Long this weekend. No. You want to rein in your horns . If i want to buy something, ill buy protection and in the puts and vix but i wont go long. Are you going to be buying what hes selling, Matt Cheslock . If you want me to. No way im throwing in the towel now. The market has gone away from me. Im going on the same premise as ben. Volatility has been awesome as far as trading goes. A 170point reversal. Dow down 116 on the open and then even more than that. Wonderful trading down here but maybe a sign of a little bit of a top. You feel we are getting a distribution top here. Not accumulating. No way im going home long. The sky isnt falling from sequestration so thats a good thing, too. Were focused on hoops right now. Got a little playoff game. Good to see you guys. Have a good weekend. Pleasure. 15 seconds left. The dow up 25 points, a volatile week comes to the end. What will the month of march bring . Well resume that again on monday. Have a good weekend. If i dont see you later, maria continues now with hour number two of the closing bell. And it is 4 00 on wall street. Do you know where your money is . Hi, everybody, welcome back to the closing bell. Im Maria Bartiromo today coming to you from the Equities Trading floor of barclays headquarters in new york. A reverse afl fortune today on wall street, the market erasing early session losses to end the day and the week in the green. Well have to wait at least until monday for the elise you have new record for the Dow Jones Industrial average. We did end with gains, as you can see. The Dow Jones Industrial average on the upside as was the nasdaq and the s p 500 on the heels of an earlier selloff, the market reversing those numbers by the close tonight. Closing out first day of march and the eve of the sequester deadline with modest gains. With us today stephanie link, cnbc contributor from the street. Mike queen and michael dayad and kenny pulcari from oneill securities. Stephanie, interesting market here. Teflon situation. The sequester just did not matter. What do you think happens now as we get into march . Its how impressive this week that were even up at all given all the uncertainty that weve had, with italy at the beginning of the week, continued concerns about what will happen with Monetary Policy down the road and then sequestration. Even Economic Data was kind mixed this week but the pillars of strength have been housing and manufacturing and the consumer, and we got good data points this week on all fronts. In fact i thought the ism number was very impressive, particularly the new orders. Consumers, they are actually hanging in in terms of auto sales and retail sales and if Oil Prices Continue to come down, maria, i think that group can continue to work, so i think were in better position to handle the uncertainties, and i think what you want to do is certainly take profits when you have them but go back to these areas when these stocks and sectors get hit, this is where you want to be buying. Mike, would you be buying . Want to put new money to work in this market . We actually would. We think stephanie made some very good points. We know were in march and the fund manage remembers thinking about the reports they will put out the end of the first quarter. They are largely underinvested. They will continue to fund the market so were not worried about the next 30 days. What about earnings . I mean, the next 30 days will be the end of the first quarter. Michael, what are you expecting in terms of firstquarter earnings . Are you expecting preannouncement . Is that going to be the lever that takes this market reversing course . Maybe. I think in general theres a pretty strong conservative bias in terms of continuing to see surprises on the upside. Its the riskoff trade thats been getting a bid. As ive been saying to my 25,000 plus amazing twitter followers, the market is broken. Someone has to explain to me if were so excited about dow new alltime highs why are yields on the tenyear back to 185 and dividend sectors outperforming, and why is it when you look at a price ratio of small caps to large caps, those areas most sensitive to domestic growth expectations, when you look at that chart were seeing underperformance kick in in high beta names relative to Global Growth large caps. Very significant weakness that means that at some point the grayhaired bears are going to come back roaring. Its interesting that you mentioned 185 on the tenyear. What are your expectations there. Any reason to believe that were going to see a spike in the tenyear, and what would be the rate that would concern you the most . You know, 2 has been kind of the panic level i think on the tenyear. What would actually concern me is if the 30 year breaks 3 , then i think you have a very strong risk off and deflation pulls. Theres a complete inconsistency here. Told that the bond market tends to be much more ripe for the stock market and nouveau bulls cannot see how much is in equities. I just look at the earnings have been pretty good, much better than expected, and its a stock pickers market. Look at the stocks that actually started to outperform when the market was falling this morning, which ones were doing well. Those are the companies that posted good solid strong