Transcripts For CNBC Squawk On The Street 20130117

Higher, up about 70 above 94. 9 0. You can keep an eye on it about squawk on the street. Join us tomorrow. Right howard heres squawk on the street lets do it good thursday morning. Im carl kquintanilla. Jobless claims did come in stronger than expected. Got blowout Housing Starts. Meantime, europe is trying to find some direction after a decent spanish bond offering and good numbers from retailer. The first grounding of a major commercial jet in this country since 1979. Is Boeings Dreamliner safety to fly. How much work will it take to make it right . Bank of america and citis earns are messy, does it justify the runup . And is citis michael core bath finished with the kitchen sink. We will preview those and talk about why ebays numbers fell a bit short. Well begin with boeing. The faa and other aviation regulators have grounded the companys dreamliners as they look to determine what caused the aircrafts battery to catch fire. Theres a look at 73 on the nose, our phil lebeau is at ohare in chicago with the latest on the aircrafts woes. Phil, good morning. Reporter good morning, carl. The significance of this grounding is that the dreamliner is really the plane that boeing has built so much of its hopes for the future around. Well, now those plans are a bit on delays. Only here in the United States action because the fundamental aa covers all of that, but also has been followed by groundings in europe, japan, india. The issue is the lithiumion batteries. One of the things that were hearing is theyre trying to come up with a way of testing the batteries in order to show they will not fail. They have to prove they are safe. The faa says the batteries represent a potential fire hazard. They said in their grounding statement, we will be taking every necessary step to assure or customers this is the boeing chairman saying this we will be taking every necessary step to ensure the customers and traveling public of the 787s safety and to return the airports to service. The last one to fly into the United States was here into chicago. A lot of airlines out of poland. It landed shortly after 8 00. Lot and other airlines are looking at replacing them with other aircraft. For some airlines not a problem, with others it will be an issue. This is really the one to watch. Gsyuasa. Gs yuasa is the firm that makes the lithiumion batteries. Yesterday the company said it may take them months to figure out why there was the Emergency Landing in japan earlier this weeks. If its months before they an answer and a solution, then theres a real problem for boeing ahead. Again, boeing looking for a solution, perhaps testing the batteries. That way showing, yeah, we know this one will not fail. Phil, a quick, polands lot has indicated it would seek compensation. Is there any precedent for boeing to compensation carriers for a grounding . Yes, not just boeing, but airbus. This happens all the time. If you are delayed in receiving your aircraft, you negotiate with the airport maker. Okay, how much is it worth in terms of compensation there. So, yeah, this will happen. It has been happening for some time as theyve gone through these delays. Phil, thank you so much for that. A busy day for you for sure. Meantime, jim, we talked about the stock. Some of the calls are not creeping out for mcinernie to go. The idea that you want to cooperate fully is different from the idea that you relesioned a plane that was ready. I think you dont get a grounding without raising the question was the plaeally ready . A flip side, i dont want to own the stock. Theres so many other plays. Airbus had a press conference that was quite extraordinary how well that company is doing. The longterm case for boeing is the orders worldwide for multiple years are so incredible that boeing simply cant be done without. In other words, you cant walk away from boeing. Someone else will step in the queue. I dont like the credibility issue here, though, because i think its just i thought boeing should have gotten ahead of this. By that you mean grounded it themselves . You know, were going to please dont use our planes, we will come up with i know jeffries has a note of only 10 recompense f although for a company of boeings size, it may looks maul, but it does add up. So if you add that up, 50 planes were sold or delivered. Excused me, delivered. 850 are in the pipeline. So we dont know. Imagine spending 200 million on expanding your business for one of these things, and then being told you cant carry passengers on it. Yeah, this story has a ways to go. I think as an investor, jim, i dont know how you approach it, not even understanding the fixes or how long its going to be or what needs to be done or will be done over the next few days. The s was at 69, 70 not that long ago when we felt the drimliner was doing better. Why shouldnt it be at 69, 70 with the dreamliner doing worse . The stock is too high. Its too high versus the news flow. I agree. Its amazing how well the stock has held up, with all of these strings testify incidences, and now the groundings. Its still above 74 a share, so it gives you a hope there is some floor in the stock. Investors are wig to step in willing to step in still. The airbus people this morning were talking about the notion behind the scenes of listen, our plane is easier to build. So i think the next shoe drop will be some Companies Walking away from boeing, then you have to factor after that that others will come back in. Boeing in the end, i come dawn to there, whether its mcnerny, theyll solve the problem, but its obvious they have outsourced everything. If it was made in redmond, i would say but this company is a parts assembler, unlike dell. This is just a multiworldwide build, and theyre hostage right now to one company and they have to solve that. Theres the intangible of the impact on the consumer. You read these reports about the battery which generates oxygen if theres a fire, so it basically fans itself, so its much more difficult to put out these battery fires on these planes. It took them 40 minutes to put out the fire in boston. Thats a problem if you are in flight, even though there are other mechanisms to make sure the smoke leaves the airplane. The faa got ahead of it, the japanese Plane Company this is wrong, boeing has to get ahead of it, they have to gives a timeline, explain whats going on, and the stock will begin to recover. Until then i think they have fallen well behind the story. Thats unlike them. They should say were a Great Company and we will do everything right. Were not getting that yet. Boeing shares holding 73 right now. In the meantime were also watching shares of citi falling premarket, the bank posting Fourth Quarter operating profits of 69 cents a share. Meantime, bank of america says it send three cents a share in q4. The Common Thread is these are messy, a lot of charges, fannie mae settlements. Its a headache for investors. Whats the take away . Bank of american in the pass thats frankly unfathomable. I remember why it went to 5, 6. Bank of america is a law firm that is its like it looks a lot like a bank because theres tellers, but in the end its a law firm, associates and partners. The International Consumer trends i like, but citi moved a lot. You always want your banks to put on a best face. Anyone who went through the Conference Call actually theres more hue mill to goldman. There was a noeshs things are great. I look at these and its like, well, im trying to understand international. This is a bank in flux, citi, i think its trying to fish out what it is. When it does, the stocks will go higher. I think there was a higher expectations, and that may have impacted the number. As you say, just going through the numbers. Debt valuation adjustment, 485 million, a billion repositioning charge, legal charges of 1. 3 billion, reserve releases, i want only 86 million, opposed to an expectation. It will be tenfold that, so you end up with the number, but well see. David, would you characterize it as a pandit quarter or corbett quarter . I would like to see how corbett would corbat would characterize it. Well still be dealing with dba for a while, though that may finally go away as well. Please dont laugh mr. Satin der actually i am msanitien der. There is a legacy. He may not have been the warm and fuzzy guy, but thats the business they like. You prefer the regionals to the Money Centers . They have credit, actual construction loans, i like at bbt, i think the fixs will go away. I think these companies are actually growing. I know that may not be enough to trigger a lot of buys, but i do think the regional banks since were still awaiting Morgan Stanley results. Its a line items, the fees were up 58 , wealth management, revenues more than doubled. Those are all good news for Morgan Stanley. That has been the unit that has been its kind of risen or fallen with the ability of that unit to either meet or exceed expectations. Or not come anywhere close. Nonetheless, thats where well be focused in part, because then the debate will start about why are you guys carries this thing if its not really carry its load. What i thought was interesting about the goldman call was how little any of the negative mattered. Thats a fantastic business that i didnt think would have that kind of growth. One day bank of american will you look at the jpmorgan release, its filled with record. Was that a record . Better than expected. Youre like a stickler. Two days weve ended on discussing lawyer fees. Ahn someone whos had a law firm on retainer, i can tell you theyre a great bargain, but i dont see it in these numbers. When we come back, some say it could have been even better. Also, will we see the same from intel . A look at the tech sector profit picture when we come right back. Helen ju, well find out whether or not shes still bullish. One more look at futures. Well go over it as well when squawk on the street comes back. At 1 45, the aflac duck was brought in with multiple lacerations to the wing and a fractured beak. Surgery was successful, but he will be in a cast until it is fully healed, possibly several months. So, if the duck isnt able to work, how will he pay for his Living Expenses . Aflac. Like his rent and car payments . Aflac. What about gas and groceries . Aflac. Cell phone . Aflac, but i doubt hell be using his phone for quite a while cause like i said, he has a fractured beak. [ male announcer ] send the aflac duck a getwell card at getwellduck. Com. This was a blowout fabulous quarter on ebay. You can characterize it any way you want, but a line, 220 millions accounts. My kids have paypal. I feel good about it, its unhackable. You dont have money there, either. David, you were talking about someone taking 10 out of your account per month anded switched to paypal. Amazon has fewer accounts than paypal. This thing is jawer naught hidden within a Broader Company as is the fulfillment business. This you interviewed him. I saw done ahow a couple months ago. He may be joining us today. What is he like . Hes turned this company around hes lauded in the valley for doing that. When you this i about the old and i used quotation marks about that how many have been turned around. He has managed to do that. Is he a wizard . The marketplace has become a vibrant site again. Now it may not be hitting perhaps where some of the analysts have, and ive seen various reports raising lowering targets, but at the end of the day, the growth is back. Is he more of a banker than a tech guy . This is a windfall, an amazing development, a stealth visa. He sent some guys off to australia literally, and think about this. Go think. And they did it. Have you ever gone for a twoweek thinking vacation. Ive neff actually had a complete thought. Im working on it. People with help with you that. Why cant our bosses say that . Just go to australia for a while, think about some stuff and come back. Id do it. I felt like he was encouraging that a bit too much. Maybe its time, david. Go to new zealand, take in that hobbit thing. Take in some shopping. Youre shocking, my friend, bloomin onion. A visa would imply that the p. E. Is capable of expanding. Analysts are already saying the valuation is full. You think no . This is now a momentum stock. Once then get into that orb, we know you can start saying, listen, i know i shouldly looking at the market cap, i think they just overshoot and it goes too high. It is not there yet. When we come back, cramer will talk about other stocks worthy of your attention. Later on, former continental ceo gordon bethune, what is he saying about, as the jets mishaps continue to mount. [ male announcer ] alkaseltzer plus presents the cold truth. I have a cold, and i took nyquil, but im still stubbed up. [ male announcer ] truth is, nyquil doesnt unstuff your nose. What . [ male announcer ] it doesnt have a decongestant. No way. [ male announcer ] sorry. Alkaseltzer plus fights your worst cold symptoms plus has a fast acting decongestant to relieve your stuffy nose. [ sighs ] thanks [ male announcer ] youre welcome. Thats the cold truth [ male announcer ] alkaseltzer plus. Oh what a relief it is [ male announcer ] to learn more about the cold truth and save 1 visit alkaseltzer on facebook. Six and a half minutes to the opening bell, but first you have to get through jim and his mad dash. In the face of this call saying its wrong, my charitable trust, i think its a fatuous call. Now hi piles on at 20. I think John Chambers will finish strong. The guy likes juniper. Juniper does have some telco business, but i do not want to own juniper, i want to own cisco. I think frankly this call will be wrong. Juniper is cheap, you know, juniper has had a nice move. I just think that the idea that cisco is doing poorly is just not in sync, and ive been critical of john, but not right now. How about apple . Wow, appearing, okay, listen, were starting to get people coming out of the woodwork saying its going to make the quarter. Goldman says it will be a nice surprise. I want to point this out about apple. I think theres a bit of a Charm Offensive going on. Apple is saying, listen, you may think were like dead, you know, but there is a pulse, maybe were okay. Goldman is uses a number that is so high, the idea you would want to leave apple if youre a value fund is ridiculous. I think the Shareholder Base is in flux, and i know people feel its lost its luster, but geez if they do a williams and nona. This is that valuation nonsense i keep talking about. Williams nona said a 4lulls percent number. I regarded that good given the temper of the time. Goldman said the story has kind of played out. I would say listen, if you have a househod play, anthro making its debut this morning, cvr refiningss first trade in a bit. S ] [ watch ticking ] [ engine revs ] come in. Got the coffee. That was fast. Were outta here. [ engine revs ] nothing. Are you stealing our Daughters School supplies and taking them to work . No, i was just looking for my stapler and my. This thing. I save money by using fedex ground and buy my own supplies. Thats a great idea. Im going to go. We got clients in today. [ male announcer ] save on ground shipping at fedex office. [ indistinct shouting ] [ male announcer ] time and sales data. Splitsecond stats. [ indistinct shouting ] its so close to the options floor. [ indistinct shouting, bell dinging ]. Youll bust your brain box. All on thinkorswim from td ameritrade. The opening bell is set to ring in a little less than 90 seconds. This impairment charge over at rio, but jim, is the tone today all based on how two banks traces . Were so used to the macro being bad and the micro being good. Today the micro frankly is kind of overwhelming. Boeing not being that good. We really thought it would be good things. Only cvs seems to have news that gets the juices going. The shares will be up sharply. You can see it right there. Perhaps more than some had anticipated. I think some who follow it closely, not a huge surprise for those more all the raves these days, whatever youve got. If its this, make it into a reit. Stock reacting very positively. Look we did american tower, the Cell Phone Company concerned into a reit. I like they know more about football than anybody else i know. A look at the s p as the stocks fill in at the big board. Nrg energy celebrating the recent merger with genon energy. And part of the ireland fund. More financials, blackrock beats. Yeah, yeah, well, look, companies are taking in a lot of assets. I think you sue the inflows, people after the uncertainty of the fiscal cliff ending, money is coming back to these funds. I think its a decent story. Ive got to tell you. The negative still among the analysts, bank of new york was downgraded today. You would upgrade bank of new york, not downgrade it. The analysts i think still have to catch up with the valuation stories. Say her out with a downgrade of Goldman Sachs, so similar call there. Were watching the Home Builders. And were seeing Home Builders , across the board trade higher. The etf that tracks Home Builders up by about a percent. And jim, its interesting you hear about all these, a story yesterday that lenar is going into the rental business, just when we thought maybe rents had peaked. Stuart miller knows more than pretty much anybody else i know other than may bob toll. More importantly i want to say that palty homes can repeat as a great performer. Its real. Interestingly just want to point out, the noise, the pinoff from cvr energy in which carl icahn had this is cvr refining set to go bub at the big board, 25 a share, which is right in the middle of the range, 84 owned by cvr energy, which trades under the ticker cvi. Thats why you hear the shouts behind us. Our friend dan dicker saying this is a must buy. Holly frontier has been returning so much to shareholders. These companies are a big beneficiary of the glut of domestic oil versus what we can charge, you know at the pump. The United States oil is so cheap. A couple incongruities today. At yet the dow is positive. You made the point about the macro being positive. We are in a rising tide situation. You know, were supposed to if you listen to anyone on how america is doing, i mean, you really think we must be doing terrible. We have higher payroll tax, a gridlock in washington, but the actual job growth is very out of sync, and it almost says like, listen, we got rid of this, lets start hiring. We may be looking at this debt ceiling, and im going to invoke shakespeare, the bard, that this may be much ado about nothing. Im going there. Right here. Right now . The cliff is dont you love you know, when i first heard, i thought what a great title, i said no, moran, take the shakespeare course first the its going to be claymation death match, maybe ufc, you and i watch that in our spare time not but i dont think its as important as getting through the fiscal cliff. People are hiring again. Dow transports continue to hit sixyear highs. Even as crude is up 95. Its like a market that has transport leadership. Did you see Union Pacific . We had mikes southern on mad money he says pointblank, the hole has bottomed and is starting to go higher. And be good to the shutdowns, the coal plants. Dont forget china has been burning coal, like you wouldnt believe. Much more inventory reduction, because it is so cold. Dont care maybe as much about the air. Apparently not given what weve been hearing out of the beijing. Can you see your feet . Klaus kleinfeld, i like to invoke him. I think something is ringing when you say it. Talks about whether you can see your feet in beijing. Well, yeah. One is michael dell working for thank you. Is michael dell working for himself or shareholders . Right, of course. And this intriguing piece about whether at t will buy something in europe. European or International Forays for some of our domestic carriers have not always got particularly well, they may be softening it up to at least expect something. We know that, the huge deal they wanted, and of course it was set aside by regulators. Well see what they choose to do, but it has been fraught with complexity, those moves overseas. But now were big. And verizon has vodaphone as a partner in wireless here, they need the Balance Sheets to do something great. They can pull it off. No doubt about it. At for dell, we certainly discussed that i think, carl, but its worth always keeping in mind, because again the conflicts that are inherent, regardless of the steps to take, are difficult to navigate when it comes to a founder with a huge stake, who wants to take his company private. Why are people interested in these businesses . Why did hewlettpackard i know you cooled expectations and speculation, why is anyone interested in hewlettpackard . What are we missing . Cvr refining its higher by about 0. 6 . So not bad. Not bad. A market thats relatively flat, so trading pretty much in line with the markets here. Hewlettpackard, listen, well see what occurs there against. You can say the same thing over and over again, so i will. I think the patience of shareholders is key here. Certainly its not going to be five years, but were into it already a year and a half or whatever, but if this el arent getting signs that things are starting to turn, you may see more activity from the shoulders, and then that would go to this argument of could you break it up . Are there buyers for some of the pieces. Things like eds seem to be so intrinsic, not to mention any growth theyre seeing. Certainly not part of her plan. They are not entertaining offers. But is there a core business here . This cvs, says listen, outdoor tiesing not core. Hewlett packards, different divisions, perhaps printers not core. Printers not core for hewlettpackard . When ibm spun off its printer division, people thought thats heresy. It turned out to be a good move. You know, i think youll hear more and more about that argument as weve said many times later in the year. This is the cvs, thats quite a move. They started off great. Content is king. Definitely. Were a content company. You are walking content, perhaps more than any other human being. Sponsored by myself. Bob pisani is there, good morning, bop. Cvr refining, opened at 25 and a quarter. The bottom line is whats attracted people to the mlps or juicy yields. This is like 18 . We saw a compression open. Sun coke will probably these energies own real assets. And thats usually what attracts people to them. Remember, thats the dividend yield story. Lets make sense of the basic of america earnings report. The press release was 38 pages. The real in other words, they read the 10q. Did you read it . I didnt either. Its not even posted, but i did look at last quarters heres the earnings report, the 10 hq last quarter, 265 pages, this is the official earnings report. Hope you all read it next time. I tried to get through parts of it. Let me tell you, its a tough slog. What do you learn when you read this thing . What you learn is theyre really kind of stuck. They cant do that much. Still not an awful lot of economic growth, so theyre down to reducing staff. On page 5 of the press release, bank of america fired 14,601 people last year out of 267,000 employees. Jim, you had it right right at the top. Bank of america is a law firm masquerading as a bank. Ill try to get to more details. What bothers me about the earnings guidance, no direction, no like were very pessimistic. So far on the big banks everyone has declined to say anything. Jamie dimon said he was optimistic. We entered 2013 strong and well positioned for further growth. That will help me evaluate whether i should buy, sell or hold bank of american, this is the earnings divide, where it is. Those who believe that were going to get topline improvement at q2 and those who dont believe it. Thats all you need to know. Thats where the bulls and bears are. This beating on the bottom line, flat on the top isnt going to continue going into 2013. Let me conclude by talking to why its so quiet. Number one, the vix is only one month out. Nobody believes theres going to be resolution on the debt ceiling. Number two, earnings season is not moving the die so far, as i mentioned Economic News has been quiet. Finally, of course, europe has been stabled. 9 good news, folks, individual stocks can move. Did you see new highs yesterday on the bank stocks . Theyre mattering, individual stock picking moves are going to matter. Finally december housing, but multifamily still predominates. More on that later on. Guys, back to you. Thank you, bob. Benjarvus greenellis, one of the big law firms. Heres a couple starts. Each was bakley up at 4 1 2year highs, june of 08. But well call it 4 1 2 years, so these arent bad numbers. If you look at initial jobless claims, all that looked terrific, except for on the claims side, it was a completely different story. They didnt drop down nearly as aggressively. Were up four basis points, but maybe the key continues to be the technicals, a chart starting on december 1st, basically in december we started a wave pattern, 1, 2, 3, 4, were starreding that fifth wave, probably takes us up somewhere close to 2 . Thats what people are looking for. Its interesting. Lets move to the currency side of the equation. If you look at the euro versus the dollars, wow, euro is screaming today. You look at the euro yen, thats screaming as well. The dollar yen is screaming as well. So the dynamic of the yen continuing to be under pressure. Will this be a huge move . Many think, if you talk to some of the japanese officials, theyre say its just getting back to a reality after the end was pretty much decimated about a year ago with respect to too strong relative to the other currencies. No matter how you slice it, all that meats is where we are now and where were going in the future. Thank you well find out the latest movements in energy. Sharon, take it over. Its all about algeria. A lot of traders are paying attention to the ongoing hostage situation at the gas field where islamist militants had attacked that facility and Still Holding some folks hostage there. We have learned from the Algerian News Agency that about 45 hostages, including some americans had escaped the complex, but still bp is confirming that the situation remains unresolved. It tellses it has confirmation that five of its employees are in safety, but 12 still are involved in this ongoing hostage situation. This has helped to take brent crude prices bo of the and were still looking at big gains as well in the wti complex. Some of this is gee on Political Risk premium thats inned marketplace, but also some of the Economic Data that were getting in the u. S. The jobless claims numbers, same with Housing Starts numbers, and then the euro rallying also helping the complex. This comes after action of course, the big supplies drop in crude supplies yesterday, so that also is helping the wti complex get above 925 a barrel, the first time we have seen this in about four months time. Keep your id on that spread as well. David, back to you. Thanks very much, sharon epperson. Did want to talk a bit about herbalife, the company out with news, releasing preliminary Fourth Quarter in 2012 results. The results of that perhaps surprisingly is that the stock is down. You can see it there, over 4 . This ballots ground stock involving some of the biggest personalities in the hedge fund business, just a fascinating story. As for the news, net sales the company says expected to be up, lets call it about 20 . Earnings per share, a buck two to a buck five, that versus from 86 a year ago. Lets call it about 125 . Preliminary results rub expected, net sales up against for 17. 