think it's the only opportunity that presented itself today. nike was a good quarter. they're spending a lot of money. i believe china reaccelerates in 2014. this reminds me of disney when it fell from 66 to 63 and went right to 72. that's nike. there's always a bull market somewhere, i promise to on "mad money." i'm jim cramer and i'll see you monday. president obama begins his year-end news conference by declaring victory on the economy, but he also said this about the rollout of obamacare. >> since i'm in charge, obviously we screwed it up. >> all right. he acknowledged that. he still insisted obamacare is going to be a net positive. really? he also said he doesn't pay attention to the polls. yet another new survey out today puts him at another all-time low. while the president boasted about obamacare, the failures and attempted fixes keep piling up. the latest change, an exemptoin

for people who had their policies canceled. the whole individual mandate may be fall apart. meanwhile, the healthcare.gov website was down for at three hours today, just three days before the deadline to sign up for coverage on january 1st. and getting back to the economy, the stock market still bullish on ben bernanke's taper, and a nice revision for the q-3 gdp to 4.1%. a lot of economists are parking up q-4 to 3%. so are soaring stocks predicting a big 2014? all those stories and much more coming up on "the kudlow report" beginning right now. good evening, everyone. i'm larry kudlow. this is "the kudlow report." we're here live at 7:00 p.m. eastern, 4:00 p.m. on the west coast. call it a swan song to a pretty bad year. president obama claimed economic victory and defended his latest obamacare flip-flop during a

year-end news conference today. cnbc's hampton pearson joins us now with all the details. good evening, hampton. >> reporter: how you doing, larry? yeah, president barack obama wrapped up his end of the year news conference saying 2014 could be a breakthrough year for america because the economy is on the rebound. >> in 2013, our businesses created another 2 million jobs adding up to more than 8 million in just over the past 45 months. this morning, we learned that over the summer, our economy grew at its strongest pace in nearly two years. the unemployment rate has steadily fallen to its lowest point in five years. >> reporter: the president's biggest setbacks, no gun safety legislation in the aftermath of the newtown shootings, and, yes, the rollout of the obamacare website. but he said progress is being made. on national security and foreign policy, the president said he'll

comment after the first of the year about altering the power of the national security agency to collect information on americans. on iran he urged critics in congress to hold off on new sanctions and let the interim accord run its course. the president also praised congress for the modest budget deal, but also renewed his longstanding refusal to negotiate with congress over raising the debt ceiling early next year. >> it's probably too early to declare an outbreak of bipartisanship, but it's also fair to say we're not condemned to endless gridlock. there are areas where we can work together. >> reporter: and finally, the president also took note, american combat troops will final lly begin withdrawing fro afghanistan in the coming year. larry? back to you. >> hampton, we're going to get to the economic stuff in just a few moments, but may i ask you this. when the president says he's going to make nsa changes on all the surveillance, doesn't that

have to go through congress because it's part of the patriot act? or can he do that administratively? >> reporter: i would assume that whatever, if, again, depending on how big the revision is, based on all the recommendations he's been given, congress will have a say. either through the intelligence committees, you know, at some point along the way. but as you said, it's going to come down to what things could he do with executive orders, but i would think the big stuff, like that, yes, congress is definitely going to have to be heard from. >> thanks very much. hampton pearson, we appreciate it. now, stocks off their highs today but finished up on the weak, faster than projected economic growth, increased economic optimism. all that helped send the dow and s&p 500 to another record close. cnbc's own bob pisani joins us now with the details. good evening, robert. >> reporter: hi, larry. what do you know? good news is finally good news again. better than expected news on third-quarter gross domestic product helped stocks even before the open.

the u.s. economy expanded at a 4.1% annual rate in the third quarter. that was stronger than expected. another data point that indicates the economy is slowly improving. the futures jumped on that news and they never really looked back. we did come after our highs in the last hour. for most of the day, though, the market was in overdrive. the major indices were all at new highs. the breadth of strong. the volume was heavy. it was a trifecta for technical analysts. now, the dow did come off its highs in the last hour, as certain names like disney had large sell-in balances going into the close. facebook went into the s&p 500. there was big volume there. the price barely budged. the stock ended up fractionally. for the week, everything was up 2.5% to 3.5% including the dow, the ruseell 2000 and the nasdaq. larry, have a good weekend. >> thanks. optimistic bob pisani. president obama today putting a hard number on how many people have signed up for

obamacare and looks way less than the administration was hoping for. we're joined now with the latest details. hello, bertha. >> hello, larry. president obama saying 500,000 people signed up on healthcare.gov this month. the real obamacare numbers during the news conference saying it now tops 1 million nationally. many of those are in family plans. it marks a big surge on how many people will be insured come the new year. >> i now have a couple million people, maybe more, who are going to have health care on january 1st. and that is a big deal. that's why i ran for this office. >> a big deal? it is a big improvement, even as the website had another glitch today. but below hhs' original projection of 3 million enrolled in exchanges by december 31st, and at a pace of about 24,000 enrollments a day, it's slower than the administration might

