right for you. Its simple. Search, compare, and apply at creditcards. Com. First rounds on me. About 3 30 left here. Let me show you the markets. There wasnt a lot of volatility in a lot of markets but let me show you a couple market that is did move. The dow is near the lows of the session. The selling began around noon time today, and as they sold stocks, what did they buy . They bought some treasuries. The 30year yield also came down today as the price of the 30year went up quite a bit. Were down five basis points here yielding 2. 46 . One other sector who is of note today, the social media stocks, facebook as we know has been near alltime highs for a while now, but twitter was the one that got a lot of attention right out of the open this morning. Just took off and continued that strength today and is up 6. 25 as we approach the close of trade today here with the market down 95 points. Joining me for our closing countdown, tom met zell heather hughes, and one Robert Pisani over there today. Tom, as the fed makes it clear that Interest Rates are going to remain low for a while, what does that due to munis overall . Is it still the place to go . Its incredible. Munis are so attractive relative to other fixed income classes. They yield more than treasuries before you adjust for taxes. A 30year muni yields over 110 for treasuries. You adjust for taxes and theyre the most compelling fixed income are they too much of a crowded trade . Are they overbought as a result . Believe it or not, this is the third Consecutive Year that the outstanding comply of munis has shrunk. There are more being recalled and redeemed than there are new ones coming into the market. Were actually seeing greater demand with lesser supply. And where else are you going to go . You look at the fixed income markets today with the inflation data, thec pi data that came out, you would think rates would rise on that saying this gives the Federal Reserve something a data indicator but oh, no nothey go down. It makes no sense. Do you stick with equity markets because it is the only game in town here . Well especially with as you referred to, the money coming in with a strong dollar. Still the dollar is up slightly today. Until that trend is reversed, youre seeing money plow into the u. S. Markets from abroad. Europe did look a little stronger today. The european markets may be seen as undervalued compared to the u. S. Right now there is no catalyst unless you get revenue and profits really heading higher as we head into earnings season which may be hurt again by the strong dollar. Picking up on that ever since the fed announcement, they seem to have taken the winds out of the strong dollar trade. Weve been trading up and the markets have been short ofort of fluttering. Thats affecting trading. We have another day with low amplitude, low energy, uncertain where the trading is going to go. Not any decisive trading patterns. I really think that taking the winds out of that strong dollar trade has sort of flutter stepped the market a little bit. Your high beta names have had a little problem. I guess earnings will be the next catalyst. Dont you think, heather . Yes. All eyes are on earnings. Tom, good to see you. Thank you again. Appreciate it. Bob, thank you as always. And were going out on the lows of the session as the selling intensifies here going into the close of trade with the dow down more than 100 points. The s p and the nasdaq sharply lower as well. Stay tuned now, second hour of the closing bell with kelly he was and Company Evans and company. Ill see you tomorrow, kelly. Thank you, bill. Welcome to the closing bell, everybody. Im kelly evans. On this tuesday, sometimes weve been calling it turnaround tuesday, maybe thats the case today for the u. S. Dollar. Were going to talk about that in a second. Here is how were finishing up a weak session. The dow going out with additional selling pressure at the close recording a drop of 103 points. Back down right towards that 18,000 level, off half a percent. The s p giving up 12 points. The nasdaq closing down 16 retreating back below 5,000 to 4,994. Lets bring in todays panel to talk about it and what direction this market is headed with our very own Sharon Epperson dan greenhouse and tay lakayla tausche and fast money trader tim seymour. Dan, let me start with you. A pretty weak session today and i point to some of the market coverage. Nobody seems to have a clue or can quite figure out this direction and what the next leg is. A lot of the weakness today came about later in the day. We had a fairly strong start to the morning and then some of the insurers started moving lower. This is all specific to today. This sounds like a rate thing, Interest Rate thing. Rates moved lower today so there were a lot of theres in a general sense theres been a lot of debate. You would have thought had the fed said what they would have said you would have gotten a larger rate move in one direction or another. Youve really divided the market even more than it was. Everybody is backed off of june and moved in our camp which is september. I started the camp. Very good. But that said theres an enormous amount of uncertainty in the market now, even more than prevailed before the fed. They tried to provide some clarity but left everybody confused. Bank of america, merrill, putting out a trading note saying they think you should buy u. S. Treasuries that the next move in this move could be 1. 