9 overall, and fully diluted eps expected to be 402 to 405 versus 330. That again for the full year. Perhaps one reason the stock is not up is that there had been a hope among some that are long that there would be a significant expansion of the stock buyback or an immediate return of capital shareholders in some way. Remember, this company does generate a lot of free cash flow, and has bought back a good deal of stock, when youre talking about a float of 108 million shares, 26 million shares, my sources tell me short alone about 37 million overall. You can create quite a potential squees. That would be something and mr. Icahn whos believed to hold a position smaller than that, but nonetheless a position, may be banking on. They have already seen a big return. Important to point out with dan lott, that was certainly having booked an enormous profit. He could have been out days ago. He could have been out days ago. Dont know whether thats the case, or maybe hes still if there. The dynamics are so interesting when you talk about the stock itself. Forget about the fundamental argument that is the heart of this. There is also just the stock story. Michael johnson, disney 17 years before he came to herbalife. Remember they brought the company public, it was private. It had got private and was very successful. Hes bought in, 145 million shares six years ago to 113 million. The idea he doesnt announce he buyback today, thats fatuous, the fact is this company has gigantic cash flow, its increasing, it is a mexican south korean, european company, not just the United States. You need a government investigation and injugs to stop him if he wants to go higher. That seems to be the crux of mr. Acmans argument. That eventually it will shut them down. Obviously they can take profits heave, right . But this isnt i have 6 00 that if lobe and icahn want to come in at the same time that the Company Comes in with a buyback underneath action then this is a better long than a short. Its interesting in the conversations weve been having with lawyers, acman has boasted in the past he has more whats the price per lawyer, like a p. E. Kind of thing . I think herbalife, this is a battleground like you wouldnt believe. Will be back to where its higher. Right. I just think that youre misjudging Michael Johnson, if you think hes not going to be there buying back stock. Hes a passionate man. I dont want to misjudge Michael Johns un. Coming up next, the need for speed, ducati and how they plan to rev up performance this year. [ male announcer ] you are a business pro. Executor of efficiency. You can spot an amateur from a mile away. While going shoeless and metalfree in seconds. And you. Rent from national. Because only national ets any car in the aisle. And go. You can even take a fullsize or above, and still pay the midsize price. Now this. Will work. [ male announcer ] just like you, business pro. Just like you. Go national. Go like a pro. Just like you. Ive always kept my eye on her. But with so much health care noise, i didnt always watch out for myself. With unitedhealthcare, i get personalized information and rewards for addressing my health risks. But shes still going to give me a heart attack. Thats health in numbers. Unitedhealthcare. That your mouth is under attack, from food particles and bacteria. Try fixodent. It helps create a food seal defense for a clean mouth and kills bacteria for fresh breath. Fixodent, forget it. Tim geithner celebrating last night. Still on a budget. So no alcohol served, we know that much, but at least hopefully geithner got some cake. What message should have been written on his farewell cake . Tweet us. We have a new handle, weve got your responses throughout the morning. Well share your responses. How about thank you for saves the American Banking some system . Some people like that. I think tim geithner did a fabulous job, wish him very well. In the meantime, a big reason why you should prepare more for the salad. The cold hard facts later in the show, but first. Coming up, not exactly ocd behavior, but certainly something requires and nobody does it like jim cramer. Six stocks in 6 on seconds, when squawk on the street returns. The s. E. C. Issue, give me a break. It looks dont sell it for that. Jeffries leapwire hold or sell . I was talking to david fablers, always breaking stories about this group. I dont think merrill columbia sports . I happen to like their stuff. This was a major inventory problem. Gorilla class turned out to be not what we thought it would be. Asml. This was not a good quarter, and the stock is up. That just tells you how pentup demand and how short people are for ultraviolet lithography. Goldman likes hertz . Yes, i think its been very misplaced. And i guess thats all we have. Like through six. I think theres this hertz is very interesting. The guys all downgraded on valuation. Goldman said, listen, valuation is very inexpensive. Lets go back to asml. I think there could be a developing short squeeze in tech. Autonomy, like hello, what are you buying there . Its like a supplement no, thats herbalife, but i feel there are lots of people who say, you know what . Tech, ive got to get in nonapple tech. Thats what this is about. Asm was a disappointments, came over in the middle of the night, believe my if i wasnt so excited about chip kelly, i wouldnt have seen the number cross. Whats tonight . Tonight were actually tonight were going to talk about the battleground between hedge funds, and were also im not supposed radio el veal exactly which stock. You can keep it quiet. Were going out with the philly fight song hit em high, jim. You bet. Watch our eagles fly. Well see you tonight. In fact, the phil,fed is after a short break and american aairlines new logo unveil when we come back. What are you doing . Nothing. Are you stealing our Daughters School supplies and taking them to work . No, i was just looking for my stapler and my. This thing. I save money by using fedex ground and buy my own supplies. Thats a great idea. Im going to go. We got clients in today. [ male announcer ] save on ground shipping at fedex office. It didnt come out, but to the down side, not the up side. Minus a. 8. The last read was benchmark revised. We had a bunch of benchmark revisions, so we want to pay close attention to the fact that the november number is our comp, but this really is a bit of a reversal. 9 market just gave back a bit. The stocks, the dow is up 63. Now up a whisker, so this number is always appreciated by the marketplace, and one of the few january reads, so always a bit in front. Carl, back to you. After Housing Starts and claims today, we have two out of three, as rick said. The dow still up 40, the s p up more than four. Again thats the highest since december of 2007. The analysis talk up about 11 and change. Back to the big story of the day under the pressure after all the 787s were grounded in the u. S. , ranging from fuel leaks to battery problems, the f. A. A. Saying boeing will have to prove the batteries are safe better flights can continue. Mary skachiavo is with us. Actually they were being very careful. They used a scalpel instead of a meat ax, by making it directed only to the lithiumion battery problems and the system that is it runs, as soon as boeing can get a handle on that, it can present an acceptable fix, they can resume, the faa could have been draconian and simply yanked the certificate for the plane and said were going to wait for the whole review, so boeing has a chance, depending on whats required. From a passenger perspective, mary, these problems sound absolutely frightening, to think of a battery that when it burns and when its on fire actually generates oxygen by which the fire can actually continue and perhaps grow. Thats scary stuff, p ultimate it in perspective to for the flying public. Is this a big safety concern . This is a big safety concern. Many of the other problems this airliner has experienced in its rollout are comparable to other planes. All planes have what boeing called a heating problems, but here the problems have now happened twice. Though fume events could actually, you know, they could kill people. In addition to the fire, which obviously could. So this was very serious. One its nominal, but when it happens twice, its a trend, so they had to act. The biggest question, mary, surely is whether the faa should have been allowed boeing to build these with think batteries, they are known for catches fire, the faa, in allowing them to be certified to use them has laid down specific measures to try to reduce the possibility of fire, but theres a big question at the heart of this ect,e not . Yes, absolutely. The faa last week in their press conference, when they announced basically the nose tail review of the plane even said they admitted they were not confident of their certification work, that the faa had done. I think the faa stands to bear a good measure of this glam, because they should have been on top of it, and because it is a new application, thats where most of their resources should have gone, to look at whats totally new on this plane. The faa has some explaining to do. Your line of logic, therefore, is very dangerous, then for boeing, for the faa and for this project. We should be very clear. The 787 is a more fuelfish, yes, but it also doesnt have the heavy, pneumatic systems. It has this unique electrical system which relying on lithiumion batteries. How far do you go that actually it has potentially a conflict of interest in that it has to both regulate and promote this industry. Thats true. Thats why when last weerk the faa at the press conference said this is a safe carrier and theres no problem with this one, that isnt their role. Their role is to regulate and oversee and really that is something that the f amount a could have done and should have done. There have been other planes with new systems. The 77 had the same bumpy rollout, but there was not a major problem with one component. If they switched it out, youre absolutely right, they may have to reengineer the system, which would add weight. Thats a very critical component for this very efficient, modern, highly desirable plane. Mary, does the bar go higher for fuss planes . Im asking you this, because airbuss ceo in the earnings Conference Call said they were confident that their carbon composite airline e. Which is dependent on the lithiusion technology will make its volley anling midyear. That depends on the fix. The batteries came from a manufacturer in japan, if they can get a battery that doesnt have the fire, the fume leakage and fire potential literally boeing could have its fix in the matter of days or weeks. If its still not ted affect airbus as well. Do you think heads will roll at the faa, mare, . No, i dont think heads will roll at the faa. Do i think they should . Yes, particularly if the large aircraft director in seattle, it was the group at the faa oversaw this, now of course faa has brought in personnel from other parts of the country, but this is their job. They no longer have aviation security. Safety should be their primary focus, and i think because its a new application and a highly desirable application. We said this to work, we the flying public and the industry wants it to work. Its a shame this is the rollout that it now has. Mary, thank you for your time. We appreciate it. Thank you. Before we leave the airline industry, within the last few minutes American Airlines has revealed for the first time. Muchawaited logo. Lets have a look at the new American Airlines logo. Not that dissimilar, perhaps. The interesting question is, if youre unveiling a new