issue. as importantly, everyday distributors, new distributors, new people are attracted into the scheme and we think the -- >> you called it a scheme multiple times. >> yes. >> you really think it is a scheme in this sense. >> yes, of course. it is a pyramid scheme. scheme. pyramid scheme. >> do you look at other multilevel, like avon, am way, as pyramid schemes? >> no. i haven't studied carefully amway or avon, but i think they are legitimate multilevel marketing companies. we aren't saying all multimarketing companies are schemes, but some are. and herbalife is. we are simply trying to create transparency around the company, something they have done their best to muddle, so the market can decide the right price for this company. we don't benefit by the stock

going up or down. we're not ditrading this. we are short the stock. >> how much communication did you have with herbalife prior to this presentation about your analysis? >> none, other than we listened to or read many times the conference call transcripts, analyst -- >> you never went to them and said, look, this is our position. we have questions. we want answers. >> correct. >> why not. >> you saw what happens to -- since david asked the calls on his conference call, they strictly cut the access for others. this is the most transparent we could possibly be. this is public presentation. the only people we didn't allow is, the cfo called and said, can we be part of your presentation? we said no, this is our presentation. they sent people from herbalife and we had the assistant corporate secretary and other people in the audience, and they

are able to participate. i don't have a list yet who was on the webcast, but we will also make a recording available for people who missed it or can't see it. i suspect anyone who cares about this issue will ultimately learn about it through both the public presentation and what comes after. >> there is already a lot of short interest in herbalife. have you discussed this idea with others, including david? >> no, i don't know if dave sid short the stock. i really don't. i've never spoken to david. we are the vast majority of the short in herbalife. >> one of the statistics of people owning the stock will come back and say, look, unsold product that herbalife sales only .5% of their sales come back. >> right. >> how can that be a pyramid scheme? >> if the answer is, if you can return the product, that would be a good answer. but you can't return the product. they make it uneconomically or

under their system illegal to return the product p.m. people that have any meaningful amount of product are people who are sales leaders. and sales leaders, every time they get a royalty check from the company, have to fill out a form, an affidavit that said, i've sold product -- 75% of my product to people, you know, outside the system. in effect i have sold ten or more consumers. they don't say if it is a tiny amount to the same ten people but they have to sign the affidavit. if they don't sign the affidavit, they get the check. let's say you move on from the scheme. let's say they audit the compliance. give me a list of one of the companies you are required to. let's say haerbalife, you have kept a list of every consumers, name, address, amount and product. so the company says they have no idea what the ultimate sales are to consumers yet they can simply

ask their distributor base, please provide the list of customers you have sold to. >> how much bottom line numbers would you contend are fraud. >> i think their accounting is -- it is not that they are selling -- that people aren't writing a check to them to buy a product from them. >> this is an fraud them? >> this is a pyramid scheme. there is a lot that's wrong with their numbers. and shane spent a lot -- >> you spent a lot of time on that. >> there are items called sales -- >> when you say pyramid scheme, most people say -- >> pyramid schemes are usually fraudulent and penalties are severe. >> let me ask you two other questions as part of this. did you participate or did anyone on your team participate as a distributor throughout this thing? >> no. we wanted to but we would have to sign the distributor agreement. we obviously con agree to that. so we did not.

>> you have gone through lots of these battles before. mwia is one of them. >> an lot. this is really my second big short idea of my career. >> this is p somewhat dependent on the ftc taking action. if they don't, what happens. >> i think the fdc will take hart look. i think the scc will take a very hard look. i think the new distributor will be better informed and this is where the media comes in. this is where, i don't know how many distributors watch cnbc, i'm sure some do, but we have 50 plus members of the media here, much broader collection of the media like cnn, et cetera, that will reach to the community. think about a pyramid scheme -- >> what would you say to those who would say you are trying to advertise yourself on one side of this. you are trying to manipulate the success of the company and therefore the stock price. >> we simply want the truth to come out. if distributors knew the