6 . Thats pretty stunning to think about especially because we thought that the deja vu from last year of seeing yields move lower and prices go higher would be over this time around but it certainly doesnt seem like that, and, kelly, if dan is right and certainly dan thinks hes right, but if september is when the rate hike is coming then were dealing with several more months of uncertainty. Were dealing with several more months of really trying to over analyze data every single day that we really dont know which direction its going and how to parse it and then more money coming into the system from europe. It just feels like there stnt really anywhere for the bond market to go right now. Its not just Interest Rates that are squirrely, tim seymour. The u. S. Dollar today as well. Again, i go back is this the break of a trend . Is this it for the strong dollar move . Is it behind us now or no . No its not behind us although im subscribing to a trading view that we hit 95 before we hit 110 on the dollar and that gives you some room to play in some of the oversold, overly sensitive stuff like emerging markets like minute ers miners. If you look at the cpi data and remove oil prices were around 2 and i would make an argument thatc pi could be higher. Im of the view that the fed has to go in june even though i think its probably the wrong thing to do. But, again look at the data out of europe today and pmis were better. I think attention should be away from the fed, and i think thats where you should be spending your investment focus. Theres so much uncertainty, you just heard it today on the panel with people saying will it be in june will it be in september . When will the fed raise Interest Rates and where does that leave the individual investor . Very confused. So what theyre doing and what they should be doing according to the Financial Advisers im talking to is looking at a variety of the options they have out there, whether its some of the financials we mentioned today, whether its looking at europe and trying to figure out what type of international but its mostly stocks . Here is what id love to know, do people generally think its a good idea like what is safer . Is it stocks which are pretty high is it bonds where they seem crazy high thats not how you should be looking at. Its not whats safer, its whats going to get you at your goal. If youre a retiree and you want safer investments, you will have to have some dividend payers probably and some fixed income, a lot of that. If youre somebody who has a long time you have to be in the stock market. Thats what i mean. What is considered the more conservative investment right now, dan. Youre 55 years old, youre supposed to be 60 years old, i dont know what it is doing the more conservative thing. Do you really want to be in fixed income right now . No with all the negative yields. But you want to be in a variety of dividend paying stocks, things that are going to generate some income without you having to worry so much about whether youre going to be able to sleep at night. What about the energy space though . They pay dividends, they were hammered. To sharons point, i have a number of clients that remind me every day that had you been in the 30year treasury this entire time, youd severely and significantly outperform. Best investment of the last five years. Absolutely. There are a lot of people who would say treasuriesy are as attractive as they were. We say rates are going up in september. Theyre going to raise the short term but what happens to the rest of it . One is whats going on in long term and one is going on in the short term. It looks like the short end of the bond market is mispriced. I dont think thats correct. The long end deals with a host of other things. With respect to the Energy Market, this is why you cant just blindly go and pick dividend yield. Thats what im saying. Kelly, weve had a 40 basis point in the 10year over the last ten days. To me you have a place where you look at the stuff in ranges. The reason we got to 2. 25 and spiked up and looked like we were breaking higher is because the fed was in play. The fed was in play because the data was better the payroll numbers spurred everything to say rates need to go higher. If you think about it were in a place where treasuries have been largely a range trade even though people have been surprised how low they went in the 1. 60s. Thats the call. If you think about it also, europe theres a scarcity value of government bornds. People are being forced into the European Equity markets and i think thats your trade still. So kayla, meanwhile twitter is flying today. Lets get off this macro discussion and try to figure out whats going on there. That was a lot of people would say that was probably a technical breakout. It broke through 50. 01 and then it got on a tear. One of the investors tweeting glad to see the market is finally realizing a market might be firing on all cylinders. I want to pick up what you said about energy. I think Energy Investors are starting to get spooked and theres one name in particular theyre talking about today. Its Whiting Petroleum, wll. Actually announced yesterday they were going to need to sell some stock to pay for an acquisition. They had planned to issue debt but with the breakdown in prices with unpredictable cash flow theres a real worry that some of these midcap Energy Companies that you thought were going to be safe are missing a lot of dilution because they cant fund themselves. What about the dividend freeport had to suspend. In a general sense, this is not a bad thing from a corporate standpoint. If youre running into cash flow troubles its a bad thing from an investor standpoint to the investor sharon from the standpoint to sell equity instead of releverage yourself in an environment like this. The underlying commodity is down from 100plus dollars a barrel to 40plus dollars. Theres a whole host of people who think its going down to 20 and 30. A lot of my clients think that. If you are a company like this that is more or less in distress, you really have an obligation to yourself to shore up your Balance Sheet and unfortunately for investors, this is the result. They get caught up in it. Maybe again, if you look at some of the higher yielding names traditionally, its utilities, areas sensitive to higher Interest Rates. Theyre caught between a rock and a hard place. Issue is you have to be strategic in where youre looking and screen out the ones that are doing well in terms of their price appreciation and in terms of the potential yield and the one that is are not necessarily Midsized Companies like we were talking about that are well secured. Were going to come back to this in a second. Tim, let me put this question to you. I dont feel like the greece or