like for the 36 states on the federal exchange when you consider california on its own is enrolling over 20,000 a day. the president defended an 11th hour policy change for people whose plans were canceled, extending a hardship exemption from the individual mandate, giving them access to buy bare boned plans. he called it a safety net for those who may have slipped through the cracks, but insurers blasted the move. >> here we are once again changing the rules in the ninth inning. that creates confusion for consumers and creates uncertainty and challenges for companies that are trying to implement all of the new changes in the reform law that are going to be taking place in just a few weeks. >> insurers are are facing challenges. larry, monday is the deadline for people who want to sign up for coverage starting january 1st and insurers have to have a sprint to really turn those enrollments around quickly. >> yeah, we're going to get into this, a lot of unfairness between those who can buy the

catastrophic and those who can't. it's going to be a big issue. bertha, why did he start out -- i watched the news conference. i afree with you number, 1 million. he started out talking 500,000. >> for the month of december on healthcare.gov. >> it grew to a million. at the end when we quoted him, he started talking about a couple million. >> the matt goh goes this way. the states have been giving out interim numbers all along. when we look on our thermometer counting what the states have given us e we're at 500,000. add the 500,000 on healthcare.gov alone over the first three weeks, that puts you at a million. a lot of the plans usually average 1.5, 1.7 people per plan because you have people who bring in a child or spouse. for those plans, that means maybe 2 million-plus lives. >> oh, i see. >> i think that's where he's calculating. >> brothers, sisters, cousins, nephews. >> your kids are on it. your wife is on it. >> the cook. it's on there. we're all dependent.

many thanks, bertha. we're all independent. add this latest rule change, by the way, to the growing list of handoffs and the bailout the administration produced to try to boost enrollment. it looks like the individual mandate, i think, is dead. utter chaos now rules. that's the problem. let's talk. we have avik roy, senior fellow at the manhattan institute and health policy expert, grace marie turner, president of the galen institute. good evening to both of you. avik, your headline on the "forbes" was utter chaos. what do you mean by that? >> it is utter chaos, because the effect of this rule is that 6 million people have had their plans canceled by obamacare now qualify for a, "hardship exemption" because the plans they shop for under obamacare are quote unaffordable, unquote. all those people don't have to sign up for obamacare-base e ed insurance. a lot of people are going to drop out of the market and drive

up the cost for people who stay in the cool and create a adverse selection problem that insurers and health policy analysts have been worrying about for a long time. >> avik, on the catastrophic insurance, the hardship he's allowing, suspect this what he was calling a few weeks ago sub par, what all his followers were saying was absolutely wrong and that's why they couldn't do it? >> that's true, but the important thing to understand, too, is obamacare catastrophic plans aren't like normal catastrophic plans because normal catastrophic plans are inexpensive, but obamacare catastrophic plans are so heavily regulated they still have to cover your drug addiction therapy and maternity benefits and all that stuff. as a result, the catastrophic plans under obamacare are not that much cheaper than the bronze plans in the exchanges. in some cases, they're more expensive. you can't get subsidized coverage through the catastrophic plan. >> i didn't know this. grace marie, you'll be with me in one second. hang on a second. you're saying these people who got this exemption today have to

buy the catastrophic plan on the obamacare exchange? they can't go to an insurance company and get the best deal? >> well, they're both the same because obamacare regulates what an insurance plan can be, whether inside or outside the exchange. so even if you shop outside the exchange, the costs are still going to be higher. >> all right. grace marie, i don't understand how you can keep this exemption, people with cancelation notices and the others don't have that. they don't have that. they can't do the catastrophic plan. they can't make a choice. how can you have one without the other? and i'm really leading up to this point. is the whole individual mandate just, you know, going down the drain? >> well, you know, the president is systemically dismantling his own law. first with the employer mandate and now with this. you're absolutely right. larry, you mentioned earlier the unfa unfairness so here now you have a situation where somebody who had health insurance last year that they liked, it was canceled because it didn't comply with obamacare. they now can get a hardship

kpejs, but somebody who was uninsured couldn't afford health insurance last year isn't exempt. i mean, it's just really -- the unfairness of this is crazy. >> how do the insurance companies parse through this? realistically. i mean, i'm going to -- they got so many problems as it is. i'm going to review that in a minute. how in the heck can the insurance companies parse through this in a matter of days, grace marie? that's what we're looking at. >> larry, remember one of the things they're supposed to do is keep administrative costs low down to 15% or 20% and they're adding enormous paperwork burdens and administrative burdens having to put new people on call centers, redesign websites, redesign forms and having to at the same time to try to figure out how are they going to price policies in a way that keeps the premiums as low as possible for people who really need coverage while still complying with this long list of obamacare mandates that they have to include in these

