in the next hour or so. meantime, stocks are higher. stock up following the news of pandit's departure. a story that still has a lot more questions than answers at this point. we'll keep you up to speed on this still developing story as the day g the highs right now. a very mixed day. you have some bank stocks higher. jpmorgan, for one, inside the dow. bank of america is lower. walmart is lower. intel among technology stocks higher. energy is higher today. so no clear trend for this market, but the dow at 13,536. technology powered higher by apple, which is up more than 2%. they announced they're going to hold a meeting next week to introduce perhaps the mini ipad. nasdaq is up a percent, the stronger of the major averages. the s&p is up 12 points. as we mentioned, a big story right now has to be citigroup chairman michael o'neil and michael corbat hosting a conference call on the shake-up. that's scheduled for 4:30 p.m. eastern time. we'll have that for you coming up here. you spoke, in the meantime, with vikram pandit on the telephone earliedaon from the ceo-ship bu from the board as well. >> i think that's really the key here. that's why everybody is scratching their heads today because it was so sudden. i spoke with vikram today. he made very specific points to me. number one, i've been thinking about this for a long time. i've been talking to the board about succession for a long time. he said once we released earnings and they were received well and we did the conference call with investors and it was received well, i recognized it was the time to go. leaving the company at their peak after we have accomplished sudden? why the abruptness of this resignation? why not announce you are stepping down and tell the market you will stay on until the end of the year? he said, once you have this decision, you cannot sitn to. there's no reason for me to be looking over the shoulder of corbat and basically critiquing the way he's going to be running citigroup. that was his most important point. number three, i said to him, what about any disasters on the horizon? are we going to learn there's an investigation over libor? he said i would not walk away from this company if i felt it was in bad shape. i walk away with the company looking strong. >> it's being handled publicly. when you think about this, that micha michael corbat is now already in place, he's going to hold a conference call in 90 minutes as the new ceo. the transition was already in place, apparently. >> right. they definitely had been talking about he eventuallyikra said to board was ready for this. having said that, i still feel there's something that doesn't smell right because of the abruptness of this. the fact that i'm leaving the post of ceo. i'm leaving the board immediately. you have to believe there is also some pressure from the board basically saying, you are not executing fast enough. that also could be an issue. >> that's somebody i want to hear from too, john havens. why he's leaving at precisely the same time. it all happened so quickly. michael corbat gets the job. havens doesn't. he's leaving at the same time. >> let's not forget vikram sold his hedge fund to citigroup five, six years ago for $800 million. he greed to take $1 in sags. i said, isn't this about compensation? he said, i'm the one who agreed to take a dollar and said i would take a dollar when it was the right thing to do. let's get more about this developing story. it is rocking the business world today. kayla with another angle. >> one of the theories that's getting tossed around as to why this new ceo is coming on before the end of the year is to help citigroup prepare for the new stress test that will come at some point in the first quarter. nonetheless, a very abrupt turn of events today. hopefully we get the whole tick by tick on how this went down on the call this afternoon. in the meantime, moving this story forward, what we're watching now are the potential moves of key personnel, of course, in addition to vikram pandit stepping down. john havens also resigning months earlier than expected and leaving a vacancy in his three-pronged role and a successor is yet to be named there. several insiders within citigroup have suggested that one of the most highly regarded executives there is jamie freese or ray mcguire, the global head of investments banking. those wtwo men could be on the short list. "the wall street journal" reporting performance in that unit was also one at board's key sticking points here. an exodus of bankers is not really expected here. my sources say it's more likely to rattle some of the other business lines, especially those led by executives viewed as loyal to vikram pandit. following pandit's departure, one other name that's come up as a potential exit is brian leach. sources say he has no immediate plans to leave the bank. remember, leach, pandit, and havens all founded the hedge fund they sold to citi for $8 million. pandit pocketed