earnings like an adt and chicago Virgin Island and eaton. People will go back to the stocks that are delivering in a tough environment. And those have been largely lower beta sectors outperforming. Not consistent with growth. Thats not really truth, but, okay. Whats not true, stephanie, that they are not low beta sectors . I certainly wouldnt call Chicago Bridge and iron a low beta name. From an average perspective. I put out a led league, the low beta sectors have been outperforming while the dow is nearing the alltime highs. Staples have done well, utilities have done well. There is your opportunity to look at some of the companies that did well in some of the cyclical areas for upside. Financial is one area, especially headed into the stress test coming up. And the stress test coming up, thats just in the next week or so, and well probably see Dividend Increases. Kenny, i want to hear your take on what went on at the end of the day here . Listen, we had a lot of consolidation between yesterday and today. Early part of the week, all the volatility and the market is really trying to find itself. It was preparing for this anxiety over sequestration which we got nothing of, and i think the market is just telling you its not really concerned about 40 billion in cuts over this year and 40 billion next year. I think that were going to were stuck in this 1,500, 1525 trading range. I think as it pulls in, like stephanie said, you look at some. Names that get overly beat up and jump back in, the ones that keep delivering, financials for sure, consumers and i like even the industrial names, infrastructuretype names which i think will really do well. And where are you seeing the conviction, kenny, in terms of consistent buyers . Which sectors or stocks . Well, from my point of view and customers that im talking, to i see a lot of activity in financials and technology. Financials and technology certainly have been the leadership in 2013. Go ahead, michael. Im just saying our high net investors are risk averse and asking us to focus on technology, energy and health care where they feel the Balance Sheet strength is and where the dependable earnings are coming from. What would turn the situation around . Mean, we know that we have a couple of cat lifts on the horizon, continuing resolution and end of the month earnings season when the quarter ends march 31 and then the debt ceiling debate. With the fed right there sort of continuing to tell us that they are going to keep rates where they are, is there any reason to believe that any of that matters . Do fundamentals not matter right now . Not really. I think the fed is still driving the show. Well see that lift all the boats. I dont see any reason to fight the trend right now. And i would agree with that and i think Central Banks around the world are running the show, mario draghi, the fed, the ecb and the market is being artificially stimulate and thats where the disconnect is and why individual investors get frustrated because they see the market attempting new highs but on the other side they dont feel the robustness of the market turning around. The disconnect is in the deflation that no one is focusing on and that makes it a very, very risky juncture in the here and not, not for the year, but a very short juncture where behaviorally its acting like were in the midst of a correction. If you look overseas, everything is weak. Monetary policy around the world is going to continue so i would just say, maria, one thing to be concerned about or just to watch for would be the strong dollar because if that continues, then your earnings story certainly has some some hair on it, if you will, but for now these companies are able to offset it with better pricing. Thanks, everybody. Have a god weekend. See you soon. The document for investors big and strong, Warren Buffetts annual later has been sent and what did buffet have to say this time . Warren Buffetts Berkshire hathaway reports, here are the numbers. 1704 per share. Misses the estimate which was 1755. Per share book value increases 14 hadnt 3 . Underperforms the s p 500 by 1. 6 . Only the ninth time in 48 years berkshire has underperformed the mark. The second disappoint in 12, buffet saying, pursued a couple of elephants and came up emptyhanded. Todd cole many and ted weschler outperformed and left me in the dust, buffet writing in very tiny font. Maria, back to you. Thank you so much. The first trading day of march in the books. A lot more action here on the closing bell. Ill talk exclusive with the ceo of barclays to talk about the Global Economy and the state of banking today and automatic spending cuts to kick in between now and midnight. What does it really mean for you . Does the other side have the real story. Well talk about that when we come back. Back in a movement. Thank you welcome back to the special edition of the closing bell. 2012 was a controversial year for barclays. The raterigging scandal taking its toll on the firms global brand. Financial standing and it cost former ceo bob diamond his job. In the Fourth Quarter the bake announced a major reorganization that will cut close to 4,000 jobs, close several Business Units, and this is just the beginning. The new ceo Antony Jenkins said theres no