Transcripts For CNBC Closing Bell With Maria Bartiromo 20130307

That. One thing that could derail that, the jobs report tomorrow morning, dont you think . I dont, because i dont think one number is indicative of a trend, and i think weve seen a nice steady upward trend in the job market that way. Hasnt been quite the recovery we want, but its been study. I dont suspect one number, even if it turns out to be bad, will torpedo the market. Three other investors in the program, and keep mentioning this because we saw the trend develop, they are all reluctantly long. Thats the term were using this hour. Are you reluctantly long . Im not reluctantly long, at this point i am. 14,2, day trade and hedge some of my exposure. The trend going on three, four months ago, time to get in. They are hanging in as long as it will take them there. Terry, thanks very much. Good to see you. Here we go. Third day in a row record highs with the Dow Jones Industrial average with a gain of almost 40 points. Stand by, very big addition of the second hour of the closing bell with cohost jack welch and larry fink will be along and the Bank Stress Tests as well. Ill see you tomorrow. Another day, another record high for the Dow Jones Industrial average. Hi, everybody. Welcome back to the closing bell. Im Maria Bartiromo on the floor of the new york stock exchange. Rock n roll on wall street. Take a look. Once again in uncharted territory. The Dow Jones Industrial average today hitting another alltime high with a gain of 33. 5 points, a quarter of a percent higher at 14,329 and change. That the highest level the dow has ever closed at. Nasdaq composite also picks up ground today, of course, well below its alltime high but still up almost ten points on the session, about onethird of a percent and the s p 500, broadbased rally there, up about three points on the s p. 1544 is where that index settles out. The dow continuing to make new record highs for the Third Session in a row. S p 500 hitting multinew year highs but the key date traders are watching is the february jobs report out tomorrow morning how do the numbers impact the market . Joining me now to talk about that is ben pace, scott wrenn from Wells Fargo Advisers and our own rick santelli. Jack welch will be along momentarily. Lets talk about tomorrow and navigate what we may see. What are you expecting out of jobs report . Expecting a decent number in the 150 to 175 range but what it will be is a confirmation from what were starting to see from an economics statistics standpoint is businesses are starting to spend, Better Capital spending numbers. The employment numbers may not be growing as fast as one would like, but they are still in positive direction. Might even see a tick down in the Unemployment Rate tomorrow so i think in general it will be a confirming type of number which might drive the markets even higher. Scott, do you agree with that . Yeah, you know, i cant argue with what ben said. You know, were in a modest growth, modest inflation environment. All of the data were seeing is confirming that. I think tomorrows number, you know, if we see 150, i mean, thats not the greatest number. You need 125,000 jobs just to kind of break even with the new entrants into the labor market every month, but its going to be a number that says, hey, were seeing slow improvement in a slow economy. I guess my question really is has this market gotten ahead of itself, and is 150,000 jobs created in the last month enough to keep this momentum going, or do you think this is sort of puts a dent in what weve been seeing . Good question, maria. I think that we would love to see it come back a little bit. Everybody would love to buy at cheaper prices. You wont get much cheaper from here now that Economic Statistics are starting to get better. Did you have something . I think were a little bit ahead of ourselves, too. I think really, but you cant argue because, you know, weve got the fed xlooit completely at markets back, and now what were seeing, the last couple of months, people are starting to chase the market a little bit. Ben mentioned that now everybody wants to see the pullback, and usually with just the chasing and the pullback alone that means the market will trade higher than most people think it will, and when the fed reiterates and yellin reiterates and bernanke reiterates, hey, were easy for a long, long time. Its tough to, you know, to really stop that, you know, grinding higher kind of motion in the market. At least in the near term. Rick santelli, earlier you were talking about what, 225,000 new jobs created. Were you modeling that on the adp numbers. You asked me where it would really get the Market Attention and the whit per number is probably close to 200,000 down here. 225,000 would be the threshold of a very impressive number. I personally dont think its going to be there. I dont either. But i would look at this completely different than many. I think we are now in that zone of equities where a really good number or a really bad number could flipflop into the Twilight Zone of unintended fed consequences because it would make the timeline shorter or farther regarding getting to 6. 