Wall street, but all of a sudden we had the worst selloff in three months. We are going to take a look at what drove stocks down and by the way, i happen to like this minor correction. I happen to think people should stay the course for long run wealth creation. All those stories, much more, coming up on the kudlow report beginning right now. Good evening, everyone. Im larry kudlow. This is the kudlow report. Were live at 7 00 p. M. Eastern, 4 00 p. M. Pacific. Lets get right down to the floor of the New York Stock Exchange for more on todays big 179 point dow drop. Bob pisani joins us with the news. Good evening, robert. Stocks started mixed but moved lower midday and closed essentially on the lows for the day, larry. Goldman sachs issued a report saying valuations were lofty by almost any measure. Then midday, atlanta fed president Dennis Lockhart said he would continue to support the feds tapering program. Although lockhart reiterated his support depended on the economy improving, traders interpreted this to mean theres a lot of momentum to continue tapering at about 10 billion a month despite the weakness in the jobs report. Another issue for the market is the strength in bonds. Many are speculating that Pension Funds have taken profits on their big stock gains in 2013, and are now using that money to buy longer dated bonds which offer more attractive yields that are a bit closer to matching their obligations. Despite the issues, larry, there is little sense of panic in the markets. The volatility index dropped befo below 12 today, the lowest level since august, although it did go up late in the day. Volume was a bit above average. Back to you. Many thanks. Appreciate the rundown. Well get to the stock market later in the show. The number of americans living below the poverty line has hit a record high during the Obama Presidency and shockingly, according to a new report, one in three women are now either living in poverty or teetering on the brink. Thats 42 million women, plus 28 million children who depend on them. But just why are so many people on the economic brink and is female poverty caused by the marriage problem, family breakup or misguided Government Policies . Here now to discuss, nbc news special anchor Maria Shriver, who is out with the new eyeopening report which details the financial struggles faced by women. Maria, welcome. Im reading the shriver report. I think your numbers are spoton. Everything i found out, all spoton. The people that did the report did work. Whats your solution . Lets begin right there. This is your game. Whats your solution . Well, theres no one solution, larry. What were talking about in here is that government plays a role, business plays a role and women themselves play a role. As you said, one out of three working women in this country are on the financial brink. Minimum wage workers, twothirds of them are women. 70 of those dont even have one sick day. So we are calling on government to play its part, businesses, we talk about what makes a business place so that workers can thrive, so they can retain women, because women are good in business, theyre half the work force. We are also saying to women themselves look, if you want to stay above the brink, youve got to pursue your education, youve got to stay in college, get a college degree. Youve got to be able to provide for yourself. Dont wait for someone else to provide for you. Delay Family Planning as long as possible. Be smart about money, understand that every decision has an economic consequence. So there are things that women can do, men can do, faithbased organizations can do, government and business, and bring them all together. Fair enough. Let me give you the kudlow plan which by the way, overlaps with the shriver plan. Oh, good. Were not far apart. I have this four point plan. Finish your education. You mentioned that. Number one. Number one. Then go out and get a job. Thats point number two. You have to get a job with a living wage. Yeah, look, if you finish your education, you are going to get eventually a very good wage. Then get married, after you have some stability, and then after you have been married awhile, have the kids. Thats the kudlow plan. It is not a very original plan. Other people have talked about this. In other words, i think the teens are jumping in too fast. I think the family breakdown is a huge part of this problem. Maria, if we dont fix the family breakdown, these numbers are just horrible. 40 in poverty. You can almost predict it. If theres a one parent family, 40 land in poverty. Well, its certainly easier to raise a child than stay above the brink when you have two incomes supporting that family. But in our poll which is about 3500 people and sampled all across the country, people said that they felt the government should play a role in supporting the families the way they are today. Yes, it can play a role in encouraging people to stay in marriage but more people felt that the government shouldnt look in the rear view mirror, but should deal with families the way they are now. So many of the women that i spoke to, larry, ended up on the brink not because they planned to be there. They might have been in abusive relationships, they might have been left, theres a whole host of reasons women end up on the brink. I read this carefully. Im a follower. You read the whole thing . Im a follower and a fan of yours. You went to the trouble to do this and thats a leadership thing that we need. I read a lot of this stuff. You have repeated quotes by women who were interviewed who said they wished they had completed their education. Correct. You just see that again and again and again and i think thats so important. Look, this may