going backed to the old way of doing things. Antony joins me now to tell us about his new plans for barclays. Thanks for joining us on the program. Thanks for coming to barclays. Another active day with the markets the way they are. These Capital Markets have to be a positive for the firm regardless of, you know, putting this new transform reorganization aside, whats been going on in the market has to be a positive for the firm, no . Yeah. Were happy with the start to the year. I think it got off to a very good start in january and continued into february. Seen a bit more volatility in markets this week because of what was happening in italy, but by and large its been a good start to the year and were cautiously optimistic about the rest of the year. Lets talk about your plans, you have said the plan is to get beyond the missteps. You are launching or you have already launched a restructuring call transform, project transform. Tell me about it. What are you trying to achieve is. Two weeks ago we launched the transform program and the program is designed to deliver what i call the goto bank and thats just the place a big customer or a big client will come to to do banking business. Theres really two key parts to t. One is about delivering a return on equity above the cost of equity for our shareholders. Thats really important to them, laying out a clear plan around cost and capital and the other part of it is about doing business in the right way so we can sustain those returns for our shareholders over time. Thats what the program is about. When you say doing things the right way, i mean, you were doing some things the right way before, right, but the libor scandal obviously has become the cloud and the trigger for you to make this change. Yes, thats true, but i would say that across barclays we have 140,000 people who come to work every day wanting to do the right thing. Partly this, of course, is stopping bad things happening but equally important its about powering the strategy forward, creating the right culture to deliver for our customers day in and day out and to do that in what will be a much more challenging environment going forward. How do you do that . This is an enormous trading floor, just this one floor and youve got others. Yes. How do you get that culture and everybody on the same page . Just about being clear what you expect from the organization. Communicating to people and holding them accountable and recognizing and rewarding people doing a great job for customers and clients, doing great work inside the organization and thats how you change culture. Its do believe. I recognize that this have a very, very controversial here in 2012, a big hit to the firm and you want to make a big push that this is transformative. I was talking to an analyst at morning star who said barclays plan to exit four Business Units is representing a combined 1. 4 of revenue. Its just not that big of a deal. Well, maria, since i did the launch two and a half weeks ago, ive spoken to over 30 different groups of investors, and the feedback that ive had has been overwhelmingly positive on transform. What we did is broke the business down into 75 different units. We analyzed them through a strategic lens and through a financial lens, and actually we said 39 of those Business Units are just fine. 36 of them need to be changed in some way, either repositioned in their market, costs reduced, portfolios sold off and businesses exited and so on so its a little bit more comprehensive than the analyst was quoting, and i do think that this is a very important time in barclays 320yearold history. Are you still in it . Do you still have cutting to do . I think weve announced the major cuts that are going to happen in the foreseeable future. Weve remained committed to our major lines of business around the world. Investment banking very important to us and cards and payments, retail banking, wealth, Corporate Banking and to our major gearing physical here in the u. S. And again very important to us, the united kick dom and africa. Let me ask you about that. I want to ask you about africa. I know this was an important part of the world and ill get to that in a moment. What about the cost of these issues . I know that the new normal in your business is lawsuits and youve got, you know, carryones and the regulatory issues begin and then investors and lawsuits follow. How much is this going to cost . I know you talked a bit about this with analysts and in your strategic review. One analyst is talking about a 10 reduction in profits on account of regulation. What is the regulation headline risk going to cost you . So, weve baked in our expectations and the cost of regulation into our plans for the next three years to the extent that we have clarity, and i do believe theres much more clarity around the big regulatory changes and thats baked into our plans. Thats why were can have dense dent in making the commitments and we can get our returns above the cost of equity in 2015. A lot of investors were happy that you didnt really take the knife to the Investment Banking business. Thats the golden goose, the real moneymaker. Why, and tell me what your vision is for that part of the business. So actually, maria, when we did this