anyone who still needs to do christmas shopping. a week from now -- you know christmas eve is a week from today. just so you know. eight days till christmas. are the best deals yet to come and how late can you order online kelly, and still get it on time? we have your crucial retail details and stocks that are moving on all of this news this holiday season. >> are you telling me you're done, that you're already finished? >> i'm 90% done. >> also coming up the who's who of the tech industry descending on the white house today. the president said he wanted to talk about how to improve healthcare.gov but the tech titans wanted to talk about the nsa and demands on their company. >> would loved to have been a fly on the wall. >> he's a sitting judge, familiar to most on wall street he has presided over wall street financial cases for year but judge jed rakoff has written an essay asking why have no high-level executives been prosecuted? is that appropriate for a judge to write and will this ramp up pressure to perp walk a bank fed? open up a whole can of worms here. >> you should really read it. it's fascinating. in the markets, take a look at what's happening. we have small losses across the index. dow off a couple points 15882 is the level right now. nasdaq seeing small declines. we're seeing pressure coming on social media names like linkedin. while on the other hand, a twitter, facebook -- at least facebook and yelp is doing better. the s&p 500, off four points 1782. >> let's talk about today's market action the fed and all those fun things in our "closing bell" exchange with heather from jpmorgan private bank rex massey from wilmington trust, greg sxr hightower and rick santelli as well. healthier, heather, i agree with you, you feel the fed doesn't taper until at least the march meeting. what's your reasoning on that? >> do i. part of it is structural. this is the last bernanke press conference and i think he'll take the opportunity to transition the leadership. january doesn't have a press conference. that brings us to march. while the data has been strong you're still looking at inflationary numbers which i think the fed wants to see come up from here. >> yellen's first meeting is in march, so if they're going to do anything, i think they wait until the new person starts. >> could be. peter, i wonder how much this is just about the inflation outlook. everybody knows how important longer term inflation, 1.5% to 2% range is for the fed, and reminded by the cpr report this morning, we're not there. and it come down to that? >> well, instead of taking a look at bureaucratic timing of all this i think one thing you have to look at is inflation, and i don't think they'll take action until they see true measures of growth. we can look at the timing of the meetings things like that. when former chairman were there, we would look at the size of their briefcase to determine whether or not they were going to raise rates. now we're not looking at the briefcase. i think what we should look at is just the macro environment and the labor market is doing well but not cannot will he well. i would say march at the very earliest but maybe three to six months beyond that. simply because yellen has to get her sea legs, get used to the rhythms of these kind of movements and i think we need to give her more time. >> you agree, don't you, greg? >> i would agree. i think the fed would rather be late than early. the economic data has been good but the risk the fed has in tapering tomorrow is if they have to go back a month or two later and repurchase bonds to reinflate the economy. deflation is greater risk than inflation. yellen will want time to get her team in place to analyze the data at her pace. she's had a dovish track record like bernanke. i think the markets will want her to have some time to make her decisions. >> rex, given we could be looking at march or later tapering or the way conditions are evolving in this super low environment, what does that mean for investors? you look with the tlt, long treasury etf up 1% you've seen some longer end of the yield curve coming down. in other words, should investors look for opportunity in the fixed income space, maybe muni bonds where people have piled out? >> i don't think you want to jump too far. it's only a matter of time before interest rates start moving up. we do have a recovery. there will eventually be taper. it's a matter of months. i wouldn't want to step in front of a long bond too quickly. >> well let's ask mr. market about that, rick santelli. if you look at the equity markets, it's clear, it's wait and see time until toemgime. the dow is up a whopping one point. what is fixed income telling you? >> i think 2s 5s 10s and 30s are going to close at one-week yield. i think they're where they want to be at this moment. the buybacks are concentrated in the middle to the ten-year part of the curve. we want to watch how everything fares with maybe the long ends and 5s and 30s spreads. here's what i find fascinating. i agree with jim grant this morning on "squawk box," what prices are going up? well, let's see. ferraris, art, stocks bonds, in terms of downside i understand, but to think we should subsidize the economy in the form of these purchases forever, it just doesn't make any sense. as a matter of fact, low interest rates by themselves forgetting permanent open market operation buyback, maybe that should be a benchmark against inflation or higher prices. but in the end, it seems as though wire forgetting about one very giant sized risk. that risk is a $4 trillion balance sheet. how that eventually turns out. >> yes, indeed. >> rick you can imagine the scenario, if a year from now if conditions did like they did in 2013, where this concern is really at the forefront, but right now it seems like you know, unemployment's still around 7 %. yes, asset prices have recovered. >> it's more like 9.5% or 10%. >> exactly. it is worth -- >> people unaffected by these buy buyback programs. the cost benefit analyses is not there. maybe a better mouse trap to catch the mouse. the mouse is the part of the economy that isn't creating jobs. >> let's make this relevant to investors, then. heather, what would you be buying here as we go through this rather uncertain period at the moment? >> how weaver been structuring portfolios is for rising interest rates. our portfolios have a core component to them, we also complement that with credit which tends to be positively correlated to rising rates and managers who have benchmark agnostic strategy who can be more nimble during this time period. if we see a rise in interest rates to 150 basis points, i would consider moving back into negatively correlated assets at that point because of the steepness in the curve and attractiveness. >> a lot of people have been talking about negatively correlated assets, like real estate. to the point rick was making isn't there such a thing? don't these prices move reflecting other developments happening across the economy? >> yes but largely what you'll be watching for is earnings. we're about to come into fourth quarter earning season. we're positive on that. we think guidance has been down enough that we'll get a decent report in the fourth quarter. 2014 looks good to us with earnings on the s&p at $116. i think rick is scared of the boogey man, $4 trillion balance sheet. years ago they said where's inflation? we don't see it. we're not worried about inflation. >> famous last words. >> we like to see rising earnings environment. and the market has been with us. >> i have to move along, rick, but i know you can't let that go. >> no, that's all right. well, in the end, you look at all the managed economies throughout history. maybe it work force a while. but i'm sorry, this is a bad stencil. the reason we're a great country, free markets free markets, not manipulated markets. if was a corporation or hedge fund, then we'd be celebrating behind bars. >> i see some heads nodding. thank you for your thoughts on today's market. appreciate it very much. >> thanks so much. cnbc is your place for live coverage of the fed sdpigs tomorrow. it all begins at 1:50 p.m. eastern, with a statement. it will be followed by ben bernanke's final conference at fed chairman although not his last meeting. that press conference will kick off at 2:30 est. we have 50 minutes left to go until the close. dow adding a couple points here. s&p 500 is a little weaker though at this juncture bill. nasdaq flat. >> we talk about how this is the most important hour of the trading day. now there are data to back that up. you want to stick around because you cannot afford to miss new data that proves when you buy stocks make a huge difference in how much profit or loss you may suffer in this market. >> also an astounding number of americans haven't even started their holiday shopping. >> really? how is that possible? >> coming up next we'll take a look at retailers set to catch in on those boxing themselves into a corner. >> what outrageous gifts do rich people give other rich people? robert frank has top gifts for the super wealthy. guess what? those you can get delivered pretty fast if you're willing to pay tore it. that's on the list there. you'll want to see what robert has lined up for us coming up later on the "closing bell." chuck vo: there's a saying around here you stand behind what you say. around here you don't make excuses. you make commitments. and when you can't live up to them, you own up, and make it right. some people think the kind of accountability that thrives on so many streets in this country has gone missing in the places where it's needed most. but i know you'll still find it when you know where to look. anncr vo: introducin g the schwab accountability guarantee. if you're not happy with one of our participating investment advisory services, we'll refund your program fee from the previous quarter. while, it's no guarantee against loss and other fees and expenses may still apply, we stand by our word. hi honey, did you get the toaster cozy? 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[ grandma ] with new fedex one rate, i could fill a box and ship it for one flat rate. so i knit until it was full. you'd be crazy not to. is that nana? [ male announcer ] fedex one rate. simple, flat rate shipping with the reliability of fedex. ♪ ♪ [ male announcer ] how could a luminous protein in jellyfish impact life expectancy in the u.s. real estate in hong kong, and the optics industry in germany? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 70% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. so if you haven't even started -- who hasn't started? >> i donlt know anyone like that. >> that's silly. you're not alone. courtney reagan looks at the number of proceed kraster ins and where they're heading for last minute shopping. and the weather is putting further pressure on those people, isn't it? >> andmy, too. it's not pleasant out here. the latest survey shows 32 million consumers had yet to start their holiday shopping. now, that was on december 9th. so, that means retailers have some time potentially to finish the season strong. except for half said they're going to do their shopping, finish it up, online. you have the combination of a ticking clock, so to get those packages to your door in time for christmas, plus bad weather, that could scare shoppers into stores. so, we checked in with shoppers in california, they're mixed online versus in store. here's what they said. >> i mostly finished it. i did it most of the time and now i'm shopping for me and getting all all the specials. >> i like trying on sizes and being able to see it in person. >> reporter: here's a video of the small traffic. both here at the mall behind us and one in l.a. not an abundance of foot traffic at either one, snow or no snow. 29% say they'll finish up shopping by tomorrow. 14% by friday. 12% will finish saturday. last holdouts 10% waiting until christmas eve. they say they'll finish at department stores first, followed by discounters. we'll see what happens, but retailers holding their breath on these final eight days. >> yeah hoping for a little santa claus rally of their own. stay with us if you would. our our e-retailers as a result dominating the game and is there any way for brick and mortar to catch up? >> let's bring in a couple of experts. steve from berman capital joined by john moore, senior retail analyst at bemo capital. kelly and i were talking earlier, she said what you feel, that there seementzs to be a tipping point toward online retailers. it's a paradigm shift. >> it's accelerated, but now a point where 130 million tablets that have been sold. everyone is buying iphones or cell phones. it's easier that way. you're seeing amazon sales have skyrocketed. they went from 31% in the second quarter to 39% in the third quarter and black friday their numbers were up 40%. what people don't realize is amazon is ten times the size of walmart's online business. the numbers are just amazing. >> does that mean john because so many people like to focus on amazon's valuation relative to lack of earnings do you bet on an amazon here? what are the ways to play this space? >> other things have you to look at you can still bet on bricks and mortar because a lot of those stocks are down and out. valuations are very cheap. expect taking expectations are really low. think about children's retailers this season, they've really been benefiting from the very cold weather. so, you've got kids sweaters kids outer wear. children's place uction, not expensive stock, doing a great job. really on the comeback we think. >> the number of people planning to shop on christmas, maybe 9% of those surveyed. that speaks to the gift cards and e-coupons people can buy at the last minute. >> isn't that amazing? i think, too, people are so value-driven these days. so many folks are holding out, trying to take advantage of retailers' desperation. they know the closer it gets to christmas, the better chance they might have of getting a deal as retailers try to sell that merchandise no how deep the discount. of course, you take the risk of some inventory falling and as you say, it's that e-card gift card, cash in on christmas day, loading up the ipads and iphones people open under the tree. it's amazing that number has doubled. >> i understand there are always going to be companying like a best buy. do you agree here you should bet on some cheap value traditional brick and mortar games or the disrupters those taking advantage of the online boom? >> i think the world has changed. i think what you have is a better opportunity. the people -- the samsungs and apples that are selling all these devices, they're winning. amazon -- i mean, the amazon is unusual, a one-of-a-kind entity. it's hard to say whether or not to buy the stock or not because the valuation is so difficult. there are segments tjxs, off retailers are doing great. >> i was going to say, there are a couple of retailers, fabulous brand names like a gap or limited which runs victoria stores and bath & body works, those are brick and mortar but they have a presence on the web. they can benefit from both. >> the feeling early on i'm talking about late '90s, is that if a company had both brick and mortar and online, it would be cannobolizing each other. >> yeah. a lot of the specialty -- nordstrom's, urban outfitters, anthropologie have done it that way. >> reporter: to that point, macy's is opening a new fulfillment center in oklahoma. macy's is doing one of the best with omni channel offering for consumers, in store and online. many think it's a winner this season. they can hopefully continue that trend throughout time building these fulfillment centers and using the stores to fulfill from the web. >> i was going to say, even urban outfitters, which steve mentioned, here's a company that has -- you know, they're telling us that within a couple of years, they're going to get up to about 50% of their business coming from e-commerce. so, don't count some of these traditional bricks and mortar guys out because they are really getting with it. they're really building up that e-commerce building in terms internet and mobile apps. >> i was telling kelly before we went on the air, years ago when i was doing "power lunch," i remember having a couple retail analysts on the show and i was shopping online at that point and i said i think this could be big some day. they both said to me no 2% 3% is what you'll get, maybe 5% of retail sales down the road. wasn't this inevitable or a big surprise to you guys? >> it's inevitable that -- the mobile devices have changed the world. instead of being 5% 10% of your business, it could be much more. the thing urban outfitters has done is they limited the number of stores they have to 250 stores. so, you could do a lot of business online and they have 50/50 split. you go to retailers like american eagle or gap, they have 1,000 stores and they have to downsize, cut the -- >> someone has to a buy them up and consolidate. >> appreciate it. snuffles reagan get back in. >> here's the dow, not a ton of movement head of the fed meeting tomorrow. >> just waiting for that fed meeting. >> boeing playing hard ball with washington state workers. not so much with investors. that stock has been flying high after announcing a huge dividend increase and a very big stoke buyback. when we come back we'll hear from one person who says the sky is the limit for boeing shares. >> did you see this one? paul mccartney, who's worth nearly $1 billion look at that disappointed after failing to catch a free t-shirt at an nba game last night. >> he's competitive. come on. >> we want to know what you think about that, if you have a caption for the video. we're having caption contests. tweet us @cnbcclosingbell. americans take care of business. they always have. they always will. that's why you take charge of your future. your retirement. ♪ ♪ ameriprise advisors can help you like they've helped millions of others. listening, planning, working one on one. to help you retire your way... with confidence. that's what ameriprise financial does. that's what they can do with you. ameriprise financial. more within reach. ♪ i wanna spread a little love this year ♪ [ male announcer ] this december, experience the gift of true artistry and some of the best offers of the year at the lexus december to remember sales event. this is the pursuit of perfection. this is for you. ♪ ♪ [ male announcer ] bob's heart attack didn't come with a warning. today his doctor has him on a bayer aspirin regimen to help reduce the risk of another one. if you've had a heart attack be sure to talk to your doctor before you begin an aspirin regimen. not a ton of follow-flew with yesterday's rally. what's going on today? >> not a lot of action here ahead of the big fed decision. let's kick things off with bigger movers of the day. frontier communications up around 9%. that's after the telecom said it would buy at&t's land line business in connecticut for $2 billion in cash. the deal gives frontier 900,000 phone lines and 15,000 broad band internet connection. then two other big movers in large cap, computer stores device makers sea gate technology and western digital are up around 3% 4% on the heels of upgrades by jpmorgan citing slower migration away from hard disk drives to flash memory products. financial data factset is down. we'll cap it off with boeing. the stock is flying higher after they announced late yesterday it would boost dividend by 50 and approved $10 billion buyback program. largest in the company's history. boeing shares are up 8 1% so far this year. back over to you. >> dom, thanks very much. >> let's talk about that. could boeing stock fly even higher from here or will it finally be grounded? i got all the lame puns out of the way. >> thank you for that. john joins us from gfi group saying it has more room to run despite the climb. guys, welcome. john first to you, i would love to know why after this run you think boeing goes higher from here? >> we think actually boeing has a beta of one. we expect the market to go higher. backlogs are nice. we love buybacks. we love when the company's on our side. the institutional ownership is below 80%. we think that will ramp up. don't think you can have another nice move of boeing. as well as the fact they're buying back about 10% of the float. they're going to have to go and compete against boeing to get exposure to the stock. >> yeah you're not exactly bearish on this stock. it hit your price target and you said enough was enough for the time being. is that it? >> yes. boeing has been a great story over the last year. executing really well on their biggest program. new program was 788. down from being a cash loser to being almost break even. hopefully in a year and a half. there are a couple big risks in the stocks people haven't taken account of. the biggest