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tv   Closing Bell  CNBC  December 5, 2012 3:00pm-4:00pm EST

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social media to get involved in the stop the debt campaign. thus, mr. simpson, you have accomplished your goal in a bigger way than you probably knew how. >> he does it better than i do. >> let's see it. >> i don't even really know how it goes. >> i don't think you're supposed to go like this when you do it. >> no? >> thanks for watching "street signs," everybody. this is not "the office." "closing bell" is next. have a great day. hi, everybody. good afternoon. we enter the final stretch. welcome to "the closing bell." i'm maria bartiromo at the new york stock exchange. good rally under way on hopes of a compromise on the fiscal cliff stalemate in washington. eamon javers standing by in a moment with information on a bipartisan letter from lawmakers that's. putting tax hikes and entitlement cuts firmly on the table. >> i'm bill griffeth. let's show you, and the charts tell the day's story, as it usually does. can you get when the president began speaking at business round
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table and we learned that at least 40 house republicans are breaking ranks to talk about anything, all possibilities as they said in an open letter. right now the dow is up 110, near the highs of the day. 13,062.59. the nasdaq is going the other direction. blame apple and overall technology having a tough day. down 13 points right now on the nasdaq at 2982. the s&p is holding with a gain of about five points. we'll have more on the markets in a moment. first, let's get to what's going on in washington. more republicans breaking ranks to join what we hope will be a bipartisan call for higher tax rates and entitlement cuts. eamon javers on capitol hill has the very latest details for us. eamon. >> reporter: hi, bill. that letter does call for the speaker to negotiate, including all options on the table. it is a bipartisan letter. we should be a little bit careful on this because the letter habit actually been sent yet, we're told by congressman
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mike simpson's office. he's the congressman circulating the letter. he's gathering signatures from other members of congress, as we speak. they expect to send this letter. i've talked to some conservative republicans today here on capitol hill who say their minds are not changed, and that's going to be the group that's most difficult for the speaker to negotiate. nonetheless, the fact there's such a letter being circulated probably gives speaker boehner more elbow room in his negotiations and might help him beat back a little brush fire he saw on the right wing yesterday for being criticized after offering up $800 billion in tax increases. meanwhile, the white house confirming it has directed the office of management and budget to prepare plans for these massive spending cuts that would come at the end of the year if we go over the fiscal cliff. the white house saying they don't expect we will. they still hope it can be prevented, but they have to start planning. also, speaker of the house john boehner meeting with small business leaders on capitol hill
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where he reiterated some of his key points. again, just within the past hour. take a listen. >> business owners with us today are here to highlight president obama's demand to raise tax rates instead of cutting spending. his plan will hurt nearly 1 million small businesses around our country. that will affect hundreds of thousands of jobs. >> reporter: and guys, there are republicans here on capitol hill who are urging the speaker to cut a deal with the president. i talked to one of the earliest republicans to say, you know what, let's take a the president up on his offer to extend the bush tax cuts for everybody under $250,000 and at least take that uncertainty off the table and then continue to negotiate the rest to have later. some of the republicans are now coalessing around that view that they should give into what the president is suggesting, at least temporarily, and continue to negotiate on the rest because there's a lot of political pain here for republicans if we do get to the point where we go
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over the cliff because of those higher tax rate pateryers, guys. >> all right, eamon. thank you. >> the talk continues, but none of it face to face. be sure to catch a live interview with one of the key players, treasury secretary tim geithner. he's here in one hour. you'll see him only on cnbc today. >> meanwhile, ahead of that, we have this market moving higher. triple-digit move. the dow industrials posting a strong gain in anticipation of a deal, even though the nasdaq is lower due to a handful of names under pressure, most notably apple. last time this happened in terms of this big move was back on september 29th, 2011, for this tripl triple-digit move. >> with the nasdaq lower. technology the weakness today. let's talk about it in today's "closing bell" exchange. gentlemen, all of you money
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managers, i realize, you are long-term investors. will, do you find yourself having to move things around on a short-term basis is as a result of these fiscal cliff talks that are causing such volatility in the market here? >> well, bill, as you said, we are long-term investors. we really don't find ourselves wanting to move things around that much. >> you're not playing these swings here? you don't buy on dips? >> we're not playing the dips and selling the volleys. >> are you expecting that we will be able to get into this market as better prices at lower prices at some point before year end? >> that would be a very short-term question. i don't know the answer to it. >> and you're not a short-term guy. >> eric, what about you? how are you allocating capital these days? >> you know, we're allocating capital much the same way we have been doing for the last few months, which is thinking, again, sort of long term like was just said. you can do things around the fringes, but they have to be, you know, considered a small move rather than something aggressive. we still don't have enough answers to know what the ultimate outcome is going to be.
