Private label business. Were going to discuss whether this is good or bad for its bottom line and how will they compete in the private label wars . My partner sue on the floor of the New York Stock Exchange. Hi, ty. Thanks. The dow and s p are hovering near their record levels. Caught up on where the market stands. The Dow Jones Industrial average up about 20 points on the trading session, the s p up 2. 30. The nasdaq is strongest in terms of the percentage side to the upside at 12. One Hedge Fund Manager says now is the perfect time to short stocks. Here you have a bubble that is largely driven without fundamentals in certain areas and this crazy by fur cated market where you have cheap and expensive stocks inside the same sector. And when this easy money period ends and maybe even before as we see some of these fundamentals starting to soften you will have an opportunity to make a lot of money op the short side. Where is all the action when it comes to shorting this market . Lets go to dominic chu, hes been taking a look at that very thing. Hi. So we wanted to look at the s p 500 companies, so the biggest names in america, for where this short action is manifesting it itself. The first thing is all the s p 500s and which stocks have Short Interest a lot of borrowing to short the stock. 10 or more of shares, we have 33 companies in the s p 500. Among the notable names, check this out, because you got big names like jc penney, you talked about them, a retailer out with earnings this morning, 26 of their shares have are Short Interest, people borrowing shares to sell short. Cliffs Natural Resources 29. Among the top in the s p 500. Another interesting theme here 13 of the stocks of these top shortsds stocks are in the retail or Consumer Discretionary sector, a lot of bets against companies are being played. You got to be careful because when shorts work against grew they work against you and its painful. On average 37 return for these Consumer Discretionary names. Shorting yes, its a timing bet. It has to work out for you otherwise you can get really violent moves to the upside. Back over to you. Yeah. Tends to be very swift indeed. Thank you very much. So is shorting stocks the best strategy . Even though its risky especially after the fed chairman said yesterday the crepe trol bank will stick with its easy money policy. Joining us is peter, chief market analyst at the Lindsay Group and a cnbc contributor, hes been bearish on this market but he says its also hard to fight the fed and robert joins us chief Market Strategist at vanyan partners and bullish. Peter, im going to start with you, you admit its hard to fight the fed at this point but also ben one that says we need to see this market give back some and its very difficult to be caught in that position. Right. Its been extraordinarily difficult to fight the fed from a stock market perspective. The stock market on a total market cap basis up 4. 5 trillion but the feds print only 900 billion. Weve seen this massive expansion in Multiplier Effect from the fed balance and pe multiples. Now that Interest Rates are tapering for the fed and 275 bond yield which is above where it was when qe2 started in 2010, i think the overall risk reward environment is getting more dangerous. Robert, what about that . I know that youre almost fully invesds, you have 8 in cash, but thats pretty much fully invesds. What about the points peter made . I think peter makes some good points. The Interest Rates arent where they were when quantitative easing started for the first time around. I think Interest Rates have a potential to move up maybe to 3. 5 , but i wouldnt let that worry me. The fed is only going to be undoing this artificial Interest Rate environment and i think when you start to see that the economy can continue to weather this worry thats out there, i really wouldnt let that worry me in and throw me off. I heard comments about the fundamentals weakening. The fundamentals arent weakeni weakening. When you look at manufacturing, the ims manufacturing Shows Positive trends, the durable good orders, factory orders continue to show positive trends, Service Sector indicates growth, retail sales, strong retail sales report as opposed to what was expected. When you look at the trends in employment, initial unemployment claims which indicate youre going to see around 200,000 new jobs created each month, nonfarm payroll jobs increase of, you know, a total of almost 2 million jobs being created for the year. A trend of 186,000 jobs per month. These trends are very positive. These trends are very favorable to the stock market. Peter, thats why youre saying, maybe dont short the market, you wouldnt recommend shorting, but if you need to do something, you want to buy the bottomed out stocks. What would those be . The biggest bottomed out area is the commodity space. No one wants them, no one cares for them, whether agriculture, Precious Metals and thats the area i would be looking at. In the buy low, sell high mentality because Everything Else is so far extend and so very expensive thats the only area that i find attractive on the long side. All right. Where do you expect Interest Rates to go . We heard from robert that even with the fed being accommodative, that maybe 3, 3. 