Transcripts For CNBC Power Lunch 20141106

Still have some value in them. 2014, of course, marks cnbcs 25th anniversary. Earlier this year, we revealed our list of the 25 rebels, icons and leaders who had the greatest impact on the world of business, commerce and maybe even culture over the past quarter century. Now were going to turn to the future with our list of 100 who we say will have the biggest influence over the next 25 years. First to one of the great influencers, sue at the nyse. Oh, thank you, ty. All right. Well, we have record intraday highs for the Dow Jones Industrial average. The dow transports and the s p 500. So its starting out to be a very strong day. But oil is really the thorn in the side of the market. It continues to be under pressure. Right now we have west texas intermediate off just about twothirds of a percent. And ice brent crude looks like it may go positive. It just hit unchanged. Opec is slashing its demand forecast and outlook for prices ahead. Oil plunging more than 20 in the past three months. Join the conversation with oil dropping and the u. S. Becoming more energy independent. Is opec becoming irrelevant . Go to cnbc. Com vote. First we set the scene. Now lets get perspective on that with jackie at the nymex. Hi, jackie. Reporter hi, good afternoon to you, sue. Well, the headline out of the opec report this morning is that opec is cutting its longterm price forecast. Right now looking at prices to stay around 100 a barrel for the long term. Thats down from 110 that they forecasted last year. Oil supply expected to grow about 22 by 2040. Part of that is going to be as the u. S. Ramps production, but they also say that the middle east will continue to be a significant factor in whats coming out of the Global International oil trade. Now, analysts are focusing in on the fact that opec cut its production forecasts by 1. 8 Million Barrels per day by the end of 2017. Thats a shortterm forecast. This is key, of course, as concerns are he grohhi ingrowin about a supply spot in the space. Also, the report is highlighting transportation and logistical issues here in the United States. Of course, getting that oil around. That makes me think about the Keystone Pipeline debate, especially after the midterm elections. The bottom line here, opec is finetuning things. Its not really having a huge impact on prices today. But the thing to watch for in answering your question to the poll there, whether opec is relevant or not anymore is the discord within the group. Watch saudi arabia. Do they continue to take unilateral action and cut prices at this point or do anything else drastic . Right now it seems to be theres a little disagreement within the cartel. Back to you, tyler. One big oil tycoon has called the bottom on oil prices. Kate kelly is here with more. You remember the hanes bottom . Were going to call this the ham bottom. The ham bottom. Continental resources chief, harold ham, is calling the bottom in oil prices right here and unwinding his own companys hedges in order to show it. We feel like were at the bottom rung here on prices he said in an Earnings Call just a short while ago where he predicted oil would rise to the 85 or 90 range in the very short term. He also said the current pullback in oil prices will help Producer Companies like his by lowering well costs and avoiding longterm supply issues. Continentals board authorized hamm for next year and also 2016. That netted the company about 433 million in realized gains for this current quarter, the fourth quarter. That money will come in handy as continental continues a brisk Drilling Program in the u. S. , a business that relies, of course, heavily on having cash handy to keep the rigs running. Analysts and investors were skeptical about the move. And nicholas lowered its price target in the wake of that decision, but theres precedent for this as well including, for example, American Airlines which earlier this year joined its now sister company, usair, in believing that hedging is so risky and too expensive to bother with. And to play it safe in this environment, tyler, continental has actually slashed its cap ex for next year 12 so theyll save a little bit of money that way as they weather this storm and wait for hamms prediction to come true. Its a big gamble. It is. A big gamble on his part. It is. Lets lock in the vote coming back. Has opec become irrelevant . 56 of you said yes, it has. 44 say no, it has not. Now to another big story involving couldnntinental resou ceo, harold hamm, and that would be his contentious divorce battle. Robert frank here with more. This has become quite something. This really has. This would be the biggest divorce in history, plus it could have big implications for shareholders. His wife is claiming a share of his 17 billion fortune in an oklahoma courtroom. But there are questions today about the role that continental is playing in the trial. Reuters reporting the companys general counsel and chief risk officer eric eisenstat has emerged as one of the most important figures in the courtroom. He interjected during proceedings. He talked with the judge. He met with sue anns lawyers in chambers. He even sat with the jury box during a witness testimony. Very unusual. Divorce attorneys tell me this is highly unusual, especially in a trial that is closed to the public. Now, this is also likely to lead to an appeal with sue ann arguing that the companys attorney had improper influence. And the other question here, tyler, is whether continental could be spending money that should not be spent in a private dispute of its ceo. Lawyers say its normal for the company to comply with court requirements, but it would be unusual if the companys attorney is