work we looked at each of the 75 unit to decide whether they were businesses we wanted to be in and whether we could make money out of them. There were many units in the Investment Bank that passed those tests and were very happen we our Investment Bank. Its a big part of the group. It does things which are really important for large companies, Financial Institutions and governments around the world and we think that we can do that in a way thats good for our clients and also good for our shareholders so we intend to be committed to that and will be one of the very, very few global Investment Banks in the world. Could you worry that eventually youll have to split the businesses up, that theres real financial changes going on in financial services, regulators all over the world and regulators in europe are thinking Something Different than the u. S. Regulators. How do you keep this firm together knowing theres pressure on the too big to fail and splitting off plain vanilla banking from Capital Markets and investing . We have discussed this before and we are operating in a fundamentally different atmosphere than the one that affected the industry in the last 30 years. More regulation, more nationalism and certainly a weaker Macro Economic environment. We took all the factors into account when we did the strategy, and we think this is the best way forward for our shareholders so we can deliver the returns that they want and give them the diversification this a universal banking model beginnings. When i was talking to various investors, stakeholders, analysts, many of them questioned your targets. I know youve got to put the bar up here in terms of where you want this firm to go, but in terms of profitability, 2015, 16, what are your targets and a lot of people questioning if in fact your targets are too high . We expected quite modest income or revenue growth. Were committed to take 1. 7 billion pounds out of the cost space, an absolute reduction of 1 billion pounds from the 2012 number and that allows us to be confident that we can deliver a return on equity above the cost of equity in 2015. Thats the main commitment that weve made. Weve also committed to progressively increase our dividend over the time period and, of course, weve said that our quarterly capital ratio will be above 10. 5 in that time period. As you would imagine, maria, i wouldnt have gone out publicly and made these commitments if we hadnt done an enormous amount of work to really ground them, so im confident in those commitments, and the good thing is now weve done the planning, were into the heavy work of execution and thats the really exciting part. The Dividend Increase will come in 2014 or 2015. Commence in 2014. 2014. While you do all of this, you also have to ensure that you are going to retain talent. Yes. We all know and youve said it yourself that its all about the people. Yes. We know what happened yesterday in europe, the european regulators saying were putting cap on bonuses. Were putting cap on salaries. How are you going to deal with that . Whats your plan to keep the people here that you want here when you know you cant pay them what you want to pay them . Its all about talent. Youre absolutely right, maria, and of the 140,000 colleagues around the world theres great people in barclays. What was announced in the eu on wednesday is in fact just a very preliminary statement. Weve not seen any of the detail about it so i dont want to comment specifically on that but weve invested a lot of money in building our business here in the United States and i feel very confident that well be able to pay people competitively and pay for performance in this market. This is going to be a major problem for all of the banks, by the way. If the european regulators are saying the european banks cannot pay their people more than this, they will all go to jpmorgan. They are going to go to citi. I think weve got to see exactly what the regulation is before we can conclude that we cant pay people. My view is well be able to pay people competitively in this marketplace notwithstanding the regulation. Let me ask you about capital, one of the major issues for your company and for the entire industry. Are you complaint with basl 3 today . Are you expecting to go back to the market and raise capital in the coming year . Well, as you know, basl 3 is phased in overtime and were complaint with the phasing in that over time. Were prepared to raise equity capital. There are questions about whether or not you have enough reserves, enough capital. At some point how do you get the numbers up . We intend to build our capital base over time and were very confident we can do that. Thats why i was able to make the commitment on the quarter one ratio for 2015. What about europe right now . Europe is a difficult place. A lot of economic pressures, as you know, and we know the authorities there are working very hard to stabilize the economies and get them through the difficult time that europe is going through. It is difficult, but progress is being made. Is it being offset elsewhere . Do you think the u. S. Is sort of the better game in town versus europe . I mean, do you want to invest less in europe given the troubles there . Well, our core economic assumptions