Transcripts For CNBC Closing Bell 20131118 : comparemela.com

The round number watch continues. I love it. Coming up later on closing bell, a big news maker, Prince Alwaleed Bin Talal al saud. Hes been asking saudi arabia to diversify because of the natural gas explosion and fracing in america. Well talk about how hes allocating capital. Which includes big stakes in citi, news corp. And twitter. Dont miss that. We hear he made 600 million on the twitter investment, on the ipo there. Unbelievable. More fallout from the new health care law. A new poll of midsized american businesses shows theres a trend to move workers to parttime status due to the mandates of the law. This is something the white house has been pushing back against very hard. But these numbers tell a different and disturbing story. Were going to have more on that. Stay tuned for more results. Bill, a lot of people pushed back on this whole idea. I reported this first on meet the press and got killed on twitter for it because people disagreed with it. Now we have these results. Want to see what corporates are doing as a result of this health care legislation. The Dow Jones Industrial average up 28 points off the highs, as you heard from bill. We hit the highs at about 2 p. M. , 2 15 p. M. Eastern time. And have come off of that pretty substantially and steadily. Now at 15,989 on the blue chip average. Nasdaq looks like this, negativity. Technology stocks rolling over. Momentum names giving it up. Particularly in the last half hour weve seen the nasdaq ex l accelerate the losses. Down 22 points. Standard poors 500 index pulling back from alltime high reached friday. Down to 1794. Were looking for bob pisani to figure out whats going on with the late selloff. In our closing bell exchange, joseph, thomas karsten, and our own rick santelli. Good to see you guys. Welcome. Joe, i know youre skeptical of this market. We keep hitting singles every day, so that the market sets new records incrementally here. What do you make of whats going on here . I think markets directionally continue to move higher. Again, this momentum weve seen in the markets so far this year, its probably unsustainable. At least in the u. S. , that is, heading into next year. Because . Well, i think, look, you have valuations which are still not expensive but clearly not as attractive as they once were. I think if you look around the world, european markets, for example, i think youll probably see a little more upside. Lets talk about the upside. When you look absolutely at valuations right here, thomas, you weigh in here, do you think valuations look fully valued at this point . Do you think this market is expensive or would you put new money to work here going into year end . Sure. I think you need to be selective. We are taking cash and reallocating to specific positions, specifically in technology and Energy Sector. Were doing it with specific positions. You mentioned the momentum stocks are contributing to the losses today. Were looking at value, Companies Like cisco where you get a great pe, good income and we think have great longterm value. In the Energy Sector we have a cost basis in bp below 42 a share. Weve seen some recent nice upside gain, but we think theres longterm value there as well. We also welcome another voice to the panel. An old friend, john rutledge. Hi. How are you . Im good. How are you . We were just talking about this continued incremental gain in the market to new highs. Its become a regular thing. You dont think the rally this year has been a fluke. Why not . Its the wall of money. The fed printed 2. 5 trillion of reserves that have not turned into bank loans but the banks are doing it, as can you see from rising Leveraged Finance credits. I think as that happens, loans create deposits. Deposit, spending. Spending makes more gdp, inflation, and ultimately higher rates. I dont like Interest Rate stocks but i love Leveraged Finance right now. Rick santelli, jump in here. What are you seeing as we see money into into equities once again . I dont think its any surprise. Unintended consequences, i think, will be the title of more books written between, you know, where were at today and over the next three years and whether it covers the ferl federal reserve, low Interest Rates, quantitative easing, obama care, the Affordable Care act, unintended consequences. I think stocks crossing the threshold of 16,000, some of the unemployment issues that push rates down that arent necessarily about a positive economy. The unintended consequences if you want to know whats in health care, have you to pass it. All this is coming back to bite us. Now, all of it isnt negative. Obviously, the dow and the s p and nasdaq are helping many people that eventually may need the money to retire. But its also disenfranchising many who need to save that dont want a more risky investment. And when it comes to obama care, you psd, you know, they keep pushing back. You were right on meet the press. And you shouldnt let them push back. The truth is the truth, maria. Truth to power. Thank you, rick. Joe, i mean, the way the markets work, they anticipate something down the road. And history would suggest that the record highs weve seen this year is the market anticipating a better economy down the road. You dont think thats whats happening right now . I do think thats whats happening. If you look over the past year, its been the uncertainty of the tax and over the past few months weve gotten more clarity. First it was who would take over for berp nan i can. Then the pace of Economic Growth. And europe and japan. As we continue to get a little more clarity and the pace of Economic Growth stabilizes, i think that allows risk assets to move higher. I would agree, if i can jump in. I agree with a lot of things rick said. I think ricks right. As long as weve got low Interest Rates, its likely the fed within the next three to six months curtails bond purchases. We think Interest Rates will stay low throughout 2014. As long as you have low Interest Rates, the party is on for stocks. You know, i think rick would agree, every party comes to an end. So, while were looking for value in the market, investors need to be cautious here to be selective about what money theyre putting to work. What do you do then . What groups do you want to be exposed in as we head into yearend where people are expecting another meltup . I think you need to be selective and look for value in the companies youre putting that money to work for in the equity sector. But a lot of our clients who are close to retirement or in retirement, they still need income. Were setting the stage for what will be a very dramatic rise in Interest Rates over the coming years. So, were trying to reallocate some of that money in bonds to investments as well. We think it adds diversification rather than just piling into stocks. John rutledge, the question on everyones mind is how this party will end. Will it be a 2 a. M. Ending where everyone leaves arm in arm with stars in their eyes or a rush to the exits when an alarm goes off . What do you think will happen . Is it will end with inflation and rising Interest Rates, which is why im fully invested in real estate and private equity are the two top categories. Utilities, interest sensitive are the bottoms. Small caps are doing well because banks are making money available again. Weve got to go, guys. Thank you very much. Thanks, everybody. Carl icahn is tweeting. Says he does not want to fight with apple but says he has no plans for walking away either. Hes hes very cautious on equities and says the market could easily have a big drop, according to a report on reuters. Hes at a reuters summit. This could account for the decline in the market. The technology stocks. He was specifically specifically about apple in one case, of which he is a big shareholder. That may be one reason were seeing this late selloff in the stock market with the dow down or the s p, excuse me, the nasdaq down about 25 points right now. Apple also, pressure. Meantime, jpmorgan has inked another costly settlement. This time with sophisticated investors who bought bad Mortgage Securities from the company during the crisis. As other banks have found, it might not yet be a done deal. Kayla has that story. There are many parties that want their money back after buying these bad loans. And jpmorgan reaching a deal with 22 of these investors who bought into hundreds of bad bear stearns mortgages which have a projected loss value of 70 billion. Fridays deal, takes them to 4. 