policies? so they really are beside themselves in trying to figure out how they can comply with the law that the president changes every week. >> for them it's an administrative nightmare, also a judgment nightmare. i don't want to lose sight of some of the earlier changes because the orders weren't mandates, but sounded like orders from the white house and hhs. have to cover people, partial payment, no payment, no artificial enrollment. no verification of their insurance and their income. there's already very little, if not any, personal security. in other words, the bulk of this whole thing has suddenly shifted to the insurance companies who probably are going to get blamed when it blows up in the next couple weeks. >> larry, you raise a really important point. you were having the discussion before about the so-called million people who've signed up for coverage on these exchanges. here's the key thing. you're not enrolled for health coverage. you don't actually have coverage under the plan unless you've

paid the premium and the insurers received your payment. and as of three weeks ago, the obama administration hadn't even built the i.t. systems to actually pay the insurers. so we don't actually know how many people are actually enrolled. it's probably about 10% based on our sources. as 10% of the people who've actually signed up or selected a marketplace plan, as the government is talking about, have actually paid. so these million figures, it's not really enrollments. more like 100,000 people are enrolled but -- >> that's the thing. just to wind this up. as i understood it in the last week or two, hhs is telling the big insurance companies we want you to cover them. we want you to cover these people. even though they may not be enrolled, even though they may have only had a partial payment, though they may have had no payment at all. the white house is saying we want you to cover them. somehow we'll make it up to you. avik, i don't see how you do that. i don't see how you do that.

>> insurers are pulling their hair out because they're going to have to take a -- as the premiums go up or expenditures on the sick or older people are higher because the healthy people are dropping out because they have an exemption under the new rule. >> grace marie, that's a great final point. the demographics are not going way the insurance companies or anybody wanted them to go. that's a bankruptcy issue, is what that is. >> absolutely. they've just created another exit ramp for the very people that they are desperately trying to get to enroll in obamacare. >> right. >> pajama boy, for example, now all he has to do is say he can't afford insurance on the marketplace. all because why should he pay that premium at the end of the month? just at the point people are being told you have to pay your premiums. now they're saying, oh, here's an kpejs, you don't have to do this after all. terrible, terrible for the pools and the people. >> it's a big mess. the whole thing is a big mess. avik roy, grace marie turner.

thank you both, very, very much. now, here's another gem from the president's news conference today. >> how do you expect americans to have confidence and certainty in this law if you keep changing it? this one here, this new waiver last night, could argue you might as well have just delayed the mandate. >> well, no, that's not true because what we're talking about is a very specific population that received cancelation notices from insurance companies. >> very specific? we're talking about 6 million cancelations. is this going to fly politically? time to focus on the politics of all this with our free market panel coming up next. you know what, i said from the beginning that the republicans should have attacked this thing by delaying or overturning the individual mandate. they didn't listen to me, and they got in trouble with the shutdown. later in the show, the bernanke rally continues today on wall street. this was the third best week of the year for the dow. but how long will this party last? well, we'll look closer at yet

another record close. don't forget, folks, free market capitalism the best path to prosperity. i'll say this for the millionth time, this obamacare has nothing to do with free market capitalism. i'm kudlow. we'll be right back. my mantra? family first. but with less energy, moodiness, and a low sex drive, i saw my doctor. a blood test showed it was low testosterone, not age. we talked about axiron. the only underarm low t treatment that can restore t levels to normal in about 2 weeks in most men. axiron is not for use in women or anyone younger than 18 or men with prostate or breast cancer. women especially those who are or who may become pregnant and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. report these symptoms to your doctor. tell your doctor about all medical conditions

and medications. serious side effects could include increased risk of prostate cancer; worsening prostate symptoms; decreased sperm count; ankle, feet or body swelling; enlarged or painful breasts; problems breathing while sleeping; and blood clots in the legs. common side effects include skin redness or irritation where applied, increased red blood cell count, headache, diarrhea, vomiting and increase in psa. ask your doctor about axiron. you stand behind what you say. there's a saying around here, around here you don't make excuses. you make commitments. and when you can't live up to them, you own up, and make it right. some people think the kind of accountability that thrives on so many streets in this country has gone missing in the places where it's needed most. but i know you'll still find it when you know where to look.

