tv Street Signs CNBC December 3, 2012 2:00pm-3:00pm EST
>> it's been dell, rim and first solar. first solar's had a nice bounce off the bottom. they've concentrated their business on more selling utilities. if it goes to 28, i intend to add to my position. >> that does it for today's edition of "power lunch." thanks for joining us. >> "street signs" begins right now with the dow jones industrial average off 40 points. see you tomorrow! welcome to "street signs." where stocks are dualing it out. good data on one fis, fiscal cliff fears on the other. if we hit the cliff, is defense done as an investment? we'll find out. plus the latest on why fast food workers are working to unionize and maybe even strike across america. and the scary story about the surge in spooks. how spies apparently are
everywhere now, mandy. >> and you wouldn't even know. let's load you up on some vital stats. firstly, december is historically the best performing month of the year but today the dow and s&p are down for the first time in four days. dow was up 61 points before the disappointing ism data at 10:00 a.m. this morning. it has never recovered. s&p is flirting with a three-week high even though it is slightly lower. nasdaq touched a one-month high earlier on. never doubt the power of of the american consumer is what we always say here on "street signs." holiday shopping season is in full swing and that, my good people, has propelled the s&p retail next to a record high early again today, though as we speak it is slightly lower. let's get out to bob pisani. so much for december being a good month for stocks. >> well, we're just starting out but the big story i think is that no progress on the fiscal cliff. it is not bothering stocks yet. it will soon but as of today it is not. instead it was the rather poor i
scht m number that came out, lowest since july 2009. just off the lows for the day. i think the important thing is if you look at sectors here, transports, materials, all the risk-on trades, industrials, all to the downside. getting a modest up side from technology stocks as dell got an upgrade today. finally i just want to point out, another day gold is up, gold stocks are to the downside. this has been going on for a long time. take a look here. there's gold for the year. there's gold stocks. look at this underperformance for gold stocks. this has been happening because people more and more are putting money when they want to be in gold and inflation into the gold directly rather than the gold stocks. again this has been a trend for a while now and it is accentuated. general motors, even though numbers were a little bit disappointing, remember truck sales a little disappointsing, gm has a whole new fleet of trucks coming out. i think a lot of people don't get that point of it. stock was just down about 1% today. >> we'll talk more about auto sales later on in the show.
meantime, rick santelli, what are we seeing on the bond side of things? >> at one point today we were close to 1.66% yield in 10s which are now back almost to unchanged. that 1.60% is like a magnet, mandy. yes, the ism report, rates went up because of the greek buyback. you have rates going up because of the bailout for spanish banks. all of that is perceived to be good news. but yet ism as we put a chart up, the weakest in three years. employment index on the heels of adp tomorrow weakest in three years. i think the consumer might have a stellar shopping season because americans always reach in their wallet at christmas but there is a lot of other parts to the economy. many are looking for fourth quarter gdp much lower than that revision that we had recently on third quarter gdp. folks, here's your market battle. on one side china data coming in better than expected overnight. there's a little more optimism about a greek resolution. in the other corner, continued
worries about what else? tax hikes and spending cuts. notice i did not call it the fiscal cliff. so ultimately which wins out? let's ask gina sanchez, director of equity and asset allocation at rubini global economics. dan, i know you've been traveling, london, san fran, all parts in between last couple of weeks. how concerned are your clients about what's going to happen on january 1st? >> it's not so much that they're concerned about what happens on january 1st because i think the bulk of our meetings have focused on the fact that this isn't really a cliff so much as a lot of people have been saying a slope. more importantly to your first question, i have been on the road for the better part of 2 1/2 months now. i don't really get many questions or have many debates about greece or spain anymore. i think there's definitely a back burner element to what's going on in europe as people focus whether it happens on january 1st or not on the fiscal
cliff. >> let me follow up with that real quick. here's the thing -- the greek situation, which was driving the market negativity a few months ago, is the same, roughly, as it was then. but yet we've conveniently forgotten about it because the fiscal cliff. >> i don't think is that people forgot about it. the ecb has gone a long way toward mitigating tail risk across the region, lowering volatility. as intention has increasingly focused on spain and italy, i think people at this point have pretty much written greece off. i think there is still a widespread belief following the german elections that debt burden is going down in the official sector, just a matter of how much. >> gina sanchez, this is live tv of course. good to have you back up and running. we have climbed the wall of worry many, many times. quite often when we climb that wall of worry we miss out on gains. is there something different this time around? are the worries justified or are we going to miss out?