probability of making $95,000 a year, which is the millionaire team as they call it, level, was a fraction of 1%, no one would ever sign up for this. and we simply expose that fact. the company has done their best to keep that from the public. the media exposes facts about things like pyramid schemes and ultimately consumers make their own decision. pyramid schemes themselves are inherently unstable. >> if this is a pyramid scheme, it lasted 32 years. why is that the breaking point? >> first of all, they are running out of countries. they are selling weight loss product. they are in ghana. countries in zambia. this is not where weight loss and digestives are big product. >> what do you expect we will hear from the company? >> i don't know how they can respond. >> is there anything they can do right in the past year? >> no. everything i have seen about

this company is simply been an affirmation of what we believed at the very beginning. we had a supposition at the beginning we were able to prove -- >> why short it before doing research? >> we didn't short it during -- we concluded by may, or whatever we started shorting the stock, it was a pyramid scheme. we spent the next seven months putting together a presentation we felt comfortable to put in front of the world. one thing, i said in q and a that i think is not correct. they are buying back today. >> you think they are pushing up the stock? >> i think they are doing their best to support it. i don't know who would buy it today at $35 a share. >> i do have to ask about jc penney, another high profile investment you have. do you have confidence in ron johnson? >> enormous company. >> what about the strategy that seems to have turned a little

bit during the holiday season, moving more towards discounts than previously articulate et. >> sure. i have confidence in ron johnson, because he is a ceo. when the facts don't work out the way he thought, he does something else. they had thanksgiving day sale, promotions during christmas. i suspect if we get good results from that, you will see more of that. >> could see more of that. >> yes. >> bill ackman, thank you for joining us. back to you guys. >> andrew, thank you very much. to kate kelly now because herbalife is responding and kate has late-breaking details on that. kate? >> thank you, sue. just to reiterate, response to ackman from herb al life. saying mr. ackman has previously said to beware of companies. we asked to be part of the call today, he refused.

his miss statements are mistakes are too numerous to address immediately. once again, michael johnson, their ceo yesterday, called claims being called bogus, add matly denied they are a pyramid scheme. sounds like we will hear more in the days to come. >> i wonder if they will address the issue ever buying back their own stock with which mr. ackman says they are doing today. >> a perfect storm is brewing in washington and at this hour. the house gets set to vote on plan b which the white house has said is a nonstarter. house speaker boehner will hold a news conference in about 15 minutes or so. we will take it live here. first, to john hart wood at the white house. john? >> sue, we've had a pretty relentless game of messaging bing pong between democrats and republicans today. we hear from eric cantor about plan b that house intends to take up. then we heard from harry reed,

now just behind me, jay carney is briefing. but bottom line from the standpoint of republicans, as negotiations with the white house have broken down, is that as eric cantor said a few minutes guy to reporters, they put the onus squarely on the president right now, saying that the action by the house today, which they say they have the votes to pass is the only concrete action to avoid the fiscal cliff. >> and the president has a decision to make. he can support these measures or be responsible for wreckless spending in the largest tax hike in american history. >> and michelle, as sue indicated moment ago, we will hear from john bainener a few minutes about the road ahead. but source near the talks told me that likelihood is that both chambers of congress will leave for the weekend. that will give more space for the speaker and president, perhaps if they choose, to negotiate and members would have the opportunity, if they come up with a product, to pass it next

week. >> maybe next week. but there is a growing body out of washington that thinks nothing happens until after january 3rd, after boehner, he hopes, is re-elected as speaker of the house. does mean we don't get anything until possibly the 4th? >> there is a chance. members could come back on the 26th or 27th. have a deal and pass it in both chambers. but it is also possible, as you just subjected, that we go over the cliff. we have the first couple of days of the year tax rates having risen, spending cuts having taken effect at least in a limited way and members would be so chastened by the reaction that then they would act. those are two scenarios for action. i still think you should rule out the possibility of something by the first of the year. >> thanks, jorge posada. >> all right. we will take a quick break on "power lunch."