5 billion payout. Bernstein analysts see the move as a positive move for a bank still facing a multimillion dollar legal fight from washington. A similar deal bank of america struck thats now under fire. B of a reached 8. 5 billion deal with same exact investors in 2011 but some bondholders said bank of new yorkmellon let them down. A new york judge will decide after closing arguments are heard this week. Now, banks are always relieved to solve these issues. Citigroup among the banks that have yet to settle with this group of investors as its been expected to. As we know well from covering these situations, its not a done deal until all the investors say so. Maria and bill, back to you. Well be discussing the outlook for major stocks later on closing bell when i speak with Prince Alwaleed Bin Talal al saud, who will be here at the New York Stock Exchange live in the next hour. Bill, we have headlines from carl icahn. He basically says, Many Companies earnings are a mirage. He says, earnings may be fueled more by low Interest Rates than strong management. He is talking about the potential of a very big drop in stocks. He says, im very cautious on equities. The market could easily have a big drop. Hes saying this at the reuters summit. Whats happening right now . Thats what were seeing in stocks. Were having a drop. All averages have come off their highs. The dow well back below 16,000. It was up there what did he say . Art cashin said 200 million for sale. That may change. That may change before the close. Were rolling over big. Nasdaq down 30 points. About 0. 75 decline at 3954. Were guessing as a result of the comments from carl icahn. Dow off the highs. 16 sth 16,000 from the dow is off the table. Bitcoins, a hearing in washington, which may be why theyre soaring. Teslas model s is the top selling automobile costing more than 75,000. Now longtime status symbol cadillac is looking to cash in on teslas success, launching its own electric car. Well get an up close look with phil lebeau coming up later on the closing bell. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Welcome back. Check out these markets. The Dow Jones Industrial average struggling to stay above the well, 16,000 level, but certainly above 15,9 62. Losing altitude quickly. We told you a headline from carl icahn who says basically hes expectinging a pretty good selloff in stocks. He says some earnings are a mirage and more to do with low Interest Rates than leadership and market demand. As soon as that headline came across the tape, the market gave up all the gains and then some. Were in negative territory and technology is rolling over the most. He says hes not walking away from a fight with apple which may very well be pressuring apple shares as well, bringing the nasdaq down. Lawmakers in washington may be the reason why. Mary thompson on capitol hill where congress is holding a hearing to find ut more about this controversial currency. Do they always some say just having this hearing has given the bitcoin legitimacy, sending prices even higher . They certainly realize that, maria. Theres a lot of excitement and concern surrounding Digital Currency, so the hearing today is basically a way to look at how government might regulate the Digital Currencies without stifling the process they hold. Including speedier, cheaper money transactions between consumers and merchants. And billions of people who may not have access to either cash or banks. Now, stored in online wallets, Digital Currencies are generated by computers that solve complex problems. Their value is set by the supply and demand on the many internet exchanges where bitcoins and other Digital Currencies trade. Unlike u. S. Dollars, theyre not backed by a government or commodity, like gold. The downside, thats many. Treasury officials testifying today say bitcoin and Digital Currency have basically become the favorite form of money by criminals because of the anonymity they provide, allowing them to commit money laundering, tax evasion or buy and sell illegal goods. Also, given that its a direct transfer between two parties without an intermediary like a bank or credit card company, that means its very difficult for Law Enforcement officials to detect fraud. Lawmakers dont want to squash any innovation with these digital curran sis. They see them, again, as a new way of looking at possibly a Payment System but they also need to make sure that consumers and investors are protected and that is the problem that they are solving for today. Back to you. Thank you so much. Since it crept into the financial lexicon, the bitcoin has been involved with speculators, drug busts, video game scam but the concept remains a darling. Lets talk about both sides of this issue. Tony, ceo of bitpay, a company that facilitates merchants being able to accept bitcoins in their transactions. Hell be testifying tomorrow on behalf of bitcoin. He joins us now. Along with longtime currency expert from merck who has concerns about merck as a viable currency. Tony, youre an advocate of bitcoin. Why isnt this simply something thats been created out of thin air. Its exciting. Weve been wearing our party hat for days and days. Its trading like an early stage tech stock. If you could trade minute by minute what the valuation of facebook or twitter could be in the early stages, it would mimic what were seeing with bitcoin today. Axle, what do you think . You dont think the bitcoin passes the test for money. Why . It doesnt pass the test for money because in 400 years you would like to have something you would chose gold over bitcoins. Its shaking up the Banking System. I think technology is promising. Think about, for example, if airlines were using bitcoin to exchange miles. Thats where i see the value of bitcoin. Putting up a price tag on something that just has a random value every day, i think, is very, very difficult. One of the knocks is lack of regulation. It has been already used for some scams out there, taking advantage of people who are unaware of how all of this works. You got a pr problem in that regard, dont you . You have to think back 20 years to the early days of the internet. In the early days of the internet there were scams and people using it for bad things. Quickly, the grownups entered and built real servers for consumers and the bad guys went to jail or went away. Any time you have a new technology, its going to explore its potential for both good use and bad use. And Companies Like ours are clearly at the forefront trying to make sure we do business only with the good actors. Obviously, the argument youre making is that youre equating this with Early