more than half a million americans have enrolled through healthcare.gov in the first three weeks of december, alone. more than 1 million americans have selected new health insurance plans through the federal and state marketplaces. i now have a couple million people, maybe more, who are going to have health care on january 1st. we've got several million people are going to have health care that works. >> all right. those numbers keep jumping around. not sure about any of that math, mr. president. the official numbers seem to be a million through december which is a million nonshort of your original short. still the matter of the 5 million to 6 million who have lost their existing insurance? and that's on top of the already uninsured. believe that's what you call a net negative. let's discuss this whole story. joining us now, our free market friday panel, former obama campaign aide, mark hanna. cnbc reporter of the american

enterprise institute and jenner in stephano. i think this hardship exemption is yet another admission of failure and it's not going to be the last one. >> i think with the hardship exemption is an admission that the president has to make accommodations for people who can't afford -- the entire design of this bill was to give affordable access to health care to people who can't afford it. what he's doing right now is saying to the people who legitimately can't afford it, there is a way out for them. and, look, the people he said, you know, if you lose -- if you keep -- if you like your plan, you can keep it, this, i think, it shows some acknowledgement that he wants to keep faith with those people and so for those people who have lost their health care through those individual markets, and through being kicked off, i think he's making accommodations for -- >> of course he is. it's not to be -- the point -- jimmy, let me ask you this. these hardship exemptions, now, they don't have to pay any

penalty because of the cancelation. what about the other uninsured by january 1st, whatever the hell the date. do they have to pay the penalty for the mandate? if they do, i'm going to predict that won't last. >> i haven't checked my google alerts on my blackberry yet. that may have changed in the last ten minutes. >> so far, they're still in the group that will have to pay the mandate if they don't sign up. that will never last. >> listen, you know, there's this hardship exemption. obama put himself in a position of being sort of the cause of and the solution to their problem. i mean, why are they -- he's creating a hardship for them that they then need to be exempted from. remember, all the stuff we know, avik roy was talking about, listen, risk pools, what insurers are going to do. that's irrelevant now. there's not a single health care that thinks this is a good idea. it's beyond that. it's politics. it's about the daily news cycle every day to keep democrats on board. because, listen, repeal, we thought, listen, it's the law,

never going to happen. you don't think democrats are worried about repeal? they're worried about repeal. >> i want to stay with this because you make a really important point. this whole exemption came from a letter from half a dozen or more democratic senators up for re-election today. i call it the jeanne shaheen group. mark warner is in this group. they know obamacare is going to sink them. this is very political, is it not? i mean, really, this is very political. >> it's completely political. like i said, there's no economic reason for doing that. like i said, where are all the democratic health care economists saying this is the great move? it makes the system worse. each of these exemptions little by little destabilizes these risk pools. destabilizes obama care. >> hang on one second. >> tear trying to win a political battle on a day-by-day basis. >> in fact, i thought this was really pretty bad for government work. the announcement was done as a letter to those democratic

senators. they didn't even make a general announceme announcement. nobody went into the white house press office to say this. to let the rest of the country know. they just wrote a letter to these democratic senators. now, that is the most pathetically partisan thing i've ever seen. jennifer, is this the end -- is this the end of the individual mandate? >> we can only hope, larry. that is obviously -- what we really want to see is the end of obamacare overall. i think what my friend, mark, is saying is somehow the president is coming out being magnanimous by making this affordable is utterly ridiculous. the affordable care act which was promised that would have no -- which turned out to be the lie of the year has people losing insurance, then it's too unaffordable for them to buy it back and the president is going completely around the congress to waive the individual mandate for some people. because the supreme court ruled it was actually a tax and not a mandate, he's actually completely violating the fundamental constitutional pr s prips. s. this is no longer a law, one man on a political mission, as jimmy

said, to make himself in a particular spin cycle look better so that the entire party doesn't get routed in '14. >> these changes, he's rips up parts of the law to substitute other parts of the law. does he have the constitutional authority to do this? this is different, when they first extended some deadlines, i kind of shrugged my shoulders. i've been in the government. you had certain regulations written by the executive branch to implement certain pieces of legislation. but this is different. this is taking the whole individual mandate and ripping it in two and i'm going to tell you, the uninsured are going to get on this bandwagon. he's going to let them get on, make the same choice. doesn't congress have to vote on this? >> a lot of my conservative friends, we're over to ten different tweaks on the law and the president is doing and the administration is doing and somehow, i'm not a constitutional lawyer -- >> neither am i. >> -- and i'm not going to talk about that. i do know what the president has

done every step of the way is fundamentally consistent with the philosophical underpinning of the law. he's not getting rid of the individual mandate because it's going to take away the personal accountability part of the law in the beginning which is why it was proposed by conservative think tanks like the heritage foundation, like aei. like the think tanks that jim works for when it was ten years ago. >> i'm stunned you don't think these changes have undermined the very essence of this law. which was getting a lot of people -- >> not at all. >> -- who either did not have insurance -- >> you pay too much or had these lousy plans that get those people into the system so they could be paying more. that is the fundamental economic principle and he's undermining it with every announcement. >> pushing it up a year, i as a taxpayer don't like when people -- >> a little econ 101. what's going to happen at the end of this year, you're turning these exchanges into high-risk pools and going to have a bunch of insurers who are going to

