putting them into cars and paintings, but collectibles certainly in a strange way the more stable market right now, which is odd and unusual. >> $40 million. that's a nice car. i'm not sure 40 bills is worth it. >> that's a lot. you can buy 20 something brand new ferraris. >> what would you do with that many ferraris. >> three of mandy's home. >> thanks for watching "street signs," guys. and welcome to "the closing bell" on this monday. i'm kelly evans down here at the new york stock exchange. >> how are you. nice to meet you. >> great to have you back. >> nice to be back at the new york stock exchange. that would make me bill griffeth. today is one of those days we don't have -- look at that. look at that. it's unchanged. just for a moment there it was -- we were right where we started the day for the dow jones industrial average. no triple digit move as we had last week with all that mega volatility. things calming down a bit as we

get ready for the testimony of janet yellen, her first testimony to congress tomorrow before the house financial services committee. so we're in sort of a wait and see mode today. >> certainly are. meanwhile, what a mess over at aol. the ceo now apologizing for citing the cost of providing insurance for, quote, distressed babies and plan to match 401(k) payments only at the end of the year. who should the ceo be looking out for first, his workers or shareholders? >> we'll make the payments at the end of the year or no. that was easy. also, that report that obamacare is going to cost the equivalent of over 2 million full-time jobs. that just continues to rattle washington right now. it was a big focus of the sunday morning talk showinp morning talk showins morning talk showinhows, and no tommy thompson will be here exclusively. he's ringing the closing bell

for his organization tooteday. he's got some views coming up. >> we know we're going to hear a little bit more about it perhaps from the gop in just a couple hours time as they grapple with the debt ceiling. >> we have breaking news on general motors. phil lebeau has that story for us. phil? >> bill, general motors has announced the 2014 compensation for new ceo mary barra. this year she will be making $14.4 million. that is 55% more in compensation than her predecessor dan akerson collected last year. of that $14.4 million, $1.6 million is in cash. short term incentive makes up $2.8 million and $10 million, a little more than $10 million, will be coming from her long-term compensation package. that needs to be officially approved by shareholders at the april annual meeting, but, again, mara barra will be making $14.4 million this year. guys, the reason they're releasing this early, to clear

up misperception that is can been floating out there on the web and other place that is she was not making as much money as her predecessor who obviously was fael, she's a female and the concern floating around general motors is that the perception is that she would not be making as much because she's a woman running the company. >> and, phil, we discussed this on the program last week because i had raised this issue about hearing mara berra war barajas g half of what her predecessor so. she's actually making more? >> 55% more. and that's not surprising. their long-term compensation package, they no longer have the restrictions that were in place when the treasury department had a say in how general motors was paying its executives. now that they can make their pay more comparable to others in their industry, their peers so to speak as far as other companies go, they can raise that compensation up. so this clears up -- >> that's going to rattle around washington. >> -- the ideas that were swirling around. >> i wonder what she was making

two weeks ago before the hue and cry. >> doesn't hurt to have the whole world watching to see that they're going to pay her. >> thank you. let's get back to the indexes. we are seeing a small deklaincln the dow, down 2 points. >> let's kick it around. our closing bell exchange coming your way, gina sanchez, david kudlow, anthony chan from chase is with us at the big board. axel merck is with us, and our own rick santelli. gina sanchez, what are you expecting to hear from janet yellen tomorrow? what does the market want to hear do you think? >> i think the market and i certainly expect to hear that the recovery is fragile but the economy is still growing and that policy will remain unchanged. that will be the most market-friendly maneuver and i think that's exactly what janet

yellen is going to do. anthony chan, a lot of people are talking today about the fact there will be a panel of experts testifying after janet yellen. they include some hawks like john taylor. how do you think that will affect the testimony, questions, and markets as they watch this all play out tomorrow? >> i think they will be asked questions based on what janet yellen talks about and, of course, the topics at hand. we know john taylor has never been a big proponent of all the stimulus that the federal reserve has put out there, so we sort of have to look at what these guys' positions or officials' positions have been prior to their testimony to get at least -- glean an idea of what they're going to say, but my suspicion is janet yellen will take an even-handed approach. if she's going to err, she's going to err on the side of caution, and at this point the caution is justified but with another employment report ahead at the next fomc meeting, i

don't think she'll reveal to mean cards. >> do you think she makes any meaningful changes to fed strategy, especially considering this her first fed testimony and it might look like she disagreed a great deal with ben bernanke if she makes any changes at this point. >> she's been laying low for a reason, because of the confirmation hearing. this is the first opportunity to speak in public. she maybe wants to get rid of that unemployment threshold for once and for good. the real challenge is all the recovery is based on asset pricprice ed inflation. as soon as those bubbles pop, the glass is half empty. they will work to try to reinflate the asset prices. she might drop some hits tomorrow, otherwise she will do so in march. >> we had christina romer on the program and she effectively said in not so many words she thought the taper was a mistake. i wonder how much of a minority view that is. is that just something that people certainly more dovish on

the spectrum think or is that view more widely held? >> well, i mean, the tapering is pretty much baked into the cake here and deviating from it is going to cause quite an uphea l upheaval. she know that is. at the same time she cannot possibly be happy with those disinflationary forces taking over with the yields coming back down. she wants to reflinflate the economy. we're coming back from a great bust. monetary policy is pushing against that. when you take the foot off the accelerator, the deflationary forces are taking over. yellen does not like that. that's not in her camp of thought. she will think of something, probably not yet tomorrow, but the market is pricing in a hawkish fed and that's just not going to happen. we're setting ourselves up for a surprise, if not for tomorrow, then in early march. >> when while, david, the markets last week, incredible volatility. the worst day of the year a week ago today, that 300 point drubbing of the dow. then on thursday and friday we

had the two best days of the year, and, in fact, we finished the week positive. what's the market telling us right now regarding the economy or fed policy or the price of tea in china, whatever? >> i think the market is telling us to expect a lot of volatility in 2014. what we saw over the past couple weeks i think is a sign of more to come. you know, last year was easy. you just added beta to your portfolio and you got great returns. we're only a month and a half into this year and we've already had a 6% pullback in the markets. we think this year will be full of more volatility like that. as far as janet yellen tomorrow, your earlier question, there have been a lot of comparisons between janet yellen and ben bernanke. we think this is where she should take a page from alan green span. saying a lot but not really telling us anything. i think for this go around it would be good for janet yellen to let the market have its

certainty that quantitative easing/tapering is on autopilot of $10 billion at every fed meeting. that's baked into the cards, and the market has that certainty. don't create any new uncertainty for the markets. >> i don't think that would wash now, do you? >> if that's what you're saying, i wonder is it safe at this point to say the correction is over? that's the verdict that already, as bill was saying, kind of in the span of a week people seem to be delivering. >> i don't know. if we get another correction now, is that a double dip correction or the start of a new one? we've had a nice rally back. thursday and friday, the best back-to-back days for the market in over a year. but, you know, we're going to have more volatility ahead of us. do we go down again before we go a little higher? you know, but i think what investors need to look for this year is a lot more modest returns than last year and how to diversify their portfolios for the ongoing volatility that we're going to see, and that is diversification abroad, diversification in the long short market neutral strategies. >> just throw the money anywhere

and make sure you get a good diversification there. rick santelli, what is the market trying to anticipate for tomorrow? what are you guys talking about for janet yellen? >> well, i think actually can be summarized in something kelly said. she said christine romer wasn't a fan of the taper. i think what tomorrow is going to do is it's going to divine which investing groups are in christ te christine romer's corner. if you look at the market today, virtually all of the trades are very close to unchanged. i think after friday's number, there's still many investors that are unsure of exactly how much qe is going to be around in a couple of quarters. so i think that will be the point tomorrow, and i wouldn't underestimate how today's calmness could play into maybe a lot more volatility either tomorrow or after thursday's testimony on the other side of the aisle. >> gina, it does have a certain calm before the storm feeling today, doesn't it?