michelle and i will be back in a moment. well talk it a congressman planning to vote no. also of course we will be awaiting the house speaker john boehner. he will hold his news briefing in just a few minutes. stay with "power lunch." we're back in two. yeah, sure you can. great. where's your gift? uh... whew. [ male announcer ] break from the holiday stress. ship fedex express by december 22nd for christmas delivery. by december 22nd 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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all right. in just a few moments, house speaker boehner will be standing at that podium. he will be taking some questions and we will find out exactly where we stand from his perspective on theish issues of

the fiscal cliff. one of the big questions is whether or not the vote tonight will be split along party lines. representative adam sieve is a representative from california. you're planning to vote no. why? >> this is really a side show. no one expect this bill to go anywhere. probably won't have the votes to get through the house. while it deserves tax cuts for families up to a million dollars in income. as the same time, adds new taxes on working families and college student. it is a tax for many families struggling by -- >> would you explain that? raising taxes on working families how? >> because the taxes that working families use now will expire. they are happy to have it expire and have taxes go up on student and working families as long as they can reserve tax cuts for families making up to a million. >> doesn't make any sense. it is intended to put pressure

on the president, which it won't. . it is intend to provide cover for some members in the house, which it won't. it is unfortunately waste of time but it is what it is. >> got it. from your perspective, sir, we hear things every single day. some days it is interpreted that you guys are close it a deal. other days you seem further apart. where are we in this particular negotiation? a little bit closer. ? >> i still think we will have a deal by the end of the year. i'm optimistic, although the clock continues to tick. we are closer than before. if you look at what president has offered by way of compromise in terms of reducing the amount of new revenues, raising the income level of the families that would be protected for many tax increase. so you can seen compromise on the white house's part. you have seen some acknowledgement on at least the need to raise or allow to expire the upper income tax cut.

the distance is narrowing. but now the rubber hits the road and i think what it will ultimately require, on some issues, the speaker allowes a bipartisan majority in the house to vote to approve the product rather than requiring it be a majority of the majority. majority of the republicans. because we could have a deal today with a stropg bipartisan majority. >> sir. >> but it would require them to jetson some of the tea party caucus members. >> what role do you think the fact that john boehner facees a reelection on january 3 as speaker of the house, does he need to play to his base now in order to keep that position and hence why we are seeing this theater right now? and additionally, as democrats, if john boehner doesn't have that job, does it get even tougher for you? what if a tea party gets that job? >> they've got to govern. they are in the majority and their responsibility to govern and the speaker has to wrestle with that.

yes, he has a challenge from the toe party talkus members. but a lot of those folks he simply will not run over. >> he is worried about reelection. >> absolutely. we could have a deal today, tomorrow, the morning, but he does have to look over his shoulder. he is worried about losing support for his conference. and that's a problem for him. none of us came here simply to perpetuate our own positions. we came here to do something for the country and he has to cross that bridge and take that risk. and i think he can do it -- >> sir, with all due respect, i think that people out there think you are very worried about your positions and that's why this situation is dragged out as long as it is. no one want it make those tough decisions and the tough decisions aren't being made

right now. are you ready for what happens to the economy if indeed we go over first cal cliff. ben bernanke made some pretty dire predictions. >> there are a great many of us not prepared to do that and don't want to see that happen. but at the end of the day this has come down to a fight between the speaker and members of his conference. >> sir, i have to -- sir, the house speaker is approaching the podium. let's listen in. >> undercurrent law tax rates will go up on all taxpayers beginning january 1st unless con a gres acts and the president will sign the bill. today we will vote to protect as many american families as small businesses as possible from the tax hikes that are already scheduled to occur. the president has called on the house again and again to pass a bill to protect 98% from the american people from a tax hike. today we are going to do better than that. our bill will protect 99.81% of

the american people from an increase in taxes. its permanent tax relief for individuals. permanent attack on the minimum tax. m a higher child tax credit and dividends rates we see today. all in all, the nonpartisan joint committee on taxation says the bill represent a $3.9 trillion tax decrease. after today, senate democrats and the white house will have to act on this measure. two years ago, 53 democrats voted for a bill like this one. now they say they oppose it. but rather than tell us what they can't do, maybe they should tell us what they can do. and senate democrats and white house refuse to act. they will be responsible for the largest tax hike in american history.

the house today will also pass a bill to replace this sequester. it will actually not only replace the sequester with cuts, but even further address the deficit problem that we have. while the democratic controlled have no plan and have offered no dear at all for these kuds. i call on he is not dar read to make sure they can vote on this to make sure before the senate adjourns. back in may, i will remind you, back in may, i said we shouldn't wait until new year's eve to address the fiscal cliff. since then, republicans have made every effort to avoid the situation we find ourselves in. we passed a bill to protect middle class families. from looming tax hikes. we have moved a bill in may to replace the sequester that will undermine our national security.