surprise you, but heres the thought i have. Okay. Youre going to see the president tomorrow from what ive gathered. Is that true . Yes, thats true. You know what i think . Im not a supporter of president obama, most of his policies, but, but, but, but, but, it seems to me this fellows a good family man. It seems to me he follows the model we have been talking about. It seems to me he takes care of his two girls and has a great marriage, and so forth and so on. Why doesnt he take a leadership position and make what im going to call bill cosby type speeches, okay, and go out and talk about the culture of marriage and stability and education and have the kids later . He is uniquely qualified as president , because of his own example, maria. This is an area where i wish he would do it and a guy like me, i would support him to the hilt. Well, i think that he is talking about economic mobility. He is talking about family structure. And i think, larry, as you have said, there is all different kinds of families and i dont believe that we get anywhere by shaming people in the situations theyre in today. The fact is, half of the babies born to women under 30 are born to single mothers. Now, we can talk all we want about marriage and im a proponent of it. I think its important to strengthen it but its also important to support women where theyre at, support families where they are. And i think education, as you said, is a very important thing to stress. I think also Financial Literacy is a very important thing to stress. Healthy relationships, what do they look like, what do they feel like. Thats the key. Thats the key. Healthy relationships and marriage. Marriage, marriage, marriage, marriage. Its not necessarily marriage. I respectfully disagree. I think marriage is important, but as you said, a healthy relationship is really important. Ill concede that point. Many people dont know what a healthy relationship looks or feels like. What happened to the men . Heres a question the men are critical to this. Where are the fathers, okay . Out of wedlock marriages have fathers. What happened to them . Its amazing, if you look at the labor Market Participation rate, the men are leaving the labor force. Im not sure i know why, maria. Maybe theyre taking government benefits, maybe theyre doing god knows what. All i know is they have an obligation even if theyre not married, it seems to me, to help out. It takes two to have a child. I dont know where the fathers are in this game. Well, the fathers are all different places and we have to encourage fathers to get involved in their childrens lives, in their daughters lives and in their sons lives. We really try to address that in the shriver report. How do we bring men into the equation. We have some really good reporting in there, saying men want to be involved, they have to be invited in because they very often feel shamed, they feel like they havent kept up their part of the bargain. They often feel that women want them only for providing. What the women said to us is that we want them for the time, we want them to spend time. I think men dont really realize how important particularly in young girls lives that they are. That can make a huge difference to a daughters selfesteem, to how she feels about men in particular. Right. You need examples and responsibility and character and all that stuff that we all know about. I tell you, maria, look, you tell obama, tell president obama he is a role model. I really mean this. Im dead serious. He sets an example. He should talk more about this. Not social mobility. Social mobility, tax the rich, im not into that, as you probably know. But this, he could really make a great contribution. Thats all ill say. Anyway, thank you for your work. Thank you for your leadership. Good luck tomorrow with the president. I appreciate you coming on the show. Thank you, larry. Many, many thanks to Maria Shriver. Now, the obama administrations Big Government poverty solution seems to be to raise the minimum wage and extend unemployment insurance. In other words, more government dependence. That i think is not the answer. However, in a wall street journal oped today, former White House Press secretary Ari Fleischer suggested theres a better approach. Address the breakdown of the family or the socalled marriage inequality. I was talking to Maria Shriver about that. Lets get some more input of the terribly important subject. Here is kathy rouss, senior fellow at the Family Research counsel and former spokesperson for the u. S. Catholic bishops and p. J. Orourke, author of the new book baby boom, how it got that way and it wasnt my fault and ill never do it again. It wasnt my fault, i will never do it again, p. J. , we are all wiser, supposedly, as maturing baby boomers. What do you think about that . What do you think about the conversation with Maria Shriver . Where should we be going to deal with this female poverty problem . Well, im with the kudlow plan. Its got there is some backup there. The great sociologist Charles Murray did a lot of studies on this and basically what he found was that people who went as far in school as they were capable of going, you know, which is certainly these days a high school education, and who got married and stayed married, and who got employed and to the best of their ability to do so, stayed employed. I mean, may have gone through brief periods of unemployment but took a job, kept a job for as long as possible. When you examine that group of people, as much education as you can stand, married and stay married and work as much as you can, you dont find any poverty. Thats it. Youre right. You may not be rich. They may not be rich. They may be scraping along but you dont find any poverty. Families headed by two married parents, kathy, 7. 