The images and lengths to articles are b s ars are s ars a monster week for the market as the dow sets new records. Key data on the economy with the strong jobs report. What does it mean for your money . Jo joining me right now is bill gross, pimco founder and former chief and former chairman of the council of economic advisers for president obama. Gentlemen, great to have you on the program. Thanks for joining us. Thank you, maria. Austan, great day to talk to you. Lets start with the jobs number released on friday. A very strong number. 236,000 new jobs create for the month. The unemployment right now, the lowest in four years. Was this what you expected and what do you think it says about where we are in the economy . Well, it was better than i expected. This is one of the reports weve been waiting for reports like this. You never want to make too much out of any one month as, you know, we always say. If you could put several months like this together, i think people would be feeling a lot better on what the implication is for gdp growth. I wouldnt get hopes up too much for that, though, because i think the sequester kicking in is going to slow growth a bit, so in the future, months might not be as strong as this one. Certainly optimistic though, none the less. Bill, the stock market keeps on hitting record highs but the phrase that youre using in your latest newsletter is rational temperance. You say investors should expect lower returns . Why and what do you mean by that . Well, i think they should, maria. Its obvious in the bond market what a fiveyear treasury only yields 90 basis points. Its obvious that five years from now, thats what youre going to get. You know, its harder in the stock market because you have earning expectations and pe ratios. But, you know, in stocks, to explain whats going on in the past few weeks, stocks have experienced an exuberance in terms of dividend payments, moving from an annualized 270 billion to an expected 300 billion now. Theyve also initiated a lot of buybacks in terms of record numbers, 117 billion in terms of announced buybacks. So cash flow is moving into the stock market. There is exuberance, perhaps a little irrational but, nonetheless, its real. Yeah, its true. I mean, those buybacks is that a positive for the stock market, bill . I think very much so. To the extent theyre corporations are bullish on their own stock. 117 billion is a decent infusion into the market in terms of buying power. You know, the 300 billion in terms of dividends is important as well. Exxon, apple, other Companies Like at t are expending perhaps 10 billion a year and increasing by 10 , 15 a year. Investors like that. I want to ask you about the fundamentals about this economy, bill, but in a moment. Austan, let me turn to politics for a moment because we saw president obama meet with republicans several times during the week. This house, of course, passing the continuing resolution to Fund Government spending. Is there a new era in dc with both sides actually talking to each other is there any chance of a bargain . Should we read into this . Well, i dont know about that part about the grand bargain. It does seem like theyre getting along better. Theyre having breakfast with each other. They had a dinner together. I still fundamentally think, though, that the American Voter is very conflicted about entitlement cuts, increases in taxes, or other cuts to Government Spending. Probably saw the recent survey where they went through 20 categories of Government Spending and there wasnt a single category that voters had that majority of voters say yes, we ought to reduce spending in that area. So i think as long as the voters are conflicted in their own minds, theyre going to have dinners and breakfasts together. They might get along a little better but i think the grand bargain is going to be hard to get. But, of course, austan, the sequester kicked in this week. The world did not end. Did the president exaggerate the consequences of these mandatory spending cuts . I dont know. I dont think so. From what i saw, the president was highlighting a bunch of specific case wheres he thought it would harm things. I do think this was nowhere near as big and negative as the fiscal cliff would have been. I see this as cut maybe half a point,. 6 of a point off the gross rate which is enough to make the jobs numbers more sour than the one we saw on friday and people will, again, you know, maybe by this summer, start saying why isnt recovery faster. Whats going wrong with it. So, bill, what about the markets . Do you think the rally in stocks is based on fundamentals, is it all that easy money from the federal reserve, the fact that theyre just very few alternatives for peoples money . What is this based on . I think all of that. And i think we should be cautious. You know, our markets as you just pointed out are moving based on Central Bank Check writing. The feds buying nearly a tril trilli trillion dollars in the year. Japan buying trillions. The bank in april is going to join in the party. All of this fuels buying of equities because of the