hi, everyone. welcome to "on the money." the market catches its breath, but will santa deliver a big rally to investors or a lump of coal. the company that wants to change the way you watch tv. can you throw out the satellite dish? that's autopsy in the air. why marijuana could mean high times to state revenues, but does it send the wrong message to kids? year-end tax tips. "on the money" starts right now.

here's a look at what's making news as we head into a new week "on the money." the markets were as cold as an ice storm in december this week. by thursday, the dow had suffered its worst three-day losing streak in over four months. the s&p 500 hit a record high on monday, but stocks took a breather later in the week because investors may have been concerned about the federal reserve tapering its bond-buying program when it meets next week. the markets rebounded on friday. consumers opened their wallets in november. retail sales rose by .7%, the sharpest increase since june. but it wasn't just holiday shopping, but auto sales helped. the strength of the consumer is important because it makes up two-thirds of the u.s. economy. the glass ceiling at general motors broken. mary barra will become the first woman to run an automaker. she'll replace daniel actikerso. she began with the company as an intern back in 1980.

instagram is rolling out a private messaging service. the photo-sharing social network introduced instagram direct which allows sharing with an individual or a group instead of mass sharing. the company is owned by facebook and has 150 million members. the move is seen to catch up with snapchat. and so far, december is proving to be a cold month for investor, but what will next year bring, and is washington finally out of the way? joining us is keith banks, the president of u.s. trust, and, keith, thank you for coming in. >> great to be here, becky. >> we did see a pullback so far in the marketis. is this just a breather? >> i think it's a breatherment it's the end of the year. we've had a great run in the equity marks. two things are going on. i think people are taking some profits. number two, with some of the recent economic data being better, people are focusing again on the issue of taper. the combination is what's done it. >> do you think there's

enough -- the fomc is meeting on tuesday and wednesday. do you think there's enough with the economy, with the good information that's been coming in for them to actually taper this month? >> i don't think this month, but i think a lot of people had viewed march as the month, march of 2014. i think it will be before march. i'd be surprised if it's this month. they probably want to see a few more data opponepoints to make the upward trend is sustainable, which we think it is. >> a lot has to do with what's happening with the consumer, just looking at the retail sales. what do you think so far? >> so far so good. unemployment has been coming down, which means people -- more people are getting jobs. the markets are up, people's home prices -- the values are up. people are feeling better in general, and they'll reflect that in the christmas and holiday spending. >> this week we did see a small deal in washington, nothing huge. >> right. >> but a bipartisan budget agreement, and announced by paul ryan and patty murray, and here's what ryan told us earlier this week. >> we think it's a good

template, a precedent, but in this divided government, dysfunctional government, we think a modest but productive step in the right direction. >> modest, as he points out. is a small deal better than no deal? >> it is. we would liked to have seen a grand bargain, a grand deal struck. i think we've come to manage our expectations lower. so i think some deal is better than no deal, but obviously not the optimal deal. >> it's been a huge year for the markets. gains of 27% or better. what are your high net worth clients doing? are they putting more into stocks? bonds? cash? >> moving more into equities, but what's been interesting, it's been a slow jog not a fast sprint. at the end of last year, our clients in general had maybe 46% of their portfolio in equities, and right now, they're probably about 53%. but what's interesting is when the markets go up, it doesn't incent them to want to put more

in, unlike past bull markets. it makes them nervous and concerned, and the question is, should i wait for a pullback as opposed to get me in, the market is going higher? an interesting difference in mindset. >> what do you think happened? is that from being badly burned in 2008 and '09? >> yeah, 2008 still weighs on people's minds. it took people getting comfortable getting back into risk assets, equities. fixed income between 2007 and november of this year, $1.1 trillion flowed into fixed income funds and $300 billion flowed out of equities. so that great rotation, we're in a very early innings of that, so we think there's a lot of money that still needs to move and ultimately will move, which is part of why we're still very constructive on equities. >> that caution is understandable. you get why people would feel that way. >> sure. >> when they come to you and ask you, should i wait for a pullback, what do you tell them? >> we tell them to increase the weighting in equities. if you get a pullback, it's a great opportunity to put more