>> it really does, and at these levels, the s&p is still a little vulnerable. i think most people who were really hoping to buy a dip were hoping to buy a dip down to 1700 and that just didn't happen. part of that is because there is growth here. a lot of the concerns around emerging markets, those were really overblown, and we're kind of getting to the other side of that. and so now everybody is looking at janet yellen to see if there's really concerns about u.s. growth. i think that we are going to continue to see growth, but it is going to be a volatile year, and so at levels at this level, we're probably going to see some potential, something is going to make -- someone is going to blink and the markets are going to fall out of bed again, and then we're going to continue to peck along along the recori. >> well, i think it's safe to say we will get some good theater tomorrow the way they have it set up with that second panel of potential critics of fed policy. we'll see how the market responds to that. thank you, folks. appreciate your insights.

>> thanks. >> we are 50 minutes away from the closing bell today. the dow at its low was down 60 points. then we've come back. it's not been a very volatile day, but it's sort of that wait and see attitude ahead of tomorrow's testimony by janet yellen. we're down seven points right now. >> you could say the market is looking for direction today. we've seen some pretty big moves in the last hour of trading recently so don't go anywhere. things could look very different at 4:00 p.m. >> and go pro, the latest technology company to file a so-called secret ipo. we're hearing more about these lately and it's kind of ironic for a company that brings you images no one else could find, and now they're filing a secret ipo. and if it's good for go pro, is it good for shareholders? we'll find out. >> this is absolutely a trend to watch. speaking of ipos, one of the best performing ipos last year, the ceo joins us next for the red hot business of keeping your

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okay. mixed market here. the dow is still down.

we're down 8 points at this hour but the nasdaq is having a praed good day up 18 points and the s&p up 1.25. there are some stocks making moves today. morgan brennan? >> we begin with apple. up around 2%. carl icahn is dropping his demand for the company to buyback $50 billion of its shares. this comes a day after proxy advisory firm iss said it recommended that apple shareholders vote against icahn's buyback proposal. s had bureau is the s&p's top percentage gainer after the toymaker gave an upbeat outlook for 2014. and auto nabby surging after i alibaba offered to buy the 72% of the chinese digital mapping and navigation firm it doesn't already own for $21 a share. it's a 27% premium off its friday close. on the flip side, medicines company which fell after an fda panel said it was divided on whether to recommend approval of its drug to treat blood clots and stent procedures.

back to you. >> morgan, thanks very much. the biotech space has been heating up. check out pet pharmaceuticals company aratana. the stock is up over 280% since its ipo last june. >> steven st. peters, the ceo, there he is, and also with us a special friend. that would be tempe. that's what a chihuahua looks like in winter when they -- they have to grow their fur. tempe looks a little upset by the lights or the people. i don't know what's going on but tempe is looking a little peaked right now. how big is this market? you just made an acquisition of another company in that space, but how big can this industry grow? >> yeah, i mean, we really don't know how big the market is for pets medical needs. today 68% of american households have pets and there's over 180 million pets in american homes. so when you really begin to

think about pets as family members that are aging with their two-legged family members, they're developing medical needs, and so the medicines to deal with those medical needs, we're really at the beginning of that market today. >> and so you guys are developing some of the medicines. what differentiates what you're involved with from -- and i realize it's the subject, it's the fact you're working on pets and not humans, but in a biotech space that's becoming increasingly populated, a ton of space, a ton of competition going on, how much roadway do you think you have for developing pet pharmaceuticals? >> so thanks, kelly. we really think that a lot of the medical needs that humans get, pets also get. so we're actually accessing innovation from human medicine and then respes yating that for dogs or cats, really finding nuances in the biology that apply to a cat or a dog because as we know, you know, you wouldn't take a medicine as a human that was shown to be safe and effective in a dog. so we believe that if you're a dog, you ought to get a medicine that's shown to be safe and effective in your species.

>> i lost a beloved pet years ago to cancer, and my wife and i after it was all said and done decided we wouldn't go through the chemo a second time. and we feel guilty about it because in part because it was so expensive to spend on a pet. is that going to be an issue? cost -- there is no pet insurance, health insurance out there to speak of, at least not on the federal level. there may be private pet health insurance, but cost is going to be an issue for a lot of people when it comes time to try and deal with the medical treatment of their pets. >> yeah. so, bill, absolutely. and first of all, sorry about your loss. >> that was a long time ago, i'm over it now. >> i will tell you that there's hundreds of thousands of pets that get cancer, particularly type of cancer, and about half the people treat that. and so there's actually over 100,000 pet owners today that are treating their dogs and cats for cancer. so not all people will do it, but there's a very big market that exists today of people who

are willing to treat their family members for cancer. >> but the cost, that's what i'm getting at there. how are margins? are costs going up the way they are in human health care world as well? >> one of the things that's different about the pet market is is it a private pay market. about 97%, 98% of the dollars are spent out of pocket, and so the orphan disease model of hundreds of thousands of dollars of therapy doesn't work, but we do know that $5,000 is not an unusual amount of money for someone to spend on a pet. and in terms of daily chronic therapies, a couple dollars a day people are willing to spend and do spend in the u.s. >> how long do you think it's going to be before you're doing $100 million in annual sales? >> well, i can't talk about our individual kind of revenue guidance, but the company at this point has over 15 products in development. our first product we received a conditional license from the usd a last month. it's a product for lymphoma and we'll be marketing that product

later this year, and then we have additional products that come to market over 2016. so really we have an entire portfolio of products, and so in terms of individual products, we don't really talk about -- >> it sounds like within a couple years. >> yeah, that's the plan. >> huge market. >> a big market. >> steven, good to see you. thank you, tempe. it's over now. you can relax. >> i would like to keep him around for the rest of the show. >> all the people and the lights will go away. there's a lot of people you don't see around here, folks. i'm sure that's what tempe is reacting to. >> thanks. we have about 40 minutes left to go. the dow is down by about 7 points. the s&p 500 slightly p lly posi. the nasdaq is up 19. >> one of those people standing by is former health and human services secretary tommy thompson. we will be waiting in on the latest obamacare controversy, on whether it will cost the equivalent of 2 million full-time jobs. he says the law is fundamentally flawed, but he says it can be

fixed, and he lays out his solution for us coming up next. speaking of fiks, aol boss tim armstrong trying to fix a pr nightmare. but is that the future of these plans anyway. we'll take a look. and this aol mess is really a battle between shareholders' best interests and employees' best interests. we want to know whether you think companies should take actions more in line with the interests of shareholders or workers? your best tweets @cnbcclosingbell coming up.

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last week the congressional budget office said obamacare will eliminate the equivalent of more than 2 million full-time jobs by 2017. that has democrats coming out in full force explaining why that could actually be a good thing. isn't that right, john harwood? >> sort of, kelly. you know, we had a classic washington political fight last week. cbo came out with a report, said that it would be the equivalent of 2 million people fewer people working in a few years. republicans pounced said, you see, we just proved it, that obamacare is a job killer. democrats ever since have been

saying, wait a minute, look at that report. it says people would choose not to work, not that companies wouldn't hire them. here is chuck schumer, the senator from new york on "meet the press" yesterday. >> the single mom who is raising three kids has to keep a job because of health care can now spend some time raising those kids. that's a family value. >> but, of course, there's a weakness in the democratic argument, too, because even if it's by choice that 2 million fewer people choose to work, that has an effect on economic growth which is what rob portman, the senator from ohio, said in response. >> you have democrats almost giddy about the fact that we're going to have fewer people in the workforce. that doesn't help the workers. it doesn't help in terms of fighting poverty. >> now, bottom line, this argument is going to go on through the election. democrats aren't sure that they have neutralized this issue. republicans are very giddy about it. so they're going to be trying to press their advantage, and you can expect it to come up tomorrow when janet yellen testifies before a house

committee, her first appearance since becoming confirmed as fed chairman, guys. >> john, thanks very much. more reaction now on this latest obamacare controversy. >> yes, in a cnbc exclusive we're joined by former health and human services secretary, former wisconsin governor, tommy thompson here at post 9. welcome. >> you're ringing the closing bell because you're the ceo of physicians realitity trust. >> i'm chairman of the board. it's an honor to be here. thoou for having me on your wonderful program and congratulations on what you're doing. >> thank you. >> thank you. look, this is such a tumultuous time for health care in this country. you know, you saw the cbo report, we've got a deadline i think coming up this weekend for people who want to receive -- who want to enroll in obamacare by march 1st. where is this all going? >> well, i think what you really see is a health care proposal that's now the law of the land that really didn't have bipartisanship and now is trying to be enacted, and it's got serious problems. the biggest problem, of course,