>> well, generally our view is that we're going to get to the end of the fiscal cliff with a resolution but that it is going to be turbulent up until that point. and so we're probably going to climb a wall of worry there. i think the issue on europe though is one that we basically -- i agree with brian, we've put europe to the back burner and probably some time at the second half of next year it is going to crop back up as an issue. but you could see, for example, the sort of classic january bounce or we think actually fiscal cliff could be pushed into january by the time they actually finally get a resolution. kicking the can may be a couple of weeks but eventually getting to a resolution. then you're going to see some relief in the market and so that could be an interesting time. again it will probably be very temporary. >> i wonder whether we've become so myopic in talking about the fiscal cliff and issues here in the u.s., talking about fiscal issues in europe, quietly
forgotten that places in the world, hong kong, india, many indices at new 52-week highs. we're missing out. >> yeah. we've actually seen some very, very interesting -- there have been positive trends in the may crow data driving markets up. china has been a bright spot and we think that will continue to be a bright spot for probably the first half of next year. >> what do you mean by bright spot? their market is the lowest since january 2009. you mean bright spot economically speaking? >> yes. government has stepped in with more spending and we think that could actually support the economy actually for the first half of the next year. >> dan, prediction time at cnbc. i'm going to ask you to give us one or two predictions for 2013. >> we're finishing up our outlook right now. we have a decidedly optimistic outlook for us. i think if we can get this fiscal cliff thing out of the way in the u.s., the case for the economy to expand at a 2%
clip or so is pretty strong. in terms of the equity markets, we're going into the year thinking that the bias is top upside here. i think the trend that we've seen of late absent a stupidity mistake out of washington is likely to hold for the foreseeable future. >> a prediction for 2013 from you as well, gina, perhaps the one kwe can steal. >> we think we're more tempered. we think it is probably 1.6% growth but we'd agree there will probably and positive bias in the first half of the year and probably a more negative bias during the second half of the year. >> 1.6% growth, gina, stinks! that's not even growth. it's not even keeping up with inflation. that's negative real growth. >> i didn't say we were optimistic about growth. i just said there might be some support in the market. >> that's going to be an interesting back half of the year. >> when you say positivity for the market, give us some levels, if you can.
how much we're going to be up next year, if that's the case. >> well, we think that earnings right now earnings are priced in forward earnings at 115. there's no way that we're going to hit that. that's one of the reasons that we think we're negative in the second half of the year. we're right now going toward between between 100 and 102 is where we'll end up this year. next year we're probably looking at something like maybe 102 to 105. right? not a lot of growth. right? i just think that we're probably going to have a small multiple expansion for the first half of the year and then that will give back. >> got it. what you giveth, he taketh away. happening right now as we speak, president obama is fielding twitter questions about the fiscal cliff. jackie deangelis is monitoring it for us. >> that's exactly right, mandy. as a matter of fact that session is now under way. it is part of the white house's my 2k twitter campaign. that refers to the more than
$2,000 in extra taxes that the average american family is going to experience before the end of the year if we don't seem to find some compromise. so today the president is using twitter to interact with americans, no doubt to gain some support for his plan that would allow those cuts to extend of course with the exception for the wealthiest americans. earlier in the day president obama tweeted about this himself. he used the white house twitter account and said it's good to see a lot of folks on twitter speaking about extending the middle class tax cuts and that he'd be answering questions on the cliff at 2:00 p.m. of course we'll be monitoring that very closely and bring you the best interactions that we find. if you want to send a question to the president, all you have to do is use #my2k. >> you can do that but certainly don't switch off cnbc at the same time. >> multi-task, folks. on deck -- why the fiscal escartment could put us at risk. and then m.i.a.,
near-term value." specifically, they are cutting a number of things. they've accelerated interventions to reduce costs. they expect to deliver $1 billion in cost interventions in 2013. 108,000. that is how many civilian defense jobs are at risk if we go over the fiscal cliff. that's according to the center for strategic and budgetary assessments. >> the defense industry is sounding the alarm. dozens of industry leaders are in washington, d.c. taking their case to congress and the president and going over that cliff could be a threat to our national security. let's bring in david hess, president of pratt and whitney. david, how severe is the problem? critics will say that the defense industry has grown pretty much every year for the last 20 years and that we probably spend way too much on defense anyway. >> it's hard to understand that comment. quite honestly what often gets