logo, what does that mean for the possible merger prospect . It is the first redesign of that plane, i think since the 60s. Wow. Well be getting very near decision time on the u. S. Air amr deal, where 60 would be owned by the creditors of amr. Do you think are you hearing that the deal will go through . I think the expectation, simon, is that its the more likely outcome at this point, yes. Of course, that would have significant reverberations throughout the industry. So let the critics begin picking this new livery apart, which they have already done in some circles. Still ahead, wile the fallout from the fiscal cliff pales in comparison to the economic compare source, b of a and citi under pressure this morning. Well read through the numbers in just a moment. With the spark cash card from capital one, olaf gets great rewards for his Small Business pizza [ garth ] olafs Small Business earns 2 cash back on every purchase, every day helium delivery. Put it on my spark card [ pop ] [ garth ] why settle for less . Great businesses deserve great rewards awesome [ male announcer ] the spark Business Card from capital one. Choose unlimited rewards with 2 cash back or double miles on every purchase, every day whats in your wallet . And only hopes to achieve them. So youll be happy to know that when it comes to your investment goals, Northern Trust uses awardwinning expertise to lead you through an interactive investment process. Adding precision to your portfolio construction by directly matching your assets and your risk preferences against your unique life goals. We call it goals driven investing. Your life has a sense of purpose. Shouldnt your investments . Expertise matters. Find it at Northern Trust. Welcome back. We have an update on the situation in north africa. The workers at the algerian oil companys joint vehement further in amenas. Bp says we have been informed that the Algerian Army is attempting to take control of the site in amenas. We continue to seek updates for the authorities. Sadly there have been some reports of casualties, but we are lacking any confirmed or reliability information. There are reports of hostages escape, but they do not elaborate that. They say as a precautionary measures, theyre bringing home nonessential employees. This is a big deal for bp. Theyve been there since the 1950s. Very involved in the country. Simon, when we have more details, well bring them to you. Michelle, thank you very much. Meanwhile, were at the height of earnings season. Bank of america and Kayla Tausche has the, both of those banks hit by steep legal costs. Citi only released 86 million from this pool. Until had can see how it affects the housing recovery. Releasing 900 million, as well, and that pool includes mortgages. While b of a is not entirely out of the woods, kreismt o Brian Moynihan said the settlement means that earnings should now be clearer, with growth across all businesses and expenses declining 6 in the last year. He says the drop in delinquency rates should shave arch additional 1 billion out of expenses by q3. Other than the, they said citi needs to set more efficiency targets across the bank, and those targets should be clearer in the upcoming months. Both companies noting the overall capital positions better than last year. Back to you. Kayla, thank you so much. Making it relatively easy to understand. For more analysis, lets bring in jeff hart. Good morning, these are a bit impenetrable. How do you read them . Thats the trouble. Theyre Big Companies with a lot of moving parts. At least to me the disappointing things from both Companies Day was they relied on tax benefits more than we expected, and thats kind of lower quality earnings to me. But i think the real key is to look at our core or sustainable things going on, but i think when you look at things like loan growth, things like credit quality, when you look at their net interest relative to their banks peers, i think theres a lot of things, not least of all expenses in banking right now scale matters better than it ever has. Both these guys have scales, but i didnt see much in the underlies trends that concerned me. Are the expense targets at bank of america realistic in your view . I think they are. Its not so much to me a question of whether theyll achieve them, but when. The legacy servicing portfolio roll off, things like that, i think they look at the efficiency targets as a matter of timing to me. On the citi side, everyones looking at these litigation fees, the forecast for litigation fees. Is that a signal that regulatory pressure are going to be more of an albatross than we already thought . I dont think so. Theres been big lit base charges quarter after quarter, it seems. But its not unprecedented in recent times, and hopefully this gets some of it behind us. I dont have the feeling that kind of regulatory pressures are building on the Money Center Banks. I actually feel the environment is still tough, maybe getting more friendlives can i ask you about the rally weve had generally . Its notable that Goldman Sachs has outperformed both the ac and citi with an 18 rise in the stock over the last month. Today, of course, you downgraded Goldman Sachs in the light of that move. Where are you on the sort of Share Price Movement that is we might see in those three and oats moves forward . To see additional up side in a broker dealing, you have to see the economy get better. That could happen. Im hoping it will happened. Im just not sure if this is the time to put new money into Goldman Sachs, if were sure not sure that will play its way out. Its just a matter of, how long does it take for the uncertainty to get out of the way, so companies can get back to making acquisitions. Jeff, do people give you a hard time when you cut the ratings and yet boost the price targets . That gets made fun of a lot. Yeah, we do get some for it. The price target increase, its very form layically driven. What our pick it into our what its done over the last decades, and the price target i dont think 1. 1 times tangible is expensive, but we do get some push back on that for sure. Ill bet you do. We had a discussion earlier about whether the go long money center short liegen center will last other reverse. Do you have a view . I would expect it to last, maybe continue. The pressure is hitting the Bank Industry right now. I think the Money Center Banks have a usneaks advantage to not have as much pressure and expenses. Its tough to be efficient with the rising compliance, and similarly i think the Money Center Banks have unique scale there to outperform. I do think the Money Center Banks will still be winners going forward. Well your weeks not done, not yet, anyway. More to come, jeff, thanks again. A bank with no branches. Well introduce you to a Company Looking to take on the big Financial Firms with the smartphoneonly bank. [ male announcer ] when we built the cadillac ats from the ground up to be the worlds best sport sedan. People noticed. The allnew cadillac ats 2013 north american car of the year. 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Debt ceiling ises much a war of words as it is with numbers. What constitutes a default . And with the economic damage of hitting the ceiling could it be worse than the fiscal cliff . Steve liesman has more on that. Steve. The questions are not easy. They again into sell mandics and have everything to do with if the debt ceiling is solved, and if only for investors, the most important part, whats the Economic Impact . Lets look at some of the rhetoric. The debt ceiling, is it a real tragedy or soap opera . What we have done is graduate the screen from blue over to red, democrat ideas on this side, red on this side. Democrats right now hitting the debt ceiling, not raising it. So some republicans say its manageable. On that issue carl mentioned of default, any missed government employees, that would constitute a default. Others are say no, no, were not paying off the debt itself, thats what default is. On another critical issue, could the government prioritize its payments, take the payments, the cash thats coming in and use it to pay a certain number of things . On this side,ed article mrgs is saying no authority to prioritize, and no ability, and the treasury have different payment systems. Republicans say yes, and in fact theyre working on a bill right now that the government can pay interest on the debt, Social Security and the defense and military salaries. On the issue of how markets will react, the idea theyll demand higher rates, some saying theyll overlook this gritlock. Finally on the economy, as carl mentioned. Alan blinder saying this would be a depression rather than the gop saying otherwise tunnel rather effects. Lets do what we call the debt ceiling game, the home edition. Heres a bunch the things the government has to pay. Interest on the debt. Federal salaries, 19 billion. Youve got to pay your tax refunds. If you were the treasury secretary, how could the possibly match incoming cash, which is about 2 7 billion a month with expenses . We have rigged the game here to work. If you decided to pay all of these things, federal salaries, retirement, interesting that would be your total cash flow, which means you could not fund, come on over here, these things. You wouldnt fund health and human services, not pay tax refunds, close down justice, fema, energy, f. A. A. That is how you match the two things. Finally one last thing here, the difference between the fiscal cliff and debt ceiling. Fiscal cliff we thought would be a 4 hit to gdp, and i dont know, 400, 500 billion. Take a look now at what the debt ceiling would be, if you reached the debt ceiling and reduced Government Spending by that amount, mark sandy, others suggest it should be a 7 hit to gdp. So, simon, a big war of numbers, and big war of words on both sides, as we game out what happens, first with the debt ceiling, then we continue resolution, and also the sequester. Simon . Lets hope they rise above. Thank you very much, Steve Liesman with the fiscal cliff. Its been the trade of many peoples lifetimes, but with the courages sill at multiyear lows. And the meeting next week, will the trade last . Its the money in motion section. Good morning. Good morning. Good to be with you guys. What about this dollar yen trade . Obviously the dollar is substantially higher today, but monday tuesday wednesday, weve reversed the trend, the yen was actually higher. Where do we go from here . I think steves presentation is one of the reasons im cautious on this trade. Were within a whisker of the obvious target. I think that trade level will stall. To me i think the better trade is to take profits and go the short side. I would like to be a seller of dollar yen at 9, if it breaks down to below 89 with a stop at 90, then take half the position off at 88. 50 and go to breakeven. I think the way the currency is trading right now, if it fails at these levels, it had create a triple pop failure. It will create a cascade to the downside. For right now its just too overbought. What are the implications for the other crosses if that does break down . If it breaks down, the yen crosses with it, it will tail the euro yen down. Thats also stalling, and aussie along with it for a bit. Again, i think this is a corrective move thats going to be substantial, and one that traders could profit from if they go to the short side. Boris, thank you for your time. An interesting call there. For more currency trade, be sure to catch more tomorrow at a 30 eastern the if you want more education about currencies. Tonight on the Television Premiere of shadow billionaire after dhl founder vanished during a routine flight over the pacific, several young women claimed he had fathered their children and sued for a piece of his massive fortune. As the ballots heated up, the sordid details of the secret life began to emerge. Our local counsel in the philippines gave us a tour of his manila, the clubs were unbelievable. Theyre or four or five hundred women in them who are classified either as dancers, nude dancers, or guest relations officers, g. R. O. S which i thought was the most formalistic title i had ever heard for a hooker. Do not miss the premiere tonight at 9 00 p. M. Eastern and pacific here. What time was that . 9 00 eastern and pacific. When we come back, Goldman Sachs strategist lays out the best sectors to play and whether or not the saul run so far has further to go. What are you doing . Nothing. Are you stealing our Daughters School supplies and taking them to work . No, i was just looking for my stapler and my. This thing. I save money by using fedex ground and buy my own supplies. Thats a great idea. Im going to go. We got clients in today. [ male announcer ] save on ground shipping at fedex office. Youre looking at natural gas futures climbing a bit toward the 3. 