china issue are getting enough oxygen today. Which to you represents a bigger threat or perhaps even was already having an impact on us being down triple digits today in terms of the dow . I tell what you, i think were in a place where first of all, people are concerned one of the things well talk about tonight is how blackouts of stock buybacks may be something that also have people going into earnings fearful the market could go lower. A lot of places i think people would have expected a Whiting Petroleum to actually have been a takeout play. If guys like exxon or royal dutch arent buying a whiting when they need to replace reserves, it means oil could go lower. It means people maybe feel the need to stay on the sidelines. Its a long way of saying i think were still very range bound. Were at the top of the range on the s p. Theres no reason to panic today because it wasnt an up day. You you dont like greece isnt a factor and chinas slowdown might be behind some of the Oil Price Declines but neither one of those are the catalysts . You think it remains movements in oil prices effectively from here . Greece is still going to be a headline story. Volatility is still going to spike higher. Vol got back down to 13. Thats the time to buy it. I think ultima thely europe to me, greece is noise. Europes economy is accelerating slowly and thats an opportunity and i would continue to invest there. Im very long europe so im talking my book. We like the transparency. Dan, what is your guys top idea . Were on the long europe trade. We think you stay long financials. We think rates are going higher the economy is improving, and i will tell you the guys in the financial space are chomping at the bit for this for higher rates. Absolutely. Thats one area you could see dividends. Well leave it there for right now. Thank you, tim. Thank you. Be sure to catch more of tim and the rest of the crew on fast money at 5 00. Theyre going to be talking to a top analyst about the apple watch and when is the best time to buy the stock around the release of a new product . Youll find out. Dont miss that. Coming up here the power of dividends. Seven ceos raking in nearly 700 million combined just from dividend payouts last year. And shark tanks kevin oleary said you should be on that dividend train. Plus well talk regulations and the state of the Hedge Fund World when i speak to jes staley. Its an exclusive interview you dont want to miss coming up. Now with the xfinity tv go app, you can watch live tv anytime. Its never been easier with so Many Networks all in one place. Get live tv whenever you want. The xfinity tv go app. Now with live tv on the go. Enjoy over wifi or on Verizon Wireless 4g lte. Plus enjoy special savings when you purchase any new Verizon Wireless smartphone or tablet from comcast. Visit comcast. Com wireless to learn more. Welcome back. That 1 annual dividend on shows shares of Kinder Morgan may not seem like much but it was enough to net the ceo more than 420 million in dividend payouts. 420 million and that was just in dividends. Take a look at this. These are the seven s p 500 companies with the biggest annual dividends earning their ceos more than 700 million last year when you add it all up. So dividends are paying out executives major money. Should you be using these stocks to mr. Your wealth too . Joining us is a big believer in dividends, kevin oleary, a shark tank investor. How wealthy have dividends made you . Dividends are the only way kelly. Here are the simple facts. Over the last 20 years if you put 10,000 in the s p, dividend payers only never bought a stock that didnt pay a dividend, it would have paid you out 15,000 worth of dividends and appreciated an additional 70,000. Youve made 10 on average, but here is the thing that matters the most. You were 40 less volatile. So here we are talking about the volatility of the markets. Dividends cushion volatility and it aligns shareholder with management. This Kinder Morgan story is a wonderful thing. That Management Team is totally aligned with every sharld whether you own one share or 10 million shares. Dividends are king. You dont worry over Time Companies might say this payout is so good, why invest the money when i can just take it home . I dont worry about that because you have to look at the longterm perspective and what individual investors are able to get when they are investing in some of these dividend payers. When you look at what some of the indices have shown, that total returns that investors get, a third of that comes from dividends. Thats from 1988 until now. We have a great story on cnbc. Com that dominic chu has done on the hottest dividend stocks in 2015. Some of them Energy Companies you may not think theyre doing so well. Look at valero energy, other Companies Like darden. The yield is a furntionnction of the price. The more the price drops, the better the dividend yield looks. These are gainers, too. They have had strong gains at least so far this year. Thats what this story is looking at. Its a great way. There are ways you can go in there and look at not just what the dividend is but overall if thats the type of company i want in my portfolio. Story you mentioned in the introduction is interesting because it looks just at the s p 500 but if you actually look within the industry that pays the most in dividends, its actually private equity of all places, and these are companies that are less well known conventionally to investors at home, about you they actually make their executives the richest. Steven schwartzman made a cool 570 million in dividends from blackstone just this last year. We talk about wall street compensation at the banks, but really the pockets are getting lined the most at private equity firms because of their holdings in their own shares. Dan, do you guys come down on this one way or the other . Do you recommend dividend stocks because theyre dividend stocks . Do you think they will keep increasing or is the best run behind them and they become more danger snous. Our clients are all institutional. The investor interest levels are shorter. In a general sense