is the program that's making half their money in the commercial business. the triple seven. the backlog is getting pretty low. they announced a successor plan meaning orders for old orders will start moving lower. people having to factor that into their estimates. the flipside is boeing has to invest about $10 billion just to build the plant for that new plane. not bad news but big haul on cash. >> if that's a big haul on cash why turn around and increase dividend, do a buyback and put cash forwards other purposes they could be investing with? >> i think that's one of the reasons we like the stock. obviously, free cash flow is very good. that will increase. they have half a trillion in backlogs. the fact the sequester is rolling off, defense spending is probably going to increase. the world is not getting safer. it's getting more risky as in ukraine, asia we see basically in the middle east as well. those are factors short term that will drive defense, not even to mention they might spin off defense and aerospace. that's another catalyst. as well as the fact getting back to the oil and gas situation and the fact that the u.s. is going to be the best place to manufacture anything over the next three to six years, so the fact the costs will be going down you know that's one thing people aren't factoring into the equation. >> just in terms of the backlog, it's true. boeing's backlog is stunning. sitting over seven years. the issue is it looks like a lot of demand from the market has been pulled forward. rates are low. it's easy to get money to buy a plane. fuel prices are high. there's a good argument for buying a plane earlier and swapping out that old, inefficient plane earlier. if you look at boeing's old estimates for underlying aircraft demand it looks like production rates are five or six years ahead of where they should be. it's clear future demand is being pulled forward into the current period which means there won't be a lot of growth if you look out in future years. >> i want to bring up from a different point of view boeing has been able to play one state off another to get the best possible deal for the location of its manufacturing here, which is not a great deal for states. it has been proven this tax incentive gaming business is just a net loser for everyone but the company involved. i guess it's a good sign from a shareholder point of view and perhaps that's why they felt more confident being able to go ahead with this dispersement plan. >> i think this is notice time for union eberus. i think that's another positive. the reason why they're doing the buyback. don't fight the fed and don't fight boeing. >> i think -- i think that the union negotiations and boeing's decision to move the plant elsewhere for 777. that's going to make them a lot more competitive over the long term. no question about that. you also have to recognize that boeing is doing that because the investment will be required and this new plant is going to be enormous. pressure in terms of cash is going to be significant. it's great for boeing but you'll get paid for it in 2020. >> if you're patient. good to see you as always. thanks for your thoughts today. >> half an hour left to go before the close now. the dow is up 14. as we said earlier, interesting moves even within this space where you have high fliers with regard to a yelp but linkedin is lagging. when we come back diana olick tells us why you might to want remodel your porfolio. >> facebook rolling out video advertising as latest effort to boost bottom line. some people really don't like auto play videos. >> i love them. who doesn't love them? 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(announcer) ranked highest in investor satisfaction with self-directed services by j.d. power and associates. eye opening number on builder confidence rising to highest level since august. >> the real money in housing isn't heading to new homes. it's actually heading to remodeling. diana olick what's going on here? >> two things. the return of home equity and the return of confidence in home values. both of those are making homeowners look at their homes in a more positive light. in that light they're seeing what they want to change. first, fast rising home prices brought more than 700,000 homeowners back into the black on their mortgages just in the third quarter of this year according to core logic. that equity gives homeowners not just the ability to remodel but that confidence. so in turn residential architecture billings hit highest level in seven years this fall according to american institute for architects. additions, kitchen and bath, back in business. folks are not, however, pulling cash out of their home to finance their projects. they are more than ever now paying all cash. remodeling permits are up 7% year to date. that from build fax. remodeling jobs are mid to low level. during the housing boom and remodeling boom between 2004 and 2007, we saw high-end renovations but today it's more general upgrades and fixing things that are broken. i spoke to those saying they want to find new homes but they can't find what they want so they are choosing to renovate their own. >> this is the way it's supposed to be. isn't it? i mean we went through a huge boom an unsustainable boom. then we went through this crash where so many were under water. now we're get back to what we would consider a normal sort of set of activity by people as they fix up the house that they want to stay in. >> right. except that a normal activity would be that maybe as folks get home equity and they feel they can sell there's that pent-up move-up demand, but they are not doing that as much. that's why when we talk about home builders and home builder stocks, what you want to do is look at building material makers going into those renovations rather than just home builders. >> i would love to know the demographics. if it's somebody in my generation, we're not looking to move up too much. >> the kitchen, i'm talking the kitchen. >> that's not low level. >> it depends. >> that's going to add to the price of your home down the road some day. that's normal. that's not flipping and burning. >> does-t does require home prices to keep moving in the right way, at least. >> it does. we expect home prices to see gains but they will ease because they were going up too far, too fast this year and that's not sustainable. >> diana thank you so much. good luck with the kitchen. >> yeah. that can ruin a marriage, too, by the way. see you later. where are we? 23 minutes left in the trading session here today. we're going out flat today. wait until the fed news conference starts tomorrow at 2 p.m. eastern time. you'll see it here on cnbc. until now, it's unchanged. >> we just dipped negative slightly. new data proving so-called smart money trading at the close giving you more reason to watch the program, but proof this is the most important hour of the trading day. ♪ sky fall ♪ >> you ever want to channel your inner james bond? now you can by chatrting the yacht from "skyfall." sing it adele! stick with innovation. stick with power. stick with technology. get the new flexcare platinum from philips sonicare and save now. philips sonicare. my mantra? family first. but with less energy, moodiness, and a low sex drive, i saw my doctor. a blood test showed it was low testosterone, not age. we talked about axiron. the only underarm low t treatment that can restore t levels to normal in about 2 weeks in most men. axiron is not for use in women or anyone younger than 18 or men with prostate or breast cancer. women especially those who are or who may become pregnant and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. report these symptoms to your doctor. tell your doctor about all medical conditions and medications. serious side effects could include increased risk of prostate cancer; worsening prostate symptoms; decreased sperm count; ankle, feet or body swelling; enlarged or painful breasts; problems breathing while sleeping; and blood clots in the legs. common side effects include skin redness or irritation where applied, increased red blood cell count headache, diarrhea, vomiting and increase in psa. ask your doctor about axiron. tdd# 1-800-345-2550 searching for trade ideas that spark your curiosity tdd# 1-800-345-2550 can take you in many directions. tdd# 1-800-345-2550 you read this. watch that. tdd# 1-800-345-2550 you look for what's next. tdd# 1-800-345-2550 at schwab, we can help turn inspiration into action tdd# 1-800-345-2550 boost your trading iq with the help of tdd# 1-800-345-2550 our live online workshops tdd# 1-800-345-2550 like identifying market trends. tdd# 1-800-345-2550 now, earn 300 commission-free online trades. call 1-888-628-2419 or go to schwab.com/trading to learn how. tdd# 1-800-345-2550 sharpen your instincts with market insight from schwab tdd# 1-800-345-2550 experts like liz ann sonders and randy frederick. tdd# 1-800-345-2550 get support and talk through your ideas with our tdd# 1-800-345-2550 trading specialists. tdd# 1-800-345-2550 all with no trade minimum. and only $8.95 a trade. tdd# 1-800-345-2550 open an account and earn 300 commission-free online trades. call 1-888-628-2419 to learn more. so you can take charge of your trading. we have pointed out, the nasdaq has outperformed the other averages for the last five years and there may be more room for nasdaq stocks to pop. sheila d. explains. >> we are looking at what stocks at the nasdaq still have room to go, despite all of those big gains. we've been coming through analyst price targets and find three names analysts think are poised to pop. first up on the list, is vertex pharmaceuticals. analysts are expecting 40% increase. oppenheimer says if you look the pipeline, it's strong. the company has been cost cutting. second up is ebay. this is interesting because this stock has been an underperformer this year, basically flat on the year. analysts are projecting the stock to go up about 20% in terms of their price target over the next 12 months. they say, the earnings group, guidance picture have been terrible this year. if you look at fundamentals of the business user activity is growing and that's what counts. rounding out the list, cisco. another underperformer a controversial stock in terms of how it's doing but analysts project the stock will rise 15% to 17% over the next 12 months. bottom line with the story, ebay guidance story, earnings story, not looking