50 level. Were looking at the latest report where it says that natural gas supplies, actually the number of natural gas supplies in the last week, it was down 148 billion cubic feet. Were waiting for the trader to tell me the number, because the board change, looking down 148 billion cubic feet, greater than the expectation, thats why were looking at natural gas futures here. Keep in mind the traders are looking at the weather coming up in the next week. Its expected to be bitter cold later in the month and into the next month a bit warmer, so of course the demand and what that means for natural gas and stores that determines where were headed. Back to you guys. Sharon, thanks so much for that. Some market reaction. Got pretty decent macro data out today, philly fed not as good, but the dow is climbing to 60 points. One of the big piece it is, its grounded ought dreamliners until further notice. Phil lebeau joins us with the latest. Good morning, phil. Good morning, simon. If you take a look at shares of boeing, theyre not off as much as you might expect, in part because many people are hoping theyll find a solution to this airworthyness directive. First, lets talk about this drowning, it effectively what it all evolves around. Thats what prompted the faa to step up and say, you know what . These conditions if not corrected, could result in damage to Critical Systems and structures, those batteries, by made are made by a gs yuasa. Overnight the company in japan said it may take months to find out the call of these failures. It has not been altered. Boying still sticking with the plans. They also have not seen large kanz lace from their customers. The belief or the hope, we should say, among many investors that boeing will come to a solution that keeps it going and gets the current dreamliners back in the air. Coming up with saying we know this battery will work as planned, and if theres a failure, that it will function, the redundancies will work. Were a long ways from a solution being signed off on, but that is the hope of investors. Thats not where you think the industry is now at the moment, clearly. Theyre in airbus planes, a number of other aircraft. Theyve been tested extensively and with other engineers around the world. The question in this case is are the ones being used here functioning properly . What caused the two failures . Thats a way different question than should list upion batteries be used at all. Thank you, phil. You bet. The composite has had a nice run. Many saying the worst may be over for the worlds second largest economy. China is out with Fourth Quarter gdp numbers tonight, and Goldman Sachs is saying there are even more returns to come this year. Helen zhu is a chief strategist for Goldman Sachs. Great to see you in person. What are we expecting overnight. And could we see the sonar wrote where the stronger the number the worth. Well, i do think people are expecting a bit of a rebound. Clearly a lot of the export drag we had seen in the Third Quarter has passed. A lot of the loosening policy measures that the government introduced around the second and Third Quarter are definitely have been an impact. We do think it would be reflected on topdown numbers as well. For the year as a whole, for the Fourth Quarter thats a bit south of, you know, 8 , so much improved versus the 7. 4 we had in the Third Quarter. As for whether that means less stimulus, i dont think theres too much expectations about further stimulus from the market at this point, you know, the economy is clearly back on track. If there are unexpected, you know shakeups from exports and the external environment, then we wouldnt rule it out, but i dont think the market expects more. No bombshell during the Chinese New Year holiday, which is what we have seen in the past . We think its relatively unlikely. The economy is morrow less back on track. We think there would be more proactive fiscal policies to come action but most of those announcements will come likely in march. The new government has made several nods towards urbanization, so weve seen material stocks go higher. Investors like to think of china in the growth sector. Is that where you see some of the best opportunities at this point . We do see a lot of those sectors did run up after the urbanization push and all of the news Media Coverage around it. We see more details on the exact urbanization probably in march or april, but at this point i think theres numerous ways to go. The obvious interpretation is more infrastructure investment, but other than the, premier to be has been very focused on the social safety net issues as well, saying he needs to migrate more people into the urban areas. You need to provide Better Health care and better social housing, so dontunder estimate what we might see. Another longterm issue is basic manufacturing is starting to leave china, that the costs of doing so are rising and other nations are benefiting from the lower cost of labor. Is that incorporated in the gdp numbers . Something that people should Pay Attention to . Well, you know, i do think thats a phenomenon thats already started an will probably continue. I think the policy makers are trying to mitigate the impacts in the short term by doing things like migrating a lot of the Manufacturing Industries from the eastern seaboard over centering and western provinces where wages are probably a bit more competitive, drastically fortifies the infrastructure, to make sure that even as the wages are going up, at least youre getting more efficiency and cheaper transport costs, et cetera, but i think its something we need to look indeed immediate term and say obviously the direction is probably likely only to shift one way, so the government needs to try to make sure that servicesoriented industries continue to prosper. The other things theyre trying to do is introduce more labor from the primary industries into the secretary and tertiary trying thus things like reform, which we think will be an essential part of this blueprint. The regulator said last year we allowed 16 billion of extra foreign money to come into the nation, which was i think the equivalent of what they had over the previous six year, and even said we could go ten times that amount moving forward. Did the stock market move 3 because its actual lie quite an illiquid stock market, and that could mean a huge amount for the market or because theres an exponential, of how much more money could be let in . I think the market is very liquid. So as far as the foreign money is not a large percentage, but in the medium to long term, they could go up ten times. Remember, he didnt set a date on that, but it does give people the few that main foreign buying could move from lets say 1 to 2 all the way up to something more substantial. I interesting thing to note here is in the last few months, as we saw, it was actually the Foreign Investors who got into china earlier, so a lot of the retail guys are thinking, hey, maybe the foreigners know whats going on. If theyre much more kind of active in our local market that may not be a bad things. Hell evan, thanks for coming by. Good to see you. Lets get a market flash. Good morning to you, simon. December Housing Starts jumped for the highest levels in june of 2008. Pulte up, and lennar up. And the biggest gainers in the s p 500 so far to date in 2013. Yeah, its only been a few weeks, but still it counts. If you look at the dow jones u. S. Home consumption, this has already gained more than 71 in a year. Carl . Yep, a lot of people are already aware. The push to get consumers to bank online and with their mobile devices. One Financial Institution is doing away with the physical bank all together. Will Security Fears turn these consumers away . Well find out when the ceo of green dot joins us next. Ive always kept my eye on her. But with so much health care noise, i didnt always watch out for myself. With unitedhealthcare, i get personalized information and rewards for addressing my health risks. But shes still going to give me a heart attack. Thats health in numbers. Unitedhealthcare. I have a cold, and i took nyquil, but im still stubbed up. [ male announcer ] truth is, nyquil doesnt unstuff your nose. What . [ male announcer ] it doesnt have a decongestant. No way. [ male announcer ] sorry. Alkaseltzer plus fights your worst cold symptoms plus has a fast acting decongestant to relieve your stuffy nose. [ sighs ] thanks [ male announcer ] youre welcome. Thats the cold truth [ male announcer ] alkaseltzer plus. Oh what a relief it is [ male announcer ] to learn more about the cold truth and save 1 visit alkaseltzer on facebook. One Financial Firm is doing away with physical branches, its launching a bank for the smartphone application. Joining us is steve street, chairman, president and ceo of green dot, the Parent Company of go bank. Good morning to you. Good morning. Im looking through some of the details of how this works. Insured by the fdic, no overdraft fee, no minimum balance, a pay what you think feels right monthly membership fee. Is that a real Business Model . Can be profitable whether or not anyone pays us that voluntary pay what you want fee, but it sets the right tone. It feels organic, morgue, more respectful for our customer base. If youre in college and were competing with pizza and beer, we may lose that fight and pizza and fear may win out over the bank fee. For a lot of people who we researched, the feeling was if its a Great Service and the bank is respectful, sure ill tick in some money every month. So we think some people will pay, some wont. But its a unique feature. They still bet a base salary, albeit low. They dont model their whole income after getting tips. How do you make money . No, we have other more reliable buckets of revenue. So, sure, the answer is first interchange, the amount the merchant pays when somebody uses a go Bank Debit Card to make a purchase. We get part of that fee, which is called the interchange. We have a massive feefree atm network, but occasionally people will use outofnetwork atms. If they do, we use money on that. How come you have such a big atm network for free, twice the size you say of your competitors. So that the customer is on the find me a free atm, you see them populate in rho front of you and typically one is within a short walk of where you are. Thats how we did it. Whenever youre building brandnew ideas and brandnew virgin technology and code, it takes some time. Weve been working at this for, gosh, a year and a half or better, but we were able to achieve that. Weve making some money with people use outofnetwork atms, we have a custom card. Some privileges of ceos, i get to use my dog as a mascot, but many people in fact like to order the custom card with any photo from facebook. Steve, you have a market cap of 470 million, this is not just an app. It is a bank, and i was really beginning to believe until i was working my way through the notes to the point at which you told our researcher, no system is hackproof. So thats right. If you dont believe your system is totally hackproof, how can i possibly bank with you . Well, respectfully only a fool would say any piece of tech following is hackproof, i dont care if ye pentagon or green dot or chase or bank of america. A security is a and game. You have tremendous security protocol that you follow, you do all kinds of testing, and then you have a lot of customer protection, so if a customer were to lose their money, whether its our bank or any regulated bank, the customer would never lose a penny. We think the app. Is supersecure, were pleased with you will a of that, but nobody in their right mind would say that any technology is hackproof. Its an intriguing proposition. You might work on the banker uniform. Were not used to argyle sweaters, but we appreciate your time. My pleasure. Thank you all very much. Steve. Streit, with go bank. We have the details next on cnbc. Its a new day. If your a man with low testosterone, you should know that axiron is here. The only underarm treatment for low t. Thats right, the one you apply to the underarm. Axiron is not for use in women or anyone younger than 18. Axiron can transfer to others through direct contact. 