to sharons point, the research is unequivocally clear the average investor, the Retail Investor should unambiguously have an exposure to dividend paying stocks over time. You can go back any period of time whether its ten years, 20 years, 100 years, whatever percentage of your investment returns that you want to attribute to one or the other, it will always be dividends are higher than everything else. Kevin, do you have any worries about companies abilities to keep paying dividends, the extent to which they can keep raising them about the multiples. Some of these names, they were supposed to pay high dividends because theyre boring or they werent going to grow but now both of those things seem to be happening because of this herd effect. Is that going to distort the returns for the next call it ten years . No. I think dividends provide a certain discipline at the board level thats absolutely crucial. I love to use an example when i talk about dividends when i teach these days yahoo . Think about yahoo if you bought that stock at 200 when it was being put into the s p decades ago. Youve watched a turnstile of ceos go into that company, i dont even remember their names anymore, suck out hundreds of millions of dollars, and shareholders have never received any return of capital. Had you taken those ceos and simply said to them we will gift you an escrow shares that pay dividends and pay them 1 a year how different would that outcome have been. They would have been myopically focused on distributing cash flow. Thats the discipline of dividends. Thats why it matters. The only thing that matters in investing is free cash flow. If a stock doesnt pay a dividend, its simply poohpooh. Thats it. What about, kevin quick question, investors are often told they should reinvest those dividends, not actually take the payout but use it to invest in the market because that will amplify their returns. Do you have a philosophy on that one . I do. I think seccer toal diversification is key. It doesnt mean you put it back into the same stock. Every quarter you rebalance your portfolio as we do at oleary, and we do no more than 5 in any one stock. Weve been selling apple as its been appreciating and we own diversification across all sectors. That in the long run is all that matters. Simply take an index, dont own any of the stocks in it and that dont pay dividends. This is rulebased investing. This is the core of the future. I feel like we have to change you from mr. Wonderful to daddy dividend dividend. I love that. Ill go with daddy dividend. Dad dwri dividend. Have a good one. Good to see you. Kevin oleary of oleary funds. Take care. Regulation nation. Are washingtons financial regulations becoming too burdensome burdensome . Blue mountain capitals jes staley will be weighing in. And a lawsuit claiming gender discrimination is rampant in Silicon Valley. We could get a decision in this case at any time and well keep you posted on that coming up on geg. So, how do you feel about cash back . I would not say im into it. But lets see where this goes. [ buzzer ] do you like to travel . Im all about free travel, babe. Thats what i do. [ buzzer ] balance transfers you up for that . Well unh. Too soon . [ female announcer ] fortunately, theres an easier way, with creditcards. Com. Compare hundreds of cards from every major bank and find the one thats right for you. Creditcards. Com. Its simple. Search, compare, and apply. [ ice rattles ] let me talk to you about retirement. A 401 k is the most sound way to go. Lets talk asset allocation. Sure. You seem knowledgeable professional. Im actually a dj. [ dance music plays ] woman [laughs] no way that really is you . If theyre not a cfp pro you just dont know. Cfp work with the highest standard. Welcome back. Jes staley knows wall street better than most. He joins me now exclusively for an inside look at this market and the state of the Banking System. Jes, welcome. Good to have you with us. Thanks. Its great to be here. Can we begin with the trading action here . Market is weaker again. Bond yields nobody knows what to think of it. What do you guys think . We are a zero rate interest environment, and i think everyone is anticipating that that zero rate environment is going to come to an end sometime in 2015, and then i think youre going to have this very odd disconnection between the bank of japan and the European Central bank which will be engaged in a historic quantitative easing whereas the United States fed is going to be starting to raise Interest Rates, and how those two dynamics play off each other is going to be a problem, i think, or a challenge for the market to digest. That and what weve seen from the correction in the oil markets, et cetera have really led to a lot of movement inside of the Financial Markets and we see that here. You have raised a lot of money, especially since you joined a couple years ago. Are you putting that money to work in the energy space . You know i think Blue Mountain is doing very well as a firm. I think one of the evolutions that weve gone through over the last couple years is we have very much lengthened eded our own funding. Weve been seeking Patient Capital. So a lot of our investors have given Blue Mountain money for two, three, five up to nine years. In part we like that Patient Capital because we do think one of the principal risks out there is a dislocation in the credit markets. Weve seen that on a small scale in the energy space which has created tremendous Investment Opportunities i think across the market. Can you give an example or two . You know the Energy Market and its correction is going to affect sectors in different ways. Some companies will benefit, some companies will struggle. It will change the dynamics of a companys capital structure. Do you want to be in the secured left, in the unsecurity level, at the equity level. Can you name any names . I cant. Can you go long, can you go short. If youre a relative value investor, this type of dislocation creates very much high market inefficiencies and a way to invest in those inefficiencies. But this is just a small micro