Transcripts For CNBC Power Lunch 20150212

March of 2000. Contract expiration and warnings from one of the Worlds Biggest Oil companies. That would be shell. Mary barra taking on the stock folks, the activist investors. That was the reference. I have to put my specks on. So you can see. So i can see what i have to tell you. Linkedin executive potentially exposed to measles thousands to people commutes in and out of San Francisco last week. Linkedin ses quote, were working very closely with the San Francisco department of Public Health and following their recommended protocol for managing this situation. The health and wellbeing of our employees is our absolute top priority and we will take whatever steps are advised to ensure their safety and the safety of the general public. And its not just employees that are at risk. According to wired magazine the children of employees are at perhaps, even greater danger due to what wired calls a, quote, sickening low vaccinatexccination rate at Day Care Centers across silicon valley. Wired joining us now from San Francisco. What specifically did you find and whose numbers did you rely on . I was relying on the numbers of of the California Department of Public Health. They maintain a giant data base of the facilities in california. I was looking through it and happened upon the world pixar and noticed that day care facility, nearby pixar in emeriville in berkley, there was a 43 vaccination rate. 4 3 overall, not just for the measles . Right. In other words, this means that only 43 , according to the California Department of Public Health, were totally vaccinated. Are there explanations for this, possibly . What did pixar tell you when you went to them . They have not responded, actually. Im still waiting for a call back. So could it be the data was out of date . Could it be that a lot of the children were below the age levels at which vaccinations are required . For example, i think infants dont have to get it or its not advised they get the mmr vaccination until they are after age 1. Thats right. The mmrs begin to children between ages of 12 and 15 months. If the data looks at under the age of 1, you expect a low rate of vaccinations because the children do not typically receive the vaccine. However, the California Department of Public Healths data looks specifically at ages 2 and up. Between the ages of 2 and 5. So you wouldnt expect to see low mmr rates because by age 2, those children should have received mmr. That said you also mentioned the data bag out of date. That is most certainly true. Google says the data is out of the date as well as the Company Bright horizons that runs the facility for ibm saying that data is incorrect. They are working on updating that. You disclosed that in the article i read. You point out the data could be out of date and, n. We heard from Bright Horizons and they say that at the ibm facility that they manage as a contractor, they have 100 compliance now with immunizations. Right. So your reaction to that . My reaction 1 the California Department of Public Health collects information coming from the facilities. The facilities in turn, get it from parents. If youre a parent you go not doctor frequently with your child for vaccinations but the extent to which you provide vaccinations to the facility varies. The data from the dph comes from last fall october or november, and so you know Bright Horizons says they have a higher vaccination rate than the state of california thats great, great to hear encouraging. Parents to v to ask, bottom line here, measles, a 92 vaccination rate is regarded as the threshold point. Below which there is some danger, correct . Thats right. All right. Thank you very much. Were going to go out and check in thank you, again, checking in with Rick Santelli for breaking news. Well tell you what after having two very solid auctions, the concessions of higher rates to the extent they were the 30 year was a disappointment. I gave the auction a dplus. Maybe i was overly kind. The bid side of the one issue market was 2. 55. This one turned out a yield of 2. 56. Higher yield lower price, not a good dynamic on the pricing of the auction. The lowest bid to cover since may of 14, 2. 26 meaning 2. 26 of investor moneys chasing every dollar of securities available well below 2. 47. Indirects in lines, directs light at 15. 5 versus 18 . Any way you spin it not a good auction, but the supply for the week is done, and now to the digestive process. Back to you. Dplus thats not good as all. If my son got a dplus i say thats absolutely not good. I might use other words. Check out shares of General Motors folks. The stocks trading near 52 week high of 38. 15, and gms been on fire so far in 2015 up 8 as investors aim at the auto maker and the ceo. Phil lebeau has whats going on now. Over to you, phil. Gm is at least looking at the options in terms of how to respond to harry wilson representing four activist funds looking for General Motors to tap into its cash horde. There was a report today out of rioters they have both been retained by General Motors to advise the company how to respond to the request from mr. Wilson, that he joined the board, and General Motors buy back 8 billion in stock. Remember, at the end of the day, this is all about trying to get into General Motors 25 billion in cash with with which mr. Wilson said its silly to have that much of a cash cushion on hand begin the fact you have costs stripped down so you break even in a market of 10 million vehicles being sold. Right now, 17 million vehicles will be sold. Shares of General Motors against tesla in three months. This is, by far, the most interesting chart of the day. People look at gm its done nothing. Well, its done something over the last month and a half, and in particular, over the last couple weeks. Harry wilson when we talked this week he made it clear. If youre General Motors with this conservative of a Balance Sheet and sitting on this much cash, its not a prudent thing to be doing in terms of corporate governance. Thats, at the end of the day, why he wants to be on the board and push them to buy back 8 billion in stock so itll push that stock higher. All right, stay with us phil. Bringing in marcus the profit welcome, marcus with us all afternoon. For a couple hours. Delighted. Great to see you and look forward to another season of the profit you are starting to shoot toad. Today. All right, talk about General Motors. Youre a car guy, own dealerships. What do you think of whats going on at gm . The activist investor critical of what he sees as a too conservative stance on the part of gm . Can you blame him . Hes not run many businesses but he and three other hedge funds own less than 3 of the business. Marys taking the stance shementsshe wants to be conservative with cash 25 billion she wants on the Balance Sheet, 9 billion on cap kpx, and they dont know what the year looks like. Let her run the business, profits are at record highs, shements to deploy capital on safety, new products, the vomit, and harry wilson needs to check the register to see how much he owns. He doesnt own that much. This brought about a debate. Weigh in on what you think about it. It seems as if recently theres a number of companies with female ceos, names like yahoo pepsi, dupont hp, they are the target of activists, and they wonder if its coincidence or female ceos seen as a softer target, what do you think . I hope not. Theyll run into a wall with mary. Its a prudent decision for this business, which, by the way, years ago was closing. Uhhuh. To put cash on the Balance Sheet, ensure they is the right capital for research and development, and if any activist thinks they have a chance theyll wake up quick. Not a soft target at all. When i talked with harry, his relationship with mary he does not view mary as a soft ceo. He does not look at her as an easy target. Be an activist investor. He looks at General Motors and believes, truly believes when you have this much of a cash cushion you are being overly conservative. Now, i understand what marcus is saying. Theres a fair discussion there, ultimately, will be hashed out over the weeks to come but this is not a case of harry wilson looking at mary barra saying shes a soft woman and soft executive. This is case looking at the Balance Sheet and believing that theres a better way of managing that money. But, but, the problem, phil you dont want to make that decision in a vacuum and so, today, to say theres too much cash on the Balance Sheet presuppose he knows what the plans are with the money. Thats the issue that i have. And one of the things he has said, when i talked with him is there are no clear metrics that have been set out in the future in terms of if we hit this we will do this. Hes said General Motors has given vague assurances well, well return more plunmoney in the future. He says thats not good enough. Do more than that. The right basis is the start, whats the right amount to begin with . A developing story, indeed. Thank you very much phil marcus, stay with us and dom, lets bring you in. Moving from the Auto Industry to the hotels talking about share buybacks and returning capital to shareholders. Marriott with a boost, up 2. 5 this after the Company Announces its Quarterly Dividend, regular one of 20 cents a share, and also increases the authorization of the stock repurchase plan by an additional 25 million shares bringing the total authorization to 40 and marriott spent 1. 