5 poverty rate. Thats it. Families headed by a single mother, 33. 9 . When you get into the specifics demographics, whites, hispanics, africanamericans, those numbers are huge. You know, 40 years ago, before the war on poverty started, this poverty rate was down around 6 or 7 for the married family. This is all new. The breakup of the family and the rise of poverty. What should we do about it . It is all new. But when you look at the societal indicators, marriage improves everything. My colleague pat fagan has a paper, 165 reasons to marry. Reducing poverty and improving your Financial Health is only one. Its a very important part of the equation. But improved happiness, longevity, improved health, a decline or decrease in the negative social indicators like drug addiction and dropout rate and so forth. Everything improves with marriage. Heres the thing. Heres kind of a fun fact for you. We were talking about education, too. The National Marriage project at uva discovered that when you raise a child in an intact twoparent married household, you increase the chances that that child wont be in poverty by two and a half times what you would do if you gave the mother four more years of education. So theres an outbalance. Marriage gives you so much more benefits in terms of raising that child. P. J. Kathy, you know, my wife says exactly the same thing. About all those benefits of marriage. 165. Let me ask you, p. J. Maria shriver makes what i think is an important point. She doesnt disagree with the culture of marriage and so forth, but shes saying look, i read it in her report, all right, we would prefer this solution, what you and i, what were all talking about. Ill just call it the cultural solution. But if you dont, if you dont, you got to deal with the world as it is, not as you want it to be. So if you have these single mothers and you have these dependent children and you have this grim outlook of poverty, which is what the statistics show, what do you do, p. J. , from here Going Forward . What would you recommend . Its painful. Its totally painful because true, we have to deal with the situation that we have, but if were going to keep paying people to misbehave and thats what a lot of government benefits are is paying people to make bad life choices, were not paying them much, mind you. Im not talking about welfare queens here or anybody cheating on welfare. Im just saying that the government benefit pays you to make bad choices. And the incentive is maybe tiny, but the effect is huge. We have to get rid of that government incentive for people to make bad choices. Paul ryan, kathy, paul ryan today apparently, i just have the news clip, he walks through this poverty trap issue and he says look, if youre making 10,000 a year and youre lucky enough to get it up to 40,000 a year, you are going to pay much higher tax rates and you lose government benefits so that your new marginal tax rate may be as high as 80 and you only take home 20 cents on the dollar. That is a disincentive to go back to work. Obamacare i think favors singles over marrieds. It does. The child credit, you know, the child tax credit, you dont have to be married to get the child tax credit. All these things, the marriage deduction, there are Economic Policy changes that we could use that would help this story. Yeah. We have to get government out of the way in terms of getting rid of all the disincentives, all the penalties. That has to be wiped out at every level. It seems like its cropping up ever more. Obamacare is a really good example. Theres a terrible penalty for married people under obamacare and its got to be cane out of there. Its awful. Government cant do everything. You cant turn to government for love and marriage. Its a cultural decline of marriage and the culture has to come and help marriage if i do the right thing, if theres a father who has been a deadbeat dad, i dont know where the men have gone. The statistics here are just awful. But if they were to do the right thing and they wanted to come back to work, whether they get together with the family or not, at least they can have relations as Maria Shriver said, they could help shoulder some of the burden. We need to provide economic incentive, not disincentive. We need to say we will make it easier for you on benefits and on taxes. Anyway, thats the subject of a much longer segment. Thanks very much, kathy, p. J. Good luck on the book. Always glad to be here. The new book, the baby boom is available right now. You can see it on the screen. Everybody go out and buy it. Lets shift gears. The fracing boom is boosting the u. S. Economy, creating thousands of jobs in a whole bunch of states. But new york, not one of them. Governor cuomo still wont make a decision about allowing fracing in his state. We will hear from the National Petroleum institute about why it decided to go after cuomo and blast him. Later, we have been waiting to find out who exactly is signing up for obamacare plans and how old they are. Just a few hours ago, team obama released that information and it wasnt good. Not near enough enrollment overall and way too few young and healthy signees. This means we are getting closer t to a federal bailout for Insurance Companies. Even the New York Times and a. P. And reuters are not being fooled by the white house happy talk. We will take a closer look. As always, dont forget, free market capitalism is the best path to prosperity. I think cultural issue we raised about marriage and responsibility and character and by the way, its never too late to reform. Im kudlow. Well be right back. That its given me time toabout reflect on some of lifeseen biggest