anticipated increases in inflation and the trillions of dollars of credit being created. The critical question Going Forward is can Central Banks generate higher real growth with these policies as opposed to simply writing checks. So if we need to lower expectations, as you say, what should investors do right now . Where do you want to be allocating capital, bill . I think i want to allocate capital in the u. S. Bond market to pro teched securities to, you know, shorten maturity, highyield bonds, two and three year pieces of paper. I think they should go outside the United States, as well. There are economies in mexico and brazil. Theyre dynamic relative to most developed economies and with Balance Sheets that are very attractive. So you look outside the United States in addition to inside the United States for growth, especially in the equities side. Gentlemen, its good to talk with you. Thanks so much. Thank you. Great to see you again. Well see you soon. Bill gross and Austan Goolsbee joining us. Up next, we are on the money. Will you google on the go, new glasses to make the power of search more mobile than ever. Ill go through the Looking Glass with the man in charge of making google profitable, chief Business Officer, nikesh arora, will join me. Tax season is approaching. The advice you will need to file your returns and save money before april 15th. As we take a break, take a look at how the stock market ended the week. Back in a moment. [ male announcer ] nows the time to save 5 off every day with your lowes Consumer Credit card. Welcome. 2 billion internet searches occur around the world every day. The lion shares is google. Stock up about 30 year to date and it is the most owned stock in the 50 largest mutual funds in the United States. More so than apple. I spoke to the man in charge of how the Company Makes money, chief Business Officer, nikesh arora, about what sets google apart. Peoples expectations from search are more way more than what they used to have in the past about getting search, get the link and you click and go to website. Today when people search, they do that on their mobile phones they do that on their tablets, they do that on their pc. They expect a lot more precise information. A name, they want to know about that person. A restaurant, they want a map, how to get there. On the phone, they literally want directions to get there. Down to the most specific things weve talked over the years about i could be walking and because the chip in my phone, you know where i am and you can send me an email and say, i know you like, you know, this kind of food, well, that kind of restaurant around the block from where you are right now. Exactly. Part of what is fascinating is ive been using my own device, as i always do, i land a new city, i have a meeting, its in my calendar, its in my phone. My phone is telling me you should leave for the meeting now because there is traffic on the way. Your phone is beginning to understand different aspects about you. Your calendar, knows about your email and what i like and is beginning to suggest things to me. Let me ask you about the stock price. I know you dont watch the stock price but this week the stocks saw a new high, amazing run. Whats behind the momentum. What can you tell us in terms of whats driving the strength and power in google . Maria, i used to do this as a living before and i have been a huge fan of the show watching you talk to so many people. So many smart people who must have a way better view about the stock market than us. You know whats driving the business, what is it . I hope the success of our business, i hope that the use that investors have, is fact that we are a company that is executing on multiple fronts, whether its search, whether its advertising, whether its youtube, android, you name it, motorola, all the Different Things that weve undertaken. Making money in advertising, particularly through mobility has been obviously key for the business outlook. A lot of Technology Executives truck strugling with the balance of intrusion of advertising into the seamlessness of consumers mobile experience. Can you do it . Has the space changed in terms of making this balance . Whether its in television, whether its in newspapers, whether its in radio, content has been modernized primarily either through advertising or some form of subscription or through some form of pay as you go or some form of some transaction. I think thats how its going to do it in the future. Viewers know that. You and i know that its not free. Its very interesting what weve done on youtube, we have an advertising format so when i watch television i have to watch the ad. On youtube when you see the ad you can skip it, you dont have to watch it. Advertisers wont pay for it if users watch it. Users only have to watch it if they want to watch it. We try to make sure its not intrusive or in your face. Let me ask you about some of the products that youre coming out with. The google glasses, do you wear the google glasses . I have worn them. They are pretty cool. A little geeky for me but it takes getting used