drop out. already the narrow group of plans is going to get even narrower. you undermine the -- we might not see 2015. >> by the way, one year, by eliminating -- >> it's the key here. >> by eliminating the penalty on a big chunk of the uninsured, i believe this will change. he's eliminated the penalty on these people who are exempt. that takes the supreme court argument kind of off the docket. >> this is not -- >> because this is the part that's so interesting to me. judge roberts made his case on the penalty being a tax. now, real quick, i have to finish this segment. if there's no penalty, there's no tax. and if there's no tax, there's no law. >> there's no law. the law needs to be pulled off the books. the president of the united states an not unilaterally go around the congress and remove a tax on part of the populous it was -- he cannot do it. thank john roberts for that. i'm not a lawyer, but that was -- >> he might get a bipartisan vote in the house to keep it, but i doubt that very much.

all right. hang on. hang on. you're all going to rejoin me in just a moment. now, we've got new developments in the fight over new sanctions on iran. cnbc kr back to join us for an update up next on "the kudlow report." please stay with us. stick with innovation.

stick with power. stick with technology. get the new flexcare platinum from philips sonicare and save now. philips sonicare. see who does good work and compare costs. it doesn't usually work that way with health care. but with unitedhealthcare, i get information on quality rated doctors, treatment options and estimates for how much i'll pay. that helps me, and my guys, make better decisions. i don't like guesses with my business, and definitely not with our health. innovations that work for you. that's health in numbers. unitedhealthcare. welcome back to "the kudlow report." senate majority leader harry reid is resting at home after

being taken to hospital earlier today. his office says he wasn't feeling well this morning. tests conducted on senator reid came back normal. when reid gets back to work, he's going to find himself in the middle of a tug-of-war on iran. senators on both sides of the aisle are pushing for a bill with new sanctions for iran. but, again today, president obama saying he wants to keep the diplomatic process going. there's even a possibility that the president could veto a bill if congress passes one. and a huge day for blackberry. up more than 15%. quarterly results for terrible. revenue was down from last year. and short of the estimate, a net loss of $4.4 billion largely due to write-downs for unsold phones, but now blackberry signed a deal with the phone manufacturer to limit its losses on unsole had handsets. investors clearly liking that. then there's optimism. hope that the new ceo, john

chen, has a plan to save the company. and larry, i've got to tell you, fair disclosure, i love the keys on my blackberry. they sold, i think, what, 4.3 million phones in 3 months. that certainly pales by comparison to iphones. >> i have tons of people -- a lot of people -- is this deal with foxconn a hardware deal? >> sounds like a hardware and production deal. >> did people think the new coo could pull it off? >> there's hope. hope springs eternal. >> hope springs eternal. i love that. thank you ever so much. now, president obama decl e declared victory on the economy in his news conference today. was it wise? was it even true? our free market panel is going to rejoin us in just a moment to debate that with much more. by the way, the numbers were pretty fogood. i'll say that because i'm completely objective. please stay with us. we'll be right back on "kudlow." avo: the volkswagen "sign then drive

sales event is back. which means it's never been easier to get a new passat, awarded j.d. power's most appealing midsize car, two years in a row. and right now you can drive one home for practically just your signature. get zero due at signing, zero down, zero deposit, and zero first month's payment on any new 2014 volkswagen. hurry, this offer ends january 2nd. for details, visit vwdealer.com today a confident retirement. those dreams, there's just no way we're going to let them die. ♪ like they helped millions of others. by listening. planning. working one on one. that's what ameriprise financial does. that's what they can do with you. that's how ameriprise puts more within reach. ♪ there's

in 2013, our businesses created another 2 million jobs, adding up to more than 8 million in just over the past 45 months. this morning, we learned that over the summer, our economy grew at its strongest pace in nearly two years. the unemployment rate has steadily fallen to its lowest

point in five years. >> all right. well, look it, it's undeniably true. the economy is finally showing signs of life of the slow recovery, but why is there still such a disconnect between the strengthening economy on one side and the president's collapsing approval numbers on the other? emp empb including his economic numbers which are down? we welcome back our free market friday panel. all right. over stlthree revisions for the summer quarter, third quarter. more or less you won't from 2 1/2 to 3 1/2 to 4.1. he's right about the job increase. you, yourself, have written about this. does he deserve credit for this economic improvement? >> you know, what's interesting is back in 2009 when they were putting out their economic forecast, what would happen because of the stimulus, they didn't predict, like -- we've had two quarters of 4% better growth during this entire recovery. they predicted about four years of 4% growth. they were off just a little bit.