questions. Like, if you could save hundreds on Car Insurance by making one simple call, why wouldnt you make that call . See, the only thing i can think of is that you cant get any. Bars. Ah, thats better. Its a beautiful view. I just knew from the getgo that i was. Flat out getting a good deal. When youre ready to buy a car, save time, save money, and never overpay. Visit truecar. Com welcome back to the kudlow report. So new York Governor Andrew Cuomo is being blasted for keeping the red light on fracing in his own state. American Petroleum Institute president jack gerard told the New York Post his refusal to permit the drilling, i quote, shortsighted and damaging to new yorks economic development. Whats holding it up . Here is karen moreau from the new york state petroleum council. That could be a very lonely job, new york state petroleum council. Let me ask you, we are all waiting for andrew cuomo to Say Something on this, one way or the other. Let me ask you, why did jack and you, why are you the american Petroleum Institute, choosing now to blast cuomo . Why the timing now . Our industry has been waiting now for andrew cuomo for the last three years to make a decision on fracing. We were told almost a year ago, larry, that a report was coming out, and then at the last minute, that was pulled and we were told the Health Commissioner was going to review things and it would be just a few more weeks. Larry, that was a year ago. Nothing has happened since then. There has been no interaction with the administration. Attempts by our industry to have the governor tour fracing sites in pennsylvania have been rebuffed. We dont even get a response. This is a state that is supposed to be open for business. Yeah, youre right. Those are the ads. Youre exactly right. So as i understand it, just looking down the list, the epa has signed on to fracing. They say its healthy. The epa has said that. The department of energy has made favorable statements. In fact, the new Energy Secretary has been very favorable towards fracing. The department of the interior is in favor of this. They are all waiting on the new York State Department of health, okay. So what are they waiting for . If the feds are saying this, federal agencies, why cant the new york state agency, or is it just political, karen . Just political . It has to be just political. Our Health Commissioner when interviewed is saying that hes not going to disclose what hes been doing for the last year. Hes not telling us, hes not telling the public. And in the meantime, thousands and thousands of landowners in the Southern Tier of new york are suffering. They have wealth under the ground. Their farms are in foreclosure. We have the highest poverty rates in some of the upstate cities in new york across the nation. And this fracing boom could happen here, 25,000 jobs by decs own estimates. Its not happening because of the governor. Literally, you go 100 feet from new york into pennsylvania, pennsylvanias a fracing miracle. Millionaires are being created, hundred thousand dollar jobs being created, cheap energy is being created. Theyre happy as a clam. I dont get that. Its not like new york is different from pennsylvania. In fact, as i understand it, some of the wells in pennsylvania, theyre going down, they frac and then they go horizontally underground, they are taking new yorks natural gas. They are literally stealing new yorks natural gas by going underground. Now, let me ask you this. Political, robert f. Kennedy jr. , leading the charge against this, okay, despite all the data and all the studies, mr. Kennedy will not relent. Is that what cuomo is worried about . Kennedy and the money and the advertisements against fracing . Kennedy and the new york city radical environmental groups. New york city based. Have found this to be a great fundraiser for their organizations. Five or six years ago, Bobby Kennedy was supporting natural gas, but when they realized that this was going to be a boom and that it was going to put their investments in solar and wind on the back burner, they changed their tune. So thats what this is all about. This is not about the science. Its not about the technology. Its pure politics. Just funny thing, i did not know this. Youre saying five years ago, robert f. Kennedy jr. Was in favor of natural gas . I did not know that. Yes. If you look at, you know, you go back to the websites of some of these groups that he represents, they were supporting natural gas as the bridge fuel to solar. And wind. And when they realized we had this abundant supply, you know, their tune changed. So he pulled back because he will never get his dream of wind mills but they wont allow wind mills in nantucket when they go on vacation. All right. Karen moreau, american Petroleum Institute, thanks. Good luck. Knives are out, you know that, the knives are out for new Jersey Governor Chris Christie but is it hurting him in the opinion polls . We have a live report on the latest in the socalled bridgegate story next up on kudlow. Stacys mom has got it goin on stacys mom has got it goin on stacys mom has got it goin on [ male announcer ] the beautifully practical and practically beautiful cadillac srx. Lease this 2014 cadillac srx for around 319 a month with premuim Care Maintenance included. 