5 , so if youre going to really pour a number normally upsetting to equities, maybe since the fed is already buying tickets for the people sitting in the theater, maybe that would be bullish meaning the fed would be around longer or vice versa if it were stronger. Makes sense. Ben pace, youre in the private Wealth Management business. What are you telling clients right now . Were telling clients that in a situation where we think Economic Growth is going to be positive, shortterm rates are going to stay as low as they are, you have to look to go into riskier assets, even if its in the bond market, Investment Grade debt, highyield debt but especially equities. Were trying to get people to get off the sideline, move into equities and its been successful over the last three, four months. Its been a lot easier now that were three or four years away from the financial crisis and weve had a couple good economic years in a row. Okay. So you also want to go Corporate Bonds then. You like Corporate Bonds. Youre looking for a yield bottom line, obviously. Everybody is looking for a yield. I think you have to be careful by stretching duration. Rather go down credit quality and corporates and even heavyweighting towards a high yield. Appreciate your time tonight. See you soon. Thanks, maria. Thanks so much. Well watch those numbers tomorrow. Well, today on the closing bell were thrilled to have jack welch cohosting for the rest of the hour with me. Jack the cofounder of the Jack Welch Institute and, of course, former chairman and ceo of General Electric. Great to see you. Thanks so much, maria. Thanks so much for joining us on the hour of the love getting your insights on so many issues of the day. Let me start with the markets. How are you feeling . Know that you feel that this is a fedinduced rally, correct . More fed induced than anything else. People are desperate for yield, and they have pushed us in a more riskon assets, and thats whats happening. Is there a danger to that . I mean, a lot of people worry that the fed at some point, you know, with all of this free money, its going to end badly. Whats your take on the implications . I dont know the answer to that and no one does. Gone from 1 trillion to 3 trillion. In the balance sheet. And were to go to 4 at the end of this year on the current plan of 85 a month so obviously its scary, uncharted territory, but the fed chairman seems to think he has the way to unwind this at the right time without severe consequences. Lets enjoy the party. And when youre talking to management teams, i know youre working with a whole host of companies right now, when you talk to management teams, do they feel like this is a positive for them . Do they not worry about stock prices . Is there a wealth effect . What do they say about it . Maria, the best way to look at this whole thing is this economy is sitting here like this. Buoyed from underneath is the fed with all this qe3. Pressing down from the top, an incredible array of new regulations and pressures, so youve got these two force is working against each other. If we can ever get a break on the red side this economy is really ready to go, and if we can quiet washington down, come to some agreements and have the regulators come to work saying, hey, how do we make this thing work better, rather than how do we come up with another re goh put sand in the gears of the economy . I want to talk about regulations because earlier you and i were talking. Did you say there were 1,200 new rules that the administration has just come out with . That they are proposing. They have laid out their rules. Every administration has to put out twice a year the upcoming regs and the cost of these regs. Last year in an Election Year this administration chose not to put out those rules. Why . It was an Election Year. Right. So they did put them out finally on the friday at 3 00 before christmas. So if you thought the regulations were going to be positive, would you put them out at 3 00 on the friday before christmas . So these regs are proposed regs, not regs yet and they have got a zillion of them. The regulations under this administration are five times the Bush Administration in the first four years and they are three and a half times the clinton regulations, in his first four years so youve got this incredible regulation overload on us, and we havent yet seen the full impact of obama care. We havent yet seen the full implication at all of dodd frank. Its not even implemented yet, right . Like 30 of it is implemented. Nowhere on both of these big initiatives, and the cost of these is enormous, so well have to see the effect. Right now the feds got this market really going, and corporate profits are in fact improving. Margins are better. Cops are productive. Companies are doing their job, so weve got a much more competitive u. S. Economy, without question. I feel like the fed is bailing out policymakers frankly because they are creating an environment where everything feels good. Everything feels good, absolutely, absolutely. So the february jobs report is out tomorrow. Now, youve talked a lot about jobs versus growth. The president comes out a lot and says im going to create jocks. I want to do this, but we havent seen the needle move much on the jobs number. My view is, maria, jobs are a product of a growing economy, so they the president and everybody else should be talking about how do you grow . How do we make you grow . How does every reg that comes out help us grow . Weve got to regulate the fracing industry, and weve got to regulate all kinds of industries, and we have, to but, on the other hand, if our message is grow, and then when you grow you get jobs, you dont just start out with jobs are a product of growth. Companies arent going to come out and say, hey, let me hire. Youve got a big balance sheet, why arent you hiring . Because we havent got the growth. Thats why were not hiring, and were more productive and technology is better and can you do more with less so we need 3. 