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>> mark, what about you? you know, we tend to oversimplify. right now the feeling is resolution to fiscal cliff good. market goes higher. no resolution, or at least in a timely fashion, bad, market goes lower. do you see it that way? do you invest that way? >> to your first question, i absolutely see it that way. we talk about risk on, risk off all year. now it's resolution on, resolution off. today is a resolution on day. i think it's dangerous to try to play that for the average individual investor. separate from fiscal cliff, the background story that's been developing has been a resurgence of developed markets, europe particularly, and investors who left that market, that's been a great place to be for the last few months. there's so much focus on fiscal cliff. i think that's very hard to do on a day to day basis. for multiasset portfolios, the rest of the world is a good story right now. >> because we're so dominated by these issues in washington. rick santelli, some enthusiasm going on in these markets today
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with the anticipation of perhaps a deal. do you buy into it? is that what you're seeing in chicago? >> first of all, there are many expecting a deal. down in chicago, we don't just hope for a deal, we hope for a reform-oriented deal. to just do a deal without tagging it to reform is just going to make more of the same at some future date. the treasury complex really, really unfazed by just about all of it. briefly, we're under a 158 yield. haven't been there since second week in november. after 815, 118,000 jobs, interest rates were never as high as they were before that number. that really set part of the stage for treasuries. >> and you guys don't have an exclusive on hoping for a reform-oriented deal. i think everybody does that elsewhere as well. will, let's talk about where you like markets. a lot of guys are mentioning it,
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you like international have inesting -- investing. >> we very much do. we're about 55% in the u.s., 25% in developed non-u.s., and 25% in emerging. those emerging and developed non-u.s. numbers we pushed up back in october. >> how much risk do you think you're taking by going overseas like that? we hear people say how undervalued they feel the u.s. market is and what a mess many of those emerging markets are right now. >> it's interesting. quite frankly, a lot of the emerging markets have underperformed quite significantly in the past year. >> isn't that appropriate, though, given the fact the growth rates have come way down? >> absolutely growth rates have come down. if you look at the underlying trend in the growth rates and the pmis coming out of those countries, they probably bottomed back in the summer, probably in august and september. they're beginning to creep back up now. >> you think we'll see back to the highs in terms of the growth rates and places like brazil?
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>> i think we're looking at 5% to 6%. that's probably better than 2% out of the u.s. >> absolutely. >> eric, what's your best idea right now? >> well, i think any of our best ideas are going to have a function that's about multinational growth. we were just talking about the global exposure, companies that are multinational in their orientation. say, a praxair and accenture in the information technology space with with more than half their revenues coming from outside the u.s. you can capture that global expansion that's still going to take place in emerging markets without necessarily having to add on the risk of going into those markets directly and doing it more through, you know, multinationally exposed u.s. companies that are still quite undervalued in our mind. >> in terms of undervalue if valuations, where would you say are the most attractive in some of the sectors we're looking at? for example, financials, one of
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the best performers today. is that undervalued? what's your take? >> i think they're always under valuations. i wouldn't say sectors as a whole are undervalued. it still comes back to looking at specific companies that haven't necessarily -- >> we just lost eric there. mark, i'll let you finish off that, if you're still with us. your best single idea. you mentioned the emerging markets earlier. do you favor them over the u.s. right now? >> yeah, i think you just want to make sure you have global exposure. i think if you look for the most undervalued areas, as always, and what's so cruel about the markets, it's going to take you to places you probably don't want to go to, which is europe and international. i think if you want the best value, you're probably going to end up somewhere in europe. >> in europe? and does the debt crisis make you reluctant there? you think there are real valuations and ultimate growth levels to come there? >> yeah, i think you have to take it all into account.