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If you have a business idea, we have a personalized legal solution thats right for you. With easy stepbystep guidance, were here to help you turn your dream into a reality. Start your Business Today with legalzoom. Another mayor says he was retaliated against for not endorsing Chris Christie. Theres a new investigation, this one about the governors appearing in a tv ad for sandy relief. Eamon javers joins us to explore the details. Its been a very tough couple of days for governor Chris Christie in new jersey following up on revelations in a document dump on friday night. The drip, drip, drip continues as you say now some democratic politicians in new jersey now questioning whether or not they have been subjected to a pattern of retribution by the governor as well, and also now we have an audit thats being done by officials here in washington at hud as to just how the state of new jersey under christies leadership spent money on a Television Ad after Hurricane Sandy designed to spur tourism. Go back to the jersey shore. But the Television Ad featured Chris Christie prominently, also members of his family. Now there are some questions about whether the state appropriately spent money on that. All of this very tough politically for Chris Christie, but when you look at the poll numbers at least so far, he seems to be holding up. Take a look at this latest poll number from pew. A view of Chris Christie has become less favorable, 16 say less favorable. 6 say more favorable. 60 , thats the key there, say unchanged and only 18 here say that they dont know whether their opinion of christie has changed or not. If he can hold on to that 60 unchanged figure, that will do him some political good here and he might be able to weather this storm over the coming days and weeks. Also, larry, i should tell you, meanwhile here in washington, weve got new news later this hour, we are expecting to see a 1 trillion spending bill introduced up on capitol hill. The bill is expected to be filed at 8 00 p. M. Its going to ease some of the across the board sequester spending cuts, increasing spending on domestic and military programs during 2014 by 45 billion. Thats coming up just later this hour. All right. Thats very important. Theres not going to be any shutdown. Actually, that appropriations bill is very close to the murray ryan compromise. Youre in good shape there. Just going back to christie. That poll you cited is very important, particularly that 60 number. He won by about 60 and it was only a month or two back. You know what, im just going to if theres no smoking gun regarding the fort lee lane closing, then i think this goes away. It may take a couple months. Unless theres a smoking these democratic mayors and assemblymen can whine as much as they want. But if they dont have a smoking gun that shows the governor knew and is not telling the truth, then nothings going to happen. I think politically, thats probably right, larry. But the other danger, the smoking gun danger is definitely there. Then theres always the danger of Something Else. We saw that the assembly in new jersey today announcing it will create a socalled Super Committee to look into Chris Christie and these allegations. You never know when these investigative committees start going and churning and pulling in documents and interviewing witnesses, what it is that theyre going to find. Remember, the whole Monica Lewinski scandal came out of Something Else entirely for president clinton. These investigations take on a life of their own. Theres the question mark danger for Chris Christie as well as the danger of some proof coming out that he did not tell the truth or was not forthcoming in that News Conference we saw last week. I just find myself agreeing with Rudy Giuliani over the weekend. I dont think the governor would have said what he said at that dramatic twohour News Conference unless he was absolutely certain. But youre right. There is Downside Risks here there. Are loopholes. I appreciate it. Eamon, thank you so much. There is no way to spin this. The obamacare demographic numbers released by the Administration Late today are just ugly. Only 24 of the enrollees are ages 18 to 34. That could mean Insurance Company bailouts may be necessary. Even the New York Times and the a. P. And reuters are playing this report negatively. We will take a closer look at a possible obamacare death spiral next up on the kudlow report. So i c an reach ally bank 24 7, but there are no branches . 24 7. Im sorry, im just really reluctant to try new things. Really . Whats wrong with trying new things . Look mommys new vacuum cat screech you feel that in your muscles . I do. Drink water. Its a long story. Well, not having branches lets us give you great rates and service. Id like that. A new way to bank. A better way to save. Ally bank. Your money needs an ally. Im bethand im michelle. And we own the paper cottage. Its a stationery and gifts store. Anything we purchase for the paper cottage goes on our ink card. So you can manage your business expenses and access them online instantly with the Game Changing app from ink. We didnt get into business to spend time managing receipts, thats why we have ink. We lik i just knew from the getgo that i was. Flat out getting a good deal. When youre ready to buy a car, save time, save money, and never overpay. Visit truecar. Com welcome back to the kudlow report. Im morgan brennan. Today we received some much anticipated National Demographic data on obamacare enrollments. The grand total is 2. 