is not the fact that 2.3 people million are not going to be employed, which is a huge problem, but the fact of the matter is younger people are not going to be enrolled. this is just plain actuarially unsound. that's going to sink obamacare unless they make meaningful changes. >> you have said before on other programs on our network that you'd like to see the president call in leaders of the industry and the republican leaders, sit down, and let's solve this problem. but as you well know, governor, the republicans would just rather see this whole thing go away. they're not in the mood to try to make this thing work, are they? >> but it's 18% of our gross national product, and health care has got to work. health care is not working, and it certainly is not going to work under obamacare, and i don't think anybody can just set aside and watch this thing disintegrate. >> that's how washington works now. >> i know that's how washington works, but it's not right because health care has got to be fixed. we've got to make sure that we have a health care system that's viable, and until they come

together, and it probably is not going to take place until after the next election, but i am here to tell you as soon as the election is over in november, you're going to see a bipartisanship coalition develop in which health care is going to have meaningful changes that's going to make it fixable and it is fixable and they'll go forward and be able to do what is necessary to really provide health care for the people of this country. >> so you're saying as soon as after the midterm elections are over this november, and you emphasize bipartisan, what is going on behind closed doors in washington? >> there's nothing going on, that's the problem. nothing is. but after the election people on both sides are going to come to the cloonclusion after going through an election -- i have been through enough of them. people are going to be asking their congressman and senators, why can't you get anything done. that's going to resonate among the individuals that are candidates and those people are going to be elected -- >> is this only the case if democrats don't do well in november? do you think that acts as a catalyst to reconsider obamacare? >> i think it's going to be a republican year, and that's

going to help to make the changes because right now with the democrats in control of the senate, obama doesn't have to make any meaningful changes. if the republicans win the united states senate, which i think by all indications is going to happen, it's going to be a republican year, republicans then are going to see we have to fix this, and that's what's going to happen. >> what would that look like? what are they going to ask for? what's the quid pro quo? >> the quid pro quo is basically they have to make it more accountable. they've got to take some of the money out of health care. it is very expensive. it's too duplicitous, and it's not taking care of young people. they have to get it actuarial sound and republicans will make that. they will allow the exchanges to work much more and in a better way. >> that doesn't sound like a whole haul replacement and repeal of the program. it makes it sound like obamacare is here to stay, just with improvements. >> people that tell you obamacare is going to be completely repealed really don't understand health care. it's there, and in another two years it's going to be the

status quo. they have to make meaningful changes and they can do that, and if people think they can repeal it, it's impossible to repeal. once people start working under obamacare, which they are right now, it's going to be very hard to roll it back. you're going to have to make changes in order to make it actuarial sound, make it more competitive, take a lot of the money out of the system so that the taxpayers can afford it, and this is what's going to take place after the election i'm fairly confident. >> all right. we'll see what happens. i know they're anxious to get you upstairs. >> don't forget, doc is a great stock. >> doc is a great stock. >> can i say that? >> you just did. >> physicians realty trust that you're chairman of. they're ringing the closing bell. >> and we're up 26 cents today. that's a good day. >> that is a good day. governor thompson, always good to see you. >> it's my pleasure. thank you very much and good luck to you. >> 30 minutes left in the trading session here. the dow holding steady. a lot of the major averages just kind of taking a wait and see attitude getting ready for that important testimony by fed chair janet yellen tomorrow.

>> we've had a pretty volatile market so far this year, but ipos have actually still been red hot in 2014. and now a new trend is emerging, so-called secret ipos. up next, we'll take a look at what that means and if this is the new normal for a lot of these new young companies. >> and famed fashion designer betsy johnson is back from bankruptcy and hitting the runway at new york's fashion week. what is she doing differently to stay in the green? just read about how she spends her sundays in "the new york times" on sunday. and she's still doing cart wheels. watch out. these new young companies. and she's still doing cart

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a very different monday than we saw a week ago when the dow was heading toward a 300-plus-point decline. worst day of the year. in fact, for a few months there. but today a different day, not as much volatility. the industrial average was down 60 points at the low this morning. as you can see, we're down 3 points right now. the nasdaq and the s&p slightly positive as we get ready for janet yellen's first testimony before the house financial services committee tomorrow. >> but the recent volatility of the stock market hasn't been scaring many companies off from going public. u.s. listed ipos have actually raised a total of $6.8 billion so far this year.

of course, it's only february. seema mody is tracking the ipo movements and has a handle on some companies that could make it to the exchanges in the next couple weeks. >> that's right, kelly. before we get to those names, let's highlight those stats because it has been a record start to the year for the ipo market. 28 deals, 10 of which went public last week, and what's more, these stocks are doing well averaging 18.4% pop on their first day. the historical average is about 14%. and renaissance capital points out that a number of ipos have shown strong follow through beyond the first day. two examples, re vance and auspx pharmaceuticals. this week biotech continues to dominate with inogen, eagle pharmaceuticals, flexion, and concert pharmaceuticals. analysts say the outperformance of the biotech sector as well as

an uptick in health care m and a are reasons companies are going public. >> stay right there, if you will. we want to talk about something relatively new to the ipo world, so-called secret ipos. there are new rules that allow some companies to go public without putting as much information out there at least until the last minute. >> this was a portion of the jobs bill that was passed a couple years ago in congress and it's about twitter did. also what a very cool company called go pro has announced it's going to do as well. they make those small camera that is can go anywhere. they bring in truly amazing points of view. but if going public is about transparency, should perpt nent details about a company be hidden until late in the ipo game as its devised by this new rule? joining us now, gene irkin.

this only pertains to companies with a market value below $1 billion. so what's the reasoning behind this new rule? >> thanks for having me. well, there's really two themes here. one is to reduce the deterrence from going public. second is just to make the ipo and ipo filing process easier. >> gene, back at the time when the jobs act was working through congress, there was some experts who testified and said, look, if we go down this path, the quality of the ipos is going to fall considerably and the individual investor at the end of the day is going to get burned. why shouldn't we be worried that that still will turn out to be the case. >> i disagree with that. this is really a question of information timing, not information type. i mean, eventually any company who files a confidence ipo is going to have to release the necessary and pertinent information to allow investors to properly scrutinize and vet them. this rule allows companies to focus on the ipo process with

the s.e.c. without having to disclose how the sausage is being made. >> but we should point out, the information will eventually come out, just at a later than usual time before the road show begins. so, i mean, i'm not sure -- and they do that so that the competitors can't get access to this information, but they will eventually. so i'm not sure exactly the reasoning again behind the timing of these so-called secret ipos. what's the advantage? >> well, i think it's just what you describe. similar to twitter, it prevents companies who -- it prevents companies from having to release sensitive financial information to its rivals while they're testing and vetting out the ipo waters. >> and i got to agree. i think this process works because it allows the company to sort out their finances in private and then showcase their books once they're finalized. many of these private companies are young and have time sensitive data as well as

disruptive ideas. maybe it's better to report out their results once they're ready to release those results and that product to the world. of course, as journalists, it dauz make our job a little tougher but i can see why that would be seen as beneficial. >> it's just interesting because, look, we like to live in a world where you have potential access to more companies, the ability to inject capital where perhaps a real upstart player is going to need it and put it to great use, but at the same time to say that -- it almost makes it sound like this is just giving companies plenty of time to put their best face forward and i don't know. it feels a little bit like like i would call it window dressing but it's almost presenting the best face and then kind of coming forward with more of the detail later. >> especially in an age of transparency or supposedly so. >> gene, do you a take on that? >> i would add, i think there's always unintended consequences with every rule, but i don't think with this rule it's going to be detrimental to the ipo process. i mean, i think they're trying to encourage smaller companies

to test the ipo waters rather than going the easier route on a private sale. >> yeah, well, at the same time we know that, look, one of the beauties of the u.s. is our deep capital markets. seema, how many companies are taking advantage of these rules? >> you know, i don't have the exact number, kelly, but experts i spoke to say that the jobs act is definitely given private companies another reason to list. now, of course, they do have the ability to sort out their finances ahead of time and then release their data once they hit the road show or right before they hit the road show. >> gene, thank you for your thoughts. seema, we'll see you later. >> certainly kept people busy around here, bill. >> yes, it did. >> a lot of ipo activity last year. a lot more coming this year. the dow, as mentioned, roughly unchanged. the s&p 500 a small positive and the nasdaq up about 19 to 4145. >> to the housing market, for foreclosures could be on the way unless congress acts. what does congress need to do