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Amazon taking aim at apple as amazons store and 22 million song catalog is available to the ipad and iphone touch users for the first time. This is a big change. Up until now iphone users havent been able to buy music from amazon on their devices. Amazon has redesigned their store network with iphone and ipad touch. Now they can buy songs from amazon mp3 songs and that have those songs show up in their amazon cloud player app. Its still not as easy as itunes. Users cant buy songs directly from the app they have to go into the safari browser. Amazon is making this move because apples prevents companies from selling content without giving apple a content. Amazon cant sell books within its cloud music app puts it at a disadvantage. Amazon has been launching work arounds. Amazon has been taking other steps to lure customers like its recent announcement of ama stone rip which gives free digital copies of cds bought from amazon in the past 15 years into the mp3 cloud app. Thanks. Lets get to the cme group. Rick santelli is in chicago with the thursday edition of the santelli exchange. Good morning, carl. Weve all gone to shopping malls and theres always a directory about every hundred yards and i like those are directories. They have a red dot that says you are here. Okay. So you can navigate. Heres where you are. You figure out where you want to go. But rarely do i see a directory that says you were here yesterday. Okay. Because that would make no sense. If you want to know where youre going you really need to know where you are. Why is this important . Because were back to this tax issue with regard to the debt ceiling potentially and revenues and we continually here about things in the past and ill tell you this. Talk to any family thats paying whatever rate they were paying in 2012 and thats the rate that makes their family work. Whatever that tax rate works. It can cover their expense, buy books, scene their kids to school, put food on the table. It doesnt matter where the tax was a generation ago or three years ago because we assimilate, were a productive capitalist society that assimilates. It on lie matters where you are. Love Steve Liesmans presentation. Its about Government Spending. What i find fascinating, what we have here is on one side debt. On the other side we have stimulus but not really. Okay. Boy the board is even getting excited. But debt and stimulus are the same. It just depends on which side of the check youre on. The 1. 2 trillion every year in debt is basically a stimulus. So why is it so shock or why is it that to stop increasing debt that once you do the numbers go down . You know what its like . You remember those old cars in the old days. You had stick shift. Your battery was dead you pushed it to get it going. Say you have to pay your buddies 20 bucks to get a push. If after 50 pushes it doesnt start maybe theres something wrong with the engine. When we contain the debt by not spending it as a stimulus the numbers are going to go down but you cant pay as you go for growth and ignore the debt thats racking up. Its childish. What a horrible argument. Okay. Another issue real quickly is philly fed. Put this graph up. Heres one of the things about you are here. One of the main reasons businesses dont want to hire because they dont want to take risk, they want to keep their cost loss. Guess what that becomes the new normal. Thats why it will be ever tougher to increase employment because they are operating just fine. Check the last price of the Dow Jones Industrial average. Carl, back to you. Rick santelli in chicago. Rick, thanks a lot. Tweet time. Treasury holding a Farewell Party for secretary geithner yesterday. What message should have been written on geithners farewell cake . Try running four. Ning a restaurant is hard, fortunately weve got ink. 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Youll never get any respect. Whats coming up tonight . Were watching intel in the after hours. Their Earnings Call gets under way at 5 00. And were seeing the top right now. We have the short list of the other reconversions in the pipeline. You dont want to miss that. One more day to go before we get to the weekend, long weekend. See you guys later. If youre just joining us heres what you missed earlier on. Welcome to hour three of stre squawk on the street. I dont want this forever. 2 forever. In 2009 three to five years. So 2009 we said three to five years. That means youre already right its 2013. Youre done. Heres what we know, heres what we dont know. Were a Great Company and we wont let our customers down. Were not getting that yet. I look at these and its like wow they stole the city hall, trying to understand international. This bank is in flux. Its trying to figure out what it is and when it does the stock will go higher. Theres the opening bell. Maybe were going to turn out to be looking at this debt ceiling and im going to say it, ill invoke shakespeare, that this cant be much ado about nothing. This is the federal aviation administrations job. They no longer have aviation security. Security should be their primary focus and i think they dropped the ball on this one. Banking right now steel matters more than ever. A tough day. I didnt see anything about the underlying trends that concerns me much for next year. Good thursday morning. Were live here at the new york stock exchange. Markets moving after a week of inactivity. Dow up 56. S p up five. Thats a fresh high from 2007. Nasdaq up 11. Home builders moving into the green after construction on new homes in this country rose to the highest rate in more than four years. Thats the highest level since june of 08. Williams sonoma one of the biggest losers. The stock getting hit with two downgrades today, goldman takes it to a neutral while Raymond James takes to it market perform from strong buy. Road map looks like this. Citi and even bank of america in the red. Is the bank rally finally over . Well get the latest highlights from the Conference Calls, get a citis shareholders take. Boeing gets grounded. Well find out what it means for the future of the company. Former Continental Airline ceo will join us live. Housing tarts hit a four year high. Another sign of a possible come back in the economy. Well find out what the cfo has to say about the state of housing. And they ducati just had the best year ever in the u. S. North america ceo is here to tell us how they did it and how they plan to keep the good times rolling on. Well start with financials. The sector is slightly lower as more banks report results. Citi and b of a out. B and a posted Fourth Quarter earnings of three cents a share. Kayla, good morning. A busy morning. Citigroup kicking off his first Conference Call as ceo and not an easy call. The bank took higher than expected legal charges, 500 million more than analysts priced in. Additionally some 800 million more was expected to released from loan loss reserves. Citi on lie released 76 million. Thats been keeping Bank Earnings afloat. Where their earnings did rise, the cfo pointed to the Investment Bank where like other banks debt under writing surged. Much of that activity of fiscal cliff related. Even with expense reductions, analysts are fng it tough to see how much profit they can post. Core return on equity from both city go up and bank of america far below their peers. Citigroup 2. 5 and bank of america 3 . Thats according to jmp securities. Bank of america saw a rarity this earnings season. They saw net interest margins rise. Net Interest Income fell leading nachlts at Citi Research to call numbers overall soft. B of a settled many issues but theres a long standing fight and an 8. 5 million private label challenged by the s. E. C. Mike mayo pressed specifically on that latter one, the ceo said that should be wrapped up biey r by early q3. Level of difficulty on this scale . Extremely difficult. I think i would point to joe kernen trying to get through the bank of America Release this morning. Hes not sure which revenue number matches what analysts are saying. Theres several numbers in there and a lot of x items. Analysts are tired of one line items. Its becoming harder to predict what these banks will make and what their earnings like. Ill go with 8. 5. I dont know about you. Ill see you later. Kayla tausche at headquarters. All boeing 787 dream liners have been grounded. The faa says all batteries have to show they are safe before they can resume operations. I just got get a sense from you as to whats being said, say in the offices of united today. You spent 200 million on this toy to expand your business and then youre told you cant, cant take it in the sky. Youre a pilot. What does it mean . Its a draconian move. They havent done it in 40 years. They did to it the dc10 and they were wrong about that. Its cause for concern but not ground the entire fleet of airplanes thats out there. They have a million successful flight hours behind it. Its not something that would require this heavy of a measure. Do you believe that carriers, regardless of what happens from this point on, when they make future orders are going more likely to look at an airbus than they would previously . I dont think so, carl. This has got to be put into context. First of all, the battery is designed to be contained. Fire and smoke. So its especially designed for that. Number two, theres six Electrical Generators so doesnt need the battery to operate safely. Boeing builds good products. They have for many, many years and i think this is a good product. It has a bug. They will fix it. But its got to be resolved and its not the end of the world. Lets talk about boeing specifically. They obviously want to ramp up the production schedule from where it is right now. Thats going to be more difficult than it was yesterday, obviously. Do you expect them to tell their suppliers to keep up with that projected schedule, or is this going to all come to a bit of a slow down here . Im not sure they would do that right now, carl. It would be premature. This could be resolved rather quickly. I want seems to be battery defect. I dont know. Be premature not to take the rate because they have a lot of customers banking on those deliveries in outer years. Lets talk about jim mcnerney. This project has been troubled from the start. Yet the stock is awfully close to a 52 week high. We know a bunch of other things theyve done right. Is he at fault . Now that the critics are beginning to come out and demand he be replaced, that the board start taking action is that deserved . Thats way out of line, i suspect. Its not Jim Mcnerneys fault that the battery is failing. They got a good product. Its an innovative product. Its got some bugs. Its a heck of an airplane and make lot of difference to a lot of people. Its got to get resolved but doesnt warrant the ceos removal. Thats absurd. Youre convinced that the battery as all clues indicate will end up being the problem, however you want to define that. How much of a project would it be say to remove lithiumion and put in Something Else thats less likely to cause fires. Carl, that can happen. I doubt it will. I suspect that its a defect in the process of building this battery because theyve been used successfully as was noted earlier on other airplanes and in use today on many airplanes. This particular battery has some kind of defect. They will get to the bottom of it. Theres a lot of smart people working this. You have a million hours behind you. The airplane is safe. Wruft got to get this defect cured. Finally, you know the faa administrator and ray lahood said last week trying to build some confidence in the project. The japanese are saying thing much different. The ground is a reversal in and of itself. We had maria on last hour. She said safety is their first concern. Its their responsibility. None of these guys are pilots that you just mentioned so im not sure that they are put on it as a knowledgeable one. I believe the faa is doing a great job. They will get to the bottom of it. The certification process on this airplane is rigorous and thorough. Took many years to get this plane in the air all with the faas oversight. Its not critical. Its out of proportion today. I know it makes the headlines but this is going to be a safe airplane for a lot of people. If you were rated on that plane right now you would take it up on a test flight today . Absolutely. Actually ive been trying to fly one and havent had a chance to do it. Its a great airplane. Youll loyalist. Before we let you go, i dont know if youve seen the new logo unveiled today first time they made a change. Your thoughts . Well, carl, you know, its within the package not the package itself that matters. I think american needs to change as a company and be mover customer friendly. They are working towards that. The paint job is not whats at risk its how you act. If it were up to aviation geeks we would have you here all hour long but well let you go. Good to see you. Good to see you carl. Some stocks are on the move. If youre long youre feeling chipper today. Kla tencor. They are upbeet about smartphones and tablets. They like what they are seeing. Asml is getting an you upgrade from buy to neutral. Construction on new homes at a four year high. So is the industry the trigger . The latest recession finally bouncing back. The cfo of online real estate will join us. Then Rick Santelli working on something for a little later on. Absolutely. In about ten minutes well have andy. Hes very outspoken. What were going to discuss when the basement of our house is filling up with debt water is it really a good idea or the answer to raise the ceiling . Well talk about that and much more in about ten minutes. [ male announcer ] you dont have to be a golf pro to walk like one. When you walk 10,000 steps a day, its the same as walking a professional golf course. Humana. Health and wellbeing partner of the pga tour. Got some more signs that the Housing Market has regiant its footing. Housing accelerated in december to its fastest pace in four years. One Company Looking to rebound is trulia. Sean aggarwal is the chief financial officer. He joins us this morning. Sean, good morning. A lot of discussion about the starts numbers. No