5 billion to buy back 24 million shares in 20 146789 back to you. Thank you. Cisco systems soaring boosting dividends, an overhaul of the switching business that handles traffic at data centers. American express biggest decliner in the dow, news that the exclusive partnership with costco ends next year and General Electric ge, allows shareholders to nominate board directors, investors owning at least 3 percent of shares for three years to receive the proxy ag access. Market, what do you think of that, ge taking this step . They resisted these shareholder initiatives in the past as Many Companies do. Why shouldnt shareholders be allowed to nominate . Well theres a little more than that, right . The number of shares a person has has to be more than 3 , hold the shares for three years. Big holders, big company. I think the maximum they nominate is 20 of the board seats. Shapiro used to chair the fed, and pushed a share of the fcc, i think its a good thing, but i want to know whats driving it . Do they see they are geding ahead of someone . Being active . Proactive . Boost stockholder confidence . Not a lot of companies do this. Paving the way for more . I just want to understand whats the everyoneimptous of it. Whats driving p p. Thank you very much. No end in sight to the problems plaguing americas biggest ports, and another setback, jane wells is live in san pedro with the latest. Jane . Reporter hi, mandy yeah partial shut down again today. We saw the first truck moving a container for the day, but this is a live picture offshore. At the ports on the west coast, 42 ships are out there, 17 of them cant find anchor space. They are just sailing around. Until somebody makes space for them. Well talk about what the hang up is in negotiations when we come back. Id rather do anything else than sit at a dealership. Its a lot of haggling and it takes so long. Craigs experience is completely different than mine. Yeah. Yes, mike has used truecar. At truecar, well show you how much others paid for the car you want and how much you should. Because i used truecar there was no haggling about the price. They treated me so well, and it was just such a quick, easy experience. Get your car, and get back to the life you love. Welcome to the future of carbuying. Welcome back shares on the rise, among the best performers in the s p, maker of chips reported better sales and forecasts sales better than estimates. Nvidia made the effort to offer products beyond chips for pcs, pushing into mobile devices and chips for cars. Over to you. Thank you. To the big story weve been all over on power lunch, a partial lockout on west coast ports again making a bad situation worse. Jane wells is live in san pedro with the latest with whats going on. Any end in sight here . Reporter no. Mandy, heres whats going on though, today. Todays lincolns birthday and pay today plus the weekend and monday is president s day is higher. As high as 92 an hour for dock workers according to managements. The pma representing management says thanks but no thanks locking all work loading and out of loading ships for the four days though it says work to move cargo off the yard continues, barely, each side accusing the other of causing the congestion. Whats holding up negotiations . They say its not pay. Every time we saw an issue important to the union, they layer on new demands. They want the permission to be able to fire a judge if they dont like the judges decision. We dont think thats workable. Do not listen to pmas [ bleep ] stay united. Reporter the union says they are trying to divide and conquer and is not showing up for negotiations. Weve been sitting here as i give this speech for five days waiting for pma, and they have not shown up yet. Reporter now stuck in the middle are farmers like charlie, and everybody trying to do trade. He cannot get his grape crop to asia. Theyre only good for two to three weeks at port, and theyve been down there for port when they open up the containers we dont know how fresh it will be for the overseas market and its going to be a domino effect. Reporter all right, pma says negotiations resume today and claims they have not met yet this week because they say theres no point while its made concessions it claims the dock workers, quote wont budge. Tyler . Hang on if marcus has a question for you. Its a huge issue, affects varied businesses because so much of imported goods come through the west coast ports. This disputes been going on for a while now. We heard about it for months and months. Those who plan way in advance made alternate plans to savannah port or jacksonville port. A number of retailer have done that. What you see in the water are those who did not plan as well Chinese New Year is february 19th. What concerns me if its not about the wage what is it about . What are the things here . You said 9 it2 an hour and as you reported last week they already pay or offered to pay 100 of medical costs with no deductibles and no copays. Whats the issue . Reporter well theres dispute over how much they make depending on who you talk to and i cannot find hard numbers, but issue on management is the union wants to unilaterally fire arbitrators, and there is a dispute, and management says were going to hold the line and not go there. To marcuss point, retailers have been doing that. Youll see it in the mar gyps because its expensive to do air freight or panama canal, but if youre a california manufacturer or a farmer youre not sending produce to savannah to get to china. This is app export issue just as much if not more an import issue. Thats affecting the local economy out there. Particularly the produce. 40 of all container traffic goes through the l. A. Long beach complex. Jane thank you. Reporter you bet. Valentines day is closer how much closer tomorrow tyler. No its saturday mandy. How much are you going to splurge is it saturday . Whats the date . It is saturday. Im ahead of myself. Oh, my husband was going to be pleased. A prevalentines day and valentines day present. Three mistakes you are making when it comes to love and money. And, yeah getting your facts straight too apparently. Plus, no love here, the former executive pascal speaks out about women who are paid less than men. Thats creating a lot of heat guys. Were back in two. Know that chasing performance can mean lower returns and fewer choices in retirement. Know that proper allocation could help increase returns so you can enjoy that second home sooner. Know the right Financial Planning can help you save for college and retirement. Know where you stand with pnc total insight. A new investing and Banking Experience with personalized guidance and online tools. Visit a branch, call or go online today. Talking about the ten year note and yields continue to rise back at the 2 mark as you see right there, 1. 981, up 10 in the last week. Lets check the bond action on the back of that degraded auction at the top of the show. Rick san tell la at the cme, hi rick. Hi tyler, indeed percentages on low yields are treacherous experimenting with that, but looking at 30 year bonds in particular because it was a spongy auction, a 24hour chart. One issue market that trades only on yields is very similar, 2. 63, 2. 54 thats why the auction likely was sloppy and if you look at year to date chart, tylers right, rates are going up. Settling at 2. 59 2. 75 settle the year 2. 17 for tens important level to Pay Attention to. The other market to Pay Attention to because everything is back to central bankers, the bank of japan saying that anymore stimulus is counter productive. Look at what its done to the dollar versus dollaryen on this chart. Down 118. 5, no more stimulus talk firms up the yen with respect to the dollar. Back to you. Thank you very much rick from bonds to Precious Metals what is gold up to . Prices are getting ready to close here. Currently flat with an upside buy. The better way to put it. 1221 lifting from a five week low hit in trade. Lets look at sill vefr, copper palladium, platinum copper industrial metal, moving up and silver at 1679. Tyler . All right. The hacked sony executive, amy pascal spoke out announcing shes stepping down as cochair there at Sony Pictures for a new production venture with the film studio. Will was she fired . Word from the west coast next. Plus todays power house is the eighth most populous city birthplace of sidney poitier, and world east largest collection of art deco architecture. Can you name that city . Your moms got your back. Your friends have your back. Your dogs definitely got your back. But whos got your back when you need legal help . We do. Were legalzoom, and over the last 10 years, weve helped millions of people protect their families and run their businesses. We have the right people onhand to answer your questions backed by a trusted network of attorneys. So visit us today for legal help you can count on. Legalzoom. Legal help is here. Can can. Hi everybody, this is your cnbc news update this hour. The democrats are headed to philadelphia. They picked the city of brotherly love for their 2016 convention to be held the week of july 25th. The European Central bank is raising pressure on greece hosting a call to discuss just how much longer they will keep greek banks afloat. All of this occurring while greece continues to negotiate with its European Partners on the terms of that countrys bailout. Tim cook scheduled to attend the opening of apples opening of the offices in israel next week. No word on what the company has planned for the new 180,000 square foot facility. And the weather is continuing to plague boston. Freezing temperatures causing another day of commuting woes for area residents who take mass transit to work and after days of sharp criticism over the handling of the weatherrelated travel rs the Transportation Authority chief resigned late yesterday. More snow is expected over the next several days. Coming up on closing bell, shaq here at 4 30 p. M. Eastern time here on cnbc. Thats the cnbc news update. Back to you. Thank you. Lets get the market flash. What are you watching sir . Gnc holdings, mandy. Getting a pop after the earnings, and they reported a beat on both the top and bottom line. The company also says its expecting mid single digit increases in sales in 2015 despite a samestore sales decrease of 3 in the Fourth Quarter. Those shares, as a result, up 13 today. Back to you. Thank you. Okay. Well talking of up look at the overall markets trading higher today, and back on feels like ground hog day. Dow 18,000 watch, again, guys were inching ever closer to the mark, and crude oil is moving higher as the nasdaq boom out of the gate this morning, hitting the highest level since march of 2000. Some on wall street are taking a closer look at the correlation between the stock market and crude oil prices which is typically positive. However, this is when it gets interesting, folks, listen up. When