pretty. they say first six months of the year may not be great but networking is big, it's a profitable business. computers always need to talk to each other and that's where cisco plays a big role. back to you guys. >> thank you very much. meanwhile, there's now a stock market phenomenon we need to bring to light, don't we? >> you've heard us say this is the most important day of the trading day. now the proof. the smart money gent get into the market until the afternoons and that can change the dynamic of how much you make or lose. here's a chart showing you xhaktly what we're talking about. look at gains if you buy after the close. with us for more art cashin from ubs who flagged this phenomenon in his note this morning. what do you make of it? >> i think there are a couple of aspects to it. if you bought at the close and sold at 10:00 the next morning, you made about 8%. since the market is up 10%, you captured most of the gain. from 10:00 to 3:00 virtually nothing happens. then if you bought at 3:00 and sold at the close, you lost 4.5%. >> the morning trade lately has been dominated by the international investor. >> bingo. >> right into about 11:30, before noon when europe closes at that point. is that who's buying? >> i think that's correct. i don't think it's so much the retail fully. i think it is europe joining in and others looking for an advantage. it is truly a global market. the interesting thing, the losses in the final hour. that would kind of bear in with the very poor performance of the hedge fund community over the last year. so, they're probably trying to fight it off. that's why they've lost out. final two active part of the year -- >> bob pisani has been waiting patiently to go on the air with us. welcome. >> i think it's an interesting phenomenon phenomenon. i'm not sure i associate it with retail money smart money, dumb money. most retail traders are flat at the end of the day. day traders, they go home flat. at the end of the day they have to start buying. there's a natural tendency for the market to move up in that first half hour. then those people who are active traders who have to get out, tend to look for periods during the day when they lighten up. it makes sense to have more upside in the first half hour and more downside in the last half hour. this is a miniature version of the first six months of the year first middle trading period of the year when the market you know tends to rise or tends to fall. i think it's a fascinating trading pattern. >> that's why -- to take this beyond whether it's a trading pattern if there's a signal we can glean from it that's why analyzing who is doing this buying, if you believe the guys who run the institutioning have an advantage and paying attention to the weakness and the close, that's the point, i guess, bob. >> well, the other thing is that the last hour is very important simply because of the clock. if you use the analogy of the stock market as a poker game n that last hour you're running out of time to bluff. have you to show your hand one way or another. >> because you're always pointing out to us -- >> trading gets very sincere. >> it's incumbent to point out anyone that's a long-term investor, this doesn't amount to a bill of beens. this is for the guy who gets in for a short period of time day traders, arbitrageurs. >> i think it's fascinating. it's just a natural tendency for traders who have to get in in the beginning of the day. they trade intraday and they have to buy at the open. that tends to push open up sideways midday and decline at the end of the day. it's fascinating to say, let's get in at 9:30 buy s&p futures, tell them at 10:00, as a way to get an advantage to buy and hold throughout the year. if you're a short-term trader it's an interesting trading pattern. >> don hayes who had the last hour indicator. i lost track of that. we may have to dig it out based on this survey. >> mr. cashin my pleasure. thank you very much. mr. pisani, join us when you can stay longer. heading toward the close with 13 minutes left in the trading session here. how's the buy/sell pressure right now? >> dollarwise a little to the sell side. very strange mix. the s&p looks 50/50. >> they're waiting for the fed meeting. >> right. >> and the dow is virtually unchanged, up a point. >> all eyes are on the fed tomorrow. will they or won't they? we'll try to do this tease without saying that "t" word. former minneapolis fed chairman gary stern is here to tell us what he thinks ben bernanke might do coming up on the "closing bell." are tight. but it's hard to get any work done like this. then came this baby -- small but with windows and office. it runs my work stuff. ...and i can use apps like flipboard for news or xbox video to watch the shows i'm never home to see... and i can still get work done at the same time. excuse me, do you mind if i... yep. ♪ honestly, i wanna see you be brave ♪ this is for you. ♪ ♪ [ male announcer ] bob's heart attack didn't come with a warning. today his doctor has him on a bayer aspirin regimen to help reduce the risk of another one. if you've had a heart attack be sure to talk to your doctor before you begin an aspirin regimen. ♪ i wanna spread a little love this year ♪ [ male announcer ] this december, experience the gift of exacting precision and some of the best offers of the year at the lexus december to remember sales event. this is the pursuit of perfection. here at fidelity, we give you the most free research reports customizable charts, powerful screening tools and guaranteed 1-second trades. and at the center of it all is a surprisingly low price -- just $7.95. in fact, fidelity gives you lower trade commissions than schwab, td ameritrade and etrade. i'm monica santiago of fidelity investments, and low fees and commissions are another reason serious investors are choosing fidelity. now get 200 free trades when you open an account. welcome back. we have breaking news. that story from sunday night, horrible tragedy at the mall in new jersey not far from here the new york stock exchange where the young 30-year-old daughter was shot and killed during a carjacking initially city officials put up a $10,000 reward seeking information for those carjackers who are still at large. now short hills mall itself kicked in another $20,000. so the reward for information is now up to $30,000. again, it's just a horrible story. the carjackers are still at large at this hour. so $30,000 is now the reward on that story. about ten minutes left here. the market is just flat going into tomorrow, waiting for the fed meeting. joining us right now is dan mcmahon from raymond james and mike santoli from yahoo! finance. you're not expecting anything from the fed tomorrow? >> no. i expect there's a very small chance the fed does anything. maybe in terms of policy maybe clearer guidance. >> you think they change the language? >> i think they'll give you some kind of potential clarity. >> what do you expect, dan? >> i think much of the same. nobody wants to hand the incoming head some type of hot poe potato they have to deal with. it's coast through, give it to the next regime. >> what if -- i agree with you. i don't think they do anything until march when janet yellen is ready to take over at the earliest, but what if they hit metrics they're after? they want 6.5%% inflation, and if they got close to that bernanke's hand would be forced wouldn't it? >> i think taper will go on a schedule -- i think weave gotten it with the exception of inflation. inflation gives them a free pass. other conditions are just as they were in september when they diplomat do anything. ten-year note yield is the same mortgage yield is the same. seems to me they have the excuse to do very little. i think the bigger takeaway for investors is even when they begin this process, everyone wants to see it start, i think. it doesn't mean you have a real clear path to what happens next. you're still going to be sitting on every single data point from there on out. >> does that affect any way you're looking at investing in this market right now? >> no. we're cautiously optimistic about 2014. we expect some pullback in the neighborhood of 5% to 10%. >> certainly due aren't we? >> certainly. well over due. there's a bear story all the good things are priced into the market so we're well overdue. short opportunities are presenting themselves, if you listen to some investors who can short stocks. it's not changing our thesis. we know it's all but a certainty in 2014 that the taper will begin to end. it's just a matter of when and how and what the velocity will be. >> what do you want to invest in? what prevails here? are you going tore early cycle stocks? is this the beginning of a -- >> we are probably avoiding the interest rate sensitive stocks a little bit. we like the growth stocks. we like those stocks that have had decent stories but not outrageous valuations heading into year end so not so much the high fliers. we think some opportunity in tech. whereas so long as the gdp continues to rise there will be some growth in stockswell. >> it's great parlor game as well on wall street what the market will do the moment they utter the "c "t" word, right? >> i think you get a bounce to the upper end as a reflex move. i think what's gone on in december is interesting. you had to have certainty december would be this easy levitation trade. it's gotten burned off. maybe you just bounce up to the upper end and see if there are real buyers there. >> if they say they're going to think about tapering you think the market rallies? >> no. if they actually do nothing, we get confirmation they do nothing, and then we're back to where we were before. >> i know you're a long-term investor, but we love playing these short-term gains. >> we're actually seeing more selling into rallies than we are buying of the dips. >> really? >> yes. derisking a little bit f that's a phrase or a word. taking some risk off the table, taking advantage of the strong year and positioning themselves for'14. got it. thanks. we'll take a break and come back with closing countdown for tuesday. apparently all paul mccartney wants is a free t-shirt at a basketball game. do you see how disappointed he looked when he didn't catch it? 