25 , does that gel with what youre looking for some. Yes. Because i see it over the next year Interest Rates getting to where nom nall gdp is which could be norm of 3. 5 . The problem i have we have an economy thats med katsds on low Interest Rates. 3. 5 tenyear yield i dont think the u. S. Economy can handle it and do damage to the u. S. Economy if we get there. You get the final word, robert. Where would you put money to work . You like discretionary and industrials. Look at the cyclicals, industrials, technology, financials, Consumer Discretionary, stay away from the consumer staple space, an area of the market that is expensive. This market is selling at around 16. 5 sometimes. With an earnings growth, a Market Selling at 14 times, 2015 earnings. About 1. 17 next year, probably going to see 128 for 2015. Theres plenty of upside potential. Okay. Gentlemen, thank you so much. Some good ideas there. We appreciate it. A programming note, Green Light CapitalFounder David einhorn will be on tomorrow at 12 00 p. M. Eastern time here on cnbc and always has some interesting and sometimes controversial things to say. A provocative guy to be sure, tomorrow on halftime. Jc penney reporting a Third Quarter loss of 1. 81 a share, more than wall street had been looking for. Revenue in line with the estimates. The stock moving higher, though, after the struggling retailer said it was enkournlgd by business this month and it forecast comparable samestore sales for the holiday quarter. There you see it up nearly 7 on the day to 9. 31. But for the year, it is a very different story, of course. For the year, down almost 53 . At todays levels. So is jc penney worth your investment dollar or not . I think you would have to have a fairly strong constitution to get in there, paul swinen from morning star and Mary Ross Gilbert from imperial capital. Paul youre the bull, mary the bear. Whats your price target on this stock and why are you confident that jc penney can get there . Yeah. To be fair this youre correct, this is not a stock for someone with a weak stomach and although the company is saying everything is sort of pointing sequentially better and better, its still not in the bag for the Fourth Quarter. The Fourth Quarter is still critical. Im bullish because i think that the story, the brand is not broken. The stores look great. Theyve pulled ahead a lot of cap so they dont have to spend a lot of cap next year. This is something where the traffic builds up, theyre going to have good cash flow. The market will bid the stock up. You think it can go up another 33 from here to roughly 12 a share. Mary, you see it going exactly the other way. Why . Thats correct. So let me just preface my comments by saying that were bullish on the turnaround at jc penney. However, it doesnt warrant the current share price. Let me explain that. Were actually recommending the long dated bonds as a better place to play which trade in the 70s. On the shares we have remained steadfast under perform and we think theres really optionalty. And let me explain that. If you consider where the shares are today, youre essentially creating the company at a valuation of 9. 5 times eva in 2015 assumes it goes from negative 900 million today to a positive billion in 2015. And if you look at where macy trades it trades at six times. And macys is executing very well and they have ebda margins twice that even if jc penneys could recover. Its all about valuation. You see this i mean if youre saying the stock is going to go from 9. 25 to 1 a share, youre basically saying this is not a viable enterprise. Were basically saying that the shares do not warrant the valuation. Thats what were saying. And so wed rather play in the debt rather than the shares. Paul, get in there, paul. Yeah. I would like to jump in. I mean the problem here is that the company has been bleeding cash for over a year now, and the model is very sensitive to any positive cash flow. Now they already said inventory is going to be a 900 million turnaround in the Fourth Quarter, but hintsds they might need to build some inventory. The thing is, if they get back to even close to their normalized operating margin, they said today they think they can get back to regular gross margin, sgna way down, my model could be conservative actually. This is a company that made decent cash flow, it could be better in 2015 than anybodys expecting. All right. Well, we provocative discussion, folks. Mary you say go with the long dated bonds, paul, you say the stock represents value. Mary sees it the other way. Thats how a market is made. Thank you very much. And tomorrow were going to continue our bull bear and retail segment when we look at abercrombie fitch. Dont miss that one, sue. All right. Speaking of retail, retailers as you probably know are all falling all over themselves to open on thanksgiving, but there are a few that are bucking that trend. Nordstrom continued its tradition of saying that it will not open on turkey day and it will not decorate for the holidays until after thanksgiving. And electronic retailer pc richard also wont open its doors for this traditional holiday. Its done so in the past saying its going to stay closed and it says that they those that do open show no respect for their employees and their families. Other stores that will be closed on thanksgiving