>> investors weigh yesterday's budget deal in congress. we have got 60 minutes to go until the closing bell. your first trade for tomorrow, the market is down again. >> yes. a second day in a row we have seen the market down. still within one percent of the high. three charts you need to see to tell you exactly what is happening now. the s&p 500 down 9/10 of one percent. 1787, the last of the s&p 500. a big story here. less of a deficit, monthly deficit numbers from the government. revenues are up. it means we might taper sooner. that means a 10 year rally. 284, the last on the 10 year.

finally, it is cold out there. i had to wear my heavy coat and winter scarf and gloves. that is why it is a theory that there you go. all right. let's move on to the big three. julie hyman is keeping an ion it for us. >> let's start with the biggest incline in the s&p 500. lab corp. of america. a lab testing company. the company shares are down very sharply after the 2014 forecast missed estimates by a wide margin. it is estimating six dollars and $.50. analysts are looking for more than a dollar more. basing this on a challenging torating environment uncertainty over the affordable care act and reimbursements for that. global, one of the biggest incline is today. it's forecast is also missing estimates. prices have been under pressure because its clients are not spending as much on the equipment joy global makes. it is the best performer in the s&p

on speculation discovery communications might make a banner for the media company. people familiar said during a routine discussion, scripps came up as a potential candidate. >> thank you so much. now on to the big story. the world's biggest hotel operator is slated to price its public offering in just one hour and is expected to break records. the ipo would be the largest lodging ipo ever, a big win for her winbut an even dig for blackstone, the company that bought hilton in 2007. hilton, once a blemish on tockstone's record is poised have one of the biggest private equity profits of all time. the market picks up 48% this year. it might be just the right time for hilton to take itself public.

our guests -- saying to you about what happens in the real estate environment right now? >> two things. those that have the staying power as they did to ride through the tough times, are now reaping the rewards. step guys did it one smarter or better. john, who heads the real estate group and headed this acquisition and restructuring, really pulled a wise move when the market brought down his debt really cheap. and recapitalized for a gave it to patients new day. the biggest story here, it is a global story. often times, folks like lactone or ourselves, we invest in a particular market, hilton is truly a global play and the , particularly emerging markets, it is really booming. china, there are so many opportunities for various rents of hills it to open up.

cities you have never heard of that are starving. >> 8 million people in them. like she ought. -- shiad. >> it is everywhere. frontier markets like indonesia, mexico, africa, they just have so much legs in which to be able to grow their bland -- brand. back here in the united states, they are doing pretty well. , probably their oldest asset, 140-year-old hotel we just finished redeveloping together with the hilton corporation. business has been good. hilton has got a good brand. people are starting to travel for business and pleasure. >> what do we think in terms of pricing? is there a lot of appetite for hilton? >> there is a lot. we are hearing five times oversubscribed as of yesterday. >> another cap -- in other words, five times as many bids as were available. >> it means it is doing decently

well for an ipo of its size. that is pretty extraordinary. in terms of pricing, we should expect that within the next two hours. that is with the lead underwriters and the company and blackstone as well. they would determine where the pricing would be. it should be somewhere within the range, some are within the midpoint of 1950. that could change within the next hour or two. >> this becomes the largest hotel by market cap. revenues are also bigger. it is the biggest publicly traded hotel in the world. >> i read it was actually the size of marriott -- combined. >> why we seem its appetite right now? we have got a market that is on a tear this year. that is without a doubt. real estate has been a part of the story. we have seen a lot of recovery. why do you think investors want this right now? >> it is not just an asset play. because of the way their

business model works and they have changed over time, we actually bought the house from hilton and relicensed the brand name or franchise. >> you own the real estate and they run the hotel. is the that allows division they originally had. for the company, it allows them to scale up the business dramatically with little capital expense. a lien on folks like us to put up the dollars. when people go back and are looking at stock rises, people had concern. i heard comments. my comment back was you cannot just look at it from real estate metrics. we have to look at it from a growth story business metrics and everybody has got real estate analysts looking at multiples and say it is too expensive. to growe so much room and so little capital for the amount of profits they can add. 8 million population sitting in nobody ever heard of.

>> let me ask you, so you own ae hilton, how are they as hotel manager. >> our experience has been good. they are detailed. the ceo is a very bright guy. he brought him in a few years ago and he did several different initiatives to tighten the ship. both involved with getting owners to put more dollars to invest in capital expense to keeping the brand standards. better disciplines in terms of execution, better friendliness. i sincerely believe when you go into a hilton today, you get editor services. they really put the focus on the business and the brand. is hardthe results work. that is now showing with this ipo. >> by phone has had a few. what is going on. why are they ipo in all of these right now? a we saw an extended stage month ago. last time i checked, it was up 26% from the offering date.

it did extremely well. the docket is hilton, which we will price tomorrow. we will see how that does. after that, we reported the national chain of hotels, that that is also looking to go public. company aslackstone well. they are seeing tons of appetite for these companies right now. >> the flipside is, whenever you see this many deals come to market, you say, is this as good as it gets? of the underlying real estate. what is your take. >> it is not just on fundamentals. the fundamentals will prove out. --t of what you are alluding alluding to, right now, there is appetite for this product. as readily as you can see the great appetite, you can see what we only had a couple of years ago where folks are not looking. they are benefiting here in terms of blackstone with hitting and getting sales up while the

wind is in the sale and demand is out there for it. it is what people want. people got dollars, interest rates are low. alternative investments are not great. it creates demand. they are lucky they are hitting the market at the right point and the right time. at rightre you looking now? where you seeing opportunity when it comes to real estate? >> for us, twofold. number one is the great cities we still think of. you talk about hospitality. we do a lot of things that relate to tourism. retail real estate and markets like fifth avenue that disproportionally benefit london, etc.. is the hospitality sector we invest in or the retailer, we still see prime, superhigh quality 27 cities disproportionally benefiting from the emerging markets. people think 8 million people who have new wealth in the city that you just discuss, are only going to be influencing the

local marketplace. it is far wider. today, with the ceo of one of the largest luxury good change are talking, we about fails in the beijing stores. to their surprise, the vast majority of chinese shopping there are from providences in the netherlands. you visit shops in new york or visit hotels in london. you are seeing so much of new customers and start to say, the mexicans, resilience, chinese, the world has globalized and there are so many more countries with new wealth and new excitement and new people starting to travel. morenvestment focus is investing in the best of the best cities, in developed markets were very active, as many people know, in places like mexico. >> rising tide is lifting all boats. thank you. it -- it is great to have you. thank you very much.