you throw in the Unemployment Rate Rising Oil Prices may not be great for the stock market. To explain, this is jim paulson, chief investment strategist with Wells Capital management who flagged this to us and with us is contributor and friend, Market Intelligence of market marketfy. Com. Why does the jobless rate change this equation jim . Well i think the jobless rate tells you where resources are, excess slack, and if you have a high Unemployment Rate mandy, and the oil price is up, it is nus better Economic Growth theres ample slack to handle growth. Go back to 1980 the one time when theres a negative correlation between oil prices and stock prices is when you fall below fall below 6 unemployment between 5 and 6 and i think the reason for that is because at that point, people start noticing the labor marketss tightening up closer to full employment and better growth might mean we have to raise rates, might mean inflationary fallout. When oil goes up from relatively tight resource markets, sometimes the stock market looks at it as a negative and moves in the opposite direction. Whats interesting is when oil fell, we were still above 6 up employment for the most part. Right. When oil if its bottoming and going up were going to be now in the part of the Unemployment Rate where typically maybe a Rising Oil Price could be bad. Quickly, is your base case scenario, jim, prices continue to rise ie hit bottom we continue to rise and have you become more negative therefore on stocks . Well, i think this is just another challenge for the stock market this year. Mandy, it dove tails in with i think well getting concerned about the fed raising rates, theyll start that process, and well struggle with that. We could go higher on optimism better growth come down later, and i do think oils in the process of bottoming. Its not just oil thats showing a bottom. Its the relative price of oil stocks basic material stocks and its oil based economies like the canadian economy stock market and australian stock market out performing the u. S. Now, and its junk bond yields that are okay. No longer widening a lot of stuff says theres a bottom going on. Okay thank you very much jim paulsen, what do you think, agree or disagree . Depends. Oil may be bottoming out. Hard to tell. It could go down to 20 a barrel if theres over supply and we have an 80 year high of oil, a supply in the United States. Could go lower. I dont know. I disagree with jim. He called the market perfectly for a number of years, but i dont think the fed is compelled to do much listening to larry summers, in that regard were singing from the same himmalymnal. Just an increase saying they are thinking about things but if you look at inflation around the world, whats happening in denmark, right . Absolutely. Sweden as well negative rates, deflation. Thats still the single biggest concern for the global economy, i think, and oil coming off very low levels. Go back to 1986 to 2000 oil traded at 15 a barrel on average, and that was a good period for the Financial Markets over that long hall. I think over the past 25 years, like the average is 40 to 50, not actually where we have become used to it in the 80s and 90s. The 150 stuff was average. That was an aberration. Bring in marcus. What do you think, sir . Guess im trying to get clarity. Talking about Interest Rates or gas prices . At the end of the day, i dont know i understand whats the discussion. I didnt see gas prices make a difference in the market at all in the month of january. I look at the retail numbers, auto sales or retail, i didnt notice a difference, and i think a month ago, sitting here a month ago, we talked about it talk about the fact it was going to create more discretionary dollars for consumers. Not to spend, but pay debts down. We were talking about two things jim brought up oil and Interest Rates. I addressed both. With respect to oil or gasoline prices steve blitz put out a chart today showing extra income went in restaurants. Restaurant sales spike, nominal gasoline sales go down they correlated perfectly. Wait a minute. Ron, on a year over year basis, restaurant numbers went up or december to january . From the departure in oil making that and gasoline prices dropping at 2 here or below. I need to know year over year. If its up a couple points over december, thats a different analysis than last january. To the point, the numbers came out this morning, actually marcus, they were disappointing, speaking to the fact that all those lower gas prices we hoped went into peoples pockets to be spent in the economy were not necessarily reaching the retailers. Well, steve raised another interesting point as well over at itg. In the 35 to 60,000 a year income bracket, youre in addition to spending more money on food thinking about buying more clothing. They were doing and digging down inside the numbers. There is an impact. Its not a magnificent change but the inverse correlation ron, maybe im wrong here, but i thought retail sales included gas prices. They do. Overall, they do. The overall numbersment spend less on gas, retail sales go down. Right. Stands to reason. I filled up today. I told the guy at the pump, i want 40 to fill the tank. Thats what it cost. Now it was 30. I think theres a range of gas prices that are not going to affect the economy much. We know when it gets to be 4 a gallon or 4. 25, theres a discussion. 2 the difference between the two does not create so much discretionary dollars, that the stock market takes off, retail takes off, but what people are doing with the extra money is paying credit cards they had from christmas. Well and so i dont buy off on the restaurant thing. Its not mine. I quoted steve. I dont like that analysis either. Im borrowing. Unless its year over year i dont buy it. Is there a Restaurant Owner out there . Im a Restaurant Owner, i own nine, and my buzz does not look different than last january. Okay. Okay yep, well as for the stock market, i think the stock market is running on something other than just oil. Its important. The geopolitical questions answered are important, and i think the fed is central to the entire equation. They dont do anything on rates. Other than a symbolic move. I doubt that. They are not doing anything in 2015. Sitting on their hands. He thought unemployment was going to get crushed when gas prices go back up. I dont know that i buy that either. Other factors may affect unemployment in the back half of the year. Im not sure that gas going from 50 a barrel oil going from 50 a barrel to 8 is going to change. Got it. Great debate guys. Thank you. Thanks, sir. Takes an army for a great debate. Another controversial topic, thats amy pascal speaking out for the first time about her firey departure from sony. We have that live from l. A. In the first comments from the sony hack pascal saying she was fired leaking out in embarrassing emails in an interview with tina brown. There was a horrible moment where i realized there was absolutely nothing at all i could do about whether id hurt people, whether id betrayed people whether id said things i didnt mean. Even now she doesnt mince words about actors. They are the most vulnerable bottomless pits of need. Bottomless pits of need. Never seen anything like it. You have to wrap it up. They are so great. Because they are this imagine call thing that no one else can be. Pascal addressed the revelation that sony paid certain women less than men. People want to work for less money, ill pay them less money. I dont call them up saying can i give you some more . Thats not what you do when you run a business. The truth is that what women have to do is not worth as much money. They have to walk away. People shouldnt be so grateful for jobs. The fact that pascals finally speaking out is a sign that sony is finally putting this hacking scandal and everything that followed behind it. Mandy . Oh just thank you so much. A quick word from you, marcus what do you think of this . Well, amy should be spending time telling everybody how grateful she is she still has a job. She got a nice deal in the production deal with spiderman. Shes got a job. She should not right now. Thats what she should be grateful for. You think she shouldnt have a job . I do. Thank you very much. Well be back. Stick with us, the worlds most costly case of air rage she went from Vice President to a rage over mac dame ya nuts. Lennar is headquartered here and hosts the busiest cruise ship port. Can you name that city . What makes it an suv is what you can get into it. What makes it an nx is what you can get out of it. Introducing the firstever lexus nx turbo and hybrid. Once you go beyond utility theres no going back. Barbara just bought a bike. She wrote a tweet about it. You cant learn much from that. But take data from millions of tweets combine that with your companys supply chain and sales data. Apply ibm analytics and expertise, and all of a sudden, you can learn which bikes to build what to make them from, where to sell them. Because barbara and the world just told you how to build a better bike. Theres a new way to work and its made with ibm. Zplmplgts welcome back watching Salix Pharmaceuticals now, because valent is set to buy financing to buy salix. Shares are up about 4. 5 and valent up as well. A possible deal in the works according to the reports, and thats why they are up on the bit of news. Back to you. Thank you very much. Power house time. Today, the eighth most popular city. I had no idea it was 8. Miami, florida. Focussing on the south miami area today. With us with the president of realty, and according to zillow the median price now is 246 grand. Properties on the market for an average of 45 days, about six weeks, with an inventory of 6,000 properties to sell. Lets go to the first listing here patricia if you dont mind. Its 12160 12 southwest avenue, annual taxes, four bed, three bath baths, 3,000 feet of living space. Where is the neighborhood . This is in the palmetto pine crest area. We have buyers all over looking to buy in miami from all over the world, and they request mind beach, coral gables and coconut grove. The areas overlooked is palmetto and pine crest. In the 1930s, this area involved around the original tourist attractions, which is now pine crest gardens, one of the most beautiful ive been to. This first house, spacious, four bedrooms, three baths, mediterranean is hot. We have pending offers on this. Woah. This is the area that has Award Winning schools, the palmetto middle and Senior High School and the founder jeff besos went to palmetto senior high. This has open floor plan huge dining huge master suite, his and her closets, french doors, private, full patio. Is that out sort of west of the airport, near the where is it . This is close to dade land the fall shopping center. Its a great area, good schools great shopping, great restaurants, and you get a lot of value for the money. First house marcus is here to join me talking about miami. Second listing, 14,000 southwest 72 avenue. 