missed in the midst of this debate right now is we're already in the middle of step one of defense budget reductions. we're in the midst of under the budget control act which has already been passed, we're in the midst of a $487 billion defense spending reductions right now. you are seeing that in the headlines and some of the analyses -- >> sorry, david, are those real reductions or are those cuts to projected increases? >> i characterize them as real reductions. you can see that in some of the headlines, unfortunately, we're dealing with across the country with some of the plant closings that have been announced recently by northrup grummond, boeing military. those impacts are real. >> if, for example, we do spend less on defense, because of the advances in technology, because of the changing nature of threats out there, can we actually spend less on defense without also putting our national security at risk? >> look, i don't progress to be smarter than secretary of
defense panetta and the way he's characterizing that for us to deal with the defense cuts that would be enacted by sequestration would be catastrophic to our national security. >> in what way? >> that's his characterization. if you look at aging assets we have, for example. in the military defense, the average age of our fighter is 22 years. average age of the average bomber is 35 years. an average tanker is 47 years old. imagine trying to drive your 47-year-old car to work every day and you can get a sense as to how difficult it is to try to continue to defend our national security with aging assets and the need to continue investing in defense. >> to mandy's point, does more money mean a safer america? >> look, there's different ways but fundamentally the issue we have -- one of the major issues we have with sequestration, it is not tied to your premise, it is not tied to any defense strategy. the cuts that are being enacted today are tied to a defense
strategy and we worked in concert with the dod to enact these $487 billion of cuts. what's different about sfres tra sequestration, whether it is tied to a strategic need or a defense need or not, it gets cut the same way as cross the board. it is an irrational approach to fiscal restraint or budget reductions. >> how many jobs are hanging in the balance if we go over the cliff then, david? >> i've seen estimates out of congressional budget office of total of 2.1 million jobs. about half of those would be defense. if you look at those million or so defense jobs that are at risk, about half of them are small businesses that would be impacted. they don't get maybe quite the same headlines as utc or north up there grom monday or lockheed martin, some others, but these are companies across the united states that make up aerospace industry association. 200, 300, 400-people companies that are at risk right now. >> david, thank you.
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just because there's not enough bad news out there, how about a double disaster dujour. look at this, folks. epic traffic jam in russia. a snowstorm caused a 125-mile back-up on the main road between moscow st. petersburg. 4,000 truck drivers were stranded in 20-degree weather. rescuers helped to slow the paralyzed drivers. the main route going between st. petersburg and moscow for cargo truck drivers. makes new york city traffic look down right peachy! collection it out, china's northwest hammered by relentless snow since last week. snow and fog have shut down
multiple airports. let's warm things up. right? we need a little sunshine. super value is the stock that we've chosen today because it is up by 10%. it has been troubled but super value's entire business may be for sale or just the albertson's stores. it is not clear if a deal will be reached but nonetheless, investors plowing in with their feet. call it the millionaire downgrade. could a big chunk of america's millionaires simply vanish if we go over the cliff? robert frank, are we talking like john mcafee going missing or we just saying we're not going to be millionaires anymore because we're not going to sell into these tax rates? >> belize is not big enough for all these missing millionaires. it is more like a downgrade. we're talking about the wealthy getting a little less wealthy if we go over the cliff and fewer people becoming wealthy. the u.s. has run 5 million
millionaires with a total wealth of $18 trillion. that's according to wealth inside base in london. three possible scenarios all depend on the cliff. if we go over the cliff, the population of millionaires would drop by over 313,000. if we get a deal that's bad for the economy, the millionaire population would drop by 126,000 people. if we get a deal and the economy grows, the millionaires would grow by 230,000 new millionaires. their fortunes would soar by $1 trillion. to underscore the cost of the cliff, if no cliff at all, the number of millionaires would grow by 433,000, a 9% increase. difference between no cliff and going over the cliff is more than 750,000 millionaires or $1.3 trillion in wealth. that's about the gdp of canada. i'm just looking at the impact of economic growth on millionaires. i'm not looking at taxes which of course could temper some of that growth.