actually advising harold hamm in this. Of course, the bigger hit to shareholders here, if harold hamm has to sell billions of dollars worth of shares to pay this divorce. That would put pressure on the shares. On the stock. Exactly. A lot at stake. Do we have any idea why the corporate attorney is there in the courtroom, sitting in the jury box . There are reasons for him, the company has to comply with subpoenas. This is all about the value of his shares in the company and how he grew it. So there are some reasons, but the level of his involvement, very unusual. Setting off concerns. Alarm bells, exactly. In some quarters. Robert, thanks very much. Sue, down to you. While Oil Prices Head lower, the transports are driving higher up some 12 from the october 15th low, up 20 so far this year. So dominic chu is going to take a look at the stocks that are powering that sector for us. Hi, dom. Hey, tailwinds for the transport companies, sue. Thats our theme because with Oil Prices Going down, these transportation stocks that use oil and gasoline may stand to benefit. Look at the dow industrials, up. 25 . Look at whats happening with the dow jones transportation index. Its hitting alltime highs. Another record high for that index in todays trade overall. If you look at the year to date, its up 21 . Leading the way higher are a variety of stocks in the dow transport index. Theres 20 of them. But one of them is trucking, j. B. Hunt, one of the bigger Trucking Companies in america, those shares are up just over the past month, you can see, 8 . Investors have been buying trucking stocks. Check out another one in package delivery. What can brown do for you and for investors, well, u. P. S. Shares are up almost 10 over that one month and the single best performing dow transport stock over the last one month is, of course, an airline. Of course, its Alaska Airlines which has gained a staggering, tyler, 28 in just the last month. Back over to you. All right. Thank you very much. Dom. So if you missed this big runup, how can small investors play catchup, joining us is a guy who knows a thing or two about the market and trading, former president of charles schwab, former ceo there, now heading up both a Wealth Advisory and a private equity firm. Welcome, dave, to power lunch. And you have a new book called stacking the deck how to lead and bring about change against any odds. Well talk about that in just a minute. I want to get your sense of the mood of individual investors. Obviously youre not working with him as intimately as you did when you were at schwab, but you know as the cohead of an Investment Firm what theyre thinking these days. What are they thinking . Well, i think that investors struggle with volatility. And theyre not sure what to do. Some of the moves theyve made to they overworry it . Yes, they do. Of course they do. Theyre looking at their nest egg. A lot of our investors are retired or coming close to retirement and thinking about what do i have in my portfolio thats going to take me through the rest of my life . And so they look at how do i achieve the upside and protect myself in the downside . Its really what we all want is to understand how to get that kind of upside opportunity with some downside protection. Youre doing lets move on now to questions of leadership. Youre doing a lot of teaching. Youve written the book. We have a new congress that is going to convene the 1st of january, or thereabouts. Theyre both at opposition here. How can you lead when one side is so opposed to what you want to do, whether youre mr. Mcconnell or youre mr. Obama . Well, it seems to me that the American People have spoken that they want something done. Both parties talk about the need to have something done. And i think the president and the leadership in the house and the senate need to start to stack the deck to take a phrase. They need to start to put the pieces in place that create momentum. Momentum is the key to any great change. You have to build momentum and build the perception of momentum. Right now we have a perception that were going nowhere. We start with little wins. Obama talked about it in his speech. Boehner has talked about it a bit. We need to find those little places where there is agreement. Agreement. Exactly. And build on that. One of the passages in your book talks about overcoming resistance. This is a classic case. Youve got to know who the resistors are, their points of resistance and how you overcome that. I guess it goes back to little wins. What we talk about is the fact that you dont overcome emotional resistance with logical arguments. You have to appeal to the emotion. You have to get at where the resistance is coming from and help the party youre trying to move to see things differently. Youve got to talk from their Vantage Point. Zoo and when you were at schwab, the context of this example was a debate over whether to cut commission costs. Right. Exactly. Way down. And what i think many people internally at schwab thought was a race to the bottom. Right, exactly. So we were looking at different pricing for our online trades. And the debate internally was do we have to cut prices . And of course at the time we were doing really well. And so thats the most difficult time to make a change is when you seem to have a lot of momentum. As we looked down the road, however, our view was this is not going to last. We need to make the change now and get ahead of things and not make the mistakes that blockbuster made or that Tower Records or blackberry, for example. It takes courage within the context of a big institutionalized enterprise like schwab or blackberry or blockbuster. Right. Thats why i wrote this book because the course that i teach at