i'm sorry, we had the sequester, the government shutdown. and the economy seems to be accelerating? i'm not sure -- i'm not sure -- did he credit those -- did i miss the part where he credited the shutdown? obviously they must be the reason. >> who gets credit? real fast. before i get to mark. equal time. >> i think brother bernanke. quantitative easing to offset the sequester. >> right. you're in my column as a market monitorist, pushing the bernanke line. all right, mark, does the president deserve credit? he went on, the deficit's down. that's truthful. i didn't hear anything that was not truthful. now, when he said we're producing more oil, that's a lot of crap because this is all done privately and his people basically did all they could to stop. let's put that aside for a minute. 4% growth. 7% unemployment. 2 million jobs. et cetera, et cetera. does he deserve -- >> housing market is coming back. i think the american people deserve credit. i think the president has shown an economic vision for the country that has been

successful. i don't think he was trying to take credit but trying to report to the american people on the reasons we have for optimism and the economy has for optimism. but, no, he said our companies have produced over 2 million jobs. he's giving credit to the job creators. and, look, there are -- there is a lot of -- if you want me to say, malaise, or there's a lot of -- >> i like that. i'll bring back -- >> old school. >> i like the point because there is a lot of pessimism. >> there is. >> this is america. i'll just make that point. i don't care who's in the white house. this economy and this free ma market democracy will survive. we survived before. it will survive again. there's too much fetching going on. how's that? got to be a word like that. there's too much complaining going on. jennifer, i want to go to you because what is so odd, as the numbers have improved at least in the last three months, "washington post"/abc opinion poll, right, obama approval,

43%. economic approval, 42%. and, yet, 59% think the economy is better. so the majority agree with mark and jimmy and the president. the economy is better, but the majority, 59% won't give obama any credit for it. why do you think that is? >> i actually agree with mark on something. i think it is the american worker that we have to thank for anything that might have happened and the american entrepreneurial spirit for being able to push through the bad economic policies of barack obama. and i think what obamacare has shown the public and which is being reflected in the polls is that barack obama's promises are not coming true. that this public policy full of we'll take care of you, we'll help you, we'll create jobs. >> we have a short-term memory. >> let me finish. let me finish. under obamacare, the working poor, the marginal workers are being slashed in their hours because obamacare penalizes

companies that allow people to work over 30 hours. >> that's right. >> those people know it and they're making it by working -- >> there was a "bloomberg" poll that asked this very question about the economy and what people -- you know what they said? people think the economy is getting better, they don't think the president is responsible. it's taken too long. the stimulus was in 2009. it's 2013. people know eventually the economies are going to recover. they always do. for him to say, listen, the reason the economy is recovering is for cash for clunkers four years ago. this is not credible. >> let's look at who's benefiting. who's benefiting from the recovering economy? you look at the stock market having a banner year. you have investors making hand, you know -- money, hand over fist. there's an economic ine wauneqi the president talks about and continues to increase. it's a priority for the country. >> as somebody who coined the term years ago, i want to say this. middle income people, union people, teachers, and firefighters and cops, through their pensions, are benefiting very well. that's never counted in the

income numbers. those capital gains that they have recouped. jimmy, president said, i'm going to quote, there's going to be a breakthrough for the american economy in 2014. he said that today. that is a forecast. i assume he's putting his chips in there and he's probably going long the stock market if he hasn't already. do you believe there's going to be a special breakthrough next year in the economy? >> listen, i think that we may finally get trend growth which is 3%. some people, goldman sachs think we'll get 3.5%. the thing is there's supposed to be a big bounceback. at some point you're supposed to have a big bounceback to make up for the lost jobs. still 8 million jobs down. 4 million fewer full-time jobs than we had in 2007. so we never had that big 4%, 5%, 6% growth. >> is jennifer right, is obamacare going to be a job killer or at least a job redu reducer? >> i think it's at a rate -- listen, it's going to help people -- there will be more compliance people.

>> the insurance companies have 30 million more customers. i mean, they will. >> no -- >> maybe not. >> larry, i just have to say one thing. >> real fast. >> there will be more jobs for federal bureaucrats. every bureaucrat job kills 98 private workers. >> have you ever met a federal bureaucrat? >> larry, what is a federal bureaucrat? >> i was a federal bureaucrat. i was a political appointee. >> my mother worked for the federal government. >> there you go. you know, they have friends, too. thanks to jim, jennifer, and mark. we appreciate it. now, there's still some very hard questions being asked about the credit card security breach at target. what did target know and when did it know it? we have the tlatest on this wrench thrown into the christmas season next up on "the kudlow report." announcer: where can an investor

be a name and not a number? scottrade. ron: i'm never alone with scottrade. i can always call or stop by my local office. they're nearby and ready to help. so when i have questions, i can talk to someone who knows exactly how i trade. because i don't trade like everybody. i trade like me. that's why i'm with scottrade. announcer: ranked highest in investor satisfaction with self-directed services by j.d. power and associates. stick with innovation. stick with power. stick with technology. get the new flexcare platinum from philips sonicare and save now. philips sonicare. ♪ [ male announcer ] bob's heart attack didn't come with a warning. today his doctor has him on a bayer aspirin regimen to help reduce the risk of another one. if you've had a heart attack, be sure to talk to your doctor

before you begin an aspirin regimen. [ male announcer ] this december, experience the gift of true artistry and some of the best offers of the year at the lexus december to remember sales event. this is the pursuit of perfection.