from cardiac surgeon to senator. why bill frist backs affordable care. hot air balloon, one company will make this happen for you. we will be back right after this. ♪

>> a cardiac surgeon was elected in 1995. the first physician in the senate since 1928. that discrepancy of having lawyers make a policy instead of doctors is probably why the health care system is dysfunctional now. he joins us now. welcome. good to see you. act is inable care the news. you said you think about 70% of the bill is pretty good. what do you like and what do you not like. >> to have 50 mine people

uninsured trying to a lot -- rely on insurance market does not work. there is no way to healthy and really subsidize the unhealthy unless everybody's in the room. obamacare, which does not address cost, and that is the not -- it didid have one good aspect. let's bring everybody in the room. the problem is they overpromise and gave everybody a comprehensive benefits that we cannot afford, and it set up such that the young people cap to subsidize everyone else but they are not -- questioner healthy and you do not need it. >> but you need enough help the people in the pool. do you think they can get him? >> they are not signing up because the way the bill was designed was that the plans are very expensive. a 30-year-old today paying very little but getting a good

incompetence of health insurance plan, can no longer get that. they have to go out and buy an expensive plan because it was designed that very sick people can only pay three times what a young or healthy person does. therefore, the healthy young person has to pay huge amount thisse they're limited by ratio. >> in other words, you're not letting the market do its job inefficiently pricing policies. sick but older person can pay as much as five is healthy andho does not need it. obamacare forces them into a three to one, so young people have to pay more and they cannot do it. so they do not sign up. >> what needs to be done to change that and make it so they can work. >> it is hard in washington where i used to be. it is hard to get something done. it will take somebody. say we need real market-based pricing. everybody needs to be in the

room. you cannot promise them everything. you cannot give them goldplated coverage. make it real insurance and not pre-k -- prepaid. >> is that not why they created gold, silver, and bronze policies. >> they are locked in a three to ratio. makes it impossible. >> how do you get people around the table to actually look at the numbers and say, this is not quite working, what do we do? class it is got to be obvious because we are talking about 18% of our economy today overall. when you have an unsustainable model being built, which is being built today, and you are not having an influx of revenue coming in, we will have a little bit, somebody has got to act. if you're not have everybody at the table and will not get the younger people to subsidize the older, it will implode. the problem is politics now are such that president obama and

not thecrats -- it will repealed. a few republicans and a few democrats put what has to be done on the table to make it accountable and appropriate pricing that obamacare can give affordable access. >> what should the pricing scale look like? >> i would immediately go to the five to one scale. >> some people might pay from $100 to $500 a month. >> yes. especially young people today 34 years of age or 28 years of age, and having to pay a whole lot of money for something you do not need, you will just not do it. get out ofy $100 to it. >>) what if there was a penalty of $5,000 if you did not join? >> it will go to probably 300 and 600-8800 dollars but still,

gets -- pay until it make sense. >> a higher penalty will work? >> is in there something that just seems inherently unfair about forcing people to do this? you do not have to buy car insurance. --car insurance >> you do if you have to buy a car. >> health insurance today is not really insurance. it is prepaid health care. we need to make it more like insurance, car insurance. what you need to do is, instead of promising all the gas and inspections, which is what obamacare is doing, step back, do not promise all of that, appropriately price it were young people will come in. we need to get healthier people in if you want markets to work. if you want insurance to work. if you just want government care, you do not have to. >> the idea is it is more for catastrophic events.

you willbender, maybe say he will pay for it yourself. >> that is the difference. everyone uses car insurance as an example. that is exactly what happens. you wait and see get into a nice appeared you waited to get sick, so you price it at that level, instead of all the benefits you do not need. preventive care is good erie to pick upcolonoscopies to one colon cancer, a whole lot of money. promising everybody 1000 colonoscopies a day, cut it back. the whole point is you have got to price something not as comprehensive, bring everybody into the system, and then you can make markets work. without markets and the educated consumer -- >> you were and are a doctor. you still practice. we were talking about that off- camera. how do you say somebody is -- deserves that preventative care and someone does not? they are choosing out-of-pocket to pay for a colonoscopy. >> i am all for prevention. it is good.

people need to recognize it is very expensive. it costs a huge amount of money. before you promise everybody this very expensive almost luxury, let's be a little take care of the 50 million people out there who do not have affordable access to their child getting of oma or leukemia or in a loved one being cancer situation. let's take care of them before promising everybody all of the other great prevention out there that someday we might be able to afford. we cannot today. >> in other words, cover the basics and prevent catastrophic things from happening. good to have you here. thank you very much. canada post tells canada you better get your own mail. we will explain today. ♪

collect the postman always rings twice, except in canada where he will not ring at all. matt miller is here to explain. >> this is something we are seeing happen around the world. just moving to it more quickly than a lot of the other developed countries. it is cutting down and will eventually end door to door mailed or of -- delivery. no mailman coming to your door. leslie you go to the post office and pick up your stuff? >> i do not get stuff from the u.s. mail i want. do you? >> i do not. i detest getting the mail. get junk,mostly i piles and piles. and i get speeding and parking tickets and a whole bunch of traffic violations. is reduce 8000do jobs, which is probably half of the canadian population.