matter what happens with revisions these numbers tend to be a little bit volatile. It adds weight to the argument that house is back something fewer and fewer people are taking wish. Its quite clear the Housing Market is on its way to recovery and also clear that as the Housing Market recovers it will be multiple winners in the space. And we at trulia find ourselves to benefit from this recovery. Give me a couple of metrics that prove that point. Is it advertising from agents . Is it actual consumer utilization . Yeah. Heres what were seeing. Two specific situations where were seeing the benefit of the recovery in the Housing Market. First, a lot of home buyers that were previously on the sidelines are coming back into the market and using trulia to start their research. And this is leading to more home sales which is putting more commissions and dollars to Real Estate Agents and on average Real Estate Agents spend 10 20 of their commissions back on marketing. And those marketing dollars are coming back, right back to trulia. Thats one. Second, as youve seen, Housing Starts are up significantly and as these builders are putting up new communities they are trying to get in front of trulias 25 million transaction users to market those properties and in 2012 every single one of the ten largest Home Builders in the country increased their media spend with trulia. So we find ourselves very well positioned and those are two specific data points that show you well recover. Everybody knows the discussion you have at the Kitchen Table do we buy a new place, do we rent for a while. Does a rub in housing strengthen housing mean rentals have to give up some of the incredible run theyve had over the past couple years . Ill share one data point with you in response to that. We just completed a Consumer Survey that showed that 31 of all current renters intend to buy a house in the next two years. So, i do believe you are going to start to see some trades as the rental market has gone up a lot. And the decision of rent versus buy is going to swing a little bit in favor of buy. And this recent data i shared points to that. Then of course on the other hand you got to have a 30 year fix thats creeping up intelligent leadership here. We know what mortgages have done in the past couple of weeks. Does the Housing Market have a long runway before higher Mortgage Rates puts pressure on sales . Theres going be a variety of puts and calls along the way and i think it will be best to think of this as a multiyear recovery and not get too far ahead out of ourselves in response to any one metric. Generally speaking the broad trends are in our favor. Housing starts are up. Home sales are up. Home prices are up. Delinquencies and foreclosures are down. These trends will move. They will zigzag but the trend is clear they are moving up and to the right. That longer trend is quite clear. Trulia hasnt been public all that long. Is there an argument is the argument to the street that were about more about more than the macro tail winds that we got . Absolutely. Absolutely. So, here is the big picture in the Real Estate Market and the data point for you to consider. Real Estate Agents spend 24 billion a year to market themselves. All that 24 billion, 12 billion is still being spent off line, in newspapers, print, grocery cart signs. Then you ask consumers and they will tell you 89 of all consumers when they think about buying a house they go online. So theres a massive disconnect. That imbalance is starting to correct. So these real estate dollars that are off line are starting to come online at a rapid clip and trulia is smack in the middle of that opportunity. Interesting. Well keep a close eye on you. Thanks for coming in. Come back soon. When we come back, ducati had the best year ever in the u. S. With the changing consumer does the company have to change its strategy as well . Have some bikes outside of the exchange. Well talk with Ducati America when squawk on the street comes back. [ male announcer ] where do you turn for legal matters . At legalzoom, weve created a better place to handle your legal needs. Maybe you have questions about incorporating a business youd like to start. Or questions about protecting your family with a will or living trust. And youd like to find the right attorney to help guide you along, answer any questions and offer advice. With an a rating from the Better Business bureau legalzoom helps you get personalized and affordable legal protection. In most states, a legal plan attorney is available with every personalized document to answer any questions. Get started at legalzoom. Com today. And now youre protected. Nothing. Are you stealing our Daughters School supplies and taking them to work . No, i was just looking for my stapler and my. This thing. I save money by using fedex ground and buy my own supplies. Thats a great idea. Im going to go. We got clients in today. [ male announcer ] save on ground shipping at fedex office. If you think that i dont know about the little tricks you play and never see you when you deliberately welcome back to the street. Shares of disney moving higher. Were at sessions high. Its a dow component. News out of jack pacific another toy maker getting geared up to sell disney branded toys. That will launch sometime in 2014. Shares of disney are up also about 36 in a year. Back to you. As republicans begin their two day retreat traders wonder if gop will challenge the debt level increase. Lets get Rick Santelli thoughts on that. Good morning. Retreat not as in running the other way, of course, retreat as getting away with a group of your colleagues. I like to welcome in andy brenner, first time hes a guest. Very outspoken. Andy, like to read what you have to write and say. When it comes to continuing resolution, sequester, debt ceiling, oh, my, you have some thoughts. Maybe you could run this through how you see this playing out and maybe if were a fly on the wall at this retreat in williamsburg what might we hear from the republicans. Thanks. What were picking up is the republicans are probably going to back away from challenging the actual debt ceiling in that its just not good for them. I mean they are very concerned about the debt to gdp and the budget deficit, which are running at roughly 101 and 8 to 10 . We kind of look like spain looks right now. If anything we might be worse. But what i think happens is the republicans have two shots. March 1st is the sequester where they can challenge or what we think will happen they will wait until the march 27th continuing resolution and they are going to press the president for spending reductions which is absolutely necessary if we want to maintain at least two of our three aaa credit ratings. Andy, i just find it amazing we now have a culture where it doesnt matter what you said a couple of years ago, even when youre the head guy running the country. We all know, raid or heard and today was the notable quotable in the journal when the president was a senator was a different guy when it comes to his interpretation of voting or not voting for the debt ceiling. But i happened in my opinion agree with you on your interpretation of the republicans and the retreat. I think that principle might be a good thing. Centerpiece in how i look at life. When it comes to the chess game of politics principle lose. Lets switch gears a bit. You also do a lot of writing regarding europe in a noticed today that the boon, the safe harbor trade in europe traded at 160. We havent had that for a while. Do you think the funding issues of europe are in the rear view mirror and some of these yields will crop up . Theres no question. The safety play is over our. When Interest Rates globally start going up there will be a lot of there will be a lot of problems because i still think theres a lot of leverage in the system and i think high yield and high grade have moved to unsustainable levels. For right now for the next three to six months youll start seeing higher rates in germany. Youll see higher rates across the board. Its hard to believe the fed is at crisis rates. When i dont see a crisis anywhere in the world. Thats the problem with the feds programs and all these government issues, they become subsidies, priced in the market. They almost have to maintain crisis programs. Take the training wheels off maybe the public gets bruised and of course we cant have that. Andy, thanks for being a guest today. Carl, back to you. Citi is in the red after reporting results. Well hear from a shareholder that says the bank needs to be broken up. Well get the bells across europe. Well find out if our rally at stateside continues once they close. 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Their stock is up 10 on that news from the west coast of the United States. Carrefour is the second largest retailer. It too has begun to win back some price sensitive customers. Its doing well today. Associated British Foods actually owns a discount fashion retailer in the uk. Its sales are up 25 and you see that reflected in a 4 gain on the Parent Company today. That major theme coming through. We should mark the fact that finally the ceo of rio tinto has been kicked out of his position in the wake of that disastrous 2007 at the top of the market purchase of 38 billion. Hes going as they take another write down this time 14 billion. The stock is not moving particularly today but you can see how badly it has fared since that acquisition and the month mozambique big purchase of coal as well so that stock very much in the doldrums. One last theme to come out of europe, the spanish and italians dont bring paper to the market early to take advantage of the fact that the bond market is so buoyant because the ecb has intervened to support it. It now takes them to 9 of their total requirement for 2013 after of course yesterday the italians bought paper. They are now at 10 of their requirement for 2013. Carl, back to you. Thanks. Lets get a check on energy and commodities. Nice move in natural gas as well after that inventory report. You know the decline that we saw in storage level was bigger than the five year average, bigger than we saw last year, a bit of a surprise to some traders and we are is going to have some bitter cold temperatures coming next week as well so all of that is helping to lift natural gas futures a bit. Were looking at momentum in the u. S. , crude oil price as well. Industrial commodities overall, copper as well as wti futures and that is coming after some positive data here on the economic front of the u with the jobless claims data coming in at a five year low, Housing Starts rising that was something that helped those industrial commodities. Were continuing to watch gold consolidate around 1685 an ounce. Were watching a lot of momentum in silver etf and thats something well continue to follow. Bring you more on that at 1 30. Lets bring in bob pisani where the volume is disguising how were moving. We dont talk about volume. Im not sure what it means any more. With apologies to the technicians. The desks are quiet. Our desk is quiet. What the heck . Come on. Folks, you can make a lot of money in a quiet take. Can i point out where were at. Were breaking out all over the place. Were at another five year high on the s p. Historic highs on the s p midcap. You can make a lot of money in that index. Russell 2000, a lot of money in that. And dow transports are at historic high. I get the low volume and slow desk activity but if youre in the market, youre going to be making money right now. How about the earnings situation because thats what im focused on. I know its early. 55 companies have reported. We on lie have 20 . That never prevented me from making observations on whats going. Theres two trends. Q4 reports are not strong or weak enough to give strong direction to the market overjalg. Were drifting up here. 2013, thats what i care about right now. Companies have been reluctant to say anything feign think i mean anything take a look what the banks said. These are the big guys. They would know whats going on in 2013. Ceo of wells fargo, were very well positioned for 2013. Thanks very much. Ceo of Jpmorgan Jamie dimon is optimistic. Mr. Moynihan, we enter 2013 strong and well positioned. Best wishes for 2013 sincerely Brian Moynihan. I can do better than this. Let me show you what i think is going on and what will matter for 2013. Heres the problem. What side of the Revenue Growth picture are you on that determines whether youre bullish or bearish. So First Quarter revenues up 2. 9 . Second quarter revenues up 1. 