include costco, bjs, tj max, marshalls and burlington stores. All right. Back up to dominic chu for a market flash. Dom . Sue, how about jm smucker this time around in a jam, still from the this morning. Shares of the maker of folgers coffee, jiff Peanut Butter and jams are down 6 after the Company Reported weaker than expected profits, sales falling last quarter. Commodity prices did fall but didnt help their situation. A sticky one still for shares of sjm. Back over to you. Thank you very much. Amazon gives storefront retailers a big run for their money. Moving even further into private label items like kitchen gadgets, power tools and food. Can this move into that area boost the bottom line or will it backfire on them . That story is after a quick break. Its as simple as this. At bny mellon, our business is investments. Managing them, moving them, making them work. We oversee 20 of the worlds financial assets. And that gives us scale and insight no one else has. Investment management combined with investment servicing. Bringing the power of investments to peoples lives. Invested in the world. Bny mellon. Two Companies Heading in opposite directions today. Lowes moving lower after the Home Improvement retailer posted weaker than expected q3 earnings. Its full year guidance below street estimates. Last trade is down 4. 2 . Deer moving higher, reported fourthquarter profits well above wall streets forecasting and its up 2. 5 on the trading day to 8492. Ty, to you. Amazon keeps growing and growing and growing, ordered stuff from them today, john fortt, and now expanding its private label business. How will this affect its bottom line . What are they going into . Well, ive done a little digging around. Heres what we came up with. Set the stage first. Theyve got several job listings on their site related to those private label plans. It seems like its early days for the project given theyre just now hiring a private label sourcing manager. The person who would go out and do deals with manufacturers to make amazon Branded Products and looking for a senior product manager and Product Development manager, the people who would figure out which products amazon should sell, who should make them and so forth. Job listing for a food safety manager work on developing private label foods, organizing lab reviews, the nine yards. An interesting time to be diving into the private label business. According to symphony rir Group National brands are doing a better job fighting against private label getting more cost competitive. The biggest area for private label market share was grocery, refrigerated meat, snacks and Peanut Butter. A big business in the u. S. Alone. 2011 total private labels were shy of 100 billion according to Research Firm package faxes. When you have a pot of money that big for jeff bezoes he sees an opportunity for share and doesnt want to be squeezed if theyre getting into the grocery business, doesnt want to be squeezed price wise. A private label business would give him leverage against everybody else. Private label nutella, thats what im for. Private label nutella. Mr. Bezoes are you listening nutella the new Peanut Butter. Can you call it nut tell la . Cant call it that. Hell figure it out. John fortt, thank you. Thank you very much. All things jason del ray says theres plenty of Unanswered Questions about what amazon is up to. Jason, tell us what you found out so far . I mean amazon certainly can execute on so many different platforms that if they do go this way, its going to strike fear in the heart of a lot of Grocery Stores . Well, it sure will, but, you know, john mentioned theres some job listings around the food category, but there are also open questions, how aggressive will they be here . Will they go into their own brand of diapers, for example . Baby category was mentioned. Will they go into Health Products . So they havent been super aggressive in the past marketing their own private labels. A lot of people dont know, they have their own line of batteries and Electronic Accessories called amazon basics. As being shown on the they have panzone which is bedding and towels. A lot of attention on their grocery business right now as they look to expand. Reports of nationwide in the next year or two. So this is something to watch for sure right now. As i understand it and from your reporting, let me know if you agree, this basically helps margins, if indeed they are successful with this. Would that be the reason to push forward with it . It could be. I also spoke to someone this morning who knows this business well who had another good take which is, amazon might identify a certain category where the lower price points are just not quality goods that amazon feels comfortable selling on their marketplace. So they might identify an area where they can go in, do a private label, cut out middle men, and address a lower price point but be confident that the quality is something up to amazon standards. How is their grocery business been doing overall . I know its not available in all areas. But they have put, you know, fresh direct and things like that kind of on alert. So theyre taig a very clslo approach and probably smart given a past history with companies blowing up in a bad way trying to go nationwide. Theyve been in