5 to 4 growth to really put a dent in this thing, but we ought to be talking about growth and jobs will come. But, jack, wheres the growth . I mean, we had the gdp report out, and it was 0. 1 . The revision before that was a contraction. How do you get to growth . Well, as i said, we now have an Energy Situation that is making america potentially selfsufficient. That could be a gamechanger. It could be a total it could be the American Century without question. Secondly, weve got to have regulators who understand that their job is to put a sal be up but its to come in and regulate the economy as it should be regulated and find ways to make things easier. You cant keep throwing sand in the gears of the economy. And in terms of the regulatory environment, i mean, i dont understand whats holding the administration or congress back from doing this because it makes perfect sense. You want tone able sectors to grow. But is it unions . Is it, you know, environmentalists stopping . Its all of the above. I mean, is the sierra club going to allow the president i mean, the obvious one right now is the Keystone Pipeline being held up. Thats outrageous. Glad you brought that up because actually we were all waiting on what the Environmental Impact to the economy would be on the Keystone Pipeline, and they release that had report on friday, sequester day, at about 5 00 in the afternoon. I didnt even see it until monday. It really got lost. Well and the answer was that theres not a negative impact on the economy, so it was good news. Whats going to happen . Obviously wed get it approved tomorrow if we didnt have the politics of the middle movement against it so youve got to find a way of how the president is coming out on that one. Hes only one that can make that watch. Incredible important. Thanks for bringing that up. Well continue our conversation for the rest of the hour on this special edition of closing bell. Well speak exclusively with black rock Ceo Larry Fink who oversees 3 trillion. Did the dow making a record surprise you . Well, it should not have if you were watching closing bell back in october and here what fink told us. This is last october. Here now ive been suggesting to investors they should be equities, and were beginning to see that movement. Find out how hes putting that largest pool of capital in the world to work, 3. 5 trillion. Also ahead, whats keeping leveraged buyout Firm Executive up at night . Wait until you hear his take on these markets, the economy and a lot more. Youre watching cnbc, first in Business World wide. Back in a moment. You skip the counters, the lines, and the paperwork. Zap. Its our fastest and easiest way to get you into your car. Its just another way youll be traveling at the speed of hertz. Your Financial Advisor should focus on your longterm goals, not their shortterm agenda. [ male announcer ] join the nearly 7 million investors who think like you do. Face time and think time make a difference. At edward jones, its how we make sense of investing. Welcome back. Another day, another alltime high for the dow industrials, and while u. S. Markets are rocking and rolling my next guest believes investors need to keep an eye on stocks overseas, the manager of kkrs investments and also joining us our special cohost for the day, jack welch. Henry, good to see you. Great to see you. Just back from europe. You went to spain, germany, uk. Yeah. Tell me what your observation was from the european story. The first thing i would say is that the government or the central bank has done a great job of stabilizing things financially. Thats the good news. The bad news is i dont think theres a lot of growth on the come. You saw the ecb mark down their forecasts today, and i think its going to consumption, traditional consumption is going to be slow as you see wage concessions. I would say as a firm weve got a lot of boots on the ground in spain. Germany, two areas were focused on. I would sayre i would feel good about whats going on there relative to where they have been. France is a country where i think its still up in the air in terms of is the government going to embrace the change thats necessary to get globally competitive . You say the central bank has done a lot. What they have done is make an announcement, and they havent thrown much at it. But i think thats actually what were finding is that this is a great point, Central Banks are actually more effective if people think they are going to swing the stick but they dont actually quantify what they are going to do, and i think youre going to see the fed move that way as well which is part of the quantitative easing 1, 2 and 3, theres been distinct times were going to start today and tomorrow, and the market reacts to that, and as the fed starts to exit the system i think what they are going to try to do is instill confidence that they will be there if the economy is weak, but they are not going to put a specific date or a specific dollar amount because ultimately investing is about psychology and its about creating confidence, an i think i heard you earlier talking about we need to create confidence in this economy. If you think about kkr globally. Theres 82 companies. We touch businesses all around the world. We see 555 of all credit card result in the u. S. And the number one thing missing right now is ceo confidence. Right. What we see is a world where the Central Banks are