assume that the u. S. Will grow by about 2 , the uk by about 1 , and europe will grow basically zero over the planned period of three years so obviously when we think about Capital Allocation, we want to allocate it to places where weve got strong franchises and where the economies are growing, and that would be the uk, the u. S. And africa. Isnt it interesting that even with the problems in europe, the uk banking system, plain vanilla banking, is doing very well. Can you get a bigger piece of that market share . We are getting a bigger piece of that market share, and last year we grew our market share in almost every category in the uk because the last three years weve focused on putting the customer at the heart of the business. You keep mentioning africa. Why is africa an opportunity for barclays . I think africa is a great opportunity and the Macro Economic environment is very favorable and increasing social and political stability. Weve been in many of these countries for over 100 years and thats a real franchise that we can build off. And certainly theres an enormous amount of money moving in there right now. Youve got to participate. Antony jenkins, i know youve been through a very challenging year. Youve taken the lead for this firm and are showing this big culture change. Well be watching. Good to have you on the program. Thank you, maria. So appreciate your time. Antony jenkins, ceo at barclays. Josh lipton and more on berkshire hathaway. Over to you, josh. Warren buffett in his letter to shareholders taking his fellow ceos to task. Let me share some of it with viewers, buffet writing there was a lot of handwringing last year among ceos who cried certainty when faced with Capital Allocation decisions. A thought for my fellow ceos, buffet said. Of course the immediate future is that america has faced the unknown since 1776. Just that sometimes people focus on the myriads of uncertainties that always exist while at other times they ignore them. He concludes if you are ceo who has some large profitable project you are shelving because of shortterm worries, call berkshire. Let us unburden you. Maria, back to you. All right. Josh, thank you so much. Up next, mission impossible. No deal between president obama and congressional leaders to avoid the automatic spending cut. Well take you live to washington and see what happens now besides morphingerpointing and austan goolsbee, once the president s top economic advisers, what he has to say now and late err top regulator gary gensler says those cuts will make it tough for them to stop the bad guys on wall street. Well find out how in an exclusive interview with the chairman ftc. Back in a moment. This is america. We dont let frequent heartburn come between us and what we love. So if youre one of them people who gets heartburn and then treats day after day. Block the acid with prilosec otc and dont get heartburn in the first place [ male announcer ] one pill each morning. 24 hours. Zero heartburn. Welcome back. We have breaking news on auto sales. Off to phil lebeau we go. Phil . All day weave been talking about february sales being solid but not spectacular. Now the Research Firm auto data has calculated total sales coming in at a pace of 15. 38 million for the month of february. That is roughly in line with estimates and compares with a pace of 14. 5 a year ago. Again, maria, february auto sales, the pace 15. 38 million. Maria, back to you. All right, phil, thank you so much. Well, the deadline a little more than seven hours from right now. Theres no deal to avoid 85 billion in automatic spending cuts. President obama spoke earlier today, and he hinted there may not be a deal for months. Thats right, months he said. Lets go live. John harwood in washington and get the latest on this. Over to you, john. Reporter the lastminute deal between president obama and bipartisan congressional leaders in washington did not produce a deal. We didnt expect it to, and what you have is a public Pressure Campaign being put on by both sides. President obama came out into the Briefing Room and said he wants to get rid of the sequester as son as republicans agree to what he sees as an evenly balanced plan. I do believe that we can and must replace these cuts with a more balanced approach that asks something from everybody, smart spending cuts, entitlement reform, tax reform that makes the tax code more fair for families and businesses without raising tax rates. Reporter the problem is that republicans see it fundamentally differently. House Speaker John Boehner came out and said, yes, we had a tax increase, but, mr. President , you got one shot at that. You dont get another one. Lets make it clear that the president got his tax hikes on january 1st. This discussion about revenue in my view is over. Reporter maria, you mentioned fingerpointing before the break. Thats what were in for several weeks but its not fingerpointing for no purpose at all. Its fingerpointing for the purpose of getting Public Opinion to put pressure on both sides and well see which one can pressure Public Opinion enough to try to get the other side to break over the next several weeks. All right, john. My next guest thanks so much, john harwood. Growth will go down and unemployment will go up as a result of these forced budget cuts. He had a courtside seat at previous economic white house faceoffs as the former chairman of president obamas council of economic advisers, now a professor at the university of Chicago Booth School of business. We welcome back to the closing bell austan goolsbee. Thanks so much for joining us. Thanks for having me, maria. Okay. So were talking about 85 billion in a 13 trillion. What are you talking about, 2. 