but a cliff deal alone could be worth $1 trillion in new millionaire wealth and that's better than any powerball jackpot i've ever seen. >> if all these millionaires disappear, who will buy all those corporate jets? >> people talk about the economic growth. the number of new millionaires is what people need to focus on when you talk about getting a deal. >> look at oregon in 2010. oregon raised taxes on the top end. saying they'd raise an extra $180 million from this tax. of course it was widely passed and it just passed easily. they raised $130 million. $50 million less than they expected because one-third of their millionaires vanished. they didn't sell anything. now if there's nowhere to go throw, if -- this is the federal government. it is not like a state where you can move. >> it's also -- >> i guess you could move to belize. >> it's also the case that markets and the economy are a
much bigger determinant. the impact of the fiscal cliff solution on that broader growth instead of focusing so much on what the tax rates will do. coming up next, spy games. america's doubling its overseas spy network.cost coming up. a prescription to sell. we have an analyst who's making a big call after a 60 minutes report last night made a big claim about a big hospital chain. that's ahead.
it is "street talk" time. happy monday, everybody. let's take a look first of all at what's happening with research in mission. this stock is down, on quite a roller coaster recently. >> downgraded to a sell from a hold. canaccord doesn't see consumer poll necessary for the blackberry 10 to reverse the overall. they say blackberry 140 won0 wo a bust but it won't be enough to move the ship in the right direction. rim stock is up 53% since october 1st.
>> but still down 20% year to date. >> it's coming back. josh brown may win the stocks draft just yet. deckers stock bolting higher, all down to sparkling leopard print uggs. >> stern ag hiked the rating to buy from neutral. set a $65 price target. they see improvement in product offerings as well as maybe trying to revitalize the ugg brand which has somehow survived skeptics from years and years. they do admit deckers sales and margins should remain challenged. you still down 64% over the past year. >> uggs came from australia. >> they sheared the heads of australian rugby players. >> yeah. dell is up, gold man upgraded from buy to sell. >> biggest del move in a long time, price target raised from 13 no $9. why is the stock getting so much
interest today? probably not through the upgrade natchez in as much as there is a leverage buyout to take dell private. can you imagine that, folks? green mountain coffee, where is herb on a day like today? it is getting a real boost from an animal lits call. >> he's sleeping because did he not have any coffee. lazard have increased confidence in the company's what they call technological advantage intellectual property. latest upgrade, williams capital and do you taughtry, all upgrad green mountain. dover airlines, this stock in the news, but it is down today. >> you probably knew this living in singapore. i did not own singapore airlines even owned a stake in virgin atlant
atlantic. it is rumored delta airlines may actually bid for singapore's stake in virgin because they want some more gates at heathrow airport in london. >> they are lucrative, those virgin gates at heathrow. that is the holy grail. hospital stock hma is down more than 4.5% today. and it is because of this. >> reporter: with american health care costs so out of control, we were stunned to hear from former doctors and m.d. ors at one of the nation's largest hospital chains that they'd been pressured to admit patients regardless of medical need to increase revenues. >> this is coming from a non-physician. somebody who never went to medical school, never seen or treated a patient is telling a physician how they should be taking care after patient and making decisions related to a patient. my blood pressure is going up just saying this. >> cheryl covers hma for crt capital. you put a sell call on the stock after last night's "60 minutes" report. a pretty powerful report indeed.
why should we be worried? >> two reasons. allegations made by "60 minutes" last night are serious. whether or not they ultimately are proven to be true the path between here and there is dangerous, fraught with risk that could affect volumes, revenues, ebita and whether or not the company changes its practices. these are pretty serious allegations. irrespective of whether they're true they are going to cost the company money. >> this was not one disgruntled employee. doctors, a colonel in the army, i mean people that have long careers filled with respect. my question is why isn't hma down even more today? >> that's a very good question. there is a lot of support but not from me. my cell call is also based on a data analyst i did which took months and months to do, involving over 20 variables, over 300 hospitals, comparing hma to really local hospital competitors as well as its
for-profit peers and finding some pretty meaningful, significant troubling statistics. >> has hma fallen short in its own defense? >> i believe it has. what they put up on their website was really rather thin. it was shockingly thin. i expected to have an argument on my hands when i had these results and that i'd have tro do some explaining versus what they found. it was really rather thin. and i think they missed another really important point. when a company hires a management team to come in and fix a broken business, which i would argue hma was, they really want that management team to affect change. and very early on, second and third quarter 2009 in fact emergency room was by gary n newsom cited as market leading growth. where was that in the defense? >> two things will happen. either one, nothing will happen. the report slams the stock for a day, we all move on to something else. or, somebody from the government gets involved. >> the government's already involved.