having to overextend themselves to overcompensate for i would say government dysfunction. Exactly whats happening in the u. S. , by the way. And thats that started to take its started to take hold. Our view overall though is that being in things like Government Bonds where you have a negative real yield and a nominal yield is not really that effective, and if you think about whats happening, reflation assets are starting to do well. Stocks, private equity, things that can actually have some inflation hedge that do well when growth comes back, weve been in a world where everybody has been scared and they needed to be in liquid assets or Government Bond and cash, and i think that world is changing and what were trying to do for investors is making sure were capitalizing on that to make investments that can generate growth, income and some inflation hedging. Henry, whats the optimism around spain and staying in the eu . Can they do it . I mean, when you look at 50 youth unemployment, when you look at an Unemployment Rate of 27 , how do they get out of it . How do they get competitive with a currency over their head . I think great point, so to me two things need to change in europe. One is rates need to come down, and then two is the currency needs to go lower. I do believe countries like spain, if you look at their wages, they have got have become much more competitive. Exports are growing as a percentage of gdp but you need macro tailwinds and thats what i focus on. Clear to me real rates are too high and the currency needs to get lower and think about that relative to japan. Japan is weak in the yen massively. Seen that stimulate the stock market and create wealth for their citizens and ultimately it may stimulate some growth so i would say that theres some positive things happening, but to really get a fullscale recovery, think about asia in 1998 and 1999 when they recovered. What did they do . Got their currency cheaper and got competetive and got lean and mean and in countries like indonesia and malaysia did well, and thats what europe wants. We just dont have all the tools in the tool kit. I think they will get there, but were not there yet. Its interesting because they are using communication and language, the ecb. The ecb said well do whatever it takes to keep rates not having this vicious circle, and yet they havent really done much. Whats interesting is the ecb has a single mandate which is inflationfighting, whereas i feel like the fed has a growth and inflation mandate, and thats an important distinction. Ultimately what the world lacks right now is growth, and when i travel around, one thing thats become clear to me is the u. S. Is not a bad spot. If you think about energy, housing, manufacturing, and autos. Autos. Those are four pillars right now if we take the government drag off of that is correct we think real gdp for the private sector is 2. 5 to 3 . Get some confidence back in there. Exactly what jack just said. You could take some of these shackles off. But are we going to be able to take them off . The reality is what the reality is . Do you think thatsing if to happen. Near term payroll will be an 80 drag and sequester between 20 and 30 how it all settles out so over 5 . Thats a big number to start with. As we go through the year if were right on the four cyclical components, the economy will be stronger into the second half of the year and into 2014. But the point is it could be better, and weve got corporate profitability at record levels and cash at record levels and debt costs low, and when i when i move around globally, everybody wants to get levered to emerging Market Growth and i agree that growth is coming out of china and india. And even though those numbers have come down. They have, but they are still strong. What im saying is that there are a lot of different ways to access emerging markets. If you think about china, last year china grew almost 8 . Their earnin corporate earnings were negative. Nobody is talking about that. Wages are going up there and margins have gotten squeezed. You have to think very selectively, an im sure when you ran ge you thought about this, how do you get access to emerging markets in a way thats actually good for your business, and it can be through multinationals and through private equity and through debt. You just i think this emerging markets theme is real, but weve got to be smart on how we approach it. Real quick, how do you want to allocate capital . Whats the bottom like here . Bottom line, stick with stocks and stick with illiquid private credit. Two things we do well. Beening to it on behalf of our own investors for a long time. When i think about what were doing in private equity and in our credit business, were pretty excited about the opportunities. Henry, great to talk with you. Henry mcveigh, always with great ideas, kkr. More with cohost jack welch coming up on the program. Also ahead, well pick the brain of wall street heavyweight larry fink from black rock and find out how worried he is in the gogo markets, person bernanke and fed policy. The Federal Reserve is about to release the results of the annual stress test. 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All up, and more moderate names, consumer staples, utilities, defensive names to the downside. How about banks . Waiting for the stress test results momentarily. A lot of people expecting they will all pass, all 19, but dividends, want to hear about whether they will raise the dividends on some of the names like the ones youre seeing right here. Exploration of production stocks very strong and natural gas starting to move up. Almost doubled since last may, 3. 