no, they have millions of people. community mailboxes is what they will go with instead. one third of people in canada get delivery directly to the door. a lot of places in canada are difficult to get to. the price of stance will be $.50 next year. $.85 per stamp. they will expand through postal franchises, which is what you're seeing a lot of countries do in the u.k.. royal mail is the best model of that. operations seems like, you should be doing anyway. will notuts, they directly fire people. they will just stop hiring people. >> canada has really remote spots. imagine getting to some of these spots. >> i really love canada. >> it is gorgeous. >> it is gorgeous. the best places up there are the hardest place to get to. communityre will be a

mailbox and you go to your mail. interesting. >> everything you need to get over e-mail or from fedex or ups. >> coming up, hedge funds, a problem and a solution. next. ♪

>> hedge funds have a problem that we have a solution. insight in action. take a look at the returns for the average hedge fund globally versus the s&p 500. 19.6%. the hedge fund index globally versus the s&p 500, 26 point four percent. you're paying two and 20 in fees

. the s&p 500, 26 and 24. this is the equity pool of hedge funds. look at all strategies together, it is less than that. hedge funds are not making a lot of money. we have a solution. thanks to our friend's research, here is a solution. in thels do the best first three quarters of the year tend to work again in december. it is happening again this year. all in the first nine months keep going especially in years like this when it is a strong bull market and a lot of hedge funds are lagging. left toonly got 20 days find the returns. here's what we did. we start with the s&p 1500. large meeting and small-cap stocks. all of them. we determined there are only 35 that doubled through september. they were the leaders doubling in price through september. .hen we found 15 of those

these are the winners, these 15 out of 1500. just one percent and here they are. netflix on the list. tele-education, vox international. some of these names. these are the winners. i will post all 15 takers on tickers on twitter. adam.nk you, houston, we have a budget deal. gop budget deal paul ryan and it's counter cash counterpoint, they have a plan to fund the government for two yes. resource spending, cuts under sequestration, and still reduce the deficit. the plan took a lot of bargaining on the side, but they seemed to put political differences aside, at least for now.

outset, we knew if we force each other to compromise a core principle, we would get nowhere. that is why we decided to focus on where the common ground is. >> i was disappointed we were not able to close a single corporate tax loophole. i know many republicans had hoped this would be an opportunity to make some of the kinds of changes to medicare and social security they advocated for. constantine set aside differences. >> you do not always get what you want in a divided government. we can still make progress toward goals. >> they have to sell it to their fellow lawmakers. we are asking, does this plan go far enough? we want to ask our panel. did they do enough, dan? >> it is never enough. our does nothing to fix structural problems on entitlements and tax reform. it really is a first step. think where we were eight weeks ago. a government shutdown.

we almost had to have the failure for us to start succeeding again. because of that, the government shut down political implications resulting from that. the parties wanted to and brinksmanship. this would carry us all the way of 2015.ctober your clearing fiscal policy out of the way for financial markets. a good first step. >> ok. should this road well for the overall economy? there has been so much uncertainty. just the fact that maybe washington can come together a little bit here. does that mean good things ahead for the u.s. economy? >> it is more encouraging. there are two think this deal have the potential to do. first, it means we will not have as much fiscal tightening into this year as currently scheduled. 2013.nly relative to from 2013 and 2014, not as big a fiscal drag. a net positive for

the economy. other factors will touch on what dan is on. -- touched on. >> for two years. this is due to the 15. >> is this a result of shutdown? >> the government did not shut down the way they wanted to. you still have to vote on it. wrong beforeill go the end of the week. expectation is the deal will go under way and the next thing to discuss isn't debt ceiling next year. with measures maybe we get to the summer when we have to face the battle. >> president clinton wanted the jobs to be extended. as you talk people in washington that that particular issue might cost this deales that

becomes questionable? >> an excellent question. initially, the deal was, democrats wanted to get sequestration more than they wanted unemployment insurance extended. it was an either or choice. after midnight of last night, the house ways and means committee put the medicare doctor fix on this bill unpaid for a three-month fix. a lot of rumbling in democratic circles if the doctor fix could be added at the last minute, out outside agreement, one thing that is interesting going on right now, i am surprised by the level of republican support through the day. we headed to submit 120 republicans. couldible that boehner get 140 to 160 republicans on the deal. with president obama endorsing this, with other democrats endorsing this, it is likely you would get the remaining democrats to get this through when we vote on it sometime tomorrow. >> what changed behind-the- scenes? >> i think it is obamacare.

the failure of implementation was the big change after the government shutdown. thing about this. the republicans want to focus on obamacare implementation failures. they think there are a number left to drop. they said, why should we have a fight on the budget and distract from the obamacare debate? democrats had a similar inventions that incentive. do they want to extract from the problems? they think these issues will be fixed by january 1. this is a great way to show they are working from american public -- for american public. in a weird way, we went through a republican shutdown from obamacare eight to 10 weeks ago. and it was obamacare that brought the parties together to get his deal through. i think we hit a low with the government shutdown and it would probably be in better shape moving forward. us apartg what drove actually brought us together. what does this mean for your

thoughts, very briefly, as you look at the markets and bank of america clients? >> it is encouraging. if it is a fact this cloud of uncertainty has been lifted at least somewhat, i think perhaps we could start see in the best businesses invest more. perhaps we could start see momentum in the economy. still challenges. if the fiscal picture is becoming more positive, 100% i applaud that and that could be a good sign for the economy. towe yet some economic data be encouraged about. >> we sure do. manufacturing. >> even consumer spending. holiday shopping season started off a little soft. it looks like data is coming in ok. >> excellent. thank you so much. good news. we shall -- thank you for sticking with us. we will get lulu lemon's report card tomorrow when it releases third-quarter results. it has gotten pummeled this year compared to peers. place,new see suite in is the company about to regain balance?

and, how to fail at everything and still when they -- win big. will join us with his key to success. achieved through failure. we will see you back. ♪

qwest tomorrow, lulu lemon has third-quarter earnings. moving on from the pr disaster it hopes ended yesterday when it appointed a ceo and dropped the infamous chip wilson as chairman. probably arethis not so good for lulu's image. >> some women's bodies do not work for it. >> they dohe past? not work for some women's bodies.