seattle a few years and recently expanded to los angeles and are growing the neighborhoods that theyre serving in los angeles right now. And there have been plenty of reports theyre looking up to 20 more markets in the next year or two. Jason, thanks a million. Appreciate it. Thank you. Jason del ray. Check out the Yahoo Finance question of the day. Would you buy amazon branded supermarket goods, 39 say sure if theyre better and cheaper, 7 say no, 55 say no, i dont buy my groceries online. Ty . Interesting. Very interesting stuff. I actually like going to the grocery store. Thats one of my little pleasures of the week. All right. Folks, up next, an update from the floor of the New York Stock Exchange where sue is, plus the bond report, mr. Santelli, and real life rock star. Coming up, power pitch. This rock climbing duo wants to scale their business to new heights but do they have what it takes to rope you in . Stay tuned to find out. Time for the power pitch. Entrepreneurs 60 seconds to make their pitch and our panelists will decide whether they have what it takes to become the next big thing. Im mandy drury. On todays power pitch a company that wants to climb its way to success literally. Can gravity founders luke and tim turn their workout into big money. Lets take a look at their power pitch. Hi. Im lucas and. And im tim. Were the founders of the gravity rock. Owners operators and franchisers of rock facilities. We are trail blazers in the industry opening two 13,000 plus square foot facility and the one and only indoor rock climbing gym franchise available in the world. We launched the opportunity in six months and have interest nationwide and proud to say were opening our First Franchise in the First Quarter of 2014, a thousand people a day getting into the sport of indoor rock climbing and were excited to capture the new audience. I sat on a board that established the National Certification program and im now proud and excited to share that opportunity with like minded entrepreneurs to open up more climbing gims across the United States. Ive been a climbing for 20 years and seen the growth of this industry over the last ten. Theres 450 dedicated climbing gyms in the United States, and we could see that number double in the next three to five years and excited to be at the front of the growth with our gyms and franchise opportunities. They are on the right side of your screen and can hear us but cannot react yet. On our power pitch panel, dina, chairman and ceo of the dwyer group with over 800 million in systemwide sales and over 30 Years Experience in the franchise industry and vent tour capitalist founder matt compton who serves on the board of rei and accomplished rock climber and ceo of shop igniter. Com and serves on the board of excess fund, nonclimbing advocacy and conservation group. Dina, ladies first on cnbc. What do you think about the power pitch . I love their passion and im impressed theyve had a business in op operation two location almost ten years. That tells me something about the sustainability and im a little concerned about what markets could they grow a business that large, 13,000 square feet is a big rock climbing facility. What about you, matt . I like the space, but im interested in how they scale this and some of the more details on the unite economics of their subscription model. I like the idea and certainly an affordable price point where you can take the family. Im interested in what kind of money they hope to make and how they grow the business through their franchise plans. Youre now in the hot seat. Time to get grilled. Thanks for joining us today. Gentlemen, im going to throw the first question out to matt. How does this business ultimately scale . Do you think you have to open where climbing gyms dont exist. Outdoor magazine did a survey and a thousand people are is joining the sport of rock climbing. Grow slowly first, three to five locations in the next 12 months and 45 to 60 locations is our goal in the next five years. What about you, dina . Whose your target franchisee. Like minded entrepreneurs for a passion for fitness as we have to grow our model with. How do you differentiate yourself . How do you make sure that people think im going to take my kids to gravity vault . We have programs for anybody from 5 years old to we have climbers in their 70s. Our difference is how hard we work, its the staff we employ and the bright clean facilities and programming. How do you acquire customers . Whats the cost and whats the value of that customer over time. Were not purely a subscription based gym but we do one time programs from parties, groups, Team Building and adult and kid programs alike. Able to disclose approximately how much revenue at the moment and what your plan is down the road in terms of what you hope to make . Both of our facilities will make more than a million each this year and because we operate at great margins we expect if any of our franchisees to see a return on their investment two to three years. Do you think theres an opportunity to convert the 450 other climbing gyms to become a gravity vault sp. The number of markets Still Available that arent being served by a climbing gym across the United States allows us to expand into new markets. Were looking to open new facilities to