60 and look at the names. Bonds, etfs, maria, down today, down five days in a row. Back to you. Thanks so much, bob pisani. A lot more with jack welch coming up on the program and then black rocks larry fink will give us his thoughts on the Federal Reserves stress test results due out four minutes from now. Well talk markets, economy, banks, a lot more. Stay with us. Al shareholders meeting. Therell be the usual presentations on research. And development. Some new members of the team will be introduced. The chairman emeritus will distribute his usual wisdom. And you . Well, youre the chief life officer. You just need the right professional to help you take charge. 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 ready for real business. Big news. Breaking news. Federal reserve out with the results of the annual stress test on 18 of the countrys largest financial institutions. Lets get right to Kayla Tausche with the test results. Over to you, kayla. Reporter all but one of the 18 Bank Holding Companies participating in the Federal Reserve stress test is sufficiently capitalized in the case of a severe economic downturn. The average tierone common capital ratio among the 18 banks, 7. 7 compared to the 5 level mandated by the dodd frank act. Allied financial not clearing the hurdle posting a 1. 5 common ratio in the hypothetical stress scenario that the Federal Reserve was modeling. Heres how the big banks faefrmtd citigroup the highest at 8. 3 , wells fargo at 7 and bank of america at 6. 8 , Jpmorgan Chase 6. 3 , Goldman Sachs and Morgan Stanley toward the bottom of this group with 5. 8 , and 5. 7 respectively. And thats above that 5 hurdle. Senior Federal Reserve Officials Say the scenarios in this test are more stringent than any twoyear period outside the greadepression. The model that they used, u. S. Gdp would be down 5 , unemployment would be 12 . Stock prices would have fallen by 50 and home prices down 20 , and the q4 2013 cpi or Consumer Price index would be 1 . Remember, maria, the news we got today did not include the capital plan for these banks. The Federal Reserve this time around is giving them an extra week to have a dialogue if in fact the fed decides to not accept the plan that they submitted. They have one chance to submit a downward revision to that capital plan. Of course, that would include a Share Buyback and dividends, et cetera, ways that they would return capital to shareholders. They have seven days now discuss that with the fed if it was not accepted. Maria . All right, kayla, thanks so much. Lets get Immediate Reaction from the head of the worlds biggest money manager black rock. With us now on a cnbc exclusive is chairman and ceo of black rock liary fink along with your special cohost for the hour, jack welch. Larry good to see you, thanks for joining us. Hi, maria. Hi, jack. Hi, larry, how are you . Like my tie . You guys have a tie thing. The last time had you a green tie on you gave it to me. I did. Do you want this one . Love it. Send it over after the show. Listen, larry, just got the results of the stress test. In january you told us here that u. S. Pages are in the best shape that they have been in five years. You just heard the stress test results. Are you sticking with that view . Whats your take on what you heard about the strength tests . I think it validates what i said this past january. Our banks are the best capitalized institutions in the world. The problems for the banks Going Forward is not capital. The problem for banks Going Forward is making sure they originate enough loans. Right. And they certainly have enough capital now. The capital will be there during these really incredible stress tests, and more importantly now it validates the tightening of credit spreads for these banks because they have a Strong Capital position that would be protecting them in these adverse scenarios. Larry, will this let them really be able to lend in a much more bullish way against Small Companies . I actually think this is the whole plan for the Federal Reserve in the qe3 scenario. I im looking at the amount of cni loans for every bank. That is my whole measurement of the health of the economy and certainly the growth for small and Medium Businesses. If you look at the banks financial positions in the first two years of low rates, they benefited by having the ability to refinance their liabilities. Now four years into this low rate environment and now with question 3 flattening the yield curve, the banks are now struggling in replacing assets as they maturech the average bank maturities are four years and less so they are seeing a record amount of maturing assets that are happening right now, and if you look at their Net Interest Margin in their quarterly reports, their Net Interest Margins are falling every quarter. They have to aggressively now be back into the market and lend, and so my theory is, jack, that they are going to be back into the market. They are going to be lending to small and mediumbases, and to meet cni loan component of the data is more important and it will be a precursor to Unemployment Rates. And so if you begin to start see cni loans pick up, and were seeing that in the form of americaners because they are doing a lot of leveraged buyouts again, youre going to start to see small and Medium Business and through these loans and then they will be able to high. I think its around the