1. 2 million, 5,000 dollars, modest property taxes there, five beds three baths, tell me quickly about it. I love this european style water front property. You get a lot here. You have vaulted wood beam ceils, brick fireplaces, marble floors priced at 1,199,000, and enjoy the boat from your backyard. That sauna, wine rack there, and this final listing, pine crest, 1. 375 million, tax 16 grand, five beds four baths, over 4,000 square feet of living space. Why is this one so much higher than the last one . This is a brand new listing, prime North Pinecrest location, large property, a secluded street with three other homes, soaring ceilings beautiful floor plan great trees, prime, prime, small sought after pinecrest location where all the miami heat players love the athletes love it for the big properties. This is fabulous, priced at a 1,375,000. Thanks so much. Join us soon again. Im so envious. Its going to be 2 degrees here sunday. Oh down there, its 80. Thank you very much. Youre welcome, thank you. You grew up in that neighborhood. Whats going on in miami . Those houses in the neighborhood ran for 2 00,000 or 300,000 total. What the problem with that neighborhood still and i love that neighborhood, but the problem with it still is you cant walk anywhere. People that want to buy a second home in miami are not going to buy in the palmetto pinecrest area because you have to have a car. You have to drive. Most of the real estate we talked about the supply is six weeks. Most of the Real Estate Today is really international money. Cash buyers and its not happening in the suburbs. Because they are far away. Yeah. They want to be downtown. You got it. In the condos, on the beach wherever. Over to you. Thank you very much. Just sitting here going to wipe up the drool. Would be nice to be there in the nice warm balmy sun. Okay. The stars are big and bright in the deep deep heart of texas. So are the returns. Brian sullivan is live in houston for the second hour of power with his picks of the Star Companies from the lone star state. Back in two minutes time. Do not go away. Welcome back to power lunch, shares of tesoro taking a hit, it missed estimates, but boosted the size of the Quarterly Dividend by 40 to 42. 5 cents a share. They have been beaten down in the overall market a, but up 8 and 66 over 12 months despite todays losses. Back to you. Thank you very much. Google testing a smart phone pay Service Called plaso, the Yahoo Finance question of the day is would you use smart phones for payments . Well, 16 say yes, and 62 say, no, not secure and 21 use cash. I use my android to pay print. From time to time. Do you . Yes, it rolls to a credit card anyway. Thats absolutely right. Absolutely. Okay. If you missed big stories in the last hour go to powerlunch. Cnbc. Com, and valentines day is literally around the corner on saturday folks, and naturally here at cnbc we think about financing, the biggest money mistakes that couples make straight ahead on power lunch. For love and money. Or stop to find a bathroom . Cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. 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And were here to help start yours. All right, welcome back everybody. Im Brian Sullivan live in houston, texas today. Ahead of the next hour we are going to drill down more on the Energy Crunch what 50 oil may really mean to the texas economy. Plus they say that everything is bigger in texas, so i found three stocks with seconds size returns for your portfolio, and outside of that, what went wrong with the other t . Tesla, hitting the skids after reporting a dismal quarter. Digging into that ahead. Melissa lee joining us from the nasdaq as well and mandy and tyler, back to you in cold new jersey, like 60 degrees here. Im never leaving. We dont feel sorry for you, brian. Looking forward to it. Thanks, brian. While most think about love on valentines day, we think about the money here on cnbc. Financial blunders made by couples happen all too often. What do you and your partner need to watch out for . Great to have you with us. Sharon, what are the pitfalls here . Well, a lot of people just dont have conversations about money, and they dont know where they stand or where their partner stands. One of the things that has to happen first is know what you own and know what you owe. Each of you. That is all the way back to Student Loan Debt Credit Card Debt as well as the clauses of the income coming in and decide whether or not youre going to keep all of that money together or keep it in separate accounts. What percentage of couples whether just living together or married do you think have completely separate finances separate Bank Accounts . I know they have private accounts they do not discuss about one and four. Or disclose. Hidden money. Exactly. How do you i think couples are more people americans are more inclined to talk about sex than money. They talk about sex lives freely. Thats why we have the reality shows. How do you get the talk started, jerry . I think you have to get the talk by taking the fear out of it saying if we set goals together and if we make it fun and see a Financial Adviser and force ourselves to meet once a quarter, hold ourselves accountable, and if we reach goals, its fun. Its fun to talk about what you achieve. Is that realistic . I never think of it as being fun. Its business right . Its like a business discussion. It is difficult to figure out, am i going to have this during a date . Where its all romantic i dont want to bring it up. Sitting down, talk to an expert, a Financial Advisers numbers are there, talk about your goal and you come together and get on the same page. I think thats a great goal. We should come back to reality for a minute. You feel this way because its valentines day. Ive been married 18 years, it works. It should. The reality is people come in relationships with baggage. A lot of times they are embarrassed with what they come with. Student loans are one thing, alimony payments another thing, Child Support is another thing. Bad debt bad businesses. We want to be realistic. Set the bar. Be honest to say people are not going to disclose everything that happened in the past. I read a study the other day they need to. People are more inclined now postrecession to talk about their level of debt because people find that if were all in the same boat. Many of us. Or my Credit Rating sucks, yours a great, were a couple lets buy a car. Im pulling you down. If you go in a bar, you meet someone, ask whats your create rating before i date you . We bring different emotions. Once you figure out that you want to say Credit Ratings need to be on your tinder profile. Love exists you know, in a relationship and exists in Business Partnerships. Money is always polarizing breaks relationships, breaks Business Partners breaks friendships. Is the number one breaker of relationships . Or Business Partners. Any of it. Does that happen in Business Partnerships like in romantic partnerships, does it happen because they dont talk about the issues . Honeymoon starts the blame game sets inment i dont tell you to buy that you didnt tell me to do this. You started a business you didnt think about it. Or no boundaries. An example to do well sometimes i advise couples to say 500 is the limit. Buy anything up to 500, after that, discuss together. Stick to that. I tried that. Didnt work in my house. Is there an argument for the yours, mine, and ours accounts . In our world there is. People get married later on in life already have significant earnings behind them. Whats mine is yours and what is yours is yours. Know accountability and responsibility to manage money and save money. Thats not just separate accounts, but separate accounts for savings. To read a statement, pay the bills issue everybody has to know that. Folks, thank you very much. Thank you. Nice to see you. We did not resolve anything, but it was a good conversation. We had a conversation, that was the point. Thank you very much, marcus. Thank you very much. Thats all for the first hour of power, and lets go down south to brian in houston. Hi brian. Hi, thank you very much. I recommend getting little heart candies that say, maybe on them. Maybe . Good luck with that brian. [ laughter ] keep the mystery alive or diamond studded ostrich cowboy boots is another idea. Thank you very much. It is 1 00 here in houston. Its about oil and the stock market as well. We are on dow 18,000 watch. Price of crude oil back above 50 bucks a barrel and why am i in houston . Tell you why. Because texas has been such a huge part of the u. S. Growth story, 23 of job creation for a state thats 8 to 9 of the u. S. Population. Were going to dig in deeper. We got Richard Fisher coming up prepping and reporting for a massive show tomorrow where were not in houston, but well be on the water in the bay in galveston. I dont know what the weather is like there, but it is great here and a great hour i think, no texas jokes because i have to walk amongst the state for the next 48 hours. Its going to snow yet again, brian. Thats the story here in the commodity complex. Nat gas rises with oil. What a day to be in texas, brian. It is. The theme of the show should be as Matthew Mcconaughey says better than any, all right, all right, all right. Well see if it will be that way. Tesla under pressure at this hour after missing