some late breaking news this evening from target will offer a 10% discount on all in-store purchases this weekend in effort to win back pr. after the embarrassing data breach. nbc news' stephanie gosk has the latest on that for us. stephanie, good evening, what can you tell us? >> reporter: tonight, target is offering a 10% discount to its customers but may not be enough for angry and frustrated shoppers who aren't mincing words on the retailer's facebook page. one writes, thanks for failing

us, target. others say they can't get through on the phone to cancel their target-issued credit cards. known as red cards. this is about the worst customer service i've ever seen, completely ridiculous. target has apologized and says it will increase capacity online and in call centers. while more and more customers are finding suspicious charges. >> they're all way more than i would spend in one go, over $60, $80, $90 each. a couple have been declined. >> reporter: there are signs of trouble among loyal target shoppers. >> scares me to death. because i shop at target almost daily. >> reporter: in an e-mail to customers, target expresses regreat for the inconvenience and insured steps are being taken to prevent incidents of this kind in the future. >> the clock is ticking. every second counts in terms of people going into their store. having people not trust your store enough to spend that money will not bode well for that retailer. >> reporter: financial experts point out this late to data

breach is a wake-up call for everyone. here are tips for people who believe they are victims of fraud. cancel your card or change your account number. if you think your identity might have been stolen, put a freeze on your credit report. so no one can open up a fraudulent account. remember, credit cards are safer but if you have to use that debit card, choose the credit option instead of the debit option. avoid using that four-digit pin. cash is really the safest. but credit and debit cards are here to stay. consumers, banks and stores will all have to find better ways to protect them. >> all right. many thanks to stephanie gosk. so, should this breach change your investment opinion of target? here now is ron kruszewski of stifel nicolaus and michael farr. what are analysts and customers saying? pretty good store. what do you do? >> it's the sign of the times we

live in today and the security breaches are not acceptable. i think in a couple of weeks this story will be forgotten. it's going to cost target, we think, you know, $50 million, $150 million. the card processer might be liable. the timing is just awful. but i don't really think it's that big of a deal to the overall market. >> michael farr, can target make it up? what ron is saying is it's bad timing. he's right. last big shopping weekend before christmas. discounting at 10%. you know, the way the retailers operate, it's like january sometimes is more important than december. what do you think about the target story? >> i think you're right. i think it is a very big story. i think probably it will turn out that target was as much of a victim as any of the credit card holders. but this credit card business and credit business for target has been very important to their bottom line. there are people now who want to cancel the credit cards. that base is going to diminish and have a big pr problem. we've seen companies go through

this before, larry. i think it is going to make a material difference on the earnings. probably through 2014. as they recover because they're not going to have the benefit from that same level of credit card -- >> you sell the stock -- real quick, do you sell the stock? >> probably short term, yes. i don't own it, but i would and i would look to buy it back if the noise gets uglier. this is the kind of thing where a good company can see a stock price drop and you look at that as a buying -- >> hang with me. reason cruszewski, michael farr will come back. plenty of questions to ask. got to finish off the show by talking about how wall street finished off the week with another set of new all-time highs. is the rally strong enough to stretch past christmas and into the new year? what about the bernanke taper? we've got plenty to talk about with our two investment experts next up on "kudlow." ♪

[ male announcer ] if we could see energy... what would we see? ♪ the billions of gallons of fuel that get us to work. ♪ we'd see all the electricity flowing through the devices that connect us and teach us. ♪ we'd see that almost 100% of medical plastics are made from oil and natural gas. ♪ and an industry that supports almost 10 million american jobs. life takes energy.