>> deeper. >> maybe deeper, maybe wider, maybe broader. and that -- >> there's probes and then there's trouble. >> and i think there's trouble. i think that it is impossible to ignore at this point. >> are there other potential hospital stocks out there that have also potentially been involved in this kind of medicare fraud? >> you know, the allegation was about a year-and-a-half ago that community had some issues in its emergency rooms as well. that was made by tenet. there was an awful lot of talk about that with observation rates and -- >> it was also to stave off a deal they were trying to fight a takeover. >> that was controversial. in my analysis when i looked at the other hospital companies, i excluded community from some of the analysis. none of the other hospital companies were nearly as problematic as consistently. 64% of markets with low observation rates. 53% of markets with high short stay rates. this is the holy grail. as you said earlier, this is the holy grail of the way you want to do the analysis. >> cheryl, thank you. we should also mention the hma senior vice president allen
levine told "60 minutes" the allegations were "absolutely wrong." of course this is just the start of an ongoing story. thank you. time for some hopium. a strong november for auto sales nearly every manufacturer showing off some big time numbers. let's bring in phil lebeau. all right, phil, prediction time, baby. can we hit 15 million cars and trucks sold this year? >> not for the year. monthly sales waist which we'll get later on this afternoon, yeah, i think we'll definitely hit 15 million. that's a pace for the month of november. each of the individual automakers all did probably better than expected. all except for general motors. when you look at these numbers, gm is the one that came in. that's the annual sales pace. as you go back to 2007, that's really the last time you were above 15 million for an entire year. for the individual automakers, again they're all positive for the month. gm the only one that does not meet expectations. what drove sales last month? an improving economy. sandy.
post-sandy storm. buying in the new york, new jersey area. in fact when you talk with dealers in that area they say they saw sales gained throughout the month and that's good news for luxury automakers. bmw just reported sales increasing 38.8% for the year. they've sold almost a quarter million bmws here in the united states and as a company, when you lump in mini , they believe they'll excel past the record of 2007. let's look at the monthly sales rate or annual sales rate. right now we are on track to finish this year probably at about 14 1/2 million. that's going to fall shy of the 16 million in 2007 but above what we saw in 2008. it's certainly what we were expecting and we'll have even stronger numbers in december. >> it is a really good numbers from honda as well. phil lebeau, thank you for that. twint che i want to check back in with jackie deangelis. president taking questions via
twitter. >> the first question was@paulmmckenzie. can you assure us that any fiscal cliff negotiations regarding entitlement reform will not hurt the most needy? the president's response to that question was -- we can reduce deficit in balanced ways by ending tax cuts for the top 2% plus reforms that strengthen safety net and invest in the future. he signed it bo. the next question that he answered was from mike,@mike5673. mr. president, why wouldn't keeping tax rates low across the board encourage more hires and therefore more tax revenue? on that the president responded -- high-end tax cuts do least for economic growth and cost almost $1 trillion. extending middle class cuts boosts consumer demand and growth. meantime the white house photographer tweeted a picture of the president answering tweets. speaker of the house john boehner also got into the conversation saying, mr. president, the budget will never balance without economic growth. how does raising tax rates on 1
million small businesses create jobs and grow the economy? let's see if the president responds to that one. he still has it. back over to you. >> that feels a little bit like a side show. >> tax cuts on one group help but tax cuts over here won't help and $80 billion a year will suddenly save medicare. america doubling down on secret agents. u.s. sending out nearly 2,000 new spies. next we'll tell you their prime targets -- hint -- and the price tag for you, the taxpayer, will be paid for by tax hikes on the rich. the cnbc real-time exchange market snapshot is sponsored by -- i always wait until the last minute. can i still ship a gift in time for christmas? yeah, sure you can. great. where's your gift? uh...
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enjoy free shipping and great values on your holiday shopping from l.l.bean. coming up on "closing bell," fuel fight. head of the aaa says a new blend of ethanol could damage your car but somebody else says aaa is just in the pocket of big oil. both sides of that very important issue. plus, a third of americans would consider getting a
mortgage at walmart if the retailer offered them. we'll look at whether that cowod be good for shareholders if they decided to offer them. we'll hear from the ceo of one contractor on how he is preparing for possible massive spending cuts if we go over the fiscal cliff. we'll see you for the last hour of trading on "the closing bell." spy versus spy. not the "mad magazine" version, this one between the pentagon and cia. "the washington post" report rg the pentagon plans to double the number of spice it has working abro abroad. it could have real impact on the future of the cia. washington post intelligence reporter greg miller and brad thor, "new york times" best selling author and former member of the department of homeland security's analytic red cell unit. greg, great story. how does this put these two agencies at odds?