2 million. Thats how many people signed up for insurance through either the state or federal exchanges but not all of those people have paid. Now, looking deeper, only 24 of those people are between 18 and 34 years old. The administration predicted 40 . This could be a problem, larry, because obamacare needs these young and presumably Healthy People to pay for the elderly and the sick. Back to you. Indeed they do. Many thanks, morgan. So lets dig in. What do those numbers mean for insurers and by the way, are there implications for a potential federal bailout . Thats an issue coming around the bend. Here to discuss, dr. Scott gottlieb from the American Enterprise institute. What do you make of these numbers . Theyre really bad no matter how you cut it. They track closely the states data. Six states were putting out demographic data. Actually, the demographic trends that we saw in those six states track pretty closely these federal numbers. So we know theyre a good proxy. The bigger issue for the administration right now isnt just the mix, the age mix of the people entering obamacare, but the fact that they need to get to about 20 Million People to have a viable market here. They need a much bigger pool. They are not on pace to get anywhere close to that. Probably they will get to four, maybe five Million People this year but the issue is, this just isnt an attractive insurance product. What were seeing is a lot of the customers, the middle class customers who might have bought obamacare who are dropping individual policies are now paying more to stay out of obamacare. Unless they can get those people to want to buy this product, they are going to have a problem getting to that 20 million which is where they need to go. Scott, what does this do theres a related issue, we talked about this, i want to raise it again. The mix is unfavorable to the Insurance Companies. The mix of young, healthy versus old and sicker. They may get into some trouble. You know more about this than i do. But they certainly would rather not have to pay all those claims without getting revenues in from premiums from the young crowd. Now, heres the point. The government stands ready to back the Insurance Companies, as i understand it. Theres a Reinsurance Fund and there is also a risk corridor and without going into details, it just means the government will back up the Insurance Companies with cash, if need be. Let me just ask you. Will the Insurance Companies need spare cash . The Insurance Companies are going to end up tapping that Reinsurance Fund and the federal government will end up paying out more because of the risk corridors, basically the reinsurance program, the government will end up picking up some of that cost. Theres no question about that right now. Well, if theres no question, how is this going to play . In other words, whats the explanation going to be . The Insurance Companies, you know, not wildly popular in the first place, but more to the point, financial bailouts are wildly unpopular. Yeah, look, its not going to play well. We saw an announcement from humana this week that they are going to take they are taking an earnings hit because of the bad risk in obamacare. Basically they had increased enrollment in Medicare Advantage plans and those in traditional revenues, the additional earnings they would have earned off that is going to be fully offset by the bad mix in obamacare. I think we will see muore such announcements but the plans wont take as big a hit because a lot of this will be borne by the federal government. The other thing that will happen is the Insurance Companies will have to reprice the products next year so premiums will go up a little, not as much as you would think because the government is going to pick up some of the losses but the Insurance Companies are also going to further skinny down the networks and make these plans even more attractive so this is a death spiral of sort insofar as already consumers dont want to buy obamacare and the plans are going to look worse next year than this year. Employer based plans, lets just go there for a minute. In other words, small groups or large, eventually, as 2014 goes on and people look towards the reimposition of the business mandate which i guess is still on the books, will they not be sending out cancellation slips in the second half of the year, because of the cost . Will there not be big changes there . We have kind of forgotten the employer side, with all the emphasis on the individual side. Right. Well, we know Small Businesses got grandfathered in an extra year so they will start sending out cancellations notices at the end of this year unless the administration does something to extend the grandfathering. The administrations really caught in a bind because they need those Small Businesses to drop coverage and force their employees into obamacare to increase the size of this risk pool. Remember, what you need isnt young and Healthy People because young and Healthy People dont pay a lot of premiums. What you need is a lot of healthy 40 year olds. You need to get middle age folks into this pool and thats not what theyre getting. The question is what do big businesses do, the big businesses that selfinsure. We always expected they would dump their employees into obamacare because quite frankly, it made business sense for them and made sense for their employees if they had a lot of lower wage employees. I would suspect that thats not going to happen as much as it would have just because this is such an unattractive market that employees wouldnt want to go into obamacare. They are probably going to hold off a little more than they would have. They may have cost sharing with their employees. Let them go out and pick lots of other plans. Walgreens done this, whole bunch of others done this. It may be that kind of thing. Heres a lump sum of money, go ahead and find your own plan. That may happen. So they will never go into the obama exchange. Moving from a defined benefit to a defined contribution, you can budget your health care essentially. The administration did some other things. They are allowing people to extend rollover year over year money on like a flexible spending card. I think that was done as a way to make it more attractive for employers to dump into obamacare because what you can do if youre a Large Employer is put your employees in obamacare and basically, the money you save, you can split it with them by giving them a flexible spending account card to spend some Health Care Dollars on and the employees now can roll it over. That was one of those 6 00 p. M. Announcements the Administration Made several weeks ago. Many thanks, doctor. Appreciate it very much. Now the big corporations have the cash so why arent they making the longterm investments that create jobs . The answer, uncertainty about taxes and regulation. We have an allstar panel set up to debate Business Investment next up. Its crucial to the economy. vo you are a business pro. Seeker of the sublime. You can separate runway ridiculousness. From fashion that flies off the shelves. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. And only national is ranked highest in car rental Customer Satisfaction by j. D. Power. natalie ooooh, i like your style. vo so do we, business pro. So do we. Go national. Go like a pro. Is American Business on the brink of an economic boom . Some economists say yes. The optimism sparks from record high stock prices, rising real estate, a surge in personal wealth, lower gasoline and less washington drama for the moment. So are businesses ready to boom their investments in 2014 . Im joined by cnbc contributors bob lutz, and former cnbc contribu contributor bob, you know better than anybody, long term investments, whether its plant, equipment or software, long term five to ten year type investment create a ton of jobs. Bob, we havent seen that in this recovery. Arguably, Business Investment has been the weakest part of this recovery for five years. Is that going to change . I really do believe because there was a profound shock in the 0809 meltdown. You know what happened to the Automobile Industry and everybody, i mean, General Motors went into the meltdown with 16 billion worth of cash which everybody thought was plenty and it turned out to be nowhere near enough. So there was a caution, lets wait the see what happens, lets accumulate cash, lets be careful not to expand capacity, lets be careful not to overinvest. I think at some point all that accumulation of cash is basically nonproductive. At some point, the shareholders want to see that invested so that money goes to work and creates shareholder value. I spent all day today at the Detroit Auto Show and ive got to tell you, the mood there, lets face it, the Automobile Industry is still the prime manufacturing economic mover of american industry. The mood there was very upbeat and i really do believe that were entering a period where business is going to invest. Jimmy, i mean, bob is right. The car sector is doing very well. But the issue here is will the big car makers produce enough inventory to sell to consumers, or will they invest in long term plant and equipment and factories and what you call longlived assets. I dont know. Whats going to happen to the companies with tax reform, for example . Whats going to happen to the companies with depreciation rates . You got a president that wants to take them out of their high. How many of these companies parked a lot of that cash overseas in order to avoid taxation and dont want to put it back in the u. S. . In other words, this socalled investment boom is not a layup to me. There is all that cash sitting overseas, all that cash sitting overseas and to stick with cars for a second, lot of old cars on the roads, we have a lot of old plants and equipment, very old, historically that needs to be updated. Thats another big plus. I think what youre not going to get, i think the basis of the proBusiness Investment, progdp case for 2014 is washington is a neutral. No tax increases but also no Corporate Tax cuts, no debt ceiling crisis. So if you get neutral from washington, i think its a go for the Business Investment case. Its neutral but its stable. And its been stable for the last two or three years. The regulation, you know, fuel economy and all the other regulations that have come down, theyre here now. And theyve been absorbed and people are planning for them and theyre investing for them, yet the profitability is there and the cash is accumulating. The American Market i think is very sound. Theres a lot of demand out there. Consumer confidence is okay and i think we will see a lot of investment in capacity, in facility renewal, in new product programs, in all manufacturing sectors. So i think boom is the wrong word, because boom has the feeling of, you know, a steep rise that ultimately is its own enemy. But i do believe we are going to see accelerated Business Investment in the united states. If we dont, if this thing falls apart, its not because theres a debt ceiling crisis. It just doesnt happen. The people out there like Larry Summers have been talking about this secular stagnation thesis. Those people are going to have a little wind at their back. We have to start looking at that scenario because it really should happen this year. The question, my last question, suppose gm and ford decide they want to build new plants. All right, fine. Will they build those plants in america . Will they build them here . Thats a big issue. Will they be treated hospitably by the tax and Regulatory Regime . This is an antibusiness administration. They have been quiescent lately as bob suggests but theres a state of the union speech coming and im telling you, it is going to be all about income inequality, its going to be a barn burner, it will be antisuccess, it will be antibusiness, it will be antifat cats. God knows whats going to happen. Ceos take a look at that, they run for the hills. They take long vacations in asia. Its not