>> beneath these outrageous comments and the marketing mess, is the company that has matched or surpassed earnings estimates every quarter since 2009 with betting on right here? pr that a bunch of bad will amount to a declining stock price? we want to ask our whole panel. julie, starting with you, is there a reason for investors to feel optimistic right now? ofhe was not the real issue the company. there are two main challenges lemon.main for lulu one of them is the supply chain and getting that back in shape after the whole sheer pants situation, after really his comments serves to highlight it is still having issues getting the product on the shelves that is correct. that is something the outgoing ceo christine day has struggled with. it is something they will have to solve. the other big issue is

competition. everybody is getting into this market now. in most cases, at lower price points. if lulu lemon is going to succeed, it will have to fix the supply chain issue and get its brand image back on track. a lot of people remain devoted to the brand despite all that happened. >> let me go over to us. bit about himle and whether you think he will have the chops to try to put this company back on course, and whether he can handle the pr onslaught that came the company's way in many ways and in many parts things to mr. wilson. >> i think he has great expertise for this particular challenge. not so sure about the pr nightmare that has been the last couple of months. in terms of running the company, fixing some of the sourcing issues and managing international growth, he has got a tremendous track record. i spoke to some people surprised by the pic and thought they would hire somebody from another

sportswear company, but that would be the wrong move. i think it is such a unique culture and they have approached the market in such a different way than nike or under armour. that is why they have been so successful with women. you needed to bring in someone who had a quirky background. he has really. to back up those quirkier companies he has worked at. stockm, how much is this affected by the news? when chuck wilson made the comments to me about not all women's bodies really being appropriate for his yoga pants, did it have an effect on the stock? walk us through the charts. >> take a look at this. in white, we are showing you lulu lemon's stock price. in yellow, we have spikes the number of news stories that mentioned lulu lemon. you can see the more news stories that came out, the lower the stock went. amazing. what is curious is that you look

at what has happened recently. maybe some of the new story flap has died down. a little bumpier when he announced he would be leaving. he had a little bump. the stock is just starting to recover. i would imagine if you are the pr agents for lulu lemon, you're hoping the what -- the yellow line goes down to zero. you have got to get the other lineup. >> will it? >> the news flow has turned somewhat positive. i am waiting to see what they say tomorrow in terms of earnings. i raise my price target. this is good news. the ceo higher and the reduced impact of chip in terms of his role on the board. i think the news flow is changing. people are taking a wait-and-see strategy in terms of how this management structure will support the growth going forward. >> we will watch for their earnings going tomorrow. up, housing recovery may not be robust as we thought. chart attack is next.

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>> littleton ipo is pricing we now. it looks like it is going out at $20 per share. >> it does. first, that story, lulu lemon, pretty long legs, the best line of the day. we were laughing about it. i have got to talk to todd helton. , biggest is pricing hotel in ipo history. this is the biggest u.s. ipo they've ever done. five times oversubscribed what we expected. 10 times oversubscribed. it is massive. we are near the year-end people are closing books and many people think the stock market is at head level. booksthe pacing deal, the close at 12, they are having an

early pricing call pure normally, they would still be tying up the books and figuring out. they have the deal done. talk with 18-20 one. it is expected when i spoke people working on the deal to price at 20. why is that noteworthy? look at all the other deals we have seen lately, twitter and other deals coming up of the talk remember how high twitter came from where we originally expected it. the fact it will most likely, 20 and not 21 or higher, clearly, they could price it higher than 21 but they will not. they are leaving money on the table. what is the smith -- what does this say? maybe blackstone, they are not saying they want to take all the money off people and squeeze every last dollar out of it. they are pricey and more failed -- more fairly and the market share seems to like it. >> you look what happened, morgan stanley, facebook rising as high as it did. all the wind was essentially knocked out of the sails early on.

can they perhaps gain more momentum? class you have hit the nail on the head. so many investors were involved in twitter that will -- what -- that light the deal. they did not drop, but assumes it was in the 40's, they sold out and said, i will revisit when it drops. they are making a different decision here being led by deutsche. goldman is the other underwriter. saying, let's try to get more value here and keep momentum have. it is not what we seen from other companies coming to market in the last year and a half. is this the tatian, goes out tomorrow, pricing at 20, we will watch it carefully. momentum. some upward 10 times oversubscribed. >> 10 times. think about it. they could probably price this thing more like 25. they will not going -- they are not going to. you have grown-ups in the room. we are not talking about excited young tech kids.

blackstone knows how to get business done. >> thank you. breaking the news, 20 dollars per share. we will be back after this. ♪