wharton on leading breakthrough change, i try to teach my students how do you build the momentum . How do you build a Leadership Team . How do you create the small wins that lead to big wins that you can stack the deck in favor of success . Dave, always great to see you. Thank you for coming on today. Appreciate it. The new book is called stacking the deck. Find it in bookstores and i assume on digital sources. Sure. Sue. Guys, two key reads on two very different economies today. Michelle carusocabrera on the event in europe that helped the markets rally today. And Steve Liesman on the u. S. Economy. Steve, youre up first. Thanks, sue. Very strong which means very low. Jobless claims in the u. S. Are making economists optimistic not only about tomorrows jobs numbers but thinking this trend will continue into november. The numbers suggest a u. S. Economy that is so far weathering weakness from overseas. Claims fell more than expected to 278,000. The Second Lowest since the year 2000. And the fourweek moving average shown here is at the lowest level since 2000. Less firing, well, what does it mean . It means whatever hiring takes place in the economy adds that much more to jobs. Ian over at pantheon says claims are low enough to signal very strong november payrolls. And joe at Deutsche Bank writes, over the last 25 years when claims have lohover around 280,000, nonfarm payrolls have increased by 330,000. Thats not the estimate for tomorrow which is the october number well get. 233 is the number. It would be the eighth time in the last seventh time in the last eight reports weve been above 200,000. The Unemployment Rate unchanged at 5. 9. The september number still 248,000. Stronger productivity data than expected. And low unit labor costs puts the fed in position of changing nothing. The jobs data, if its strong, but not too strong, with a big decline in the Unemployment Rate should keep the fed on track toward a midsummer nights dreamy rate rise and the prukivity number should mean strong growth with little threat of deflation. None of what i just said, of course, is true in the case of europe. As michelle will tell you. No, absolutely not. And thats why a lot of economists here in the United States think that the ecb should be doing a lot more. The European Central bank. Look at what the euro has done. Its moved to 1. 23, yet another new 52week low for today. Interest rates dropped in places like italy and spain after mario draghi, the head of the European Central bank, reiterated the commitment to increasing the size of the banks Balance Sheet dramatically. Thats a kind of version of qe. Draghi also said that the staff of the ecb was instructed to prepare for the possibility of additional measures to be implemented if needed and that there was unanimous support for those measures, even though he didnt say exactly what they would be. He also played down a reuters story earlier this week suggesting that there is deep internal conflict at the ecb which might prevent him from doing a u. S. Style quantitative easing. First of all, its fairly normal to disagree about things. It happens everywhere. Its important to add another thing. When we differ in our views and in our policies, there is no thats another obsession of some of you there is no drawing line between north and south. Theres no coalition. His statements came as once again today there are protests in europe against the very measures that draghi says needs to be taken to improve europes competitiveness. Take a look in brussels. Cars and trucks were overturned. Smoke bombs were fired as unions and Police Clashed during protests against Government Spending cuts. Ladies and gentlemen, back to you. All right. Thank you, michelle. Very much. Thank you. House Speaker John Boehner getting ready for his News Conference. Hes laying out his agenda for the gop. We will take that live as soon as he begins. Power lunch is back in two minutes time with the dow up 47 points. Theres confidence. Then theres trusting your vehicle maintenance to ford service confidence. Our expertise, technology, and high quality parts means your peace of mind. Its no wonder last year we sold over three million tires. And during the big tire event, get up to 140 in mailin rebates on four select tires. House Speaker John Boehner is expected to make a statement very shortly right after these midterm elections. Any moment now we expect him to appear there. Eamon javers is live in the capitol. What can we expect to hear and will he be taking questions . I think what youll hear is a similar tone from yesterday from mitch mcconnell. Mcconnell very much offering an olive branch to president obama saying because we have divided government essentially doesnt mean we have to be at each others throats all the time. I think what youll hear here from Speaker Boehner is more of that sort of olive branch, bring us together postelection rhetoric. The question is, though, beyond some smallball opportunities, are there real specific areas where these republicans new in power on capitol hill and president obama can actually work together. Youve heard a couple of different ideas come out over the past 24, 48 hours of what that might be. International trade agreements, for example, could be won. But on the big things, these parties just simply disagree. And you heard president obama come out yesterday saying, you know, if the republicans have a good idea, ill sign it. The problem with that is that he doesnt think that they have all that many good ideas or he would have signed some republican bills already. And he seems very poised to veto bills that come his way that now ones that might not have gotten out of a democratcontrolled senate, that may now come out of