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it's down to individual stocks, but people like dividends. you can get twice the dividend levels with some large companies in europe selling at cheap valuations. we know all the problems haven't been fixed there, but you compare to what we were talking about in europe a year ago versus today, particularly exporters with china maybe turning a little bit. i just think an awful lot of money has left that area. if any of it starts moving back, and maybe that's what we're seeing, it's a nice place to be. the trick is you have to be there before the turn. >> hey, bill. >> yeah, rick? >> with citigroup cutting 11,000 jobs, austerity makes their stock run up. i'd like to know what our guests think if many of the others are going to be cutting. investors found something golden in those cuts. >> it's true because the stock goes down real quick. you like the financials? >> we're kind of agnostic. sorry, maria. >> sounds like you don't like them. >> we're underweight. >> mark, quickly. >> we are underweight financials. we've moved to more of a neutral weight. citi is one of the names we're
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overweight. it's a shame for the folks who have lost their job, but it's a nice move today. >> 7.5%. bank of america, 6%. thanks, guys. >> thank you very much. see you later. as a matter of fact, the financials are leading us higher. we're near the highs of the session right now with about 50 minutes left. the dow up 124 points. >> pretty good move. if you can own only one stock in 2013, which one would make you the most money? top fund managers were asked that question. we have their answers. we have names coming up. stay with us. >> get pencil to paper. also ahead, the art of negotiation. we're going to hear from somebody who says a deal on the fiscal cliff could have already been reached if only lawmakers took a page out of wall street's deal making strategy of keeping things behind closed doors. where have we heard that before? plus, secretary tim geithner with us exclusively. will the white house let our economy go over the fiscal cliff if a deal on higher tax rates for the wealthy is not reached? we're checking it out. back in a moment. [ male announcer ] research suggests cell health
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welcome back. this very public negotiation on the fiscal cliff still does not seem to be closing in on a deal. the white house out in campaign style events regularly, making multiple media appearances, kle including timothy geithner right here in 25 minutes. >> but would things be done faster if it was done privately? in his latest column, jeff goldfor a compares u.s. budget talks to merger proxy battles. jeff joins us to explain about that. plus, we have bob from jones day who specializes in wall street deal making. jeff, it is ammo on wall street to do things behind closed doors. you don't want word to get out on the negotiations. it gets too messy. >> right. i wouldn't advocate for a lot of people to do what wall street does. one thing you can say is they've
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helped facilitate thousands of mna deals this year. they've figured something out with these transactions. the deals that are most successful have the better chance of success are the ones that you negotiate behind closed doors, not the ones that turn into hostile battles and spill out into public, which is what we're seeing noup. >> i understand that, but at the same time, what wh are we going to have a deal already? people are so frustrated by this. we've had 13 months to think about. now we're down to 26 days. bob, can you really make a deal on the fiscal cliff when the negotiation is out in public? do you think we'll get a deal done? that's what everybody wants to know. >> if everybody thinks we ought to get to a deal, we'll get to a deal. the public part of this, obviously, it's different. you got to get 435 people to vote in the house and 100 in the senate. different than getting a board to approve a
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fundamentally, getting to a deal is about understanding expectations. this public thing is a very good point. it couldn't be different. when two ceos are meeting to do a merger negotiation, one guy shows up in jeans, and the other guy has sunglasses on. they meet at the o'hare hilton. they don't want anybody to know about it. >> wait a minute. let's point this out. go ahead, jeff. >> the risk is taking the worst part of what wall street does, which is this negotiation of do a deal, do a deal, do a deal, do any deal. that's what happened with hp-autonomy. that's what you don't want to take from wall street in this situation. >> let's face it. a ceo is judged on success by the bottom line, the profitability, the stock price and all that. an elected official has to let his or her constituency know that they're on the case and can only do that publicly.