>> well, this is -- there's a long history of these two agencies having a rivalry but the amazing thing this time around is how they have worked out a deal here where both sides seem to feel okay about it. when you look at what's happened, this cross in leadership where you have a secretary of defense who used to run the cia and until a few weeks ago a cia director ursed to be a four-star army general, they've made an arrangement that seems to work for both sides. they've reduced that friction and pledge to work together on this. >> it feels a little though like russia, doesn't it, brad? >> it does. this is the camel's nose in the tent. department of defense has wanted this for a long, long time. rg russians have their own gru, the clandestine intelligence service. but russia's service doesn't report to the kgb. for the moment our service will report to the cia but with enough success they'll be able to peel the cia away and go their own way.
>> bottom line, is it going to be more effective? >> i think for the pentagon they think that this will -- i think both sides think it will be, one because you just have a lot more spies overseas and there are just so many targets that they're focused on right now. >> brad, does spying work? is it worth the money? >> not whether the cia does it! thae that's big open secret in the intelligence world, is that the cia is really, really bad -- >> it works in "argo." >> yeah. if the cia is as good as they claim to be, there's too much bureaucracy, too much red tape. the cia is lousy at spying. if they were so good, the dod wouldn't need their own spying agency and that's why this is happening. >> two questions here. is it going to work and two, what is it going to cost? is this going to be more expensive or less expensive than a congressional kind of force? >> they got about $100 million to kick-start this problem but they've been told you have to do
it without any increase in your budget for five years. they're eliminating existing position and converting them to condestine, spying positions. that's where this has gone. >> you guys want to talk about hot money that sloshes around the globe? hot black money sloshes around washington like it's nobody's business especially when it comes to the dod and intelligence xluntcommunities. $100 million isn't even going to get them out of the garage. >> i get your point. we did a story about a missing billion dollars for iraq. like things go missing. but is the money better spent on a group of spies, a drone, a missile -- like what's the most effective use of money to remain safe? >> the most effective use is to put it where we don't have any resources -- human intelligence gathering. you put even -- >> isn't that spying? is isn't that what you just described? >> but it's different. the cia does signals collection where they get the electronic information. we need human relationships. principal agents.
that's how we do this. >> how much does it cost to train up a spy and who becomes a spy? fy wanted to become a spy, how do i become a pspy? >> you can't park all these guys at our embassies and consulates around the world. that's the real key. those guys are hard to find because they don't grow on trees. >> because they're spies! they're supposed to be hard to find! that's the whole point, right, greg? are you a spy? damn, you got me. >> do they all look like sean connery is the biggest question? sorry. >> you touched on one of the tough questions. where do you put all these people overseas? you guys are right, the cia takes up a lot of the slots in embassies with covered positions, posing as diplomats. how do you make room for 500 to 800 more of these people in embassies or -- it costs a lot more and it is a lot harder to do if you don't put them in embassies. >> greg, i mean this semi-seriously but i am
curiously. are there super secret parts of the cia we don't even know about? you see this stuff in movies. how many agencies really are there working in washington, d.c.? honestly. how many layers are there? >> i cover the cia and i have covered the intelligence beat for a number of years now. i don't have any doubt that i only know a tiny fraction about what the agency really does, about where its people really are. of course they have a lot of, lot of secret places and secret things that they do in secret places. and that's just sort of the reality of espionage. this is an area where the pentagon is trying to move more in to that world, more in to that secret world to have more of its own people there. >> this is my professional and moral obligation to ask this question, brad. if we go over the fiscal cliff, what happens to all these spies in the spy program? >> listen. there are certain moneys that aren't going to be available but like i said, there is a lot of black dollars that are secreted way out there. i'm not that worried about people in the intelligence community.