>> we will get you caught a break now on the only sauce you need to get caught up today. number 10 is home depot, up about a half percent right now. the home improvement retailer that's a profitability goal met a year earlier than planned. home depot says it is -- the operating markets looks than 12% by the year ending january, to the 15. class that is because matt and i

are in there buying all kinds of stuff. cheers sinking six percent. the maker of mining equipment posted earnings. as company has suffered miners continue spending cuts as commodities drop. class a light of mining stuff at home depot. class yes. class h&r block down after record -- reporting a 2.1% drop posting losses roughly in line with the year ago. confidence the company is well- positioned to deliver strong .esults still down. class number seven is cisco, falling more than one percent overturnng a bid to approval of microsoft's takedown of skype. cisco and others filed a complaint that said a deal would hamper competition. they said the deal would fail to demonstrate that eu was wrong to clear the deal. qwest groupon gaining one percent as well as upgrades are starting to outperform today. groupon is poised to take market share in the huge commerce

market, wells fargo. groupon is likely to benefit from increasing popularity of mobile commerce. that is for sure. blackberry shales -- shares are falling as coverage of the stock. the analyst for the smartphone maker continues to struggle and is more broken in speak -- worth more broken into pieces. class it is brutal where it is headed. class that does not quite would like a blackberry. where is the keyboard? that is the whole point. with blackberry, you get a keyboard. qwest that is one without a keyboard. it was supposed to save the company does it was supposed to be like an iphone but is not an iphone. qwest the only thing i think it has going for it is the keith -- the keyboard. on my iphone, typos all over the place. my blackberry, you know? i am pretty coherent on it. class it has been repeatedly said on the show the pattern is worth $2 billion.

maybe there is salvage value. , was ity, the folks city? >> rish, you should get one of the t-mobile messengers? have you seen those? >> yes. do member the avon lady? they are both from rural america? iowa. ohio.nd the ladies to come to my house in new hampshire. the world's largest door-to-door cosmetics seller. the ceo has been cutting jobs and exiting markets as part of a plan to save $400 million by 2016. qwest urban outfitters, shares are up as the company reports shares have grown so far this quarter. they are growing, at least a couple of percentage points. the operator said fourth-quarter stores open at least 13 months and then rising mid-single digits. number two is microsoft. qwest down one percent even as the company said sales of its new xbox one video eight --

videogame console reached more than 2 million. microsoft will keep pace during the holiday season. qwest all right. you hear the closing bell. mastercard, shares are up since august after announcing a dividend increase. is stock split, mastercard also launching a $3.5 billion stock buyback program. stocks are up more than 60% this year. here we are we will get some additional context on today's market moves. >> art of what was going on in the equity markets had to do with what was going on in the buying market. we did see the yield going up today. about the talking -- notlity in december

only that, there is also, when you get to these december markets, there is not as much news. you get speculation that goes out there. >> the monthly budget statement was less negative, which means that revenues are going up. >> i am defending julie. i don't have any problem with that. i'm not sure that traders react much,day on paper as maybe the algorithms do. part of theis equation. >> time for the round table. olivia is joining us and kicking it off. on ising pandora head spotify. the company already has in ads free mobile product but it costs 9.99 per month.

it has secured the first license to stream music by led zeppelin. is to expand the potential user base. spotify currently has 24 million active subscribers in of them, 6 million are paying. when you think about who they are up against, pandora and apple, look at the scale apple brings to apple radio. the itunes store he has hundreds of millions. >> spotify is very specific. you can request a specific song and listen to something very specific. on the smartphone app, you can only shuffle. you can pick the artist and it will play all the songs by that artist. tablet, you can get it, on your phone, you can't.

$9.99 version. you can still get an individual song from the individual artist. >> i'm talking about the free version. >> what i find curious is, you are paying this monthly amount, and yet you somehow have to get the money to the artist. my concern is because it is a smaller pool that the artist are getting a smaller pro rata share . to send thosee revenues to all the artists. no artists, no music. >> they are still being compensated for it. >> the artist are making money from this stuff anymore, right? you think about it, art has never really made money. made money from the actual conserves. >> the other big advantage apple

iphones all have a tommy you can just buy the track right there and that is a lot easier. remember when my local classic rock radio station with all led zeppelin all the time for like three weeks. it is the most important and for classic rock radio. , probablybig deal bigger than getting spotify's new pandora service on your mark phone. -- on your smart phone. of theparent company food network and hd tv and the travel channel, according to an article in variety, shares in both companies topped out on a report that analysts are getting ahead of themselves. citigroup says a takeover is

unlikely because discoveries more focused on international markets. scripps was valued at $11 billion. >> it's not even the actual viewership, it is a very specific market. hdtv is a great place for the home depots of the world to be advertising. >> i go there when i'm looking at home renovation projects. >> the traditional way of pricing the cash flow, the stock value plus all the bonds, that may no longer be relevant. what you are talking about is accessing eyeballs in a whole new world where accessing is the goal. >> some analysts have come out and said we should not get ahead of ourselves because the discovery is focused on international. they are focused abroad, and a

lot of analyst think scripps might not make sense for that. >> i don't know how we make this transition, but let's talk about the pope. andeat out edward snowden massar alice shot to be time magazine's hersen of the year. he beat out edward snowden and bashar al assad. -- this is the third time the magazine has picked up hope as its person of the year. >> i was looking at some of the found thatd a poll 92% of catholics have a versusle view of him, 76% for benedict after he announced his resignation,

abdication, what is the term? non-catholics have a 62% favorable rating of pope francis. >> but they might not have a favorable view of the catholic church. >> a few weeks ago he released what was considered by some as a controversial piece am aware he said capitalism doesn't necessarily do enough for the little guy. >> he said the trickle-down theories of economic growth have never been proved. he is a champion of the poor. >> in fairness, this is a pope who practices what he preaches. >> he absolutely does. >> he is not driving around in a fancy car. what does he have? inexpensive, not memorable car. >> he is a man of the people. just is hard to overstate

how big a deal it is for the one to change his tune homosexuality and abortion. he said quite clearly, if someone is homosexual and seeks god, who am i to judge? >> it's hard to overstate how lame it is to pick a hope as man of the year. >> i beg to differ on that. pope as man of the year. >> if he can take the religion -- let's move on. relief forittle manhattanites. apartment rents fell for the third month in november. that is according to a new report. the decline in median rent 230 $100 a month is a sign that the rental market is weakening --

median rent is $3100 a month. >> this is an incredibly interesting story. the price coming down is a function of only the most expensive rents romping. your average joe -- most expensive rents dropping. your average joe did not see his rent drop i'm 250. -- i $250 a month. that came the top end down, not regular rent. i'm shocked that anyone would pay $3100 a month rent. the volcker rule, coming up next. ♪