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welcome back. so to help resolve the mortgage mess that started during the financial crisis, debt forgiveness and home short sales have been exempt from counting as income. that expired at the end of last year forcing borrowers who had their debt forgiven to have to pay taxes on the short sales, a lot of money, a lot of money they likely don't have. some legislators want to help but like much in washington, not one plan is getting more traction. here is more on what happens now is diana olick. >> here is a number for you, 2.8 million. that's the number of short sales done since 2007. add to that hundreds of thousands of loan modifications where the principal amount was lowered. money that was tax exempt for borrowers. that exemption expired six weeks

ago and has not been extended. b borrowers like tony are on the hook. he got his short sale approved but it would a month too late. he could owe the irs around $30,000 which he does not have. >> now with this debt relief act not being extended as of yet, i'm really nervous now. so i'm staying unlate p late at. just can't sleep at night. it's causing a lot of stress. >> now, remember, the banks were actually mandated to do principal reductions in legal settlements. that's why the foreclosure and delinquency numbers are down. loans in foreclosure down 28% from a year ago. if you think the crisis is over, think again. there are still 3.24 million delinquent loans out there according to black knight financial, plus 1.24 million in the foreclosure process. add it up, 4.48 million loans

that could be helped by either a short sale or principal reduction. there are several bills in congress that could extend the tax relief one or two years. but so far no movement. we have lots more on this. >> all right, diana. thank you very much. heading to the close. 15 minutes left, call it 14. the dow down 6. the nasdaq and s&p with fractional gains right now. >> still can't believe they haven't resolved this issue in congress that diana was just talking about. remember when we were discussing this and we said they wouldn't leave this out there. >> it's government by committee of politicians. that's why. >> all right. we'll see what happens on that front. meantime, aol chief tim armstrong may have taken his foot out of his mouth and fixed his 401(k) faux pas after blaming a change in his plan on sick babies. he's only laying out what many employers are considering, the fate and future of your 401(k). that's coming up. stay tuned.

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we are at the ten-minute mark before the closing bell down. and the dow is down 7, was down 60 at the low. not nearly the kind of volatility we saw last week around this time.

the nasdaq is up 17, 18 points, and the s&p is a point higher. joining me talking about the markets, joe quinlan and erin gibbs from s&p capital iq. what changed? we are down 300 points a week ago today. then we had our two best up days of the year on thursday and friday. and now we're going sideways here. >> you know, i think a lot of it had to do with, one, seeing the negative numbers from the pmi for the managers index. that was a big disappointment for january versus where we were in december. then we got the good number for services. >> manufacturing was bad but services was good. >> manufacturing was terrible but service was great. >> we care about fundamentals again. >> i certainly hope so. >> but we're sideways today. >> we're waiting for china to come back online. they have been during the holiday so they're going to kick back into gear. europe is looking a little better. really here at home, u.s.

economy i think is gaining momentum and gaining steam with or without tapering. >> i think a lot of the confusion is all the negative numbers we have seen recently for december and january, there's been this constant excuse of bad weather, bad weather, bad weather. >> but is it real or is it an excuse? >> i stayed in. the weather was bad. i think people don't want to go out and search for homes in the middle of a snowstorm. so we kind of have to have this wait and see pattern until we can return to normal, particularly for housing. >> are you putting money to work now? what are you doing? >> we are putting money to work. we're looking at the cyclical sectors in the u.s. we're looking at parts of the emerging markets like mexico. so we still like energy, information technology, the industrials. we see good growth coming in the spring. we're going to have a snap back in the housing. the downturn in spending we've seen in the last couple weeks. we're looking for good nominal gdp growth above 5%. >> even if the fed keeps the

tapering coming -- >> oh, yeah. that's a sign of strength. the tapering means the economy is getting stronger. >> we hope. >> that's going to bring in more capital. >> my concern is as long as the fed keeps tapering, what we're really looking for are do people start buying houses again. if they keep tapering and we don't see that housing recovery, that's a much bigger cause for concern. >> theoretically as they taper, long rates should be going up, they're not but that -- >> we had a huge jump last summer and a huge jump last fall. as long as they stabilize and people start buying houses, i think that's where -- what we're really looking for. >> you still think earnings have been pretty decent this quarter. >> earnings have been exceptional. right now we're looking at finishing fourth quarter -- sorry the year, 2013, at 6% and earnings next year at 8.5%. >> revenue though? >> revenue has come down and that is concerning zefl. we came from a high of 3.6% to

2.8% for twis2013. >> i think revenues will pick up, overseas, here at home. i think 3%, 4% revenue growth. that's better than we expected going into this year. >> but is that what the market is anticipating? this volatility we've had so far early in 2014, if we believe that the market is trying to guess what's coming, is it really forecasting a better economy? >> i think it is, bill. i think the big question -- there's problems in the emerging markets. we know that. now the investors are looking at, listen, the u.s. is growing, japan is growing. the developed economies are leading the way. we haven't thought of that in a long time but that's what happened. >> we started the year priced for perfection. >> they're taking it all in stride here. erin and joe, good to see you both. thank you. we'll take a break, come back with the closing countdown for a monday. after the bell, the curling craze swept the olympics four years ago and it's roaring back once again. cnbc is the evening home of olympic curling, and we couldn't be more proud of that, but if you are still not exactly sure

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chart of the dow. so we're missing the 300-point drubbing the industrial average took a week ago today, last monday. then we were sideways tuesday, wednesday, and then it was off to the races. today not so much. very much a sideways move. we all maintain that it's probably they're waiting for janet yellen. peter costa, fed chairs have been scrutinized before with their testimony. what's different this time is we have a new entity this time. we have no idea how she's going to perform or what she's going to say here. >> right. i think that this could be a very telling, you know, meeting. i think listening, nuances, all the things we used to go with going back to bernanke when he first came down. we have to learn what her words are. >> another new wrinkle, they're bringing on a second panel, a shadow panel after her, and it's made up in some cases of hawks, monetary hawks, and they are

there to respond to her testimony. so we could get some fireworks tomorrow. >> it's like the republican rebuttal to the president's state of union. >> exactly. >> that will be interesting. listening to the hawks, i think at some point they will be heard but i don't think it needs to be now. i think the market is going to do all right. i think the next week will be about earnings. we'll get through tomorrow's testimony and then we'll still deal with the earnings. >> throw you a little curve. we all talk about what the market wants to hear from janet yellen. what do they not want to hear from her tomorrow? what would disappoint this market? >> i think if she wants to accelerate the tapering more than it already is, i think that that might have a negative impact on the market, but i think you're not going to hear that. >> she's not likely to do that. she's been a big proponent of this. >> i don't think you're going to see any curveballs out of her. i think what everyone is expecting is pretty much what we're going to get which is okay because it's about earnings. let's continue with that. we still have two weeks left.

>> still about fumndamentals. thank you. a question vie yet davery quiet. but is it the calm before the storm. meantime, the second hour of "the closing bell" with kelly evans and company right now. see you tomorrow, kelly. and welcome to "the closing bell." i'm kelly evans. stocks in a holding pattern ahead of new fed chair janet yellen's testimony before congress tomorrow. here is how we are finishing the day on wall street. looks like we'll finish with green arrows across the board but the gains are relatively small. the dow hanging on to that 15800 level. the s&p adding a couple. and the nasdaq the stronger performer up half a percent to 4148. this despite some weakness in social media names. let's bring in today's closing

bell panel. david greenhouse, kayla tausche and dom chu and guy adami. what's going on in the markets here? >> you've talked about it all day. everybody is waiting to hear what janet yellen has to say tomorrow. the fact that they have this shadow committee after the testimony i think is pretty interesting. i was just talking to brian kelly, fellow lumber bringer, if there's any hawkish tone whatsoever to her, it could throw a little bit of a monkey wrench. remember, the s&p is up, what, 60 handles in 2 1/2 days. i think it's a little too much too fast. i think we have to sift back a little lower. >> dan greenhouse. a lot of this is about janet yellen. a lot of this is about the fed or maybe it's not. are we making too much of this or is this the most important event of the year? >> it's the really important event. it's the first time she's speaking in front of the house financial services committee but i would reject the idea that