that same bill also has additional cuts in it, which would help reduce our deficit and wave the way for long time job growth. their plan b is to slowly walk us over the fiscal cliff. for weeks the white house said if i move owned rates that they would make substantial concessions on entitlement reforms. the president's last offer of $1.3 trillion in new revenues with only 850 billion worth of spending reductions, fails to mate the test of balance that he continues to call for. and frankly, i'm convinced that the president is unwilling to stand up to his own party on the big issues that face our country. time's running short.

>> harry reed just add conference saying house republicans have no future. [ inaudible ] tell us what he said -- [ inaudible ] >> i talked to senator reid this morning. he was more polite. >> we know the reality here, that if you get the votes of the house, it is not going anywhere with the senate. is this a necessary step -- >> i am not convinced at all that when the bill passes the house today that it will die in the senate. at some point the senate has it act. they failed to act. we have a bill sitting on the desk in the senate that pro protectets all-americans from an increase in taxes. they can take up that bill sitting a the desk. pass it, amend it and help move the process. but to date they've done

nothing. >> listen, i remain hopeful and our country -- and the president and i have to work together to solve the challenges. >>. [ inaudible ] >> the white house says the reason that you are resorting to plan b is because you realize you didn't have as much republican support as you wanted from your own proposals in fiscal cliff negotiations. is that true? >> the president knows i've been able to keep my word on every agreement we've ever made. the fact is, is that his plan is not balanced. and as a result, time is running short. i'm going to do everything i can to protect as many americans from an increase in taxes as i can. >> speaker boehner, in light of the tragedy in newtown, new push

from the white house regarding possible gun control maesh moving forward, would you open in 2013 to allowing an un -- an unclosed measure on the house floor. >> we joined the president on the morning with the victims of the horrible tragedy in co. he appointed vice president biden to commission and when the vice president's rec men dags come forward we will certainly take them into consideration. at this point, i think our hearts and souls aught to be to think about those victims in this horrible tragedy. >> allowing to -- >> we will look at the recommendations and -- >> by your own description of their offer, and with you with a one to one balance, you're only about $450 billion apart. the president said that you're

close. senate democrats say you are close. why can't you just split the differences and get a deal done? >> i think the real issue here that we all know is spending. you go through all of these discussions. i don't think the white house has gotten serious about the big spending problem that our country faces. when we were down at the white house, just days after the election, secretary geithner in that meeting, outlined, the minimum credible plan that had to happen. the minimum credit plan. the middle credit plan, some place around where the president and myself are. why should we be attempting to do a minimum plan? we have a serious problem that has to be addressed. >> speaker boehner. >> you said it is up to democratic he is notates of the

white house. with what you know about negotiations, are we going over the fiscal cliff? >> listen, our country faces serious challenges and president and i under our respective roles, have a responsibility to get them resolved. and i expect we will continue to work together. >> last question. >> mr. speaker -- >> mr. speaker, after the house passes plan b today, what are you going to do? adjourn, come back? >> the house has work scheduled for tomorrow. possibly for the balance of the week. so we've got work to do and we expect to do it. thank you. >> does that mean saturday as well? >> house speaker john boehner addressing reporter. if you are riddled for a deal from keeping us from being run over the cliff, we're on your side. but after listening to that and others, we are right down to the wire.

let's get to john har wood? the capitol. it is getting very close. >> it is. but the money quote was at the very end, when the question was put, knowing what you know about negotiations, is this over and are we going over the cliff? and john boehner said, the president and i have the obligation to work together and we are working together. when they plas plan b there will be further conversations between the speaker and president and once those conversations happen, then we will know whether they can grij that gap which is not that large between the two sides and few hundred billion in spending then if both of that can return that to their respective party. >> add to what you are saying there, when asked if the house would leave town, he basically said no. isn't that a good sign? >> not necessarily. michelle, one of the things that

is easier, is it is easier to negotiate without senators in town. they will come back after christmas. john boehner a couple of times in the last couple of weeks sent his caucus home for the week en. that gives him more breathing room and his staff as well, to talk with the white house. so not necessarily a signal and there have been some reports this morning the house would head home. i wouldn't read too much into that. >> okay. thanks, john. >> you bet. >> market reaction to boehner's can comment right after this quick break. back in two minutes. don't move. we understand. at usaa, we know military life is different. we've been there. that's why every bit of financial advice we offer is geared specifically to current and former military members and their families. [ laughs ] dad! dad! [ applause ] ♪ [ male announcer ] life brings obstacles. usaa brings advice. call or visit us online.