to. I like the idea of having a camera mounted sort of above my eyebrow, having the ability to see a screen over there, see my email, see my messages, see results to google searches. I think whats interesting is its a whole different way of visualizing computing. And i think many interesting applications will be created over time, and i can imagine a surgeon having the watch and doing an operation and somebody else on the other side watching it with him and talking to him through it or helping him. You know, go down well in countries like india where you cant have the experts being in every village that you want. That will be an interesting application s application. Thats a great analogy, the surgeon. See the world through the eyes of the person wearing it. Thats very different from you and me taking a picture or something. I love it. How do you see technology and how its changed . Here you have a lot of expectation that the pcs dead, its all about mobility. How do you see Technology Today and how what is shaping it . I think whats fascinating as you think about the evolution of technology. What happens is theres a way when technology was created for enterprises. The first time i ever touched a pc is when i went to work or first time i had a laptop, i had it at work. If you look at whats happening now, technology has been created for end consumers first, enterprises second. Another thing is technology has been created for point solutions. You have a tablet, operating system, eco system, desktop which works with the internet and has a different operating system, phone, a third run. Whats fascinating is were going to keep seeing a diversion to streams, yet we will see diversion of services. I listen to music across multiple streams but ill do it different, in a seamless way so i dont have to keep dialling in different services. I think thats going to be a fascinating change, a fascinating revolution coming up in the next few years. Nikesh, great to have you on the program. Thank you. Nikesh joining us, chief Business Officer at google. Up next, we are on the money, how tax law changes can impact your bottom line. What you need to know as april 15th draws near. You can find us on [ male announcer ] its a rule of nature. You dont decide when vegetables reach the peak of perfection. The vegetables do. At green giant, we pick vegetables only when theyre perfect. Then freeze them fast so theyre are as nutritious as fresh. [ green giant ] ho ho ho. Green giant theres no subtext. Just tacos. Yeah, its our job to make you want it. But honestly. Its not that hard. Old el paso. When you gotta have mexican. Well, it is that time of the year again, tax day approaches. How to be sure youre getting the most out of your return . Ernst and young tax partner greg rosica is here. Greg, good to have you on the program. Thanks for your time today. Thanks, maria. Glad to be here. Lets talk about the new changes we need to be aware of. Tax law changes so quickly. There was a lot of discussion at the end of last year about all of this. What do we need to know about any changes or misunderstandings as we prepare to file for 2012 . Sure. Lots of changes happened. And always think about what kind of life change you have because any kind of life change generally is a tax change, means some kind of tax change. That can help you start to inventory that. Some of the changes we had are retroactive so they didnt really exist through 2012, they expired but then came back in on january 1st of 2013 with late legislation. Things like the alternative tax exemption. That was permanently put back in place. Its higher. That means for everyone, less people are subject to the alternative minimum tax. Also other items like deductions for teachers. Teachers that spend 250 on expenses for their classrooms, those are dedubt i believe. Dedubt i believe above the line which is always good. We like those better. Look ahead. How is what were experiencing now how can that impact filing 2013s returns . Filing for 2013, those are things you want to know about. You want to try to minimize errors, find deductions you might be overlooking. And just be able to expect what the impact is going to be on your tax return and ultimately maybe your refund that you will be getting. Are there common deductions that people overlook . There are. There are deductions that people dont always focus on they should think about. Sometimes simple things, things like charitable contributions, bought some things for a charity or maybe just used your card to deliver holiday meals or to drive to charitable meetings that you go to. You can actually deduct mileage expenses for those kinds of things. Thats interesting. So ernst young keeps a list of 25 errors that tax filers regularly make. Number one is, your check your math. Tell me some other common mistakes. Yes, so thats a very simple one but also making sure you have the right Social Security on there and if you take dependent exemptions, things like kids or relatives, you have those on there, as well. But go back and look at last years tax return first. Its chockfull of all kinds