somehow we're rallying in front of her testimony. we have no idea what she's going to say. the overwhelming likelihood is she sticks to the playbook that's been in place. i just don't understand why she would deviate from that playbook in front of a meeting that she hasn't even chaired yet. >> we will hear from her tomorrow and then on thursday. guy brought up something really interesting. see what you think about this. there is going to be -- it's not just janet yellen who will be testifying tomorrow. there will be a couple people, experts, also giving their view on monetary policy. they include a couple more hawkish names like john taylor. so there's this thought that if that's coming up, that there might be more of a conversation, more political pressure on janet yellen that would somehow make her strike a more hawkish note. does any of that ring true? >> it doesn't. the reason why is fed chairman janet yellen is looking to make a mark not in a bad or good way, but to establish her credibility. what she wants to do is identify the fed as independent, which it always has been or is viewed to

be. technically it is. the reason why you have this reset, if you will, is the markets really need to figure out what exactly janet yellen is going to say about the future of the fed in this, her first ever real public testimony since taking the job. if she does do this, a lot of investors are going to view this kind of maybe perhaps balance, if you will, being brought to this tone to really identify what janet yellen says about the new fed. >> we know the fed is an -- >> hang on one second because there's a couple things that aren't happening that are kind of interesting at the same time. earnings haven't been a disaster. they have actually been okay. we, meanwhile, we're talking about merger and acquisition activity, although today, kayla, it was notably quiet. people have been betting on these m&a stocks thinking companies have so much cash, this will be a catalyst, but kind of a quiet day. >> they have a lot of traders who are wondering why they came into work today with the snow overnight and a big day tomorrow. it was really just staging for the rest of the week with such a range-bound trading day but

there wasn't anything. mcdonald's global same-store sales, hasbro, you don't have anything to hang your hat on. everyone is looking at janet yellen. i do not think they will bow to political pressure. that's the last thing someone in her role would want to do in their first public appearance on the job. >> lindsey, there are a lot of cross currents, a lot of speculation, a ton of scrutiny. it's not an enviable position. what do you think happens tomorrow? >> certainly not. i know yellen's testimony is an important event but i think the market is focused on the key here and that is jobs. the market is trying to differentiate between temporary weakness and underlying fundamental weakness as we saw a disappointing january report on the heels of a weaker december juxtaposed with strength that we saw in october and november. so really the market is trying to discern that underlying trend all against the backdrop again

as the other guests mentioned, yellen's testimony to which we will look for more guidance as to how she sees that economic trend. >> sara, as we have been watching a great counter rotation, if you will, counter reformation or something, in the bond market because, look, if the fund flows the last couple weeks have been crystal clear, people are piling out of equities and into bonds. >> and nobody expected this. bonds were so hated at the end of last year. everyone loved stocks. guess what? the fund flows tell a completely different story. if you look at the new data actually from last week, investors yanked money out of global equity funds, $28 billion. that was the worst week for equity fund flows since back in 2011, and meanwhile, the money was pouring into bond funds. $15 billion. so the question is why? what can the bond market tell us right now given the conversation that you guys are having? number one, it was a lopsided trade. everyone piled onto one side of

it. so it snapped back. jeff gundlach saying that particularly is why you actually want to own some bonds on january 14th. you also have weakness in the global economy. emerging markets are still not okay and the outlook is a little shaky given what the federal reserve is doing, tapering its quantitative easing, and the u.s. story. it's not like a straight shot up. it's not at what some economists call escape velocity, that things are perfect and going well. it's going to be a burchy ybum recovery. perhaps you should own some bonds at least in your portfolio or at least look to the yields as a sign that not everything is okay. >> right. sara, we just put up a quote from jeff gundlach who is doubling down because remember around this time -- or around middle of last year, he said i think the ten-year is going down to 2.5%. now, that came right as we were getting this unraveling with taper talk last time around, but he is standing by that call, dan. is he crazy? >> no, i don't think he's crazy, and far be it from me.

but generally speaking with respect to what sara is pointing out about the global uncertainty and the fight to safety and bond yields, it shouldn't be entirely surprising. if there was going to be trouble in emerging markets and trouble in domestic equity markets that investors would pull money out and find their way into the bond market. back to sara's point about bonds being hated at the end of the year, the question is not can you time the first two weeks or the first month or the first two months. the inquire is what are the likely path for the asset classes over the next 6, 12, and 18 months? the themes from before hold true which is the bias for bond yields should still be higher. >> and i would just add in, as you are talking about janet yellen's testimony gnotomorrow,e is going to try to make the nint interest rates will stay super low. interesting to see what she says about the unemployment rate, but tapering is not tightening. it doesn't mean interest rates are going to change. so perhaps don't fight the fed. >> when we're talking about structural demand for some of these asset classes, dom, it was interesting in barron's they had

an interview with the woman who runs harvard's endowment program and she was talking about their asset allocation. guess how much of the harvard portfolio which is in the past been seen as kind of the model for endowments, first of all, her target return is 8%. it's not just pension funds reaching for yield. guess how much of her portfolio is in u.s. equities? >> i don't know, maybe a quarter. >> 11%. >> wow. >> 11%. and that's somewhat indicative of where a lot of people are just pouring money into credit, pouring money into the bond market, and, you know, you need the retail buyer, someone else besides just companies buying back their own stock here. >> absolutely. and that's why some strategists will tell you it's okay to have some bonds in your portfolio whether it's for a flight to quality or just because the world doesn't look like a great place right now and the ferveg is on hold for a very long time, super loose monetary policy. perhaps don't dump all your bonds in your portfolio as you were hearing toward the end of last year. >> i will say this, again, when we talk about bonds, we don't

say that bonds are exactly synonymous with treasuries. it's not all going to treasuries right now. when we talk about the fund flows, the majority of those bond fund flows are into the general taxable bond community. that can be everything from corporate investment grade to high yield to municipal -- not municipal for taxable but just a lot of bonds -- >> despite the fact equities have been volatile, companies have had no trouble raising money, raising debt, borrowing in this market whatsoever. we're off to another great start. >> we are off to another great start. the problem is the beginning of the year is always an earnings season. you don't really have as much activity in january as you do during other points of the year. when i was talking to a few capital markets bankers i was saying are you seeing an influx of activity because rates are still low? they said, no, because they're not technically really allowed to do that as they're nearing earnings. so they might hit this window on the wrong end of it.

but it doesn't seem like interest rates, as sara was mentioning, are going to go up skyrocketing anytime soon. it does feel -- >> that's exactly right because it goes back to the general theme of the economy where we see each component of the economy still positive but losing momentum. so this is certainly not indicative of a strong recovery to justify a raise in rates in the near term. so, again, looking to yellen's testimony, she's going to have to convince the market, this is part of the challenge, that rolling back, continuing to roll back accommodation in terms of monthly bond purchases is not the same as rolling back accommodation in terms of raising feds funds rate. >> can we talk about a couple stocks real quick? >> sure. >> for example, twitter. we've discussed this one ad nauseam. there were certainly a lot of people -- there was lots of ink spilled over the weekend on the fact that its metrics look weak.