5 budget cut. Is it really that dire, austan . I would say its a negative. Its not tremendously dire, but it will probably cut the Congressional Budget Office said maybe 0. 6 off of the growth rate. The only thing is to remember the growth rate wasnt that big to begin, you know. The forecasts were for at least 2. 5 2013. So if you cut off 0. 6 of a point and we get down below 2 , then i think we ought to expect the Unemployment Rate to start drifting back up again because thats slower than productivity growth. So what are you expecting in the next couple of showdowns . Youve got the march 27th continuation resolution when the government shuts down unless Congress Extends funding. How do you think that plays out, and then youve got the debt ceiling debate in may . It feels like cliff to cliff, austan. I agree with you, and im glad you raised those because in the discussion, you know, that the people were just having, it was all about just the sequester, but really all of this is setting the stage for the continuing resolution and will the government should down because we fundamentally dont have an answer to the question if were going to do the second half of Simpson Bowles and the grand bargain. Weve basically done half but weve done the easy half. The tax rates on highincome people went back to what they were. Through the debt ceiling we had some cuts with no revenues, but now were to the hard stuff, and if were going to do that, is it going to be all cuts, or is it going to be some cuts and some revenue . Thats a key that is a key factor that hasnt been decided. The American People got to make up their mind and it seems like what both sides are trying to do is highlight to them, look what the other guys want to do is no good so the administration is pointing out here are these cuts. If we do all cuts they are going to be painful, going to go on spring break and will have a big line at the airport because they will have to cut back on tsa personnel, and and the republicans are highlighting, well, look, if you have to raise taxes, heres what would be bad about that, and i think its its we the American People who got to make up our minds, and i think they will follow. Let me ask you this, austan, because it feels like at this point in the cycle where weve been talking about this for so long the fact that, you know, the three major drivers of our debt, medicare, medicaid, Social Security and youre talking about the average guy and gal out there that both sides are trying to appeal, to i think the average guy and gal out there understands and sort of gets it, that these programs are going bankrupt. They do need to be restructured. You know the president very well. Youve worked with him so much in the first term. If the president was really serious about getting to where the problem is, cutting medicare, medicaid and Social Security, how come he hasnt done it yet . Well, lets back up to the first thing you said, that everybody gets it. In a way they get it, but in a different way theres massive overwhelming majorities of people saying lets not cut Social Security. Lets not cut medicare and anybody who is proposing those things, they are getting mad at them, and then if people come in and say, okay, fine. If you dont want to cut those, then weve got to raise taxes, then people say, whoa, whoa, wait a minute, we dont want to raise taxes so thats what i mean so until we the voters have a little more clarity to washington what we want i think we are likely to see continued stalemate where both sides are saying but i think america is on my side. So i think is the stalemate even worse than having a decision . I mean yeah. Of course. Unemployment is going to get impacted. The stalemate is really the problem, the fact that its a problem. 100 right about that. Definitely every year we go by that we dont act it makes it worse and worse because the problems build up, but also the stalemate in which we just keep saying, all right, well, fine, in two months lets revisit this. A lot of people dont know what to do. They say, well, okay, kind of if you came in and told me that the taxes are going up now, at least i understand whats going on, i dont want to make a bet on well maybe in two month the taxes would go up and maybe in two months they are going to start a program to cut the entitlements. I think thats a big problem. All right. Austan, great you have to on the program. Thanks so much. Great seeing you again. Well see you soon. Austan goolsbee. Unable to go after the bad guys, the top cop on the futures and swaps market warning the spending cuts will hurt enforcement. Gary gensler will be with me next exclusive in a few minutes. Dont miss it and it will go down as one of the greatest goodbyes ever. Groupon ceo andrew mason got a deal he wasnt looking for yesterday