microchasm in what might happen. When corporate debt has ballooned, Stan Druckenmiller has talked to us about that, liquidity could be a problem. Do you blame regulation do you blame big banks . Who is impeding the recovery and who is helping it . You know i dont think theres fault. One, you do have roughly a doubling of the corporate debt market. Its one of the largest Capital Markets now in the industry in part brought on by the fact that banks are derisking their Balance Sheets so sure moving from bank lending to corporate debt issuance so we have that phenomenon phenomenon. For sure the volcker rule has impacted the inventory that banks will hold on their Balance Sheets, but i also think one of the stories which isnt quite written about is the credit markets attempt to find the transparency and efficiency you have seen in the equity markets was really the synthetic credit market or the credit derivative market and the credit derivative market is seen as one of the causes of the financial crisis. So in a bank Like Deutsche Bank for instance, makes the announcement they are no longer going to write individual name credit default swaps, that is a major shift away from transparency and efficiency in the credit market. You know the open interest in the cds market is well off of 60 of what it was going into the financial crisis. We have a very large market. Its very opaque. Its very idiosyncratic, but i think all the market is focused on this as a risk so it will not be a surprise. Well at the same time we talk about going back to the banks. You know you came from jpmorgan. Theres been a lot of criticism about the way the banks were run. You left it notably. So whats your own view now from the outside as to whether these banks are too big to fail more changes need to be made culturally or has there been too much regulation if you will already, on them and is that holding back the u. S. Economy . I think a very important speech was the speech by chairman yellen in march about large Financial Institutions and she made a lot of very important statements there. The Regulatory Environment is much more robust and for sure i think we have a Regulatory Environment which is going to lead to safer institutions. The supervision. You talk to any banker today, the interchange they have with regulators around the world is at an unprecedented level before. Much Better Regulation much more intense supervision. You combine that with extraordinary capital levels across banking and much better liquidity profile, undoubtedly the Financial Markets are significantly safer today than they were precrisis. My own view is the markets and the corporate environment and government overall need large Financial Institutions. I think one of the reasons behind putting the large european banks under a single supervisor in the European Central bank is the recognition you need cross boundary Financial Institutions in a market thats globalizing. So large banks provide the oxygen for large corporations. So i would if theyre so great, why dont you go work at one . The other phenomena is the buy side is doing quite well versus the sell side. Yes. Share of the Financial Market is clearly shifted to the buy side community. I personally think in my lifetime probably the biggest evolution in the Financial Market is what you see with the large sponsors. The economic throw weight of the blackstones is something truly extraordinary. So means what were seeing is a lot of corporate debt issuance instead of more traditional lending behavior and is that going to come home to roost . I think we should as an industry together with our regulators continue to seek ways to find better transparency better liquidity, better efficiency across the credit markets. You know we dont i think weve done a very good job in dealing with the issues that created the financial crisis of 2008. Now we have and the regulators have that incredibly difficult task of trying to find the challenge thats around the corner, thats not that obvious today, and we need to be thinking of having a dialogue within the Financial Community to try to feel out what is that challenge around the corner and make sure that we have the mechanisms to deal with it when we confront it. We have to go. Markets seem to be heading towards a verdict though the u. S. Is going to be slow growth for longer. Do you fundamentally agree or no . I dont. I think when the Unemployment Rate dips around 5 and you start to see wage inflation, the notion that we are low forever i think will be dispelled. Jes, thank you so much for being here. Thank you. Jes statementy is ystaley is a managing partner at Blue Mountain capital capital. Here is whats happening at this hour. The black box has been recovered from the site in the french alps where a germanwings a320 jet carrying 150 people crashed. Its not known whether its the flight data recorder or the voice recorder. Senate Majority Leader Mitch Mcconnell says the senate would vote on a bill to toughen sanctions on iran if international negotiators miss a deadline at the end of the month for reaching a framework nuclear agreement. The Serbian Radical Party leader and his supporters burned eu and u. S. Flags in front of the serbian Army Headquarters in belgrade today. This as 200 radical Party Members gather to mark the 16th anniversary of the that i toe bombing of what was then yugoslavia. And residents of a peruvian town east of lima made efforts to clean up after a powerful avalanche of mud and rocks killed at least seven people and destroyed 65 homes. The landslide came after torrential rains pounded that city for more than two hours. That is the cnbc news update. Kelly, back to you. All right. Thank you very much. Coming up, a major gender discrimination lawsuit hearing closing arguments in Silicon Valley and more lawsuits on the horizon. How big is this problem . And should College Players be paid when their likeness appear miss video games without their permission . Former athletes have scored a victory in courts so far. Well hear from the man who started this battle former ucla star ed obannon ahead on closing bell. In