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going behind closed doors doesn't show them they're making the case their constituents want to have made. >> you're probably better off negotiating a deal, coming out with strong terms, and taking it to the board. in this case, it would be like the party kau scaucuses. then selling it to your shareholders, in this case the electorate. i think you're better off coming out with a firm deal first. all the specifics get consumed by politics and egos and messaging. the substance gets lost. >> but the problem is, you know -- i don't know. i have a problem, you know, comparing this to an mna transaction. this is a deal that needs to happen for the economy to move forward. yeah, maybe an mna transaction giv gives growth to one company and makes profitability better. this is a lot more important than doing an mna transaction. this is about people's lives. frankly, people want answers. i think the time for hiding everything under a rock is sort
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of like it was yesterday. >> it's not so much hiding it under a rock. it's getting to basic principles. one way the mna process is better is that people agree to it and have a multifaceted communication program. it isn't another debate. it isn't a series of, you know, this is my point of view, and if you don't agree with me, you're wrong and how could you think that way. it's organized, and it's sold. i don't mean improperly. we got the sec. we have the rest of it. it's explained in organized fashion. when you just go out and continually -- this has been an extension of the debates. it hasn't moved the needle at all. hopefully, behind the scenes stuff is going on. although, both sides claim that's not happening. >> we can only hope we get a deal in a timely fashion. i think everybody shares maria's frustration. thank you, both. thoughtful discussion.
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i know we could solve the problem. we could have it done. >> we certainly feel like the reception and the perception on wall street is a deal is coming soon. dow industrials in the triple digits. 114 points higher. alan simpson has been fighting for a fiscal cliff deal. now he's doing it "gangnam style." watch this. ♪ some people have gone off the cliff on this. we've officially jumped the shark in an attempt to not go over the fiscal cliff. much more of this incredible video coming up. and then even if you don't like facebook as a stock, you may soon own it in your portfolio. we'll tell you why, and whether that's a good thing or not. back in a moment on "the closing bell."
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you see the dow and s&p higher but nasdaq lower. apple almost single handedly keeping the composite in the red today. horrible day for that sock. plus, the nasdaq gets another black eye launching an ipo. seema mody has details. >> apple the big. story. shares getting close to a death cross, which is when its 50-day moving average crosses its 200-day. analysts reacting. brian marshall says apple is cheap and attractive here, but damage has been done with that
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recent 20% slide from its recent high. shares down about 4.7%. whitehorse finance was set to debut and ipo today. due to a human error, it was delayed. apparently someone hit the ipo halt button instead of the ipo extension button. nasdaq said all orders were canceled and no shares actually exchanged hands. shares did resume trading at 3:00 p.m. it was priced at $15 a share. we're trading lower by around 7%. of course, not the way you want to kick off your first day of trading. back to you. >> it really isn't. of course, facebook, another name that saw a botched-up ipo. the stock still below the initial offering price of $38, but the stock has been on a tear this month. now the social giant will be added to the nasdaq 100 index coming next week. if you own an etf or a fund that
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tracks the nasdaq 100, you'll immediately own a piece of facebook. is it time to start liking the stock? we'll talk numbers right now on facebook. on the technical side, richard ross is with me. on the fundamental story, zachary carabell. gentlemen, good to see you. zach, do you think being added to the nasdaq 100 helps facebook's stock? >> no, it's a good one-day story. it helps for liquidity, but this is not a name with hundreds of millions of shares in circulation that needs liquidity help. it's a nice thing to talk about, but not help for the stock. >> what do you think, rich? >> we love the chart. look, there's a thin line between love and hate in this business. we hated it at 33. we love it here at 28. we bring up the chart, i'll tell you how we get there. we've taken out the down trend that's been in place since the failed ipo you alluded to. we now have a four-month base of support. we say the bigger the base, the