a republican one. You know, mr. Boehner, mr. Obama, mr. Mcconnell, they all Pay Lip Service to the idea that they want to work together. Will they . Can they . Well, thats exactly the question here. I mean, for Speaker Boehner, the question is not whether or not hes going to pass bills that will then be passed by the senate, but will the Republican House of representatives pass bills that they think could be signed by president obama if they get all the way down to the white house . Lets listen in now to mr. Boehner who has just appeared at the podium. I hope you didnt believe it. Im going to start by congratulating my friend, senator mitch mcconnell. As you know, mitch and i have worked very closely together over the last eight years. And i dont think i could ask for a better partner or do i think the senate could have a better majority leader than mitch mcconnell. I also want to express my gratitude to the people of ohios 8th congressional district. My mission is the same today as it was in 1990 when i was first elected to build a smaller, less costly, more Accountable Government in washington, d. C. And right now i believe that means continuing to listen. To make the American Peoples priorities our priorities. And to confront the big challenges that face middleclass families starting with the economy. Youve heard me talk many times about the many jobs bills that the Outgoing Senate majority has ignored. Those bills will offer the congress, i think, a new start. An act on the Keystone Pipeline, restore the 40hour workweek that was gutted by obamacare. And pass the hire more heroes act that would encourage our businesses to hire more of our veterans. And again, this is just a start. Ive been going around the country outlining my own personal vision for how we can reset americas economic foundation. The energy boom thats going on in america is real. And i think it provides us with a very big opportunity. But to maximize that opportunity, i believe we need to do five things. And that is fix our broken tax code, address the debt thats hurting our economy and imprisoning the future of our kids and grandkids. Reform our legal system. Reshape our regulatory policy to make bureaucrats more accountable, and give parents more choices in a system that isnt educating enough of americas children. For you, finding Common Grounds can be hard work, but it will be even harder if the president isnt willing to work with us. Yesterday we heard him say that he may double down on his goitalone approach. Ive told the president before, he needs to put politics aside and rebuild trust. And rebuilding trust not only with the American People but with the American Peoples representatives here in the United States congress. This is the best way to deliver solutions to get the economy going again and to keep the American Dream alive and well. This will be the focus of our new majority, and im eager to get to work. Mr. Speaker, as the president moves forward [ inaudible ] type of cooperation between this new republican majority and the white house . Listen, youve all heard me say, starting two years ago yesterday, that our immigration system is broken and needs to be fixed. But ive made clear to the president that if he acts unilaterally on his own, outside of his authority, he will poison the well, and there will be no chance for Immigration Reform moving in this congress. Its as simple as that. Obamacare and 40hour workweek. The second paragraph of your oped and mr. Mcconnell in the wall street journal talked about obamacare. How do you walk back, or is it the predominant issue when you have new fresh mn coming mn fre have never had the chance to vote no, or do you try to tweak it . Obamacare is hurting our economy. Its hurting middleclass families. And its hurting the ability for employers to create more jobs. Now, and so the house, im sure, at some point next year will move to repeal obamacare because it should be repealed, it should be replaced with commonsense reforms that respect the doctor patient relationship. Now, whether that can pass the senate, i dont know. But i know in the house, it will pass. But were going to pass it. But that doesnt mean that we shouldnt do other things. There are bipartisan bills that have passed the house, sitting in the senate that would, in fact, make changes to obamacare. You know, theres a bipartisan majority in the house and senate for repealing the medical device test. I think theres a bipartisan majority in the house and senate for getting rid of the ipad, the independent payment advisory board, the rationing board in obamacare. How about the individual mandate . There are a lot of democrats and republicans who believe this is unfair. Just because we may not be able to get everything we want doesnt mean that we shouldnt try to get what we can. All right. Youve been listening to house Speaker John Boehner. And we will continue to monitor that News Conference and bring you the headlines as they become available. Meantime, 2014 marks cnbcs 25th anniversary. From the 25 rebels, icons and leaders who had the most impact in the world of business over the past quarter century to those who will have the biggest influence on the next 25 years. Well speak to some of them straight ahead. For the year. Hi. Sorry. Just want to say, i bundled home and auto with state farm, saved 760 bucks. Love this guy. So sorry. Okay, does it bother anybody else that the mime is talking . Frrreeeeaky [ male announcer ] savings worth talking about. State farm. Frrreeeeaky in a we believe outshining the competition tomorrow quires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. So i can reach ally bank 24 7, but there are24 7branches . Its just im a little reluctant to try