of good information. You might have carryovers from prior losses you had on stock sales that can come forward to this year. Also, its a great reminder to see what things you had in prior years you should have this year. Also, look at things like errors that people might make. Nobody likes to admit if they lost any money gambling, but actually you can deduct gambling losses up to your winnings. So you dont have to admit that maybe you lost more than you won, but up to that amount you can take a deduction for as well. Thats funny. So, are we all paying more taxes this year because of the limitation of the payroll tax holiday, perhaps were paying less last year . Right. Well, yeah, you pay less this year meaning 2013 but for those people filing for 2012, that was still in place and they got there. Heres a caution. People that get large refunds, doing that, they must like earning 0 bads because thats what theyre getting. Loaning the government money for 0 if they bed refunds. Think about that, whether you should increase your w4 exemptions. Maybe when you first started your job, thats driving a lot of whats withheld and why you might be getting a refund. But be cautious because, you know that payroll holiday that we had in 2012 is gone for 2013. So everybody that earns a wage from the first dollar up to about 110,000 of income is paying extra 2 for 2013, so your refund wont be as big for 2013 most likely. All right. Well leave it there. Greg, great advice as always. Thank you so much. Thanks, maria. Greg rosica joining us. Up next, news this upcoming week that will have an impact on the money. And searching for the richest people in the world. Se seems they got by with a little help from their friends. Back in a moment. For more on our show and our guests, check out the website otn otc. Com. I hope you will follow me on twitter and google plus, look for maria bartiromo. Stories coming up in the week ahead that may move the markets and impact your money this week. Tuesday, say goodbye to super size. Limit the sale of sugary beverages over 16 ounces will go effect. Paul ryan expected to release the latest version of his budget proposal. Thats happening on tuesday as well. On wednesday, we get a total number of the retail sales for the last month. And then on thursday, the reproducer price index will indicate whether there is Price Inflation at the wholesale level and followed by the Consumer Index on friday. Forbes annual ranking for the worlds richest came out this week. Among the usual suspects like bill gates and mexican mogul, there are 29 billionaires under the age of 40 on that list. Four of those earned the fortune from facebook. The youngest richest people in the world is 28yearold former roommates, Marc Zuckerberg and dustin, worth over 11 13 billi and 3 billion respectively. And former president and napster founder shawn parker. Nice work, if you can get it. Thats the show for today. Thank you so much for joining me. A my guest next week, mary robinson, the first woman to serve as president of ireland. Have a great week, everybody. Ill see you again next weekend. [ wind howling ] [ female announcer ] it balances you. [ water crashing ]. It fills you with energy. And it gives you what you are looking for to live a more natural life. In a convenient two bar pack. This is nature valley. Delicious granola bars made with the best ingredients in nature. Nature valley. Nature at its most delicious. This is the Chris Matthews show. Ask not what your country can do for you. Tear down this wall. I can hear you the time for change has come. Chris escape from washington. Jeb bush is doing it. Chris christies doing it. And now so is barack obama. Theyre all saying im not part of the problem. Jeb attacks a country driven from crisis to crisis. Christie said he doesnt have the fist damn idea whats happening in washington. Now we see the president doing it hillary style across the aisle listening store. The uninvited. Is this about the tea party . Some say obamas kumbaya is his idea to turn the right to his terms. Is this something jeb and christie knows they must do too, smash the tea cups . Cheney on cheney. Subject of a new documentary. Denies all guilt for pushing iraq war, supports waterboarding and seems to relish new attention and historic charges many make against him. Hi, im Chris Matthews. Welcome to the show. With us today the Washington Posts david ignatius. Cnns gloria borger, the Washington PostKathleen Parker and the dishs andrew sullivan. First off the latest job news terrific. Stock market at historic levels. Fiscal cliff deal that raise taxes top 1 and spending cuts may be help but washington is still stuck. This week you saw a couple republicans, chrisyty and jeb bush gearing up to run for president by attacking washington from afar. Appears to be the last two years bog crisis to crisis. I think people are just numb by this dysfunction. If anybody this this room thinks they understand washington, d. C. , please come on up and stand behind the podium and you give the answers. Because i dont have the first damn idea what theyre doing down there