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bigger the support. we see upside to 33 on facebook. we're a big buyer. >> zachary, what do you say about that? >> you know, obviously the name has been working. it's down hugely from its ipo price. momentum, as any trader will say, and i'm not speaking with that hat, can be your friend, but it can also easily reverse on you and be your foe. a lot of people were short facebook at 17, and we saw what happened there. i think facebook is a name in search of a valuation. its overly high ipo price kind of may mark out the parameters. >> one minute you love it, one minute you hate it. right now we love it. you got to love the chart. momentum is in your favor. this stock goes higher. i don't drink green mountain coffee. i like to taste my coffee. but the stock is up 15% since we put a buy on it last week. we see a technical symmetry
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here. >> how much higher can it go? >> ipg you only buy faigs book now if you like it for the next two to three years. i'm more concerned the market goes back to 23, 24. i'm not interested in that as this play. this is a stock in search of a valuation. it hasn't really found one yet. >> maria, i've never had a customer complain about making money too quickly. >> bottom line. all right, gentlemen. thanks very much. we'll keep watching. bill, over to you. >> the blue chips are making money today. without technology, the dow up 114 points, just off the highs of the session. more on that coming up. plus, we're going to wonder what compromises is the white house willing to make in order to avoid falling off the fiscal cliff. do not miss the exclusive interview with treasury secretary tim geithner coming up at 4:00 p.m. eastern time right here. stay tuned. tdd#: 1-800-345-2550 when i'm trading, i'm so into it,
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all right. listen up. if you're hunting for the best stocks to take you through next year, look no further.
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"fortune" magazine asked its favorite money managers for their take. >> we have the names exclusively for you right now. lee gallagher is with us to make the big reveal. >> hey, thanks for having me. >> let's get right to it. two technology stocks are on the list. neither of them is apple. >> no, although we have a story on apple in the issue. these are not our picks. so we have align technology as one of them. align is best known for making invisalign, which is a retainer that fixes your teeth. tom cruise has used it. i've used it. you can't underestimate the vanity of american people. the big market is teenagers. >> teenagers and magazine editors. >> apparently. >> and pent air. >> yes, it this makes filtration devices that helps homes and hotels and spas run their water
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morefacient efficiently. >> was there a theme throughout this list? what's the theme in terms of how they selected these names? >> the theme is given how uncertain everything is, we picked fund managers that have a great record that beat their piers, have an extended tenure of management, so they've been there for a while. we just asked them in their particular niches what are their best ideas. the theme is just, you know, what are the best ways to get through this. >> people with experience and track records, basically. >> yeah, basically. >> health care. >> health care, iliyad. >> they're hoping to create a treatment for hepatitis c, which will be a big deal. >> this is sort of controversial. moody's. >> which, of course, was vilified with the other ratings agencies in the financial crisis. the story here is that the stock is actually still a bargain, according to the fund manager we talked to, given that if you
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look at what's happening in europe, the demand for issuing bonds is going to be huge as companies can't raise cash. here in the low-interest rate environment, debt financing is going to be big. >> and the large cap plays. go through those. >> verifone, a leader in electronic payment devices. this has been disrupted by new players like square and paypal and google. the stock has been hit, but our fund manager we talked to think it's been unfairly hit. any time an industry is being disrupted, that's a good opportunity. >> u.s. bancorp? >> this is an old fashioned bank. focuses on deposits and loans and wealth management. none of the other stuff that can get you into trouble. this is one our clients really liked. >> this year dividend plays have been huge. everyone is looking for income. they look to these companies that have a good yield. the two that came through here were ford and, as it happens, our majority owner comcast. >> yes. so ford, you know, the auto