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welcome back to "power lunch." we just heard the house speaker putting to the side his thought. so kenny, they are going to -- there is still some differences. one reporter said, exactly what was on my mind, they're not that far apart. just split it down the middle, let's get it over with tp i saw youing your head as well. >> it is dead in the water. >> we actually moved up a little

bit. >> a couple point. >> but the mark set screaming for resolution. on a certain level, what the wrong with that statement? split the difference, come to the middle and get the deal done. no one want to go over the cliff. the fact is, a, are they going to do that? and b, even if they do that the at last possible minute, will the market even believe it? >> the economic news was pretty good. existing home sales, highest since 2009. home prices going up. home business is reviving nicely. we bounced on that but have gone nowhere because they can't resolve it. i will agree with one thing with you. web we said a several weeks ago, market heading south to. that hasn't happened yet. despite everybody's predictions. >> jeff, why do you think that is? investors are pricing in a deal it would seem based on the market we have seen the last several days, which is strong, if we don't get a deal, does that mean we have a big sell-off

coming? >> you're right, michelle, we do. i think the key take way is yesterday when obama said we are only a hundred or 200 billion away bp. but boehner, and he said this a lot of times, balance. he want an eye for an eye. dollar per spending or revenue cut. right now the market is hanging in there. you see an uptick in the s&p michelle. >> yeah. we will keep watching it all. sticking around, let's go to bertha coombs standing by. >> closing lower for a third day, michelle, and today really seeing selling prices. we have low volumes going into the holiday. gold on track, actually. for its worst gain in 12 years. still up for a year but take a look at silver. that is what one trigger is telling me. these days it looks like this move is more about allocation, people moving out of metals and silver more after beta play is really taking up more on the

chin. lowest close here since august 22, down for six straight session and copper following suit as well. down for fourth session. back to you guys at nyc. >> thank you, bertha. let's look at the bond market. ricky? >> thanks, sue. if you look at ten-year 24-hour chart, you will not see a trade above the 180 yield today. we saw one on tuesday, saw one on wednesday. not today. looking a the 30-year bond 24-hour chart, one thing you won't see is a three-handle. you have one today and one on wednesday. so the market seems to be calming down a bit on the treasury side in the sell off. and far from huge within that for sure. i know there's time left. let's look at a few atfs. investment grade, it is still fighting at very lofty levels. way up on the air. hyg high yield looks like it want to make a new high for the

year. new al time high as a matter of fact. the one that isn't fairing very well, did pretty well for a while, and now it is faltering. that's the mub. the fiscal cliff looks like it is getting keeper in my opinion. back to you michelle. >> that could be. how should investors maximize income these days? advice from ed perks. manager of $70 million four star hybrid fund. mixing in corporate foreign and u.s. treasury bonds and stocks with relatively high dividends. one-year return just over 12%. ed, good to have you here on "power lunch." >> good to be with us. >> i'm reading through notes. you told our producer, when it comes to managing the portfolio, how on earth do you manage ton pay attention to it wh some say it could be debt tricksal to

gdp. >> we look at it as to how it can affect the companies we are investing in. but in terms of listening to press conferences on a daily basis and how that will impack the market today, that's something we are less concerned about. >> because? we are focused on long-term objectives in our investors. that is speaking about prospects for investors. >> so in other words, this too shall pass. >> i think so. we are at a point where it is a bit of -- a point where we are tired of hearing the same thing out of leaders in washington. i think it is time that this is dealt with and we move past it. and hopefully we will get to that point soon. >> talk about the bond bubble. now that they have made their intejss clear and link movement isment to the employment rate, a lot of people that this that is going to prick the bond bubble, if you think we are inland, what

do you think. >> we have seep tre me-- i thin general from the fixed income class with lower yields for total return going forward and in our portfolio we have shifted. we have significantly more equity content in the portfolio. i think it is a pretty unique environment where you can improve your yields, invest in high quality companies and experience dividend growth. higher kwaulds going forward. >> when we talk about a bond bubble, is it mostly treasuries or possibly corp rates? do you divide a line there or is it all the same? >> that a great question. ultimately it impacts really the broader fixed income market. so if you look at 2012, we have seen record issuance of corporate bonds.