going to be a pivot . Thats not going to be a pivot to the center speech . Is that what youre saying . The difference between 190,000 jobs a month which is kind of where were averaged for a couple years, and 350,000 jobs a month which is what we really need is longterm Business Investment. Thats whats missing from this recovery. I hope it happens but im skeptical. Well, we all should be skeptical. But lets face it, its been quite a long time since 20082009. I think the fear and the paranoia about a double dip and this horrible administration, i think that fear is abating somewhat and dont forget, youve got the pressure of all of that cash piling up and shareholders dont like to see a company that is sitting on a pile of cash as opposed to investing it. I would point out that, you know, especially the american Automobile Industry and its supply base has been, over the last two or three years, and will continue to invest in new plant and equipment because the demand is definitely up. In the u. S. Thats the key question. In the usa. Well, of course, because look i got to jump. Well talk about this some more. Bob, the night of the state of the union speech, im going to email you. Okay. Please do. Email me, too. Thank you both. Now lets get back to the big selloff on wall street today. Fast moneys John Najarian about to make his return to the the kudlow report to tell us whats going on. Stay with us. Start the engine. And shift through all eight speeds of a transmission connected to more standard horsepower than its german competitors. And that is the moment that driving the lexus gs will shift your perception. This is the pursuit of perfection. [ male announcer ] we could say a lot about the most tracktested is ever. A sea of red on wall street. The dow drops nearly 200 points. The s p 500 sells off 24 points. Oh, by the way, tokyo opened down almost 2. 5 . That at the top of this hour. Is it the correct pause that refreshes . Should investors stay the course . Lets ask John Najarian, cofounder of monster option. Thanks for giving us your time. We have to go lightning round. I just want to ask you, is this correction healthy and overdue . Yeah, its both, larry. You know, i think those that didnt have any hedge on today, the vix moved better than 10 . The market dropped 1 . So you dont have to have a oneonone hedge on to be hedged. If you had just 10 of your portfolio exposure hedged with the vix, you didnt lose money today. I think thats one of the messages, is that those that dont have protection are the ones that panic. What are you looking at . What do you like here . There is stuff that you like and dislike. Lets go to your likes. Well, i mean, right now as far as buys, i like energy, larry. I like vanguard and i like atlas. I like both of these two and if you take a look at the graphs, they are going from lower left to upper right. Thats a positive. I think that will continue, larry. The ones that i think are also doing very well, airlines and very discretionary stocks, the casinos. Take a look at wynn, mgm and lvs. Over the last five days, all of these are up. One of those is up double digits. Its been a heck of a run. Airlines, even with all the cancellations still doing well. All the doomsayers, i dont think they have enough evidence. I think commercial business is pretty good. What dont you like . Give us a little warning on what you do not like. Sure. I think based on what target keeps leaking out every day, and theyre not the one thats been hit the hardest, but the retailers. Everything from Sears Holdings to bonton. Take a look at how they performed the last five days. There are several stocks in that group down several digits, several others down just less than 10 . That and kohl stocks. You mentioned the state of the union, you know coal will not be positive in the state of the union. I would stay away from that until after the state of the union. Yeah. Coal will not be positive. I dont know whats going to be positive coming out of state of the union. Probably solar. Yeah, yeah, yeah. Sick of that. Rates went down today, real quick, Interest Rates went down but stocks went down, too. Higher rates are coming. Higher rates are coming. Im telling you. Higher rates are coming. Its going to be bullish. But later in the year. Not right away. All right. Good point. Fair enough. John najarian, thank you, buddy. Great stuff. Thats it for this evenings show. Thanks for watching. See if we get our business boom or not and if we do, Interest Rates are going up. Im larry kudlow. See you tomorrow night. [ male announcer ] legalzoom has helped start over 1 million businesses. If you have a business idea, we have a personalized legal solution thats right for you. With easy stepbystep guidance, were here to help you turn your dream into a reality. Start your Business Today with legalzoom. Were here to help you turn your dream into a reality. So i can reach ally bank 24 7, but there ar24 7. Branches . Im sorry, im just really reluctant to try new things. Really . Whats wrong with trying new things . Look mommys new vacuum cat screech you feel that in your muscles . I do. Drink water. Its a long story. Well, not having branches lets us give you great rates and service. Id like that. A new way to bank. A better way to save. Ally bank. Your money needs an ally. 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It absolutely killed my grandmother. She was crying about this when her heart burst and she died. Narrator but first, Larry Salander is one of the biggest names in new yorks art world. He was a big deal. People would look at him and say, thats a really successful dealer. Narrator but collectors see red when he swipes more than 100 million from their pockets