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recovery story is pretty significant. it's still happening. cars on the road are older. the replacement rate is going to go up. with ford, it has a rock-solid balance sheet. its dividend yield, we think, could go up. comcast is interesting. not because it's the boss' of "closing bell," it has a new revenue stream in nbc universal, which is up 32% in the third quarter because of the olympics and the election. you know, on the other side, the cable side, the companies really pared expenses. that's why we picked those two. >> it was interesting you saw money moving into europe at a time that the debt crisis seems to be, you know, at its worst, if not, you know -- it's still very tough. >> it is. our european plays, though, if you look at them, unilever -- the reason we picked this stock, it's based in europe, but this
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is an emerging market story. this company gets 50% of its revenue from developing markets. it's been in them for a really long time. it's been in india for 70 years. some of these companies enter into china, enter into india, and you can't just plant a flag. you have to understand the market. it's an exceptional story. >> and for medical? >> this is again because of our ageing market going to be a huge, tremendous growth story over the growth industry over the next 10 to 20 years. >> and she did it without any notes. that's amazing. good job. >> good to see you. thank you so much. we appreciate it. we're in the final stretch of trading. we have a market holding on to gains. 20 minutes before the closing bell sounds. the dow industrial average up 116 points right now. >> citigroup's job cut a big gain for financials today. is citi on the right course right now with these cuts? will the financials lead the
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market higher or lower this month? we'll look that the coming up. bank of america also up 6% right now. mean while, congress lee leaving for a long weekend. really? yes, they are leaving for a long weekend. they just left. treasury secretary geithner will weigh in exclusively at 4:00 p.m. eastern. [ male announcer ] at scottrade, we believe the more you know, the better you trade. so we have ongoing webinars and interactive learning, plus, in-branch seminars at over 500 locations, where our dedicated support teams help you know more so your money can do more. [ rodger ] at scottrade, seven dollar trades are just the start. our teams have the information you want when you need it. it's another reason more investors are saying... [ a i'm with scottrade.
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welcome back. good rally under way on wall street. full-ti financials leading the market higher today. citigroup is cutting 11,000 jobs. kayla is following the story. unfortunately, we're looking at a big rally in the stock on the heels of this news announcement. >> i think investors have been waiting for that announcement for a while. those cuts, though, only representing roughly 4% of the bank's work force. part of a massive restructuring plan that newly minted ceo mike corbat hopes will mean more than $1 billion a year in cost savings by 2014. a big move for a man just 50 days into his new job. the upfront costs aren't cheap. they'll take $1 billion in charges in and $100 million in the first half of next year. you saw shares spike today on
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that news, helping to lead the financial sector to a rally. some aren't convinced that citi has been righted. anyway, not yet. the changes amount to a tremor, when what's really needed it an earthquake. but more belt tightening could be coming. the cfo said that the plan was an initial foray into their new strategy. he said you could also se continued asset sales from citi holdings, even if the price wasn't right, they're definitely going to be moving quickly to sell those assets. no doubt this is the first of many announcements coming from the new stable of executives at citigroup. >> all right, kayla. thanks so much. >> in fact, the s&p 500 financial sector is the top performer so far today. the xlf hitting its highest level in about a month. as financials go, this has been the case this year, the financials have been one of the leaders in the broader stock market. as the financials go higher,
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it's taken the rest of the market with it. >> even though the financials are representing less and less of the s&p 500. so will the banks lead the market higher into the new year? gentlemen, good to have you on the program. thank you so much for joining us. good to see you. let me kick it off with you. you've been a student of this sector for many years. you're an investor in banks. what do you think? do we look for a rally into 2013? >> it's all about fiscal cliff, but today we got a piece of market moving news. the real lever at these banks right now is cost cutting. we got a very big announcement. if you listen to the presentations at goldman's financial services conference, you heard cost cutting as a theme across the board. you thaerd at bank of america. you heard it at pnc. of course, citi, the granddaddy of them all with 11,000 job cuts, really moves the needle. that will help earnings quite a bit next year. >> it's amazing. you see this rally in the financials, yet it's because people are being cut right before christmas, and that's unfortunate.