analysts estimates for deliveries in the Fourth Quarter. This is a chart of tesla. You are seeing the 200day moving average, the purple line and 50day average. As you see here tesla shares are well below both the 200 and 50day moving average. We have the 50 day crossing below the 200 day, which in technical departments is called the death cross. Not good news for shares of tesla. Key level to watch here is 173 and change the recent 52 week low on the stock, but phil lebeau whats behind the stock . The talk was about a Capital Raise later on in the year and the fact the Conference Call was late. Today is the day that investors are reacting to the news. And melissa, an unusual Conference Call. Thought they were talking about, look, heres the challenges we ran into in the Fourth Quarter. This is why we did not meet delivery goals. This is why we earned 13 cents adjusted or lost 13 cents adjusted when the expectation was for a profit of 31 cents. And then they started talking about their hurdles for the future, but elan musk was surprisingly upbeat. In fact, the hurdles, the situations that they are encountering in the next year to three years, you got china sales which they need to figure out, and elan musk said its not insurmountable insurmountable, that said, its not been figured out, theres a model launch next year, theres rising costs, costs going into additions of the model s, whether its auto pilot new features, or expansion of the factory. Theres also rising costs for Capital Expenditures and heres what elan musk said on the Conference Call about how much the Company Plans to spend in the future. Were going to spend Staggering Amounts of money on cap x. I mean for good reason and with a great roi. You know and its important to not look at the cap x in isolation because, like thats cap x thats been done for a reason in order to capture a substantial future revenue flow. As you look at shares of tesla year to date and they have been under pressure the thing to keep in mind is how much of a return on investment can we expect from tesla . Elon musk threw broad targets out in terms of, look, we expect to be cash flow positive profitable, by any measure by the Fourth Quarter of the year. A number of other metrics thrown out there. Yet, look at the commentary from analysts today, almost all say the same thing, which is wow, this was a little more ambitious than we were expecting from musk and from tesla, and the question is, do you buy into it . Not just over the next quarter or two, but do you buy into it, lets say three years down the road . You know, phil heres the thing. We pointed out its not an official valuation metric, but the Company Valued at more than a Million Dollars per expected car sold market cap at 20 billion. No other car company is within that area, but the bulls say, hey, you cant value this like a car company. This is a Technology Company. I know youre not a stock analyst, phil but should we look at tesla a little bit like a Technology Company as much as just a car company . You know whats interesting . A couple analysts notes says tesla looks more like an auto maker. Its different because of the technology involved, but the moves that its making in terms of Capital Expenditures, in terms of expanding the product line up its looking more like a traditional auto maker, and as a result brian, brian, you got maybe we have to dial back expectations. Look at how much they spend. Staggering amounts of money. This is a company over the past 12 months generated less than 200 million in cash. This companys going to do a Capital Raise and said it was not dilutive but if they are 3 million in convertibles out in the market when thats converted to share, thats eluded to shares as well. Theres a lot of pressure here. Were going to marcus now, its a capital user not creator. Owners dont want to hear it is valued like a car company. Marcus, host of the profit, and lets talk about elon musk. I didnt like saying they are going to spend a Staggering Amount of capital and chuckle and hope for a good roi. Its not a Technology Company. As phil said yes, technology is at the base of the business, but this is an auto manufacturer. What we didnt see in the hurdle analysis that you did a few minutes ago is distribution. Nobody is answering this distribution question. There has not been progress in the states. One of the things were starting to see is the residual values of the teslas as they come back on trade are not holing the same values that i think everybody thought they were going to. If you look at whabs happening in whats happening in the auctions, they are soft giving finance companies reason to pause. Finance companies have reason to pause, youre not getting cars sol. The Auto Industry loves capital. Marcus, stay tuned. Lets get to sue with a news alert. Sue . Concerning the banks stress test, brian. The Federal Reserve saying they are going to release the results of the stress test on march 5th and it will be at 4 30 p. M. Eastern time. So the after market response in shares of the Financial Institutions affected will be very interesting to watch. It is the annual examination of the 30 largest Financial Institutions operating in the United States and its really seen as critical because it is as part of the governments ability to ensure that individual deposits are safe and banks are prepared to withstand the next financial crisis. Its also important for the banks because failure to pass the stress test comes with pretty major consequences including prohibiting stock buy backs and dividend hikes. In addition related results from the comprehensive critical analysis and review or car report will be released on march 1th also at 4 30 p. M. Eastern time. Something to watch for on march 5th and 11th. Back to you. Absolutely. Shares of expedia skyrocket after a deal to buy orbitz simon . One of the smallest agencies struggling against the growing market power rival giants of expedia and priceline spending billions on advertising and new technology. As the saying goes, if you cant beat them, join join them. One of the two industry expedia, agreeing to pay 12 a share in cash for orbitz for 1 1. 6 billion when you include debt. They can add orbitz brand, ebooker and hotel club. They will be much more profitable once the ceo at expedia cuts costs and gives access to the big stockpile of hotel rooms for sale. The ceo of the target orbitz is wellrespected. Over two years, hes managed to reinvigorate or bitz with Better Technology and private brand business, like ammex travel. Without the market of expedia and to bid in realtime he went for a trade sale. People may have tried to write us off in the past but they continue ongoing growth showing through. What remains of travelosity for 280 million, and trivago cost over 6 00 million, and priceline deals are bigger open table for 2. 4 billion andkayak, and expedias ceo rejects the idea that theres a lack of competition, or that the regulators should get involved. Millions of millions of people go directly to american airlines, hilton directly. Google is in the game trip adviser, so we compete in a much larger segment in general, and theres lots of competition for that top audience. In the meantime the ceo of expedia promises all 17 brands will operate with an independence, so youll still get a deal he says even if they are all owned by the same company. Brian, over to you. All right, thank you very much. Interesting stuff there. Meantime, the ceo of Oil Giant Royal Dutch Shell out with surprising comments today. The shells ceo says the Oil Industry Needs to take what he calls a leading role in the fight against climate change. He also says that Oil Companies need to introduce what he calls, quote, realism and practicality into the debate. As a guy that builds companies and advises to make companies better, do you think this is a good strategy by van beurden to say weve not done a good job, we need to do better or will he take heat from critics saying its all talk no action. What matters what he does in his own business right . He can only set the course for what happens in his company. I applaud him for the niche five. I want to see results. I think everyones going to be a little leery of what happens. Brian, you cant beat him, so join them. Already, theres movement afoot to, you know curtail co 2 emissions emissions. Embrace it, work with the people working to get it done because come this summer the epa will have rules on the table. And so essentially you say you think hes going to get ahead of the curve. Its coming why not get free press for it . Exactly. Exactly. Heres the rest of the hour i get paid for this, profiling men and women with jobs everybody wants. Think helicopter skiing and Richard Fisher is the texas Energy Economy starting to falter . Plus, more on comments yesterday calling for a fed overhaul, and a big ipo at the nasdaq part technology, part health care the ceo is coming up after the break. The ticker is inov stock up 7 last i checked. Stay tuned. Female announcer through president s day, get 36 months interestfree financing, and save up to 300 on beautyrest and posturepedic. Even get three years interestfree financing on tempurpedic. Plus, free delivery, set up and removal of your old set. And sleep trains 100day money back guarantee. Keep more president s in your wallet. This special financing offer ends president s day at sleep train. Guaranteed sleep train your ticket to a better nights sleep inovalon making a strong boost here data to Health Care Firms priced 2 2. 