new things. Whats wrong with trying new things . Feel that in your muscles . Yeah. I do. Try a new way to bank, where no branches equals great rates. Well, to kick off cnbcs 25, our ranking of the leaders who have had the most profound impact on business and finance since 1989. Were very pleased to welcome bob wright to power lunch. Bob served as vice chairman of General Electric and also chairman and chief executive officer of nbc universal, and he oversaw the creation of cnbc 25 years ago. Actually, he hired me. So i owe all of this to bob. But perhaps his most Lasting Legacy will be changing the way that autism is viewed in this country as the cofounder and head of autism speaks, which is the largest Autism Foundation in the nation. So good to have you here, bob. Its good to have you. You are one of the original cnbc people. Yes. And neither one of us have gotten any older. Right. At the very beginning. I really was. And its been an amazing journey. I was saying that during the commercial because when we all started at cnbc, there were a lot of doubters out there. They werent sure that we would be able to survive, and now were the biggest and most influential brand in business television. You know, its so important to recognize today what wasnt even apparent then. That Live Television is a unique experience. And especially with Television Sets being so inexpensive and so fantastic today. I mean, thats why sports are doing so well and so forth. And Live Television has a uniqueness and a feel. Its reality programming. In this case, theres real money. Youre not playing with chips here. Youre playing with real money. And youre seeing things happen. And people get a chance to really feel that theyre engaged with part of whats going on in the world. And i couldnt be prouder that its worked out so well all these many years. It really has. You know, as you look ahead for us, you know, the next 25 years, for cnbc, but also for business in general, what do you see . Well, i see, you know, deeper journalism, trying to you have so little time. You have to get really good facts up front. Right. And getting those facts is not easy. And something that people, if they miss it, they will feel badly. And they can read it later, but if they miss it, they fell badly. And i think that can be done. And it is being done. I remember when we had the 1991, which was a terrible economic year, we were, you know, having our own struggles. And we had an opportunity to buy fnn. So im down in bankruptcy court. Fnn was in bankruptcy. And we bid 105 million. And dow jones was in at 90 million. And the bankruptcy judge gave it to us, but he said ill give them one morbid. Pretty soon it started to go up and up and up. Were doing were trying to win this bid. So we came up with this very complicated workout. The money would be big on the top, but it only would come out of profit aeshlt that was incremental to nbc because of fnn. So it was a little bit of the sleeves of our vest, if you will. It was a good investment. It was at, like, 175 million. And we worked on it. And as soon as we got the judges gavel to go down, i get a call from jack welchs office saying what happened . 175 million . We only bid 105 million. Take it easy. Take it easy. We had to take him through the whole then he realized it was all an earnout. Thats okay. Thats okay. Then it was all right. Let me turn you to what i think is going to be perhaps your most Lasting Legacy, and that is your campaign to discover the root cause of autism. And along those lines, you cofounded with your wife, suzanne, autism speaks. Youve also, though, partnered with google now in a project called missing. Tell me about that because youre trying to track get the data. Technology is able to give you the data that you need to discover the root cause of autism. Two wonderful things have happened. Hold genome sequencing which has been known for 12 or 14 years which has been so expensive and so difficult to do is now able to be done at prices that are reasonable at some standards, between around 2,000 to 2,500 a sample. But the second thing thats happened is google has entered the picture with us to collaborate with us. And were sequencing 10,000 hold genomes, and were doing it with all the phenotyping, we have Data Collected from people all over the world. And its all going to be a process by google. Its going on googles cloud platform, and theyre building a science and Research Platform for this, which is going to come up next the first half of this next year. Its an incredible breakthrough. And hopefully it will show what hold genome sequencing can be done if you have the capability for any disease or condition, but were going to be the first here with scale for a very complicated, you know, autism is extremely complicated. I hope this will save us years and years of Traditional Research so that we can move on and really have some things. And in two weeks youre going to the vatican . Two weeks were going to see the pope. The pope has set up a threeday seminar for autism in the vatican. Three days. And were going to go, and hes going to be at the inn, and hes going to have a general interviews, and im hoping that he will Say Something and pray for those children and families with autism. His impact around the world is so significant. Absolutely. This would be brilliant. Zloo be best of luck, bob. Thanks for 25 years. Youre in the second now. Im in the second inning. Thats right. All right. Bob wright. Thank you. All right. You can see bob tonight at the cnbc 25 gala which will be airing live at 6 00 p. M. Eastern time right here on cnbc hosted by jim cramer. Tune into fast money at 5 00 eastern. Regis philbin, one of cnbcs first 25 rebels, leaders and