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[ male announcer ] now the world is your trading floor. get real-time market scanning wherever you are with the mobile trader app. from td ameritrade. two minutes left. terry dolan, we were talking, as the dow is down just three points, it will probably finish unchanged. same thing with the s&p and nasdaq nasdaq, down five points right now. it's clear, they're waiting for the fed announcement tomorrow. what does the market want to hear, do you think, to rally? >> i think the market wants to hear the fed is going to take a prudent look at tapering. that they're not going to -- that they're going to do it in a contro fas the market should be able to accept that. interest rates are saying part of this tapering is built into what's going on here f you look at the bonds over the next six months as they tick up. these yields are saying to you, tapering will end at some point or another. also a reminder that you know the markets will determine interest rates in the future not necessarily federal reserve policy. >> we're getting back to that now. >> the fed has been so lucky with low inflation right now. >> the prevailing wisdom is any time they start talking tapering, market sells off big. the party's over. the easy money party is over at that point. do you buy that at all? >> i think that -- >> is that a dip you buy? >> i think it's a dip i buy, yes. i actually think the market may rally over the tapering scenario. a lot is built in. a lot of expectations are built in. the other thing the market will look at closely is, again, the inflation and the real rates versus nominal rates of interest. as the market begins to assimilate market rates are relatively well. interest rate necessarily run away from the fed and run away from objectives at the same time. i think it's congruent as long as the market can stay in check. we're going out flat here. a little dip to the downside in terms of buying -- some selling as we await the fed's announcement. we'll have live coverage beginning at 2:30 eastern time tomorrow. meantime, stay tuned. it's kelly evans and company on the second hour of the "closing bell." i'll see you tomorrow. welcome to the "closing bell." i'm kelly evans. we're taking a look at markets as they move to the sideline waiting for the fed announcement tomorrow. dow finishing in the red. down about ten points despite trying to stage a late day rally. nasdaq and s&p are weaker by five points. the indexes for those of you watching the numerical levels. we didn't quite get much closer to 16,000 despite yesterday's rally, but let's bring in today's panel. we have our very own jane wells, cnbc contributor jane roth kate kelly and joining us is "fast money" trader brian kelly. brian, what jumps out to you about the market action and you're not allowed to use the word fed? >> i'm not? then the fmoc. the action today, it was a nonevent type of day. we had really good rally after pmi numbers. a day of going sideways doesn't bother me too much. i think tomorrow will be a nonevent. if you wake up and say, the fed might taper today, you're not doing your job. money managers have been thinking about this for months. they're fully positioned. thinking about year end, you go a little higher and you look toward 2014. >> kate i see you nodding. >> i think people are excited. taper or no taper, i think this market has legs to it. i've been talking to hedge fund managers about what the new big thing is going to be for 2014. what's the new exciting asset class? sticking with equities? i'm getting equities, equities, equities maybe ipos across sectors. there's a lot of euphoria and the fed is less of a factor. >> i love you said that sharon. >> it's the exact opposite of what i cover in commodities for gold. a lot of folks are saying no matter what happens tomorrow the sentiment in gold has been so weak for such a long time outflows from the gld, largest gold etf have been earth shattering in the last couple of months. in terms of what we're seeing in weakness in oil price, a lot of traders i talk to say, of course we're looking for the fed in the afternoon but they'll be watching to see what the numbers look like in terms of the inventories for oil because that's more likely to drive that market. >> true. jane? >> five women on the set, where's the red wine? >> it's under the table over here. >> i think for -- look, i'm a main street type of person. everybody's saying the taper is factored into the market. i find that to be complete baloney because every time someone says it's baked into the market, then it isn't and everybody freaks out. >> you're so right. >> it's usually about the certainty. i know it's kind of a farce because there is no such thing as certainty in the market but i think the perception of certainty. so i don't know that the fed is actually going to taper, even give specific guidance we'll taper in january but they are going to hopefully reiterate some metrics here. i think that's really what the market's looking for. >> speaking of the metrics, there's so much focus on the unemployment rate and i can't wait to ask gary stern about that, that interview is coming up later this hour goldman's recap of 2013 they were saying here are the ten things we said were going to happen we nailed them, except we missed the unemployment rate. it's come down to 7%. >> there's a difference between the unemployment number and u-6 number. even though we have 7%, we have a very low participation rate. if you look at the u-6, which is over 13%, i think that's a bigger factor and the fed will lean on that when making a decision. >> here's another question. are people skeptical about the data to begin with? you remember the conspiracy they'res our own jack welsh with espousing, is that legitimate -- >> on the one hand kate the employees at department of labor who weren't doing the calls they were supposed to and fudging the numbers and then the clear downward trend. the unemployment rate and the key point, on the labor participation rate. if you're the fed you'll say, sure, it's down but we would like -- >> where i live people are working but not working as many hours. they're working at jobs that pay less money. maybe they're not technically part of the unemployed anymore. >> they had benefits and god forbid they try to go on healthcare.gov. >> exactly. >> to be underemployed, even looking at all the gains in the market, people are saying i don't want to participate because i don't have the disposable income to invest in this market. one of my colleagues was asking why aren't people seeing as record highs? i said because they're underemployed. that's why they're concerned and we're not seeing the participation in the markets. >> brian, we were flipping through the sectors. it looked like tech and materials were the only two that were up today. which is still interesting because those two sectors where i feel there's the most potential buzz going into 2014. is this a preview of what's to come? >> if you you think the global economy is getting better which is what all the pmis are showing, you want to be in material sectors n commodities n base metals. these are all areas that you have less mining cap ex. they could be supply constrained in a growing global economy so the risk here is to the upside. >> this issue about commodities, to talk about -- and the manager survey just confirmed this for december commodities are still a hated space. >> so f you're putting faith in what brian suggested, sharon, do you go with copper long position? >> no. it's a difficult -- >> or socks. >> there is a base metal etf, dbd, which is heavy copper. you also get all the other zinc led, aluminum or go with alcoa. it's starting to perform fairly well. >> the mining index has been one of the most hated index of the year. maybe it's poised for a bounceback. >> should they not wait until after the end of the year for those doing tax loss harvesting -- equities are up 30%, you have to be careful with some of these beaten down names before the end of the year, aren't you? >> people i'm talking to are saying just that. they'll wait until the beginning of the year even if there is a rise up. one trader said if you look at where we've been in terms of shifting out of gold into equities, even if we have a taper, if there is any fluctuation in the equity market, could we see gold get a bounce, even with a taper? that's something to watch and a lot of folks don't know the answer of how much is baked into this market. but the sentiment that's going to have to shift overall. >> remember when everybody thought gold would never go back to $1,000 again? how long ago was that? >> no no back up. >> back up. >> oh we'll never top $1,000 again. what was that, like three years ago? >> that was at the same time you could buy oil for -- >> in 2009 it was still sub 1,000. i don't know if that conviction was there. if wasn't that long ago. >> if you want to talk about the biggest blown call of 2013, what was it? it was to be long gold inflation protected securities everything -- and this at a time when a lot of pension money or whatever you want to call it they had to have this as key pillar of their. portfolio portfolio. that pillar collapsed. >> short gold, silver and coffee were the best short positions this year. >> really? >> coffee is in a massive rout. it's like 20-odd percent. >> chocolate, cocoa. >> always go long chocolate. where's the red wine? >> quietly can starbucks has benefitted from that margin. brian, a couple names, themes you want to keep an eye on for tomorrow? i couldn't help put look at the tlt. the cpi report comes out, pretty much every component except rent is declining. no surprise that is rallying. >> that is going to be ground zero for tomorrow. you know as we look into 2014 i personally am short bonds for our portfolios. and i think that's going to be the way to position for 2014. what you look for tomorrow you guys talked about the unemployment rate if the fed decides to taper, do they lower that threshold to the end of qe down to 6% the unemployment threshold. >> right. i want to know what they say about that inflation rate, too. lots to glean from the state. 