2 . Earnings are growing here and they are growing in q2 but no top line growth still. They are going to change these numbers into Third Quarter youll see bulls will come out raising estimates on top line growth. December home sales, December Numbers here overall for the builders, pretty good numbers here on the upside many of them at new highs but those numbers starts multifamily. A lot of those multifamily. Incredible numbers. Thanks. Get a check on shares of citi. The Bank Reporting Fourth Quarter earnings that missed estimates whether you include or take out the charges both on top and bottom line. The ceo owns about 300,000 shares of citi and you might know the firm has been calling for citi to be broken up. Welcome back. Thank you. Your argument has been they are too complicated and hard to argue with you when you look at this mornings results. Too complicated and as weve said, we cofiled with a shareholder proposal asking for the board to look at the potential ways in which we can unlock shareholder value by potentially restructuring this business. We think the company is, as weve said, not just too big to fail but too big to manage. Theres too much complexity in its Current Business and they need to look at how to restructure. You also say, though, that one of their attributes, one thing that makes city attractive is the international footprint. How do you stay international, stay global and simplify in we think they can do it along product lines and geography. Thats one reason why we own the stock and they have a lot of good businesses within this structure including credit card business but as we look at it we think theres a better way to manage it to realize greater value for the shareholders and take way that risk to the financial system. I wonder how much room youre willing to give him to run to demonstrate that this is a new era at citi if thats in fact what is it. Sure. Obviously, we were pleased to see the change. Were happy to see Michael Corbat at the helm. Hes demonstrated some competency. We think it does need to be stepped up in terms of looking at a restructuring. I think what they really need to do is look at the reality postdoddfrank, post all the issues over the years and say is our Restructuring Plan of 2009 really address all of the Current Issues or should we be looking at new options and what were saying is please look at new openings, please do a little bit more thorough review of where we are now and that is going to involve, i think, a much different plan than what was developed in the middle of the financial crisis. Has he given you any reason to think hell do more on that front . Weve had conversations with the company in which they sort of gave us that they think they are executing to a plan they developed. Again we think that plan is outdate sod were saying this needs to go back to the board with Senior Management being instructed to look at new plans of action to try to unlock value with all that we know now. They came up with their plan of restructuring before think about it. It was in the middle of 2009 it was a different world. It was just after they had accepted the t. A. R. P. Money and they came up with a plan that addressed really what they were required to do fix their Balance Sheet under t. A. R. P. Theres a lot more that can be unlocked when they talk about focusing on shareholder value. What if they were given the green light to return some capital to shareholder in a way they have not yet. Would that quiet your criticisms. I dont want to say can you be bought. Can your proposals be made to go away . Yeah. What were asking them to do is to consider other options. So were not if they came back and said okay weve agreed, the board will take it up and well look at other options, including potential spinoffs and including other potential restructuring options we would be very pleased. You know, certainly being able to pay a dividend would being a great. I mean we look at every one of our holding, we look at the environmental, social governance profile and try network to help improve the companys profile on all those factors and thats really what were trying to do at citigroup. Were saying you have a great business. Theres a lot of your aspects we like. Thats why we bought the stock for our clients. But there is room for improvement that we think will improve particularly the potential impacts that could have on a company of this size having another crisis and that we need to take action now to make the Business Model simpler and thats what were asking. Our. Thats something a lot of people could get behind for that very reason. That was so much for your time. Thank you. Ducati power is taking over the nyse. This is a shot of whats going on outside of the exchange. The luxury automaker racking up some says. Well talk to the ceo of Ducati America. And why your new years diet could get more expensive as if dieting wasnt hard enough. 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What if you didnt know that boxes by the curb. Make you a target for thieves . Or that dog bites account for a third of all home liability claims . What if you didnt know that one in seven drivers is uninsured . And that grease fires have to be smothered . The more you know, the better you can plan for whats ahead. Get smarter about your insurance. We are farmers bum pa dum, bum bum bum bum take a ride on the wild side wild side welcome back. Coming up on halftime a big and some say controversial call on stocks. Is the rally on banks running out of steam or taking a breather. Is intel starting to show signs of life . One stock two traders, one big debate is just ahead. Well send it to carl outside of the exchange with a little ducati action. Ducati had a record year last year. The Motorcycle Company reported an all time sales record, 21 yearoveryear growth and of course was acquired by audi about eight months ago. Joining us first, the ceo of ducati north america. Good morning to you. Welcome. First show me the bikes. Thats what we want to see. What are we looking at here in this is a bike that is phenomenal. Its four bikes in one. Four bikes in one. You sit on the bike and you choose which riding mode you prefer. You feel sporty, you put sport and zip through town. Feel like touring, long term touring. List price . 22,000. Well look at some of the others in a second. Why was 2012 a good year in the snus first our product. We invested in the last few years. Every year we come up with new Technology Products and its appreciated especially in times where the market is not doing so well. Audi acquired ducati eight months ago. Some people laughed. They didnt think it was a good move. Is this just desserts. Cant comment what people say. But its been good. How does 2013 look . How is it shaping up given that we still have long debates about how much our consumer is willing to spend on things that are truly discretionary items, right . They are. You know, we dont sell commodities. Clearly you dont have to buy a motorcycle. You dont have to buy a ducati but you choose to do so because we create a fantastic product. I was talking with my friends and colleagues. This year between mobile varyations were launching 5 new motorcycles in the market. Thats why we expect growth to continue strong for us in north america. Walk me through some of these other bikes. This is a lower price point. This is an 18,000 bike. Its called a diavo. Its fun. More than anything else. Comfortable. Easy to ride. Extremely agile. And this is a bike that anyone can ride. Over here . This is our flagship. This is our 1199 r. Its the pinnacle of our production. Its a 30,000 motorcycle. Its a racing inspired bike. This bike is the fastest thing you can ride. Interesting. On the racetrack and in the streets if you are inlined to do so. Weve seen on the auto sector some manufacturers like bmw tart to bring their list price down trying to compete with the ford, nissan here in the states. Your into that or do you still apartment courtroom who is looking to play at the high end . What we try to do, we try to fulfill our mission which is bring the passion for what we do in motorcycles. That means we make better motorcycles, higher technology, more doesnt. Then we try to make a price that is right. We dont see the trend, we do our own thing and it seems to be working so far. Looks great outside the exchange. In a Perfect World we would have you get on right now and ride away. Thank you for your time. Just in case none of your leagues told you were having a bit of a cold snap on the west coast, so cold that the states fruit and vegetable crops could be frozen. Jane wells tracking that story at an artichoke farm in the golden state. Jane . Theyve called this a frost kissed artichoke. Sort of warming up california coming out of their arctic freeze. Farmers are assessing the damage. What youll pay more for after the break. Weve talked about higher prices for beef and anything made with corn. Have you looked at the prices of eventual tables lately . Our jane wells has been following this story and says it could get ugly in the produce ails. Shes at an artichoke farm in california. Narrearly all the artichokes come from this area. The price increases are just beginning. What were learning most of the news you probably heard involves california Citrus Industry where theres a billion dollars worth of fruit the trees and farmers spent 17 million to protect it. The fruit looks okay. The real story is vegetables. Most of what goes into your salad comes from Southern California and arizona and prices are going through the roof already because of the freeze. The usda says romaine lettuce prices are three times higher than they were this time last year to as much as 32 a carton. Thats compared to 11. 50. Broccoli has tripled. Red cabbage is up 175 and spinach up 150 . It comes in like this from the freeze. She runs a chain of restaurants in california. Her chopped is a salad our top selling item and since her menus are printed she cant raise those prices. For example you wont see a any asparagus for her prima vera. We anticipated spinach. This is a baby spinach. So the baby spinach, the growers cut the whole crop this time as baby spinach. We have that. They have having an issue growing to it full term which is that clean and washed bag spinach that you see in the grocery stores. Chiquita package cost should move higher but should pass along the cost on the Food Services sides meaning restaurants but have to eat some of those costs on the retail side. And why farmers in this part of the business say a freeze can be good for profits. They dont get crop insurance. Had they have a cold snap and short supply they jack up the prices. Fascinating. Interesting you say it one day we see it in the produce aisle the next day. Jane wells in california. Lets get a market flash Courtney Regan is back in headquarters. New skin. A company that makes these antiageing products. You can see here shares are up 10 . The company will top wall street expectations when it reports its earnings on february 6th. Shares up 10 . Keep those tweets coming. Treasury secretary celebrated his farewell barb. It was not a wild affair. They didnt serve alcohol. Apparently no alcohol was served. Lets hope he at least got some cake. Speaking of which we want to know what should have been written on his farewell cake. Tweept us. We got your answers coming up next. Come within the kitchen. Help in a first of its Kind Partnership with walmart, humana medicare plans now include 5 savings on great for you healthier foods at walmart its part of the vitality healthyfood program. And one more way humana medicare can help you choose whats good for your health and your wallet. So you can spend a little less money. And spend a little more time sharing what you know with the people who matter most. Humana. You name it. Ive hooked it. But theres one. One thats always eluded me. Thought i had it in the blizzard of 93. Ha never even came close. Sometimes, i actually think its mocking me. [ engine revs ] what . Quattro Quattro we asked total strangers to watch it for us. Thank you so much. I appreciate it. Ill be right back. They didnt take a dime. How much in fees does your bank take to watch your money . If your bank takes more money than a stranger, you need an ally. Ally bank. Your money needs an ally. Nothing. Are you stealing our Daughters School supplies and taking them to work . No, i was just looking for my stapler and my. This thing. I save money by using fedex ground and buy my own supplies. Thats a great idea. Im going to go. We got clients in today. [ male announcer ] save on ground shipping at fedex office. Time for squawk on the tweet. The treasury secretary celebrated his farewell bash last night but no alcohol was served. We hope he got a cake. What message should have been written. Show me the money. Hot under the collar, sweat on the brow and cool under fire. And wall street fireman. From the Treasury Department to actual treasuries, got a final thought from Rick Santelli on that. I know what i would write on the cake. Forever indebted. Listen, when it comes to the markets hopefully were showing a three month chart of tens. The right side of the chart has a pattern that looks like its the fifth wave of a five weave pattern. That means audiotape round 2 should be coming but might be a great place for resistance. Boom yields popped 160. Theres a feeling that things are getting more calm in europe. Just dont look at the economic outlook. Given the data we saw today, philly fed aside, housie ing sts good. Do you think those numbers will alter the outlook for the fed