Technology, pioneering technologies people dont understand to begin with. The difference between some of these Early Technology companies, there was a business model. Maybe they werent always profitable but at least there was a business model. They were making money. Where is the store of value when it comes to a bitcoin, other than the fact that the buyer and seller have agreed on a value for that bitcoin . Yeah. Bitcoin does get price discovery in an open market. Buyers and sellers auction the price up and down based on supply and demand. Businesses like ours that provide services around bitcoin is where the profit lies. When you look at bitcoin itself, it functions as an etf on the whole space. Can you choose the individual companies but clearly bitcoin itself is an etf possibly on the whole space. You want to jump in . Then i have a question about anonymity. Go ahead. I do get calls from both attorneys and venture capitalists in Silicon Valley so big moneys are looking at this. I think antimoney laundering will need to be upset. This will upset original founders of bitcoin but it will be ironed out. As far as value of money, i think we need Derivatives Exchange to reduce the volatility, so forth, more liquidity in the market so the price cant be pushed around by a few actors. As far as value is concerned, thats very difficult to assign at this point. My question really, axle, for you, is what about the idea of anonymity of using bitcoins, whether it be what youre buying, what youre trading, maybe thats one of the attractions. I have been on the record as being a skeptic here but i was having a discussion with someone oefrt weekend and they brought up this idea of anonymity. For that reason alone would we use more use of it . People want to be anonymous in terms of what theyre buying and selling. Sure. Can you do that with a 100 bill, a gold coin. Once you get over 10,000, regulators will kick in and theyll find a way to regulate you if bitcoin will remain to be successful. The question is how much of a value fluctuation will you accept . Its like a Prepaid Debit Card that fluctuates in value every day. As long as the price goes up, thats great. For Prince Alwaleed Bin Talal<\/a> al saud. Hes been asking saudi arabia to diversify because of the natural gas explosion and fracing in america. Well talk about how hes allocating capital. Which includes big stakes in citi, news corp. And twitter. Dont miss that. We hear he made 600 million on the twitter investment, on the ipo there. Unbelievable. More fallout from the new health care law. A new poll of midsized american businesses shows theres a trend to move workers to parttime status due to the mandates of the law. This is something the white house has been pushing back against very hard. But these numbers tell a different and disturbing story. Were going to have more on that. Stay tuned for more results. Bill, a lot of people pushed back on this whole idea. I reported this first on meet the press and got killed on twitter for it because people disagreed with it. Now we have these results. Want to see what corporates are doing as a result of this health care legislation. The Dow Jones Industrial<\/a> average up 28 points off the highs, as you heard from bill. We hit the highs at about 2 p. M. , 2 15 p. M. Eastern time. And have come off of that pretty substantially and steadily. Now at 15,989 on the blue chip average. Nasdaq looks like this, negativity. Technology stocks rolling over. Momentum names giving it up. Particularly in the last half hour weve seen the nasdaq ex l accelerate the losses. Down 22 points. Standard poors 500 index pulling back from alltime high reached friday. Down to 1794. Were looking for bob pisani to figure out whats going on with the late selloff. In our closing bell exchange, joseph, thomas karsten, and our own rick santelli. Good to see you guys. Welcome. Joe, i know youre skeptical of this market. We keep hitting singles every day, so that the market sets new records incrementally here. What do you make of whats going on here . I think markets directionally continue to move higher. Again, this momentum weve seen in the markets so far this year, its probably unsustainable. At least in the u. S. , that is, heading into next year. Because . Well, i think, look, you have valuations which are still not expensive but clearly not as attractive as they once were. I think if you look around the world, european markets, for example, i think youll probably see a little more upside. Lets talk about the upside. When you look absolutely at valuations right here, thomas, you weigh in here, do you think valuations look fully valued at this point . Do you think this market is expensive or would you put new money to work here going into year end . Sure. I think you need to be selective. We are taking cash and reallocating to specific positions, specifically in technology and Energy Sector<\/a>. Were doing it with specific positions. You mentioned the momentum stocks are contributing to the losses today. Were looking at value, Companies Like<\/a> cisco where you get a great pe, good income and we think have great longterm value. In the Energy Sector<\/a> we have a cost basis in bp below 42 a share. Weve seen some recent nice upside gain, but we think theres longterm value there as well. We also welcome another voice to the panel. An old friend, john rutledge. Hi. How are you . Im good. How are you . We were just talking about this continued incremental gain in the market to new highs. Its become a regular thing. You dont think the rally this year has been a fluke. Why not . Its the wall of money. The fed printed 2. 5 trillion of reserves that have not turned into bank loans but the banks are doing it, as can you see from rising Leveraged Finance<\/a> credits. I think as that happens, loans create deposits. Deposit, spending. Spending makes more gdp, inflation, and ultimately higher rates. I dont like Interest Rate<\/a> stocks but i love Leveraged Finance<\/a> right now. Rick santelli, jump in here. What are you seeing as we see money into into equities once again . I dont think its any surprise. Unintended consequences, i think, will be the title of more books written between, you know, where were at today and over the next three years and whether it covers the ferl federal reserve, low Interest Rate<\/a>s, quantitative easing, obama care, the Affordable Care<\/a> act, unintended consequences. I think stocks crossing the threshold of 16,000, some of the unemployment issues that push rates down that arent necessarily about a positive economy. The unintended consequences if you want to know whats in health care, have you to pass it. All this is coming back to bite us. Now, all of it isnt negative. Obviously, the dow and the s p and nasdaq are helping many people that eventually may need the money to retire. But its also disenfranchising many who need to save that dont want a more risky investment. And when it comes to obama care, you psd, you know, they keep pushing back. You were right on meet the press. And you shouldnt let them push back. The truth is the truth, maria. Truth to power. Thank you, rick. Joe, i mean, the way the markets work, they anticipate something down the road. And history would suggest that the record highs weve seen this year is the market anticipating a better economy down the road. You dont think thats whats happening right now . I do think thats whats happening. If you look over the past year, its been the uncertainty of the tax and over the past few months weve gotten more clarity. First it was who would take over for berp nan i can. Then