>> time for chart attack, where we have a couple of charts that will make you smarter. people are getting married, but moving in with their folks. what does it mean for the housing market?

>> the key factor holding back we have only seen household formation of perhaps 500,000. we don't have the final numbers yet. it is down from last year, .ignificant lee low >> as we look at the data, aside from last year, it has even been sloping down ever since. the question becomes, why is this happening? why are people moving in with their? ?- with their folks >> if you look at the employment population ratio, it has come back down. it started to recover into last year and the beginning of this year it interior eight. job opportunities are not robust . if you're are not confident about your income today, the key

factor is that these households are not lost. i think they will ultimately come back. now, it has been a very slow path. >> come see us again soon. it has certainly been a busy week in washington, with major economic indications. first, the volcker rule became a reality, issuing in a new era of oversight for our country's biggest financial institutions. then last night, house and senate negotiators reached agreement on a budget deal in what democratic senator patty murray called an important step in helping to heal some of the ones in congress. is a top republican on the budget committee and also the head of wall street's largest lobbying group. welcome senator judd gregg back to the show.

>> how are you? >> i'm good. let's talk a little bit about this budget deal. do you think it is enough? >> no, it's not enough, but it is a very significant step. up until now we really have not had both parties at the table in a constructive way. what you see with this agreement is that senator murray and congressman ryan have shown that there is a way to reach agreement, that there is a path forward that can be bipartisan. are taught him and reform, and you cannot do that unless you do it in a bipartisan way. the fact that the process has been set up where it agreement can be reached may have a significant impact on the deficit down the road, so it is very positive. >> let's talk about some of those other issues such as corporate tax reform.

is there still hope that something could become -- could be done when it comes to corporate tax reform? >> yes, and that is the positive. you have both chairman camp in the house and chairman baucus in the senate who runs the finance committee trying to do something. i expect you're going to see, as we head into next winter and into the spring especially, a very robust debate around the issue of how you do major tax reform. can they reach closure? i'm not sure, but i do believe they can make progress on getting the issue before the public thomas and hopefully ,tarting to -- to the public and hopefully starting to sugar it off as they say in the north. >> the volcker rule that has been over three years in the making, finally some clarity. there is concern that the banks will be hindered by this and the ability to hedge, which has a real effect on all the other

companies out there, main street company's, is going to be impacted negatively by all this. give us your sense of how it's all going to stack up for the banks. >> well, we don't know yet. it is a thousand page bills for a proposal and sorting through it will take some time. most of the major financial houses have already adjusted their criteria activity i'm a so they have addressed the issue. the real concern here is, if you get too much regulation in this area, you start contracting liquidity in the marketplace. liquidity is really the fuel that drives the american economy. the ability of people to get atns, to get capital reasonable prices is the core of how our economy expands. that is called liquidity. we will have to wait and see how it plays out. the rule is so complex and so in just the number pages

that are involved, it's going to take a while to figure it out. ,> oil hedging as an example what oil prices will look like over the next 6-12 months. part of the way they do that is by using a bank, and someone is going to take the other side of that trade. between a distinguish service you are providing for a client and something that you might make money on? >> as i understand the proposal, and i haven't read it in depth yet, they are trying to identify fairly closely to hedge with the actual event that is being hedged, versus separating them. you take the example of the airline hedging oil, if a financial house was being a market maker in that, they would have to tie it to the actual hedge, the oil. it's very possible you could do that. the question will be coming if you contract that relationship too much, then you end up

contracting liquidity and you make it very hard for various industries which need hedges to get them when they need them. is such aid, this complex issue, how it works out is still to be seen. the goal of volcker was to make sure that deposits that were insured by the american taxpayer were not used by the financial system to basically make money through investments and what might be called speculation. i believe that's arty been addressed. most of the financial houses do not do that any longer. propped rating off their desk relative to that. now we have to make sure we don't undermine the robustness of the economy as we put in place these rules as they come down, rule such as volker. the compliance departments will be very busy. thank you for joining us today.

balloons are not just for trips to office. we will take you up in one and go three times as high as a commercial jet. the sympathetic office nerd we all love, we are talking about dilbert. his creator, scott adams, is joining us. ♪

>> you have probably been hearing a lot about richard branson's virgin galactic, they will send you into space for two hours. is, it will cost you $250,000. and you company is called

worldview, and the high altitude balloon that they have will fly area about 100,000 feet that will only cost you $75,000. a better view, perhaps. we are joined by the ceo who is here to explain how the whole thing works. where are you in the process? >> we will start testing in the spring. then we will be ready to fly you and everyone else up to about 100,000 feet at the end of 2016. >> what was the inspiration to do this? it is kind of out there, no pun intended. >> i have been involved in commercial space practically my entire life. people have been flying balloons for decades. a handful of people, about six people have been up to this altitude back in the 1950s. the first person when up to a helium balloon

in 1967. the idea itself is not brand- new. however, being able to take all of us up there is brand-new. >> is this a passion, is this a profitable opportunity? what is the driving force to make this thing a reality? >> all of the above. the market right now looks really promising. luxury market, people are wanting to spend their money on incredible experiences. that is one aspect. personally, i am excited about the aspect of going myself and seeing that view. >> that is the basic question, will i get back down? >> of course, we are building all kinds of safety features into this thing. one of them is the power wing. there is effectively what looks like a parachute, and it is pre- deployed. that means it's out all the time. you have effectively turned your capsule into a glider.