just about $80 million of that price tag. so definitely a very multifaceted story. we should get more in just the next hour. >> you would think so. let's get some reaction now from some respected analysts. mike mayo, bank analyst. he's also the author of "exile on wall street." our friend rob cox, the america's editor at reuters breaking views. michael, what do you make of the breathtaking events over the last 24 hours? >> i think the ceo transition is ludicrous. to have the ceo and c.o.o. step down at the same time with zero transition and to have this change one day after they report earnings. just yesterday i was asking vikram pandit questions. we were all asking him questions about the long-term strategy. one day later, he's out the door. something's not right. i think this poor transition of the ceo is a microcosm of the poor corporate governance at citigroup under the vikram pandit reign. >> mike, i want to ask you what you think is going on here, but let me get anton in first. you're a shareholder of citi? >> i am, indeed. >> what's your next move? how do you see it? >> i'm going continue to hold. i think michael o'neil has a long history of creating valued companies he's been with. i think the transition here is important. michael corbat is very well respected by the regulators. the process is so critical because citi really generates a ton of capital. i think the ability to return some capital through buy backs, through increased dividends is critical. i think the upside to citi has been kind of, you know, sped up here. i think vikram was doing a lot of the right things, but the regulators did not like him. >> you've been waiting for a dividend too. they couldn't pay a dividend after failing the stress test. as a shareholder, are you frustrated? does it make sense it was time for him to go? >> well, i don't think it was time for him to go, but unfortunately the relationship historically was very bad with the regulators, particularly sheila bear, who really embarrassed him by what she wrote in the book about him. sheila scuttled the merger between citi and wachovia. i think vikram would be a hero today had that merger happened. it would have created a lot of great benefits for wells fargo. the deal was done. citi stood behind it. sheila snatched it away. >> rob, you also spoke on the phone just as maria did with vikram pandit today. what's your read? he essentially told you the very same thing he told maria. it was his idea. it was time to go. he accomplished all he was after. do you believe him, and why wha -- what do you think is going on? >> i think this is not all that exciting. in one sense, it's certainly a disorderly departure, but it doesn't feel to me like there's something we're going to find out, some sort of cockroach that's going to come out of the woodpile. feels more like these two guys basically didn't see eye to eye. from michael o'neil's perspective, it's great to turn over a new leaf as you're going back to another discussion with the regulators. so in a sense, they just had a spoiled relationship. don't forget, earlier this year, michael o'neil was in charge of the committee that was supposed to get a deal done for vikram's pay package, right? he was supposed to get that deal done. he was supposed to make sure it went through to shareholders. he completely failed in that. so i can't imagine that the blood between those two guys was especially strong -- it was pretty bad going into this. that was before, mind you, he became chairman. dick parson was the chairman at the time. so this couldn't have been very good. remember, both he and havens, i mean, they're kind of like two musketeers. they left morgan stanley together. they sold the hedge fund to citi. them leaving together seems to me like, you know, they go out arm in arm. one thing vikram did tell me was he doesn't see this as the last chapter in his career. he's going to do something else. >> i get that. that all sounds fine and good, but why so abrupt then? if he has been thinking about this the way he said he was, and it wasn't a compensation issue, then why not stay until year end, do it in a more orderly fashion? at least not make a stunner for investors to digest. >> unless it has to do with the bad blood they were talking about. >> i heard that as well, that they have been oil and water. let's not forget o'neil coming from the commercial banking part of the business whereas vikram comes from the institutional part of the business. mike, let's go back to where we started. what do you think is behind this then? if you feel the whole thing is ludicrous and they handled this awfully, what do you think is behind it? >> well, one of the most important jobs of a ceo is to ensure a smooth ceo transition. this is anything but. but let's look at the bigger picture here. since vikram pandit's arrived, citigroup stock price has been the absolute worst performer among the largest bank stocks. they changed their financial