money to work. but don't wait for the pullbacks, because timing the market is a very difficult thing. we do think as tapering becomes more front and center, you may get a bit of a correction, but a modest one. our view is you continue to put money into equities, especially out of fixed income. >> timing the market is next to impossible, but i'll put you on the spot. where do you see the market going in 2014? >> we're constructive, so we think earnings for the s&p will go up to about $114 per share, up from about $108 to $110 this year, and as there's more clarity on the macroenvironment, as capital expenditures increase, and the u.s. economy glows in excess of 3%, and globally 4%, $116 this year, multiple expanse to 17, 17 1/2 time, and that's 1,900, 2000 on the s&p. >> all right. great to see you. we're "on the money."

changing the way you watch television. easier, cheaper access to tv when and how you want it. why the cable guide is afraid of aereo. and puff the profit magic center. a new wave of entrepreneurs. they're all saying, dude, where's my revenue? right now, as we head a break, look at how the stock market ended this week.

it is a david versus goliath fight that might make its way to the supreme court. u.s. broadcasters are trying to shut down a tiny start-up that they believe could end its business. it gives subscribers access to a tv antenna that rebroadcasts

channels onto the ipads and cell phones. joining us now to talk about this and explain the controversy is the founder and ceo. chet, thank you so much for being here today. >> sure, my pleasure. >> first of all, for people who aren't familiar with it, why don't you tell us how it works? you have warehouses fool of these antennas that you've set up, and people individually get assigned to one of those? >> well, they're no longer warehouses. they are rooftops with telecommunications-style equipment. yeah, the concept is very simple, which is as a consumer you used to be able to use rabbit ears or tv antennas and a lot of people still do. and all we did was we miniaturized them so we can pack tens of thousands, or hundreds of thousands in a small space, and allow consumers to have access to their u noon antenna remotely using the internet. and a dvr as well built into, cloud-based technology. so it really changes the experience, make it is great,

simple, very cost effective. you can get it for dollars a month without a cable subscription, which is fantastic for a lot of people. >> it's great for consumers, but the broadcasters are upset. they claim you are stealing their copyrighted information. >> well, i think their characterization has no meaning, because four federal courts have found that it's absolutely legal. so, you know, name-calling doesn't necessarily get anything done and the reality is all courts in a row have dpound that aereo prevails on the merit. >> they have asked the court case to be picked up by the supreme court. you have gone along with that, as well. we're not sure the supreme court will hear it. just to take their perspective for a moment. this is their copyrighted material. you're taking it and selling it without paying anything back to them. they have cable companies that pay emthis transmission fees. why shouldn't you pay those? >> we don't sell content. since the beginning of broadcasting, there's been antenna manufacturers, tv manufacturers, lots of different equipment manufacturers that

allow consumers to let us watch tv, and aer eeo. the reality is the consumers have the right to buy equipment from whoever they choose to. >> the broadcasters have threatened that if you are successful and if the supreme court were to pick this up and say that you were allowed to go through with this, they might start doing transmissions over the air. how would that impact your service? >> i can't speak on their behalf. all i know is the reality again, today, according to the national association of broadcasters, 60 million people, which is up from 54 last year, use an ten na -- antennas. it would be disenfranchising 60 million people from the overall market penetration perspective, and it would be a tragedy to say that people have the right to use an antenna can't be allowed anymore. i think it's unimaginable to me. >> chet, i know you're in about ten cities so far. what are your plans for next

year? how many more cities would you like to expand into? >> we're not done with the 22-city expansion, so that's the big focus, and we'll continue to march down that road as soon as aggressively as we possibly can. we're a little behind. we were hoping to be a little ahead at this point, but we have three or four more that we'll probably knock off between now and mid-january. >> you already profitable in some of the markets you've opened in? >> i think that comment was -- that i made was the company's on a market-by-market basis, we need a few subscribers to turn a profit. certain market, we launched -- you know, we're well past those thresholds, so we're on a market-by-market basis we can generate a profit, yes. >> you think this is the end of the cable company? do you think more and more people will cut the cable and go with a company like aereo? >> i think the reality is, you know, people like internet-based systems. it's just the nature of the beast. in a modernization, it's happening whether you like it or not. and so, i think inevitably,