when his board handed him a big slip but jaws really dropped after he is sent his farewell email. Jane wells on how masons missive stacks up about other notable exits. Stay with us. Friday night, buddy. You are gonna need a wingman. And my cash back keeps the party going. But my Airline Miles take it worldwide. [ male announcer ] it shouldnt be this hard. With creditcards. Com, its easy to search hundreds of cards and apply online. Creditcards. Com. A new ride comes along and changes everything. The powerful gs. Get great values on your favorite lexus models during the command performance sales event. This is the pursuit of perfection. How many times have you heard this line . Im leaving to spend more time with my family. Its an old standby used any time a position of power is ousted from his perch and yesterday Richard Mason ripped up the proforma Resignation Letter and got canned. Where mason ranks in the Resignation Letter hall of fame. Jane . Reporter you know what should be banned, saying youre leaving to pursue other opportunities. Well, duh. Thats because you got fired. At least andrew mason said, quote, im looking for a good fat camp. Joins a special camp of those who have gone out in style like jetblue Flight AttendantSteven Slater or this hotel worker who hired a marching band. All of you out right now. Im here to tell you that im quitting. One, two, three, four. Reporter this is classic. This video has gotten nearly 4 million hits and merck product director who quit online invoking aido. Quitting on youtube is now really the way to take this job and shove it and so is resigning through the New York Times like greg smith in a scathing letter about Goldman Sachs calling clients muppets or aigs jake disantis saying we have been betrayed and then theres mocking the quitting for family reasons when perhaps the companys poor performance and when stryker Steve Macmillan left for family reasons there was also the board lost confidence over an inappropriate relationship with an employee but this is what sets the letter unique. It made it all the way to the tubes without dying on his first ever play through. Bravo. If only groupon daily deals were as captivating as his letter, maria, he might still have a job. That is wild. Jane, thank you so much. Jane wells. Spending cuts showdown as ax hangs over spending programs that will put hundreds of thousands out of work and potentially slow down the economy. Ill be talking next with gary gansler. The head of the commodities tradings Commission Says the cuts could help him stop bad actors on wall street and later taking the stand. Jc Penney Ron Johnson facing off against macys lawyers over who has the rights to sell murtd products. Well recap the courtroom drama. Back in a moment. I know what youre thinking. Transit fares as in the 37 billion transit fares we help collect each year. No . Oh, right. Youre thinking of the 1. 6 million daily Customer Care interactions xerox handles. Or the 900 Million Health insurance claims we process. So, its no surprise to you that companies depend on todays xerox for services that simplify how work gets done. Which is. Pretty much what weve always stood for. With xerox, youre readysiness. [ no audio ] understand my charts, and spend more time trading. Their quick trade bar lets my account follow me online so i can react in realtime. Plus, my local scottrade office is there to help. Because they know i dont trade like everybody. I trade like me. Im with scottrade. announcer scottrade. Voted best Investment Services company. Welcome back. Well try this again. My next guest warned cook that massive automatic spending cuts that take effect at the stroke of 12 will wallop market activities. Joining me right now is gary gensler, chairman of the Commodities Future Trading Commission good to be with you, maria. Thanks so much for joining us. Absolutely. What Enforcement Actions have the cftc put on the shelf because of cuts . Maria, we are an agency that was sized to the 1990s to oversees the futures market and now we oversee a much larger market, more systemic in size, the swaps market eight times larger, and what i indicated to congress is we are overseeing these two markets now but dont have the resources and have been shelving. Enforcement matters and were not examining the firms that we need to examine, but its far more ready than the sequestration. Its not sized to the new job. I understand because i think you guys were squeezed even before this, right . Originally the cftc watched futures and now youre policing 650 trillion swaps market, so how does all of this stuff impact that, i mean, put the sequester along with all of the other dysfunction and the cuts are coming . How is that impacting it specifically . To put it in context, think like the National Football league, if there were eight times the number of games but only the same number of referees, youd probably have mayhem on the field and the fans would lose confidence. I think that could happen in our oversight. We just dont have the people to oversee this vast market, but the good news is weve completed the rules. Weve got market transparency coming with these rules and the public will be better served if we have little resources as well. So was it a bad idea in