both investment grade high yield bond. both trade today at much lower yoelds. the flip side to seeing high yields at an all-time high as we have seen all time low yields in that asset class. that is something that is giving us a bit more pause. but we are still finding opportunities and our approach is really focussing more on the junter lying fundment yals and you want to be specific in your security section in that area. >> are there favorite areas of the equities markets right now that you favor? >> yeah. that is something that i think is really seen a transition over the years. i managed franklin income for about ten years. ten years ago we had a smaller segment. today we have seen a broadening of that base or opportunities to add more sectors with attractive dividend yields. we still own utilities and like them as part of the portfolio. but more recently we increased energy exposure.

increasing our tefls and in those areas with you think are new areas. >> all right, have a great holiday, nice to see you. >> thank you, you too. >> when we come back, inside a world we don't see until now. a relationship between a woman and man and capitol. episode number one coming up in two minutes. ♪ [ engine revs ] ♪ [ male announcer ] oh what fun it is to ride. get the mercedes-benz on your wish list at the winter event going on now through december 31st. [ santa ] ho, ho, ho! [ male announcer ] lease a 2013 e350 for $579 a month at your l mercedes-benz dealer.

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finance, lawmakers are set to vote on the so-called plan b bill aimed at avoizing the fiscal cliff. should congress vote on plan b before plan a? 33% say yes, a good way to pressure the white house. 32% say no, it is self defeating. 35% say, it will make no difference. wow, a third, a third, and a

third. what's coming up, on "street signs," mandy? >> we will had breaking news yesterday, the story of bill ackman's herbalife short and the ceo's results on "street signs" yesterday. today we delve further into the story with an analyst and also herb. staying away from retiring, we have frank of massachusetts. talking about everything from call from increased financials to crimes what he is going to be doing in days. >> we are happy to announce a brand new super segment here on "power lunch," it is called the power pitch. we get inside the relationship between venture capitol and men and women for start-ups across the country. take a look.

>> hi everybody, i'm brian sullivan and this is the power pitch. where entrepreneurs have 60 seconds to make their best pitch. we have the opportunity to dig into their business model, giving you an inside look at the fast paced world of venture capitol. ceo and founder of one full. they offer a more simple way to give gift. here is his power pitch. >>? >> i'm john, founder and ceo of a retailer hoping you find exceptional product and great gifts. we collected beautiful items from designers around the world that you don't see in mainstream retail. if you struggle with getting the perfect gift, we help you and we are very rarely wrong.

we help you find 12 perfectly suited choices and present them in this custom printed personalized gift book that right in japanese advice paper and delivered in an em bossed envelope. they just flip through the book and find the one item they would like to receive and we send it their way. we take everything we do for consumer gifting and make it corporate. we had a very big market and with the holidays just around the corner we expect this to be a big break. >> john son the right side of your screen. he can react it our critiques just yet. and on our panel today, media reporter and venture capitalist, co-head of yea's seed stage investing practice and founder of harvard's experiment fund. that's for student entrepreneurs. let's huddle up. julia, y your concerns here. >> i think this service is

interesting. the product are great. but i'm concerned this requires a whole new model for gift giving p.m. do people want to give, instead after gift, a buchblg of choices. >> john's got an interesting model. what is fascinating is, he says, it is just about impossible to get wrong. i want it ask him, is it really that impossible. >> there are lays of physics. >> let's welcome john. you're on the hot seat, which is literally the chair to my left. i will ask you questions, you can defend yourself. this is beautiful. gift card here, rice paper. this is says this is expensive. how are your margins. >> fantastic. surprisingly strong. we are doing 50% gross margin business. we are totally drop ship. we don't have any inventory. no cost, no risk. >> why would i go through the hassle, trouble of filling out