the pace of Economic Growth<\/a>. And europe and japan. As we continue to get a little more clarity and the pace of Economic Growth<\/a> stabilizes, i think that allows risk assets to move higher. I would agree, if i can jump in. I agree with a lot of things rick said. I think ricks right. As long as weve got low Interest Rate<\/a>s, its likely the fed within the next three to six months curtails bond purchases. We think Interest Rate<\/a>s will stay low throughout 2014. As long as you have low Interest Rate<\/a>s, the party is on for stocks. You know, i think rick would agree, every party comes to an end. So, while were looking for value in the market, investors need to be cautious here to be selective about what money theyre putting to work. What do you do then . What groups do you want to be exposed in as we head into yearend where people are expecting another meltup . I think you need to be selective and look for value in the companies youre putting that money to work for in the equity sector. But a lot of our clients who are close to retirement or in retirement, they still need income. Were setting the stage for what will be a very dramatic rise in Interest Rate<\/a>s over the coming years. So, were trying to reallocate some of that money in bonds to investments as well. We think it adds diversification rather than just piling into stocks. John rutledge, the question on everyones mind is how this party will end. Will it be a 2 a. M. Ending where everyone leaves arm in arm with stars in their eyes or a rush to the exits when an alarm goes off . What do you think will happen . Is it will end with inflation and rising Interest Rate<\/a>s, which is why im fully invested in real estate and private equity are the two top categories. Utilities, interest sensitive are the bottoms. Small caps are doing well because banks are making money available again. Weve got to go, guys. Thank you very much. Thanks, everybody. Carl icahn is tweeting. Says he does not want to fight with apple but says he has no plans for walking away either. Hes hes very cautious on equities and says the market could easily have a big drop, according to a report on reuters. Hes at a reuters summit. This could account for the decline in the market. The technology stocks. He was specifically specifically about apple in one case, of which he is a big shareholder. That may be one reason were seeing this late selloff in the stock market with the dow down or the s p, excuse me, the nasdaq down about 25 points right now. Apple also, pressure. Meantime, jpmorgan has inked another costly settlement. This time with sophisticated investors who bought bad Mortgage Securities<\/a> from the company during the crisis. As other banks have found, it might not yet be a done deal. Kayla has that story. There are many parties that want their money back after buying these bad loans. And jpmorgan reaching a deal with 22 of these investors who bought into hundreds of bad bear stearns mortgages which have a projected loss value of 70 billion. Fridays deal, takes them to 4. 5 billion payout. Bernstein analysts see the move as a positive move for a bank still facing a multimillion dollar legal fight from washington. A similar deal bank of america struck thats now under fire. B of a reached 8. 5 billion deal with same exact investors in 2011 but some bondholders said bank of new yorkmellon let them down. A new york judge will decide after closing arguments are heard this week. Now, banks are always relieved to solve these issues. Citigroup among the banks that have yet to settle with this group of investors as its been expected to. As we know well from covering these situations, its not a done deal until all the investors say so. Maria and bill, back to you. Well be discussing the outlook for major stocks later on closing bell when i speak with Prince Alwaleed Bin Talal<\/a> al saud, who will be here at the New York Stock Exchange<\/a> live in the next hour. Bill, we have headlines from carl icahn. He basically says, Many Companies<\/a> earnings are a mirage. He says, earnings may be fueled more by low Interest Rate<\/a>s than strong management. He is talking about the potential of a very big drop in stocks. He says, im very cautious on equities. The market could easily have a big drop. Hes saying this at the reuters summit. Whats happening right now . Thats what were seeing in stocks. Were having a drop. All averages have come off their highs. The dow well back below 16,000. It was up there what did he say . Art cashin said 200 million for sale. That may change. That may change before the close. Were rolling over big. Nasdaq down 30 points. About 0. 75 decline at 3954. Were guessing as a result of the comments from carl icahn. Dow off the highs. 16 sth 16,000 from the dow is off the table. Bitcoins, a hearing in washington, which may be why theyre soaring. Teslas model s is the top selling automobile costing more than 75,000. Now longtime status symbol cadillac is looking to cash in on teslas success, launching its own electric car. Well get an up close look with phil lebeau coming up later on the closing bell. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets<\/a> and drive forward with broader possibilities. Cme group how the world advances. Welcome back. Check out these markets. The Dow Jones Industrial<\/a> average struggling to stay above the well, 16,000 level, but certainly above 15,9 62. Losing altitude quickly. We told you a headline from carl icahn who says basically hes expectinging a pretty good selloff in stocks. He says some earnings are a mirage and more to do with low Interest Rate<\/a>s than leadership and market demand. As soon as that headline came across the tape, the market gave up all the gains and then some. Were in negative territory and technology is rolling over the most. He says hes not walking away from a fight with apple which may very well be pressuring apple shares as well, bringing the nasdaq down. Lawmakers in washington may be the reason why. Mary thompson on capitol hill where congress is holding a hearing to find ut more about this controversial currency. Do they always some say just having this hearing has given the bitcoin legitimacy, sending prices even higher . They certainly realize that, maria. Theres a lot of excitement and concern surrounding Digital Currency<\/a>, so the hearing today is basically a way to look at how government might regulate the Digital Currencies<\/a> without stifling the process they hold. Including speedier, cheaper money transactions between consumers and merchants. And billions of people who may not have access to either cash or banks. Now, stored in online wallets, Digital Currencies<\/a> are generated by computers that solve complex problems. Their value is set by the supply and demand on the many internet exchanges where bitcoins and other Digital Currencies<\/a> trade. Unlike u. S. Dollars, theyre not backed by a government or commodity, like gold. The downside, thats many. Treasury officials testifying today say bitcoin and Digital Currency<\/a> have basically become the favorite form of money by criminals because of the anonymity they provide, allowing them to commit money laundering, tax evasion or buy and sell illegal goods. Also, given that its a direct transfer between two parties without an intermediary like a bank or credit card company, that means its very difficult for Law Enforcement<\/a> officials to detect fraud. Lawmakers dont want to squash any innovation with these digital curran sis. They see them, again, as a new way of looking at possibly a Payment System<\/a> but they also need to