and no one applies more technology to produce american energy and refine it more efficiently than exxonmobil. because using energy responsibly has never been more important. energy lives here. ♪

welcome back to "the kudlow report." i'm larry kudlow. heck of a week on wall street. today was another historic day. dow and s&p 500 closed at record highs. dow add 42 points. nasdaq added 47. s&p 500 added nine. back with the ceo of stifel nicolaus and michael farr. farr, miller and washington. reason cruszewski, i want to go

back. the third quarter gdp is history. okay? i get that. that quarter ended in september. it sometimes tells you a little bit about the future, first of all, a big number. looking in here, consumer spending was revised up. that has to be positive. one area that worries me is the job creator, business investment was also revised up significantly. now, you know, it's the internals of the economy. profit is up 5.7% that will carry it forward ultimately. what's your take on all this? are we going to have a stronger 2014? >> look, larry, first of all, that was a strong upward revision. though a lot of it was inventory driven. it's 4% or greater than 4% and that's powerful. if you look forward to 2014, look, we're up 28%. you know, 25% of that's multiple expansion. we need to see this economy go from fed liquidity and policy

life support to main street prosperity. and if we can do that, then, yeah, this market can go further. but it's going to be driven by earnings, larry, not by multiple expansion. >> absolutely. michael farr, i think ron just nailed it completely. i'll ask you to answer. can this market be driven by profits, the mother's milk of stocks and the economy without the federal reserve? because let's face it, bernanke basically on wednesday announced a long-term tightening cycle. may last two or three years. so ron is saying, can we be profitable during that cycle? i ask you. >> i agree with ron, and i also agreed with your article on the fed taper, and bernanke when you call him the central planning agency as you do, you actually nailed that. as i look to profits, i'm looking for demand. i'm looking for the average consumer. i saw consumer spending tick up, but i don't think the consumer has a great deal of capacity to

keep spending because those earnings for the consumer and wages haven't increased. in fact, adjusted for inflation, we're back at 1997 kind of levels. so we need to see that e employment date to continue to improve. we have to see the average american begin to do better to create that organic demand to drive those profits. it will rely on profits but the economy has to really drive it and it can't be the fed. >> ron kruszewski, profits are on a 5%, 6% trajectory, in the fifth year of an expansion. you have to kind of grind it out in terms of the stock market. is that what's going to happen? let's say the profits stay on a 5%, 6% trajectory give or take. is that a way to measure the likely advance of the stock market? >> i think, larry, looking at it a different way, i think that maybe, i'm not sure it's 5% trajectory. next year's earnings for the s&p 500 i think is $120 give or take. and that's, you know, that's up,

what, 14%, 15%. >> that's a big number. >> and that's my concern in the market is that the market, gdp is still slugging along. i like the 4%. but if it's only going to grow 2%, 3%, corporate profit is at an all-time high as a percentage of gdp. >> that's a big number. i actually wasn't aware that it was that number. big of number. michael, let me speculate. the ten-year note, because the economy is rising, and because the fed is buying fewer bonds, the ten-year note is going to go up 100 basis points sometime in 2014. that is my forecast. that will put it in line with nominal gdp. what's that do it the stock market, real fast? what's that going to do to the market? >> i think it slows the housing market, slows the economy. it puts a cap on really accelerated growth. i think it kills a certain level of demand. and i think it keeps you in that

single-digit optimistically for earnings growth and stock market advances. >> all right. >> i disagree with that, larry. i think if it's up 100 basis points, i think the market will like that, going to signal growth and maybe a little inflation which we need. >> ron kruszewski, michael farr, that's for tonight's show. the "kudlow report" taking this coming christmas week off. i'll be back on monday, december 30th. please have a holy and blessed christmas season. thank you for watching. my mantra? family first.

but with less energy, moodiness, and a low sex drive, i saw my doctor. a blood test showed it was low testosterone, not age. we talked about axiron. the only underarm low t treatment that can restore t levels to normal in about 2 weeks in most men. axiron is not for use in women or anyone younger than 18 or men with prostate or breast cancer. women especially those who are or who may become pregnant and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. report these symptoms to your doctor.

tell your doctor about all medical conditions and medications. serious side effects could include increased risk of prostate cancer; worsening prostate symptoms; decreased sperm count; ankle, feet or body swelling; enlarged or painful breasts; problems breathing while sleeping; and blood clots in the legs. common side effects include skin redness or irritation where applied, increased red blood cell count, headache, diarrhea, vomiting and increase in psa. ask your doctor about axiron. [ male announcer ] how could a luminous protein in jellyfish, impact life expectancy in the u.s., real estate in hong kong, and the optics industry in germany? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 70% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing.

with investment information, risks, fees and expenses >> narrator: in this episode of "american greed: the fugitives," fred monem is presented as the paragon of efficient government spending in oregon. >> he was, within the state prison system, considered a hero. >> narrator: he saves the state department of corrections millions of dollars a year feeding the inmate population. but according to the fbi, monem is taking a little taste for himself. >> he committed bribery, money laundering, and a host of crimes. he stole at least $1.2 million from the taxpayers. >> narrator: but by the time the fbi tries to get him to face up to his alleged crimes, he's on a plane across the country. >> and before we could unravel it all, he was gone. >> narrator: and later, the father-and-son team of juan and harold rangel are the toast of the latin american community in