>> we thought it would trade sub 50. it basically got there. i think it flushed a lot of folks out. i think the trajectory in the stock is probably lower. i think it sifts into the mid to low 40s, but right now given what we saw last week, i think there's a really good chance you sort of trend back up to $58 or so. it's all about trading these things. to try to -- you know, to buy this and say six months from now you're going to see twitter at $65, i think that's a fool's errand. i think you have to learn how to trade them. i think you put in a tradeable bottom last week in the name. >> all right. are you going to say something? >> guy, i apologize, i think i missed something in the middle. do you think it's likely to go to the low 40s or the upper 50s? >> from here i think the first move is to the upper 50s. i think the trajectory in the stock is such that it has to trade down. you have a lock up coming up, a major lock up coming up in april. i think once the volume, once the flow comes back in the name, i think it's all been a supply/demand story. the supply being the amount of shares that's out there which is

what took the stock to the levels we saw. if you ask me in six months, where is the stock? i think it's $42 to $45. >> we also have a ton of earnings on tap, guy. any names in particular you're trading ahead. we have a conton of consumer products. >> hartford, i thought they did exactly what they should have done. prudential is a neat name. going back to the original point, i really think the deflation has been the battle all along. i think there's a good chance ten-year yields go back down around 2%. i'm in the gundlach camp times two. >> all right. thank you very much for joining us as we try to figure out how to make the market. a very different tone from the 300 point sell-off we were looking at seven days ago. olympic curling is coming up on cnbc at 5:00 p.m.

yes, it's that time again. but get your second screen ready and not that one. guy adami and the "fast money" freestyle will be streaming live and that starts at 5:00 p.m. thank you, guys. we'll see new a bit. escape from new york and we're not talking about kurt russell, we're talking about banks. up next, dick bove saying a deluge of lawsuits is driving the big banks out of new york. he says that makes as much sense as las vegas driving out casinos. and tim armstrong backpedaling from his decision to pay out 401(k) matches at the end of each year. will this be the trend anyway for 401(k) plans? our panel will weigh in on that. we want you to weigh in on whether companies should align themselves more with employees when it comes to these 401(k) payouts. tweet us @cnbcclosingbell. thk has a new plan -- dozens of tax free zones all across the state. move here, expand here, or start a new business here

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welcome back so some breaking news on obamacare's employer mandate. john harwood has the news from washington. >> kelly, remember that the employer mandate was delayed a year. what the treasury department has announced today is that it is phasing in the employer mandate even more slowly than that original delay. it's only going to apply in 2015

to the employers that have 100 or more employees, not the ones between 50 and 100. remember, it doesn't apply to people below 50 employees. also those firms in their first year will only have to provide health coverage to 70% of the employees in their firms. that's, again, to cushion. in 2016 the mandate will be applicable to businesses between 50 and 100, but they're slowing it down. also cushioning some of the rules that allow employers to determine what their payroll is at the time that they have to apply coverage to smooth out some of the seasonal variations. but a couple of ways in which the obama administration is trying to accommodate complaints from employers in implementing that mandate, guys. >> john, this is potentially a big move, and it comes as we have, i believe, a deadline this weekend for individuals who want to sign up for the exchanges. has there been any move with regard to the individual mandate that you can glean?

>> no, not at all. and there is no deadline this weekend on the individual mandate. the dleadline for individuals i march 31st to sign up, so people still have the months of february and all of march to sign up. >> i see. so february 15th is for people who want coverage as of march 1st. that's on the individual side. this is on the employer side which affects the total number of people who will be in the exchanges. >> well, it doesn't affect it that much because most big firms already offer coverage. this is something that -- it's part of the reason why the employer mandate doesn't hit that much. now, it's possible that with the exchanges up and running, some firms may drop coverage, so that number would diminish, but right now most large firms already offer coverage, so it's not -- it doesn't have an impact on a vast swath of the workforce in the united states, although a significant number of employers.

>> another move in terms of the deadlines. john, thank you very much for trying to is up rise all of that from washington. the big apple is home to some of the world's biggest banks, but are new york's regulators driving them out? from alleged wrongdoing on hiring practices in china, new twists in the foreclosure fiasco, officials continue to put banks in the legal crosshairs. that has dick bove shaking his head. he joins me along with andrew stultman, specializing in securities litigation. dick, this line caught a lot of people's attention when you said your view here is new york won't stop until its driven the banks out. do you really feel that way? >> yeah, i do. they obviously are not going to drive all the banks out of new york but they are driving them out of new york. think about, you know, where bny melon is. goldman sachs had to add new people. they did it in new jersey and utah.

citigroup is the third largest employer in singapore with jobs, all of which could be in the united states. although they have pushed a lot of jobs to south dakota. morgan stanley is pushing jobs to japan and to china. so if you go company by company, the first thing you recognize is there aren't very many companies. there used to be at least a dozen banks and brokerage firms that are headquartered in new york that were of great size. they're not there anymore. and of the ones that are left, they are putting money and jobs out of new york. why are they doing it? one of the key reasons is because you had three attorney generals in a row who can't stop suing them. in fact, today we had this unique situation where, you know, we've got the brooklyn district attorney suing banks for something that mcdonald's just did in vietnam and the whole world is cheering mcdonald's for being in vietnam. >> you mean prioritizing its own in this case -- making use of connections to get the business yield on which you say should

actually be a matter of fact. >> well, as a matter of fact, you know, the situation that i'm mentioning in vietnam, of course, is mcdonald's opened its first, you know, new shop in ho chi minh city of all places, and the franchise went -- it isn't just the franchise. it's the country's distributorship went to the daughter of the prime minister's husband. you know, in china when jpmorgan made a consultant payment to the daughter of the old prime minister, the s.e.c. and the brooklyn district attorney jumped all over them. that's not fair. >> andrew -- >> kelly -- >> go ahead. the point is basically there should be priority and preference for banks in new york as opposed to what appears to be a piling on. >> that's one of the most ridiculous things i have ever heard. look, if you don't want to pay the fine, don't do the crime. the banks have nobody to blame except themselves, and for them to be pointing their finger and saying, gee, the regulators are beating us up, this is so unfortunate, we're going to move

elsewhere. you have yourself to blame. jpmorgan paid $20 billion in fiennes last year. they have six department of justice investigations. if you don't want to be piled upon, simply don't engage in activity that melts down the global world wilde economy. >> not to mention the trends are two over arching phenomenon that don't have necessarily anything to do with the regulatory action you've cited. >> let's take that statement, if you don't want to pay the fine, don't do the crime. let's take the statement of jpmorgan just paying $15 billion in fines. who created the fine there? was it the -- >> jpmorgan's conduct. >> they didn't create the fine. >> sure they did. >> the problem was done by the people who washington mutual, it was done at bear stearns. the people at washington -- >> how about the london whale debacle. they paid $2 billion. >> the shareholders of jpmorgan and jpmorgan's shareholders did not commit the crime.

if you believe that those people who committed the crime should pay the fine, why are the shareholders of jpmorgan paying for the fines that -- for the crimes that were created by carey killinger and jimmy cane, neither of whom are you going after? so the net effect is you have made the decision to fine the people who did nothing and to let the people who have committed the crimes go free. so if you believe in -- if you t to pay the crime or the fine stuff, you ought to do what you say. >> how about a $2 billion fine for the london whale debacle. the firm shouldn't have to just -- >> that fine was ridiculous. it made no sense whatsoever. >> the regulators aren't willing to do that. but the banks have nobody to blame but themselves. and to claim that the regulators too rough on us, give me a break. you almost melted down the global worldwide economy in 2008 and the fact that more of these firms -- any of these firms weren't criminally indicted is stunning. to simply have to pay the fine is the minute yimum you should

to do. >> the banks did not create the global financial crisis. >> sure they did, dick. >> if you understood economics and finance, you will know that the financial crisis was created by an excess -- >> how come jpmorgan paid $15 million in fines for shoddy mortgage passes? >> they didn't pay them -- >> sure they did. >> they paid them for shoddy mortgage practices that washington mutual did and that -- >> tell the state attorney generals that. please. >> the net effect is -- well, the attorney general said it pretty clearly. these fines were not being applied to jpmorgan because of what jpmorgan did. it was applied to jpmorgan because of what other companies did. >> dick, i will say in this regard you actually agree with the point that jed has made which is by not going after individuals and going after institutions, the entire prosecutorial system has gone completely off track. >> exactly right. in other words, if people really believe that the people who committed the crimes should be fined for committing those crimes, then they should go after the people who committed

the crime. >> kelly, you know what you do? you go after the companies. look at what happened. once arthur andersen was -- >> you went after the shareholders of the companies. >> we've seen no -- >> 95% of the shares of jpmorgan are owned by -- >> go ahead, finish the point. >> -- an apologist for the securities industry and i'm sorry but it's that sort of attitude that led to what happened in 2008 and that's why nothing has changed since 2008 took place. >> i'll give you the last word there to defend yourself mr. bove. >> all right. well, to assume that nothing has happened since 2008 means that you have not looked at any of the laws, regulations, or rules that have been put in place since that period of time which have been stunning in terms of their impact on the consumer and the financial industry. >> and the meantime, the actions will speak for themselves. thank you very much. an important issue, especially in new york. tim armstrong trying to turn

back a storm of controversy, doing an about face an aol's decision to delay company matches until the end of the calendar year. he faced backlash when he blamed the move on the cost of sick babies. we'll discuss this controversy next. we want to know if you think companies should align themselves more with their employees instead of shareholders when it comes to decisions like 401(k) matches. tweet us @cnbcclosingbell. your thoughts in a little bit.