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>> you know how wall street works. it's all about the bottom line. >> how about business? not just wall street. >> wall street is all about the bottom line. i like to see this cost cutting that's taking place to increase earns and profitability. i also simultaneously want to see some top-line growth as well. i think that the banks are if search of some more top-line growth with different product performances. i kiepds of like more of the regional banks, sun trust, where i think they're going to have a pick-up as a result of this housing -- >> where does their additional r revenue come from? >> well, this housing boom. there's a lot of depressed real estate. people buy homes and bring revenue to these regional areas. >> what happens if we go over the fiscal cliff? you said it's all about the fiscal cliff. what if we go over? >> well, i mean, i think there's clearly short-term pain. the question is how long do we stay over?
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i think there's a latent amount of cash on the sidelines. i met with a lot of companies that talked about this business desire to do things, but they need this catalyst. so i think we go over the cliff. yeah, it's terrible. the numbers in the short term aren't so pretty. i think if we don't stay over for long, it won't matter that much. hopefully we get it resolved in a reasonable fashion. >> what do you think? >> i contends the fiscal cliff will come to an agreement. it will be temporary in nature, kind of a year type of plan. i think the market has digested a bit that tax rates will go up. it's just a matter of how much spending are we going to cut to make this a market between the democrats and republicans. >> does monetary policy hurt or help the banks? keeping rates as low as they are, it's tough to make a buck the traditional way of lending and spending, right? >> i'm going to be a two-armed economist because i can't said on the other hand. there's two things that are very important. first of all, credit in commercial real estate is phenomenal. cap rates are really low. so the fact that rates are as
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low as they are has allowed commercial real estate not to fall into the abyss. if commercial real estate had to refi at high rates, we would have had another problem. the other problem is the fact margins are getting squeezed at these banks. credit quality is better. >> that's where the money comes from. >> yeah, fees. by the way, you can eat these loan loss reserves. citi still has close to $10 billion in reserves. they've not used them. >> that's interesting. >> these are assets they can utilize. >> do you think regulators want to see these banks as utilities? i know you like the regionals. you like the regionals also. in terms of the makeup, what these companies look like in the next couple of years, is there real reason to own them, or are they very difficult to profit from? >> look, i think the valuations look attractive. you bring up a very interesting
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point about the regulatory environment. this environment is -- i think the pendulum has swung the other way. i think it puts a really big stronghold on the potential for growth going forward. at least in the short term with these banks. >> favorite financial. >> well, right now i would actually say regents financial. i think it has a lot of upside. it has the southeast leverage and credit recovery. i think hopefully we'll get a modest buyback. i think the stock actually is something that could go up another 30, 40% without a lot of trouble. >> and march is when the banks have to put their plan forward. >> the plan is being put forward now. they're getting two shots at it, much better than last year where they simply rejected plans. this year, if the plans are rejected, they get to resubmit. this year i think the banks will
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be conservative. >> see if citigroup makes the cut this time. favorite regional? >> sun trust banks. i like it a lot. plays into this regional play with the housing recover write rates low. >> okay. good. thank you, both, for joining us. we're starting to lose altitude here as we head toward the close with about 15 minutes left. the dow now up less than 100 points. >> have you looked at apple today? the stock now near the lows of the day. single handedly dragging down the nasdaq. up next, he's been talking nonstop about fixing our debt, so why is alan simpson taking the time to make his point by doing this? ♪ >> you should see the look on t anton's face. also, we'll hear exclusively from one of the key people in
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fiscal cliff negotiations. that man there, treasury secretary tim geithner. later, exclusively on "the closing bell." stay tuned. [ male announcer ] how can power 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 75% 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. with investment information, risks, fees and expenses try running four.ning a restaurant is hard, fortunately we've got ink. it gives us 5x the rewards on our internet, phone charges and cable, plus at office supply stores.
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i can't decide whether we should have you bring the kids into the room for this or quickly sends them out. we don't want to scare them. >> alan simpson is going "gan a "gangnam style." the campaign is called the can kicks back. there are no words. just take a look. ♪ >> stop instagraming your breakfast and tweeting your first world problems and getting on youtube so you can see "gangnam style," and start using those precious social media skills to go out there and sign people up on this baby. three people a week.