make sure that consumers and investors are protected and that is the problem that they are solving for today. Back to you. Thank you so much. Since it crept into the financial lexicon, the bitcoin has been involved with speculators, drug busts, video game scam but the concept remains a darling. Lets talk about both sides of this issue. Tony, ceo of bitpay, a company that facilitates merchants being able to accept bitcoins in their transactions. Hell be testifying tomorrow on behalf of bitcoin. He joins us now. Along with longtime currency expert from merck who has concerns about merck as a viable currency. Tony, youre an advocate of bitcoin. Why isnt this simply something thats been created out of thin air. Its exciting. Weve been wearing our party hat for days and days. Its trading like an early stage tech stock. If you could trade minute by minute what the valuation of facebook or twitter could be in the early stages, it would mimic what were seeing with bitcoin today. Axle, what do you think . You dont think the bitcoin passes the test for money. Why . It doesnt pass the test for money because in 400 years you would like to have something you would chose gold over bitcoins. Its shaking up the Banking System<\/a>. I think technology is promising. Think about, for example, if airlines were using bitcoin to exchange miles. Thats where i see the value of bitcoin. Putting up a price tag on something that just has a random value every day, i think, is very, very difficult. One of the knocks is lack of regulation. It has been already used for some scams out there, taking advantage of people who are unaware of how all of this works. You got a pr problem in that regard, dont you . You have to think back 20 years to the early days of the internet. In the early days of the internet there were scams and people using it for bad things. Quickly, the grownups entered and built real servers for consumers and the bad guys went to jail or went away. Any time you have a new technology, its going to explore its potential for both good use and bad use. And Companies Like<\/a> ours are clearly at the forefront trying to make sure we do business only with the good actors. Obviously, the argument youre making is that youre equating this with Early Technology<\/a>, pioneering technologies people dont understand to begin with. The difference between some of these Early Technology<\/a> companies, there was a business model. Maybe they werent always profitable but at least there was a business model. They were making money. Where is the store of value when it comes to a bitcoin, other than the fact that the buyer and seller have agreed on a value for that bitcoin . Yeah. Bitcoin does get price discovery in an open market. Buyers and sellers auction the price up and down based on supply and demand. Businesses like ours that provide services around bitcoin is where the profit lies. When you look at bitcoin itself, it functions as an etf on the whole space. Can you choose the individual companies but clearly bitcoin itself is an etf possibly on the whole space. You want to jump in . Then i have a question about anonymity. Go ahead. I do get calls from both attorneys and venture capitalists in Silicon Valley<\/a> so big moneys are looking at this. I think antimoney laundering will need to be upset. This will upset original founders of bitcoin but it will be ironed out. As far as value of money, i think we need Derivatives Exchange<\/a> to reduce the volatility, so forth, more liquidity in the market so the price cant be pushed around by a few actors. As far as value is concerned, thats very difficult to assign at this point. My question really, axle, for you, is what about the idea of anonymity of using bitcoins, whether it be what youre buying, what youre trading, maybe thats one of the attractions. I have been on the record as being a skeptic here but i was having a discussion with someone oefrt weekend and they brought up this idea of anonymity. For that reason alone would we use more use of it . People want to be anonymous in terms of what theyre buying and selling. Sure. Can you do that with a 100 bill, a gold coin. Once you get over 10,000, regulators will kick in and theyll find a way to regulate you if bitcoin will remain to be successful. The question is how much of a value fluctuation will you accept . Its like a Prepaid Debit Card<\/a> that fluctuates in value every day. As long as the price goes up, thats great. For International Transfers<\/a> youll accept more volatility. Of course, the Banking System<\/a> uses technologies thats decades old. Its great theres a new way to shake up everybody but very, very early stage. Quickly, before we go, look at that chart. As i was saying to you during the break were asking me what i think of bitcoins. Ive seen my share come and go over the years in my career but and read about them in history. When you get that kind of price action, that is not sustainable. It smacks of a you know, the tulip mania in holland in the 1600s and the whole market just disappears when people started to flee at the same time. Whats to keep this market from just evaporating . If you look at that chart and go back to april where the first peak was, looks like the chart on the right. We said, oh, my gosh, in april, this is going to the moon. Now it is going to the moon. Six months later we surpassed it. Maria brought up a point about the anonymity. Bitcoin doesnt work like credit cards and debit cards do. When youre a user of your bank, you expect your bank to keep private and not broadcast your activities into the open world. With bitcoin, every transaction is broadcast broadcast out there for public record. Thats why it is important for people to have privacy for their individual transactions. Real quick. Hold up the bitcoin. You brought one in. Show viewers. Youre telling me that one coin is valued right now at 640. Yes, roughly. This is a physical bitcoin. You know, the metal itself has no value but what is valuable is the private key under the hologram. Like a plastic gift card. The value is not the plastic, its the code under the scratchoff. This is a gift at 600, i cant take a gift but i appreciate that. Well see you in washington tomorrow. Axle, thank you for your thoughts. For a currency on the rise to a city on the decline, looking for escape go scapegoats, oakland, california, is claiming wall street sold them complicated Financial Securities<\/a> bound to fail. Scott cohn is in oakland with details in his america city series debuting this weekend. Scott . Reporter day one of our trip across america to look at u. S. Cities in critical condition, were in oakland, california. One of hundreds of u. S. Cities that made bad bets on wall street. Wall street was selling these bets to cities back in the 90s. Swap contracts that let cities lock in a fixed Interest Rate<\/a>. Interest rates back then were high and theyve gone down yet cities like oakland are paying millions a year to fund swap deals and would take millions more to get out of it. We have a lot more at cnbc. Com cities. Tomorrow well look at the pension crisis. Its bad everywhere, but particularly bad in chicago, which makes detroits problems look like a walk in grant park. Im scott cohn, cnbc Business News<\/a> in oakland, california. Thank you so much. We have news on apple. We know apple stock is down. Were just watching it fall here after the comments by carl icahn at the reuters summit, where he was commenting on the market. Where he said he felt that t the there would be a drop coming in the markets here. We know hes ep a big shareholder of apple. Advocating of a much bigger Dividend Payment<\/a> to the company, to the tune of 250 billion, something tim cook has resisted to this point. Its been an applicable relationship but apple is falling and taking a toll on the nasdaq, which is down 36 points right now. And his quote is, i do not want to fight with apple but i also have no plans for walking away. Stock down 1 on apple. Now hes losing money. Yes. Were in the final stretch of trading. 