2 million shares upwardly revised of 24 dollars. Joining me now with an exclusive is dr. Keith dunleavy. Thank you for joining us. Can you just tell us in laymans term what your company does . Sure. Its entirely focused on how data and analytics can help the Health Care Industry and make the transition from an industry focused on volume and consumption to an industry focused on value and quality. If you leverage data and analytics, you make a dramatic impact on individuals quality, performance, outcomes and so forth in order to make a dramatic impact not only in their lives, but in the Health Care Systems that manage them. Your customers are Health Care Providers . Customers are predominantly health plans, we call payers in the marketplace and provider organizations, integrated Health Care Delivery systems, pharma life sciences, and the consumer urmt ultimately. The Company Founded 15 years ago, and now a cloud company, and 15 years ago, there was no cloud. These days the cloud is a commodity. Everyone has access to the cloud, access to less expensive ways to analyze big data. What makes your product pro proprietary proprietary, and how do you compete where Companies Offering big data sorting services but not necessarily health care . Great question absolutely right. The cloud component itself is an enabler that allows for an approach to analytics thats a much greater scale. So inovalon has a unique mote around it by the fact we take in data from across the United States. Data from approximately 120 million americans, close to about 745,000 physicians about 750,000 clinical facilities. We utilize data that makes up 9 9. 2 billion medical events that makes prognostic analytics smarter, better faster to make the point of care a more impactful point of care for the physician and patient and therefore for the Health Care System that manages them. Are you positioning yourself as a High Growth Company . I ask because a lot of companies out there who position themselves as high growth spend a lot of money to capture the market share. Just looking at the s1 your opx is up 11 2011 to 2013 by 25 roughly. Sure. What can we expect in terms of expenditures . Lets talk impressive financial performances. Over the last five years, weve had a Revenue Growth rate north of 20 compounded annual growth rate operating leverage such that our profitability, our adjusted ebda grew at 34 compounded annually and net income grew at 47 per year on a compounded growth rate. The company in 2014 did over 360 million in revenue, and very profitable at approximately 132 million plus. Okay. So, yes, it goes up to support this. As the growth of the company goes up as far as sales and markets, we spent 2 of revenue to grow the top line at 20 per year. All right, thank you so much for joining us. We appreciate it. Keith dunleavy. Still to come back to houston for texas sized returns for your portfolio, plus im robert gallagher, and im paid for this. What it takes to be a ski pilot next on power lunch. Tdd 18003452550 [ male announcer ] your love for trading never stops tdd 18003452550 even on the go. Tdd 18003452550 open a schwab account, and you could earn tdd 18003452550 300 commissionfree online trades. Tdd 18003452550 so if you get a trade idea schwab can help you take it on. Tdd 18003452550 were getting a lot of questions tdd 18003452550 about organic food stocks. Tdd 18003452550 [ male announcer ] sharpen your instincts tdd 18003452550 with indepth analysis by schwab experts. Tdd 18003452550 and if you want to run your idea tdd 18003452550 by a schwab trading specialist, tdd 18003452550 our expertise is just a tap away. Tdd 18003452550 whats on your mind lisa . Tdd 18003452550 id like to talk about a trade idea. Tdd 18003452550 lets hear it. 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Were focusing on it lablt today, but tomorrow is a giant oil show trickling down the effects of the price of oil decline. Dont miss that. For right now, lets talk about returns because since were in texas, decided to run a stock screener on better texas based companies. Not just houston, but anywhere. Guess what . A single best performing stock in texas year to date southwest airlines, 103 gain, and then you got austin based Free Scale Semiconductor up 68 . Upstream is suffering, but socalled downstream selling oil and gas and Refined Products to you, thats what tesoro does with todays loss still up 67 , hurt on earnings, but third best performed stock this year. Well i feel guilty saying this. Its 60 degrees in houston. Feels doggone good and boston is struggling. Commuters struggling to get to work yet again today. Get this 77 inches of snow more than six feet has now fallen on boston over the past couple weeks. Busses and rails are, indeed running, but most on delayed schedules, Rail Services reopened yesterday after shutting down completely to clear ice and snow off the tracks. Boston, were thinking about you. All right. Boston might be fed up with the snow, but in this weeks installment of i get paid for that . Meet a man who makes a living going where the snow is. Take a look. Im robert gallagher, and im paid to be a ski pilot. It is the best job in the world. It is the best view from any office i can imagine. Our day starts very early, about 6 00 a. M. Doing two hours of paperwork, reviewing weather, risk assessments, snow stability, evaluations, and then we get into safety briefings with the passengers and then get loaded and ski. We ski all day, lunch in the mountains, fantastic every day, and back at 3 30 or 4 00. We go into another meeting, debrief the day, and then we do it all again the next day. We dont fly off an airport. We land at high altitudes in the mountains in whiteout conditions and we average between 80 and 100 landsings a day. Ive had close calls in my career, but good days outweigh the bad. The worst day of the job is probably bringing back somebody that did not make it. Whether responding to a rescue scenario or an avalanche victim. Best day of the job . Bringing the folks that did make it out. Ive pretty much done everything i want to do in a helicopter. My job is to get them home safely at the end of the day. Wow. What a job. Well, flying skiers up the mountain is not all that robert does. His company also does Fire Suppression work in the summer and oil and Gas Exploration as well as tourism. They have been hired for several different movies. Find out which ones at powerlunch. Cnbc. Com. So half the show is in texas today, but Steve Leisman is 250 miles from here, in dallas sitting down with the Dallas Fed Bank president , Richard Fisher that interview is moments away. Plus, the final trades are crossing for yet another wild day in the oil pits. Were going to have the subtle price coming for you when power lunch returns. Stick around. Know that chasing performance can mean lower returns and fewer choices in retirement. Know that proper allocation could help increase returns so you can enjoy that second home sooner. Know the right Financial Planning can help you save for college and retirement. Know where you stand with pnc total insight. A new investing and Banking Experience with personalized guidance and online tools. Visit a branch, call or go online today. Hi everybody, this is your cnbc news update this hour. The white house is cautiously welcoming announcement of the a cease fire agreement in eastern ukraine, but demanded that russia withdrawal troops and military hardware. The russian response . What troops . The war against isis turns into a war of words. House Democratic Leader Nancy Pelosi says it is going to be hard for congress to pass president obamas war powers proposal against the islamic state. John boehnerments to give military commanders quote, the flexibility and authority they need to defeat the islamic state. He thinks the president s proposal is too restrictive. Testing ebola vaccines in humans after subsidizing this year subsiding rather this year a number of new cases in west africa rose for the second week in a row. Harder times ahead, prap, for u. S. Farmers Federal Reserve bank in chicago says Farmland Values dropped 3 in 2014, first annual decline since 1986. Later today on mad money in a cnbc exclusive, jim cramer talks with the ceo at 6 00 p. M. Eastern time here on cnbc and thats the news update this hour. Brian, back to you. Thank you very much. Oil is about to settle at the imex and theres a pop at the end. Crude oil up 5 to 5120 per barrel bouncing above the oil level, a volatile time for crude oil. Well, we wanted to do a texas thing. Im not the only one live from somewhere in texas today. We have our friend Steve Leisman in dallas texas with the fed Bank President , Richard Fisher, steve . Great reporting by you. When we talked about the idea of doing a special in texas on the economy and oil, i thought of only one person who knows the most about the issue, dallas fed president , Richard Fisher. Thank you, steve. Thank you for joining us richard. You had a board meeting, those part of the community, part of the dallas reserve board, you get information about them about the local economy. Give us Fresh Information here on what Economic Impact were seeing in texas. Well first, employment growth last year we just redid the numbers, 3. 4 in texas. Thats stout compared to the rest of the United States. The December Numbers fell off in houston midland, as you expect a pickup in dallas forth worth, and articlelington, which is larger than st. Louis, depends where in the state you will be. The production levels will stay the same and carry on for quite a while because they are more efficient, these rigs but the employment effect will be negative, will have a head wind and estimate at the dallas fed through our own models if this holds for a year or more, well lose about 140,000 employees that we had before jobs and we pick them up as a Consumer Society elsewhere. We have positive job growth. Its not at the same rate. Theres a positive effect also in the production state from Lower Oil Prices as well. Well were like everybody else america, well diversified. Were consumers. If you drive here steve, you see gas at 1. 71 a gallon. Its astonishing, a tax cut for texans. In the United States, theres a discussion about that. A plus depending on which model you use, adds to the gdp, because 70 of america is consumption driven. You have to acknowledge people down here are afraid. They have been through some wrenching declines in oil prices. 