corner you would see cni loans pick up which would reason a reduction in the Unemployment Rate . But i hear i hair that Small Companies are having problems getting loans from Regional Banks, that the regulators are all over these banks in terms of the credit quality, and they are having a tough time, Small Companies, getting loans from Regional Banks. Is that a story youve heard or not heard . Well, i think the Regional Bank story is a tough one. Im not sure in its just regulation. I actually believe the Regional Banks are you know, if you look historically, Regional Banks made most of their money in real estate. They are now trying to develop relationships with small and Medium Businesses. Right. And so i think its a combination of obviously more regulation, but i also look at it, their business behavior and their business practices. Well have to look at the large banks, the top 20 bakes to be the prior lender to small and mediumsized businesses. Im not suggesting that banks wont play a role because they play a significant role in our economy but the large banks, especially the large banks who have now been successful in their most recent stress test, that they will be the leader of this lending pattern, and then it will filter down to the small Regional Banks. Larry, you know, you hear a lot some of the complaints from the ceos of these companies, that its too much capital, that they want to use this capital elsewhere. Whats your take on this . Talk about the cnthe Banks Holding 9 tierone capital is this appropriate . I actually look, if i was if i was setting the rules, which obviously im not, i would ask banks to hold even more than 9 capital, but would i not have dodd frank. I would not have the volcker rule. I would let them have, you know, more Business Activities but have more Equity Capital to protect society and protect the overall marketplace. I actually think that in the think books coming out suggesting that we, you know, capital is going to be the protector for society. I think high capital standards are important, but i think the restrictions in business behavior and the restriction in assets, i think thats most harmful to institutions. When people ask me is there a bubble in credit . I then remind them the reason we have credit spreads spreading so much is because regulatory rules are inhibiting most institutions, banks and Insurance Companies, to move out of bonds and into other asset cat xwris, and this is one of the real central problems that i think we need to focus in the future. We node to make sure that our banks and our Insurance Companies have the ability to invest in a larger array of assets, what i would call more of objectivebased investing. If your liability is ten years, you should have as thats the are ten years. Your assets should be five years. Whats going on in regulation is they are looking at oneyear var, oneyear analysis on your asset, but they dont ask what happens to your liability, and that is causing what i would call a concentration of risk by theseinstitutions. They are all stuck in these markets, and thats one of the reasons why i believe the economy has been dragging so long, and we have not seen as much capital moving into other sectors. Larry, you mentioned the issue with the volcker rule and some of these regs. Is there any hope that we can in fact halt of these regs . I actually see Regulatory Oversight becoming more cumbersome, and im not just talking about the United States. I actually think that the regulatory issues that we are facing as an asset manager, the regulatory issues that banks and Insurance Companies are facing in europe and the uk are far more onerous than whats happening here, jack. This is a global issue. It is in my mind creating not a slowdown in the economy, but its inhibiting faster growth in our economies, and i think thats one of the issues that really disturbs me. Amen. Plus, youve got all these youve got so many different regulators, vickers and basl, europe yap regulators and u. S. Regulators and thats also mudying the waters. And well, i think its a full employment act for lawyers, so it does help employment in some areas, yes. We have we have so many regulators, so many regs that we now have to look towards, and we if we had a more systematized streamlined view with regulators, it would allow us to have more simplicity. Im all in favor of more regulation if its good regulation, all in favor of protecting society, and i do believe that obviously we saw with the credit crisis, society was not protected t. Required huge government bailouts. Right. And so i dont want to suggest we did not get ourselves in this situation as a Financial Services industry, but i now believe the pendulum has moved a little too tar. Its not just banking but energy, the epa. And the nlrb, youve got everybody. Youre not alone in that regulatory morass going on which is the Thing Holding back the economy from taking o. All the conditions are right for a real takeoff if the Regulatory Burden could be taken down. I agree, jack. But i think its not go ahead. Im sorry, maria. Please finish your thought. I was going to say its not just Regulatory Burden. Its also indecisions in government whether its the sequester here and other issues. I truly believe the United States economy is ready to be launched whether its the strong fortified capital of banks, whether its the Energy Strength that we have as a country. Well, the keystone is a nobrainer, right . Well, keystone to me, you know, theres another side to keystone. Because