you are i have as to figure out the right gift from your selections and the person i'm giving the gift too, has new york work to pick out the gift too. >> we make it far easier than going to the store it find a gift. second we find a lot of time finding product you don't find in retail. >> what you would find in a small boutique but we have thousands and thousands of products. >> your concerns and questions for john, patrick? >> john, congratulations. it used to be giving one gift to one person. is this working? do you see return rates lower than traditional model? >> our return rates are almost zero. it is remarkably low low. >> final question to you. >> john, receiving kmod advertised these days. how do you find the rarite snems. >> that's a big part of what we do. we have a team of brilliant buyers who scour the product

that you haven't found anywhere else, that aren't the can kinds of things amazon would typically carry because they aren't in large quantity. >> julia, first to you then. >> i will be spending a lot of money this holiday season but i would say as look at this as an investor, and how much the total new model is going to appeal to consumers who are traditional and how they make purchases. . for now, i'm out. >> you have an investor and a customer. which is a good start. >> patrick? >> i think with products shifted all over the place, i love that. i think this new model is going to work. i think they are great guys, they know what they're doing. and they believe against a commodity world. it is a wonderful thing. we have to support that. i'm in. >> i'm also in. you had me at 50% margins. i love the fact that margins are

so high pch you find that unique gift as long as margins stay up. i think people are interested in that. once you get to the price when tigs, you're in trouble. >> i understand. >> our panel, thank you. that is the power pitch. >> thank you, brian. we also want to know if you would be in or out. go to cnbc.com. scroll down to the editor's picks and can you cast your vote. as the country gears for con control troll, gups are flying off the shelves of local retailers. we will have that story when "power lunch" returns. om a mile. while going shoeless and metal-free in seconds. and you...rent from national. because only national lets you choose any car in the aisle...and go. you can even take a full-size or above, and still pay the mid-size price.

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shares of merck down. their drug measuring good cholesterol failed to make trial. there is no longer regulatory approval for the drug in the u.s. >> calling for gun control early next year, guns are flying off the shelves. mary thompson with a look at who is buying what. >> that statement is not an s j

exaggeration. gun store owners fearing the government will restrict their right to have a gun so they are stocking up. at a gun shop in vermont, sales doubles last year's. guns and ammo moving. selling more bulk and ammos, cartones with a thousand rounds, more than this year. they expect a crisis to arise. the national armory gun store in p florida, what is selling now? cheapers once. little left on freedom firearm shelves, saying with a semiautomatic ar-15 used in newtown shootings selling out first. customers are buying anything

left with high capacity magazines. she want it restock shelves but can't because her distributors are sold out too. lastly, texas guns and san antonio owner saying air assaults and are sold out. he blames the government for cree creating histerics. fears that president obama would have new gun laws if re-elected. those expectations may become a reality, michelle? >> assault weapons is eaccept shlly what we are taking about, right? >> is this an skoesten shl threat? >> they say they could make a living but these are the most popular, the semiautomatics really are the ones that are most popular right now, and are also very pricey. air 15 from 899 to $4,000.

and these are the ones that clients have been buying over the last year, which looks like it could be a record year for them. >> did any of the owners raise the level of watching who buyers are and thinking twice and doing profiling of their own? >> it is interesting, i spoke to one manager in maryland, and he said, in this business you want to be on the look outs for fruit cakes. and i'm quoting him. you don't want fruit cakes buying your guns. you said, these are educated people, so he is still selling them their guns. >> you mean the buy-in -- >> we have the documentary tonight. >> they are concerned -- >> gun retailers are very much aware of what their reliability. as they like to point out, most of the guns used to commit a crime or injury someone tend to be not purchased through gun stores themselves.

thank you. >> ladies, in the next hour, "street signs" holiday hope yum hat trick. three reasons the markets have cheer. back in two minutes.

you've got a growing derivative business. a big company very heavy in tech. we have seen this many times. time warner aol. that's classic one. i think people are pretty realistic about it and there are comments about keeping the floor and iconic brand at least for the moment. at least for the moment. >> in tact. >> in tact. >> all right. michelle over to you guyes. >> until one day it is a museum or something. thank you. >> let's bring in jeff. we have seen a little bit of a pop in the