new york state, were reinventing how we do business so businesses can reinvent the world. From pharmaceuticals to 3d prototyping, biotech to clean energy. Whether your business is moving, expanding or just getting started. Only new york offers you zero taxes for 10 years with startup ny business incubators that Partner Companies with universities, and Venture Capital funding for high growth industries. See how new york can grow your business and create jobs. Visit ny. Gov business [ male announcer ] your love for trading never stops. So open an account with schwab. And when a market move affects, say a Cloud Computing stock youre holding, we can help you decide what to do. With tools that help you see how market activity is affecting your positions. So when the time comes to decide whether to scale in or scale out. You can make your move wherever you are. And start working on your next big idea. Welcome back. A major gender discrimination lawsuit wrapping up today in Silicon Valley. Cnbcs scott cohn is at the courthouse there with the details. Hi, scott. Hi, kelly. On trial is the preeminent Venture Capital firm in kill son valley Kleiner Perkins. The partner is being portrayed as a partner whose performance was stellar. She suggested the company invest in twitter. She was denied promotions because of her gender and who was ultimately retaliated against when she complained in 2011 and fired when she filed suit in 2012. Her attorney allen axelrod, arguing before this jury of six men and six women, who are the people who ran the show at Kleiner Perkins . All men. Where was the level playing field. Kleiner perkins, he says, broke the law. This jury will ultimately be looking at a verdict sheet that is seven pages down but boils down to a few basic questions. What was the substantial motivation of the firm in its treatment of ellen pa o. Was it substantially because of gender or retail yation or would all of these actions have been taken regardless in which case the firm could be exonerated. Did the firm try to prevent discrimination against ellen and others and does ellen deserve damages . Shes seeking 16 million in compensatory damages and tens of millions more in punitive damages which the jury could decide she deserves if the Company Acted with malice. Well Kleiner Perkins attorney will be up arguing before the jury later this afternoon painting a very different picture of a difficult employee who did not get along well with others and did not have the Leadership Qualities the company needed. This case could go to the jury at this pace probably tomorrow morning. Kelly, back to you. All right scott. Heading towards that scott back at the courthouse in california. Joining us for more on how big had issue is were joined by meredith koverik. Its great to have you with us. And im looking here at a little bit about your background and some of the lessons you say you have learned from the front lines. Is it a battle field out there for you as a woman . You know kelly shall i dont know if its a battlefield, but its certainly something youre cognizant of on a regular basis. You are in a minority. Ive been lucky to not feel like im going into a war zone jen time i walk into work but theres a dialogue happening about women in the workforce specifically within Silicon Valley and within Venture Capitalism. Does what you heard from this lawsuit surprise you . Does it ring true . Can you give us any personal examples of what youve had to deal with . You know like i said i havent dealt with any personal examples within my job. I have been very lucky. Do i think gender bias still exists out there . Probably it does. But i think what were seeing is theres an interesting dialogue taking place around how is gender bias perceived. I think most companies that i have worked with and dealt with really want these very equal, very diverse workforces but they dont really know how to go about being intentional about dealing with maybe subconscious bias on the part of existing leadership and thats the thing i think is really interesting about this case is it really forwards the dialogue around the disruptions were seeing in the workforce as more and more geny comes in as were moving toward this more equal workforce. I think one of the things meredith this is sharon ep epperson epperson, you brought up in your oped which is very important whether yearwere talking about Racial Discrimination or gender discrimination, that you can be the best performer but it depends on the Company Culture whether it amounts to anything. You say you have not really experienced discrimination, but in terms of other places you may have worked or the culture in general in Silicon Valley what do you see . I think that theres its really an interesting time to be part of technology. What were seeing is this interesting shift with generation y coming into the workforce and really being disruptive disruptive. Really open and transparent cultures from what i have seen really dont leave a lot of room for gender bias. The reason is because you can see a very clear alignment between performance and promotions and advancement, and that kind of open and very transparent and very honest and sometimes uncomfortable dialogues is what is really, really key to me and what i have seen in not only Silicon Valley but also in jay bill and in other companies i have worked and consulted for. Kayla . Meredith im just wondering, we were discussing this Kleiner Perkins case on this Network Earlier today and i got a lot of people on twitter saying okay maybe what we should do instead is just not hire as many women so, therefore, when they get passed up for a promotion, they dont whine, they dont sue, they dont get overly litigious which is exactly the wrong takeaway to make here. Im twitter has the wrong takeaway . People on twitter dont know everything apparently. Meredith, im wondering what you think the valuable takeaway from this case regardless of how the jury decides on it and whether you think there will actually be real changes made to the locker room culture perceived or real . Right. I think the most important