30 minutes before the trading bell rings. A market thats rolled over huge on the heels of the carl icahn comments. Nine points down. Nasdaq hardest hit with decline of 40 points. S p pulling back from fridays high. S p is more than 160 since the bottom of the market in march of 2009. If you go back to march of 2000, its not up much at all. It was that lost decade we keep talking about. Well talk about if this market is getting ahead of itself or if theres a lot more room to run coming up. A new electronic cadillac which critics are calling an impressive car spell more trouble for tesla . Phil lebeau goes behind the wheel to find out. Well take a first look at the electric caddy coming up. vo you are a business pro. Maestro of project management. Baron of the buildout. You need a permit. To be this awesome. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. You can even take a fullsize or above, and still pay the midsize price. aaron purrrfect. vo meeeow, business pro. Meeeow. Go national. Go like a pro. There is a battle brewing in the world of sports broadcasting. Julia with details on this latebreaking story. Traditional tv programmers fight with streaming video services, now the National Football<\/a> league and Major League Baseball<\/a> are warning the Supreme Court<\/a> that if aria wins legal battle, sports fans can say goodbye to free games on broadcast tv. The nfl and mlb filed a friend of the court brief urging the high court to take up the lawsuit. Abc, cbs, nbc and fox, saying if area yeah was i will loued to keep operating without compensating the broadcasts, sports programming would leave broadcast channels where its free, and move to kainl cable where theyre guaranteed retransmission fee worth 100 million to the league. Mlb and nfl saying in the brief, Court Intervention<\/a> is now necessary to restore clarity and certainty in this area and to prevent the unraveling of marketplace built upon the licensing of rights rather than the exproceed operation of such rights through Tech Knowledge<\/a> cal chicanery. Tv nets filed a petition to Supreme Court<\/a> urging it to get involved and resolve conflicting conclusions drawn by other courts. Well see if this does what if takes to get the Supreme Court<\/a> to set a date and hear this case. Back over to you. Julia, thank you very much. This could have been an historic day with wall street with the dow trying to close above 16,000 for the first time. Doesnt look like that will happen now. Dominic chu looks at some stocks that have been driving us lately. Were a little cool now. Lets get a check on the best performer in the dow. Boeing leading to the upside. Aerospace is higher on the heel of monster orders at dubai air show. Boeing got 259 orders close to 100 billion, the biggest combined order in boeings history. Also large cap Pharmaceutical Company<\/a> abvi saying experimental hepatitis c drug. 9 0 of patients treated saw no signs. 3d printing stocks, analysts say bank of america mentioned some positively in a note to clients. Well finish off with tesla. Just down huge. About 10 again today. Investors continue to push the stock lower. Remember, this was one of the highflying momentum names to the upside. Shares down nearly 40 from alltime high of 194. 50 back at the end of september. Tesla continuing that downward draft. Back over to you. 40 in a month and a half. That hurts. Thank you. Meanwhile, looking at tesla, we may be looking over its shoulder, the stock having the tough day, down 12 as dom showed us. Today gms cadillac brand is introducing its first luxury electric car. Phil lebeau is looking at whether this new caddy can rival tesla. Reporter this is the cadillac er. Not allelectric. Like a chevy volt, gasassist, extended range gas car. Is it the volt . No, the styling is different. Does it feel different in we had a chance to go up the Pacific Coast<\/a> highway in the er. Theyve been able to tweak the guts of the chevy volt they put in this car and has a crisper acceleration. 37 miles, all electric. Gas assist range, 355 miles. Heres what will get a lot of attention. It will start at under 76,000 when it goes on sale in january. And that has people saying, is there a market out there for that right now . Yes, tesla is there. When you look at ev sales in United States<\/a> through september, the volt leads the way. And then the leaf. Those are selling down between 25,000 and 40,000 range. Then the model s at over 14,000. A lot of people will wonder, will the elr cut into the business of tesla . The model s is the top selling luxury car. Not just electric car but luxury car selling for over 75,000. Average transaction price for the model s, 93,000. Want to show you shares of gm over tesla. You heard dominic chu talk about the selloff in tesla. Gm is up. Gm shares close to hitting their alltime high, which was back early 2011, the ipo happening in 2009 2010. We want to see you drive away in that hot looking cadillac. Yeah. How does it drive . Reporter its a little crisper than the chevy volt. Its definitely a luxury car. No doubt about that. What stands out, you get instant acceleration that happens with all electric cars. I think theres a market there, but, you know, well have to see what happens when it goes on sale in january. Phil lebeau heading up pch in santa monica. There he goes. Looks like another lovely day. What a surprise . Thank you, phil. Car country. 25 minutes left in the trading session here. Still a slight downward bias. The dow has lost 75 points since carl icahns comments were made public 20 minutes ago he could see a drop in the market. So, he could move trillions and trillions of dollars in market value with it one comment . Thats carl icahn. Where are the best opportunity in this market as we see the market trade around record highs . Well ask one of the richest men, prince al saud, well talk twitter, oil, iran. Make sure to stick around for this oneonone interview. Always enjoy his visits. Up next, why cant humans just accept when something good is happening . I mean, the markets are at record highs. Now were hearing bubble talk. Is that remotely justified . A look at both sides of the that story coming up. And we own the. 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<\/a> app from ink. We didnt get into business to spend time managing receipts, thats why we have ink. We like being in business because we like being creative, we like interacting with people. So you have time to focus on the things you love. Ink from chase. So you can. As know, the dow and s p have been breathing airzona with alltime highs. Even the nasdaq was approaching a range we havent seen since the internet boom days of 200. Seema mody has been monitoring. We put together a couple different factors that could derail this market rally. First trigger is fresh Economic Data<\/a> due out on wednesday when we get october existing home sales number. Fitz weaker than expected, the staying power of the housing recovery will be questioned. Also this week, inflation ratings on wednesday. Consumer price index and retail sales. Another potential catalyst, earnings. This week we get a good read on the consumers with home depot, jcpenney, target and gap reporting. Throughout the week, commentary could provide a window into holiday expectations. Theres still a lot of longterm head winds, including hbc. Most valuations are slightly above their tenyear averages. A warning sign prompting some analysts to disagree with the notion that the market will continue to move higher. Lastly, europe. While the situation is improving its still dealing with deflation, tepid growth and fiscal worries in greece, slower than expected recovery could impact the bottom line of some multinationals that do have exposure to the eurozone. Thank you so much. The dow and the nasdaq aiming to close at milestone levels. 