1980s in particular. That have terrible recessions here. Is that not the story this time . No. Ill tell you why. We talked about that today, and we studied this enormously at the dallas fed. We had a 63 drop in prices in that 80s period and it happened almost as suddenly. Back then, we had a concentrated banking system, the big banks here failed. They did not have the system they do today. Secondly, the laws that govern commercial real estate federal laws changed significantly, and then thirdly, and i think most importantly, our bankers have memories. You know sometimes you wonder if banks have memories at all, right . Like fish, no memory. The bankers in texas are those who survived and did realmwell they have been conservative in lending. The people who came in late in the game are going to suffer. Private equity groups ccc credit type investments, bonds came down, 18 of the index, so net from the standpoint of what its like versus what it was then, heres the number astonishing. We estimated today everything that we could sum in terms of total state tax revenues that even stem from oil and gas. 9 of the texas state revenues. It was almost 20 in the 1980s. This is a different ball game. Lets move on and talk about youre leaving the fed next month after ten years, or ten plus years. In dog years, seven years. What is the policy outlook . Expect a rate rise this year . Concerned about the downdraft of disinflation not only in the United States, but around the world . Well, take that into account. Now, we at the dallas fed like Everything Else look at things differently. We use a trim mean calculation. Its steady and for the decade ive been in service, best predictor of the next 12 months of inflation. The last nine months is 1. 6 and 1. 7 , different than headline pce or the core. We think that should be the best guidance of where we are. We are below the 2 target. We have price stability in the United States. What do you do with rates then . You know what i would do with rates, would have liked to see us begin to slowly raise rates. I was in favor of an early and slow approach. Right. Theres counter arguments out there in the academic community. Larry summers, for example, saying sure. See the full eyes of unemployment. We run the risk of doing what the feds always done, raise rates too rapidly, and every time we do that every time it happens, reach full employment raise rates, drive the economy in recession. I dont want to see that happen. My best guess is and im not on the Committee Going forward, march 17 th is the last day, going away dinner for me happy to. But heres the point, i believe rates will be raised in 2015. The question is timing and thats decided by other people in the committee. I wanted to start in march, but i lost that argument. Richard, you, yesterday, or two days ago, gave a bold proposal in reforming the fed. Thats right. I hope im not giving away a confidence but before you came on you said it created shock waves i didnt use that word shock waves. But theres political interest in the proposal creating six governors six president s all voting . We have seven governors, yellen the chair, six other governors, have not filled the other seat yet here in the process of doing, but we have 12 Bank President s. Part of the proposal, with all doo respect to the Federal Reserve bank in new york returns deposits and runs the trading desk what the fomc does is instruct the trading derveg what to do. Whats what we do when we meet, how to construct Monetary Policy with the portfolio or short term markets. My proposal was to change something in place since 19 36 which is my good friend bill dudley, whoever the president in new york is, gets to be vice chair of the fomc and always gets a vote. Cleveland votes every two years as well as chicago. This is not 1936 any longer. Its not the 19 60s. Population trends change. Federal reserve district has grown total over a period of 1970 to today by 9 . Our Federal Reserve district 121 of population and San Francisco fed 112 . We need to reflect that. My idea was to take away the steam from this and we can talk about it later, but giving all six president s a vote, six governors a vote, rotate so you have every two years all 12 president s vote, and then make the vice chair every two years would be one of the Federal Reserve Bank President s. Okay. Rather than the new york fed. Read about this online. Thank you for joining us. Richard is going to stay guys to talk about the other controversial issue in washington, which is the issue of auditing the fed. Well bring you what he says about that in the 3 00 hour. Brian, back to you, i guess, in houston. Dallas to houston, buddy. Thank you very much, thank you mr. Fisher. Great interview there. This is marcus and melissa lee. Marcus, starting with you, no disrepublic to Richard Fisher smarter guy than i am but i heard the comments at the top of the interview concerning me saying that jobs may be lost in the oil patch, but made up elsewhere. Im sorry. The jobs in the oil patch pay really solidly, and im not convinced that the Overall Economic benefit of somebody that maybe loses a job in oil, but gains a job in the retail space or elsewhere is going to balance out. Its not. If you look at whats happening in dakotas, oklahoma louisiana, and texas, theres definitely a problem going on. I own ten businesses in the areas. I can tell you that were seeing dramatic difference dramatic difference with the customer traffic and confidence. Its really in the zone where the worker is. Its not in the expensive products. Its not in the inexpensive products. Im concerned hes not going to make that up on the retail side. We got retail numbers today, and they told us they were not good. I dont know if retail in texas is different than every else but unemployment continues to be a problem. Yeah and brian and marcus honing in on the comments about banking in the banking standards in texas. Yes, they have memories and stress tested energy loans portfolio down to 37 a barrel. For arguments sake the bulk of the Loan Portfolio is actually outside of the Energy Sector and then you pair it off with what you saw in the january dallas fed sursurvey the Business Sentiment goes from 13 to negative 6. 4 in a month, Business Owners do not feel good with the sustained drop in oil. And, you know, having been to midland and all where the oil patch in the last two years, guys, i can say this whatever you think about the oil business some politicize it, forget it. This is one of few industries where a High School Diploma makes 125,000 a year at 25 years old and modelling 140,000 job losses tell me where the 25yearold is going to go get another job making 150,000 a year. My concern is not just job losses, but even those who stay employed are going to be facing an have already faced significant pay cuts. Brian, did you notice he mentioned that the amount of output is not going to change. So the production level is not changing. People who get laid off, its in the margins, right . Oil companies are trying to make up what the difference is on the earnings side. Its not on the production side. Right. I dont know if anybody picked up on that. Great point. Let me finally this comment, guys said it in midland, every drilling rig is 400 different Jobs Associated with it directly or indirectly. Keep that in mind. All right. Each one. Moving on. One stock with disappointing earnings that an analyst says buy anyway. Street talk coming up why should facebook account die when you do . Explaining what you can do to remain immortal on the internet. Stay tuned. Your moms got your back. Your friends have your back. Your dogs definitely got your back. But whos got your back when you need legal help . We do. Were legalzoom, and over the last 10 years, weve helped millions of people protect their families and run their businesses. We have the right people onhand to answer your questions backed by a trusted network of attorneys. So visit us today for legal help you can count on. Legalzoom. Legal help is here. Off session highs here apple hitting another record going in for street talk, analystss recommendations on stocks to know about. Cut to 31 bucks on earnings about roofing, exceptions roofing has better margins as expectations fell but those were too high. Im going to keep it in texas, rbc pointed out that 16 of all Housing Starts in the past year took place in texas at this level of oil. Hes predicting a decline in houses here less houses less needs for roofing and housing. Next up dsw shoe warehouse, jeffrey starting with a buy rating in a 43 target called last year uneven but they do see a stronger year this year in part because of improving trends in the womens casual shoe space. I dont know if you noticed, brian, but theres nothing new in the womens category in the last category. Thats why sales stagnated a bit. Next stock, out perform rating disappointing guidance from pac crest, upside potential, buyers on the big pull back here was a big pullback paired with losses here. Yeah, and one of the rare Tech Companies that pays a dividend. Not a lot, but 1. 7 but that factors into i guess, anybody thinking about amat those who cover it is 3 more than it is now. Getting to the consensus price target. Fourth, not fifth for a reason, called hub spot, a massachusetts based cloud based marketing firm. If you catch that. Upgraded to overweight. Earnings beat by a penny. A recent ipo back in october, and its called a tornado of growth. Optimism on that one. Atlas air worldwide beats the quarter, exceeding estimates. Interesting raid, after the open, hit a new high and slumped immediately. Traffic Growth Guidance shy of the most bullish estimates on the street. This company, brian, as you know, one thats seen as a beneficiary of the west coast port shut downs as retailers move to air freight to get goods where they need to go. Dang it. You stole my point. I was going to say it could benefit for the port show down. You got it before i could. It is. Speaking with the ceo of bill flynn of atlas air tonight on fast. A sixer today, i guess, dr. Pepper snapple, its in the news and also a Texas Company based up north near dallas in plano, beat earnings and revenue, guidance low to some but dr. Pepper raised eps outlooks twice in the last year but note average analyst price target is 71. 