thing about this case is it is a dialogue, and the judge said something really interesting about whether or not the bias or whether or not the discrimination was intentional. And were starting to see the shift right now between what is intentional and unintentional or maybe subconscious bias and thats why if you look at these studies about the word ambition and aggressive when you tie those words to a woman, theyre more often than not negative. When you tie them to a man, theyre positive. So i think the dialogue is really changing and the fact that this case is going on right now is really key to how that dialogue goes forward. Its whether or not this bias is intentional. I do think that Companies Need to be intentional with the way that they work with looking at gender equality and also whether thats racial or cultural equality within their workforce, and so thats exciting to see. And meredith we have to leave it there, but appreciate your firsthand perspective on this. I notice dan is being pretty quiet. Lessons to be learned from wall street in this case . I can only speak for our firm and the culture is tremendous. In many respects women are outearning outperforming, out getting credit for things up and down the organization. We can only hope that holds true on silicon alley and valley these days. Josh lipton joins us now. Some quick news here. Lexmark international today announcing right now it will acquire koufax under the terms of the merger lexmark will acquire all the outstanding shares for 11 per share. Thats a 50 premium. Thanks josh. If your image was used on television, you would want to be compensated for it so why arent the ncaa and video gamemaker electronic art playing former College Stars for their likenesses. Well speak to ed obannon who is leading the charge to get them paid. And spacex building new aerospace competition. Jane wells has the details of this racket warocket war coming up on the closing bell. March madness is under way. The annual quest for the College Basketball championship the college game has been getting as much attention lately for what is happening in court as for on the court. Five years ago former ucla basketball star ed obannon sued the sports governing body the ncaa, and gamemaker Electronic Arts over the use of his image in video games without his permission or even knowledge. Ea sports eventually reached a Settlement Agreement but a judge ruled against the ncaa imposing a rule that would allow colleges to permit deferred payments to players for the use of their names and images. The ncaa is currently appealing the courts decision. One company is coming out in support of obannon and College Athletes across the country. Kingsford charcoal took the information to troll the ncaa saying lights 25 faster doesnt burn athletes and payed. With us now the man imz, ed obannon to give us his case against the ncaa. Its great to have you with us. You started this unaware that this was even happening, your likeness being used. Now youre at the center of a maelstrom. Are you satisfied with whats happened so far or will you not be satisfied until you start getting checks . Well first of all, this was never to get checks. This was always about righting a wrong, and i always thought that if a company or someone was to use your likeness then you should be compensated for it. At the very least asked if your likeness can be used and so thats really my biggest thing is to recognize that your likeness is being used. And what do you say, ed to the ncaa whose line over and over again is these are scholar student athletes, they are students they are athletes, they are amateurs. In other words not professionals. Should that distinction hold . Should it be the case that if you are a student athlete you should not be able to receive income . No, not at all. I think with the amount of money that the athletes are bringing in in particular basketball and football, they should be compensated something. I have always kind of said not a million dollars, you know, but a Little Something to recognize the fact that they are bringing a billion dollars into their respective universities. And kayla, just so everybody is aware, were talking about an ncaa that pretty much gets a billion dollars in tv ads for march madness alone. Theyve got 17 corporate sponsors paying between 10 million and 35 million. And thats what i want to ask ed about. You were part of a segment a couple weeks ago on john olvers show on hbo where he went a step further and he said if the ncaa is not willing to pay athletes then they should basically be stripped of all of their corporate sponsorships and become a nonprofit. Would you agree with that . Would you go that far . Well they do say that they are a Nonprofit Organization so, you know in that respect, no pun intended but put your money where your mouth is that sort of thing. But, you know, in all honesty, look Everyone Wants to play at least the athletes that are participating in the tournament want to be there and are honored to play in that tournament. I just think that along with their possible degrees that they are getting, they should be compensated for it. Simply as simple as that. Do you view this as part and parcel of the large err conversation that ath leases should be compensated in general or do you view this as separate . Well i think they all kind of touch each other in some form or fashion. I know when we first started our lawsuit, it was about controlling your likeness and from there it kind of branched off or grew into players being paid while theyre in school. Now, there are conversations that are going on about if theres going to be a trust fund for players set up for when theyre done and the eligibility is up then they can collect on that. You know the biggest thing at this point is conversation is being had, and i think i feel strongly that if everyone involved can kind of get together and talk about things they can work something out, whether it be pay while youre in school or collecting when your eligibility is up. A quick question about a bidding war that could ensue thats even greater than what