start with but dont rule out cunning in the future. What kind of techniques do you use to acquire new members . Weve been using the grass roots and social marketing, has been a big focus for us in getting people in. We do a lot in the community our Community Involvement is high from participating in town days to sponsoring teams and doing things of that nature to get people involved. Okay. Guys, you heard what lucas and tim had to say. We need to know whether or not you are in or whether youre out on gravity vault. What do you think, dina . I think theyve got a proven model here and realistic about the number of franchise locations, i am in. Matt . I love the space, climber myself, i think this industry is growing rapidly and its great for our kids and youth so im in. Im in as well. I like the ep thuse yachl that lucas and tim one more high five. There you go. I like their enthusiasm. Seems like theres room for growth here and its, again, something i would take my kids to. Got three ins. Your reaction. Its fantastic. We always say from the beginning the people that didnt believe in us it ten years ago when trying to open up our own facilities to today has been such a turn in the perception of our industry that its great to have the, you know, people today all believe in our business as we do. Thanks very much to lucas and tim of gravity valts and panelists today. Dina and matt and that is todays power pitch. Okay. You heard what the panel had to say. We want to hear from you. Are you in or out on that guys hair . No. In or out on the rock climbing franchise gravity vault. Logon to power pitch. Cnbc. Com and leave a comment or go on twitter and follow the conversation with the hashtag power pitch. Sue . All right. Lets get the trading action from post nine where i am with bob pisani. And we were just talking about the fact that the interest on the tenyear is now 276. Its moving up which could be a problem for stocks. Were up 13 points but a narrow range. Keep Interest Rates down ahead of the fomc minutes released. Very narrow trading range. 125 points. Typical, its only been 60, 80 points for the last five days. I want to point out high beta names have continued to move most of the downside, priceline, groupon, tesla, twitter, big moves considering the dow is flat here. 3d printing systems, not a lot of news yesterday, moved down again today, the 3d printers are down. This is the other high beta group hit a lot. Retail stocks, some of the other ones out there, jc penney having a great day, some of the other discounters that are out there, kohls and freds. With Interest Rates higher as sue mentioned emerging markets get hit any time this happens, emerging markets generally have a problem. Well see what happens with the fomc minutes at 2. The market held hostage too that. Thank you very much. Gold moshgts closing about now and Sharon Epperson is tracking the ax next at the nymex. Slide in gold down about 15 below 1260 an ounce and this close below that mark is significant because technically this is the lowest settlement price weve seen for gold since july. Closing here below the 1260 level. Keep in mind that traders are still looking at that low that we saw back in october around 1251 an ounce. Is that the next level that theyre watching. And below that they say theres very little Technical Support above the 1209 level. So looks like maybe we could see gold prices near that level by the end of the year. Were seeing lower prices across the board in Precious Metals and traders waiting for the fed minutes to come out. Maybe that will have impact on where gold goes from here. Back to you. Sharon, thank you very much. Lets talk about Interest Rates right now. Thats what the buzz is about down here on the floor. Rick santelli is tracking the action at the cme. Theyre pushing it up today, 276 on the ten year. Yeah. And ill tell you what, listen, i didnt think a lot of this had to do with looking toward the minutes but i asked all my sources and they overruled me. Most of my sources said that they do think theres a little extra upward drift as you look at the intraday of 5s and 10s, 5s are unchanged, 10s are up more. Theres your yield curve steepening. The interesting question they brought up is, will they remain higher even if the minutes are a bust and i think thats an interesting question. The assumption seems to be sideways or higher the only way rates can go because theyre flexing their muscles a bit. Open the chart up to the last fed meeting the one that were having the minutes to, nothing but upside. Last chart, dollar index hitting the stride, european currencies are falling under the weight of uncertainty regarding the health of their banks. Tyler, back to you. Thank you very much. Starbucks continues to gather momentum with 20,000 locations and 14 quarters of higher than 5 global growth. But can the company keep that momentum brewing . Up next, the coffee chains top number crunching. Cfo will talk holiday repail, global coffee prices and much, much more. My mantra . Family first. But with less energy, moodiness, and a low sex drive, i saw my doctor. A blood test showed it was low testosterone, not age. We talked about axiron. The only underarm low t treatment that can restore t levels to normal in about 2 weeks in most men. Axiron is not for use in women or anyone younger than 18 or men with prostate or breast cancer. Women especially those who are or who may become pregnant and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. Report these symptoms to your doctor. Tell your doctor about all medical conditions and medications. 