icons will be there as well. Ty, up to you. All right. Now we go to Michelle Carusocabrera for a market flash. The brazilian staterun oil company. The stock taking a big hit after it did not announce it is raising the price of gasoline in brazil, even though theyve now gotten permission by the government to do exactly that. The Company Sells gasoline at a loss because the government wanted to keep prices low before the recent election. The company did not say why it did not raise prices this time or when they might consider it again even after a long board meeting. You can see its lower by about 4 . Back to you. Michelle thank you very much. To the bond market now, Rick Santelli tracking the action, cme. Reporter if you look at intraday, you can see were up. Over the last trasix trading sessions, weve closed between 231 and 235. This could be a onemonth high you see on the chart. Look at three intradays. The central bank spoke today. The only Lasting Impact in the market was the weak euro which has gotten weaker. But you didnt hold on to the gains in the dax. And Interest Rates on the bund moved back down into the low 80s. Back to you. Americas most expensive real estate listing, where is it . Well tell you next. Get to the terminal across town. Are all the green lights you . No. Its called grid iq. The 4 51 is leaving at 4 51. They cut the power. Itll fix itself. Powers back on. Quick thinking traffic lights and self correcting power grids make the world predictable. Thrillingly predictable. The getaway vehicle for all the confidence you need. Td ameritrade. You got this. Twhat do i do . You need to catch the 4 10 huh . The Equipment Tracking system will get you to the loading dock. There should be a truck leaving now. I got it. Now jump off the bridge. What . In 3. 2. 1. Are you kidding me . Go. Right on time. Right now, over 20,000 trains are running reliably. We call that predictable. Thrillingly predictable. Welcome back to power lunch. A green day for the Dow Jones Industrial average, up about 57 points right now. Leading the way higher, shares of General Electric, also home depot, microsoft and exxon mobil all helping to power the gains. Sue. Thank you, dom, very much. Well, its a talentpacked show with cnbcs list of leaders who have had the most profound impact on business and finance over the last 25 years. Were pleased to welcome another nominee from that list, the 24th administrator of the u. S. Small business administration, Maria Contreras sweet. Nice to have you here. Good to see you, sue. Congratulations. Thank you. Youre in such a perfect spot to talk to us about the economy because Small Businesses are really the backbone of the economy. How is job creation going right now from your Vantage Point in terms of lending and hiring . Well, were really delighted that we have had 55 months of consecutive job growth. Thats an american record. And we know that its being driven by Small Business. Twothirds of every of our job creation has been created by the Small Business community. And half of the private work force is employed by the Small Business community. So Small Business today is a big deal. At the sba, we just hit a record lending. We were given 17. 5 billion of authorization, and we exceeded it. We went back and asked for another 1 billion. So were at record numbers. What im really delighted to say is particularly in the disenfranchised areas where we had not had the kind of lending we wanted to see, we are up by 35 with africanamericans and 15 with hispanics and women. And that points to, i think, kind of a renewed confidence in the economy. Because we did see one lending standards were getting very, very tight. And two, businesses did not feel confident enough and entrepreneurs did not feel confident enough about the economy to launch a new business. It sounds like from what youre saying that has changed. Well, weve done a couple things. One of the things i did after being abouting the new chief is to say lets set fees at zeros for sba loans under 150,000. And so already weve seen an uptick on those small dollar loans. And then banks say its too much paperwork for my client. Its too much monitoring for us. Right. So we put in a new algorithm so the banks can be more efficient, save pages of paperwork, time and it also allows more people to get through the system. My partner, tyler, has a question for you. Hi, madam administrator and welcome to cnbc. One of the biggest, i think, Economic Issues that this country will face over the next 25 years and immediately is immigration. Obviously, it has been on the front burner politically. You yourself were born in a different country. One out of six Small Businesses are founded and owned by immigrants to america. I wonder what you think ought to happen with americas immigration policy and what you think Small Business would like to see out of washington on it . You know, im so happy that you asked me that question because indeed, i am an immigrant. And immigrants are overindexed in terms of patents that are filed. We employ one in ten employees. The numbers are extremely high. Im pleased to tell you that i just recently, for example, met with the restaurant association. And business after Business Association with which i connect are all tell me that they need certainty. They want to be able to get to know who they can hire and not worry about convoluted rules and be in trouble or penalized for something that they didnt know that they were doing. So were really pleased that the president is prepared to take some executive actions to help us get there. But its only a partial solution. So it would really be wonderful for america if we had certainty around this. And i hope that congress will come together