we had delays in keystone, we had actually more development in north dakota than we would have had in other years so the good side of keystone was we developed more energy in the last year in our country than we would have otherwise. Only a partisan could come up that answer, larry, come on. Im a believer in keystone, yes. Got to switch gears for one second because weve got to give you a bit of a shoutout because back in october you came on the program, running sound bites throughout the show today, and basically we were talking about a market that was flat and everybody was afraid, risk averse. They had their money in bonds, and i came out on this program and began a campaign. This campaign was telling people youre losing money if youve got your money in bonds and you need to put money in equities. Great, larry, absolutely right. Would you commit new capital to the markets today after the record hit . I would not be surprised to see a 5 correction here, and we are seeing a slowdown in flows, especially etf flows in the last ten days from the recordsetting flows we saw in the last quarter, january and february. So, you know, what i could there be a shortterm correction, yes, but i believe equities, again, will outperform other forms of investments, including bonds over the next 12 months. I believe, you know, from october when we made that projection, bonds were up 6 so they did very well over the last this last period of time, but equities were up 32 . I think people are miscalculating the opportunities they have over longterm investing, especially with the high dividend rates that youre getting from equities, and, in fact, equities with the dividend have less risk than a 30year treasury today, so to think that bonds are a protector of value, that will not be the case if Interest Rates go up. All right. So youre going you want to put new money to work. Even here, but youre going to be a buy on the dip mentality when and if we do see that correction of about 5 at some point, which is what you just said. Larry, good to have you on the program. But if youre a longterm investor you shouldnt be thinking that way. You should be in equities and dont Pay Attention to the momentary moves. Long term is what, ten years . I think if youre a 35yearold individual looking out to work for another 30 years, why do you care what happens in the next few months . You have to have assets that will protect your retirement, and you need assets that will perform over a 30year cycle and i dont know of any other asset class other than equities where you can get that kind of protection. Really smart move. In fact, im taking off my tie. Send it over. Lets get to breaking news on jc penney and macys. Reporter more on the trial thats happening in downtown manhattan. Apparently the judge said that macys Ceo Terry Lundgren and Martha Stewart spoke after her testimony. It appears an olive branch of some kind has been extended, not clear by who. The judge is now ordering both of the companies, jc penney and macys, to mediate. He wants the companies to settle this on their own. He said we live in a free market society, and the Business People involved need to work out a resolution. However, if the case cannot be settled by april 8th, he will hear macys application for a preliminary injunction at 10 00 a. M. Though he prefers not to, he said hell decide the case if he has to, and while it appears macys is winning some of the battles, it doesnt mean things will necessarily end up their way. Interesting developments, maria. Well bring you more when we have it. Thanks, court. Facebook, getting a facelift and time warner says its time tore big changes. Our special cohost jack welch knows something about running media giants and will weigh in on the latest overhauls. Stay with us next. [ 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. From td ameritrade. Its not what you think. Its a phoenix with 4 wheels. Its a hawk with night vision goggles. Its marching to the beat of a different drum. And where beauty meets brains. Its big ideas with smaller footprints. And knowing theres always more in the world to see. Its the allnew lincoln mkz. Thank you orville and wilbur. Amelia. Neil and buzz for proving theres nowhere we cant go. But, at some point. Giant leaps gave way to baby steps. And with all due respect, youre history. If you tt us its that you cant cling to the past. If you want to create the future. Thats why, instead of looking behind. Delta is looking beyond. Pushing u. S. Aviation to new heights. All 80 thousand of us. Busy investing billions in the industrys boldest moves. Its biggest advances in technology. Bringing our passengers the best, the most spacious fleet in the sky. And earning more awards than any other airline. To show for it. So rather than simply saluting history. Were out there making it. Try running four. Ning a restaurant is hard, fortunately weve got ink. It gives us 5x the rewards on our internet, phone charges and cable, plus at Office Supply stores. Rewards we put right back into our business. This is the only thing weve ever wanted to do and ink helps us do it. Make your mark with ink from chase. Welcome back. Breaking news. Lets goat Julia Boorstin with that. Over to you, julia. Reporter thats right, pandora announcing ceo and president Joseph Kennedy is stepping down and the company had start up a new process to find a new leader. Joe kennedy has been ceo of pandora and has led the Company Since 2004 and been there nearly ten years. This comes, of course, on the heels of better than expected earnings. Pandora shares are trading 20 higher after hours on the better than expected results. Maria, no details here about why kennedy is stepping down, but there are some comments about what kind of growth hes overseen and how cofund err has been a significant leader of the company is looking forward to helping found the next leader of the company. Kennedy does say hell stick around and help in the transition. Interesting that hes stepping down at a time that the company is showing such Significant Impact and growth. Julia boorstin, thank you. So much news in the social network space. More than 1. 