16,000 for the dow industrials. 4,000 for the nasdaq. Dow is looking to have a better shot of hitting that mark at the moment. At the moment. But anything can change. In this market, are we in a bubble territory, far from it . What should you do with this given the kind of gains weve seen since the market bottom of march of 2009 . Go back to early in the year 2000. In fact, if the teleprompter will keep moving ill make my case. Whos running prompter today . The market isnt up at all. We had this lost decade going back to 2000 where the dow hit 10,000, fell and then finally got back to it a decade later. But are we in bubble territory now that weve gone from 10,000 to 16,000 in just a few years . Cnbc contributor ron says theres no bubble in sight. Hello, bill. And michael, it says on the prompter when it moves, he thinks the good times are coming to an end. Bills getting mad. I know, bill, hes getting mad. Theres two of me now. Im beside myself. Hey, ron, how are you doing . Im fine, thank you. We hear from more and more analysts that say theres no place for the market to go up up because of quantitative easing by the fed. Thats classic bubble talk, isnt it . Bill, it would be if this were classic bubble activity. Bubbles have very defined characteristics, weve done studies on bubbles, how they develop over time and how they burst. Stan breckenridger says two things kill bull markets. Higher Interest Rate<\/a> and uncertainty preceding a war. We see environment where there are bubblelike circumstances in certain situations. Bitcoin, thats one. Private equity deals are getting too rich, too levered. Social networking type stocks taking off. Bis bizarre things like fanex that was going to sell arian foster, which got ditched because he got hurt. There are pocket expectations but i wouldnt classify this as a bubble. Michael, you have have been concerned this is a bubble. What are the alternatives . Sometimes bubbles get bigger and bigger. Thats absolutely right. We talk about what defines a bubble. Gaps, disconnects, ends conviction the market has. You have a bubble, i think, in the wealth gap between rich and poor, which is a direct effect of coming from the wealth effect, which only affects the wealthy. You have a bubble in where stocks are relative to inflation expectations. This is an incredible glaring disconnect thats happened all year. Doubles are not supposed to be inflaigs flags deflation hedge. Third bubble in conviction that the fed is going to fix it all. I want to remind everybody we have this belief because theres this insurance policy that affects qe that we cannot go down, excuse me, but we have multiple 20 , 30 moves in the nikkei despite qe in japan. I would disagree with that assessment. Japan has never done until recently attempted fullscale quantitative easing. It made many policy mistakes from 1990 until today and has further to go on the policy front until were sure theyve attempted to ameliorate the problems theyve had. At home, the fed has been aggressive. Well extend the zero percent Interest Rate<\/a> until 2014. Qe may not taper away. Hard to sell. Fed is supporting not only Financial Assets<\/a> but the economy. Theyve recapitalized banks. Corporations are in the best fiscal shape since the 1950s. The private sector is doing far better than most people would suggest. This is not just built on air. I think thats a wild misconception. This is a classic debate. I wish we had more time. Carl icahns comments took the air out of todays bubble. Hes not a market timer and i dont think people should put weight in what he says. Markets can go down any time. We should also ask him if he was short the market. I wish i could. I understand. Thank you both. Your thoughts on todays market action. Heading toward the close no hard feelings, teleprompter. You think we make this up . No, we read it all. The dow is up 7 points so were starting to come back. Lets take a short break. After the break, one of the wealthiest men in the world, Prince Alwaleed Bin Talal<\/a> al saud will stalk about shifts in balance of oil power to the current state of the middle east. Jooifshgs up the check . [thinking] im still working. Hes retired. I hope hes saving. I hope he saved enough. Who matters most to you says the most about you. At massmutual were owned by our policyowners, and they matter most to us. Whether youre just starting your 401 k or you are ready for retirement, well help you get there. Customer erin swenson ordebut they didnt fit. Line customers not happy, im not happy. Sales go down, im not happy. Merch comes back, im not happy. Use ups. They make returns easy. Unhappy customer becomes happy customer. Then, repeat customer. Easy returns, im happy. Repeat customers, im happy. Sales go up, im happy. I ordered another pair. Im happy. both im happy. Im happy. Happy. Happy. Happy. Happy. Happy happy. I love logistics. In a we believe outshining the competition tomorrow requires challenging your Business Inside<\/a> and out today. At cognizant, we help forwardlooking Companies Run<\/a> better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. Some of the biggest names in technology have gathered at Cloud Computing<\/a> conference in San Francisco<\/a> where we find our own josh lipton. Josh . Reporter yeah, bill, here at dream force, it is billed as the biggest Cloud Computing<\/a> party on the planet. Some 130,000 expected to register. They are here to party, to network and to listen to a whos who of Silicon Valley<\/a> superstars. Yahoos marissa mayers, sean penn, rock bands like green day. A clear shot at oracle and its big event in San Francisco<\/a>, open world. The two have been bitter rivals in the past and now partners integrating their inte netbased software. Foes becoming friends. This years investors have clearly sided with salesforce. That stock has surged higher. They are now seen as poster child for the cloud. The street wants to see eps on nine cents on revenue of 1. 1 billion which would represent year over year growth of 34 . Well bring you all the numbers on the closing bell in about 20 minutes. Bill, back to you. Josh, thanks very much. By the way, salesforce chairman and Ceo Marc Benioff<\/a> will be on mad money. Jim cramer is out there broadcasting from dreamforce. Dont miss that at 6 p. M. On cnbc. The biased is sloe slightly to the downside. This has been an exciting market. Much more on this wild market. Tdd 18003452550 searching for trade ideas that spark your curiosity tdd 18003452550 can take you in many directions. Tdd 18003452550 you read this. Watch that. Tdd 18003452550 you look for whats next. Tdd 18003452550 at schwab, we can help turn inspiration into action tdd 18003452550 boost your trading iq with the help of tdd 18003452550 our live online workshops tdd 18003452550 like identifying market trends. Tdd 18003452550 now, earn 300 commissionfree online trades. Call 18886282419 or go to schwab. Com trading to learn how. Tdd 18003452550 sharpen your instincts with Market Insight<\/a> from schwab tdd 18003452550 experts like Liz Ann Sonders<\/a> and randy frederick. Tdd 18003452550 get support and talk through your ideas with our tdd 18003452550 trading specialists. Tdd 18003452550 all with no trade minimum. And only 8. 