people will consume media online. and now, the cable companies obviously provide internet connectivity, so that's great. i'm not sure that anybody's ending anything. i think it's too early to say what's going to happen. what is inevitable, in my mind, is online and choice of some sort has to come in, because currently the model, irrespective of aereo, whether it's involved or not, the rate at which the prices are going on on the wholesale side -- i think every cable company is complaining at the imbalance today. if you take us out of the equation, it's the same set of issues they face. >> it's an arena for disruption. we've seen a lot of it. we want to thank you very much for joining us today. >> my pleasure. up next, we are "on the money." is legalizing marijuana the key to big profit, or could it all go up in smoke? pot's a growing cottage industry in places like colorado and washington state. what could it mean where you live? and you can find us on

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in just a few weeks, colorado and washington state will allow residents to smoke marijuana for fun. the legal marijuana market is beginning to boom as more states ease regulations on the drug. the street market's analyst deborah bouchard is here, and joining us with more on investing in high times. deborah, thank you so much for being here. >> sure.

>> we have colorado and washington state, and all of the other states must be watching. >> you're absolutely right. there are already 20 states have approved it for medicinal, but then you have more states jumping into medicinal and four more states expected to go to the recreational legalization next year. >> and it makes sense. when states are looking around, trying to find new ways to come up with revenue, this has to be an easy way. if you can regulate and bring something into the market and tax it, well, that's a good way to do it. is that their thought? >> that's true. not only that, becky, they are saving a ton money on criminal costs. >> yes. >> instead of processing the criminals, they'll save money there. >> federal government, this is still illegal. they haven't stepped in yet, but it has to be something that causes the states to take a pause. >> it is something, because the federal law is that this is a controlled substance. and so, you have banking issues, you have taxation issues. so you have a lot of issues surrounding that, and again, like you said, you have states that are just jumping right in.

so you have a big disconnect going on. >> i mean, i've been a little surprised that eric holder, that somebody else hasn't kind of stepped in from the federal government and ruled one way or the other. are they watching to see how this plays out, too? >> they definitely came out and said, we're going to turn the other cheek, we will not pursue any kind of prosecution against you. so they basically have thrown in the towel, but they haven't come right out and done that. >> although "they" can change at any point. if you have a new administration or something happens that they decide to change their mind, that's when i start thinking about it from the investors' point of view, a company's point of view, somebody trying to make it in the market, there's a lot of unwritten rules. >> ethat's correct. that's what you're seeing with colorado and washington, they're writing the rules for this and everyone is watching them. you'll see a lot of legislation come out in 2014 with local elections. then you've got a lot of states that are waiting for 2016 for the presidential election, and you're going to see a whole

another gang come out then. >> a lot of us look at this, high times, and we make the jokes. but this is serious business. you've been looking at this with an investor's eye. what have you found? >> when i started looking at these companies, because there are several companies that are publicly traded companies on the over-the-counter platform that are marijuana-related. and i thought, wow, this is going to be so cool. i'll find these emerging growth companies, jobs act companies. and i was really shocked that a lot of these companies were a little sketchy. some of the characters a little dubious. and again, they're traded on the over-the-counter platform, which does not have the same requirements for a company trading on nasdaq or the new york stock exchange. >> what should investors be aware of in this situation? when you say they don't have the same requirements, they don't have to do what? >> they do have to file, but no one is really looking at the numbers that they're filing, the audits that they're doing. a lot of the companies tend to file late.