metrics and targets from time to time. they've had inadequate disclosure. the compensation was not aligned with performance. it's been 182 days since shareholders, 55% of shareholders spoke up and said no to the executive compensation plan and perhaps vikram couldn't see his way through a new compensation plan. perhaps it was board pressure because of the underperformance for the past four to five years. >> if i had to guess, i would say it was compensation as well, bill. only because the way this has been handled as abruptly it has been. it seems to me that, you know, he's tired of getting bashed by the public, tired of getting bashed by the regulators and not being paid the commensurate salary that his colleagues are. not to say he was underpaid. it smells like there's more here. more will be revealed. >> don't forget, we have the conference call with mr. o'neil and the new ceo michael corbat coming up at 4:30 p.m. eastern time. gentlemen, thank you. mike mayo, see you next hour. meantime, still have this rally going on. >> stick around. coming up, we have much moren the evolving story surrounding vikram pandit's sudden resignation, including a conference call at 4:30 p.m. we'll take you there live. we'll also hear from the new ceo on that call. we'll have a lot more. stay with us. he said the call to equity is done, but what about the banks after the citi shocker? and why are stocks rallying even in the face of pandit's stunning departure and bill gross' bearish call? pim koe's bill cross is here next. plus, is this citi news a canary in a coal mine for the entire financial sector? that trade is ahead. plus, more details from maria's personal conversation earlier today with vikram pandit. and two titans of the tech world are ready to report earnings. what will intel and ibm tell us? we'll also hear from intel's chief financial officer just moments after the numbers are released. that's all ahead on the "closing bell." for over 60,000 california foster children, extra curricular activities help provide a sense of identity and a path to success. joining the soccer team. getting help with math. going to prom. i want to learn to swim. it's hard to feel normal, when you can't do the normal things. to help, sleep train is collecting donations for the extra activities that, for most kids, are a normal part of growing up. not everyone can be a foster parent... but anyone can help a foster child. you know, usually when a company's chief executive officer abruptly resigns as vikram pandit did today, it's bad for the stocks. not the case today. >> citigroup off its highs but still up about 0.7 p%. heavy volume in the stock. remember, citi will host that conference call at 4:30 p.m. eastern standard time. keep it here on cnbc. we'll have that live for you. bill. >> all right, seema. thank you very much. so what does the shake-up at citi mean for the financial sector? they've been a leader whether up or down. pimco's bill gross has been outspoken about it. he feels the stock market and bonds have plateaued. >> let's get his view. bill gross is joining us now. thanks so much for joining us. stocks haven't plateaued just yet with this 110-point rally here. what are you seeing, bill? why do you think they've plateaued? >> well, let's look at it this way from a common sense standpoint. you have to realize returns over the past 30 years have been significantly influenced by lowers yields. the lower the yield, the higher the price. it sort of works like a totter up and down. for bonds, that means 3 to 4% over a long period of time. for stock, 5 to 6%. when you floor interest rates, you cap asset prices at a certain premium. >> and how much of the qe, the quantitative easing, the liquidity the markets have absorbed by the fed is in that? what would the returns be like if the fed wasn't in the mar markets? >> they wouldn't be as high, both in the bond market and stock market. bonds are up 5 to 6% this year. total return for pimco is up close to ten. absent the fed buying the long-term treasury and the five-year treasury and holding fed funds basically at 25 basis points, then even the fed admits that interest rates would be 50 to 100 basis points higher, which means prices would be, you know, perhaps 4 to 6% lower. yes, the fed is significantly influencing the bubbling of both bonds and stocks. >> and the fundamentals have weakened. we know that already. it's really not trading on fundamentals. bill, i have to get your take on the news of the day. vikram pandit abruptly stepping down. what do you think this tells us about the overall financial sector, the market? the group has been a leader recently. you're seeing more money going to the financials. today, another rally. what's your take? >> let me give you my take on that, pennsylvania r that, marimaria. the bonds are higher today. the banking industry or the financial industry, insurance companies and other financially related companies, are under threat here simply