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The stock up nearly 50 ts so far this year. Can the coffee giant keep the momentum going. With us troy, cfo of starbucks and member of cnbcs global cfo council. Can it get better. We have more to come. We are only beginning. Everything that drove our record results in 2013 theres more of that on the way. Is there a point at which you got some 20,000 locations or roughly . Yes. A point at which there are too many starbucks . We have no idea where that number is. In the u. S. Where we are the most saturated we continue to add storeser y rear, add more stores in 2014. 100 more stores in the coming year. Than in the past year. Coffee prices have come down significantly. Is this good for your business . Good for your margins . Do you lower prices when those coffee prices come down . Its both good and i have concerns about it. Its good in the sense that two years ago coffee prices were too high. The Commodity Prices had skyrocketed, painful for us and for others. Since then theyve reset to a better place and we will have a commodity tailwind in 2013 and 2014 and frankly in 15. The problem is theyve become too low and many cases are below the cost of production for our farmers around the world. Thats concerning for us. In fact, we will you get a floor. You do. You will not pay them below that. Absolutely. You need them . With you need them. Were in this for the long game. Not going to chase the commodity price down. They will get what it takes to sustain their farms to invest in their farms to take care of their families. Talk a little bit about international. Big part of your business, strongest market is . China without a doubt and Fastest Growing. What about tea . You did an acquisition in tea. How do you plan to make that one grow the way coffee has grown. Tea is a part of the heritage since the beginning and acquisition a year ago brings into our house a fantastic company with great capabilities around blending and sourcing fine teas. Were bringing that together with what we do around beverage innovati innovation, store design and reimagining what the future is. Well have more than 1,000 stores in north america in the future and huge possibilities with this reimagined. A huge arbitration judgment last week, 2. 8 billion that you have to pay as a result of this settlement and judgment to kraft foods. Yes. Onetime thing, not a peelable. One time in our 2013 results, the great news here is the long arbitration is over. Since weve brought direct control of the business inhouse weve grown our profitability in packaged coffee and allowed us to pursue the Fastest Growing segment of coffee in premium single serve into 2. 8 million is a lot, how do you pay for it . Write one big check . We will. Mr. Cfo. We will write one big check. We have a strong balance sheet, under levered as a company. Issue debt shortly. Hand shake when you write a check like that. We are pleased to be moving forward. Holiday sales, its an interesting time of year for you guys. It is. Do you sell more of the ancillary products, the mugs, hard goods, bagged coffees in your stores at this time of year and is it a big game changer . Holiday is a fabulous time for us. People are out shopping, they often look to starbucks for that gift item. Last christmas the starbucks card the single most given gift to adults. We have much more to come this year during the holiday season. We couldnt be more excited about it. The stores have turned red with the holiday, excited about whats to come. Congratulations on a good financial report, good year. Nice to have you with us. Very good to be with you. Thanks. For more on our exclusive cfo council, head to cfo. Cnbc. Com. Cfocouncil. Cnbc. Com. Sue . Darn it. Now you know what youre going to get in your stocking from me, ty. Apples ambitious Silicon Valley complex in the works and josh lipton got an exclusive sneak peek at the physical model. Tell us about it, josh . Yeah, sue. Apples spaceship is cleared for takeoff. The city of cupertino gave the final stamp of approval last night for apples new campus. Take a look at this. We got an exclusive look at the model of what that new campus is going to look like. Were the only tv network that got this video. Apple is essentially building a 176 acre park to house its new offices, planting 7,000 trees, building hills and walking paths. The centerpiece the spaceship, this kirk cular Office Building accommodating 12,000 employees, four stories high and 2. 8 million square feet with a circumference of a mile. Put the size in perspective for you. You could fit the uss nimitz super carrier for the navy and largest warships in the world, fit that inside the center of the ring. Apple will pay cupertino more in taxes. Apple is already the single largest taxpayer in the city. Last year apple generated 25 Million Dollars of profit tax revenue and bought 4. 