95 a trade. Tdd 18003452550 open an account and earn 300 commissionfree online trades. Call 18886282419 to learn more. So you can take charge of your trading. Welcome back. About seven minutes left in the trading session here. The dow down 2 1 2 points. Erin gibbs, chief equity strategist here. When carl icahn says there could be a big market decline and then the market declines, that speaks to how skiddish the market is, dont you think . Were priced for perfection. Looking forward into 2014, we actually still see about 12 earnings growth. I think there still is room to grow in the year forward. I wouldnt say were going down next year. When you look at momentum names, teslas of the world, big leadership names that have led this market year to date, is it ready to cash in on those . Oh, yeah, definitely. Any of those, the high flying, internet retail, some of your technology, you know, anything thats really froth y trading in hundred times earnings, absolutely, i would say take my money off the table and lets get into companies that are priced a little more reasonably. Who would that be . Some of the financials, some of the reits, particularly with the question of tapering coming back in 2014. Some of them are trading below ten times, like nine times earnings. We also have a few of the technology names. Your beaten up ciscos, microsoft. With so much cash, theyre trading around ten times earnings. Apple . Apple, too . Apple, too, absolutely. In broadly speaking, the pes on the broad market daisht broad Market Selling<\/a> at 15 times . 17 times for 2014 earnings. What about trailing earnings . 15 times. Erin, thank you so much. Thanks. Well come back with the closing countdown and see if we can finish with an alltime high on the dow. But not energy or even my mood. Thats when i talked with my doctor. He gave me some blood tests. Showed it was low t. Thats it. It was a number. [ male announcer ] today, men with low t have androgel 1. 62 testosterone gel. The 1 prescribed topical testosterone replacement therapy increases testosterone when used daily. Women and children should avoid contact with application sites. Discontinue androgel and call your doctor if you see unexpected signs of early puberty in a child, or signs in a woman, which may include changes in body hair or a large increase in acne, possibly due to accidental exposure. Men with Breast Cancer<\/a> or who have or might have prostate cancer, and women who are or may become pregnant or are breastfeeding, should not use androgel. Serious side effects include worsening of an enlarged prostate, possible increased risk of prostate cancer, lower sperm count, swelling of ankles, feet, or body, enlarged or painful breasts, problems breathing during sleep, and blood clots in the legs. Tell your doctor about your medical conditions and medications, especially insulin, corticosteroids, or medicines to decrease blood clotting. In a clinical study, over 80 of treated men had their t levels restored to normal. Talk to your doctor about all your symptoms. Get the blood tests. Change your number. Turn it up. Androgel 1. 62 . [ male announcer ] lauras heart attack didnt come with a warning. Today her doctor has her on a bayer aspirin regimen to help reduce the risk of another one. If youve had a heart attack, be sure to talk to your doctor before you begin an aspirin regimen. If youve had a heart attack, be sure to talk to your doctor maestro of project management. Baron of the buildout. You need a permit. To be this awesome. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. You can even take a fullsize or above, and still pay the midsize price. aaron purrrfect. vo meeeow, business pro. Meeeow. Go national. Go like a pro. [ bell ringing, applause ] five tech stocks with more than a 10 . Change in aftermarket trading. All the tech stocks with a market cap. Of at least 50 billion. Are up on the day. 12 lowvolume stocks. Breaking into 52week highs. Six upcoming earnings plays. That recently gapped up. [ male announcer ] now the world is your trading floor. Get realtime market scanning wherever you are with the mobile trader app. From td ameritrade. Inside three minutes. Looks like were not going to make 16,000 today. Real reversal going into the close, thanks to words from carl icahn. On our watch. The dow bumping along. We had been at 16,000 for a while. Any positive close would be an alltime high and then the carl icahn comments coming out saying he feels we could see a decline in this market right now. And we got one. Were down a fraction. We could still finish positive, but we had a guy with us, i think, who agrees with carl icahn. Matt, youve been skeptical of this market. Yes. I dont have as much pull as he does, unfortunately. Obviously, his words do mean something. And the market you talk bubble, we Start Talking<\/a> about froth, talking about Investor Sentiment<\/a> being as high as it is, the bull sentiment, money inflows. Weve gotten some place end, no doubt about it. High fliers selling off, facebook, tesla, they have been darlings. It may be time for a sectional rotation of money. It might be time to take a break. Valuations are not 15 times, 17 times trailing earnings. Very few alternatives in i very lowyielding world. Where do i put my money if i want to sell out . Interesting comments out of china that maybe theyll start seeing more political help for investors over there. Maybe they take their money out of the u. S. And maybe they put it in china. Are you telling me to sell the u. S. And buy china, matt . Were not doing that. U. S. Companies have done well. I want to see what the prince is doing. Prince alwaleed next hour. Good to see you. The fed is always asked, is this a market bubble . They always have to answer that question. Nobody wants to cop to the fact that maybe asset prices have become inflated. We dont know its a market bubble until after its happened. So were going with hindsight, all these market tells appeared and we didnt take advantage of them. If youre an investor, you probably want to play more defensive. You see stocks like exxon performed well. That was a defensive stock down on the year and now its up. Look at this. Now the dow is starting to move higher again. Well finish in alltime high territory. Wont be at 16,000 but a new record. The s p finishes lower. Nasdaq certainly getting clobbered today from the comments by carl icahn. Matt, thanks very much for joining us. Salesforce. Com will be out with earnings momentarily. Well see how those numbers look from out in california. And stay tuned, the prince himself, alwaleed bin talal will be with maria on the second hour of the closing bell. Ill see you tomorrow. And did is 4 00 on wall street. Do you know where your money is . Hi, everybody, welcome back to the closing bell. Im Maria Bartiromo<\/a> on the floor of the New York Stock Exchange<\/a>. It was tough getting there, but we are closing at another alltime high. The dow industrials tonight hitting 16 sthou. Early today for the First Time Ever<\/a> but the market sold off after carl icahn warned hes very cautious on this market and then came back a fraction to close at another alltime high. In unchartered territory for the blue chip average. Dow industrial at 15,975. 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