and work with the president to find some longterm permanent solution for the Small Business community. Maria, we will see you a little bit later tonight. Thank you so much for joining us. Looking forward to it. We appreciate it. Cnbcs 25 gala which will be airing live at 6 00 p. M. Eastern time right here on cnbc is hosted by mad moneys jim cramer. You certainly dont want to miss that. Ty . Sue, americas most expensive real estate listing. Its not my house. How much is it . Where is it . Thats next. Power lunch back in two. You can bring back a lot of things from a trip around the world. But you cant always bring back customer data. Because many customers dont like it when their data moves around. Can i go now . If youre going to do business globally, you need a cloud that can keep your data where it needs to be. Today, theres a new way to work and its made with ibm. Welcome back to power lunch. Check out shares of orbitz, the Online Travel website. The stock is down by about 6. 5 off session lows after the Company Posted weaker than expected quarterly profits due to higher marketing costs. It also cut the top end of its 2014 sales forecast, blaming the stronger dollar pressuring its international business. Orbitz shares can you see there down by 7 now. In a programming note, orbitz ceo Barney Harford will be live on the closing bell at 3 00 p. M. Eastern. Tune in right here to cnbc. Barney, were reaching out to a whole new demographic. Big listing just hit the market in Beverly Hills. Robert frank who knows the hills is here with the breaking details. Every month it seems we get a new record for the most expensive listing in america. Check it out. Today its this house. The 35,000 square foot villa in Beverly Hills called get this palazzo di amore. Palace of love. Palace of love. Sits on 25 acres with a vineyard. Thats a lot of love. Pool. The whole compound has 60,000 square foot of living space, 12 bedrooms, 23 bathrooms. Its got a 15,000 square foot Entertainment System with a theater, a disco ballroom, bowling alley, game room. Theres a floating glass floor walkway over pools lined with 70yearold olive trees imported from europe. Its got a 27car garage. You need a wine cellar for all the wine youll make. Its got a wine cellar with 13,000 bottles. The price tag for all that love, 195 million. Palazzo di amore. 23 bathrooms. These people got to go, man. This is crazy. You can go almost in a different bathroom every day of the month. Robert frank, thank you. All right. Cnbcs next 25 gala gala or ga gala . Gala. Takes place tonight at 6 00 p. M. Eastern. Dont miss the live special event hosted by the highly caffeina caffeinated, always entertaining jim cramer. An allstar lineup includes the ceos of mastercard, starbucks. Thats where he gets the caffeine, ladies and gentlemen. As well as the wall street legend sandy weill. Who else will have influence in the next 25 years . Well talk to the ceo of one Company Coming right up who is making a difference in africas education system. It is a fascinating story, potentially a transformational one. Power lunch back right after this. Requires precision and anattention to detail. G it takes knowledge, hard work and a plan. At baird, we approach your Wealth Management strategy that same way. As an Employee Owned firm we have the freedom and resources to create customized financial plans built to last, from generation to generation. Well listen. Well talk. Well plan. Baird. I wish. Please, please, please, please, please. [ male announcer ] the wish we wish above all. Is health. So we quit selling cigarettes in our cvs pharmacies. Expanded minuteclinic, for walkin medical care. And created programs that encourage people to take their medications regularly. Introducing cvs health. A new purpose. A new promise. To help all those wishes come true. Cvs health. Because health is everything. Welcome back to power lunch. Stocks near session highs and airlines are mauving to those highs as well today. Once again investors are taking advantage of Lower Oil Prices as a catalyst. United, continental, delta, spirit, southwest, all of the majors and midmajors moving higher. Back over to you. Dom, thank you very much. So lets get to cnbcs next 25. Bridge International Academies is focused on making a difference in africas education system. This is where 45 of instructional time is lost due to neglect and absent teachers. They have created a chain of lowcost, highquality schools for families living below the International Poverty line, which if you didnt know, is only 2 per day. Jake joins me here at post 9, ceo and cofounder of bridge International Academies. Welcome. Thank you. Congratulations on being in the next cnbc 25. Thank you. Its an honor. I was looking through the notes at what your company does. You gave me such an interesting point. You said the cycle of poverty begins in the classroom, and thats where you feel it must end. And thats your mission statement, is to end that cycle of poverty. Tell me what you do and how you do it. Sure. So bridge International Academies is a chain of highquality, ultra lowcost primary and nursery schools, as you said, that focus on families that live under less than 2 a day. Five years ago we opened our first school in kenya. Today we have 359 academies that search 100,000 pupils every day except for sunday. And right now because of our speed of scaling, were looking at reaching 1 million children over the next few years and 10 million over the next decade. Thats what we do. And the teachers, where do they come from . Do they come from africa . Do they come from the United States . Globally . They all come from the communities that we work in. They walk to work. We train them. Theres an intense