1:50 p.m. eastern. thanks, everyone. you can catch brian on "fast money" at 5 p.m. coming up on this show tech titans gathering the -- at the white house, not for a holiday party but to discuss the troubled government website, job creation and nsa. now video ads are coming to facebook. what will do that do for the bottom line and will users like the experience? that's coming up. the american dream is of a better future, a confident retirement. those dreams, there's just no way we're going to let them die. ♪ ♪ like they helped millions of others. by listening. planning. working one on one. that's what ameriprise financial does. that's what they can do with you. that's how ameriprise puts more within reach. ♪ ♪ welcome back. if you went looking for a tech titan in silicon valley today, you probably wasted the effort. anyone who was anyone was at the white house, including our own eamon javers. this was no holiday celebration. >> reporter: we had ceos of facebook google yahoo! more than a dozen all told. an unusual session by white house standards. two hours and 45 minutes. we got to see some pictures of the executives as they began their meeting. we got to see a little executives as they came out of the white house. we tried to ask them a few questions. they weren't biting on answers. that's because so much of the conversation today was on this sense sensitive nsa spying between u.s. and tech community. very sensitive conversation at the white house. >> speaking of which, wasn't there some dust-up at the press getting access to the meeting at all? >> reporter: absolutely. there have been tensions here that have exploded into public view between white house press corps and white house itself over how much access particularly still photographers, but how much of us have to this white house. there was question who would be allowed into this meeting. the white house did allow a video crew at the top so we could get pictures of what happened at the beginning of the meeting. there's been a real battle here about access to this white house. >> how unusual is it for a meeting like this or relationship with the white house to get to this point that it's, as you say, exploding into public? what happens now? >> reporter: the real sort of area when this blew up was on air force one going to nelson mandela's funeral, bill clinton on the plane, mr. bush and the white house allowed their own photographer to go in and take pictures but they didn't allow any actual reporters in for that. that was the flash point where a lot of reporters said hey, wait a second you can't cover these events yourself. have you to allow real reporters in otherwise the white house gets to select the message, the image, they tailor it all when they decide what to release on social media. what reporters have been saying is theyment real reporters independent of the white house to go in there. >> troubling turn of events. thank you for recapping it. eamon javers in washington. facebook in the meantime is rolling out online video ads that will automatically start playing on users' news feed. is if a good plan for investors? stock today up 2% on the news, nearing $55 a share. joining me ross gerber, whose firm advertises on facebook but not a fan, and larry from dyna link a facebook shareholder. larry, are you worried about backlash? >> i'm not worried. this is a wonderful thing long expected. the most powerful operating system in the world. the idea is you've got to be in video advertising. that's where big dollars will come, big revenue, big advertisers. it's a de facto system and targeted ads on video is king. it's huge. i think this will add another $1 billion in revenue. >> where does that put facebook shares if you're right? >> i think they'll finish the year u i think it will hit over $60 by the end of the week. next year at this time i think it's $100 stock. this is long-term growing advertise refer new main stream. high tech, high touch. this thing will take off. >> ross you could argue people are used to ads on television ads all over youtube so this won't be that big of a deal for fusers and advertisers will like it. >> i think video ads have a nice element to it. what facebook is doing is selling out for the short term to get money into shareholder pockets today for maybe the experience longer term. let me tell you, i think it's a fine line between what amount of ads i'm willing to take on facebook and still use it before i'm just done with it. i'm pretty sure they're there now. any more ads, i'm done. >> i disagree. the whole world is going to video advertising. as we continue on the video on the mobile as we go to smart tvs. it will be high tech high touch. >> but larry, what's interesting is -- >> i'm not disagreeing with that. >> ross is not disagreeing. >> i don't go on facebook for that experience. i want to see what my friends are doing. i want information from the people i care about, not from advertisers. i advertise on facebook and the engagement is incredibly low compared to google or yelp. you have to ask yourself as an invoeer on the short term, i think you're right. it's great for the stock short term. remember there was this great company invented the television called rca. where are they today? >> i'm going to bet big money advertisers come to it because everything flows through it. it's where you have to be in advertising. >> people are doing that -- >> larry do you have a facebook profile? >> i do not. >> so you're not -- >> you're a shareholder -- >> seriously. >> my business is on facebook. i do not have a personal facebook profile pp. >> ask your kids what nair using? >> but also ask them what it's like? i can tell you even now when i get linked to youtube videos from my friend i hate opening them half the time because i have sit through, click through to get past the ads. >> our attention span is so short today. these kids, their attention span is so short. are they watching too many videos? not really unless it's really good, the "anchorman ichltd i" trailer for the video, they'll watch that -- >> you have to be in it to win it. >> ross, are you and your kids on instagram? >> yes. my kid is 1 1/2 so he's not using that. instagram is what facebook used to be and what it should be. there's no ads on instagram. >> exactly. and they own it. if you look at the note from oppenheimer today, they slapped a $16 billion valuation on it. >> instagram is incredibly popular right now. a lot is the traffic migrating from facebook to instagram. i give them credit on the acquisition. it was a very smart move. if you look at the other companies big in social media and growing, whether it's the snapchats of the world or whatever, there's so much competition. people are just migrating. younger people are migrateing to different social media sites. that's reality. >> i disagree with you. have you to be in video advertise advertising. this will catapult them over next year and into the future. i think they'll take over and go up against google and youtube. and i think twitter's vine will take it all over. >> triple digits in 2014. we'll see if you're right. >> you should sign up for an account. >> that, too. movie goers turned moguls might happen. some loyal customers of amc offered ipo price. 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[ bagpipes and drums playing over ] [ music transitions to rock ] make it happen with the all-new fidelity active trader pro. it's one more innovative reason serious investors are choosing fidelity. get 200 free trades when you open an account. . welcome back. you may be able to join the ranks of walt disneys of the world or own a piece of the studio. amc expected to price its ipo in what may be the ultimate customer rewards program. we'll have julia about this one. how do you turn movie tickets into people being stockholders of amc? >> amc is one of the biggest theater chains out there. they're really hoping all their movie goers will also want to buy into their ipo, which is expected to price after the bell and begin tomorrow morning. what amc is a little different. it reached out to members of stubs and offered them a opportunity to buy into the ipo between -- investing between $200 and $500 on shares. they're using a system called loyal three, allowing members to buy into ipo without all the extra fees. kelly, i think this could be a smart marketing move. if they get investors to feel really committed to the theater chain, then more reason they should go to amc rather than one of their rivals. >> at the same time, reports demand for this ip on is a little tepid. >> the two rivals are cinemark and regal. this loyal three offering direct to consumers is relatively small. it's a small piece of the overall ipo offering but it's kind of a fun marketing play. but there are a lot of reasons why amc has advantages over its rivals. they charge higher prices on average. people spend more on beverages. they have a lot of fun extra things like reclining seats and bars and lounges attached to their movie theaters. at the same time they are more highly leveraged than either of the other two major companies. >> they still have the overhang from the lbo. appreciate it. is this a stock you should buy tomorrow when amc hits the open market? joining us david menlo. no one knows more than ipos. >> i love this deal. it's a rags to riches story where we had a leveraged buyout and all the people with cash thought they would make a grand slam and ended up selling at the bottom. >> i'm gesticulating wildly to kate kelly. please. >> this is an interesting deal. i asked a couple of sources on wall street what they thought about this process. they were dubious. bear in mind some do the traditional ipos so they don't appreciate being cutout. but they said remember vonage in 2006 facebook last year. any time you have this attempt to have customer participation is not a guarantee of a good after-performer. those stocks notoriously did badly. >> when you have a movie going crowd that knows more about cp30 than ipos. you have chains that went private, merged sold and coming back public. was there any value that was created or is this really a financial engineering play? with $2.2 billion on the books, it seems like this was a financial play more than actual value being created for the underlying chain. >> it's interesting if you go back to 2004 when the deal was originally announced for leveraged buyout of $2 billion, i think it was $1.6 billion in equity by the time the chinese concern came around in 2010, they bought it for $700,000. we had three unsuccessful attempts to bring this company public in 2007 for a valuation that was $2.87 billion. now we're seeing a valuation at $1.8. we a smaller valuation for a company that will deliver far more than anyone imagined. >> does this sound crazy for a movie goer -- it may work for warren buffett to buy things he believes in -- >> no it does work. so many people don't understand leveraged buyout -- >> exactly. why they shouldn't buy stock. >> maybe they should start to buy something that they do know and start to understand it. and starting at $100 with something, if they're like me they spend $100 at the movie theater any way every year. >> exactly. >> with kids, that's not unfeasible. >> this is an opportunity for people to understand what it means to get into the ipo market. >> it's very risky from a company standpoint customer loyalty perspective. what keeps them sticking and loyal could cut them the other way if the stock doesn't do well, if they don't get the allocation they want, that could make you not loyal to the brand. >> i covered amc in the mid-2000s for the"the wall street journal" and there was so much resentment against that destroy. the trade association would go out. a movie is still cheaper than mini golf or basketball game but people are like you paid a lump sum for the movie and why are we paying $7 for popcorn. >> jane will be first in line -- >> how much do you go to the movies? how often? >> i'm not normal. i go like twice a year. >> that is normal. >> i'd like to get in here, if i can. >> yeah go ahead. >> i really believe this is a financial news channel, the best out there. it's nice to be able to talk about the ipo process, but what we need to be focused on is the experience of the customer. when a customer gets in there and realizes these upgrades that are are going object in the next five years, strategic initiatives, this will completely change how investors are -- >> just to make sure i have you straight. you're saying, yes this company has been through a rocky period. yes, it's going to be valued at a discount to its rivals but if you believe they're going to upgrade the offerings and be able to make more money, then you should be involved in this ipo? >> without question. >> the question on that david, i guess if they're going to use the money from the ipo to pay down debt and they have so much debt on their balance sheet, where are they getting money to upgrade the chain? >> they're not going to pay down the debt. they're thinking they're going to pay down the debt. they have two note offerings of $600 million each trading at a premium. they might pare it down slightly. they still have $400 million in cash they can use for the upgrades. >> look, this is what makes the market right? david menlo, appreciate your time. wall street has tomorrow circled on its calendar for weeks. fed decision day. fed chair ben bernanke's last hoorah. the taper question will finally be answered and former fed president gary stern is joining us next. consumption in china impact wool exports from new zealand, textile production in spain, and the use of medical technology in the u.s.? at t. rowe price we understand the connections of a complex, global economy. it's just one reason over 70% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information risks, fees and expenses to read and consider carefully before investing. tdd#: 1-888-648-6021 there are trading opportunities tdd#: 1-888-648-6021 just waiting to be found. tdd#: 1-888-648-6021 at schwab, we're here to help tdd#: 1-888-648-6021 bring what inspires you tdd#: 1-888-648-6021 out there... in here. tdd#: 1-888-648-6021 out there, tdd#: 1-888-648-6021 there are stocks on the move. tdd#: 1-888-648-6021 in here, streetsmart edge has tdd#: 1-888-648-6021 chart pattern recognition tdd#: 1-888-648-6021 which shows you which ones are bullish or bearish. tdd#: 1-888-648-6021 now, earn 300 commission-free online trades. tdd#: 1-888-648-6021 call 1-888-648-6021 tdd#: 1-888-648-6021 or go to schwab.com/trading to learn how. tdd#: 1-888-648-6021 our trading specialists can tdd#: 1-888-648-6021 help you set up your platform. tdd#: 1-888-648-6021 because when your tools look the way you want tdd#: 1-888-648-6021 and work the way you think, you can trade at your best. tdd#: 1-888-648-6021 get it all with no trade minimum. tdd#: 1-888-648-6021 and only $8.95 a trade. tdd#: 1-888-648-6021 open an account and earn 300 commission-free online trades. tdd#: 1-888-648-6021 call 1-888-648-6021 to learn more. tdd#: 1-888-648-6021 so you can take charge tdd#: 1-888-648-6021 of your trading. the federal reserve concludes policy meeting with big announcement on stimulus and what ben bernanke's final meeting as fed chairman will hold. all of this seen on the "closing bell." my next guest thinks it will begin tomorrow. joining us on a cnbc exclusive, former minneapolis fed chair gary stern. thank you for joining us. >> good to be with you. you looked quite closely, you seven on a number of boards. you think they will taper tomorrow. why? >> yes, i think it will but it's a close call. some are concerned about the pace of the economic expansion. i think they will taper because most conditions are right. the economy is doing better. the labor market has improved. much of the uncertainty surrounding the budget has been resolved now. it certainly has diminished. and, you know there will never be a perfect time to start. this seems like a good time. that's why i think they will. >> what about inflation? we just had another reminder this morning, the consumer price index, pretty much every component falling month on month. it's up roughly 1.5% if you average out headline year on year. why not safe than sorry? >> that's the counterargument there's no rush into this. clearly that's what they decided back in september. i think it's a close call. they could decide that again. on the other hand the inflation news it's lower than their target. but there still is positive inflation. and if you're a central banker you don't want inflation to get out of hand. that's a reason. while i think inflation doesn't get as much weight overall, but the performance has been from my perspective satisfactory. >> has your view on the fed balance changed? did you think years ago the condition would be more inflationary as a result of all this quantitative easing and have you been surprised they are not? >> no. i'm not one who's greatly surprised. i think there's a lot of inertia in the inflation process which is to say, when inflation is low, tends to stay low. when it's high, it tends to stay high. it's hard for central banks to move it around a lot one way or the other. clearly, we've had low inflation for quite some time now. i expect that will persist even with all the stimulus. >> and do you think that your successor at minneapolis fed is indicative of people more generally coming around to saying you know what even despite as proactive as the central bank has been either they can or should do more because of the weakness? >> clearly, some people think that way. narayana may be one of those, although i let him speak for himself. the economy and markets have responded to some degree. it may be we're in what i would call a rhinehart/rogoff deal. that means the pace following a major financial crisis tends to be disappointing and subpar from perspectives no matter what policymakers do. >> do you think that means they shouldn't? the reason i'm asking there's a back story here as well with what's happening at the minneapolis fed. some economists who have left and the direction, again, that his own views have developed. is your sense that activist policies as central bank is useful and has an impact and has a role? >> i think in this case the quantitative easing and purchases the fed has undertaken clearly have had what i would call a positive wealth effect. they've had an effect on equity values, bond values. that filters into spending. it has been positive. in my judgment it has not been a game changer, which is another reason why i think it's appropriate to start to refocus policy at this point. >> all right. we'll have to leave it there for now. gary stern, thank you so much for coming by while in town and have a great holiday. cnbc will be your place for live coverage of the fed decision beginning at 1:50 p.m. eastern tomorrow. it will be followed by ben bernanke's final news conference as fed chairman at 2:30. coming up, $636 million, if you can believe it, and climbing. that's the bounty in the mega million lottery. also, take a look at this. sir paul mccartney estimated to be worth more than $636 million himself, but he still desperately tried to grab a free t-shirt in the crowd last night. is that fitting of a former beatle? 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[ male announcer ] the new new york is open. open to innovation. open to ambition. open to bold ideas. that's why new york has a new plan -- dozens of tax free zones all across the state. move here, expand here, or start a new business here and pay no taxes for ten years... we're new york. if there's something that creates more jobs, and grows more businesses... we're open to it. start a tax-free business at startup-ny.com. welcome back. what's popping on cnbc's hot list? allen joins us with the breakdown. what's at the top? >> it's pensions today. this time it's sort of a flip-flop of our usual pension story. usually we have something about cities blaming pensions for public service employees for bringing down finances and stuff. some researchers at boston college, they took a look at it. and they found that it was actually mostly due to bad decisions by local budget administrators. we're leading with don't blame pensions for cities woes. nice write-up. our second big getter earlier today, our futures internet only show interviewing mark faber, he said qe will last forever. it will never end. >> wow. >> that's why we call him dr. doom. essentially his rap is that this is going to sputter out. if they do a little tapering tomorrow, they'll have to take that back. >> i'm going to short that prediction. >> our third go getter fascinating piece on our staff, taking a look at north korea and the recent execution of jan sang thaek. he amassed a business conglomerate so this could be seen as the purge of 1% in korea. fascinating look. readers are eating them all up. all are logging at about 100 readers a minute. >> thank you so much, sir. again, that qe story doing well on the eve of this big fed decision. no surprise perhaps, people are finally understanding what's happening with pensions. federal judges often issues rulings and opinions on cases and that's all they say on the case. judge jed rakoff wrote a scathing piece in the wall street journal. scott cohen is here following the story and the fallout from the judge's unusual essay. >> this is really