what greg was just saying about the cia, one of the things you need to know about that agency -- not a single person got fired after 9/11. that tells you how bad the bureaucracy is there and that explains why the dod needs their own intelligence service. >> greg, brad, thank you so much. james bond lives among us. >> how do you know who among you is a spy? it's the guy you don't see. mitt romney has a new job a month after he lost his bid for president. he is rejoined the board of marriott international. next up -- two big union battles are playing out. one has america's busiest port at a standstill. the other has fast food workers demanding a union and maybe even double the pay they're currently making. maybe new buildings? what about updated equipment? they can help, but recent research shows... ... nothing transforms schools like investing
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jane wells at the port. >> reporter: today is day seven. nothing is going on. this is a classic showdown between labor and management. negotiations resumed about 45 minutes ago. only 4 of 14 terminals are working at this point. on the port of l.a. side they only have one terminal going. 21 ships are sitting here, either in port or out to sea. 30 more expected today, another 9 diverted. clerkici iic clerical workers a trying to stop from being outsourced. >> we have 29% absenteeism. an employee works 3 1/2 days a week they want somebody to come out of the union dispatch hall to sit in that desk if there's nothing to do or not. >> reporter: you're willing to do some of that? >> some of that. >> reporter: sounds like a great gig. >> some of it. unfortunately these guarantees are false.
during the course of contracts they will outsource jobs. >> 560 employees who are making at the end of the contract we proposed wages and benefits over $190,000 a year are creating a national emergency. this will fastly become a major crisis for the entire country. >> my question to them, if it's true, you're not outsourcing, agree to the language that says you won't outsource. it's very simple. >> reporter: approximately 40% of shipping cargo comes into the ports. while christmas goods are on the shelves, they say just in time retailers will start to feel this later this week. >> thank you for that, jane wells. protests are taking off on the east coast. behind the picture lines are fast food workers. the man behind the movement joins us now, jonathan westwood. do you think this is going to work, jonathan?
>> definitely, something has to happen. you have workers living in poverty, not being able to put food on their clothes' back, many food workers rely on subcy dis. we are footing the bill for multimillion dollar corporations while they get away with not paying their workers fair wages and providing them any benefits. to, you know, continue to have a family and thrive. >> i understand that mcdonalds has put on the records they're committed to dialogue. any other big fast food chains out there that have said, in light of this, they're willing to talk, to negotiate? >> i haven't actually heard from mcdonald's myself. i haven't heard from, you know, yum brands, which is taco bell and kfc and a set of other restaurants. they also made billions of dollars in profit last year and
also pay their workers minimum wage. >> i respect what you're doing. most of these franchises are owned by mom and pop. they're not owned by mcdonald's themselves. >> this is not about mom and pop stores. mcdonald's corporation, yum brands corporation, set the wage standards in these companies. they have the power to work with franchises to make sure that they can afford to pay workers $15 an hour, which we're demanding -- >> is that going to raise prices? no one is going to eat the profit. they're going to jack the prices. isn't that going to hurt the community? where's the balance? >> like i said, after the recession, these companies have regained and are actually making billions of dollars in profits again. mcdonald's, yum brands, burger king, domino's pizzas. they are doing very well. the people not doing well are minimum wage workers. these are mothers and fathers, trying to raise their families,
trying to put food on the table, kids -- clothing on their kids back and possibly have money to buy christmas sxrents they're not able to. >> thank you very much for describing your cause to us. thank you for coming on the show. >> thanks for having me. >> let's get a final check on the president's twitter q&a. >> the president answered quite a few questions on twitter, eight to be exact. the session is over. here are a few more highlights. hunter asked him, what's your opposition to taking away deductions for the 2% rather than upping the rate? seems like a reasonable compromise. the president said not enough revenue, unless you end charitable deductions, et cetera, less revenue means more cuts in education. white house photographer tweeted to another photo, president tweeting on a mac, for those wondering. david asked, why not place more emphasis on reducing government spending than on raising revenues? the president needed two tweets to answer this question. part one he said, cut $1
trillion in government spending, discretionary spending the lowest of gdp since ike. part two reading, open to more smart cuts but not in places like r&d, education that help cut jobs, the disabled. back to you. >> and he doesn't even have the lackey doing it, a twacky. >> is that what we call it? >> yeah, a lackey tweeting. we know how much the baby everyone is talking about will be worth. that is next. places. to a lot of you know, i've helped alot of people save a lot of money. but today...( sfx: loud noise of metal object hitting the ground) things have been a little strange. (sfx: sound of piano smashing) roadrunner: meep meep. meep meep? (sfx: loud thud sound)
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