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the dow is seesawing near break even more for much of the day. >> the open cloud company announced its ceo has retired. it's fourth quarter earnings came in line with street expectations. organic food producer annie's also down in the after hours after reporting weak are than expected fourth quarter earnings. a pair of cyber security stocks on the raise. palo alto is in talks to buy an israeli security firm. and fire eye says it plans to start selling intrusion prevention systems which help companies detect cyber threats that breach their fire walls. lastly, we end with aol, finishing the day in the red. the company reversed a controversial change to the 401(k) retirement plan which would have replaced regular matching cc was a once a year lump sum payment. tim armstrong apologizing for

singling out two unnamed female employees as reasons why the current plan is too costly. >> it still raises the question is this where 401(k) plans are going? should workers be in line with employees or shareholder obligations. dom, what do you think? >> when i first heard about this story, i thought, you know, this is a company who even offers a match to begin with. not all companies do. that's a real perk, first of all. second of all, does it really matter? it's a cash flow management issue. they're still going to end up paying you the same amount of one. think of it like a wall street bonus where you don't get paid until a certain time of the year. the real issue for the average investor if you're a 401(k) plan is whether or not that fits into your financial plan. what you'd like to do is maybe take $1,000 a month and spread it over a year so you can dollar cost average in rather than taking a sniper shot and a one-time buy of that lump sum of

money. that's big. >> do you worry that people then when they see a lump sum like that will, you know, be more likely to borrow and think about using the money in other ways? >> that certainly could be a result of this, but i think the bigger issue here, and, of course, i don't think aol did this in the most politically correct manner or the best image for the company, but i think this speaks to the bigger issue of companies are struggling to offset these rising health care costs. and most of the woe tales we've heard from been from small businesses, mom and pop stores that had to let employees go. here we see a big guy not immune from the costs either. if health care benefits begin to increase, you have to offset those in other areas. in this case it's in retirement and saving benefits. >> kayla, i guess, look, if it's not an obligation, you know, it's on the company. we can all talk about 401(k)s and how important it is to save and all of these things, but it reminds you almost again of what the president announced, not that that's an ideal option

either, but people need more than a nudge. they really need the vehicle there to help begin this process of saving for retirement or look at the crisis we're talking about and how little people have saved in this country today. >> it is a good reminder to average joe investors that if your company offers a 401(k) you should be contributing. i think aol was coming from a good place. tim armstrong last week when he made the comments about the $7.1 million in additional obamacare costs they're trying to offset, he said our last priority of people we would like to use our money to contribute towards their funds ever people who have decided to leave the company. they have decided aol is not the ri right place to work. on wall street no one leaves if their bonus is coming in february. they don't leave in january. if it's coming in june, they don't leave in may. that's something you know is a line in the sand and you don't leave before this happens if it's really that important to you to get. >> dan, what do you think? >> listen, i come at this from a

textbook standpoint leaving the company aside. the rule of a corporation is to maximize shareholder value, profit maximization, and if tim armstrong and the board of directors or any given board of directors thinks it's in the company's best interest to change the contribution to an elective benefit to employees, then i don't understand, clearly this wasn't done in the most politically correct way and to borrow the president's way, it was probably done stupidly -- >> but the pressure is there is what you're saying. >> i don't understand why there's any outcry whatsoever. if they want to give you money in 12 payments or give it to you in one payment, you're still getting extra money in terms of a contribution to your 401(k). >> people are just basically worried this is the first step towards more phasing out of 401(k) benefits. >> but that's fine then. if you're an employee of aol or any company and you don't like the benefit plans, you are free to go somewhere else. >> well, it becomes a problem of the commons. everyone has to offer them or else no one will offer them. >> someone will eventually offer

it. >> we'll tweet at each other during the break to continue -- no? all right. what's heating up the website? our "hot list" is coming up next. it's fax weshion week in new yo and we have betsy johnson in the house. we want to talk about her comeback from bankruptcy and what it takes to make it in the fashion world. don't go anywhere. you'll experience reliable uptime for the network and services you depend on. multi-layered security solutions keep your information safe, and secure. and responsive dedicated support meets your needs, and eases your mind. centurylink. your link to what's next. a 401(k) is the most sound way to go. let's talk asset allocation. sure. you seem knowledgeable, professional. would you trust me as your financial advisor? i would. i would indeed. well, let's be clear here. i'm actually a dj. [ dance music plays ]

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welcome back. time to check in with the website and see what people are clicking on today, allen, because the markets weren't doing it for them. >> market was kind of boring but we had that obamacare bullet that zinged into the website. you broke it earlier. basically another delay, this time for small businesses. they got until 2016 instead of 2015. people are reading all about that one. now, we also have a feature from diana olick talking about the looming foreclosure problem. that's because congress failed to renew an exemption for when you get mortgage forgiveness. that's going to count as income which makes people say, well, why would i do a short sale then? i will just move to foreclosure. that could derail what's been happening in the real estate market. third on the website, olympics. we have a feature up about why there's all those empty seats. apparently it's not so much a

question of not selling the tickets. it's that in russia apparently people like to get to the venue right on time but they're not counting for all the security they have to go through. and so it's ending up with people not making it to the games. so that's our top three right now. >> well, we'll see if the seats fill up as they wise up, allen. thank you so much. good to see you. that housing story is such an important one. we've been talking about it all show. speaking of hot top pics, the nation's debt ceiling fight is in the news. john harwood rejoins us. i guess there's been some movement this evening. >> republicans will be meeting tonight as the leadership and the members try to come up with a strategy for raising the debt limit. everybody wants to do it. republicans don't want this fight again. they were hurt by the shutdown. they want to talk about obamacare this year. and so they're looking for a way to pass it. we expect they will raise the debt limit in the house this week before going away for president's day. the question is what terms are attached to it. now, it is expected that one of the terms may be a tweaking of

veterans benefits that were cut to some degree during the last budget deal with some offsets. it wouldn't increase the deficit. they would pay for it in some ways, but this would provide cover for members who don't want simply to vote for a debt limit. there's another potential item which is the so-called doc fix, raising physician reimbursements under medicare. not clear whether that's going to be part of it, but that's what this meet something about tonight. the good news is nobody has got the stomach for a fight and it looks like we're headed for a resolution to this well before the end of the month. >> john, it's dan greenhouse. let me ask you a question about the 30 or so house republicans that apparently won't vote for a debt ceiling under any circumstances. when pressed on whether or not this pushes an ultimate agreement further to the left, that is to say that it actually worsens their position, what is the response? >> the response is it's true. everybody knows that if you do a

deal with a coalition with republicans alone, it's going to look differently than what you can do if you've got to have democrats, and that's something that republicans have been dealing with ever since they took over the congress. the fact that some people don't want to play on the team that the leadership or run the play that the leadership has called means that in effect it does shift a little bit towards the democrats, but some of these members are so strongly motivated by their initial position that they're simply not willing to go along. >> all right. john harwood with the latest on that one. john, thanks very much for now. and just want -- dan, from an investing point of view, the debt ceiling is back with us. we're so used to it at this point it doesn't look like we'll go to the final hour so where does that leave investors? >> i can tell from you our experience, we had a horrible scare in the summer of 2011, a near 20% stock market crash in a very short period of time culminating in a 6.7% correction in one day following the s&p's

downgrade. since then investors have cared much less. i think to john harwood's point, republicans seem less likely to push the issue to the brink, so really we've spent about two years discounting this and largely speaking at this point i don't have any conversations with clients about the debt ceiling almost at all. >> lindsey, do you? >> you know what's interesting about the debt creel something that we're waiting for yellen's testimony and the debt ceiling may be a little more political than normal. chairman bernanke was the one that continued to champion the idea of bringing fiscal policy in line with monetary policy. so it will be very interesting tomorrow to see if yellen is pushed on some of the questions regarding the federal budget, the debt ceiling and other issues on capitol hill. >> right, xexactly. from riches and rags and hopefully back to riches again, fashion designer betsy johnson on her remarkable comeback from bankruptcy two years ago. her story and what she says is hot on the runway right now. also later we take you to russia with a curl.