dodd frank to to have so much more overseeing of so many more markets and business if you werent going to get the appropriate resources . Well, i think it was a good idea in dodd frank. I think the public will be well served, but i do think that we need to have the resources as well to answer market questions but also to have cops on the beat and well continue advocating with congress to do that. But are you going to get it . Lets face it, gary. This is where we are. Money is tight. Are you going to get the resources or will you have to make do with less . We are making do with less. We are finding efficiencies wherever we can, but just to note weve done three large enforcement cases this past year in the Interest Rate rigging of libor, and along with the department of justice that alone brought in 2 billion in fines. Its not why we pursue these things, but we are a good investment to the American Public to try to promote market integrity and to keep the markets working for the rest of america, not just a few. A few. Yeah, im glad you mentioned that and brought up libor. Youve said libor is unsustainable. What has your task force done in terms of coming up with the replacement . How will that impact markets . What would you like to see in terms of a replaymate for lib replacement for libor. Its something that is referencing a market that doesnt largely exist today. It would be like a realtior saying, heres where the transactions in your neighborhood were, but there were no sales in that market place for years. What we think needs to happen is, we need to move to a reference rate thats based on real transactions, so that the market can have confidence that it cant be rigged or manipulated. All right. So well be watching then, as you come up with replacements and this story develops. Let me ask you with this lawsuit. The cftc suing nymex. Whats this all about . Well, im not able to speak specifically on an enforcement matter, but we take very seriously at the cftc our obligations and of course market obligations to keep information appropriately confidential. And i think ill leave it there on that suit. You cant go more on individual cases, i totally understand. Good to have you on the program. Thanks so much. Terrific to be with you, maria. Chairman gary gensler joining us. Embattled j. C. Penney ceo in court today. The struggling retailer warring with macys over legal rights to sell Martha Stewart products. Courtney reagan has been covering it for cnbc. Well, j. C. Penney ceo had to put disastrous earnings behind him in order to take the stand today in the case where macys is suing j. C. Penney and Marth Stewart living. When johnson arrived today, he was in a good mood, telling us, he was wearing a j. C. Penney tie and shirt from stafford. Our producer caught up with johnson to ask about the trial and those earnings, no comment on both. Back in court, macys lawyers used many emails to try to show j. C. Penney understood macys contract with Martha Stewart living, but pursued an equity stake in the company anyway. In email december 2011 johnson emailed dan walker, chief talent officer, saying, im chuckling, he, lundgren, now has to work again. Walker reply. Check, check, check mate. He really doesnt know whats happening to him. Thats just an example how this case has gone beyond business and beyond two retailers fighting over Martha Stewart, but really two ceos competing to win. All right, courtney. Thanks so much. It was the week that wasnt for j. C. Penney. Ron johnson testified in court as we heard. Well have more on that story as it develops. Is this the end of the story . J. C. Penney shares were pummelled this week, over 20 after they posted disappointing earnings. Is the worst behind . Lets check in with brian, options action contributor. Do the traders see the stock falling even lower . Its interesting bets here. We saw some short bets. One big trader sold 10,000 may 20 calls for a little over a buck. They were not buying puts and be aggressive. But certainly theyre saying it wont trade above 21 over the next couple of months. Ron johnson walked into the situation, wanted a new opportunity, something to motivate him in life. He left apple, thought the grass was greener on the other side. Not only was it not green, it was burned brown. You read articles about the store being dishevelled. One store offering free wifi. Thats what i want to do, spend my day in j. C. Penney for free wifi. The stock is in trouble. I dont think its in huge trouble where you short it here, but certainly i dont want to own this stock. The only thing i would touch is maybe if you could find a locate on some of the highyield corporate bonds. Thats where i would touch the stock. Certainly its a big mess, this stock, right here. Thanks so much. Well see you soon, brian. Be sure to stay tuned for options action top of the hour. When we come back, my thoughts on standing tall when you get kicked to the curb. [ indistinct shouting ] [ indistinct shouting ] [ male announcer ] time and sales data. Splitsecond stats. [ indistinct shouting ] its so close to the options floor. [ indistinct shouting, bell dinging ]. Youll bust your brain box. All on thinkorswim from td ameritrade. 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