amazing, in the new york review of books. it's one thing if you or i talk about, why haven't there been any high level prosecutions following the financial crisis? this is judge jed rakoff a sitting judge out of the securities division of the new york attorney's office so this is cases he may hear. he says i'm not saying there was fraud, but a lot of people say there are. if they're right and failure to bring cases in this issue, bring people to trial, is in his words one of the most egregious failures of the criminal justice system in recent memory. pretty strong words. >> is there blow-back by him sticking his neck out for being able to continue taking these cases? >> well we'll see what happens. i mean he's very careful, if you read this article. it's like a 4,000 word article. he's careful not to make pronouncements on any specific cases. by the way, that's one of the things the doj faults him on that they don't say there's any one case that he says should have been brought to trial or person he says should have been brought to trial that wasn't. we'll see what happens if he gets one of these cases. it's a fair bet he will if a case comes along. a defense attorney is saying, hey, look at this article from late 2013 where the judge basically showed his bias. we'll see what happens. >> right, exactly. it could affect his own ability to issue a ruling in some of these cases. scott, thank you very much. want to bring the panel into this one. >> because i live in california where everybody is -- wants someone, they want blood, they want someone to go to prison for this. you could argue, people were lying -- >> it's the epicenter with the mortgage meltdown. >> yes. it's difficult to prove guilt beyond a reasonable doubt where there are various levels -- countrywide/bank of america paid most of it. last month when i interviewed prosecutor bob wagner, part of the jpmorgan $13 billion, i said when is someone going to go to jail. he said we have been looking into it for months now. months. >> you mentioned an interesting point. i want to bring this up. the article isn't that long new york review books. it goes beyond wall street here. one of the points the judge is making is the whole culture has shifted from going after people to going after companies. he says for a company to be liable, one of its senior management has to have been guilty of misdoing anyway. if you go after the company and not the individual, it's basically you know, you -- you save time and resources, et cetera, but he has this line where he says many innocent employees and shareholders are punished for crimes committed by unprosecuted individuals. it's contrary to elementary notions of moral responsibility. >> i think the challenge here is -- i'm all for personal accountability. in this particular case, there's such a web of mess and so many things that caused this, that it's difficult to prove fraud. the people who lied on their mortgage applications, the applications that got passed the cdos the credit default swaps that had nothing to -- >> he makes the point. i'm totally sympathetic to this point of view but he says the commission's report on this uses the word fraud 157 times. if you go back to the element of those who are hurt by this the people -- were these not sophisticated investors because that's another argument he says, it's not about whether you -- whether those people should have been responsible for what they were buying into he goes, in that case you would let every seller of every fraudulent product off the hook. >> what i found interesting -- i was just koring this case downtown before i came here that deals with insider trading, michael steinberg accused of insider trading and the jury is deliberating right now. this article takes what could be interpreteds direct shot at manhattan u.s. attorney's office because they have put a lot of prosecutorial muscle into insider trading cases with great success. they've had 76 convictions. the issue is it takes man power away from more plain -- i shouldn't say plain vanilla but more obvious financial crisis cases from the very people -- >> that's one of the points brought up too, is how much money has already been spent in litigation and all these things and do they really have a case against win individual. >> by the way, while we're talking about fed and employment, let's remember because of sequestration, these offices are notoriously short-staffed. every time -- >> i want to give you a quick final word. >> in terms of clarity, it's very easy to present insider trading case and have it be very black and white. i think in terms of a fraud here, that's very challenging. negligence yes. sloppy work yes. fraud at the highest level -- >> criminal negligence. >> that's his point too. >> exactly. it's a fascinating read. hope everyone reads it. we want to see what happens in the steinberg case too. 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(vo) so do we, business pro. so do we. go national. go like a pro. . >> welcome back. there is some excitement drawing for tonight's megamillions drawing. morgan, ticket sales are piling up. every time i write down the figure, it jumps higher. >> that's true. call it jackpot fever. megamillions continues to surgery ahead of tonight's drawing as last minute ticket buyers flock into stores across the country. at $636 million, this jackpot is the second largest in lotto history, $656 million. it breaks down to a 341 million sum before taxes. what you pocket depends on state. so of the 43 states you can buy tickets no income tax like florida and texas, the reports new york which takes almost 9% of taxes up front. that's not stopping new yorkers from trying their luck. they are selling tickets every hour. the numbers ramping up florida is up to 789 per hour in the mid-west, we're looking at ohio is up to $393,000 an hour. kelly, back to you. >> this is crazy. i know we're almost at the record high. speaking of states. some other surprises in terms of the best place to buy tickets. it turns out california doesn't take a cut of the winnings officially, is that right? >> that is true. they do not hold any taxes? if you are, they will take those taxes at the end of the year when you file your tax returns. another interesting number for you $87 million. that's how much the federal government will take if you take the lump sum. >> it doesn't mean a lot of time. >> thank you. >> 13.3% of that. >> is that a lot or a little? >> that's the state tax. 13.3%. that's a lot. >> let's say you won the megamillions jackpot, what would that buy you? robert, are the super wealthy indulging in? >> christmas it's all about the kids so we will start with a dollhouse, check this out. it has polished wood floors and a hand painted mural t. price for that $57,760. by the way, that's unfurnished. for the adults in the room. we have watches. they're very big. so we pick this reference 101. it comes with a tour of a watch making facility and a champagne toast we have a party package, selena gomez, you can dance with mark balas the combined price $350. >> that doesn't include food or drink, though. i called it the qe package. you will appreciate this. on the qe cruiseship. more importantly, we get qe from santa bernanke tomorrow. that's what the rich really want is that other qe. we will see if they get it tomorrow morning. >> i think we can add a holiday package for j. wells here. >> that would be a steal. >> more expensive than anything on that list. that's way too high in for me. i can't fit those zeros on my screen. >> thank you. god, what is the world coming to? where is ringo when you need him? sir paul mccartney looking like he can use a hand. at what? he is trying to catch a t-30. yes. well i guess i gave you the answer. just what the ex-beatel was doing? yeah, he wasn't performing. we'll be right back. ♪ ♪ [ male announcer ] how could a luminous protein in jellyfish . . >> welcome back. earlier, we asked you to tweet us your video for paul mccartney trying to get a free t-30 in the nba game. here's that video again. yeah that's paul in the corner there. here are some of your captions yesterday, that t-30 didn't seem so far away. another viewer tweeted us yoko's fault. >> that always seems to come up. it's like the guy that said you may not have won the t-30. you can have someone shoot the t-30s at him next time. take a look at jamey wright diamond's christmas card. i believe we can show you a picture of it. if you have seen over the top ones before this kate i don't know if it's over the top or kind of artsy. >> it's an offbeat sense of humor. jamey wright has a lot of personality. you know he's made a name for. partly on that and good results. we had an eccentric sense of humor at all. >> what is happening? >> heck no this is what happens when you have too much money and you bring someone in to produce the family holiday card. okay. here's what we're going to do. you will all throw tennis balls and hit them around. i would like to commend jamey wright for keeping a low profile. way to go. yeah really. compared to last year where they look so somber this is at least i guess telling us things are going good. >> in this photo, he is watching a new game. >> he's been served. >> that's not bad. she does this on the fly, folks. >> you also by the way, we were talking about stories for tomorrow t. fact that face boong can read your postings as you can typing them this is news to me there there was a story in the los angeles times right now that face boong can read your what you are typing even if you don't post it that it was discovered through some research and to me. >> creepy. >> that is creepier than -- >> somebody that has access to your machine at work can look up any key stroke you made even if it's something deleted. that's standard corporate security. this is a perfect transition to irobot. that's coming up huge things to the panel. melissa lee, these irobot they no what you are thinking. >> kelly, do you like to vacuum? >> not a huge fan. no. >> all right. i don't mind. >> we got the ceo of irobot. >> that stock was up 17%. it is up a lot right now. we are talking to the ceo about that. all the news in the headlines by goggle and boston dynamics and drones we will ask them about the defense business as well. >> take it away. ""fast money"" starts right now. i'm melissa lee. here's tonight's lineup. tech support at the white house. the ceos meeting with president obama today. if the companies are