>> do you have oxygen? >> the capsule is like a spacecraft. >> we are looking at pictures, it's very attractive. >> the designers would be so happy to hear you say that. >> i'm not saying i necessarily want to get into it. richard branson has been on the show many times. all excited about virgin galactic, what they are doing. 75,0000,000 versus dollars, how are you able to undercut the price so much? >> it is an incredibly different experience. we are using a helium balloon. in many ways, it's much simpler. but it gives you a very different experience. >> may be the next time we do this interview, it will be in one of your capsule's.

>> coming up, what is the key to success? ,ccording to our next guest failure. we will be joined by the creator of the dilbert comic strip, right after this. ♪

>> time for the scene where rabri knew the business behind media entertainment and pop- culture. time to have a little fun. hollywood on track to deliver its highest year ever at the box office. the current take his $10.1 billion, and just below last year's record. what are the best films this year? let's ask two of the most notable critics. oh when and chris. ris.wen and ch

chris, you are kind of the indie guy. >> this is my number 10 pick. it is not an obvious choice. it is the most fun i had at the movies this year, seeing this horror movie. >> you had more fun getting scared. >> i did, absolutely. i thought this was a scary movie, i dug my nails into the armrest, and i thought it really delivered. >> did you think it was believable? greg says believable as a haunted house can be, absolutely. >> he got scared. >> it is freaky thomas some of these stories like amityville horror. >> the new co. and brothers movie is -- the new cohen brothers movie creates with a

lot of authenticity. en brothersrky coh film. i could not get this movie out of my head after i had seen it. >> was it justin timberlake? >> he is a really good actor. is oscar isaac. it is about how he is flipping through the crack of history, which is a sad story. it has great songs, all these elements work together in a way that is profound and in delano. -- indelible. the folk scene that it captures is dead on. >> one thing i found interesting, we were just looking at your top 10 list of the year. you both came in spot on with

number four, you both picked it. number four, clearly. we have some agreement here. >> it first played at the sundance film festival. it came out of nowhere and was made by first-time filmmaker. it tells the true story of a young african-american man who was killed for no reason by a transit officer in oakland in 2009. it's exactly the kind of story of someone who could have become a statistic. the movie brings him alive as a human being. it flashes back to the last 24 hours of his life. it shows it was a complex, flawed person who was trying to pull his life together. it ties into things like the trayvon martin case. too often these become news stories but we don't see the person behind the story. interesting that it can be

woven into the new cycle of what we are seeing. >> it features a breakthrough performance by young actor named michael b jordan. he is someone you will hear a lot about in the future. >> i predict we will see some oscar buzz with this movie. >> that is a big statement. all little have debate over this. -- wait a minute. adam and i saw "gravity" and it was a mixed bag. we were very into the elements and the production. i see you put it on your list as number five. number two. boringust thought it was

because it is basically sandra bullock in a big suit and she is all alone for half the movie. >> i loved it. i thought she did a great job. the movie is more about the feeling you get in outer space, the coldness, the loneliness of it. this is a movie technically that really pushes the limits of what movies can be. experience,al especially if you see it in 3-d. i loved the movie. there is always room for debate. >> i loved it, too. it puts you in outer space and takes you through what the sandra bullock character is going through. i felt it was a pretty good moment, itfor every was an experience. it really just made you feel it. that is what the audience has responded to. there have been plenty of movies

set in space, but how many put you there? a real achievement. >> moving on, the number one pick. who should we start with? >> my number one movie of the year is "12 years a slave or slave.""12 years a man who wrote his memoir. he was kidnapped as a free black man in 1841, brought into slavery. makes us feel all the more the horror of what it would be to be trapped in this kind of nightmare. at the same time, it's an incredibly humane film, incredibly emotional. we never lose touch with his desire to persevere, to survive, to transcend this experience.

very brutal film, but also uplifting. it is the most powerful movie experience of this year. >> a lot of people have said so. >> before midnight, the third in the trilogy. >> they met by chance on a train, and here we are 18 years later, and they are finally together, but things are not quite great. there is some trouble in their relationship. this movie really captures how , anda romance can be hollywood is very good at depicting romances that feel like hollywood creations. to me, this felt like real life. i think it is a tremendous movie, especially if you are married, it will hit home. >> i agree with that completely. a makes me think there is realism and authenticity that it's there in a lot of the films

we are talking about. i think the audience is more and more looking for that. they love hot corn blockbusters, but at the end of the year, people want movies that speak to them in a meaningful way. this year it is an embarrassment of riches. >> talk about an embarrassment of riches, having both of you guys here. let's do this again, and not wait until this time next year. more about movies, music, and tv shows in the new issue of "entertainment weekly." up, matt has the step-by- step on how digital currency is used on everything. we will be right back. ♪