they don't have to disclose as much about the past history of the people running the company. that's what investors need to be very careful about before they get involved in this. fenro listed a stock scam about this in august. they were warning about pump and dump, penny stockbrokers saying you can make double your money on these pot stocks, because this is the new thing, it's the green revolution, the green rush. and people are getting sucked into that, and that's what's happening, too, now, you see a lot of investors thinking i'm going to get in on this early and make a ton of money, and these are penny stocks, and they can also be manipulated. >> is there anything you found that does look like a promising sort of a company, or a promising thing, you think maybe there is room for this? >> there is a company that -- there are a couple of companies. grow life and terratek are hydroponic, so they're into the machinery for the growing of any

kind of plant. but tends to be used for marijuana. and i think there will be some more companies that will be publicly traded, like diego, which is run by a former microsoft executive. so there will be some legitimate companies coming through. >> okay, deborah, thank you so much for joining us. >> thank you, becky. up next, a look at the news this week that will have an impact on the money. and saving your money in 2014. we have some top tip s for lowering your annual tax bill. here's the key. you have to act fast before new year's eve.

for more on our show and our guests, go to oub website. you can follow us on twitter on @onthemoney. the calendar still reads december, so april 15th may seem like a long way off. but if you want to save big on your tax bill for next year, time is running out, and with this year's expiration of the bush tax cuts, some filers could be facing some bigger bills come spring. joining us right now with tips on how to reduce the 2013 tax bill by acting before the end of the year is diana rosada. thank you for being here. >> great to be here. >> we may forget there's a couple of weeks left to affect the 2013 bill, and this year is important. what are the biggest changes? >> there have been a lot of changes, particularly for higher-income earners. one great -- one important then to think about, though, a lot you can do right at this time.

a great way to offset the -- it's been a banner year in the stock market, and if you wanted to sell some of your securities, one great way to offset the gains is to find some of the stocks that you haven't done well on, sell those, and it's a very effective -- find your losers, may be harder this year to find the losers, but very effective deduction, because it's dollar-for-dollar offset on the gains. >> what about other things we can be doing, like charitable deductions? >> right, this is the time of year people are naturally thinking about it, but you get a tax deduction. if you are donating more than $250, keep the receipts, because get audited on that and the irs is cracking down. there's a way you can get a double play on charitable organizational donation. if you donate appreciated securities to a nonprofit, charitable organization, then you can get not only -- not only will you get a big tax deduction, but you'll not have to pay the capital gains tax. >> that's a great point. that's something i hadn't thought about before. what are some other tips? >> go green. the federal government is again

continuing reward people who make home-energy improvements to their house. so if you install, say, a mo more -- better insulation, a more effective door, window, as far as energy, then you can get up to $500 credit. if you really go big, say install a solar energy system, you can get up to 30% off the cost as a deduction, but go to energystar.gov to make sure what you're doing qualifies. >> one other thing are 529 plans, the college savings plans. i was shocked when i realized you could save up to $13,000 a year. that's how much you can sock away. >> it's one of the most effective ways to save money. and, also, if you invest in a state-sponsored plan, you can also get a state tax break. you don't want to forget about the state tax deductions. 34 states in washington, d.c. who offer the state deductions. >> is there a place i can check that out? >> yes, finaid.org, it's a great resource and give you a list of all of the states. >> all right. thank you so much. >> thank you, becky. here are the stories that may move the markets and impact

your money this week. on the earnings front, we'll hear from fedex, lennar, oracle, and blackberry. tuesday kicks off the last federal reserve meeting of the year and we'll find out if tapering is in the cards. the official announcement comes on wednesday followed by a press conference by chairman ben bernanke. on thursday, we'll find out whether existing home sales in november declined for a third straight month. and on friday, the final estimate for third quarter gdp is due. that's the show for today. i'm becky quick. thanks so much for joining me. next week, we go through the looking glass inside some of the retail industry's best-known holiday windows. wait till you see these. each week, keep it right here, we are "on the money." have a great one, and i'll see you next weekend. if every u.s. home replaced one light bulb with a compact fluorescent bulb, the energy saved could light how many homes? 1 million? 2 million? 3 million? the answer is... 3 million homes.

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