5 million followers on twitter. Yes. And always talking to your followers. I love doing it. I think it keeps you right in the game, and youre up on news, and i i learn more on twitter when things are anywhere else. The news feed is pretty good, i agree. Let me ask you whats going on now in terms of the activist investors coming back. You had apple, cl, for so long, was the stock to own. It loses it luster. What do you think an apple, some of the other companies that are getting pushed by activist investors should be doing with the cash on Balance Sheets . I think it varies. But if you take apple, theyre in the middle of an Enormous Technology war. And they risk, every day, being commoditized. So, theyve got to have cash and theyve got to have flexibility to move on acquisitions. Look, apple was the golden boy, if you will, until six months ago. And, now were all jumping on board. Look at that chart. The facts are, let tim cook run the company, put the resources in. Hes got samsung nipping at his heels. Hes got everybody coming at his heels. And he runs the risk of running a, rather than sexy company, a commodity company. What do you do . You just you just blow off a David Einhorn . Oh, i think you do. Look, we had that problem for years at ge when they would come after us. What are you going to do with all that cash . Were going to do a smart thing. Trust us. Be with us. Stay with us. Look, these guys are, after a quick hit, id blow them off. Id give einhorn the back of my hand. And you have carl icahn doing this with dell, as well. The dell situation is a selfdealing with you. You have michael making and the board making a deal. I find the apple dell going private to sort of be able to work in secret and not be under the spotlight. To be a weak argument. I mean, i think they should be able to do anything they want, if they lay out their strategy. So, im im more sympathetic to a challenge there than i am in the apple one. Apple deserves, after what theyve done, the chance to deliver on all their promises. Okay. Well keep watching that. More with jack coming up. Look ahead to tomorrows job report. Stay with us on closing bell. S new options platform, weve completely integrated every step of the process, making it easier to try filters and strategies. To get a list of equity options. Evaluate them with our p l calculator. And execute faster with our more intuitive trade ticket. Im greg stevens and i helped create fidelitys options platform. Its one more innovative reason serious investors are choosing fidelity. Now get 200 free trades when you open an account. So free Credit Scores redesigned site has this new score planner tool with these cool sliders. This one lets us know what happens if we get new credit cards. Oh. This one here lets us know what happens if they raise our credit card limit. Yeah. Whats this one do . I dunno. May i respond negatively about your porcelain poodle . This should be in the trash. Score planner is free to everyone. Free score applies with enrollment in freecreditscore. Com fancy bear slider still in beta. Welcome back to the closing bell with former General Electric chairman and ceo jack welch. Tomorrow, we have the employment n numbers out. 163,000 new jobs created expected for the month. How are we going to get this economy moving . Look, were poised. Weve got the banks strong, weve got the companies competitive. The companies are lean. I could see if washington comes together, and we show some tipping over the curb on the expense line and we start to really go at the regulatory issues, we could have a very strong second half with a market thats caught up to by the performance of the companies. The performance of the companies, meaning growth. Yeah. Because revenue has been just okay. Things are so poised to be right, if we can get these regs right. What do you hope what are your goals for the jack welch management institute. Tell me about that in terms of the corp raments youre speaking to, in terms of what you would like to see. Well, were growing rapidly. We have over 500 mba students now. Weve just come out with a new product. Called welch way on leadership. Its an ipad, its ipadfriendly. Ten hours of leadership training. Its selling like hot cakes. Its a very exciting tenhour program that teaches you how to be a leader. And you can do it at your own pace on the ipad thanks for asking. Got to get some of that. Jack, good to have you on the program for this hour. Nice to see you. Nice to see you. Jack welch. Well take a short break and recap the day on wall street. Stay with us. Departure. Hertz gold plus rewards also offers ereturn our fastest way to return your car. Just note your mileage and zap youre outta there well email your receipt in a flash, too. Its just another way youll be traveling at the speed of hertz. music throughout why turbo . Trust us. Its just better to be in front. The sonata turbo. From hyundai