6 billion from over 700 local businesses. Residents have concerns about construction noise and congestion. Apple says it plans to widen streets and expects one third of its employees to take public transportation. Apple isnt giving guidance on the price tag for the campus but estimates range from 3 to 5 billion. Sue, back to you. Wow. That looks fantastic. Thanks so much. All right. All this week we are measuring the crisis in americas cities. By finances both large and small, and a lot of them are in critical condition. Today, cnbcs scott cohen is in miami for us. Hi, scott. Hi, sue. Baseballs Miami Marlins threatened to leave if the taxpayers didnt help them build a stadium. Is that appropriate at a time when budgets are tight everywhere . Well look into that and why the securities and Exchange Commission is taking some interest in this. Thats next on power lunch. [ engine revs ] [ male announcer ] the mercedesbenz winter event is back, with the perfect vehicle thats just right for you, no matter which list youre on. 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All this week were measuring the crisis in americas cities. Whose finances by and large are in critical condition. In some cities the issues are obvious and in others not so much. That brings our Senior Correspondent scott cohen to miami for day three of our tour. Hi, scott . Hi, sue. In miami it looks on the surface like things are not so bad. Theyve rebounded from the worst of the foreclosure crisis, but the s. E. C. Says that things may not always have been as they seem. This city, this area, is actually at the heart of a nationwide crackdown on municipal finances and bond market and now the s. E. C. Is taking a close look at a deal na already had a lot of people here fuming. It is a baseball palace, retractable roof, gourmet food. Ever think you would eat this at a baseball game . Never. Reporter even a swimming pool. Your take on this. Reporter sports radio host Adam Cooperstein said the home of the last place of the Miami Marlins is a sight behold. Massive, modern, doesnt look like anything else youve seen in miami. Reporter mostly paid for by the taxpayers who could be on the hook for more than a billion dollars. They used dollars that were taken away to fight slum and blight. Reporter billionaire norman brayman sued in 2008 to block the deal. They cashed in along the stupidity of our elected officials and thinking that a sports stadium is more important than the quality of life of the citizens that live in the community. Reporter he lost, but now the securities and Exchange Commission could get involved. The agency wont confirm it but the city of miami and Miami Dade County acknowledge theyve gotten subpoenas. Carlos jimenez the countys top elected official. I dont think that theyll find that the bond buyers were misled. I think at the end of the day, i was pretty one of the lone deals against it. Reporter the s. E. C. Has been busy in miami. This year it sued the city alleging that during the depths of recession, it made material misrepresentations about its financial health. The city says the s. E. C. Is trying to turn political and budgetary decisions it disagrees with into securities violations. The s. E. C. Wants damages and ultimately real reform. And real reform not just here in miami, but nationwide. The Municipal Bond market is huge, about 3. 6 trillion. People go in there because its safe, because of the tax benefits but its actually in many ways one of the least regulated markets around. How safe is your Municipal Bond investment . Is the muni bond market about to blow up . We have a lot more about that in our special report online at cnbc. Com is ci daum slsh cnbc. Com cities. From here well go up to baltimore, a city dealing with a lot of infrastructure issues particularly with its aging water system and not enough funds to fix it. Thats another issue thats plaguing cities across the country. We want to hear from you on twitter use the savingourcities. Scott reporting from miami. The l. A. Auto show is in full swing with the spotlight on the latest and hottest cars. And our phil lebeau is onsite mingling with the top auto ceos. Hey, tyler, electric cars a big theme at the show this year. This is one of the new ones introduced, volkswagens e gulf well talk with the head of volkswagen of america when power lunch returns. [ bagpipes and drums playing over ] [ music transitions to rock ] make it happen with the allnew fidelity active trader pro. Its one more innovative reason serious investors are choosing fidelity. Get 200 free trades when you open an account. Day two of the l. A. Auto show and cnbc is all over the hottest cars or phil lebeau is. Hes onsite with the first on cnbc interview with the ceo of volkswagen of america. Phil . Thank you, tyler. Im here with Jonathan Browning the gentleman who runs volkswagen of america and were standing in front of your newest vehicle you unveiled the e gulf, e for electric. How much due mand is out there in your opinion in terms of electric vehicle . The electric vehicle demand is a small minority of the total market price but its growing. For example, in our longterm planning were only assuming 3 of our total sales by 2018 will be electric, still a small minority. Lets show everybody the egulf here. You get 70 to 90 miles the first 70 to 90 in terms of the range there, electric. Is the market right now saying, i need more