because the yield on their assets is moving down and the cost of their borrowing can't move much lower. you know, for instance, what they call the nims, the net interest rate more gin for banks, is being compressed simply because the yield on their assets is moved down from 5 to 4% and the yield on their borrowings is floored. that's the reason why bank stocks are selling at half of their book value. simply because the return on equity is influenced by these margins that basically are compressed and promised to be compressed for perhaps a long period of time. >> do you think that goes into part of the reason that citi along with the other banks are having a harder time making money because it's tougher with the interest rate scenario? i mean, from a person who's been a student of these markets and of wall street for so many years, have you ever seen anything like this? a ceo reports earnings one day, spends an hour with the analyst community going through the earnings and what's ahead for the emerging markets and the next day says he's out? and i'm also off the board. here's the new ceo. have you ever seen anything like this? >> well, i haven't. i agree with your analysis. we've been watching you and cnbc all day for an analysis. i would simply add this, that the banks and other financial institutions are in the business of making money with money. to the extent that money moves lower in yeield and the return n that money is basically floored and capped at a certain level, it's very difficult for a bank going forward to provide historical returns like they have in the past. is this the reason why vikram pandit retired? probably not. but all bank ceos and investment management company ceos basically face this future in which the return on assets, you know, basically is limiting their ability to make money. >> last question, bill. very quickly, in mid-september around the time the market was peaking, the fed was announcing their quantitative easing. you were out there saying you felt this was inflationary and you'd be buying hard assets. i imagine you still feel that way, but, you know, gold has stalled here. are those the kinds of assets you would buy? what's the play for inflation in your view? >> yeah, i think so, long term, bill. we need to see 2.5% to 3% inflation in assets such as gold. ultimately, you know, those that protect themselves against inflation -- and in the bond market, i would suggest tips that do that. tips have negative yields for the most part. a long-term tip is basically the only instrument in the bond market that provides a guarantee relative to the future cost of purchasing power in the united states. it has a real yield and it protects you against inflation. real assets like gold and, you know, tips and perhaps municipal bonds, which are cheap and are s a -- assets for the future. >> bill, glad you could join us. >> all right. we're in the final stretch of trading. we have a market holding on to a pretty good rally. dow industrial is up 103 points. financials leading the way. >> bill gross says the markets have plateaued, and they've plateaued again today. this guy is incredible. is citi ceo vikram pandit's shocking departure a warning of things to come in the financial sector? kevin warrish and robert zelic will weigh in on that coming up. then citigroup's largest individual shareholder giving his support to vikram pandit when i spoke to him earlier this year. >> the group under the leadership of vikram is doing really, really well. vikram was able to stabilize the company. >> and today he told me that vikram steps away with citi at its peak. so why did pandit resign abruptly? is more of my personal conversation with citi's former ceo coming up as well as the comments from the prince. and don't forget, the new ceo is set to host a conference call at 4:30 p.m. eastern time. stay tuned. so anyway, i've been to a lot of places. you know, i've helped a lot of people save a lot of money. but today...( sfx: loud noise of large metal object hitting the ground) things have been a little strange. (sfx: sound of piano smashing) roadrunner: meep meep. meep meep? (sfx: loud thud sound) what a strange place. geico®. fifteen minutes could save you fifteen percent or more on car insurance. why they're always there to talk. i love you, james. don't you love me? i'm a robot. i know. i know you're a robot! but there's more in you than just circuits and wires! uhhh. (cries) a machine can't give you what a person can. that's why ally has knowledgeable people there for you, night and day. ally bank. your money needs an ally. welcome back. we've been on the front lines of this citigroup story since it broke. now we want to talk to two people who were on the front lines of the financial crisis in 2008 that forever changed the industry. >> does today's seismic shift at citigroup raise red flags about the financials? kevin warrish is with us as well as robert zelic. both joins now for a cnbc excl