>> matt miller's excursion into the world of virtual currency,

back for day three. just to recap for everyone, bitcoin has gone up, but it could have gone down today. >> it is very volatile, but usually on the way up. it is over $1000 in value right now. >> putting on your professor hat, you're going to give us a lesson in how a bitcoin transaction works. >> after i went out and bought it yesterday, the first bitcoin forhased ever was pizza 10,000 bitcoins. that pizza today would be worth over a million bucks. in any case, i'm going to show you, for those of you who have no idea how bitcoin works at all or what it is, i'm going to show you a very simplistic tutorial. first of all, you have to .xchange some form of currency

inter-e to go into the webs and get some bitcoin. you have to start with a digital wallet. for consumers, the wallet will be the same as what your wallet is now. you will pay money out of it and get money into it. for merchants or vendors or people who offer goods and services, it will be more like a cash register, which is why we've shows that -- chose that image there. is with publicit or private keys. a public key, you can show someone. .t has a code on it we have a picture of it we can probably pull up. the publiccture of and private keys. they have to come together to make a transaction.

the private key has all the little numbers on it. there you go. you put the transaction and theyr in a box verify the transaction and make it your of reversible. viewers whatto the that means. do, they ares trying to get bitcoin as a reward for verifying or wrapping these transactions in a code armor. every block bay mine, they get a reward of 25 points, which is a lot of money right now -- every block they mine. >> i hear all that, and it is really interesting. could you somehow hack the

system to put more bitcoins out there in the universe? >> it is an open source code, which everybody is warring ov all the time every day, and has been for years. could it be hacked? theably so, but so could nuclear launch codes. it is unlikely that they would be. >> there are people who are aware of where the bitcoins live , and might there be a way to actually break into someone's wallet and effectively steal? >> there are ways to do it, but the miners are the ones who are providing the most security in this issue. just bring in our guest to help explain it. >> we do have a guest here to give us more insight into the legality of bitcoin activity. .e are joined by dominic romano

one of the questions is, is this really legal? currency that is being used in the united states and throughout the world that is not effectively backed by anything at all? >> it's not illegal yet. it's perfectly legal. coming back to something you were just discussing, there have been a few instances in the last few years, 30 instances where 1000 or more bitcoins were illegally transferred. from wallets. so there is a serious problem. i think that is part of the volatility >> if you compare that to the instance of dollars taken from wallets by fraud. >> there is a lot more fraud when it comes to physical dollars and other established currency, but there are established laws.

it is a bit ironic that the very decentralization of the open- source system that made bitcoins so popular transnational he is now part of the greatest problem. there is no regulation. it's like the wild west, there are no laws specifically. some have said the sec may step in. a texas man was running a ponzi scheme using bitcoin. use wire fraud legislation, but it's not established. the u.s. is not actively policing this. >> thank you for being here today. more "street smart" after this. ♪

>> it was the worst day in a

month for the markets, the dow ending off 130 points. we were talking earlier about about the fed potentially tapering this month, sending some jitters into the market. , it's almostous like were back to good news is bad news. the monthly statement came out less negative. revenues were higher than expected, which you want to see, but it suggests there is growth in the economy. businesses are making enough money -- >> i love the idea that there is growth in the market. we have gdp coming in stronger than expected. manufacturing growth, all of this is adding up to some very good signs. but that may mean they will taper sooner than later. curious that the markets

are wrestling with that. in the past two days, we were only down two days in a row. we are down about 1.25% over two days. about -- a talk little bit of clarity on the horizon because of the volker rule. 900 pages to go through. you look at how it affected the banks today, financials down about 1.5%. highery sector that was was consumer staples. >> which is the lasix place to --when you are unsure plastic place to go. >> lots of interesting things on that. thanks for joining us here today. we will see you back here at 3 p.m. eastern tomorrow. ♪

>> it is approaching 56 past the hour. i'm julie hyman. let's get you caught up on where stocks closed out the session. we saw sizable declines in terms of stocks today. the s&p down about 20 points, the nasdaq down nearly 67 points , or 1.4%. that as washington it's closer to a central budget agreement to read some investors are saying could we get tapering of federal reserve stimulus in december possibly? that speculation drove treasury yields higher during the

session. the 10 year yield at 2.85%. overall we are seeing bond mutual funds expecting to see record withdrawals this year. for more on their performance this year and the outlook for next her, we have manager of the best-performing auntie sector bond fund right now. kathleen, it has been a tough time for the fixed income market, although you guys have been out performers. what do you tell your investors right now when they come to you with concerns about finding yields in the fixed income market right now? >> not to be afraid of tapering. tapering is really a good thing for fixed income markets. it's going to bring a lot more value back to the markets. the challenge right now is that there is so little value, it's hard to find good opportunities.

>> i guess the convincing that you do comes from the refund -- from the returns that your fund has seen. where have you been getting that from? >> we been getting it in corporate bonds, but a little bit different than typical investment-grade or high-yield bonds. we have been using equity sensitive converts, so that is a great way to get exposure to good corporate fundamentals without taking a lot of rate risk. it's a great way to bring some stability of income into the bond fund. the next big thing going into 2014? whether you see tapering as good bad, it's definitely going to cause more volatility as people try to digest it. what are some of the things you are doing to brace yourself for that? think of volatility as an

opportunity. when tapering begins, it's really going to give investors opportunities. it means a strong economy, which is good news for corporate bonds. him expecting a lot more and a activity -- m and a activity. that will make certain investors unsure of what to do, but if you can look at it from a long-term perspective, this is where you will get some great buying opportunities. >> what about internationally, what are you seeing? the developed world, there are ways to pick up a little more yield than you are getting here in the u.s., so that is a positive. on the developing side, in emerging markets, i think the fundamentals are challenging, and tapering could present some real strong challenges their. looking at those markets with a very long-term view, being poised to be flexible and nimble

is going to be foremost for investors. >> thank you so much for joining us. i'm julie hyman for on the markets.

>> this is taking stock. the theme today is high in the sky that comes down to earth. a budget deal before the new year as congress pushes partisanship aside. we'll hear from the lawmaker who's going to drum up those votes. peopleearly 3 billion cook with primitive methods him and one colorado company makes