range . Do you still see the range anxiety question out there. Thats certainly an issue but the role for this is specifically in terms of a commuting vehicle and people who know roughly their travel patterns and this is a vehicle that you can adjust the regenerative braking, rate of usage of the fuel available and its very practical for the majority of daily use. Its a vehicle that actually the mileage is over 100 miles on a calculated basis if you drive in an economy mode. This has been an unusual year for you guys in this sense. The market has been up, but your sales are down. In part because your products start. Did your product cadence miss the mark in terms of you knew you were going to be growing over the last few years but 2013 one of the years in hindsight you may have missed the cadence. Node to look at it in perspective. Weve doubled the business since 2009. Youre not going to sustain a growth rate since we achieved last year. Weve established a new level. Well be selling over 400,000 vehicles this year, only the second time in addition to last year in the last 40 years, in the u. S. For the volkswagen. Were at a new level. Were not consolidating, building up for the next phase of growth and well be ready to run again. Achieving the high level is an important landmark. Lot of discussion about fuel cell vehicles. You have interesting thoughts on this. Are we getting ahead of ourselves in terms of expecting hydrogen to be a major source of power for the consumer out there . Absolutely. As we were talking earlier, electric vehicles are still a small minority. Hydrogen is on the horizon but a long way in. Its not just about the products themselves, the vehicles, its about the infrastructure. So whether its hydrogen, even cng, those infrastructures dont exist today. The important had thing with a vehicle like gulf is weve developed a physical architecture where you can plug and play different power trains and that gives us the flexibility to respond to different regulator environments, customer environments and marketing environments an gives us a great flexibility on a global basis. Last question. The uaw is saying we think that we can organize the vw plant in chattanooga. Your perspective some. Weve said that our employees in chattanooga will make the decision. The important thing is we want our employees to have a really important voice in how we run the plant. We talk about a work on a global basis. The role of a union is or isnt in that is still up for discussion and it will be the employees who decide ultimately. Jonathan browning, head of volkswagen of america joins us as they unveil the egulf at the l. A. Auto show. Thanks, phil, very much. How does the economy look to the fed . The markets on pins and needles and they want to know were counting down to the minutes of the fed due out momentarily. Power lunch is back in a second. We went out and asked people a simple question how old is the oldest person youve known . We gave people a sticker and had them show us. We learned a lot of us have known someone whos lived well into their 90s. And thats a great thing. But even though were living longer, one thing that hasnt changed much is the official retirement age. The question is how do you make sure you have the money you need to enjoy all of these years. Lets get you up to date on the markets which are trading in a narrow range all waiting for the fed minutes due out momentarily. Weve had a narrower range in the dow than yesterday. The dow is up 15 points on the trading session. The s p up 2. 3. The nasdaq up 11. As bob pisani pointed out, quite a big move percentage wise in the higher beta names like twitter, facebook, a number of those newer ipos in case of twitter, and also high beta tech stocks. Tenyear note is what everybody is focused on. It moved above the 2. 75 mark in todays trading session hitting 2. 76 before it backed off. Ty, a lot of people here are very interested to see what those minutes look like and the bond vigil an it tees will give the markets a run for their money. Its interesting in light of the Consumer Price numbers that came out today the fed has whatever inflation wiggle room it might need or want to continue doing what its doing. Inflation basically was 1 over the past month, running at an annual rate of that. Were going to leave early here today to get you ready for the fed minutes. Thats all for power lunch. Street signs begins now. It is just seconds to the fed minutes. Heres what else were going to hit in the hour. Why the death of retail has been exaggerated, what amazon. Com is doing and what somebody left in the bathroom of a boeing jet that will have you thinking, what a flake. Mandy and her income aflok are here but start with Steve Liesman and the fed minutes which are due out. The Federal Reserve and its october meeting the committee generally expected data would justify tapering in coming months or in other words they used later the next few meetings. Considered scenarios to taper before the economy showed clear or what they called unambiguous improvement and discussed qe issues and ways to improve guidance what amounts to one of the most confusing and inconclusive debates from a fed meeting. A number of participants supported equal size reductions in treasure rises and mortgage backed