>> coming up on cnbc, everything you wanted to know about curling, wall street's favorite olympic sport. we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present. so ally bank really has no hthat's right, no hidden fees.s? it's just that i'm worried about, you know, "hidden things." ok, why's that? well uhhh... surprise!!! um... well, it's true. at ally there are no hidden fees. not one. that's nice. no hidden fees, no worries. ally bank. your money needs an ally.

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♪ ♪ where you think you're gonna go ♪ ♪ when your time's all gone? [ male announcer ] live a full life. the new lexus ct hybrid with an epa estimated 42 mpg. the further you go, the more interesting it gets. lease the 2014 ct 200h for $299 a month for 27 months. see your lexus dealer. welcome back. it's fashion week in new york city and i am now joined by one of the most renowned designers throughout the fashion world, betsy johnson herself. her wild styles, her cart wheels down the runway have generated worldwide recognition, but it hasn't been without speed bumps. her company filed for bankruptcy in 2012.

now back from the brink under new ownership by her close friend steve madden and betsy is here with us at the stocks exchange. great to see you. thanks so much for coming. >> believe it or not. >> i hope you don't ask me to do a cart wheel. >> that's what grandma has to do. >> do you train for these cart wheels or you do a lot of these? >> i think it's bad luck if i practice. usually if i practice, i'm so unfit that when i practice, i ruin myself. so i wing it. one day i know i'll fall and i'll get up. >> it brings us to the point so some extent which is there are so many lines competing in the fashion world right now, and you look at the success of michael kors, for example, just doing amazing. why is it that it's been more of a struggle for you? >> because i'm more weird. >> is that what it's all about? >> i really like to do the clothes i want to do.

i have kind of represented doing your own thing for all these years, and i'm just not made for mega -- steve madden, we're doing mega mass production there, but for me and my little retail pink operation, i really liked doing my own thing to the nth degree. i didn't care if we made 50 or 500. we barely made 1,000. so i had a 38-year run with my retail stores, and then we sold, and you know what happens when you sell. things change. >> you lose some control. a little bit. maybe a lot of control. >> that's putting it mildly. >> yes, yes. >> and then when steve picked me up again, i wanted to continue working, so i'm creative director of the brand, and it's very creative instead of very bottom line, are we shipping,

damages, return. >> and we're looking at some of your designs now. this is what you are made for. >> that is what i did. now, that's my prom dress. not quite black, but i grew up in my 50s -- 55 to 60s in prom dresses and tutus and ballerina stuff and costumes. >> what do you consider your role in society, in the world? >> well, i'm just -- you know, it's all about staying power, and, boy, have i stayed around, and i still love it, and my show coming up is really the most me show, the best show of my life. can you see my t-shirt. it's called betsy's hot. >> i love this. betsy's hot, that's the theme of the show. >> what grandma is hot. >> and it's not just as you have

struggled with whether to grow the fashion line or do other kinds of endeavors, effectively the market cap tailizes on who you are. you have a reality show coming up. it's kind of like taking the betsy brand out through a bunch of different venues or avenues instead of trying to be, for example, a michael kors. >> oh, yeah. my partner and i, we weren't sharp enough, experienced enough to play with the big boys. you have to know much more than we knew to be able to play that game, and we knew it, and so we just worked really, really hard and kept making our very pink mark, and i think that's what it's about. and i never wanted that corporate world. i function well with steve on the creative zone, but i want to be the inspiration. i'm the little inspiration of the world, and i love that.

>> thousands, millions of . and we so appreciate you coming by. >> it's amazing. i didn't know until i went bankrupt how much i was loved. really. >> that's what adversity will tell you. >> exactly. >> good luck on your show in the next couple days. >> thank you for having me. >> betsy is hot. thank you for coming here. we should have her dress us. that would be interesting. >> times square on a billboard. >> media is amazing. >> can you believe it? live stream. in times square. >> in the biggest screen in the world. >> thank you, betsy. coming up next, what do hipsters and wall street have in common? it's curling. we'll be showing this over the next couple weeks and you don't want to miss it. we'll be right back. ♪boots and pants and boots and pants♪ ♪and boots and pants and boots and pants♪ ♪and boots and pants... voice-enabled bill pay. just a tap away on the geico app. ♪

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as mentioned, starting tonight at 5:00 p.m. eastern, curling takes center stage on cnbc and it will stay there throughout the olympics games. michelle caruso-cabrera is in sochi for us. it's not like ice hockey, it's not skiing, sponsors are few and curlers have to work for a living. michelle, what do they do?

>> curling is a growing sport in the united states in large part because every time there's a winter olympics, there's lots and lots of coverage on networks like cnbc. if you're interested in curling, there are more and more places in the united states where you can try it. plainfield curling club of new jersey where members come to throw, sweep, even grab a beer. holy smokes, these are heavy. these stones cost the club a cool 500 bucks a pop. they glide so easily across the ice. this is how it's done. but setting them in motion, it's kind of hard. okay. that's not how it's done. sweeping -- >> don't forget to breathe. >> tiring for the novice. the members of the club tell us after the winter games they always see a big increase in the number of people who want to join the curling craze. an olympic boost, but curling is

far from becoming a professional sport. mark simple is president of the club. >> there are curlers who do curl on a weekly basis, that participate in tournaments that do pay out money, but, again, everybody has a day job. >> most curling is done with clubs in the united states, but many curlers hope it becomes big enough and as common as bowling alleys. in minnesota they're trying a full on business, although it's still not for profit. curling may not be big business yet, but wall streeters love the sport. mark says it's because it's a thinker's game. >> there's a lot of strategy involved. it's not just throwing a rock down the ice. you usually have to think a couple shots ahead. it's almost like chess. >> a game of chess where a lot of yoga would help. speaking of yoga, when you watch curling today, check out jared zezel, he has a lunge that would make any yoga instructor jealous. he says he doesn't do yoga. kelly, i don't believe him.

back to you. >> and we've been asking, you've been tweeting. up next, your thoughts on whether companies should align themselves more with employees or investors when it comes to paying out 401(k) matches. really what i should be telling su curling coverage starts here on cnbc at 5:00 p.m. coming up, we will talk a little bit more about that. we're also going to get to those tweets as promised. workers versus shareholders. is it an either/or? we'll be right back. that's why new york has a new plan -- dozens of tax free zones all across the state. move here, expand here, or start a new business here and pay no taxes for ten years... we're new york. if there's something that creates more jobs, and grows more businesses... we're open to it. start a tax-free business at startup-ny.com. you want everything.orks we're open to it. an expert ford technician knows your car's health depends on a full, complete checkup.

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welcome back. so two screen viewing, keep it here for the latest olympic curling action coming up in a couple minutes, and here is where that second screen i mentioned comes in. "fast money" freestyle will be streaming live on fast money.cnbc.com. melissa lee joins us with a preview of what's coming up. >> this is a first, kelly. we're going to have a do you by the breakouts in apple, tesla, or yelp and the ceo of the first publicly traded bitcoin company. this is 30 minutes uncensored, commercial free. >> i don't know how i'm going to pick my screen. thank you, melissa. we'll look forward in just a couple minutes. tell guy we say hello and all that. in the meantime, should

companies take action that is favor interests of shareholders or employees? here are some of your tweets. roger tweets, employees versus shareholders? i'm thinking most would be for whatever group they happen to be in. taking care of work certifies taking care of shareholders. joshua tweets employees are a dime a dozen. investors on the other hand are not. ouch. not a great verdict on employees, is it? >> wow. >> by the way, look, they have to favor shareholders, kayla. had isn't really a choice unless you're in a different structure. >> but i think if you're taking care of your employees, that's a basic principle of entering the working world. you expect your company will give you a modicum of support. if you as a company cannot support your employees well, you're probably too big. you probably have too many employees if you can't take care of all of them. >> let's not forget steve jobs said take care of customers first and everything will take care of itself.

>> if only workers were customers. >> if only they were and if only they paid for everything like maybe investors do. i don't know. there has to be a happy medium somewhere. >> everyone, thank you for joining us this afternoon. lots to get through and now as this is the type of performance you dream about! >> she just brought the house down! ♪