50 per share. You see the current price that maybe analysts have to change their estimates a bit. Well look at that stock price chart, brian. Its nuts. Two times return over the past 12 months as pepsi. There you have it. Story in a nutshell. Bringing you back a sun drop. I hope so. Thank you very much. Lets switch gears. You might remember this rather perp walk video. A former korean air executive goes insane on a plane. The punishment is in. What it is coming up. Plus, do you recognize this building here in downtown houston . Its got one of the more infamous history in energy lure. Who formally occupied the building when power lunch returns. Ren always wanted me to quit smoking but i resigned myself to the fact that it wasnt going to work. But chantix helped me do it. Along with support, Chantix Varenicline is proven to help people quit smoking. It gave me the power to overcome the urge to smoke. Some people had changes in behavior, thinking or mood hostility, agitation, depressed mood and suicidal thoughts or actions while taking or after stopping chantix. Some people had seizures while taking chantix. If you have any of these stop chantix and call your doctor right away. Tell your doctor about any history of Mental Health problems, which could get worse while taking chantix or history of seizures. Dont take chantix if youve had a serious allergic or skin reaction to it. If you develop these stop chantix and see your doctor right away as some can be lifethreatening. Tell your doctor if you have a history of heart or blood vessel problems or develop new or worse symptoms. Get medical help right away if you have symptoms of a heart attack or stroke. Decrease alcohol use while taking chantix. Use caution when driving or operating machinery. Common side effects include nausea trouble sleeping and unusual dreams. Im a nonsmoker. Ask your doctor if chantix is right for you. I make a lot of purchases for my business. And i get a lot in return with ink plus from chase. Like 60,000 bonus points when i spent 5,000 in the first 3 months after i opened my account. And i earn 5 times the rewards on internet, phone services and at Office Supply stores. With ink plus i can choose how to redeem my points. Travel, gift cards even cash back. And my rewards points wont expire. So you can make owning a business even more rewarding. Ink from chase. So you can. Before the break, we asked you if you happen to recognize this rather infamous building in houstons old anaron headquarters. Yeah, that one, the famous one with the giant rotating e in front of it while we went there, melissa, can you guess who the current occupy of that building is today . Chevron . I cant get anything by you, that is correct. Well actually brian, truth be told, we showed the sign that said chevron, 1400 smith street. We did . Its on the screen right now. I dont have any say. I cannot see the show im literally now i know how guests feel im staring into this little tiny camera. Great job reading the video, melissa. Thanks ryan. All right. Weve got an update on this video. Some of you guys out there might remember. Cho, former Vice President sentenced to one year in prison today for forcing a plane on the runway to return to the gate. All of this because a Flight Attendant served her macadamia nuts in a bag rather than a plate. Which is brians preferred method of eating macadamia nuts as well. Generally just roll them down my nose and on my tongue. Or in a cookie form. Ge the Biggest Company yet to allow Share Holders to nominate shareholders to the companys board. Kind of. Well debate it. Facebooks plans for your page after you leave this planet. Point, counterpoint is coming up on power lunch. Can it make a dentist appointment when my teeth are ready . Can it track my crews performance, and protect their heads . Can it tell the Flight Attendant to please not wake me this time . At cognizant, we see opportunities for every company. To meet the new digital demands of their customers. Can it process my Insurance Claim . Like, right now . Can it download a track while im sampling it . Can my keys find me . With the power of digital, analytics and automation now every little thing can provide even greater value. Ok, so can it tell the doctor how long you have to wear this thing . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . Just another day of debate in ukraine, two lawmakers getting into it on the floor. The video just came into the newsroom. Ironically the fight comes after the announcement of a ceasefire. Melissa. See, thats what we would do with count, counterpoint brian if we were in the same location. Punch, counterpunch. It is time for point, counterpoint. Let us know on twitter. So lets get to it. Sfirs up ge shareholders take control. Shareholders either individual or group of shareholders who own more than 3 of the companys stock now allowed to nominate the companys board of directors. I think it is a great move towards corporate governess. I hope this will set an example for the other companies out there to follow in the same footsteps. I think its a pure victory of shareholders. I applaud ge for the concept. 3 of ges stock. Thats mom and pop arent getting their buddies together in their Investment Group to get 3 of ges stock. You have to have all the biggest hedge funds in the world. Its sort of like eh. Social media these days brian, who knows what you can get together in terms of 3 of stock. Thats true. Anyway. Next up some people think that fax continues to live because theyre more secure. That is a falsie brian, modern day fax machine save the images you scan to fax, and theyre there forever. Faxes are actually very insecure office piece of hardware. Well blame the medical industry. I guess theyre still the primary users of faxers. They have continue to digitize that industry as well. Ill say this not only a fax not died but America Online still has 2. 2 million dialup subscribers. You have to love the noise. That lets you know you have mail. Or the modem. Or the modem. Finally, facebook now lets you choose your social destiny with the legacy contact. Effectively, melissa, when we leave this planet facebook will allow us to designate someone to control our postlife facebook profile. Is it a good move by facebook . I think it is brian, from a business standpoint because it keeps those accounts alive. It keeps those users so to speak alive and beeching up the numbers that facebook can put in front of shareholders. Yeah i would agree were not going to fight on this one. You sort of have that its a nice way, its a nice way to have lasting memories of the people you love who may no longer be with us. Yes brian, and if you ever depart this earth, brian, i will visit your facebook page. You will like that. I would not. Lets go to marcus here marcus would you preserve your online account for eternity . I dont even think people to want go today while im alive. No i would not. I would not. Marcus its been great having you for the past two hours. I want to get your thoughts again on prices we didnt see that, the consumers are spending, will we see it as a benefit to the economy, to the consumer . I dont think were really going to see a benefit as everybody thinks. Heres the concern that i have. I correlate gas prices and the Retail Consumer to Interest Rates and the commercial consumer. And so were spending a lot of time talking about how gas prices will effect the economy, in the back half of the year, if rates move the commercial Consumer Companies who spend cap x dollars on software equipment, thats going to go away as well. The same digs cession their dollars available to the consumer when gas prices go down, the same dollars that are available to the commercial consumer when Interest Rates are low. Be prepared for scary numbers in the back half. So youre a pessimist. I am. Not as it relates to the outlook, but im concerned about cap x dollars. I think about my own businesses whether im businessing in cisco, home depot, whatever im doing, when the Interest Rates go up and i have debt in any of my businesses, theres less dollars for the business to use. And guys ftn titled the money stays in the pocket basically saying that the retail sales data should eliminate the automatic narrative that just before gas prices are lower that people are going po to put that money back into the economy. About 30 is being saved. No doubt it makes a big difference to a lot of families but americans are also used to these wild gas price swings the last six, seven years, i dont know if people believe that these low gas prices are here to stay. Do you believe it . No. Okay. There you go. Youre a consumer. You dont believe it. I am but last night had dinner with oil guys who were saying that once production finally comes offline, demand the global population is rising in a couple years, you can expect oil prices to go back up. It may take guys a couple of years, not months. Marcus if lower gas prices arent helping the consumer what will it take then to help this Consumer Spend the money they have in their pockets . You look across your businesses is it the fact that the stock market is close to record highs at this point . Whats making the consumer feel decent . I think whats making the consumer feel decent is whats happening with their ability to borrow money number one, how loose that credit market is. And number two, how theyre feeling about their home values. So the gas prices move its going to affect people a little bit. But as Interest Rates starts to move you have a lot, variable rates on houses and thats going to bug people as well. Thanks so much for being with us. Tonight on fast money, ill be peeks with dave dewalt up 10 on the back of earnings. 5 00 eastern time and brian, see you tomorrow right . Look forward to that. Tomorrow, it is the big oil special. Were going to trace the oil fallout, banking, real estate consumer were going to dive into the defining economic story so far this year. Closing bell starts right now. And welcome to the closing bell everybody, im kelly evans here at the new york stock exchange. And im bob in for bill griffith. Welcome, great to have you here. Dont look now, the dow is flirting with 18,000 and the s p 500 is only points away from a record close. Im talking three points oil also surging today, now back above 50 a barrel. Lets go back to the s p for a quick second and make sure everybodys aware of this. Were three points away from record highs