amount of talent in each of these communities. Just no ones providing the infrastructure to support and enable the talent thats there. So theyre all local from those communities. Ty . Jay, i think some people call your approach a school in the box. Id like to get you to react to that description of it. But who pays you, and how . And then how do you pay the teachers, and how much . So the parents pay. We charge about 6 per child per month. And we run the schools profitably on that. Weve developed this academy in a box that allows us to provide this highquality education, lemplging a lot of technology. We have customized tabletbased applications for every teacher in the classroom, a proprietary smartphonebased solution to run the academy and all that puts together to allow us to plan lessons better, deliver content into the classroom, monitor teacher performance, but most importantly, look at pupil outcomes. Thats what we do. We focus on the outcomes. So every day we deliver eight hours of eight hours of instruction to all of our schools. We had less than 1 teacher absenteeism. For every year that a child attends bridge, they accomplish two years worth of academic achievement. Thats why parents come to our schools. Thats why they pay these affordable how do you keep absenteeism by the teachers as low in a place, africa, where absenteeism is normally almost 50 . We provide obviously monitoring rewards. Every time a teacher clom comes to the classroom, we monitor when they come to class, what time they start lessons, how pupils are performing and all that connects to a reward and disciplinary system that allows us to enable and motivate our teachers to succeed if that way. How hard is it to do business in africa . I suppose it differs depending on what countries you are in, but how do you deal with the logistics of doing business in africa . Well, weve had to create a vertically integrated system so that we dont have to depend upon existing infrastructure. So we do everything from our own Market Research to determine where the parents are to our own Real Estate Acquisition and construction. We run our own backend call center, territory management, curriculum development, printing and publishing division. So that we can ensure that every penny, and theres only 600 of them that come from our parents, goes to actually delivering that education, but ensuring that its all under one roof. You are a busy man. Thank you, jay. Thank you very much. Congratulations for making the cnbc 25 list. We will see jay tonight at the cnbc 25 gala which will be airing live at 6 00 p. M. Eastern time right here on cnbc hosted by jim cramer. It is mustsee tv. Also mustsee tv is street signs. Lets see whats coming up. An oil producer calling a bottom in crude. Also, our cnbc Investigations Department has been looking into luxembourg as a tax haven. Weve got a special report on that and the findings. And multiyear lows in silver bringing out a certain type of investor from the woodwork. Well tell you all about it later on in the show. But make sure you join us, top of the hour on street signs. Power lunch returns after this quick break. Thats the stupidest thing ive ever heard. Theyre paid vacation days. If you guys agreed to travel more well all do better in school. Well have a better understanding of other cultures. I will learn to parler francais. Oui oui. Were not asking for much we just want one more day. One more day for help planning your one more day, contact mastercard Concierge Services or download our new app. Because one more day is priceless. For tapping into a wealth of experience. For access to one of the top Wealth Management firms in the country. For a team of Financial Professionals who provide customized solutions. For all of your Wealth Management and retirement goals, discover how pnc Wealth Management can help you achieve. Visit pnc. Com wealthsolutions to find out more. So if you get a trade idea about, say, organic food stocks, schwab can help. With a trading specialist just a tap away. Whats on your mind, lisa . Id like to talk about a trade idea. Lets hear it. [ male announcer ] see how schwab can help light a way forward. So you can make your move, wherever you are. And start working on your next big idea. Welcome back to power lunch. The debacle of the day has got to go to at least partially in part to gen worth financial shares. The stock is plummeting, losing nearly 40 of its value after the insurer reported an 844 million Third Quarter loss and said the turnaround in its longterm care business would take longer than expected. Again, those shares down by about 37 , sue, on the days trade. Back over to you. Wow. That is not a pretty picture at all, dom. Thank you very much. On the flip side, though, we do have positive reads on most of the major market indexes. The Dow Jones Industrial average is up 59 points on the trading session. But with oil moving to the down side, the transports are up 126. The s p is up about 5. And the nasdaq is up about 7. In terms of Interest Rates on the tenyear note, well, theyve been holding pretty steady at 2. 37 , ty. That will do it for power lunch. Street signs begins now. All right, welcome to street signs, everybody. It is no longer an f word stock market. No, not that f word. This is a family program. Well tell you what it is and why it may be a good thing. Plus, what the post office said that could be the bullish thing that you have heard in a long time. Mandy, we are, what, 40some days away from christmas . Yeah, thats right. Pretty scary, right . Get started, everybody. But im going to get started with the markets for you. Records, records everywhere. Yesterday was the first time brian in over 16 years of the s p, the dow