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let it grow. don't forget, take part or get taken apart. boy, these old coots will clean out the treasury before you get there. >> i love that. he's great. >> he is hilarious. obviously, trying to appeal to a younger demographic with this message. >> i was talking to a defense analyst the other day. he said the problem with all of this is the fact i'm worried about my 9-year-old. i'm worried about my 15-year-old. they're going to be paying unbelievable tax rates because we are dumping all of this on them. so on the one hand, yes, it looks like -- he looks a little crazy in this. a little goofy. at the same time, he's appealing to kids because, guess what? it's on you, kids. >> and you know what? i'm thinking that generation is not listening right now. they're not paying attention. >> when they pay the tax rates at 90% or 75% like france is doing, they'll listen. thanks, alan simpson. >> we applaud your efforts
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there, senator. good job. all right. we'll come back with the closing countdown. market still losing altitude. up just 94 points. >> after the bell, he said there will be no fiscal cliff deal without higher tax rates. find out if treasury secretary tim geithner thinks going over the deal is a better option than compromising on revenue. he joins us at 4:00 p.m. eastern. you're watching "the closing bell" on cnbc, first in business worldwide. ♪
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about four minutes left. another one of those days where it was clear that wall street is fixated on washington and what's going on with the fiscal cliff talks. they were still public today. here's where the president started speaking to the business round table and where we learned also that those 40 republicans part of this bipartisan group that would be open to new ideas on the fiscal cliff talks. of the dow, the best performers and worst performers today, the full-ti financials higher led by bank of america. nasdaq, we need to highlight this, was lower, down 20 points today. why? because of apple.
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apple had one of its worst days. we highlighted this earlier. something very archean called the death cross, the 50-day moving average crossed below the 200-day moving average. what does that mean? just means it could be going lower from here. down 6% on apple today. the yield of the ten-year went lower. as they were buying stocks, they were also buying treasuries today. we were below 1.58 for a time on the ten-year note. finally, watch the vix. the fear indicator continues to move lower today. we've not been above 20. sort of the yellow flag territory since july. ben willis, is this market complacent since the fear indicator does not go higher even when we have fears about the fiscal cliff? >> no, i don't think it's come play september. i think we've actually started the end of year santa claus rally, whatever you want to call it. yes, they are giving away cheap protection if you want to cover some risk. the market is telling us that the fiscal cliff is not going to happen. the only risk is if it doesn't
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happen. boehner stepped in front of the microphone the day after the election and this market tanked. that's a clear signal to washington they better get it right. >> i think ben is right on the money. this is basically what is happening. there's an enormous amount of room for disappointment in this market. this market is expecting a deal. i don't know why all of the sudden today we get this triple-digit move as if something is happening. if we don't get a deal, how big of a sell-off can we see? >> well, we've seen the t.a.r.p. disappointment. we've seen the debt ceiling disappointment. i think if we go over the cliff, we're going to have a very big sell-off, then the politicians are going to go, hey, we're here to the rescue. >> what's fueling this optimism then? >> i think we have seen the idea that the market has voted to tell washington they need to get it right with the sell-offs we have seen. the anticipation is they want to get re-elected. they understand the republicans now have detectors.
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again, the market is saying we with believe in you. don't screw this up. >> all right. you have to get ready for the next hour. >> huge show coming up. timothy geithner at the top of the hour. we're going to find out what's changed since the sunday shows he was doing interviews on. anton, ben, see you soon. i'll see you at the top of the hour. >> capital gains rates are probably going to go up. does that hurt the market as well? >> we've seen a lot of companies sell themselves. it's been a problem in the banking industry because loans have been paid off. they want to grow loans. people are taking control and repaying their loans. i think it's already been anticipated. >> you've had a hot hand trading this market lately. what are you doing, especially bearing in mind we have a jobs number on friday. >> i'm a little concerned on the adp numbers. this is generally the weakest of the year. that's probably baked in a little bit. i think we're at the beginning of an end of the year rally.


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