were seeing right now if there, in fact if they are paid. I like the idea about the trust fund set up for later, but is there a concern on your part that this might create even a greater bidding war for, again, student athletes. Thats really what the goal is supposed to be, student first i would think. One would think. At least that is the title. I think when we get to that when we get to that bridge we can cross it. Whether its a bidding war or be an athlete actually just decides on a university simply because they want their degree from their particular university right. And will never mind any money that is thrown at them i guess is to be determined but the conversation is being had. It certainly is. Which is yeah which is much better than where we were five years ago. Ed appreciate all the work youve done. I cant believe we dont even have time to talk about the bruins this year, whether theyre going to make it out of fridays game. Bryce alford. He could keep dropping those threes. Do you have them going all the way . I to. At least to the final four. Hopefully the bruins will make it. So, participating in march madness, march sadness is the hash tag people have been using in the meantime. Thanks for joining us ed. Bring more oxygen into the conversation there. Thank you. Ed obannon. Coming up, chipolte. Jersey custards subs can be the next big investment that tantalizes taste buds as well. On the hot list next. Still ahead, the space race is on. Its not russia versus the u. S. Its all red, white and blue. Jane wells has that story when were back in two. R of active management. Every day, our teams collaborate around the world to actively uncover, discuss and debate Investment Opportunities. Which leads to better decisions for our its a uniquely collaborative approach you wont find anywhere else. Put our global active management expertise to work for you. Mfs. There is no expertise without collaboration. We got this whole thing all wrong. Dont worry about declining commodity prices. In fact my bottom line is that the lower commodities go the the big bounce in home sales bounced that story to the top of cnbc. Com today. With the rest of the hot list alan joins us now. Hi. Kelly thats been the hot one today. Diane throwing cold water on the hot sales number this morning putting up point supplies issue in the housing market. We also have a neat piece from Landon Downey about millennial jobs. Theyre having a harder times finding jobs in this hot job market. Basically theyre getting dinged for experience. Finally we have the Fastest Growing restaurant slide show topping the list, freddys frozen custard and steak burger. 45 growth in sales this year. Check it out. There you go. Not too bad. All right. Thanks very much. Back at headquarters. The space race is on again. This time the contest is to provide rockets to nasa and increasingly private u. S. Space program. Jane wells has the players and who is winning up next. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. under loud music this is the place. Their beard salve is made from sustainable tea tree oil and kale. You, my friend, recognize when a trend has reached critical mass. Yes, when others focus on one thing you see whats coming next. You see opportunity. Thats what a type e does. And so it begins. With e trades investing insights center, you can spot trends before they become trendy. E trade. Opportunity is everywhere. E lon musk and his spacex corp garners more of its fair share of headlines as the u. S. Continues its march toward a privatized space industry. The longtime leader in the field is a name not so familiar for those who dont follow the daily race to the stars. Jane wells joins us with an exclusive look from inside a United Launch Alliance rocket. Building facility. Did i get that right, jane . Reporter you got it right, kelly. 1. 6 million square feet. Get ready for space 2. 0. The era of reusable rockets. Unitedlaunched technology which makes this delta market is about to unveil a new rocket system with billions on the line and unprecedented competition. This is a liquid oxygen tank for a delta 4 booster. Reporter now delta and atlas rockets could be history in a few years at ula, jointly owned by boeing and lockheed martin. Up until now, theyve been the only launch provider for the u. S. Military. Spacex will with able to compete for the sum of the contracts faster and cheaper. Now ula has brought in a new ceo, is planning a new rocket which it says will be cheaper, more powerful and one reason it will be less expensive, were lenning it too, will be a reusable rocket like spacex is working on. Im here to transform the company. Thats my mission. So were going to do just that. Ula cut the price of launch in half. Im going to cut it in half again and shorten the cycle time to lift to just a few months from what used to be several years. Reporter now, thats little hitch in the meantime. The atlas rocket that ula makes has a russianmade engine. Congress said that can not be used after 2019. They wont have a new rocket kelly, until 2022. How do they cover that gap . Theyre hoping congress will let them buy a few more russian engines in the meantime. Back to you. Jane wells, as no one other than jane could. Thanks a lot this afternoon. We should note dan owns lockheed. No spacex though . No. I own lockheed martin. Full disclosure will reserve comment in general. Youre supposed to root for them. March madness like the e quif cent. Thanks for being here. Saved by the bell. Does it for us on closing bell. Fast money begins right now. Live from the Nasdaq Market site overlooking new york citys times square, this is fast money. Im melissa lee. Tim seymour, carol finerman, and guy adami. Twitter closing above the key 50. Is it too late to get in on the action . The apple watch out in one month. Well fell you whether youre better off buying apple stock before or after the watch is released. The top story, the buyback blackout. That is the period of time before a Company Reports earnings when it cannot announce new any buybacks. Were entering that window for First Quarter results. Many thi